HowAboutWe buys Nerve.comJanuary 29, 2014: 12:01 AM ET
Exclusive: The company is launching an entire network of content sites based around dating and love -- an effort to challenge much bigger properties and be more than a dating site.
FORTUNE -- Your go-to Friday night date routine may not be as unique as you thought. In fact, Brian Schechter and Aaron Schildkrout, co-founders of the dating website HowAboutWe, say they're looking specifically to solve the "Netflix-and-Chinese-takeout-every-Friday-night problem."
That's why they launched HowAboutWe in 2010 with the slogan, "The Offline Dating Site." Every dating product has an angle, whether it's a focus on marriage or catering to certain groups by race or religion; HowAboutWe's is all about activities that couples can do together. The site offers two separate subscription services: One lets singles post self-designed "ideal" first dates, while the other offers couples dates that the company has set up for them, often with discounts involved.
(Though Schechter cautions: "Date night should not be deal night. It should be an exceptional experience.")
HowAboutWe's goal is to keep people coming back even after they've found someone special, a challenge for all dating sites. In January 2013, the site launched its service for couples (currently available in only five U.S. cities) that gives members access to a concierge to set up dates ranging from the straightforward (a prix fixe dinner in Manhattan) to the offbeat (an archery lesson in Queens). The couples membership runs $18 per month; the one for singles starts at $8 per month.
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The young company has accepted more than $22 million in funding from a number of high-profile venture capital firms such as Khosla Ventures. It is now embarking on a plan that is rather ambitious for a small fish in the small online-dating pond: Establishing a network of dating and relationship-focused content sites. Wednesday, HowAboutWe will launch HowAboutWe Media, which contains four websites that will be free to all and independent from the company's pay memberships: The Date Report, Swimmingly, Famously, and Nerve.
The last one is the most notable. Readers may remember Nerve.com as one of the first popular web-only magazines, launched in 1997 as a somewhat edgy place for opinion, fiction, and essays about sex. While Nerve is an acquisition, Swimmingly and Famously are brand-new sites; TheDateReport was an already extant site run by HowAboutWe that has been refreshed. Brian Moylan, a former Gawker writer who has been editing TheDateReport, is now editor-in-chief of HowAboutWe Media and, by extension, all four sites. Two former Nerve freelance writers have joined HowAboutWe full-time and have been quietly posting content to Nerve and TheDateReport during the transition period. (Swimmingly and Famously first went live Tuesday afternoon.)
The entire online dating industry brings in about $2 billion in annual revenue, according to a September 2013 report from IBISWorld. In other words, it's small. (For comparison, that's a bit less than the annual sales of sports-apparel maker Under Armour.) And it is truly dominated by one giant: IAC (IACI), which owns Match.com, OkCupid, and PeopleMedia, which itself contains a number of smaller niche dating sites like BlackPeopleMeet. (For more, see "The nerd king of online dating.") The launch of HowAboutWe's media network is an attempt by its parent company, This Life Inc., to take on the giants of its space by offering something more: not just a site where singles can meet someone, but a buffet of sites where singles and couples can find date ideas, relationship advice, humor, Q&As, and more.
Schechter and Schildkrout know what they are up against. "The online dating business is completely monopolized -- IAC owns online dating," Schechter says. "So what we're trying to do is build a media company whose sole focus is love. And we think that's the way to beat IAC."
It's a tall order. IAC's only real competitors in terms of size are eHarmony and Spark Networks (LOV), which owns JDate, ChristianMingle, and others. IAC's dating properties had combined revenue of $713 million in 2012. (IAC has not yet released its results for 2013; HowAboutWe would not share its financials.) Moreover, the utility of traditional content sites for meeting people is less clear at a time when mobile applications such as Tinder and Hinge are exploding in popularity. (For more, see "Hookup app Tinder wants to change its image.") Traffic to Nerve.com has been relatively small -- 1 million monthly uniques on average for the past few years -- but the site did see a big traffic boost, close to 5 million uniques, in the past month as HowAboutWe's writers have begun posting fresh content to it. The company is banking on continued traffic growth in the months to come as its writers post more frequently.
Content aside, an important element of the HowAboutWe Media launch is the absorption of Nerve's personal ads platform, Nerve Dating, into the HowAboutWe community and its availability to HowAboutWe's audience of 2.3 million people. HowAboutWe also has white-label partnerships with a number of major publishers, which display HowAboutWe's dating platform on their sites with the publisher's own branding. (Those partners include AARP and New York Magazine.) And if traffic on the four sites does measurably increase, the company can make a more compelling case to advertisers, stoking further growth.
Rufus Griscom, who co-founded Nerve.com, has high hopes. "A lot of Nerve content is similar to the kind of content that is going viral now -- funny, short, a little bit surprising, a little earnest. I think it was a very smart acquisition for that reason," he says. "Even though the pace of publishing on Nerve went down quite a bit, the audience remains meaningful and loyal." HowAboutWe sure hopes so.