Science and technology

Babbage

Social networking

A nightclub on your smartphone

Sep 19th 2011, 17:44 by L.S.

A BIG fridge full of drinks, comfy chairs, even a Jacuzzi—Badoo’s new digs in a top floor office in Soho in central London feel as if the firm is trying too hard to resemble a Silicon Valley start-up. Yet when it comes to business, Badoo is certainly no wannabe. It has a shot at becoming one of Europe’s leading internet firms.

What makes the firm so promising is that it seems to have discovered a new “space”, as digital cognoscenti call a big new market. If social networks such as Facebook are about keeping in touch with friends, and online-dating sites about finding a long-term relationship, Badoo is about something in between: meeting people spontaneously. Some call it “nightclub-as-a-service”. 

When users sign up, they upload photos of themselves and provide such details as age, sex and interests. Other users can discover them based on this information as well as by browsing the photos. Originally the service was only available on the web, but the firm now also offers applications on Facebook and for smartphones. The mobile application, for instance, lets users adjust how widely they fancy casting their net. If they set the dial to one mile, say, and find somebody they would like to meet, they can strike up an online chat and then get together.

Even more intriguing is how Badoo makes money. The basic service is free. But if users want to increase the chances of being discovered, they can pay £1.50 ($2.36) or a similar amount in their country’s currency to rise to the top of the list. Their ranking drops as others put down money—which can create somewhat of a bidding war for the top slots. Users can also take out a subscription for £5, which gives them “super powers”, such as being able to view others’ profiles anonymously. 

Without any marketing, Badoo has managed to become one of the most popular online meeting services worldwide. It is available in 35 languages and boasts 124m registered users—a number that is growing by about 125,000 a day. Its Facebook application has more than 16.4m monthly active users, making it one of the most popular applications on the social network. And although only about 5% of users pay, the firm claims to be on its way of exceeding $100m in annual revenues.

Yet to become a true gold mine Badoo has to crack the English-speaking markets. So far its users are concentrated in southern Europe and South America. This may be because Andrey Andreev, the firm’s founder, after having created three start-ups in Russia, launched Badoo in Spain, from where it spread virally to France, Portugal, Brazil and Mexico. But people in English-speaking countries may also be culturally less inclined to use such a service, in which case Badoo’s growth prospects would be limited. 

What is more, the barriers to others entering Badoo’s market are quite low. At least in markets where the service has not yet attracted a critical mass of users, others could easily copy the service. And as every nightclub owner can attest, even the most popular establishment can quickly fall out of fashion. At least on Facebook, Badoo seems to have peaked. In March its number of monthly active users had reached 68m (though this may be the result of changes to the firm’s Facebook application).

Another challenge for Badoo is not to turn from a nightclub into a bordello. Professionals are known to have used the service and quite a few users appear only out for a one-night stand—although these seem to be a minority. Should this happen, Badoo would become a much less valuable property because sleazy online services, even if they are highly profitable, generally find it almost impossible to go public. To keep its service clean, Badoo immediately terminates accounts of known prostitutes and employs 350 “moderators” around the world to make sure that no pornographic pictures are among the 2m photos which existing and new users upload daily.

As with successful Silicon Valley start-ups, Badoo must regularly deny that it is gearing up for a public listing or about to get an injection of venture capital with a high valuation (so far the only outside investors are Finam, a Russian technology fund, and some undisclosed private individuals). But the firm is clearly setting itself up to move to the next stage: not only did it hire a new chief executive, but also a chief financial officer and a marketing executive. Which allows Mr Andreev to focus on improving the product, the new office—and thinking about his next start-up.

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1-15 of 15
willstewart wrote:
Sep 19th 2011 7:18 GMT

Mr Andreev at least looks as though he has been up all night...

shanep13 wrote:
Sep 19th 2011 9:37 GMT

With the success of the online meeting servers becoming known throughout the world and being able to hold meetings over the internet and not having to go great distances to meet people, it's no surprise that someone has now come up with a way to make it easier for everyone to meet and greet. Now that the era of social networking has come into play, the combination of the internet firm with the social network. What's even more great about it is he did no advertising for it and it has become a great success. Spontaneously meeting new people on a different level than a dating site and moving towards the social networking phase with the viewing of the person's profile and what they are interested in. And the clever part of it all is he makes money through people signing up to have their profiles noticed more. The more money you put down, the more you get noticed. Great new way of viewing the people of the world!

eseraz wrote:
Sep 20th 2011 2:10 GMT

"Yet to become a true gold mine Badoo has to crack the English-speaking markets."

- or the Chinese-speaking ones, or the Arabic-speaking ones, or the Spanish-speaking ones. Gee, not everything has to be all about America!

vtbasser wrote:
Sep 20th 2011 2:33 GMT

I don't really see this catching on in America. I feel that people in the US really want their internet to be free. I mean some dating sites make money but as a purely social type thing I don't think Badoo will cut it by asking users to pay. At least where I live.

samanr4 wrote:
Sep 20th 2011 3:23 GMT

It can be agreeable that this may be a new hit soon to come, but I think the parts that stick out the most about it are the ones that are being charged for. When people enter a dating site, they clearly want to be recognized from the start, so why join and have to pay if you wanttt to be noticed. Isn't that the point in the first place? Also the more you want to be noticed (which most people want when they join these sites) the more you have to pay. For example, Facebook is a huge hit and will always be a huge hit because people wont ever have to pay for any part of it. The mixing of the social network and dating site is a well thought idea but I do not think that it will be as big a hit in the "english speaking countries" or other areas because of the potential costs.

Zambino wrote:
Sep 20th 2011 8:47 GMT

@eseraz: English speaking does not mean America only - it means England, Scotland, Ireland and Wales, Canada, The Caribean countries, Benin, Australia, New Zeland, Singapore, Hong Kong, Phillipines, South Africa, much of Africa (particularly for people that connect to the internet)...

and it has purportedly already cracked at least some spanish speaking countries 'launched Badoo in Spain'...

Zambino wrote:
Sep 20th 2011 9:19 GMT

D'oh - I meant Belize, not Benin....

vectro wrote:
Sep 20th 2011 12:04 GMT

Good article. I think the author is correct to suggest that a service like this may not work well in the English-speaking world. America has already had a service like this --- MeetMoi --- for four years, and it has not shown significant success at all.

Trevor Senior wrote:
Sep 20th 2011 3:10 GMT

Even if they are removing prostitutes from the web service, this service still feels like a "sex service" in a way just because it is asking you for your "sex and interests", location, and that distance you are willing to travel to "meet" the other person.

I also find it interesting that they have so many people on their Facebook application. I understand that this start up is all about meeting people randomly, but I wouldn't ever want to associate myself with Badoo on Facebook.

t3po7re5 wrote:
Sep 20th 2011 3:14 GMT

I don't see how this could challenge facebook because they're almost different markets but I can see becoming a success if they are able to keep it 'clean'

jennb924 wrote:
Sep 20th 2011 7:07 GMT

This website service does not appear to have any significant features that truly sets it apart from any other dating website, except for maybe the "bidding war" aspect. It would have possibly been a more innovative idea in this era of social networking to create a service that would link groups of people together through a physical social interaction, instead of virtually. It is far too common now a days to rely on the computer to make friends and romantic relationships, where as a physical meeting could provide a much stronger relationship in the end.

allymay5 wrote:
Sep 20th 2011 8:32 GMT

In America, there are already so many online dating services that can be used not only for long-term relationships but also just simply to meet those of the same interests. I do not see this becoming popular in the US for this reason. This website seems like a way to encourage the members to have "one-night stands" and "occasional hookups" and I could see this becoming an issue throughout the world buy spreading sexually transmitted diseases and AIDS. I just cannot see this website catching on for a long amount of time regardless if it is used on a smartphone or the internet.

jaygeers wrote:
Sep 20th 2011 9:11 GMT

I totally understand why this would be popular. The world is so globally connected that these kinds of things are starting to feel somewhat normal. I do think that penetrating the US market for this attraction is going to be difficult. Also, keeping this site creditable and away form sleazy type users is another challenge. However, if there is market of people that want a service, and you give that that service, it should be a success. If Badoo has peaked, find a new way to get the same market, and penetrate a new one.

carlym12 wrote:
Sep 20th 2011 9:42 GMT

I believe dating sites are complete outrageous, this one in particular and the fact that people buy into the this propaganda is even more outrageous. Hasn't anyone heard of the saying, "love don't cost a thing?" Then why is it that millions of people would possible waste hundreds of dollars to find someone that brings them no guarantees? These methods are unrealistic and as far as Im concerned, love should come naturally, and if it doesn't, then it shouldn't come at all.

Moreykat wrote:
Sep 21st 2011 1:27 GMT

While reading this article I kept thinking of this one website in the US called zoosk, where you pay to browse profiles and can just flirt or try for something more. I find it hard to believe that the majority of people would use this for anything more than a one night stand if it made it in America.

1-15 of 15
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In this blog, our correspondents report on the intersections between science, technology, culture and policy. The blog takes its name from Charles Babbage, a Victorian mathematician and engineer who designed a mechanical computer. Follow Babbage on Twitter »

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