In 2000, Alex Mehr came to the United States from Iran to find better opportunities. He wasted little time — besides earning a doctorate in mechanical engineering, he worked at NASA for a couple years.
Then in 2007, Mehr joined Shayan Zadeh to create Zoosk, with a focus on the Facebook platform. Since then, they have raised more than $40 million in venture capital and have attracted more than 50 million registered singles. Last year, the revenue run-rate was $90 million. And the Zoosk Facebook page has over 6 million “Likes,” which is on par with brands like Yahoo! (NASDAQ:YHOO), Disney‘s (NYSE:DIS) ESPN and Nike (NYSE:NKE).
I recently had a chance to talk to Mehr about Zoosk, apps and the Facebook IPO:
Q: Your company built some of the first apps on Facebook in 2007. Did you expect how much it would grow?
A: We actually tried another product, which was kind of like HotOrNot.com. It grew like crazy and we knew that Facebook would be a great platform. So we pivoted and created a site for dating.
Q: Wasn’t online dating a tough market to crack?
A: It was, because it has network effects. But when there is a transformation, there is an opportunity for new players. We saw that social would be the change. The big dating sites like Match.com and eHarmony did not see this coming.
Q: What do you think about the Facebook IPO and its ability to keep its dominant position?
A: I think the deal will fetch a valuation of $75B to $100B. And unless it makes some big mistakes, the company will definitely maintain its lead. Google+ will exist but not displace Facebook.
But I think Facebook will have a big hurdle over time. For the company to scale its revenues to levels of, say, Google (NASDAQ:GOOG), it needs to move into e-commerce and transactions. But this will be tough because Facebook is not a place users go where to buy things. It is a place to hang out.
Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli. As of this writing, he did not own a position in any of the aforementioned securities.
A long-time follower of the IPO scene, back in 1999 Tom started one of the first sites in the space called WebIPO. It was a place where investors got research as well as access to deals for the dot-com boom. Tom also wrote the top-selling book, Investing in IPOs. In it, he covers all the aspects of analyzing an IPO, such as reading the prospectus, detecting the risk factors and understanding some of the arcane regulations. But don’t worry — if that process is too intimidating for you, thankfully Tom will do the legwork for you right here in the IPO Playbook blog.
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