Sorry for my long absence from PT but I've been busy with life events.  Like getting divorced and getting back out into the dating world.  I was told by a friend of mine about a dating site called OkCupid.com.  He said he had met a lot of great girls through there, and best of all, it's free.

So to tell things in order... I went on the site and it occurred to me that Okcupid would absolutely blow Match.com out of the water.  Why?  First of all, it's free.  Lots of people get on it, and stay on it, because why not?  It's free.  I think there may be some stigma associated with paying for a dating service, like in some indirect way you're paying for sex.  (Even though you're not.)

There are also some very clever ways that Okcupid hooks you in.  I'll come back to those.  Suffice to say I look at OKC as the Facebook of online dating.  (Because it's free and because their web programming is so polished.)  Anyway so the people at Match.com, owned by IAC Interactive, which also owns Ask.com and a number of sites such as CollegeHumor.com and The Daily Beast, must have started to think along the same lines that I was, because recently they bought Okcupid for $50 million.

Now for the OKC people, this is surely a great acquisition, I'm sure they made out very nicely.  But as an outside observer, this really seems like a cheap valuation.  With many of these web companies being valued at 2 and 3 billion, 50M is a steal.

How does OKC make money? Or does it?  They have ads, like facebook, and they have a premium service which allows you certain things the free service does not.  But for the sake of my argument, they could make $0.  It's a very popular site and I think we've seen that when you capture the eyeballs, and you get people to spend time on a site, the money will follow.

I found a couple of things interesting when looking into IACI's stock. 

1. The news of the OKC acquisition barely moved the stock at all.  It's melted up since then a little, but no spike the way I would have expected.  But this should be no surprise because the Wall Street set are mostly married, not mostly on dating sites.  And the OKC set is a younger set.  So Wall Street is sleeping on how valuable this acquisition will prove to be.

2. In buying March calls (I have), there is virtually no time value at all.  As of a few moments ago there was only .40 of time value for the March $30 calls with a month left to go on them (at the ask price).  This doesn't seem right to me.

So I don't want to say you 'can't lose' on this stock, though it is tempting.  But I will say it seems very low risk, and that eventually the Street will catch on to OkCupid's value.

Back to some of the clever ways that OkC reels you in.  You can go into QuickMatch mode, where it pops up a profile on your screen, someone who meets your basic criteria (close to me, female, etc)  and you then rate the person with 1 - 5 stars.  It moves on to the next one, making it almost like a game.  Here's the fun part - if you rate someone 4 or 5 stars, it will email them with a display of like 9 profile pictures and say, 'one of these people rated you 4 or 5 stars, and if you rate them highly as well, we'll let you know'.  So in that email you click on one of the faces ('please be the hot one, please be the hot one') and it takes you to quickmatch. Within the first half dozen or so profiles, it will make sure you have a chance to rate the person who rated you highly.  If you then both rate each other 4 or 5 stars, you get a message in your inbox about it.  Effectively, you've broken the ice.  You know the other person thinks you're hot - or at least doable.

The other clever thing are all the questions.  I'm sure they didn't come up with this idea but the way they do it is pretty cool.  Questions about various topics that you answer allows the system to match you up with others.  The universe of questions is ever expanding since users can submit them.  What is interesting to me is how you can compare your answers with a girl you are interested in, but although it allows you to answer a question privately, you can only see her answer if your answer is public.  So the only people who get to see your answer are also making public their answer.

So after spending all this time talking about OkC, I should also mention that Match.com is already hugely popular.  So with this stock you basically get the entire online dating space, which is becoming a bigger and bigger space all the time.  This is excluding eHarmony.com - which is only used by senior citizens and Mormons.  True story.

If you want to buy into the lucrative 18 - 35 online dating market, this stock is a one-stop shop, and it's on sale.  Confidence 10.