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USA Interactive, uDate.com to get hitched

The Internet company announces that it will acquire uDate for $150 million in stock, a deal that should strengthen its growing online dating business.

USA Interactive announced Thursday that it will acquire uDate.com for $150 million in stock, a deal that should strengthen its growing online dating business.

The acquisition of Derby, England-based uDate, which runs uDate.com and Kiss.com, will not serve as an immediate financial boost, but it will help USA Interactive expand into the U.K. market for personals. For the nine months ended in September, uDate generated $29.2 million in revenue, a 135.6 percent jump from the same period a year earlier.

USA Interactive's Match.com is one of the largest online dating services and has been a steady revenue provider. In the quarter ended Sept. 30, USA reported $33.4 million in revenue for its Match.com division, up from $12.5 million the preceding year. The division also reported an operating profit of $3.8 million for the quarter, up from an $88,000 loss in the same quarter in 2001.

Online dating has been a growth business, both in its popularity among love seekers and in its earnings potential. These sites require people to pay monthly subscription fees to search their databases for potential mates.

Yahoo, USA Interactive's closest competitor in this area, has touted its personals business as testament to its ability to diversify its revenue away from a reliance on online advertising. However, Yahoo has not broken out financial details about its personals business.

The acquisition is expected to close in the first quarter of 2003, pending regulatory approval. USA Interactive earlier this year announced plans to merge with Ticketmaster, even as it called off plans to assume control of Expedia and Hotels.com.