Tagged to Bring Social Discovery to Mobile Apps After a Profitable 2012

By Devon Glenn 

Tagged, a social network designed for meeting new people, has turned a profit for the fifth year in a row, the company announced today. To kick off 2013, Tagged has opened a new office in San Francisco and plans to revamp its mobile applications.

“We’re transitioning Tagged to be mobile first,” said Steve Sarner, VP of Marketing at Tagged. The number of mobile visitors increased by 56.5 percent in 2012. Mobile users now make up 37 percent of the site’s 3 million daily active users and Sarner expects this to go up to 50 percent in the near future.

Tagged acquired the mobile startup Urbantag for its technical talent in October 2012. The company is now working on building out Sidewalk, a stand-alone social discovery app for finding and sharing experiences in your city. It’s available now in San Francisco for iOS and Android and will spread to other cities soon.

When Greg Tseng and Johann Schleier-Smith founded Tagged in October 2004, the site was “in the race to be the world’s new social network,” Sarner explained. But by mid-2007, it was clear that Facebook was going to be the winner.

Instead of making Tagged a place to connect with old friends, the company changed direction to become a site for meeting new people. With ice breakers like virtual gifts and Zynga-style games, Tagged expanded beyond early adopters to middle America. It’s retained some of the gems from the MySpace era, like customizable profile backgrounds and a no-last-name policy, which protects people’s privacy. “Dating and flirting is the most popular use case,” said Sarner. “We get at least one email a week from happy couples who are either engaged or married.”

In 2008, Tagged became one of the first social networks to become profitable. This past year, Tagged reached $51 million in revenue, including a 30 percent increase year-over-year in virtual currency. The company’s business model also includes revenue from premium subscriptions and advertising.

The increase in revenue coincides with a surge in traffic. The Tagged community has grown to 330 million registered users and nearly 20 million active users in 220 countries, due in part to its December 2011 acquisition of the social network hi5, which now makes up 25 percent of Tagged’s daily active user base.

The company just signed a 7-year lease to expand its headquarters from 15,000 to 40,000 square feet. The space will include a “zen room” with yoga-friendly flooring and expanded lounge workspaces.