Site for Cheaters Complains About Groupon’s Ethics

The head of AshleyMadison.com, an online site for adulterers, thinks U.S. executives at Groupon are terrible prudes, not to mention poor businesspeople.

The reason: Last week, the offer giant killed an AshleyMadison offer just hours after Groupon Spain published it on its platform.

“No one in Spain had a problem with it,” says Noel Biderman, who founded AshleyMadison and is today CEO Avid Life Media, the privately held company that acquired the site in 2007. “But 97 people – mostly women – had bought the offer in the hours after it was posted. I’m told that’s very fast adoption in Spain. And [its momentum] apparently drew attention to it.”

Biderman calls the decision to “shut down the ad by Americans” “backward,” considering “American liberalism and consumerism” in contrast with what he calls Spain’s comparatively stronger focus on religion.

He adds that in Spain, where 750,000 people have registered to use AshleyMadison, the company “hasn’t faced a lot of obstacles with our advertising. We advertise at national soccer games; we advertise during top women’s programming and [popular] movies. Our biggest challenge has been with radio, because Ashley and Madison are very feminine, American names. So we’d been looking into digital content and reached out to what we thought were tier one digital companies.”

Says Biderman: “This isn’t the first time I’ve found marketing partnerships to be frustrated by an individual within an organization. But here’s a public company in desperate need to produce revenue and take care of its shareholders, and instead it’s trying to make some some de facto moral decision on behalf of the people of Spain. So it’s a little ridiculous.”

Asked about Groupon’s ethics policy and the AshleyMadison l’affaire, a Groupon spokeswoman declined to comment.

AshleyMadison claims that nearly 16 million people in 27 countries have registered for the service since it was founded in 2002, though Biderman says that just 2.1 million are active users who’ve visited the site in the last 90 days. He also tells me that 35 percent of its members are women, that nearly all of its users aged 65 and older are men, and that the company sells packages of “tokens” that users employ to contact other members, versus the monthly subscription model employed by other dating sites, such as eHarmony and Match.com.

“You’re paying for volume,” explains Biderman. “With an Affair Guarantee membership package, you receive 1,000 credits, which would allow you to talk with 200 different members. A $49 introductory package [of tokens] would allow you to talk with about 20 different members.”

Apparently, all those tokens are adding up. Biderman, a former sports attorney, says that AshleyMadison is operating firmly in the black and it “may be more profitable,” at least in North America, than Match.com and eHarmony. And he suggests that an IPO isn’t unlikely for Toronto-based Avid Life.

“My business is all about giving me credit cards, and I believe that when it comes to digital businesses, things will tilt back to where the value lies,” says Biderman. “Wall Street will be less interested in the the fanfare around eyeballs and more interested in how many loyal users a business has.”

Industry observers “might not like the vertical” that AshleyMadison is operating in, adds Biderman, “but 100 percent of our revenue comes from people communicating with other people. It’s not a claim many companies can make.”

Here’s the copy from that short-lived Groupon ad, by the way (published without, ahem, comment):

Never before has it been so easy to find a lover, not as cheap! With AshleyMadison.com, the leading web dedicated to helping married men and women to have an affair discretely, Groupon launches with an irresistible offer to gain basic package of 100 credits for just 9 euros, compared with its normal price stands at 49 euros.

The promotion will be available for 3 days through Groupon page. All persons who are not yet registered you can discover all the services offered by this network, benefiting from the advantages of AshleyMadison.com Premium users. With over 750,000 registered users in Spain, our new users will see their needs met sentimental and discreet sex with an adventure without worrying about the price.

Image: Courtesy of AshleyMadison.com