By: Tomas Ronolski - AllPennyStocks.com News

Wednesday, August 20, 2014

According to Statistic Brain, there are 54.25 million single people in the United States. A stunning 76 percent, or 41.25 million people, have tried online dating. The giants of the industry, eHarmony and Match.com, command the lion’s share of members with membership of 15.5 million and 21.58 million, respectively. The industry continues to grow at a 3.5-percent clip each year since 2008 and experts think the growth trend will continue for the next five years and become an industry worth $2.1 billion. IBISWorld estimates that nearly 4,000 companies are elbowing for position in the industry, including Snap Interactive, Inc. (OTCQB:STVI). The New York-based company’s flagship product is AYI.com (an acronym for “Are You Interested”), a website that has fully integrated Facebook, iPhone, Android and Web dating applications. AYI.com is built on the premise that by integrating a member’s friends and interests that more meaningful connections can be made.

Snap has been regularly reporting expanding usage of AYI.com, with July marking the eighth straight month of active subscriber growth. At the end of the month, there were 99,500 active subscribers, up from 77,700 at the end of 2013.

The growing membership has translated to improved quarterly reports, although Snap is still operating at a loss. The company reported last week that revenue for the second quarter improved by 9 percent year-over-year to $3.5 million. Compared to the first quarter of 2014, revenue was up 5 percent. Net loss for the second quarter was about $260,000, down from approximately $1.46 million in the year prior quarter and $960,000 in the first quarter. Adjusted EBITDA swung into positive territory at approximately $62,000, an improvement of $1.2 million year-over-year and $700,000 improvement quarter-over-quarter.

Snap has kept good company to grow its footprint, including a partnership with Match.com owner InterActive Corp. (NASDAQ:IACI) that featured integration of Match.com dating properties into the core AYI.com experience. In June, Snap signed a marketing agreement with Zoosk. That deal, officially dubbed a “Membership Acquisition Agreement,” began last week and runs for three months. Per the agreement, Snap will promote Zoosk and Zoosk will pay Snap for each person that registers for Zoosk resulting from the promotion. The total payout is capped at $1 million.

After Tuesday’s closing bell, Snap reported that it continued to see growth in its mobile platform and that Apple (NASDAQ:AAPL) iOS users have been pulling the cart. The company said that the AYI online dating app is the number one grossing application in U.S. Lifestyle category in the Apple iTunes Store as of August 18, 2014. In July, mobile users accounted for 38 percent of total logins, a record level for the company. Total mobile logins were up by 33 percent compared to July 2013 and new mobile subscription transactions climbed 57 percent over the same period.

"Mobile is the primary platform for an increasingly large segment of online dating users, and we were determined to create an excellent experience on all mobile platforms to take a leadership position in the market,” said Snap's CEO Clifford Lerner in a statement late yesterday.

“This robust mobile acquisition and monetization capability contributed to our recent success in delivering positive Adjusted EBITDA in the quarter ended June 30, 2014, and will further support the goal of generating net cash from operating activities for the quarter ending September 30, 2014," added Snap COO Alex Harrington.

Shares of STVI are trading ahead by 3.7 percent at 28 cents each only moments after the opening bell on Wednesday.

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