IACI Iac/Interactivecorp

By Deepa Seetharaman and Georgia Wells 

Facebook Inc. plans to launch a dating feature on its platform, in an unexpected push into a new business even as the social-media giant battles questions about how it handles users' data and privacy.

Chief Executive Mark Zuckerberg announced the new service Tuesday at an annual developer conference in which he pledged that Facebook would continue to innovate while also addressing myriad challenges related to its legacy businesses.

The announcement punished shares of Match Group Inc., which with such brands as Tinder, OkCupid and Match.com dominates the online-dating market. Match's share price dropped 22%, while its majority owner, IAC/InterActiveCorp, lost more than 17%. eHarmony, another big player in online dating, isn't publicly traded,

Facebook's dating feature will be targeted at what Mr. Zuckerberg said are some 200 million Facebook users who identify as single. The feature will require users to opt in, he said, and was designed with privacy in mind.

Mr. Zuckerberg didn't say whether the service would be free but Facebook doesn't offer any paid products currently. Most dating apps are free to try, but offer extra services for a fee. Some, like eHarmony, make money from subscriptions.

The competition jabbed at Facebook on Tuesday, alluding to the social network's recent challenges.

"We're surprised at the timing given the amount of personal and sensitive data that comes with this territory," Match Group CEO Mandy Ginsberg said.

"Their product could be great for U.S.-Russia relationships," said IAC chief Joey Levin, in an apparent reference to the ways Russian actors used Facebook in an attempt to sow discord in the U.S. around the time of the 2016 presidential election.

During his keynote remarks at the developer conference, Mr. Zuckerberg acknowledged the mounting concerns among many users, regulators and academics about the way the social network is shaping the world. He said Facebook was working hard to stamp out abuses of its platform, but also defended its larger mission to connect people.

"The world would lose if Facebook went away," Mr. Zuckerberg said at the gathering, called F8, in San Jose, Calif.

This year's conference took a more serious tone compared with the broad and brash promises of years past. The announcements mostly drew tepid applause from developers, which typically could be counted on for more boisterous appreciation.

In his remarks, Mr. Zuckerberg said Facebook was slow to recognize in 2016 that its platform was under attack by Russian-backed actors and touted recent steps Facebook has taken to stamp out efforts to influence elections. "We will never be unprepared for this again," he said.

But he also reiterated a common refrain among Facebook executives that the company doesn't need to refrain from creating products in order to protect users' privacy.

"This is how we're thinking about our responsibility: to keep people safe and also to keep building," Mr. Zuckerberg said toward the end of his remarks. "We will keep building."

Facebook's new dating feature will be for fostering "real, long-term relationships -- not just hookups," Mr. Zuckerberg said.

The company said those using the dating service could browse coming events, such as concerts, and see if others using the feature plan to attend, Facebook's head of product, Chris Cox, said. The messaging system for the dating profiles will be independent of Facebook's Messenger app.

Users' dating profiles will be distinct from their Facebook profiles and what people do within the dating feature won't be shared with friends or through the news feed, the company said.

Facebook's push into online dating demonstrates how mainstream meeting people online has become. When the first large internet dating websites launched in the late '90s and early 2000s, the stigma attached to finding people on websites led many couples who met online to pretend they had met in other venues, such as bars.

Now 15% of U.S. adults say they have used online dating sites or mobile dating apps, according to a study from Pew Research Center. Dating services in the U.S. make about $3 billion a year in sales, according to IbisWorld, an industry research firm.

Part of the challenge for startups building online-dating apps is attracting enough singles to their networks to be able to pair people based on specific preferences, said Mark Brooks, an analyst and consultant in the dating industry. Facebook's vast number of users could make it daunting for future dating startups to convince investors to fund their ideas.

"I think it could be game over for the dating industry as we know it," Mr. Brooks said.

Write to Deepa Seetharaman at Deepa.Seetharaman@wsj.com and Georgia Wells at Georgia.Wells@wsj.com

(END) Dow Jones Newswires

May 01, 2018 18:27 ET (22:27 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.