IAC misses analyst views; Ask.com unit revenue sinks 19%
Internet services company InterActiveCorp said Tuesday that the company swung to a profit in the fourth quarter of 2008, bolstered by the sale of a 30 percent stake in a Japanese TV shopping company.
On the other hand, IAC was not "recession-proof," and it adjusted earnings, missing analysts' expectations.
IAC, headed by billionaire Barry Diller and including Web properties such as dating Web site Match.com, earned $227.4 million, or $1.57 per share, in the quarter.
This compares with a loss of $369.9 million, or $2.53 per share, in the same quarter last year.
IAC said its earnings include a benefit of $242.5 million from the $493 million December sale of its stake in Jupiter Shop Channel, for $1.67 per share.
Excluding the Jupiter benefit and $26.4 million write-down in the value of the company's investment portfolio, IAC earned 2 cents per share lower than what analysts surveyed by Thomson Reuters expected.
IAC revenue fell 7 percent to $351 million, missing analysts' expectations of $367.8 million.
The company's media and advertising unit -- which includes search engine Ask.com --reported that its revenue sank 19 percent to $183.7 million. IAC said this was due in part to the removal of toolbars and search boxes from a variety of non-IAC sites as it moves to place them mostly on its own Web sites, according to an AP report.
IAC also said that fewer searches were performed at proprietary Web properties such as Ask.com and at Fun Web Products sites. It attributed the drop in Ask.com searches to lower marketing spending.
Ask.com relaunched in October, and the company blames the drop in revenue to a more efficient (and thus less clicks) site.
Sales from the company's Match unit, which includes the Match.com and Chemistry.com dating Web sites, dipped 3 percent to $88.1 million.
IAC cited a 21 percent decline in revenue per subscriber in its international markets that stemmed mostly from strengthening of the dollar, which lessens the value of sales in other currencies.
The number of Match's paid subscribers rose 5 percent to 1.3 million.
IAC reported growth in two areas — its emerging businesses and ServiceMagic units. Revenue from emerging businesses, which includes Web sites such as ShoeBuy and Gifts.com, increased 19 percent to $54.6 million. ServiceMagic, which runs Web sites that match homeowners with home-improvement contractors, reported sales rose more than 15 percent to $25.3 million.
For the full year, IAC reported a loss of $156.2 million, or $1.08 per share, compared with a loss of $144.1 million, or $1.01 per share, in 2007. The company's revenue climbed 8 percent, totaling $1.45 billion in 2008.
The fourth quarter was the first in which IAC operated alone. Previously, it was part of a larger conglomerate that split into five publicly traded companies in August.