Stock Sale Helps Boost IAC’s Third Quarter Income
IAC, which provides a variety of online consumer services, generated $336.6 million during its third quarter, down from $369.3 million in third quarter 2008. The company recorded net earnings of $21.7 million, compared with a net loss of $14.8 million a year ago. The quarter ended Sept. 30.
The company’s third quarter net earnings were boosted by $35 million it realized from selling 1.8 million shares in OpenTable Inc. For the quarter, the company recorded operating income of $7.1 million, compared with an operating loss of $22.6 million a year ago.
IAC’s Media and Advertising unit pulled in $172.3 million, down 11% from the $193.3 million it realized during third-quarter 2008. It recorded operating income of $20.8 million, a 35% drop from the $32.1 million it pulled in a year ago. Media & Advertising consists of search properties such as Ask.com, Fun Web Products, and Dictionary.com, a local business, Citysearch, and IAC’s distribution business, which includes distributed search, sponsored listings and toolbars. According to IAC, Ask.com is experiencing lower revenue per query because of an improved experience on Ask.com following the search engine’s relaunch in October 2008, which has resulted in fewer clicks by consumers to find their desired results, as well as a decrease in cost per click.
The Match unit’s revenue drop, from $93.5 million to $81 million, reflected the sale of Match Europe to Meetic on June 5th. That said, the company reported “solid growth” in the U.S. business and a $6.4 million contribution from PeopleMedia, which was acquired July 13th. This unit generated $23.9 million in operating income, only slightly off the $24 million it generated a year ago.
ServiceMagic, which is comprised of the company’s domestic service recommendations as well as ServiceMagic International and Market Hardware operations, saw a revenue jump to $43.9 million, from third-quarter 2008’s $33.8 million. According to IAC, ServiceMagic revenue benefited from 22% growth in service requests to a growing and more active service provider network and shift in the mix of requests to higher value service requests, driven primarily by increased marketing efforts. The ServiceMagic unit’s operating revenue was $4.31 million, off from the $8.1 million it generated a year ago.
IAC’s Emerging Businesses include Shoebuy, Pronto.com, InstantAction.com, CollegeHumor, Vimeo, Life123.com and The Daily Beast. This division’s revenue fell from $49.6 million to $40.5 million, and its operating loss widened from $7.4 million to $8.9 million.
