IAC/INTERACTIVECORP (IACI) filed Quarterly Report for the period ended 2009-09-30.
IAC/InterActiveCorp is the world's leading multi-brand interactive commerce company. IAC consists of IAC Travel which includes Expedia Inc. Hotels.com Hotwire Interval International and TV Travel Shop; HSN; Ticketmaster which oversees ReserveAmerica; Match.com; LendingTree; Precision Response Corporation; IAC Local and Media Services which includes Citysearch Evite Entertainment Publications Inc. and TripAdvisor Inc.; and IAC Interactive Development which includes ZeroDegrees. Iac/interactivecorp has a market cap of $2.49 billion; its shares were traded at around $18.8 with a P/E ratio of 470 and P/S ratio of 1.8.
Highlight of Business Operations:
Revenue in 2009 decreased $32.7 million from 2008 primarily as a result of decreases of $21.0 million from Media & Advertising, $12.5 million from Match and $9.2 million from Emerging Businesses, partially offset by an increase of $10.1 million from ServiceMagic. The decrease from Media & Advertising reflects a decline in revenue per query across proprietary properties, partially offset by continued growth in partners and queries at the Ask toolbar business and growth at Lexico, which includes Dictionary.com and Thesaurus.com. The decrease in revenue at Match was driven by the sale of Match Europe to Meetic, an online dating company based in France, on June 5, 2009, partially offset by solid growth in the U.S. business and the favorable impact from the acquisition of PeopleMedia on July 13, 2009. The decrease in revenue from the Emerging Businesses was primarily due to the absence of revenue from ReserveAmerica in the current year period following its sale on January 31, 2009. Partially offsetting the overall decrease in revenue was an increase from ServiceMagic, primarily driven by 22% growth in service requests to a growing and more active service provider network and a shift in the mix of requests to higher value service requests.
Revenue in 2009 decreased $85.5 million from 2008 primarily as a result of decreases of $86.7 million from Media & Advertising and $18.0 million from Match, partially offset by an increase of $19.0 million from ServiceMagic. The decrease from Media & Advertising was driven by a sharp decline in network revenue, resulting from the discontinuation of relationships with certain partners that took place during 2008 in conjunction with the renewed Google agreement. Partially offsetting this decline is the continued growth in partners and queries at the Ask toolbar business and the favorable impact in 2009 from the acquisition of Lexico on July 3, 2008. The decrease and increase in revenue from Match and ServiceMagic, respectively, were driven primarily by the factors described above in the three month discussion.
Cost of revenue in 2009 decreased $12.5 million from 2008 primarily due to decreases of $5.7 million from Match, $4.8 million from Media & Advertising and $1.6 million from Emerging Businesses. The decrease in cost of revenue from Match was primarily due to the sale of Match Europe to Meetic. Cost of revenue from Media & Advertising decreased due in part to a decrease in traffic acquisition costs resulting from a decrease in IAC Search & Media revenue. The decrease in cost of revenue from Emerging Businesses was primarily due to the absence of ReserveAmerica in the current year period following its sale on January 31, 2009, partially offset by a write-off of capitalized software, including game development costs, at InstantAction.com.
Selling and marketing expense in 2009 decreased $2.7 million from 2008 primarily due to decreases of $4.2 million from Match, $1.7 million from Media & Advertising and $1.0 million from Emerging Businesses, partially offset by an increase of $5.8 million from ServiceMagic. The decrease in selling and marketing expense from Match is primarily due to the sale of Match Europe to Meetic, partially offset by an increase in advertising and promotional expenditures associated with online marketing. Selling and marketing expense from Media & Advertising decreased due to a decrease in compensation and other employee-related costs, due in part, to an approximate 8% decrease in average headcount at IAC Search & Media. Also contributing to the decrease in selling and marketing expense is Emerging Businesses and the cost savings related to the shutdown or sale of certain businesses and the absence of ReserveAmerica in the current year period following its sale on January 31, 2009. Partially offsetting these decreases in selling and marketing expense is an increase of $3.8 million in advertising and promotional expenditures associated with online marketing from ServiceMagic. The growth in service requests from paid channels outpaced the growth in free requests as a result of the increase in online marketing. Also contributing to the increase in selling and marketing expense from ServiceMagic is an increase in compensation and other employee-related costs, due in part, to the continued expansion of its sales force.
General and administrative expense in 2009 decreased $42.5 million from 2008 primarily due to a decrease of $41.4 million from corporate. The decrease from corporate is principally due to the inclusion in the prior year period of $20.8 million in expenses related to the spin-off of HSN, Inc. ("HSNi"), Interval Leisure Group, Inc. ("ILG"), Ticketmaster Entertainment, Inc. ("Ticketmaster") and Tree.com, Inc. ("Tree.com") (the "Spin-Off"), as well as a decrease in compensation and other employee-related costs, including stock-based compensation. The decrease in compensation and other employee-related costs is primarily due to a decrease of $17.2 million in non-cash compensation expense as the prior year period included the impact of the acceleration and modification of certain equity awards associated with the Spin-Off.
Product development expense in 2009 decreased $3.6 million from 2008 primarily due to a decrease of $2.3 million in compensation and other employee-related costs from Media & Advertising which is due in part to a decrease in average headcount at IAC Search & Media. Also contributing to the decrease in product development expense is an increase in costs being capitalized in the current year period related to the development and enhancement of the company's search technology and products.
IACI is in the portfolios of Bill Gates of Bill & Melinda Gates Foundation Trust, PRIMECAP Management.
Rate This Article: |
  |