IAC/INTERACTIVECORP (IACI, Financial) filed Quarterly Report for the period ended 2011-06-30.
Iac/interactivecorp has a market cap of $3.46 billion; its shares were traded at around $38.48 with a P/E ratio of 42.3 and P/S ratio of 2.1.
Revenue in 2011 increased $173.2 million from 2010 primarily as a result of revenue increases of $104.9 million from Search, $41.8 million from Match, $15.9 million from Media & Other and $10.7 million from ServiceMagic. The increases in revenue from these businesses are primarily due to the factors described above in the three month discussion. The revenue from Media & Other was further impacted from the inclusion in 2010 of revenue associated with profit participations related to our former interest in Reveille.
For the six months ended June 30, 2011 and 2010, revenue earned from Google was $436.2 million and $345.7 million, respectively.
Cost of revenue in 2011 increased $40.8 million from 2010 primarily due to increases of $32.1 million from Search and $10.3 million from Media & Other, partially offset by a decrease of $3.2 million from Match. The increase in cost of revenue from Search was primarily due to an increase of $29.2 million in traffic acquisition costs related to the increase in revenue. As a percentage of revenue, traffic acquisition costs increased over the prior year period due to an increase in the proportion of revenue from customized browser-based applications and other arrangements with third parties who direct traffic to our websites. Cost of revenue from Media & Other increased primarily due to increases from Electus and Notional. Also contributing to the increase in cost of sales from Media & Other is an increase of $2.6 million in the cost of products sold and $1.1 million in shipping and handling costs at Shoebuy resulting from increased sales and higher fuel costs, partially offset by a decrease from The Daily Beast which, following the formation of The Newsweek/Daily Beast Company joint venture with Harman Newsweek on January 31, 2011, has been accounted for as an equity method investment. The decrease in cost of revenue from Match was primarily due to reduced spending from Singlesnet.
Selling and marketing expense in 2011 increased $14.9 million from 2010 primarily due to increases of $8.1 million from Match and $5.6 million from Search; however as a percentage of revenue selling and marketing expense decreased from 2010 primarily due to an increase in the proportion of revenue that results in the payment of traffic acquisition costs. The increase in selling and marketing expense from Match is due to an increase of $8.8 million in advertising and promotional expenditures primarily related to offline marketing, including an ad campaign to launch the OurTime.com website, as well as an increase in advertising spend associated with an agreement entered into during the second quarter of 2010 with Yahoo!. The increase in selling and marketing expense from Search is due to an increase of $6.8 million in advertising and promotional expenditures, partially offset by a decrease in bad debt expense at CityGrid Media. The increase in advertising and promotional expenditures at Search was driven primarily by increased online marketing spend from its destination websites as well as efforts related to new product launches at Mindspark.
General and administrative expense in 2011 increased $5.6 million from 2010 primarily due to increases of $2.3 million from corporate, $1.4 million from Match and $0.9 million from Media & Other; however as a percentage of revenue general and administrative expense decreased from 2010 primarily due to operating expense leverage. General and administrative expense from corporate increased primarily due to higher compensation and other employee-related costs including an increase of $1.5 million in non-cash compensation expense related to the cancellation of certain equity awards during the second quarter of 2011. The increase in general and administrative expense from Match resulted primarily from an increase in professional fees due, in part, to the Meetic tender offer, partially offset by a decrease in compensation and other employee-related costs. The increase in general and administrative expense from Media & Other is principally due to Electus and Shoebuy, as well as Mobile Hatch, which was not in the prior year period, partially offset by The Daily Beast, which has been accounted for as an equity method investment from January 31, 2011 as described above.
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Iac/interactivecorp has a market cap of $3.46 billion; its shares were traded at around $38.48 with a P/E ratio of 42.3 and P/S ratio of 2.1.
Highlight of Business Operations:
A substantial portion of the Company's revenue is attributable to online advertising. A significant majority of the Company's online advertising revenue is attributable to a paid listing supply agreement with Google Inc. ("Google"), which expires on March 31, 2016. For the three months ended June 30, 2011 and 2010, revenue earned from Google was $221.3 million and $174.1 million, respectively. The majority of this revenue was earned by the businesses comprising the Search segment.Revenue in 2011 increased $173.2 million from 2010 primarily as a result of revenue increases of $104.9 million from Search, $41.8 million from Match, $15.9 million from Media & Other and $10.7 million from ServiceMagic. The increases in revenue from these businesses are primarily due to the factors described above in the three month discussion. The revenue from Media & Other was further impacted from the inclusion in 2010 of revenue associated with profit participations related to our former interest in Reveille.
For the six months ended June 30, 2011 and 2010, revenue earned from Google was $436.2 million and $345.7 million, respectively.
Cost of revenue in 2011 increased $40.8 million from 2010 primarily due to increases of $32.1 million from Search and $10.3 million from Media & Other, partially offset by a decrease of $3.2 million from Match. The increase in cost of revenue from Search was primarily due to an increase of $29.2 million in traffic acquisition costs related to the increase in revenue. As a percentage of revenue, traffic acquisition costs increased over the prior year period due to an increase in the proportion of revenue from customized browser-based applications and other arrangements with third parties who direct traffic to our websites. Cost of revenue from Media & Other increased primarily due to increases from Electus and Notional. Also contributing to the increase in cost of sales from Media & Other is an increase of $2.6 million in the cost of products sold and $1.1 million in shipping and handling costs at Shoebuy resulting from increased sales and higher fuel costs, partially offset by a decrease from The Daily Beast which, following the formation of The Newsweek/Daily Beast Company joint venture with Harman Newsweek on January 31, 2011, has been accounted for as an equity method investment. The decrease in cost of revenue from Match was primarily due to reduced spending from Singlesnet.
Selling and marketing expense in 2011 increased $14.9 million from 2010 primarily due to increases of $8.1 million from Match and $5.6 million from Search; however as a percentage of revenue selling and marketing expense decreased from 2010 primarily due to an increase in the proportion of revenue that results in the payment of traffic acquisition costs. The increase in selling and marketing expense from Match is due to an increase of $8.8 million in advertising and promotional expenditures primarily related to offline marketing, including an ad campaign to launch the OurTime.com website, as well as an increase in advertising spend associated with an agreement entered into during the second quarter of 2010 with Yahoo!. The increase in selling and marketing expense from Search is due to an increase of $6.8 million in advertising and promotional expenditures, partially offset by a decrease in bad debt expense at CityGrid Media. The increase in advertising and promotional expenditures at Search was driven primarily by increased online marketing spend from its destination websites as well as efforts related to new product launches at Mindspark.
General and administrative expense in 2011 increased $5.6 million from 2010 primarily due to increases of $2.3 million from corporate, $1.4 million from Match and $0.9 million from Media & Other; however as a percentage of revenue general and administrative expense decreased from 2010 primarily due to operating expense leverage. General and administrative expense from corporate increased primarily due to higher compensation and other employee-related costs including an increase of $1.5 million in non-cash compensation expense related to the cancellation of certain equity awards during the second quarter of 2011. The increase in general and administrative expense from Match resulted primarily from an increase in professional fees due, in part, to the Meetic tender offer, partially offset by a decrease in compensation and other employee-related costs. The increase in general and administrative expense from Media & Other is principally due to Electus and Shoebuy, as well as Mobile Hatch, which was not in the prior year period, partially offset by The Daily Beast, which has been accounted for as an equity method investment from January 31, 2011 as described above.
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