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| UPDATED: 2006-05-03 |
 IAC Profits Drop, But Ask Is On Fire 
By: David Utter 2006-05-03 Though not unexpected, profits at IAC/InterActiveCorp fell by nearly a third when it reported net income of $47.2 million. Revenue for the quarter topped $1.55 billion, 36 percent over the year-over-year quarter.  That first quarter 2006 figure was 32 percent off IAC's (IACI) same quarter last year. IAC reported diluted earnings per share of 14 cents, compared to 19 cents last year.
IAC also said it generated $62 million in free cash flow, down from 2005 due to the impact of income taxes. At IAC's Search & Media division, formerly the home of its iconic butler Jeeves and Ask Jeeves Inc, the Citysearch sites delivered strong revenue. Search market share grew to 5.9 percent of US search queries for the period. Despite the growth in search queries, IAC has lower revenue per query. From the statement: IAC Search & Media increased revenue by 9% as compared to its prior year period, attributable primarily to search query growth, largely offset by lower revenue per query, in part due to the reduced amount of paid advertising on Ask.com, and lower non-search advertising revenue. Profits declined significantly on a comparable basis with last year due to increased marketing expense, higher revenue share payments to third-party traffic sources and higher other operating expenses. Recently, Microsoft lured away Steve Berkowitz from the CEO chair at IAC Search & Media to take a senior VP position instead. IAC chairman/CEO Barry Diller said in the earnings call that "Steve was an asset to the company, and we're sorry he decided to leave. But we do not believe it will have an effect on what we do." The company engaged in buying back its stock during the quarter, spending about $222.3 million to repurchase 7.6 million shares at an average price of 29.25 each. On the down side, net income experienced the impact of lower profits from the Home Shopping Network channel and its LendingTree mortgage business. IAC blamed "disappointing merchandising performance" at HSN, with gross margin drops, more shipping promotions, and higher returns and freight costs. --- Tag: IAC Add to | DiggThis | Yahoo! My Web | PreFound.com Bookmark WebProNews: 
View All Articles by David Utter About the Author: David Utter is a staff writer for InternetFinancialNews and WebProNews covering technology and business. |
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