Earnings: IAC/i Posts 3Q Gain; Media & Advertising Revenue Soars; Will Spend Heavily On Content

Updated below:
IAC/InteractiveCorp posted better-than-expected third quarter profit today and announced a buyback of as many as 60 million shares. Net income rose to $74.9 million, or 24 cents per share, up 10 percent from $68.1 million, or 20 cents per share, a year earlier. Revenue jumped 11 percent to $1.6 billion. Excluding some costs, profit would have been 35 cents.
In the earnings release, chairman and CEO Barry Diller addressed the confusion that many investors have expressed about his strategy to align his diverse group of businesses: “We are unabashedly building an interactive conglomerate. We have three interrelated strategies: one, the growth of each of our businesses; two, Ask.com as the connecting thread; and three, all our cross company efforts which allow us to leverage our audience, scale and diversified expertise.”
Here are some highlights:
–Revenue in Media & Advertising, which includes Ask.com and Citysearch. rose 62 percent to $135.5 million, helped by query increases across most properties. The business still posted a loss of $2.1 million.
–Membership and subscriptions operating income was $36.6 million, up 34 percent, while revenue rose 14 percent to $185.1 million.
–Retailing revenue rose 3 percent to $768.7 million while operating income jumped 31 percent to $49.8 million.
–Services operating income fell 2 percent to $68 million on weakness in lending and real estate; revenue rose 13 percent to $511.9 million.
NYT: Investors have long found IAC to be a confusing company because of its wide variety of businesses. Some were confused further when Diller hired former television executive Michael Jackson as president of programming. So far, IAC has either invested in or started targeted content sites build around humor, news and popular culture. Diller told the Times that Jackson will undertake dozens of such ventures over the next few years investing hundreds of millions of dollars. In the article Diller and Jackson explain why they went with CollegeHumor, instead of a phenom like Facebook. Diller: “Making very large bets on businesses that don

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