Updated: Earnings: IAC Q2 Profits Rise; Revs Up; Ask.com Ad Campaign Not Working?

Updated below: InterActive Corp. (Nasdaq: IACI), the parent of sites such as Ask.com and CitySearch, posted Q2 earnings growth of 78.4 percent to $95.97 million, or 32 cents per share, from $53.8 million, or 17 cents per share, a year ago. Revenue rose 5.6 percent to $1.51 billion. Other highlights from its report included:

— Results for the Media & Advertising segment, which encompasses IAC Search & Media (Ask.com and Fun Web Products), Citysearch and Evite, posted an operating loss of $10.7 million versus $11.3 million the year before. Revenues were up 33 percent to $174 million from $131.3 million. The increase in revenues was driven by more queries from syndicated search and at Fun Web Products, partially offset by lower revenue per query across most other properties. The company said that users need fewer clicks to find what they are looking for on the new Ask.com, which resulted in lower revenue per query since the June launch, but higher frequency and retention.

— The Membership segment’s Entertainment unit saw revenues decline 3 percent to $18.9 million. Earnings release | Webcast (11:00 a.m. EST)

Updated from the conference call transcript: Tom McInerney, IAC’s CFO, on Ask.com’s new ad campaign: “As you know, the business is related to driving new users, obviously frequency and retention we have seen good improvements in frequency and retention, but it’s offset by not having the growth in new users on the Ask.com business…we can very scientifically look at the marketing spend in the US and relate that to new user growth and so the way to measure it is by new users showing up at the site and we’re not seeing it with this marketing campaign, the way we have seen it with prior marketing campaigns. What we’re doing on that front is retooling the marketing campaign, making it a much stronger call to action and much more product demo spots for later in the year and we hope that will have some effect.

Diller gives a more positive spin to this: “We think that it was effective, but not necessarily effective on day counts of additional users for queries for Ask or new users, but it certainly was effective in repositioning Ask and introducing Ask X, which is the new Ask.”

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