IAC Earnings Call: Diller Says Ad Market Continues To Worsen; Ask.com Needs More Work


IAC’s earnings call today was particularly meaty, as Barry Diller shed new light on state of online advertising and talked about specific initiatives to improve the company’s search business and overall profitability. He confirmed that online advertising decelerated in January and continues to slump into February, not good news for those hoping for signs of stability in the online ad market. Some of the other highlights from the call:

Industry cost-per-click rates are down:. Diller said he was seeing CPC declines of 8 percent to 12 percent at IAC (NSDQ: IACI), and volume declines of an additional 10 percent in its search business. The volume declines are company specific, but the 8 percent to 12 percent declines in CPC (the rates that marketers pay search companies when a person clicks on an ad) indicate that greater-than-expected weakness in the search category as a whole is continuing into the first quarter of ’09.

Bottom falling out of display: Diller didn’t try to sugarcoat the dismal environment for display advertising, saying it could be down 50 percent this month. This likely is significantly worse than many had been expecting for IAC and the industry. But it’s worth noting that many other online companies may fare slightly better that that with display because they have sites that with more targeted demographics, which lead to higher ad rates. (Citysearch, which targets local, seems to be holding up better than other IAC properties.)

Ask.com has plenty of room for improvement: Diller said the company will shift its marketing strategy for Ask.com because the site


John Doe

The problem here is an overpaid CEO, where is the government when you need one.

Rory Maher

No color on video, though other channel checks indicate it is holding up pretty well and should grow in 2009.

Frank Sinton

Any specifics about Video and/or Video Search? We are seeing a big uptick in video buys, whereas that money used to go to display buys.

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