Search revenue boosts third-quarter results at IAC

Wed Oct 24, 2012 10:00am EDT

(Reuters) - Media veteran Barry Diller's IAC/InteractiveCorp (IACI.O) breezed past quarterly expectations on the strength of its search businesses such as Ask.com.

IAC, a holding company for search, dating and media websites, said on Wednesday that revenue increased 38 percent in the third quarter to $714.5 million.

Analysts had expected revenue of $692.8 million, according to Thomson Reuters I/B/E/S.

Adjusted for tax benefits and one-time items, IAC reported earnings per share of 71 cents, beating analysts' forecast of 66 cents.

"It's a diverse set of internet businesses and they continue to manage each business well," said Brian Fitzgerald, an analyst with Jefferies & Co.

Shares of IAC rose more than 2 percent to $53.56 in morning trade on Wednesday.

"Search overall was very good," Sean Kim, an analyst with RBC Capital Markets, said.

"The focus will be on the About Group acquisition and potential synergies from that."

While not included in third-quarter results, IAC bought the About Group, a website that publishes specialty articles on topics ranging from personal finance to pets, from the New York Times Co (NYT.N) for $300 million in September.

Revenue at its search properties that include Ask.com and Dictonary.com jumped 43 percent to $370 million.

At its dating sites, which include Match.com, revenue rose 35 percent to $178.2 million.

At its media properties, IAC's operating loss widened to $13.2 million, from $2.8 million during the same period a year ago, mainly because of weakness at Newsweek Daily Beast.

IAC said last week it would cease the print version of Newsweek at the end of the year.

Net income fell to $40.7 million, or 43 cents per share, from $65 million, or 69 cents per share, in the same quarter last year.

The company was helped last year by tax benefits associated with its investment in European dating site Meetic.

(Reporting by Jennifer Saba; Editing by Jeffrey Benkoe, Dale Hudson and Sofina Mirza-Reid)

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