• by Gavin O'Malley  @mp_gavin, August 1, 2007

In the face of poor second-quarter results, IAC/InterActiveCorp's media and ad segment--including Ask.com, Citysearch, and Evite--saw revenue grow 33% to $174 million from $131.3 million year-over-year. The gain was attributed to a smaller operating loss of $10.7 million versus $11.3 million the year before, but lags last quarter's 43% revenue boost for the segment.

Following the recent launch of a new multimedia Ask.com, IAC reported increased searches and longer periods of time spent by site visitors. Revenue per search fell across most of IAC's Internet properties.

The Ask Network has lost ground over the past year and remained a distant fourth in search--behind Google, Yahoo, and MSN. Ask accounted for 5.2% of U.S. Web searches in March--down from 5.9% in March 2006, according to comScore Networks.

To reverse that trend, IAC in May launched a multimillion-dollar Ask.com awareness campaign. The TV and online ad blitz is expected to last a year and attempts to familiarize consumers with Ask.com's algorithm.

Overall, IAC reported a 78% gain in net income of $96 million for the second quarter, compared with $53.8 million a year earlier. Revenue increased 5.6% to $1.51 billion.

Due to rising marketing expenses, IAC's operating income fell 33% to $54 million. By segment, operating income fell 31% at the retailing unit, which includes HSN, and dropped 36% at the transactions business, including Ticketmaster and online mortgage unit LendingTree.com.

"We are not satisfied with these results--whether driven by market conditions or our own hand--and are taking every appropriate action to have the back half of the year reflect a demarcation point to a 2008 more reflective of our ambition," IAC Chairman and CEO Barry Diller said on Tuesday.

Ticketmaster's U.S. revenue fell 5% due to lower sales volume, while operating profit dropped 24%.

"While we expected this quarter to be difficult, we did not anticipate the softness in domestic ticketing volumes which impacted Ticketmaster," Diller said.

IAC shares closed in New York at $28.74, down 5.34%.