• by Mark Walsh  @markfwal, May 1, 2008

IAC/InterActiveCorp. reported net income down 13% for the first quarter, but posted gains for the Web media and advertising businesses it will focus on after spinning off its business units.

The Internet conglomerate's profit dropped to $52.8 million, or 18 cents a share--from 60.7 million, or 20 cents per share, in the year-earlier period. Excluding expenses and other items, earnings fell to $87.2 million, or 30 cents per share--just below Wall Street expectations of 31 cents a share.

Quarterly revenue was up 8% to $1.6 billion, beating analysts' consensus estimate of $1.53 billion.

In an earnings conference call Wednesday, IAC chairman and CEO Barry Diller said the company planned to complete the business spinoffs by August after filing details with the Securities & Exchange Commission in May.

With IAC set to be broken into five separate public entities, the company presented quarterly results for each of the units as they would be post-spinoff. They include the "new IAC," comprised of ad-driven properties such as Ask.com, Citysearch and Evite as well as services like Match.com and home improvement site ServiceMagic.com.

The HSN home shopping network, Ticketmaster ticketing service, mortgage site LendingTree and time-share exchange Interval are the other four entities to be split off.

For the new IAC, revenue was up 22% to $392 million and operating income increased 15% to $33.3 million. Within that group, media and advertising revenue increased 28% to $215.5 million, driven by its renewed search ad deal with Google in late 2007.

Revenue and revenue per query at Ask.com grew strongly, although the overall number of queries declined because of "significantly reduced marketing" of its flagship search property.

Among results for the other units:

--Revenue at HSN (which includes the Catalogs business) was basically flat at almost $677 million compared to a year ago, while operating income fell 42%.

--Ticketmaster revenue was up 15% to $349 million, but operating income fell 21% to $51 million because of one-time costs and losses from acquisitions and investments in Germany and China.

--LendingTree (including RealEstate.com) continued to be buffeted by a harsh economy, resulting in fewer loans and real estate closings. Revenue dropped 38% to $61.8 million and operating income fell 11% to $8.7 million.

--Interval revenue increased 34% to $115.9 million, while operating income was up 25% to $40.8 million.

IAC shareholder Liberty Media Corp., controlled by John Malone, has opposed the plan to split the company into five parts since Diller proposed it last November.

Liberty Media holds about 30% of IAC equity, but 62% of the voting power of its outstanding stock. Under Diller's plan, however, Liberty's voting power would shrink to about 30% in the spinoff companies.

A Delaware court in March ruled in favor of Diller and against Liberty, which had tried to remove him over the proposed restructuring of IAC.

On Wednesday, Diller firmly rejected the possibility of an asset swap with Liberty for one of the IAC units. "The best thing is to get these companies spun out and to get them into the public markets--get their managements out there, so to speak," he said.

The media mogul added that IAC was planning multiple sessions with investors and analysts for managers to discuss their plans for each of the units as independent companies.

IAC shares closed Wednesday up 1.7%, at $20.81.