• February 4, 2009

IAC/InterActive Corp. reported revenue, OIBA, and pro forma EPS of $351M, $28M, and $1.69 ($0.18 excluding the effects of Jupiter and write-downs), which was below J.P. Morgan Research's respective estimates of $381M, $35M, and $0.23. Revenue and EPS were also below consensus estimates of $368M and $0.20.

The most significant weakness was in media and advertising, according to the analysts. Media and advertising revenue and OIBA totaled $184M and $27M--below estimates of $204M and $39M, respectively. "Revenue reflects a significant decline in network revenue, which we believe is due to increased competition from Google with this business line." according to a research note. "We think other companies with similar exposure could also show weakness. Query declines at Ask.com reflect significantly lower marketing spend in the period. Revenue per query also declined due to fewer clicks per visit."

On an earnings call Tuesday afternoon, IAC Chairman Barry Diller said the company will shift its marketing strategy for Ask.com in hopes of boosting traffic. IAC will move from syndication partnerships to providing search for targeted verticals. A deal with NASCAR is the first example, with Ask.com providing search for the popular sporting franchise and its fans.--Tanya Irwin