IAC Earnings Clipped By Coupons
By: David Utter
Ask.com's parent company InterActiveCorp reported a big 98 percent drop in fourth quarter as they wrote down their Entertainment book coupon operation; the Search & Media Group performed well for IAC, enjoying a nice revenue gain.
Disappointing sales by fundraising groups led to a $214 million impairment charge as part of the operating loss IAC suffered for its fourth quarter 2006. Shares of IACI closed down 55 cents to 38.72.
They did much better on the Media & Advertising side, which contains Search & Media (emphasis added):
Media & Advertising revenue growth was driven by an increase in queries and higher revenue per query across most properties. Within IAC Search & Media, network revenue growth outpaced that of proprietary revenue, primarily due to an increase in syndicated sponsored listings. Proprietary revenue grew on the strength of Ask.com in the U.S. and Fun Web Products, offset by weakness at portal properties and Ask.com UK. Additionally, Citysearch delivered yet another strong quarter of revenue growth.
We highlighted that increase for a reason. Gaining more listings has been a necessity for the whole group. Ask.com is being used as a traffic driver to other IAC properties.
If they are being effective at getting people from search to destination, advertisers will continue to gain confidence in Ask. Though their share of the search market has hovered around 5.5 percent according to comScore, being able to provide conversions for a lower keyword bid than on Google or Yahoo tends to make advertisers quite happy.
Overall, IACI reported $1.8 billion in Q4 '06 revenue, and full-year revenue of $6.3 billion, the latter a gain of 15.9 percent over 2005.
"Our 2006 figures demonstrate our ability to drive those metrics that matter most to value creation," IACI Chairman Barry Diller said in a statement. "While everything metric counts, you will find these leading indicators will become first among equals in our future reporting and commentary."
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