IAC's Strong Q3 Hinges on Ask.com and Citysearch

  |  October 31, 2006   |  Comments

Strong growth by Ask.com and other IAC businesses comes as Diller and co. continue to improve company-wide practices in key areas.

IAC/InterActiveCorp reported growing revenue overall last quarter, with strong performance in its media and advertising sector, which includes Ask.com and Citysearch.

IAC reported over $1.6 billion in revenue, an 11 percent increase over the prior year's $1.4 billion. Adjusted earnings per share (EPS) were $0.35, compared to $0.32 in the year-ago period. Revenue in media and advertising grew by 62 percent to $135.5 million. Revenue growth came both on Ask.com, which grew 59.3 percent, and across the network of IAC-owned sites, which grew 40.7 percent all together.

"We are unabashedly building an interactive conglomerate," said Barry Diller, chairman and CEO of IAC. "We have three interrelated strategies: one, the growth of each of our businesses; two, Ask.com as the connecting thread; and three, all our cross-company efforts which allow us to leverage our audience, scale and diversified expertise."

IAC's decrease in ads per page, implemented last August, has paid off in higher retention, query volume growth and higher revenue-per-query, according to Doug Lebda, IAC's president and COO. Ask.com grew its market share during the quarter as well, reaching 2.4 percent of queries from 2.18 percent in the previous quarter.

Growth in Ask.com's U.S. business was partially offset by troubles at Ask UK, but a management change there has allowed the company to begin making improvements within the division, he said.

Progress is being made in several business investments IAC undertook earlier this year. Its implementation of best practices in key areas across all its businesses continued this quarter in areas such as online and offline marketing, strategy and business development and technology, Lebda said.

In addition, IAC is coordinating its ad-buying efforts with Google, Yahoo, and Microsoft. "We want to make sure we're getting the proper attention and care that we deserve. We want to be seen as one large corporate advertiser, IAC, instead of as a dozen smaller ones," said Lebda.

Other efforts to improve integration and overall performance of the various businesses include a company-wide search engine optimization (SEO) program and report card, complete with action items and metrics, he said. The company is also in the midst of implementing customer satisfaction survey tools across its various businesses.

The integration of Ask.com with other IAC properties is progressing, but still in "early days," according to Lebda. Search boxes have been present on all IAC properties for awhile now, and are being integrated more deeply within the sites. IAC sites are also beginning to be integrated into Ask.com's toolbar, and into its search results.

"People inside IAC are very focused on this," Lebda said. "They understand its importance, and they're open to it."

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Kevin Newcomb

Kevin Newcomb joined ClickZ in August 2004, covering search marketing and other online marketing topics. He has been reporting on web-based businesses since 2000.

Before the bubble burst, Kevin was a marketing manager for an online computer reseller, handling copywriting, e-mail marketing, search marketing and running the affiliate program.

With a combination of real-world marketing experience and years of business journalism, Kevin brings to ClickZ a unique ability to deliver news and training materials that help online marketers do their jobs better.

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