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Growth in search, Match contributes to IAC revenue

- Associated Press - Wednesday, July 28, 2010

SAN FRANCISCO (AP) - IAC/InterActiveCorp reported stronger second-quarter revenue Wednesday, citing growth in its search and Match online dating businesses. Net income fell, however, because the comparison quarter a year ago included a bump from the sale of its Match Europe operations.

IAC's core search businesses, which include the search engine Ask.com and reference site Dictionary.com, generate the bulk of their revenue from online advertising. Their growth suggest improvements in the online ad market after a slump plagued the company throughout most of last year.

Meanwhile, IAC's second-largest unit, Match, which includes dating websites such as Match.com and Chemistry.com, saw a big jump in subscribers: The number of paid Match users shot up 48 percent to 1.7 million in June, compared with a year ago.

For the April-June quarter, the company run by billionaire Barry Diller earned $13.6 million, or 12 cents per share. That is down 67 percent from $40.8 million, or 28 cents per share, in the same quarter a year ago. The quarter last year included a $116.8 million gain from the sale of Match Europe last June.

After excluding one-time items, IAC earned 24 cents per share _ 4 cents more that what analysts polled by Thomson Reuters were looking for.

Revenue climbed nearly 19 percent to $402.9 million, about $20 million more than the $382.6 million analysts expected.

Revenue in the search unit rose 18 percent to $197.2 million. The increase is similar to what IAC reported in the first three months of the year, thanks to growth in online ads. Both Google Inc. and Yahoo Inc. also reported growth in online advertising during the quarter, though Yahoo's was much lower than Google's.

For Match, revenue climbed 10 percent to $97 million.

In a conference call with analysts, Chief Financial Officer Tom McInerney said Match's subscriber growth was helped by a new agreement with Yahoo through which Match runs Yahoo's personals service. Still, he said growth was "very strong" even without the Yahoo deal.

IAC's media-related businesses, which includes comedy website CollegeHumor and invitation website Evite, saw revenue increase 34 percent to $59.6 million. IAC said the increase stemmed from the inclusion of Notional, a video production company it started last summer, and growth at sites such as Gifts.com.

IAC also reported growth in its ServiceMagic business, which runs websites that match up homeowners with home-improvement contractors. This unit's revenue climbed 17 percent to $49.5 million as more people made and accepted service requests.

Shares of IAC, which is based on New York, rose 83 cents, or 3.5 percent, to $24.56 in midday trading Wednesday.

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