Barry Diller's InterActiveCorp Disappoints Wall Street
IAC/InterActive Corp reported its second quarter earnings today and net income was up 78%, but Wall Street wasn't impressed -- the jump was thanks solely to divestiture and lower acquisition costs. Looking only at continuing operations (excluding stock compensation and those divestiture costs), the quarter's earnings were 31 cents, a penny less than the year-ago quarter, and two cents less than the analyst consensus. Revenues grew six percent, less than analysts expected.
CEO Barry Diller said he wants to better in the conference call: "We are not satisfied with these results -- whether driven by market conditions or our own hand -- and are taking every appropriate action to have the back half of the year reflect a demarcation point to a 2008 more reflective of our ambition."
Translation? The next two quarters will be better? What went wrong? For one thing, Diller said he didn't expect Ticketmaster (one of the many companies in IAC's portfolio) to be hit by the decrease in ticketing volume. And revenue at HSN has been flat, despite attempts to jazz up the network with cool new products. That particularly stings because cash from HSN is supposed to provide the cash flow to grow the company be one of the company's main drviers.
One area of strength: media and ad revenue grew 33%. There were more internet searches, and people are staying longer at Ask.com, even though revenue per search fell. If you haven't seen it yet, Ask.com has been totally revamped with 3-D search results. The search competition is killer, but Diller isn't giving up on Ask.com. What does Wall Street think? The S&P's Scott Kessler reiterated his Buy option on IACI stock.
I'm hoping to sit down with Diller and get his thoughts. I've put in the interview request. I'm dying to ask if he's going to sell off HSN as it doesn't really fit with the rest of the properties and seems to be dragging IACI down. What would you ask Diller?
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