IAC 1st-qtr loss narrows as online ad revenue bounces back from last year’s slump

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IAC 1Q loss narrows as online ad revenue climbs

SAN FRANCISCO — Internet company IAC/InterActiveCorp said Wednesday that its first-quarter loss narrowed as online advertising bounced back from a slump that persisted throughout most of last year.

For the first three months of the year, the company run by media billionaire Barry Diller had a net loss of $18.7 million, or 16 cents per share, compared with a net loss of $28.4 million, or 19 cents per share, in the year-ago quarter.

Revenue for the New York-based company climbed 16 percent to $385.9 million, well ahead of analyst expectations for $350.2 million.

Most of IAC’s growth came from the core search business, which includes the Ask search engine and city guide Citysearch and makes money from ads. Here, revenue jumped 20 percent to $199 million.

That marks a stark change from last year, when search revenue dropped for the first nine months and then rose just 3 percent in the fourth quarter. IAC even took a $991.9 million impairment charge in the fourth quarter to account for decreased projections for revenue and profit growth at its search properties.

IAC’s improvements in revenue from online advertising mirror results from Google Inc. and Yahoo Inc. On April 15, Google said that its first-quarter revenue rose 23 percent, while Yahoo said April 20 that its revenue rose 1 percent. The vast majority of both companies’ revenue comes from online ads.

Cowen & Co. analyst Jim Friedland said IAC’s quarter was much stronger than he expected, especially in the search business.

“The numbers are clearly getting better because the economy is improving,” he said.

Still, IAC Chief Financial Officer Tom McInerney said in a conference call with analysts that the company doesn’t see the 20 percent boost in search revenue as “the new normal.” He pointed out that growth this month hasn’t matched that which it saw during the first quarter. Second-quarter search revenue is expected to be “solid,” though “not quite to the Q1 levels.”

Revenue in IAC’s Match business, which is composed of dating sites such as Match.com and Chemistry.com, dipped 1 percent to $89.3 million. IAC attributed the slip to the absence of Match Europe, which it sold last June. At the same time, the number of paid Match subscribers jumped 10 percent to 1.6 million.

In IAC’s media and other business, which includes online retailer ShoeBuy.com and video-sharing site Vimeo, revenue rose 20 percent to $55.9 million. The company cited growth at shopping website Pronto, along with several other sites.

IAC’s ServiceMagic business, which operates Web sites that connect homeowners with home-improvement contractors, increased revenue 35 percent to $42.2 million during the quarter from the same period a year ago.

Shares of IAC fell 35 cents to $22.82 in afternoon trading. Earlier in the day, the stock climbed as much as 94 cents, or 4.1 percent, to $24.11.