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May-01-2008IAC CEO Barry Diller received $1.4M in 2007 compensation(topic overview)
CONTENTS:
- In the first quarter, LendingTree's revenues fell 38 percent compared to the same period a year ago, to $70 million. (More...)
- The new IAC posted oustanding results with revenues for the division grew 22% to $392 million while earnings improved 15% to a narrowed loss of $33.3 million. (More...)
- NEW YORK, April 28 (Reuters) - LendingTree LLC, an online mortgage unit of Barry Diller's Internet conglomerate IAC/InterActiveCorp (IACI.O: Quote, Profile, Research ), has reported a data breach in which several former employees gave mortgage lenders access to confidential customer records. (More...)
- Excluding expenses and other items, earnings fell to $87.2 million, or 30 cents per share, from $96.9 million, or 31 cents per share, which met the expectations of analysts polled by Thomson Financial. (More...)
- Since the first Vital Express story brokelast week, another key Santa Clarita investor decided to share hisstory. (More...)
- As for progress on the spin, the IAC board met Monday to move forward, and it plans a series of meetings with investors and analysts to pitch the case for the spin. (More...)
- Profits at HSN are being held back by declines in the catalog segment, the company said, noting, "Online sales continued to grow at a double digit rate in the first quarter." (More...)
- On an adjusted basis, earnings would have been essentially flat, dipping to $0.30 a share from last year's $0.31-a-share showing. (More...)
- In fact they are doing almost exactly what Geosign did before (and was cracked down last year by the big GOOG): Buy traffic cheap on Google, then monetize through Google (something that is officially not appreciated by Google). (More...)
- Sales at the Cornerstone Brands catalog unit slid 7 percent, while the HSN TV channel and Web site gained 9 percent. (More...)
- Bolstering Diller's point, IAC's prospects as a single company aren't looking bright. (More...)
- In March, the two men battled in a Delaware court over Diller's proposal to break up IAC into five separate companies. (More...)
- The operating loss narrowed to $33.3 million from $39.2 million on lower marketing costs at Ask.com. (More...)
- The bad credit situation didn'''timpact us much because we knew we'''d have to pay depositsanyway. (More...)
- The bright side for what will remain of IAC after the spin-offs is that Google is improving monetization. (More...)
- Diller heads internet conglomerate IAC/InterActiveCorp, which spun Expedia off in 2005 as a publicly traded company. (More...)
- Through an agreement between them, Diller has controlled Liberty's votes for years. (More...)
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In the first quarter, LendingTree's revenues fell 38 percent compared to the same period a year ago, to $70 million. IAC's board, meeting this week, has begun ironing out the specifics of the breakup scheme. Bernstein Research analyst Jeffrey Lindsay believes "it is increasingly unlikely that IACI will meet its original spin-out deadline of third quarter 2008 and the implementation could be delayed well into 2009," he noted in a recent report. "It's not clear that any of the players have come to an agreement on how they'll allocate debt, voting rights, and assets," Lindsay wrote. "We're telling new investors to wait until this all becomes more clear." Diller offered few spinoff specifics in his conference call with investors Wednesday morning but will stick to his schedule of finishing the transaction in the third quarter. [1] Ticketmaster is almost prepared to make up for the lost income from Live Nation, McInerney said. "Margins at Ticketmaster dropped to 21 percent from 26 percent a year ago,'' said Ross Sandler, an analyst at RBC Capital Markets in New York, who said the stock should perform in line with its peers. "That is not going to go over well.'' LendingTree's revenue fell 38 percent to $70.2 million, in line with an estimate by Devitt, who recommends holding IAC shares and doesn't own them.[2] Diller, IAC's chairman and chief executive, is trying to boost the stock after a 57 percent drop since July 2003. The shares rose 4 cents to $20.46 at 4 p.m. New York time in Nasdaq Stock Market trading and are down 24 percent this year. In November, Diller, 66, proposed separating the company, whose brands include Ticketmaster Inc. and time-share manager Interval International Inc. Under his plan, HSN, Ticketmaster, LendingTree and Interval would each become independent.[3]
The Ticketmaster business had $349 million in revenue over $303.6 a year ago; LendingTree had $70.2 million, down from $113.2 million last year; and the Interval time-sharing exchange had $115.9 million, up from $86.4 million last year. A Delaware court last month upheld IAC CEO Barry Diller's authority to split up the company, after major shareholder Liberty Media Corp., led by Chairman John Malone, tried to oust him because of the plan.[4] The spin offs will include Interval, LendingTree, Ticketmaster, Retailing (HSN) and the new IAC. "With this quarter's results, it couldn't be clearer that we are on the right course in separating IAC into 5 distinct public entities. Each of the businesses have their own unique opportunities - some with current challenges and others with wind at their backs," said IAC's Chairman and CEO, Barry Diller. Ticketmaster saw its revenues improve 15% to $349 million, but saw a 21% decline in earnings of $51 million.[5] Earnings from continuing operations for the latest quarter declined to $86.15 million, or $0.18 per share from $98.25 million, or $0.20 per share in the prior-year quarter. IAC said on Wednesday that the quarterly results have been presented for the businesses - IAC, HSN, Ticketmaster, LendingTree and Interval - as they would appear after the spin-offs.[6]
ANALYST TAKE: In a recent note to clients, Citi Investment Research analyst Mark S. Mahaney predicted IAC will report adjusted earnings of 26 cents per share on $1.62 billion in revenue. "Given the macro headwinds in retail (particularly in offline catalogues) and real estate and rising online marketing costs, we anticipate an inline quarter _ i.e. we anticipate that IAC will report March quarter results that generally meet current Street estimates," he said.[7] Analysts polled by Thomson Financial were expecting, on average, earnings of 30 cents per share on revenue of $1.53 billion. IAC also broke down results as they would appear after the company's planned spin-off into five publicly traded companies.[4]
IAC shares rose 68 cents, or 3.3 percent, to $21.14. Diller said in November that he wanted to break IAC into five publicly traded companies _ a move that was opposed by major shareholder Liberty Media Corp. and led to a legal skirmish related to Liberty's voting rights in IAC. A judge recently sided with Diller against Liberty. Diller said in an earnings conference call Wednesday that the company hopes to file with the Securities and Exchange Commission in May regarding the spinoffs and have them finished in August. Wednesday, IAC reported its first-quarter profit fell, but adjusted results met analysts' expectations.[8] NEW YORK (Reuters) - IAC/InterActiveCorp (IACI.O: Quote, Profile, Research ) said on Wednesday its quarterly profit fell, but it posted promising growth for the Web advertising and media businesses that it will keep after spinning off four major units. Shares in the Internet conglomerate rose as much as 4 percent after Chief Executive Barry Diller said he aimed to complete the spin-offs in August, with details to be filed with U.S. regulators in May. Diller won a court battle last month against IAC's controlling shareholder Liberty Media Corp (LINTA.O: Quote, Profile, Research ) (LMDIA.O: Quote, Profile, Research ) (LCAPA.O: Quote, Profile, Research ), which had tried to oust him over the proposed structure of the spin-offs. He said IAC was no longer discussing the possibility of an asset swap with Liberty for one of the units, nor did he expect to bring in private equity investors despite discussions with interested firms.[9] Disappointing results at HSN or one of IAC's other four units may further hamper Chairman Barry Diller's plan to break up the New York-based company, said Scott Devitt, an analyst at Stifel Nicolaus & Co. in Manassas, Virginia. He estimates sales growth at HSN slowed to 5 percent last quarter, down from an 8 percent increase in the three months through December. Profit at the unit probably fell 12 percent, he said. "They won't get the hoped-for turnaround at HSN,'' said Devitt, who recommends investors hold IAC stock and doesn't own it. "They're fighting a tough economic headwind, so even if the business is improving you won't see it this quarter.''[3] The results indicate most of IAC's divisions are performing well as Diller prepares to break the company into five independent businesses, said Lindsay, who recommends holding the stock and doesn't own it. The HSN home-shopping unit missed his sales and profit forecast, while Ask.com and Ticketmaster beat predictions and the LendingTree mortgage business stabilized.[2]
Analysts believe that to be a poor performance, considering that Internet advertising is growing at 22 percent a year and e-commerce is growing at around 19 percent each year. The fact that some of businesses continued to struggle through the first quarter supports Diller's claim that each of them demands the individual focus that a separate management structure can provide. "With this quarter's results, it couldn't be clearer that we are on the right course in separating IAC into five distinct public entities, Diller said in a release. "Each of the businesses have their own unique opportunities - some with current challenges and others with wind at their backs." IAC companies such as Ticketmaster, LendingTree, and Cornerstone Brands are seeing slower profit growth.[1]
"We believe ownership conflicts are likely to resurface, and uncertainty is an overhang," wrote Mahaney, who maintains a "hold" rating on IAC shares. He also noted that unlike many of IAC's e-commerce peers, international sales are only 11 percent of total revenue. Google ( GOOG, Fortune 500 ), eBay ( EBAY, Fortune 500 ), and Amazon.com ( AMZN, Fortune 500 ) all generate close to half of their revenues overseas, where they gain from higher growth prospects, lower tax rates, and currency exchange benefits. Wednesday's earnings release will offer an indication as to whether IAC brands like Ask.com and Match.com are maintaining some revenue growth, as analysts speculate they have been in the first quarter of 2008, even in the midst of consumer penny-pinching.[10] A consensus of Wall Street analysts expects that IAC ( IACI, Fortune 500 ) generated $1.53 billion in revenue during the first quarter of 2008, or $.30 in adjusted earnings per share.[10] Revenue grew to $1.6 billion from $1.49 billion a year ago, beating Wall Street expectations of $1.53 billion. IAC's first quarter had been saddled with an ongoing lawsuit filed by Liberty Media LINTA, which owns a 30% stake in the company and about 62% of its voting control through a second class of super-voting shares.[11]
Diller won a court battle with Liberty Media Corp,'' the company's controlling shareholder, in March over how the businesses will be structured.'' Diller planned to complete the spin-offs in the second or third quarter of this year, putting the success and profit'' of "new IAC" in even greater Wall Street spotlight. "We're really trying to do this in a way that traditional media brands can't," Nicholas Lehman, IAC's programming division COO, said during an interview with Reuters.[12] IAC's businesses are better off on their own in the market than trying to work with a''strategic partner, according to chief mogul Barry Diller. Recently empowered by a court decision that says he can do what he wants with IAC with little limitation from controlling shareholder Liberty Media, Diller said today a plan to spin off four major IAC units probably won't involve any partners and that he was on track to complete the separation in August.'' Here's his comments from a conference call to discuss quarterly earnings.[13] OVERVIEW: The Internet conglomerate's first quarter was dominated by a skirmish with major shareholder Liberty Media Corp. surrounding IAC's intention to split into five parts. At the end of March, a Delaware judge sided with IAC chief executive Barry Diller and against Liberty, deciding Liberty had failed to prove Diller violated an agreement between them by pursuing the breakup plan.[7] New York - "HSN continued to exhibit strong momentum," said Barry Diller, chairman and ceo of Home Shopping Network parent company IAC regarding results for the first quarter ended March 31. "With this quarter's results, it couldn't be clearer that we are on the right course in separating IAC into five distinct public entities," Diller said of the planned corporate spinoff/breakup. The company gave results in combined form and as they would appear post-spinoff.[14] If the company he helms, IAC/Interactive Corp, posts a good earnings for the first quarter, the CEO can begin the process of mending his bruised reputation as a deft leader. If the results are lackluster, they may lend additional support for Diller's proposal to break IAC into five parts.[10]
The new IAC posted oustanding results with revenues for the division grew 22% to $392 million while earnings improved 15% to a narrowed loss of $33.3 million. The Media & Advertising segment more than doubled its profits thanks to a renewed partnership with Google, which resulted in an increase in revenue per query across all proprietary search sites. Other divisions like Match and ServiceMagic also grew thanks to increases in subscribers and improved monetization. Combined, many shareholders believe that these spin offs will command a substantially higher valuation as independent companies and will benefit from more focused and incentivized management teams. [5] Operating income was down 4%, to $135 million; Barry and co blamed the decrease on "a difficult macro environment on our Catalogs business, profit declines at Ticketmaster, and transaction expenses in connection with our planned spin-offs." Most interesting to us is IAC's breakout of the 5 companies it imagines it will be, post break-up. (It's still trying to give one of those companies -- HSN -- to Liberty Media so it can complete its messy divorce with John Malone)[15] IAC's media and advertising unit, whose largest business is Ask.com, increased sales 28 percent to $215.5 million and operating profit almost tripled to $30.7 million.[2] Operating profit at HSN, IAC's largest division, dropped 43 percent to $20.2 million as sales gained 1.5 percent to $676.9 million.[2]
Due in part to cost increases for product sales and marketing, IAC's net profit fell 13% compared to 2007's first quarter, to $52.8 million.[1] The retail division, which will be named HSN (and will also include the IAC catalog businesses), posted first quarter sales of $676.9 million, up 2% over the same period last year.[14]
On the bright side, online sales continued to grow at a double digit pace during the first quarter. LendingTree significantly narrowed its losses for the quarter to $8.7 million and posted its first quarter of sequential revenue growth in eight quarters of $70.2 million.[5] LendingTree sales probably fell 38 percent to $70 million in the first quarter, while the division's loss widened to $5 million, according to Stifel's Devitt.[3]
The New York-based company reported a decline in net income for the first quarter to $52.82 million, or $0.18 per share from $60.75 million, or $0.20 per share in the previous-year quarter.[6] New York-based IAC (NASDAQ: IACI) posted first-quarter net income of $52.8 million, or 18 cents per diluted share. That is down from net income of $60.7 million, or 20 cents per share, in the year-ago quarter.[4] Net income fell to $52.8 million, or 18 cents a share, from $60.7 million, or 20 cents, a year earlier, New York-based IAC said today in a statement.[2]
IAC's first-quarter profit fell to $52.8 million, or 18 cents per share, from $60.7 million, or 20 cents per share, a year earlier.[9]
The decrease came in a year in which IAC's shares declined 27.6 percent and the company swung to a loss, and Diller unveiled a plan to spin off some of the company's assets that ignited a battle with a major company shareholder. As in 2006, Diller received a salary of $500,000, but this year he received no bonus, according to IAC's filing with the Securities and Exchange Commission. He received a bonus of almost $1.8 million in 2006.[16] Malone's lawyers made the trial referendum of sorts on Diller's leadership of the company. Unlike his success in the movie and television business, Diller's IAC had some early successes, but over the last five years, shares have fallen 59 percent. Diller insists he sketched out the spinoff plan to unlock growth. Malone wanted to oust Diller, claiming Diller's breakup proposal was a breach of his duty to shareholders.[10]
IAC shares will track the market, said Lindsay, who doesn't own any himself. Low traffic at HSN's Web site also points to slowing growth, he said. HSN gets about a third of its sales online. Most bad news about LendingTree, an online exchange that matches potential borrowers with up to four banks that compete for their business, is already reflected in IAC's stock price, Bernstein's Lindsay said. His estimate that IAC is worth $25 a share doesn't include any value from LendingTree.[3] Sales jumped 22 percent to $392 million at what Diller calls "New IAC,'' with Ask's growth outpacing the 10 percent sales gain at Match.com.[2] The "New IAC," which would include Oakland-based Ask.com, would have seen $392 million in first-quarter revenue, 22 percent growth compared with $320.7 million a year ago.[4] Op income in that unit fell 42 percent to $20.2 million. Revenue growth at 'New IAC', as it would be called post-spin, was up 22 percent, with its op loss slimming to $33 million from $39 million.[17]
New IAC, which includes the company's online dating service Match.com and search engine Ask.com, reported a 22% increase in revenue to $392.0 million from $320.7 million in the year-ago period.[6]
The company's revenue rose to $6.37 billion from $5.91 billion in 2006. In November, Diller said that IAC will spin off its HSN home shopping network, ticket service Ticketmaster, Interval time-share service and LendingTree mortgage referral businesses.[16] In its first report since a Delaware court win affirming chairman and CEO Barry Diller's authority, IAC (NSDQ: IACI) announced Q1 revenue of $1.6 billion an 8 percent increase from $1.49 billion in the year-ago quarter.[17] Barry Diller's about-to-be-broken-up IAC's Q1 meets the Street's modest expectations: Revenues are up 8%, to $1.6 billion (vs. $1.5B consensus) and adjusted EPS was 30 cents, which is where the Street had predicted it would fall.[15]
NEW YORK (Associated Press) - Barry Diller, the head of Internet conglomerate IAC/InterActiveCorp, received compensation valued at $1.4 million in 2007, according to a company filing with the SEC Tuesday _ a decrease of more than 53 percent from his 2006 compensation.[16] NEW YORK (AP) — IAC/InterActiveCorp, the Internet conglomerate led by Barry Diller, said Wednesday its first-quarter profit slipped 13 percent marketing and other expenses, but adjusted results met expectations.[18] NEW YORK (AP) _ Semiconductor stocks wavered in afternoon trading Wednesday, but shares of some major chip testing companies fell following disappointing quarterly reports. NEW YORK (AP) _ Major Web stocks mostly rose Wednesday, with IAC/InterActiveCorp rising after the Internet conglomerate's head, Barry Diller, predicted its plans to spin off various business units would be completed in August.[19] IAC, an Internet conglomerate that's Barry Diller's baby, is planning to break itself up into five chunksa new IAC that will include Ask.com and other Internet properties, a retailing unit (HSN), LendingTree (real estates and loans), Interval (condos and vacations) and Ticketmaster.[20] Diller's plan will result in five separate companies: HSN, Interval International (a vacation timeshare exchange), LendingTree, Ticketmaster and IAC, which would be left as a pure Internet company holding Ask.com, Evite, and Match.com.[1] Diller's plan would result in five separate companies: HSN, Interval International (a vacation timeshare exchange), LendingTree, Ticketmaster and IAC, which would include the Ask.com and Match.com holdings. IAC's board is expected to meet this week to begin ironing out the specifics of the breakup scheme. They are not expected to reach a conclusion on how to proceed anytime soon, something that is likely to be a drag on the stock, say analysts.[10]
Diller initially announced plans to spin off IAC's HSN home shopping network, Ticketmaster, LendingTree.com and Interval time-share businesses in November. During the quarter, IAC said Doug Lebda would become head of its financial services and real estate businesses, and Jim Safka the new CEO of Ask.com.[7] IAC's holdings include Ask.com, Evite, Match.com, Ticketmaster, and the Home Shopping Network. Malone wanted to oust Diller, claiming Diller's plan for the new company's voting structure was a breach of his duty to shareholders. Diller insisted that his plan is simply designed to unlock value and allow the new companies to flourish without overbearing large investors.[1]
Last month, a Delaware court ruled in favor of the company by halting majority voting shareholder Liberty Media Corp.' s (LINTA) attempt to stop IAC/InterActiveCorp Chairman Barry Diller from splitting IAC into multiple companies.[6] Diller's plan to split IAC was unsuccessfully challenged in court by Liberty Media Corp., which owns 30 percent of the company's shares.[3] "There's nothing in our process that will cause a delay," Diller said. He added that the uncertainty surrounding a lawsuit filed by Liberty Media LINTA has been lifted since a judge ruled in favor of IAC last month. Liberty, which owns a 30% stake in the company and about 62% of its voting control through a second class of super-voting shares, had accused Diller and IAC's board of trying to dilute that stake by proposing the break-up and giving each spin-off a single-tier voting structure.[21]
Net income, however, slipped 13 percent to $52.8 million ($.18 per share) from $60.7 million ($.20 per share). Earnings were hit by income decline at HSN?which is seen as a possible bargaining chip in its attempt to completely extricate itself from John Malone and Liberty Media (NSDQ: LINTA).[17] Net income after preferred dividends for the period ended March 31 dropped to $52.8 million, or 18 cents per share, compared with $60.8 million, or 20 cents per share, in the previous year.[18]
The conglomerate's results ( Techmeme ): Net income of $52.8 million, or 18 cents a share, on revenue of $1.6 billion.[20]
In the same period a year ago, the company posted adjusted income of $96.9 million, or 31 cents a share.[22] The company said Wednesday that first-quarter profit fell to $52.8 million, or 18 cents a share, compared with $60.8 million, or 20 cents a share, a year ago.[11]
The loan was secured by other IAC shares. In addition to his compensation from IAC, Diller, who is also chairman and senior executive of Expedia Inc., received $4.3 million in compensation from the online travel company in 2007, according to a recent SEC filing by Expedia.[16] Separately, Diller had a loan issued by the company for about $5 million that was due and paid Sept. 5. Diller used the borrowed money to buy nearly 900,000 shares of IAC stock and was given to him when he became CEO in August 1995.[16]
IAC posted a $144 million loss last year, as a tough credit market hurt the company's LendingTree home-loan business.[23] The company reported an operating income of $70.01 million for the quarter, down 18% from $85.45 million in the same period last year.[6] Operating income for the quarter rose to $30.7 million from $10.5 million a year ago, and benefited from a reduction in the current year expense of $4.6 million resulting from the capitalization and amortization of costs related to the distribution of toolbars which began on April 1, 2007, in addition to lower marketing spend at Ask.com.[6] Operating income for the segment climbed 25% to $40.8 million from $32.6 million a year ago, driven by strong transaction revenue due to 6% growth in member transaction volume and higher average fees as well as a 4% increase in members.[6] The segment, to be named HSN home-shopping network, reported a 2% increase in revenue to $676.9 million from $666.7 million in the same period last year, reflecting 9% growth at HSN, excluding America's Store, partially offset by a 7% decline at Catalogs.[6]
The segment recorded an operating loss of $33.3 million that narrowed from operating loss of $39.2 million in the previous-year quarter. Media and Advertising, which consists of proprietary properties such as Ask.com, Fun Web Products, Citysearch and Evite, reported a 28% growth in revenue to $215.5 million from $168.1 million in the prior-year period.[6] Product sales increased to $723.53 million from $706.51 million in the previous-year quarter, while Service revenues increased to $878.82 million from $783.63 million last year.[6] Revenue for online mortgage firm Lending Tree declined 38% to $70.2 million from $113.2 million in the previous-year quarter. Of this, lending revenue declined 38% to $61.8 million from $100.0 million in the year-ago period, while real estate revenue declined 37% to $8.4 million from $13.2 million a year ago.[6] Revenue for ticket broker Ticketmaster climbed 15% to $349.0 million from $303.6 million a year ago, driven by a 3% increase in tickets sold, with 7% higher average overall revenue per ticket.[6]
Revenue for Interval International, a vacation timeshare service, surged 34% to $115.9 million from $86.4 million in the prior-year period, reflecting a $19.1 million contribution from ResortQuest Hawaii, acquired by the company in May last year.[6]
Total queries declined due to a decrease in marketing?so fewer Ask.com ads on TV, which is something analysts had been wanting to see go. Revenue fell 38 percent, and the unit's loss deepened to $8.7 million from a loss of $7.8 million.[17] Revenue at Charlotte-based LendingTree, which operates an online lending and realty-services exchange, fell 38 percent to during the latest quarter to $70.2 million from $113.2 million in the year-ago period.[24]
Ticketmaster sales rose 15 percent to $349 million, buoyed by two acquisitions, while operating income fell 21 percent to $51 million. Profit dropped on higher technology spending as the division competes with EBay Inc.' s StubHub.com ticket-resale unit and as concert promoter Live Nation Inc., its biggest customer, prepares to process tickets itself.[2] Barry Diller's online-commerce empire IAC/InterActiveCorp, which is preparing to break up into several companies, reported lower first-quarter net income because of continuing problems in its retailing and home-lending businesses and reduced profits at Ticketmaster. The results are likely to be one of IAC's last report cards in its current structure.[25] The company details what IAC will look like once all the spin-offs happen. "With this quarter's results, it couldn't be clearer that we are on the right course in separating IAC into 5 distinct public entities. Each of the businesses have their own unique opportunities - some with current challenges and others with wind at their backs," said IAC's Chairman and CEO, Barry Diller in a statement. Just what IAC shareholders need: Another magic potion to deliver shareholder value.[20] Watching IAC (Nasdaq: IACI ) is like walking into an ice cream parlor and being forced to eat a five-scoop sundae when all you want is''a single scoop. The company knows it. Barry Diller's plan to split his empire into five stand-alone units still hasn't materialized, so you have to either spoon down the hodgepodge sundae or head out of hodgepodge Dodge. It's a shame because this past quarter is a ringing endorsement for the ability to single out your favorite flavor.[26] Bottom line : In the statement, CEO Barry Diller said the quarter's results demonstrate: "it couldn't be clearer that we are on the right course in separating IAC into 5 distinct public entities." Certainly, now that the company introduced the notion of the spin, it's hard to imagine what business these disparate units have being under the same roof.[17]
Diller said IAC's board was expected to meet a few more times to hammer out the details of the company's "massive, detailed" spinoff effort, but he added that the deliberations would be procedural in nature. "We believe we will get this done in the third quarter, hopefully in the early part," he said in a conference call with analysts after IAC reported first- quarter results.[27] In a conference call on Wednesday, Diller told analysts that IAC's board of directors had met on Monday and would likely meet one or two more times before moving ahead with plans to break up the company into five publicly-traded entities, to be completed by August.[21] Malone recently lost a court battle with Diller for control of IAC, but the court left the door open for Liberty to challenge the plan at a later date. It was believed that Malone and Diller were trying to negotiate a resolution of their disagreement to avoid another legal battle. The New York Post reported earlier this week that Diller and Malone were discussing a deal that would trade one or more of IAC's assets for Liberty's ownership stake in IAC. Diller on the conference call told analysts that he was not considering a "swap transaction" with Liberty.[27] With IAC (NSDQ: IACI) having defeated Liberty in court, CEO Barry Diller's spin plan can go through as planned. As such, said Diller: "What we're not discussing is a so-called swap transaction with Liberty." As I mentioned this morning, it's been speculated that IAC could trade out HSN in order for Liberty to relinquish its grip. It's still possible, but, said Diller: "It's very unlikely."[28]
Diller said IAC isn't talking with Englewood, Colorado- based Liberty Media Corp. about exchanging HSN or any other asset for Liberty's 30 percent stake in IAC before the spinoff. Those talks had gone on for more than a year, with Diller and Liberty Chairman John Malone unable to agree on terms.[2] Malone asserted that Diller's plan was an attempt to wrest control of IAC from Malone's Liberty Media, because the scheme would have diminished by half Malone's 61 percent majority voting rights in the new spinoffs.[10] The plan was opposed by major shareholder Liberty Media Corp. and led to a legal skirmish related to Liberty's voting rights in IAC. A judge recently sided with Diller against Liberty.[16] Last month, a court sided with Diller against Liberty Media Corp., a major shareholder in a ruling that will likely determine the fate of IAC.[18]
Liberty Chairman John Malone, who sits on IAC's board, said that the deal would unfairly reduce Liberty's voting rights in the four spun-off companies. Delaware Chancery Court Judge Stephen Lamb ruled March 31 that the spinoff plan didn't exceed Diller's rights under a 1995 agreement that lets him vote Liberty's shares.[3] In March, Diller won the first round of a court battle with Liberty, which tried to block the deal in a dispute over whether Liberty's enhanced voting rights in IAC should be extended to the new companies.[2]
Liberty claimed that IAC's chief executive, Barry Diller, was trying to dilute that stake by proposing to break up IAC into five separate companies and give each spin-off a single-tier voting structure.[11] Lackluster profits could boost CEO Barry Diller's plan to split the Internet conglomerate into five companies.[10] April 30 (Bloomberg) -- IAC/InterActiveCorp, Barry Diller's Internet company, said first-quarter profit dropped 13 percent, as the slow economy depressed retail sales.[2]
Diller said on the fourth-quarter earnings call in February that HSN had reversed declines in sales and profit. He also said online advertising had boosted the Ask.com search engine, positioning most IAC businesses to thrive after the breakup.[3] HSN is expected to post earnings improvements over 2007, as a result of a restructuring that included operational improvements and greater use of the network's website as a conduit for sales. IAC companies such as Ticketmaster, LendingTree, and Cornerstone Brands are seeing slower sales.[10] Sales were up 8 percent from a year ago and earnings were down 8 percent from a year ago. Where things really get interesting is IAC's "imagine this" technique with its results.[20]
Quarterly sales rose to $1.6 billion, up 7 percent from $1.49 billion in the prior year. That beat Wall Street's estimate of $1.53 billion.[18] Sales rose 7.5 percent to $1.6 billion, beating the $1.53 billion average of 12 analysts' estimates compiled by Bloomberg. "Overall, it's definitely better than expected,'' said Jeffrey Lindsay, an analyst at Sanford C. Bernstein & Co. in New York.[2]
Revenue for the New York-based Internet conglomerate rose 8% to $1.6 billion from $1.49 billion a year earlier.[22] If the new campaign succeeds, it will be one of several areas critical to the growth of parent company IAC/InterActiveCorp, an Internet conglomerate.'' IAC plans to concentrate on media and Web advertising after it spins off four of its businesses later this year.[12] NEW YORK (Reuters) - CollegeHumor.com's founders want to help their audience members fulfill "their stupidest wish ever" -- maybe a machine to dress them in the morning or a chute from their bedroom to the front door. The idea, which is still in development, is a hallmark of the site's wacky humor, but also a new advertising strategy that lets sponsors build stronger ties with young men by catering to their tamer dreams. Its success will be one of several segments key to the growth of its parent, Internet conglomerate IAC/InterActiveCorp, which plans to spin off four of its businesses this year and focus on Web advertising and media. CollegeHumor co-founder and editor-in-chief Ricky Van Veen said the online ad model for sites like his own had completely changed in recent years.[29]
NEW YORK, April 28 (Reuters) - LendingTree LLC, an online mortgage unit of Barry Diller's Internet conglomerate IAC/InterActiveCorp (IACI.O: Quote, Profile, Research ), has reported a data breach in which several former employees gave mortgage lenders access to confidential customer records. In an April 21 letter to customers, LendingTree said a "handful" of lenders obtained access to customer information such as Social Security numbers and income and employment data and used it to market their own mortgages. [30]
In 2007, Barry Diller, who serves as chairman and senior executive of Expedia, received compensation from the company valued at $4.3 million, according the filing.[31] The company valued Diller's stock-option pay at $14 million, also the same as 2006, reflecting the recognition of a 2005 grant of options.[23]
Diller also received other compensation valued at $927,429. This includes $693,202 for the personal use of a company airplane, $7,750 in the company's 401(k) retirement plan match and $62,020 in miscellaneous perks, which include personal use of two cars leased by IAC and other car services.[16] Expedia (nasdaq: EXPE - news - people ) CEO Dara Khosrowshahi received a salary of $1 million and a bonus of $2.5 million in 2007. He also received other compensation valued at $89,665, which included the company's matching contributions to his 401(k) retirement plan and personal use of a corporate aircraft. In 2007, Khosrowshahi received stock and option awards valued at $4.4 million on the date they were granted.[31] The executive received total compensation valued at $16.4 million in 2006, the vast majority of which was stock awards related to Expedia's spin-off from IAC/InterActiveCorp (nasdaq: IACI - news - people ).[31]
Excluding expenses and other items, earnings fell to $87.2 million, or 30 cents per share, from $96.9 million, or 31 cents per share, which met the expectations of analysts polled by Thomson Financial. [18] Adjusted for certain items, earnings totaled $87.2 million, or 30 cents a share, compared with $96.9 million, or 31 cents a share. That was in line with consensus estimates by analysts surveyed by Thomson Financial.[11]
BOSTON (Thomson Financial) - IAC/InterActiveCorp. Wednesday said first-quarter adjusted income fell to $87.2 million, or 30 cents a share, in line with the mean estimate of analysts polled by Thomson Reuters.[22]
On average, thirteen analysts polled by First Call/Thomson Financial expected earnings of $0.30 per share for the quarter.[6] The Internet conglomerate said earnings for the first three months of the year amounted to 30 cents per share.[1] Excluding special items, earnings for the latest quarter totaled 30 cents per share, just below the average Wall Street forecast of 31 cents per share, according to Reuters Estimates.[9]
Adjusted net income per share for the latest quarter declined 5% from a year ago.[6] On a per share basis, adjusted net income declined 5% to $0.30 from $0.31 a year ago.[6]
Since the first Vital Express story brokelast week, another key Santa Clarita investor decided to share hisstory. He told us he was attracted to VitalExpress because, for a small investment, only a $35,000.00franchise fee, investors could have an exclusive Vital Expressfranchise. The Boaz'''s had done itright; heavy marketing in franchise publications, the naming of thePerforming Arts Center at College of the Canyons and the communityinvolvement Dan and Lisa had coveted during their years in theSanta Clarita Valley. As they rolled out the marketing of thefranchises the leads just poured in. [32] Alongwith the franchise fees another $500,000.00 was raised frominvestors who bought shares in the Corporate Franchise Group. Allthese investors were from Santa Clarita or the Ventura area, whereDan and Lisa were renting an expensive beach house.[32]
'''The list covers other shipping companies,attorneys, cellular, computers, florists, printers, even a localpizza franchise that had delivered hundreds of dollars of pizza toVital Express. This figure doesn'''t include $500,000.00paid to the Corporation by investors, nor the money paid by thefranchisees.''' KHTS called a number of these businesses in preparation for thisstory.[32]
As for progress on the spin, the IAC board met Monday to move forward, and it plans a series of meetings with investors and analysts to pitch the case for the spin. In terms of timing: "I would think we're going to have one or two more board level discussions on this? we believe that we'll get this done in the third quarter, hopefully the early part." Some sort of filing on this will come this month. The company is focusing on its core user base, which, it claims, is more engaged in the property. [28] Wednesday's earnings lend credence to Diller's plan to break up IAC -- a plan that caused a rift between Diller and major IAC investor John Malone.[1] Wednesday's earnings offer the first look at IAC's numbers since a courtroom battle between Diller and major investor John Malone put Diller's leadership under intense public scrutiny.[10]
Diller seemed confident that the spin-offs would go forward. He also minimized the chances of a much-discussed swap between one of IAC's businesses -- likely the Home Shopping Network -- and Liberty's stake. "I think it's very unlikely one will occur," he said. Diller's comments came as IAC reported its first-quarter earnings, which were in line with Wall Street estimates.[21] We may do one or some modified thing but I don't think we're going to do anything that would particularly engage (the) private equity world.'' The best thing is to get these companies spun out and to get them into the public markets, get their managements out there, so to speak, and taking care of their own businesses and talking to the investment community. I think that's probably the better step forward for us at this point.'' For those watching at home, Liberty was mulling a swap for IAC's HSN shopping channel, or maybe a smaller asset. Firms such as Quadrangle and Elevation Partners were also among the parties who have discussed taking a stake in another IAC unit.[13] "We don't anticipate anything that will slow us down." IAC is in the middle of an effort to spin off four of its units, Ticketmaster, HSN, LendingTree and Interval International, a time-share operation, while keeping its advertising-supported Internet businesses such as Ask.com and Match.com.[27] IAC is spinning off LendingTree into a publicly traded company as the parent corporation splits itself into five businesses. Along with its spinoff of LendingTree, IAC will turn its HSN home shopping network, Ticketmaster ticket service and Interval International time-share business into separate, publicly traded operations. IAC will retain its media and advertising segment.[24] Goldman Sachs analyst Jennifer Watson said in a client note that IAC's first-quarter results "demonstrated several trends moving in the right direction." These include strong growth at its Ticketmaster and Interval businesses and solid growth at its HSN home shopping network business in spite of slowing consumer spending.[8]
IAC Chief Financial Officer Tom McInerney told analysts that management was in the process of trying to determine the appropriate capital structure for each of the five units. IAC earlier said first-quarter net income fell 13% despite higher revenue amid lower margins and higher costs at its retail business, acquisition costs and higher royalty rates at Ticketmaster and continued weakness in mortgage lending.[27]
Revenue at the "New IAC"'s biggest unit -- its media group -- grew 28%, primarily due to a renewed Google (GOOG) deal which resulted in an increase in revenue per query across all proprietary search sites". A nice bonus: Though Ask's queries continue to decline -- the company says it's because it's advertising less, not because Google is crushing all competitors -- "Revenue and revenue per query at Ask.com grew strongly, even excluding the benefits of the renewed contract."[15] According to New York-based parent company IAC/InterActiveCorp (NASDAQ:IACI), sales dropped primarily because fewer loans were sold to the secondary market, revenue per home loan declined and fewer loans closed on LendingTree's online exchange.[24] A 9 percent revenue increase at the company's recently restructured cable shopping channel, Home Shopping Network helped to boost sales during the quarter.[1]
Product sales increased to $723.5 million from $706.5 million, while service revenue grew to $878.8 million from $783.6 million. Costs rose for both product sales and service revenue, along with selling and marketing and other general expenses.[18] The retailing business struggled with revenues growing only 2% to $676.9 million for the divison while earnings fell a dramatic 42% to $20.2 million.[5]
The retailing business, to be named HSN, would have had $676.9 million, up 2 percent from $666.7 million a year earlier.[4] The chief executive of online travel company Expedia Inc. received compensation valued at $8 million in 2007, which represents a 51 percent decline from his compensation in the prior year, according to a regulatory filing by the company Monday.[31] The company reported a net loss of $144.1 million that year, compared with a profit of $187.1 million in 2006.[16] In the same period last year, the company posted operating losses of $7.8 million.[24]
Net income may have declined to $54.6 million from $62.1 million a year earlier, according to the average of seven analysts' estimates compiled by Bloomberg.[3] Adjusted net income for the latest quarter declined 10% to $87.17 million from $96.87 million in the prior-year quarter.[6] Operating income for the segment fell 42% to $20.2 million from $35.2 million in the year-ago period. This comprises an operating income at HSN of $27.6 million, reflecting a decline of $1.5 million from the year-ago quarter, due to amortization of non-cash marketing of $3.7 million and amortization of intangibles of $0.1 million.[6] Operating income for the segment declined 21% to $51.0 million from $64.8 million in the same period of the prior year and reflects an increase in amortization of intangibles and an increase in non-cash compensation.[6] Lending recorded an operating loss of $3.7 million compared to operating income of $0.1 million in the prior-year period, reflecting a shift to lower margin products, higher costs per loan sold and charges aggregating $3.1 million associated with legal and regulatory costs as well as restructuring initiatives.[6] Results for the latest quarter include $3.1 million in charges from restructuring and legal expenses.[24]
Amortization of non-cash marketing for the quarter rose to $6.51 million from $507 thousand in the year-ago quarter, while amortization of intangibles declined to $29.82 million from $30.23 million a year ago.[6] Selling and marketing expenses for the latest quarter were recorded at $337.20 million, up from $331.38 million a year ago, while general and administrative expense increased to $219.88 million from $203.00 million in the prior-year quarter.[6]
Loss for the division narrowed to $5.0 million from $8.0 million a year ago, due to lower marketing expenses and lower administrative costs resulting in part from the restructuring of the business during 2007.[6]
Quarterly revenue rose 8 percent compared to the same period a year ago, to $1.6 billion.[1] Revenues for the quarter grew 8% to $1.60 billion from $1.49 billion in the same period last year.[6] Analysts had a consensus revenue estimate of $1.53 billion for the quarter.[6]
The company's annual revenue rose to $2.67 billion from $2.24 billion.[31] Revenue probably fell 3.8 percent to $1.53 billion, according to the average of 12 estimates.[3]
Acquisitions contributed $18.4 million to Ticketmaster's overall revenue.[6]
The owner of a local private investigationcompany, Net Check Investigations, Jonathan ran for College of theCanyons Trustee in November 2005. He lost that election, but therace became a real eye opener. During the election Jonathan used his detectiveskills to conduct due diligence on Vital Express. He saw the lackof payments for the performing arts center as a huge campaignissue. He shared with KHTS, '''Everything happened backwards.Here was this $2 million dollar pledge the Boaz'''s made to theCollege, COC scrambled to change the name on all of theirpromotional material, yet there was no contract, no pre-screening.The College had already given Vital Express the naming rights forperpetuity yet no one had done a background check to see if theyhad the financial resources to back it up. As it turned out, afteronly an hour of research last September, my staff determined thatthey didn'''t have the resources to honor their $2 millioncommitment.''' By this time, KHTS had received a number ofcommunications from individuals concerned about the Vital Expressnaming.[32] Jonathan Kraut spoke with a number of thefranchise owners and investors. '''It was the same story. TheBoaz'''s had made all these promises that weren'''thappening. They were making transactions under five or sixdifferent company names at a time. I could see them planning to getready to get a fresh start in North Carolina.''' As the Boaz'''s were preparing for theirmove, many outstanding bills to local vendors had not beenpaid. '''It covered a wide range of people, manybusinesses in Santa Clarita,''' Jonathan commented.'''[32] The Boaz'''s beganpositioning themselves to move to North Carolina. They had alreadyestablished a number of other entities, including a company calledGlobal Logistics, which they formed in partnership with formerSanta Clarita resident, Rich Brulato, the former owner of Mama MiaRestaurant in Stevenson Ranch. As they preparedto leave Santa Clarita, the Boaz'''s purchased a million plusdollar home, on Lake Norman, in the suburban town of Mooresville,outside of Charlotte. Dan also purchased a boat to go with his newhome, along with a brand new Infinity Q-56. '''It'''slike he had no conscience,''' another investor told us.''' Here he wasn'''t paying his staff or his vendors, but hehad to brag about the new car he just bought to use at a locationhe wasn'''t even living at.''' Several investorstold KHTS that anytime they expressed concern they had to fear thewrath of the Boaz'''s. One investorexpressed concerns the Boaz'''s needed to increase theircommunication with the franchisees and investors.[32]
People'''s lives have beendisrupted. It'''s the stories of theseindividuals that really bring home the impact of what happened, asthey attempt to pick up the pieces of what'''s left of VitalExpress. Many of theinvestors were first introduced to Dan and Lisa Boaz through theirinvolvement in the community. One investor told us he was impressedwith what the young couple had accomplished. They had built an upand coming company in a very short period of time.[32]
Profits at HSN are being held back by declines in the catalog segment, the company said, noting, "Online sales continued to grow at a double digit rate in the first quarter." [14] The company he helms, IAC/Interactive Corp. ( IACI, Fortune 500 ) posted a decent earnings result for the first quarter of 2008, allowing him to begin the process of mending his bruised reputation as a deft leader.[1] IAC reported its first quarter earnings on Wednesday and it's the usual mix of mental hurdles, GAAP reconciliations and imagining what it could be.[20] NEW YORK (Associated Press) - IAC/InterActiveCorp reports earnings for the first quarter on Wednesday.[7]
On an adjusted basis, earnings would have been essentially flat, dipping to $0.30 a share from last year's $0.31-a-share showing. [26] In Wednesday's regular trading session, IACI is trading at $21.23, up $0.77 or 3.76% on a volume of 2.37 million shares.[6]
IAC was forced to take a $457 million write-down on mortgage broker LendingTree's 2007 loss of more than $500 million.[1] Let IAC's Interval take on Wyndham's (NYSE: WYN ) RCI timeshare swapping business. Let HSN compete against Liberty's QVC. Let LendingTree fend for itself, tapping its survival instincts to get through the real estate and refinancing downturn. Let the remaining IAC -- the online arm that watches over sites like Ask.com and dating site Match.com -- be free to take on the big boys like Google (Nasdaq: GOOG ) and Yahoo! (Nasdaq: YHOO ) on its own.[26] April 29 (Bloomberg) -- IAC/InterActiveCorp may report a drop in first-quarter profit tomorrow as slowing U.S. economic growth hampered a turnaround at the HSN shopping channel and hurt its LendingTree mortgage business.[3]
Excluding some costs, IAC's profit fell to 30 cents a share, missing the 31-cent average of 11 analysts' estimates.[2] Also, several of IAC's businesses posted lackluster profits, lending momentum to Diller's proposal to break IAC into five parts.[1] In a statement Wednesday, Diller maintained that spinoffs are still the way to go. "With this quarter's results, it couldn't be clearer that we are on the right course in separating IAC into five distinct public entities," he said. "Each of the businesses have their own unique opportunities -- some with current challenges and others with wind at their backs."[11]
IAC will report quarterly results Wednesday, and investors hope to hear more about CEO Barry Diller's spinoff strategy.''[12]
IAC and Diller also ran into a legal challenge over plans to split the company into five pieces.[23] IAC is slated to report first-quarter earnings Wednesday, when Diller is expected to further detail the company's planned breakup.[23]
As it happened, IAC matched Wall Street's consensus earnings estimates and exceeded expectations in revenue growth for the first-quarter of 2008.[1] The growth in ad revenue was partly attributed to the company's renewed partnership with Google (NSDQ: GOOG), which it said contributed to higher revenue per query on Ask.com.[17] Revenue growth was driven by improved economics associated with the renewed partnership with Google Inc. (GOOG), which resulted in an increase in revenue per query across all proprietary search sites.[6]
In fact they are doing almost exactly what Geosign did before (and was cracked down last year by the big GOOG): Buy traffic cheap on Google, then monetize through Google (something that is officially not appreciated by Google). No wonder revenue is flying at IAC. It's inflated. [15] In the fourth quarter, IAC wrote down almost two-thirds of the value in the unit as revenue plunged.[3] More than half of the revenue gain came from ResortQuest Hawaii, a vacation-rental business IAC bought last May.[2] Revenue declines at the Real Estate division reflected the absence of revenue from the agent network business, which closed in December 2007, and fewer closings at the builder and broker networks. These were partially offset by increased closings at the company owned brokerage.[6] The company noted that lending revenue declined in the quarter due to fewer loans sold into the secondary market and fewer loans closed at the exchange.[6] The 'Chinese Google' tops revenue estimates. The company takes down its full-year operating income forecast.[11]
Operating income of $20.2 million showed a year-to-year 42% drop, however.[14] Diller received a salary of $465,000 and a bonus of $1.3 million from Expedia. He received other compensation valued at $554,698, which included $521,302 for personal use of corporate aircraft and the use of automobiles for business and personal uses. Diller also received stock and option awards valued at $2 million on the date they were granted.[31] Diller's 2007 pay included a $500,000 salary, unchanged from a year earlier.[23]
Analysts believe that to be a poor performance, considering that Internet advertising is growing at 22 percent a year and e-commerce is growing at around 19 percent each year. Diller and Malone revealed during the March trial that they have been talking all along to hash out an agreement that might, say, spin the companies off and compensate Malone for his reduction in voting rights.[10] "What we're not discussing is the possibility of a so-called swap transaction with Liberty," Diller told analysts on a conference call. "The best thing is to get these companies spun out and to get them into the public markets -- get their managements out there, so to speak."[9] Diller said in November that would break IAC/Interactive into five separate publicly traded companies and eliminate Liberty Media's control.[18] While Liberty Media Corp. owns about 30 percent of IAC's equity, it controls about 62 percent of the voting power because of a dual-share structure.[18] Liberty holds more than 60 percent of the voting rights in IAC, because it owns Class B shares that get 10 votes each.[3]
Shares of search leader Google Inc. rose $20.75, or 3.7 percent, to $579.22.[8] Shares of IAC/InterActiveCorp rose $0.75, or 3.67%, to $21.21 on the news.[5] Elsewhere in the sector, shares of online auctioneer eBay Inc. gained 49 cents to $31.57.[8] Excluding some expenses, analysts anticipate earnings dropped to 31 cents a share from 33 cents.[3] Says Bernstein Research analyst Jeffrey Lindsay, "a poor earnings result would lend weight to the notion that the breakup needs to happen as soon as possible because certain parts of the company are holding others back."[10] In a client note, Citi Investment Research analyst Mark S. Mahaney said that the company's core listings trends "remain strong" but are being overshadowed by lower conversion rates, or listings that result in sales.[8] Analysts' concerns that the economy would hurt ad sales at Ask.com eased after Google Inc., which sells most of the search engine's advertising, reported first-quarter results April 17 that beat analysts' estimates.[3]
Sales at the Cornerstone Brands catalog unit slid 7 percent, while the HSN TV channel and Web site gained 9 percent. [2] The spin-off units include the HSN cable shopping network, LendingTree online mortgage site, Ticketmaster box office service and Interval time-share exchange.[9] Diller, 66, has proposed spinning off HSN, LendingTree, the time-share management firm Interval International and Ticketmaster.[2]
Bolstering Diller's point, IAC's prospects as a single company aren't looking bright. [1] Longtime Fool contributor Rick Munarriz has no problem with niche-specific search engines that bring something new to the table. He is a freelance contributor to IAC's Citysearch, but does not have a financial stake in IAC or in any other company in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.[26] The judge declined to rule on the spinoff plan itself because it has yet to be put into action. IAC's board has voted to support the spinoff in principle, but has yet to determine how they will allocate shareholder voting rights, debt, or assets among the new companies.[1] WHAT'S AHEAD: There could be more legal issues with Liberty ahead. The Delaware judge said it was too early to decide whether IAC directors met their fiduciary duties on voting for or against the spinoffs, since they had not yet fully approved the plan or its details. Lamb wrote that he would reserve judgment on that until a later date, if needed.[7] The judge ruled that Diller does not need to get Liberty's approval to split up IAC.[7] Last month, a judge ruled in favor of IAC, saying that Diller didn't need Liberty's permission to propose the spinoffs.[11]
In March, the two men battled in a Delaware court over Diller's proposal to break up IAC into five separate companies. [1]
The verdict was a boost for IAC, which went to court in January for the right to spin out four major businesses on terms that would dilute Liberty's voting power.[6] Liberty owns about 30 percent of IAC's equity but controls about 62 percent of the voting power due to a dual-share structure.[7]
IAC's board decided the company didn't meet performance objectives for last year.[23] "We can take very different chances." Prior to joining IAC last year, Lehman helped Viacom Inc's MTV Networks implement its digital media strategy.'' He explained how each of the sites within IAC's programming portfolio uses a slightly different advertising model.''[12] The company's remaining assets, which include search engine Ask.com and dating site Match.com, will remain part of IAC.[16] What remained of IAC would include the Ask.com search engine and the Match.com online dating Web site.[6]
IAC would keep Ask.com, the Match.com dating service, and smaller Internet advertising and retailing businesses.[3] IAC would keep Ask.com, the Match.com dating service and dozens of smaller Web businesses. The split should happen by August, he said today.[2]
The operating loss narrowed to $33.3 million from $39.2 million on lower marketing costs at Ask.com. [2] The operating loss of $7.3 million at Catalogs in the latest quarter reflects amortization of intangibles of $2.1 million.[6] Operating loss for the segment widened to $8.7 million from $7.8 million in the previous-year quarter.[6] Depreciation for the quarter was recorded at $42.60 million, up from $37.85 million in the prior-year period.[6]
In 2007, Expedia earned $295.9 million, compared with $244.9 million in the prior year.[31]
HSN only charges shipping. If you order an item you think is a great price at QVC, by the time they are done, you're paying at least $30 for $22 dollar item.[32] HSN may now be struggling because it has a less affluent audience than Liberty's QVC, according to analyst Jeffrey Lindsay at Sanford C. Bernstein & Co. in New York.[3] NEW YORK (AP) _ Shares of office-supply retailers fell on Wednesday, after OfficeMax Inc. reported weak first-quarter results.[19] NEW YORK (AP) _ Airline shares rose for the fifth straight day Wednesday as oil prices retreated further from recent record highs.[19]
The bad credit situation didn'''timpact us much because we knew we'''d have to pay depositsanyway. That would be the case with any new company.''' Thisfranchise owner seems to be the only one of the five franchiseeswho wasn'''t impacted by the Boaz'''s exploits. One ownerhas shut down his operation, a second opened and has distancedhimself from Vital Express corporate because of the problems heknew the other franchise owners were experiencing, a third has yetto open and has told us he is unlikely to open and the fourth hasleft the franchise fold and is trying to make it on its own under adifferent name. [32] The college complied with Lisa Boaz'''srequest to terminate, having only received $74,359 of the $2million dollars the Boaz'''s had agreed to pay. As for the percentage of money promised to the Henry MayoHospital Foundation for local companies who use Vital Expressservices, as reported in our last story, Vital Express still hasthe 5% offer posted on the home page of their websitewww.vitalexpress.com, along with a logo of the Vital ExpressPerforming Arts Center.[32]
Vital Express: The Aftermath Tuesday, 08 August 2006 Two weeks ago,Dan and Lisa Boaz, owners of Santa Clarita based, Vital Expressmoved to North Carolina. In the wake of their departure, money isstill owed to many Santa Clarita businesses and a group ofinvestors and franchise owners are exploring their legal options,trying to determine if any assets remain to go after. The Boaz'''s sold their Sand Canyon home andmoved on July 22nd to a million dollar plus home on Lake Norman, inMooresville, North Carolina, a wealthy suburb of Charlotte.[32]
The troublestarted a few months later. All those leads didn'''t really panout. A lot of people had the $35,000.00 to get them in the door,the problem was most of them couldn'''t come up with the$350,000.00 in Capital needed to successfully launch a franchise.In the end, only five franchises were sold, Phoenix, the SanGabriel Valley, Milwaukee, Seattle and Chicago.[32]
The bright side for what will remain of IAC after the spin-offs is that Google is improving monetization. Overall the quarter had its "usual plusses and minuses," according to Merrill Lynch analyst Justin Post. [20] IAC faces other challenges as well, Citigroup analyst Mark Mahaney wrote in an April 27 note to investors.[10]
One of the big minuses is that IAC always requires you to perform mental gymnastics to figure out if the company is worth your time.[20] Cornerstone, a catalog company that relies heavily on the sale of housewares and home goods, is suffering due to the housing downturn as well. As it stands, Bernstein Research's Lindsay believes "it is increasingly unlikely that IACI will meet its original spin-out deadline of third quarter 2008 and the implementation could be delayed well into 2009," he noted in a recent report. "It's not clear that any of the players have come to an agreement on how they'll allocate debt, voting rights, and assets," Lindsay wrote.[10] Cornerstone is concentrated in housewares and industries tied to housing and consumer confidence. Margins at HSN narrowed as the company got less of its sales from jewelry, he said.[2]
Diller heads internet conglomerate IAC/InterActiveCorp, which spun Expedia off in 2005 as a publicly traded company. [31] SAN FRANCISCO -- Chief Executive Barry Diller of IAC/InterActive Corp. IACI said he sees no more obstacles to impede the spin-offs of the Internet conglomerate.[21]
Through an agreement between them, Diller has controlled Liberty's votes for years. Liberty had sued to reclaim the voting rights it claims Diller gave up when he went against Liberty's will in pushing for the breakup. [7] Diller told analysts on Feb. 6 that the new deal would make Ask more profitable.[2]
SOURCES
1. IAC earnings a win-win for Barry Diller. - Apr. 30, 2008
2. Bloomberg.com: Worldwide
3. Bloomberg.com: U.S.
4. IAC's profit down as Diller plans split - East Bay Business Times:
5. Investerms.com - IAC InterActive Updates on Spin Offs
6. IAC Q1 Profit Declines 13% Despite Higher Revenue - Update [IACI] - RTTNews, Today's Top Stories, Global Newswires, ToDay's Top News,Global Business news .
7. Earnings Preview: IAC/InterActiveCorp to report 1st quarter
8. Sector Snap: Major Web stocks mixed; IAC, Google rise | Chron.com - Houston Chronicle
9. IAC profit falls, sees spin-offs in August | Markets | Hot Stocks | Reuters
10. IAC's make-or-breakup earnings report - Apr. 30, 2008
11. IAC/InterActiveCorp Meets Profit Estimates | Internet | IACI LINTA - TheStreet.com
12. CollegeHumor Finds Innovative Sponsorship Model - Technology - redOrbit
13. MediaFile » Blog Archive » Barry Diller goes it alone, and he's fine with that | Blogs | Reuters.com
14. Cutting down catalogs to aid standalone HSN - 4/30/2008 1:01:00 PM - Home Textiles Today
15. IAC Q1 In-Line; Ask Revenue "Grew Strongly" (IACI) - Silicon Alley Insider
16. IAC CEO Barry Diller received $1.4M in 2007 compensation
17. Earnings: IAC Q1 Revs Up 8 Percent; 'New IAC' Revs Up 22 Percent; Income Down 13 Percent - washingtonpost.com
18. The Associated Press: IAC 1Q profit drops on rising costs
19. Sector roundup: Airlines, office supply retailers | Chron.com - Houston Chronicle
20. IAC: Shareholder value or money pit? | Between the Lines | ZDNet.com
21. IACs Diller: Paths Clear for Spinoffs | Internet | GOOG IACI LINTA - TheStreet.com
22. IAC/InterActiveCorp 1Q adjusted income meets estimates; revenue up 8% | Latest News | News | Hemscott
23. UPDATE: IAC CEO Diller Gets Pay Package Valued At $15.4 Million
24. LendingTree posts 1Q loss of $8.7M - Charlotte Business Journal:
25. Free Preview - WSJ.com
26. Split Already, Will You, IAC?
27. UPDATE: IACs Diller Sees Spinoff Completed By August
28. Earnings: IAC: Not Talking Swap Transaction With Liberty; Unlikely To Sell Spins To PE - washingtonpost.com
29. CollegeHumor site finds ad niche in sponsorships | Technology | Reuters
30. LendingTree reports data breach | Markets | Markets News | Reuters
31. Expedia CEO received $8M in compensation in 2007 - Forbes.com
32. Battle of the Brands: QVC vs. HSN (Joan Rivers vs. Suzanne Somers) - BloggingStocks
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