IAC Profits, But Misses Expectations
Q4 2008 was an important time for IAC—it was their first full quarter going it alone, after they spun off four businesses, a change announced in November 2007 that finally took effect in August 2008. And, as for everyone else, Q408 was not an easy time for the now solo company.
On the plus side, as the New York Times reports, IAC did post a profit: $227.4 million, or $1.57 per share for the company which now includes Match.com and Ask.com. In Q407, the then-much-larger company posted a loss of $369.9 million, or $2.53 per share.
However, some of this success comes with a definite price: the $493 million sale of 30% of a Japanese shopping network (with a benefit of $242.5 million from the sale). And the company’s revenue fell 7%, missing analysts’ predictions by almost $18 billion (a “modest miss” according to one analyst).
Worse still, Ask.com didn’t fare as well as their parent company did overall:
The company’s media and advertising unit — which includes search engine Ask.com — reported revenue sank 19 percent to $183.7 million. IAC said this was due in part to the removal of toolbars and search boxes from a variety of non-IAC sites as it moves to place them mostly on its own Web sites.
IAC also said that fewer searches were performed at proprietary Web properties such as Ask.com and at Fun Web Products sites. It attributed the drop in Ask.com searches to lower marketing spending.
IAC said revenue per search rose overall at its proprietary Web sites, but revenue per search at Ask.com dropped. The company attributed this to users clicking fewer times during visits to the site as they were able to find what they wanted more quickly in the wake of Ask.com’s relaunch in October.
For the full year, the company posted a loss.
What do you think? Is this the end for Ask.com? Or will their fortunes turn around with the economy (if they can just hold on long enough)?