IAC/InterActiveCorp Posts Drop in Quarterly Net Income

Ticketmaster Division Records Revenue Increase

By Jane Cohen and Bob Grossweiner

Media and internet company IAC/InterActiveCorp recorded a 4.2% drop in net income for the quarter ended Sept. 30, 2007, but its Ticketmaster division saw revenues and operating profit increase, according to financial reports released this week.

IAC’s net income for the quarter was $71.8 million, or 24 cents a share, down from $74.9 million, or 24 cents a share for the same period a year ago. It also reported a drop in operating income that fell about 3.5 percent to $104.1 million from $108 million in 2006. Revenue grew 7.4 percent to $1.52 billion.

Despite Ticketmaster’s very public dispute in August with key client and concert promotions juggernaut Live Nation that resulted in a failed attempt to reach a new long-term agreement, Ticketmaster said revenue grew 13 percent for the quarter to $301.3 million, as ticket sales worldwide increased 11 percent. Ticketmaster’s operating profit also rose 7 percent. "We have not really seen any change in the competitive environment in any way at all," IAC Chief Financial Officer Thomas McInerney said on a conference call with analysts. "I think Ticketmaster's position remains as it was."

Ticketmaster will cease selling tickets to Live Nation’s vast network of venues after the contract ends at the end of 2008. Its contract with Live Nation’s House of Blues subsidiary will end at the end of 2009. Live Nation and House of Blues generate about 15 percent to 20 percent of Ticketmaster revenue.

Higher expenses at IAC’s HSN and an operating loss at its Lending Tree division contributed to the company’s net income loss. IAC said it bought back 8 million shares in the quarter, at an average price of $27.54. IAC also owns Citysearch, Evite, Match.com and the Ask.com search engine.