IAC Writes Down $1 Billion Of Its Search Business

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IAC’s troubled search business actually grew revenue last quarter, helping the company beat the Street’s expectations for Q4. But IAC wrote down $992 million of the value of its search business, reflecting its lousy-at-best future.

Barry Diller’s internet conglomerate posted $367.2 million in Q4 sales, up 5% year-over-year and higher than the $339.6 million the Street was anticipating. Search revenue grew 3% year-over-year to $185.4 million.

Media revenue — including Shoebuy (“strong holiday season”), CollegeHumor, Vimeo, etc. — grew 6% to $63.5 million. Match.com dropped 6% to $83.3 million.

From the release:

Search revenue reflects an increase in proprietary queries and the continued growth in distributed toolbar partners and queries, partially offset by a decline in revenue per query. Ask.com’s site enhancements have improved monetization, leading to increased revenue per query, but have resulted in fewer queries per visit as users find their desired results more quickly. Citysearch’s revenue declined, primarily reflecting lower display revenue due to lower pricing and a planned reduction in inventory availability.

Ask.com represented 3.7% of the U.S. search market in December, down from 3.9% in December ’08, according to comScore.

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