IAC's Romance With Online Dating Deepens As Revenue Grow

Newsweeks Gets The Cold Shoulder

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Barry Diller's IAC/InterActiveCorp seems to be in love with its suite of online dating services.

IAC introduced the matchmaking app Tinder last year
IAC introduced the matchmaking app Tinder last year

The company -- which owns Match.com, OKCupid, Tinder and Europe's Meetic -- beat analysts' expectations for the second quarter when on Tuesday it reported second-quarter revenue growth of 23%, partly on the strength of its dating sites.

Revenue from Match, Inc. -- the umbrella company that oversees the portfolio of dating sites -- was $194 million, 9% above the same period last year, and ahead of analysts' expectations of $193 million. IAC expects that percentage growth to accelerate into the low double-digits during the second half of the year, it said.

"I really think we'll reach a point where everyone single will be using technology in some way to help them make romantic connections," said Greg Blatt, CEO of IAC/InterActiveCorp, during an earnings call on Wednesday. "This is one of the things that people are willing to pay for online even when there are free alternatives."

Overall revenue for the quarter was $799.4 million, ahead of the anticipated $781.6 million. Net earnings climbed 35% to $58.3 million. IAC owns 150 brands, including CollegeHumor, Vimeo, Newsweek and The Daily Beast.

The company made little mention of Newsweek, which is on the block, during the earnings call and did not discuss The Daily Beast. On Wednesday, the New York Post's Keith Kelly named PMC, which is owned by auto scion Jay Penske and publishes Deadline Hollywood and Variety, as a potential suitor for Newsweek.

A spokeswoman for IAC played down the report. "There are a couple of interested buyers, but we can't comment on who they actually are," she said. A rep from Penske did not respond to a request for comment

Media and other combined revenue totaled $93 million in the second quarter, ahead of analysts' expectation of $83 million. IAC's search products, such as About.com and Ask.com, gave IAC the strongest lift, with revenues of $427 million, up 22.5% year over year and ahead of analysts' expectations of $397 million.

While giving Newsweek and The Daily Beast the cold shoulder, Mr. Blatt heaped praise upon Match Inc., which includes a suite of products aimed at various demographics, all with different strategies for monetization.

Match.com, which IAC acquired in 1999, charges a subscription fee. OKCupid, which it bought for $50 million in 2011, carries advertising and offers a premium subscription service called A-List.

The company also owns OurTime, a site for singles older than 50, as well as Tinder, a slick smartphone app aimed at college-aged singles that rolled out last year. Tinder is free and does not carry ads.

"We're not monetizing it now and we probably won't monetize it in earnest for a while," said Mr. Blatt, himself the former CEO of Match.com. "But I assure you that if its growth continues and truly takes hold, it's going to be a very valuable asset."

Owning a range of these services gives IAC a powerful hold on the market, Mr. Blatt said, with Tinder serving as the gateway to online dating.

"Services like Tinder and OKCupid acclimate new groups of people to meeting online," he explained. "That meaningfully expands the market and once people have used technology to meet other people, no matter what the service was they initially used, the barrier has been broken and they're more likely to do it again."

Nearly 50% of first-time Match.com subscribers have previously used another service for meeting someone online, according to Mr. Blatt.

Expect IAC to be in the market for more dating sites. "The more people we can get to try these services -- whether we own them or not -- the more likely they are to use our other services," said Mr. Blatt. "Of course, it's better when we own them."

The company completed the purchase of another European dating site, Twoo, in January and plans to grow in Latin America. It also owns a minority stake in Zhenai, a matchmaking service in China.

"We'll likely add others," Mr. Blatt said.

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