IAC reports 3Q profit but ad revenue still slips

The results for IAC, which is led by media mogul Barry Diller, come after other Internet companies indicated in their third-quarter reports that the online advertising market remains uneven. Google Inc. reported a 7 percent increase in revenue in the period, but Yahoo Inc. said its revenue dropped 12 percent.

The period was tough for IAC, whose revenue fell 9 percent.

Counting one-time events such as a large gain on a stock sale and the sale of Match's European operations, IAC earned $21.7 million, or 16 cents per share, on $337 million in revenue. In the same period a year ago it lost $14.8 million, or 11 cents per share.

Revenue in IAC's media and advertising unit, which includes search engine Ask.com and online city guide Citysearch, dropped 11 percent to $172.3 million. For the third straight quarter, the company said the difficult ad climate - which is hurting media on and off the Web - lowered revenue at Citysearch.

IAC also said for the second quarter in a row that Citysearch was hindered by the relaunch of its site and the use of a new ad-delivery system.

Revenue from IAC's Match unit, which includes Match.com, Chemistry.com and other dating sites, fell 13 percent to $81 million. IAC attributed the drop to the absence of Match Europe, which was sold to a French company in June.

Match's number of paid subscribers rose nearly 5 percent to 1.4 million.

The only IAC unit that reported revenue growth during the quarter was ServiceMagic, which operates Web sites that connect homeowners with home-improvement contractors. ServiceMagic's revenue rose 30 percent to $43.9 million. IAC said the number of service requests rose 22 percent.

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