and IAC Beat the Street:: 2Q 2008 Earnigs

Some skeptics have publicly predicted the death of With IAC planning to spin off its properties into four units, that's a bold prediction indeed.

For the divisions that will become the new IAC, including Internet services such as and, revenue rose 11% as earnings improved 3%.

The Ask-Google partnership is already paying dividends. More people are using Ask more often.

Here's how the IAC Search business breaks out:

Media & Advertising consists of proprietary properties such as, Fun Web Products, Citysearch and Evite and network properties which include distributed search, sponsored listings, and toolbars.

Proprietary revenue grew strongly during the quarter and now represents 75% of total Media & Advertising revenue.

Media & Advertising revenue growth was driven by improved economics associated with the renewed partnership with Google, which resulted in an increase in revenue per query across all proprietary search sites.

Revenue per query at grew, even excluding the benefits of the renewed contract. continued to grow its core user base which searches most frequently, while queries declined overall due largely to significantly reduced marketing.

Media & Advertising profit benefited from lower marketing spend at and higher margin traffic resulting from the ongoing shift in query mix towards proprietary and away from the partner network.

About the author

Kevin Heisler, formerly the executive editor of Search Engine Watch, is a search and advertising industry veteran. His former roles include VP, strategic accounts for integrated digital marketing firm 360i; director of business development for Didit Search Marketing; and search industry analyst at Jupiter Research.

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