Contributed by: ElyseRomano on Saturday, August 16 2014 @ 10:31 am
Last modified on
IAC fell slightly short of expectations in Q2 2014, but nevertheless had a solid second quarter.
Subscribers are up where IAC's dating sites are concerned, but revenue dropped in its Search & Applications unit. Match Group revenue increased 8%, as paid dating subscribers grew 10% to 3.5 million globally.
The Media segment fell 36% to $36.7 million, due primarily to the closure of the Newsweek print business and the sale of its digital business. However, video site Vimeo increased revenue over 45% and reached nearly 500,000 paid subscribers. Websites revenue also increased 1% and page views grew 8% to 8.5 billion.
Search & Applications was the weak link in the chain for Q2 2014. Revenue declined 7%, enough that it could not be offset by growth elsewhere. On the whole, consolidated revenue declined 5% year-over-year. Consolidated Adjusted EBITDA dropped 10% compared to the previous year. Total revenue for Q2 2014 is $756.3 million, down from $799.4 million in Q2 2013 and below the $796.6 million consensus estimate of analysts consulted by Thompson Reuters.
Looking to the future, IAC will push forward with its new marketing campaign for Match and plans to put a renewed focus on native mobile apps. IAC will also acquire the Princeton Review, an in-person tutoring service that publishes college rankings, via its online-only tutoring firm Tutor.com. And then there’s one thing that gets more attention than any other: Tinder.
IAC says it intends to monetize the popular dating app this year, and stands to make quite a hefty sum. Greg Blatt, chairman of IAC’s Match Group unit, said recently[*1] that Tinder has the potential to generate as much as $75 million a year in earnings (before interest, taxes, depreciation and amortization).
“It’s growing like a weed,” Blatt said, but earning money from Tinder is still “a work in progress in terms of exact manner and timing.” Several monetization possibilities are available to IAC at this point. Back in April, IAC chairman Barry Diller said[*2] three approaches are currently under consideration:
Tinder certainly isn’t hurting for opportunities, so at this point any direction seems like a real possibility. “I have been developing online businesses for quite a while now,” Diller claims, “since the Internet started. I have never had the number of people banging through our doors to see if we would sell them a little piece of Tinder.”
So far it hasn’t happened, but don’t think he doesn’t have something up his sleeve. “We have got lots of little areas marked for revenue,” Diller said. “You bleed into them over time.”
For more on these 2 dating services you can read our reviews of Tinder and Match.com.