IAC Reports Q1 2014 Results

  • Saturday, May 10 2014 @ 09:46 am
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IAC has released its first quarter 2014 financial results. All in all, the company reports $740.2 million in revenue for Q1 2014, more or less on par with the $742.2 million in revenue of Q1 2013.

Websites revenue increased thanks to the acquisition of the “Owned & Operated” website businesses of ValueClick (which the company acquired in January of this year), the contribution of CityGrid Media, and growth at About.com. On the other hand, applications revenue decreased, primarily due to lower queries in B2B. Adjusted EBITDA decreased as well, as a result of lower revenue in B2B and higher marketing expense in B2C.

The Match Group – which includes Match.com, Chemistry, People Media, OkCupid, and other dating businesses – saw 9% growth in dating revenue (broken down into 7% growth in North America and 12% growth in International). Non-dating revenue grew 53%. Despite the higher revenue, driven mostly by increased subscribers, IAC’s profits declined due to a significant increase in marketing expenses for certain businesses.

Dating revenue for North America totaled $134.5 million in Q1 2014, up 7% from $125.6 million in Q1 2013. International dating revenue jumped 12% to $70.5 million in Q1 2014 from $63.2 million in Q1 2013. Combining both, IAC’s total dating revenue for Q1 2014 is $205 million, an increase of 9% from $188.9 million in Q1 2013.

The question now, of course, is what does the rest of 2014 have in store for IAC?

One major change that stands to make a huge impact on IAC's bottom line is the monetization of Tinder. Though IAC has declined to specify its exact ownership stake in the company, it has said that Tinder is now completely owned by IAC and Tinder executives, with CEO Sean Rad at the helm. The hugely popular mobile dating app is the hottest company in IAC's portfolio, but it doesn't yet generate any revenue. IAC has announced that 2014 will be the year that changes, though they've been vague so far about the exact way that monetization will take place.

The most obvious strategy would be to run ads on the service. In fact, it wouldn't be the first time it's happened. Fox used fake profiles to promote The Mindy Project, as did the USA Network program Suits, though they did not bring Tinder or IAC any revenue and a company spokesperson maintains that the campaigns were "strategic partnerships" rather than advertising.

Happily ad-free Tinder users should enjoy the experience while it lasts – with all the money-making potential the app packs, it’s probably only a matter of time before ads become the new norm.