Web-holding firm IAC promises continued search growth
By Alexei Oreskovic
SAN FRANCISCO (Reuters) - IAC/InteractiveCorp's said that growth in its search business would slow from the "meteor ride" of the past two years, but it was confident of double-digit growth for the "foreseeable future."
Shares of IAC were unchanged at about $43 in after hours trading on Wednesday after the company reported a 28 percent increase in fourth-quarter revenue, slightly exceeding Wall Street targets.
Executives at the Web holding company sought to dispel concerns that industry changes were taking a toll on its search business, which includes the Ask.com website and accounts for roughly half of IAC's revenue.
"The growth rates will slow from the meteor ride we were on in 2011 and 2012, but we've been saying that would happen since the ride started," said IAC Chief Executive Greg Blatt on a conference call with analysts on Wednesday. "We're confident this segment should yield double-digit growth for the foreseeable future."
Shares of IAC have been under pressure, falling roughly 20 percent since October, on concerns that recent policy changes at Google Inc and consumers adoption of mobile devices would erode revenue in its search business.
Executives said the impact of changes to Google's search algorithm had not hurt traffic and monetization of IAC's online proprieties as drastically as some investors feared. And executives said the company saw significant opportunities to grow its business among users of smartphones and tablet PCs.
"They went to pains to clear up that confusion," said Jefferies & Co analyst Brian Fitzgerald. "The takeaway was Q1 is going to feel some impact from search changes but long-term the business is not going away."
The company for the first time provided a financial forecast, projecting that consolidated revenue and operating income before amortization in the first quarter would grow in the "strong double digits, high-teens range." Continued...