October 29, 2014 / 12:47 PM / in 3 years

Barry Diller's IAC makes handsome profit from online matchmaking

IAC/InterActiveCorp Chairman Barry Diller leaves the Allen and Co's annual media conference in Sun Valley, Idaho July 10, 2014. REUTERS/Rick Wilking

(Reuters) - Money can’t buy you love, but Barry Diller’s IAC/InterActiveCorp knows the search for it can be rather lucrative.

Higher revenue from dating websites such as Match.com and OurTime.com helped the company triple its profit and beat Street estimates in the third quarter.

Shares of IAC, which also owns the popular mobile dating app Tinder, rose as much as 5 percent on Wednesday.

Revenue from IAC’s dating services business rose 5 percent due to higher revenue from North America and more paid subscribers.

Paid subscribers across its dating websites grew 9 percent to 3.6 million.

IAC benefited also from its Vimeo video sharing service, with revenue in the business surging 30 percent as more paid subscribers logged on.

However, revenue from IAC’s Web search services business, its biggest, fell 3 percent, mainly due to lower revenue from Ask.com.

The company said revenue from the business, under which it also operates websites such as About.com and Investopedia.com, would be “flattish to down a little” in 2015.

The search services business accounts for more than half of IAC’s total revenue.

Barclays analyst Chris Merwin said the revenue decline in the business in the third quarter was less than the 10 percent fall the market was expecting.

Analysts had expected revenue from Ask.com and IAC’s other Web apps to be hurt after Google Inc changed a setting in its Chrome browser, allowing users to choose to download a toolbar instead of having one installed automatically.

Google’s add-on policy “became opt-in as opposed to opt-out ... you have to elect to download the toolbar as opposed to the situation where it might have been the default option - unless you unchecked it, it was going to get downloaded,” Merwin said.

IAC made news in June when Tinder’s former marketing vice president, Whitney Wolf, accused a senior executive of sexual harassment. Wolf settled the lawsuit in September.

The company’s net income more than tripled to $326.8 million, or $3.68 per share, in the third quarter ended Sept. 30 from $96.9 million, or $1.13 per share, a year earlier.

Revenue rose 3.3 percent to $782.2 million.

Excluding items, the company earned 92 cents per share.

Analysts on average had expected a profit of 66 cents per share and revenue of $751.7 million, according to Thomson Reuters I/B/E/S.

IAC’s shares were up 1.3 percent at $66 in afternoon trading on the Nasdaq.

Editing by Kirti Pandey

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