AFI BLOG: Media and Technology

The Media Industry Is Worth Watching in 2008 - Seeking Alpha

2007 was a not a pleasant year for the Media Industry. Most of the Media stocks including IAC, Walt Disney, News Corp. and Time Warner have undergone correction between 10% to 40%. Except Walt Disney, all other stocks are trading close to at their 52-week lows. Most of the companies have reported below the Street’s expected results. Considering all the news and activity in the online media business, the segment’s performance is a sobering reminder to the fact that change is a difficult phenomenon to manage. Let’s have a look at the results.

In 4Q’07,InterActiveCorp (IAC) reported y-o-y revenue growth of 8% to $1.86 billion. This was just above the Street’s expectation of $1.83 billion. It reported a net loss of $370 million against a profit of $15.3 million a year ago. Excluding certain abnormal items, it would have earned $0.46 a share versus $0.05 a share in the corresponding period of the previous year.

Segment wise, new IAC was the strongest with 21% y-o-y growth, and operating losses came down to $59.2 million from a loss of $184.1 million a year ago. HSN experienced y-o-y revenue growth of 3% but profit slipped by 7% due to low gross margin and higher expenses. Ticketmaster experienced 27% y-o-y revenue growth, and profit increased by 8% to $63.8 million. Revenue at online mortgage referral unit LendingTree fell by 55% to $52.1 million, predictably due to the worsening mortgage market. [You can read our detailed analysis of IAC’s various businesses in Web 3.0 and IAC.]

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