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INTERNET MEDIA

March 12, 2014


Company Update

IAC/InterActiveCorp (IACI - $75.68)

RATING: Buy
Price Target: $98.00

Online Dating Deep Dive; Raising PT to $98

Victor Anthony

Summary

va@topekacapitalmarkets.com
Tel: 212-709-5734

In this report we present to investors a comprehensive investment overview of the online


dating industry. The industry was once thought to be mature, but is now returning to secular
growth, driven by favorable demographic, social and technological trends such as mobile.
As the leader in the industry, Match.com is best positioned to capitalize on the growth
resurgence. We have taken up our 5-year Match.com revenue and EBITDA growth CAGRs
to 9% and 11%, respectively, from 7% and 8% previously. Our IACI SOTP-based price target
increases to $98 from $78. We recommend investors purchase shares of IACI in anticipation
of a Match spin off.

Topeka Trading: 212-709-5750

STOCK DATA
Price

$75.68

Price Target

$98.00

Market Cap ($M)

$6,304

52-Week Range

$42.50 - $80.64

Shares (mil)

83.3

ADTV (000)

823

Enterprise Value ($M)

$6,097

Free Cash Flow ($M)

$331

Dividend Per Share

$0.96

Yield

1.5%

Key Points
Attractive Industry Dynamics. The industry is characterized by predictable and recurring
subscription based fees, add-on advertising revenues, incremental transaction fees,
inherent operating leverage, low capital requirements, and high incremental cash flow
margins. Network effects are present and high re-subscription rates drive down customer
acquisition costs.

FINANCIAL DATA
LT EPS CAGR

11.1%
2013A

2014E

2015E

EV/Sales

2.0

1.9

1.7

P/E Ratio

18.4x

19.4x

16.1x

EV/EBITDA

10.2x

9.6x

8.2x

2013A

2014E

2015E

Q1

742.2

732.0E

797.6E

Q2

799.4

812.1E

885.9E

Q3

756.9

826.2E

903.3E

Q4

724.5

836.7E

914.3E

3,493.9E

3,023.0

3,207.1E

3,501.0E

REVENUE ($M)
FY December

Previous
FY

EPS
FY December

2013A

2014E

2015E

Q1

0.83

0.53E

0.73E

Q2

0.95

1.02E

1.26E

Q3

1.29

1.16E

1.34E

Q4

1.04

1.18E

1.37E

4.67E

4.11

3.90E

4.71E

Previous
FY
EPS: Adjusted EPS

Favorable Trends. A rising singles market, increasing favorable opinions of online dating,
and mobile adoption are driving growth trends. The result of the return to secular growth
should be more private companies accessing the equity capital markets, further industry
consolidation by the leaders, and increased funding by financial sponsors.
Match.com is Best Positioned. Match is the king of paid subscribers, with over two times
more paying subscribers than the next highest competitor, which is based in China. The
company has a collection of assets that cut across most online dating models and has
a commanding 20% share of global industry revenues (the next largest at a 5% share).
Match.com's high brand equity, its role as the industry consolidator, management's keen
focus on technology, and attractive assets such as Tinder and OkCupid, should allow the
company to grow its dominance over time.
A Margin Expansion Story. We see Match.com growing revenues and EBITDA at healthy
growth rates over the next five years, with revenue growing at a 9% CAGR and EBITDA
growing at an 11% CAGR. EBITDA margins expand by +300bps over the next five years
driven by operating leverage at standalone Match.com U.S., greater mix of high margin
OkCupid revenues, and increased profitability at Meetic and other developing sites.
Monetization of Tinder would lead to more margin upside. Our estimates are conservative,
in that they are below management's aspirational EBITDA goal of $500mm in 2016, and
the potential for subscriber growth to exceed 5 million over the next five years. A DCF of
Match.com points to an enterprise value of $4.7B, with additional future upside tied to
monetization of Tinder, and the value of Dailymotion and Tudor as part of Match Group.
Risks to our Match estimates include competition, inefficient marketing spend, and legal
matters.

Valuation
IACI trades at 9.6x 2014 EV/EBITDA. Our $98 price target is based on a SOTP valuation analysis
using what we believe are reasonable EBITDA-based and revenue-based multiples for the
segments.

Important Disclosures located on the Disclosure Appendix.

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

Executive Summary
In this report we present to investors a comprehensive investment overview of the online
dating/personals industry. The industry was once thought to be mature, but is now returning
to secular growth, driven by favorable demographic, social, and technological trends such as
mobile. The industry is characterized by predictable and recurring subscription based fees,
add-on advertising revenues, incremental transaction fees, inherent operating leverage, low
capital requirements, and high incremental cash flow margins. Network effects are present
and high re-subscription rates drive down customer acquisition costs leading to strong cash
flow growth. As the leader in the industry, Match.com is best positioned to capitalize on the
growth resurgence, in our view. Match is the king of paid subscribers, with two times more
paying subscribers than the next highest competitor, which is based in China. We have taken
up our 5-year Match.com revenue and EBITDA growth CAGRs to 9% and 11%, respectively,
from 7% and 8%, previously. Our IACI SOTP based price target increases to $98 from $78.
We recommend investors purchase shares of IACI in anticipation of a Match spin-off. A DCF
of Match.com points to an enterprise value of $4.7B, with additional future upside tied to
monetization of Tinder and value for DailyMotion and Tudor as part of Match Group.
We continue to believe that with the corporate re-organization announced on December 19,
2013, IAC has taken the first steps to spin-off Match.com. The reorganization would include
a newly created Match Group, consisting of IAC's Match businesses, Tutor.com, DailyBurn,
and IAC's investment in Skyllzone. Current IAC CEO Greg Blatt will become Chairman of
Match Group and Sam Yagan, the current CEO of Match, will become CEO of Match Group.

Online Dating Industry A Return to Secular Growth


The online dating industry has evolved from one considered mature to a growth sub-sector
within the Internet, with nearly all newspaper-based personals having shifted to the
Internet. As such, the online dating industry had been viewed as a mature, slow growing
category. That view is changing due to favorable demographic and social trends that should
continue to support double-digit subscriber growth for the industry as a whole. The rise of
singles and the increasing use of social media, which has reduced the negative stigma once
associated with finding a partner on the Internet, coupled with a general trade down in the
economy, is driving the industry back to secular growth, in our view. Furthermore, the rising
adoption of mobile devices, and correspondingly mobile apps, has increased the
convenience factor and time spent with online dating services, helping to drive the industry
back to meaningful growth. Online dating sites can take on several forms including online
personal sites where users have to search for potential mates, sites focused on personality
tests and matchmaking, niche content sites that focus on religions, ethnicities, age ranges,
and other demographic data, adult focused sites, and now apps that focus on delivering
location based matches. The subscription based economic model employed by a vast
majority of the industry participants ensures revenue predictability with high incremental
cash flow margins. The result of a return to secular growth should be more private
companies accessing the equity capital markets to capitalize on that the growth, further
industry consolidation, and increased funding by financial sponsors.

Important Disclosures located on the Disclosure Appendix.

Page 2

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

The Secular Growth Argument in One Chart The Singles Market is Growing. Most
measures estimate that there are over 90 million single adults in the U.S. To illustrate the
opportunity for the online personals industry, we analyzed the trend of the U.S. unmarried
population using data from the Census Bureau. Per the data, 47% of the U.S. was unmarried
in 2012 compared to 42% in 1994, illustrating an expanding market opportunity for the
online personals industry.
Exhibit 1. IAC: U.S. Unmarried Population
48%
47% 47%
47%

46%
46%

46%
45%

45%

2005

2006

45%

45%

46% 46%

44%
44%

44%

44%

44%

44%

44%

43%
43%
42%

42%

41%
40%
1994

1995

1996

1997

1998

1999

2000

2001

2004

U.S. Unmarried % of Population

2007

2008

2009

2010

2011

2012

Linear (U.S. Unmarried % of Population)

Source: U.S. Census Bureau: Topeka Capital Markets

Familiarity With Online Dating Has Increased. According to a Pew Research Center study,
the percentage of Americans who were familiar with online dating in 2013 jumped to 42%
from 31% in 2005. And as well, the percentage of adult Americans who know someone who
has been in a long-term relationship or has been married with someone they met through
online dating has increased to 29% in 2013 from 15% in 2005.
Exhibit 2. Familiarity with online dating through others, 2005-2013
80%

60%
+11pts

42%

40%
31%

29%
+14pts

20%

15%

0%
Know someone who has used online dating

2005

Know someone who has been in a long-term


relationship or marriage w/ someone they met
through online dating
2013

Source: Pew Research Center's Internet & American Life Project; Courtland Brooks; Topeka Capital Markets

Important Disclosures located on the Disclosure Appendix.

Page 3

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

Favorable Opinions Of Online Dating Have Also Increased. According to the same Pew
Research Center survey, the percentage of adult Americans who believe online dating is a
good way to meet people jumped 15 percentage points to 59% in 2013 from 44% in 2005,
and 53% believe that online dating will allow uses to find a better match versus 47% in 2005.
Conversely, the percentage of adult Americans who believe users of online dating are
desperate declined to 21% in 2013 from 29% in 2005.
Exhibit 3. Opinions of Online Dating, 2005-2013
80%
59%

60%

53%
47%

44%
40%

32%

29%
21%
20%

n/a
0%
Online dating is a good
way to meet people

Online dating allows


people to find a better
match
2005

People who use online


dating are desperate

Online dating keeps


people from settling
down

2013

Source: Pew Research Center's Internet & American Life Project Spring Tacking Survey,

Under-penetrated Internet Category. Although the offline category has almost entirely
shifted to the Internet, relative to the overall Internet, online dating has a small share of
overall unique visitor traffic. In the U.S., online dating unique visitors average 17-18 million
and represent 8% of total Internet unique visitors. Globally, the penetration rate is similar.
This compares to online travel, which has a 39% share of unique visitors in the U.S. and
globally. This is a bullish scenario, in our view, implying that online dating remains underpenetrated within the Internet itself and there is more room to expand.

Important Disclosures located on the Disclosure Appendix.

Page 4

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

Exhibit 4. Online Dating vs. Online Travel Unique Visitors Penetration, Desktop Only
45.0%
39.6%

40.0%

38.7%

35.0%
30.0%
25.0%
20.0%
15.0%
10.0%

8.4%

8.1%

5.0%
0.0%
U.S. Unique Visitor Penetration
Online Dating

Worldwide Unique Visitor Penetration


Online Travel

Source: comScore, January 2014; Topeka Capital Markets

Competition See Detailed Competition Grid At The End of This Report. The online
personals industry is highly competitive with thousands of competing websites across the
globe. There are websites such as Match.com, that cater to a broad demographic, to very
niche focused sites based on race, religion, ethnicity, and other demographic data. While
competition is rife, as with all things Internet, scale matters, as the large players benefit from
network effects.

eHarmony. eHarmony is the second largest online personals site in the U.S. in terms
of revenues and paid memberships and one of most visible from a brand equity
perspective. The company pioneered the long-form dating questionnaire and then
uses proprietary algorithms to find potential matches based on the user responses.
The site claims more marriages than any other online dating site. After a series of
management changes, the founder of the firm, Neil Clark Warren, who appears in
eHarmonys TV commercials, is now back as CEO of the company. The 175 person
company plans to leverage its expertise in matching online daters to finding
matches for jobs.

Sparks Networks (LOV-$5.09:NR). Sparks Networks is popular not for its name but
for the sites that it owns Jdate.com and Christian Mingles, both of which have
high brand equity. The near 300K paying sub base is spread across over 20 niche
dating sites. The company is currently the subject of a shareholder activist who is
seeking to replace the current board of directors.

Graph Search. We can see how Facebooks (FB-$70.10:Buy) Graph Search could
offer a compelling alternative to the online dating sites given the relatively simple
searches users can conduct, such as Single female friends of XX who live in San
Francisco. Contact can then be initiated by sending the Facebook user a message.
While the service is compelling and adds a layer of personalization, that is, you are

Important Disclosures located on the Disclosure Appendix.

Page 5

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

making contact with someone whom you may not know but is a friend of a friend, it
has not caught on with users. Most users we speak with are unaware that this type
of search can be conducted on Facebook. There is opportunity for Match and
others, as they can advertise their services against those searches.
Zoosk. According to Bloomberg, online dating site Zoosk, has picked bankers to
initiate an IPO. The dating company leverages Facebook to drive subscriber growth
and claims more than 40 million active members. Zoosk reported that 1Q13
revenues topped $40 million and 2011 revenues were $90 million. Users can initiate
contact for free but subsequent contacts require a premium service.

In the U.S. Match.com, inclusive of all their owned and operated sites, had 5.4 million unique
visitors, 68% higher than the next highest, Zoosk, which had 3.2 million unique visitors,
followed by POF at 2.8 million, and the Spark Network of sites at 2.8 million.
Exhibit 5. Top U.S. Dating Sites by Unique Visitors, November 2013

Unique Visitors, mn

5.4

5
4
3

3.2

2.8

2
1
1

0.8

0.78

0.57

0.5

0.17

0.125

U.S. Unique Visitors

Source: CortlandBrooks, TopekaCapital Markets


Match.com sites had the highest market share of unique visitors in the U.S. at 31% - defined
as Match.com unique visitors divided by total unique visitors for the online personals
industry.

Important Disclosures located on the Disclosure Appendix.

Page 6

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

Exhibit 6. Market Share of Unique Visitors, U.S., November 2013

Unique Visitors Penetration of Total Online


Personals Uniqve Visitors

35%

31%

30%
25%
18%

20%

16%

15%
10%

6%

5%

5%

4%

3%

3%

1%

1%

0%

Source: comScore, Topeka Capital Markets

Match.com The King of Paid Memberships. Based on available data, Match.com had the
highest number of paid members, with core Match (ex-Meetic), ending 2013 with 2.54
million paying members, 84% higher than the next largest site, Jiayuan.com (DATE$8.05:NR), which is based in China. The participant subscriber base below sums to 6.85
million.
Exhibit 7. Online Dating Sites Based on Paid Memberships, as of December 2013
4.00
3.50

Paying Subs, mn

3.00

3.36

2.54

2.50
2.00
1.38

1.50

1.00
1.00

0.82
0.29

0.50
0.00
Total
Match.com, Jiayuan.com
Match.com Ex-Meetic

eHarmony

Meetic

Spark
Networks

Source: Company Reports; Topeka Capital Markets

Match.com, ex-Meetic had the fastest paid subscriber growth in 2013, with growth of 24%
YoY, led by Matchs developing sites OkCupid, Speeddate, DateHookup, Twoo, and Match
International. In total, Matchs subscriber base grew 19% YoY in 2013. Spark Networks grew
13% YoY, Jiayuan.com grew 12% YoY, and Meetic grew 6% YoY.

Important Disclosures located on the Disclosure Appendix.

Page 7

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

Exhibit 8. 2013 YoY Subscriber Growth


30%
2013 YoY Subscriber Growth

25%

24%
19%

20%
15%

13%

12%

10%
6%
5%
0%
Match.com, ExMeetic

Total
Match.com

Spark Networks

Jiayuan.com

Meetic

Source: Company Reports; Topeka Capital Markets

Economics Of The Online Dating Industry. The underlying unit economics of the industry are
attractive with high-single to double digit annual sub growth, APRU in high teens to low
$20s, high churn but high repeat subscribers, and high cash flow margins for the leaders in
the space.


Members/Subscribers/Conversions. Most online dating sites claim millions of


registered users, however, only a small portion of those members are paying
subscribers at any point in time. For instance, Match.com claimed 30 million
registered members at yearend 2013, up 500% from five years ago, with 3.35
million paying members, up 150% from five years ago, for a conversion rate of
approximately 10%.

Churn. Unlike other subscriber based models like cable television, the online dating
sites are surprisingly hush-hush about their churn rates. However, we understand
that industry monthly churn rates average in the high-teens to 20%. While the
monthly churn can be high relative to other subscriber based models, resubscriptions can constitute a high percentage of the subscriber base at any point in
time, and is as high as 50% for Match.com U.S. standalone. The participants do not
provide gross subscribers, cancellations, and customer acquisitions costs in addition
to the churn, so it is difficult to calculate the life-time value of a subscriber.
However, we understand that a typical subscriber can last up to three years on the
premium sites with a payback on marketing in less than one year.

ARPU. Per monthly subscriber fees average $15 to $25 per month for most sites,
with the premium sites like Match.com averaging at the upper end of that range.
There appears to be an industry wide effort amongst the sites to push discounted
longer-duration subscription plans, which provides better revenue predictability
and increased cash collection from the subscriber overtime, but lower ARPU.
Match.com, specifically, engages in price optimization or dynamic pricing where

Important Disclosures located on the Disclosure Appendix.

Page 8

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

they price differently in different markets with different prices for certain packages.
Depending on adoption, ARPU could be positively or negatively impacted leading to
short-term variability in ARPU, but we suspect the basis for dynamic pricing is to
have ARPU trend up, while still capturing subs at the lower-end. Incremental add-on
services like pay to promote profiles employed by the sites could drive-up ARPU
trends.


Revenue. Revenue is derived from the monthly subscriber fees described above,
fees for add-on services, fees for offline events (aids retention, increases ARPU),
and advertising fees, which are mostly branded ads from what we can see. Most
free sites eventually push subscribers into premium pay packages for access to
greater services. Ashley Madison has a different model, whereby users pay an
upfront fee for credits which they then use for services like emailing members.

Marketing Margin Cash Flow Growth Trade-offs. Direct marketing is likely the
most important P&L item on the cost side as it is used to drive subscriber and
revenue growth in subsequent periods. The larger sites like Match.com and
eHarmony advertise heavily on television and almost all use online search to drive
traffic. Lately, we have noticed sites advertising aggressively on Facebook, namely
Zoosk. Partnerships and affiliate relationships to drive traffic are often considered
part of the marketing funnel for most sites. ROI is monitored heavily with most sites
pulling back spend when channels become inefficient. There is a trade-off quarterto-quarter with marketing spend and margins, with periods of increased marketing
denting margins and vice-versa. However, most sites are resolved to spending
heavily on efficient marketing channels in order to drive profit growth longer-term
and are willing to sacrifice margins quarter-to-quarter to achieve their goal.

Capital Expenditures. Capital expenditure requirements for online dating sites are
relatively low compared to other Internet based models, averaging about 3% of
sales.

Working Capital. Working capital is a source of cash for the established firms and
can vary between 3%-5% of sales. As the sites shift to longer-duration plans, the
working capital benefit should increase over-time.

Sizing The Market. The U.S. dating industry is estimated to be a $2 billion market in the U.S.,
according the IBISWorld report, and they expect the industry to add an additional $300
million in revenues annually, to reach to $2.3 billion in 2016, for a CAGR of 4%. Given the
rapid rise of mobile dating applications that could capitalize on advertising and quick up-sell
opportunities, we believe those numbers will prove conservative and we can likely see a
growth CAGR close to double digits over the same time frame.

Important Disclosures located on the Disclosure Appendix.

Page 9

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

Exhibit 9. U.S. Dating Services Revenue


($ in Millions)
$2,300

$2.3B

$2,250
$2,200
$2,150
$2,100
$2,050

$2.025B

$2,000
$1,950
$1,900

$1.87B

$1,850
$1,800
$1,750

2011

2012

2013

2014

2015

2016

U.S. Dating Services Revenue


Source: IBISWorld March 2013; Sparks Networks; Topeka Capital Markets

U.S. mobile dating revenues at $254 million in 2013, represented 13% of total U.S. dating
services revenues. Mobile revenues are projected to grow at a 14% CAGR to reach 16% of
total U.S. total revenues.
Exhibit 10. U.S. Mobile Dating Revenue
$ in Millions
$400

14% CAGR

$350

$373

$295
$254

$300
$213

$250
$165

$200

15%

14%

14%

12%

13%

10%

11%
9%

$150

8%

$109

6%

$100
$50

18%

16% 16%

$333

4%

$43

2%

$0

0%
2009

2010

2011

2012

U.S. Mobile Dating Revenue

2013

2014

2015

2016

Mobile % of Total Revenues

Source: IBISWorld 2012; Courtland Brooks; Topeka Capital Markets

Important Disclosures located on the Disclosure Appendix.

Page 10

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

International estimates are sketchy. Industry forecasters like Metaflake suggest that the
worldwide revenue market stands at $4 billion, including $318 million from China, $130
million from India, and 170 million in the U.K. For lack of other sources we will consider
that estimate for our market share estimates. Match.com and its sites come in a
commanding first with 20% share of the global markets revenues, followed by eHarmony at
a 5% share, and Zoosk, which has reportedly filed IPO documents, coming in third at 4%
global revenue market share.
Exhibit 11. Online Dating Global Revenue Market Share
Match.com ,
20%

eHarmony, 5%
Zoosk, 4%
Sparks
Networks, 2%
Ashleymadison,
3%
Jiayuan, 2%

Other, 65%

Based on $4B Global Revenue Estimate


Source: Company Reports; Metaflake; Topeka Capital Markets Estimates

Important Disclosures located on the Disclosure Appendix.

Page 11

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

Match.com, As The Leader, Is Best Position In The Industry


Match.com was launched in April 1995 in the U.S. and is now in 24 countries and hosts
websites in 15 languages.
IAC entered the online personals industry in 1999 with the acquisition of Match.com through
its Ticketmaster-owned unit. Since then, IAC has bolstered the personals business with
several acquisitions, including Web Media Ventures in 1999, and Soulmates in 2002, which
provided the core of Matchs international platform; uDate.com in the U.K. in 2003; People
Media in 2009; Singlesnet in 2010; OkCupid in February 2011; and a controlling interest in
Meetic in September 2011, and eventual 100% ownership in 2014. Through all these
acquisitions, IAC covers all demographics and most major ethnicities. Revenues are
generated largely through paid subscriptions, and, to a lesser extent, through online
advertising.
First Mover, Industry Consolidator, Investor in Technology. Match.com has the highest
brand visibility in the online personals industry and is the largest personals site in terms of
traffic and revenues. We are estimating a 20% global share of industry revenues for IACs
personals business. The unit has, over the years, invested heavily in a suite of differentiated
products, technology, and marketing to get to that level of brand superiority. Relationships
with distribution partners, such as AOL (AOL-$42.37:Buy), MSN, and Yahoo! (YHOO$37.57:Buy), and other affiliate relationships, have also helped Match cement its position as
the leading online personals website. The Company was ahead of the curve in terms of
implementing technology-based product enhancements such as personality, lifestyle, and
physical matching, as well as using online video to provide a richer consumer experience,
and mobile to capitalize on that shift in user behavior. Those investments helped ward off
what had once appeared to be a secular threat from free online personal websites. Those
sites were unable to match, so to speak, the breath of content and service offerings from
Match.com, allowing for continued growth of subscribers and ARPU. Further, the
subscription-based model appeals to consumers who place a high value on the screening
processes and the value-added services at the paid sites. Nonetheless, IAC participates in the
rise of the free ad-supported sites through OkCupid and Singlesnet (Kiss.com), although they
have premium subscription tiers, and eventually through Tinder, which we believe will be
monetized through online advertising. More than 50% of standalone Match.com U.S. logins
are from mobile and more than 60% of OkCupid login-ins are from mobile.
Exhibit 12. Match Segment Assets
Match.com Assets
Company
Description
Match.com
General, all demos
Chemistry.com
Premium dating site
People Media
23 demo, ethnic, religious sites
OkCupid
General, all demos
Singlesnet - Now Kiss.com
7 general, ethnic, religious sites
Meetic
General, all demos
T inder
Mobile dating app
T woo
Social discovery site
Speedate.com
Online speed dating
Source: Company Reports; T opeka Capital Markets

Important Disclosures located on the Disclosure Appendix.

Classification
Core
Core
Core
Developing
Developing
NM
Developing
Developing
Developing

Revenue Model
Primarily Paid subscriptions; online advertising
Primarily Paid subscriptions; online advertising
Primarily Paid subscriptions; online advertising
Online advertising, paid subscritptions
Online advertising, paid subscritptions
Paid subscriptions
None today, but likely through online advertising
Primarily Paid subscriptions; online advertising
Primarily Paid subscriptions; online advertising

Page 12

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

Match.com ended 2013 with 3.357 million paid subscribers, +19.4% YoY, including 1.964
from Core Match, +8.9% YoY, 578 million from developing sites, +140.8% YoY, and 815
million from Meetic, +6% YoY. The Core Match consists of Match.com in the United States,
Chemistry.com and People Media. Match Developing consists of OkCupid, Singlesnet
(Kiss.com), SpeedDate, DateHookup, Twoo, Tinder, and Match International Ex-Meetic.
Exhibit 13. Match.com Paid Subscribers by Type
4,000

3,357
3,500

2,812

Subscribers (mn)

3,000

2,696

815

2,500

769

762

1,818

578

2,000
270

318

1,500

240

1,000
1,470

1,664

1,803

1,964

2011

2012

2013

500
2010
Core Paid Subscribers

Developing Paid Subscribers

Meetic

Source: Company Reports; Topeka Capital Markets

Core average revenue per subscriber has oscillated between the high teens to the low
twenty dollar range over the past few years. The all-in blended ARPU, which includes core,
developing, and Meetic subs and revenue, averages in the low $20 range.
Exhibit 14. Match.com Core, Meetic, and Blended ARPU
$28.00
$26.00

$25.95
$23.71

$24.00
$22.00

$20.92

$23.25

$20.00
$18.00

$17.95

$16.00
$14.00
$12.00

$11.97

$10.00

2Q13

Meetic ARPU, in $US Dollars

3Q12

4Q11

1Q11

2Q10

3Q09

Core ARPU

Blended ARPU

Source: Company Reports; Topeka Capital Markets

Important Disclosures located on the Disclosure Appendix.

Page 13

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

Matchs core subscriber growth trumped core revenue growth in the past five quarters.
Exhibit 15. Match.com Core Quarterly Sub and Revenue Growth
25%

21.7% 22.0%

20%
15.0%

15%

18.0%

16.7%

16.0%

16.4%

10.0%
13.2%

10%

9.5%

8.0%

12.3%

8.4%

9.0%

8.0%

8.9%

12.2%

11.9%

8.1%

5%

7.2%
5.2%

4.5%

6.0%

4.5%

0%
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13
Core Subscriber Growth

Core Revenue Growth

Source: Company Reports; Topeka Capital Markets

IAC provides the change in absolute marketing spending for Match in the quarterly and
annual filings. Marketing spend declined in 2009 following the great recession. Spend
jumped significantly in 2012 due to increased marketing spending for Meetic. Despite the
dramatic ramp in spending in 2012, margins went up.
Exhibit 16. Match.com Change in Match.com Marketing Spend
$100.0

40.0%

$88.2
33.2%

$80.0

30.3%

32.2%

35.8%
35.0%

33.9%
30.0%

27.4%
$60.0

$49.6

25.0%
20.0%

$40.0
$20.0

$16.8

$15.1

$12.8

15.0%
10.0%

$0.0
2008
-$20.0

2009
-$10.2

2010

2011

Change in Marketing Spend, $mn

2012

2013

5.0%
0.0%

EBITDA Margins

Source: Company Reports; Topeka Capital Markets

Important Disclosures located on the Disclosure Appendix.

Page 14

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

Why Investors Should Be Enthusiastic About Tinder. Online dating app Tinder has grown
rapidly, reaching 750 million swipes per day in February, up from 400 million in November
2013, with 10 million matches per day, according to the founders at the Upfront Summit in
late February 2014. An average user spends 60 minutes per day on the app and 57% of
active users use the app daily and an average of seven times a day, according to the
founders. Early in the apps start, 90% of the users were between the ages of 18-24, now
that number has been reduced to 51%, with 32% of the user base falling between the ages
of 25-34, and 7% between the ages of 13-17, the balance over the age of 35. The founders
have turned their focus to international with the U.K. and Brazil adding 1 million users in the
past two months. The site is not being monetized but we see Match layering ads onto the
site in between the swipes, both graphic as well as video, leading to an enormous revenue
opportunity for Match.com. In addition, the founders have implied that they could move the
model to other non-dating business services.
The numbers in the following exhibit appear outdated given the recent comments from the
founders on daily usage. However, it illustrates how rapidly the app has grown over the past
year.
Exhibit 17. Tinder Monthly Active Users
7.0
40%

6.0

43%

50%
40%

4.09

4.0

30%
2.94

25%
1.59

2.0
1.0

6.63

40%

5.0

3.0

44%

0.43
0.11

0.71
0.29

0.63

2013 Q1

2013 Q2

2013 Q3

20%

1.77

10%

0.0

0%
2013 Q4

2014 Q1

Daily Active Users (MAU) (mn)


Monthly Active Users (MAU) (mn)
DAU % of MAUs

Source: appmtr

The following set of exhibits show Match.coms pricing schema, additional upsell services,
the added benefits to becoming a paid subscriber, and a list of current events. Pricing could
change dynamically depending on region, therefore the prices listed below, which are for
New York City in the first week of March 2014, could differ from other regions of the U.S.
Matchs other sites generally have lower pricing packages.

Important Disclosures located on the Disclosure Appendix.

Page 15

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

Exhibit 18. Match.com Subscriber Pricing

Exhibit 19. Match.com Subscription Benefits

Important Disclosures located on the Disclosure Appendix.

Page 16

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

Exhibit 20. Match.com Events

Important Disclosures located on the Disclosure Appendix.

Page 17

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

Our Longer-Term Match.com Outlook


We see Match.com growing revenues and EBITDA at healthy growth rates over the next five
years, with revenue growing at a 9% CAGR and EBITDA growing at an 11% CAGR. Our
previous estimates called for five year revenue and EBITDA growth CAGR of 7% and 8.4%
previously. Our estimates could ultimately prove conservative as IACs management has
publicly stated that Match could do $500 million in EBITDA in 2016, near $100 million more
or 23% higher than our estimate of $406 million. As the undisputed leader in the online
personals industry we believe Match will reap the primary benefits of the favorable secular
industry dynamics we noted in the industry section of the report.
Exhibit 21. Match.com Revenue and EBITDA Outlook
$1,400
$1,200
$979

$1,000
$788
$800

$200

$883

$714
$518

$600
$400

$1,151

$1,070

$366
$100

$401
$343
$133 $167

$104

$242

$282

$324

$366

$406
$443

$0
2008

2009

2010

2011

2012

Revenue, $mn

2013

2014E

2015E

2016E

2017E

EBITDA, $mn

Source: Company Reports; Topeka Capital Markets

4.4M Subs in 5yrs Versus 5-6M Aspirational Goal By Company. The growth will be driven at
the top from subscriber growth which we expect to grow at a 5.6% five year CAGR. IAC
ended 2013 with 3.357 million subscribers, up 19% over the prior year. See Exhibit 13 for
more detail. IACs management has stated publicly that they expect subscribers to reach 5
million or even 6 million over the next five years, hence our estimate of 4.417 million
subscribers at the end of 2018 could prove conservative.

Important Disclosures located on the Disclosure Appendix.

Page 18

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

Exhibit 22. Match.com Subscriber Outlook


5,000
4,500
3,895

4,000
3,357

3,500
3,000

2,696

2,812

2011

2012

4,109

4,280

4,417

2017E

2018E

3,608

2,500
1,789

2,000
1,500

1,347

1,377

2008

2009

1,000
500
2010

2013

2014E

2015E

2016E

Paid Subscribers, mn

Source: Company Reports; Topeka Capital Markets

We expect the blended company ARPU to grow at a measured 2% pace through to 2018, and
remain in the low $20 range. While we do see pricing as a longer-term lever, we do think
that the optimum price for online dating has been set in the market place and we are
unlikely to see a material step-up in pricing over the years. The move in the industry to
discounted longer-duration subscription plans is healthy for the business but pressures
ARPU. In addition, competition in the space is likely to keep pricing growth in check. Pricing
levers include events and pricing optimization or segmentation could potentially lead to
more affluent subscribers paying more for added services or for the base service.
Furthermore, add-on services, such as subscribers paying for premium placement of their
profiles should aid ARPU growth overtime.
Exhibit 23. Match.com ARPU Outlook
$24.00
$23.00
$22.00
$21.00
$20.00
$19.00
$18.00
2008

2009

2010

2011

2012

2013

Blended APRU

2014E

2015E 2016E 2017E 2018E

Core ARPU

Source: Company Reports; Topeka Capital Markets

+300 Basis Points of Margin Improvement Over The Next Five Years. Perhaps the best part
of the model is the expectation for meaningful EBITDA margin expansion over the next five
years driven by increasing margins at Meetic, other core sites, and developing sites.

Important Disclosures located on the Disclosure Appendix.

Page 19

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

Management has stated that it expects the developing sites to contribute as much profit as
Meetic in 2014. The standalone Match.com U.S. site itself has very high margins likely north
of 40% and OkCupid has even higher margins due to its advertising based model, added
transactions, which as a percentage of revenues now eclipse OkCupids advertising revenues.
Advertising costs at OkCupid are minimal compared to standalone Match. Standalone Match
has inherently high margins as incremental subscribers get spread against the fixed costs
base. As these two sites become a bigger part of the mix, overall margins come up. Meetic,
Chemistry.com, and People Media all have lower margins compared to core Match.com. Our
expectations are that margins will improve at these sites over the coming years but never
matching the core Match.com site. Further, Tinder is all cost at the moment, so when
monetization kicks in, it will be margin accretive to the group.
Margins levers include leverage on fixed costs, more efficient marketing, and subscriber
growth. Margins increased 840 basis points over the past five years. Moving forward, we
expect EBITDA margins to increase from 35.8% in 2013 to 38.9% in 2018, a 314 basis point
improvement. Incremental EBITDA margins in 2013 were a healthy 53.8% but we see mid40% incremental margins over the next few years.
Exhibit 24. Match.com EBITDA and OIBA Margin Forecast
55%

53.8%

50%

46.8%
44.6%

45%
40%
33.9%

35%
30%

35.8%

36.7%

44.0%

37.4%

30.3%

33.3%
30.5%

30.2%

31.6%

2010

2011

2012

37.9%

45.1%

38.4%

38.9%
36.9%

33.2% 32.2%

27.4%

43.3%

34.2%

35.2%

35.8%

36.4%

27.5%

25%
25.0%

20%
2008

2009

EBITDA Margins

2013 2014E 2015E 2016E 2017E 2018E

OIBA Margins

Incremental EBITDA margins

Source: Company Reports; Topeka Capital Markets


M&A. Commentary from management on consolidation suggests that they are focused on
consolidation outside the U.S. rather than domestically, although they remain opportunistic.
In the 1Q13 CEO Greg Blatt said : In terms of consolidation, yes, theres always room for
consolidation in this business, especially internationally. I think domestically theres nothing
that we need to own, meaning weve got sort of everything checked off. That doesnt mean
theres not continuing opportunity. And internationally I think theres a lot of room for
consolidation and were looking at it all the time. And I think our pace of M&A has been
actually a pretty steady drumbeat over the last four years in the Personals business.

Important Disclosures located on the Disclosure Appendix.

Page 20

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

And again in 2Q13, CEO Greg Blatt said: I think in the U.S., there is nothing that we need
that we dont have. That doesnt mean there arent things we would buy under the right
circumstances because we do think that, in general, we are good at operating these
businesses and there are real efficiencies to owning multiple business. They have tended not
to be so much on the cost side, more on the competency side. But we know there is cost to be
gotten to. So I think over time, in the U.S., you can see more consolidation. But it will be
100% opportunistic. In terms of Europe, as weve said, we are looking to add new brands
and new things. So I think you could see a little more there. And globally, each market is its
own thing and I think there is lots of opportunity for M&A internationally and were very
much looking at all that stuff.

Exhibit 25. Match Outlook


CAGR
'13-'18
5.6%

2007
1,287
0.8%

2008
1,347
4.7%

2009
1,377
2.2%

2010
1,789
29.9%

2011
2,696
50.7%

2012
2,812
4.3%

2013
3,357
19.4%

2014E
3,608
7.5%

2015E
3,895
8.0%

2016E
4,109
5.5%

2017E
4,280
4.2%

2018E
4,417
3.2%

APRU
y/y Growth %

$22.68
7.8%

$23.13
2.0%

$20.96
-9.4%

$21.10
0.6%

$19.25
-8.7%

$21.59
12.2%

$21.29
-1.4%

$21.12
-0.8%

$21.74
2.9%

$22.29
2.5%

$22.87
2.6%

$23.47
2.7%

2.0%

Revenues
y/y Growth %

$349
12.1%

$366
4.8%

$343
-6.3%

$401
17.0%

$518
29.3%

$714
37.7%

$788
10.5%

$883
12.0%

$979
10.9%

$1,070
9.4%

$1,151
7.5%

$1,225
6.4%

9.2%

EBITDA
y/y Growth %
OIBA Margin
Incremental EBITDA Margins

$86
21.4%
24.7%
40.5%

$100
16.4%
27.4%
83.9%

$104
3.5%
30.3%
-15.3%

$133
28.4%
33.2%
50.6%

$167
25.5%
32.2%
28.9%

$242
44.9%
33.9%
38.3%

$282
16.6%
35.8%
53.8%

$324
14.9%
36.7%
44.6%

$366
13.0%
37.4%
44.0%

$406
10.9%
37.9%
43.3%

$443
8.9%
38.4%
45.1%

$477
7.8%
38.9%
46.8%

11.1%

OIBA
$78
$91
y/y Growth %
23.7%
16.5%
OIBA Margin
22.5%
25.0%
Incremental OIBA Margin
40.0%
76.8%
Source: Company Reports; Topeka Capital Markets

$94
3.1%
27.5%
-12.3%

$122
29.7%
30.5%
48.1%

$156
28.0%
30.2%
29.2%

$226
44.4%
31.6%
35.5%

$262
16.1%
33.3%
48.7%

$302
15.2%
34.2%
42.1%

$344
14.0%
35.2%
44.0%

$383
11.4%
35.8%
42.5%

$419
9.3%
36.4%
44.2%

$453
8.1%
36.9%
45.8%

11.5%

Paid Subscribers
y/y Growth %

Discounted Cash Flow Analysis Yields $4.9B Enterprise Value For Match.com. A DCF with a
WACC of 9%, a terminal growth rate of 3%, and a 10x implied terminal year multiple on
EBITDA, yields an Enterprise Value of $4.7 billion for Match. Our WACC estimate is based on
the average Beta for several media and Internet subscriber based. Capital expenditures
averaged 3% for Match in the years that IAC reported it (2006-2008). We assume the same
today. We also assume working capital of 3% of sales, which is consistent in other sub based
models on the Internet.
We also provide a matrix that shows the sensitivity of Matchs DCF valuation to various
assumptions, i.e., the range of fair values based on WACCs of 7.0%-11% and terminal growth
rates of 2.25%-3.75%. The extremely bullish scenario implies a value of $8.5 billion, and the
bearish scenario implies a value of $3.3 billion for fiscal year-end 2014.

Important Disclosures located on the Disclosure Appendix.

Page 21

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

Exhibit 26. Match.com Discounted Cash Flow


Match.comDiscounted Cash Flow, $mm
Ending Paid Subs
Annual Revenues
EBITDA
- Taxes @40%
+ D&A * Tax Tate @40%
- Capex @3% of Sales
+ Working Capital @3% of Sales
= Free Cash Flow

2014
3,608
$883
$324
($130)
$15
($26)
$26
$210

2015
3,895
$979
$366
($147)
$15
($29)
$29
$235

2016
4,109
$1,070
$406
($162)
$15
($32)
$32
$259

2017
4,280
$1,151
$443
($177)
$16
($35)
$35
$281

2018
4,417
$1,225
$477
($191)
$16
($37)
$37
$303

2019
4,539
$1,295
$511
($204)
$17
($39)
$39
$324

PV of Free Cash Flow


PV of Terminal Value

$210
$3,610

$216
$3,934

$218
$4,289

$217
$4,675

$214
$5,095

$210
$5,554

Sumof Free Cash Flow


PV of Terminal Value
Enterprise Value
EV/Paid Subscriber

$1,076
$3,610
$4,685
$1,299

Match WACC
Perpetual Growth Rate
Terminal Multiple =(1+G)/(WACC-G)
Implied Terminal Year Multiple on EBITDA

9.0%
3.0%
17x
11x

TV

$511
($204)
$17
($39)
$39
$324

Sensitivity of Valuation to WACC and g Assumptions


Weighted Average Cost of Capital (WACC)

$4,685

G(Perpetual Growth Rate)

7.0%

8.0%

9.0%

10.0%

11.0%

2.25% $6,102.63 $5,021.22 $4,260.83

$3,697.15 $3,262.74

2.50% $6,391.30 $5,209.20 $4,391.42

$3,792.19 $3,334.37

2.75% $6,713.93 $5,415.09 $4,532.46

$3,893.79 $3,410.35

3.00% $7,076.89 $5,641.56 $4,685.25

$4,002.64 $3,491.08

3.25% $7,488.25 $5,891.88 $4,851.33

$4,119.56 $3,577.01

3.50% $7,958.37 $6,170.00 $5,032.51

$4,245.47 $3,668.67

3.75% $8,500.81 $6,480.85 $5,230.94

$4,381.45 $3,766.65

Source: Topeka Capital Markets

Risks To Our Match.com Estimates. (1) Competition. Competition is by far the biggest risk
faced by Match.com. There are thousands of websites, both paid and free, that are vying for
users. A few competitors are looking to access the capital markets for funding that could
make them more competitive. In addition, given the growth resurgence, financial sponsors
are more willing to back start-ups in the space that could compete with Match.com. Rising
competition could force management to significantly increase marketing spending, which, in
turn, would put pressure on our margin assumptions. Of late, investors have been concerned
that the rise of Tinder could stunt the growth rate of the paid subscriber business. We note
that Match.com has faced similar concerns from the rise of free sites in the past and it has
weathered that concern. We think the same for the rise of app focused sites like Tinder. The
value proposition that the paid sites offer such as the ability to dive into profiles, send
personal emails, see higher quality profiles from users who have a higher level of
commitment to online dating, and fraud review, remain attractive to subscribers and we do
not see that changing. Moreover, the paid sites subscriber growth remained strong along
with the rapid rise of Tinder and other similar apps. While we can never say that Tinder will
not cannibalize Match we do see a different use case for both, with Match used by those
seeking longer-term relationships rather than hookups, and in many cases the two could be

Important Disclosures located on the Disclosure Appendix.

Page 22

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

complementary products. We heard similar concerns with OkCupid, but OkCupid has been
complimentary to standalone Match, serving as a source of customer acquisition for
standalone Match. Bottom line is that historically younger users will trend towards the free
sites and move up the funnel to paid sites as the age or as their experience demands greater
ways to interact with users. Match has said that almost 50% of its subscribers have used
another service for meeting someone online. (2) Inefficient marketing spending. There is a
strong correlation between subscriber growth and marketing spend. If marketing spending
and channels prove inefficient, subscriber growth, revenue growth, and EBITDA growth
would suffer. (3) Negative Headlines Related to Bad/Criminal Dating Experiences.
Match.com is frequently on the receiving end of lawsuits tied to matches and then dates
that result in criminal activity. These suits damage the brand and have the potential to sway
positive public opinion of online dating.

IACI Valuation
We have updated our sum-of-the-parts analysis to reflect our new estimates for Match.com,
and an increase in our target multiple ranges for Match to 12x-13x from 10x-11x, previously.
In addition, we have switched our valuation on Local to a revenue based multiple from an
EBITDA based multiple previously and increased our Media and Other target revenue
multiple to 2x from 1x previously. The change increases our price target on IACI from $78 to
$98. We believe a sum-of-the-parts valuation analysis is the best way to underscore the true
value of IACs shares, given the different risk and cash flow profiles of the various business
segments within the portfolio.
Exhibit 27. IAC: Sum-of-the-parts Valuation
2015
3 yr EBITDA Low High
Low
EBITDA/(Rev for Local, M&O) CAGR '13-'16 Multiple Multiple Enterprise Value
IAC
Search
Match
Local (Revenues) /1
Media and Other (Revenue)
Total IAC
Corporate
Total IAC Enterprise Value
Add: Cash & Equivalents, &Investments, Other
Less: Debt
Equity Value
Diluted Shares
Fair Value per Share
Current Share price
Upside/(Downside)

$430
$366
$326
$378
$1,501
($60)

11%
13%
NA
NA

% of
Total EV

per Share

High
Enterprise Value

% of
Total EV per Share

5.0x
12.0x
1.5x
2.0x

5.5x
13.0x
2.0x
2.0x

$2,151
$4,397
$489
$756
$7,793

28.2%
57.8%
6.4%
9.9%

$25.82
$52.79
$5.87
$9.08
$93.56

$2,366
$4,764
$652
$756
$8,537

28.3%
57.0%
7.8%
9.0%

$28.40
$57.19
$7.83
$9.08
$102.50

3.0x

3.0x

($179)
$7,614
$1,286
($1,080)
$7,820
83.3
$94
$75.68
24%

(2.3)%

($2.15)
$91.41
$15.44
($12.97)

($179)
$8,359
$1,286
($1,080)
$8,565
83.3
$103
$75.68
36%

(2.1)%

($2.15)
$100.35
$15.44
($12.97)
$102.83

Average Fair Value:


Current Share price
Upside/(Downside)

$98
$76
30%

Source: Topeka Capital Markets Research

Important Disclosures located on the Disclosure Appendix.

Page 23

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

Interestingly, we still believe that there will be upside to our price target when the Search
business gets revalued, and other assets such as Vimeo get to their true valuation. For
instance, Vimeo, has greater than 120 million unique visitors and 22 million registered
users. On the 3Q13 call, IAC stated that Vimeo crossed the 400K subscriber mark and TTM
revenues grew 65% to $37 million. A few simplified but credible assumptions on those
numbers (listed in the table below) show that Vimeo can grow revenues to greater than $67
million. Applying a reasonable 5x revenue multiple to those revenues get us to a $462
million valuation, which would be more than half the valuation of the Media & Other
segment we model in our sum-of-the-parts.
Exhibit 28. Vimeo Valuation
TTMRevenue, $mn
y/y
Subscribers

$37
65%
400,000

Assumptions:
Assume Subs Grew 65% YoYas Well
Then, Beginning Subs were 242K
Hence, Average Subs were 321K
Thus, APRU is $115
Beginning Subs
1 Yr Growth Rate
Ending Subs, 2014
ARPU, +3% YoY
Revenues, mn, 2014

400,000
40%
560,000
$121
$67.6

Beginning Subs
1 Yr Growth Rate
Ending Subs, 2015
ARPU, +3% YoY
Revenues, mn, 2015

560,000
30%
728,000
$127
$92.3

Revenue Multiple
Valuation, $mn
Source: Company Reports; Topeka Capital Markets

Important Disclosures located on the Disclosure Appendix.

5.0x
$462

Page 24

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

Exhibit 29. Online Personals Competition Grid 1


Company

Match.com

Chemistry.com

People Media

OkCupid

Singlesnet

Meetic

Tinder

Twoo

Description

Sites Owned

Subscribers

1.964M at end of
The worlds largest online dating site. Launched in Match.com, Chemistry.com,
4Q13 but includes
1995; Services 24 countries and territories and
People Media, Meetic, Tinder, Chemistry.com and
host websites in 15 different countries.
SinglesNet, OkCupid
People Media
A premium service offering Launched in 2006.
Matches members using an algorithim based on
chemistry and compatibility methods. Designed by
Dr. Helen Fisher, a professor of Anthropology.
Part fo Match.com's Core websites
Chemistry.com
24 Sites in Total. OurTime,
Operator of several demographic targeted datings BlackPeopleMeet.com, &
websites. Acquired by IAC from American Capital SingleParentMeet.com are the
in July 2009 for $80M. Site reportedly recorded marquee sites. Others include:
BBPeopleMeet.com,
$11.6M in EBITDA in 2008 off 255K paying
CatholicPeopleMeet.com,
members. Powers AOL Personals. Part of
Match.com's Core Websites. People Media claims JPeopleMeet.com,
20K members join each week.
LoveAndSeek.com.
An ad-supported online personals service. Also
subscriptions for premium svcs. Features membercreated quizzes and mutliple choice questions.
Part of Match.com's Developing sights. Acuqired
by IAC in February 2011 for $50M.
Acquired by Match in February, 2010 by IAC
"more as a value acquisition than a strategic one".
Had 3M UVs at time of acquisition according to
TechCrunch
A European online dating company based in
France amd established in 16 European
Countries. Meetic was founded in 2001. In June
2009, Match contributed the European operations
of Match.com to Meetic in exchange for a 27%
interest in Meetic and a 5M Euro note. In early
2014, IAC acquired the remaining publicly traded
shares of Meetic for $72mm.
A widely popular mobile app that uses a user's
Facebook profile to show potential matches. Users
swipe right if they like a picture of someone and
swipe left if they do not. If both parties like each
other a private chat box appears when they can
have a conversation.
A social discovery website that allows users to
meet new people. Launched in March 2011 and
available in 200 countries. Acquired by Match in
January 4, 2013 for $25M in cash plus potential
additional consideration of up to $113.8m (using
12/31/2013 FX rate) that is contingent upon a
combination of earnings performance and user
growth thru 12/31/2015.

As of December
2013, 13M people
had taken the
Chemistry.com
personality test.

VC Backers

NA, Owned by IACI

NA, Owned by IACI

Revenue Model

Subcription Plan
Full Price one month Minimum $42.99/month; Basic Plan-12mth for
$19.99/mth; 6mth for $20.99/mth; 3mth for
$23.99/mth; Bundle Plans -12mth for
$20.99/mth; 6mth for $23.99/mth; 3mth for
$26.99/mth. Bundle Plan includes email
Paid subscriptions; read notification, First Impressions,
branded ads as well Highlighted Profile.

$464M in 2013 as part of


Match.com's Core Webistes
(Match.com,
Chemistry.com, People
Media). All of Match.com
recorded $788M in
revenues in 2013.
5.4M

Paid subscriptions

$39.99 per month

$464M in 2013 as part of


Match.com's Core Webistes
(Match.com,
Chemistry.com, People
Media)

Varies by site

$464M in 2013 as part of


Match.com's Core Webistes
(Match.com,
Chemistry.com, People
Media)

NA, Owned by IACI


578K Paid Subs as of
12/2013 as part of
Match Developings
sites. Had claimed
3.5M active users in
OkCupid, OkTrends Blog
September 2010.
NA, Owned by IACI
578K Paid Subs as of
12/2013 as part of
Match Developings
Being rebranded as Kiss.com sites.
NA, Owned by IACI

Can join the A-List premium service:


Browse profiles invisbliby, Get special
match search options, See who likes you,
Online advertising & Message read receipts. 6mth for $9.95/Mth,
Subscriptions
3mth for $14.95/mth, 1mth for $19.95/mth
Free but upgrades for unlimited messaging,
flirts, and matches. 1mth for $24.95; 3mths
Online advertising & for $16.95 a month; 12mths for $7.49 a
Subscriptions
month

Meetic, MeeticAffinity,
MatchAffinity, lexamore.nl,
lexa.nl, neu.de, Partner.de,
neu.at, DatingDirect.com,
DatingDirectAffinity, meeticgay,
cleargay.
815K subs

NA, Owned by IACI

Paid subscriptions

Tinder Mobile App

Since launch, users


have swiped over
13B times and 2M
matches are made
each day.

NA, Owned by IACI

None as of date of
this report

NA

NA

twoo.com

Claims over 12M


active users

NA, Owned by IACI

Paid Subscriptions

1mth for $14.99/mth; 3mths for $12/mth;


6mths for $9mth; 12mths for $7.50/mth

NA

Claiming 13M
registered members

NA, Owned by IACI

Paid Subscriptions

1mth - $29.95/month; 3mths-$19.95/month;


6mths-$15.95/mth; 12mths-$12.95/mnth
NA

Speed dating focused site. Originally a Stanford


University business class project, Speeddate.com
combines online dating and round robin-style
speed dating, where singles spend five minutes or
Speedate.com
less connecting live with potential matches.
speeddate.com
Source: Company Reports; Cortland Brooks; Wikipedia; comScore November 2013; Topeka Capital Markets

Important Disclosures located on the Disclosure Appendix.

Paid subscriptions

2013 Revenues

U.S. UVs Global UVs

7.1M

$98M for 2013 as part of


Match Developing sites

$98M for 2013 as part of


Match Developing sites

$225M in 2013

17.8M

780K

1M

Page 25

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

Exhibit 30. Online Personals Competition Grid 2


Company

Description

Sites Owned

Spark Networks (LOV)

An online dating company, found on 11/2007,


available in 25 languages and serves more than
70 countries. Leveraging the unique Behavioral
Matchmaking technology. Acquired Woome on
11/2011, Private Company in San Francisco, CA zoosk.com
Jewish Networks:
JDate.com, Jdate.co.uk,
Jdate.fr, Jdate.co.il, Cupid.co.il
Christian
Networks:ChristianMingle.co
m, ChristianMingle.co.uk,
ChristianMingle.com.au
Other
A leading provider of online personals services in Networks:AdventistSinglesCo
the U.S. and internationally, owns many special- nnection.com,
interest online sites, the company was corporated BBWPersonalsPlus.com,
in Apr 20, 2007. is traded on the NYSE, ticker is BlackSingles.com,
DeafSinglesConnection.com,
"LOV"

Meetme (MEET)

The Company is the leading social network for


meeting new people in the US and the public
market leader for social discovery, was
incorporated in Nevada in June 1997. Changed
the name from Quepasa Corporation to MeetMe in
2012. operates MeetMe.com and MeetMe apps meetme.com
myYearbook.com
on iPhone, iPad, and Android. Traded on the
NYSE, ticker is "MEET"
Quepasa.com

eHarmony

eHarmony is an online dating website designed


specifically to match single men and women with
each other for long-term relationships. eHarmony
was launched on August 22, 2000, is based in
Santa Monica, California; it has members in more
than 150 countries and maintains operations in the
US, Australia, Canada, the UK, and Brazil. The
company is privately held.
eharmony.com

Zoosk

Ashleymadison

POF

Ashley Madison is an online dating service and


social networking service marketed to people who
are already in a relationship with the slogan "Life
is short. Have an affair." The website was
launched in 2001. The name of the site was
created from two popular female baby names
"Ashley" and "Madison".
ashleymadison.com

POF.com is the worlds largest free dating site,


created by founder and CEO Markus Frind in
2003. Today, POF exceeds 45 million registered
users worldwide, and receives over 9 billion page
views per month. The site is available in English,
French, Spanish, German and Portuguese
pof.com

Jiayuan.com is the largest online dating platform in


China. Founded by the current CEO Rose Gong
from her domitory room at Fudan University in
Shanhghai in 2003, per Wikipedia. Site focuses on
Jiayuan (DATE)
helping uses get married.
Jiayuan.com
Date.com is the premier online dating website with
thousands of success stories from connected
singles who looked for friendships, romance, love
Date.com
and marriage.
date.com
Source: Company Reports; Cortland Brooks; Wikipedia; comScore November 2013; Topeka Capital Markets

Subscribers

N/A

VC Backers
Revenue Model
ATA Ventures, Amidzad
Partners, Canaan
Partners, Bessemer
Venture Partners,
Crosslink Capital,
Keating Capital,
Subscription Fee

Average Paying
Subscriber
292.7K in 2013;
259.2K (2012);
196.3K (2011);
161.6K in 2010

99m members (Jan


2013)
average VIP monthly
subscription members:
2500

US Venture Partners,
First Round Capital,
Norwest Venture
Partners

Online advertising;
subscriptions

Sarofirm Fayez and


Co., Sequoia Capital
Technology Crossover
Ventures
Paid Subscription;
Tuputele Ventures
online advertising
AshleyMadison's
business model is
based on credits
rather than monthly
subscriptions. For a
conversation
between two
members, one of the
members must pay
five credits to initiate
the conversation.
24.5m members from
30 countries
Fortress Investments
Any follow up

LikeIt.com

Qiming Venture
Partners. By Christina
Chao , PEdaily.cn.

Avalanche, LLC

Important Disclosures located on the Disclosure Appendix.

2013 Revenues

$29.95 for one month membership; $19.98


each month for three months membership;
$12.49 each month for 6 months
1Q13 Revs $40m;
membership
2011 Revs $90m

JDate Cost: $36.99/ month for one month


Primarily
membership, 23.99/month for 3-month
subscriptions, online membership, $19.99/month for 6-month
advertising
membership, after 6 months, $24.99

25.9m registered
member;
approximately 1M
paying subs

40m registered
members
Average monthly
active accounts in
4Q13 was 4.92M;
Average monthly
paying accounts in
4Q13 was 1.382M;
has over 100M
registered accounts

Subcription Plan

$6.99 for Green VIP


$9.99 for Gold VIP
$19.99 for Black VIP

$59.95/Month for 3-month plan,


44.95/Month for 6-month plan,
$25.95/Month for 12-month plan,
$9.95/Month for 24-month plan;
Sign up for free, but have credits cost:
5 credits to contact a member initially, but
every message sent to that person after the
first contact is free;
30 credits for 30 minutes of instant
messaging, or 60 credits for 60 minutes of
instant messaging; and
20, 30 and 50 credit Ashley Gifts.
$49 CDN gets you the Introductory
Package with 100 credits, $149 CDN earns
500 credits and Elite status, and $249 CDN
for 1000 credits

U.S. UVs Global UVs

3.2M

6.5M

$69.4M in revenues in
2013; $61.7m (2012);
$48.5m (2011); $40.9m
(2010)

1M

1.25M

$46.7m (2012)
$10.7m (2011)
$6.1m (2010)

NA

NA

Approximately $200mm

800K

1.2M

$90m in revenues and


$30mm in profit in 2012, per
the CEO Noel Biderman;
On 10/31/2013, CEO
expected $120M in
revenues and $40M in
profit for 2013.
570K

1.5M

Ads and Premium


Service Fee

A premium membership, which costs


between $5.95 a month (if you're paying
for one year in advance) and $9.80 per
month (if you're paying for three months at
a time), is intended to allow your profile and
messages to stand out to other members
with a special gold star designation.
$20m+

Ads and Service


Fee

sign up for free, but have credits cost:


each stamp for 2 RMB, VIP package: 16
RMB for month, 42 RMB for 3-months, 80
RMB for 6-month, 150 RMB for 12-month;
Message writing survice plan: 88RMB for a
month
$81.4m in 2013

2.8M

6.1M

18.4M

500K

Page 26

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

Risks to Our Analysis


Risk of Toolbar Disintermediation. Through the Mindspark Interactive Network, IAC has had a
growing and highly profitable toolbar distribution business, which accounts for approximately
50% of Search revenues and 25% of total Company revenues. Mindspark distributes its
toolbars via a suite of brands such as Smiley Central, Retrogamer, and Webfetti and through
third-party relationships with, for example, security software companies where consumers
download toolbars with installation of the software. While we do not have precise figures,
we believe toolbar searches account for a high-teen percentage of industry searches and the
largest companies in the search space have sought to monetize toolbar searches through
distribution relationships similar to what Mindspark has done. However, as part of search
activity migrates to mobile and tablet devices, there is a risk that toolbar search could lose
its relevance, although we believe that risk is overstated. First, we believe that desktops
and laptops will remain the primary consumer computing tool, particularly in work and
educational settings. Second, we believe that products offered by Mindspark are entertaining
and their use should move to the tablet device. Third, management has other ways to
monetize toolbars, including micropayments and subscriptions. There is also a risk that
browsers could disable toolbar functionality, or that the Google (GOOG-$1,199.99:Buy)
Chrome browser, which hides toolbars, could continue to take material share from Internet
Explorer, which allows toolbars.
High Revenue and Profit Exposure to Google. IAC has a very high exposure to Google, with
47% of total Company revenues coming from its search relationship with Google in 2011. The
profit exposure, while difficult to estimate, is less than the revenue exposure, due to the high
margins at the personals segment and revenue-sharing expenses at the toolbar business. We
project the profit exposure is below 30%, but still high. The Google relationship was extended
for five more years in early 2011 so there is no near-term risk of IAC losing the relationship. In
addition, IAC estimated the value of the deal to IAC at $5 billion over the five years. However,
this high exposure to Google poses several risks to IAC, including: 1) Googles monetization
could diminish and thus impact monetization at IAC; 2) Googles search quality could diminish
and result in a decline in click-through rates, resulting in the same at IAC; and 3) searchers
could sour on the attractiveness of Google searches and move to a competitor, resulting in a
decline in relevancy of Google searches. IAC would feel a similar impact.
Conglomerate Complexity. Underneath the four business lines of Search, Personals, Service
Magic, and Media & Other, is a rather complex collection of over 50 brands, many of which do
not have clear publicly-traded comparables. As such, we believe the shares trade at a discount
typically assigned to conglomerate media firms, thereby limiting the possibility for significant
multiple expansion for the shares. Further asset spin-offs and asset sales would reduce that
complexity over time.
Rising Competition in Personals and Service Magic. Many of IACs businesses face an
increasingly competitive landscape. Match faces intense competition from the rise of free, adsupported, online personals sites, although the model has been incredibly resilient in the face
of this secular threat over the past few years. These free ad-supported websites often lack the
marketing muscle to compete in the space, and Matchs attractive suite of offerings continues
to resonate with users of online dating sites. We do not view Facebook as competition, since
it is a destination to interact with people you know, whereas the whole purpose of online
dating is to meet people you do not know. Service Magic, which faces rising competition from
Angie's List and Google, is constantly seeking ways to deliver a better local search experience
to customers.
Concentrated Voting Control. Chairman Barry Diller, through his super-voting Class B shares,
along with other officers and directors, controls close to 40% of the voting power of the
Company, despite owning less than 15% of the shares.

Important Disclosures located on the Disclosure Appendix.

Page 27

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

IAC Inc. Stmnt ($m)


Period
Revenues
y/y growth %

2009
$1,364.324
-5.6%

2010
$1,636.815
20.0%

2011
$2,059.444
25.8%

2012
$2,800.933
36.0%

1Q13
$742.249
15.9%

2Q13
$799.411
17.5%

3Q13
$756.872
5.9%

4Q13
$724.455
-5.3%

2013
$3,022.987
7.9%

1Q14E
$732.037
-1.4%

2Q14E
$812.093
1.6%

3Q14E
$826.220
9.2%

4Q14E
$836.701
15.5%

2014E
$3,207.051
6.1%

2015E
$3,501.029
9.2%

2016E
$3,984.892
13.8%

Cost of Revenue
Gross Profit
y/y growth %
Gross Profit Margin

$455.297
$909.027
-5.3%
66.6%

$593.816
$1,042.999
14.7%
63.7%

$761.244
$1,298.200
24.5%
63.0%

$992.470
$1,808.463
39.3%
64.6%

$255.082
$487.167
16.8%
65.6%

$272.822
$526.589
18.6%
65.9%

$248.856
$508.016
12.3%
67.1%

$222.574
$501.881
1.4%
69.3%

$999.334
$2,023.653
11.9%
66.9%

$251.728
$480.309
-1.4%
65.6%

$277.225
$534.868
1.6%
65.9%

$271.660
$554.560
9.2%
67.1%

$256.831
$579.871
15.5%
69.3%

$1,057.444
$2,149.607
6.2%
67.0%

$1,154.044
$2,346.985
9.2%
67.0%

$1,313.208
$2,671.684
13.8%
67.0%

Operating Expenses
Selling and marketing expense
y/y growth %
% of revenues
General and administrative expense
y/y growth %
% of revenues
Product development expense
y/y growth %
% of revenues

$459.945
1.9%
33.7%
$289.620
-17.8%
21.2%
$62.147
-13.1%
4.6%

$492.206
7.0%
30.1%
$316.500
9.3%
19.3%
$65.097
4.7%
4.0%

$614.174
24.8%
29.8%
$328.728
3.9%
16.0%
$78.760
21.0%
3.8%

$898.761
46.3%
32.1%
$396.013
20.5%
14.1%
$101.869
29.3%
3.6%

$242.914
10.5%
32.7%
$98.026
6.8%
13.2%
$33.582
43.0%
4.5%

$247.153
16.0%
30.9%
$103.515
12.2%
12.9%
$34.052
47.3%
4.3%

$248.282
4.9%
32.8%
$75.977
-19.9%
10.0%
$35.232
43.8%
4.7%

$225.782
-1.4%
31.2%
$97.254
-17.0%
13.4%
$36.929
20.0%
5.1%

$964.131
7.3%
31.9%
$374.772
-5.4%
12.4%
$139.795
37.2%
4.6%

$239.945
-1.2%
32.8%
$84.586
-13.7%
11.6%
$70.864
111.0%
9.7%

$251.021
1.6%
30.9%
$92.592
-10.6%
11.4%
$40.840
19.9%
5.0%

$270.889
9.1%
32.8%
$94.004
23.7%
11.4%
$19.949
-43.4%
2.4%

$260.579
15.4%
31.1%
$95.052
-2.3%
11.4%
$51.710
40.0%
6.2%

$1,022.434
6.0%
31.9%
$366.234
-2.3%
11.4%
$183.363
31.2%
5.7%

$1,115.879
9.1%
31.9%
$395.632
8.0%
11.3%
$148.896
-18.8%
4.3%

$1,241.880
11.3%
31.2%
$425.460
7.5%
10.7%
$182.623
22.7%
4.6%

Depreciation expense
Amortization of intangibles/non-cash marketing
Goodwill impairment
Total Operating Expenses
y/y growth %
% of revenues

$63.690
$173.379
$917.924
$1,966.705
92.4%
144.2%

$63.897
$27.472
$28.032
$993.204
-49.5%
60.7%

$56.719
$22.057
$0.000
$1,100.438
10.8%
53.4%

$52.481
$35.771
$0.000
$1,484.895
34.9%
53.0%

$14.016
$14.078
$0.000
$402.616
13.6%
54.2%

$17.036
$18.137
$0.000
$419.893
21.2%
52.5%

$13.489
$13.032
$0.000
$386.012
3.1%
51.0%

$14.368
$14.596
$0.000
$388.929
-5.1%
53.7%

$58.909
$59.843
$0.000
$1,597.450
7.6%
52.8%

$14.400
$14.500
$0.000
$424.295
5.4%
58.0%

$14.400
$14.500
$0.000
$413.352
-1.6%
50.9%

$14.400
$14.500
$0.000
$413.743
7.2%
50.1%

$14.400
$14.500
$0.000
$436.242
12.2%
52.1%

$57.600
$58.000
$0.000
$1,687.631
5.6%
52.6%

$57.600
$58.000
$0.000
$1,776.007
5.2%
50.7%

$59.328
$59.740
$0.000
$1,969.031
10.9%
49.4%

Operating Income
y/y growth %
Margin

($1,057.678)
1607.0%
-77.5%

$49.795
-104.7%
3.0%

$197.762
297.2%
9.6%

$323.568
63.6%
11.6%

$84.551
34.7%
11.4%

$106.696
9.5%
13.3%

$122.004
56.3%
16.1%

$112.952
32.4%
15.6%

$426.203
31.7%
14.1%

$56.014
-33.8%
7.7%

$121.515
13.9%
15.0%

$140.817
15.4%
17.0%

$143.629
27.2%
17.2%

$461.976
8.4%
14.4%

$570.978
23.6%
16.3%

$702.653
23.1%
17.6%

Interest income
$10.218
Interest expense
($5.823)
Equity in losses of unconsolidated affiliates
($14.014)
Other income, net
$100.607
Earnings (loss) from continuing operations before income taxes($966.690)

$1.666
($1.437)
($25.676)
($1.662)
$22.686

$0.000
$0.000
($36.300)
$10.060
$171.522

$0.000
$0.000
($25.345)
($9.161)
$289.062

$0.000
($7.663)
($0.091)
$1.658
$78.455

$0.000
($7.658)
($1.078)
($0.004)
$97.956

$0.000
($7.623)
($3.253)
$16.719
$127.847

$0.000
($10.652)
($2.193)
$11.936
$112.043

$0.000
($33.596)
($6.615)
$30.309
$416.301

$0.856
($10.652)
($2.193)
$0.000
$44.025

$0.824
($10.652)
($2.193)
$0.000
$109.494

$0.849
($10.652)
($2.193)
$0.000
$128.821

$0.885
($10.652)
($2.193)
$0.000
$131.669

$3.414
($42.608)
($8.772)
$0.000
$414.009

$3.534
($42.608)
($8.772)
$0.000
$523.131

$3.863
($54.001)
($8.772)
$0.000
$643.743

Income tax provision


Tax rate
Minority interest in losses of consolidated subsidiaries
Earnings (loss) from continuing operations

($1.866)
0.2%
0
($968.556)

($32.079)
-141.4%
0
($9.393)

$4.047
2.4%
0
$175.569

($119.215)
-41.2%
0
$169.847

($25.746)
-32.8%
0
$52.709

($39.416)
-40.2%
0
$58.540

($36.126)
-28.3%
0
$91.721

($33.214)
-29.6%
0
$78.829

($134.502)
-32.3%
0
$281.799

($15.409)
-35.0%
0
$28.616

($38.323)
-35.0%
0
$71.171

($45.087)
-35.0%
0
$83.734

($46.084)
-35.0%
0
$85.585

($144.903)
-35.0%
0
$269.106

($183.096)
-35.0%
0
$340.035

($225.310)
-35.0%
0
$418.433

$0.000
($11.356)

$140.768
($37.023)

$0.000
($3.992)

$0.000
($9.051)

$0.000
($0.944)

$0.000
($1.068)

$0.000
$3.914

$0.000
$0.024

$0.000
$1.926

$0.000
$0.000

$0.000
$0.000

$0.000
$0.000

$0.000
$0.000

$0.000
$0.000

$0.000
$0.000

$0.000
$0.000

Net earnings (loss)


y/y growth %
% of revenues

($979.912)
504.7%
-71.8%

$94.352
-109.6%
5.8%

$171.577
81.8%
8.3%

$160.796
-6.3%
5.7%

$51.765
48.6%
7.0%

$57.472
32.2%
7.2%

$95.635
135.8%
12.6%

$78.853
88.0%
10.9%

$283.725
76.5%
9.4%

$28.616
-44.7%
3.9%

$71.171
23.8%
8.8%

$83.734
-12.4%
10.1%

$85.585
8.5%
10.2%

$269.106
-5.2%
8.4%

$340.035
26.4%
9.7%

$418.433
23.1%
10.5%

Net (earnings) loss attributable to noncontrolling interests


Net earnings (loss) attributable to IAC shareholders
y/y growth %
% of revenues

$1.090
($978.822)
526.6%
-71.7%

$5.007
$99.359
-110.2%
6.1%

$2.656
$174.233
75.4%
8.5%

($1.530)
$159.266
-8.6%
5.7%

$1.872
$53.637
55.6%
7.2%

$0.818
$58.290
34.5%
7.3%

$1.305
$96.940
138.1%
12.8%

($1.936)
$76.917
88.8%
10.6%

$2.059
$285.784
79.4%
9.5%

$0.000
$28.616
-46.6%
3.9%

$0.000
$71.171
22.1%
8.8%

$0.000
$83.734
-13.6%
10.1%

$0.000
$85.585
11.3%
10.2%

$0.000
$269.106
-5.8%
8.4%

$0.000
$340.035
26.4%
9.7%

$0.000
$418.433
23.1%
10.5%

Basic earnings (loss) per share from continuing operations


Diluted earnings (loss) per share from continuing operations

($6.99)
($6.99)

($0.09)
($0.09)

$2.02
$1.86

$1.97
$1.82

$0.63
$0.60

$0.70
$0.68

$1.10
$1.07

$0.95
$0.91

$3.38
$3.25

$0.34
$0.33

$0.86
$0.82

$1.01
$0.96

$1.03
$0.98

$3.24
$3.09

$4.10
$3.91

$5.04
$4.81

Basic earnings (loss) per share


Diluted earnings (loss) per share
y/y growth %

($7.06)
($7.06)
551.0%

$0.93
$0.93
-113.2%

$2.01
$1.85
97.5%

$1.85
$1.71
-7.3%

$0.64
$0.61
63.3%

$0.70
$0.67
42.9%

$1.17
$1.13
161.9%

$0.93
$0.88
104.0%

$3.42
$3.29
92.5%

$0.34
$0.33
-46.4%

$0.86
$0.82
21.5%

$1.01
$0.96
-14.5%

$1.03
$0.98
11.3%

$3.24
$3.09
-6.1%

$4.10
$3.91
26.4%

$5.04
$4.81
23.1%

$73.454
-72.3%
5.4%

$92.966
26.6%
5.7%

$208.784
124.6%
10.1%

$244.465
17.1%
8.7%

$72.738
51.2%
9.8%

$82.875
1.9%
10.4%

$111.441
65.2%
14.7%

$91.072
37.5%
12.6%

$358.126
46.5%
11.8%

$46.438
-36.2%
6.3%

$88.992
7.4%
11.0%

$101.555
-8.9%
12.3%

$103.406
13.5%
12.4%

$340.391
-5.0%
10.6%

$411.320
20.8%
11.7%

$491.784
19.6%
12.3%

Adjusted EPS
y/y growth %

$0.51
-71.5%

$0.83
61.0%

$2.14
158.1%

$2.57
20.5%

$0.83
63.9%

$0.95
11.3%

$1.29
82.3%

$1.04
48.4%

$4.11
59.6%

$0.53
-36.0%

$1.02
7.0%

$1.16
-9.7%

$1.18
13.5%

$3.90
-5.2%

$4.71
20.8%

$5.63
19.6%

GAAP Basic weighted average shares outstanding


GAAP Diluted weighted average shares outstanding

138.599
138.599

106.274
106.274

86.777
94.343

86.23725
93.07975

84.218
87.38

83.609
86.563

83.094
86.072

83.016
86.971

83.48425
86.7465

83.016
86.971

83.016
86.971

83.016
86.971

83.016
86.971

83.016
86.971

83.016
86.971

83.016
86.971

Adjusted EPS shares outstanding


Source: Company Reports; Topeka Capital Markets

142.958

112.381

97.775

94.97575

87.667

87.073

86.602

87.325

87.16675

87.39125

87.39125

87.39125

87.39125

87.39125

87.39125

87.39125

Gain on Liberty Exchange


Income (Loss) from discontinued operations, net of tax

Adjusted Net Income


y/y growth %
% of revenues

Important Disclosures located on the Disclosure Appendix.

Page 28

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

IAC Cash Flow


Period
Operating Income before Dep & Amortization (EBITDA)
y/y growth %
Margin

2009
$167.182
-2.3%
12.3%

2010
$253.476
51.6%
15.5%

2011
$365.126
44.0%
17.7%

2012
$497.445
36.2%
17.8%

1Q13
$125.308
21.2%
16.9%

2Q13
$153.689
13.1%
19.2%

3Q13
$162.890
36.0%
21.5%

4Q13
$156.073
12.8%
21.5%

2013
$597.960
20.2%
19.8%

1Q13
$99.114
-20.9%
13.5%

2Q13
$164.615
7.1%
20.3%

3Q13
$183.917
12.9%
22.3%

4Q13
$186.729
19.6%
22.3%

2014E
$634.376
6.1%
19.8%

2015E
$743.378
17.2%
21.2%

2016E
$880.225
18.4%
22.1%

Operating Income before Amortization (OIBA)


y/y growth %
Margin

$103.492
3.4%
7.6%

$189.579
83.2%
11.6%

$308.407
62.7%
15.0%

$444.964
44.3%
15.9%

$111.292
21.9%
15.0%

$136.653
10.5%
17.1%

$149.401
40.2%
19.7%

$141.705
14.9%
19.6%

$539.051
21.1%
17.8%

$84.714
-23.9%
11.6%

$150.215
9.9%
18.5%

$169.517
13.5%
20.5%

$172.329
21.6%
20.6%

$576.776
7.0%
18.0%

$685.778
18.9%
19.6%

$820.897
19.7%
20.6%

Levered Free Cash Flow


Cash from operations
$348.547
Less, purchases of property and equipment
($33.938)
Plus: Tax Payments related to the dividend received from Meetic
$0.000
Less: Tax refunds related to the sale of certain businesses and investments
($96.700)
Levered FCF
$217.909
y/y growth %
-1561.4%
EBITDA to LFCF Conversion %
130.3%
OIBA to LFCF Conversion %
210.6%
Free Cash Flow Margin
16.0%

$340.707
($39.829)
$3.500
($51.900)
$252.478
15.9%
99.6%
133.2%
15.4%

$372.386
($39.954)
$0.000
$0.000
$332.432
31.7%
91.0%
107.8%
16.1%

$354.527
($51.201)
$0.000
$0.000
$303.326
-8.8%
61.0%
68.2%
10.8%

$92.362
($33.638)
$0.000
$0.000
$58.724
18.8%
46.9%
52.8%
7.9%

$135.901
($14.181)
$0.000
$0.000
$121.720
-10.3%
79.2%
89.1%
15.2%

$96.067
($16.295)
$0.000
$0.000
$79.772
-23.4%
49.0%
53.4%
10.5%

$86.631
($16.197)
$0.000
$0.000
$70.434
483.0%
45.1%
49.7%
9.7%

$410.961
($80.311)
$0.000
$0.000
$330.650
9.0%
55.3%
61.3%
10.9%

($7.643)
($16.367)
$0.000
$0.000
($24.009)
-140.9%
-24.2%
-28.3%
-3.3%

$136.074
($18.156)
$0.000
$0.000
$117.918
-3.1%
71.6%
78.5%
14.5%

$170.873
($18.472)
$0.000
$0.000
$152.401
91.0%
82.9%
89.9%
18.4%

$137.209
($18.707)
$0.000
$0.000
$118.502
68.2%
63.5%
68.8%
14.2%

$436.513
($71.702)
$0.000
$0.000
$364.811
10.3%
57.5%
63.3%
11.4%

$479.069
($78.274)
$0.000
$0.000
$400.794
9.9%
53.9%
58.4%
11.4%

$636.804
($89.092)
$0.000
$0.000
$547.712
36.7%
62.2%
66.7%
13.7%

LFCF per share


y/y growth %
% of Adj. EPS

$1.57
-1618.1%
306.0%

$2.38
51.1%
287.2%

$3.52
48.3%
165.0%

$3.26
-7.5%
126.6%

$0.67
24.7%
81.0%

$1.41
-4.8%
147.7%

$0.93
-15.8%
72.0%

$0.81
529.9%
77.7%

$3.81
17.0%
92.8%

($0.28)
-141.1%
-52.0%

$1.36
-3.6%
133.1%

$1.75
89.1%
150.8%

$1.36
68.2%
115.2%

$4.19
10.0%
107.7%

$4.61
9.9%
97.9%

$6.30
36.7%
111.9%

Unlevered Free Cash Flow


Plus cash interest, after-tax
Unlevered Free Cash Flow
y/y growth %
EBITDA to UFCF Conversion %

$2.637
$220.546
-1232.5%
131.9%

$0.137
$252.615
14.5%
99.7%

$0.000
$332.432
31.6%
91.0%

$0.000
$303.326
-8.8%
61.0%

($4.598)
$54.126
9.5%
43.2%

($4.595)
$117.125
-13.7%
76.2%

($4.574)
$75.198
-27.8%
46.2%

($6.391)
$64.043
430.1%
41.0%

($20.158)
$310.492
2.4%
51.9%

($5.878)
($29.887)
-155.2%
-30.2%

($5.897)
$112.021
-4.4%
68.1%

($5.882)
$146.519
94.8%
79.7%

($5.860)
$112.642
75.9%
60.3%

($23.517)
$341.295
9.9%
53.8%

($23.445)
$377.350
10.6%
50.8%

($30.083)
$517.629
37.2%
58.8%

$1.59
-1276.5%
309.7%

$2.38
49.4%
287.3%

$3.52
48.2%
165.0%

$3.26
-7.5%
126.6%

$0.62
15.0%
74.7%

$1.35
-8.4%
142.2%

$0.87
-20.6%
67.9%

$0.74
472.7%
70.6%

$3.58
9.8%
87.1%

($0.34)
-155.5%
-64.7%

$1.29
-4.8%
126.5%

$1.68
92.8%
145.0%

$1.30
75.9%
109.5%

$3.92
9.6%
100.8%

$4.34
10.6%
92.2%

$5.95
37.2%
105.8%

UFCF per share


y/y growth %
% of EPS
Source: Company Reports; Topeka Capital Markets

Important Disclosures located on the Disclosure Appendix.

Page 29

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

IAC Search
Period
Revenues
y/y growth %
% of company Revenue

2009
$649.642
-15.1%
47.6%

2010
$805.284
24.0%
49.2%

2011
$1,040.507
29.2%
50.5%

2012
$1,465.800
40.9%
52.3%

1Q13
$397.200
15.7%
53.5%

2Q13
$427.400
22.5%
53.5%

3Q13
$407.300
10.0%
53.8%

4Q13
$373.000
-7.6%
51.5%

2013
$1,604.900
9.5%
53.1%

1Q13
$379.384
-4.5%
51.8%

2Q13
$409.012
-4.3%
50.4%

3Q13
$435.106
6.8%
52.7%

4Q13
$447.783
20.0%
53.5%

2014E
$1,671.284
4.1%
52.1%

2015E
$1,819.447
8.9%
52.0%

2016E
$2,171.529
19.4%
54.5%

Operating Expenses
y/y growth %
% of Revenues

$557.100
-6.1%
85.8%

$628.738
12.9%
78.1%

$810.043
28.8%
77.9%

$1,137.600
40.4%
77.6%

$299.700
12.5%
75.5%

$325.000
19.8%
76.0%

$308.800
3.7%
75.8%

$285.600
-5.5%
76.6%

$1,219.100
7.2%
76.0%

$307.301
2.5%
81.0%

$308.972
-4.9%
75.5%

$327.706
6.1%
75.3%

$340.621
19.3%
76.1%

$1,284.600
5.4%
76.9%

$1,389.335
8.2%
76.4%

$1,647.328
18.6%
75.9%

OIBDA (EBITDA)
y/y growth %
Margin
% of company EBITDA

$135.251
-21.5%
20.8%
80.9%

$176.546
30.5%
21.9%
69.6%

$230.464
30.5%
22.1%
63.1%

$328.200
42.4%
22.4%
66.0%

$97.500
27.0%
24.5%
77.8%

$102.400
32.1%
24.0%
66.6%

$98.500
35.9%
24.2%
60.5%

$87.400
-13.8%
23.4%
56.0%

$385.800
17.6%
24.0%
64.5%

$72.083
-26.1%
19.0%
72.7%

$100.039
-2.3%
24.5%
60.8%

$107.400
9.0%
24.7%
58.4%

$107.162
22.6%
23.9%
57.4%

$386.684
0.2%
23.1%
61.0%

$430.113
11.2%
23.6%
57.9%

$524.202
21.9%
24.1%
59.6%

$31.395
4.8%

$35.754
4.4%

$25.484
2.4%

$15.000
1.0%

$3.900
1.0%

$6.400
1.5%

$3.900
1.0%

$4.000
1.1%

$18.200
1.1%

$4.000
1.1%

$4.000
1.0%

$4.000
0.9%

$4.000
0.9%

$16.000
1.0%

$16.000
0.9%

$16.480
0.8%

$103.856
-23.8%
16.0%
100.4%

$140.792
35.6%
17.5%
74.3%

$204.980
45.6%
19.7%
66.5%

$313.200
52.8%
21.4%
70.4%

$93.600
27.3%
23.6%
84.1%

$96.000
29.6%
22.5%
70.3%

$94.600
36.7%
23.2%
63.3%

$83.400
-13.5%
22.4%
58.9%

$367.600
17.4%
22.9%
68.2%

$68.083
-27.3%
17.9%
80.4%

$96.039
0.0%
23.5%
63.9%

$103.400
9.3%
23.8%
61.0%

$103.162
23.7%
23.0%
59.9%

$370.684
0.8%
22.2%
64.3%

$414.113
11.7%
22.8%
60.4%

$507.722
22.6%
23.4%
61.8%

Non-cash compensation expense

($0.663)

($0.630)

$0.202

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

Amortization of non-cash marketing

($6.494)

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

Depreciation
% of revenues
OIBA (EBITA)
y/y growth %
Margin
% of company OIBA

Amortization of Intangibles & Goodwill Impairment


Operating Income (Loss)
y/y growth %
Margin
% of company oper inc.
Source: Company Reports; Topeka Capital Markets

($1,064.356)

($11.806)

($1.176)

($7.400)

($6.700)

($6.700)

($6.900)

($7.300)

($27.600)

($7.300)

($7.300)

($7.300)

($7.300)

($29.200)

($29.200)

($30.076)

($967.657)
-1092.5%
-149.0%
91.5%

$128.356
-113.3%
15.9%
257.8%

$204.006
58.9%
19.6%
103.2%

$305.700
49.8%
20.9%
94.5%

$87.000
18.4%
21.9%
102.9%

$89.300
20.5%
20.9%
83.7%

$87.800
27.2%
21.6%
72.0%

$76.000
-14.7%
20.4%
67.3%

$340.000
11.2%
21.2%
79.8%

$60.783
-30.1%
16.0%
108.5%

$88.739
-0.6%
21.7%
73.0%

$96.100
9.5%
22.1%
68.2%

$95.862
26.1%
21.4%
66.7%

$341.484
0.4%
20.4%
73.9%

$384.913
12.7%
21.2%
67.4%

$477.646
24.1%
22.0%
68.0%

Important Disclosures located on the Disclosure Appendix.

Page 30

Topeka Capital Markets


IAC Match
Period
Paid Subscribers (000's)
q/q growth %
y/y growth %
Absolute Subscriber growth (mn)
Organic subscriber growth

2009
1,377.0
0
2.2%
30.0

2010
1,789.0
0
29.9%
412.0
-

2011
2,696.0

2012
2,812.0

50.7%
907.0

1,213.0
0.0
0.0%
88.1%

1,470.0
0
21.2%
82.2%

$0.0
0
0.0%
0.0

Core ARPU
q/q growth %
y/y growth %
Developing Business
Developing paid subscribers (000s)
q/q growth %
y/y growth %
% of total subs

Core Business
Core - paid subscribers (000s)
q/q growth %
y/y growth %
% of total subs
Core revenues
q/q growth %
y/y growth %
Revenue growth from Developing

Developing Revenues
q/q growth %
y/y growth %
Revenue growth from Developing
Developing ARPU, all in, including ad revs
q/q growth %
y/y growth %

Total APRU
q/q growth %
y/y growth %
New Registrations (000's)
% Growth
New Subscriptions - 1st Time Only (000's)
% Growth
Conversion Rate (Reg to Subs)
Revenues
y/y growth %
% of company Revenue
Operating Expenses
y/y growth %
% of Revenues
OIBDA (EBITDA)
y/y growth %
Margin
% of company EBITDA
Depreciation
OIBA (EBITA)
y/y growth %
Margin
% of company OIBA

IAC/InterActiveCorp
March 12, 2014

2Q13
3,196.0
1.8%
14.7%
56.0

3Q13
3,308.0
3.5%
17.3%
112.0

4Q13
3,357.0
1.5%
19.4%
49.0

2013
3,357.0

4.3%
116.0

1Q13
3,140.0
11.7%
11.3%
328.0

1,664.0
0.0
13.2%
61.7%

1,803.0
0.0
8.4%
64.1%

1,940.0
7.6%
8.0%
61.8%

1,945.0
0.3%
9.5%
60.9%

1,953.0
0.4%
9.0%
59.0%

1,964.0
0.6%
8.9%
58.5%

1,964.0

$338.9
0
0.0%
84.6%

$398.6

$439.9
0
10.4%
61.7%

$113.8
2.8%
4.5%
60.2%

$116.1
2.0%
6.0%
59.8%

$118.8
2.3%
7.2%
59.1%

$115.7
-2.6%
4.5%
56.7%

$464.4

$0.00
0
0.0%

$20.43

$21.20

$21.15
0
-0.2%

$20.27
-1.3%
-3.4%

$19.92
-1.7%
-2.5%

$20.32
2.0%
-1.8%

$19.69
-3.1%
-4.1%

$20.55

164.0
0.0
0.0%
11.9%

318.0
0
93.9%
17.8%

270.0
0.0
-15.1%
10.0%

240.0
0.0
-11.1%
8.5%

388.0
61.7%
45.3%
12.4%

440.0
13.4%
69.2%
13.8%

514.0
16.8%
98.5%
15.5%

578.0
12.5%
140.8%
17.2%

$0.0
0
0.0%
0.0%

$55.5
0
0.0%
13.9%

$73.2

$66.9
0
-8.6%
9.4%

$20.1
15.5%
19.6%
10.6%

$23.4
16.4%
44.4%
12.0%

$26.0
11.1%
57.6%
12.9%

$29.4
13.1%
69.0%
14.4%

$98.9

$0.00
0
0.0%

$19.20
0
0.0%

$20.76

$21.86
0
5.3%

$21.34
-8.2%
2.3%

$18.84
-11.7%
-8.1%

$18.17
-3.6%
-14.3%

$17.95
-1.2%
-22.8%

$20.15

$20.96
0.0%
-9.4%

$21.10
0.0%
0.6%

$19.25
0.0
-8.7%

$21.59
0.0
12.2%

$21.16
-2.1%
0.5%

$20.44
-3.4%
-3.6%

$20.61
0.8%
-2.7%

$20.40
-1.1%
-5.7%

$21.29

0%
0%
0%
$342.598
-6.3%
25.1%

0%
0%
0%
$400.723
17.0%
24.5%

0%
0%
0%
$518.027
29.3%
25.2%

0%
0%
0%
$713.500
37.7%
25.5%

0%
0%
0%
$188.900
8.4%
25.4%

0%
0%
0%
$194.300
8.9%
24.3%

0%
0%
0%
$201.100
12.9%
26.6%

$238.9
-10.0%
0.0%

$267.6
12.0%
0.0%

$351.0
31.1%
67.8%

$471.5
34.3%
66.1%

$137.9
3.3%
73.0%

$121.9
8.7%
62.7%

$103.698
3.5%
30.3%
62.0%

$133.099
28.4%
33.2%
52.5%

$167.054
25.5%
32.2%
45.8%

$242.000
44.9%
33.9%
48.6%

$51.000
25.0%
27.0%
40.7%

$72.400
9.2%
37.3%
47.1%

76.9%

14.1%

1Q13
3,543.1
5.5%
12.8%
186.1

2Q13
3,545.9
0.1%
10.9%
2.8

3Q13
3,604.4
1.6%
9.0%
58.5

4Q13
3,607.8
0.1%
7.5%
3.4

2014E
3,607.8

2015E
3,895.2

2016E
4,109.4

7.5%
250.8

8.0%
287.5

5.5%
214.2

2,095.2
6.7%
8.0%
59.1%

2,081.2
-0.7%
7.0%
58.7%

2,089.7
0.4%
7.0%
58.0%

2,101.5
0.6%
7.0%
58.2%

$2,101.48

$2,248.58

$2,361.01

7.0%
58.2%

7.0%
57.7%

5.0%
57.5%

$117.2
1.3%
3.0%
57.0%

$128.6
9.6%
10.7%
57.2%

$130.9
1.9%
10.2%
57.9%

$127.5
-2.6%
10.2%
56.4%

$504.2

$555.7

$606.5

8.6%
57.1%

10.2%
56.8%

9.1%
56.7%

$19.26
-2.2%
-5.0%

$20.52
6.6%
3.0%

$20.93
2.0%
3.0%

$20.28
-3.1%
3.0%

$20.67

$21.29

$21.93

0.6%

3.0%

3.0%

595.3
3.0%
53.4%
16.8%

613.2
3.0%
39.4%
17.3%

631.6
3.0%
22.9%
17.5%

650.5
3.0%
12.6%
18.0%

$650.54

$748.13

$822.94

12.6%
18.0%

15.0%
19.2%

10.0%
20.0%

$30.0
2.2%
49.5%
14.6%

$35.2
17.1%
50.3%
15.7%

$34.9
-0.7%
34.4%
15.4%

$35.6
1.8%
20.9%
15.7%

$135.7

$160.4

$185.6

37.2%
15.4%

18.2%
16.4%

15.7%
17.3%

$17.07
-4.9%
-20.0%

$19.41
13.7%
3.0%

$18.71
-3.6%
3.0%

$18.49
-1.2%
3.0%

$18.41

$19.11

$19.69

3.0%

3.0%

3.0%

$19.87
-2.6%
-6.1%

$21.13
6.3%
3.4%

$21.10
-0.2%
2.4%

$20.88
-1.0%
2.4%

$21.12

$21.74

$22.29

-1.4%

-0.8%

2.9%

2.5%

0%
0%
0%
$203.900
11.7%
28.1%

0%
0%
0%
$788.200
10.5%
26.1%

0%
0%
0%
$205.700
8.9%
28.1%

0%
0%
0%
$224.692
15.6%
27.7%

0%
0%
0%
$226.287
12.5%
27.4%

0%
0%
0%
$225.914
10.8%
27.0%

0%
0%
0%
$882.594
12.0%
27.5%

0%
0%
0%
$978.518
10.9%
27.9%

0%
0%
0%
$1,070.402
9.4%
26.9%

$127.7
12.3%
63.5%

$118.5
5.6%
58.1%

$506.0
7.3%
64.2%

$153.7
11.4%
74.7%

$138.7
13.8%
61.7%

$139.2
9.0%
61.5%

$126.8
7.0%
56.1%

$558.3
10.3%
63.3%

$612.1
9.6%
62.6%

$664.2
8.5%
62.1%

$73.400
13.8%
36.5%
45.1%

$85.400
21.3%
41.9%
54.7%

$282.200
16.6%
35.8%
47.2%

$52.042
2.0%
25.3%
52.5%

$85.972
18.7%
38.3%
52.2%

$87.119
18.7%
38.5%
47.4%

$99.139
16.1%
43.9%
53.1%

$324.271
14.9%
36.7%
51.1%

$366.432
13.0%
37.4%
49.3%

$406.192
10.9%
37.9%
46.1%

19.4%
545.0

8.9%
58.5%

0.1
58.9%

-2.8%

578.0
140.8%
17.2%

0.5
0.1

-7.8%

$9.8

$11.0

$10.8

$16.3

$4.7

$4.8

$5.0

$5.6

$20.1

$5.6

$5.6

$5.6

$5.6

$22.4

$22.4

$23.1

$94.1
3.1%
27.5%
90.9%

$122.1
29.7%
30.5%
64.4%

$156.3
28.0%
30.2%
50.7%

$225.7
44.4%
31.6%
50.7%

$46.3
24.1%
24.5%
41.6%

$67.6
8.0%
34.8%
49.5%

$68.4
14.0%
34.0%
45.8%

$79.8
21.3%
39.1%
56.3%

$262.1
16.1%
33.3%
48.6%

$46.4
0.3%
22.6%
54.8%

$80.4
18.9%
35.8%
53.5%

$81.5
19.2%
36.0%
48.1%

$93.5
17.2%
41.4%
54.3%

$301.9
15.2%
34.2%
52.3%

$344.0
14.0%
35.2%
50.2%

$383.1
11.4%
35.8%
46.7%
($2.5)

Non-cash compensation expense

($0.2)

$0.2

($1.6)

($2.9)

$0.2

($0.4)

($0.3)

($0.6)

($1.1)

($0.6)

($0.6)

($0.6)

($0.6)

($2.4)

($2.4)

Amortization of non-cash marketing

($4.4)

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

Amortization of Intangibles

($4.9)

($6.8)

($17.1)

($17.4)

($4.0)

($4.6)

($2.7)

($3.8)

($15.1)

($3.8)

($3.8)

($3.8)

($3.8)

($15.2)

($15.2)

($15.7)

$84.7
12.1%
0.0%
-40.0%

$115.4
36.3%
0.0%
52.8%

$137.6
19.2%
0.0%
18.9%

$205.5
49.4%
0.0%
34.8%

$41.0
37.1%
21.7%
76.0%

$58.4
2.3%
30.1%
8.2%

$64.8
15.5%
32.2%
38.0%

$81.4
30.4%
39.9%
89.2%

$245.9
19.7%
0.0%
54.1%

$42.0
2.5%
20.4%
6.2%

$76.0
30.1%
33.8%
57.8%

$77.1
19.0%
34.1%
48.9%

$89.1
9.5%
39.5%
35.2%

$284.3
15.6%
0.0%
40.7%

$326.4
14.8%
0.0%
44.0%

$365.0
11.8%
0.0%
42.0%

Operating Income (Loss)


y/y growth %
Margin
Incremental Margins
Source: Company Reports; Topeka Capital Markets

Important Disclosures located on the Disclosure Appendix.

Page 31

Topeka Capital Markets


IAC Local
Period
Revenues
y/y growth %
% of company Revenue

IAC/InterActiveCorp
March 12, 2014

2009
$230.426
86.0%
16.9%

2010
$263.749
14.5%
16.1%

2011
$303.418
15.0%
14.7%

2012
$322.600
6.3%
11.5%

1Q13
$74.900
-2.9%
10.1%

2Q13
$84.700
0.2%
10.6%

3Q13
$62.800
-25.5%
8.3%

4Q13
$55.000
-28.3%
7.6%

2013
$277.400
-14.0%
9.2%

1Q13
$62.600
-16.4%
8.6%

2Q13
$82.004
-3.2%
10.1%

3Q13
$75.861
20.8%
9.2%

4Q13
$66.668
21.2%
8.0%

2014E
$287.133
3.5%
9.0%

2015E
$326.061
13.6%
9.3%

2016E
$354.666
8.8%
8.9%

Operating Expenses
y/y growth %
% of Revenues

$131.3
38.9%
57.0%

$245.3
86.8%
93.0%

$264.7
7.9%
87.3%

$287.5
8.6%
89.1%

$73.6
4.7%
98.3%

$80.0
14.0%
94.5%

$49.1
-33.6%
78.2%

$54.1
-25.9%
98.4%

$256.8
-10.7%
92.6%

$61.4
-16.6%
98.1%

$77.0
-3.7%
94.0%

$71.3
45.2%
94.0%

$65.2
20.6%
97.9%

$274.9
7.1%
95.8%

$310.6
13.0%
95.3%

$336.1
8.2%
94.8%

OIBDA (EBITDA)
y/y growth %
Margin
% of company EBITDA

$18.6
-36.7%
8.1%
11.1%

$18.5
-0.9%
7.0%
7.3%

$38.7
109.5%
12.7%
10.6%

$35.1
-9.2%
10.9%
7.1%

$1.3
-80.9%
1.7%
1.0%

$4.7
-67.1%
5.5%
3.1%

$13.7
33.0%
21.8%
8.4%

$0.9
-75.7%
1.6%
0.6%

$20.6
-41.3%
7.4%
3.4%

$1.2
-6.8%
1.9%
1.2%

$5.0
5.5%
6.0%
3.0%

$4.6
-66.5%
6.0%
2.5%

$1.4
58.3%
2.1%
0.8%

$12.2
-40.8%
4.2%
1.9%

$15.5
26.9%
4.7%
2.1%

$18.6
20.2%
5.2%
2.1%

Depreciation

$6.3

$7.8

$10.4

$10.2

$2.3

$2.7

$1.3

$1.3

$7.6

$1.3

$1.3

$1.3

$1.3

$5.2

$5.2

$5.4

$12.4
-52.8%
5.4%
11.9%

$10.7
-13.6%
4.0%
5.6%

$28.3
165.1%
9.3%
9.2%

$24.9
-12.0%
11.7%
5.6%

($1.0)
-125.0%
-1.7%
-0.9%

$2.0
-83.1%
2.8%
1.5%

$12.4
59.0%
18.6%
8.3%

($0.4)
-130.8%
-0.7%
-0.3%

$13.0
-47.8%
5.1%
2.4%

($0.1)
-91.2%
-0.1%
-0.1%

$3.7
83.0%
4.5%
2.4%

$3.3
-73.5%
4.3%
1.9%

$0.1
-131.1%
0.2%
0.1%

$7.0
-46.3%
2.4%
1.2%

$10.3
47.0%
3.1%
1.5%

$13.2
29.0%
3.7%
1.6%

Non-cash compensation expense

($0.2)

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

Amortization of non-cash marketing

($5.0)

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

Amortization of Intangibles & Goodwill Impairment

($3.2)

($2.3)

($2.8)

($3.3)

($2.4)

($5.9)

($2.6)

($2.5)

($13.4)

($2.5)

($2.5)

($2.5)

($2.5)

($10.0)

($10.0)

($10.3)

$4.0
-83.4%
1.7%
-0.4%

$8.4
111.5%
3.2%
16.9%

$25.5
203.8%
8.4%
12.9%

$21.7
-15.0%
10.2%
6.7%

($3.4)
-189.5%
-5.9%
-4.0%

($4.0)
-134.2%
-5.5%
-3.7%

$9.9
35.6%
14.8%
8.1%

($2.9)
163.6%
-4.9%
-2.6%

($0.4)
-101.8%
-0.2%
-0.1%

($2.6)
-23.9%
-4.1%
-4.6%

$1.2
-129.0%
1.4%
1.0%

$0.8
-92.0%
1.0%
0.6%

($2.4)
-18.1%
-3.6%
-1.7%

($3.0)
653.7%
-1.0%
-0.7%

$0.3
-108.9%
0.1%
0.0%

$2.9
999.6%
0.8%
0.4%

OIBA (EBITA)
y/y growth %
Margin
% of company OIBA

Operating Income (Loss)


y/y growth %
Margin
% of company oper inc.
Source: Company Reports; Topeka Capital Markets

Important Disclosures located on the Disclosure Appendix.

Page 32

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

IAC Media & Other


Period
Revenues
y/y growth %
% of company Revenue

2009
$125.6
-42.0%
9.2%

2010
$168.4
34.1%
10.3%

2011
$198.2
17.7%
9.6%

2012
$299.4
51.0%
10.7%

1Q13
$81.3
76.4%
11.0%

2Q13
$93.0
34.8%
11.6%

3Q13
$86.1
5.3%
11.4%

4Q13
$92.8
-9.5%
12.8%

2013
$353.2
18.0%
11.7%

1Q13
$84.5
3.9%
11.5%

2Q13
$96.5
3.8%
11.9%

3Q13
$89.4
3.8%
10.8%

4Q13
$96.7
4.2%
11.6%

2014E
$367.0
3.9%
11.4%

2015E
$378.0
3.0%
10.8%

2016E
$389.3
3.0%
9.8%

Operating Expenses
y/y growth %
% of Revenues

$181.4
-27.0%
144.4%

$187.1
3.2%
111.1%

$215.0
14.9%
108.5%

$347.9
61.8%
116.2%

$91.4
70.8%
112.4%

$99.1
28.7%
106.6%

$95.1
-0.5%
110.5%

$98.4
-19.2%
106.0%

$384.0
10.4%
108.7%

$97.5
6.7%
115.5%

$107.3
8.3%
111.2%

$91.2
-4.1%
102.1%

$99.5
1.1%
102.9%

$395.5
3.0%
107.8%

$385.8
-2.5%
102.1%

$395.4
2.5%
101.6%

OIBDA (EBITDA)
y/y growth %
Margin
% of company EBITDA

($20.3)
-37.1%
-16.1%
0.0%

($18.7)
-7.8%
-11.1%
0.0%

($16.8)
-10.1%
-8.5%
0.0%

($48.5)
188.9%
-16.2%
0.0%

($10.1)
36.5%
-12.4%
-8.1%

($6.1)
-23.8%
-6.6%
-4.0%

($9.0)
-34.8%
-10.5%
-5.5%

($5.6)
-71.0%
-6.0%
-3.6%

($30.8)
-36.5%
-8.7%
-5.2%

($13.1)
29.6%
-15.5%
-13.2%

($10.8)
77.0%
-11.2%
-6.6%

($1.8)
-79.5%
-2.1%
-1.0%

($2.8)
-49.9%
-2.9%
-1.5%

($28.5)
-7.4%
-7.8%
-4.5%

($7.8)
-72.8%
-2.1%
-1.0%

($6.0)
-22.1%
-1.6%
-0.7%

Depreciation

$2.7

$1.1

$1.6

$2.5

$0.8

$0.8

$0.9

$1.0

$3.5

$1.0

$1.0

$1.0

$1.0

$4.0

$4.0

$4.1

($23.0)
-28.5%
-18.3%
-22.2%

($19.8)
-14.1%
-11.7%
-10.4%

($18.3)
-7.2%
-9.3%
-5.9%

($51.0)
178.0%
-17.0%
-11.5%

($10.9)
39.7%
-13.4%
-9.8%

($6.9)
-19.8%
-7.4%
-5.0%

($9.9)
-31.7%
-11.5%
-6.6%

($6.6)
-67.2%
-7.1%
-4.7%

($34.3)
-32.7%
-9.7%
-6.4%

($14.1)
29.2%
-16.7%
-16.6%

($11.8)
71.0%
-12.2%
-7.9%

($2.8)
-71.3%
-3.2%
-1.7%

($3.8)
-42.4%
-3.9%
-2.2%

($32.5)
-5.2%
-8.9%
-5.6%

($11.8)
-63.8%
-3.1%
-1.7%

($10.2)
-13.5%
-2.6%
-1.2%

Non-cash compensation expense

($0.8)

($0.6)

($0.8)

($1.0)

($0.2)

($0.2)

($0.2)

$0.0

($0.6)

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

Amortization of non-cash marketing

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

Amortization of Intangibles & Goodwill Impairment

($1.4)

($34.6)

($1.1)

($7.8)

($0.9)

($0.9)

($0.9)

($0.9)

($3.6)

($0.9)

($0.9)

($0.9)

($0.9)

($3.6)

($3.6)

($3.7)

Operating Income (Loss)


y/y growth %
Margin
% of company oper inc.
Source: Company Reports; Topeka Capital Markets

($25.2)
-52.1%
-20.1%
0.0%

($55.0)
118.0%
-32.6%
0.0%

($20.2)
-63.3%
-10.2%
0.0%

($59.8)
196.5%
-20.0%
0.0%

($12.0)
42.9%
-14.8%
-14.2%

($8.0)
-15.8%
-8.6%
-7.5%

($11.0)
-31.3%
-12.8%
-9.0%

($7.5)
-70.9%
-8.1%
-6.6%

($38.5)
-35.6%
-10.9%
-9.0%

($15.0)
24.9%
-17.7%
-26.8%

($12.7)
58.7%
-13.2%
-10.5%

($3.7)
-66.0%
-4.2%
-2.7%

($4.7)
-37.3%
-4.9%
-3.3%

($36.1)
-6.1%
-9.8%
-7.8%

($15.4)
-57.5%
-4.1%
-2.7%

($13.9)
-9.7%
-3.6%
-2.0%

OIBA (EBITA)
y/y growth %
Margin
% of company OIBA

Important Disclosures located on the Disclosure Appendix.

Page 33

Topeka Capital Markets


IAC Eliminations/Corporate
Period
Intersegment Eliminations
y/y growth %

Corporate Expenses
Operating Expenses
y/y growth %
OIBDA (EBITDA)
y/y growth %

IAC/InterActiveCorp
March 12, 2014

2009
($1.569)
-92.0%

2010
($1.382)
-11.9%

2011
($0.737)
-46.7%

2012
($0.400)
-45.7%

1Q13
($0.100)
0.0%

2Q13
($0.100)
0.0%

3Q13
($0.400)
300.0%

4Q13
($0.300)
200.0%

2013
($0.900)
125.0%

1Q13
($0.105)
5.0%

2Q13
($0.105)
5.0%

3Q13
($0.420)
5.0%

4Q13
($0.315)
5.0%

2014E
($0.945)
5.0%

2015E
($0.992)
5.0%

2016E
($1.042)
5.0%

$52.0
6.8%

$54.6
4.9%

$55.7
2.1%

$59.0
6.0%

$12.9
-4.4%

$15.3
8.5%

$12.8
-6.6%

$17.7
0.0%

$58.7
-0.5%

$13.0
1.0%

$15.5
1.0%

$12.9
1.0%

$17.9
1.0%

$59.3
1.0%

$59.9
1.0%

$61.7
3.0%

($54.3)
-50.0%

($55.9)
3.0%

($56.4)
0.9%

($59.4)
5.3%

($13.0)
-4.4%

($15.4)
8.5%

($13.2)
-4.3%

($18.0)
1.1%

($59.6)
0.3%

($13.1)
1.0%

($15.6)
1.0%

($13.3)
1.1%

($18.2)
1.1%

($60.2)
1.1%

($60.9)
1.1%

($62.7)
3.0%

Depreciation

$11.2

$8.2

$6.4

$8.6

$2.3

$2.3

$2.4

$2.5

$9.5

$2.5

$2.5

$2.5

$2.5

$10.0

$10.0

$10.3

OIBA (EBITA)
y/y growth %

($65.5)
-46.1%

($64.2)
-2.0%

($62.8)
-2.2%

($68.0)
8.3%

($15.3)
-2.5%

($17.7)
8.6%

($15.6)
-1.9%

($20.5)
2.0%

($69.1)
1.6%

($15.6)
2.2%

($18.1)
2.0%

($15.8)
1.6%

($20.7)
0.9%

($70.2)
1.6%

($70.9)
0.9%

($73.0)
3.0%

Non-cash compensation expense

($68.3)

($83.2)

($86.4)

($81.9)

($12.6)

($11.2)

($13.8)

($13.6)

($51.2)

($13.6)

($13.6)

($13.6)

($13.6)

($54.4)

($54.4)

($56.0)

Amortization of non-cash marketing

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

Amortization of Intangibles & Goodwill Impairment

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

($133.7)
-35.1%

($147.3)
10.2%

($149.2)
1.2%

($149.9)
0.5%

($27.9)
-22.5%

($29.0)
-19.2%

($29.4)
-23.8%

($34.1)
-13.5%

($120.3)
-19.7%

($29.2)
4.8%

($31.7)
9.2%

($29.4)
0.2%

($34.3)
0.6%

($124.6)
3.6%

($125.3)
0.5%

($129.1)
3.0%

Operating Income (Loss)


y/y growth %
Source: Company Reports; Topeka Capital Markets

Important Disclosures located on the Disclosure Appendix.

Page 34

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

IAC Balance Sheet


Period
Cash and cash equivalents
Marketable securities
Accounts receivable, net
Other current assets
Total current assets

2009
$1,245.997
$487.591
$101.834
$164.627
$2,000.049

2010
$742.099
$563.997
$119.581
$118.308
$1,543.985

2011
$704.153
$165.695
$177.030
$112.255
$1,159.133

2012
$749.977
$20.604
$229.830
$156.339
$1,156.750

1Q13
$673.757
$5.814
$235.181
$140.930
$1,055.682

2Q13
$678.725
$7.775
$235.950
$148.285
$1,070.735

3Q13
$741.652
$26.340
$209.949
$151.980
$1,129.921

4Q13
$1,100.444
$6.004
$207.408
$161.530
$1,475.386

2013
$1,100.444
$6.004
$207.408
$161.530
$1,475.386

1Q13
$1,021.511
$6.004
$272.614
$161.530
$1,461.659

2Q13
$1,084.505
$6.004
$284.809
$161.530
$1,536.848

3Q13
$1,181.982
$6.004
$275.086
$161.530
$1,624.602

4Q13
$1,245.560
$6.004
$286.027
$161.530
$1,699.121

2014E
$1,245.560
$6.004
$286.027
$161.530
$1,699.121

2015E
$1,426.659
$6.004
$363.330
$161.530
$1,957.523

2016E
$1,750.475
$6.004
$413.544
$161.530
$2,331.553

Fund held in escrow for Meetic tender offer


Property and equipment, net
Goodwill
Intangible assets, net
Long-term investmetns
Other non-current assets
Total Assets

$0.000
$297.412
$999.355
$261.172
$272.930
$184.971
$4,015.889

$0.000
$267.928
$989.493
$245.044
$200.721
$192.383
$3,439.554

$0.000
$259.588
$1,358.524
$378.107
$173.752
$80.761
$3,409.865

$0.000
$270.512
$1,616.154
$482.904
$161.278
$118.230
$3,805.828

$0.000
$293.282
$1,674.220
$478.784
$157.750
$120.528
$3,780.246

$0.000
$289.493
$1,664.315
$466.161
$196.811
$124.976
$3,812.491

$0.000
$290.470
$1,672.705
$458.371
$164.170
$89.145
$3,804.782

$0.000
$293.964
$1,675.323
$445.336
$179.990
$164.685
$4,234.684

$0.000
$293.964
$1,675.323
$445.336
$179.990
$164.685
$4,234.684

$0.000
$295.931
$1,675.323
$445.336
$179.990
$164.685
$4,222.923

$0.000
$299.687
$1,675.323
$445.336
$179.990
$164.685
$4,301.869

$0.000
$303.759
$1,675.323
$445.336
$179.990
$164.685
$4,393.695

$0.000
$308.066
$1,675.323
$445.336
$179.990
$164.685
$4,472.521

$0.000
$308.066
$1,675.323
$445.336
$179.990
$164.685
$4,472.521

$0.000
$328.740
$1,675.323
$445.336
$179.990
$164.685
$4,751.596

$0.000
$358.504
$1,675.323
$445.336
$179.990
$164.685
$5,155.391

Accounts payable, trade


Deffered revenue
Accrued expenses and other current liabilities
Total current liabilities

$39.173
$57.822
$193.282
$290.277

$56.375
$78.175
$222.323
$356.873

$64.398
$126.297
$343.490
$534.185

$98.314
$155.499
$355.232
$624.889

$78.168
$169.480
$343.791
$591.439

$83.294
$164.667
$362.695
$610.656

$72.966
$161.950
$366.635
$601.551

$77.653
$158.206
$351.038
$586.897

$77.653
$158.206
$351.038
$586.897

$68.727
$167.148
$339.061
$574.937

$75.400
$167.279
$368.449
$611.128

$70.622
$176.789
$400.228
$647.638

$81.149
$182.718
$405.428
$669.295

$81.149
$182.718
$405.428
$669.295

$79.344
$199.654
$443.005
$722.003

$90.310
$227.247
$504.231
$821.787

Long-term debt
Income taxes payable
Other long-term liabilities
Redeemable noncontrolling interests
Commitments and contingencies

$95.844
$450.129
$23.633
$28.180
$0.000

$95.844
$475.685
$20.350
$59.869
$0.000

$95.844
$450.533
$16.601
$50.349
$0.000

$580.000
$479.945
$31.830
$58.126
$0.000

$580.000
$481.908
$66.405
$59.254
$0.000

$580.000
$496.168
$66.081
$64.147
$0.000

$580.000
$411.172
$65.175
$32.779
$0.000

$1,080.000
$416.384
$58.393
$42.861
$0.000

$1,080.000
$416.384
$58.393
$42.861
$0.000

$1,080.000
$416.384
$58.393
$42.861
$0.000

$1,080.000
$416.384
$58.393
$42.861
$0.000

$1,080.000
$416.384
$58.393
$42.861
$0.000

$1,080.000
$416.384
$58.393
$42.861
$0.000

$1,080.000
$416.384
$58.393
$42.861
$0.000

$1,080.000
$416.384
$58.393
$42.861
$0.000

$1,080.000
$416.384
$58.393
$42.861
$0.000

$0.000
$0.223
$0.016
$11,322.993
($751.377)
$24.503
($7,468.532)
$3,127.826
$4,015.889

$0.000
$0.226
$0.016
$11,428.749
($652.018)
$17.546
($8,363.586)
$2,430.933
$3,439.554

$0.000
$0.234
$0.016
$11,280.173
($477.785)
($12.443)
($8,885.146)
$1,905.049
$3,409.865

$0.000
$0.251
$0.016
$11,607.367
($318.519)
($32.169)
($9,601.218)
$1,655.728
$3,805.828

$0.000
$0.251
$0.016
$11,606.585
($264.882)
($44.096)
($9,661.355)
$1,636.519
$3,780.246

$0.000
$0.251
$0.016
$11,604.296
($206.592)
($32.187)
($9,734.479)
$1,631.305
$3,812.491

$0.000
$0.251
$0.016
$11,585.545
($109.652)
($6.625)
($9,734.479)
$1,735.056
$3,804.782

$0.000
$0.251
$0.016
$11,562.567
($32.735)
($13.046)
($9,830.317)
$1,686.736
$4,234.684

$0.000
$0.251
$0.016
$11,562.567
($32.735)
($13.046)
($9,830.317)
$1,686.736
$4,234.684

$0.000
$0.251
$0.016
$11,604.150
($4.119)
($13.046)
($9,900.317)
$1,686.936
$4,222.923

Stockholders' Equity
Common stock
Class B convertible common stock
Additional paid-in capital
Accumulated deficit
Accumulated other comprehensive income
Treasury Stock
Total stockholders' equity (deficit)
Total Liabilities & Shareholders Equity
Source: Company Reports; Topeka Capital Markets

Important Disclosures located on the Disclosure Appendix.

$0.000
$0.000
$0.000
$0.000
$0.251
$0.251
$0.251
$0.251
$0.016
$0.016
$0.016
$0.016
$11,645.733 $11,687.316 $11,728.900 $11,728.900
$67.053
$150.786
$236.371
$236.371
($13.046)
($13.046)
($13.046)
($13.046)
($9,970.317) ($10,040.317) ($10,110.317) ($10,110.317)
$1,729.690
$1,785.007
$1,842.175
$1,842.175
$4,301.869
$4,393.695
$4,472.521
$4,472.521

$0.000
$0.000
$0.251
$0.251
$0.016
$0.016
$11,895.232 $12,069.209
$576.407
$994.840
($13.046)
($13.046)
($10,390.317) ($10,678.717)
$2,068.543
$2,372.553
$4,751.596
$5,155.391

Page 35

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

IAC Statement of Cash Flows


Period
2009
2010
Net income (loss)
($979.912)
$94.352
Less: loss from discontinued operations, net of tax
$23.439
($103.745)
Earnings (loss) from continuing operations
($956.473)
($9.393)
Adjustments to reconcile net income (loss) to net cash provided by$0.000
operating activities:
$0.000
Depreciation
$61.391
$63.897
Amortization of intangibles
$157.031
$27.472
Amortization of non-cash marketing
$15.868
$0.000
Goodwill impairment
$916.868
$28.032
Impairment of long-term investment
$4.936
$7.844
Non-cash compensation expense
$70.081
$84.280
Deferred income taxes
$27.707
($6.074)
Equity in losses of unconsolidated affiliates
$14.014
$25.676
Gain on sale of Match Europe
($132.244)
$0.000
Decrease in the fair value of the derivative asset related to Arcandor AG
($28.835)
stock
$0.000
Gain on sales of investments
$58.097
($3.989)
Changes in operating assets and liabilities:
Accounts receivable
($18.121)
($32.901)
Other current assets
$6.458
($8.636)
Accounts payable and other current liabilities
$18.825
$54.188
Income taxes payable
$109.009
$76.749
Deferred revenue
$14.238
$19.653
Other, net
$9.697
$13.909
Net cash provided by (used in) operating activities
$348.547
$340.707

2011
$171.577
$3.992
$175.569
$0.000
$56.719
$22.057
$0.000
$0.000
$0.000
$88.588
($35.483)
$36.300
$0.000
$0.000
($1.974)

2012
$160.796
$9.051
$169.847
$0.000
$52.481
$35.771
$0.000
$0.000
$8.685
$85.625
$37.076
$25.345
$0.000
$0.000
$0.000

1Q13
$51.765
$0.944
$52.709
$0.000
$14.016
$14.078
$0.000
$0.000
$0.000
$12.663
($11.010)
$0.091
$0.000
$0.000
$0.000

2Q13
$57.472
$1.068
$58.540
$0.000
$17.036
$18.137
$0.000
$0.000
$0.000
$11.820
$4.273
$1.078
$0.000
$0.000
$0.000

3Q13
$95.635
($3.914)
$91.721
$0.000
$13.489
$13.032
$0.000
$0.000
$0.000
$14.365
$0.798
$3.253
$0.000
$0.000
($32.896)

4Q13
$78.853
($0.024)
$78.829
$0.000
$14.368
$14.596
$0.000
$0.000
$5.268
$14.157
($3.157)
$2.193
$0.000
$0.000
($17.712)

2013
$283.725
($1.926)
$281.799
$0.000
$58.909
$59.843
$0.000
$0.000
$5.268
$53.005
($9.096)
$6.615
$0.000
$0.000
($50.608)

1Q13
$28.616
$0.000
$28.616
$0.000
$14.400
$14.500
$0.000
$0.000
$0.000
$14.200
$0.000
($2.193)
$0.000
$0.000
$0.000

2Q13
$71.171
$0.000
$71.171
$0.000
$14.400
$14.500
$0.000
$0.000
$0.000
$14.200
$0.000
($2.193)
$0.000
$0.000
$0.000

3Q13
$83.734
$0.000
$83.734
$0.000
$14.400
$14.500
$0.000
$0.000
$0.000
$14.200
$0.000
($2.193)
$0.000
$0.000
$0.000

4Q13
$85.585
$0.000
$85.585
$0.000
$14.400
$14.500
$0.000
$0.000
$0.000
$14.200
$0.000
($2.193)
$0.000
$0.000
$0.000

2014E
$269.106
$0.000
$269.106
$0.000
$57.600
$58.000
$0.000
$0.000
$0.000
$56.800
$0.000
($8.772)
$0.000
$0.000
$0.000

2015E
$340.035
$0.000
$340.035
$0.000
$57.600
$58.000
$0.000
$0.000
$0.000
$56.800
$0.000
($8.772)
$0.000
$0.000
$0.000

2016E
$418.433
$0.000
$418.433
$0.000
$59.328
$59.740
$0.000
$0.000
$0.000
$58.504
$0.000
($8.772)
$0.000
$0.000
$0.000

($58.314)
$1.287
$57.228
($29.215)
$48.950
$10.674
$372.386

($30.991)
($22.991)
($14.384)
($10.091)
$1.864
$16.290
$354.527

($4.635)
($8.001)
($12.929)
$22.666
$7.827
$3.429
$92.362

($5.119)
($6.788)
$36.367
$22.863
($8.030)
$5.022
$135.901

$20.564
($5.127)
($29.597)
$2.607
($1.203)
$7.312
$96.067

($0.389)
($14.716)
$5.393
$1.055
($4.435)
$3.638
$86.631

$10.421
($34.632)
($0.766)
$49.191
($5.841)
$19.401
$410.961

($65.206)
$0.000
($20.903)
$0.000
$8.942
$0.000
($7.643)

($12.195)
$0.000
$36.060
$0.000
$0.131
$0.000
$136.074

$9.723
$0.000
$27.000
$0.000
$9.509
$0.000
$170.873

($10.941)
$0.000
$15.727
$0.000
$5.930
$0.000
$137.209

($78.619)
$0.000
$57.886
$0.000
$24.512
$0.000
$436.513

($77.303)
$0.000
$35.772
$0.000
$16.935
$0.000
$479.069

($50.214)
$0.000
$72.192
$0.000
$27.593
$0.000
$636.804

Investing Activities
Acquisitions, net of cash acquired
Capital expenditures
Proceeds from sales and maturities of marketable debt securities
Purchases of marketable debt securities
Proceeds from sales of investments
Purchases of long-term investments
Fund transferred to escrow for Meetic tender offer
Dividend received from Meetic, an equity method investee
Other, net
Net cash provided by (used in) investing activities

($85.534)
($33.938)
$229.583
($586.274)
$64.046
($6.482)
$0.000
$0.000
($4.041)
($422.640)

($17.333)
($39.829)
$763.326
($838.155)
$5.324
($2.283)
$11.355
$0.000
($0.501)
($118.096)

($278.469)
($39.954)
$584.935
($203.970)
$15.214
($90.245)
$0.000
$0.000
($12.697)
($25.186)

($411.035)
($51.201)
$195.501
($53.952)
$14.194
($36.094)
$0.000
$0.000
($9.501)
($352.088)

($29.194)
($33.638)
$12.500
$0.000
$0.214
($0.975)
$0.000
$0.000
($1.051)
($52.144)

($7.719)
($14.181)
$0.002
$0.000
$0.096
($24.284)
$0.000
$0.000
($0.392)
($46.478)

($2.544)
($16.295)
$0.000
$0.000
$41.976
($1.346)
$0.000
$0.000
$10.347
$32.138

($1.233)
($16.197)
$0.000
$0.000
$27.682
($24.475)
$0.000
$0.000
$0.690
($13.533)

($40.690)
($80.311)
$12.502
$0.000
$69.968
($51.080)
$0.000
$0.000
$9.594
($80.017)

$0.000
($16.367)
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
($16.367)

$0.000
($18.156)
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
($18.156)

$0.000
($18.472)
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
($18.472)

$0.000
($18.707)
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
($18.707)

$0.000
($71.702)
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
($71.702)

$0.000
($78.274)
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
($78.274)

$0.000
($89.092)
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
($89.092)

Financing Activities
Purchase of treasury stock
Issuance of common stock, net of withholding taxes
Excess tax benefits from stock-based awards
Liberty Exchange
Other, net
Net cash provided by (used in) financing activities

($545.489)
$151.933
$0.796
$0.000
($12.706)
($405.466)

($539.598)
$25.939
$14.291
($217.921)
$0.079
($717.210)

($507.765)
$132.785
$22.166
$0.000
($8.751)
($372.233)

($691.830)
$262.841
$57.101
$0.000
($15.648)
$44.301

($88.605)
$0.552
$12.530
$0.000
($1.101)
($113.897)

($74.055)
($1.420)
$11.017
$0.000
($2.533)
($84.442)

($5.716)
$7.324
$2.883
$0.000
$0.248
($70.824)

($95.838)
($11.533)
$6.461
$0.000
($79.312)
$287.085

($264.214)
($5.077)
$32.891
$0.000
($82.698)
$17.922

($70.000)
$35.000
$0.000
$0.000
$0.000
($54.924)

($70.000)
$35.000
$0.000
$0.000
$0.000
($54.924)

($70.000)
$35.000
$0.000
$0.000
$0.000
($54.924)

($70.000)
$35.000
$0.000
$0.000
$0.000
($54.924)

($280.000)
$140.000
$0.000
$0.000
$0.000
($219.695)

($280.000)
$140.000
$0.000
$0.000
$0.000
($219.695)

($288.400)
$144.200
$0.000
$0.000
$0.000
($223.895)

Total cash provided by (used in) continuing operations


Total cash used in discontinued operations

($479.559)
($25.039)

($494.599)
($7.545)

($25.033)
($8.417)

$46.740
($3.472)

($73.679)
$2.425

$4.981
($0.090)

$57.381
($0.078)

$360.183
($4.134)

$348.866
($1.877)

($78.933)
$0.000

$62.994
$0.000

$97.477
$0.000

$63.578
$0.000

$145.116
$0.000

$181.099
$0.000

$323.816
$0.000

Foreign-currency effect on cash and cash equivalents

$5.601

($1.754)

($4.496)

$2.556

($4.966)

$0.077

$5.624

$2.743

$3.478

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

Net increase (decrease) in cash and cash equivalents


Cash and the beginning of period
Cash and cash equivalents at end of period
Source: Company Reports; Topeka Capital Markets

($498.997)
$1,744.994
$1,245.997

($503.898)
$1,245.997
$742.099

($37.946)
$742.099
$704.153

$45.824
$704.153
$749.977

($76.220)
$749.977
$673.757

$4.968
$673.757
$678.725

$62.927
$678.725
$741.652

$358.792
$741.652
$1,100.444

$350.467
$749.977
$1,100.444

($78.933)
$1,100.444
$1,021.511

$62.994
$1,021.511
$1,084.505

$97.477
$1,084.505
$1,181.982

$63.578
$1,181.982
$1,245.560

$145.116
$1,100.444
$1,245.560

$181.099
$1,245.560
$1,426.659

$323.816
$1,426.659
$1,750.475

Important Disclosures located on the Disclosure Appendix.

Page 36

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

IMPORTANT DISCLOSURES AND INFORMATION ABOUT THE USE


OF THIS DOCUMENT
This report has been prepared by Topeka Capital Markets (Topeka). Topeka is a
broker-dealer registered with the SEC and member of FINRA, and Investor Protection
Corporation (SIPC). Topeka Capital Markets is located at 40 Wall Street, Suite 1702,
New York, New York 10005.

Analyst Certification
Victor Anthony who is principally responsible for the preparation of this report with
respect to each subject security or issuer contained within this report certifies as of
the date of the report that:
(1) the recommendations and guidance expressed accurately reflects the research
analyst's personal views;
(2) no part of the compensation was, is, or will be directly, or indirectly, related to the
specific recommendations or views expressed in this report.

Company Disclosures
For up-to-date company disclosures, please click on the following link or
paste URL in a web browser: www.topekacapitalmarkets.com. Company specific
disclosures and price charts for compendium reports are available by emailing
tcmresearch@topekacapitalmarkets.com.
Investment Banking Services: Topeka Capital Markets Inc. seeks to do business with
the issuers in its research reports.
The analyst may receive direct or indirect compensation based on the performancerelated to the recommendation and guidance expressed.
The information and rating included in this report represent the long-term view as
described more fully below. The analyst may have different views regarding short
term trading strategies with respect to the stocks covered by the rating, options on
such stocks, and/or other securities or financial instruments issued by the company.
Our brokers and analysts may make recommendations to their clients, and our
affiliates may make investment decisions that are contrary to the recommendations
contained in this research report. Such recommendations or investment decisions are
based on the particular investment strategies, risk tolerances, and other investment
factors of that particular client or affiliate. From time to time, Topeka, and its
respective directors, officers, employees, or members of their immediate families
may have a long or short position in the securities or other financial instruments
mentioned in this report. We provide to certain customers on request specialized
research products or services that focus on covered stocks from a particular
perspective. These products or services include, but are not limited to, compilations,
reviews, and analysis that may use different research methodologies or focus on the
prospects for individual stocks as compared to other covered stocks or over differing
time horizons or under assumed market events or conditions. Readers should be
aware that we may issue investment research on the subject companies from a
technical perspective and/or include in this report discussions about options on
stocks covered in this report and/or other securities or financial instruments issued
by the company. These analyses are different from fundamental analysis, and the
conclusions reached may differ. Technical research and the discussions concerning
options and other securities and financial instruments issued by the company do not
represent a rating or coverage of any discussed issuer(s). The disclosures concerning
distribution of ratings and price charts refer to fundamental research and do not

Important Disclosures located on the Disclosure Appendix.

Page 37

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

include reference to technical recommendations or discussions concerning options


and other securities and financial instruments issued by the company.

Disclaimer
Information about our recommendations, holdings and investment decisions:
The information presented in this report is for informational purposes only. It was
prepared based on information and sources that we believe to be reliable, but we
make no representations or guarantees as to the accuracy or completeness of the
information contained herein. This report is not to be construed as an offer to sell
or a solicitation of an offer to buy any security. The opinions expressed in this report
may change without notice.
Topeka Capital Markets Inc. reports are intended for use by institutional investors.
The securities discussed in Topeka Capital Markets Inc. research reports may not be
suitable for some investors. Investors must make their own determination as to the
appropriateness of an investment in any securities referred to herein, based on their
specific investment objectives, financial status and risk tolerance. Past performance
is no guarantee of future results and the predictions made in this report may not be
met.
Topeka Capital Markets Inc. accepts no liability whatsoever for any loss or damage of
any kind arising out of the use of all or any part of this report. Topeka Capital Markets
Inc. specifically prohibits the re-distribution of this report by third parties, via the
internet or otherwise, and accepts no liability whatsoever for the actions of such third
parties in this respect. Additional information is available to clients upon request.

90
80
70
60
50
40
May-13 Jul-13
Sep-13
IAC/InterActiveCorp

Nov-13

Jan-14

Mar-14

Stock Ratings
Buy - The stock is expected to trade higher on an absolute basis or outperform relative
to the market or its peer stocks over the next 12 months.

Important Disclosures located on the Disclosure Appendix.

Page 38

Topeka Capital Markets

IAC/InterActiveCorp
March 12, 2014

Hold - The stock has average risk/reward and is expected to perform in line with the
market or its peer stocks over the next 12 months.
Sell - The stock is expected to trade lower on an absolute basis or underperform
relative to the market or its peer stocks over the next 12 months.

Ratings Distribution for Topeka Capital Markets as of March 12, 2014


Buy
Hold
Sell

Count

% of total

78
48
0

61.90%
38.10%
0.00%
Source: Topeka Capital Markets

Important Disclosures located on the Disclosure Appendix.

Page 39

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