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Thriller Diller? Excite! InterActive Stock? Ask Jeeves

Read more articles on Internet Marketing and Internet and Investing.

March 27, 2007

Posted by neillevine

About This Editor: I am a writer. Have been writing for other sites, but expect to do most of my future work HERE! My expertise extends from the esoteric such as burning hydrogen to the unpredictability of the stock market and my writing makes me a jack of all trades and exasperated master of none. I have had some influence over national wildfire and water policy and there are hints of a change in energy policy, BUT as Samuel Goldwyn once said, "A verbal promise is not worth the paper it is written on."

         

IAC/InterActiveCorp, IACI, is a combination of some sixty-five or so mostly internet brands that was put together by Barry Diller, the chief executive and in a previous incarnation a television network chief. The stock closed yesterday at $38.64.

Because many of its brand components are familiar to internet surfers, I had heard of this company many times before and, finally, a full page ad in “The New York Times” listing many of its subsidiaries motivated me to write this article.

InterActive had $6.3 billion in 2006 gross revenue and its major divisions are HSN (Home Shopping Network), Ticketmaster, Lending Tree, Ask Jeeves, or, listed by major business lines, retailing, memberships and subscriptions, services, media and advertising and emerging business or, to simply explain its business focuses, travel services, retailing and ticket services, as business groupings, account for eighty-five percent of the company’s gross. There has been a lot of restructuring of the business with many acquisitions as well as significant spin offs (Expedia.com, most recently) along the way.

IACI expects earnings of $1.77 for the fiscal year ending December, 2007 and $2.04 for the year ending December, 2008. What counts is that they expect to grow pretty much in a comparable fashion with other internet oriented businesses. However, because they actively acquire businesses such as Cornerstone Brands and spin off others, the previously mentioned Expedia travel services, it is hard to compare one year’s financial reports to the previous year’s filings because the parts of the company are constantly in flux. On the other hand, the numbers are headed in a positive direction and improving earnings by acquiring assets with positive earnings is a time tested method of improving the bottom line.

A check of its basic stock chart shows it is near its fifty-two week high of about $41 a share and well above the low of $23.54 and that shares have mostly increased in value over the years with a recent pause in the general upward trend.

At $38.64, the stock is about 22 times projected 2007 earnings and fifteen times promised 2008 earnings so the stock would appear to have upside potential should the current scenario work out, less any future spin offs or acquisitions.