Despite owning a well-known matchmaker, media mogul Barry Diller’s IAC/InterActiveCorp can’t seem to get any love from Google’s Larry Page.
IAC, which runs a collection of dating and informational websites, including Match.com, saw its shares drop 5.5 percent on Wednesday after the company said revenues took a hit last quarter on a recent change to Google’s ad pricing algorithm.
IAC has been struggling with the change since last year, when Google rearranged its algorithm in such a way that hurt some of IAC’s websites, a wide portfolio that also includes Ask.com and OKCupid.com.
The change “seems to have most negatively impacted publishers with concentrations of advertising in a disparate range of categories and with a user base with less disposable income than the average Internet audience, thus the more pronounced impact on our website business” IAC CEO Gregory Blatt told investors in October.
On Wednesday, the extent of the change was clear when IAC said revenue in its search and applications division, the company’s biggest unit, fell 7.5 percent in the fourth quarter compared to the year-earlier period.
Total revenue, meanwhile, dropped 5.3 percent from last year’s fourth quarter, to $724.5 million, IAC said. Wall Street had been expecting revenue of $743.3 million.
IAC said it earned $76.9 million last quarter, or 88 cents a share. That was well above last year’s fourth-quarter earnings of 43 cents, and above Wall Street’s consensus view of 71 cents a share.
In a conference call with investors, IAC’s CFO Jeffrey Kip said he expects revenue from the search and applications division to be “somewhat down seasonally” in the current quarter and to otherwise grow “modestly” in 2014.