Welcome to the IAC Reports Q4 2012 Results Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Mr. Jeff Kip, CFO for opening remarks and introduction. Please go ahead sir.

Thanks operator for the help. Thank you to everyone who has joined us this afternoon for our fourth quarter 2012 earnings call. Barry and Greg will make several remarks, after which I’ll come back and offer some comments on our fourth quarter financial results and financial outlook for full year and first quarter 2013 and we’ll go to Q&A. For your convenience, the notes for our remarks will be posted in the Investor Relations section of our website shortly after the call. Let me first remind you that, during this call, we may discuss our outlook for future performance. These forward-looking statements typically are proceeded by words such as we expect, we believe, we anticipate or similar statements. These forward-looking statements are subject to risks and uncertainties and our actual results could differ materially from the views expressed today. Some of these risks have been set forth in our fourth quarter 2012 press release and our periodic reports filed with the SEC. We will also discuss certain non-GAAP measures. I refer you to our press release in the Investor Relations section of our website for all comparable GAAP measures and full reconciliations for all material non-GAAP measures. Barry?

Thank you. As I think many of you know, I’ve always thought it was kind of poor form to take up most of the time on these calls with formal remarks. And the fact that you all know, we’ve consistently shortened that portion to give more time to your questions. However, there are times when we want take time to more fully explain ourselves. And after our last call, when we reported excellent results and a positive future outlook, our stock went into what I thought was an inexplicable tail spin. So today, we’re going to give another positive financial report, but we’ll be taking some additional time to talk fully about the outlook for each of our key businesses. We hope that it’ll give you a real and substantive foundation for why we’re so optimistic about our future. And, if we go into an inexplicable tailspin again, you can then blame the messenger. So, with that, Mr. Blatt.

Thanks, Barry. Hey everybody We just finished our third consecutive year of outstanding growth. And we expect outstanding growth again in 2013. We’re excited about the business and we’ve been looking forward to talking to you all about it. It feels like a longer stretch than usual between calls that we have a lot to talk about. I’m going to walk through near and long-term outlook for Match and Search & Applications and touch briefly on the other segments, then Jeff will get a little more granular on the associated financial information, Barry will talk about capital, and then if anyone’s still out there we’ll take your questions. Let’s start with Search & Applications. We had a great quarter, with Q4 OIBA and revenue up 63% and 30%. Pro forma for the About acquisition, OIBA and revenue were up 40% and 20% and for 2013 we’re expecting solid double-digit revenue and strong double digit OIBA growth, in each case pro forma for About, which is seriously exceeding expectations. On an as reported basis, obviously, the numbers will be even stronger. To paraphrase Mark Twain, the rumors of this business’ death have been greatly exaggerated. Search & Applications has a solid foundation and is looking ahead to strong growth for the foreseeable future. Now let’s look at some of the granular issues that people have been talking about this quarter, and then I’ll talk a little about long-term outlook. As all of you know, at the beginning of Q4, Google changed its advertising policies. The primary impact to our business relates to the marketing of our Ask.com product on Google. The policy changes reduced both click-through rates from our marketing and our revenue per query. As we tried to digest the impact of these changes, we pulled back on marketing, which…

Thanks, Greg. I’m now going to take everyone through some key points on our fourth quarter results and our full year and first quarter 2013 expectations. In the fourth quarter of 2012, before restructuring charges, we grew consolidated OIBA 48% to $134.9 million and consolidated revenues 28% to $765 million. Including the About business and News_Beast pro forma, OIBA grew 39% and revenue 17% versus the prior year. In order to fully capture our year-over-year operating results and progress, we’re going to talk about our results both on an as reported and a pro forma for About and News_Beast basis over the next few quarters. OIBA margin in the quarter expanded year-over-year, 240 basis points excluding restructuring charges. Including restructuring charges, OIBA margin still expanded 90 basis points and 100 basis points respectively, on an as reported and on a pro forma basis, our eighth consecutive quarter of OIBA margin expansion. The restructuring charges in the fourth quarter consisted of $7 million associated with the closure of the Newsweek print magazine, $1.8 million at CityGrid, and $2.8 million associated with the shutdown of Hatch Labs and the Pronto business within Search & Applications. It’s worth noting that our reported adjusted EPS is flat year-on-year, however, there are two points to recognize here. First that the number includes restructuring costs, and secondly, our tax rate a year ago was approximately 2,500 basis points or 25% lower on rate due to the release of old reserves. If you don’t give affect to these changes, our adjusted EPS growth would obviously approximate the OIBA growth rate. This wraps up a year in 2012 where IAC delivered 44% overall OIBA growth on 36% revenue growth. As Greg mentioned, the third straight year of this level of OIBA growth are higher for IAC. Let me…

Thank you. We generally talk about capital allocation in using terms like returning cash to shareholders, being over or under capitalized, but today I’d like to expand that because we’re in a very different capital position today than we’ve been in years past. After years of having $2 billion plus of net cash, we started 2009 with approximately $1.8 billion. We ended 2012 with net cash of approximately $175 million. Several years ago, we committed we would not be over-capitalized indefinitely, now we can say we’re there. During that period, we generated approximately $2 billion of cash from a combination of free cash flow, asset dispositions, derivative exercises and other activities, not including our recent debt issuance. So when you do the math, we’ve spent approximately $3.5 billion on non-operating activities over the last four years. There’s a considerable amount of activity, and here’s what we’ve done with it. The biggest piece is stock buybacks. Over the last four years, we’ve repurchased 97.1 million shares of stock, for a total consideration of $2.7 billion, and at an average price of $27.37. This includes the repurchase of 6.4 million shares during this last quarter for a total consideration of almost $300 million. In addition, we paid out about $75 million in dividends, and based on yesterday’s stock price, our dividend yield is currently 2.3%. To put it in perspective, during this period we returned to our shareholders 250% of our free cash flow. Over the same amount of time, we spent $800 million on a series of acquisitions, all of which, most all of which, fell within our core areas of business. These have returned approximately $70 million of after-tax cash since acquisition. And we expect they’ll generate over $165 million of earnings this year. After taking into account the return…

Yes, thank you. (Operator Instructions) And we’ll go first to Ross Sandler with Deutsche Bank. Ross Sandler – Deutsche Bank: Great guys. I just have one question, but first off, thanks for all the color and thanks for posting the comments on the website so we can go back and read them. The question is, since you guys are literally taking the gloves, why don’t we all the way. Shares are trading now 2% to 3% in the aftermarket, I don’t know if that’s real or not, but despite your many helpful clarifications what if we hypothetically envision a scenario where you go into another tailspin as Barry called it after this call. What other measures would you consider taking, are there any things that you would consider doing to create additional shareholder value like more leverage, more buyback or even a spin? Thanks.

Well we’ll continue to operate our businesses. We’ll continue to follow the capital allocation policy that I just kind of went on about. And we’ll trust that the markets will react appropriately. That may take a quarter, may take two, we can’t really do anything manipulatively to it. Obviously if we have bought back stock back opportunistically continue to do so. The lower stock goes, the more I would say hungrier we will probably get for doing so consisted with how much cash we’ve got. So I don’t think we should struggle too much. Look, we’ve told you why we feel optimistic about our key businesses. We can’t prove it because the future of the course is the only proof. But as you know, we’ve had our short interest move up in direct relationship to reports and rumors that our growth is more than challenged. And we know of this kind of activity is more and more the way of the world in momentum and manipulated trading. So I just advice that I’d be vary of taking this lumps kind of locked step rumor mongering and shorting as any kind of gospel and just try and remember that while we really are confident, softly hard to disprove the negative where there is money involved. Ross Sandler – Deutsche Bank: I mean if I can follow-up Barry. So you created north of 100% return on the Expedia TripAdvisor spin. I know this is a different scenario but would you consider separating the businesses either search separate from the rest of it or personal separate from the rest of IAC?

Look, we talked about everything here. But our conclusion now and I think the reason why we change notwithstanding I think any condition, or I shouldn’t say any condition that’s not real. But I think that this consolidation of businesses is we think good for us. We think that there are relationships between all of our businesses. So I think we’d be reluctant. You want to add anything?

Yeah, I just think look at some point math takes over and comes compelling and we think it’s at that point now. But maybe it’s tomorrow. We’re going to generate huge cash flow this year, our earnings are going to be great and our growth is going to be great. And at some point sort of that’s going to be reflective. So I think as Barry says while spins are always possible at some point in the future as they’re not going to be because some short-term dislocation in the stock price driven by sort of god knows what.

Fair, thank you. Next question please. Ross Sandler – Deutsche Bank: Okay thanks guys.

We’ll go next to Neil Doshi with Citi. Neil Doshi – Citi: Great. Thanks guys. Greg, could you provide a little more detail as to what are some of the changes that you’ve implemented on the Search and toolbar sites to become more compliant with Google? And then as we think about mobile, it seems like on the search site you guys have grown the business a lot through the application and toolbars, if it’s more to the challenging to use toolbars on the mobile side. How can we think about IAC growing mobile without being able to implement lot of those toolbars?

Sure. I think, look on the policy side, I’m not going to get to the details, that’s part of our contract. We’ve got a contract with Google this was a negotiated process. As Jeff said, in certain areas we’re going to show fewer ads. There are certain things about installing across multiple browsers and…

Purely fewer ads.

No on some of them are fewer, there is a whole bunch of stuff I think in general the fact that we distribute a branded search engine which is Ask.com I think it gives us a whole lot of advantage with respect to Google with respect to the policies that are applicable and so I think that without getting the details I’ll say a lot of the noise that we know out there about these polices generally probably don’t apply to a large part of our business. In terms of mobile, look, I think toolbar is a thing right. In Internet Explorer we use toolbars, on Chrome we use something called an Extension it’s not a toolbar. I think mobile and tablets are just opening. And at the end of day what we’re doing is distributing search, now we do that because we have good monetization, good technology and the ability to develop great applications. And we’re seeing lots of opportunity open up as there as the modernization on those steel sub-par get better and better. I’m not going to tell you exactly what sort of technological feature exactly where the distribution is going to happen, obviously it’s very nascent and we’ll show it to you over time. But I think the point there again is just mobile represents sort of long-term incremental growth for us. We’ve got tons of growth sort of in the near term on desktop and frankly with the medium term. And the growth in mobile is really going to start happening this year and you’ll see as it comes, but its actually a very wide open in terms of both the technologies available and the abilities to monetize these applications both through and otherwise. So we’re going doing quite optimistic about it.

Next question please.

We’ll go next to Mark Mahaney with RBC. Mark Mahaney – RBC: Great, thanks. Two questions, you made just a very brief reference to Google CPC trends in January. Anymore color on that? Does that seem strike you as anything other than seasonal? And in terms of mobile monetization, Greg, I think you made some comments that you’re relatively optimistic about mobile monetization rising up to desktop levels. Can you expand on that a little bit that seems like a very reasonable insight the finance markets may have viewed that differently in middle for the last year, but are there particular data points you’re looking that give you confidence in that? Thanks.

I’ll let Jeff take the CPC comment next, but I don’t think I said what you think I said. I think that if I did, I didn’t necessarily mean it. Yeah I think that mobile monetization is going to improve meaningfully from where it is today. I don’t know that given in the form factor, look, people use the word mobile to mean a lot of things. When I talk about mobile I’m talking about a device that you hold in your hand and operate with one hand. I’m not talking about larger tablets and all that where the form factor allows for much more comparable modernization to desktop. I think mobile will get better, but I think my instinct is and has been that it’ll be a long way before mobile, true mobile device this handheld smartphones are comparable to desktop in terms of modernization, but the hope is you make up for it in volume and because as we all know with regards to what you want you want to say about desktop and mobile, the combination of the two is growing rapidly. And clearly desktop is clearly here, its still going and its going to be here for a long, long time and so the mobile build keeps coming on top of that. And so I think that in aggregate you’re going to have lots of revenue growth opportunity.

Mark, can you just repeat the CPC question, I apologize.

Just want to know seasonal or foreseeing anything else.

No, I don’t think it’s particularly seasonally. I think we actually look at it across the system as part of the general ad policy changes where because CPC is a product of supply and demand as you have people shuffling to adjust just as we have. We think there is a temporary shift exiting at something we’ve seen start to rebound a little bit and we’re not terribly worried about it.

But I do think that Q1 tends to be a little lower.

It is.

Q1 is lower seasonally and then there is audit added delayed effect of the policy changes. Mark Mahaney – RBC: That’s quite great. Thank you, Jeff.

We’ll go next to Peter Stabler with Wells Fargo Securities. Peter Stabler – Wells Fargo Securities: Thanks. Greg, earlier in your remarks you referred to mobile counting for 7% of Ask queries and you attributed that to the fact that Ask users are later adopters I think to user your terms. Would it be safe to say that the profile of the toolbar installer, user fan in similar in terms of being let’s say a laagered in terms of adoption technology and new form factors?

I would not use the word laagered, but yes I think in general the people who use our products are not the advanced adopters. And I think the 7% figure also needs to be thought of in the following way, which is, we’re making – we’ve made virtually no effort to distribution on mobile. So 7% absolutely mostly organic and exigent organic traffic, it’s actually more representative of the market generally. And as we start to do distribution, that number will tick up as well. So I think the answer to your question, yes, 7% exaggerated at.

Next question please.

We’ll go next to Jason Helfstein with Oppenheimer. Jason Helfstein – Oppenheimer: Thanks, two questions. Can you go into a little bit more on Match specifically so we saw core revenues 5% but Core softs were better than that? Was that just a function of adding the kind of subscribers later in the quarter or just talk about any kind of pricing trends we’re seeing or is it a function of kind of the weaker results we saw from the developing assets. And then secondly, to the extent that you’re having of course you’ve had detailed discussions with Google on the applications and the rule changes. And Google continues to think about had a push its Google Play platform out there. Is this causing more discussions that perhaps are catalyst toward how your applications work in a more mobile environment? Thanks.

Okay. On the Match side, I think it’s a combination of things. I think there are some mix there which People Media it’s an increase in People Media which tends to be lower priced. There is a big effect in Q4 when you get a big push at the very end of the quarter. So to your point, you’re not getting the revenue reflected throughout the whole quarter. I’m not sure if I understood the third point, but its really mix of those first two and I think that we’re going to see over the course of the year, as we talked about is, we’re going to be driving revenue per user up through the various things that I talked about in my opening remarks, which is taking margin on events keeping add-ons sort of be doing a drive up the price of Match while still pushing people into longer term packages which tend to bring revenue per user down. So this is balancing of the two components and I would say by second quarter the gap between revenue and PMC on the core side ought to narrow substantially. On the Google side, sorry I’m not sure what the places issue has to do with our application. So I didn’t understand what you’re… Jason Helfstein – Oppenheimer: So I think it’s come up in numerous calls and you got to ask how are you transitioning applications to mobile because there are no toolbars in mobile, but there is apps. Google is clearly thinking about all of its partners on the application side in meeting with all of you guys as we’ve heard. Has there, I think, about the new policies, do you think this is a catalyst toward working with Google to let’s say work on distribution of your applications into mobile?

No, look I think our applications policies are, they cover mobile or good with mobile. I do think people get really bogged down in the assumption of toolbar and people need to think about toolbar is something that is simply the way we formatted our applications on desktop. That is not a form factor that works on desktop we will, on mobile, so we will configure our applications in different ways and distribute them in different ways. And that way it’s going to be different on an iPhone on a Windows tablet etc. So the whole verities like…

Word to use for that is application.

Yes. They’re all applications. That’s right. And search will be good monetization I don’t think we haven’t had discussions with them with any note about driving our applications into their places product or anything like that. Jason Helfstein – Oppenheimer: Well I said Google Play, sorry, it’s the payment platform as far as that’s working out.

The platform, look I think we’re always looking at ways to directly monetize our applications clearly as I said on mobile. There are more and more opportunities to do that than they were on desktop. In Android that sure will be a part of it over time. Jason Helfstein – Oppenheimer: Just last one quick one, Barry, I mean you said no to effectively know in the medium term to a Match spinoff. I mean what about attracting stocks effectively people could invest in the assets they want to invest in without actually separating from the business.

Look, as I said before, we think the best configuration is a consolidated number of businesses that we think relate to each other and that we also think are very good, sorry the ability to manage through them is really enhanced often by the relationship of one to the other best practices in terms of being able to populate these businesses with effective leaders etc. So I’m not much for tracking stock, so I just I think it actually look. I am much for spinoffs that’s already been rather clearly demonstrated. As I say I don’t think it is time yet, they never be time to spinoff assets, but that is always a possibility, but I don’t think I would substitute a tracking stock for a spinoff.

I’ll say again. We’re expecting great growth in both fees businesses here and beyond and so we are – we see both good double-digit growers for as far as we can see and we’re excited about both of them and again this current sort of fog that sort of come out of nowhere besides we feel really good about them.

We know the fog was created because people thought that our Match businesses we’re going to have much slower growth that the universe was not really bit etc. You spent 10 solid minutes explaining why you feel otherwise. Now I think you’re right, but time will tell. I have enormous confidence. And the other part of it obviously was, and I refer to it when I talked about this whole short, but I consider, no it’s inappropriate to call it anything, but this short process which was based up on literally some leaks and other things that ended up in Newsletters and other reports saying that our Search & Applications business was over. Now we spent another 10 or 15 minutes telling you all why we felt otherwise, I don’t want to be defensive, I know there is no productivity in that. So the only thing I would just say is that we’re going to do our best. We’ve tried to explain our businesses to you today in-depth. We’re optimistic about the year and we’re optimistic beyond the year. Jason Helfstein – Oppenheimer: Thank you very much.

Next question please.

We’ll go next to John Blackledge with Cowen & Company. John Blackledge – Cowen & Company: Great, thanks. Thanks for the all the data on the call. Couple of questions, did you guys consider raising the share buyback authorization heading into with the print that’s one. And then two, on Match, on the offline initiatives, are you going to have a bigger impact on (indiscernible) or ARPU or both? And then if you could give mobile search ad revenue as a percent of total that’d be great. Thank you.

What are we now then authorized shares now? Yeah I mean look, the issue for us is never going to be how many shares are authorized because whenever we want to buy stock if we want to, we’ll increase the authorization. So that’s not a material issue. Now some people use it to a big authorization, but don’t have to necessarily have to implement because they think it kind of sounds good. I mean we’re, I’m sure we’ll be optimizing more shares, just the question when.

On Match side, look, I think events as I said certainly launched and we thought that the potential to a whole bunch of things. One is to improve the efficiency of acquisition as I said that didn’t happen as quickly and as dramatically as we thought, but we’ve got new marketing out that we see really good about and it’s performing well. In terms of revenue we’re starting to drive direct revenue this year for them which will increase ARPU and then it also helps drive conversion. So it really is across and retention, so its really across all of those various areas in a different state as it has different levels of impact. The other question was… John Blackledge – Cowen & Company: The mobile advertising and search as a percent of total.

Yeah, look, we gave you sort of sense of the page views that we were seeing across the products and revenue per query is substantially less. So it you consider to do the math, we don’t disclose it but it’s still small and we’ll be growing.

Next question please. John Blackledge – Cowen & Company: Thank you.

We’ll go next to Mark May with Barclays. Mark May – Barclays: Hi, thanks for taking them, two on search please. You said in your prepared remarks, Greg, that the AdWords policy changes that took effect in the quarter I think your wording had impact roughly 12% of the search segment. Do you mind just clarifying that in how you get to that figure? That might be helpful. And then secondly regarding the new guidelines around apps, I think you mentioned that it will have an impact, it will impact I think you said, quote a bit. Would you mind kind of quantifying what that is and why are comfortable you can after this initial depth impact in Q1? Thanks.

Sure. On the first question…

Sorry I was going to say, the last question is really gee. I take it first.

Okay, sure. The first question – the second question is, we do all these things on an LTV basis, okay. So we literally we can look at virtually any change that a policy has and we can calculate its impact on the LTV of a toolbar and in application. And we can then calculate the marketing cost of that application and then forecast it out. So we know within, tending just from testing all these things, it frankly as we’re negotiating with Google we can quantify the impact. We were going to have unbent for these. We were going to having off the chart year, I mean it was going to be another year of 40%, 50% growth. So there are real impacts, but even when you calculate them out, we’re going to beat the levels that Jeff laid out; it’s pretty clear in front of us. Look, if its Google’s CPCs are bad or anything else of course you start, but assuming the world as we know it, we understand the impact of the policy changes pretty well. I think and I think this is an important point we really are in a strengthened competitive position. So we look at this as a one-time hit which we’ll feel this year, but the hit is going to be on us much less hard than it is on many other people out there because of the existence of our Ask business. And the benefits inherently…

Inherently this we think almost all of it is a healthy development.

That’s right. Mark May – Barclays: Meaning – is it meaning this enables you to more competitively go after distribution.

We will have a more attractive LTV to offer to distribution partners on a comparative basis than we had before. It maybe a little less than it was on an absolute basis, but it will be comparatively much stronger, especially since one of the things that as I said we reached out to Google proactively in the summer because there were a lot of people doing things that we weren’t knowing to do and we were starting to lose business with those people and we wanted clarification. And those people are not going to be doing those things anymore, which again puts us on a much more advantageous perspective with respect to distribution partners. So we feel really good about that, the hits on LTV are one-time hit. We really – our app’s – our relationship with Google has never been better, really harmonious process didn’t agree with them on everything, but we’re participants in it, because we really are in it for the long-term and to that respect we really do think that overall we think the strengthen the segment long-term.

It’s important to underline. We set this off. Google may have for their own wisdom cover up on the same thing. We sent a 30 page how long was that?

We reached out to them with a comprehensive analysis of the market and sort of ideas about how to cleanse it.

How to cleanse it? But it was a very long was involved with little mischiefs in fact.

Yeah, again to your point I’m sure Google was thinking about the same think, but we’re not blindsided by this and again not exactly where we would have ended up ourselves, but overall we feel really good about it. On the first point, I think basically what we said was that we make of the segment’s OIBA we make about 12% of it off of marketing as gone to Google. So you can think about the ways one would calculate that. I’m not going to walk through the whole derivation, but you’ve got contribution margin from the key words that you buy and again the thing and then you calculate in sort of your repeat customers and you allocate some costs and you do other sort of stuff. And that’s, you get to, you can do it three or four ways and you get to around 12% no matter which way you choose.

We’ll take one more question.

We’ll take or final question from Brian Fitzgerald with Jeffries. Brian Fitzgerald – Jeffries: Thanks guys. Greg, you mentioned about Mobile pays at 40% and Dictionary at 40% where can those get longer term and does the inherent nature of that nature debt or that service drive that or are there things related to the interfaces or apps I can kind of move that needle quicker.

Well I think what I would say is that we’ve seen in the growth of Mobile reference actually tends to be a larger part of mobile search than a desktop search, because a lot of mobile search tends to be sort of, you can imagine you’re somewhere and you want to know the answer to X. Dictionary is a prime example of that and that is where Ask, About and Dictionary all play. So we are very well positioned from a Q&A reference perspective for that area. I think that Dictionary frankly put more effort into it earlier and really saw that as an area that they were going to go after, About a little more and Ask has just had so much runway but it’s just starting a little bit later in terms of really putting it into it. So in terms of where they can end up and that depends on a lot of macro assumptions what’s going to happen to Mobile and Desktop search, I’ve laid out sort of what our view is at least over the next four or five years which is desktop search is going to be flattish and we don’t expect to decline in that area. We expect to be able to continue to get growth in that area and we expect to continue to increase our penetration in mobile and table device Brian Fitzgerald – Jeffries: And then a quick follow-up. Could you just give some color on mobile ad versus ad traffic? Do you differentiate between those two?

We differentiate in terms of the way one gets distribution for one versus the other can be different, but at the end of the day all the circs in the circs get served up on the web. So there won’t be questions where you’re getting the query and obviously we’re in different, we’ll go wherever we can get the query the cheapest and the most widespread and we’re seeing lots of opportunity in both areas.

Thank you for staying with us all this time. We appreciate that you seem to all have paid attention and we look forward to talking with you next quarter. Good day to everyone.

Bye-bye everybody.

Thanks

Thank you. That does conclude our conference. You may now disconnect.