Good day, and welcome to the IAC Reports Q3 2014 Results Conference Call. Today’s conference is being recorded. At this time, I’d like to turn the conference over to Jeff Kip, Executive Vice President and Chief Financial Officer. Please go ahead, sir.

Thank you, operator. Good morning everyone and welcome everyone to our third quarter earnings call. Joining me today is Grég Blatt, Chairman of Match Group and Joey Levin, CEO of our Search & Applications segment. Before we get to our results, outlook and general business overview, I’d like to remind you that during this call, we may discuss our outlook and future performance. These forward-looking statements typically maybe preceded by words such as we expect, we believe, we anticipate or similar statements. These forward-looking use 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 third quarter 2014 press release and our periodic reports filed with the SEC. We’ll also discuss certain non-GAAP measures, which, as a reminder include adjusted EBITDA, which we will refer to today primarily as EBITDA for simplicity during the call. I’ll 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. To briefly recap our consolidated results, in the third quarter IAC returned a year-over-year revenue growth with revenue of $783 million up 3%. Third quarter adjusted-EBITDA was $135 million, down 18% from the third quarter of 2013. However it was down only 1% when excluding approximately $14 million in net gains related to asset sales in the prior year and the impact of roughly $13 million of acquisition related differed revenue write down for the Princeton Review, FriendScout 24 and Slimwear in the current period. Now I'll turn it over to Greg Blatt to discuss the Match Group and then to Joey to discuss Search & Applications before I wrap up with the few comments on the Media and e-Commerce segments. Greg?

Thanks Jeff. Lots of exciting things happening across the Match Group. Today I'm going to focus on Dating in the prepared remarks but happy to hit on Q&A some of the other businesses. We just got a lot to talk about in Dating. When we look back 2014 is clearly going to be a transformative for the Dating business. User growth has been phenomenal, MAUs up 60% year-over-year and looking back over a longer period, 600% since 2010. So really just great expansion of the category. Additional what’s great is that within that growth we've had significant mixture both in favor of the younger user and mobile users, both very valuable. Talking first about the youth piece, it’s really a critical group and this has been moved mostly by OkCupid and Tinder where we have had lot of growth in this area. Let’s just look at North America as illustrative of the world. It's not precisely but it’s directionally -- it’s just much easier to get hands around these numbers. But if you look back at the year 2000 and you look at Match’s numbers, 60% of our users were under the age of 35 with 8% over the age of 50. You fast forward to 2010 and that changes dramatically with increased comfort with older demos, with the internet with the launch of OurTime, with marketing that became more sort of targeted to older demos. We have really grew the older demo and by 2010 we were roughly evenly split in users between sort of what we call our three main buckets, which is under 35 years old, 35 to 49, and 50 plus. So it's really sort of equally distributed across them. Fast forward to 2014 and 65% of our users are now under 35. Now that’s not…

I will try to be a little briefer to allow some time for questions. Thanks Jeff. Thanks Greg. We meaningfully exceeded our expectations on both revenue and EBITDA, driven by better than anticipated success in adjusting to the recent changes in the Chrome browser and the strong revenue for query. And we also had continued sequential growth in our websites business. So in combination we held nearly flat sequentially and revenue should be growing again by Q4, which in context feels pretty good. We have spent a lot of time this quarter focusing on the changes in Chrome which went live in July. We expected a negative impact to our performance in that channel, which we clearly saw, but moments like these in the download software space can also open up opportunities for the stronger players. We were prepared well in advance and our team did a spectacular job across the board. As a result we ended up performing better than we anticipated. In our direct to consumer business, we successfully mitigated a portion of the expected impact and Q3 turned out to be another record quarter in profit for that business. Our new products in Chrome are streamlined and working well under the new framework and we have been increasing our marketing accordingly. The underlying search metrics have also been favorable. We have seen increased revenue per visit in this business thanks to continued improvements to our user experience and general strength in CPCs. Our desktop audience just continues to perform well for advertisers. We're also making progress in subscription revenue products as SlimWare, where we're adding subscribers and narrowing the losses as we rebuild the deferred subscription revenue. We've also now fully integrated that operation into our marketing machine and we should start to see a nice small…

Thanks Joey. Combined revenue in the media and e-commerce segments grew 9% versus last year, with total EBITDA losses of approximately $4 million in the two segments. Revenue growth was principally driven by strong growth in both Vimeo and home advisor, increasing over 30% and 20% respectively versus the prior year. Looking at the fourth quarter, we expect continued solid revenue growth from media and e-commerce and again expect a comparable combined low single digit million EBITDA investment. Turning to our media segment, the third quarter was another strong quarter for Vimeo. Unique users and subscribers continue to grow significantly with both up 33% in September. Total subscribers recently surpassed 540,000. Vimeo on demand continues to scale with September gross revenue almost doubling the second quarter average. The catalog continues to expand as well currently approaching 14,000 titles. One title reached nearly 25,000 views and well over 200,000 in sales in September. We're very excited about the potential for this business. We're also seeing momentum at our other media businesses including the Daily Beast which continues to see strong traffic growth, increasing over 40% on average during the third quarter. Additionally our films business produced two films that are being released before the end of the year. Top Five directed by and starring Chris rock and Inherent Vice directed by Paul Thomas Anderson. In the e-commerce segment home advisor revenue growth continues to accelerate, increasing over 20% year over year, up from 12.5% in the second quarter and 10% in the first quarter. Domestically service request and service success increased 70% and 14% respectively and paying service providers were up nearly 30% year-on-year in the third quarter. We continue to be very happy with the progress in that business. Looking to 2015, we expect solid revenue growth from the combined media and e-commerce segments to continue for the full year and EBITDA losses to be on the mid to high single digit millions range, a level somewhat reduced from our 2014 investment and we're going to continue to invest in our early stage businesses. With that we'll take your questions. Operator.

Thank you. (Operator Instructions). We'll go first to Ross Sandler at Deutsche Bank.

Great, thanks guys. I want to drill in on the Match segment. Grég you mentioned the cannibalization effect of Tinder versus the core Match properties and this cycle is a little bit different than prior when you had OkCupid or People Media whereas those were like -- they were vertical or desktop sites in terms of their evolution. It was easier to see how all of them would grow in tandem but with Tinder you not only have a new and exciting business, but you've also got a platform shift to mobile. So can you talk about what you expect for -- I think you mentioned low double digit growth or core PMC growth ex-Tinder. How comfortable are you with that and would you expect that to be longer term. And then on Tinder specifically Shawn [ph] mentioned that that premium is going to get rolled out pretty soon. What is that pricing going to look like? How are those products going to evolve? And then the second question is, EBITDA for Match would've been about $70 million excluding the differed write-down that you guys mentioned. So even if we kind of normalize that, I think we're down 300 basis points year-on-year. So as you see this mix shift to the kind of free and mobile or at least lower monetization in mobile happening over the next couple of years, what do you expect the longer term EBITDA margin profile to look like for the group? Thanks. Grég Blatt: Okay let me and try and get those. On the cannibalization question, I think -- I actually don't -- I don't think of it a sort of a different platform I mean. Again, even ex-Tinder you're looking at 67% of our usage on mobile and the rest of our products. So,…

Okay. And then one last one. This will be a quick one. Just a clarification. There is some articles about advisors joining the Tinder team et cetera that came out yesterday. Can you just remind us on the record what - I see the ownership of Tinder as 100%, correct? Grég Blatt: Yeah, IAC owns the business plus management has a stake and now Benchmark has a small stake. So there are no outside investors. The Benchmark transaction, which is what you’re referring to I think was not a typical fund raising transaction. It was more analogous to sort of a executive compensation type deal, though not exactly that either. But they got a small equity stake and management has an equity stake that you might expect in a business like this. But even with that on a fully diluted basis IAC owns the vast majority of it and there are no outside investors.

We’ll move next to John Blackledge with Cowen & Company. John Blackledge - Cowen & Company: I think I’ll stick with the Match Group. So, just questions. First could you give us an update on the $25 million to $30 million in 2014 investments at Tinder, Tutor and DailyBurn, what the updated number is? Second, Greg can you provide some more detail on the streamlining initiatives at Match and what the intended outcome is for the various properties Match.com, OkCupid, Tinder et cetera and then also maybe clarify the $5 million impact on credit card, security breaches. Was that in 3Q '14? Any lingering impact in 4Q? And then Tinder 7X last 12 months, what’s the base number? Thank you. Grég Blatt: Okay, hopefully someone was taking notes beyond me, but I'm going to try and get them. On the investment number I think that the total number is now looking like -- it’s about 45 -- now you've got Princeton Review in there, plus you've got the increased investment in Tinder that I highlighted earlier, that that basically is the mix of it. In terms of… John Blackledge - Cowen & Company: The streamlining initiatives at Match that you refer to, just give us some more clarity on that? Grég Blatt: So we're looking at a number of different alternatives. So I can’t tell that what it would look like. But right now what basically happens is we have got in virtually every one of our product lines, People Media, Match our international business, me take [ph] et cetera. We have got independent development teams who have to develop everything for desktop, then everything for each mobile device. So you've got repetition across lots of different things. And a lot of these features are common. And we're looking at…

And just to be a 100% clear in case anybody missed it, these were really only the Target and Home Depot breaches. There is nothing in Match, just in case anybody misheard that. Grég Blatt: Yes. That's right. It was just failed credit card renewals which are precipitated by those external events.

We will take our next question from Jason Helfstein of Oppenheimer & Company. Jason Helfstein - Oppenheimer & Company.: Thanks. One more on Match and then a question on Search. So could you just comment on the slowdown in international ARPU and do you see that rebounding back any kind of -- what impact do you think if any, currency has on international ARPU in the fourth quarter. On the Search business, is it fair to say that you are benefitting on the B2C side from your beneficial relationship with Google? There's a lot of discussion about does Google want kind of toolbar applications to exist long term and it seems like you guys benefited at least from that early in this quarter. And then lastly, maybe you talk about the overall value in the market of like the application types businesses. There was a report back in August that private equities buying out answers.com. That valuation hasn’t been disclosed but I'm pretty sure it's more than the value that the market attributes to you are website business sorry. And then just talk about, perhaps what you see as the mismatch between the value of the markets applying to your destination websites versus what maybe the value in the private market? Thanks. Grég Blatt: I think on the ARPU stuff -- I think domestically you have seen ARPU increase sequentially every quarter and we expect that to continue. That’s what we said would happen at the beginning of the year. We're doing a bunch of pricing effects and we said the beginning of the year would be sort of the low point and it would climb and it's done. We expect it to continue to do that in Q4. Internationally Q3 is a really a blip. We expect Q4 to be back, effectively consistent with Q2 and Q1. Basically you have -- these PMC numbers are quarter end numbers and we bought FriendScout in the quarter, which led to an increase in PMC without any associated revenue. There are also FX effects, that the euro against the dollar that are hurting us, both on a rate basis and international performance, which was another factor that I didn’t throw into the mix. But that's the ARPU story. The ARPU story is actually a good story, even with mix shift to lower price product like OkCupid and true, overall ARPU is going up because we’re driving up rate in each individual business line. Joe?

So in terms of the relationship with Google -- we're a large partner with a lot of scale and I think that we have a good deal with Google but the - as it relates specifically to the Chrome issues and the performance this quarter relative to our expectations, we don’t get any benefit in terms of how things operate in Chrome or how we operate in Chrome relative to the rest of the market. Those things are very separate. So there is decidedly no benefit in terms of the relationship there. But we have good deal and I think that we are a strong -- always have and continue to be a strong operator in the space and we’re generally on principle aligned with Google on where they want to be. We said in the past that the changes that they've made to some of the downloadable applications are not the changes that we would have made. But in spirit and principle we’re generally looking for the same things in terms of user experience. In terms of valuation on the website side of business or the application side of the business, I can’t really comment on that -- on the valuation that other people are paying for other assets or even really where value add is in. I see -- I know that people don’t like volatility and we’ve seen some volatility certainly over the last year, year and a half or so, and people tend to focus on the negative volatility in that, and as you pointed out this quarter, that’s particularly in terms of revenue per query this quarter was positive, that volatility. And so it's good and in generally we operate within a band on these things and it's a diversified group of assets and properties and so the hit somewhere might be a benefit somewhere else. So overall it's been a relatively stable business in the context of everything, but sometimes people can over react to the volatility. I don’t know, Jeff, if you want to add to that in terms of valuation?

No, just to add onto what Grég said, I think we saw $1 million to $2 million of impact on currency in the third quarter and we think that’s going to expand with the volatility you’re seeing in the fourth quarter, maybe another $1 million.

On the FX side. But I think -- just want to be clear. On a local currency basis there is no downward pricing going on of any measure in general that pricing is going up across the board.

: We’ll go next to Mark Mahaney at RBC Capital Markets.

I knew you had lot of Dating brands. I didn’t know you had 39. Any thoughts on rationalizing any of those? And then secondly just comment briefly about share buyback activity; your thoughts on the environment here and then what you did or did not do in the quarter? Thanks a lot. Grég Blatt: Well just to take the share buyback question quickly, there was none in the quarter. As our policy is, we do it opportunistically from time-to-time and we announce it when we do it. So there is no change in policy.

As for the 39 brands, we certainly don’t have a target number. I think that the key is really in the project that we’re talking about, which is not so much to rationalize the number of brands, it's to rationalize the infrastructure that underlies them so that the incremental brands don’t create incremental complexity and cost. And not that we’re focused on I think -- there are certainly brands we start and brands we stop and they tend to focus on - they are ones you haven’t heard of and they tend to focus on this market and they tend to be driven whether or not they are sort of positive marketing opportunities for groups that want to be in a particularly focused site. Again those shouldn’t -- we should be in a place where there is not meaningful incremental complexity and cost to those and not that we’re working towards.

We’ll go next to Peter Stabler at Wells Fargo Securities.

A couple for Grég. Thanks for providing the cohort data over time. That’s really helpful to understand the mix shift and use. Question related to that. As you look out over the next couple of years, would you expect a significant change in the revenue mix between advertising and subscriptions as products like Tinder start monetizing or - and do you think that could be if so related to a mix shift in the youth segment just curious about that? Grég Blatt: I certainly getting -- we’re going to -- Tinder is going to monetize in three ways, effectively the same as all the rest of our products do, which is a combination of what I’ll call subscription revenue, ala carte revenue and advertising revenue. We then optimize the mix. I think that Tinder lends itself to a particular type of sponsorship in advertising that I think some of our products don’t, that we’ve now. I think we’ll see where that goes. My instinct is that Dating continues to be a category where even in the freemium model, there is real value to certain features and there is a meaningful number of people who will pay extra for those features. And so, while I think that advertising may well become a meaningful part of it, I wouldn’t sit here and forecast any particular mix shift. It may happen, but the overwhelming majority of our revenue right now is non-advertising and my expectation is that that continues to be the case for the foreseeable future but the mix shifts a little bit -- I don't know -- of course I could be wrong. We might come up with the greatest native ad unit ever and it may change the world; and there are certainly people focused on doing that. But it's not -- certainly not built into our numbers or our long term expectations.

And our next question comes from Heath Terry at Goldman Sachs.

Grég, when you talk about cannibalization -- how much of that is taking the form of Match subscribers, individuals actually leaving to go to Tinder, OkCupid versus just a mix shift in the incremental growth on those other platforms is faster than what you're seeing at Match. And then Joey, if you could give us a sense of what drove the B2C growth, how you would say it breaks down between applications downloads increasing; and if so if there are any specific applications that you're seeing getting traction versus queries for application or revenue per query. Grég Blatt: Sure Heath. On your first question, it's the latter, meaning we're not seeing increases in churn or anything like that and as I said, I think when you exclude Tinder in the younger demo, we're still seeing growth year-over-year. It's just when you compare the overall performance in that youth demo against the overall performance in the older demos, you can see a differential that is somewhat new in terms of sort of the positive year-over-year performance and it's impossible to know precisely, but our best guess is this is actually a mix of both, Tinder cannibalization and the fact that in some of those products we're not as good in mobile as we need to be. And those -- both those things impact the youth demo primarily. As I said we launched our app at Match in April. We've already improved conversion by 50% in a five month period over -- on a desktop site that takes years to do. So as we continue to make those improvements, I think that will narrow and I think that will help mitigate it. But right now it's a differential in sort of go forward performance as opposed to any sort of churn or increased exit or anything like that.

And in terms of what drove B2C growth, so really the -- first of all there is definitely RPQ. RPQ is very strong in the quarter and that was some things we did on our side and some things that Google did, which definitely helped. But the substance of the Chrome change, as it related to B2C business was when we would offer a product we would make multiple search offers with multiple search assets, when we would distribute the product and the change to Chrome was to limit that that to basically one search offer. And so when we did our forecasting, which is hard to do in advance of these things until they’re live and you test as much as you can but it didn't really come out until we saw it fully in the wild [indiscernible] happening was we certainly didn’t make offers for those other search assets. So we didn't get them obviously. But what we saw on the flip side was an increase in conversion and an increase in retention. So the friction presented by some of those offers was -- in the previous framework was eliminated and that helped on conversion going forward. And then again I think could be a bunch of things but that also users are keeping the product longer, which is leading to more queries and higher retention. So it's those combinations of things that while net not as much margin as there used to be in Chrome, not as much LTV as there used to be, it's still a good business.

We'll go next to Kevin Rippey at Maxim Group.

Can you give us a sense of the breakdown between international and domestic in terms of the 7X growth in Tinder MAUs?

Sure, international -- non-North America is -- makes up about two-thirds of the total MAUs right now. Tinder -- so start in the U.S. So sort of growth was faster there and so now growth is a little faster internationally than it is domestically, although still great growth in both places. But the current mix is about two-thirds -- one-third international, North America.

Appreciate it. And then just to move to Vimeo briefly, can you give us a sense of what your long term EBITDA margin objectives are?

Can you just repeat that again?

Oh sure. On Vimeo, the long term EBITDA margins, any objective or any color you can give there would be really helpful.

Look, I don't think we have a specific objective in mind. We think that it's a great business that's got a great trajectory in front of it, and a huge addressable market. I think we'd love to see solid margins out of it but we're going to manage this thing for growth and ultimately a nice margin over time and I don't want to put a target on it.

I appreciate it, thanks.

One more question.

Alright and we'll take that question from Chris Merwin at Barclays.

For Tinder Premium, is a single digit penetration rate of your user base still the right way to think about the opportunity there and I know for Tinder also you can talk about the user base, but is there anything you’re willing to share on engagement metrics whether it's the ratio of DAUs to MAUs or something else? And then a second one on Vimeo, YouTube has talked about the possibility of maybe implementing a subscription model that could remove advertising, kind of similar to what Pandora has today. You've got an enormous audience now for Vimeo. Is that something that you'd ever think about doing in a future? Thanks. Grég Blatt: So on the Vimeo question, yes I think we would and probably will soon think about a subscription offering or one sort or another. We think that that’s something that you see more and more out in the market. We think some of the consumers and then so yes.

Yes, and I'm sorry, my brain must be a little fried. I got your first question, but not the second question. On the first question penetration rate, yes look, I think we'd love it to be higher, but I certainly in sort of the straw men I lay out for you, it is very much a single-digit penetration rate. And I would think that getting into the double-digits is not happening quickly. You don’t know what -- you don’t know what will happen over time but when we’re talking about sort of coming at a two-thirds -- the OkCupid rate North America and Europe and one-tenth that rate rest of world, you’re very much on the single-digits. In terms of engagements, I don’t want to give precise numbers, but I would say the DAU to MAU numbers have remained constant and very solid. I would -- we’ve often described Tinder as sort of the cross between a Dating product, a social network and a gaming product. Now I would say that the engagement numbers are stronger than a regular Dating product and much more in the social sort of -- social network range than in the traditional Dating range. Grég Blatt: Thanks everyone for joining the call and let us know if you have questions.

Talk to you all next quarter.