Match Group Inc (MTCH) 2009 Q1 法說會逐字稿

Good morning, my name is Leslie.

I will be your conference Operator today.

At this time I would like to welcome everyone to the IAC Q1 2009 earnings conference call.

(Operator Instructions)

At this time I would like to turn today's conference over to Mr.

Tom McInerney, Executive Vice President and Chief Financial Officer.

Please go ahead.

Thanks, Operator, and everyone for joining us this morning for our first quarter 2009 earnings call.

Barry will make some brief remarks, after which I will come back to quickly highlight some issues.

But first, I'll remind you that during this call we may discuss our outlook for future performance.

These forward-looking statements typically are preceded 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 Q1 2009 press release, and our periodic reports filed with the SEC.

We will also discuss certain non-GAAP measures.

I refer to you our press release and the Investor Relations section of our website for all comparable GAAP measures and full reconciliation.

With that, I will turn it over to Barry.

Thank you, Tom.

Good morning to everybody.

I will make just a few comments, no grade order, and then we'll take questions for the majority of the call.

First, to a cheer from a grateful nation, we bought back some stock.

We won't say anymore about that, that is our policy, but of course we will report each quarter any stock purchases that we make.

In our search sector, Ask isn't just Ask.com, it's the Ask network, which is 173 million uniques worldwide, growth is about 33% year-over-year and 5% quarter-to-quarter.

It's the sixth largest property on the web, up from the seventh last quarter.

As for queries in the U.S., we're closing slowly on the losses over the previous year, improving 9% this quarter.

We have got all sorts of ideas and initiatives to grow our queries and share, but this is a long process.

Results come far slower than we would like, though we have had -- we have held on pretty much to our share over the last years.

In local, Citysearch and ServiceMagic are doing quite well in this environment.

More important than that, they're putting into place many initiatives for future leadership.

Our personals business continues to grow, and it continues to extent its leadership.

We're every day mindful of our bountiful capital.

We talk about endless ideas the day long, but we haven't yet found a compelling place to put it down, and we're going to continue to enforce patience until we do or until we find a way to repatriate it to shareholders.

With that, Tom and your comments, and then we'll do Q&A.

Thanks.

The results are fully laid out in the release, and I don't want to be repetitive.

Let me just give you some supplemental information as it relates to Q1 as well as going forward.

In media and advertising, the reported revenue decline of 22% reflects about 10 points of decline from the phaseout of certain sponsored-listing distribution businesses, when we put in place our new Google deal a little over a year ago.

You will remember there was some continuing activity in this in Q1 as we phased it out, so Q1 this year will be our last quarter with this drag on the year-over-year comparisons.

Excluding this effect, revenue was down in the low double digits on a percentage basis, reflecting weak general conditions plus some of the changes we made to the Ask product at the beginning of Q4, which reduced monetization in return for a better consumer experience, as we have discussed in the past.

On the profit side, we basically saw the revenue decline flow through to OIBA, and while we have made selective cost reductions, we increased marketing year-over-year and generally sustained investment levels in the business.

The last few weeks of the quarter, continuing into April, have been modestly better than earlier in the quarter in terms of volume, so while we don't expect a dramatic improvement in trends in Q2, we also don't expect further deterioration either, year-over-year or sequentially; although obviously external conditions, especially monetization, are very unpredictable.

We will discuss more of the metrics and the like in the Q&A.

Just quickly on a couple of the other businesses, for Match, please know we expect to close the sale of Match Europe to Meetic in early June, following which Match's Europe revenue and OIBA, which were roughly $50 million and $8 million respectively from June '08 through year end last year, will be excluded from the results the remainder of this year, and we'll own a 27% interest in Meetic and a promissory note with a total current value of approximately $140 million.

ServiceMagic had a difficult first quarter.

The weakness in housing and, by extension, home improvement, drove margin pressure as the Company had to spend more to generate consumer demand than in previous quarters, and revenue per service request declined as the mix shifted to more inexpensive projects.

In addition to macro headwinds the Company had a few operational challenges, which we think were largely addressed by the end of the quarter.

As such, we think that while Q2 will still be down year-over-year, we're hopeful that it will be a smaller decline than Q1, and we're set up for still a quite profitable year despite conditions.

I would also just note that the number of paying service providers is still growing, and there is just no question that local businesses are moving to pay-for-performance online marketing, and ServiceMagic's competitive position and long-term opportunity remain great.

Respect to our emerging businesses, we continue to rationalize this sector and hone our efforts around fewer businesses, which led to the sale ReserveAmerica and 23/6 during the quarter.

Q1 aggregate net losses in this segment were down sequentially from Q4, and I expect that trend to continue all year.

ReserveAmerica was a profit maker, and Pronto, another profit maker, is being materially impacted by declining market CPCs.

Right now I believe it's unlikely that we'll get to our previously-stated goal to reduce our 2008 aggregate emerging business loss by about half this year, but I do believe we'll continue to drive it down sequentially.

Finally on cash, you'll see we ended Q1 with approximately $2 billion, and we expect to be modestly free cash flow positive over the balance of the year.

And in addition, to receive a $76 million tax credit in Q4, which will benefit actual cash flow; although, just as a footnote, not free cash flow as we have defined it.

With that, Operator, let's take questions.

Thank you.

(Operator Instructions)

Our first question comes from the line of Jennifer Watson of Goldman Sachs.

Your line is open.

Great, thank you.

I wanted to ask a question on Fun Web products.

They had been performing rather well, probably up until this quarter, when it sounds like some of the queries declined there.

You can discuss some of the dynamics, and how that contributed to proprietary revenue down 10% year-over-year relative to Citysearch and Match?

Sure, Jennifer.

I think the starting in the middle of last year, the back half of the last year, we started to see a number of the facts -- I think it was a mix of external and kind of certain internal operational issues.

I think that the premise of Fun Web, which is to great creative products in order to drive a toolbar download, continues to be a strong general premise, but there's no question there's increasing competition for control of that toolbar and control of the other search experience through the browser and related effects.

So there were a number of kind of competitive actions.

We think we have solved many of those, so the business was stronger in that -- the last third of the quarter and into April than it was in the early parts of the quarter.

And, you know, we look to launch new products and continue to drive these operational experiences around this search experience.

So, we think the business is, you know, still fundamentally sound, but there is no question it's competitive.

And then if you could just comment a little bit on the direction of display relative to search in the quarter, and if you saw search hold up better as you -- as one would expect, seeing that it's ROI-driven?

We did.

Display, as you know, is only about 3%, 2% or 3% of our revenue, but we did see display impact us in the Citysearch and Evite businesses, which are in the media segment, as you know, and we were down 37% in display year-over-year, and we did not, obviously, see that kind of impact.

As I said, our search businesses were down low double digits, if you adjust for that one business we got out of a year ago.

So there is no question that search is holding up more strongly than display, at least for us, although obviously still impacted.

Thank you.

Thank you.

Our next question comes from the line of Ross Sandler of RBC Capital Markets.

Your line is open.

Just two questions.

First, can we just get the metrics question out of the way?

What do you think in April in terms of RPQ and CPC trends across the search businesses?

And then second, on the margins, the immediate advertising margins came in much better than expected.

Was that driven by some of the stuff you're talking about in terms of pick up at Fun Web, or was there something else there that contributed, and how do you think of margins in that segment as we look into the next few quarters of '09?

And the same thing on ServiceMagic, clearly we're having an impact on the economy on lower revenue per request, but do you expect to see margins kind of stabilize at this level or should they pick up as we move throughout '09?

Thanks.

Okay, I'll take these in order.

I think on CPCs -- we operate a number of so much properties, as you know, and we're seeing them and I think we were through the first quarter and really through today, anywhere down, you know, kind of 5% to 20% year-over-year, and that is a wide range because it really depends on the property.

A property like Pronto which relies heavily on commercial shopping terms, we're seeing CPC year-over-year declines in the 20%, even above 20% sometimes.

In other businesses, other search properties we have, it's closer to 5%, but it is down across the board, and I'd say April is the same as Q1, which is not good.

Not really better, not really worse, just continuing to show those sorts of declines.

In terms of long-term margins in the media and advertising segment, you know, these businesses continue to have pretty strong operating leverage.

We probably spend close to 30%, call it 30% in marketing, which would include all sorts of online/offline pay-for-performance marketing, et cetera, in these businesses.

They don't have large, you know, kind of fixed cost structures generally, other than in the -- you know, the Citysearch business, obviously you have a big sales force.

But -- so there is no question that, I think, longer-term, we can get back to 20%, you know, plus margins, but obviously you've got to get that top line moving, and we have to see better comparisons and a more benign environment.

You're just not going to do it in this -- in this kind of environment.

Finally, on ServiceMagic, was there a specific question on ServiceMagic, I don't recall?

How do you think about the margins on -- in ServiceMagic, you know, clearly the economy is having an impact on the revenue per request and --

Yes, again, there is nothing that has changed secularly in that business.

I think its competitive position is as strong or stronger.

I think it will come out of this cycle stronger than it was going into it.

The business did 21% margins last year on a business which was still growing quite strongly and it -- and at early stages of development.

So I don't think there is any reason it can't get back to that and beyond, when conditions are more favorable.

That's not going to be in Q2 and it probably won't be this year, but there's no reason it can't get back there.

Thank you.

Thank you.

Our next question comes from the line of Jeetil Patel from Deutsche Bank.

Your line is open.

Thank you.

A few questions.

First of all, on the proprietary query trend side, it seems like April, if you back out the Easter effect, you may be -- can you comment on whether you're close to getting to flat and maybe positive on the query trend on the proprietary side of the business as you look at April thus far?

And then secondly, I guess -- you made a comment about Pronto being maybe down 20% or more on CPCs, and that probably speaks more to retail keywords, where the other properties are more non-retail oriented keywords or a mix of non-retail and retail, but I guess is there something you're doing inside monetization in terms of lowering ad coverage that is basically keeping your overall monetization lower, given that you're probably seeing better pricing if you look on an aggregate CPC basis because of the other properties performing better than Pronto?

I guess can you just comment on what you're doing outside of CPC to drive or kind of adjust for monetization in the business?

On Ask, yes, April is essentially flat so far.

The only thing I would add to that is in the toolbar business, because our downloads going into the period, there's a lag effect, right, so your queries are a function, on the Ask proper business, of kind of just daily activity.

On the toolbar business, it's how many downloads you had over the trailing, you know, two, four, six months, and downloads were lower because of those competitive forces I cited earlier.

So queries will take a bit of time to catch up in that category, but we've seen improved lifetime values there as well.

And I am sorry, Jeetil, I just -- I didn't understand the Pronto question.

I guess -- you're seeing greater pressure on low-price keywords, more retail-oriented, so product-oriented versus non-retail keywords seems to be holding up better in terms of pricing.

I guess are you doing something, after you look at all the CPC, to kind of get to the aggregate RPQ out there, you know, taking down ad coverage or kind of taking down ad links as a way to kind of manage to a certain RPQ number?

I think -- on our data, everyone's data is probably different, I'm not sure what Google has said on this point, our data suggests that the year-over-year declines on the CPC/RPQ side in the search business are substantial and comparable for both commercial terms and non-commercial terms.

And so you're seeing in both places.

There's a lot of things you can do to address monetization, and we're pulling all the tricks.

They're not enough to compensate for those broader trends.

So we think we have mitigated some of these year-over-year declines, but they are all swamped by the general market conditions as well as by the threshold issue, which was we launched a new product at Ask in Q4 last year, and it is a much better search experience, which causes people to use the algo -- algorhythmic links more and the sponsored links less.

And so, that -- those two factors, macro and that, are just too big to overcome with the other things, although we're pulling the other levers as best we can.

Thanks.

Thank you.

Next question.

Thank you.

Our next question comes from the line of Justin Post of Merrill Lynch.

Your line is open.

Thanks.

A couple of questions.

Barry, you did buy some stock back in the quarter.

I guess you can't talk about forward, but what prompted you to do that?

Tom, may be you could talk about why this -- the total number of shares increase during the quarter?

And then on the Ask side, maybe you can talk about the cost benefit of the new Nascar deal, and is that helping your overall query trends?

Thanks.

We said we were opportunistic, we thought it was an opportunity, so we bought some.

We don't, obviously, talk about it beyond that, but yes, it was a change for us, but we did it because we thought it was a good investment.

The share change reflects the fact that there were just under 12 million warrants exercised into shares, which were right before they expired, we talked about that on the last call, for $13 a share.

There was nothing we could do about it.

We couldn't force any kind of -- we had to take the cash per the terms of the agreements, and that added 11 million, 12 million to the share count, and then netting against that was the buyback shares we did.

There is no other big tranche of warrants.

These are very old warrants from an old deal.

There is nothing else that close to [in the money] that would be imminent in that regard.

As far as Nascar's concerned, I think it's definitely had some benefits.

We -- you can't really cost evaluate it probably for another few months to determine whether it will essentially be cost positive.

It has, of course, gained us some queries, but we're going to in the next 90 days open up two more vertical areas that we think will bring us queries.

We have a lot of initiatives to do exactly that, and as I said, the next two will come out over the next 90 days.

Great.

Thank you.

Next question, please.

Thank you, our next question comes from the line of Mark Mahaney of Citi.

Your line is open.

Sir, your line is open.

Sorry.

Can you hear me now?

I apologize about that.

Tom, I wanted to ask about the Match Europe contribution or takeaway in the second half of this year.

Based on those numbers you gave out earlier, is it around $25 million in quarterly revenue and around $4 million in quarterly OIBA we should think about as the adjustment post the sale of that asset?

It was -- a slight -- can call it $20 million-ish revenue.

I think we will see a third of that impact in Q2, because it will close in early June, so it will have a, you know, six or seven point, probably, impact on Q2 revenue, just because of the partial quarter effect, and then $20 million-ish in Qs 3 and 4.

And, you know, the business was generally in line with profits of the business overall, slightly lower margin.

I think it was about $13 million of OIBA for the full-year last year, and you can assume flattish for this year.

So you're losing, you know, a couple of million dollars, $2 to $3 million a quarter.

And then in the emerging businesses segment, you have a lot of -- you have a lot of businesses in there.

When you think about --

Less now that we did last quarter, and less than we did the quarter before, Mark, but yes, we do have some.

Yes, and are there particular ones in there you that want to put a stake in the ground and say these will be core to IAC in the future, and ones that seem less core?

Any hints you want to give us as to which of those -- whether, if the trend continues and it you continue to shed, which ones will be shed?

I think it's inappropriate for us to do it, since we haven't informed the people involved.

It's certainly not appropriate to involve others -- or to inform others.

I do think that you can look to see that we will continue to lessen the number, and probably lessen the investment in emerging businesses.

There will be a few that I think are going to emerge to be core, but look for us in the next quarters to do what we've done in the last few quarters, which is to -- which is to continue to refine and continue to invest only in those things that we think can be core, could be large businesses for us.

But specifics are inappropriate.

Thank you, Barry.

Thank you, Tom.

You're welcome.

Next question.

Thank you.

Our next question comes from the line of Jim Friedland of Cowen & Company.

Your line is open.

Thank you.

The first question on Match, if you pull out the one-time charge for the Meetic act -- or the Meetic deal expense, it looks like OIBA margins were up over 3 percentage points on a year-over-year basis.

I was wondering was there any kind of one-time benefits in the quarter, or some sort of marketing dollar shifts that we should be thinking about, or are you just gaining more leverage there?

And secondly, you talked a lot about successful iPhone downloads, things like Dictionary.com; is there any kind of a meaningful monetization business plan there?

Could that actually turn into a revenue stream, or is it just building use of the brand or awareness of the brand?

Thanks.

On the -- the short answer is no.

There were no unusual benefiting items.

We've always said with Match, the strategy is not to drive margins but we do think there will be opportunities as the brand grows and there's scale and leverage and those good things, and we just saw real good marketing efficiency and registration to subscription conversion.

You know, you pay to get people to the site, and if you can convert a slightly higher percentage, you see margin benefits all day long.

So nothing unusual or one-time, just a good quarter and good execution.

On mobile, no, I don't know think anybody knows yet.

There are -- of course, we see the statistics that show that downloadable apps that are paid for, or they're on a subscription basis, are very robust.

There is an awful lot of activity there.

It doesn't relate to huge amounts of income yet, except for Apple, but there is a lot of paid activity, and so I think that it's hopeful.

I mean it isn't there yet, and it does -- certainly for Urbanspoon, which I think we're announcing that we bought today, which is just a great application, Urbanspoon.

It has been all over the iPhone, it has huge uptake.

It's a --

4.2 million iPhones download it.

That's huge.

That is really ridiculous.

Anyway, we just purchased that as part of our Citysearch network.

And Dictionary just started the [zooming].

I think we can't yet whether it's going to be advertising base and -- and/or subscription base.

Now what the world would like, of course, is to have dual revenue streams on these products, and particularly dual revenue streams are going to be increasingly necessary for, I think, any content site, and certainly a content site that is not just an aggregator but a content site that actually makes content, is not going to be, I think, survival -- I shouldn't say survival, not going to be profit contributory until you get two revenue streams.

And mobile, because of the nature, because of the practices, et cetera, is potentially a gateway to that.

I gave you a longer answer than you wanted, but that is our thinking on mobile.

I would just add that, you know, on the subscription side, we're already seeing Match.com generate real revenue.

We don't disclose the specifics, but the subscription product as an add-on product, and then our local businesses, mobile is a key distribution point for both Citysearch and ServiceMagic, and merchants will clearly pay for leads generated via mobile apps.

So we're in the right part of the market, assuming that is the way it develops, which you'd expect.

Great, thank you.

Next question, please.

Thank you.

Our next question comes from the line of Imran Khan of JPMorgan.

Your line is open.

Hi, this is Bridget in for Imran.

On Urbanspoon, what is their monetization model right now, and specifically what synergies do you see with Citysearch?

And then as a follow-up to that, I think you've mentioned before that you see smaller acquisitions such as Urbanspoon being more of your strategy than the large acquisitions; do you continue to think that way?

Thank you.

Yes, we definitely think the one area -- not the one area, but the area we're assured of investing, and when we think there is value there, is behind or as part of the product services that we now offer.

If we can increase our competition, if we can hold on, that is a very good strategy for us, and we're going continue to do it.

It does not, at least at this stage, can't see where it will, take large amounts of capital, and certainly Urbanspoon was not a large capital acquisition.

And, you know, in terms of monetization, what we do with ServiceMagic and Citysearch, in its simplest terms, is we sell leads.

The exact pricing mechanism, and the way they're bundled and tracked and all of that stuff varies, but in general we sell X numbers of leads for Y dollars a month, and there is no reason those leads can't be, in fact they are today, and Urbanspoon will be an additional outlet for this, there is no reason why those leads can't be driven through mobile devices.

So, ultimately, all our local businesses are going to be pulling in merchant spend from a variety of places and a variety of categories, and then distributing that spend and driving traffic from both our own properties as well as partner properties.

And in the case of Urbanspoon, we just thought it was such a great property that it's a distribution point that we choose to own as opposed to partner with, but we'll do both.

Great, thanks.

Next question, please.

Thank you.

Our next question comes from the line of Doug Anmuth of Barclays Capital.

Your line is open.

Hi, this is actually Ron Josey calling in for Doug.

A quick question on Match and the recent Meetic transaction.

We're wondering if there is a potential for Match to be an acquirer in the U.S.?

I believe Yahoo!

has said in the past it's shedding some of the non-core assets.

Potentially is there something with Yahoo!

Personals?

And then a quick clarification, I believe it was mentioned that search was essentially flat thus far in April; I am wondering if that is year-over-year?

Thank you.

It is year-over-year, isn't it, Tom?

Yes but you're referring to -- I think the reference was to volume, so queries, at Ask.com specifically.

So we have seen good traction at Ask specifically on the query side.

We're still seeing very negative trends year-over-year, again in line with Q1, not better, not worse, on the monetization side, and there is that lag effect on the toolbar side.

Great, thank you.

That is helpful.

On Match, we are very interested, we would love to have Yahoo!

Personals, and I think there are some initial discussions about that.

Whether that would go anywhere or not is, of course, enormously speculative, but I think Yahoo!

has said it's not an absolute core asset to their future, and it is core to us, personals, we are unquestionably the leader in the category, and our Meetic association is, I think, going to make us undisputedly the leader in Europe.

So we're very aggressive behind Match, and any possibilities for increasing its hegemony in the world.

Great, thank you very much.

Next question.

Thank you.

Our next question comes from the line of Jeffrey Lindsay of Sanford Bernstein.

Your line is open.

Thank you.

Two questions.

First of all, is there more that you can do to deploy your Ask.com development team on the page search side?

Because it seems that that is a talented team, and as they develop the algorithm side, it seems to be undermining the page search side of the business.

Are you restricted in what you've agreed to with Google for that, or is it possible that you could redeploy that team to focus more on the page -- to drive on the page search side?

And then my second question is in Match.com, are you seeing the industry trend towards more of an ad-supported business, or is Match.com immune from that?

Thank you.

Yes, you know, we have been increasing -- we have a nice business on the page search side.

We don't talk about it so much, but Ask's sponsored listings has been a very nice grower.

It operates in a part of the market where Google and the other large players are not as focused.

It still serves a minority of the sponsored listings on our own search properties, but it's up to probably about 4% or something like that, and our Google deal doesn't prohibit that.

So we have long said that we view our participation in the page search side on the sponsored listings business as opportunistic.

We don't think and have a desire to try and compete with the larger players, but think there is very good money to be made and we'll keep doing that.

On Match, Match is a paid service.

It will always be, I believe, a paid service.

It is, with -- there are some new offerings that have gotten a little bit of traction, not a great deal, I would say more in the frivolous staging area, whatever you take to mean by that, and do not mean in that -- the Craigslist version.

But the overwhelming world of personals is on the subscription paid side, and I think it will continue.

Thank you.

Next question.

Thank you.

Our next question comes from the line of Jeff Shelton of Natexis.

Your line is open.

Thanks.

Barry, you have commented for a couple of quarters that there has been a lack of compelling places to put your cash.

Have you seen any movement on asking prices?

You know, it seems to be that they're still too high for your taste?

I've seen no movement.

No movement.

Do you have any fears that we have hit the bottom and that perhaps you may miss it?

I don't know.

I would probably be the only person in the world to say that I'm fearful that this economic period is over.

Unfortunately, from whatever standpoint you sit, I do not think it is over.

I think we have a lot more to come, and I particularly think in a lot of sectors that they are going to affect prices for the future.

I still think, I think there are -- in many, many things we look at, the prices are irrational, primarily because they're private market prices of people sitting around a room agreeing what their value is based upon nothing other than hopes and dreams.

I think that comes to reality some time in the near future, but I can't predict when.

And if I could re-ask a question that was asked earlier.

You have been acquiring a lot of smaller assets; would you consider something in the $500 million or $1 billion range?

Is that possibly on the plate of things to do?

It would be on the plate but, you know -- I mean, yes, plate, here's the plate.

There is nothing on it.

The -- and the problem is, or things that are key to what we do, add-ons, bolt-ons, et cetera, there is the ability to rationally acquire.

When you get up into the nine figures, it's -- there just haven't been an opportunity.

I wouldn't rule out an acquisition, actually, of any size, but I'm not particularly optimistic that we're going to find one.

And I'm certainly not going to simply -- we're not going to perpetuate, in a sense, what IAC did for the first 10 years of life, which is open up sector after sector, acquisition after acquisition.

We did that.

We got up to very large size, and then we started spinning them out.

I don't think we're going to start that cycle again.

I don't think that is in the interest of this Company.

So while I can't say what we'll do, obviously, other than invest in the businesses we have, because we believe they're worthy of investments, relatively small scale, we're open but I am actually not optimistic about being able to extensively spend the enormously large amounts of cash that we have.

It could change on a dime, but there it is at the moment.

Thank you.

You're welcome.

Next question, please.

Thank you.

Our next question comes from the line of Gene Munster of Piper Jaffray.

Your line is open.

Good morning.

Just a follow-up to the Match question.

As far as the customer as versus (inaudible) in the quarter, was that related to any sort of increased marketing spend or macroenvironment, and do you that that trend is going to continue?

No, it wasn't -- it was business as usual for Match.

It was just good conversion improvements, good marketing efficiency, which is a variety of, you know, kind of plumbing work.

You can speculate, and it's fun to speculate, does the weak macroenvironment to help the business to a degree because people are looking for love, and maybe there is some of that.

But, you know, there is no big one factor to point to.

We have said that -- have been saying, I think now, almost 10 years, that this is a category which is still underpenetrated relative to its addressable market.

Match had 7 million active registrants in the last six months.

It still only has, you know, a million -- and that is just a domestic figure, by the way.

So there is still an immense opportunity, and the business has for 10 years and probably will continue to grow in fits and starts, as it figures out product wrinkles and marketing efficiency and the like.

Thanks.

Next question.

Thank you.

Our final question comes from the line of Mark Mahaney of Citi.

Your line is open.

Great.

I just want to get back to the Match business.

Barry, could you just remind us again the rationale for the sale of the Europe -- Match Europe business, if -- given your interest in Yahoo!

Personals, and the strength -- relative strength of that business.

What was it about that segment that you didn't want, or is it just the price of the offering was too attractive to pass up?

Thank you.

Well, first of all, you know, we didn't sell, so to speak.

I mean, we converted into a larger entity.

We own 27%, I think, of the French public company.

The issue was that Meetic was stronger than Match outside of the United -- in Europe, had done a stupendously good job in various Western European markets.

Match has done okay.

The synergy savings by putting these together was very, very large, and what we decided to do, really, is to take and convert our ownership into the ownership of a company that we thought could exploit the world better.

We have the opportunity in the future to increase our ownership.

And the other principal reason for all of this is that the Chief Executive, Marc Simoncini, of Meetic is just the kind of person that is going to grow that category.

So we thought putting the two together made more sense than competing on their own.

It has nothing to do with our point of view in the United States relative to acquisitions, relative to anything else.

I, again, just reiterate one thing, we did not sell.

We sold into a larger entity that we think we're going to profit from over the years.

Do you have the option to take a majority stake?

No, we don't have the option.

It's a complicated process of -- we can fill you in on later, that gives us certain rights to acquire more stock, et cetera, at certain moments down the road.

Thank you very much, Barry.

You're welcome.

Thank you all, and we will see you at the next quarter.

Thank you.

And this concludes today's conference call.

You may now disconnect.