Match Group Inc (MTCH) 2015 Q3 法說會逐字稿

Good day, and welcome to the IAC reports Q3 2015 result conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Jeff Kip. Please go ahead, sir.

Thanks, operator. Good morning, everybody. Welcome to our third-quarter earnings call. With me today is Joey Levin, our CEO.

As you know, we're limited by securities laws as to what we can say due to the previously announced Match IPO. Greg Blatt, Chairman of the Match Group, is fully engaged in that process and won't be joining the call today. Thus, we're not going to be in a position to answer questions regarding the Match Group beyond what's already been put out there in the press release, our published remarks, and the Match Group Inc.'s S-1 filing, which we'll direct you to.

As a reminder, we'll also not be reading our prepared remarks on this call. They're currently available on the investor relations section of our website.

Before we get to the Q&A, I'd like to remind you that during this call we may discuss our outlook and future performance. These forward-looking statements typically may be preceded by words such as we expect, we believe, we anticipate, or similar statements. These forward-looking views 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 the third-quarter press release and our periodic reports filed with the SEC.

Today we'll also discuss certain non-GAAP measures, which, as a reminder, include adjusted EBITDA, which we'll refer to today as EBITDA for simplicity during the call. I'll also refer you to our press release, and again, to the investor relations section of our website for all comparable GAAP measures and full reconciliations for all material non-GAAP measures.

Now, we'll jump right into Q&A. Operator?

Thank you.

(Operator Instructions)

Jason Helfstein, Oppenheimer.

Thanks. Jeff, just to start out. A three-part question on search and then one accounting question. So, on search, one, can you tell us what Google revenues were, per year, under the old deal, let's say, 2014? And, how this compares to your forecast for $1 billion, per year, on average, going forward? So, any color around that comment. And, how to compare?

Two, for this year, can you break down the search revenues between Google and non-Google? And hap -- perhaps, help us understand the margin difference between the two re-streams? And then, three, related to the new Google deal. When we think about the Google policy changes, historically, have created disincentives for IAC to invest in user growth and new products. Does the new deal to anything to incentivize IAC to invest in search growth?

And then, just on the accounting side. Is the Company considering changing segment reporting, post the Match spin, to provide individual segment results for HomeAdvisor and Vimeo? Thanks.

I think I'll -- this is Joey. I think I'll take all those. On the old Google revenues. I think the number in 2014 was about $1.4 billion. And, the -- just to put in the context the $4 billion.

When we announced our deal in -- or going way back, because, our deal in 2007, I think, we said we'd do $3.5 billion in that deal over five years, and we signed a new deal about three years in. And, we were -- had already done, I think, more than $2 billion of revenue and growing nicely. In 2011, we did our deal -- we said we'd do $5 billion of revenue over the five years on that deal. And, that deal's still not done and we've already done over $6 billion.

I don't say that all to imply that we'll beat the $4 billion. I just say that, look, it's a long way out. It's not a precise projection. It's not a precise forecast. It's a rough estimate of what we think is possible or theoretical.

I think, it's a -- the other thing that's important is, into -- I guess, going into your second question. About 85% of revenue in the search and apps segment comes from Google. That is, that's gone down a bit over time. And, the non-Google revenue is higher margin than the Google revenue.

Also, when we think about the parts of the Google revenue that'll change in the context of this new deal. It's generally parts that are lower margin. So, one of the things that we talked about is the mobile rev share changing.

Mobile today is -- Google mobile revenue today as part of the search and apps segment is about 15% of that segment revenue. And, it's lower-margin stuff. But, it's also much more heavily weighted towards Ask and less weighted, significantly less weighted, than the -- what we've called the premier publishing properties.

So, when you add that all up, the stuff that's being impacted is going to be lower-margin stuff and stuff where we've had, generally, more trouble. If we talk about the applications piece of it, also, going to be more impacted on the B2B side. Where, again, there's been volatility on that over the last few years.

So, what -- when we put the whole thing together, I think we signed, I'm sure we signed a great deal. We are very optimistic about the future of that business. We'll set a new baseline, as we've done before, and we'll grow from there.

As far as segment reporting, we are looking very hard at that and hope to be able to provide a little more clarity pretty soon.

Thank you.

John Blackledge, Cowen and Company.

Great. Thank you. Just wondering if you can quantify the revenues' stepped out impact. Or, how should we think about Google revenue for 2016?

And also, if you can quantify the impact to EBITDA? If EBITDA's running at $300 million in 2015, how should we think about the 2016 EBITDA?

And then, pivoting over to HomeAdvisor, the EBITDA margin was close to 10% this quarter versus about 6% in 2Q 2015. How should we think about the long-term margin trajectory at that business? Thank you

Yes, so we're not going to give a 2016 forecast yet. I think it's too early. But, it is a -- this is not a dramatic cut to the business. This is some adjustments and adjustments in areas where, again, I think is lower margin. And, some of the areas that have demonstrated weakness over the last few years. So, it is -- the business is still very healthy and will do very nice cash flow.

On -- we're not going to share, specifically, the economics on mobile. But, just to, again, to help frame it a little bit. We've been preparing for what we thought might be a change in the mobile economics for a little while now. And, we -- on About.com, for example. If you look at the same period two years ago, our mobile revenue on About.com was coming 100% from Google.

Now, our mobile revenue on About.com is coming less than 20% from Google. And, we think we have, we know we have, alternatives there that monetize very well. And so, on the -- those publishing businesses, I think, they'll be very healthy in the new relationship.

On HomeAdvisor, to -- what was the question on HomeAdvisor?

So, the question was, the margins with -- EBITDA margins look like close to 10% versus about our estimated 6% in 2Q. Just talk about, with revenue growing very quickly, so, just how we should think about the long-term margin trajectory for the business?

Yes, I -- we talked about this a little bit last quarter. I think the answer stayed the same. We could see 15% to 20% long-term margins in this business. We could see better than that in this business. But, we're not focused on the near-term margin for right now.

The great thing about HomeAdvisor is when you've got the system working, it's a virtuous cycle. So, we just crossed 100,000 service professionals last week, which is a huge amount going for us. And, we crossed it faster than we thought. In fact, we beat the confetti poppers that were mailed out to all the office. We got a 100,000 before the confetti got there. So, we had a little bit of a delayed celebration.

But, the bigger the service professional network is, the more you satisfy the consumers, more frequently they come back. The more frequently consumers come back, the happier the service professionals are with more demand. And, we're seeing that happen in the business.

The increased service provider retention and increased homeowner repeat rate dropped straight down to the bottom line. But, right now, we're reinvesting that. We're reinvesting that in sales resources, we're reinvesting that in product, and we're investing that in marketing. And, I expect that to continue.

In some ways we won't be able to help ourselves delivering more margin next year and same thing as you saw in this last quarter. But, we see huge opportunities for growth here. So, we're focused on growing it in the market share.

Thank you.

Peter Stabler, Wells Fargo.

Thanks for taking the question. Joey, could you give us a little bit more color around your comments in the prepared script around the transition from out-out to opt-in? Just, give us a sense of which products you're talking about. And, how much that is impacting your forecast for the next couple years?

And then, secondly, could you let us know whether FX had any margin impact on the business this quarter? Thanks.

Yes, I'll let Jeff take the FX one. On, opt-out to opt-in, we're not giving up our right to do opt-out. So, a portion of our business will continue on opt-out basis.

But, we -- long term, it's healthy for us to move towards opt-in distribution of our software. Or, at least a portion of our software. And, that's been working very nicely so far.

Now, we haven't perfected that on every browser. And so, we're working on that right now. But, where we've done it, we've seen increases in conversion, and increases in retention and increases overall increases in customer satisfaction.

So, long term, we see that as a good thing for the business. But, near term, it requires some adjustments. And, that we're working through right now. I think it is -- I think it's a short-term impact on the business, but, a long-term -- we'll we be just fine on the business.

Is that primarily a B2B issue? Or, sounds like a B2C?

It's much -- it is -- yes, it is much more an issue for B2B than B2C. I think there is some impact on B2C. But, it's more on the B2B side.

And look, B2C, we've always said, we much more control our destiny on B2C. So, we own the distribution from marketing to conversion to customer relationship, et cetera. And, on B2B, it's just, sometimes harder to adjust and to -- the flow of things through partners.

And Jeff, margin impact to then. If you could touch on, did you guys have any negative impact from the credit card chip issue?

First, on margin impact. I think, across, I see, really, revenues [weren't] impacted as much as EBITDA was. Varied a little bit by business. But, you're talking about, little bit of leverage, little bit of deleverage, either way, nothing material. And, across our businesses, no, I didn't think we really saw that much of an impact at all on the credit card issue.

Thanks.

Ross Sandler, Deutsche Bank. Ross Sandler with Deutsche Bank, please check the mute function on your phone.

Why don't we just let Ross come back if he's not there.

Brian Fitzgerald, Jefferies.

Yes, hello, Tim O'Shea for Brian Fitzgerald. Thank you for taking my question. There's been a lot of quo -- a lot of talk about ad blockers. I'm just wondering if you're seeing any impact, either on desktop or mobile? And then, I have a follow up, thanks.

Yes, on mobile it's been negligible. I think we see less than 1% type impact. On desktop, we see an impact, maybe, measuring something in the teens. Not accelerating, but, some -- probably somewhere in the teens, impact.

I think we under-index towards, or, relative to the general Internet on ad blocking. I think, partially, because we drive a lot of traffic through advertising. So, by definition, if we acquired a user through an ad, then they're going to see an ad when they get to our site. And, also, because just our demographic is less likely to be adopting ad blockers.

Look, I think it's something we have to pay a lot of attention to, the industry has to pay a lot of attention to. And the solution's going to be adjustment in ads, better ads. The solution is not going to be that everyone on the Internet is just going to give away their content for free with no ads. There's technological solutions to it and there's just, better practice solutions. And, we're looking at all those things.

I'm not hugely worried about the impact there. But, it's something that we're absolutely focused on. And, it's not, I don't think, it's meaningfully costing us financially right now.

Thanks. And then, looking at the mobile component of the Google deal. I was wondering if you could quantify the delta between the current and the former revenue share? And then, maybe how that revenue share compares to what you get on desktop? And then, just also, the deal's non-exclusive. Can you just remind me, maybe, who are the other partners you're working with here? Thanks.

Yes, on quantifying it. We can't quantify it other than to say it's lower. On other partners. There's a bunch of other partners in this space. I think our solution on mobile is going to be a combination of proprietary ad products, Google ad products, and other third-party ad products.

I think there's a bunch of players that offer ads in mobile. Bing, Facebook; I mean, this -- the list runs very long. We have deals in place with a handful of partners. And, we're going to spend a lot more time figuring out exactly what the optimal solution now is and what the right deal is.

Thank you.

Heath Terry, Goldman Sachs.

Great. Thanks. Just have a couple of questions on the deal. Really, in part, to follow up on some of things that Peter asked about. Will the move to opt in on some of these products begin before the current deal ends? Or, do you plan to carry out current performance all the way or current structure all the way up until the new deal goes into place next year?

And then, can you also give us some examples of specific products were you moved to opt in? And, what has happened to the conversion rates once you've made that move? You've mentioned, specifically, in the prepared remarks that this is a change to the way you handle search defaults. Just want to make sure that also includes homepage setting opt-in as well.

And then, if you can also just remind us what percentage of the business is coming from B2B versus B versus B2C? And, what portion of the business you envision staying opt-out? That would be helpful. And, sorry, I know that was a lot.

Yes, let me -- I'm not sure I got them all, but let me try. On opt in and when we'll start to move. We've been moving for a while now. That move will continue but up until the new deal. I think it'll accelerate to some extent in Q2 2016. But, that move has been happening and will continue to happen up until then.

In terms of product on opt in, most of our B2C products on Chrome are now opt in, or, opt in or native. Essentially, using the native extension format available in browsers. So, that transition has largely happened.

On the question of default search. Again, in Chrome, for example, on our B2C products, we're not offering a default search product today. We're not offering a toolbar today. We're just offering new tab product. So, what -- I think that answers your question, but, I -- you can ask more of it.

On B2B and B2C, the -- let me just see if I can pull the split. In terms of revenue -- wait. Jeff, have we disclosed B2B versus B2C before?

We said -- we've said in the past they were roughly half and half.

Yes, that's materially different now. I mean, I think, I -- it's called, roughly, a quarter is B2B right now. So, 75/25 B2C, B2B. Was there other questions there, Heath?

So, maybe, just the -- on the example question. I was thinking more along the lines of are there specific products, like Football Fanatics, or, one of the others, that used to be opt-in, or, sorry, used to be opt-out, that has moved to opt-in? Or, you can give us an example of what's happened in conversion rates there? Because, correct me if I'm wrong, but, in the case of Chrome, just because of way Chrome's structured, you've actually never had an opt-out format on Chrome? But, I could, obviously, be wrong about that.

Yes, no, I think a while back we did have a opt-out format in Chrome. And, that changed. I mean, has been changing for a while now. But, substantially changed, I think, over a year ago. The -- we can get to you -- we can get you a list of products. We'll follow up with a list of products.

And, what happens on conversion is, it's, well, I don't -- I can't quantify it right now. We've generally seen an increase in conversion. Now, that -- and an increase in retention. That -- but, it's an increase in conversion and retention on a product, that, by virtue of opt-in versus opt-out has less unit economics within it. And so, that's the trade-off there.

Okay. Great. Thank you.

Ross Sandler, Deutsche Bank.

Okay. Let's try this again. Can you guys hear me? (laughter)

Yes.

Good. All right. Okay a bunch of these questions have been already answered. But, a couple other kind of nitpicky issues in search. So, you guys -- Joe, you just said that about 85% of the revenue comes from Google, and, if it's going to be $1 billion a year going forward. That implies some modest, call it $200 million or so, downtick.

So, is that reflective of future traffic hits from this opt-in, opt-out issue? Or, is that you moving away from Google in mobile without any traffic impact?

And then, on mobile, what are the other options that you're using to monetize outside of Google? And, how they compare from like a RPS standpoint?

And then, you just gave the breakdown of the B2B versus B2C apps side of the business. If we look at the website side, what would be the rough break down today of organic versus paid traffic within the websites' revenue? Like, is it half and half organic paid? Or, is it a different percentage? Thank you.

On your first question. Does our estimate include out -- yes, look, our thoughts right now is it includes -- that that's our best guess on putting everything into the mix. On mobile alternatives, it's a -- again, I'll go back to the About example. Significant portion of that moved to display ads. And, when you look at our publishing properties, the search ads are helpful, specific search ads. But, we also -- just the nature of the content. Things like display and other sorts of products work well.

And so, on About, I think a substantial portion of that transition has been to display. And, I think that's a reasonable model for other properties. I think, again, less relevant for Ask. And, I think that's where we'll see most of the impact on the mobile change.

But, on the other publishing properties, there's a lot of alternatives. A lot of alternatives that look like display or other sorts of native ad units.

On the question of organic versus paid, I think it's roughly 2/3 organic, 1/3 paid. But, is that right, Jeff?

About the run rate, yes.

Yes, that's about the run rate. Does that answer all your questions, Ross?

Chris Merwin, Barclays.

All right. Great. Thank you. So, first for HomeAdvisor. I think you mentioned that network effects and some of the product changes that you did were a driver of the acceleration in top-line growth. Can you just talk a bit about the pace of marketing spend this past quarter? And, what role, if any, that played in the accelerating growth? Or, if it was, really, just a function of those organic improvements that you made?

And then, just secondly, on Vimeo. Are you able to provide any updates on revenue growth rates there? I know -- I think you've given those in the past periodically. So, just wondering if you could update us there? Thanks.

Jeff, I'll let you take the second one. And, you'll help me with the details on the first. But, absolutely marketing's a factor too. I neglected to mention that. But, when you get the service provider network growing and when you get the service provider network bigger, you can get much more efficient on your marketing. Meaning, you can reach -- you can satisfy demand in more DMA, as if you're doing national marketing.

So, we've absolutely increased that. And, that's been on a ROI-positive basis. And, that's been great. I don't know if we've disclosed the numbers there. But, it's certainly up in terms of marketing. And --

But, as you mentioned, the engagement and spend from the average service professional is up significantly year over year. And, retention has improved dramatically. I think we mentioned about 1500 basis points on the last call. So, the LTV of the service providers tripled and its those guys who are supplying the revenue and fulfilling the customers. And, that's, that -- the SP network is the biggest driver. The -- in a way, you can think about TV replacing other paid marketing.

And then, there was a question on Vimeo.

On Vimeo, I think, we said in the prepared remarks, Vimeo growth accelerated this quarter. Reaccelerated 27% on a net basis.

Got it. Thanks, guys.

Sure.

Mark Mahaney, RBC Capital Markets.

Thanks. Two questions. One on HomeAdvisor. Could you, just, broadly, just, explain why the accepts-to-request ratio has been trending down over the last two years?

And then, secondly, I think this has been asked a couple of times. But, I'll try it another way. Which is, the deal going forwards is exclusive desktop non-exclusive mobile. And that my surprise would be, I would've thought that you would've had fewer options on the mobile side. So, I would've expected that to be exclusive and the desktop non-exclusive. Any, just, general help in thinking about industry options that would explain why you chose the exclusivity on desktop versus on mobile. Thank you

Look, on the HomeAdvisor question. A, we've had such tremendous success on the consumer traffic side. Where we've been running 40% and 50% up on uniques. Our repeat rate has been going up and up.

Our TV returns have been far better the -- far more positive than we ever expected. We've had tremendous consumer demand. I think one of the unique things about HomeAdvisor is it's got a really sophisticated algorithm for matching up demand to supply and distributing over the course of a month. And so, I think we've been really efficient there.

I think, secondly, we built in a product where we -- the -- end up having, because of subscribers pay some subscription -- they pay some subscription, we have some matches not show up as requests because people go through the directory. Which the service providers subscribe through.

And then, finally, we've been driving two new one-to-one products, which are now 7% of all our service requests. Which are always single matches. Which are online booking and online calls. Which have averaged us down a little bit. But, those are higher price point, and as we've mentioned, far higher satisfaction. So, I think we're pretty pleased about that. So net, we're fine with the trend and we think we're absorbing -- we're fulfilling more service provider demand and more consumer demand.

On the mobile exclusivity. Look, in terms of what decisions we made. All the various terms go into mixing pot of how we work out a deal and all come out in one way or another. And so, it's hard to say why we did one thing on one particular slice of the business and another thing on another particular slice of the business because they all come with relative tradeoffs.

The publishing property, this kind of premier publishing property, as we've talked about just use less search ads. Some use no search ads,. Some use less search ads. And so, it's not a huge focus of those businesses. It's not a huge portion of those businesses.

And again, on the alternatives, they're display. There is other third parties who provide search ads to -- sorry, there's other third parties who provide mobile ads like Facebook, like Twitter, like Bing, et cetera. Those are all available options and the proprietary option has been working for us on the About side. I think on the apps business, the Google mobile revenue, as I said in the remarks, is negligible.

So, really, the impact on that is going to be primarily within the Ask business. And look, we've -- the Ask business has come down over time for a whole host of reasons. Which we've talked about on our previous calls. And, I think this development doesn't help the Ask business. But, it is a sort of non factor for the rest of those businesses.

Okay. Thanks, Joey. Thanks, Jim.

You're welcome.

Eric Sheridan, UBS.

Thanks for taking the questions. Maybe one on the Vimeo. One on HomeAdvisor. On Vimeo, how should we be thinking longer term about the ability for the video on demand versus subscription to trend longer term? And, how you think about the revenue mix?

And then, on the HomeAdvisor piece. How should we think about capital allocation in that business longer term against com -- potential competition from larger players versus existing competition from smaller players? Thanks.

On Vimeo. The business today is substantially weighted towards subscription. But, the VOD business is growing much faster and growing very nicely. It's still small, but it's growing very nicely.

So, if I look out many years, I see VOD being a -- and, whether it's transactional VOD or subscription VOD, I see VOD being a huge portion of that business if we're doing things right over time. I'd say a massive market, and, I think, given our structure, we ought to be able to take a piece of that.

On HomeAdvisor on the competitive market. It is most -- we like where we stand right now in Home Advisor. We like where -- we like our growth. We like our product. We like our consumer satisfaction, which is going up nicely. We like our service provider satisfaction, which is going up very nicely. We like the place we're in. We like the product that we're delivering and it's a hard hard category.

We've been at it for 11 years just under our ownership. We've been at it for 11 years and through a lot of changes. And, it takes a long time to build up the service provider network. And, that ends up being a real moat to the business. Because, like I said before, it allows you to satisfy more consumers. It allows you to do more marketing.

And, it allows you to, in any given transaction between a consumer and a service provider, make the best match. Meaning, when there's competition among the service providers for the consumer, you can deliver the highest quality service professional to the consumer and make the best match. So, that's a real network effect. And, we're finally, again 11 years into it, starting to see the benefit of that.

There's a lot of people who seem to think this is easy and we're watching everybody who's come into. A lot of companies have raised money recently. A lot of established players have come into the market. And, we haven't seen a model, when we looked at them; and we look at all of them, we haven't seen a model where we said, holy cow, these guys have got it. They've figured it out. A lot of them are going after it. And, in fact, the same way we've gone after it. Just, 10 years ago. And so, we like the place we stand competitively.

If we look at some of the big players. I think I talked about this a little bit last call. Guys who are focused on high volume, low margin, as it relates to service professionals. That doesn't work for quality service professionals and that doesn't work for quality work. So, again, they're formidable competitors, but, it is -- you've got to have a real custom energy here. You've got to have a real custom product here and we've built that and we like the way it's working.

Brian Nowak, Morgan Stanley.

Thanks for taking my questions. The -- you mentioned in the prepared remarks, 40% of the app revenue is opt-in. What did that look like a year ago? And, how do you see that phasing over the next couple of years as you manage this shift?

And then, just to go back to your earlier comments. What percentage do you see staying opt-out? And, how did you go about determining that percentage long term? And, I have one more follow-up.

Sure. On -- I don't know off the top of my head where the 40% was a year ago, but was small. And, so that's been continuing to grow and will continue to grow.

In terms of opt-out, looking forward I -- it will be a minority. I don't think it goes to zero, but, it will be a minority. And, I think that, look, part of it is decisions we've made. Part of it is components of the agreement with Google. And, part of it is just the reality of the browsers and the operating systems.

I mean, the browsers and the operating systems are more and more pushing software and extensions to use their native environments and their native environments look much more like opt-in than opt-out. So, independent of everything, that's where the industry is headed. And, that's where we're headed, ahead of it or with it.

So, the short answer is a minority. But, I don't have a precise number for you. And, you had another question, Brian?

Yes. And, just to follow up. Just to go back to an earlier question. Which opt-in apps on the biggest opt-in app revenue drivers at this point? If you could name a few of the apps that are the most successful opt-in?

Yes. Let me get you guys a list on that. I don't have it in front of me. But, the -- you -- look, let's get you guys a list on that.

Dan Kurnos, Benchmark.

Great. Thanks for taking my questions. Joey, first off, I guess this is going to sound funny, given the line of questioning earlier. But, actually, congrats on the Google deal. Given what we know about the marketplace, I think you guys probably got the best possible deal within the current environment. And, frankly, with both Yahoo and Google already pushing for lower take rates on mobile, this was inevitable. And, we've seen Bing and others already make great strides to narrow the RPM gap.

So, just turning back to the mobile piece. Could you talk about any metrics around the user experience you've seen when mitching -- when mixing and matching desktop and mobile solutions? We know the mobile experience and monetization process feels a little different to begin with. But, just wonder what you're seeing there?

And then, we know about posted strong results in the quarter. Just curious if the recent Panda rollback or refresh has been reversing any of the positive SEO trends? I know you talked about the legacy business is continuing to struggle, but have you seen any impact on the content publishing side?

And then, just lastly, long-term thought process on B2B? Obviously, you're doing well in B2C. Even though it was down year to year, it seems like, maybe, it got a little less worse now. Obviously, there are going to be some changes with opt-in and mobile, but we know BlueCore is getting out of the search game. So, just curious about how you feel about continuing to participate in B2B? Thanks.

Sure. On mobile versus desktop monetization we're -- mobile continues to grow nicely and the gap between mobile and desktop continues to narrow. I think it is a -- I think our mobile desktop monetization was up probably 20% or something like that, ballpark, year on year this year. That -- so, that's nice. It's nice to see that gap narrowing. I think that continues to narrow over time.

On SEO, we haven't seen a ton of movement this quarter, neither positive nor negative. I think we've seen, again, a few properties pick up a tiny bit of -- a few properties lost a tiny bit. But, I don't think there's been a big swing in terms of SEO recently. I think that the way this is, just, what you hearing in the marketplace and I think a lot of people just guess here. But, that -- the way that the algorithms work now is it changes happen more constantly over time and to a lesser magnitude.

So, there's not these moments where the whole Internet traffic bridge shifts. Now, I -- that may not be the case. It's just how we've seen it lately and who knows what'll happen going forward. But, that's just what we're seeing at least.

On B2B, your question was, is that -- how's that doing? Look, I think I said it in the remarks, we've -- that business had trouble over the last few years and the changes in our agreements don't make it easier. I think the B2C business is healthy and we're excited about it. I think the B2B business has profit in it and it's okay. But, it's not a -- I'm not going to say that we're solved there because I don't think we're totally solved there.

Victor Anthony, Axiom Capital.

Yes. Sure. Thanks. Just got a piggyback question on Vimeo. It's a nicely growing asset. I think there's a lot of optionality, I think, ahead for that business going forward. So, how should we think about the level of investment needed to continue to grow that business?

And second, just, in the post Match world for IAC. Now, how should we think about you guys? Is this still more of the same? And, each bit of assets capital return? Or, are there any opportunities for you to, at least, pick up more growthy assets in the market today?

I'll answer the second one first. And then, maybe, go to Jeff on the first one, which I think was the -- growth investment in Vimeo. I couldn't totally hear.

Yes.

The -- what -- thing about IAC in a post Match world is, we've got, I think four big bets. We'll have a pile of cash and we'll keep doing what we've always done. You look at IAC, we talked about this a little bit. I think there's, once Match goes public, I think there will be eight independent public companies out of what was IAC eight years ago. Which is a tremendous accomplishment and something that we haven't really celebrated ever but, is very much in our DNA.

Most companies when they have a business like Match and, or, businesses like we've had in the past, which are leaders in their categories and doing very well. You -- they hold onto those businesses. Our philosophy has been, when you get those businesses and when they reach that level of scale and when they have that sort of independence, that we give them their own currency and set them off on their own. And, because we think that's generally best for shareholders.

Now, the timing of that is something that's always complicated. But, that's generally our philosophy in building, assembling, growing, nurturing these businesses. And, I think we've got a bunch of bets within IAC that have the potential to be the next one. And, we absolutely will make more bets over time. Both supplementing our existing businesses and finding new businesses. I think we're very active in the market looking at things and we'll continue to be forever.

And, we look at those -- the four big bets in IAC right now. We've got Home Advisor. We've got Vimeo. We've got the publishing businesses. And, we've got the applications businesses. And, all of them have a good standalone trajectory. All of them have the opportunity to use more capital efficiently. And, we like their -- we like the future on each one.

So, I'm pretty excited about a post Match world in terms of what we are in IAC. And, I'll turn it back to Jeff on the Vimeo question

Yes, and if I could just ask you to repeat it because I didn't pick up all of it when you first said it.

Yes, I was just curious about the level of investment that you foresee in Vimeo. It seems to be -- it's a unique asset I think. Fast-growing.

Well, we --

Looks like there's opportunity to really grow it quite substantially over the next several years. So, what sort of level of investment should we think about for that business?

Look, I think we've invested in it very significantly. It's a big piece of the media investment line that you see this year. I think we think that that level of investment will come down somewhat next year. And, that when you look at media and e-commerce on a combined level, you'll actually see some profit there next year. But, we expect to continue invest in media.

I mean, I think there's two key areas. One is very profitable lifetime marketing where we have incredible retention rates in that business. And, we are able to market to creators who, in turn bring viewers and also, in turn, upload content that feeds into our whole viewing ecosystem, both free and paid.

And then, I think secondly, we have strategically and selectively made some investments in content to also help build the ecosystem. And I think we continue to plan to do that. And, I think, look, our revenues are going to grow and that'll naturally reduce the overall investment in the business as we make more money. But, I think we fully expect to continue to invest.

Thank you.

And, it appears that we have no further questions at this time.

Thanks, everyone.

Thanks very much.

This does conclude today's teleconference. You may now disconnect. Thank you and have a great day.