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IAC/InterActiveCorp Message Board

  • Getting away from the specifics here, let it be known that the VIX(volatility index), has settled in at 20 for a long time now. That is known to correlate with downturns in the past. Shortly, the market may begin its long awaited correction that should last until the VIX climbs to 40 at least.
    IACI correlates fairly close to the market. Then, you can blame its weakness on the market.

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    • dry, you have no clue what you're talking about and you don't listen. Jeff continues to teach you lessons that you refuse to learn. Regardless of whether you are short or long, can't you see that the guy is taking time to teach you some particulars about this business? He's teaching you about growing the top line. When you can grow the top line, the bottom line can rocket. But you can also grow the bottom line by reducing total costs or by diluting your fixed costs by moving more unit sales through them. Ask yourself these questions.....Where are Expedia phone rooms located and who operates them? Where are ROOM phone rooms and who runs them? What about Ticketmaster? How bout EPI? What about HSN? Who is PRC and how might they fit it? Diller gave you a hint to this on the conf call. The piece of the puzzle are in front of you. Can you put them together?

    • << A $100 purchase from Amazon is booked at $100 of revenue. A $100 purchase on EBay is booked as only about $7-10 in revenue. A $100 purchase on EXPE is booked by EXPE as just $10-$15 in revenue. And to make matters even more complicated -- a $100 purchase on ROOM is booked as $100 in revenue, and a $100 purchase on Ticketmaster is booked (I think) as just service fee revenue, or roughly $5-9.

      This "gross versus net" way of recognizing revenues really complicates the math a lot. Given that EXPE handles over $2 billion of travel purchases every single QUARTER, yet "only" reocgnizes $247.5 million in net revenue to their top-line, IACI could actually multiply their EXPE revenue by 10-fold with a simple decision to start recognizing EXPE revenue on a gross basis. (Which they already do for ROOM, as PCLN does, and which has also been blessed by the SEC, but which I would argue is less conservative than the way EXPE does it.)>>

      You are the one who has misinterpreted and complicated everything for everyone. I can't believe that you are so naive or expect others to be so naive as to swallow that such disparities can exist.
      Don't you realize that companies have independent auditors to oversee and be accountable for such matters? Obviously, AMZN and ROOM are not going to get away with such an advantage. They simply deduct the difference as an expense item and it equals out. And EXPE is not being any more conservative than the others.
      You are fixated on top line items to put your spin on everything.
      BTW, you also misinterpreted, purposely or otherwise, my analysis showing that IACI has a forward P/E of 96 instead of 46. It is based on THEIR numbers which they again didn't take out to the bottom line. I simply did it for them.

    • your logic is right on. I have alot of executive level experience as CEO and officer etc, and kno wthe services business well. The room method of gross revenues is flawed IMO.
      "Net Gross Revenues" is a mandatory method IMO. This is the only way to determine "a true profitablity" transaction. After your cost of goods/services computation, the rest is SG&A. And that is where the boogie men hang out. A wayward CEO can easily destroy a company by slashing service levels (SG&A) and other vital expenses needed to maintain quality service and response levels.

      measuring a services business on profitablity alone is stupid. Promise.

    • >> tcpdog, rapid growth is over.


      A few facts:

      1) The travel industry is literally trillions of dollars large, on a worldwide basis. For the US alone, it is $600 billion, according to the US Travel Industry Association.

      2) EXPE's bookings of $8 billion annually represent around 1.3% of the US total, and probably more like one half of one percent at most on a worldwide basis.

      3) EXPE, ROOM and IACI as a whole are expanding worldwide. Internet adoption in the US is far ahead of many other countries, but Western Europe and Australia/Asia are coming on very strong.

      4) The rate of people moving their travel purchases and event ticket purchases and home financing activity online is growing more than 50% year over year. Demographics and technology trends (e.g., spreading broadband) are wind at the back of these trends.

      For these and other reasons, it is very unlikely that "growth is over". In fact, with only 5-10% of travel being booked online, and 5%-10% of home financing being secured online, and Ticketmaster expansion in Europe and elsewhere, I think it's a lot more likely to double than it is to stay flat.

    • phdry, you write:

      >> You are the one who has misinterpreted and complicated everything for everyone. I can't believe that you are so naive or expect others to be so naive as to swallow that such disparities can exist.
      Don't you realize that companies have independent auditors to oversee and be accountable for such matters? Obviously, AMZN and ROOM are not going to get away with such an advantage. They simply deduct the difference as an expense item and it equals out. And EXPE is not being any more conservative than the others.
      You are fixated on top line items to put your spin on everything.
      BTW, you also misinterpreted, purposely or otherwise, my analysis showing that IACI has a forward P/E of 96 instead of 46. It is based on THEIR numbers which they again didn't take out to the bottom line. I simply did it for them. <<


      Let me share a few facts:

      1) ROOM and EXPE have long disclosed the way they recognize revenues. It is in the "revenue recognition section".

      2) ROOM recognizes revenue on a gross basis. PCLN recognizes revenue on a gross basis. AMZN recognizes revenue on a gross basis. Wal-Mart recognizes revenue on a gross basis. Home Depot, Starbucks, Lowe's, and nearly all other retailers recognize revenues on a gross basis. Ebay recognizes revenue on a NET basis. EXPE recognizes revenue on a NET basis. Many "market-making" inntermediaries recognize revenue on a NET basis.

      3) IACI invited the SEC in to comment on the way that ROOM and EXPE recognized revenues. The SEC didn't ask IACI, IACI asked the SEC.

      4) After a two month examination, the SEC blessed the way that EXPE and ROOM recognize revenues.

      5) IACI announced all of the above.

      6) Explaning the way revenues are recognized is not obfuscating it or misrepresenting it. It is explaning it.

      7) Annualizing a quarterly earnings to derive a P/E means you are talking about an ANNUALIZED P/E. A "forward" P/E is generally interpreted as a P/E on forward-earnings estimates. Only if you assume that forward-earnings grow by 0% (i.e., don't grow at all) are annualized P/E's = forward P/E's.

      Cheers

    • Well, Jeff, you'd be surprised to find out that in Europe the rate of growth in online retail (not just travel) is much slower than you're led to believe. There is very strong offline competition, for one thing. There is much less obsession with technology and privacy than in the US where everyone is so paranoid that their neighbour may find out what they're doing. Finally, people would generally much rather go down a nice boulevard to one of ten agencies and get an excellent deal than spend an hour online searching and wondering.

      Also, in the US people are growingly becoming more savvy about finding out great deals elsewhere. THey're not particularly attached to EXPE. I am talking from my own experience, I've often found better deals from Travelocity or other competitors, although on occasion I've booked with EXPE (and paid the extra money just out of lazyness).

      Cyclical trends are no guarantee of further growth. Furthermore, the capitalization of this conglomerate is already very rich with expectations such as you describe. At best, you will find stability at somewhat lower levels. At worst, it'll much worse than you care to consider.

    • Yet EXPE's International revenues are tripling year over year...

      Go figure.

    • Padded numbers. Go buy some more, it's very cheap indeed!

    • >> Padded numbers.

      Evidence, please?

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