Tom McInerney - CFO Doug Lebda - President and COO Barry Diller - Chairman and CEO

Mark Mahaney - Citigroup Anthony Noto - Goldman Sachs Justin Post - Merrill Lynch Doug Anmuth - Lehman Brothers Heath Terry - Credit Suisse Jeetil Patel - Deutsche Bank Securities Michael Millman - Soleil Securities Imran Khan - JP Morgan Robert Peck - Bear Stearns Paul Keung - CIBC World Markets Safa Rashtchy - Piper Jaffray Scott Kessler - Standard and Poor’s Scott Schiffman - Lehman Brothers

Good morning, ladies and gentlemen and welcome to the InterActiveCorp third quarter earnings conference call. (Operator Instructions) I would now like to turn the conference over to Tom McInerney, Executive Vice President and Chief Financial Officer. Sir, please go ahead.

Thank you and good morning. Joining me on this call is Doug Lebda, President and COO and Barry Diller, Chairman and CEO. As you know, we may, during this call, discuss our outlook for future performance. These forward-looking statements typically are preceded by words such as we expect, we predict, we anticipate or similar statements. Also you are aware that there are risks and uncertainties associated with these forward-looking statements and our results could be materially different from the views expressed today. Some of these risks have been set forth in our earnings release filed earlier today with the SEC and our other publicly filed reports. We will also discuss certain non-GAAP measures and I refer you to our press release and the Investor Relations section of our Web site for all comparable GAAP measures and full reconciliations. I will highlight a few items in our financial results before turning it over to Doug and Barry. Rather than bore you by reading off the results from page 1 of our earnings release, let me jump right into a discussion of some additional numerics and a few observations. Excluding the results of IAC Search & Media, which we owned for a only portion of the year-ago period, and excluding transaction expenses related to the spin-off, each of which expanded our corporate and other losses in the year-ago period, Q3 revenue increased 8%; operating income before amortization grew by 4%; and operating income excluding a $67 million non-cash comp charge in Q3 2005 relating to the spin-off of Expedia, increased 20%. For the nine months ended September 30th, free cash flow was $310 million, up $90 million from the year ago period due primarily to higher operating income and non-cash expenses. Turning now to the operating results and starting first in retailing, which as you know has faced some challenges thus far in 2006, retailing results reflect the inclusion of Shoebuy acquired in February of this year; single-digit growth from catalogs; and flat sales at HSN. New leadership has been in placed for five months and while still in early days, signs of renewed energy and focus necessary to run the daily operations of the 24 hour TV Shopping Network are evident. Flat sales at HSN during the quarter cannot be classified as good in a 30-year-old business where history indicates that mid to high single-digit top line growth rates are achievable. That said, Q3 was marginally better than Q2 and we would hope to continue to see tangible evidence and improvement as we go. While looking for modest top line growth at HSN in Q4, it will be a challenging quarter on a year-to-year earnings basis for a few specific reasons: we saw lower operating expenses in variable costs in the fourth quarter a year ago that we do not expect to benefit from again; and we are seeing higher year-over-year program distribution costs. Thus, even if we achieve modest top line growth at HSN in Q4, we expect margin contraction in the quarter and profits to be down. While this may be partially offset by anticipated profit growth in our catalog business, we expect domestic retailing profits to be down at a high single-digit percentage rate. Turning now to our ticketing business, a balanced contribution from increases both in the average revenue per ticket and ticket sales led to continued worldwide revenue and profit growth. Looking forward, we have always said that predicting growth in this business is a challenge. However, in the fourth quarter we think we will have a tough comp given the strength of the year-ago period. Q4 2005 results included strong playoff success from our MLB clients, the return of the NHL, the Commonwealth Games in Australia and a strong contribution from other international operations. We currently anticipate mid-single digit revenue growth with approximately flat margins compared to the year-ago period. But to be clear, the fundamental growth drivers of ticketing have not changed. We have said consistently that growth can jump around quarter-to-quarter and this is indicative of that, but we feel very good about our prospects here. In lending, we continue to operate in an environment significantly less attractive from mortgage refinancing and home purchases in the prior year period. Close-rates across all home loan products, especially refinance, were lower in Q3, leading to year-over-year revenue declines. As you know, we have cut planned marketing expenditures in this business to strike the correct balance between gaining share and improving margins in the back half of the year. Although we did come in a little shy of our hopes on the revenue side in Q3, it cost us 4% less to acquire a new customer versus last year and 11% less versus Q2, leading to a 400 basis point increase in sequential margins. The fourth quarter in lending is an easier comp, and we look to grow profits again in Q4. Now let me spend just a moment on a business we don’t often speak about. Service Magic, reported as home services in our release, has a scalable business model matching over 200,000 consumer service requests per month with a network of over 40,000 prescreened service providers and has really begun to gain traction. Q3 revenue and profit growth were 51% and 71% respectively. As you look at Q4, it’s worth highlighting that as with lending, we have historically seen some seasonality in this business, as home owners turn their attention to the holiday season and away from repair and remodeling, so sequential results may reflect this; but, this business is starting to be a real contributor to our overall results. Now let me speak to our Media and Advertising sector, where the effects of our efforts to differentiate Ask.com and grow share are early but promising. On a pro forma basis, IAC Search and Media grew revenue by 34%, encouraging when you take into account that for one-third of the quarter Ask.com was comping against a higher paid link monetization format. Looking deeper into the numbers, Ask.com continues to grow queries at a rapid pace in the U.S. and declines at Ask in the UK while still disappointing, are showing signs of lessening. Our syndicated search and Fun Web products businesses both exhibited strong query and revenue per query growth with the latter business benefiting significantly from the highly successful launch of our Zwinky product, a personalized avatar which can be used for chat, social networking and other places on the web and desktop. This latest innovation, which added 1 million registered users during the quarter, accounted for over half of the new downloads in the quarter and is just one of many examples of the business’ ability to create products that resonate with its audience. In Membership and Subscriptions sector, results at our vacation and personals business continue to benefit from growth in worldwide membership, that both seek to expand our global footprint. Match.com continues on its march to being a true global brand and it achieved excellent profit growth, despite significant and innovative marketing efforts in a number of early international markets including the UK, France and Spain. Turning to the balance sheet, we have continued to repurchase our shares from early August when we reported Q2 results and have repurchased an additional 7.3 million shares through October 27 at an average price of $26.44. Year-to-date we have repurchased a total of 34 million shares at an average price of $26.75 at a total cost of $909 million. 8.8 million shares remain in our current authorization, and yesterday our board authorized IAC to repurchase up to an additional 60 million shares of common stock. While obviously we will determine in our usual manner if and when this is the most appropriate use of our capital versus other alternatives. We finished the quarter with cash and securities of $1.9 billion and pro forma net cash and securities of $1 billion, so our balance sheet remains very strong. With that, Doug will make some remarks.

Thanks, Tom. I would like to expand on the results you have heard about. To sum up, our overall performance reflects continued progress and momentum in several businesses, particularly search and media, both Ask and consumer applications, ticketing and personals. Strong performance from home services and vacations, and two businesses where we are still working through challenges: lending and retailing. The challenges aren’t simple to solve but there is clearly some very solid work going on and we are making progress. In retailing, Mindy Grossman and her team are in place. They are improving execution and discipline across the operation, including how sharply we define our brand and target audience, how that brand articulation is carried through to the products we buy, how those products are sold on air and then backed up by more seamless and high quality operations. After months of review, Mindy and team have key operating priorities for Q4 and 2007, including: bringing in new people, particularly in merchandising and planning. Already four out of the seven merchandising heads have changed and we have a new head of planning as well. As late as last week, we transferred in the new head of our dotcom business, who previously ran our very successful startup, Gifts.com. Processes are being totally revamped to ensure product depth, quality and selling at the right price points. Second, we decreased our reliance on core vendors and dramatically increased the number of new, better and more current brands that we carry. You will see those effects throughout 2007, as we launch these new brands. Third, we’ve launched a company-wide quality initiative. We are looking with fresh eyes are many processes inside the company, and holding ourselves to much higher standards. We intend to have higher quality products, fewer product defects, better streamlining of how products get on air, when products get ordered and how we predict order quantity. Lastly, we are deploying video and new technologies both on dotcom and on television. We are starting to see early adoption of video on demand in our test markets, and online our video capabilities have been dramatically improved. All of the on-air shows are now archived on the web. Many are pushed to video sites across the Internet, and increasingly our web experience will be much more interactive than it is today. It’s clearly early days here and the overall effects of these initiatives will take time to manifest themselves in operating results, but early indications are good. In lending and real estate, we are obviously fighting a well-known macro environment. The mortgage market is down 29% in Q3 versus last year according to the Mortgage Bankers Association, with a 43% decline in refinance. In the face of these headwinds, the team at LendingTree has put in place a number of initiatives that are gaining traction. These include continued focus on the purchased mortgage business. At LendingTree Loans, the number of purchased, dedicated loan officers has doubled year-over-year. Purchased closings at LendingTree Loans are up 39% year-over-year in a market that’s down 14%. While we clearly need more progress, including new initiatives to step change the success of purchased mortgages, both on the network and at LendingTree Loans. We have made very solid success in online marketing. A year ago, LendingTree was encountering new competition who were frankly better at online marketing than we were. We put in better technology, and better people and gave this important area significant focus. One year later we are beginning to see the fruit of that hard work. In spite of seeing costs of online media rising dramatically in 2006 and conversion rates – and thus revenue – falling, online advertising partners, where we couldn’t advertise profitably a year ago are now making money. In addition, Get Smart, our lending brand geared towards consumers who want a shorter qualification form, improved its cost of customer acquisition by over 30% year-over-year. This is translating into online share growth. Through internal tracking and third-party data, we track consumer leads generated through LendingTree and all of our competition. A year ago, LendingTree and Get Smart combined to generate about 39% of all of the online qualification forms, and that number is now north of 45%. Lastly, we are continuing to innovate in our forms and on our website. The TOF has been streamlined, that is the qualification form, through a continuous program of testing and experimentation that has yielded great results. For example, one recent change in the refinance form yielded a 15% improvement in that form’s conversion rate. Additionally, LendingTree has now launched an integrated short form business, which is generating incremental loan requests every month, and hopefully will be a significant driver to contribution profitability next year. Obviously, we wish the picture were better at LendingTree, but we firmly believe we are growing share, doing better than most players in the mortgage market, and grew profit margins sequentially by vigorously managing our discretionary spending. Offsetting year-over-year OIBDA declines in these more challenging business was another strong quarter of ticketing. The event pipeline was seasonally healthy, with popular events domestically as well as MLB. We also did very well internationally, particularly in Canada, Australia, and the United Kingdom. Contributions from the acquisition of TicTacTicket in Spain will add presence in one of the top markets in Europe. We just announced our JV with local partners in China to serve as the exclusive supplier of the 2008 Beijing Olympic Games, which provides us with a foundation for ticketing operations in China. Innovation in ticketing continues. We have made steady progress with initiatives in the secondary market. The Sports Ticket Exchange business added five teams, and we expect more. This past concert season, we are seeing real traction with our auction product. This quarter saw a 100% increase in the number of auctions and 187% increase year-to-date. At Ask, we are definitively taking share. Ask.com share was over 2.4% in September, up from 2.18% last year. Query growth for the quarter was equally strong, up about 30%. According to ComScore, Ask traffic was up 46% in September compared to September 2005, second only to Google in terms of growth. And, we now lead AOL in search rankings for IAC Search and Media. Innovation will continue across the search and media businesses. At Ask.com, we fundamentally believe that we have a great search product, and future releases will be even better. We recently launched Ask Mobile, where you can locate what you need on any web-enabled phone with a few key strokes, with faster page loads and better navigation. In our consumer applications group, our Fun Web products, which include smilies, continue to grow dramatically. Fun Web products toolbars were downloaded almost 13 million times this quarter, up from 10 million last year. City Search 2 has rolled out innovations, recently launching Send to Phone which text messages merchants contact information to the consumer cell phone, and adding CS 411 to perform searches using text messaging. And we are investing to expand the merchant base, by aggressively growing the City Search sales force, and launching a self-enrolment program to make it even easier for merchants to sign up and receive leads. In personals, we’ve had yet another strong performance due to very healthy growth in Match.com’s domestic and international business. Domestically, the partnership with Dr. Phil has been helpful in distinguishing the site from the rest of the pack, and driving new users. Internationally, Match is now present in 33 countries and offering services in 15 languages, making this a truly global business. I would like to close with an update on what is happening with some of our cross-company initiatives. We’ve had six different cross-company best practice sessions in the largest and most fertile areas of commonality in our businesses, including online marketing, offline marketing, strategy and business development, and technology, among others. As a result of these, we have now launched new products and new projects in each discipline. We are beginning to change the way we deal with the major portals and search engines as well. Instead of each business dealing solely independently, we are beginning to coordinate across the businesses. Starting this fall, we will have people from each business come together and meet senior executives and product reps from Google, Yahoo and MSN. These meetings will be the first step in making sure we have the proper attention and care from these partners and that we are seen as one combined IAC advertiser, not a dozen smaller ones. We have created virtual forums on our corporate Internet, and dedicated them to the key disciplines such as marketing and technology. Now employees from one IAC business can easily connect with their peers in another IAC business, in order to exchange ideas, collaborate on projects, or help each other with recruiting. We have put in place an SEO program, and report card, with action plans and metrics to measure search engine optimization performance, and return on investment. Perhaps most importantly, we have made a commitment to a common way of measuring customer satisfaction across our businesses, by integrating the Net Promoter score program into all of the IAC websites by early next year. For those of you who don’t know Net Promoter, this score is a simple way of measuring customer satisfaction by asking one question about a consumer’s likelihood to recommend your service. We think this common measure, along with persistent follow-up, will enable us to improve how we are viewed by our customers across our various businesses. As you can see, the work at our businesses is progressing, and the results from our efforts to transform IAC into an integrated conglomerate are showing early traction, with the hope and belief there is a lot more to come. We fundamentally believe that our focused execution and discipline in these areas is well placed, and will bear fruit in the short term, and even more so in greater earnings growth and ever more delighted customers in the quarters and years to come. With that, I will turn it over to Barry.

Good morning, all. I believe more and more that these minutely scrubbed and prepared remarks have really severe limitations. While they do give you a lot of useful detail into our results, they just don’t allow for talking about the fundamentals of our business model, and where we think that they are going to go in the future. The truth is, that given the time constraints they are not much of a forum for any real strategic discussion. So, this morning all I am going to do this time is tell you that we are going to have a conference call in December to talk about our businesses, their trends and hopes for the years ahead, without trying to squeeze all of that in during the earnings season. You know our feelings that formal guidance is a poor practice, and we are not about to change that. But we do want to tell you everything we can about our ambitions both in the near and in the long term. Before we get to questions, one of my colleagues said that I should wish everyone Happy Halloween. It’s unfortunate that you can’t see us, because we’re all in costume, which at least we enjoy. So now to questions.

(Operator Instructions) Your first question comes from Mark Mahaney – Citigroup. Mark Mahaney – Citigroup: Great, thank you. Two quick questions. First, can you talk about the strategy for international retail? And to what extent lessons that you gain as you work through the U.S. turnaround can be applied there? Secondly, to what extent do you have to be concerned about challenges to the personals business from the rise of the social networking sites? It is clearly not showing up in your numbers, you have acceleration in personal subs, but at some point do you have to change the product experience or do you have to make any adjustments for that? Or is that a non-issue? Thank you very much.

Mark, on international retail, you said it well which is we clearly need to do a better job of taking our learnings from our new leadership team at HSN and exporting that overseas. That is a second priority to focusing on getting HSN U.S. growing again, as we’ve constantly alluded to. This year we’ve had a number in Germany, which is really the HSN International business, we’ve had a number of operating distractions and disruptions; some market-related and some by our own hand, moving to a new fulfillment center which we’ve mentioned before. On this size of business, which I still call small in the retailing world, that type of thing can be highly distracting and it flows back into your merchandising operations and everything else. We think that particular problem is behind us. We’ve had to solidify certain distribution arrangements. We think we are well through, or most of the way through that and we think we are now in a position where we can refocus the entire management team on the core television retailing disciplines, which are merchandising, marketing and selling on air. It is absolutely the plan to do a better job of knowledge transfer across border, which we have not historically done. Again, I think that will be a second priority to the HSN U.S. focus.

On Match, certainly I don’t think the people that are on social network sites aren’t flirting, and interested in flirt, chat, all the things that used to be done on the telephone. But I don’t think that as carefully as we’ve looked at this, I don’t believe that it is dead serious. But people who register and join Match.com are doing so because they really either don’t want to waste time, don’t want to go out and stare across the room and not get enough stares back; they want tools and help and a huge database of people who are registered and who subscribe. I think it is a different practice. I think that certainly there will be more and more – there are, obviously. But what is a better definition of a social network site than Match.com? I don’t think that one leads into the other. I don’t think that the models will change. Not that I can see.

Your next question comes from Anthony Noto - Goldman Sachs. Anthony Noto - Goldman Sachs: Thank you. A couple of questions. Barry and Tom, as you look at the percentage of your revenue that is from Internet revenue within retailing, it has leveled out over the last several quarters at 26% of revenues and it has decelerated to about 16% year-over-year growth. I was wondering if you could comment specifically on what initiatives you can implement there to accelerate that growth and at least get it back above where U.S. ecommerce growth stands today? Then as it relates to the Cornerstone business, do you think you have been able to, in any way, leverage increased distribution through new channels such as the Internet and television? If you could comment on what percentage of Cornerstone sales were from TV or from the Internet? Thank you.

Anthony, on the first thing, I think what you are seeing there in terms of this flattening out is in part due to mix effects. Because of Cornerstone growth relative to HSN growth, that has changed some of it, as well as some seasonality things. We are seeing, when you pull apart the numbers, we are seeing Internet growth at both HSN and in the Cornerstone properties. So the Cornerstone properties are over 40%, HSN now is over 20% and each of that is growing consistently. I think it is probably fair to say at a slower rate, at least at HSN, than it has historically. There are a number of new initiatives, I will rattle off a couple and then Doug can jump in, in terms of driving that. On HSN, it is really trying to drive this integrated video experience, so we are now capturing automatically in real time all of the live programming into HSN.com, so if you miss a show on television you can go back and look at it on HSN.com. This is one baby step in a long series of steps that will allow our customers to break down that linearity model. Where you are watching on TV and you are stuck on what we are presenting, as opposed to what you may want. So that is just beginning. I think we will look to completely revamp the site next year with a lot more video integration. As it relates to Cornerstone, they are only really starting to think of their business as an Internet business. It has really been thought of as a catalog business notwithstanding the high Internet penetration. So they are doing what I call pretty basic blocking and tackling steps in terms of SEM and SEO and things like that and really trying to leverage off of IAC as well as HSN’s experience. So I think there is plenty of opportunity. I think those numbers will continue to rise quickly.

It’s going to grow; there is no way it can’t grow, the Internet part of Cornerstone. There is some internet penetration of Cornerstone that was pretty high Garnet Hill, so all of you who want great products go to Garnet Hill. Honestly, I mean God knows, it could be said I am not a low-end shopper, but Cornerstone’s Garnet Hill has products that I don’t think have a peer in terms of cashmeres and blankets and things like that. So that is my little commercial. We should make some money out of this deal. Garnet Hill got 54% Internet penetration which is pretty good. But it is clear you get more broadband without any question, you are going to get higher and higher percentages of the catalogue business moving over the Internet. In the last months or so we’ve really begun to pass the Internet and I think given them a lot of help with getting it right. Anthony Noto - Goldman Sachs: You had mentioned that you made a change there in who is running that business and I didn’t know if it was Frank that was moved out of that business. Could you clarify?

On HSN.com? Yes. We took William Lynch who was running Gifts.com, who really started it for us and did just a great job. I mean what are we at on Gifts?

We don’t break it out, really. It’s a mid single-digit million, depending on Q4, which will be a big year. It’s multiple millions of revenue this year just a shade under breakeven. It really should be breakeven on run rate basis.

Literally a year-and-a-half in business. That’s pretty good and it’s got pretty good traffic. Anyway, we took Mr. Lynch and we put him in charge of HSN.com because we really want the same kind of supercharged atmosphere at HSN.com that he’s been able to give us at Gifts.com.

I think just a couple of things. One is as Tom mentioned, a major site redesign next year, we will really try to bring a lot of the features that are innovative and the consumers want to the forefront, make them easier to find in addition to just making it easier to navigate. This is a site that is still in the early days of SEO and SEM and there will be lots more of that. Also, changing the merchandising focus of HSN.com and making sure that our buyers know that when you are on HSN.com that you need to show a wide assortment of products, not just a couple examples. So we are expanding our product depth on HSN and also integrating it within the other IAC businesses, for example Shoe Buy, and bringing all of that product to bear on HSN.com. Anthony Noto - Goldman Sachs: Great thank you.

By the way, Shoe Buy, this little business we bought, that is just a stellar operation. It is a virtual – it has virtual inventory, it carries zero inventory against its competitors, and it is a little jewel for us. Anything else? Anthony Noto - Goldman Sachs: I guess since you prompted me, I would just ask one question on ticketing. It is almost 50% of your absolutely growth in EBITA today. As we look into 2007 and 2008, do you think you can sustain this high single-digit revenue per ticket growth, especially as your renegotiations with Live Nation hit by the end of ’07? Thanks.

Anthony, there has been a multi-prong driver of growth, and if you go back you can go back probably five, six, seven years and Ticketmaster has consistently grown at rates faster than the underlying market. It comes from multiple levers, even on a volume basis, including net picking up clients. While it has a lot of clients, there are always more to get. Adding new services that are now starting to kick in in terms of volume, things in the aftermarket, things in auction, et cetera. International has been a big piece of the story and we are really firing on all cylinders, growing those international businesses as we move into new markets. In addition to the one that Doug mentioned, we are actually announcing yesterday or today, the acquisition of a property in Turkey, so it is another new country we are moving into. So we are very bullish on Ticketmaster’s growth opportunities, even on a volume basis, notwithstanding the fact that some of the underlying markets might be at lower rates than what they have been able to do.

Your next question comes from Justin Post - Merrill Lynch. Justin Post - Merrill Lynch: Thank you. Can you talk about Ask’s proprietary growth versus network growth, why is network outperforming so much? And then if we do the math, you said queries are up I believe 30%, we have got to assume that the monetization is improving as you work with Google. What is the sustainable growth rate for proprietary going forward?

Let me hit the first part of that and then let Tom pick up on the numbers. First off on the network that is really driven, these two things are related but also very independent: the network growth is driven by great products and consumer applications and portals. That business will grow share largely independently based on how great their products are. They’ve got great products in Smilies, they’ve launched a great new product in Zwinky, and they innovate like crazy and launch new products all the time. Proprietary is obviously direct domain Ask.com and that is based on consumers hearing about Ask, either through TV advertising or online and coming to Ask.com, purely direct domain. A big driver of that is the interrelationship between visitors and frequency and how many times they come; and retention, that we actually retain them month-over-month.

In addition to some of the strong performance we have seen in our syndication businesses is as we have referenced a couple of times, the UK, AskUK, which is a proprietary business has declined and continues to decline including this quarter. So while Ask.com U.S. is doing terrifically, the U.K has declined so that is weighting down that proprietary number and that is also related to your question. We mention that query volume growth, that’s really a U.S reference. When you layer on the higher monetization, that gets offset by some of the revenue declines we’ve seen in the international markets. As to sustainability that’s to be seen. Obviously it’s a big market, it is growing quickly and we have a small share and we are firing on all product, marketing and everything else we see as an opportunity to continue to drive that. We expect it to continue, albeit at what rates is to be determined.

Part of the UK, we made a management change some months ago, I don’t know how many months ago. I think we have gotten it back in hand. it is going to take a while, I think, for us to get competitive again, but I think we are on our way there.

Your next question comes from Doug Anmuth - Lehman Brothers. Doug Anmuth - Lehman Brothers: Thank you. I just want to follow-up on the question regarding HSN, specifically talk about the product mix shift. It seems like over the last few years it has moved around quite a bit, and obviously in this quarter going a little bit more towards jewelry and accessories. I was wondering if this is a more fundamental shift that is driven by the new management team? Should we expect this trend to continue going forward? Can you clarify why the reduced on-air distribution at HSN International? Thank you.

I think the answer to the first question is no in the sense of quarter to quarter we are always going to see this mix move around, it has happened for as long as I’ve been involved in the business. I think going forward it will happen. I think within those categories, you mentioned accessories, for example. That is a small business for us, so that could be a secular opportunity where you see consistent growth. But I think at a high level, HSN is competing in a very wide range of classifications, across all hard and soft lines, jewelry, et cetera, electronics. We see opportunity in all of those areas. Within each of those macro areas, we think there is more opportunity and less opportunity in certain cases, but once you get to that macro level of jewelry, home fashion, I don’t think there is going to be any long term, as we see it now, secular changes. It will move around quarter to quarter, depending on what we see and what we anticipate the customer is looking for. Can you repeat the second question? Doug Anmuth - Lehman Brothers: The reduced on-air distribution, international.

Internationally, in Germany the distribution market is really concentrated in three cable companies, unlike the U.S. where we tend to operate under long-term contracts, there it is much more fluid. As that country is going through a digitalization process and needs to free up capacity, they are starting with much lower analog capacity to begin with. As you go through digitalization you have to free up some capacity so you can make that move. In certain locations within the country, certain states, in parts of states we’ve had to work with cable operators to accommodate that move to digital. I think it is a mid single-digit percentage loss, it is something we will have to work through, but I don’t think it is long-term structural.

Your next question comes from Heath Terry - Credit Suisse. Heath Terry - Credit Suisse: I was wondering if you can talk about the Ask integration into the rest of the network. How far along would you say you are with that? Are you at a point where you feel like the heavy lifting in that integration is complete? And if so, to what degree are you seeing the ecosystem building the way you envisioned it when you first bought the company?

Let me touch on that. I think it’s safe to say we are still in the very early days of integrating Ask. It will be integrated in two ways. Clearly, for example, you have got the search boxes on all of the IAC properties and those search boxes are beginning to propagate inside of the search experience. For example inside of CitySearch you can place it in the right place for search queries that makes sense and inside that product. But it’s still small and still early days. We are also working with each of our businesses on toolbar distribution. As our sites want to maintain a presence with their customers with a toolbar that they can download we’ve got those that we are starting to work on. Then you have got the reverse integration, if you will, which is integrating the IAC properties inside of Ask.com. That is beginning, I would say, and we are working on it and we are working with the product teams at Ask. The very good news I would say on all of this is the people inside of IAC are very focused on this and understand that it’s incredibly important and are open to it. So we talk to the people at the businesses and they say, let’s find a way to help Ask grow share and we talk to the people at Ask and they want to integrate within IAC to differentiate their product from others but we are still in the very early days.

Your next question comes from Jeetil Patel - Deutsche Bank Securities. Jeetil Patel - Deutsche Bank Securities: Thank you very much, a couple of questions. I guess relating to the ticketing business but on the question asked earlier, following up on that. As you look over the next several years what kind of mix do you think you will see in terms of an ASP lift from a ticketing standpoint that is pushed along by your partners relative to the commissions that you will be able to capture? I think in this last quarter it was a 5% lift in ASPs and you picked another 5% in commissions, in addition to the volume. Can you give us a sense of what it looks going forward? Second on the ticketing side, can you just remind us where do you think the biggest pricing power lies as you look inside the ticketing side? Is it in the yield management side, systems and infrastructure that you are operating or is it the marketing and distribution side?

The convenience per ticket rate that we have tended to get over the last several years, as you mentioned, low to mid single-digits on a per quarter basis. These are contractually built into our contracts and largely tied to ticket prices. So predicting where ticket prices go across tens of thousands of events over a multi-year period is very difficult. So we don’t build the business and in a sense plan on getting that pricing, although as we figure it today, I don’t think it is necessarily something that we think is going to abate. We don’t see signs of it abating. Every kind of market segment is different, micro segment, every geography is different, et cetera. But in general the trends that we have benefited from, as far as we see it, will continue. But as you say, it is not something we control and it is a function of many kind actions and factors. I think you asked in terms of relative to what we get versus what we keep. We have done a great job building a variety of value-added services for our clients, and you hit on both areas. I think they are both critically important. They are infrastructure in terms of them managing their buildings, managing their season ticket base in the case of sports clients, access control at the arena, and increasingly it is about distribution. We are selling now 13% to 14% this quarter of our ticketing volume was tied to specific products and services that were as a function of all of these new initiatives. That is up consistently each quarter.

It is going to keep going up, there is no question.

That is what gives us pricing power, if you will.

I don’t think we have pricing power, but I think what we do have is we have invested enough in that infrastructure, which we started to do several years ago, that the services that we provide and the fact that we are leading on ticket exchange and that our auctions business which started a couple of years ago and this year is going to be really robust, other than that, obviously we want to continue to help these mature adults that are performing out there, and we hope that they continue to stay sprightly and healthy.

Your next question comes from Michael Millman - Soleil Securities. Michael Millman - Soleil Securities: Thank you. I wanted to look at a different area. Can you talk about your thinking with regard to real estate? Is that something that you can ultimately tap into your sales, or is that business basically to provide leads to the established companies in the industry? Also, where do you go with vacations? Can you integrate that? Is it totally a one-off kind of business for you?

On real estate, we operate in multiple businesses there, so the answer is both. We will have a balanced business that provides leads to agents and brokers, and right now, we have two ways that we make money. Either paid on a closing basis, or paid on a subscription basis for a package of leads. The other business that we have, that we have talked about in the past, is our company-owned brokerage business. We are in, I believe six markets live today, and we’re launching another four over the coming months. That’s going really well, we’ve doubled the number of agents and the transaction volume is doing really well in that business and its starting to become a material contributor. So, it’s going to be mix and it’s going to be a balance, and we’ve got optionality as to which way we go and where those leads go over time. The other thing I would highlight on real estate is a significant new RealEstate.com website redesign. What you are going to see if you went there today, nationwide, is a much more listings-focused, listings-centric website. If you are in Dallas you will see a full range of new tools and integrations with maps and lots of other services around house alerts and linking directly over to a call center to give you support through the process. So that’s live in Dallas, and we are going to be continuing innovate there. Michael Millman - Soleil Securities: Do you have your own office in Dallas?

Today, we are working in Dallas through relationships with our brokers. We are not live there as a company-owned brokerage market, but we are live in six other markets.

I would encourage people to give it a shot in markets like Seattle, Portland, Sault Lake, Denver, et cetera. You go in, you look at listings, anytime you want more information on the house you get linked immediately through an 800 number with a live agent, in the field, who can give you more information, set up an appointment to take you out to see that home, list your home, come for a listing presentation, et cetera. It is higher margin than traditional real estate, because we don’t have a lot of the bricks and mortar, and the commission structure, because we are sending the leads to the agent, is more beneficial than traditional real estate.

This is a long effort for us. This is not overnight, we are not going about it in some crazy, full throttle basis, because it takes time to get the right relationships, to get the right ground brokerage, so we are deploying it as quickly as we think is prudent, but eventually it will be all across the United States. Michael Millman - Soleil Securities: How much of that business do you have on the sell side versus the buy side?

I am not sure of the exact number; I think its roughly split two-thirds on the buy side, one-third on the sell side, but we will get you the exact number.

As far as Interval is concerned, Interval is a standalone business. We do have and hopefully will have the relationships with Expedia in terms of the excess inventory. It has some inter-relationships, but relatively minimal with IAC. It is obviously, I mean this is a business we bought how much? About $500 million. Its return, it is in a sense, a lot. It is the perfect LVO in a sense. I mean, we didn’t borrow money to do it, but –

We did borrow, at the time of the bond offering.

We did a bond offering so you can say we funded it with whatever, but if you look at it on those metrics and it is not a little star, it’s a big star at IAC. The management, Craig Nash and his operation, they are just superb; it is not possible for you to get better. So it stands very nicely alone.

Your next question comes from Imran Khan - JP Morgan. Imran Khan - JP Morgan: A question regarding share buybacks, you bought back 12%, you reduced the share count by 12%, and outstanding share buyback is 23% over your basic share count. Can you give us some color – I know you will not give an exact date or timeframe -- but give us some qualitative color, like at what price you will be more aggressive on the share buyback? Can you give us some sense that the share you bought back since July 27, how much you bought this quarter? Thank you.

My response to you is, we are never going to talk about what price we will pay. We are never – we think it is very unwise, for all of the obvious reasons. We make no announcements, we do nothing, we simply report two things. One, the authorization of a buy back; and two, after the quarter in which we bought we tell you how many shares we bought. Obviously we just made a new authorization, pretty significant, 60 million shares, but when, how, what and who we will only report after it has been completed.

I think if I understood your question it was what did we spend in the quarter. Actually in the financials is a 12 million share reduction; the 7 million share reduction I mentioned was since we have announced Q2, which is a month into Q3. So in Q3, reflected in our cash flows et cetera, is a 12.4 million share buyback at $25.80 for a total of $320 million. Imran Khan - JP Morgan: Tom, I was interested about Q4?

I think Barry answered that one.

Q4 you have to wait. Imran Khan - JP Morgan: Okay. Thanks.

You have to wait. Sorry but there it is. Next question please.

Your next question comes from Robert Peck - Bear Stearns. Robert Peck - Bear Stearns: First of all on Ask, do you talk about what the growth was when you strip out any of the traffic coming from affiliated properties? Could you also touch a little bit on the TAC increase during the quarter and what your view is with the Google relationship going forward? Secondly, Barry maybe could you touch a little bit on capital management for us? Any large acquisitions going forward, if there are any holes in your portfolio, and maybe what do you think the optimal leverage ratio is for you? Lastly I have clients emailing me, they want to know what you are going to be for Halloween.

I am going to be what I am right now, I was really joking, I got no costume. I am costumeless. I do have clothes on, though.

On Ask growth I think the difference between the affiliated sites as you call them and direct domain is what I answered before, where the Ask.com query growth is up about 30% and that is direct domain to Ask. The IAC Search and Media network would be the so-called affiliated sites which would be a combination of portals, our own Fun Web products and some other affiliated sites where we would have a so-called TAC, or we would be paying for distribution.

I think the TAC costs from the cost of syndication have been rising. I mean, that market has just gotten more competitive. The good news is we re finding good syndication opportunities and good revenue and profit growth from that, but it does come at a higher cost. So there is no question that over time, I think as we turn around the UK, hopefully continue the trajectory we are on at Ask.com U.S., I think at some point you will see this mix between proprietary and network shift, which is important to our long-term margin objectives.

As far as capital and IAC, we don’t see any specific holes. We see all sorts of opportunity in many of the businesses we are in for add-ons, for bolt-ons, so to speak. No usually of huge size. I have said in the last several quarters, and the last year, we have deaccentuated, so to speak, M&A or big ticket M&A. Not that if something – not that we are, because we are certainly always alert and looking around, seeing what the opportunities are. But we are not – we have been much more concentrated in the consistency of our operations. As somebody pointed out, this is our eighth straight quarter of consistent earnings. We are much, much more disciplined in that. But it doesn’t mean that we don’t make acquisitions, don’t contemplate making them, and around the corner, who knows what can come. We are certainly ready. We’ve got a good balance sheet to do whatever we want with. As far as leverage is concerned, we have consistently said we are comfortable with 2X. We use our cash, our strong cash flow to bring it back down. So I think that is the most grounded picture. If there is anything specific I can answer you on capital. Robert Peck - Bear Stearns: No, that is good. Thanks.

Your next question comes from Paul Keung - CIBC World Markets. Paul Keung - CIBC World Markets: Good morning. Given that you saw pretty strong revenue and overall growth in media and advertising, I was wondering if you could give some color on monetization trends for us? How much the normalized growth would have been if you adjusted for the demonetization for Ask in Q3 2005 last year. A follow-up question to that was, do you have any plans for monetizing your strong CitySearch website through video advertising?

We have seen good trends on monetization. I think if you scroll back our decision to demonetize the site was premised on we will get higher retention, greater query volume growth, the consumers will like the service, customers will like the service more and at the end of the day, we will use it to drive that volume growth and that will offset any reduced monetization because of fewer paid links. That is exactly what is happening. When we look at our overall revenue per query, it is up strongly in the quarter year over year. So the combined results, which we have talked about a couple of times, reflect the very strong query volume growth at Ask.com, some of our other properties as well, and good revenue per query monetization trends, despite demonetizing the site. So the headline is, it worked well. Your next question was CitySearch and video. On that, what I think we’d say is CitySearch has done a great job getting the business to breakeven, getting it to profitability and now growing it. I would say all things are on the table in terms of continuing to increase traffic and continuing to monetize great leads to advertisers. One of the things, it is not video, but one of the things that they recently started, for example, is a whisper feature in key markets which when consumers call through CitySearch, lets the merchant know the number of calls we are actually sending to the merchant. So all things are on the table, and they are very focused on innovation and will be hopefully as the course progresses, announcing more of those innovations.

Your next question comes from Safa Rashtchy - Piper Jaffray. Safa Rashtchy - Piper Jaffray: Good morning everyone and congratulations. A couple of questions, one again on Ticketmaster, and I know we have talked about it for a while. But could you give us your sense as to the impact of Live Nation, if they were to actually do ticketing on their own? What are your contingencies? I understand the contract is not up for a while, but it appears that they are pretty serious about doing something on their own. And if you see this trend among others? Second, if you could talk and give us your thoughts about video content I understand you will invest in Brightcove, which is a very innovative new product. Are you planning to get into either video content distribution or other types of video advertising, perhaps, in some way in the future? Give us -- are you set up [inaudible]? Thank you. Hello?

Management, we cannot hear you.

Sorry, I was on mute. I have already answered your question. Safa Rashtchy - Piper Jaffray: That was a good one.

I hope you enjoyed it. TicketMaster has 2.5 years left to go in its agreement with Live Nation. We have been in discussions with them about renewing it, somewhat intensified lately. I cannot tell you whether or not we will or not. We hope that we will. We think that we provide good service. We think they think that we provide good service, but you know, it is in negotiation and people make statements about negotiating positions, which is totally understandable, but I am not going to make one. As far as video -- is there anything further that my colleagues want to add anything further on TicketMaster, other than -- nothing? Good. Okay. As far as video is concerned, yes, without question. Brightcove, which is a really good product, a series of products, tools and products, will be -- certainly Brightcove will be a consumer site sometime over the next year or two. I think it will very clearly develop into -- in addition to being the best tools, I think it is going to be a consumer thing. As far as IAC is concerned, there is not question. We will, in as many areas as we can, of course we are going to play in video. As you know, HSN is already, so to speak, digital video, and that symbiosis is just going to get richer and richer as broadband continues, but as far as Ask is concerned, Ask will be in video. It is not like we are going to make multiple hundred-million dollar or billion-dollar plus acquisitions in video. We are going to follow our disciplined approach of developing video out of what we do. Safa, did I put you to sleep? Safa Rashtchy - Piper Jaffray: No, that is perfect. Thank you.

Okay, we are going to take -- did you say two, or one?

I suggested two, but --

Okay, we will do two more questions. Thank you.

Thank you. Our next question comes from Scott Kessler with Standard and Poor’s. Please go ahead. Scott Kessler - Standard and Poor’s: Thanks very much. Barry, you were quoted in The Guardian recently, indicating that you are looking at things in the travel space. I thought that was kind of interesting, given that you guys just sold a lot, if not all, of your travel properties, and wanted to get a little bit more detail on that. Thanks a lot.

Oh, no, no, no. First of all, I was speaking for Expedia, certainly not for IAC. I am, in addition to being this Chief Executive of IAC, I am a Chairman of Expedia. Even in that, I really was not saying that we were going to acquire travel properties on behalf of Expedia. We may, but we do not have a big interest here in doing so. There are some opportunities, small, relatively. We have leadership already in the U.K., Italy, Germany, France, in online travel and we are going to do everything to maintain it. Scott Kessler - Standard and Poor’s: Great, thanks for the clarification.

You’re welcome. We will take one more IAC question, as I consider that an Expedia question, for which -- you know, we don’t want Expedia having to compensate IAC for this call. Go ahead. One more.

Thank you. Our final question comes from Scott Schiffman with Lehman Brothers. Please go ahead. Scott Schiffman - Lehman Brothers: Thank you. Two question for Barry. First, related to the earlier leverage question, a question around investment grade ratings. Is it still an absolute priority for the company to maintain investment grade ratings? That is question one. Two, in terms of strategic direction, maybe you could just discuss the merits of staying public, or would you consider taking the entire company private? Thank you.

One of my colleagues just wrote something down to flash me. It is Mr. McInerney, so I am going to let him respond to the first part of it, and I will respond to the second.

Scott, we think it is a goal. It has always been a goal. We think it has benefits. We do [inaudible] with the access to the credit market, so it is a goal. You can never say never, and we have always valued our flexibility, and so it is a goal, but we value our flexibility if and when it came to that.

As far as taking the company private, we have had everybody knock on our door of the, so to speak, usual suspects. They see all these values for us. Every time it has happened, I just do not think it is something that we would pursue. I am not really interested in it. I think at IAC, we are very clearly comfortable in our public company status. We think that the market over time will reflect the values that we are building, and we like that configuration. That would be that. I think, if my colleagues do not have anything they would like to add, because they do need to go rush to get into their costumes, I will thank you all for being with us and tell you that we look forward to talking with you again in three months.

No, in December.

Sorry. Forgive me. I blew the whole purpose of reconfiguration.

We will set up a call in December and obviously we will give you plenty of notice on the date once it is set.

Thank you all very much.

Thank you. Ladies and gentlemen, this concludes the Interactive Corp. third quarter earnings conference call. Thank you for your participation. You may now disconnect.