Tom McInerney – EVP and CFO Barry Diller – Chairman and CEO Mindy Grossman – CEO, HSN Sean Moriarty – CEO, Ticketmaster Doug Lebda – Chairman and CEO, Tree.com Craig Nash – Chairman and CEO, Interval

Jeetil Patel – Deutsche Bank Mark Mahaney – Citigroup Imran Khan – JPMorgan Brian Pitz – Banc of America Securities Justin Post – Merrill Lynch Jennifer Watson – Goldman Sachs Jeffrey Lindsay – Sanford Bernstein Doug Anmuth – Lehman Brothers Alan Gould – Natixis Bleichroeder Scott Kessler – Standard & Poor's Colin Gillis – Canaccord Adams

Good morning my name is Cynthia and I will be your conference operator today. At this time, I would like to welcome everyone to the IAC second quarter earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. (Operator instructions) I would now like to turn today's call over to Tom McInerney, Executive Vice President and Chief Financial Officer. Please go ahead, sir.

Thank you operator and thank you everyone for joining us this morning. The format of the call will be a little different than usual given the impending spinoffs. On the call with me is IAC Chairman and CEO, Barry Diller; HSN CEO, Mindy Grossman; Ticketmaster CEO, Sean Moriarty; Tree.com Chairman and CEO, Doug Lebda; and Interval Chairman and CEO, Craig Nash. I believe each of their CFOs are with us as well. Barry is going to make some brief remarks, and then for expediency, I will summarize the Q2 results for all five companies, although all of my colleagues will be available to take questions. I'll remind you that during this call, we may discuss our outlooks for future performance. These forward-looking statements typically are preceded by words such as we expect, we believe, we anticipate, or similar statements. These forward-looking statements are subject to risks and uncertainties. Our actual results could differ materially from the views expressed today. Some of these risks have been set forth in our Q2 2008 press release and our periodic reports filed with the SEC. We will also discuss certain non-GAAP measures. I refer you to our press release and [Author ID1: at Mon Aug 25 15:43:00 2008 ]in[Author ID1: at Mon Aug 25 15:43:00 2008 ] [Author ID1: at Mon Aug 25 15:43:00 2008 ]the investor relations sections of our website for all comparable GAAP measures and full reconciliations. And with that preamble, Barry?

Thank you Tom. I think this is probably the first and most definitely the last time that on a single conference call, there are five pro forma separate companies talking to you, so we should enjoy the great history of this moment. We're almost there on the spins, I think you all know. We'll begin when it should traded [ph]. Talking about the old IAC,[Author ID1: at Mon Aug 25 15:44:00 2008 ] doesn't make very much sense to me. I think – I can't imagine it would be very productive to you given that all the noise, pop[Author ID1: at Mon Aug 25 15:44:00 2008 ]t[Author ID1: at Mon Aug 25 15:44:00 2008 ]s and pans that are thrown [Author ID1: at Mon Aug 25 15:44:00 2008 ](inaudible)[Author ID1: at Mon Aug 25 15:44:00 2008 ] into this last consolidated quarter. It is a ton of information to absorb and I think that is probably a real underlying absolute truth to why we are doing this which is it'[Author ID1: at Mon Aug 25 15:45:00 2008 ]s just too much complexity and information and lack of single focus which I think you get a sense of. Hopefully, during this call with your questions about each of the individual companies but most productively when you can talk to each of them on their very own. Some of that has already be gone[Author ID1: at Mon Aug 25 15:45:00 2008 ]begun[Author ID1: at Mon Aug 25 15:45:00 2008 ]. I think we have had [Author ID1: at Mon Aug 25 15:45:00 2008 ]130 meetings or so with 400 investors in the last week or so and today they are all with us. So what we really want to do is spend the most amount of time with questions and we know they will be all over the place and soon they will be each in their rightful places. On new IAC, I am really excited about the new IAC company. It is, I think, perfectly focused. It has got all internet brands, about 32 of them. They vary from established brands like Match and Citysearch to ones in the midstage like Evite and Gifts and Pronto and about 15 emerging businesses during various stages. And the thing I think that pay attention about this company is – is that it starts with this mix of these 32 various stage businesses with excellent overall growth and earnings. And obviously, it starts with a lot of capital, and that combination plus the expertise that we have gained in what I would call the new order of marketing and distribution of the internet across how to monetize sites, how to distribute them, how to market them in internet ways that are – it gives us a really competitive edge against –[Author ID1: at Mon Aug 25 15:47:00 2008 ],[Author ID1: at Mon Aug 25 15:47:00 2008 ] I think, any other player who is in the area of developing let us say new businesses or are just generating the growth on the existing businesses.[Author ID1: at Mon Aug 25 15:47:00 2008 ] S[Author ID1: at Mon Aug 25 15:47:00 2008 ]s[Author ID1: at Mon Aug 25 15:47:00 2008 ]o we start in this – and I would say this perfect place with a good base, with a lot of capital that we are going to deploy in the areas that we have this expertise in, and we will deploy it, probably not in huge amounts, and we will certainly do call it better than the cost of the capital itself. So without going on and on about the new IAC, we will answer questions about that too today, but we do not want to hug [ph] this, or I do not want to nor do my colleagues here,[Author ID1: at Mon Aug 25 15:48:00 2008 ] who [Author ID1: at Mon Aug 25 15:48:00 2008 ]we[Author ID1: at Mon Aug 25 15:48:00 2008 ] [Author ID1: at Mon Aug 25 15:48:00 2008 ]are o[Author ID1: at Mon Aug 25 15:48:00 2008 ]i[Author ID1: at Mon Aug 25 15:48:00 2008 ]n the central microphones, w[Author ID1: at Mon Aug 25 15:48:00 2008 ].[Author ID1: at Mon Aug 25 15:48:00 2008 ] [Author ID1: at Mon Aug 25 15:48:00 2008 ]W[Author ID1: at Mon Aug 25 15:48:00 2008 ]e got everybody dispersed around the country. So we will let the questions dictate the areas of interest, but before that, I think Mr. Tom is going to clarify some issues.

Thanks Barry. Just on the timing plan. We have now closed our bank and bond financings for the three spinoff companies that are beginning with initial debt, and we are working through the last stages of the process with the FDC and on the tax side. So we do not yet have precise timing set for either the commencement of one issue trading or the completion of the spinoffs, although we continue to think very soon, and we will announce it just as soon as we do know the precise timing. To the results, as Barry[Author ID1: at Tue Aug 26 05:31:00 2008 ] it is very [Author ID1: at Tue Aug 26 05:31:00 2008 ]alluded to – I mean operating factors, the pending spinoffs, and estimates of market values for some of these spinoff companies contributed to large non-cash charges in the retail lending and real estate areas. We also have[Author ID1: at Tue Aug 26 05:32:00 2008 ]d[Author ID1: at Tue Aug 26 05:32:00 2008 ] an after tax non-cash impairment charge related to our investment in Arcandor on the positive side of the ledger one time after tax gains by selling our EPI business in points preferred stock. The treatment in figures for all of these are laid out in the release and I'm not going the spend any further time on them, but instead will just make a few comments on the operating results of the five soon to be public companies. At HSN Inc., the trends we witnessed for the past couple of quarters continued with a rejuvenated HSN representing roughly two-thirds of the business growing very strongly while Cornerstone remains challenged by macro economic headwinds. HSN revenue was up 11%, operating income before amortization was up 20%, and the resilience and product diversity of that service allowed it to excel in this macro environment, and importantly, momentum has continued in July. Cornerstone's exposure to home and apparel products puts it square in the weakest part of the retailing sector, and this is evident in the results. Mindy and team have taken aggressive action and expect better relative performance in the second half as the effects of cost reductions take hole. And longer term, we see no reason why historical margins are not achievable in this business in a more favorable environment. To Ticketmaster, trends were similar to Q1 with revenue growth significantly greater than OIBA growth. There are a number of factors involved here, so let me just quickly tick through them. First, acquisitions in the current period operated at lower margins than TM's core business. Second, losses in Germany and China which are early stage businesses for TM continued. And third, significant investments have been made in establishing position in the secondary business with sponsorship and other arrangements. Each of these three factors contributed between 100 basis points to 150 basis points of margin contraction. In addition, general investments and higher client rebate levels offset the benefit we had comping against a prior year second quarter, which included some legal charges. Sean can speak to the specifics behind these items in Q&A, but here is the headline. The results generally reflect elective expenditures made in order to grow the business in 2009 post the loss of Live Nation, not any general market pressures. While we thought the margin impact of these activities would mitigate to a greater degree than happened in the second quarter, as has been previously announced, Ticketmaster has now taken very aggressive actions to rationalize these investments and reduce operating expenses by $35 million annually. Through these actions and the groundwork laid by investment to date, Ticketmaster can grow earnings in 2009 and beyond. Turning to Tree, macro pressure continued unabated here with all the same pressures that have been in evidence since the maelstrom began. The good news is all that all cost reductions Doug and team have done, lead to a very lead operation. They lost $2.3 million in the lending business, excluding restructuring costs, which is pretty remarkable considering revenues were one-half the prior year which was before things really turned down. In the real state business now operating in 14 markets with nearly 1000 agents, they continue to make traction with OIBA loss narrowed year-over-year and sequentially. This will be a very interesting business when conditions improve. Rounding out the discussions of the spin companies with Interval, which grew revenue 20% and operating income before amortization 2%; there were some discrete drivers of this dichotomy, so let me flesh them out a little bit. ResortQuest Hawaii contributed about 10 points of the top line growth, because they were not as large in the prior year period. But no OIBA growth as the business was adversely impacted by double digit percentage decrease in air lifts to Hawaii, due in large part to the bankruptcy of two low cost airlines during the quarter. Excluding ResortQuest, Interval grew revenues 11%, saw only slight OIBA growth primarily due to the timing of some discrete conference and training expenses as well as the phasing in of certain public company expenses. Other than those discrete items, OIBA would have grown 7% year-over-year, which is more indicative of its true performance in the quarter. Turning last to new IAC, as Barry said, a pure Internet company post the spin offs, with the eighth largest audience network on the Web and virtually all of its revenue coming from online advertising. Overall consolidated results were exceptional in the quarter, double digit profit growth from all but our emerging businesses, which by their very nature, are in investment mode. Media and advertising revenue grew 7% in the second quarter and as expected, this growth was considerably slower than Q1, reflecting the de-emphasis of our sponsored listings distribution business in connection with our renewed contract with Google that we've told you all about previously. We saw a very strong double digit revenue growth in our search, display and local lead generation revenue streams and significant OIBA growth reflecting this revenue growth in high margin areas as well as reduced marketing expenses in our search business. Going forward for the balance of the year, we currently expect a continuation of the same financial trends with reported revenue in this segment, reflecting declines in the sponsored listings distribution business. In fact, revenues were quite strong in the second half of last year in this area. So total reported segment revenues may show a decline in the second half, but we expect strong revenue growth in our proprietary search business and strong margin as we continue to see a mix shift towards this proprietary business. At Match, revenue and OIBA grew 8% and 17% respectively on continued strength from our international business, which grew subscribers and revenue per subscriber 4% and 15%, respectively, domestic revenue was us slightly year-over-year. OIBA growth was strong with margins up nearly 200 basis points. Looking ahead into Q3, you will remember that in the year-ago quarter, there was somewhat of an anomaly in the timing of marketing spend for Match where we shifted a significant portion of the traditional Q3 spend into Q4. This resulted in rapid profit growth which yielded 33% margins for the quarter a year ago. This year, we have planned a more traditional level of spend, so while margins will remain strong and in the upper 20s, you should not expect quite the level of profitability we saw last year. Now to Service Magic, which after two quarters facing headwinds in the housing and home improvement markets, has righted itself and implemented a series of marketing and conversion improvements which paid significant dividends during the first quarter. The company is now firmly back on track with strong revenue growth of 42% in Q2, but perhaps more impressively, OIBA growth of 33%. The fact that a business centered on home repair and improvement could grow at these rates in this environment is a strong indicator of the value of the Service Magic network to both local service professionals and consumers. And they still have a very low single digit share of the enormous market for home improvement, repair and maintenance. Finally a housekeeping point on our emerging businesses, you will recall that in the prior year period, this segment benefitted from an $8 million non-recurring gain from our previous investment in Reveille, which is why you see profits in this segment in that period. We have some exciting businesses in the segment. One of the benefits of the simpler IAC going forward will be that we will have time to really discuss these. For new IAC overall in Q3, OIBA growth will be impacted by the timing of the Match marketing spend mentioned a moment ago, with Match roughly 40% of our OIBA before corporate expenses currently. The shift in spend from one period to another can easily skew aggregate results. So even with strong growth in the other business lines, we'll likely see something closer to low double digit OIBA growth excluding spin off expenses which thankfully will end after the third quarter. In terms of the balance sheet, I think our releases and filings have clearly laid out the anticipated starting capitalizations of each of the five companies, so I won't be repetitive, but will be happy to answer any questions in this area. And with that, let's go to questions. Operator?

(Operation instructions) Your first question comes from Jeetil Patel with Deutsche Bank. Jeetil Patel – Deutsche Bank: Hey guys, a couple of questions here, first of all, congratulations. But on the Ticketmaster business and HSN businesses in particular, just curious, what kind of trends are you seeing so far in July, given that obviously, there is a lot of talk of consumer spending slow down. Secondly, can you just go over on Ticketmaster, I guess you had talked before about replacing the Live Nation contract, I might have jumped on late, but can you just refresh us on kind of where that stands? And I have a quick follow up.

Sean, why don’t you take the trends and the Live Nation question and we will go to Mindy on trends as well.

Sure, Jeetil. We have been watching closely, but so far, haven't seen that broader economic climate is directly impacting the live entertainment category or our business specifically. Pollstar reported, for example, mid-year, that concert ticket prices were up 6%. You saw, certainly, our pricing and volume is up in the category and we think that the category itself has some resistance to broader trends. One, because if you look, our average person buys a ticket slightly less than once a year, and much of our best inventory is often over-subscribed. It may take a bit longer for us to see what impact, if any, these broader economic trends are going to have on the industry or our business, but we are watching closely. So far, no direct evidence. As far as Live Nation goes, we believe we have substantially replaced the revenue that that business represents, both with international expansion, movement into the resale category and the recent acquisitions. Our focus now is driving comparable profitability through that business. Going forward, both in the areas of ramping up to scale international and with resale, and as we previously announced, went through a very thorough global cost review in Q2 and expect that we are going to pulling $35 million in costs out of the business on a full year basis in 2009. So, feel that we've made very good progress on replacing that top line and are well on our way to driving that necessary profitability through.

Mindy, why don't you quickly –?

Sure. At HSN, we have continued to see the momentum in the business into July. Particularly, it happens to be our birthday month, so it is a big month for our core customers as well as new customer acquisitions. We just finished a very strong weekend where on Sunday alone, one of our number one items sold over 150,000 sets. So the advantage of our business, the diversity, variety of product, the fact that we offer significant value and the rebound in our customer base has allowed our momentum to continue.

Thanks. Next question? Or you have a follow-up, Mr. Jeetil? Jeetil Patel – Deutsche Bank: Well, I had a quick follow up, which is, I just wanted the find out on HSN, what do you think it is, is it merchandising, and is it driving more – basically purchase activity among the existing customer base or just more customers coming in the door with the new strategy. And then just Tickets Now, have you guys started to feed a lot of that supply into the Ticketmaster demand side of the equation yet, or is that still going to be ahead in Q3?

Okay, I'll take HSN. It's a combination of all of that. Our focus has been on our customer base and we're seeing both a rebound in total customers as well across all our buying segments. And it really is a result of our product strategies, our improvement in quality, our improvement in customer service and really offering great price value and the assortment that we've built over the past year.

All right, let’s just go to the next question, please. Operator?

Your next question comes from Mark Mahaney with Citigroup. Mark Mahaney – Citigroup: Thank you. I wanted to ask one question on the new IAC business, and then one on HSN Cornerstone. On the new IAC segment, is there any way you could figure out the economic impact on search versus display versus lead gen. If you can look through the impact of the Google change, is there anything that convinces you that search may be more economically resistant, or resistant to a recession than display versus lead gen. And then on the HSN Cornerstone, I think the comment was that there's clearly seen a macroeconomic impact or recession impact on the Cornerstone business, not yet on HSN. Is there any particular reason why HSN should be recession resistant over the next – not in July, but over the next six months, seeing the weakness that we're seeing in Cornerstone? Thank you.

Mark, I'll take the first one and then Mindy can answer the second, obviously. When we look at the business that right now, I would say there is always pockets. It depends on the property and everything else, particularly on the display side. But in these types of climates, the most performance oriented advertising tends to be the most resilient. So that tends to be on the search side and the local lead gen. Service Magic is our largest local lead gen business, and you see the results there. Citysearch's results, which are not broken out, were very strong in the quarter as well. And on the search side, we're continuing to see very good monetization gains and revenue growth, even aside from the impact of the new Google arrangement, et cetera. The display side is a little spottier. In certain properties, with certain situations, you're seeing the sell through in the CPMs and other situations not, so that one, which is this more manual sales process and not always direct performance oriented tends to be the toughest in this environment, and I don't think that is a surprise.

Also, there is generally a shift as we all know to online advertising and the greater pie of advertising as a whole. And given the fact that it is much, much more targeted by definition and many of its attributes are based upon actions, I think that it's going to have that secular change, so to speak, is going to have an ameliorating effect on whatever the general economics of advertising are. Mindy?

On HSN, we definitely have an advantage. Our business model is predicated on great price value. We have storytellers and individuals to tell you why you need the product. We have the ability to shift product categories based on demand and a tremendous amount of flexibility within that. Our home business is also incredibly diverse and we can focus on high volume, lower ticket item type business, which has been working in this environment. On the Cornerstone side, our segment is primarily 65% in the home category and the balance in apparel, with Front Gate being one of the biggest sales drivers in Q2 and Q3, so they've been hit more relative to the environment than the HSN business, which can manage through that.

Thank you. Next question please.

Your next question comes from Imran Khan of JP Morgan. Imran Khan – JPMorgan: – for taking my questions. Two questions, media and advertisement OIBA margins improved almost 250 basis points year-over-year, and you talked about how Google contract and shift toward pro rata revenue and lower marketing spend helped them. Could you give us more color, the breakdown, what contributed what percentage on this margin expansion? And secondly, search market share is a big challenge for smaller companies. Do you think these reduced marketing expenditures could impact your market share in the long term? How confident that you don't need to increase your market expenditures, thank you.

Imran, on the first one, market expenditures were down reasonably materially. I think they were down probably $10-ish million, $8 million to $10 million in the media and advertising segment, so that was a material contributor to the margin expansion. Obviously, the new arrangement with Google was a material contributor, and then just general growth. And all three of those were big contributors, but we got very good revenue growth, even aside from the new Google arrangement, and there is very strong monetization trends across our search properties. So I think we saw a material contribution to the market expansion from all three of those factors.

On share, we have learned a lot since we acquired Ask, and last year, as I think you know and I think you may be alluding to, in terms of money we spent on marketing then that we're not spending now, we spent a good deal on marketing, we got big, big increases in queries, but what we didn't have was a lot of retention. After we stopped marketing, we lost a good many of them. Obviously not all, but we lost a good many. The keys for Ask are much, much, much more practically driven this year and ongoing. We want frequency, which is up 32% year-over-year, and retention, which is up 15% year over year, are more important to us than one time spikes in terms of queries. Now, we do intend to grow queries, we have grown queries in the Ask network itself. But, our plans for the future, which may involve – probably will involve marketing expenditures beginning in the mid to late fourth quarter and on into next year are going to be based on a much, much more practical path than they were last year. And I don't believe that we are going to weaken, as a matter of fact we have – in terms of share, we just passed AOL. Now that is not one of the great land feats in the world, but nevertheless, it does notch us up one rung on the ladder. So, gaining share I think will be kind of secondary outgrowth of the very practical plans that we have in place for the balance of this year and onto next year with Ask. Imran Khan – JPMorgan: Thank you.

Pleasure, next question please.

Your next question comes from Brian Pitz with Banc of America Securities. Brian Pitz – Banc of America Securities: Question is on new IAC. Would you provide some additional color on some of the non-Ask media properties such as Citysearch and Evite and basically, how they're performing in terms of both usage and monetization? And then secondly, would you provide any additional color on Ask in terms of US versus international? Thanks.

Go ahead.

Yes, Brian, it's Tom. On Citysearch and Evite, both of them have seen really good growth. On Citysearch, by our tracking, we're up in the mid 20 million unique users. I think the third party services significantly understate that. We were up 19% year-over-year, roughly 80% of the traffic is free. So Citysearch and its tremendous depth of content has just been very effective at driving free audience through SEO, Direct Domain, et cetera, and it has got very strong monetization. As a local lead generation, the ability to drive targeted leads to local merchants is one of the very effective forms of online advertising as these local merchants come online. So, Citysearch will probably do in excess of $100 million of revenue next year, and relative to that audience, that is very significant. Evite, 16 million uniques, 1.6 million events this quarter, growing 20% year-over-year, it's primarily a source of revenue. On the display side, the monetization is lower relative to the audience, but so is the cost structure. So it is a nicely growing profitable business for us. And both of these services have very significant product overhauls coming in the back half of this year, which I think we all readily admit are long overdue. So we're excited about that as well.

One way to think about both Citysearch and Service Magic together are, these are of course local businesses. You have heard over the years endless concepts from different people and initiatives from big players across the boards that they're going to take local, et cetera. Essentially, they have all gone by the wayside and what's left standing is the Citysearch growing network of local merchants and consumers who are interested in finding solutions locally, and that and Service Magic's extremely directed circle of home improvement merchants and consumers in that mix. We are, without I think any question, we are far ahead of anyone else in this category. And you can look for us next year to make increasing investment and increasing emphasis on what happens in – I mean local is a dopey word, because wherever you live, is where you live – is local to you. But this is an area where we are going to push, push, push.

And I think your other question was on the breakdown of Ask in terms of domestic/international. I mean, it's primarily a domestic business, well over half of the revenue is domestic. Its principal international operation is in the UK, where it has a reasonably modest share. And as you know, Google is very large there. I think the trends in the business in the UK are generally comparable to the US. The monetization there is starting at higher levels, so we're not getting quite the monetization gains that we are in the US. But in general, the trends are the same, and I think that the strategy will largely piggyback off of the US strategy from a product and marketing perspective. Brian Pitz – Banc of America Securities: Great, thanks.

Next question, please.

Your next question comes from Justin Post with Merrill Lynch. Justin Post – Merrill Lynch: First a question for Tom and then maybe a HSN question for Mindy. On the assets that new IAC will have, what are you expecting for cash – net cash and relative to all the debt that is going to go out to the affiliates? So what do you think for the entire company the net cash balance is going to be? And what are some of the hidden assets, where do you see the valuations of those that might not be providing any operating performance at this point? And the second thing is on Cornerstone, where do you think that will start to comp on a year-over-year basis and stop hurting performance, what's your time frame on that?

On the first two, we think IAC will start with $1.3 billion approximately of net cash when all the sources – Justin Post – Merrill Lynch: And what's the debt level of all the affiliates combined, or the net debt for everyone combined?

What's the relevance of the combined net debt? But anyway, we'll give it to you for sure.

Well, we could go through them. Ticketmaster raised $750 million of debt with $500 million of cash. HSN is $390 million with debt of $50 million of cash. Interval is $450 million of debt with $170 million of cash. So we can do the math, I can't do that in my head. Justin Post – Merrill Lynch: That's fine.

And we can send you that as a follow up. On the hidden assets, I guess just kind of below the line, we do still have a substantial and we think valuable position in shop channel Japan that is staying with IAC, because it was neither strategic to – was not strategic to HSN, it is just a financial investment. And the value of that, there is no public market value. So the value will depend on what we can negotiate over time. But that is a multiple $100 million asset. We also have a number of kind of emerging businesses, and I think we'll talk more about those kind of post-spin, Barry alluded to some of those in his remarks, that we think are in essence hidden assets as well.

Mindy?

Yes. On Cornerstone, as I mentioned with Frontgate being a big part of the business through Q2 and Q3 and some of the challenges in home, we still will see challenges there. But once we get to Q4, where all the businesses play much more evenly and we are comping against where we saw the challenges begin, we see the business getting back to comps and improving.

Next question please.

Your next question comes with Jennifer Watson with Goldman Sachs. Jennifer Watson – Goldman Sachs: Great, thank you. Can you talk a little bit about the opportunities in mobile for the new IAC properties which you have seen gaining traction and adoption at this stage?

Yes, we'll do that. But actually, as a shareholder of all of these companies, I would like to ask Doug Lebda talk to us a bit about the prospects for the fourth quarter and first quarter. And how do you get out of this? Obviously, you're in the cycle and you are in the throes of the macro world, but what is your strategy in just a couple of sentences?

Sure, I think one – well first, on how you get into this, at the end of the day, what we're experiencing is just a fundamental change in the supply of leads and the demand for leads, particularly in the mortgage product. Lenders have continued to want, as they ramp down their marketing spend and they shrink their businesses, they buy fewer and fewer leads from places like us. The good news of the way we're getting out of that is simply by growing the lender base. At the end of the day, we have about 250 or so lenders on the network, and there is probably about 4,000 or 5,000 more would be good targets for us. We have put a new sales force in place and we're going after those. The second thing you do is by improving the website, making it better for search engine optimization and trying to increase the frequency of purchase and transaction on the Lending Tree site. We did that. The first step of that was a new beta site, which you can see a live link from the home page. The second step of that will be a number of new tools that we will engage a much broader set of customers coming at year end. And then the third part of the strategy is to add new products to diversify away from just pure mortgage. We're doing that with a new credit cart search engine, a student loan site and have some interesting ideas in the insurance space. And then lastly is the real estate business, which continues to march along, despite an incredibly tough environment, and then obviously maintaining very strict discipline on cost, which we're continuing to do.

Thanks, Doug, a little taste from Lending Tree. As to mobile for IAC ,as you all know, it is really just beginning, but we got 35 million or so page views currently, 1.5 million messages, text messages going through our system. Seven of our businesses have active mobile products that they're rolling out and we have got partnerships with 13 wireless carriers. So we're in it. And as you'll see – worth nothing in terms of prediction, probably along with everybody else, but '09 you are certainly going to see more and more action in mobile and all of our businesses are geared for participating. Jennifer Watson – Goldman Sachs: Great, thank you.

You're welcome, next question please.

Your next question comes from Jeffrey Lindsay with Sanford Bernstein. Jeffrey Lindsay – Sanford Bernstein: Hello, could I ask, will the new businesses have any residual obligations to take search or do business with each other? For example, could HSN and Tree and Ticketmaster buy keywords direct from Google, or is there an expectation that they have to go to Ask.com first? So I guess what I'm asking is, will it be a loss of synergies with the new IAC as a result of this? And then in terms of the new IAC, what would be the management structure be? Will the businesses still have a high degree of autonomy, have their own CEOs or will you use a new management structure and make it more of an operating company? Thank you.

As far as new IAC and management, we are going to – each of the businesses is going to have a CEO. It is an operating company, but the emphasis will be on each individual business or each P&L center, anything that has got revenues and expenses is going to have somebody directly managing that business. They essentially are all going to report directly up to the CEO of IAC.

On the first question – there is no change, really. All of our businesses, including the four spin off companies, have always bought at their full discretion through Ask or Google or advertising any place else. We have never forced allocation or budget. And that will continue obviously afterwards, so there is no net change from the spin in that regard.

One of the things that I think is – one of our areas I think of real expertise is understanding how you manage both early start-up companies, entities, ideas with entrepreneurs who want to push their agendas forward, their ideas to get them to market, mid-stage companies that have got different disciplines and somewhat mature companies that have been in business a long time. And our, I think, ability to actually have a management structure that fits all of these individually tailored is one of the reasons we can house multiple brands in one store, which as I have said before, I think is a competitive advantage against others. Anyway, next question please.

Your next question comes from Doug Anmuth with Lehman Brothers. Doug Anmuth – Lehman Brothers: Thanks for taking my questions. One on Ask and then one on Interval, first on Ask, you're obviously getting the benefits in terms of shifting from the network over to proprietary, can you talk about what the mix shift should be over time and then also how we should think about the long term margins in the media and advertising business? And then secondly on Interval, can you talk about what you're doing to take cost out potentially and improve profitability around RQH in the back half and into '09? Thank you.

Mr. Craig Nash, our fine CEO of Interval gets his moment in the microphone.

Thank you. On the ResortQuest Hawaii, we are looking at all different types of expense reductions, both at the property level as well as corporate. That is an exercise that is going on right now. The last thing we want to do is injure the business though, because we think this is a relatively short term economic cycle with Hawaii being a very good market consistently over the years. So yes, we are going to make some cost reductions there.

On your first question, Doug, the – in terms of the mix, the kind of de-emphasis of the GSL distribution business has largely run its course in this quarter. So we're mostly to where we will be. We're comping against some big back half quarters next year, so I think you may continue to see the percentages move around. The other thing is, we have other distribution businesses in our various properties and you can add a lot of revenues quickly, and it is part of our strategy. We're not trying to get out of that business or distribution broadly. So the mix may move around, although I'd say generally speaking, the type of mix you saw this quarter is probably more along the lines of what you'd see going forward. But it will bounce around. Doug Anmuth – Lehman Brothers: Can you comment on the long term margins?

Yes, let me do that. When we bought the Ask business, it was up at a 20% margin. We made some investments in it, as you know. I think the margins are going to grow quickly over the course of this year up into this kind of high-teens area. And certainly, there is no question it will probably end the year at 20% plus. I'm speaking to the media advertising broadly, but it would apply to the search business as well. I think where we go from there will be kind of a strategic decision we make. As we balance short and long term, we'll go through our normal planning and trade offs and stuff on that. There is no question there's the opportunity to drive margins even further the business scale. But we also think there is a lot of revenue growth opportunity. The market is growing very strongly. So what choices we make within that, as we get up into the high teens, 20% plus, are decisions yet to be made.

Thanks. Next question please.

(Operator instructions) Your next question comes with Allen Gould with Natixis. Alan Gould – Natixis Bleichroeder: Thank you. Barry, historically, one, you've liked acquisitions. You have also been very conservative financially. You said there should be lots of capital, $1.3 billion of net cash at the new IAC. Should we anticipate a fair number of acquisitions, or do you have concerns on the economy and you would be conservative at this point in time?

Well, I think you got to be conservative at all times in terms of acquisitions. And I think for us for the future, the profile of acquisitions that we're going to make are in the areas where we think that the IAC machine, this distribution and marketing machine, can really add value, and I think those acquisitions are probably, hopefully, going to be numerous. I don't think that they're going to be in any one of them particularly pricey in terms of nominal amounts, meaning I don't think that they will be over $100 million. And I think that right now many, many things that are "for sale" are at still very inflated prices. They're based upon – this kind of internal magic step-up from first stage investing to second, third stages where each time it gets marked up. Not on the basis of anything other than internal desire, I think no external reality, and we're not going to be in that game. And I think – I intend for us, and all my colleagues, I think, agree with this, that we're going to be extremely disciplined about anything that we acquire. And as I said, I'm absolutely certain we're going to be better than the cost of the capital. And if we find that in the next couple of years that acquisitions don't meet that profile for us, then we'll repatriate the cash. We're certainly not going to just sit there with it, but we're not going to also put it down in anything other than what we think is really productive. Alan Gould – Natixis Bleichroeder: Thank you.

Now I'm going to ask a question, again, on the basis of my proposed – proposed? I hardly propose my prospective share holding. So Mr. Moriarty at Ticketmaster, a lot of investors are concerned about the deteriorating margins. How are you going to reverse that?

Thanks Barry. So the focus on margin is absolutely the right one, as most of you know, we have made a series of investments, both in international expansion into new markets, domestic acquisitions and investment in the resale category. And as Tom spoke earlier, if you kind of look at the margin compression in the business, about 90% of it comes from this expansive activity by way of acquisition and movement. And so the resale category, as a matter of fact, if you actually look at pricing and volume actually in the core business is outpacing royalties. So we have got good, solid core fundamentals. And our focus is really on driving comparable profitability through these new areas of our new business, which will position us very well to grow, certainly over time and we feel very good about the investments that we've made. Certainly have to execute very well against those businesses to make sure they perform at the levels that we expect, and again, so that they can contribute comparably relative to the core. But we feel very good about those investments and our execution against the opportunities.

And what about expense reduction?

Yes, so the – one of the – certainly the opportunities we have is really in the wake of this recent acquisitions, one of the things that is really important in our business is scale. So Ticketmaster really is a business driven substantially by retail tickets sold through the platform. So for example in 2007, we sold 141 million retail tickets. When we acquire businesses, they operate generally at levels of scale far below our own. So we've got tremendous opportunity as we move them on to the platform, consolidate operations, to drive comparable profitability in these businesses, but on a standalone basis, would never enjoy the scale and therefore the margins that we enjoy. So when you look across the platform, we're really focused now in operating what we have. All of this activity, including I would say also the investment in the resale category by way of sponsorship, means that we have grown revenues ahead of that bottom line performance. But as we pull costs out of these businesses across the board, we do expect really to drive good, solid margins.

All right, thank you. Next question please?

Your next question comes from Scott Kessler with Standard and Poor's. Scott Kessler – Standard & Poor's: Hi, thanks a lot. A couple of quick questions. Obviously, one of the prior questions related to acquisitions and the indication is that you're going to be conservative in that regard. I'm wondering though if you could talk about the fact that $1.3 billion of that cash is pretty substantial. So what is going to be done with that capital? The second question I had is related to Ask City. A year or so ago, there was a lot of excitement around that offering and we haven't really heard as much about it recently. So an update would be appreciated. Thanks.

Well, I'll take the last part on Ask City. Ask City was a venture that Ask.com really rolled out with the participation of Citysearch and some other parts of the company. And the truth is, they had just too much on their plate in terms of product, and so they deemphasized it. And a lot of it has been taken over by Citysearch in terms of the new Citysearch product launch, which is going to come I think in October. But Ask City itself is allowing a debt on the shelf by design because of the concentration that Ask is making as I spoke earlier in this very practical process of relevance, of answering questions, and of increasing retention. So, it is – I don't think there is anything more to say about it. For the moment though, as I say, I think Citysearch is taking up the slack in terms of its own product.

On the first part, I think Barry outlined the philosophy, but just to add to it, we're going to buy properties where we think we can directly add value through our expertise in distribution and modernization. So if you look at, for example, the Lexaco acquisition we recently did, we're going to rebrand that in a gradual way to Ask. We're going to cross link the dictionary.com site to Ask, and vice versa, which will drive traffic in both places. We're going to increase its monetization across all of its advertising revenue streams, display, search, et cetera. So we can look at that property, and we did before we bought it, and know before X, Y and Z, based on the competencies we have in-house and plugging in kind of next to and into one of our businesses will get immediate economic lift, drive that effective purchase multiple down into the single digits in short order. We did the same on a smaller scale with Insider Pages 18 months ago. So that is the acquisition focus, taking Internet properties we know we can improve because of our scale and advantage in our areas. We're also going to spend some of that money in start-up activities, where we have had good success. Again, I think we'll talk more about that post the spin, because there is just too much to cover on this type of call now. But that will be another focus, again leveraging those advantages in distribution and monetization.

The investments that we've made in starting businesses have almost all paid off for us. And we will outline as we go forward – we will get into much, much more detail. We'll be able to get into much more detail than we can today, of course. That is what this ability to focus in this area, I think, allows us to do. Next question please.

Your next question comes from with Colin Gillis with Canaccord Adams. Colin Gillis – Canaccord Adams: Just to drill down on that $1.3 billion in cash, are we going to see the deal engines ignited at a more aggressive pace?

I don't think so. I mean I don't see it at a more aggressive pace. We have been making acquisitions in this place for a long, long time and we have always got kind of active M&A activity going on. We get a lot of deal flow. We look at everything. We're looking at a number of things now. But we're not going to suddenly wake up next month or two months from now and come out with 10 acquisitions or this or that. We'll kind of keep our regular pace. And look, if there is opportunity there, we're going to hit it, we're able to hit it, we've got the people internally to analyze things and I think we have got the area very, very clear in our own eyes. So I mean that is what you would need to look for. Colin Gillis – Canaccord Adams: Sure, that makes a lot of sense. I don't think anyone has touched on dictionary.com. Can you just talk quickly about what was attractive about that property? And do you have interest in similar deals where you can leverage your relationship with Google to improve monetization?

Well. Yes, I mean it is leveraging the whole apparatus of where we have expertise. We bought a company for our consumer apps and portals business called Girl Sense which is in Israel. A little company, but has fantastic URL, fantastic actually product inside of it, and that will go into our expertise in downloadable applications. The dictionary is part of the Lexaco that Tom referred to earlier, where it just adds to the system that we have got in place today, adds enormous traffic to us. It actually will give us a couple more points of share in terms of the overall share count of the Ask properties for search. So that is really where you can look for us to spend our money.

Very substantial audience, very under monetized, and an audience which fits exactly hand and glove with kind of the Ask brand, because Ask is about answers, and that is what dictionary.com is about. So we would love to buy other properties which have those characteristics. Colin Gillis – Canaccord Adams: That makes a lot of sense. Just one last one, are you trying to expand into social knowledge, like Yahoo Answers or Wiki Answers?

Yes, very much so. We are definitely on that path as part of Ask. Colin Gillis – Canaccord Adams: Thank you.

You're welcome. I think that is it. We are, as is obviously clear from this call, all over the place, and this will be the last call for the consolidated company. And we'll all be five separate entities in – I guess the next moment is November, when we'll be talking to you all again. Meanwhile, have a good summer. Enjoy the process of breaking these things apart. Look to each of the ingredients and use the summer productively, or leisurely. In any event, have a good time. Thank you for being with us.

Ladies and gentlemen, this concludes today's conference call. You may now disconnect.