Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

As of July 22, 2011, the following shares of the registrant's common stock were outstanding:

The aggregate market value of the voting common stock held by non-affiliates of the registrant as of July 22, 2011 was $2,985,357,951. For the purpose of the foregoing calculation only, all directors and executive officers of the registrant are assumed to be affiliates of the registrant.

		June 30, 2011			December 31, 2010

		(unaudited)			(audited)
		(In thousands, except share data)
ASSETS
Cash and cash equivalents		$	622,866		$	742,099
Marketable securities			288,997			563,997
Accounts receivable, net of allowance of $8,375 and $8,848, respectively			126,887			119,581
Other current assets			110,341			118,308

	Total current assets		1,149,091			1,543,985
Funds held in escrow for Meetic tender offer			360,583			—
Property and equipment, net			261,118			267,928
Goodwill			1,077,476			989,493
Intangible assets, net			245,822			245,044
Long-term investments			255,909			200,721
Other non-current assets			159,302			192,383

TOTAL ASSETS		$	3,509,301		$	3,439,554

LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Accounts payable, trade		$	47,252		$	56,375
Deferred revenue			90,412			78,175
Accrued expenses and other current liabilities			267,828			222,323

	Total current liabilities		405,492			356,873
Long-term debt			95,844			95,844
Income taxes payable			460,138			475,685
Other long-term liabilities			19,710			20,350
Redeemable noncontrolling interests			56,482			59,869
Commitments and contingencies
SHAREHOLDERS' EQUITY:
Common stock $.001 par value; authorized 1,600,000,000 shares; issued 229,718,224 and 225,873,751 shares, respectively, and outstanding 81,518,917 and 84,078,621 shares, respectively			230			226
Class B convertible common stock $.001 par value; authorized 400,000,000 shares; issued 16,157,499 shares and outstanding 5,789,499 and 4,289,499 shares, respectively			16			16
Additional paid-in capital			11,539,948			11,428,749
Accumulated deficit			(591,524	)		(652,018	)
Accumulated other comprehensive income			62,224			17,546
Treasury stock 158,567,307 and 153,663,130 shares, respectively			(8,539,259	)		(8,363,586	)

	Total shareholders' equity		2,471,635			2,430,933

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	3,509,301		$	3,439,554

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

IAC/INTERACTIVECORP AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)

		Three Months Ended June 30,						Six Months Ended June 30,

		2011			2010			2011			2010
		(In thousands, except per share data)
Revenue		$	485,404		$	394,244		$	945,617		$	772,422
Costs and expenses:
	Cost of revenue (exclusive of depreciation shown separately below)		181,472			140,638			354,190			271,787
	Selling and marketing expense		133,218			118,306			273,468			248,687
	General and administrative expense		80,553			74,917			156,844			148,881
	Product development expense		17,280			14,369			35,002			29,161
	Depreciation		12,450			16,625			25,889			32,418
	Amortization of intangibles		2,200			4,756			4,657			7,930

Total costs and expenses			427,173			369,611			850,050			738,864

	Operating income		58,231			24,633			95,567			33,558
Equity in losses of unconsolidated affiliates			(8,720	)		(4,002	)		(10,599	)		(26,615	)
Other income, net			5,637			103			6,389			5,339

Earnings from continuing operations before income taxes			55,148			20,734			91,357			12,282
Income tax provision			(9,518	)		(5,313	)		(25,559	)		(11,458	)

Earnings from continuing operations			45,630			15,421			65,798			824
Loss from discontinued operations, net of tax			(2,488	)		(2,586	)		(4,436	)		(7,313	)

Net earnings (loss)			43,142			12,835			61,362			(6,489	)
Net (earnings) loss attributable to noncontrolling interests			(718	)		756			(868	)		1,375

Net earnings (loss) attributable to IAC shareholders		$	42,424		$	13,591		$	60,494		$	(5,114	)

Per share information attributable to IAC shareholders:
	Basic earnings per share from continuing operations	$	0.50		$	0.15		$	0.72		$	0.02
	Diluted earnings per share from continuing operations	$	0.46		$	0.14		$	0.68		$	0.02
	Basic earnings (loss) per share	$	0.47		$	0.12		$	0.68		$	(0.05	)
	Diluted earnings (loss) per share	$	0.44		$	0.12		$	0.63		$	(0.04	)
Non-cash compensation expense by function:
	Cost of revenue	$	1,151		$	1,011		$	2,233		$	1,952
	Selling and marketing expense		1,200			971			2,235			1,954
	General and administrative expense		18,926			17,676			35,326			35,819
	Product development expense		1,730			1,390			3,374			2,868

Total non-cash compensation expense		$	23,007		$	21,048		$	43,168		$	42,593

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

IAC/INTERACTIVECORP AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

		Six Months Ended June 30,

		2011			2010
		(In thousands)
Cash flows from operating activities attributable to continuing operations:
Net earnings (loss)		$	61,362		$	(6,489	)
Less: loss from discontinued operations, net of tax			4,436			7,313

Earnings from continuing operations			65,798			824
Adjustments to reconcile earnings from continuing operations to net cash provided by operating activities attributable to continuing operations:
	Depreciation		25,889			32,418
	Amortization of intangibles		4,657			7,930
	Non-cash compensation expense		43,168			42,593
	Deferred income taxes		14,136			(5,812	)
	Equity in losses of unconsolidated affiliates		10,599			26,615
	Gain on sales of investments		(1,544	)		(3,989	)
Changes in current assets and liabilities:
	Accounts receivable		(10,210	)		(8,831	)
	Other current assets		(237	)		2,548
	Accounts payable and other current liabilities		(6,343	)		(2,734	)
	Income taxes payable		(8,146	)		24,678
	Deferred revenue		11,878			9,048
Other, net			7,515			6,287

Net cash provided by operating activities attributable to continuing operations			157,160			131,575

Cash flows from investing activities attributable to continuing operations:
	Acquisitions, net of cash acquired		(79,968	)		(16,681	)
	Capital expenditures		(19,349	)		(23,513	)
	Proceeds from sales and maturities of marketable debt securities		402,096			366,543
	Purchases of marketable debt securities		(135,021	)		(427,286	)
	Proceeds from sales of investments		11,808			5,325
	Purchases of long-term investments		(1,604	)		(796	)
	Funds transferred to escrow for Meetic tender offer		(360,585	)		—
	Dividend received from Meetic, an equity method investee		—			8,800
	Other, net		(7,127	)		(127	)

Net cash used in investing activities attributable to continuing operations			(189,750	)		(87,735	)

Cash flows from financing activities attributable to continuing operations:
	Purchase of treasury stock		(155,241	)		(379,508	)
	Issuance of common stock, net of withholding taxes		52,043			6,592
	Excess tax benefits from stock-based awards		17,865			4,992
	Other, net		20			5

Net cash used in financing activities attributable to continuing operations			(85,313	)		(367,919	)

Total cash used in continuing operations			(117,903	)		(324,079	)

Total cash used in discontinued operations			(2,913	)		(2,517	)
Effect of exchange rate changes on cash and cash equivalents			1,583			(4,232	)

Net decrease in cash and cash equivalents			(119,233	)		(330,828	)
Cash and cash equivalents at beginning of period			742,099			1,245,997

Cash and cash equivalents at end of period		$	622,866		$	915,169

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements

IAC/INTERACTIVECORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

IAC is a leading internet company with more than 50 brands serving consumer audiences across more than 30 countries...our mission is to harness the power of interactivity to make daily life easier and more productive for people all over the world. IAC includes the businesses comprising its Search segment; its Match and ServiceMagic segments; the businesses comprising its Media & Other segment; as well as investments in unconsolidated affiliates.

All references to "IAC," the "Company," "we," "our" or "us" in this report are to IAC/InterActiveCorp.

The consolidated financial statements include the accounts of the Company, all entities that are wholly-owned by the Company and all entities in which the Company has a controlling financial interest, whether through voting interests or variable interests. The Company's consolidated financial statements include one variable interest entity, in which the Company has a controlling financial interest through voting rights and is also the primary beneficiary. Intercompany transactions and accounts have been eliminated. Investments in entities in which the Company has the ability to exercise significant influence over the operating and financial matters of the investee, but does not have a controlling financial interest, are accounted for using the equity method and are included in "Long-term investments" in the accompanying consolidated balance sheet.

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and with the rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation. Interim results are not necessarily indicative of the results that may be expected for a full year. The accompanying unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2010.

The accompanying unaudited consolidated statements of operations for the three and six months ended June 30, 2010 and cash flows for the six months ended June 30, 2010 have been reclassified to present Evite, Gifts.com, IAC Advertising Solutions and InstantAction, all of which were previously reported in IAC's Media & Other segment, as discontinued operations. In addition, certain other prior year amounts have been reclassified to conform to the current year presentation.

The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make certain estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and the related disclosure of contingent assets and liabilities. Actual amounts could differ materially from these estimates. On an ongoing basis, the Company evaluates its estimates and judgments including those related to the fair values of marketable securities and other investments, goodwill and indefinite-lived intangible assets, the useful lives of definite-lived intangible assets and property and equipment, the carrying value of accounts receivable, including the determination of the allowance for doubtful accounts and other revenue related allowances, the reserves for income tax contingencies and the valuation allowances for deferred income tax assets and the fair value of stock-based awards, among others. The Company bases its estimates and judgments on historical experience, its forecasts and budgets and other factors that the Company considers relevant.

NOTE 1—THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

A substantial portion of the Company's revenue is attributable to online advertising, the market for which is highly competitive and rapidly changing. Significant changes in this industry or changes in customer buying behavior or advertiser spending behavior could adversely affect our operating results. A significant majority of the Company's online advertising revenue is attributable to a paid listing supply agreement with Google Inc. ("Google"), which expires on March 31, 2016. For the three and six months ended June 30, 2011, revenue earned from Google was $221.3 million and $436.2 million, respectively. For the three and six months ended June 30, 2010, revenue earned from Google was $174.1 million and $345.7 million, respectively. The majority of this revenue was earned by the businesses comprising the Search segment. Accounts receivable related to revenue earned from Google totaled $75.3 million at June 30, 2011 and $70.5 million at December 31, 2010.

		June 30, 2011			December 31, 2010

		(In thousands)
Balance at January 1		$	59,869		$	28,180
Purchase of non-controlling interests			(5,652	)		—
Noncontrolling interests related to acquisitions			—			23,583
Noncontrolling interest created by a decrease in the ownership of a subsidiary			—			15,750
Contribution from owners of noncontrolling interests			80			79
Net earnings (loss) attributable to noncontrolling interests			868			(5,007	)
Change in fair value of redeemable noncontrolling interests			1,389			(2,059	)
Change in foreign currency translation adjustment			126			(267	)
Other			(198	)		(390	)

	Balance at end of period	$	56,482		$	59,869

The specific-identification method is used to determine the cost of securities sold and the amount of unrealized gains and losses reclassified out of accumulated other comprehensive income into earnings. The amount of unrealized gains, net of tax, reclassified out of accumulated other comprehensive income into earnings related to the sales and maturities of available-for-sale securities for the three and six months ended June 30, 2011 were $1.3 million and $1.4 million, respectively. The amount of unrealized gains, net of tax, reclassified out of accumulated other comprehensive income

into earnings related to the sales and maturities of available-for-sale securities for the three and six months ended June 30, 2010 were less than $0.1 million and $2.7 million, respectively.

At the end of each interim period, the Company makes its best estimate of the annual expected effective tax rate and applies that rate to its ordinary year-to-date earnings or loss. The income tax provision or benefit related to significant, unusual, or extraordinary items, if applicable, that will be separately reported or reported net of their related tax effect are individually computed and recognized in the interim period in which those items occur. In addition, the effect of changes in enacted tax laws or rates, tax status, or judgment on the realizability of a beginning-of-the-year deferred tax asset in future years is recognized in the interim period in which the change occurs.

The computation of the annual expected effective tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected pre-tax income (or loss) for the year, projections of the proportion of income (and/or loss) earned and taxed in foreign jurisdictions, permanent and temporary differences, and the likelihood of the realizability of deferred tax assets generated in the current year. The accounting estimates used to compute the provision or benefit for income taxes may change as new events occur, more experience is acquired, additional information is obtained or our tax environment changes. To the extent that the expected annual effective tax rate changes during a quarter, the effect of the change on prior quarters is included in income tax provision for the quarter in which the change occurs. Included in the income tax provision for the three months ended June 30, 2011 is a benefit of $0.7 million due to a lower estimated annual effective tax rate from that applied to the first quarter's ordinary income from continuing operations.

For the three and six months ended June 30, 2011, the Company recorded an income tax provision for continuing operations of $9.5 million and $25.6 million, respectively, which represent effective tax rates of 17% and 28%, respectively. The tax rates for the three and six months ended June 30, 2011 are lower than the federal statutory rate of 35% due principally to the reduction in state tax accruals resulting from income tax provision to tax return reconciliations and the expiration of statutes of limitations and foreign income taxed at lower rates, partially offset by interest on tax contingencies and state taxes.

For the three and six months ended June 30, 2010, the Company recorded an income tax provision for continuing operations of $5.3 million and $11.5 million, respectively, which represent effective tax rates of 26% and 93%, respectively. The tax rate for the three months ended June 30, 2010 is lower than the federal statutory rate of 35% due principally to foreign tax credits, partially offset by interest on tax contingencies and state taxes. The tax rate for the six months ended June 30, 2010 is higher than the federal statutory rate of 35% due principally to a valuation allowance on the deferred tax asset created by the impairment charge for our investment in The HealthCentral Network, Inc. ("HealthCentral"), interest on tax contingencies and state taxes, partially offset by foreign tax credits.

At June 30, 2011 and December 31, 2010, unrecognized tax benefits, including interest, are $473.3 million and $487.6 million, respectively. Of the total unrecognized tax benefits at June 30, 2011, $460.1 million is included in "non-current income taxes payable," $12.3 million relates to deferred tax assets included in "other non-current assets" and $0.8 million is included in "accrued expenses and other current liabilities." Included in unrecognized tax benefits at June 30, 2011 is $94.9 million relating

to tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. If unrecognized tax benefits at June 30, 2011 are subsequently recognized, $95.1 million and $210.7 million, net of related deferred tax assets and interest, would reduce income tax provision for continuing operations and discontinued operations, respectively. In addition, a continuing operations income tax provision of $4.3 million would be required upon the subsequent recognition of unrecognized tax benefits for an increase in the Company's valuation allowance against certain deferred tax assets.

The Company recognizes interest and, if applicable, penalties related to unrecognized tax benefits in income tax provision. Included in income tax provision for continuing operations and discontinued operations for the three months ended June 30, 2011 is a $1.5 million benefit and a $1.9 million expense, respectively, net of related deferred taxes of $1.0 million and $1.2 million, respectively, for interest on unrecognized tax benefits. Included in income tax provision for continuing operations and discontinued operations for the six months ended June 30, 2011 is a $0.6 million expense and a $3.3 million expense, respectively, net of related deferred taxes of $0.4 million and $2.1 million, respectively, for interest on unrecognized tax benefits. At June 30, 2011 and December 31, 2010, the Company has accrued $104.2 million and $97.7 million, respectively, for the payment of interest. At June 30, 2011 and December 31, 2010, the Company has accrued $4.5 million and $5.0 million, respectively, for penalties.

The Company is routinely under audit by federal, state, local and foreign authorities in the area of income tax. These audits include questioning the timing and the amount of income and deductions and the allocation of income and deductions among various tax jurisdictions. The Internal Revenue Service ("IRS") has completed its review of the Company's tax returns for the years ended December 31, 2001 through 2006. The settlement has not yet been submitted to the Joint Committee of Taxation for approval. The IRS began its review of the Company's tax returns for the years ended December 31, 2007 through 2009 in July 2011. The statute of limitations for the years 2001 through 2007 has currently been extended to December 31, 2012. Various state and local jurisdictions are currently under examination, the most significant of which are California, New York and New York City for various tax years beginning with 2003. Income taxes payable include reserves considered sufficient to pay assessments that may result from examination of prior year tax returns. Changes to reserves from period to period and differences between amounts paid, if any, upon resolution of issues raised in audits and amounts previously provided may be material. Differences between the reserves for income tax contingencies and the amounts owed by the Company are recorded in the period they become known. The Company believes that it is reasonably possible that its unrecognized tax benefits could decrease by $57.0 million within twelve months of the current reporting date, of which approximately $10.9 million could decrease income tax provision, primarily due to settlements, expirations of statutes of limitations, and the reversal of deductible temporary differences that will primarily result in a corresponding decrease in net deferred tax assets. An estimate of other changes in unrecognized tax benefits, while potentially significant, cannot be made.

On January 20, 2011, Match acquired OkCupid for $50.0 million in cash, plus potential additional consideration of up to $40.0 million that was contingent upon OkCupid's 2011 earnings performance. During the second quarter of 2011, the provisions of this contingent consideration arrangement were

amended. Pursuant to the amendment, $30.0 million was paid to the former owners, and a potential additional payment of up to $10.0 million is contingent upon revised performance goals. The fair value of the contingent consideration at June 30, 2011 is $10.0 million and is included in "Accrued expenses and other current liabilities" in the accompanying consolidated balance sheet. The Company estimated the fair value of the contingent consideration using its judgment of the likelihood of achieving the revised performance goals, which incorporates significant unobservable inputs.

At June 30, 2011, available-for-sale marketable securities are as follows (in thousands):

At December 31, 2010, available-for-sale marketable securities are as follows (in thousands):

The net unrealized gains in the tables above are included in accumulated other comprehensive income for their respective periods.

The contractual maturities of debt securities classified as available-for-sale at June 30, 2011 are as follows (in thousands):

The following table summarizes investments in marketable securities that have been in a continuous unrealized loss position for less than twelve months (in thousands):

At June 30, 2011 and December 31, 2010, there are no investments in marketable securities that have been in a continuous unrealized loss position for twelve months or longer.

Substantially all of the Company's debt securities are rated investment grade. Because the Company does not intend to sell any marketable securities and it is not more likely than not that the Company will be required to sell any marketable securities before recovery of their amortized cost bases, which may be maturity, the Company does not consider any of its marketable securities to be other-than-temporarily impaired at June 30, 2011.

The following table presents the proceeds from sales and maturities of available-for-sale marketable securities and the related gross realized gains and losses (in thousands):

Gross realized gains and losses from the sales of marketable securities and from the sales of investments are included in "Other income, net" in the accompanying consolidated statement of operations.

On July 8, 2011, IAC launched its previously announced tender offer for the 73% of Meetic that it does not own at a price per share of €15.00. The initial phase of the tender offer will close on August 29, 2011 and the second phase of the tender offer will close on September 19, 2011. In connection with the tender offer, IAC was obligated to place sufficient funds in escrow to purchase 100% of the shares that it does not own or $360.6 million. These funds are classified as a non-current asset as their expected use is to acquire a non-current asset. At the conclusion of the tender process, any unused funds will be returned to IAC.

The Company categorizes its assets and liabilities measured at fair value into a fair value hierarchy that prioritizes the inputs used in pricing the asset or liability. The three levels of the fair value hierarchy are:

The following tables present the Company's assets and liabilities that are measured at fair value on a recurring basis:

		June 30, 2011

		Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value Measurements
		(In thousands)
Assets:
Cash equivalents:
	Treasury and government agency money market funds	$	332,878	$	—	$	—	$	332,878
	Commercial paper		—		100,635		—		100,635
	Time deposits		—		20,650		—		20,650
Marketable securities:
	Corporate debt securities		—		116,732		—		116,732
	States of the U.S. and state political subdivisions		—		113,140		—		113,140
	U.S. Treasury securities		49,999		—		—		49,999
	Equity security		9,126		—		—		9,126
Funds held in escrow for Meetic tender offer:
	Treasury and government agency money market funds		158,305		—		—		158,305
	Commercial paper		—		202,278		—		202,278
Long-term investments:
	Auction rate security		—		—		8,680		8,680
	Marketable equity security		80,961		—		—		80,961

Total		$	631,269	$	553,435	$	8,680	$	1,193,384

Liabilities:
Contingent consideration arrangement		$	—	$	—	$	10,000	$	10,000

Total		$	—	$	—	$	10,000	$	10,000

		December 31, 2010

		Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value Measurements
		(In thousands)
Assets:
Cash equivalents:
	Treasury and government agency money market funds	$	275,108	$	—	$	—	$	275,108
	Commercial paper		—		309,183		—		309,183
	Time deposits		—		26,050		—		26,050
Marketable securities:
	Corporate debt securities		—		238,163		—		238,163
	States of the U.S. and state political subdivisions		—		110,621		—		110,621
	U.S. Treasury securities		199,899		—		—		199,899
	Equity security		15,314		—		—		15,314
Long-term investments:
	Auction rate securities		—		—		13,100		13,100

Total		$	490,321	$	684,017	$	13,100	$	1,187,438

The following tables present the changes in the Company's assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

There are no gains or losses included in earnings for the three and six months ended June 30, 2011 and 2010, relating to the Company's assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs.

The Company's auction rate securities ("ARS") are valued by discounting the estimated future cash flow streams of the securities over the lives of the securities. Credit spreads and other risk factors are also considered in establishing fair value. During the first quarter of 2011, one of the ARS was redeemed at its par value of $5.0 million. The cost basis of ARS is $10.0 million and $15.0 million at June 30, 2011 and December 31, 2010, respectively, with gross unrealized losses of $1.3 million and $1.9 million at June 30, 2011 and December 31, 2010, respectively. The unrealized losses are included in "Accumulated other comprehensive income" in the accompanying consolidated balance sheet. At June 30, 2011, the remaining auction rate security is rated A/WR and matures in 2035. Due to its high credit rating and because the Company does not intend to sell this security and it is not more likely than not that the Company will be required to sell this security before recovery of its amortized cost basis, which may be maturity, the Company does not consider the auction rate security to be other-than-temporarily impaired at June 30, 2011.

The Company's non-financial assets, such as goodwill, intangible assets and property and equipment, as well as equity and cost method investments, are measured at fair value only when an impairment charge is recognized. Such fair value measurements are based predominantly on Level 3 inputs.

During the first quarter of 2010, the Company recorded an $18.3 million impairment charge to write-down its investment in HealthCentral to fair value. The decline in value was determined to be other-than-temporary due to HealthCentral's continued losses and negative operating cash flows. The Company estimated the fair value of its investment in HealthCentral using a multiple of revenue approach. The impairment charge is included within "Equity in losses of unconsolidated affiliates" in the accompanying consolidated statement of operations.

The fair values of the financial instruments listed below have been determined by the Company using available market information and appropriate valuation methodologies.

	June 30, 2011						December 31, 2010

	Carrying Value			Fair Value			Carrying Value			Fair Value
	(In thousands)
Cash and cash equivalents	$	622,866		$	622,866		$	742,099		$	742,099
Marketable securities		288,997			288,997			563,997			563,997
Funds held in escrow for Meetic tender offer		360,583			360,583			—			—
Auction rate securities		8,680			8,680			13,100			13,100
Long-term marketable equity security		80,961			80,961			—			—
Notes receivable		3,615			2,849			3,316			2,818
Contingent consideration arrangement		(10,000	)		(10,000	)		—			—
Long-term debt		(95,844	)		(88,640	)		(95,844	)		(83,363	)
Guarantee of The Newsweek/Daily Beast Company debt		(5,000	)		(5,000	)		—			—
Letters of credit and surety bond		N/A			(232	)		N/A			(362	)

The carrying value of cash equivalents approximates fair value due to their short-term maturity. The funds held in escrow for the Meetic tender offer consist of cash and cash equivalents. The carrying value of these cash equivalents approximates fair value due to their short-term maturity. The fair value of notes receivable is based on discounting the expected future cash flow streams using yields of the underlying credit. The fair value of long-term debt is estimated using quoted market prices or indices for similar liabilities and taking into consideration other factors such as credit quality and maturity. The fair value of the letters of credit and surety bond are based on the present value of the costs associated with maintaining these instruments over their expected term. See Note 5 for discussion of the fair value of marketable securities, Note 7 for discussion of the fair value of the auction rate securities and Note 4 for discussion of the fair value of the contingent consideration arrangement.

The Company has guaranteed $5.0 million of The Newsweek/Daily Beast Company's $10.0 million line of credit. At June 30, 2011, $10.0 million had been drawn on this line of credit. The carrying value and fair value of this guarantee represents the amount the Company expects to pay to settle this obligation.

At June 30, 2011 and December 31, 2010, the carrying values of the Company's investments accounted for under the cost method totaled $6.9 million and $39.0 million, respectively, and are included in "Long-term investments" in the accompanying consolidated balance sheet. IAC's investment in The Active Network, Inc., which was previously accounted for under the cost method, became an investment measured at fair value during the second quarter of 2011. The cost basis of this long-term

marketable equity security was $33.4 million at June 30, 2011, with a gross unrealized gain of $47.5 million included in "Accumulated other comprehensive income" in the accompanying consolidated balance sheet. The Company evaluates each cost method investment for impairment on a quarterly basis and recognizes an impairment loss if a decline in value is determined to be other-than-temporary. If the Company has not identified events or changes in circumstances that may have a significant adverse effect on the fair value of a cost method investment, then the fair value of such cost method investment is not estimated, as it is impracticable to do so.

The following tables set forth the computation of basic and diluted earnings (loss) per share attributable to IAC shareholders.

	Three Months Ended June 30,

	2011						2010
	Basic			Diluted			Basic			Diluted
	(In thousands, except per share data)
Numerator:
Earnings from continuing operations	$	45,630		$	45,630		$	15,421		$	15,421
Net (earnings) loss attributable to noncontrolling interests		(718	)		(718	)		756			756

Earnings from continuing operations attributable to IAC shareholders		44,912			44,912			16,177			16,177
Loss from discontinued operations, net of tax		(2,488	)		(2,488	)		(2,586	)		(2,586	)

Net earnings attributable to IAC shareholders	$	42,424		$	42,424		$	13,591		$	13,591

Denominator:
Weighted average basic shares outstanding		90,050			90,050			109,287			109,287
Dilutive securities including stock options, warrants and RSUs(a)(b)		—			7,252			—			3,320

Denominator for earnings per share—weighted average shares(a)(b)		90,050			97,302			109,287			112,607

Earnings (loss) per share attributable to IAC shareholders:
Earnings per share from continuing operations	$	0.50		$	0.46		$	0.15		$	0.14
Discontinued operations, net of tax		(0.03	)		(0.02	)		(0.03	)		(0.02	)

Earnings per share	$	0.47		$	0.44		$	0.12		$	0.12

	Six Months Ended June 30,

	2011						2010
	Basic			Diluted			Basic			Diluted
	(In thousands, except per share data)
Numerator:
Earnings from continuing operations	$	65,798		$	65,798		$	824		$	824
Net (earnings) loss attributable to noncontrolling interests		(868	)		(868	)		1,375			1,375

Earnings from continuing operations attributable to IAC shareholders		64,930			64,930			2,199			2,199
Loss from discontinued operations, net of tax		(4,436	)		(4,436	)		(7,313	)		(7,313	)

Net earnings (loss) attributable to IAC shareholders	$	60,494		$	60,494		$	(5,114	)	$	(5,114	)

Denominator:
Weighted average basic shares outstanding		89,568			89,568			112,847			112,847
Dilutive securities including stock options, warrants and RSUs(a)(b)		—			5,923			—			3,394

Denominator for earnings per share—weighted average shares(a)(b)		89,568			95,491			112,847			116,241

Earnings (loss) per share attributable to IAC shareholders:
Earnings per share from continuing operations	$	0.72		$	0.68		$	0.02		$	0.02
Discontinued operations, net of tax		(0.04	)		(0.05	)		(0.07	)		(0.06	)

Earnings (loss) per share	$	0.68		$	0.63		$	(0.05	)	$	(0.04	)

(a): If the effect is dilutive, weighted average common shares outstanding include the incremental shares that would be issued upon the assumed exercise of stock options and warrants and vesting of restricted stock units ("RSUs"). For the three and six months ended June 30, 2011, approximately 1.2 million and 1.3 million shares, respectively, related to potentially dilutive securities are excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive. For the three and six months ended June 30, 2010, approximately 22.1 million and 22.6 million shares, respectively, related to potentially dilutive securities are excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive.
(b): There are no performance-based stock units ("PSUs") included in the denominator for earnings per share as the performance conditions have not been met for the respective reporting periods. For the three and six months ended June 30, 2011, approximately 3.3 million PSUs are excluded from the calculation of diluted earnings per share. For the three and six months ended June 30, 2010, approximately 1.9 million PSUs are excluded from the calculation of diluted earnings per share.

The overall concept that IAC employs in determining its operating segments is to present the financial information in a manner consistent with how the chief operating decision maker and executive

management view the businesses, how the businesses are organized as to segment management, and the focus of the businesses with regards to the types of services or products offered or the target market. Entities included in discontinued operations are excluded from the tables below. Operating segments are combined for reporting purposes if they meet certain aggregation criteria, which principally relate to the similarity of their economic characteristics or, in the case of Media & Other, do not meet the quantitative thresholds that require presentation as separate operating segments.

Revenue by geography is based on where the customer is located. Geographic information about the United States and international territories is presented below:

The Company's primary metric is Operating Income Before Amortization, which is defined as operating income excluding, if applicable: (1) non-cash compensation expense, (2) amortization and impairment of intangibles, (3) goodwill impairment, (4) pro forma adjustments for significant acquisitions, and (5) one-time items. The Company believes this measure is useful to investors because it represents the operating results from IAC's segments, taking into account depreciation, which it believes is an ongoing cost of doing business, but excluding the effects of any other non-cash expenses. Operating Income Before Amortization has certain limitations in that it does not take into account the impact to IAC's statement of operations of certain expenses, including non-cash compensation and acquisition related accounting. IAC endeavors to compensate for the limitations of the non-U.S. GAAP measure presented by providing the comparable U.S. GAAP measure with equal or greater prominence, financial statements prepared in accordance with U.S. GAAP, and descriptions of the reconciling items, including quantifying such items, to derive the non-U.S. GAAP measure.

The following tables reconcile Operating Income Before Amortization to operating income (loss) for the Company's reportable segments and to net earnings (loss) attributable to IAC shareholders in total (in thousands):

		Three Months Ended June 30, 2011

		Operating Income Before Amortization			Non-Cash Compensation Expense			Amortization of Intangibles			Operating Income (Loss)
Search		$	50,568		$	—		$	(259	)	$	50,309
Match			42,335			—			(1,336	)		40,999
ServiceMagic			8,622			—			(383	)		8,239
Media & Other			(3,137	)		120			(222	)		(3,239	)
Corporate			(14,950	)		(23,127	)		—			(38,077	)

	Total	$	83,438		$	(23,007	)	$	(2,200	)		58,231

Equity in losses of unconsolidated affiliates												(8,720	)
Other income, net												5,637

Earnings from continuing operations before income taxes												55,148
Income tax provision												(9,518	)

Earnings from continuing operations												45,630
Loss from discontinued operations, net of tax												(2,488	)

Net earnings												43,142
Net earnings attributable to noncontrolling interests												(718	)

Net earnings attributable to IAC shareholders											$	42,424

		Three Months Ended June 30, 2010

		Operating Income Before Amortization			Non-Cash Compensation Expense			Amortization of Intangibles			Operating Income (Loss)
Search		$	32,043		$	(89	)	$	(337	)	$	31,617
Match			29,104			179			(3,793	)		25,490
ServiceMagic			6,125			—			(377	)		5,748
Media & Other			(2,618	)		(159	)		(249	)		(3,026	)
Corporate			(14,217	)		(20,979	)		—			(35,196	)

	Total	$	50,437		$	(21,048	)	$	(4,756	)		24,633

Equity in losses of unconsolidated affiliates												(4,002	)
Other income, net												103

Earnings from continuing operations before income taxes												20,734
Income tax provision												(5,313	)

Earnings from continuing operations												15,421
Loss from discontinued operations, net of tax												(2,586	)

Net earnings												12,835
Net loss attributable to noncontrolling interests												756

Net earnings attributable to IAC shareholders											$	13,591

		Six Months Ended June 30, 2011

		Operating Income Before Amortization			Non-Cash Compensation Expense			Amortization of Intangibles			Operating Income (Loss)
Search		$	99,954		$	—		$	(557	)	$	99,397
Match			67,323			—			(2,895	)		64,428
ServiceMagic			12,799			—			(752	)		12,047
Media & Other			(6,503	)		(7	)		(453	)		(6,963	)
Corporate			(30,181	)		(43,161	)		—			(73,342	)

	Total	$	143,392		$	(43,168	)	$	(4,657	)		95,567

Equity in losses of unconsolidated affiliates												(10,599	)
Other income, net												6,389

Earnings from continuing operations before income taxes												91,357
Income tax provision												(25,559	)

Earnings from continuing operations												65,798
Loss from discontinued operations, net of tax												(4,436	)

Net earnings												61,362
Net earnings attributable to noncontrolling interests												(868	)

Net earnings attributable to IAC shareholders											$	60,494

		Six Months Ended June 30, 2010

		Operating Income Before Amortization			Non-Cash Compensation Expense			Amortization of Intangibles			Operating Income (Loss)
Search		$	63,584		$	(236	)	$	(674	)	$	62,674
Match			43,910			153			(4,871	)		39,192
ServiceMagic			8,984			—			(840	)		8,144
Media & Other			(5,014	)		(279	)		(1,545	)		(6,838	)
Corporate			(27,383	)		(42,231	)		—			(69,614	)

	Total	$	84,081		$	(42,593	)	$	(7,930	)		33,558

Equity in losses of unconsolidated affiliates												(26,615	)
Other income, net												5,339

Earnings from continuing operations before income taxes												12,282
Income tax provision												(11,458	)

Earnings from continuing operations												824
Loss from discontinued operations, net of tax												(7,313	)

Net loss												(6,489	)
Net loss attributable to noncontrolling interests												1,375

Net loss attributable to IAC shareholders											$	(5,114	)

In the ordinary course of business, the Company is a party to various lawsuits. The Company establishes reserves for specific legal matters when it determines that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable. Management has also identified certain other legal matters where we believe an unfavorable outcome is not probable and, therefore, no reserve is established. Although management currently believes that resolving claims against us, including claims where an unfavorable outcome is reasonably possible, will not have a material impact on the liquidity, results of operations, or financial condition of the Company, these matters are subject to inherent uncertainties and management's view of these matters may change in the future. The Company also evaluates other contingent matters, including tax contingencies, to assess the probability and estimated extent of potential loss. It is possible that an unfavorable outcome of one or more of these lawsuits or other contingencies could have a material impact on the liquidity, results of operations, or financial condition of the Company. See Note 3 for additional information related to income tax contingencies.

During 2010, IAC received a dividend from Meetic, which the Company deemed to be a partial return of its investment. Accordingly, the dividend is reflected as a cash flow from an investing activity in the accompanying consolidated statement of cash flows. IAC's share of the dividend was $11.4 million in total. IAC received $8.8 million of the dividend in June 2010 and the balance in July 2010.

On February 8, 2011, in connection with the tax-free exchange with Liberty Media Corporation in the fourth quarter of 2010, the Company received 0.1 million shares of IAC common stock, valued at $2.9 million, in fulfillment of post-closing working capital adjustments.

On January 31, 2011, IAC contributed The Daily Beast, previously reported in IAC's Media & Other segment, to a newly formed venture with Harman Newsweek called The Newsweek/Daily Beast Company. Pursuant to this transaction, IAC and Harman Newsweek operate The Newsweek/Daily Beast Company jointly. IAC accounts for its interest in The Newsweek/Daily Beast Company under the equity method.

The consideration for the acquisition of OkCupid on January 20, 2011 includes a contingent consideration arrangement which is described in Note 4.

On March 10, 2010, Match and Meetic completed a transaction in which Match contributed its Latin American business ("Match Latam") and Meetic contributed its Latin American business ("Parperfeito") to a newly formed venture. These contributions, along with a $3.0 million payment from Match to Meetic, resulted in each party owning a 50% equity interest in the newly formed venture, which was valued at $72 million. Match controls the venture through its voting interests. Accordingly, this transaction was accounted for as an acquisition of Parperfeito and a decrease in ownership of Match Latam. No gain or loss was recognized on this transaction as the fair value of the consideration received by Match equaled the fair value of the assets exchanged.

Between July 1, 2011 and July 22, 2011, IAC repurchased 2.4 million shares of common stock for aggregate consideration of $89.9 million.

On July 26, 2011, IAC's Board of Directors authorized the repurchase of up to 15 million shares of its outstanding common stock.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

IAC is a leading internet company with more than 50 brands serving consumer audiences across more than 30 countries… our mission is to harness the power of interactivity to make daily life easier and more productive for people all over the world. IAC includes the businesses comprising its Search segment; its Match and ServiceMagic segments; the businesses comprising its Media & Other segment; as well as investments in unconsolidated affiliates.

For a more detailed description of the Company's operating businesses, see the Company's annual report on Form 10-K for the year ended December 31, 2010.

Results of Operations for the three and six months ended June 30, 2011 compared to the three and six months ended June 30, 2010

Set forth below are the contributions made by our various segments and corporate operations to consolidated revenue, operating income (loss) and Operating Income Before Amortization (as defined in IAC's Principles of Financial Reporting) for the three and six months ended June 30, 2011 and 2010 (dollars in thousands).

Refer to Note 10 to the consolidated financial statements for reconciliations of Operating Income Before Amortization to operating income (loss) by reportable segment and to net earnings (loss) attributable to IAC shareholders in total.

Revenue in 2011 increased $91.2 million from 2010 primarily as a result of revenue increases of $55.2 million from Search, $19.5 million from Match, $9.8 million from Media & Other and $6.6 million from ServiceMagic. The increase in revenue from Search reflects strong growth from Mindspark's B2B operations as well as growth from destination websites, Mindspark's B2C operations and CityGrid Media. The increase in revenue from Match reflects strong growth from its Core operations (consisting of Match.com U.S., People Media and Chemistry.com) as well as from the impact of OkCupid, acquired January 20, 2011. The increase in revenue from Media & Other was driven by growth at Shoebuy, Electus, Notional and Vimeo, partially offset by a decline at Pronto. The increase in revenue from ServiceMagic came from growth in both its domestic and international operations.

A substantial portion of the Company's revenue is attributable to online advertising. A significant majority of the Company's online advertising revenue is attributable to a paid listing supply agreement with Google Inc. ("Google"), which expires on March 31, 2016. For the three months ended June 30, 2011 and 2010, revenue earned from Google was $221.3 million and $174.1 million, respectively. The majority of this revenue was earned by the businesses comprising the Search segment.

Revenue in 2011 increased $173.2 million from 2010 primarily as a result of revenue increases of $104.9 million from Search, $41.8 million from Match, $15.9 million from Media & Other and $10.7 million from ServiceMagic. The increases in revenue from these businesses are primarily due to the factors described above in the three month discussion. The revenue from Media & Other was further impacted from the inclusion in 2010 of revenue associated with profit participations related to our former interest in Reveille.

For the six months ended June 30, 2011 and 2010, revenue earned from Google was $436.2 million and $345.7 million, respectively.

Cost of revenue consists primarily of traffic acquisition costs. Traffic acquisition costs consist of payments made to partners who distribute Mindspark's customized browser-based applications, integrate our paid listings into their websites or direct traffic to our websites. These payments include amounts based on revenue share and other arrangements. Cost of revenue also includes Shoebuy's cost of products sold and shipping and handling costs, as well as expenses associated with the operation of the Company's data centers, including compensation and other employee-related costs (including stock-based compensation) for personnel engaged in data center functions, rent, energy and bandwidth costs, and content acquisition costs.

Cost of revenue in 2011 increased $40.8 million from 2010 primarily due to increases of $32.1 million from Search and $10.3 million from Media & Other, partially offset by a decrease of $3.2 million from Match. The increase in cost of revenue from Search was primarily due to an increase of $29.2 million in traffic acquisition costs related to the increase in revenue. As a percentage of revenue, traffic acquisition costs increased over the prior year period due to an increase in the proportion of revenue from customized browser-based applications and other arrangements with third parties who direct traffic to our websites. Cost of revenue from Media & Other increased primarily due to increases from Electus and Notional. Also contributing to the increase in cost of sales from Media & Other is an increase of $2.6 million in the cost of products sold and $1.1 million in shipping and handling costs at Shoebuy resulting from increased sales and higher fuel costs, partially offset by a decrease from The Daily Beast which, following the formation of The Newsweek/Daily Beast Company joint venture with Harman Newsweek on January 31, 2011, has been accounted for as an equity method investment. The decrease in cost of revenue from Match was primarily due to reduced spending from Singlesnet.

Cost of revenue in 2011 increased $82.4 million from 2010 primarily due to increases of $60.0 million from Search and $18.5 million from Media & Other. The increase in cost of revenue from

both Search and Media & Other are primarily due to the factors described above in the three month discussion.

Selling and marketing expense consists primarily of advertising and promotional expenditures and compensation and other employee-related costs (including stock-based compensation) for personnel engaged in sales, sales support and customer service functions. Advertising and promotional expenditures include online marketing, including fees paid to search engines and third parties that distribute Mindspark's downloadable applications, and offline marketing, including television and radio advertising.

Selling and marketing expense in 2011 increased $14.9 million from 2010 primarily due to increases of $8.1 million from Match and $5.6 million from Search; however as a percentage of revenue selling and marketing expense decreased from 2010 primarily due to an increase in the proportion of revenue that results in the payment of traffic acquisition costs. The increase in selling and marketing expense from Match is due to an increase of $8.8 million in advertising and promotional expenditures primarily related to offline marketing, including an ad campaign to launch the OurTime.com website, as well as an increase in advertising spend associated with an agreement entered into during the second quarter of 2010 with Yahoo!. The increase in selling and marketing expense from Search is due to an increase of $6.8 million in advertising and promotional expenditures, partially offset by a decrease in bad debt expense at CityGrid Media. The increase in advertising and promotional expenditures at Search was driven primarily by increased online marketing spend from its destination websites as well as efforts related to new product launches at Mindspark.

Selling and marketing expense in 2011 increased $24.8 million from 2010 primarily due to increases of $14.8 million from Match and $11.4 million from Search, partially offset by a decrease of $3.5 million from Media & Other. The increase in selling and marketing expense from both Match and Search are primarily due to the factors described above in the three month discussion. Selling and marketing expense from Media & Other decreased primarily due to lower online marketing spend at Pronto. As a percentage of revenue selling and marketing expense decreased from 2010 primarily due to the factor described above in the three month discussion.

General and administrative expense consists primarily of compensation and other employee-related costs (including stock-based compensation) for personnel engaged in executive management, finance, legal, tax and human resources, facilities costs and fees for professional services.

General and administrative expense in 2011 increased $5.6 million from 2010 primarily due to increases of $2.3 million from corporate, $1.4 million from Match and $0.9 million from Media & Other; however as a percentage of revenue general and administrative expense decreased from 2010 primarily due to operating expense leverage. General and administrative expense from corporate increased primarily due to higher compensation and other employee-related costs including an increase of $1.5 million in non-cash compensation expense related to the cancellation of certain equity awards during the second quarter of 2011. The increase in general and administrative expense from Match resulted primarily from an increase in professional fees due, in part, to the Meetic tender offer, partially offset by a decrease in compensation and other employee-related costs. The increase in general and administrative expense from Media & Other is principally due to Electus and Shoebuy, as well as Mobile Hatch, which was not in the prior year period, partially offset by The Daily Beast, which has been accounted for as an equity method investment from January 31, 2011 as described above.

General and administrative expense in 2011 increased $8.0 million from 2010 primarily due to increases of $2.6 million from corporate, $2.4 million from both ServiceMagic and Match and $1.9 million from Media & Other, partially offset by a decrease of $1.2 million from Search. The increases in general and administrative expense from corporate, Match and Media & Other are primarily due to the factors described above in the three month discussion. General and administrative expense at ServiceMagic increased primarily due to the inclusion in 2010 of a reversal of a $2.5 million provision for contingent consideration related to the 2009 acquisition of Market Hardware, which was not earned. The decrease in general and administrative expense from Search is primarily due to a decrease in litigation related expenses, partially offset by an increase in compensation and other-employee related costs due, in part, to an increase in average headcount at CityGrid Media and Mindspark. As a percentage of revenue general and administrative expense decreased from 2010 primarily due to the factor described above in the three month discussion.

Product development expense consists primarily of compensation and other employee-related costs (including stock-based compensation) that are not capitalized for personnel engaged in the design, development, testing and enhancement of product offerings and related technology.

Product development expense in 2011 increased $2.9 million from 2010 primarily due to increases of $2.0 million from Search and $0.8 million from Match. Contributing to the increase in product development expense at Search is a decrease in costs being capitalized in the current year period related to the development and enhancement of IAC Search & Media's product offerings and related technology, partially offset by lower compensation and other employee-related costs due, in part, to the Ask.com restructuring that took place during the fourth quarter of 2010. The increase in product development expense from Match is primarily due to an increase in compensation and other employee-related costs.

Product development expense in 2011 increased $5.8 million from 2010 primarily due to increases of $3.8 million from Search and $1.7 million from Match. The increase in product development expense from both Search and Match are primarily due to the factors described above in the three month discussion.

Depreciation in 2011 decreased $4.2 million from 2010 primarily due to the write-off of certain assets in the prior year period, as well as a decrease in depreciation in the current year period resulting from the write-off of certain capitalized software costs associated with the Ask.com restructuring that took place in the fourth quarter of 2010 and lower overall capital expenditures.

Depreciation in 2011 decreased $6.5 million from 2010 primarily due to the factors described above in the three month discussion.

Operating Income Before Amortization in 2011 increased $33.0 million from 2010 primarily due to increases of $18.5 million from Search and $13.2 million from Match. The increase in Operating Income Before Amortization reflects, in each case, higher revenue and operating expense leverage, as well as a decrease in depreciation from Search and a decrease in cost of revenue from Match.

Operating Income Before Amortization in 2011 increased $59.3 million from 2010 primarily due to increases of $36.4 million from Search and $23.4 million from Match. The increase in Operating Income Before Amortization from both Search and Match are primarily due to the factors described above in the three month discussion.

Operating income in 2011 increased $33.6 million from 2010 primarily due to an increase of $33.0 million in Operating Income Before Amortization described above and a decrease of $2.6 million in amortization of intangibles, partially offset by an increase of $2.0 million in non-cash compensation expense. The decrease in amortization of intangibles is principally due to certain intangible assets at Match being fully amortized prior to the second quarter of 2011. The increase in non-cash compensation expense is primarily related to the cancellation of certain equity awards during the second quarter of 2011.

At June 30, 2011, there was $149.6 million of unrecognized compensation cost, net of estimated forfeitures, related to all equity-based awards, which is expected to be recognized over a weighted average period of approximately 2.3 years.

Operating income in 2011 increased $62.0 million from 2010 primarily due to an increase of $59.3 million in Operating Income Before Amortization described above and a decrease of $3.3 million in amortization of intangibles, partially offset by an increase of $0.6 million in non-cash compensation expense. The decrease in amortization of intangibles and the increase in non-cash compensation expense are primarily due to the factors described above in the three month discussion.

Equity in losses of unconsolidated affiliates in 2011 increased $4.7 million from 2010 primarily due to the inclusion in 2011 of losses related to the Company's investment in The Newsweek/Daily Beast Company.

Other income, net in 2011 increased $5.5 million from 2010 primarily due to $4.6 million in gains associated with certain non-income tax refunds related to Match Europe, which was sold in 2009.

Equity in losses of unconsolidated affiliates in 2011 decreased $16.0 million from 2010 primarily due to the inclusion in 2010 of an $18.3 million impairment charge to write-down the Company's investment in The HealthCentral Network, Inc. ("HealthCentral") to fair value. Absent this impairment charge, equity in losses of unconsolidated affiliates increased primarily due to the factor described above in the three month discussion, partially offset by the positive contribution from our investment in Meetic. The Company recognized a loss in the prior year period related to its investment in Meetic primarily due to the amortization of intangibles, which was required by purchase accounting rules.

Other income, net in 2011 increased $1.1 million from 2010 primarily due to the factor described above in the three month discussion, partially offset by the inclusion in 2010 of a gain of $4.0 million related to the sale of certain securities.

In 2011, the Company recorded an income tax provision for continuing operations of $9.5 million on pre-tax income of $55.1 million, which represents an effective tax rate of 17%. The 2011 tax rate is lower than the federal statutory rate of 35% due principally to the reduction in state tax accruals resulting from income tax provision to tax return reconciliations and the expiration of statutes of limitations and foreign income taxed at lower rates, partially offset by interest on tax contingencies and state taxes. In 2010, the Company recorded an income tax provision for continuing operations of $5.3 million on pre-tax income of $20.7 million, which represents an effective tax rate of 26%. The 2010 tax rate is lower than the federal statutory rate of 35% due principally to foreign tax credits, partially offset by interest on income tax contingencies and state taxes.

In 2011, the Company recorded an income tax provision for continuing operations of $25.6 million on pre-tax income of $91.4 million, which represents an effective tax rate of 28%. The 2011 tax rate is lower than the federal statutory rate of 35% due principally to the reduction in state tax accruals resulting from income tax provision to tax return reconciliations and the expiration of statutes of limitations and foreign income taxed at lower rates, partially offset by interest on tax contingencies and state taxes. In 2010, the Company recorded an income tax provision for continuing operations of $11.5 million on pre-tax income of $12.3 million, which represents an effective tax rate of 93%. The 2010 tax rate is higher than the federal statutory rate of 35% due principally to a valuation allowance on the deferred tax asset created by the impairment charge for our investment in HealthCentral, interest on income tax contingencies and state taxes, partially offset by foreign tax credits.

At June 30, 2011 and December 31, 2010, the Company has unrecognized tax benefits of $369.1 million and $389.9 million, respectively. Unrecognized tax benefits at June 30, 2011 decreased by $20.8 million from December 31, 2010 due principally to the reversal of state tax reserves to reflect income tax provision to tax return reconciliations, the expiration of statutes of limitations, and the receipt of favorable income tax rulings, as well as a net decrease in deductible temporary differences, partially offset by an increase in reserves related to a cost sharing and buy-in arrangement with a foreign subsidiary. The Company recognizes interest and, if applicable, penalties related to unrecognized tax benefits in income tax provision. Included in income tax provision for continuing operations and discontinued operations for the three months ended June 30, 2011 is a $1.5 million benefit and a $1.9 million expense, respectively, net of related deferred taxes of $1.0 million and $1.2 million, respectively, for interest on unrecognized tax benefits. Included in income tax provision for continuing operations and discontinued operations for the six months ended June 30, 2011 is a $0.6 million expense and a $3.3 million expense, respectively, net of related deferred taxes of $0.4 million and $2.1 million, respectively, for interest on unrecognized tax benefits. At June 30, 2011 and December 31, 2010, the Company has accrued $104.2 million and $97.7 million, respectively, for the payment of interest. At June 30, 2011 and December 31, 2010, the Company has accrued $4.5 million and $5.0 million, respectively, for penalties.

The 2011 amount is primarily due to interest on income tax contingencies. The 2010 amount is principally due to losses of InstantAction and interest on income tax contingencies.

The 2011 and 2010 amounts are primarily due to the factors described above in the three month discussion.

Of the Company's six reporting units with goodwill, IAC Search & Media and Shoebuy have fair values closest to their carrying values. The amount of goodwill of each of these two reporting units is $533.9 million and $21.7 million, respectively, at June 30, 2011. To illustrate the magnitude of potential impairment charges related to potential future changes in estimated fair values, had the estimated fair values of each of these two reporting units been hypothetically lower by 20% at October 1, 2010, the date of our most recent annual impairment assessment, the carrying values of IAC Search & Media and Shoebuy would have exceeded their fair values by approximately $9 million and $3 million, respectively. If operating results of these two businesses vary significantly from anticipated results, future, and in the case of IAC Search & Media, potentially material, impairments of goodwill and/or indefinite-lived intangible assets could occur.

In addition to the discussion of consolidated results above, the following is a discussion of the results of each segment.

Our Search segment includes Mindspark, a digital consumer products business consisting of our B2C operations, through which we develop, market and distribute downloadable applications, and our B2B operations, which provide customized browser-based applications for software and media companies; destination websites, including Ask.com and Dictionary.com, through which we provide search and additional services; and CityGrid Media, an online media company that aggregates and integrates local content and ads and distributes them to publishers across web and mobile platforms.

Revenue increased 28% to $252.4 million, reflecting strong growth from Mindspark's B2B operations as well as growth from destination websites, Mindspark's B2C operations and CityGrid Media. The revenue growth in Mindspark's B2B operations was driven by increased contribution from both existing and new partners. The increase in Mindspark's B2C revenue was driven primarily by new products launched since the year ago period. The revenue growth in destination websites reflects increased and more efficient marketing efforts as well as improved monetization. The increase in revenue at CityGrid Media primarily reflects growth from existing resellers and the contribution from new resellers.

Operating Income Before Amortization increased 58% to $50.6 million, growing at a faster rate than revenue due to a decrease of $3.6 million in depreciation and lower selling and marketing expense and general and administrative expense as a percentage of revenue, partially offset by an increase of $29.2 million in traffic acquisition costs. The decrease in depreciation is primarily due to the write-off of certain assets in the prior year period, as well as a decrease in depreciation in the current year period resulting from the write-off of certain capitalized software costs associated with the Ask.com restructuring that took place in the fourth quarter of 2010. As a percentage of revenue both selling and marketing expense and general and administrative expense decreased primarily due to an increase in the proportion of revenue that results in the payment of traffic acquisition costs and operating expense leverage, respectively; however, overall selling and marketing expense increased primarily due to an increase in advertising and promotional expenditures, partially offset by a decrease in bad debt expense at CityGrid Media. The increase in advertising and promotional expenditures was driven primarily by increased online marketing spend from our destination websites as well as efforts related to new product launches at Mindspark. General and administrative expense increased due to higher compensation and other employee-related costs, partially offset by a decrease in litigation related expenses. The increase in traffic acquisition costs is primarily due to the increase in revenue. As a percentage of revenue, traffic acquisition costs increased over the prior year period due to an increase in the proportion of revenue from customized browser-based applications and other arrangements with third parties who direct traffic to our websites.

Operating income increased 59% to $50.3 million, primarily due to the increase in Operating Income Before Amortization described above and a slight decrease in both non-cash compensation expense and amortization of intangibles.

Revenue increased 26% to $501.0 million, driven primarily by the factors described above in the three month discussion.

Operating Income Before Amortization increased 57% to $100.0 million, growing at a faster rate than revenue due to a decrease of $5.7 million in depreciation and lower selling and marketing expense as a percentage of revenue, partially offset by increases of $53.7 million in traffic acquisition costs and $3.8 million in product development expense. The decrease in depreciation, the lower selling and marketing expense as a percentage of revenue and the increase in traffic acquisition costs are primarily due to the factors described above in the three month discussion. The increase in product development expense is primarily due to a decrease in costs being capitalized in the current year period, partially offset by lower compensation and other employee-related costs due, in part, to the Ask.com restructuring that took place during the fourth quarter of 2010.

Operating income increased 59% to $99.4 million, primarily due to the increase in Operating Income Before Amortization described above and a slight decrease in both non-cash compensation expense and amortization of intangibles.

Revenue increased 20% to $116.4 million, benefiting from strong growth within its Core and Developing operations. Match's Developing operations consist of OkCupid, Singlesnet, mobile-only products and its international operations. Core revenue increased 22% to $97.6 million driven by a 17% increase in subscribers. The growth in Developing revenue was primarily due to display advertising revenue driven by the acquisition of OkCupid, which was not reflected in the prior year period. Revenue in the prior year period was negatively impacted by the write-off of $2.2 million in deferred revenue associated with the formation of our venture with Meetic in Latin America and the Singlesnet acquisition.

Operating Income Before Amortization increased 45% to $42.3 million, primarily due to the higher revenue noted above, a decrease of $3.2 million in cost of revenue and lower general and administrative expense as a percentage of revenue, partially offset by an increase of $8.1 million in selling and marketing expense. The decrease in cost of revenue was primarily due to reduced spending from Singlesnet. General and administrative expense decreased as a percentage of revenue, however increased from 2010, primarily due to an increase in professional fees due, in part, to the Meetic tender offer, partially offset by a decrease in compensation and other employee-related costs. The increase in selling and marketing expense is due to an increase of $8.8 million in advertising and promotional expenditures primarily related to offline marketing, including an ad campaign to launch the OurTime.com website, as well as an increase in advertising spend associated with an agreement entered into during the second quarter of 2010 with Yahoo!.

Operating income increased 61% to $41.0 million, primarily due to the increase in Operating Income Before Amortization described above and a decrease of $2.5 million in amortization of intangibles due to certain intangible assets being fully amortized prior to the second quarter of 2011.

Revenue increased 22% to $228.0 million. Core revenue increased 20% to $190.9 million driven by an increase in subscribers. Developing revenue increased 38% to $37.2 million driven primarily by Match's venture with Meetic in Latin America, which was not reflected in the full prior year period, as well as from the acquisition in 2011 of OkCupid and the contribution of Singlesnet, acquired March 2, 2010.

Operating Income Before Amortization increased 53% to $67.3 million, growing at a faster rate than revenue primarily due to lower cost of revenue and operating expenses as a percentage of revenue.

Operating income increased 64% to $64.4 million, primarily due to the increase in Operating Income Before Amortization described above and a decrease of $2.0 million in amortization of intangibles.

Revenue increased 13% to $56.1 million, benefiting from growth in its domestic and international operations. Domestically, revenue growth reflects an 8% increase in accepted service requests, which was driven by an 8% increase in service requests and a 4% increase in service professionals. Domestic growth also reflects an increase in revenue from website design and hosting services. ServiceMagic's international revenue growth reflects a 71% increase in accepted service requests. A service request can be transmitted to more than one service professional and is deemed accepted upon transmission.

Operating Income Before Amortization increased 41% to $8.6 million, primarily due to the higher revenue noted above and lower selling and marketing expense as a percentage of revenue. Operating Income Before Amortization in 2010 benefited from the reversal of a $0.9 million provision for contingent consideration related to the 2009 acquisition of Market Hardware, which was not earned.

Operating income increased 43% to $8.2 million, primarily due to the increase in Operating Income Before Amortization described above.

Revenue increased 12% to $102.4 million, driven primarily by the factors described above in the three month discussion. Domestically, revenue growth reflects an 8% increase in accepted service requests, which was driven, in part, by a 4% increase in service requests. ServiceMagic's international revenue growth reflects a 65% increase in accepted service requests.

Operating Income Before Amortization increased 42% to $12.8 million, driven primarily by the factors described above in the three month discussion. Operating Income Before Amortization in 2010 benefited from the reversal of a $2.5 million provision for contingent consideration related to the 2009 acquisition of Market Hardware, which was not earned.

Operating income increased 48% to $12.0 million, primarily due to the increase in Operating Income Before Amortization described above and a slight decrease in amortization of intangibles.

Revenue increased 19% to $60.8 million primarily reflecting growth at Shoebuy, Electus, Notional and Vimeo, partially offset by a decline at Pronto.

Operating Income Before Amortization loss increased by $0.5 million to a loss of $3.1 million. Losses increased primarily due to increased operating expenses at Electus; reduced profitability at Pronto due to lower revenue; and start up costs at Hatch Labs, which was not in the prior year period. Operating Income Before Amortization loss in 2010 included losses related to The Daily Beast, which, following the formation of the joint venture with Harman Newsweek on January 31, 2011, has been accounted for as an equity method investment.

Operating loss increased by $0.2 million to $3.2 million, primarily due to the increase in Operating Income Before Amortization loss described above, partially offset by a decrease in non-cash compensation expense.

Revenue increased 16% to $115.0 million primarily due to the factors described above in the three month discussion. Revenue was further impacted from the inclusion in 2010 of revenue associated with profit participations related to our former interest in Reveille.

Operating Income Before Amortization loss increased by $1.5 million to a loss of $6.5 million. Losses increased primarily due to the factors described above in the three month discussion and the inclusion in 2010 of profit participations related to our former interest in Reveille.

Operating loss increased by $0.1 million to $7.0 million, primarily due to the increase in Operating Income Before Amortization loss described above, partially offset by a decrease of $1.1 million in amortization of intangibles and a decrease in non-cash compensation expense.

Operating Income Before Amortization loss increased by $0.7 million to a loss of $14.9 million reflecting higher compensation and other employee-related costs.

Operating loss increased $2.9 million to $38.1 million primarily due to the increase in Operating Income Before Amortization loss described above and an increase of $2.1 million in non-cash compensation expense. The increase in non-cash compensation expense is primarily related to the cancellation of certain equity awards during the second quarter of 2011.

Operating Income Before Amortization loss increased by $2.8 million to a loss of $30.2 million primarily due to the factors described above in the three month discussion.

Operating loss increased $3.7 million to $73.3 million primarily due to the increase in Operating Income Before Amortization loss described above and an increase of $0.9 million in non-cash compensation expense.

At June 30, 2011, the Company had $622.9 million of cash and cash equivalents, $289.0 million of marketable securities, $360.6 million of funds held in escrow for the Meetic tender offer, which launched July 8, 2011, and $95.8 million in long-term debt. Long-term debt consists of $80.0 million in Liberty Bonds due September 1, 2035 and $15.8 million in 7% Senior Notes due January 15, 2013.

During the six months ended June 30, 2011 and 2010, the Company purchased 4.8 million and 17.1 million shares of IAC common stock for aggregate consideration, on a trade date basis, of $172.8 million and $383.5 million, respectively. In addition, in connection with the tax-free exchange with Liberty in the fourth quarter of 2010, the Company received 0.1 million shares of IAC common stock in February 2011 in fulfillment of post-closing working capital adjustments. IAC also repurchased an additional 2.4 million shares of common stock from July 1, 2011 through July 22, 2011 for aggregate consideration of $89.9 million. On July 26, 2011, the Company's Board of Directors authorized the repurchase of up to 15 million shares of IAC common stock. IAC may purchase shares over an indefinite period of time, depending on those factors IAC management deems relevant at any particular time, including, without limitation, market conditions, share price and future outlook.

Net cash provided by operating activities attributable to continuing operations is $157.2 million and $131.6 million in 2011 and 2010, respectively. The increase of $25.6 million in net cash provided by operating activities attributable to continuing operations is primarily due to higher income in 2011, partially offset by cash income tax payments in 2011 as compared to cash income tax refunds in 2010.

Net cash used in investing activities attributable to continuing operations in 2011 of $189.8 million includes $360.6 million of funds held in escrow for the Meetic tender offer, acquisitions, net of cash acquired, of $80.0 million and capital expenditures of $19.3 million. The funds held in escrow secure IAC's obligation in the event that all Meetic shares are tendered. Escrowed amounts reflecting shares not tendered will be released to the Company after the closing of the tender. Partially offsetting these uses of cash are the net proceeds of $267.1 million related to purchases, sales and maturities of marketable debt securities and the proceeds from sales of investments of $11.8 million, including the redemption of one of the Company's auction rate securities. Net cash used in investing activities attributable to continuing operations in 2010 of $87.7 million includes net purchases of $60.7 million related to the purchases, sales and maturities of marketable debt securities, capital expenditures of $23.5 million and acquisitions, net of cash acquired, of $16.7 million, partially offset by the dividend received from Meetic of $8.8 million and the proceeds of $5.3 million from the sale of certain securities.

Net cash used in financing activities attributable to continuing operations in 2011 of $85.3 million includes the purchase of treasury stock of $155.2 million, partially offset by proceeds related to the issuance of common stock, net of withholding taxes, of $52.0 million and the excess tax benefits from stock-based awards of $17.9 million. Net cash used in financing activities attributable to continuing operations in 2010 of $367.9 million includes the purchase of treasury stock of $379.5 million, partially offset by proceeds related to the issuance of common stock, net of withholding taxes, of $6.6 million and the excess tax benefits from stock-based awards of $5.0 million.

IAC anticipates that it will need to make capital and other expenditures in connection with the development and expansion of its operations. The Company may make a number of acquisitions which could result in the reduction of its cash and/or marketable securities balance or the incurrence of debt. IAC expects that 2011 capital expenditures will be less than 2010. IAC believes that its cash on hand along with its anticipated operating cash flows in 2011 and its access to capital markets are sufficient to fund its operating needs, capital, investing and other commitments and contingencies for the foreseeable future.

IAC reports Operating Income Before Amortization as a supplemental measure to generally accepted accounting principles ("GAAP"). This measure is one of the primary metrics by which we evaluate the performance of our businesses, on which our internal budgets are based and by which management is compensated. We believe that investors should have access to, and we are obligated to provide, the same set of tools that we use in analyzing our results. This non-GAAP measure should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. IAC endeavors to compensate for the limitations of the non-GAAP measure presented by providing the comparable GAAP measure with equal or greater prominence, financial statements prepared in accordance with GAAP, and descriptions of the reconciling items, including quantifying such items, to derive the non-GAAP measure. We encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP measure which we discuss below.

Operating Income Before Amortization is defined as operating income excluding, if applicable: (1) non-cash compensation expense, (2) amortization and impairment of intangibles, (3) goodwill impairment, (4) pro forma adjustments for significant acquisitions, and (5) one-time items. We believe this measure is useful to investors because it represents the consolidated operating results from IAC's segments, taking into account depreciation, which we believe is an ongoing cost of doing business, but excluding the effects of any other non-cash expenses. Operating Income Before Amortization has certain limitations in that it does not take into account the impact to IAC's statement of operations of certain expenses, including non-cash compensation and acquisition-related accounting.

We will only present Operating Income Before Amortization on a pro forma basis if we view a particular transaction as significant in size or transformational in nature. For the periods presented in this report, there are no transactions that we have included on a pro forma basis.

Operating Income Before Amortization is presented before one-time items, if applicable. These items are truly one-time in nature and non-recurring, infrequent or unusual, and have not occurred in the past two years or are not expected to recur in the next two years, in accordance with the Securities and Exchange Commission rules. GAAP results include one-time items. For the periods presented in this report, there are no one-time items.

Non-cash compensation expense consists principally of expense associated with the grants, including unvested grants assumed in acquisitions, of stock options, restricted stock units ("RSUs") and performance-based RSUs. These expenses are not paid in cash, and we include the related shares in our fully diluted shares outstanding which, for stock options and RSUs, are included on a treasury method basis, and for performance-based RSUs are included on a treasury method basis once the performance conditions are met. Upon the exercise of certain stock options and vesting of RSUs and performance-based RSUs, the awards are settled, at the Company's discretion, on a net basis, with the Company remitting the required tax withholding amount from its current funds.

Amortization of intangibles (including impairment of intangibles, if applicable) and goodwill impairment (if applicable) are non-cash expenses relating primarily to acquisitions. At the time of an acquisition, the identifiable definite-lived intangible assets of the acquired company, such as customer

lists, technology and supplier agreements, are valued and amortized over their estimated lives. Value is also assigned to acquired indefinite-lived intangible assets, which comprise trade names and trademarks, and goodwill that are not subject to amortization. An impairment is recorded when the carrying value of an intangible asset or goodwill exceeds its fair value. While it is likely that we will have significant intangible amortization expense as we continue to acquire companies, we believe that intangible assets represent costs incurred by the acquired company to build value prior to acquisition and the related amortization and impairment charges of intangible assets or goodwill, if applicable, are not ongoing costs of doing business.

For a reconciliation of Operating Income Before Amortization to operating income (loss) by reportable segment and to net earnings (loss) attributable to IAC shareholders in total for the three and six months ended June 30, 2011 and 2010, see Note 10 to the consolidated financial statements.

The Company's exposure to market rate risk for changes in interest rates relates primarily to the Company's investment portfolio and long-term debt.

The Company invests its excess cash in certain cash equivalents and marketable debt securities, which consist primarily of money market instruments and short-to-intermediate-term debt securities issued by the U.S. government, U.S. governmental agencies, states of the U.S. and subdivisions thereof and investment grade corporate issuers. The Company employs a methodology that considers available evidence in evaluating potential impairment of its investments. Investments are considered to be impaired when a decline in fair value below the amortized cost basis is determined to be other-than-temporary. If a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded and a new cost basis in the investment is established.

Based on the Company's total investment in marketable debt securities at June 30, 2011, a 100 basis point increase or decrease in the level of interest rates would, respectively, decrease or increase the fair value of the debt investment securities by $1.9 million. Such potential increase or decrease in fair value is based on certain simplifying assumptions, including a constant level and rate of debt securities and an immediate across-the-board increase or decrease in the level of interest rates with no other subsequent changes for the remainder of the period. Conversely, since almost all of the Company's cash and cash equivalents balance of $622.9 million is invested in short-term fixed or variable rate money market instruments, the Company would also earn more (less) interest income due to such an increase (decrease) in interest rates.

At June 30, 2011, the Company's outstanding debt is $95.8 million, all of which pays interest at fixed rates. If market rates decline, the Company runs the risk that the related required payments on the fixed rate debt will exceed those based on market rates. A 100 basis point increase or decrease in the level of interest rates would, respectively, decrease or increase in fair value of the fixed-rate debt by $10.7 million. Such potential increase or decrease in fair value is based on certain simplifying assumptions, including a constant level and rate of fixed-rate debt for all maturities and an immediate across-the-board increase or decrease in the level of interest rates with no other subsequent changes for the remainder of the period.

At June 30, 2011, the Company has three investments in equity securities of publicly traded companies. One of these investments is the Company's investment in Meetic, which is accounted for using the equity method. The other two investments are available-for-sale marketable equity securities. The investment in Meetic is included in "Long-term investments" and the available-for-sale marketable equity securities are either included in "Marketable securities" or "Long-term investments" depending on management intent on holding the securities. The available-for-sale marketable equity securities are reported at fair value based on their quoted market price with any unrealized gain or loss, net of tax, included as a component of "Accumulated other comprehensive income" in the accompanying consolidated balance sheet. Investments in equity securities of publicly traded companies are exposed to significant fluctuations in fair value due to the volatility of the stock market, among other factors. During the three and six months ended June 30, 2011, the Company did not record any other-than-temporary impairment charges related to its available-for-sale marketable equity securities.

It is not customary for the Company to make significant investments in equity securities as part of its marketable securities investment strategy.

Because our investment in Meetic is accounted for using the equity method, it is not reported at fair value. In the event the fair value of our investment in Meetic were to decline below its carrying value, this decline would be only one factor in an assessment for other-than-temporary impairment. In the event the Company acquires a controlling financial interest in Meetic pursuant to the tender offer, the Company will be required to remeasure its investment in Meetic at the acquisition-date fair value. Based on the tender offer price of €15.00 per share, the Company's current estimate of the remeasurement loss is approximately $10 million.

The Company conducts business in certain foreign markets, primarily in the European Union. The Company's primary exposure to foreign currency exchange risk relates to investments in foreign subsidiaries that transact business in a functional currency other than the U.S. Dollar, primarily the Euro and British Pound Sterling. However, the exposure is mitigated since the Company has generally reinvested cash flows from international operations in order to grow the businesses. The statements of operations of the Company's international businesses are translated into U.S. dollars at the average exchange rates in each applicable period. To the extent the U.S. dollar strengthens against foreign currencies, the translation of these foreign currency denominated transactions results in reduced revenue and operating results. Similarly, the Company's revenue and operating results will increase for our international operations if the U.S. dollar weakens against foreign currencies. The Company is also exposed to foreign currency exchange risk related to its assets and liabilities denominated in a currency other than the functional currency.

The economic impact of foreign currency exchange rate movements on the Company is often linked to variability in real growth, inflation, interest rates, governmental actions and other factors. These changes, if material, could cause the Company to adjust its financing and operating strategies. Foreign exchange gains and losses are not material to the Company's earnings in 2011 and 2010. As foreign currency exchange rates change, translation of the statements of operations of the Company's international businesses into U.S. dollars affects year-over-year comparability of operating results. Historically, the Company has not hedged foreign currency exchange risks because cash flows from international operations are generally reinvested locally. However, the Company periodically reviews its strategy for hedging foreign currency exchange risks. The Company's objective in managing its foreign currency exchange risk is to minimize its potential exposure to the changes that foreign currency exchange rates might have on its earnings, cash flows and financial position.

The Company monitors and evaluates on an ongoing basis its disclosure controls and internal control over financial reporting in order to improve its overall effectiveness. In the course of these evaluations, the Company modifies and refines its internal processes as conditions warrant.

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), our management, including our Chairman and Senior Executive, our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined by Rule 13a-15(e) and 15d-15(e) under the Exchange Act). Based upon that evaluation, our Chairman and Senior Executive, our Chief Executive Officer and our Chief Financial Officer concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective in providing reasonable assurance that information we are required to disclose in our filings with the Securities and Exchange Commission under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and Forms, and include controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

As required by Rule 13a-15(d) of the Exchange Act, the Company, under the supervision and with the participation of the Company's management, including the Chairman and Senior Executive, the Chief Executive Officer and the Chief Financial Officer, also evaluated whether any changes occurred to the Company's internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, such control. Based on that evaluation, the Company concluded that there has been no such change during the period covered by this report.

This quarterly report on Form 10-Q contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The use of words such as "anticipates," "estimates," "expects," "intends," "plans" and "believes," among others, generally identify forward-looking statements. These forward-looking statements include, among others, statements relating to: IAC's future financial performance, IAC's business prospects and strategy, anticipated trends and prospects in the industries in which IAC's businesses operate and other similar matters. These forward-looking statements are based on management's current expectations and assumptions about future events, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict.

Actual results could differ materially from those contained in these forward- looking statements for a variety of reasons, including, among others: changes in senior management at IAC and/or its businesses, changes in our relationship with, or policies implemented by, Google, adverse changes in economic conditions, either generally or in any of the markets or industries in which IAC's businesses operate, adverse trends in the online advertising industry or the advertising industry generally, our ability to convert visitors to our various websites into users and customers, our ability to offer new or alternative products and services in a cost-effective manner and consumer acceptance of these products and services, changes in industry standards and technology, actual tax liabilities that differ materially from our estimates, operational and financial risks relating to acquisitions, our ability to expand successfully into international markets and regulatory changes. Certain of these and other risks and uncertainties are discussed in IAC's filings with the SEC, including in Part II "Item 1A. Risk Factors" of our quarterly report on Form 10-Q for the fiscal quarter ended March 31, 2011. Other unknown or unpredictable factors that could also adversely affect IAC's business, financial condition and operating results may arise from time to time. In light of these risks and uncertainties, the forward-looking statements discussed in this report may not prove to be accurate. Accordingly, you should not place undue reliance on these forward-looking statements, which only reflect the views of IAC management as of the date of this report. IAC does not undertake to update these forward-looking statements.

In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in Part II "Item 1A. Risk Factors" of our quarterly report on Form 10-Q for the fiscal quarter ended March 31, 2011, which could materially affect our business, financial condition or future operating results. The risks described in this report are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

The following table sets forth purchases by the Company of its common stock during the quarter ended June 30, 2011:

	Description	Location

3.1	Restated Certificate of Incorporation of IAC/InterActiveCorp.	Exhibit 3.1 to the Registrant's Registration Statement on Form 8-A/A, filed on August 12, 2005.
3.2	Certificate of Amendment of the Restated Certificate of Incorporation of IAC/InterActiveCorp.	Exhibit 3.1 to the Registrant's Current Report on Form 8-K, filed on August 22, 2008.
3.3	Amended and Restated By-Laws of IAC/InterActiveCorp.	Exhibit 3.1 to the Registrant's Current Report on Form 8-K, filed on December 6, 2010.
10.1	Amendment No. 4 to Google Services Agreement, dated as of April 1, 2011, between IAC/InterActiveCorp and Google.(1)(2)
31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act.(1)
31.2	Certification of the Chairman and Senior Executive pursuant to Rule 13a- 14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act.(1)
31.3	Certification of the Executive Vice President and Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act.(1)
32.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act.(3)
32.2	Certification of the Chairman and Senior Executive pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act.(3)
32.3	Certification of the Executive Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act.(3)
101.INS	XBRL Instance(4)
101.SCH	XBRL Taxonomy Extension Schema(4)

(1): Filed herewith.
(2): Certain portions of this document have been omitted pursuant to a confidential treatment request.
(3): Furnished herewith.
(4): Pursuant to applicable securities laws and regulations, the Company is deemed to have complied with the reporting obligation relating to the submission of interactive data files in such exhibits and is not subject to liability under any anti-fraud provisions or other liability provisions of the federal securities laws as long as the Company has made a good faith attempt to comply with the submission requirements and promptly amends the interactive data files after becoming aware that the interactive data files fail to comply with the submission requirements. In addition, users of this data are advised that, pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under these sections.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


ý		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 2011
Or
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to


Delaware (State or other jurisdiction of incorporation or organization)		59-2712887 (I.R.S. Employer Identification No.)
555 West 18^th Street, New York, New York 10011 (Address of registrant's principal executive offices)
(212) 314-7300 (Registrant's telephone number, including area code)


Large accelerated filer ý		Accelerated filer o		Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o


Common Stock			79,174,454
Class B Common Stock			5,789,499

Total outstanding Common Stock			84,963,953

		June 30, 2011			December 31, 2010

		(In thousands)
Buildings and leasehold improvements		$	234,606		$	234,328
Computer equipment and capitalized software			191,260			183,055
Furniture and other equipment			41,568			41,930
Projects in progress			6,116			2,944
Land			5,117			5,117

			478,667			467,374
Less: accumulated depreciation and amortization			(217,549	)		(199,446	)

	Property and equipment, net	$	261,118		$	267,928

		June 30, 2011		December 31, 2010

		(In thousands)
Foreign currency translation adjustment, net of tax		$	25,889	$	16,027
Unrealized gains on available-for-sale securities, net of tax			36,335		1,519

	Accumulated other comprehensive income, net of tax	$	62,224	$	17,546

			Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value

Corporate debt securities			$	116,492	$	249	$	(9	)	$	116,732
States of the U.S. and state political subdivisions				112,593		589		(42	)		113,140
U.S. Treasury securities				49,987		12		—			49,999

	Total debt securities			279,072		850		(51	)		279,871
	Equity security			7,631		1,495		—			9,126

		Total marketable securities	$	286,703	$	2,345	$	(51	)	$	288,997

			Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value

Corporate debt securities			$	237,406	$	773	$	(16	)	$	238,163
States of the U.S. and state political subdivisions				110,478		373		(230	)		110,621
U.S. Treasury securities				199,881		18		—			199,899

	Total debt securities			547,765		1,164		(246	)		548,683
	Equity security			12,896		2,418		—			15,314

		Total marketable securities	$	560,661	$	3,582	$	(246	)	$	563,997

		Amortized Cost		Estimated Fair Value

Due in one year or less		$	195,082	$	195,443
Due after one year through five years			83,990		84,428

	Total	$	279,072	$	279,871

		June 30, 2011					December 31, 2010

		Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Corporate debt securities		$	12,271	$	(9	)	$	34,552	$	(16	)
States of the U.S. and state political subdivisions			6,764		(42	)		39,171		(230	)

	Total	$	19,035	$	(51	)	$	73,723	$	(246	)

		Three Months Ended June 30,

		2011						2010
		Auction Rate Security			Contingent Consideration Arrangement			Auction Rate Securities
		(In thousands)
Balance at April 1		$	9,050		$	40,000		$	13,420
Total net losses (realized and unrealized):
	Included in other comprehensive income		(370	)		—			(2,165	)
Settlements			—			(30,000	)		—

Balance at June 30		$	8,680		$	10,000		$	11,255

		June 30, 2011		December 31, 2010

		(In thousands)
Long-lived assets (excluding goodwill and intangible assets):
	United States	$	259,862	$	267,060
	All other countries		1,256		868

	Total	$	261,118	$	267,928

		Three Months Ended June 30,									Six Months Ended June 30,

		2011			Growth			2010*			2011			Growth			2010*
Revenue:
Search		$	252,436			28	%	$	197,194		$	501,040			26	%	$	396,155
Match			116,429			20	%		96,961			228,026			22	%		186,236
ServiceMagic			56,104			13	%		49,519			102,397			12	%		91,731
Media & Other			60,767			19	%		51,014			115,047			16	%		99,129
Inter-segment elimination			(332	)		25	%		(444	)		(893	)		(8	)%		(829	)

	Total	$	485,404			23	%	$	394,244		$	945,617			22	%	$	772,422

	Three Months Ended June 30,

	2011		% Change	2010
	(Dollars in thousands)
Revenue	$	485,404	23%	$	394,244

	Payments Due by Period

Contractual Obligations(a)	Total		Less Than 1 Year		1-3 Years		3-5 Years		More Than 5 Years
	(In thousands)
Long-term debt(b)	$	196,062	$	5,109	$	24,953	$	8,000	$	158,000
Purchase obligations(c)		61,345		16,927		32,028		12,390		—
Operating leases		282,555		21,544		34,237		25,483		201,291

Total contractual cash obligations	$	539,962	$	43,580	$	91,218	$	45,873	$	359,291

Period			(b) Average Price Paid Per Share(1)

April 2011		—		—	—	—
May 2011		1,640,287	$	35.20	1,640,287	5,560,712
June 2011		3,162,118	$	36.37	3,162,118	2,398,594

	Total	4,802,405	$	35.97	4,802,405	2,398,594

Exhibit Number			Description		Location

	101.CAL		XBRL Taxonomy Extension Calculation(4)
	101.DEF		XBRL Taxonomy Extension Definition(4)
	101.LAB		XBRL Taxonomy Extension Labels(4)
	101.PRE		XBRL Taxonomy Extension Presentation(4)


		IAC/INTERACTIVECORP
		By:		/s/ THOMAS J. MCINERNEY Thomas J. McInerney Executive Vice President and Chief Financial Officer

Signature	Title	Date


/s/ THOMAS J. MCINERNEY Thomas J. McInerney	Executive Vice President and Chief Financial Officer	August 5, 2011