Earnings Preview: IAC/InterActiveCorp

IAC/InterActiveCorp reports earnings for the third quarter on Tuesday before the market opens. The following is a summary of key developments and analyst opinion related to the period:

OVERVIEW: During the third quarter, the Barry Diller-led Internet company said it would begin a new media venture with Ben Silverman, who was leaving his post as co-chairman of NBC Entertainment.

The venture, which was announced in July, will aim to bring advertisers into the development process for TV shows and Web videos. IAC said at the time that it plans to develop content and marketing across every medium.

IAC has not yet released the name or corporate structure of the venture. The company said that it will eventually become a separate entity that won't affect its own earnings, but IAC will provide an undisclosed amount of capital to start it up.

Also during the quarter, IAC's Match.com business - which includes Match.com, Chemistry.com and other dating sites - bought targeted dating Web site operator People Media for $80 million in cash from American Capital Ltd. The July acquisition added 27 Web sites to Match's stable, including BlackPeopleMeet.com and SingleParentMeet.com.

BY THE NUMBERS: Analysts polled by Thomson Reuters expect third-quarter earnings of a 13 cents per share on $335.8 million in revenue. Analyst estimates generally exclude special items.

ANALYST TAKE: In a recent client note, Goldman Sachs analyst James Mitchell predicted IAC's media and advertising revenue will drop 8 percent year over year, mostly due to advertisers consolidating their budgets at bigger search properties.

He thinks revenue from Match.com will be down 18 percent due mostly from the sale of its European operations to France-based online dating company Meetic last quarter.

WHAT'S AHEAD: IAC depends heavily on online advertising for revenue, so it remains to be seen how the company will fare in the current quarter given the still-shaky economy. It is also unknown how its media venture with Silverman will develop.

STOCK PERFORMANCE: During the quarter, IAC shares rose 26 percent to close at $20.19. The stock finished Friday's trading at $19, down 32 cents.