SK Telecom

Report
(NADSAQ: IACI)
Jordan Tipton
Andrew Yen
Kevin Zhang
Agenda
Executive Summary
Search and Applications
The Match Group
eCommerce and Media
Valuation
Company Overview
InterActive Corporation
Search & Applications
•
•
•
•
•
Ask.com
Investopedia
About.com
Dictionary.com
Citysearch.com
50% of Revenue
(29% Search, 21% Apps)
60% of EBITDA
Match Group
•
•
•
•
•
•
•
•
•
Match.com
OKCupid
Tinder
Chemistry.com
Twoo
Meetic
Zhenai
Friends Scout
Others
30% of Revenue
56% of EBITDA
Media
eCommerce
•
•
•
•
HomeAdvisor
Felix
ShoeBuy
Tutor.com
15% of Revenue
3% of EBITDA
•
•
•
•
•
•
Vimeo
Electus
DailyBurn
Daily Beast
CollegeHumor
Others
5% of Revenue
-7% of EBITDA
Why Invest in IACI?
The Street’s View
• Match Group’s growth slowed to 9.5% in Q2, and many fear growth will continue to fall
• IAC is compared to business like AOL and Yahoo, which trade at ~6.4x and 5.5x
EV/EBITDA
• View company as a Search and Applications business first and foremost
• Google negotiated more restrictive download policies and implemented new advertising
policies, adversely affecting this segment
• Management expects applications revenue to fall 20% before resuming growth in 2015
Our View
Strong long-term
prospects for Match
Group over time due to
subscriber growth and
operating leverage
58% of IAC’s value is
locked in the Match
Group
Significant value in
Search business despite
headwinds in
Applications
Applications
Applications
Toolbars and Apps
Queries include B2C and B2B, as well as downloadable applications queries from Ask.com
11%
Revenue down
11% in 1H 2014
15%
Queries down
15% in 1H 2014
Applications
Applications Revenue Growth
Applications Revenue
300
60.0%
250
200
185.4
178.6
188.2
207.6
208.2
50.0%
223.8
191.5
194.5
194.3
190.5
40.0%
150
30.0%
100
20.0%
50
10.0%
0
-50
0.0%
Q112
Q212
Q312
Q412
Q113
Q213
Q313
Q413
Q114
Q214
-10.0%
-100
-20.0%
-150
-30.0%
-200
* Terms of the deal were undisclosed.
Google negotiates
more restrictive
toolbar application
download policies*
-40.0%
Applications
What Can we Expect?
The recent transition required by a new version of
Chrome is having an adverse effect on the segment
Distribution partners are struggling, posting
sequential declines and losing distribution to
competitors, hurting revenues in the B2B segment
IACI’s other segments dramatically mitigate
the projected share price decline
A BAD COMPANY
Search
Search
Strong Growing Online Properties
10%
Page views up
10% in 1H 2014
4%
Revenue up 4%
in 1H 2014
Search
Search Revenue Growth
Search Revenues
ValueClick O&O
added
300
60.0%
250
200
157.8
170.1
182.0
196.1
189.0
203.6
215.8
178.5
203.7
205.2
50.0%
40.0%
150
30.0%
100
20.0%
50
10.0%
0
-50
0.0%
Q112
Q212
Q312
Q412
Q113
Q213
Q313
Q413
Q114
Q214
-10.0%
-100
-20.0%
-150
-30.0%
-200
About.com
added
Change in how
Ask.com could
market on Google
CityGrid Media
reclassified from
eCommerce
segment
-40.0%
Online Dating Industry
Online Dating Market Breakdown
Online Dating Site Differentiation
Online Dating Market Share
Interactive
Corp,
27.0%
eHarmony
, Inc.,
13.8%
Source: Zosia Bielski and Tonia Cowan, 2010
Online dating sites differentiate themselves on a
spectrum of wholesome vs. raunchy and marriage
vs. one night stand
Zoosk
Inc., 5.1%
Plenty of
Fish, 1.1%
First Media Spark Networks
Group, 1.8%
Inc., 3.2%
Source: IBISWorld
Other,
54.1%
Changing Public Perception
1 in 5 25-34 year olds have used
online dating
Majority of people now think online dating is a good
way to meet people
Growing Online Dating Industry
Online Dating Industry
Generalized
Hookup
Specialized
Relationship
Match Group spans the online dating spectrum and
dominates the generalized category
Network Effect
• Daters choose platforms that
already have a large
membership, creating a barrier
to entry
• Generalized dating sites allow
users to sort by specific
interests/beliefs, reducing the
incentive to use specialized
dating sites
The Match Group
Match Group
Match Group
Growth Drivers
• Project monetization of Tinder
yielding $75mm in EBITDA by 2018
(analysts project $75mm in 2015)
• Monthly Active Users has grown at a
rate of 60%, potentially leading to
uptick in future subscriber growth
• Dating websites offer a tremendous
amount of operating leverage
• Overall Match Making Industry is
expected to grow 5% 1
Match Subscribers and Rev/Subscriber
6000
$25
5000
$20
4000
$15
3000
$10
2000
$5
1000
0
$2012
2013
2014
2015
Total Subscribers (thousands)
2016
2017
2018
2019
Revenue/Subscriber/Month
“To use a bad analogy, it's like a gateway. You use Tinder and suddenly you've done it. It works, you say, Oh,
this is great. And then suddenly, you're willing to do all these things. And that's happening globally. And so I
think that the category is going to get very large.” – Gregory Blatt, Chairman of Match Group
(1) Source: IBISWorld
Match Group: Operating Leverage
$1,200
$1,000
$800
$ in millions
EBITDA
$600
$400
Operating Expenses
$200
$2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
eCommerce and Media
eCommerce
Segment Description
• Segment down 16% last year
• Hit by CityGrid (excluding this
portion, segment would have
been positive)
• HomeAdvisor increased revenue and
service requests by 20%
• Management expects Tutor.com to
take advantage of cost and revenue
synergies
Projected Growth
600.0
500.0
400.0
300.0
200.0
100.0
2012
2013
2014
2015
2016
2017
2018
2019
Media
Vimeo
• Represents 25% of IACI’s media
segment
• 500,000 subscribers, 100 million
users
• ~$100 rev/subscriber
• Subscriber base growing at
40%/yr
• 6x revenue
•
•
•
•
1b users
~$3.5 rev/user
User base flat at ~5%/yr
Valued at 6.7x revenue
IAC’s Upcoming Acquisitions
Expected to add ~$80m in annual revenue
• German dating site
• Makes IACI market leader in the
online dating market for
Germany (hopes to break profit
jam)
• Test preparation and college
admissions services company
• Offers test preparation services,
tutoring, admissions resources,
online courses, and books
Spin-off Optionality
History of spin-offs
• Barry Diller, Chairman and Senior Exectuvie, has a long
history of creating shareholder value through spin-offs.
• His previous spin-offs include Expedia (EXPE) and
TripAdvisor(TRIP)
Potential Match Group Spinoff
• Investors have been asking about the possibility of a Match
Group spin-off in earnings calls for years
• In late 2013 Barry Diller installed a separate management team
for Match Group, possibly setting it up for a spin-off
• IAC no longer has a CEO: Search & Applications, Match
Group and Media segments each of a CEO reporting to Diller
Value for Shareholders
There is a reason why investors have been asking about the
possibility of a Match Group Spin-off for years in earnings calls:
On average, shareholders gain 15.63% value after spin-offs1
(1) Source: M.D. Hamid Uddin, University of Sharjah
“I am the Spin Master”
Barry Diller
Chairman and Senior
Executive,
InterActiveCorp
Valuation
Sum of the Parts Valuation
Segments
EV/EBITDA % of Valuation
Search & Applications
6.0x
21%
The Match Group (ex-Tinder)
12.0x
56%
Tinder
20.0x
9%
Fair Value
Corporate
6.0x
-5%
$89
EV/Revenue
eCommerce
1.5x
15%
Media
2.6x
4%
Cases
Downside
Base
Upside
-100% revenue growth
-45% revenue growth
-20% revenue growth
before going to 2%
Search
4% revenue growth
4% revenue growth
4% revenue growth
The Match Group
-1% revenue growth
8% revenue growth
12% revenue growth
$50m revenue &
$20m EBITDA
$70m revenue &
$34m EBITDA
$88m revenue &
$53m EBITDA
eCommerce
5% revenue growth
5% revenue growth
5% revenue growth
Media
10% revenue growth
10% revenue growth
10% revenue growth
Current Price
$66.72
Downside Case
$48 (-29%)
Base Case
$89 (+34%)
Upside Case
$124 (+86%)
Probabilities
20%
50%
30%
Applications
Tinder
Price Target
All numbers and growth rates are estimated 2015 projections
$91.40 (+37%)
Appendix
Model Summary: Upside Case
Revenue Build
($ in millions)
Search (Websites)
% Growth
Applications
% Growth
Search & Applications (Total)
% Growth
The Match Group (ex-Tinder)
% Growth
Total Subscribers
% Growth
Revenue/Subscriber
% Growth
Tinder
% of Revenue
eCommerce
% of Revenue
Media
% of Revenue
Corporate
Total Revenue
EBITDA
Search & Applications (Total)
% Margin
The Match Group (ex-Tinder) EBITDA
% Margin
The Match Group (ex-Tinder) Operating Expenses
% Growth
Tinder
% Margin
The Match Group (Total)
% Margin
eCommerce
% Margin
Media
% Margin
Corporate
Total EBITDA
% Margin
% Growth
2012A
706.0
2014E
Q2A
Q3E
205.2
215.5
0.8%
-0.2%
190.5
156.3
-14.9%
-18.4%
395.7
371.7
-7.4%
-8.7%
207.6
216.7
6.8%
7.7%
3,500
3,675
9.5%
11.1%
0.059
0.059
-2.5%
-3.0%
5
0.0%
0.7%
109.9
105.7
14.7%
14.3%
36.7
40.2
4.9%
5.4%
(0.3)
(0.3)
749.6
739.1
457.1
16.3%
164.1
5.9%
(0.4)
2,800.0
421.9
14.0%
191.4
6.4%
(0.9)
3,005.5
328.3
22.4%
236.7
33.2%
477
385.8
24.0%
266.9
33.9%
521
9%
82.1
20.6%
47.4
23.1%
158
11.9%
91.3
23.1%
69.4
33.4%
138
9.1%
78.1
21.0%
87.2
40.3%
134
2.0%
2
45.0%
79.1
21.0%
110.0
49.0%
124
2.0%
5
50.0%
330.6
21.4%
314.0
36.8%
555
17.6%
7
76.8
21.0%
76.6
33.5%
167
6.0%
9
60.0%
76.5
21.0%
105.1
45.4%
146
6.0%
12
60.0%
80.4
21.0%
124.2
51.4%
143
6.0%
15
60.0%
81.4
21.0%
146.4
58.5%
132
6.0%
17
60.0%
315.2
21.0%
452.3
47.5%
588
44.0%
53
319.4
21.0%
550.6
52.8%
623
6.0%
78
60.0%
348.8
21.0%
616.6
54.7%
661
6.0%
90
60.0%
362.6
21.0%
660.3
55.2%
700
6.0%
99
60.0%
380.5
21.0%
689.2
54.9%
742
6.0%
105
60.0%
236.7
33.2%
31.2
6.8%
(38.6)
-23.5%
(60.1)
497.5
17.8%
266.9
33.9%
22.9
5.4%
(17.0)
-8.9%
(60.4)
598.2
19.9%
20%
47.4
23.1%
2.8
3.0%
(7.9)
-21.7%
(16.3)
108.1
14.7%
-14.7%
69.4
33.4%
4.5
4.1%
(8.9)
-24.3%
(14.8)
141.5
18.9%
-10.4%
89.5
40.4%
4.2
4.0%
(8.9)
-22.0%
(16.1)
146.9
19.9%
-10.2%
115.0
49.1%
4.4
4.0%
(9.3)
-22.0%
(18.4)
170.7
22.4%
13.8%
321.3
37.0%
15.9
3.8%
(35.0)
-22.5%
(65.6)
567.1
19.0%
-5.2%
85.6
35.1%
4.0
4.0%
(8.0)
-20.0%
(14.9)
143.5
19.2%
32.7%
117.1
46.5%
4.6
4.0%
(8.1)
-20.0%
(17.8)
172.3
22.3%
21.8%
139.2
52.2%
4.4
4.0%
(8.9)
-20.0%
(20.0)
195.1
24.3%
32.9%
163.2
58.7%
4.6
4.0%
(9.3)
-20.0%
(22.3)
217.6
26.3%
27.5%
505.1
48.6%
17.6
4.0%
(34.3)
-20.0%
(75.1)
728.5
23.1%
28.5%
628.6
53.6%
18.5
4.0%
(37.7)
-20.0%
(85.1)
843.7
25.2%
15.8%
706.6
55.3%
19.4
4.0%
(41.5)
-20.0%
(94.3)
939.0
25.9%
11.3%
759.3
55.8%
20.4
4.0%
(45.6)
-20.0%
(99.8)
996.9
26.1%
6.2%
794.2
55.5%
21.4
4.0%
(50.2)
-20.0%
(104.1)
1,041.8
25.9%
4.5%
1,465.8
713.4
2,812
0.254
Q4E
217.9
22.1%
158.7
-18.4%
376.7
1.0%
224.3
10.0%
3,804
13.3%
0.059
-2.9%
10
1.3%
108.9
14.3%
42.5
5.6%
(0.3)
762.0
2014E
842.3
7.0%
699.8
-14.5%
1,542.1
-3.9%
853.6
8.3%
3,804
13.3%
0.224
-4.4%
15
0.5%
419.3
14.0%
155.8
5.2%
(1.1)
2,984.7
Q1E
211.2
3.7%
154.6
-20.4%
365.8
-8.1%
228.7
11.6%
3,988
15.0%
0.057
-3.0%
15
2.0%
99.5
13.3%
40.0
5.3%
(0.3)
748.7
2015E
Q2E
Q3E
212.8
223.4
3.7%
3.7%
151.6
159.4
-20.4%
2.0%
364.3
382.8
-7.9%
3.0%
231.6
241.7
11.6%
11.6%
4,025
4,227
15.0%
15.0%
0.058
0.057
-3.0%
-3.0%
20
25
2.6%
3.1%
115.4
111.0
15.0%
13.8%
40.4
44.3
5.2%
5.5%
(0.3)
(0.3)
771.4
804.4
Q1A
203.7
7.8%
194.3
-6.7%
398.0
0.2%
205.0
8.6%
3,468
10.4%
0.059
-1.7%
0.0%
94.8
12.9%
36.4
5.0%
(0.2)
734.0
759.8
2013A
786.9
11.5%
818.0
7.7%
1,604.9
9.5%
788.2
10%
3,357
19.4%
0.235
-7.5%
Q4E
226.0
3.7%
161.9
2.0%
387.9
3.0%
250.2
11.6%
4,375
15.0%
0.057
-3.0%
28
3.4%
114.3
13.8%
46.7
5.6%
(0.3)
826.8
2015E
873.3
3.7%
627.4
-10.3%
1,500.7
-2.7%
952.2
11.6%
4,375
15.0%
0.218
-3.0%
88
2.8%
440.3
14.0%
171.4
5.4%
(1.2)
3,151.4
2016E
881.1
0.9%
640.0
2.0%
1521.1
1.4%
1,043.7
9.6%
4,944
13.0%
0.211
-3.0%
130
3.9%
462.3
13.8%
188.5
5.6%
(1.2)
3,344.4
2017E
1,008.1
14.4%
652.8
2.0%
1660.8
9.2%
1,127.1
8.0%
5,503
11.3%
0.205
-3.0%
150
4.1%
485.4
13.4%
207.4
5.7%
(1.2)
3,629.6
2018E
1,060.9
5.2%
665.8
2.0%
1726.7
4.0%
1,195.4
6.1%
6,017
9.3%
0.199
-3.0%
165
4.3%
509.7
13.3%
228.1
6.0%
(1.2)
3,823.7
2019E
1,132.8
6.8%
679.1
2.0%
1811.9
4.9%
1,256.3
5.1%
6,518
8.3%
0.193
-3.0%
175
4.3%
535.2
13.3%
250.9
6.2%
(1.2)
4,028.1
Model Summary: Base Case
Revenue Build
($ in millions)
Search (Websites)
% Growth
Applications
% Growth
Search & Applications (Total)
% Growth
The Match Group (ex-Tinder)
% Growth
Total Subscribers
% Growth
Revenue/Subscriber
% Growth
Tinder
% of Revenue
eCommerce
% of Revenue
Media
% of Revenue
Corporate
Total Revenue
EBITDA
Search & Applications (Total)
% Margin
The Match Group (ex-Tinder) EBITDA
% Margin
The Match Group (ex-Tinder) Operating Expenses
% Growth
Tinder
% Margin
The Match Group (Total)
% Margin
eCommerce
% Margin
Media
% Margin
Corporate
Total EBITDA
% Margin
% Growth
2012A
706.0
2014E
Q2A
Q3E
205.2
209.2
0.8%
-3.0%
190.5
105.3
-14.9%
-45.0%
395.7
314.6
-7.4%
-22.8%
207.6
209.8
6.8%
4.3%
3,500
3,559
9.5%
7.6%
0.059
0.059
-2.5%
-3.0%
0.0%
0.0%
109.9
103.8
14.7%
15.6%
36.7
38.2
4.9%
5.7%
(0.3)
(0.3)
749.6
666.1
457.1
16.3%
164.1
5.9%
(0.4)
2,800.0
421.9
14.0%
191.4
6.4%
(0.9)
3,005.5
328.3
22.4%
236.7
33.2%
477
385.8
24.0%
266.9
33.9%
521
9%
82.1
20.6%
47.4
23.1%
158
11.9%
91.3
23.1%
69.4
33.4%
138
9.1%
66.1
21.0%
71.4
34.0%
138
5.0%
40.0%
66.8
21.0%
94.1
43.3%
128
5.0%
2
42.5%
306.3
21.5%
282.3
33.6%
562
5.8%
2
66.8
21.0%
56.4
25.5%
175
11.0%
5
45.0%
66.7
21.0%
85.8
38.3%
153
11.0%
7
47.5%
65.5
21.0%
93.0
41.0%
154
11.0%
10
50.0%
66.2
21.0%
117.3
50.0%
142
11.0%
13
50.0%
265.1
21.0%
352.5
38.9%
624
24.9%
34
259.1
21.0%
394.6
40.8%
693
11.0%
60
50.0%
277.9
21.0%
384.5
37.9%
769
11.0%
70
50.0%
282.0
21.0%
338.5
32.5%
853
11.0%
75
50.0%
286.5
21.0%
273.9
25.8%
947
11.0%
80
50.0%
236.7
33.2%
31.2
6.8%
(38.6)
-23.5%
(60.1)
497.5
17.8%
266.9
33.9%
22.9
5.4%
(17.0)
-8.9%
(60.4)
598.2
19.9%
20%
47.4
23.1%
2.8
3.0%
(7.9)
-21.7%
(16.3)
108.1
14.7%
-14.7%
69.4
33.4%
4.5
4.1%
(8.9)
-24.3%
(14.8)
141.5
18.9%
-10.4%
71.4
34.0%
4.2
4.0%
(8.4)
-22.0%
(13.3)
119.9
18.0%
-26.7%
96.2
43.3%
4.4
4.0%
(9.3)
-22.0%
(15.6)
142.4
20.6%
-5.0%
284.4
33.7%
15.8
3.8%
(34.6)
-22.5%
(60.0)
511.9
18.0%
-14.4%
60.9
26.3%
4.0
4.0%
(8.0)
-20.0%
(11.9)
111.8
16.2%
3.4%
92.9
38.8%
4.6
4.0%
(8.1)
-20.0%
(14.9)
141.2
19.8%
-0.2%
103.0
41.8%
4.4
4.0%
(8.4)
-20.0%
(15.4)
149.0
21.0%
24.3%
129.8
50.0%
4.6
4.0%
(9.3)
-20.0%
(17.9)
173.3
23.6%
21.7%
386.7
39.6%
17.5
4.0%
(33.8)
-20.0%
(60.1)
575.3
20.2%
12.4%
454.6
41.8%
18.4
4.0%
(37.2)
-20.0%
(63.5)
631.5
21.3%
9.8%
454.5
39.4%
19.3
4.0%
(40.9)
-20.0%
(64.1)
646.7
20.4%
2.4%
413.5
34.7%
20.3
4.0%
(45.0)
-20.0%
(59.6)
611.2
18.7%
-5.5%
353.9
29.0%
21.3
4.0%
(49.5)
-20.0%
(53.2)
559.0
16.6%
-8.5%
1,465.8
713.4
2,812
0.254
Q4E
211.1
18.3%
107.0
-45.0%
318.1
-14.7%
217.1
6.5%
3,683
9.7%
0.059
-3.0%
5
0.7%
108.9
15.8%
42.5
6.1%
(0.3)
691.2
2014E
829.2
5.4%
597.1
-27.0%
1,426.3
-11.1%
839.5
6.5%
3,683
9.7%
0.228
-2.9%
5
0.2%
417.4
14.7%
153.8
5.4%
(1.1)
2,841.0
Q1E
211.2
3.7%
106.9
-45.0%
318.1
-20.1%
221.3
8.0%
3,863
11.4%
0.057
-3.1%
10
1.5%
99.5
14.5%
40.0
5.8%
(0.3)
688.7
2015E
Q2E
Q3E
212.8
216.9
3.7%
3.7%
104.8
94.8
-45.0% -10.0%
317.5
311.7
-19.8%
-0.9%
224.2
226.6
8.0%
8.0%
3,899
3,964
11.4%
11.4%
0.058
0.057
-3.1%
-3.0%
15
20
2.1%
2.8%
115.4
109.0
16.2%
15.4%
40.4
42.1
5.7%
5.9%
(0.3)
(0.3)
712.2
709.2
Q1A
203.7
7.8%
194.3
-6.7%
398.0
0.2%
205.0
8.6%
3,468
10.4%
0.059
-1.7%
0.0%
94.8
12.9%
36.4
5.0%
(0.2)
734.0
759.8
2013A
786.9
11.5%
818.0
7.7%
1,604.9
9.5%
788.2
10%
3,357
19.4%
0.235
-7.5%
Q4E
218.9
3.7%
96.3
-10.0%
315.1
-0.9%
234.4
8.0%
4,102
11.4%
0.057
-3.0%
25
3.4%
114.3
15.5%
46.7
6.4%
(0.3)
735.3
2015E
859.8
3.7%
402.7
-32.6%
1,262.5
-11.5%
906.6
8.0%
4,102
11.4%
0.221
-3.0%
70
2.5%
438.3
15.4%
169.2
5.9%
(1.2)
2,845.3
2016E
871.5
1.4%
362.4
-10.0%
1234.0
-2.3%
967.3
6.7%
4,512
10.0%
0.214
-3.0%
120
4.0%
460.2
15.5%
186.1
6.3%
(1.2)
2,966.4
2017E
997.1
14.4%
326.2
-10.0%
1323.3
7.2%
1,013.3
4.8%
4,873
8.0%
0.208
-3.0%
140
4.4%
483.2
15.3%
204.7
6.5%
(1.2)
3,163.3
2018E
1,049.3
5.2%
293.6
-10.0%
1342.9
1.5%
1,041.9
2.8%
5,165
6.0%
0.202
-3.0%
150
4.6%
507.4
15.5%
225.2
6.9%
(1.2)
3,266.1
2019E
1,100.3
4.9%
264.2
-10.0%
1364.5
1.6%
1,061.2
1.9%
5,423
5.0%
0.196
-3.0%
160
4.8%
532.8
15.8%
247.7
7.4%
(1.2)
3,364.9
Model Summary: Downside Case
Revenue Build
($ in millions)
Search (Websites)
% Growth
Applications
% Growth
Search & Applications (Total)
% Growth
The Match Group (ex-Tinder)
% Growth
Total Subscribers
% Growth
Revenue/Subscriber
% Growth
Tinder
% of Revenue
eCommerce
% of Revenue
Media
% of Revenue
Corporate
Total Revenue
EBITDA
Search & Applications (Total)
% Margin
The Match Group (ex-Tinder) EBITDA
% Margin
The Match Group (ex-Tinder) Operating Expenses
% Growth
Tinder
% Margin
The Match Group (Total)
% Margin
eCommerce
% Margin
Media
% Margin
Corporate
Total EBITDA
% Margin
% Growth
2012A
706.0
2014E
Q2A
Q3E
205.2
205.1
0.8%
-5.0%
190.5
93.8
-14.9%
-51.0%
395.7
298.9
-7.4%
-26.6%
207.6
194.8
6.8%
-3.1%
3,500
3,485
9.5%
5.3%
0.059
0.056
-2.5%
-8.0%
0.0%
0.0%
109.9
103.8
14.7%
16.3%
36.7
38.2
4.9%
6.0%
(0.3)
(0.3)
749.6
635.5
457.1
16.3%
164.1
5.9%
(0.4)
2,800.0
421.9
14.0%
191.4
6.4%
(0.9)
3,005.5
328.3
22.4%
236.7
33.2%
477
385.8
24.0%
266.9
33.9%
521
9%
82.1
20.6%
47.4
23.1%
158
11.9%
91.3
23.1%
69.4
33.4%
138
9.1%
62.8
21.0%
49.8
25.6%
145
10.0%
35.0%
61.7
21.0%
67.5
33.5%
134
10.0%
35.0%
297.9
21.5%
234.1
28.9%
575
-12.3%
-
44.4
21.0%
27.4
13.5%
181
15.0%
2
40.0%
44.7
21.0%
57.3
27.8%
159
15.0%
4
40.0%
44.7
21.0%
41.8
21.6%
167
15.0%
6
40.0%
43.3
21.0%
66.1
33.0%
154
15.0%
8
40.0%
176.9
21.0%
192.7
24.0%
661
-17.7%
20
N/A
21.0%
138.4
17.3%
760
15.0%
40
40.0%
N/A
21.0%
24.6
3.2%
874
15.0%
48
40.0%
N/A
21.0%
(120.2)
-16.1%
1,005
15.0%
56
40.0%
N/A
21.0%
(300.1)
-42.5%
1,156
15.0%
60
40.0%
236.7
33.2%
31.2
6.8%
(38.6)
-23.5%
(60.1)
497.5
17.8%
266.9
33.9%
22.9
5.4%
(17.0)
-8.9%
(60.4)
598.2
19.9%
20%
47.4
23.1%
2.8
3.0%
(7.9)
-21.7%
(16.3)
108.1
14.7%
-14.7%
69.4
33.4%
4.5
4.1%
(8.9)
-24.3%
(14.8)
141.5
18.9%
-10.4%
49.8
25.6%
4.2
4.0%
(8.4)
-22.0%
(10.8)
97.5
15.3%
-40.4%
67.5
33.5%
4.4
4.0%
(9.3)
-22.0%
(12.4)
111.8
17.3%
-25.4%
234.1
28.9%
15.8
3.8%
(34.6)
-22.5%
(54.4)
458.9
16.6%
-23.3%
29.4
14.1%
4.0
4.0%
(8.0)
-20.0%
(6.8)
63.0
11.3%
-41.7%
61.3
28.4%
4.6
4.0%
(8.1)
-20.0%
(9.9)
92.7
15.9%
-34.5%
47.8
22.9%
4.4
4.0%
(8.4)
-20.0%
(8.2)
80.2
14.0%
-17.8%
74.1
33.6%
4.6
4.0%
(9.3)
-20.0%
(10.5)
102.1
17.4%
-8.7%
212.7
24.9%
17.5
4.0%
(33.8)
-20.0%
(35.3)
338.0
14.7%
-26.3%
178.4
19.9%
18.4
4.0%
(37.2)
-20.0%
N/A
N/A
N/A
N/A
72.6
8.1%
19.3
4.0%
(40.9)
-20.0%
N/A
N/A
N/A
N/A
(64.2)
-7.3%
20.3
4.0%
(45.0)
-20.0%
N/A
N/A
N/A
N/A
(240.1)
-28.0%
21.3
4.0%
(49.5)
-20.0%
N/A
N/A
N/A
N/A
1,465.8
713.4
2,812
0.254
Q4E
198.7
11.3%
95.3
-51.0%
294.0
-21.2%
201.6
-1.1%
3,606
7.4%
0.056
-8.0%
0.0%
108.9
16.8%
42.5
6.6%
(0.3)
646.6
2015E
2014E
Q1E
Q2E
Q3E
Q4E
812.7
211.2
212.8
212.6
206.0
3.3%
3.7%
3.7%
3.7%
3.7%
573.9
-29.8% -100.0% -100.0% -100.0% -100.0%
1,386.6
211.2
212.8
212.6
206.0
-13.6% -46.9% -46.2% -28.9% -29.9%
809.0
203.7
206.3
193.6
200.3
2.6%
-0.6%
-0.6%
-0.6%
-0.6%
3,606
3,745
3,780
3,763
3,895
7.4%
8.0%
8.0%
8.0%
8.0%
0.224
0.054
0.055
0.051
0.051
-4.4%
-8.0%
-8.0%
-8.0%
-8.0%
5
10
15
20
0.0%
0.9%
1.7%
2.6%
3.4%
417.4
99.5
115.4
109.0
114.3
15.1%
17.8%
19.7%
19.1%
19.5%
153.8
40.0
40.4
42.1
46.7
5.6%
7.2%
6.9%
7.4%
8.0%
(1.1)
(0.3)
(0.3)
(0.3)
(0.3)
2,765.7
559.2
584.5
572.0
587.0
Q1A
203.7
7.8%
194.3
-6.7%
398.0
0.2%
205.0
8.6%
3,468
10.4%
0.059
-1.7%
0.0%
94.8
12.9%
36.4
5.0%
(0.2)
734.0
759.8
2013A
786.9
11.5%
818.0
7.7%
1,604.9
9.5%
788.2
10%
3,357
19.4%
0.235
-7.5%
2015E
842.6
3.7%
-100.0%
842.6
-39.2%
803.8
-0.6%
3,895
8.0%
0.206
-8.0%
50
2.2%
438.3
19.0%
169.2
7.3%
(1.2)
2,302.7
2016E
859.9
2.1%
N/A
N/A
N/A
N/A
798.7
-0.6%
4,206
8.0%
0.190
-8.0%
100
N/A
460.2
N/A
186.1
N/A
(1.2)
N/A
2017E
983.8
14.4%
N/A
N/A
N/A
N/A
778.9
-2.5%
4,459
6.0%
0.175
-8.0%
120
N/A
483.2
N/A
204.7
N/A
(1.2)
N/A
2018E
1,035.3
5.2%
N/A
N/A
N/A
N/A
745.2
-4.3%
4,637
4.0%
0.161
-8.0%
140
N/A
507.4
N/A
225.2
N/A
(1.2)
N/A
2019E
1,055.7
2.0%
N/A
N/A
N/A
N/A
706.2
-5.2%
4,776
3.0%
0.148
-8.0%
150
N/A
532.8
N/A
247.7
N/A
(1.2)
N/A
Valuation Summary: Upside Case
Enterprise Value
Equity
Debt
Less: Cash
5,551
1,080
987
Enterprise Value
5,644
Stock Price (as of 9/23/14)
$66.72
EV/ 2015E EBITDA
11.0
SOTP Valuation
Segement
EV/EBITDA, 2015
Enterprise Value
%of Valuation
7.0x
Search & Applications (Total)
2,206
21.2%
The Match Group (ex-Tinder)
5,880
56.6%
13.0x
22.0x
Tinder
1,162
11.2%
8.0x
Corporate
(601)
-5.8%
EV/Revenue, 2015
2.5x
1,321
eCommerce
12.7%
428
3.0x
Media
4.1%
10,396
Equity Value
Proj. Stock Price
Return
Multiple Assumptions
EV/EBITDA, 2015
7.0x
Search & Applications (Total)
13.0x
The Match Group (ex-Tinder)
22.0x
Tinder
8.0x
Corporate
EV/Rev., 2015
2.5x
eCommerce
3.0x
Media
10,304
123.84
86%
Valuation Summary: Base Case
Enterprise Value
Equity
Debt
Less: Cash
5,551
1,080
987
Enterprise Value
5,644
Stock Price (as of 9/23/14)
$66.72
EV/ 2015E EBITDA
12.2
SOTP Valuation
Segement
EV/EBITDA, 2015
Enterprise Value
%of Valuation
6.0x
Search & Applications (Total)
1,591
21.1%
The Match Group (ex-Tinder)
4,230
56.1%
12.0x
20.0x
Tinder
683
9.1%
6.0x
Corporate
(361)
-4.8%
EV/Revenue, 2015
1.5x
1,140
eCommerce
15.1%
254
2.6x
Media
3.4%
7,536
Equity Value
Proj. Stock Price
Return
Multiple Assumptions
EV/EBITDA, 2015
6.0x
Search & Applications (Total)
12.0x
The Match Group (ex-Tinder)
20.0x
Tinder
6.0x
Corporate
EV/Rev., 2015
1.5x
eCommerce
2.6x
Media
7,443
89.46
34%
Valuation Summary: Downside Case
Enterprise Value
Equity
Debt
Less: Cash
5,551
1,080
987
Enterprise Value
5,644
Stock Price (as of 9/23/14)
$66.72
EV/ 2015E EBITDA
15.1
SOTP Valuation
Segement
EV/EBITDA, 2015
Enterprise Value
%of Valuation
5.5x
Search & Applications (Total)
973
24.0%
The Match Group (ex-Tinder)
2,120
52.3%
11.0x
18.0x
Tinder
360
8.9%
4.0x
Corporate
(141)
-3.5%
EV/Revenue, 2015
0.5x
657
eCommerce
16.2%
85
1.5x
Media
2.1%
4,054
Equity Value
Proj. Stock Price
Return
Multiple Assumptions
EV/EBITDA, 2015
5.5x
Search & Applications (Total)
11.0x
The Match Group (ex-Tinder)
18.0x
Tinder
4.0x
Corporate
EV/Rev., 2015
0.5x
eCommerce
1.5x
Media
3,961
47.61
-29%

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