SecProbe.io

CORRESP
1
filename1.htm

IAC/INTERACTIVECORP

555 West 18th Street

New York, New York 10011

June 3,
2008

Securities
and Exchange Commission

100
F Street, N.E.

Washington,
D.C. 20549

Attention:
William Thompson

  RE:

  IAC/InterActiveCorp

  Form 10-K
  for Fiscal Year Ended December 31, 2007

  Filed
  February 29, 2008

  Form 10-Q
  for Fiscal Quarter Ended March 31, 2008

  Filed
  May 7, 2008

  File
  No. 0-20570

Ladies
and Gentlemen:

                Set forth below are the Staff’s
comments conveyed in your comment letter dated May 15, 2008 pertaining to
the filings listed above along with the Company’s responses:

Form 10-K
for Fiscal Year Ended December 31, 2007

Note 2 -
Summary of Significant Accounting Policies, page 86

Revenue
Recognition, page 86

Ticketmaster,
page 86

1.              Reference
is made to your disclosure on page 45 that ticketing royalties, which
represent your client’s share of convenience and order processing charges, are
recorded in cost of sales. With reference to the authoritative accounting
literature you relied upon, please explain to us why it is appropriate to
report revenue based on the gross amount of convenience and order processing
charges billed to customers rather than the net amount retained.

Response:

We
have noted the Staff’s comments. We make reference to Emerging Issues Task
Force Issue No. 99-19 “Reporting Revenue Gross as a Principal versus Net
as an Agent” (“EITF 99-19”) as the applicable authoritative accounting
literature that we relied upon in making the determination that the gross
amount of convenience and order processing (“C&P”) charges billed to
customers should be reported as revenue rather than the net amount retained
after paying any applicable royalties to a client. Set forth below are the
indicators of gross revenue and net revenue reporting identified in EITF 99-19
and the analysis of each considering Ticketmaster’s facts and circumstances in
making our

1

determination
that Ticketmaster’s presentation of C&P revenue on a gross rather than a
net basis is appropriate.

Indicators of Gross Revenue Reporting:

The company is the primary obligor in the
arrangement.

The
transaction or “arrangement” that gives rise to the C&P revenue is the
service that provides Ticketmaster’s customer (a general public consumer who is
purchasing tickets offered by Ticketmaster’s clients) with the ability to
conveniently purchase a ticket to an event in advance at a location other than
the client’s box office. Ticketmaster is the principal or primary obligor with
respect to this transaction. Ticketmaster enables this transaction through its
websites, call centers and retail sales outlets. Ticketmaster determines the
consumer experience aspects of its websites, call centers and retail sales
outlets. This includes, for example, establishing security policies to ensure
that its site is not subject to abusive purchasing practices and the
determination of the credit cards that will be accepted for purchase
transactions on its website and through its call centers. Importantly,
Ticketmaster, not its clients, provides customer service before, during and
after the sale with respect to tickets purchased by customers from
Ticketmaster.

The
customer service that Ticketmaster performs related to the ticketing
transaction is extensive. Prior to sale, Ticketmaster through its websites and
call centers provides potential purchasers with information regarding seat
availability, prices, and venue accessibility and ticket delivery methods.
After the sale, Ticketmaster serves as the primary contact with its customers
regarding lost tickets, postponements, cancellations or other circumstances
that might prevent a customer from attending an event. In such cases, among
others, Ticketmaster acts as the liaison between its client and its customer.
In the case of cancelled events, Ticketmaster’s customer communications would
include sending automated emails and phone messages to customers to notify them
of the cancellation. Ticketmaster then manages the customer refund process and
handles customer service inquires related to the cancellation. In a typical
month, Ticketmaster handles in excess of four million customer service
inquires.

We
believe that Ticketmaster’s principal or primary obligor status in the
transaction that gives rise to the C&P revenue is a strong indicator that
Ticketmaster should present revenue on a gross rather than a net basis.

The company has general inventory risk (before
customer order is placed or upon customer return).

Ticketmaster
does not take title to the tickets in any manner as a principal in the
ticketing transaction. While this fact is relevant to our determination that
the face value of tickets sold should not be, and is not, presented as revenue
on a gross basis, we do not consider this indicator to be relevant to the
analysis of the presentation of Ticketmaster’s C&P revenue.

The company has latitude in establishing price.

Ticketmaster
and its clients mutually agree to the pricing for its C&P revenue as part
of their contract negotiations. Each client contract is separately negotiated
and the related convenience and processing fees are determined on a
client-by-client basis. This process

2

provides
Ticketmaster with latitude in establishing price and is supportive of Ticketmaster’s
presentation of C&P revenue on a gross basis.

The company changes the product or performs part of
the service.

Importantly,
Ticketmaster, not its clients, provides the entirety of the service that gives
rise to the C&P revenue. Ticketmaster has made the significant investment
in technology, systems, personnel and infrastructure which enable consumers to
conveniently purchase tickets outside of the client’s box office. Ticketmaster
enables the ticket purchase transaction through its websites, call centers and
retail sales outlets and determines order verification and payment processing
related thereto. Ticketmaster determines the consumer experience aspects of its
websites, call centers and retail sales outlets. This includes, for example,
website configuration, establishing security policies to ensure that its
website is not subject to abusive purchasing practices and the determination of
the credit cards that it will accept for purchase transactions on its website
and through its call centers. Importantly, Ticketmaster, not its clients,
provides order taking, fulfillment services and customer service before, during
and after the sale and delivery of tickets purchased by customers from
Ticketmaster. We consider these factors to be strong indicators that
Ticketmaster should present revenue on a gross basis.

The company has discretion in its supplier
selection.

While
each ticketing transaction is unique with respect to the customer’s selection
of event, venue and time, Ticketmaster, not its clients, determines the
suppliers used to provide ticketing services to its customers. These suppliers
include, but are not limited to, credit card processors, ticket stock
providers, ticket delivery service providers, and telecommunications and data
center providers. We consider these factors to be supportive of the
presentation of C&P revenue on a gross basis by Ticketmaster.

The company is involved in the determination of the
product or service specifications.

Ticketmaster
enables the ticket purchase transaction through its websites, call centers and
retail sales outlets and determines order verification and payment processing
related thereto. Ticketmaster determines the consumer experience aspects of its
websites, call centers and retail sales outlets. This includes, for example,
website configuration, establishing security policies to ensure that its
website is not subject to abusive purchasing practices and the determination of
the credit cards that it will accept for purchase transactions on its website
and through its call centers. Importantly, Ticketmaster, not its clients,
provides order taking, fulfillment services and customer service before, during
and after the sale and delivery of tickets purchased by customers from
Ticketmaster. We consider these factors to be strong indicators that
Ticketmaster should present revenue on a gross basis

The company has physical loss inventory risk (after
customer order or during shipping).

If
tickets are lost in transit to the customer, Ticketmaster, generally, cancels
the barcodes for the original tickets and replacement tickets are issued with
new barcodes. If physical tickets are issued and lost in transit, Ticketmaster
issues physical replacement tickets. The replacement tickets are then sent to
the customer. In each case, the replacement tickets clearly indicate that they
are replacement tickets so that any disputes as to which are the

3

genuine
tickets are easily resolved. In certain limited circumstances, where physical
tickets have been printed and are in Ticketmaster’s possession, Ticketmaster
does bear the risk of physical loss. However, generally, neither Ticketmaster
nor its client bears the risk of physical loss in the transaction that gives
rise to C&P revenue. Accordingly, we do not consider this indicator to be
relevant to the analysis of the presentation of Ticketmaster’s C&P revenue
on a gross or net basis.

The company has credit risk.

Ticketmaster
has credit risk for the amount billed to customers for C&P charges and, in
certain circumstances, bears the credit risk associated with the face value of
tickets. Ticketmaster, not its clients, establishes fraud prevention measures
related to purchases of tickets via credit card. These include address verification
and credit card authorization procedures. In the case of fraudulent
transactions, Ticketmaster, not its clients, interacts and communicates with
the credit card issuer regarding fraudulent activity and chargebacks. If, for
example, the C&P amount charged by credit card is subsequently not
collectible, due to fraud or charge-backs, the loss is incurred by
Ticketmaster. In addition, Ticketmaster, generally, bears losses associated
with the face value of tickets incurred due to fraudulent activity. We consider
these factors to be supportive of the presentation of Ticketmaster’s C&P
revenue on a gross basis

Indicators of Net Revenue Reporting:

The
Company has also considered the indicators of net revenue reporting described
in EITF 99-19, noting none that are considered to be supportive of the
presentation of Ticketmaster’s C&P revenue on a net basis.

Summary

EITF
99-19 indicates that the determination of the presentation of revenue on a
gross or net basis is a matter of judgment. After referencing the indicators of
gross or net reporting included in EITF 99-19 and the facts and circumstances
relevant to Ticketmaster’s customer transactions, we have concluded that
Ticketmaster maintains a position as a principal in the transaction with its
customers that gives rise to C&P revenue. Accordingly, we determined that
the presentation of Ticketmaster’s C&P revenue on a gross basis rather than
the net amount retained, after paying any applicable royalties to a client, is
appropriate.

2.              We
understand that you earn interest on funds that are collected from ticket
purchasers by investing those funds until remittance to your applicable
clients. Please tell us in detail your basis in GAAP for classifying this
interest income as revenues.

Response:

We
make reference to Financial Accounting Standards Board Statement of Financial
Accounting Concepts No. 6 “Elements of Financial Statements” ¶ 79:

Revenues are inflows or other
enhancements of assets of an entity or settlements of its liabilities (or a
combination of both) from delivering or producing goods,

4

rendering services, or other
activities that constitute the entity’s ongoing major or central operations.

Integral
to the services that Ticketmaster provides on behalf of its clients is the
collection of the face amount of tickets sold, custodial services and
recordkeeping with respect to such proceeds and subsequent remittance to its
clients. Such funds are specifically segregated from Ticketmaster’s general operating
cash balances. In order to maximize its profitability, Ticketmaster invests
these funds upon receipt on its own behalf until remittance to the client is
required. Ticketmaster classifies the interest earned on these client funds as
revenue because these inflows arise directly from the collection, custody and
remittance of client funds and these functions are integral to Ticketmaster’s
ongoing central operations of providing services regarding sales of tickets
offered by Ticketmaster’s clients.

Note 14 - Equity Investments in Unconsolidated Affiliates, page 130

3.              Please
provide us your fiscal 2007 significance tests under Rule 3-09 of
Regulation S-X for Jupiter Shop Channel. Please ensure that any impairment
write-down or other activity related to this investment is included in your
significance computations and is clearly identified. If you believe separate
financial statements are required for this equity method investment, please
tell us when you plan to amend your Form 10-K to file such financial
statements.

Response:

We
have noted the Staff’s comments. Attached hereto, as Exhibit I, is our
significance tests under Rule 3-09 of Regulation S-X for Jupiter Shop
Channel for the year ended December 31, 2007. We believe that financial
statements are required for this equity method investment. We indicated this in
Exhibit 99.1 of Item 15 (a) (3) of our Filing on Form 10-K
for the year ended December 31, 2007. We expect to amend our Form 10-K
to file such financial statements on or about June 30, 2008.

Exhibits
31.1 and 31.2

4.              Please
be advised that the certifications required by Exchange Act Rules 13a-14(a) and
Rule 15d-14(a) must include language exactly as set forth in Item
601(b)(31)(i) of Regulation S-K. Accordingly, other than in paragraph 1, please
replace references to “annual report” with “report.” Similarly, with respect to
certifications provided in Form 10-Q, replace references to “quarterly
report” with “report.” Additionally, please add the parenthetical language in
paragraph 4(d).

Response:

We
have noted the Staff’s comments. In future annual filings on Form 10-K, we
will, other than in paragraph 1, replace references to “annual report” with “report.”
In addition, in future quarterly filings on Form 10-Q we will replace
references to “quarterly report” with “report.” We will also add the
parenthetical language to our paragraph 4(d).

5.              Please
eliminate reference to the title of your chief executive officer and chief
financial officer in the introductory paragraph of your certifications. Also
confirm that the inclusion of the titles in this filing and in Form 10-Q
for the quarter ended

5

March 31, 2008 was not intended to limit the capacity in which
these individuals provided the certifications.

Response:

We
have noted the Staff’s comments.  We will
eliminate the reference to the title of our chief executive officer and chief
financial officer in the introductory paragraph of our certifications on a
prospective basis. We confirm that the inclusion of the titles in the filings
on Form 10-K for the year ended December 31, 2007 and on Form 10-Q
for the quarter ended March 31, 2008 was not intended to limit the
capacity in which these individuals provided the certifications.

The Company acknowledges that:

·                  the Company is
responsible for the adequacy and accuracy of the disclosure in the filings;

·                  staff comments
or changes to disclosure in response to staff comments do not foreclose the
Commission from taking any action with respect to the filings; and

·                  the Company may
not assert staff comments as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the United
States.

*******

Pl