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CORRESP
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IAC/INTERACTIVECORP

555 West 18th Street

New York, New York 10011

July 2,
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 is the Staff’s comment conveyed in your comment letter dated June 19,
2008 pertaining to the filings listed above along with the Company’s response:

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

Note 2 —
Summary of Significant Accounting Policies, page 86

Revenue
Recognition, page 86

1.               We
reviewed your response to comment two in our letter dated May 15, 2008. In
accordance with the guidance in Rule 5-03(b)(7) of Regulation S-X,
please classify interest income as a component of non-operating income or
explain to us in further detail why it is appropriate to classify interest income
as revenue. Since such interest income is generated from the investment of
funds and does not result from transactions with customers, please clarify why
revenue classification is appropriate and why you believe this interest income
is substantively different from the interest income you classify within
non-operating income. Additionally, explain why you believe the segregation of
funds collected on behalf of customers impacts the classification of interest
income received on such funds. In your response, please provide us with the
amount of interest income included in revenue for all periods presented.

Response:

With
respect to Ticketmaster, IAC/InterActiveCorp (the “Company”) derives interest
income from two primary sources: its general cash and related investment
accounts; and its client cash and related investment accounts. The interest
income earned from

Ticketmaster’s
general cash and related investment accounts is classified as non-operating
income in accordance with Rule 5-03(b)(7) of Regulation S-X.  The interest income earned by Ticketmaster
with respect to client cash and related investment accounts is classified as
revenue. In forming its judgment regarding this classification, the Company concluded
such interest income is directly related to Ticketmaster’s central operations
(i.e., transactions with its customers and clients) and is therefore
appropriately classified as revenue. In making this determination the Company
has made reference to Staff Accounting Bulletin 104, Financial Accounting
Standards Board Statement of Financial Accounting Concepts No. 6 (“CON 6”),
“Elements of Financial Statements” and Rule 5-03(b)(1) of Regulation
S-X.

Ticketmaster’s
primary business activities (i.e., its ongoing major or central operations) are
providing its customers with the ability to conveniently purchase a ticket to
an event in advance at a location other than the client’s box office,
collecting gross sales proceeds from the customer, maintaining custody of these
funds, recordkeeping with respect thereto, and remittance of the client’s
portion of these funds to the applicable client. Interest on funds held for
clients is earned on the gross sales proceeds that are collected from customers
until the remittance of such funds to the client. The most significant
component of this client cash relates to the face value of tickets sold.
Ticketmaster acts as the client’s agent in collecting this cash and,
accordingly, the face value of sold tickets collected from the customer is not
presented by Ticketmaster as revenue.

From
an operational standpoint, Ticketmaster segregates client cash and maintains
detailed recordkeeping regarding its composition and the client remittance
terms. This allows Ticketmaster to ensure that the appropriate amount of funds
is remitted to the right client at the proper time.  This process also supports Ticketmaster’s
accounting processes, allowing Ticketmaster to analyze the client cash and to
distinctly record as revenue the interest income earned on it. Prior to
settlement with and remittance of funds to a client, Ticketmaster serves a
custodian function with respect to these funds. Following the remittance of the
face value of sold tickets and applicable royalties to the client, the
remaining cash is transferred to Ticketmaster’s general operating cash accounts
and any interest income subsequently earned by Ticketmaster is classified as
non-operating income.

The
economics of Ticketmaster’s arrangements with its clients are dependent in the
aggregate on the gross convenience charges and order processing fees charged to
its customers, the portion of such proceeds to be shared with clients in the
form of royalties and the interest income from the cash float that is retained
by Ticketmaster. Ticketmaster considers its ability to capture this interest
income as part of the profitability of its client agreements, affecting
business decisions regarding client contract pricing and terms, and as
compensation for collecting, safeguarding, accounting for, and remitting its
clients’ funds.  This client cash float
is a very visible dimension of Ticketmaster’s operating interactions with its
clients and the remuneration it receives.
The client cash float and the nature of Ticketmaster’s servicing
activities with respect to such funds are tightly integrated with, and are
critical components of Ticketmaster’s central operations. The source of the
client cash float and the resulting interest income earned from it is
correlated with, and is not incidental to, Ticketmaster’s operating cycle. This
determination is consistent with the classification of interest earned on its
client cash float as a component of Ticketmaster’s revenue.

2

In
considering the classification in its statement of operations of the interest
income earned on its clients’ cash float, Ticketmaster has concluded that the
essence of its role as a compensated intermediary between its customers and its
clients is analogous to the business model associated with a variety of service
providers. Other such publicly held non-financial service providers classify
interest income derived from operations as part of revenue. These include
payroll service providers such as Automatic Data Processing, Inc. and
Paychex, Inc. and business service providers such as Online Resources and
Checkfree Corporation. These types of businesses earn both transaction fees and
interest income from cash float that they collect in conjunction with their
core operating activities and, for these “fee and float” business models, the
presentation of both fee revenue and interest income earned on its cash float
as revenue is general practice.

In
making its determination regarding the classification of interest income on its
client cash as revenue, the Company has made reference to SAB 104 which states:

The
accounting literature on revenue recognition includes both broad conceptual
discussions as well as certain industry-specific guidance. If a transaction is
within the scope of specific authoritative literature that provides revenue
recognition guidance, that literature should be applied. However, in the
absence of authoritative literature addressing a specific arrangement or a
specific industry, the staff will consider the existing authoritative
accounting standards as well as the broad revenue recognition criteria
specified in the FASB’s conceptual framework that contain basic guidelines for
revenue recognition. — ¶1

Accordingly,
the Company has made reference to CON 6, in making its determination that the
classification of the interest income earned on its clients’ cash float as
revenue is appropriate. This literature provides the following guidance:

·                  “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, rendering services, or other
activities that constitute the entity’s ongoing major or central operations.” —
¶78

·                  “Revenues represent actual or expected cash
inflows (or the equivalent) which have occurred or will occur as a result of
the entity’s ongoing major or central operations.…the transactions and events
from which revenues arise and the revenues themselves are in many forms and are
called by various names-for example, output, deliveries, sales, fees, interest,
dividends, royalties, and rent—depending on the kinds of operations involved...”
— ¶79

·                  “Revenues and expenses result from an entity’s
ongoing major or central operations and activities…” — ¶87

·                  “Distinctions between revenues and gains and
between expenses and losses in a particular entity depend to a significant
extent on the nature of the entity, its operations, and its other activities.
Items that are revenues for one kind of entity may be gains for another. “— ¶88

The
Company has concluded that interest income earned by investing Ticketmaster’s
client cash has occurred as a result of Ticketmaster’s ongoing major or central
operations and therefore is operating, rather than non-operating in nature.
Accordingly, it has classified this interest income as revenue in reference to
the accounting literature discussed above and Rule 5-03(b) (1) of
Regulation S-X.

3

The
amount of interest income included in revenue for the years ended December 31,
2007, 2006, and 2005 was $18.7 million, $15.3 million and $8.9 million,
respectively.  In future periodic filings
with the Commission, the Company will disclose the amount of interest income
included in revenue for each period presented.

*******

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.

*******

Please
contact me at 212-314-7260 (fax: 212-632-9690) if you would like to discuss
these comments or responses.

  Sincerely,

  /s/
  Thomas J. McInerney

  Thomas
  J. McInerney

  Executive
  Vice President and

  Chief
  Financial Officer

  Copy
  to:

  Sarah
  Goldberg

  SECURITIES
  AND EXCHANGE COMMISSION

  Gregory
  R. Blatt

  Executive
  Vice President,

  General
  Counsel and Secretary

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