UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  November 1, 2005

IAC/INTERACTIVECORP

(Exact name of Registrant as specified in charter)

Registrant’s telephone number, including area code:   (212) 314-7300

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02    RESULTS OF OPERATIONS AND FINANCIAL CONDITION/ ITEM 7.01    REGULATION FD DISCLOSURE

On November 1, 2005, the Registrant issued a press release announcing its results for the quarter ended September 30, 2005.  The full text of this press release, appearing in Exhibit 99.1 hereto, is incorporated herein by reference.

The attached document is furnished under both Item 2.02 “Results of Operations and Financial Condition” and Item 7.01 “Regulation FD Disclosure.”

The attached document refers to non-GAAP measures, within the meaning of Regulation G.  Below is additional information regarding those non-GAAP measures.

IAC’S PRINCIPLES OF FINANCIAL REPORTING

IAC reports Operating Income Before Amortization, Adjusted Net Income, Adjusted EPS and Free Cash Flow, all of which are supplemental measures to GAAP. These measures are among 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. These non-GAAP measures 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. We provide and encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP measures as set forth in the exhibit attached hereto and which we discuss below.

Definitions of IAC’s Non-GAAP Measures

Operating Income Before Amortization is defined as operating income excluding: (1) amortization of non-cash distribution, marketing and compensation expense, (2) amortization of intangibles and goodwill impairment, if applicable, (3) pro forma adjustments for significant acquisitions, if applicable, and (4) one-time items, if applicable. See below for explanations of these adjustments. 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, non-cash payments to partners, and acquisition-related accounting.

Adjusted Net Income generally captures all items on the statement of operations that have been, or ultimately will be, settled in cash and is defined as net income available to common shareholders excluding, net of tax and minority interest: (1) amortization of non-cash distribution, marketing and compensation expense, (2) amortization of intangibles and goodwill impairment, if applicable, (3) pro forma adjustments for significant acquisitions, if applicable, (4) equity income or loss from IAC’s 5.44% interest in Vivendi Universal Entertainment LLLP (“VUE”) and gain on the sale of IAC’s interest in VUE, (5) non-cash income or expense

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reflecting changes in the fair value of the derivatives created in the Expedia spin-off as a result of both IAC and Expedia shares being issuable upon the conversion of the Ask Jeeves notes and the exercise of certain IAC warrants, (6) one-time items, if applicable, and (7) discontinued operations. We believe Adjusted Net Income is useful to investors because it represents IAC’s consolidated results, taking into account depreciation, which we believe is an ongoing cost of doing business, as well as other charges which are not allocated to the operating businesses such as interest expense, taxes and minority interest, but excluding the effects of any other non-cash expenses.

Adjusted EPS is defined as Adjusted Net Income divided by weighted fully diluted shares outstanding for Adjusted EPS purposes. We include dilution from options and warrants per the treasury stock method and include all shares relating to restricted stock/share units (“RSUs”) in shares outstanding for Adjusted EPS. This differs from the GAAP method for including RSUs, which treats them on a treasury method basis. In addition, convertible instruments are assumed to be converted in determining shares outstanding for Adjusted EPS, if the effect is dilutive. Shares outstanding for Adjusted EPS purposes are therefore higher than shares outstanding for GAAP EPS purposes. We believe Adjusted EPS is useful to investors because it represents, on a per share basis, IAC’s consolidated results, taking into account depreciation, which we believe is an ongoing cost of doing business, as well as other charges which are not allocated to the operating businesses such as interest expense, taxes and minority interest, but excluding the effects of any other non-cash expenses. Adjusted Net Income and Adjusted EPS have the same limitations as Operating Income Before Amortization, and in addition Adjusted Net Income and Adjusted EPS do not account for IAC’s former passive ownership in VUE. Therefore, we think it is important to evaluate these measures along with our consolidated statement of operations.

Free Cash Flow is defined as net cash provided by operating activities, including preferred dividends received from VUE, less capital expenditures and preferred dividends paid by IAC. In addition, Free Cash Flow includes tax distributions on the VUE common and preferred interests upon receipt of the distributions by IAC. For purposes of Free Cash Flow, we also include changes in warehouse loans payable in Lending due to the close connection that exists with changes in loans held for sale which are included in cash provided by operations.  In addition, Free Cash Flow excludes the taxes paid on the gain on the sale of IAC’s interest in VUE due to the exclusion of the proceeds on the sale from cash provided by operating activities. We believe Free Cash Flow is useful to investors because it represents the cash that our operating businesses generate, before taking into account cash movements that are non-operational.

Free Cash Flow has certain limitations in that it does not represent the total increase or decrease in the cash balance for the period, nor does it represent the residual cash flow for discretionary expenditures. For example, it does not take into account stock repurchases. Therefore, we think it is important to evaluate Free Cash Flow along with our consolidated statement of cash flows.

We endeavor to compensate for the limitations of the non-GAAP measures presented by providing the comparable GAAP measures, GAAP financial statements, and descriptions of the reconciling items and adjustments, including quantifying such items, to derive the non-GAAP measures.

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Pro Forma Results

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

One-Time Items

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 SEC rules. GAAP results include one-time items.  For the periods presented in the attached exhibit, Operating Income Before Amortization is not adjusted for any one-time items.

Non-Cash Expenses That Are Excluded From Our Non-GAAP Measures

Amortization of non-cash compensation expense consists of restricted stock and options expense, which relates mostly to the treatment of options in connection with the spin-off of Expedia and unvested options assumed by IAC in acquisitions. These expenses are not paid in cash, and we include the related shares in our fully diluted shares outstanding. Non-cash compensation also includes the expense associated with grants of restricted stock units for compensation purposes. We view the true cost of these RSUs as the dilution to our share base, and as such all RSUs are included in our shares outstanding for Adjusted EPS purposes.

Amortization of non-cash distribution and marketing expense consists of non-cash advertising secured from Universal Television as part of the transaction pursuant to which VUE was created. The non-cash advertising from Universal is available for television advertising primarily on the USA and Sci Fi cable channels without any cash cost. Ticketmaster and Match.com also recognized non-cash distribution and marketing expense related to barter arrangements, which expired in March 2004, for distribution secured from third parties, whereby advertising was provided by Ticketmaster and Match.com to a third party in return for distribution over the third party’s network.

Amortization of intangibles is a non-cash expense relating primarily to acquisitions. At the time of an acquisition, the intangible assets of the acquired company, such as supplier contracts and customer relationships, are valued and amortized over their estimated lives. While it is likely that we will have significant intangible amortization expense as we continue to acquire companies, we believe that since intangibles represent costs incurred by the acquired company to build value prior to acquisition, they were part of transaction costs and will not be replaced with cash costs when the intangibles are fully amortized.

Equity income or loss from IAC’s 5.44% common interest in VUE is excluded from Adjusted Net Income and Adjusted EPS because IAC has no operating control over VUE, has no way to forecast this business, and does not consider the results of VUE in evaluating the performance of IAC’s businesses.  The gain from the sale in June 2005 of IAC’s interest in VUE is excluded from Adjusted Net Income and Adjusted EPS for similar reasons.

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Non-cash income or expense reflecting changes in the fair value of the derivatives created in the Expedia spin-off is excluded from Adjusted Net Income and Adjusted EPS because the obligations underlying these derivatives, which relate to the Ask Jeeves Zero Coupon Convertible Subordinated Debentures due 2008 and certain IAC warrants, are expected to ultimately be settled in shares of IAC common stock and Expedia common stock, and not in cash.

Free Cash Flow

We look at Free Cash Flow as a measure of the strength and performance of our businesses, not for valuation purposes. In our view, applying “multiples” to Free Cash Flow is inappropriate because it is subject to timing, seasonality and one-time events. We manage our business for cash and we think it is of utmost importance to maximize cash — but our primary valuation metrics are Operating Income Before Amortization and Adjusted EPS.  In addition, because Free Cash Flow is subject to timing, seasonality and one-time events, we believe it is not appropriate to annualize quarterly Free Cash Flow results.

RECONCILIATION

Set forth below is a reconciliation of Operating Income Before Amortization growth rates for the quarter, excluding results from Ask Jeeves, Cornerstone and spin-off expenses:

Operating Income Before Amortization ($ in millions)

SIGNATURES

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 hereunto duly authorized.

Date: November 1, 2005

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EXHIBIT INDEX

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Exhibit 99.1

FOR IMMEDIATE RELEASE

IAC REPORTS Q3 RESULTS

NEW YORK—November 1, 2005—IAC/InterActiveCorp (Nasdaq: IACI) reported Q3 results today.

Overall Highlights

•                  IAC performed strongly with growth from each of its principal sectors.

•                  Operating Income Before Amortization margins increased by 250 basis points versus the prior year period.

•                  IAC repurchased 18.1 million shares of its common stock between July 1 and October 28, 2005, at an average price of $25.36.

•                  Operating income was impacted by a non-cash compensation charge of $67 million related to the Expedia spin-off (please see page 7 for more information).

Sector Highlights

•                  Retailing benefited from the inclusion of Cornerstone Brands and improved top-line results at HSN, though gross margins declined slightly.  Online demand was strong and now represents 23% of IAC’s U.S. Retailing business.

•                  Services was driven by significant growth at LendingTree, particularly from closing loans in its own name along with double-digit growth from the Lending exchange, strong domestic concert and sporting event ticket sales, and international expansion in Ticketing.

•                  Media & Advertising now includes Ask Jeeves which increased its share of U.S. search queries to 6.4% in September (source: comScore) and the decision to reduce the number of sponsored search results on Ask’s U.S. site is tracking favorably.  Citysearch strengthened its position in local online pay-for-performance advertising and delivered its second consecutive quarter of profitable growth.  Unique users at Citysearch increased 168% to record levels.

•                  Membership & Subscriptions was led by record results at Personals, which increased worldwide subscribers by 19% and recently launched Chemistry.com, a new premium relationship service.  Vacations had soft top-line growth but strong bottom-line performance and launched an online travel and lifestyle membership club.

IAC acquired Ask Jeeves on July 19, and spun-off Expedia to shareholders and effected a 1-for-2 reverse stock split on August 9.  Accordingly, results for Ask Jeeves are included from the date of acquisition, and results for Expedia prior to the spin-off are treated as discontinued operations.  Please see page 10 for GAAP financial statements, and page 16 for definitions of non-GAAP measures.

SEE IMPORTANT NOTES AT END OF THIS DOCUMENT

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SECTOR RESULTS

Sector results for the third quarter ended September 30 were as follows ($ in millions):

Please see discussion of financial and operating results beginning on page 3, and reconciliations to the comparable GAAP measures and further segment detail beginning on page 13.

SEE IMPORTANT NOTES AT END OF THIS DOCUMENT

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DISCUSSION OF FINANCIAL AND OPERATING RESULTS

RETAILING

Retailing results were driven primarily by the inclusion of Cornerstone Brands, which was acquired in April 2005 and accordingly is not reflected in the prior year results. U.S. Retailing also includes HSN, which modestly improved its revenue growth as compared to the second quarter.  While still in the early stages, the integration of Cornerstone Brands is underway with a number of products now being tested on HSN and HSN.com in anticipation of increased cross-selling in 2006.

U.S. Retailing revenue benefited from a 35% increase in units shipped, principally reflecting Cornerstone Brands as well as strong growth at HSN.com.  Profits grew at a slower pace than revenue due to the inclusion of Cornerstone Brands (catalogs have relatively higher operating expenses) and lower gross profit margins at HSN resulting primarily from increased clearance sales and markdowns.  Prior year results were adversely impacted by the Florida hurricanes, which resulted in programming disruptions and increased costs, due to mandatory evacuations.  As compared to its prior year period, Cornerstone Brands grew revenue at a double-digit rate.

International Retailing grew revenue by 18%, while profits grew more slowly due principally to gross margin declines.  Foreign exchange had little impact on the results during the quarter.

SEE IMPORTANT NOTES AT END OF THIS DOCUMENT

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SERVICES

Services results were driven by significant growth at LendingTree, particularly from closing loans in its own name along with double-digit growth from the Lending exchange, strong domestic concert and sporting event ticket sales, and international expansion in Ticketing.  The segment formerly known as Financial Services & Real Estate is now being reported as separate segments, Lending and Real Estate.

Worldwide ticket sales increased by 28% and the gross value of tickets increased by 30%. Domestic Ticketing revenue increased 29%.  International Ticketing revenue grew by 16%, or 14% excluding the benefit of foreign exchange. Ticketmaster’s purchase of the remaining interest in its Australian joint venture (in April 2005) and an acquisition in Finland (in August 2004) contributed 20% of Ticketing’s overall revenue growth.  Ticketing profit growth was attributable to higher tickets sales and increased cross-selling on behalf of IAC businesses and other affiliates.

The significantly higher revenue and profit generated from the loans LendingTree is closing in its own name and improved conversion of customer traffic into revenue-generating transactions benefited Lending’s results.  Refinance mortgages performed strongly and increased as a percent of revenue from the prior year period, while revenue from purchase and home equity loans also increased. Lending profits grew faster than revenue due primarily to lower marketing expenses as a percentage of revenue, offset partially by lower gross margins as a percentage of revenue due to the higher costs related to originating, funding and closing loans.

SEE IMPORTANT NOTES AT END OF THIS DOCUMENT

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Real Estate revenue was driven by a 34% increase in closings, primarily due to the acquisition of iNest in October 2004, and double-digit growth in the company’s other real estate businesses.  Real Estate losses increased principally due to higher marketing expenses relating to a test advertising campaign for RealEstate.com.  RealEstate.com now makes available 1.5 million home listings.

Home Services includes ServiceMagic which was acquired in September 2004. ServiceMagic acquired ImproveNet in August 2005 and these two businesses have integrated their operations.  The business continues to scale its network of service providers.

MEDIA & ADVERTISING

Media & Advertising’s results largely reflect Ask Jeeves, which was acquired in July 2005 and therefore is not included for the entire period.  Ask Jeeves’ properties increased their share of U.S. search queries to 6.4% in September (source: comScore). Ask Jeeves’ decision to significantly reduce the number of sponsored search results on its site is believed to have enhanced the search experience for users.  Sector results were also favorably impacted by increased pay-for-performance revenue and lower operating expenses at Citysearch, which contributed positive earnings in the quarter.

For the full quarter, as compared to its prior year period, Ask Jeeves increased revenue by 15%.  This was attributable primarily to an increase in queries in North America.  Growth rates were adversely impacted by the reduced monetization efforts, as anticipated.  Profit margins at Ask Jeeves also declined due to increased sales and marketing expense and higher revenue share payments to third party traffic sources.

SEE IMPORTANT NOTES AT END OF THIS DOCUMENT

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MEMBERSHIP & SUBSCRIPTIONS

Membership & Subscriptions results were led by record revenue and profits at Personals, which increased paid subscribers by 19%, attributable largely to Match.com’s successful marketing efforts in the U.S., continued international expansion, and higher revenue per subscriber.  Revenue growth at Vacations was slower than in prior quarters due to inventory constraints reflective of high-occupancy levels in the travel industry, as well as slightly fewer vacation confirmations as compared to the prior year period.

Vacations revenue growth was driven by a 5% increase in members and higher average fees.  Vacations profit growth was attributable to increased revenue and higher gross margins, partially offset by costs associated with its newly launched online travel and lifestyle membership club.  22% of vacations were confirmed online during the quarter, versus 20% in the prior year period.

Personals revenue growth benefited from higher average prices for packages.  International subscribers grew by 13% driven by expansion in several markets, most notably in Scandinavia and Latin America.  Personals profit growth was attributable to higher revenue partially offset by higher marketing expenses, start-up costs in connection with Chemistry.com, a newly launched premium relationship service, and charges in the prior year period related to the elimination of non-core businesses.

SEE IMPORTANT NOTES AT END OF THIS DOCUMENT

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OTHER ITEMS

Operating Income Before Amortization was impacted by a 17% increase in corporate and other expense to $26.6 million, including transaction expenses related to the spin-off of $2.1 million in Q3 (and $16.1 million year-to-date). Operating income was impacted by the increase noted above, plus significantly higher non-cash compensation expense. The increase in non-cash compensation was principally due to a $67 million charge (or $49 million, net of tax) related to the treatment of vested stock options in connection with the Expedia spin-off.  To a lesser degree, non-cash compensation increased due to the acquisitions of Cornerstone and Ask Jeeves. These increases were partially offset by a reduction in non-cash compensation expense of $5.5 million due to the cumulative effect of a change in the Company’s estimate related to the number of stock-based awards that are expected to vest.

Other income was impacted by a $9.4 million gain reflecting changes to the fair value during the period ended September 30, 2005 of the derivatives that were created in the Expedia spin-off. The derivatives arise due to IAC’s obligation to deliver both IAC and Expedia shares upon the conversion of the Ask Jeeves notes and the exercise of certain IAC warrants.  Net income was also adversely impacted by the decreased contribution of our discontinued operations due primarily to including Expedia’s results through August 9, as compared to the entire third quarter in the prior year.

The consolidated effective tax rates for continuing operations and adjusted net income were 17% and 32% in Q3 2005 compared to 15% and 26%, respectively, in Q3 2004.  The Q3 2005 effective tax rates were lower than the statutory rate of 35% due principally to the recognition of a capital loss, a non-taxable gain associated with derivatives, interest received on IRS refunds, and net adjustments related to the reconciliation of provision accruals to tax returns.  These favorable items were partially offset by state taxes.  With respect to continuing operations, these items were further offset by non-deductible non-cash compensation.  In 2004, the effective tax rate for continuing operations and adjusted net income was lower than the statutory rate due to tax-exempt interest and foreign tax credits, partially offset by state taxes and foreign losses for which no benefit was recognized.

LIQUIDITY AND CAPITAL RESOURCES

 During 2005, $1.6 billion in cash has been used to fund common share repurchases through October 28. IAC repurchased 18.1 million shares of common stock from the spin-off through October 28, at an average price of $25.36. Prior to the spin-off, IAC repurchased 26.4 million common shares at an average price of $24.67. Additionally, in connection with the sale of its interest in VUE in June, IAC received 28.3 million IAC common shares as part of the consideration. The common share numbers for periods prior to the spin-off are stated after giving effect to the reverse stock split and the average price for repurchases prior to the spin-off has been adjusted for both the reverse stock split and the value of the spin-off. Also, 13.1 million shares of preferred stock for $656 million in cash were put to IAC in connection with the spin-off.

SEE IMPORTANT NOTES AT END OF THIS DOCUMENT

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LIQUIDITY AND CAPITAL RESOURCES – continued

Subsequent to September 30, 2005, there are some significant items which will impact our net cash position of $1.4 billion.  After giving effect to these items, and adjusting for debt that is non-recourse to IAC, the Company would have had approximately $1.3 billion in net cash and securities as of September 30 as follows (rounding differences may exist):

DILUTIVE SECURITIES

IAC has various tranches of dilutive securities.  The table below details these securities as well as potential dilution at various stock prices (shares in millions).

IAC has outstanding approximately 6.1 million shares of restricted stock and restricted stock units (“RSUs”), which generally vest over five years from date of grant, including 3.1 million issued in 2005, and 0.3 million which will be settled in cash and therefore have no dilutive effect.

SEE IMPORTANT NOTES AT END OF THIS DOCUMENT

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OPERATING METRICS

(a)         Internet demand as a percent of total Retailing - U.S. demand excluding Liquidations and Services.

(b)         Customer “Qualification Forms” (QFs) transmitted to at least one exchange lender (including LendingTree Loans) plus QFs transmitted to at least one GetSmart lender.

(c)          Loan closings consist of loans closed by exchange lenders and directly by LendingTree Loans.

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GAAP FINANCIAL STATEMENTS

IAC CONSOLIDATED STATEMENT OF OPERATIONS
(unaudited; $ in thousands except per share amounts)

SEE IMPORTANT NOTES AT END OF THIS DOCUMENT

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IAC CONSOLIDATED BALANCE SHEET
(unaudited; $ in thousands)

SEE IMPORTANT NOTES AT END OF THIS DOCUMENT

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IAC CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited; $ in thousands)