JPMorgan Technology and Telecom Conference May 4, 2004 Erik Blachford

JPMorgan Technology and Telecom ConferenceMay 4, 2004

Erik Blachford

Important Investor InformationSafe Harbor Statement Under The Private Securities Litigation Reform Act Of 1995 This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of

1995, particularly statements anticipating future growth in revenues and operating income before amortization. Words such as “believes,” “could,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “projects,” “seeks,” or similar expressions used in connection with any discussion of future operating or financial performance identify forward-looking statements. These forward-looking statements are necessarily estimates reflecting the best judgment of IAC’s senior management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. These risks and uncertainties are described in IAC’s filings with the U.S. Securities and Exchange Commission (the “SEC”), including its Annual Report on Form 10-K for the fiscal year ended 2003, especially in the business and the Management’s Discussion and Analysis sections, its Quarterly Reports on Form 10-Q and its Current Reports on Form 8-K. Other unknown or unpredictable factors also could have material adverse effects on IAC’s future results, performance or achievements. In light of these risks and uncertainties, the forward-looking events discussed in this presentation may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date of this presentation.

IAC is not under any obligation and does not intend to make publicly available any update or other revisions to any of the

forward-looking statements contained in this presentation to reflect circumstances existing after the date of this presentation or to reflect the occurrence of future events even if experience or future events make it clear that any expected results expressed or implied by those forward-looking statements will not be realized.

Agenda

"Prepared 5/14/04 - Read Important Disclaimer."

IAC Travel Brands and StrategyGrowth Drivers

InternationalPackagesCorporateCustomer Retention

IACT’s Merchant Hotel BusinessFinancials

Source: IACT estimates and company reports – 2003 In billions


1. American Express Rosenbluth

2. TUI3. JTB4. Carlson Wagonlit5. IAC Travel6. My Travel7. Navigant Travel8. World Travel BTI9. Travelocity10. First Choice11. Orbitz12. AAA Travel

$20.1$19$13.5$12.5 (est)$10.5$7.1$5.3$5.3 (est)$3.9$3.8 $3.4$3.2 (est)

IAC Travel Brand Portfolio

Air tickets

Hotel rooms

Rental cars

Packages

Complex itineraries

Business travel

$$$$

$

Simple Complex


IAC Travel Brand Portfolio

Air tickets

Hotel rooms

Rental cars

Packages

Complex itineraries

Business travel

$$$$

$

Simple Complex


http://www.hotwire.com/index.jsp?lid=index.jsp:nav:topNav:0:logo

IACT Portfolio vs. Competitor Brands


http://www.hotwire.com/index.jsp?lid=index.jsp:nav:topNav:0:logo

IACT Long Term Revenue Mix Goal

Leisure Corporate

25% 25%

25% 25%International

US


IACT Growth Drivers

International

Packages

Corporate

Customer retention


• 1.3 billion people

• 11 languages

• 50% of the non-US travel market

IACT International Presence


CA GR42%

European Opportunity• Travel growth greater

than GDP growth; more flexibility & leisure time, lower costs

• Rapid online growth driven by internet adoption and convenience

• Germany catches up to UK and France in online adoption

2004 and beyond numbers are projections


Source: PhoCusWright

($bn)$70

$60

$50

$40

$30

$20

$10

$02002 2003 2004 2005 2006 2007 2008

57%Other

65%DE

37%FR

27%UK

European online travel market

Europe Tracking US Growth Trends


$-

$20

$40

$60

$80

$100

$120

$140

$160

$180

Jan Jul Jan Jul Jan Jul

US (Jan 98 - Dec 00)

$-

$20

$40

$60

$80

$100

$120

$140

$160

$180

Jan Jul Jan Jul Jan Jul

Europe (Jan 02 - M ar 04)

US Europe

Hotel market $77B $137B

Total rooms nights capacity 1.5B 1.7B

Total room nights filled 0.9B 1.2B

2003 occupancy 60% 71%

Average daily rate $85.38 $114

Number of hotels 50,000 73,000

Chain hotels and franchisees

22,000* .21,000*

Booked online 13% 3%* Hotels with top 50 brands


Source: IACT and industry estimates

IACT Growth Drivers

International

Packages

Corporate

Customer retention


Source: IACT estimates and company reports - 2003


1. American Express Rosenbluth

2. TUI3. JTB4. Carlson Wagonlit5. IAC Travel6. My Travel7. Navigant Travel8. World Travel BTI9. Travelocity10. First Choice11. Orbitz12. AAA Travel13. IACT Packages

$20.1$19$13.5$12.5 (est)$10.5$7.1$5.3$5.3 (est)$3.9$3.8$3.4$3.2 (est)$2.0

In billions

U.S. Packages Market

Total U.S. Travel Market $250 Billion


U.S. Tour Business IACT’s Package Business

A La Carte 98%Packages 2% Packages 20%

A La Carte 80%Source: PhoCusWright

ClassicVacations.com


European Train E-Packages


In-destination Activity Sales


IACT Growth Drivers

International

Packages

Corporate

Customer retention


Online Corporate Travel Opportunity


U.S. Travel Market Managed Corporate

Online ManagedCorporate

Percent online

2003 2007

$250B $124B

$8.7B

7%

$280B

$140B

$17.3B

12%

Source: Forrester and IACT estimates

Benefits in lower total cost of ownershipExpedia Corporate Travel’s Approach

• Save an average of $113 per airline ticket• Save up to 50% on hotel rates with ESR • Save up to 80% on transaction fees• No additional hidden fees• No management fee• No reporting fees

Fares, Fees


•Agent Salaries•Software Licensing•Add-on Reporting

•Manual Policy Enforcement

•Training Costs•Time-intensive Fare

Search

Fares, Fees

Business the old way

• Unused tickets for travelers• Automated seat search and

upgrades

ECT – Innovations and upgrades


IACT Growth Drivers

International

Packages

Corporate

Customer retention


Expedia.com Customer Retention

New Customer Revenue Repeat Customer Revenue


Repeat customers growing


Expedia.com only

Q1,02 Q2,02 Q3,02 Q4,02 Q1,03 Q2, 03 Q3,03 Q4,03 Q1, 04

10%

20%

30%

40%

50%

60%

39%43%

50%

Quarter averages of monthly percentages

Merchant Hotel Business


The IAC Merchant Hotel Business

Travelers50% of conversionbooks direct

Hotel’s Potential New Customers Want Choice

Hotels don’t pay for listings, only for business generated

Compares favorably to risking money on newspaper advertising

Customer books via Expedia or

Hotels.com, paying in advance

Expedia & Hotels.com pay hotel for room post-checkout

IAC keeps margin

Loyal CustomersShop Direct

Direct Bookings

Hotel Direct Hotel87% First Time Customers

http://images.google.com/imgres?imgurl=www.eldan.co.il/hotel/images/ph-hotel.jpg&imgrefurl=http://www.eldan.co.il/hotel/&h=213&w=316&prev=/images%3Fq%3Dhotel%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8%26sa%3DN

All Others80%

20%

Top Hotel Chains on IACT

Top five hotel chains equal about 20% of merchant hotel revenue.

Top 5 Chains


U.S. Hotel Occupancy Rates

Source: Smith Travel Research


10%20%30%

40%50%

60%70%

80%90%

100%

January February AprilMarch

20 0 420 0 3

Peak times

Low times: hotels need

help


2000 2001 2002 2003 2004 2005

Source: PhoCusWright

Supplier Share of Online Travel100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

New York / Las Vegas / Orlando

Top 3 U.S. cities hotel revenue as % of IACT revenue


Q1 ,02 Q2 ,02 Q3 ,02 Q4 ,02 Q1 , 03 Q2,03 Q3,03 Q4 ,03 Q1 ,04

5 %

1 0%

1 5%

2 0%

0

2 5%


Same Store / Hotel Sales Increases

5,0004,5004,0003,5003,0002,5002,0001,5001,000

5000

Expedia room nights in thousands

660,000 room nights from hotels added since Q1-03800,000 new room nights from hotels under contract in Q1-03

Q1,04

Q1,03

Financials


Gross Bookings


$3,500

$3,000

$2,500

$2,000

$1,500

$1,000

$500

$0Q1,02 Q2,02 Q3,02 Q4,02 Q1,03 Q2, 03 Q3,03 Q4,03 Q1, 04

$3.5B 1Q04 vs. $2.3B 1Q03

51% Y/Y

In Millions

Expedia$1,802

Expedia$2,672

Hotels$344

Hotels$494

Net Revenue


$600

$500

$400

$300

$200

$100

$0Q1,02 Q2,02 Q3,02 Q4,02 Q1,03 Q2, 03 Q3,03 Q4,03 Q1, 04

In Millions $494M 1Q04 vs. $351M 1Q03

41% Y/Y

$82$88$77$60$52$50$42$26

Packages revenue (M)

$104


23% Y/Y

Operating Income Before Amortization /Operating Income$160

$140

$120

$100

$80

$60

$40

$20

$0

Q1,02 Q2,02 Q3,02 Q4,02 Q1,03 Q2, 03 Q3,03 Q4,03 Q1, 04

$128M 1Q04 vs. $104M 1Q03

In Millions

OIBA Operating IncomeSee reconciliation at end of presentation

Reconciliation of Operating Income Before Amortization to Operating Income

Q102 Q202 Q302 Q402 Q103 Q203 Q303 Q403 Q104

Operating Income Before Amortization $ 56 $ 69 $ 84 $ 71 $104 $132 $137 $150 $128

Adjustments 24 25 31 22 34 43 57 42 43

Operating Income 32 44 53 49 70 89 80 108 85

Operating Income Before Amortization is defined as operating income plus: (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 and (4) one-time items. 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 income statement of certain expenses, including non-cash compensation associated with IAC’s employees, non-cash payments to partners, and acquisition related accounting.

Documents

JPMorgan Technology and Telecom Conference May 4, 2004 Erik Blachford