Before and After at IAC

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You look different, IAC (Nasdaq: IACID). Have you lost some weight?

Barry Diller's new-media company is certainly slimmer these days, posting its first quarterly report since splitting into five different companies this summer. The IAC that remains -- a collection of dot-com properties like search engine Ask.com, dating website Chemistry, and contractor lead-generator ServiceMagic -- is off to a good start, if you know where to look.

Worrywarts may point to the $0.11-a-share deficit, but that figure is weighed down by $20.8 million in spinoff expenses, and an even bigger accounting hit for the early extinguishment of debt. Revenue fell sharply from what the conglomerate generated a year ago, but it's actually a 10% improvement to $369.3 million when you count just the remaining pieces of the company.

With all the goodbye hugs between IAC's appendages, it's hard to get a clear picture of the company if you limit yourself to the top and bottom lines. The most encouraging metric here is the 36% spike in operating income from continuing operations before amortization.

IAC is on its own now. Investors can cherry-pick the Diller entities they like:

• HSNi (Nasdaq: HSNI) is headlined by the company's HSN home shopping channel.
• Tree.com (Nasdaq: TREE) is the play for gamblers who want to take a chance on out-of-favor sites like Lending Tree and RealEstate.com.
• ILG (Nasdaq: IILG) is anchored by the popular Interval timeshare exchange network.
• Ticketmaster (Nasdaq: TKTM) is your ticket for live event ticketing and venue marketing services.

"This is the last quarter when the costs of our spin-offs will distort the operating performance of the Company," Diller notes in this morning's earnings release.

He's right, but that doesn't mean that you won't find a few surprising sneak peeks in the quarter. One surprise is that the company's online dating sites generated healthier revenue gains than its largest subsidiary of ad-based sites like Ask.com and city maven Citysearch.

However, the biggest surprise has to be the 37% spike in revenue at ServiceMagic, powered by a 41% increase in service requests. It's a tricky time to take out a home equity loan to dive into home improvement projects, yet folks are clearly hitting up the site for handyman help. You certainly aren't seeing 41% gains in foot traffic at your local Lowe's (Nasdaq: LOW) or Home Depot (NYSE: HD) home-improvement superstore, so there's something special going on at ServiceMagic (and perhaps that's a ray of light for the distressed hardware chains).

If you're the type of investor that needs everything spelled out on the top and bottom lines, your best bet is to check back on IAC in three months when the debris settles. However, opportunistic investors who want the dot-com sizzle of the sites that now make up the new IAC can latch on to a company with a sparkling balance sheet, at a price well below the pre-split buzz.

Don't fall for IAC just because it lost some weight. If you're moving in for the embrace, make sure it's for the inner beauty.