Barry Diller’s (pictured, right) IAC (NSDQ: IACI) lost $3.2 million on $332 million in revenue during the first quarter, part of a mixed batch of results that shows improvements in some areas but continued weakness in search and advertising. Revenue dropped 10 percent in the first quarter, down from $370.7 million in the same quarter last year—and that’s almost good given that revenue from the Media & Advertising segment, which accounts for nearly half of IAC’s haul, was down a whopping 22 percent.

Excluding special items, IAC lost $0.2 cents a share compared with a gain of $0.7 cents per share in the same quarter last year. Analysts surveyed by Thomson Reuters (NSDQ: TRIN) expected better results on slightly lower revenue: a penny per share on $329.7 million in revenue. The numbers look far worse with everything included: a loss of $28.4 million, or $0.19 per share, compared with a profit of $52.8 million, or $0.38 per share, in Q108—but net income in that quarter included the businesses IAC spun off in August. Free cash flow from continuing operations was $49 million, up 33 percent.

Among the reasons for the 22 percent drop in Media & Advertising, according to IAC: a sharp decline in network revenue, changes at Ask.com at the cost of some monetization including fewer on-site queries and, of course, economic conditions. The segment, which includes Ask.com, Citysearch, Dictionary.com and Fun Web Products, eked out $1.1 million in operating income on $167.6 million in revenue but that was down 97 percent from $31.3 million in Q108. IAC is either going to have find major improvements or change its business mix to cause less reliance on Media & Advertising.

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