UPDATE: Goldman Sachs Downgrades IAC/InterActiveCorp to Sell on Search Headwinds

Goldman Sachs reduced its rating on IAC/InterActiveCorp

from Neutral to Sell and lowered its price target from $53 to $42. Goldman Sachs noted, "Search represents 52% of IAC revenues and 65% of operating profit. With IAC search revenues having grown at a 37% CAGR over the past 2 years, versus approximately 24% at Google, while IAC's search queries have declined at a 6% CAGR, according to comScore, though they increased 55% according to IAC, we believe there is considerable risk to the company's profitability should either of the concerns we noted develop. Even under more benign competitive scenarios, the impact to growth will be material, particularly alongside the shift to mobile and the changing browser market share dynamics." IAC/InterActiveCorp closed at $47.17 on Monday.