Feb. 6 (Bloomberg) -- IAC/InterActiveCorp posted an unexpected fourth-quarter loss after writing down the value of its mortgage brokerage, increasing pressure on Barry Diller as investor John C. Malone seeks to oust him as chairman of the Internet and media company.

The owner of Ticketmaster and HSN, the home-shopping channel, fell the most in more than three years in New York trading.

A $508.1 million operating loss at IAC's LendingTree mortgage unit may erode support Diller has among shareholders as Malone's Liberty Media Corp. seeks a judge's permission to remove Diller and six directors from the IAC board.

``It probably hurts Barry Diller's hand,'' said Jeffrey Lindsay, an analyst with Sanford C. Bernstein & Co. in New York. ``If he came in with a stellar set of results, the balance of sentiment among investors would be for him. Now, there's probably no momentum to maintain Barry Diller in his current role.'' He recommends investors hold their shares.

In November, Diller said he intended to create separate companies for the HSN; Ticketmaster, the largest U.S. ticket seller; the Interval International vacation timeshare service; LendingTree; and a new IAC that includes the Ask.com Internet search engine.

IAC reported a net loss of $369.9 million, or $1.31 a share, compared with a profit of $15.3 million, or 5 cents, a year earlier, the New York-based company said today. Excluding one-time costs, IAC profit trailed analysts' estimates.

Revenue rose 8.1 percent to $1.86 billion, IAC said in a statement.

Analysts' Estimates

Excluding the LendingTree writedown and other one-time gains and losses, IAC earned 46 cents a share. Eleven analysts surveyed by Bloomberg estimated earnings of 55 cents a share. They projected revenue of $1.83 billion.

IAC dropped $1.71, or 7 percent, to $22.84 at 4 p.m. in Nasdaq Stock Market composite trading, the biggest decline since August. The shares have dropped 15 percent this year after falling 28 percent in 2007.

LendingTree's writedown ``was not all that surprising, given the state of the market,'' sad Chris Marangi, an analyst at Rye, New York-based Gabelli & Co., which owns the shares.

Of greater concern to investors might be LendingTree's write-off of $8.3 million in bad loans, suggesting that the company may have more problems in the housing market than investors previously believed, Marangi said.

IAC, Liberty

IAC claimed in a Jan. 23 Delaware Chancery Court filing that Liberty threatened to block the breakup unless the deal was structured to give it control of the new companies. Liberty sued the next day, accusing IAC of attempting to wrest control of the companies in what amounts to a ``corporate coup,'' according to its Jan. 24 complaint.

Liberty holds 30 percent of IAC's shares and 62 percent of its voting power. Liberty claims Diller, who controls the voting rights of Liberty's IAC shares through a proxy agreement, is contractually obligated to vote against the spin off.

Liberty filed a request to halt the spinoffs and asked the court to let it oust Diller and six directors from IAC's board. Liberty, owner of the QVC and Starz channels, wants to name three directors as replacements.

A court will hear the arguments in a March trial.

``The litigation is an unfortunate situation,'' Diller said on a conference call with analysts and investors. ``I do wish Liberty hadn't raised the roof in such an aggressive way. I will do everything I can to not let this be a distraction in the running of the business.''

LendingTree Writedown

IAC wrote down the value of LendingTree's goodwill and intangible assets by $475.7 million, reflecting mortgage-market conditions and its expectations of future profits. Revenue fell as the company sold fewer loans to investors and received less for them as consumers grapple with the worst housing market in 26 years.

``One thing about LendingTree, this is a true moment in time,'' Diller said. ``It is a cyclical business; we knew it when we bought it. We bought it for its brand, and I guarantee you one thing, the brand is solid.''

Ticketmaster revenue gained 27 percent as U.S. customers purchased tickets to concerts by Bon Jovi, Celine Dion and Bruce Springsteen.

Retailing revenue rose 3 percent, boosted by gains at the HSN shopping network. Online sales increased at a ``double- digit'' pace on a percentage basis.

Media and advertising revenue climbed 42 percent as more people queried Ask.com to find information on the Internet. Sales at the Match.com personals service increased 14 percent on a gain in international subscribers.

Entertainment Unit

IAC also wrote down the value of its entertainment unit by $57.2 million as the company sold fewer Sally Foster products and coupon books.

In December 2006, IAC wrote down the value of Entertainment Publications Inc., which publishes the ``Entertainment'' book of restaurant and attractions coupons, taking a $214 million charge. IAC acquired Entertainment Publications in 2003 for $360 million.

To contact the reporter on this story: Oliver Staley in New York at ostaley@bloomberg.net.

Last Updated: February 6, 2008 16:21 EST