Goldman Sachs recommended buying e-commerce conglomerate InterActiveCorp ( IACI) Friday, on the basis of higher earnings expectations.

The company is the Barry Diller vehicle that used to be called USA Interactive.

Analyst Anthony Noto raised second-quarter and full-year 2003 revenue and earnings estimates, citing "impressive fundamentals, strong balance sheet and valuation, which make it an attractive investment leveraged to the secular growth of the Internet."

The firm now expects the operator of the travel sites Expedia ( EXPE) and Hotels.com ( ROOM) to earn 17 cents a share in the second quarter, up from the 16 cents it estimated previously, and for revenue to reach $1.52 billion, from $1.50 billion.

For 2003, Noto predicts a slightly higher profit of 76 cents a share, up from 75 cents, and for sales to hit $6.22 billion, above his initial estimate of $6.16 billion.

On the basis of these expectations, Noto believes the stock has the potential to rise 20% from current levels over an unspecified time frame.

Noto said several catalysts warrant the improved outlook, including completion of acquisitions and increased stock buyback activity.

The analyst kept his outperform rating on the stock. Goldman Sachs makes a market in the stock of and has an investment banking relationship with InterActiveCorp.

Shares of the company were $1.18 higher, or 3%, at $39.02 in morning trading Friday.

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