Updated from 2:29 p.m. EDT

IAC/InterActiveCorp

(IACI)

, Barry Diller's online strip mall of e-commerce shops, saw revenue and profit growth in the first quarter that was stronger than what analysts had been forecasting. However, lingering questions remain about a turnaround in its Hotels.com business and about how Diller is going to shape his empire into a coherent whole.

Still, the company's shares were recently up 99 cents, or 4.5%, to $23.05.

Ask Jeeves

(ASKJ)

, the search engine that IAC intends to acquire, was up $1.06, or 3.8%, at $28.42.

IAC earned $72.2 million, or 9 cents a share, in the first quarter, up from the year-ago figure of $41.5 million, or 5 cents a share. On an adjusted basis, excluding certain costs, latest-quarter earnings were 22 cents a share, 2 cents ahead of the Thomson First Call consensus estimate.

Revenue rose to $1.65 billion from $1.44 billion a year earlier, slipping past the $1.63 billion consensus estimate.

"There's been much talk in the past few months of the strengthes and weaknesses of what I'll call the new IAC," Diller said in a conference call Wednesday with investors. "These figures show the level of growth in this quarter and any given quarter. We're consistently hitting dozens of key markers we track every which way."

Diller took pains to point out that the businesses are emerging into a whole. "A hodgepodge or a mess it certainly isn't by any measure," he said in the call. But while millions of customers are taking to the individual businesses in the IAC family, there wasn't much talk of what strategy Diller will use to bring them more tightly together.

There's never been much question that Barry Diller is a good dealmaker. After a strong career at numerous media companies, Diller has turned IAC into a mosaic of largely growing Internet properties, fastening and pulling apart a number of companies like Lego pieces.

The question facing IAC is not whether Diller can make deals, but whether he can make them work together. While many of the companies he's assembled have flourished, the synergy that was supposed to turn IAC into a transcendent e-commerce giant that would rival

Amazon.com

(AMZN) - Get Report

has yet to gel.

IAC's planned purchase of Ask Jeeves may go some way toward integrating the shops, even if it's just by directing more search-driven traffic their way. Diller said boosting Ask Jeeves' traffic would be a priority as soon as the deal closes. "On the day the transaction closes, we'll have done all the work," he said. "We'll begin the process on adding traffic, which will be our mantra for the first year." Diller also mentioned that Ask Jeeves has "internally all the pieces they need to compete" in search, so IAC wouldn't make any more purchases in that sector.

In anticipation of spinning off its travel business, IAC broke out revenue growth for its core nontravel business, which was up 13%. The core business comprises the retailing and media services businesses that will remain part of InterActiveCorp. Revenue at its travel business rose 17%. But some of that growth came from acquisitions made in the past year, like TripAdvisor.

Bookings at IAC's Hotels.com unit dropped 2% in the quarter. IAC said its U.S. hotel business "continues to operate in a more challenging environment" because of rising competition from third-party distributors and travel search engines that can direct traffic to hotels' own sites. Higher occupancy rates hurt IAC because it meant fewer discounted-rate rooms available for it. While Diller stressed the strong brand of Hotels.com, IAC said it expects those trends to continue.

Offsetting the decline in the U.S. hotel business was a 29% rise in gross bookings for the Expedia unit to $3.4 billion. Growth was strongest overseas, with gross bookings rising 45% to $947 million.

IAC shares were hit hard last year when the company bowed to the reality of the rough and tumble U.S. hotel business and reduced its growth expectations for the unit.

IAC said it has bought back 49.2 million shares through May 3, at an average price of $22.13. The stock closed Tuesday at $22.06.