Internet company IAC/InterActiveCorp, which is headed by billionaire Barry Diller and runs search engine and dating site, reports its fourth-quarter results before the stock market opens Tuesday.

WHAT TO WATCH FOR: Signs that IAC's media and advertising unit is getting stronger. Revenue from this business — IAC's largest — dropped during the first nine months of the year, hampered by an ongoing slump in online advertising.

In the third quarter, media and advertising revenue dropped 11 percent to $172.3 million. IAC attributed the decline partly to the difficult ad climate, which it said lowered revenue at its online city guide, Citysearch.

WHY IT MATTERS: IAC's media and advertising results in particular should give more insight into how the online ad market is recovering from last year's decline.

Several of its peers have already issued fourth-quarter results that indicate this market is improving: Yahoo Inc. reported a drop of 4 percent and AOL Inc. reported an 8 percent drop — declines that were less than those logged during the first three quarters of the year. Google Inc., the online advertising leader, reported fourth-quarter ad revenue grew 17 percent.

If IAC's advertising revenue rises in the fourth quarter, or drops at a slower pace than earlier in 2009, it would be another positive sign.

WHAT'S EXPECTED: Analysts polled by Thomson Reuters expect IAC to report adjusted earnings of 18 cents per share on $339.6 million in revenue.

LAST YEAR'S QUARTER: IAC earned $1.57 per share on $351 million in revenue. When excluding a benefit from the sale of a stake in a Japanese TV shopping company and a $26.4 million write-down in the value of IAC's investment portfolio, the company earned 18 cents per share.