IAC & InfoSpace: Broken Up to Boost Shares

What do InfoSpace and IAC have in common? Their stocks were under performing and the market wasn’t valuing these companies in the ways that significant investors wanted. The solution: break up the companies. InfoSpace has seen some significant gains since selling its local unit to Idearc and mobile unit to Motricity.

Today IAC announced that the company would be broken up into five publicly traded units:

  • IAC (the online media business including Ask, Citysearch, Bloglines, Match.com, etc.)
  • HSN (including HSN TV, hsn.com, and the Cornerstone Brands, Inc. portfolio of catalogs)
  • Ticketmaster
  • Interval International (CondoDirect, Resort Quest Hawaii and VacationSource.com)
  • LendingTree (RealEstate.com, Domania, GetSmart, Home Loan Center and iNest)

The move is essentially an admission that the much sought after synergies and network never materialized, despite the proliferation of Ask search boxes on the online properties. IAC also announced a deal extending the company’s relationship with Google, worth $3.5 billion according to Diller.

This is probably the right result for the company, given the struggle for momentum across disparate properties. But it was likely forced by disgruntled shareholders that wanted greater performance from their IAC shares.


Related: Here’s the Wall Street Journal’s “day two” coverage.

3 Responses to “IAC & InfoSpace: Broken Up to Boost Shares”

  1. Doug Mehus Says:

    One question for you, Greg, you may be able to answer. The remaining, albeit much smaller, IAC company (hopefully renamed as IAC Inc. instead of the awkwardly redundant IAC/InterActiveCorp) generally includes its general Web properties from the former IAC Search & Media segment. Why on earth is Entertainment Publications staying with IAC!? I would’ve thought it could either stand on its own as a small publicly-traded company or as part of either HSN or Interval International. Any idea why they’ve slotted it in with the “New IAC”?


    P.S. What are your thoughts on Lycos these days? IAC’s drastically outdated Web portals Excite and MyWay are in need of a complete overhaul and are reportedly losing market share every month. Is the same thing happening with Lycos and do you see it as likely that IAC could buy Lycos and become somewhat of an operator of second- and third-tier Web portal brands like Ask.com, Excite, iWon, MyWay, Lycos and maybe even the remaining Web search brands of InfoSpace (if InfoSpace wanted to sell)? Do you think Daum Communications may be ready to throw in the towel, so to speak, on Lycos and pawn it off?

  2. Greg Sterling Says:

    Something has to happen to Lycos. It’s effectively a “dead brand.” The company continues to do things and try things and nobody’s paying any attention.

    Entertainment has potential as an online coupons site/source. I agree that there’s a way in which it doesn’t fit. But if well used it could be effective as an online couponer.

  3. Peter Metcal Says:

    My inside source tells me that NOVL is expected to explode today. Get in fast if you want to make some easy fast money.

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