To Grow, IAC Splits Itself Up

Interesting news today that media conglomerate IAC will break itself up into five separate public companies. IAC shareholders will own stock in all five companies. It will be split up as follows: IAC will continue to manage web properties such as Ask.com and Match.com and will spin off Ticketmaster, Interval International, LendingTree and HSN home shopping network and catalogs.

According to the WSJ, IAC head Barry Diller is breaking up the company "to focus his energies on some of the fastest-growing parts of his conglomerate, including the media and advertising businesses such as Ask.com." Those Internet companies originally needed cash from other business units to grow. Now that they can stand on their own feet, says Diller, "it makes nothing but sense to me to reorganize the whole."

That may be good for Ticketmaster, which could start to face serious competition in the coming years. Its contract with Live Nation will end at the end of 2008. The concert promotion behemoth will probably use its MusicToday acquisition to handle ticketing to its shows. Ticketmaster could face competition from smaller promoters if mobile ticketing ever picks up stream.

Nice quote from a 2005 article on spinoffs at CFO.com: "In what has become a cyclical trend, fee-hungry investment bankers have gone through several phases of counseling companies to expand to non-core areas through mergers and acquisitions, only to advise them later to slim down when the deals don't work out as well as had been hoped. Now, even as merger mania heats up, companies that participated in the last M&A boom are moving in the opposite direction and shrinking to core, focused businesses."