Ask.com Parent Company Breaks Up
Ask.com Parent Company Breaks UpNov 07 2007 - PPC - Farhad Divecha
IAC, the parent company of search engine Ask.com has announced that they will split into five companies, namely IAC, HSN, Ticketmaster, Interval and LendingTree, in order to improve shareholder and investor clarity.
Speaking at a press conference on Monday, Barry Diller, CEO of IAC said, “our complexity and many mouthfuls of sentences to explain who we are and what our strategy is have hampered clarity and understanding with all our constituencies, particularly investors.”
The parent company, IAC (Stock ticker: IACI)will now include their principal search and user generated content businesses and associated advertising properties Ask.com, Bloglines, Citysearch, Excite, InsiderPages, IAC Advertising, My Way, Webfetti, Zwinky, Match.com, Gifts.com and a number of other investments.
LendingTree, the popular mortgage and loans market place will be spun off to form its own company along with RealEstate.com, iNest, Domania, GetSmart and Home Loan Center.
Similarly, TicketMaster, the leading online ticket brokers will be separately incorporated. The group will include a number of domestic and international ticketing businesses including Admission.com, TicketWeb, Ticnet.se, Frontline and iLike.
HSN will hold their retail businesses including HSN TV, hsn.com and some catalogue, e-tail and retail businesses. Interval International will focus on travel businesses and will include CondoDirect and VacationSource.com.
Reaction to the announcement has been mixed. Some analysts have raised concerns that the split might not be easy. Most perceive the break up to be motivated by a desire to rid Barry Diller’s flagship search property, Ask.com of struggling businesses such as HSN and LendingTree, which were pulling down net profits. “A couple of companies in Diller’s portfolio had been dragging down the value of the rest of the company,” said Fred Boxa, a principal of IBB Consulting Group, “The value of IAC’s companies is higher split apart than together.”
Diller also announced during a conference call on Monday that IAC has renewed a pact that keeps Google the exclusive provider of search ads that appear on IAC’s Ask.com for the next five years.