IAC Announces Plan to Spin Off HSN, Ticketmaster, Interval and LendingTree as Four Publicly Traded Companies
NEW YORK, Nov. 5 /PRNewswire-FirstCall/ — IAC (Nasdaq: IACI - News) announced today that its Board of Directors has approved a plan to separate IAC into five publicly traded companies:
Context & Ripple Effects
IAC's board has approved breaking the Barry Diller-run conglomerate into five publicly traded companies, spinning off HSN, Ticketmaster, Interval and LendingTree while the remaining IAC keeps the media and search assets. The move lands the same week IAC signed a $3.5 billion sponsored-search deal with Google, meaning the ad economics underpinning the portfolio were being re-cut just as the corporate structure was being torn up.
The breakup follows a year of aggressive expansion — including a June 2007 push into a Bay Area venture operation that alarmed some local startups — and Silicon Alley Insider's 'Thank Heavens' reaction captures the prevailing read: the market had stopped crediting the conglomerate structure with any value. It also comes weeks after WSJ reporting put Ticketmaker's parent in a court fight with RMG Technologies over ticket-reselling practices.
First-order effects
- Shareholders in IACI will hold stakes in five separate listings instead of one, forcing each business — HSN, Ticketmaster, Interval, LendingTree and the residual IAC — to be valued on its own financials rather than blended into the parent.
- Ticketmaster exits the fold carrying its own legal exposure, including the RMG Technologies litigation over reselling practices reported by WSJ last month, without a diversified parent behind it.
Second-order effects
- The newly signed $3.5 billion Google sponsored-search arrangement, struck with unified IAC, will have to be allocated across the separated companies — giving each spun-off entity its own dependence on Google's search pricing rather than negotiating leverage pooled across the group.
- LendingTree stands alone just as mortgage-market conditions deteriorate through 2007, so its lending marketplace takes the credit-cycle hit directly rather than cushioned inside the conglomerate.
Third-order effects
- If investors reward the breakup as the early commentary suggests, the episode strengthens the case that large multi-category internet holding companies trade below the sum of their parts — pushing boards toward structural separation rather than diversification.
- A successful five-way carve-out would make spin-offs a repeatable tool in IAC's playbook, reshaping how the company grows: build or buy assets, then release them once they can be priced independently.
The trend: Internet conglomerates are unbundling into focused pure-play companies because blended valuations hide the worth of individual businesses — and IAC's board is betting five tickers beat one.