Barry Diller Uncomplicates His Life—Splits IAC Five Ways

iac-logo.pngBarry Diller is finally streamlining his life by deconglomerating IAC. The Internet giant (with quarterly revenues of $1.5 billion) announced this morning that it will break up into five separate companies, each one publicly traded. They will be:

—HSN (the Home Shopping Network, both TV and online)


—Lending Tree

—Interval International (a marketplace for vacation timeshares, which will also include CondoDirect, Resort Quest Hawaii and

—IAC (the remaining Web businesses, including, Bloglines, Citysearch, Evite, iWon,, BustedTees, and CollegeHumor)

Diller will continue as CEO and chairman of IAC, which still remains somewhat of a grab bag of about 30 Websites. But at least those businesses are starting to finally be able to stand on their own feet. It doesn’t make much sense for them to be weighed down by Lending Tree because of the mortgage credit crisis or overshadowed by the Home Shopping Network. IAC’s holding company model gave shelter to its startups with the earnings of its more established operations, but any troubles in the larger businesses are difficult for the smaller ones to overcome no matter how fast they are growing.

That will continue to be the case in some respects within the Web-only IAC. While a portfolio approach does help to reduce overall risk, it is not what most investors are looking for (the stock was up nearly 9 percent this morning on the news). IAC is better off spinning off its larger standalone companies. Arguably, it could still benefit by shedding more businesses down the line.

The big news buried in all this was that re-upped its ad-serving deal with Google for five more years, and got $3.5 billion guaranteed. Currently, makes up 10 percent of Google’s ad revenues from partner sites, or about $100 million a quarter. The new five-year deal assumes that will increase to $175 million per quarter. So something is working.