Layoffs Point to Confused Strategy at IAC

Last Updated Mar 6, 2008 11:54 AM EST

Interactive Corp.'s identity crisis is nearly full blown. Barry Diller, the creator and would-be dismantler of IAC, is turning the company into a textbook example of how to blur a company's brand and how to confuse and and alienate customers, employees and partners. Diller quilted together a bunch of barely-alike companies -- a home shopping network, a mortgage company, a shoe retailer and a joke site. Only Diller could do it, because he's such a master of dealmaking that people had faith in him.

The parts never added up to a tidy sum, however much Diller said it would. He spun Expedia off of IAC in 2005. Last November, he said he'd spin off even more companies, until that idea met a court challenge. Now he's announced layoffs at search engine, not long ago considered the crown jewel of IAC and the thread that would tie the whole bunch of businesses together.

Forty workers at Ask are going away, or 8 percent of the total. There really isn't a faster way to telegraph to your workforce, your advertisers, and the other people who do business with you that you don't know what to do than to shift repeatedly your game plan and then top it all off with a round of layoffs.

What is IAC now? I'm not sure anymore, except that it's starting to look like a mess. If Diller keeps up at this rate, he's going to end up tinkering IAC to death.

  • Kevin Kelleher

    Kevin Kelleher writes a regular stock column at and is a contributor to Wired, Popular Science, and GigaOm. He has previously worked as a reporter and editor at Bloomberg News, Wired News, and The Industry Standard.