The highest paid CEO of 2005, Barry Diller, announced today that he will break up his massive media and internet conglomerate IAC/Interactive Corp. into five separate companies.
"I've always believed 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 five companies to be spun-off are: IAC, which will retain the media and advertising brands such as Ask.com and Citysearch, HSN, Ticketmaster, which includes both international and domestic operations, Interval International, which includes vacation homes businesses, and Lending Tree. In order to achieve this division, Diller has focused on building revenues to make each unit independently viable. He commented:
"One of the reasons we've stayed with some of our more transactional businesses is that we needed their earnings to allow us to invest in emerging Internet businesses. Now that we have real scale in the pure Internet units, it makes nothing but sense to me to reorganize the whole. Each of these spun-off businesses is in fact a distinct business sector, and each will benefit from standing on its own."Wall Street reacted positively to the news with IAC's share price rising 8.5%. Which makes sense. Simplicity can be powerful. Wired's Epicenter blog points out that "analysts have claimed that Yahoo would be worth more if it followed suit."
The Times' DealBook also has an interesting take on the story, asking who will get IAC's Gehry designed headquarters in Manhattan.