So what if IAC (NSDQ: IACI) decided to go after Yahoo (NSDQ: YHOO) Personals, as Barry Diller suggested it might Wednesday? A combination of the two properties would certainly make strategic sense. Bernstein & Co. Analyst Jeffrey Lindsay points out in a report that IAC's Match.com already provides personal listings on MSN and AOL (NYSE: TWX), so by adding Yahoo Personals, it would now presumably have access to all three major portals. More heft (together Yahoo Personals and Match.com would bring in double the unique visitors as their nearest competitor, according to comScore) would also help fend off growing competition from free, exclusively ad-supported dating sites. And perhaps most importantly for IAC, it would allow the company to double-down on what is likely already its best-performing business.
Diller raised the possibility of an acquisition during IAC's earnings call Wednesday, saying: "We'd love to (have) Yahoo Personals, and I think there is some initial discussion about that, whether they're going away or not is, of course, enormously speculative." Enormously speculative is probably too strong. Yahoo is busy jettisoning non-core assets under new CEO Carol Bartz, and the dating site would likely fit the bill. HotJobs reportedly is on the block and GeoCities is being shuttered soon.
Citigroup's Mark Mahaney puts Yahoo Personal's value at $500 million, working under the assumption that Yahoo Personals brings in just as much money as Match.com. In the past, IAC executives have said that they would prefer smaller acquisitions. But asked during the call, whether he would consider an acquisition in the range of $500 million to $1 billion, Diller said "it would be on the plate." He cautioned though that it would have to bolster a key business for the company. Like Match.com, perhaps?
By Joseph Tartakoff