A time to come together, a time to split up

By now, you've heard Monday's news about IAC's split up of various businesses, including LendingTree, into five separate parts.

An interesting analysis at NYT's Bits blog, "Barry Diller and the Fallacy of IAC," notes that the breakup points to the old question about conglomerates on the Web:

"The bigger question is whether it is possible for anyone to build the General Electric of the Internet, as Mr. Diller was trying to do. The stock market won’t let it happen. When an Internet company becomes a hit, it grows so rapidly, and investors get so excited about its possibilities, that its value as an independent company can be enormous. Look no further than the $15 billion valuation Microsoft agreed to for Facebook."

Like many others LendingTree has suffered the ills of the housing market, reporting a third-quarter loss of $5.6 million, declining revenues and in May announcing a layoff of 20 percent of its staff. The company did well during the housing boom before Diller bought it, and Diller has a track record for successful spin-offs (think Expedia).

The question now is how will LendingTree fair as a standalone, given the wrath of a down market with Wall Street investors acting cautiously on real estate and mortgage-related stocks today?

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