Barry Diller’s InterActiveCorp today announced plans to separate into two publicly traded companies. The planned companies will be IAC and Expedia.
InterActiveCorp’s holdings include home shopping, ticket, travel, lodging, dating, and mortgage and real estate-related businesses. The company’s overall revenue was $1.5 billion in the third quarter, and overall net income was $89 million.
IAC will include the domestic and international operations associated with InterActiveCorp’s ticketing business, including Ticketmaster, ReserveAmerica, TicketWeb and MuseumTix.com; electronic retailing business, including HSN, HSN.com, HSE 24, America’s Store, Improvements and 9Live; financial services and real estate, including LendingTree, RealEstate.com, GetSmart, iNest and Domania; local and media services, including Citysearch, ServiceMagic, Entertainment Publications and Evite; personals, including Match.com and uDate; Teleservices, including Precision Response Corp., Access Direct, and Hancock Information Group; and Interval International.
The second company, Expedia, will include the domestic and international operations associated with Expedia.com, Hotels.com, Hotwire, TravelNow.com, Activity World, HotelDiscount.com, Condosaver.com, AllLuxuryHotels.com, Anyway.com, eLong, TV Travel Shop, Expedia Corporate Travel, Classic Custom Vacations and TripAdvisor.
Barry Diller will remain chairman and CEO of IAC, and also will serve as chairman of Expedia and its senior executive. Dara Khosrowshahi, who the company previously announced would become president and CEO of IAC Travel, will serve as CEO of Expedia. Victor Kaufman will remain as vice chairman of IAC and will also serve as vice chairman of Expedia.
The proposed spin-off is expected to be completed in the second quarter of 2005.
In a letter to shareholders, Diller explained the rationale for the decision. “We believe greater value can be created in the configuration we announce today than any other, and from this all else flows. This is entirely an elective…there is nothing else that pushed us, no transaction, no inherent worry that led us to take this course at this time,” he wrote.
Diller said the travel businesses have grown to represent 50 percent of IAC’s earnings, and “dwarf” the companies other operations. “Many of those, standing on their own, have real import and significance but are considered irrelevant in the current construct,” he said. This made it difficult to grow the company’s offerings outside of travel.
InterActiveCorp shares (Nasdaq: IACI) traded at $28.01 per share this morning.
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