IAC, the holding company of major online properties like Ask.com, Match.com, and Ticketmaster, announced today that it has completed the much-anticipated spin-off of HSN, Inc., Interval Leisure Group, Inc., Ticketmaster and Tree.com to IAC shareholders and retained the litany of more profitable companies. According to IAC, the move will be best for all parties involved and let the newly-formed companies blaze their own, independent, paths.
The very fact that IAC was required to even engage in a spin-off underlies the issues many companies are facing after acquiring popular online properties and holding them in the hope that they will grow in popularity and yield a positive ROI. And although the companies IAC was forced to spin-off were seemingly fine acquisitions, when one consults the company's latest quarterly filing, it becomes blatantly clear that this move was best.
According to IAC's second quarter financial statements, the company incurred a staggering $421 million loss, representing a $500 million swing since last year when it made a $94 million profit. But after the spin-off, the new company is doing much better and according to its financial statements, would have grown by 49 percent and incurred a loss of just $18 million. More importantly, Tree.com and HSN, the two biggest culprits in the decline in IAC's value, are left to smolder on their own without impacting the company's bottom line.
But along with cutting its losses, IAC is becoming a more agile company instead of a media conglomerate that's trying desperately to stay relevant in a constantly changing Web environment. Now, IAC has a slew of great properties, headlined by Ask, Bloglines, Collegehumor.com, and Match.com, that more adequately adapt to the changing Web landscape and solve a specific need.
In a Web environment where CPM is down and more sites than ever are battling for your time, services like Tree.com and the entire HSN network are becoming far less necessary. And in the process, these sites are losing money at an astounding rate and pulling all of IAC down with them.
The new IAC is much stronger without the companies it spun-off. And although Ticketmaster was still profitable, that too has been losing ground over the past few years and could easily be supplanted by a service that streamlines ticket purchases in a new way.