Breakup plan slows IAC in Q4
EmptyShares of IAC/InterActiveCorp. dropped 7% on Wednesday after the firm reported that it lost $369.9 million in its fourth quarter, partially because of costs associated with chairman and CEO Barry Diller's plan to turn the single company with disparate Internet assets into several different companies.
Lending Tree, IAC's online mortgage unit, also dragged down earnings as the U.S. housing and credit markets continued to work their way through signficant slumps.
Plus, Diller warned that a supbpar performance at the company's Ticketmaster unit should be expected going forward. Ticketmaster faces the prospect of losing giant customer Live Nation at year's end as that company instead becomes a competitor in the ticket-selling business.
IAC, which earned a profit of $15.3 million in the fourth quarter a year ago, said it grew revenue 8% to $1.9 billion. While revenue exceeded expectations, the big loss took investors by surprise, and IAC shares tumbled $1.71 to $22.84.
Diller told analysts Wednesday that he refused to be sidetracked by a legal dispute with Liberty Media about IAC's intention to carve itself into four parts.
"While the court decides this matter, I'm going to do everything I can not to let it become a significant distraction in the running of the businesses," Diller said. Liberty and IAC are expected to begin their court battle March 10.
Contrary to speculation, Diller also said that it was doubtful IAC would be interested in acquiring any part of AOL if Time Warner CEO Jeffrey Bewkes looks to sell or partner the unit with an outside firm.
"If AOL came down in price to something ridiculous, we probably would look at it. I just doubt we have very much interest in it," Diller said. TW said Wednesday that it eventually will split AOL's audience and access businesses into two separate entities.