With IAC (NSDQ: IACI) locked in a battle with Liberty to complete its intended break up, CEO Barry Diller used the company’s quarterly call to drive home the point that breakup planning is still on track. He described Liberty’s legal actions as “an unfortunate situation”, but until the issue is worked out in the courts (mid-March at the earliest, and at most a couple of months), IAC is moving forward on its plans.
– Liberty litigation: Diller: “I do believe we will prevail…”All the directors, including Liberty’s, approved a spin concept.” The company has a Mar. 10 court date and since it’s an expedited process, a court decision could be handed down soon after.
– Contingencies if Liberty wins: No contingency planning (so it’s claimed)… if Liberty does prevail, that’s going to obviously have consequences.
– Private equity: During the Q&A, Diller was asked whether private equity had expressed interest in the company’s various. “We’ve had a lot of interest… we have no interest in selling an asset in its entirety prior to the spin.” IAC continues to to have discussions. One or two of our business may see outside investors acquire a stake pre-spin but an outright sale is unlikely, given the tax issues. More after the jump.
– Google (NSDQ: GOOG) deal: The latest Google deal was not in effect as of the latest release, but has since started. The changes will reduce top-line revenue growth, but it will lead to an increase in higher margin, in-network revenue, so profit growth will increase. It sounds like the company is trying to explain away future growth weakness, if it comes.
– YHOO-MSFT: Diller: “I think that if Microsoft (NSDQ: MSFT) does acquire Yahoo (NSDQ: YHOO), it will strengthen competition, in terms of having at least two players that are strong and probably enduring.” He explained that before IAC signed its recent deal with Google, both Microsoft and Yahoo vied for that business, but didn’t have the scale to compete: “We had extensive conversations with Microsoft and Yahoo… as much as they wanted to, they simply did not have the ability to bid for us… if they combined, I think that they would have.” In the meantime, Ask is focused on innovation and Diller believes that with Yahoo and Microsoft in a holding pattern on search innovation, they are slowing down their pace of innovation. “I think that this gives us an advantage.”
– Interest in AOL: Diller was asked if he’d stand by previous comments about being interested in buying AOL: “I don’t really feel the same way.” He then suggested that he’s not so keen on the portal business right now. “If AOL (NYSE: TWX) came down in price to something really ridiculous, we probably would look at it.”
– Ticketmaster: In the future, Ticketmaster won’t just be tickets. But, it won’t be in the ’360 business.’ ” It won’t go out and buy some superstar”, but will be in things like live events and fan clubs. So it will look more like Live Nation (NYSE: LYV), but it won’t have Madonna.
– Online advertising: IAC is building its own online ad network (though it didn’t go into any details on this) and it believes that the “New IAC” will be in a position to deliver more targeted, niche ads.