Implications
IAC's strategy to spin off Ticketmaster, HSN, Lending Tree and Interval signify a major shift in strategy for IAC. In the past year Ticketmaster, HSN and Lending Tree have seen declines from past performance. Will these firms thrive independent of IAC? Are current market conditions going to continue? Will these firms may see struggles in the years ahead?
Analysis
IAC's strategy in the past was to leverage the cash from what many consider "non-dot.com's". In this announcement Barry Dillard's past strategy to weave a network of companies has to come to an end. Many financial analysts have struggled to find the value in this strategy over the years. Each firm may thrive when released from the IAC brand. However, market conditions are making business tough for Ticketmaster, HSN and Lending Tree. In addition, IAC has other constituents that are most likely pushing a change in strategy too.
Ticketmaster is facing increased competition from various forces. New entrants and changes in preferences by venues are reshaping the marketplace. The creation of an independent company for Ticketmaster does provide opportunity to drive a strategy independent of IAC. This may allow Ticketmaster to drive growth into new markets but without the financial banking of IAC the process may very different from the past.
HSN is now in a turnaround but can the marketplace support two TV shopping networks? Are consumer preferences changing to a point where this distribution channel is less preferred? Finally Lending Tree is a victim of the overall housing slump. It is obvious that all these firms face challenges and the future for high growth is unclearn given current market conditions.
