Conglomerates have, to say the least, gone out of fashion. There seem to be many factors including Wall Street's current preference for the "pure play," the rise of private equity and poor relative performance over the years.
Now IAC has announced that it will carve itself up into five pieces separating out a group of businesses that had very little in common (Lending Tree, Ask.com, Ticketmaster ...).
In announcing the breakup, Barry Diller, chairman and chief executive of IAC was quoted as saying: "While we've created a lot of value, I've always believed our complexity and many mouthfuls of sentences to explain who we are and what our strategy is have hampered clarity and understanding with all our constituencies, particularly investors."
Which is a great articulation of one more downside to conglomerates - no simple story to tell and, therefore, no easy way to build or leverage the corporate brand.
Sunday, November 11, 2007
IAC: another conglomerate bites the dust
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