Barry Diller, chairman and CEO of IAC/InterActiveCorp, is pressing ahead with plans to spin off the group's online travel business in May or early June and said his $1.85bn acquisition of Ask Jeeves, a search company, would not derail the process.
Ask Jeeves will be brought under the IAC umbrella of non-travel internet businesses, which include Ticketmaster, an entertainment bookings group; HSN, a home shopping network; Match.com, a dating service; and LendingTree, a financial service provider.
However, Mr Diller said contracts would be signed between Ask Jeeves and his travel businesses, which will operate under the Expedia name. The ability of Ask Jeeves, which lags behind the big search operators such as Google and Yahoo, to increase its monthly audience of 42m by gaining some of the IAC group's 44m monthly users is a key reason for its purchase.
?We are going to make commercial arrangements between IAC/Ask Jeeves and Expedia. By the time it's spun off all the agreements will be in place,? Mr Diller said. IAC late last year announced it would spin off its travel sites into a publicly listed company under the Expedia name. Since then, IAC stock has dropped more than 20 per cent amid concerns of declining margins from hotel and flight sales and on doubts about future growth prospects.
Mr Diller said he had been looking at opportunities in the search space since the summer of 2003, in recognition of the growth in online advertising and search. He expects this section of the market to remain the fastest growing component of online advertising ?everlastingly so? but does not expect interactive television growth to kick off for several years. ?It will ramp up in a year or two,? he said.
He said IAC had explored partnerships with the big search companies, as well as smaller acquisitions, but Ask Jeeves had the only reasonable audience and biggest growth opportunity. ?Ask Jeeves will be the mortar between our commerce sites. It will tend, over time, to pull the IAC assets together because it is a global search engine,? Mr Diller said.