The New York-based Internet conglomerate said Tuesday it will move its extensive online travel holdings, including reservation services Expedia.com, Hotels.com and Hotwire, into one venture, which will do business under the Expedia moniker.
The company’s other operations, including its Ticketmaster business and online retailing divisions, will go forward under the name IAC.
The company said that media entrepreneur Barry Diller, its highly visible leader, will remain as chairman and chief executive of IAC and also serve in the role of chairman at Expedia. Dara Khosrowshahi, who was previously announced as the new president and chief executive of the firm’s travel unit, will become CEO at Expedia. Victor Kaufman will remain as vice chairman of IAC and will fulfill the same role at Expedia.
In a letter to shareholders, Diller explained the reasoning behind the split, citing rapid growth in InterActiveCorp holdings such as Ticketmaster and online personal classifieds company Match.com, as well as the continued development of the company’s travel interests. The executive also said the reality that InterActiveCorp has grown to be perceived primarily as a travel specialist has hurt its overall growth prospects.
Under the terms of the deal, the transaction will consist of a reclassification of InterActiveCorp shares, with stockholders receiving a proportionate amount of Expedia stock in a tax-free transaction. InterActiveCorp said that any outstanding stock options held by its employees will be converted into options or restricted stock in whichever of the two new companies the employee remains with following the transaction.
The effect of the deal on Match seems negligible at first glance, especially after the massive layoffs this fall, thorough re-org, and the rumored major changes coming to the Match.com website during Q1.
Link to press release.
