Keith Watanabe * NET 2.0

I've kept my eye out on IAC ever since I left Ticketmaster.  Now, in some ways I really wish I didn't leave Ticketmaster as I probably could've had a good chance to make some money off of potential stock options.  Of course, at the time I was working for Ticketmaster, I had no inkling that IAC intended to break up even further, despite the fact that I did see Expedia and some of the travel pieces of IAC get sent into their own direction.

Despite my own frustration at myself for leaving such a great opportunity behind, I have to say that this is a great move on IAC's piece.  The situation is quite simple: how does one walk into a boardroom and describe a conglomerate of companies glued together?  At its heart, IAC is not a venture company, although it does spin off companies on occasion.  It's no a true incubator company like Idealab.  People could describe it as just some ecommerce spot.  But you have things like loans, search, tickets, home shopping, etc. without any real relationship with one another outside of the fact that they interrelate through a common company and the fact that they are mostly internet companies.

Having five distinct companies makes a lot of sense each one could focus clearly on some objective rather than having the parent company achieve more revenue/profitability through sheer numbers.  Still these companies can hold strong partnerships with each other through the bond of having been part of IAC. 

However, the bigger questions is if IAC's move will impact other large internet companies?  Talks abound for Citigroup's split since CEO Chuck Prince stepped down.  While Citigroup does, indeed, have a large portfolio of financial tools and assets, the sheer size and bureaucracy involved makes the company slow and clunky.  You already have too much political infighting in places as bifurcated as a Nikko Citigroup, so imagine the scale when you have something on a much larger global scale!

I seriously doubt that all companies will follow suit.  Also, I think the move was more specific to IAC and Citigroup's split is necessary on the basis that the internal operations are just paralyzed in the attempts to standardize things at so many different levels.  Plainly speaking, it just is an impossible wet dream to get that many levels on the same page (i hate that phrase).

I do think that more companies should follow suit though.  Yahoo is horribly unfocused and their continuous buyouts to demonstrate growth to investors have done little to truly add value to Yahoo's portfolio.  ebay's acquisitions of irrelevant companies recently demonstrated poor judgment from their management; the huge $450 million write off on Skype clearly illustrates my point.

The key thing overall is that a company really needs focus.  I think buyouts are a great thing because the company getting bought out can have more security financially through the buyout.  I just think that companies need to be careful in choosing what they want to buy rather than just buying for the sake of growth or picking up a company because it looks like a good deal.