Investment bank Sifel Nicalous believes that IAC/Interactive (NASDAQ: IACI) may sell one of its largest units, Home Shopping Network to Liberty Interactive (NASDAQ: LINTA), a company controlled by John Malone. It would allow IACI to become an almost purely internet company.
Such a sale would transform the company. Retail operations which is mainly HSN accounted for $787 million of IACI's $1.595 billion in revenue last quarter. The balance was from online businesses including Lending Tree, Ask.com, and Match.com. While HSN was half of the company's revenue, its was only 43% of operating profit.
IACI's chairman Barry Diller would be gambling that a pure internet play would be valued more highly by the stock market than a hybrid firm with a large retail component.
While Diller may be right, he would end up with an only operation much smaller than properties like MSN and AOL, and that lack of scale could worry investors.
Douglas A. McIntyre is a partner at 24/7 Wall St.
Will Rich Ross really have a positive impact on Disney's movie operations?
Consumers sick of recession, may spend extra on holidays
Corrections, seasonality and Santa Claus
