IAC/InterActiveCorp operates as a media and Internet company in the United States and internationally. It operates through four segments: The Match Group, Search & Applications, Media, and eCommerce. The Match Group segment provides subscription-based and ad-supported online personals services through its Websites and applications. This segment also operates The Princeton Review that offers college and graduate school admissions test preparation and college readiness services; Tutor.com, which offers various live, one-on-one, and on-demand tutoring services; and Daily Burn, a health and fitness property that provides streaming fitness and workout videos in various platforms. The Search & Applications segment operates various Websites to offer search services, and content and other services comprising Ask.com, About.com, CityGrid, Dictionary.com, Investopedia, PriceRunner, and Ask.fm; and develops, markets, and distributes various downloadable applications, which provide users the ability to access search services. The Media segment offers Vimeo, a video sharing platform that provides video creators tools to share, distribute, and monetize content online, as well as offers viewers a clutter-free environment to watch content in various Internet-enabled devices; and The Daily Beast, a Website dedicated to news, commentary, culture, and entertainment. This segment also provides Electus, an integrated multimedia entertainment studio to produce video content for distribution, as well as operates Electus Digital, which consists of various Websites and properties. The eCommerce segment offers HomeAdvisor, an online marketplace for matching consumers with home services professionals; and operates Shoebuy, an Internet retailer of footwear and related apparel and accessories. The company, formerly known as InterActiveCorp, was founded in 1986 and is headquartered in New York, New York.
(Summary) (Company) (Chart)
27 September 2015
1yr Target $85.60
Payout Ratio 39.30%
1yr Cap Gain 27.95%
1yr Tot Return 29.98%
EPS (ttm) $3.46
EPS next yr $4.13
EPS next 5yr 19.85%
1yr Potential $81.98
Market Cap $5.55 Bil
Revenues $3.16 Bil
Earnings $306.40 Mil
Profit Margin 9.68%
1yr EarnGR 42.24%
3yr EarnGR 35.83%
5yr EarnGR ---
1yr DivGR 31.25%
3yr DivGR 72.84%
5yr DivGR ---
Quick Ratio 1.90
Current Ratio 1.90
IAC was incorporated in 1986 under the name Silver King Broadcasting Company, as a subsidiary of the Home Shopping Network. In 1992, Silver King was spun off to Home Shopping Network shareholders as a separately traded public company. In August 1995, Barry Diller bought a controlling stake in Silver King Communications, taking control of the television company as Chairman and CEO. A year later, Silver King Communications and Home Shopping Network merged and acquired a third company, Savoy Pictures Entertainment. The three companies were combined to create HSN, Inc.
HSN, Inc. acquired several assets in the late-1990s. In May 1997, the company acquired a controlling stake in Ticketmaster Group; in February 1998, it acquired the majority of the TV assets from Universal Studios (including USA Networks, Sci-Fi Channel, and Universal Television's domestic production and distribution arms). The company's name was changed to USA Networks, Inc. at this point, after the Universal deal was approved. Continuing its acquisition strategy, the company acquired Match.com in May 1999 and the Hotel Reservation Network in June 1999.
In the early 2000s, USA Networks began divesting itself of its traditional television broadcasting and production units. In May 2001, Univision Communications acquired USA Broadcasting - a division of USA Networks including 13 fully owned stations. The following year, 2002, Vivendi bought the rest of USA Networks' broadcast entertainment businesses, including the USA Network and Sci-Fi Channel. This led to the creation of a new entity called Vivendi Universal Entertainment (Barry Diller became the CEO of the newly created company). In the midst of this transition, USA Networks continued to build up its online portfolio. In July of 2001, the company entered the online travel business with its acquisition of Expedia, followed the next year by an acquisition of Interval International.
In August 2003, IAC acquired the online mortgage comparison site LendingTree, and in September, the company added discount travel website HotWire to its growing list of acquisitions. In October, Transat A.T. Inc. entered into an agreement to sell its French subsidiary Anyway.com to IAC, for an enterprise value of €53 million (approximately CAD$81.6 million, $62.7 million USD).
In 2004 and 2005, IAC continued its growth through acquisition, adding assets including TripAdvisor, ServiceMagic, and AskJeeves.com. It also launched Gifts.com during this period. In August 2005, the company bundled together its travel-related sites, including Expedia, and spun them off as a new publicly traded company on the NASDAQ. Additional acquisitions in 2006 included Shoebuy.com and CollegeHumor.com.
In May 2008, IAC and Ask.com acquired Lexico, the owner of Dictionary.com, Thesaurus.com, and Reference.com. In August 2008, IAC spun off several of its businesses, including: Tree.com, the Home Shopping Network, Ticketmaster, and Interval Leisure Group. 2009 saw the acquisition of Urbanspoon.com and PeopleMedia, and the launch of production company Notional.
In July 2009, IAC partnered with Ben Silverman to create Electus, a company focused on multimedia production and online distribution.
In 2010, IAC acquired dating site Singlesnet and fitness site DailyBurn. Later that year, Barry Diller stepped down as CEO of IAC. In February 2011, IAC acquired the free-to-contact dating site, OK Stupid, for $50 million. In April 2011, IAC extended its deal with Google, originally worth $3.5 billion, to hand over all search advertising on Ask.com and other IAC search products through March 31, 2016.
On February 14, 2012, Barry Diller introduced Aereo, an Internet television service. In March 2012 Aereo started streaming all of the broadcast networks to smartphones, tablets and televisions with Internet capability. On June 25, 2014, in a 6-3 Opinion, the U.S. Supreme Court ruled against Aereo. The Court found that Aereo infringed upon the rights of copyright holders.
On August 26, 2012, IAC acquired About.com from the New York Times.
In January 2013, IAC acquired online tutoring firm Tutor.com. On August 3, 2013, IAC sold Newsweek to the International Business Times on undisclosed terms. In November 2013, IAC acquired Investopedia and PriceRunner from ValueClick.
On December 22, 2013, IAC fired their Director of Corporate Communications, Justine Sacco after an AIDS joke she posted to Twitter went viral, being re-tweeted and scorned around the world. The incident became a byword for the need for people to be cautious about what they post on social media.
On August 14, 2014, IAC acquired Ask.fm. In January 2015 IAC sold Urbanspoon to Zomato for $52 million. On July 14,2015, the dating service PlentyofFish was purchased for $575 million in cash to become a part of The Match Group.
This company can be a little difficult to understand simply because of its history and the many twists and turns its taken over the years. But there's no doubt that although you may have never heard of this company, you surely have used many of their sites. And that's the real secret here. These sites are everywhere and the company is constantly buying, selling and reshaping the organization over time.
What I like most about this company are the fundamentals listed above. They're very nice and comforting for an investor like myself. And if this company was easier to understand, an investment in it would be a no-brainer, especially since it has pulled back so far with the rest of the market.
So here's what I'm going to do in the near future. I'm going to start a small position and see how the company grows over time. If it performs as I expect, I'll be adding more shares quickly to capture that expected 30% expected return on investment over the next year. And with an expected earnings per share growth rate of almost 20% over the next five years, this could end up occupying a slot in my portfolio for a very long time.