Will IAC/InterActiveCorp (Nasdaq: IACI ) sell the Home Shopping Network? Not while Barry Diller is CEO.
"I'm not really interested in selling HSN," Diller told the audience at last week's Communacopia conference, hosted by Goldman Sachs. "It's not something that we are out there trying to do, but we've always said that if there was a transaction with Liberty Media that made sense, it would probably be in everybody's interest."
Everybody hates HSN?
You'd think so by how many people are calling for a sale. My buddy Rick Munarriz made his case over the summer. Quoting:
HSN commands the thickest slice of IAC's revenue pie, but the home-shopping juggernaut is a seasonal low-margin albatross. Surely QVC parent Liberty Media would be willing to pay more for its rival than the market is currently valuing it.
Perhaps, but the market's skepticism isn't unwarranted. During the conference, Diller was particularly candid in describing HSN's (ahem) transition. Quoting:
Historically, the home shopping business has been somewhat counter cyclical in times of economic slowdown and consumer spending ... But HSN was [a] self-inflicted [wound].
How so? Diller says that HSN's marginal growth is the product of switching to a new team and a new product mix. "We had a very difficult year because we built up inventory, we introduced too many products too quickly, [and] we had new people taking over all these areas."
Dare to dream
And yet Diller, I dare say, is a daring dreamer whose derring-do defies definition. (Huh?)
My point is that Diller sees plenty of runway for IAC's other businesses. He's a believer in the transforming power of technology generally and of the Internet specifically.
HSN offers an interesting example. Earlier this year, IAC struck a deal with EchoStar (Nasdaq: DISH ) to make it possible for HSN viewers to buy from their Dish remotes. Just click "select," and you're back to the cheese puffs and soda.
And that's just one deal. Diller says that HSN's interactive feature now reaches 15 million homes, a small portion of which have been couch shopping for more than a year. Of those, more than half have bought. "Convergence is absolutely coming along," Diller says.
What a Web you'll weave
But IAC very much remains an Internet business. And while analysts didn't probe into Ask.com as much as they did last time, they still wanted to talk about the former Mr. Jeeves and his relationship with Google (Nasdaq: GOOG ) .
Why? DoubleGoo and IAC have an agreement whereby Google supplies ad inventory and IAC displays it. The partnership seems to be working well so far: Media and advertising revenues were up 33% in the second quarter ended in June.
Yet here's the problem. Unless IAC and Google agree to keep working together, the partnership dissolves on December 31. What happens then? Diller won't say, preferring instead to point out that Web advertising is still in its infancy and that both Microsoft (Nasdaq: MSFT ) and Yahoo! (Nasdaq: YHOO ) could be worthwhile partners.
And it's not like Diller is done with dealmaking. In music, IAC has a partnership with Apple and iTunes via Ticketmaster. In gaming, IAC has taken a majority stake in GarageGames.com, a website for developers who produce today's thumb-challenged interactive treats.
For Diller, practically all business is online business. And some of the best aren't even his. Here's his take on The Knot (Nasdaq: KNOT ) , a Motley Fool Rule Breakers pick: "They've got two-thirds or so of every [wedding] registration every year ... What's a better buying audience than that?"
How about none, Barry?
Diller has it right: Online business is business. And few firms are doing more e-business than IAC. But, hey, it's big digital world, right? Diller only wants to own most of it.
You don't mind, do you?