Watching IAC (Nasdaq: IACI) is like walking into an ice cream parlor and being forced to eat a five-scoop sundae when all you want is a single scoop. The company knows it. However, Barry Diller's plan to split his empire into five stand-alone units still hasn't materialized, so you have to either spoon down the hodgepodge sundae or head out of hodgepodge Dodge.
It's a shame because this past quarter is a ringing endorsement for the ability to single out your favorite flavor. As a whole, the showing is ho-hum. Revenue inched 8% higher to $1.6 billion. Earnings fell 13%, or down to $0.18 a share on a per-share basis. On an adjusted basis, earnings would have been essentially flat, dipping to $0.30 a share from last year's $0.31-a-share showing. The results were in line with Wall Street's expectations. (Review IAC's fourth-quarter showing.)
However, the different moving parts that make up IAC aren't the same ho-hummery you see in the end results. It's a heated tug-of-war taking place. LendingTree is naturally anchoring the south-tugging team. Revenue there fell a sharp 38%, but what do you expect when the heart of your model is delivering leads to lenders who are curling up in fetal positions and sucking their thumbs?
Pulling IAC the other way are double-digit top-line gains at the company's ticketing, online, and vacation travel arms. The fifth subsidiary -- retail -- is the only one befitting the overall stagnation, with gains at HSN partly offset by a slowdown in the company's catalog business.
You won't get much of an argument in favor of keeping IAC intact. Liberty Media Interactive (Nasdaq: LINTA) is the only one objecting to having IAC dispensed in five bite-sized pieces, but that was because the company was afraid its voting power would be diluted after the split.
If there were any other antisplit fan club members, this morning's report should be enough to dry up the rolls on that cheering section. It's time to let IAC play. Let IAC's Ticketmaster take on Live Nation (NYSE: LYV). Let IAC's Interval take on Wyndham's (NYSE: WYN) RCI timeshare swapping business. Let HSN compete against Liberty's QVC. Let LendingTree fend for itself, tapping its survival instincts to get through the real estate and refinancing downturn.
Finally, let the remaining IAC -- the online arm that watches over sites like Ask.com and dating site Match.com -- be free to take on the big boys like Google (Nasdaq: GOOG) and Yahoo! (Nasdaq: YHOO) on its own.
Investors deserve that much. Nobody wants to go to an ice cream parlor that forces you to eat five flavors that have proven that they don't belong on the same spoonful.
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