Friday, May 16, 2008

Has Synergy Seen Its Heyday?

Enough of this integrated-conglomerate pretension.

-Barry Diller, Chairman of InterActive Corporation (IAC)

In Diane Mermigas, "Even for Diller, Vision Does not Equate Value," Mediapost's Media Daily News, March 15, 2008.

IAC is a collection of interactive businesses such as Home Shopping Network (HSN), Ticketmaster, Lending Tree, City Search and College Humor that Diller had been collecting for thirteen years on the IAC banner. Like other new-media executives, Diller often suggested that bringing these companies together would allow them to interact with each other in ways that would yield synergies--benefits from the interconnections that would transcend what they could do alone. Now, with the value of his company sinking on Wall Street, Diller says that salvation lies in breaking the firm into five publicly traded pieces: HSN, Ticketmaster, Interval travel, Lending Tree, and IAC (assets such as City Search and College Humor). The question of whether unrelated media activities are synergistically useful to a firm, or whether the firm should spin them off and concentrate on core competencies, are issues that several media conglomerate, including Time Warner, now face.

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