IAC to Spin Off Interval International

[T. R. Oglodyte Moderator Find all posts View Profile Close T. R. Oglodyte]

IAC Announces Plan to Spin Off HSN, Ticketmaster, Interval and LendingTree as Four Publicly Traded Companies

NEW YORK, Nov. 5 /PRNewswire-FirstCall/ -- IAC announced today that its Board of Directors has approved a plan to separate IAC into five publicly traded companies:

-- IAC, which will include:

-- The businesses currently comprising its Media & Advertising sector:
Ask.com, Bloglines, Citysearch, CursorMania, IAC Advertising
Solutions, Evite, Excite, InsiderPages, iWon, My Fun Cards, My Way,
Popular Screensavers, Smiley Central, Webfetti and Zwinky;
-- Match.com, ServiceMagic, Shoebuy.com, Entertainment Publications and
ReserveAmerica;
-- The businesses currently comprising its Emerging Businesses sector:
Black Web Enterprises, BustedTees, CollegeHumor, GarageGames,
Gifts.com, Green.com, InstantAction, Primal Ventures, Pronto, Very
Short List, Vimeo and 23/6;
-- IAC's current investments in Active.com, Brightcove, FiLife, Medem,
MerchantCircle, OpenTable, Points.com and SHOP Channel.

-- HSN, which will include the primary businesses currently comprising
IAC's Retailing segment, including HSN TV, hsn.com, and the
Cornerstone Brands, Inc. portfolio of catalogs, web sites and retail
locations, including Alsto's, Ballard Designs, Frontgate, Garnet Hill,
GrandinRoad, Improvements, Isabella Bird, Smith+Noble, The Territory
Ahead and TravelSmith;

-- Ticketmaster, which will include its domestic and international
operations including Admission.com, Biletix, Billetnet, BillettService,
Cottonblend, Echomusic, Kartenhaus.de, Lippupalvelu, LiveDaily,
TicketService, Tick Tack Ticket, TicketWeb and Ticnet.se, as well as
Ticketmaster's current investments in Frontline and iLike;

-- Interval International, which will also include CondoDirect, Resort
Quest Hawaii and VacationSource.com;

-- LendingTree, which will also include RealEstate.com, Domania, GetSmart,
Home Loan Center and iNest.

"We've been a complex enterprise almost from the very beginning 12 years ago, with hundreds of transactions over those years. And while we've created a lot of value, I've always believed our complexity and many mouthfuls of sentences to explain who we are and what our strategy is have hampered clarity and understanding with all our constituencies, particularly investors," said Barry Diller, Chairman and Chief Executive Officer of IAC. "One of the reasons we've stayed with some of our more transactional businesses is that we needed their earnings to allow us to invest in emerging Internet businesses. Now that we have real scale in the pure Internet units, it makes nothing but sense to me to reorganize the whole. Each of these spun-off businesses is in fact a distinct business sector, and each will benefit from standing on its own, with its own capital structure, its own currency which will enhance its ability to attract and retain superior talent and make acquisitions, and a focused story investors can clearly understand and buy into:

[Jya-Ning Silver Contributor Find all posts View Profile Close Jya-Ning]

Very like CD, they decide they were too diversified, now they decide to concentrate. And II part also include other travel lodging service.

Jya-Ning

[timeos2 Senior Member Find all posts View Profile Close timeos2]

II is a weak player. Always has been

II has been an orphan more times than not. Marriott had to bail them out way back when. Remember back when Cendant was being cobbled together there was a short period where the same company owned both RCI & II - although always with the understanding that II had to be spun off. II doesn't have the financial backing RCI did (neither may have as strong a position anymore) and that is one reason it has stayed about 1/3 the size or less of RCI. Now that both are heading into rentals and non-timeshare who knows what will become of the dominant players in the old week for week trade idea. The main players now are the 10 to 12 bigger "mini's" that will only grow more powerful with time - especially if they start direct exchanges between themselves. II will be locked out of the game. In ten years the weeks tradind may be nothing but a memory with what little still gets traded that way in the hands of the even smaller boutique type companies. Those who have tried those tiny companies already know the inventory is seriously lacking compared to the heyday of the week for week system giants.

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

II has not gone hog wild into rentals like RCI has. One result is that one can still get a reasonable range of decent exchanges into Europe with II while that is now only a memory at RCI. Still, II has followed the rental path more than it should.

What would have really put II on a course to blow past RCI and become the leader in the exchange field would be to have been spun off as a standalone, without the other rental-oriented baggage that it is placed with. That way they could agressively go after the RCI affiliated resorts, especially the majority which are weeks-based and pry them away by realing hammering on what RCI's rentals and its points preference is doing to exchange, and thus the member satisfaction of resort members. With that strategy, they could eat RCI's lunch and make RCI rue the day they ever hired Ken May. the godfather of points and rentals.

No mini is large enough to be a ''big player''. The best a few of them can claim currently is to barely make being a medium player. Now, if a bunch of them linked up, that would be a different story, indeed.

[bnoble Senior Member Find all posts View Profile Close bnoble]

The question is: which model will win? II's continued exchange-centric focus, or RCI's incresing reliance on rentals?

And remember: "win" means "make more money", not "makes TUGgers happier."

Time will tell, but it sure looks like RCI's profits are increasing quickly based on the recent Wyndham earnings release that Jya-Ning posted. Anyone know of a comparable performance figure for II as a business unit?

[somerville Senior Member Find all posts View Profile Close somerville]

The next question is how long will II remain independent before some other travel related company buys it?

[Jya-Ning Silver Contributor Find all posts View Profile Close Jya-Ning]

II is owned by IAC, so the stock symbol is IACI. They just have the quarterly report filed.

I think it is two different concept, you try to rent out to as many as you can to general public (RCI model), or you try to set the min. value, and hold that line (II). Since the market is very weak, either methods can not be that wrong.

Have not look into detail, but I don't see the new II branch will be bigger enough for a decent big public trading company (or even a mid siz company). It may need to add some pieces, or may need to work with redweek and open all its inventories for rent.

Jya-Ning

[timeos2 Senior Member Find all posts View Profile Close timeos2]

Cash is king.

Have not look into detail, but I don't see the new II branch will be bigger enough for a decent big public trading company (or even a mid siz company). It may need to add some pieces, or may need to work with redweek and open all its inventories for rent.

Jya-Ning

Thats really the problem. These companies can't be happy with the nickels and dimes that a simple week for week trade brings - even if those nickels are $169+ per trade (far too much for the services rendered already so the chance to raise that number is extremely limited). They need a much bigger revenue stream to be a wall st player. So RCI took the (free!) inventory from weeks and has tried to turn it into cash via rentals. But that is a seriously flawed approach and, if the owners wise up, one that eventually collapses.

The RCI Points model is more likely to succeed as it has many methods of generating cash, not limited to skimming the inventory for rentals. If that one can work is still open for discussion but appears to have legs.

II almost has to find other ways to generate income if they are to survive. The on going changes to timeshare exchange only puts pressure on them to find an answer fast. Now the spin off will add to that big time.

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

II's best bet to rocket ahead of RCI is to aggressively compete for their customers - both resorts and their members - by shining a spotlight on what RCI is doing with the points and rentals. The class action gives them a great way to do it. If II snags all the timeshare membes, RCI won't have anywhere to get the rentals from, and their house of cards will collapse.

The ethics behind the Ken May business plan at RCI is similar to that behind the Savings and Loan business model that worked for a while but then collapsed in on itself.

[MandL Junior Member Find all posts View Profile Close MandL]

Doesn't Blackstone own Fairfield, Westgate, RCI and now Hilton? Seems to me RCI's pool is getting larger. Am I missing something here? Correct me if I'm wrong.
Lauren