Who Will Buy Ask.com?

IAC recently broke up into 5 separate companies - LendingTree, Interval International, Ticketmaster, Home Shopping Network, and new IAC. Barry Diller thought that splitting up the company would lower uncertainty associated with the company and allow the core company to trade at a richer multiple, but that has not been the case, as noted in this WSJ article:

Stripping out $1.3 billion of net cash on the balance sheet, Wall Street is valuing the operating businesses at barely $1.1 billion, or an undemanding multiple of 5.5 times Ebitda. Google enjoys a multiple of 11.6; Amazon.com, 18.7; and slower-growing eBay, 7.4, says Cowen & Co.

For the entire remaining company (Ask.com, Dictionary.com, Thesaurus.com, Reference.com, Citysearch, Service Magic, Evite, Iwon, Gifts.com, Match.com, college humor) to be valued at only 1.1 billion seems a tad bit crazy. They paid 1.85 billion for Ask and roughly another $100 million for Lexico (Dictionary.com, Thesaurus.com, Reference.com).

If Microsoft could afford aQuantive for $6 billion they should be able to afford buying all the above brands for a couple billion. And if Microsoft doesn't buy Ask I wouldn't be surprised to see some private capital raise to take IAC private.

Published: September 4, 2008 by Aaron Wall in

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Comments

September 5, 2008 - 11:45am

I wonder whether there will be a similar merger / acquisition with another media giant of some sort, similar to AOL Time Warner...

September 5, 2008 - 6:38pm

There have been talks of a AOL deal (with Yahoo! & Microsoft), but Ask could become a stronger search brand and is available for about 10% the price.

September 6, 2008 - 12:04am

Wasn't aware of that - interesting...shall we club together and buy it? If we all throw in a few quid, I'm sure we can raise enough...!

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