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Yahoo Finance Exclusive: Barry Diller on Match IPO and more

How do you know when to sell a company? Specific metrics? Advice from investment bankers? Not if you’re Internet billionaire Barry Diller, chairman of IAC/InterActive and Expedia.

“There is no precise formula for us,” says Diller. “We’ve spun off now eight companies and our methodology, not written down, is essentially instinctive.”

Diller was speaking of his decision to break Match Group, which owns Match.com, OkCupid, and Tinder, into its own separate business. On Thursday, IAC said Match will offer less than 20% of its common stock in an initial public offering, with IAC retaining a stake.

“When a company gets to a certain size—and that certain size is not defined by X, Y or Z—but in our feeling, when it gets to a certain maturity it ought to stand to a certain degree on its own," Diller said in an exclusive interview with Yahoo Finance.

Diller says that since its inception, IAC and its spun-off offspring have grown into seven public companies worth $44 billion, starting from $275 million some two decades ago. IAC's business model is not simply to hold assets "a la Berkshire Hathaway, in Warren Buffett’s words, forever,” says Diller. “We believe it is much better for some of those assets—not all assets obviously—but when they reach their own size that they gain their own independence. We think it’s great for management. It’s great for shareholders. It’s great, we think, for everyone.”

Speaking about other IAC companies such as the Daily Beast and CityGrid, Diller acknowledged they were in tough spots now because the advertising business is so competitive.

Diller also said he anticipated the Justice Department would approve the proposed Expedia-Orbitz merger. He talked about Airbnb, saying that he monitors that company pretty carefully as it competes with Expedia. “Airbnb is growing. But we do not believe Airbnb is a 'threat' to the general lodging business. We think it is a great addition. We do not think that Airbnb is going to take all of the demand away from either brands or independent hotels that are actually hotels with a doorman and services and all of that. It just seems unlikely.”

When asked later if he would buy Airbnb, he said no, saying the valuation was too high. Diller noted that valuations for consumer Internet companies in general are lofty, though he says he doesn’t anticipate a crash like the one that happened in 2001 -- unless there is some sort of significant external event.

And what will Diller buy or create next? “Anything that Internet walks,” he says.

 

Corrections: A previous version of this report stated IAC/InterActiveCorp plans to spin off Match Group. Match Group in fact plans to offer less than 20% of its common stock in an IPO, with IAC retaining a stake in the company. Separately, an earlier version of this report also stated IAC and its spun-off offspring were worth $275 billion two decades ago, the correct figure was $275 million.

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