Diller Should Be Selling
On Monday, Diller's IAC said it plans to spend around $1.8 billion purchasing the Web search engine Ask Jeeves, which started life as a site on which people could ask questions and then be forwarded to Web pages that might contain the answers.
While the deal has some Wall Street analysts enthused, it looks like an expensive and defensive maneuver by Diller, whose travel-focused Internet acquisition strategy has left investors so confused and disappointed that IAC's stock trades nearly 40% below its 52-week high.
Fierce competition in the online travel market has hurt IAC businesses such as Hotels.com and Expedia so much that analysts expect IAC to post only 6% growth in pro forma earnings in 2005. Diller's reputation has taken a battering. Once seen as a savvy dealmaker, he is now regarded more as someone who has overpaid for Internet assets and then failed to achieve the goals he targeted with his purchases.But instead of admitting to mistakes and doing a proper restructuring, IAC's approach has been to come up with moves that seem more aimed at diverting attention from real problems. Take the
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