Diller Should Be Selling

In fact, recent developments suggest that one of the main reasons that Hotels.com and Expedia are underperforming is that the search engines are taking business from them. People are going onto Google to look for sites that sell flights or hotels and bypassing IAC's sites in the process, or at least finding a world of other options.

In essence, then, Diller is buying an also-ran search engine to fight off the encroachments of much larger search engines -- and paying through the nose to do so. It is one more move that shows that IAC isn't ready to admit that it's getting pushed out of the game.

A far smarter deal for Diller would be to sell all of his Internet assets now. He'd get a much higher price now than he will two years down the road, when the Internet craze will have died down and the flaws in his Web properties are apparent to all.