Will HSN Be Ensnared in Liberty's Web?

The slowdown in U.S. consumer spending is emerging at a particularly complicated time for John Malone.

The mogul behind Liberty Media is in a tussle with his longtime business partner, Barry Diller, about the future of his stake in IAC/InterActiveCorp (IACI Quote). With Diller planning to break up his hodge-podge of Web businesses in an attempt to unlock shareholder value, investors on Wall Street are speculating that Malone may move to swap his controlling stake in IAC for HSN.

HSN, IAC's home shopping network, competes directly with QVC, the main holding behind Liberty Media Interactive (LINTA Quote), the stock tracking Web businesses owned by Malone's holding company.

For its part, QVC posted disappointing third-quarter results on Friday due to softness in retail spending amid the U.S. housing slump, and investors have doubts about whether this is a good time to double down on that business.

"Malone does not like to pay taxes, so if he could get it done on a tax-free basis, then I could see it happening," says Steve Roge, manager of the Roge Partners Fund. "That doesn't bode well for Liberty Interactive because it would just further complicate the already opaque nature of the holding company and the fundamentals of the business could deteriorate further."

Shares of Liberty Media Interactive recently were down 59 cents, or 2.9%, to $19.92 after the company reported that third-quarter revenue rose just 2% at QVC.