IAC/InterActiveCorp's (IACI) travel business is on a journey, but Wall Street is increasingly unsure about its final destination.

While $218 million in writedowns caught attention at Barry Diller's e-commerce giant in the fourth quarter, sell-side analysts appeared more concerned Wednesday about weaker-than-expected sales growth in IAC's travel operations. IAC is planning to spin those businesses off into a separate company later this year.

Additionally, IAC indicated that its Hotels.com lodging business, which disappointed investors with its performance in prior 2004 quarters, is in the midst of a fundamental repositioning. In place of its tradition of presenting itself to consumers as a source for discounted hotel stays -- a strategy that's increasingly difficult to follow through on given the challenges of competition and inventory acquisition -- Hotels.com is now in the process of emphasizing its role as a trusted, objective adviser for travelers in the market for a hotel room.

"A purely price-based positioning no longer makes sense," IAC Travel CEO Dara Khosrowshahi told analysts on a conference call Wednesday. Positioning Hotels.com as a hotels expert, on the other hand, is "powerful and ownable," he said.

While outsiders noted that IAC's core nontravel business -- the HSN home shopping operation -- performed strongly, Wednesday's glimpse of the travel business apparently has investors still waiting and seeing before they express definitive confidence in the long-term growth and profitability of the operations.

IAC's shares dropped $1.42, or nearly 6%, to trade at $22.58.

"The issue is that IAC Travel topline growth slowed considerably," wrote Goldman Sachs analyst Anthony Noto Wednesday morning. Hotels.com's fourth-quarter gross bookings declined 4% year over year, he noted, "which is concerning." Noto has an in-line/attractive rating on the stock, for which his firm has done recent investment banking.

"We believe that execution challenges still exist for IAC that create uncertainty in the sustainable growth rate of the overall company," Noto wrote.

Piper Jaffray's Safa Rashtchy, who has an outperform rating on IAC, wrote before the call that the major appeal of IAC's stock was its low valuation -- a valuation he hoped would be more "relevant" if the company's business stabilized. "So far the results are not suggesting that," wrote Rashtchy, while saying he would withhold final judgment until after the call. "We do note the expected spin off of IAC travel is likely to unlock some of the conglomerate discount and may be a catalyst for the stock, if the travel segment at least stabilizes," he wrote.

Looking forward, Khosrowshahi said he expected the travel business -- of which Expedia is the flagship brand -- will show first-quarter 2005 percentage revenue growth in the teens, and earnings growth in the high single digits. For the full year, the company says travel revenue growth will be in the high teens, and bottom-line growth will be in the low to mid-teens.

For HSN, the company is expecting revenue growth in the high single digits and bottom-line growth in the mid-teens. HSN's international operations are expected to show bottom-line growth in the neighborhood of 20%, similar to their 2004 bottom-line performance.