Thread by @SahilBloom

IAC is one of the most interesting companies in the world—yet very few people understand its history, structure, and playbook.

Here's a very simple breakdown on IAC:

1/ First, let's set the stage...

IAC is an American holding company. It's the brainchild of Barry Diller—its Chairman and Senior Executive.

Today, the company holds dozens of internet and media brands under its umbrella and touches millions of consumers across 100+ countries.

2/ To understand IAC's business, you have to understand its founder's history.

Barry Diller drops out of UCLA in 1961 after just a few weeks at the school.

Undeterred, he works his way up from the mailroom of William Morris to the CEO roles of Paramount and Fox.

3/ By the early 1990s, he is looking for his next challenge.

He believes technology will disrupt entertainment and commerce, but hasn't figured out how to participate.

The spark comes in 1992 after his friend—and future wife—Diane von Furstenberg visits QVC headquarters.

4/ She tells Diller that she had watched an actress sell $500K of hair products in an hour on a broadcast.

Diller is intrigued.

His big realization: screens were no longer static. They were INTERACTIVE.

He buys a $25m stake in QVC—it marks the start of his next adventure.

5/ After selling his QVC stake in 1995 for $130m—a cool 5x outcome—Diller makes his next play.

He acquires Silver King Broadcasting Company—a collection of local TV stations—brings its spun-out Home Shopping Network back in-house, and renames the company HSN Communications.

6/ But the real fun is just beginning...

HSN acquires a controlling stake in Ticketmaster in 1997 (and the remainder in 1998).

It then goes on a deal spree of epic proportions.

It acquires the television assets from Universal—USA Network & Sci-Fi—and renames as USA Networks.

7/ In what would become a common play, it merges Ticketmaster's online business with city guide website Citysearch, forming a company that goes public as Ticketmaster Online–CitySearch (TMCS).

It later sells the rest of Ticketmaster to TMCS (and then buys the whole thing back).

8/ More deals follow:

Acquires Hotel Reservation Network (future Hotels. com)

Ticketmaster acquires Match. com

Acquires a controlling stake in Expedia to combine with Hotels. com and dominate travel.

As he invests in new/growing markets, he divests positions in old markets.

9/ Diller sells the USA Networks television assets to Univision and Vivendi, preferring to focus on large, growing markets within travel, hospitality, and entertainment.

The company is soon rebranded as USA Interactive, then InterActiveCorp, then IAC/InterActiveCorp.

10/ In the background, a clear playbook is developing...

IAC doubles down on focus markets, acquiring Hotwire, TripAdvisor, Anyway. com in travel, and uDate. com and Kiss. com in dating.

It quickly builds scale in new plays in home services and search via acquisitions.

11/ Alongside it's aggressive acquisition strategy, it forms an equally aggressive spin-out strategy.

Expedia, LendingTree, Interval International, and HSN all spin-out from IAC as independent public companies.

The spin-out enables clear focus on driving shareholder value.

12/ Abstracting the complexity, the IAC playbook:

Step 1: Analyze & Select—find large, fragmented markets with strong macro tailwinds.

Step 2: Acquire & Build—acquire into scale in said markets.

Step 3: Spin-Out—spin-out companies to enable independent, focused value creation.

13/ The playbook is a fascinating one to study for anyone interested in business, finance, and markets.

It has developed a bit of a cult following, with plenty of companies and incubators fundraising on the thesis of "building the IAC of the future."

14/ Today, IAC's empire is spread across 4 core segments—ANGI Homeservices, Dotdash, Search, Emerging & Others.

11 public companies have spun-out from its umbrella, with more to come.

Many current CEOs—including Uber CEO @dkhos—trace their lineage to IAC as mentees of Diller.

15/ For more on this fascinating company and model, I recommend the resources below:

New York Times piece by @andrewrsorkin: nytimes.com/2015/11/24/bus…

Forbes Article by @EdgeCGroup: forbes.com/sites/jimosman…

The Generalist by @mariogabriele: thegeneralist.substack.com/p/the-barry-di…

16/ I hope you found that simple breakdown to be helpful in understanding IAC and its unique business model.

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