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Tuesday, October 31, 2006 Is Going Nowhere: Barry Diller’s Fantastic Journey


Ah. To believe that anything is possible. That’s the ticket.

Shares of IAC/Interactive have done well this year, up almost 15%. Odd for an internet stock, although the company also owns big TV commerce channel Home Shopping Network. But part of IAC’s appeal is that it owns No. 5 search engine

According to Comscore, has between 5% and 6% of the US search engine user market. Google is over 45%, followed by Yahoo! at 28%, and Microsoft at 12%.

It would appear that Google will hold its lead, at least until Hell freezes over. Search is critical to the strategies of Yahoo! and Microsoft.

Microsoft can’t stumble in search. For the new Microsoft Live suite of products to work, its search function has to be more and more widely used. And, the company is making the case that they can close the ground between themselves and the two leaders to anyone who will listen: "We believe the search business is still in its infancy, and we’re upping our game with cutting edge features like best of breed Local and Image search, along with practical tools that give people more control to help them better find what they’re searching for," a company spokesperson told BetaNews.

Yahoo! is also in a position where it cannot afford to lose any more of its search share. With Google cutting deals with companies like MySpace to provide search features, a marginalization of Yahoo! search would put the last nail in the big portal’s coffin. may be a nice product. But IAC does not have the audience or balance sheet to mount a real campaign to catch the companies ahead of it. According to the company’s last 10-Q, IAC has operating income of $81 million in the last quarter. Retailing was almost half of the company’s business. Ticketing, lending, real estate and teleservices businesses made up nearly another 30%. That means that is not a very large business, and if it is strategic to IAC, it does not show in the numbers. might be a nice toy for IAC, but that is all it will ever be.

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