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The Opposite of a Roll Up

In an entry a few weeks ago, I questioned whether there was a viable future for roll-ups of web properties. In that entry, I noted that the closest thing to a roll up on the net was IAC and I didn't really see that working from either the cost or revenue side.

Apparently neither did Mr. Diller. Today's big news is that IAC is giving up on its roll up strategy and spinning out its properties into five separate companies. From the press release:

Each of these spun-off businesses is in fact a distinct business sector, and each will benefit from standing on its own, with its own capital structure, its own currency which will enhance its ability to attract and retain superior talent and make acquisitions, and a focused story investors can clearly understand and buy into...

The strategy for a roll up is in essence, the sum of the whole is greater than the sum of the parts. The strategy for a spin-out is the opposite. Clearly the sum of IAC's parts exceeded the sum of its whole.


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