Big Changes Are Ahead For
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Big changes are in store for Match in 2014, and by "big" I really mean big. IAC/InterActiveCorp, the Internet holding company controlled by billionaire Barry Diller, plans to turn its Match dating services into a separate business with its own chairman. The newly created group - which also includes, DailyBurn and IAC's investment in Skyllzone - could be setting the stage for a potential spinoff.

A whole lot of internal rearrangement will follow the creation of the new business, called Match Group. Greg Blatt, IAC's chief executive officer, will become chairman. Blatt will continue to report directly to Barry Diller, the Chairman and Senior Executive of the Company. Sam Yagan, the CEO of Match, will become CEO of the Group, where he will focus on growing the dating businesses, implementing best practices, and expanding the Match Group portfolio. Blatt will step down as CEO of IAC and will not be replaced. Instead, Joey Levin, CEO of Search & Applications, and Kerry Trainor, CEO of Vimeo, will report directly to Diller.

Diller explained the move in a statement released just before Christmas. "Over the last three years our areas of focus have crystallized, our management teams have developed, our reporting lines have consolidated, and Greg and I agree that a less centralized operating structure, pushing talent and decision-making closer to the businesses, is now the best way to achieve our growth objectives," he said.

"IAC has evolved into three principal areas of focus," he continued, "and we're now organizing that way. First the Match Group, with early and later stage businesses, collectively represents a significant portion of IAC's value. Our ambitions for growth here are great, and with Greg continuing to work alongside Sam Yagan and the talented management teams these businesses have in place, I have utterly no worry that our goals will be realized."

Investors seem to be equally confident. IAC stock vaulted to a six-year high of 70.44 in afternoon trading directly after the announcement, then closed the day up 14% at 68.49. Shares have rebounded 29% since October 30, when IAC's stock sank more than 8% following a disappointing third-quarter sales report and an analyst downgrade.

Things look bright for the spinoff. "They are effectively aligning the best management resources in the best way possible," John Blackledge, a New York-based analyst at Cowen Group Inc., told Bloomberg. "All those businesses that they have spun off before have been pretty significant," added San Francisco-based analyst Kerry Rice.

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