[R]2:15PM New York – IAC/IntreActiveCorp, a media and web conglomerate breakup to unlock values.[/R]

IACI/InterActiveCorp the convoluted conglomerate of Internet and media properties finally revealed a break-up plan that investors had long sought after. The IAC (IACI: chart) rose as high as 10% after the break-up news.

IAC will be split into five companies to reflect various businesses core focus. The much ballyhooed synergies between the companies acquired in the last twelve years never delivered the earnings and revenue growth that investors were led to believe. IAC pursued the path of web properties acquisition with no clear direction and ended up a hodgepodge of internet businesses that are loosely related.

IAC in its latest acquisition of Ask.com tried to emulate Google advertising revenue model with lackluster results. In separate news, IAC agreed to sell Google Ads on its Ask.com and related properties in a five-year deal which the company says will bring early $3.5 billion.

IAC will retain all the web properties including Ask.com, CitiySearch, Math.com, and its current investment in various video and web transaction related properties.

HSN, the television and web based shopping channel will be the second company, Ticketmaster, the online concert and performance ticket seller will be the third company, Interval international, time-share seller, and LendingTree including RealEstate.com and Domania and iNest will be the fifth company.

IAC stock has struggled in the last three years as it has lagged in delivering revenue and earnings growth similar to Google, Yahoo, and several properties controlled by News Corp.

Last week IAC reported third quarter revenue growth of 7% to $1.5 billion and net income decline of 4.2% to $71.80 million or earnings per share fall of 1% to 24 cents. Retailing revenue struggled in the quarter and rose 2%, transaction revenue declined 1%, media and advertising revenue surged 40%, and membership and subscription revenue increased 19%.

IAC and its largest shareholder Liberty Media, controlled by John Malone, in the recent months have sparred to unlock shareholder value. Even though Liberty Media is the largest shareholder in the company, it assigned its voting rights to Barry Diller, chief executive of IAC, years ago. The two media moguls have locked horns in the recent years as the aimless acquisition of web properties failed to deliver critical competitive position in many categories. While Ticketmaster, online concert reservation business, and formerly controlled Expedia, online travel agency, thrived in the early stages of their lives, however, recently both have faced declining economics and rising competition.

Barry Diller, Chairman and Chief Executive Officer of IAC said, 'One of the reasons we've stayed with some of our more transactional businesses is that we needed their earnings to allow us to invest in emerging Internet businesses.

Now that we have real scale in the pure Internet units, it makes nothing but sense to me to reorganize the whole. 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.”

In the last 52-weeks IAC stock has traded between $25.08 and $41 and recently traded near $29.

[R]10:30AM New York – Market averages opened lower on losses from Citigroup and market volatility in Asia and Europe.[/R]

Market averages fell after one hour of opening on the worries of further losses in mortgage securities. Dow, Nasdaq, and S&P 500 fell nearly 0.5%.

Banks and brokerages fell sharply in the morning trading after Citigroup announced “retirement” of its chief executive Charles Prince and declared further deterioration in its sub-prime portfolio.

Citigroup said that it will take a further charge in its fourth quarter beginning on October 1, 2007 to reflect the weakness and lower valuations in the mortgage securities market.

In the statement released on November 4th, Citi said, “at the present time, the reduction in revenues attributable to these declines ranges from approximately $8 billion to $11 billion (representing a decline of approximately $5 billion to $7 billion in net income on an after-tax basis).

The $55 billion in U.S. sub-prime direct exposure as of September 30, 2007 consisted of approximately $11.7 billion of sub-prime related exposures in its lending and structuring business, and approximately $43 billion of exposures in the most senior tranches (super senior tranches) of collateralized debt obligations which are collateralized by asset-backed securities.”

European markets fell across the region on the weakness in Asian markets and weak market opening in the U.S.

UK led the decliners with a loss of 1.6% followed by losses in Italy of 1%, 0.9% in the Netherlands, France, and Switzerland.