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Table of Contents
In November 2006, IAC sold PRC, LLC, its Teleservices subsidiary. In June 2007, the Company sold its German TV and internet retailer,
HSE Germany. In July 2008, the Company acquired the Lexico Publishing Group, owner of reference websites Dictionary.com , Thesaurus.com
and Reference.com , and in June 2008, the Company sold EPI. On August 20, 2008, IAC separated into five publicly traded companies: IAC,
HSN, Inc. ("HSNi"), Interval Leisure Group, Inc. ("ILG"), Ticketmaster and Tree.com, Inc. ("Tree.com"). In this report, we refer to this
transaction as the "Spin-Off." Immediately following the Spin-Off, IAC effected a one-for-two reverse stock split.
In January 2009, we sold ReserveAmerica and acquired MarketHardware, Inc., an online provider of marketing solutions for home services
businesses. In June 2009, we sold the European operations of Match.com to Meetic, a leading European online dating company based in France,
in exchange for a 27% interest in Meetic and a €5 million note. In July 2009, we acquired PeopleMedia, a leading operator of targeted dating
sites.
In February 2010, we announced the formation of a joint venture between Match.com and Meetic, through which we provide personals
services in certain countries in Latin America, as well as acquired Singlesnet.com . In May 2010, we acquired a majority stake in
DailyBurn.com
, a diet and fitness tracking website. In June 2010, Citysearch changed its name to CityGrid Media in connection with the launch
of CityGrid®, its local advertising network, and its transformation from an owner and operator of local, consumer-oriented websites into one of
the largest local advertising networks on the web.
In December 2010, we exchanged the stock of a wholly-owned subsidiary that held our Evite, Gifts.com and IAC Advertising Solutions
businesses and approximately $218 million in cash for substantially all of Liberty Media Corporation's equity stake in IAC. See "Equity
Ownership and Vote" and "Item 8—Consolidated Financial Statements and Supplementary Data—Note 11". For additional information
concerning certain of these transactions, see "Item 7—
Management's Discussion and Analysis of Financial Condition and Results of Operations"
and "Item 8—Consolidated Financial Statements and Supplementary Data—Notes 1 and 11".
EQUITY OWNERSHIP AND VOTE
IAC has outstanding shares of common stock, with one vote per share, and Class B common stock, with ten votes per share and which are
convertible into common stock on a share for share basis. As of January 31, 2011, Barry Diller, IAC's Chairman and Senior Executive, owned
4,289,499 shares of Class B common stock representing 100% of IAC's outstanding Class B common stock and approximately 33.8% of the
outstanding total voting power of IAC.
On December 1, 2010, Mr. Diller acquired 4,289,499 shares of Class B common stock from the Liberty Parties (as defined below) pursuant
to a letter agreement among Mr. Diller, IAC, Liberty Media Corporation and Liberty USA Holdings, LLC (the "Liberty Parties"). Pursuant to
this letter agreement, the Liberty Parties exchanged with Mr. Diller an aggregate of 4,289,499 shares of Class B common stock held by them for
the same number of shares of common stock held by Mr. Diller (the "Diller-Liberty Exchange"). Immediately following the Diller-Liberty
Exchange, the Liberty Parties exchanged with IAC their remaining shares of Class B common stock and 4,169,499 shares of common stock for
the stock of a wholly-owned subsidiary of IAC that held our Evite, Gifts.com and IAC Advertising Solutions businesses and $217.9 million in
cash (the "IAC-Liberty Exchange," and together with the Diller-Liberty Exchange, the "Transactions"). For additional information regarding the
Transactions, see "Item 8—Consolidated Financial Statements and Supplementary Data—Note 11". Following the Transactions, the Liberty
Parties did not own any shares of Class B common stock and owned approximately 18,000 shares of common stock.
As part of the Transactions, in consideration of Mr. Diller waiving certain pre-existing rights under a stockholders agreement with respect
to Liberty's transfer to IAC of shares of common stock and Class B common stock, IAC agreed that from time to time until September 1, 2011,
Mr. Diller may
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