ServiceMagic 2011 Annual Report Download - page 6

Table of Contents
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, a leading provider of campground reservation services and software to United States federal and
state agencies. In June 2009, we sold the European operations of Match.com to Meetic, S.A., a leading European online dating company based in
France ("Meetic"), 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 websites.
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 "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 12."
In February 2011, we acquired OkCupid, an advertiser-
supported online personals service. During the third quarter of 2011, through Match,
we increased our ownership stake in Meetic to 81%.
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 27, 2012, Barry Diller, IAC's Chairman and Senior Executive, owned
5,789,499 shares of Class B common stock (the "Diller Shares") representing 100% of IAC's outstanding Class B common stock and
approximately 43.4% of the outstanding total voting power of IAC.
Pursuant to an agreement between Mr. Diller and IAC, certain transfer restrictions apply to 1.5 million of the Diller Shares, including a
requirement that, until December 1, 2015 and except for transfers to certain permitted transferees, the Diller Shares must first be converted into
common stock in order to be transferred. In addition, pursuant to an amended and restated governance agreement between IAC and Mr. Diller,
for so long as Mr. Diller serves as IAC's Chairman and Senior Executive, he generally has the right to consent to limited matters in the event that
IAC's ratio of total debt to EBITDA (as defined in the governance agreement) equals or exceeds four to one over a continuous twelve-month
period.
As a result of Mr. Diller's ownership interest, voting power and the contractual rights described above, Mr. Diller is currently in a position
to influence, subject to our organizational documents and Delaware law, the composition of IAC's Board of Directors and the outcome of
corporate actions requiring shareholder approval, such as mergers, business combinations and dispositions of assets, among other corporate
transactions.
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