Priceline.com Inc (PCLN), AOL, Inc. (AOL), IAC/InterActiveCorp (IACI): What You Want in an Internet Investment

IAC/InterActiveCorp (NASDAQ:IACI) prospered through the last decade, and its peak year was 2008, when shares sold for about $80/each. They’re presently down to $50, but they have been rising steadily since the $16.60 bottom achieved in late 2008. If you bought IACI when it first went public in 1996 you’ve had a wild ride, but you’re still 19 times better off than you were.

IAC/InterActiveCorp (NASDAQ:IACI), on its own, has nearly doubled its revenue over the last three years, from just under $1.5 billion/year to the present level of $3 billion. So far in 2013 it’s drawn over $100 million in profits on over $1.5 billion in revenue. Those are narrow margins, but sales growth is real.

The company’s current portfolio includes match-making sites like Match.com, search sites like Ask.com and DailyBeast, a clone of HuffPo. That doesn’t sound especially strong, but if you were a long-term holder of IAC/InterActiveCorp (NASDAQ:IACI) you also got a piece of the Expedia.com (EXPE) spin-off in 2005, and if you held onto that you also got a taste of its 2011 spin-off of Trip Advisor (TRIP). That’s five times the equity that IACI itself holds today.

In other words, if you’re in business with IAC/InterActiveCorp (NASDAQ:IACI) founder Barry Diller, you’re making money.

Foolish Conclusion

When looking at any Internet investment, look for transactions or database exclusivity. This is what Priceline.com Inc (NASDAQ:PCLN) and IACI have, and both remain buys at present levels. This is not what AOL, Inc. (NYSE:AOL) has, and if you’re stuck with it, sell.