Is IAC Trying to Sell Off Half of Vimeo?

vimeo1 Is IAC Trying to Sell Off Half of Vimeo?It’s possible that beloved New York startup scene original gangster Vimeo could go the way of Seamless or Reddit, startups that spun out from their corporate owners.

IAC is seeking new investors to buy up a 25 percent stake in Vimeo, the video-sharing platform best known for being prettier than YouTube, as PandoDaily’s new ace of the East Erin Griffith reported last night. While Ms. Griffith misspelled co-founder Jake Lodwick’s name and at one point identified IAC as IAB, we’re taking this story seriously. Is IAC, the owner of a wide range of successful ( to dubious (The Daily Beast) to very dubious (, still identified as AskJeeves in SEC filings), really trying to sell half its hippest property just as Vimeo launches a major redesign?

According to PandoDaily, IAC wants to keep a 50 percent non-controlling stake in the company, while selling 25 percent to new investors in order to raise $50 million and distributing 25 percent to its management team (which seems high). A look at IAC’s annual and quarterly reports shows that Vimeo is still growing, although we don’t know by how much, despite competitor’s YouTube’s slow encroachment on its turf. The revenues for IAC’s “media and other” category last quarter is up 8 percent year over year, from $66.7 million in Q4 2010 to $72.4 million in Q4 of 2011, which IAC said reflected growth at Vimeo, CollegeHumor, Shoebuy, Pronto, the multimedia studio Electus and Ricky Van Veen’s web TV studio experiment, Notional.

Regarding spinouts, on its most recent earnings call, IAC CEO Greg Blatt Chairman Barry Diller said:

“As far as the future, I think that depending upon what happens with this company, company is this IAC company, having gone through these multiple spin-offs over these last years, is right now, at very good size with very good prospects. And I think we are going to keep these configurations for a period of time depending upon what happens and grow things and all sorts of other issues pertains. But I don’t certainly contemplate it.”

But Vimeo also had increased operating expenses in 2011, IAC reports, and the company took a hit on “promotional expenditures related to Vimeo’s 2010 video festival.” As much as Mr. Diller reportedly loves Vimeo, it’s an expensive little darling. It may be that IAC realized the division needs greater resources in order to keep up with YouTube’s evolution toward higher definition video and a less-hideous interface.

IAC declined to comment on “speculation.” Betabeat has reached out to sources and will continue looking into the story and its implications for Laptop Tag.