Quick Update: IAC to Open Venture Arm
The San Jose Mercury News reported yesterday that IAC is a few weeks away from opening its new venture arm in Silicon Valley called Primal Ventures. The focus will be investments that are more strategic than financially driven in order to tap into the early stage deal flow and get a jump on companies that could be complementary to the famously dynamic IAC portfolio.
This is also a departure from the normal investment paradigm at IAC, which instead of investing in early stage companies, has mostly involved acquiring more established companies such as Lending Tree, Ask and Ticketmaster. Former Match.com CEO Jim Safka will run the operation, which will initially focus on wireless and video start-ups as well as online content companies in the recruitment and health-care verticals.
Interestingly, the other thing this move does is tip IAC’s hand more so than previously (and with more lead time than before) on the types of companies it hopes to bring into its fold. Wireless and video are certainly logical, given the integrations possible in local search for AskCity and Citysearch (already integrates video). Recruitment and health-care investments would likewise be telling for the continued development of IAC’s vertically oriented house of brands.
The setup will also include tapping into a handful of existing Silicon Valley VC firms.
“We’ll get plugged into their deal flow and we’ll get them plugged into IAC to share with them what our needs are,” Safka told the Merc. With this, it will also have elements of an incubation model according to Safka, to “help start-ups with everything from distribution to technology development to search optimization to access to talent.”
We’ll keep an eye on the venture and see what it can tell us about the future of IAC, especially investments with local search implications. Meanwhile, Read the Merc article here.
Related: IAC-owned Ask.com has launched a new design and search interface, known as Ask 3D. This is similar to other moves as of late and continues the search engine’s differentiation strategy meant to gain ground on market share leaders Google and Yahoo!. The universal search features, explained by Business 2.0’s Erick Schonfeld, head in a similar direction to that promised by Google and could represent a new important area of competition among search engines.
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