Barry Diller’s IAC is reportedly looking to sell half of Vimeo. Last night PandoDaily’s Erin Griffith reported that “two sources familiar with the situation” say that IAC is pairing a spinoff of Vimeo with a $50 million round of funding. IAC has yet to comment and allegedly a similar rumor several years ago “never came to fruition.” Still, it will be interesting to see how this plays out.
Apparently the IAC wants to maintain a 50 percent non-controlling stake in Vimeo’s business. 25 percent of the company will go to new investors and the remaining 25 percent will go to the management team.
Griffith reports, “The deal isn’t a clear win for investors. While popular among hip youths, Vimeo is no cash cow. Its audience is strong – more than 55 million uniques. Its revenues – we hear $5 million – are not. And yet, Diller and IAC are peddling the investment with a $300 million valuation attached. According to sources, the valuation reflects Diller’s affinity for the brand and will likely remain a sticking point. So far, the investors we spoke with balked at the figure.”
While Vimeo does offer a number of premium services like their Vimeo Plus and Vimeo PRO services and the recently launched Vimeo Music Store, the site, which prides itself on it’s inclination towards indie over commercial has done little to make money for its owners. Adrianne Jeffries of BetaBeat also points out that, “Vimeo 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 IAC’s Barry Diller reportedly loves Vimeo, it’s an expensive darling.”
As we said, IAC has not yet commented on this news, but we’ve reached out to see if we can get any more information.
What’s your take on this news, and Vimeo’s proposed $300 valuation? Do you think Barry Diller’s IAC will find a buyer?
Image credit: Lukiyanova Natalia / frenta
Megan O’Neill is the resident web video enthusiast here at Social Times. Megan covers everything from the latest viral videos to online video news and tips, and has a passion for bizarre, original and revolutionary content and ideas.