In the second quarter, IAC swung from a $94.6 million profit last year to a $421.6 million loss this year. Don't blame Jakob Lodwick! His former company, Vimeo, is nowhere near the top of IAC/InterActiveCorp's expense report for the past quarter. The real problem at Barry Diller's Internet empire is Cornerstone Brands, a rollup of catalog companies undermined by weak consumer spending in home and apparel retail. Cornerstone's losses led to a $300 million writedown in goodwill in IAC's second quarter. In addition, the soft real estate market cut revenue for home financing site LendingTree nearly in half.IAC is moving ahead with plans to spin off four of its divisions by the end of August: HSN (which includes Cornerstone), Ticketmaster, Tree.com (which includes LendingTree), and Interval Leisure Group, which operates vacation sites including ResortQuest Hawaii. That leaves IAC with Ask.com, Match.com and Citysearch. What's happening? Simple: Diller and company have learned that bundling a bunch of diverse online businesses together doesn't create the promised "synergy" of the Web 1.0 boom. Better to let each site fend for itself. Since IAC got rid of Expedia in 2005 (Barry Diller's still chairman of the board), the travel site's ups and downs have closely followed the travel market. That's the watercooler version. You can wonk out with the full details.

Having escaped John Malone's hook, former studio boss and internet tycoon Barry Diller is attempting to reinvent himself, says Portfolio's Duff McDonald. The new Diller trademark? Humility. "We were kidding ourselves if we thought we could pull off an integrated conglomerate that acts like G.E. or P&G in anything less than 10, 20, or 30 years." Diller is indeed cutting internet conglomerate IAC down to a more manageable rump of web sites such as Ask, Citysearch and Evite. But the 65-year-old tycoon hasn't entirely lost his trademark vindictiveness. Doug Lebda-who sold Diller online mortgage search engine Lending Tree for $726m before the real-estate bubble burst-was prepared to buy the business back at a discount. Why hasn't that happened? "No one is allowed to school Diller twice," says a mogul watcher.

Not only has Barry Diller exiled his former IAC No. 2, Doug Lebda, to LendingTree; he's officially washing his hands of Lebda's company. After he finishes splitting IAC into five parts, Diller plans to stay involved only with the new IAC and Ticketmaster, as well as Expedia, the online travel agent he spun off in 2005. A source close to Lebda believes he's just as glad to be through with Diller.

Left in the wake of Barry Diller's acquisitive empire: a flotsam of discarded executives. Doug Lebda, IAC's president and COO since 2003, now joins them. According to an internal memo obtained by Valleywag, Lebda has been appointed CEO of IAC's mortgage and finance businesses, which are soon to be spun off. This can hardly be welcome news to Lebda, who's essentially returning to LendingTree, a business he founded in 1996 and sold to Diller in 2003. Here's the memo.