Barry Diller’s IAC internet-media empire has a long track record of successful spin-offs, including companies such as travel booking site Expedia, ticket seller Ticketmaster, and dating app company Match. Vimeo, its latest, hasn’t exactly shared their fate. Since its May separation from IAC, the video software firm’s stock has plummeted 77%.
That slide, which shrank Vimeo’s market capitalization to just $2.1 billion, reflects a sharp slowdown in the company’s growth caused in part by slower spending on the part of small businesses that had ramped up their use of Vimeo during the pandemic. Vimeo’s management is trying to turn things around.
But at its current price, Vimeo may also be attractive to buyers, which could include a private equity firm or another tech firm, such as Salesforce or Microsoft’s LinkedIn. Salesforce could use Vimeo to bolster its video-service capabilities, for instance. Thrive Capital, Josh Kushner’s venture capital firm, may be a fan of looking for a buyer given that it bought into Vimeo in late 2020 at a price that’s roughly 25% above where Vimeo stock is now trading.