Executive Chairman of the Board, ANGI INC
IAC CEO on M&A opportunities, spinoff from ANGI and AI
Joey Levin, IAC CEO, joins 'Closing Bell: Overtime' to discuss IAC earnings, considering a spin-off of its ownership stake in ANGI, ...
About Joseph Levin
Joey Levin, CEO of IAC, discussed the company’s consideration of a spin-off of its 85% stake in Angi, stating that Angi is “in great shape now” and “healthy enough to be on its own” after years of improving customer experience and expanding profit. He noted that IAC is “slimming down” to focus on a few things well. Regarding M&A, Levin said the bar for new acquisitions is “very high” and that the market is “pretty expensive,” leading the company to “try and build cash.” He predicted that 2024 would be a “big year for M&A generally,” citing a loosening regulatory environment. Levin commented on the impact of AI, saying that OpenAI’s ChatGPT is “likely to be positive for traffic” and will “increase audience and profits over time.” He described AI as helpful for organizing data and making it more searchable, citing examples in nursing job matching and customer service. However, he criticized large language models for being “designed to steal the best of the internet” and argued that a framework is needed to reward content creators and ensure journalism survives. On the 2024 election, Levin called the current choices “horrible” and said he hoped for “a new candidate” who would be “inspiring for people.”
Transcript (9 segments)
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Host0:04
Welcome back to "Overtime." Shares of IAC are higher now despite posting a wider than expected loss. The company beat analysts' estimates on revenue. The company announced it is considering a sale of Angie to its shareholders. The online marketplace for finding home improvement specialists. IAC spun out Angie into its own public company in October of 2017 and currently owns about 85% of it. Angie shares initially popped about 10% on the news but are now trading lower. So joining us now for an exclusive interview is Joey Levin, CEO of IAC, with our own Julia Borstin.
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Julia Borstin0:41
Thank you for joining us on the heels of your big news about Angie, as well as your earnings report. Let's start with the Angie news. Why are you deciding to spin off that 85% of the company that you own and why now?
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Joseph Levin0:53
Angie's in great shape now. We've spent the last couple of years really improving the customer experience, expanding profit. I think adjusted EBITDA is 2.5x or so the last couple of years. Customer experience up meaningfully, retention up meaningfully. Net promoter scores up meaningfully. The business is now in a position where we think it's healthy enough to be on its own. And we're slimming down IAC and trying to focus on doing a few things well. And Angie's in a position where it's capable of standing on its own and having its own currency. I think not impossible, there's consolidation in that category. And Angie can do really well on its own.
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Julia Borstin1:34
Tell us a little more about this strategy of slimming down IAC and what could come next. You say in your letter to shareholders that you're looking at new opportunities to deploy capital and also there might be other opportunities to spin things off. What are you looking at right now, where do you expect to put that capital to use?
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Joseph Levin1:50
Yeah. We're looking at a wide range of things. The bar for us on new acquisitions is very high, always has been. I think that when we look at the market right now, we've generally seen things at a level where they're willing to transact, pretty expensive for us. And when we see that environment we try and build cash. And that's a little bit more of the mode that we're in right now. But we're very actively always looking and seeing if those opportunities arise. In any market, opportunities can happen. But it has been generally on the more expensive side where people want to transact.
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Morgan2:27
Joey, it's Morgan. When I hear you talking about building cash in this environment, it reminds me of Warren Buffett and what's going on at Berkshire Hathaway, especially as we do see public equity markets at record highs today. I am curious, though, what you make of the M&A landscape more broadly, especially as we go into 2025 and have a new administration that will take the helm in January.
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Joseph Levin2:52
I expect this will be a big year for M&A generally. Whether for us, I'm not sure, but for M&A generally, it will. Certainly loosening up the regulatory environment is a factor. But also I think people have sort of... last five years probably enormous volatility from going into 2019, then COVID, then coming back up with rates, now then coming back down as rates came up. I think there's actually a little bit of stability, people have been at a stable place for a while. And I think when that happens and the regulatory environment supports it, I think that's a recipe for real transactions and the kind of transactions that can help drive real efficiency in businesses.
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John Ford3:36
Joey, it's John Ford. Great to have you. So question about AI. I know you've had the OpenAI relationship that's been talked about. But when you have so many brands that touch so many different customers, you've got a lot of data. How do you end up using AI in a way that accelerates your business overall and the individual businesses?
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Joseph Levin3:55
Yeah. I can give you a bunch of great examples. But one is just using conversational interfaces is enormously valuable for our businesses. A business like Angie, about to launch a product I think at the end of this month where we find out more about the user's job, what they want to get done in their home by using a conversational or offering a conversational user interface. Same thing in one of our nursing businesses where nurses are trying to find jobs. They can interact with an AI that's available 24/7, generally more empathetic, generally more knowledgeable and has been a great tool. We've experimented with a few clients. One of our biggest businesses, Dotdash Meredith, we've been able to take the performance data that we have on our small section of the internet, the content that we own, and been able to map that using, partnering with OpenAI, map that on the rest of the internet to show the performance that we drive.