IAC/InterActiveCorp, one of the Web's largest media firms, is floundering badly. Its stock is down 44 percent over the last year and 17 percent over the last five years--during a period when the overall stock market rose 54 percent, according to the Standard & Poor's 500 Index. The company's chairman and CEO, Barry Diller, has been taken to court by majority shareholder (and Liberty Media CEO) John Malone over Diller's decision to break IAC into five separate entities, a move the would dilute Malone's voting power as a major IAC shareholder. Despite the Malone suit, most analysts …

Portfolio's Russ Mitchell scores a lengthy interview with Google CEO Eric Schmidt in which he reflects on a variety of subjects, from the Microsoft-Yahoo deal to DoubleClick, Android, and of course, recession. Asked how a combined Microsoft-Yahoo would hurt Google--particularly when many analysts are saying the opposite-- Schmidt says it would really serve to limit consumer choice, particularly applications like email and instant messaging, where Microsoft would have a dominant share. Schmidt says it would "break the Internet" for so many important properties to become part of Microsoft's universe of proprietary software. "All internet-based systems today are …

In a research note, UBS analyst Michael Morris warns that Time Warner's acquisition of Bebo won't necessarily fix AOL, which paid $850 million for the social network last Thursday. Morris pointed to the challenging climate for social networks, which face mounting competition, slowing growth, user defection, less time spent per user and an uncertain (and thus far, underwhelming) advertising strategy. He added that because of AOL's corporate management structure, Bebo could find it hard to innovate and acquire new talent. In the note, Morris, who's actually bullish on Time Warner's stock, urges the media giant to get rid …

Over the weekend, Japan's four leading Internet service providers announced that they would use tracking software to catch users who share files illegally over the Internet. The "special detection software" gives copyright organizations user IP addresses and interprets whether the files they exchange contain copyrighted material. The ISPs then warn infringers for the first offense and disconnect or disrupt their service for subsequent offenses. Frequent offenders could be disconnected permanently; the process for termination will be developed in April, when the ISPs collaborate with copyright holders in devising the system. This was not a government-mandated initiative-the ISPs …

Tim Berners-Lee, one of the founding fathers of the Internet, reflects on plans by UK Internet service providers to use Phorm, a controversial company that tracks Web activity to deliver personalized advertisements. Berners-Lee doesn't want his ISPs to track the Web sites he's visited, and would be willing to change providers if it introduced such a system. One of the main points of contention about Phorm is that its tracking software is opt-out, not opt-in. As we know, opt-out isn't very popular with users or privacy advocates. Facebook last fall was forced to renege on plans to …