• by Gavin O'Malley  @mp_gavin, December 2, 2010

Effective immediately, Barry Diller is relinquishing his role as CEO of IAC/InterActiveCorp, the Internet holding company said Thursday. Taking his place is Greg Blatt, formerly CEO of IAC unit Match.com. "This company needs a full time aggressive and aspirational executive in the CEO role," Diller said on Thursday -- seeming to concede that he was none of those things.

Greg Blatt joined IAC in 2003 as General Counsel, and in February 2009 was named CEO of Match.com.

Since that time, Blatt has overseen a period of "record setting performance in the business," according to Diller, who is now assuming the role of Chairman and Senior Executive at IAC.

Blatt, who has also joined IAC's Board of Directors, said to expect two thing from IAC under his reign: change and consistency.

"The one constant throughout IAC's history has been change," Blatt said Thursday. Yet, at the same time, "We intend for the same emphasis on consistent operating performance and disciplined deployment of capital that have defined our recent quarters."

IAC's Match segment -- including Match.com, Chemistry.com, and People Media -- will continue to be run by its current leaders and will continue to report directly to Blatt in his IAC role.

Separately, Liberty Media said it exchanged its entire equity stake in IAC for a combination of operating assets and cash in a transaction intended to be tax-free to Liberty and IAC.

Liberty exchanged about 12.8 million shares of IAC stock -- consisting of some 8.5 million shares of Class B stock and 4.3 million shares of common stock, and representing approximately 60% of the total votes of all classes of IAC stock -- for all of the capital stock of a wholly owned subsidiary of IAC that holds the Evite and Gifts.com businesses, and approximately $220 million in cash.

These assets, according to both companies, will now be attributed to the Liberty Interactive tracking stock group.

Diller has also exchanged approximately 4.3 million shares of IAC common stock held by him for an equal number of shares of Class B common stock held by Liberty.

Diller now owns shares representing approximately 34% of the total votes of all classes of IAC stock, the largest individual voting stake in the company.

Marking a major strategy shift for the company, IAC said it was effectively throwing in the towel on algorithmic search, and planned to cut 130 engineering jobs from its Ask.com search unit. The company also announced plans to close offices in Edison, N.J. and Hangzhou, China over the next several months.

As the company outlined earlier this year, it will now focus squarely on a Question and Answer strategy, which relies on real people answering questions rather than a search algorithm.

In the third quarter, IAC's search revenue increased 20% year-over-year to $205.1 million, while operating income in search was up 43% to $28.9 million.

Presently, Google controls 65% of the U.S. search market, according to Nielsen, while Ask.com is barely holding onto 2%.

Ask.com has an existing partnership with Google, which generates a portion of its search results as part of a broader agreement between IAC and Google, which runs through 2012.