IAC to raise China profile

Media mogul Barry Diller said Friday that his Internet conglomerate, IAC/InterActiveCorp, would invest $100 million to expand in China by creating services designed for local users.

Diller also said IAC would launch its Ask.com search engine in China within two years.

IAC is looking for opportunities to develop or buy businesses geared to Chinese users, added Diller, IAC’s chairman and chief executive.

New York-based IAC’s 30 Web brands include dating site Match.com, directory service Citysearch and portal Excite.

With 162 million people online, China has the world’s No. 2 population of Internet users after the United States. But foreign companies have struggled to win market share. Yahoo Inc. and EBay Inc. both have turned to local partners to run their China operations.

IAC bought a Chinese online travel service, ELong Inc., in 2005. But Diller said it mishandled the business early on and was trying to recover after falling behind Chinese rival Ctrip.com International Ltd.

“I think we, in our imperialistic way, made some early dumb decisions and hopefully we’re making smarter ones now,” Diller said.

IAC announced this month that it would spin off its HSN home shopping network, Ticketmaster ticketing service, Interval time-share business and LendingTree mortgage referral units to become a purely Internet business.

Ask.com, with about 6% of the U.S. search market, probably will be launched in China in partnership with a Chinese newspaper or broadcaster to build public awareness, Diller said.

Foreign search providers have struggled to compete with dominant Chinese search engine Baidu.com, which has a 60.7% market share, according to research firm Analysys International. Google Inc. is in second place with about 23.7%.