IAC/InterActiveCorp (NDAQ:IACI) shares rallied over six percent today after the diversified internet company announced that it would split up into five separate entities. Shareholders are hoping that the move will enable them to better capitalize on web media and services. The deal also included a deal with Google to provide sponsored search listings, which is expected to yield in excess of $3.5 billion in advertising revenue for the company.

The new IAC, led by Barry Diller, will be comprised of Ask.com, Citysearch, CursorMania, IAC Advertising Solutions, Evite, Excite, InsiderPages, iWon, My Fun Cards, My Way, Popular Screensavers, Smiley Central, Webfetti, Zwinky, Match.com, ServiceMagic, Shoebuy.com, Entertainment Publications, Reserve America, Black Web Enterprises, BustedTees, CollegeHumor, GarageGames, Gifts.com, Green.com, InstantAction, Primal Ventures, Pronto, Very Short List, Vimeo , and 23/6 along with its investments in Active.com, Brightcove, FiLife, Medem, MerchantCircle, OpenTable, Points.com and SHOP Channel.

The four new operations will include HSN for retailing, Ticketmaster, Interval International and LendingTree. Upon completion of the transaction, IAC's shareholders will own 100% of the equity in all five companies in a transaction that is expected to be tax-free. Shareholders are hoping that this transaction will help unlock value in the company that has been somewhat depressed despite its strong holdings of internet properties. This makes IACI a stock worth watching!

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