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Liberty Media, which owns a majority voting stake in IAC, has filed a court action to remove Barry Diller and others from the IAC board and replace them with Liberty nominees, according to The Wall Street Journal (subscription required).

The moves come a week after Liberty and IAC sued each other over IAC's plans to spin off a majority of its business units into new companies. Under the restructuring, announced in November, search site Ask.com and its advertising business will remain inside IAC, while LendingTree, Ticketmaster, and others are spun off.

Barry Diller's InterActiveCorp has acquired a significant minority stake in The HealthCentral Network. The terms of the deal were not disclosed.

HealthCentral, which boasts 7.7 million viewers, is a collection of more than 30 sites on healthy living and specific conditions where patients and experts share information.

Diller and Peter Horan, chief executive of IAC's media and advertising sector, will serve on HealthCentral's Board.

IAC invested in Medem, a suite of Web-based physician-patient communication services last year, and its Ask search engine has partnered with Healthline Networks.

IAC isn't the only big Internet company jumping into the health space. AOL launched AOL Body last year in partnership with Healthline. And Microsoft and Google are also working on health-related initiatives.

This post was updated at 9:18 a.m. PST.

InterActiveCorp CEO Barry Diller was remarkably candid in his acknowledgment Monday that his media conglomerate will be splitting up into five publicly traded companies because it's simply spread itself too thin.

"We've been a complex enterprise almost from the very beginning 12 years ago, with hundreds of transactions over those years," Diller said in the company's announcement. "And while we've created a lot of value; I've always believed (that) our complexity and many mouthfuls of sentences to explain who we are and what our strategy is have hampered clarity and understanding with all our constituencies, particularly investors."

The new plan was given the go-ahead by IAC's board of directors on Friday and is expected to be complete in the second or third quarter of 2008; final details have not yet been approved. The transaction--which is expected to be tax-free--will allow IAC's shareholders to retain all of the equity in the five companies.

With brands ranging from dot-coms to mail-order catalogs, InterActiveCorp has grown into a large and amorphous mass that Diller said was difficult to explain and allegedly hurt the company's valuation. "Hot air--or any air--won't do it in terms of what IAC is," Diller said during a call on Monday with press, investors, and analysts. "It's confusing to every constituency."

"In a way, IAC is starting again," he asserted. "At least, it feels that way to me, so it's very invigorating."

Barry Diller

One of the five companies will remain under the name IAC and will include many of the company's popular online media brands, including Ask.com, Bloglines, BustedTees, Citysearch, CollegeHumor, Evite, Excite, Gifts.com, iWon, Match.com, Vimeo, and Zwinky. In addition, this new pared-down IAC will include the company's current investments in brands like Active.com, Brightcove, and OpenTable.

The "new IAC," as Diller underscored during the investor call, will be all-Internet. "We now can stand on our own with an IAC that's a perfectly integrated Internet conglomerate across business lines, across business sectors, that's primarily in advertising and in media."

Diller also announced that Google will be providing sponsored listings on its online brands--including its search engine, Ask. "Just hours ago, we concluded an arrangement with Google to be our sponsored listings provider for the next five years," he explained, "and the value off that transaction to us will be in excess of three and a half billion dollars."

But not all of IAC's dot-coms will remain--namely, retail brands have been dropped. Ticketmaster.com, under the new plan, will spin off into its own publicly traded company, along with other IAC-owned global ticket brands like Admission.com, Echomusic, and TicketWeb, as well as the company's investments in Frontline and social music service iLike. "Ticketmaster is entering the most dynamic era in its history," Diller said in the statement, "and its ability to participate fully (with its own currency) in shaping the live entertainment industry is critical." Sean Moriarty, currently president and CEO of Ticketmaster, will retain that role in the new company.

"That business is evolving," Diller said on the investor call, referring to shakeups in the music industry that have gone far beyond piracy and record label controversies. "I think Ticketmaster has to evolve with it."

HSN will also spin off along with a number of IAC's retail brands and catalogs, like HSN TV, Frontgate, Garnet Hill, and TravelSmith. Additionally, several of IAC's vacationing brands will join the title Interval International, and the company's LendingTree brand will also become a publicly traded company.

LendingTree has been a particular burden on IAC in the wake of the subprime mortgage crisis. "That is going to be hurt for a period of time, but by the way, that will be over. There will clearly be a lot of blood on the floor," Diller acknowledged in the press call, "but at some point it's going to be over, and when it's over, LendingTree is going to grow to be in great shape."

In IAC's official press release on Monday morning, quotations from Diller projected a clean split. "Each of these spun-off businesses is in fact a distinct business sector, and each will benefit from standing on its own, with its own capital structure, its own currency which will enhance its ability to attract and retain superior talent and make acquisitions, and a focused story investors can clearly understand and buy into," he said.

But when asked on the press call, Diller spoke only vaguely with regard to how business relationships between the newly separate companies would unfold. "The truth is, the companies go their own ways," he said.

This is not the first time that IAC has shrunk itself; in 2005, the company ditched its Expedia travel brand. "If you total all of the assets that include Expedia and IAC, it's an enterprise of about $19.5 billion," Diller said in the press call. "We thought Expedia was certainly large enough to stand on its own, and we thought that it would be enhanced as a standalone company, and that has certainly proven true."

Now that IAC's consumer-focused Web companies have matured, Diller said, IAC has been able to shake off some of the older brands that are no longer needed to bolster the development of their younger brethren. "We've been characterized as having old assets, and new assets meeting old assets meeting old hard assets in the retail business or transaction business," he explained, "and our strategy was really to use those businesses and their cash flow to start and to acquire all sorts of online businesses, which is of course where we have wanted to go since the very first time we talked about interactivity in 1992."

With new developments in Internet advertising on the forefront of Silicon Valley chatter these days, IAC's ad-focused restructuring is a sign that Diller and his company don't want to be left behind. "There's no question that Internet advertising is effective in every way. Not only is it effective, (but) against scattershot, wide advertising, it's absolutely trackable," he said on the call.

"I couldn't imagine a sector that has more wind at its back than online advertising of every kind."