Barry Diller’s IAC/Interactive veered to a net loss in the second quarter on restructuring charges related to its pending five-way breakup, the company announced Wednesday.

Overall, the company reported a net loss of $421.6 million, versus a profit of $94.6 million in the 2007 quarter. Diluted loss per share was $1.51 versus earnings of $.31 in the prior year’s period.

Excluding special charges, however, earnings per share came in at $.35, a penny above the previous year’s quarter and four cents above analysts’ consensus estimate.

Shares of IAC fell $.14, or .78 percent, to $17.81 in mid-day trading.

On a conference call, Mr. Diller, the IAC/Interactive chief executive who will lead the “New IAC” Internet business said investors should not expect him to go on a spending spree with the unit’s $1.3 billion in net cash.

Though acquisitions might be “numerous,” he said the new company would avoid over-priced assets and those costing more than $100 million.

Many properties are being offered “at very inflated prices” with “no external reality,” Mr. Diller said. “We’re not going to play that game.”

At the consolidated company, revenue climbed 7 percent to $1.56 billion, ahead of the year-ago quarter’s $1.49 billion and beating the mean estimate of $1.53 billion from analysts polled by Thomson Reuters.

The nationwide credit crisis continued to take a toll at Tree.com, IAC’s mortgage-lending unit, which saw revenue fall 47 percent to $60 million and its operating loss increase by 1,659 percent from $10 million in the 2007 quarter to $176.7 million.

Given that this was the final combined earnings release before the breakup, Mr. Barry Diller stressed that the businesses should be viewed as independent entities.

Mr. Diller will lead the “New IAC” unit, which will include the Ask.com search engine, dating site Match.com, citysearch.com and other online properties.

In a new initiative, IAC has rolled out Life123, a new web site designed to compete against sites like The New York Times’ About.com and lifehacker.com. The company also launched RushmoreDrive.com, a search engine aimed at African Americans.

Mr. Diller won a heated courtroom battle in the spring for control of IAC over John Malone’s Liberty Media, whose super-voting stock gave it control of the company. The spin-off companies—New IAC, home shopping network HSN, Ticketmaster, Tree.com and time-share firm Interval Leisure Group--will give shareholders equal voting rights.

According to proxy materials, Liberty owns 30 percent of IAC common stock and 100 percent of the super-voting class B stock, which will be converted to common shares. Liberty, however, had granted Mr. Diller an irrevocable mandate to vote its shares.