Even when Manhattan's favorite Internet hipster Jakob Lodwick isn't high, he's not that hard-working. Connected Ventures cofounder Zach Klein reminisces about the early days of Connected Ventures, the IAC-backed testosteronefest behind CollegeHumor and Vimeo. Lodwick leads the startup's crew in singing "Semi-Charmed Kind of Life," and trashes cofounder Ricky Van Veen's cardboard cutout of Shaquille O'Neal. Any questions on why Vimeo's performance soared after IAC fired Lodwick? shaq attack from Amir Cohen on Vimeo.

In the second quarter, IAC swung from a $94.6 million profit last year to a $421.6 million loss this year. Don't blame Jakob Lodwick! His former company, Vimeo, is nowhere near the top of IAC/InterActiveCorp's expense report for the past quarter. The real problem at Barry Diller's Internet empire is Cornerstone Brands, a rollup of catalog companies undermined by weak consumer spending in home and apparel retail. Cornerstone's losses led to a $300 million writedown in goodwill in IAC's second quarter. In addition, the soft real estate market cut revenue for home financing site LendingTree nearly in half.IAC is moving ahead with plans to spin off four of its divisions by the end of August: HSN (which includes Cornerstone), Ticketmaster, Tree.com (which includes LendingTree), and Interval Leisure Group, which operates vacation sites including ResortQuest Hawaii. That leaves IAC with Ask.com, Match.com and Citysearch. What's happening? Simple: Diller and company have learned that bundling a bunch of diverse online businesses together doesn't create the promised "synergy" of the Web 1.0 boom. Better to let each site fend for itself. Since IAC got rid of Expedia in 2005 (Barry Diller's still chairman of the board), the travel site's ups and downs have closely followed the travel market. That's the watercooler version. You can wonk out with the full details.

Justin Ouellette's Muxtape, a site which hosts online mixtapes, is on shaky legal ground — and not just over the way Ouellette left his former employer, IAC-owned video site Vimeo. Making a mixtape for personal use is clearly accepted; but posting it online, for everyone on the Internet to listen to? Unclear at best. Ouellette himself has hinted that he's worried about being sued. On Userscripts.org, a site where people post and discuss add-ons to the Firefox Web browser, Ouellette has been scolding programmers for creating tools that let Muxtape users download MP3 files directly from the site — even as he was claiming that he wasn't worried about copyright issues."Please remove this script, it can only contribute to getting the site shut down," Ouellette wrote in April on Userscripts.org. "As long as you can hear the music you can copy it, but that doesn't mean I'm not going to do the diligence of trying to stop casual downloading (one of the things that would hurt its long-term viability)," he wrote on another occasion. "I was naïve enough to think assholes like you wouldn't want to wreak a good thing, but I guess I was wrong," he concluded. He's been quieter since then, aside from suggesting the site would drop the popular MP3 format in an effort to stop downloaders. The scripters have kept up their efforts. Not that this cat-and-mouse game matters. The RIAA has wisely left Muxtape alone, avoiding an ugly publicity squabble over a site that has yet to show any commercial potential. If it does begin to show some financial success, then the music-industry lawyers will swoop in demanding money. People are swift to criticize the RIAA, which has made a number of boneheadedly unpopular moves. But what should we say about the naivete of entrepreneurs like Ouellette, who are hoping that battling Firefox script kiddies will somehow count in their favor when the record labels come knocking? Muxtape's lawyers might make a "safe harbor" argument under the Digital Millennium Copyright Act — but that requires showing that Ouellette was unaware of copyright violations on the site. Hard to argue that, when he uses it himself.

Fraps are easy to shoot — just click record while playing a game on your PC. A 10-minute session at HD quality makes for a Godzilla-sized video file to upload to Vimeo.

AOL has launched Walletpop, a personal-finance site; IAC and Dow Jones have FiLife; and TheStreet.com has MainStreet.com. All hope to attract a younger audience to personal-finance news than the conventional stock talk and online portfolios offered by the staid likes of Yahoo Finance and CNNMoney. The bets are wrong both in their timing and their premise. Stockbrokers and mortgage lenders, reliable advertisers during good times, are both ducking for cover and pulling back their budgets. Froth might have sustained these sites a couple of years ago, but not now. No matter when they launched, though, their proponents should have remembered this maxim: Financial advice, like youth itself, is wasted on the young.

At Allen & Co.'s annual schmoozefest in Sun Valley, Idaho, there were a lot of regulars, like IAC's Barry Diller — and a few new faces, like Slide CEO Max Levchin. Julia Boorstin of CNBC reports that the two were "lingering" together at lunch. This after Kevin Rose reported how Diller charmed
the (metaphorical) pants off of him in acquisition talks that ultimately went nowhere. I doubt any dalliance between Diller's IAC and Levchin's Slide will go much further; Slide's far too expensive, and Diller's far too fickle. But I'm sure Diller finds the company of young men refreshing.

In a more innocent age, much earlier in this decade, bloggers traded links out of a sense of camaraderie. Over time, it turned into more of a quid pro quo: You scratch my back, I boost your pageviews. Now, blogs routinely auction off space in their blogroll. CollegeHumor, the IAC-owned juvenile-jokes site, has refined this business model even further. A come-on from CollegeHumor's marketing department encourages Valleywag to participate in its Linkswap program. Every link to CollegeHumor, it promises, will be returned one for one with a link to Valleywag. Thanks, but I think we'll pass.

On Monday, we posted Muxtape founder Justin Ouellette's accidentally-emailed-to-the-Internet photo of a napkin on which he'd scribbled details of his investment deal with Jakob Lodwick. Lodwick, best known for getting fired from Vimeo, an online video-sharing site he founded, now owned by IAC. He now spends his days playing the solipsistic teenager in a man's Crocs-shod body. Now Lodwick's replacement at Vimeo, director of development Andrew Pile, joins the fun.

Is IAC's Vimeo, the video-sharing site founded by bizarrely charismatic (and just plain bizarre) New York entrepreneur Jakob Lodwick, missing its founder? In a word, no. Lodwick lost his job due to insubordination last November; his dare-you-to-sue-me funding of an IAC employee's music startup, in an apparent violation of his noncompete agreement, is right in line with the nose-thumbing he did while on the job. We heard IAC finally fired Lodwick because he would blow off meetings with upper management when it wanted to talk to him about things like marketing and growth. So who got it right — IAC chairman Barry Diller's suits, or the wannabe iconoclast?

Yesterday, we asked why Justin Ouellette, the founder of Brooklyn's favorite music-sharing site, Muxtape, would post the terms of Jakob Lodwick's investment in Muxtape to his personal blog — especially when those terms might prove dangerous for Ouelette's friend Lodwick, an oddly charismatic tech entrepreneur who had a frosty falling out with IAC chief Barry Diller? The answer: Because even for the founder of a Web service that's grown to 140,000 users in just 5 months, sometimes email is hard. Writes Ouellette in a post replacing the now removed image:

Once an oversharer, always an oversharer — no matter what it costs, personally or financially. When IAC fired Jakob Lodwick — the Internet's own Howard Roark — from Web video site Vimeo, IAC agreed to pay Lodwick $100,000 a year until 2011, just so long as he stayed away from IAC employees in any new ventures. Lodwick, reportedly bipolar and never much one for consistency, has proven unable to resist the temptation. An image posted to former IAC employee Justin Ouellette's personal blog seems to confirm what's already been rumored: Lodwick funded Ouellette's side project, an online-music site called Muxtape, with enough cash — $95,000 in exchange for 1 percent of Muxtape's equity, going by the scribbled napkin — so that Oullette could quit IAC to run Muxtape full time.

A full half of our usual readership came to Valleywag on Christmas day last year. Even more showed up on New Year's Eve. We figure a good percentage of you will be stuck at the office today, too. So if you can't come out to see the Fourth of July fireworks tonight, we'll bring them to you, with the Web's 10 best fireworks videos. A surprising six come from IAC's Vimeo, proving that hosting expensive high-definition content is totally worth it at least once a year. All of them are guaranteed not to maim small children or start wildfires.

Gary the Puppet — who in the clip embedded below tours the offices of Tumblr, Next New Networks, Gawker, CollegeHumor, and Wallstrip — might be the perfect metaphor for the New York tech scene. It makes a big show of itself, but it's kind of flimsy and despite how it may look, somebody much larger and more powerful is actually running things. For New York tech, the puppeteer's hand is old media companies. IAC and CBS own College Humor and Wallstrip, respectively. Tumblr has its roots in Hanna-Barbera cartoons. So does Next New Networks, which just agreed to distribute its videos over Hulu, a News Corp. and NBC joint venture. And what's Gawker but a tape worm in Old Media's belly? Still, New York tech has this over the Valley: perhaps because of those old media connections, it knows how to present itself with a hokey smirk instead of new media's typical sassback.

After selling its premium advertising inventory, the 63 companies that used to make up Barry Diller's IAC sell the remnants to third-party ad networks, which pay $1 or $1.50 per thousand pagviews. Not a great business. In an effort to boost those CPMs nearer to $6, IAC will from now on instead pool the inventory from the 63 companies and then divide it up based on advertiser-friendly demographics. AdAge reports that IAC will define its wealthy users, for example, as

Yahoo, IAC and eBay are in for rough sailing, but Google and Amazon.com should cruise smoothly and emerge as the big winners in the coming years, according to analyst Jeffrey Lindsay of Wall Street research firm Sanford C. Bernstein in a 310-page report published yesterday titled "U.S. Internet: The End of the Beginning." Tellingly, there's no mention in the summary article of Facebook CEO Mark Zuckerberg's plans for a totes awesome IPO. [Reuters]

There's one person apart from shareholder John Malone who stands to lose when IAC is broken up: Alex von Furstenberg, adopted son of the internet conglomerate's boss, Barry Diller. The shaved-headed socialite, Diane von Furstenberg's son by her first gay husband, will still inherit a large part of his adoring stepfather's fortune. But after IAC is divided into five, Alex von Furstenberg may have trouble securing the front-row seats at Lakers games that are such a mark of social status in Los Angeles, where von Furstenberg has lived since 2005. He's been relying on Diller's office to cadge tickets to the bastketball games from Ticketmaster, the online ticketing service which IAC is spinning off. The IAC boss will remain chairman of Ticketmaster after the split, but one peons still hopes Diller and his relatives will no longer be able to use the service as a personal favor bank.

Hail the survivor! We'd heard that IAC dealmaker Jason Rapp's career was on the rocks. Turns out it was just in a deep freeze. Rapp has been named CEO of minor IAC property Gifts.com. The holdup?

After decades of sprinkling his virile mogul seed on lots all over town, cultivating muscular sprouts along the lines of Jeffrey Katzenberg, Dawn Steel and others, inveterate media pollenator Barry Diller offered these wrenching words about Hollywood at this week's D6 Technology conference in Carlsbad: "It's a community that's so inbred it's a wonder the children have any teeth." Ouch. He must have forgotten about decidedly toothless Sahara director Breck Eisner, whose father Michael got his start under Diller during his years at ABC. That said, we weep for the third generation, whose inability to type or mouse-click with their beflippered limbs will sink Diller's digital empire once and for all. [Fortune, Photo Credit: Getty Images]

IAC's Barry Diller has just explained-to the audience at the Wall Street Journal's D Conference-the breakdown of his relationship with the internet conglomerate's biggest shareholder, evil John Malone's Liberty Media. Paid Content was taking notes. Diller's metaphor? "Partnerships are marriages without the stuff." Oops, Freudian slip!

Los Angeles-based law firm Kabateck Brown Kellner filed a class action suit against IAC property Citysearch, alleging the site charges pay-per-click advertisers for fraudulent clicks. The firm has won similar cases against Yahoo and Google. All the major search firms now belong to anti-click fraud coalitions and make lots of nice noises about the problem. Truth is, click fraud isn't much of one. As Google CEO Eric Schmidt explained during an unguarded moment a couple years ago, click fraud will never be that much of a problem because if fraudulent clicks devalue the worth of click for an advertiser, that advertiser can always pay less per click.