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There’s nothing the Street likes to see more than a company with a nice big fat pile of cash. And you know who is stacking up the long green? None other than Barry Diller’s post-spinoff edition of IAC/Interactive (NASDAQ:IACI), which owns Ask.com, Match.com and other Internet properties. (But no longer owns Ticketmaster, Lending Tree or HSN.)

Yesterday, IAC/Interactive sold its 30% stake in Jupiter Shop Channel, a Japanese home shopping television channel, for $493 million in cash to affiliates of Sumitomo Corp. (OTCPK:SSUMY). And that’s triggered a new awareness on the Street of just how much money IACI has sloshing around.

George Askew, an analyst at Stifel Nicolas, figured the after-tax haul on the deal comes to $325 million. He says the company now has $1.69 billion in net cash, or about $12.06 a share; even after a substantially rally today, that represents more than 70% of the company’s market cap. Askew notes that Barry Diller indicated at a media conference that he expects the cash position to rise to $2.2 billion by March 2009, which would be about $15 a share, or roughly where the stock was trading at yesterday’s close.

The obvious question: What will they do with the cash?

Askew notes that Diller has said the company will pursue acquisition opportunities next year, and has downplayed the idea of a substantial share repurchase; the analyst says he would be more inclined to recommend the stock if the company would commit to a large buyback.

Diller has a long history as a wheeler-dealer, and you know that with the prices of everything now depressed, he must have an itchy trigger finger. But he likes to sell things as much as likes to buy them. And there are still pieces of the company that could lure potential bidders.

Deutsche Bank’s Jeetil Patel today raised his target price on the stock to $22 from $20, noting that the cash position provide a downside cushion and that “the strategic nature” of its Ask.com unit offers “substantial upside” from current levels. And he contends that the search battle between Microsoft (NASDAQ:MSFT) and Google (NASDAQ:GOOG) “could potentially result in an acquisition premium for Ask longer term.”

IACI closed Tuesday up $1.56, or 10.14%, to $16.95.

Source: IAC Keeps Building Its Cash