IAC is back after a lengthy corporate restructuring that saw a fierce legal battle and the break up of the conglomerate into five separate companies. But with his house in order, IAC boss Barry Diller is setting his sights on an old rival: The Walt Disney Co.

Starting Sept. 16, Diller and IAC will get behind ZwinkyCuties.com, a virtual world that is an extension of Zwinky.com, the company's popular tween site. The virtual world, which allows for enhanced user interaction and games, is seen by many as direct competitor to Disney's Club Penguin because it will focus on the pre-teen demographic.

John Park, president and CEO of IAC's consumer applications and portals division, said the company decided to launch the younger site because it was turning away kids who were not old enough for Zwinky.com.

Both Zwinky and its younger cousin compete in a tight space for marketers, who are eager to curry favor with young consumers. That competition has prompted brands such as Barbie and Bratz to launch their own virtual worlds.