What do the Home Shopping Network, Hotels.com, Ticketmaster, Match.com, Expedia, and the Lending Tree have in common?
Answer: Barry Diller.
Barry Diller was born in 1942 in San Francisco and raised in Beverly Hills with movie stars as neighbors. His father was a real estate developer. In 1959 he left UCLA to take a job in the mailroom at the William Morris Agency.
Just five years after his mailroom job, Diller went to ABC where he became Vice President of Prime Time Television. While he was there he vastly improved the fortunes of ABC and created the docudrama, the miniseries, and the Movie of the Week. Hmm ... movie ... that would be the next big step for Diller.
In 1974 he moved to Paramount Pictures as Chairman. Under his guidance the studio cranked out some top television series (Laverne and Shirley, Taxi, Cheers) and a string of successful movies (Saturday Night Fever, Raiders of the Lost Ark, Terms of Endearment, Beverly Hills Cop).
Diller had been brought to Paramount by Charles Bluhdorn who was head of Gulf + Western Industries, the conglomerate that owned Paramount. When the regime changed there, Diller clashed with his new boss, Martin Davis, and soon it was time to move again.
In 1984 Diller became Chairman and CEO of Twentieth Century Fox. A year later Fox was acquired by Rupert Murdoch. Using that investment power and what he'd learned at ABC and Paramount, Diller rebuilt the studio's reputation and embarked on the ambitious project of creating a fourth US television network, FOX Broadcasting.
But it seems that what Diller wanted was to share ownership. That was something Murdoch definitely did not want. In 1992 Diller surprised just about everyone by leaving Fox and buying a stake in QVC, a television shopping business. Since then moves and deals have come and gone until today Barry Diller has a company that is his.
The company is called USA Interactive. It's an almost-conglomerate that includes three groups of businesses.
One group is called Electronic Retailing. That's mostly the Home Shopping Network with a bit of Home Shopping Europe thrown in.
The second and largest group is called Information and Services. It includes Ticketmaster and CitySearch. It includes Match.com (a dating service) and Reserve America (a service that will help you make camping reservations) and Evite (a free online event planning service). Those seem to be the information component. Lending Tree will probably go here.
On the services side the group includes Electronic Commerce Solutions, which provides end-to-end e-commerce services to folks like the NBA and NASCAR. Another company, Styleclick, provides e-commerce services and technology to Electronic Commerce Solutions and other companies. And there's Precision Response Corporation which offer companies a variety of customer relationship management services.
The third group is called Travel Services. It includes Expedia and Hotels.com along with a site called TV Travel Shop that does business in the UK.
It's pretty impressive. Some of the businesses connect people with information and with products or services. Others leverage USA Interactive's investment in technology by offering technology and technology-based services to other companies. But what's the grand design?
That's what the analysts and business magazines and pundits want to know. They want to know what kind of grand strategic vision Barry Diller sees.
Diller isn't much help. He says that he is driven by curiosity and that there is no strategy. That makes his critics snort. They can't see it. Most of them see Diller as a product of the entertainment industry where intrigue is a way of life and plans are elaborate and always kept secret.
Because he started out in movies and television, Diller is still referred to as a "media mogul." But all of that history and success in entertainment may blind us to what he really is. If we understand that, then we can understand USA Interactive and Diller's strategy. So let's try to look at that history another way.
Diller is definitely both ambitious and driven. First his course was up, and up to ever bigger and better things. Then he wanted to be a partner and not just hired help. So what would be next in this progression?
Well, this certainly isn't a man who'd be content managing a trucking company, even if he did have full ownership and control. Whatever's next will have to be big. According to Victor A. Kaufman, a vice chairman, "We want to be the largest, fastest-growing, most profitable interactive company in the world."
Diller is also an opportunist. He may be telling us the truth when he says he doesn't have a grand design. I'm not sure he did when he took over either ABC prime time or Paramount or Fox. He probably knew the general direction he wanted to go. Then it seems like he hunted for vehicles that would help him achieve his aims, mixed them creatively and found ways for them to make the company successful.
Barry Diller is a businessperson. Profit and loss matter to him. That immediately seems to set him apart from many of the media folks he's often compared to. Where they seem to want to spend and spend and spend, Diller watches costs and keeps an eye on the bottom line.
One aspect of that is not budging on what he thinks a property or a company is worth, just because everyone else seems to disagree with him. Not long ago he wanted to buy Lycos. He set a price at $6 billion.
Lycos board member David Wetherell thought the price was far too low. Wetherell was what was called an "Internet entrepreneur" which means that he thought the Internet had changed everything. He led a shareholder revolt, calling Diller an "old media" guy who "doesn't get it." Diller didn't budge. The deal died.
Finally, Diller is exceptionally good at building companies. Look at the record. He's been successful wherever he's been. Every company he's run was better when he left than it was when he walked in the door on the first day. FOX Broadcasting is a good example.
To create FOX Broadcasting, Diller had to put lots of pieces together. There had to be television stations that would air the programming. Metromedia Television with stations that could reach almost a quarter of the US population was purchased and deals were made with other stations.
For the network to grow and succeed there had to be programming and it needed to be different from what everybody else was doing. So Fox came up with Cops and America's Most Wanted, In Living Color, Married with Children and the Simpsons.
Look at that list again. Not only were those shows very different from what was on other networks, for the most part they were less expensive to produce as well.
Despite being known as a "media mogul" and fond of the dramatic, Diller took time to roll out FOX Broadcasting. The network started in 1987 by airing only two nights of prime time programming. It gradually expanded its offerings until there were five nights of programming in 1990.
The picture we get of Diller this way is of a practical opportunist who thinks profit and thinks big. It fits the way USA Interactive has come together.
Diller has picked up companies that are solid and well run. They have assets of information, customer base or expertise. Some of them are well known brands. They have a lot of potential, but they're incomplete in some way.
Most importantly, no two of those fit together naturally, but they could. It's the business genius of Barry Diller that may make that happen. Watch for him to seek out and create ways for the different parts of the company to make each other more profitable. But expect him to get rid of under-performers and companies that ultimately don't fit the profit-making mix.
But that's the future. Right now these are different companies brought together under a single banner. And that banner reads "Barry Diller".
