An Interview With Barry Diller

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L.G.: Well don’t tell me the things that drive you nuts, that would just hurt people’s feelings. But what are the things that excite you?

B.D.: Well by definition, that would tell you other things too. Look, in a company like this, the problem is I’d go on too long. There are dozens of things from embryonic to fully developed that I adore, so—

L.G.: What are the characteristics of the things that sort of get you excited?

B.D.: Things that haven’t been done before. I mean, all my life, it’s been my pleasure and curse—which is that I’m only interested in things that, not of original thought necessarily, but things that are either difficult to do, or that nobody’s pulled off before, or that nobody’s done before. And that’s what I get excited about.

L.G.: That’s just your own personality?

B.D.: Pure nature. I have nothing to do with it.

L.G.: Some people wonder, just looking in from the outside, they would’ve thought that things like running a movie studio, starting a television network, being an enormous influence on what today is our culture, popular and otherwise, and being responsible for so many things that we just take for granted as part of our daily intake of entertainment, would be much more glamorous and exciting than selling shoes [as with Shoebuy.com]. Or being in the financial-services business [LendingTree.com].

B.D.: Well that would be if you were after glamour. It’s not something I want to be after....  The brilliance of Shoebuy [is that] it is one of the first companies that found out to have a virtual inventory, meaning they have no inventory of their own, what they have figured out is how to get the inventory from hundreds of people who sell shoes in a way that one person can come and access all of it and then get instantly—find out instantly—whether that product is available and buy it instantly. And that’s fascinating to me. Each of the things that we do, we’ll find in there some different, new way of doing things. And that really has interested me since the moment that I kind of got involved in it 13 or 14 years ago. So to the people who say that isn’t making a movie and all of that—I ran movie companies for 20 years. If I wanted to repeat myself, it seems quite boring. It doesn’t seem glamorous to me, it seems repetitive.

L.G.: Is there an upside in not having your life so dominated by dealing with agents and movie stars?

B.D.: The truth is my life has never been dominated by anything. I don’t mean that at all arrogantly. But what it means is that when I was consumed, as I tend to get with things that I do, like when I was consumed by film and the television business, the challenge of this person or the challenge of that person and having to deal with them and being stimulated and irritated by them is the same. You know, you could put anybody else from any other function and just because of their public role, that doesn’t make it any different in terms of dealing with them than dealing with the person who runs Shoebuy.

L.G.: What do you think IAC will look like five years from now?

B.D.: Well, I think one of the things about this company is that’s unpredictable, which is why I think some investors who have not been with us long—who have been in and out—it makes them nervous. I don’t think you can predict what IAC will look like five years from now. You can certainly say that we’ll be some form of an interactive conglomerate, but IAC three years ago had its principal business of being Expedia, leading travel online.

L.G.: I use it all the time.

B.D.: IAC is no longer Expedia, it’s now its own independent company. So I think that’s the good news.

L.G.: When you tried to do the buyback of Expedia a few months ago and the credit became unattractive—

B.D.: —It didn’t become unattractive it became unavailable—

L.G:—was that the first indication that we were going into a credit crunch period for you?

B.D.: Yeah. Well, I had thought that this all can’t continue—all this access to tremendously easy, non-tethered credit. And yet, when we got commitment to borrow $3.5 billion, I thought that was good money. It turned out three weeks later it wasn’t, and we were, I think, the first; we were the first I think that actually got caught. We ended up, out of our own funds, buying back close to a billion dollars in stock. It was just, to me, a lost opportunity. I would’ve liked to buy back more.

L.G: Were you already seeing problems in the mortgage markets by that point?

B.D.: Oh problems, sure. That’s not news. It’s just been continuing rolling bad news for six months.

L.G.: You talked a little bit about LendingTree yesterday. What’s the prognosis there?

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