An Interview With Barry Diller

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B.D.: Well, LendingTree is only a mortgage originator. In one part of its business, it’s essentially an exchange, and LendingTree did not have very much subprime business and LendingTree also didn’t hold loans, it sold them off instantly. So we had very little exposure.  The position of Lending Tree is that it’s had to do something very painful,  because the market has been so wounded. It’s had to cut back a large part of its workforce. It has had to cut over 500 jobs. That’s painful. But LendingTree itself, it will have a profitable year, much less than last year, and it will emerge much stronger from this than it entered this crisis. And that’s partly because it has a very good brand name, and partly because it had so much less exposure. During this period, it can work to gain market share, so that it can, when this is over—and it will be over in some undetermined time—LendingTree will emerge very well.

L.G.: By the way I’m not a big reader of quarterly reports.

B.D.: That’s good.

L.G.: I did note in the most recent quarter, you actually said basically “We’ve had a lousy quarter and we’re dissatisfied.”

B.D.: It’s true.

L.G.: Right, and it just struck me, that’s not the most popular way companies use to deal with bad quarters. They usually try and find something positive, and hit that really hard.

B.D.: Well, I don’t know. If you look at our statements over the years, we’re very direct. I have always believed, long before it became popular, in what I think is a great rule, which is: bad news first, good news you can wait for. And we’ve always given much, much more information, we were very criticized for giving too much information, which I always found amusing. And we’ve always also been very direct in trying to express ourselves in plain, direct English.

L.G.: On internet news sites, [Vanity Fair writer] Michael Wolff—

B.D.:—Hmmm—

L.G.: —wrote recently that he pitched you on his Newser.com site and you didn’t bite. Do you think any of these are viable? I mean, obviously, you’re involved with Huffingtonpost.com, but what’s your interest in these sites?

B.D.: Well I think everybody’s interest—and probably I have a little more interest because I think maybe we can participate, but our chances of figuring it out are probably slim—is somebody is going to figure it out at some point. Huffingtonpost has done a very good piece of original work, in being early at organizing the dread word blogs, and it’s expanded from there. But someone is going to figure out between aggregating news, and adding to the aggregation of news, editing, and making a product that uses the tools of the internet, uses the resources of what the internet does, to deliver a news product that is compelling for people. I mean, there have been the attempts we all know about, but nobody really has pulled that one off. I think it’s inevitable. And no newspaper has done it, I don’t think any newspaper website. Some are far better than others. Washingtonpost.com is one of them, but the I’m biased because I’m on the board. No newspaper, I think, has done an interesting job online.

L.G.: Of course, Matt Drudge will claim that his news site is the sixth most visited.

B.D.: Matt Drudge is purely an aggregator—an aggregator and quasieditor. It’s certainly edited. But Drudgereport.com is a great resource for lots of people. It doesn’t really use the internet—I mean, it uses the internet as a distribution mechanism, it doesn’t really use the internet tools...

L.G.: He has more traffic than People.com. He has much more traffic than the Washington Post.

B.D.: He doesn’t have much more traffic than the Washington Post. He has huge traffic. I don’t know what his uniques are a month, but look, I take Drudgereport as a very important Web resource.

L.G.: What news sites do you visit?

B.D.: Oh my god, too many. A lot. I’m a scavenger.

L.G.: Let’s talk about the future of newspapers. You’re on the board of the Washington Post, as you’ve mentioned. It’s been losing circulation for, what, 15 years now solidly?

B.D.: Not solidly. I think that you have to say “solid” is in the last period, when for every newspaper it’s been particularly tough, it’s very difficult. I don’t think there are easy solutions. It’s hard when you use the word newspaper. If you mean news-gathering, or just news, take the paper off, then I’m very hopeful. But the current print system is going to continue to decline. To what extent? I can’t really predict, but it’s going to continue to decline. But there are endless analogies to this. I mean, the railroad business, or the horse business, you would say that if you defined them as those businesses, or those paths of commerce, you’d be for a period in chaos and have to go through an awful lot of rejuvenation over decades—which has happened, certainly with the railroad business. If instead you said you were in the transportation business, who knows what would’ve happened to those companies? So the problem for print is print. I mean, it’s paper, it’s current distribution, and it’s going to be supplanted by other paths. So I’m optimistic about the paths but you certainly can’t be optimistic if you’re running a newspaper.

L.G.: But they’re also losing revenue sources. Classified advertising is dropping, with Craigslist and suburban newspapers.

B.D.: Sure, all of those things. It’s part of the creative destruction of the internet. But there are paths out from there. If you have an audience, and you are of service to that audience, then there’s value in that—different values, different ways of obtaining revenue. As I say, I think that the print business, the ink business, is deeply challenged. But I also think that’s just the distribution mode. I think that the work that is done produces value, and it will produce value in the internet and in other forms. I mean, I now get the Washington Post printed on my own little printer on my boat every morning via the internet...
 
L.G.: The good news is there are still people like you who actually want to have the paper in their hands to read it.

B.D.: Yes, it’s tactile, but that’s for an aging population, and we can’t predict what form people will want the news to be in. But people are going to absolutely want edited, informed products of journalistic process. So if you organize that on the kind of scale that great papers have done, and do, there’s a future for you, I believe.

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