Barry Diller

Chances are you have shopped online. They call that interactive commerce, where you buy what you buy on a screen.

Barry Diller, once a big wheel in Hollywood, was one of the first businessmen to figure out that this would be the wave of the future. He started a company now called InterActiveCorp or IAC. Though you may not recognize the name, Fortune Magazine recently named IAC America's most admired company in Internet services, ahead of eBay, Amazon, Yahoo, and even Google.

And you've certainly heard of some of the company's brands, like Ticketmaster or the dating service Match.com. As correspondent Lesley Stahl reports, IAC is an Internet giant that Diller sewed together, piece by piece.

Diller has for years had a reputation as a business visionary from his success in Hollywood when he ran Paramount Pictures and then created the Fox television network. He's now in his third act, as his own boss. This time the vision was that a TV screen could do a lot more than entertain us. It all started 15 years ago when he looked into the future.

Asked if it was dumb or scary, he admits, "Oh, [I was] totally scared. It was like 'What the hell am I going to do?' 'Cause I didn't have an idea in my head."

His companion on the journey was his best friend and now wife Diane von Furstenberg, the fashion designer. They were two vagabond millionaires. "We didn't know what we were gonna do," von Furstenberg recalls. "And then one day I went to visit QVC."

She was going to the home shopping cable channel in suburban Pennsylvania to sell her designs; Diller happened to tag along to the studio that day.

"And I was struck. I'd never seen a television set used that way. All I'd known from television screens is telling stories," Diller remembers. "I saw this interactivity, this primitive interactivity and this mix of computers and televisions and phones. And I thought, 'I don't know.' This seized my curiosity."

What grabbed him, what he saw - and this was well before people started going online - was a future where most shopping would be done by interacting with a screen. On the way home, they couldn't stop talking about it. "We drove and we got lost, because we were like so excited, talking about this entire new world that we had just experienced. It was incredible," von Furstenberg remembers.

"This is the first interactive thing...that he saw, and [it clicked]?" Stahl asks.

"But Barry can see something way before you can see anything," von Furstenberg explains.

Diller decided to buy QVC. The move surprised a lot of people. "They said I'd lost my mind," he remembers.

Diller had traded the glamorous life in Hollywood for running a cable channel in West Chester, Pa. For one, cold winters were a new reality for the executive. "I'd never been any place in the winter except to ski!" he says, laughing.

"And the first day he went to work there, he took the Metroliner. And he was not happy. He was not happy at all," von Furstenberg remembers with a smile. "And he called me and he said, 'What did you make me do? Why do you do that?'"

He knew his Hollywood friends thought QVC was tacky and a joke, but within days of his getting there, the company's stock shot way up.

Barry Diller made his first fortune as his own boss. But then he was beset by a string of setbacks. He got into a bidding war to buy his old work-place, Paramount, which he lost. It was embarrassing. "I didn't feel like I lost. I just felt I didn't make the last bid. Now by the way, it was stupid. I should have made the last bid. But I was very fresh to being on my own, and in the clutch I actually didn't have the guts to do it," Diller says.

"You're admitting a mistake," Stahl remarks.

"Absolutely," Diller acknowledges.

It was a mistake he learned from. But in making other deals, he ended up losing QVC. Yet his gut told him he had been right: that interactive commerce would catch on. So he turned around and bought QVC's competitor, Home Shopping Network. Then the Internet came along, and deal by deal, he assembled an interactive retail empire, IAC, buying Ticketmaster, Citysearch, Evite, Match.com, LendingTree - over 60 sites and growing.

"A lot of people from the outside look at your company and say it's a hodge-podge. How do these things fit together?" Stahl asks.

"We are an interactive conglomerate and we're proud of being a conglomerate, which is we operate in financial services and flirt services with Match.com, so you know, we run the gamut," Diller says.

"How much did you understand this when you started or has it been a journey to figure out what your company is?" Stahl asks.

"Of course it is," Diller replies.

Asked if he has figured it out, Diller tells Stahl, "I hope we're figuring it out. I know this now. I know now that in fact many of our businesses relate to each other."

Everything he bought was interactive, but beyond that he made it up as he went along, and is only now trying to create a sense of oneness by linking his brands together through his search engine, Ask.com. Here, you can check local listings from Citysearch, get tickets, find a date, and even buy a pair of shoes.

"We're tying location to event, to ticketing, to reviews, to all of these different things," Diller says.

He's also uniting his brands under one roof, in new headquarters designed by world famous architect Frank Gehry, not only changing Manhattan's skyline, but trying to give IAC the same kind of cache that other big internet companies have.

"Why do you think that Google is such a sexy story..." Stahl asks.

"'Cause it is!" Diller replies.

"...and IAC isn't a sexy story?" Stahl continues.

"Nobody knows from IAC. IAC is brand by brand by brand by brand. We are an endlessly multi-product company. Endlessly. So, Google is Google. Googling. Googled. All of that," Diller says. "You know, one-product companies will be known by their one product."

Asked if he doesn't want IAC to be a "sexy company," Diller says, "Yes, would I like that? Sure. And I'd like to have ice cream every third hour. But here's the thing: I'll be quite happy to be kind of similar to Procter and Gamble, someday, which also nobody knows."

With IAC, Diller has amassed a personal fortune of well over a billion dollars. He works hard, but enjoys his time off, whether hiking, biking, or sailing on his luxurious yacht. But he says it isn't the money that drives him. He was born the son of a wealthy real estate developer, and went to Beverly Hills High School, sort of.

Stahl had heard a story that Diller routinely skipped classes on Mondays and Fridays. He confirms that it is true. Asked where his parents were and what was going on, Diller says, "It wasn't that my parents were Britney Spears. But they had a very laissez-faire concept. And so, I had no actual supervision."

After he dropped out of UCLA, family connections got him a job at the William Morris talent agency. He worked in the mailroom. It turned out to be just the education he was looking for.

"I literally read the file room from, you know, A to Z," Diller says. "I read the entire history of the entertainment business."

The mailroom kid proved to be an innovator with great instincts about popular taste. He became a Hollywood player, churning out hits when he ran Paramount like "Saturday Night Fever," "Urban Cowboy," "Raiders of the Lost Ark," and "Beverly Hills Cop."

Then, he did it again when he created Fox TV, the fourth network. He says none of this came easy. "Every single thing that I did, first I had to figure it out. Which meant, you know, I mucked around and I made lotsa mistakes. And then I would figure it out. Not that fast, by the way," Diller says.

That goes for his personal life, too. It was back in those Hollywood heydays that he first met Diane.

"I was 28, and he was 33. We were both kind of famous," von Furstenberg recalls. "He was a tycoon, and I was a little tycooness, and we were young."

After six years they broke up, but later became best friends and he became close to her children.
Then on his 59th birthday, von Furstenberg says, "I said, 'If you want, I marry for your birthday. I'll be your gift.'"

When the New York Times announced their marriage, they called it a "merger" and said that the relationship was "assumed to be platonic."

"We married because it is the culmination of a long relationship and we have a family together. And it just felt right," says von Furstenberg, who also considers her husband her best friend.

"You're also said to be each other's closest business advisers," Stahl adds.

"We are everything for each other," von Furstenberg replies.

Asked what she thinks drivers her husband, von Furstenberg tells Stahl, "What drives him is the vision. It's definitely not the money. He has a vision, and he's not quite sure what it is. You know, and then he kind of fakes it until he makes it."

60 Minutes sat in with Diller for a morning as he met with one group of employees after the next. Discussions were brief and decisions made quickly.

Those who meet with him say his ability to grasp new and complicated concepts is uncanny. And his 20,000 employees better keep up.

"Have you ever heard your meetings described as making people crawl over barbed wire?" Stahl asks.

"Oh, please. For some people I think it is that, but look, it is absolutely process," he says.

Diller says it's not screaming and yelling but admits the process is intense.

These days, Diller is expanding IAC beyond retail, buying and creating interactive entertainment sites. He has bought CollegeHumor.com, a humor site for young men, and is developing his own original content in videos, advice, and information.

"We're going to invest probably hundreds of millions of dollars in this over the next years," Diller says.

"The shareholders have no voice in this company," Stahl remarks. "It's the Barry Diller show, from beginning to end."

"Yeah," Diller agrees.

"They're investing in you," Stahl says.

"They're investing in this company and its assets," Diller replies. "But if you ask, 'Okay, who's the ultimate...the word "decider" is such...an embarrassing word. If you talk about something that is ever going to vote in the company, I do control the vote."

But last year, this decider had to face public scrutiny when it was revealed that he was the nation's number one highest paid CEO, taking home a whopping $470 million in one year.

"I think that executive compensation, as a topic, is a hot-word topic. And yes, there are terrible examples of excess compensation," Diller says.

Asked if he is one of those examples, Diller says, "I don't think so."

He says most of the money came not from an inflated salary, but rather a single stock-option given him when his company was founded. And he says he put the money back into the company.
But analysts point out that in 2005 the board he controls awarded him another lump of new options.

"They gave you more stock options that same year. That came to $80 million," Stahl remarks.

Diller dismisses this: "you know, here's this thing. And I know you're doing it. And believe me, I deal in drama every day. So, I want to be just as dramatic as you. Saying, 'They gave you more stock options,' okay?" Diller says.

"They did," Stahl insists.

"What the company did is they said, 'He should have an incentive for the future,'" Diller explains. "I also don't think, by the way, I don't need an incentive...I'm absolutely not shy about saying that if you create something of value, then receiving compensation for it - to the skies if that's what happens, then I do not think that that's a bad thing."

Asked if this embarrasses him, Diller says, "No. Is it more money than I need and worth or all of those things on some value scheme? Of course it is. But I did start a company. I did make all of the decisions. And that company's value grew a lot."