Barry Diller's Third Act

Lesley Stahl Profile's One Of America's Top Internet CEOs

(CBS)  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.

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The year was 1992 and Barry Diller, who had turned 50, was wandering around the country in search of a new idea. He had just done the unheard of: leaving one of the top jobs in Hollywood, running the Fox studios. "I thought, this is the dumbest thing I've ever done in my life," Diller remembers.

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.

[solow8]

Gosh Leslie, you went light on this guy. He feels good about 1/2 a billion dollars a year and says money isn't important, its the vision. What vision. I never heard one. He could afford to give each of his 22,000 employees a raise of $20,000 each and still draw 30 million salary. He makes as much as 14,000 of his employees, combined. If the 14,000 didn't show up to work for a week Barry would quickly earn who earns the money and who just collects it.

In fact, it is exactly what America needs to do, a workers strike so people like Barry can see that the unfairness has gone too far.

Leslie, you really had an opportunity to tell the extremely rich that they are inappropriate, and you missed it.

Let's not pretend that Savage Capitalism is okay, it isn't. It is ruining our society and your story made a big deal out of a unworthy figure

[donnie900]

Oh yah.. ******* unbelievable. Der ******* heroes.. Wit de ******* fancy houses and de ******* fancy cloths.. Deyz got me ******* admirations too. It's just people I admire.. I pee down der ******* backs.

Its just de way I am.

[c1264648]

We must applaud and give a standing ovation to anyone that works hard to grow a business, and that creates job formation for tens of thousands of individuals around the world. Individuals such as Barry Diller and Diane Von Furstenberg must also be compensated for taking financial and psychological risk to create something from nothing. Moreover, Mr. Diller is being compensated more for the psychological risk that he and Diane Von Furstenberg took to actuate their vision. The rewards are commensurable with the risk. More power to them! From the creators of I DO SPORTS. COM and I DO SPORTS WITHOUT FEAR AND WITHOUT REPROACH.

[donnie900]

.. I'll pee on ya. Pee right down yer freak'n back der pal.

[donnie900]

You just.. suck me left nut der pal, and git de hell outta my neighborhood. I'll spit on ya.. Dis is just fer people live'n in cardboard boxes. Know my name? Huh? Uh-uh.. Dats cuz I'm de only guy 'round here whos farts stink!

[donnie900]

I'm gonna give yaz me poor man's speech! DIS IS WHERE I LIVE! AND NOT YOU! Yer the guy that sells me my food! Yer the guy that sells me my medicine! And you gonna hide no more from no one.

Yer a record album, pal. You and yer subsidiaries can suck my nub..

[donnie900]

Subsidiaries? Tax shelters? Overseas endeavors? These people do nothing but hide! And people who hide are afraid of something.

When you put your name on something, thats not just your pride. That's your guarantee! "This product is something I market, and I'll put my name on it."

You people! You corporate bigwigs! You used to be something special! You used to be something to admire! Now you're running away from home.

[donnie900]

Why don't companies want anybody to know who they are anymore?

[greedwar]

Upon viewing Leslie Stahl's story on Barry Diller, I've learned who's behind such monopolies as Ticketmaster. Leslie Stahl always asks the easy questions, and is by far the most nonconfrontational, uninteresting interviewer on 60 Minutes.
If Leslie's interview suggests that Barry Diller feels he is a CEO for the "vision" and not the "money", then why would there be such complacency with his company's convenience charges? If Barry Diller is so concerned with Ticketmaster's vision, then why does he represent a company that collects $10 on every $30 ticket charge? Cleary Barry Diller's vision is that music fans should expect to pay a 25% sum for something unrelated to music or the venue. Is his use of words like "convenience charge" an example of this vision? This story was painted like he was a unique icon as oppossed to the stereotypical power and money hungry CEO.

Ed Green
Musician

[avantinet]

Barry Diller can afford to be a visionary.You can make hugh financial mistakes and proceed on to the next venture. Thanks 60 Minutes for that wonderful profile. How about How Paris Hilton worked here way up through the business world next?

[truthinbiz]

I work for a Barry Diller company. While his "incentive" may motivate him, it has the opposite effect on employees.

[lovelymom1]

HE Should Have never even been asked was it for money. Yes, we all work for money.(for the challenge of the impossible.) Some dream, some do. some work for those who do. Shame on America for being hard on smart men and women who actually make it and take it. He has earned it. He said during the interview he wasn't worth what they where paying him.(shame on HIM) for allowing anyone to make HIM feel bad for earning a healthy living. Everyone in the World is worth that kind of money. If people would stop whinning and give all they have and get off their duff, we would all have. We could all be happy. The Bible says there will always be poor among us. It will rain on the just and unjust. All money belongs to God. Isn't it good he allows us to keep 90% of what we earn. I live paycheck to paycheck and barely do that. So I am not a rich person defending a rich person. Americans Have created a stock exchange system that people think they should be able to invest, sit on a couch and the men and women that earn all that money for them get what the invester thinks is fair? They work 60-80 hour, week don't see their famlies. I think The system is broke. Most of those companies he ownes he didn't have to take to the stocks except for tax reasons and other things. He doesn't need you to buy his stock to live. Could you not see he loved what he did. The America system made it so he could not be a propriter.

[solojojo]

"It's not the money, it's not the money, it's not the money" How many times did the Dillers say that? Why not take 70 million, divide it amongst his 20,000 employees who work hard because it "is" about the money and take "only" 400 million for the Diller household? Did he ever think of that? Was that ever one of his visions? Can you say "corporate greed"?

[jweihe]

Everyone agrees of course that if you start and make something you desearve to be compensated for it. In fact compensated with all profits after taxes, bills and payroll. But once you sell it, or go public, it no longer belongs to just you. It belongs to whomever bought it, in this case, the shareholders. This was not an inspiring story about a great American business person, but just another story, in a long line, of CEO and management greed and over compensation where once again shareholders pay the price. Oh yeah, and it's not about the money. Whatever!

[blimeylimey-2009]

Barry is a very bright man. Good luck to him and his ideas. Of course he said the dreaded sentence - "it isnt about money". Okay. What I would like to know is how he compensates his employees. I know person totally responsible for an entire magazine. His CEO takes home a bonu;s of seven million. He doesn't get $30,000. Now that would have been a good question Lesley.