Barry Diller's E-Way

The head of USA Interactive says the key is doing what the Web does best: Streamlining communication between buyers and sellers

Barry Diller made it to the top ranks of showbiz by working his way up from the William Morris mailroom to moguldom as head of Paramount Pictures and USA Networks. Over several decades in the business, he has become known for his sharp vision, especially when it comes to spotting undervalued assets.

It's no surprise, then, that when Diller decided to go dot-com, he cleaned up, earning him a designation as one of BusinessWeek's 25 for 2002. Through a series of savvy acquisitions by the company he controls, USA Interactive (USAI ), Diller has gained controlling stakes in some of the most profitable Internet companies around.

Expedia (EXPE ) is consistently ranked as the top travel site. is the leading dating site and enjoying triple-digit revenue growth. (TMCS ) has a near-monopoly on ticket sales for shows and concerts online. And (ROOM ) has become the default choice for many travelers looking for last-minute deals on accomodations.

It's all part of Diller's grand strategy to leverage these assets to sell more trips, rooms, and recreation over USAI's Home Shopping Network and other video properties. BusinessWeek Online Technology Editor Alex Salkever recently spoke to Diller about his e-plans. Here are edited excerpts of their conversation:

Q: What's the ultimate strategy for USAI?


The strategy is to be the largest and most profitable e-commerce company in the world. We are certainly close already.

Q: Are there other sectors of e-commerce you're eyeing for possible acquisition?


Sure we are. People can speculate, but we can't really disclose it.

Q: What specifically do you look for when shopping for acquisitions?


The potential for growth. Some things are just starting out and only have growth [potential] in the eyes of the beholder. What we look for is really solid intersecting ground between supply and customers, where we can use interactivity to make the process better for the consumer. In making the process better for the consumer, which we have done in all of these different areas already, in effect we benefit the suppliers, too.

Q: You bought into way before the Internet-dating scene took off. What did you see that made you think it would work?


Exactly what I just said, the possibilities were there. Consumers had a need, and suppliers could fill it better with interactivity.

Q: What do you think it will take to get the public to be more receptive to the idea of convergence between e-commerce, TV, and other media?


Evolution, time, and bandwidth.

Q: How far along are we in terms of evolution and bandwidth?


Maybe 20% or 15%. We have a ways to go.

Q: Down the road, what will you do beyond what you have scoped out right now -- trying to combine video and interactive sales? What's the next step?


It's a radical revolution. And when you are in one, it's hard to see what its effects are, what the next exact steps are, except to put one foot in front of the other. We are in a revolutionary process right now.

Q: In the past, you've spoken of the convergence between media and other forms of online transactional commerce. What will that mean going forward?


It depends on what the product is, but the changes in methods of distribution make the convergence inevitable.

Q: Do you use the Internet for all this stuff yourself?


I'm not the [target] audience, except that I am a curious person. I'm hardly the prototype customer for most of this. So I just follow my own curiosity.

Before it's here, it's on the Bloomberg Terminal.