IAC's Barry Diller: "Google is irrelevant to us"

IAC Chairman and CEO Barry Diller

May 28, 2008

Speaking at the D6 conference Barry Diller said Google is irrelevant to his Ask.com business and explained his quest to spin off five public companies from his collection of companies and 63 brands.

As Chairman and Chief Executive Officer of IAC, as well as chairman of Expedia, Diller overses brands including Home Shopping Network, Ticketmaster, Lending Tree, Ask.com, Match.com, CitySearch and Evite.

On August 1, IAC will become five separate companies--HSN, Lending Tree, Ticketmaster, Interval and a "new" IAC, which will be a series of businesses naturally related to each other, Diller said. "We are a mini-multiple business organizing principle in the new IAC," he said. For example, Match.com and Ask.com will be part of the new IAC.

Diller also discussed the acrimonious lawsuit with partner Liberty Media and John Malone that stalled the move to break up IAC into several companies. "It was a horrible thing, putting our lives in the hands of a judge in Delaware. It was very difficult and painful and in fact what it was about wasn't any of the bomb throwings from various sources. It was about whether I had the rights over the shares," Diller said. "It was a three-month clump out of my life I could have done without." Diller won the right to split up the company. "We have expertise in certain areas where we really have edge. That's the blinders we will use to start new things," he said.

Diller was able to fend off Malone, and also thinks he is doing alright versus Google.

"Ask is successful, and has gained in search more than anyone else but Google," he said. "The market is not going to be controlled by one party. Google is irrelevant to us. It's a different competitive set issue (than Microsoft's). If you are after scale and arguing rights that you are not a loser in the business and other business initiatives, that's one thing. I believe our product is in most respects better than Google and it gives you an ability to make a claim....If you keep at it, have good purpose and a good product, it will stand the test of time. At some point Google will not live ever after with 60 or 90 percent of market."

That may be true, but it's hard to imagine Ask.com getting more than 5 percent share no matter what it does. Google is irrelevant in the sense that Diller doesn't intend to compete with Google head on as Microsoft does.

He was asked about Microsoft's quest to acquire Yahoo and thought that the bid made sense as a way for the software giant to compete with the rise of Google in search. "It seems to me that if you fire a gun, making a hostile bid, the bullet has to land in the heart or can't imagine firing it off," he said. Microsoft missed the direct hit and Yahoo was able to escape, at least for now. He indicated that Yahoo's obligation to long term shareholders will be to get a higher share price or buyout than what Microsoft offered. He also appreciated the tenacity of Microsoft. As Steve Ballmer says, Microsoft will keep "coming and coming and coming."

Regarding Facebook, Diller compared the social network to the princess phone from 30 years ago. He didn't elaborate on the comparison, but the princess phone was a status symbol of teenage communication coolness. Facebook has great tools to draw users in and keep them engaged, he said. "Passivity won't go out the window but will go pretty far down," he said.