Barry Begins Again
Most tech billionaires are precocious revolutionaries. Then there’s Barry Diller. The former Hollywood mogul has ground his way to a $4.2 billion technology fortune, one unsexy spinoff at a time—and at 77 he is about to start afresh.
grow to $17 billion. Travel, Diller also predicted, would move from agencies to the Web. In 1999 he purchased Hotels.com for $245 million and then, in 2001, struck a deal with Microsoft to take control of Expedia for $1.5 billion, agreeing to complete the purchase just after the September 11 attacks. “If there is life, there’s travel,” Diller decided, persuading himself to complete the deal. Expedia is now worth $20 billion.
Not every deal has panned out. In 1999, Diller tried and failed to buy Lycos, an early search engine. That’s probably a good thing given that a small company named Google had been founded a year earlier. But he still managed to waste nearly $2 billion in search, buying the also-ran Ask Jeeves in 2005.
Jeffrey Katzenberg, who worked under Diller at Paramount, believes Diller’s instincts and doggedness, learned over two decades in Hollywood, have transferred perfectly to the Web and IAC. A movie like The Bad News Bears, he points out, is willed into existence by a producer with conviction, the same way Diller has impelled some of his disparate Web properties to success. “Barry would always say there’s no natural momentum to a movie,” Katzenberg says. “It must be driven by somebody’s belief and passion.”
Diller’s current hand looks challenging. He’s slimming IAC down at a time when the behemoths of Silicon Valley look every bit as powerful as John D. Rockefeller’s Standard Oil. As Diller entertained hours of questioning from Forbes in early September, Match shares were falling after Facebook said it would redouble its online dating efforts. Meanwhile, ANGI HomeServices, which grew out of Angie’s List, a decades-old directory of reliable local businesses, plunged 45% in August when its profits fell short.
There are also lawsuits. The cofounders of Tinder, Sean Rad and Justin Mateen, claim they were deprived of billions when the app was consolidated by Match. Diller responds sharply: “Sean Rad is a blowhard and a bad actor.”
Facebook, Diller adds, has yet to register as a threat to Match. “I’m not overly worried,” he quips, then brings up the possibility of regulation. “I think that there are real issues,” he says, turning his attention to Google. “It’s okay to take our money as advertisers. It’s not fine, in my opinion, to then try and get our customers.”
Diller has delegated much of IAC’s day-today to a new line of deal-hungry executives, led by Joey Levin, a 40-year-old former M&A banker with a thick Chicago accent who took over as CEO in 2015. Levin spearheaded the $10 million acquisition of Bluecrew in March 2018. Bluecrew connects construction and logistics workers with jobs and fits in with IAC’s vision for the future of ANGI HomeServices. In a similar vein, last October ANGI paid an estimated $150 million for Handy, an on-demand cleaning service, and a few months later Levin spent $250 million on Turo, an app that lets motorists share their idle cars like homeowners rent out Airbnb rooms.
Diller’s deals are puny compared with the ones cut in Silicon Valley, but they are much more likely to make money. The rival internet conglomerate Softbank is sweating to salvage its massive investments in Uber ($7.4 billion) and WeWork ($10.6 billion). IAC is more old-school. Diller would rather invest years—and millions—growing a property like ANGI into a multibillion-dollar business than try to jump-start the process with a bazillion-dollar investment.
Even the duds are put to work. IAC continues to own Ask Jeeves. Now rebranded as just Ask, it is split into a media company and Web browser app. It still draws 120 million monthly users, and IAC milks it for cash. Diller’s eight-figure acquisition of Connected Ventures, owner of CollegeHumor, drew hackles in 2006. But Diller might have the last laugh. Tucked inside was a media player called Vimeo.
In 2015, a 32-year-old Harvard M.B.A. named Anjali Sud pitched Levin and Diller on abandoning Vimeo’s money-losing original content in favor of doubling down on it as a publishing tool for filmakers. Much the way WordPress is the software behind hundreds of millions of blogs, Vimeo is now the publishing platform of choice for more than a million paying subscribers who generate more than $200 million in annual revenues. It’s gone from bad-news bear to IAC gem, growing at a 26% clip to an estimated $2 billion valuation.
In 2019, Diller’s IAC will generate $5 billion in revenues, up about 12% over last year. Its $20 billion market capitalization, however, seems to reflect investments in only two operations, 81% of Match Group and 84% of ANGI HomeServices, both of which Diller is considering jettisoning.
But if you think for a second that you’ve heard the last from Barry Diller and his band of underdogs—from Investopedia and Ask to Bluecrew, Brides and Turo—you’re mistaken.
“My heart has been in this little tiny company that has grown up,” says Diller, wistfully. “At some point, I said, If they don’t laugh at me, something’s wrong.”
DILLER’S DEALS ARE PUNY COMPARED TO THE ONES CUT IN SILICON VALLEY, BUT THEY ARE MUCH MORE LIKELY TO MAKE MONEY.