Page 84 - Forbes - USA (October 2019)

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 con-
trol of Expedia for $1.5 billion, agreeing to com-
plete the purchase just after the September 11 at-
tacks. “If there is life, there’s travel,” Diller decid-
ed, persuading himself to complete the deal. Ex-
80 pedia is now worth $20 billion.
Not every deal has panned out. In 1999, Diller
tried and failed to buy Lycos, an early search en-
R
E gine. That’s probably a good thing given that a
L C O M P A R E D
L small company named Google had been found-
I T H E
D ed a year earlier. But he still managed to waste
Y nearly $2 billion in search, buying the also-ran
R
R Ask Jeeves in 2005.
A
B Jeffrey Katzenberg, who worked under Diller
at Paramount, believes Diller’s instincts and dog-
E
L gedness, learned over two decades in Hollywood,
I
F
O have transferred perfectly to the Web and IAC. A
R movie like The Bad News Bears, he points out, is
P M A K E
willed into existence by a producer with convic-
tion, 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.”
D iller’s current hand looks chal-
lenging. He’s slimming IAC down
at a time when the behemoths of
Silicon Valley look every bit as
powerful as John D. Rockefell-
er’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. Mean-
while, 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 Tin-
der, Sean Rad and Justin Mateen, claim they were
deprived of billions when the app was consoli-
dated 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 regula-
tion. “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-to-
day to a new line of deal-hungry executives, led
by Joey Levin, a 40-year-old former M&A bank-
er with a thick Chicago accent who took over as
CEO in 2015. Levin spearheaded the $10 million
F O R B E S . C O M
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 Oc-
tober ANGI paid an estimated $150 million for
Handy, an on-demand cleaning service, and a few
months later Levin spent $250 mil-
lion on Turo, an app that lets motor-
D I L L E R ’ S
ists share their idle cars like home-
D E A L S owners rent out Airbnb rooms.
A R E P U N Y Diller’s deals are puny compared
with the ones cut in Silicon Val-
T O
ley, but they are much more like-
O N E S C U T
ly to make money. The rival inter-
I N S I L I C O N net conglomerate Softbank is sweat-
VA L L E Y, B U T ing to salvage its massive invest-
ments in Uber ($7.4 billion) and We-
T H E Y A R E
Work ($10.6 billion). IAC is more
M U C H M O R E old-school. Diller would rather in-
L I K E LY T O vest years—and millions—growing
a property like ANGI into a multi-
M O N E Y.
billion-dollar business than try to
jump-start the process with a bazil-
lion-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 acqui-
sition of Connected Ventures, owner of College-
Humor, 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 abandon-
ing Vimeo’s money-losing original content in fa-
vor of doubling down on it as a publishing tool
for filmakers. Much the way WordPress is the soft-
ware 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 bil-
lion market capitalization, however, seems to re-
flect 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 under-
dogs—from Investopedia and Ask to Bluecrew,
Brides and Turo—you’re mistaken.
“My heart has been in this little tiny compa-
ny that has grown up,” says Diller, wistfully. “At
some point, I said, If they don’t laugh at me,
something’s wrong.” F
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