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Diller's Foxy Strategy

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So now comes Diller and buys Ask Jeeves (market share: 6 percent), and the reaction is a perfect echo of what was said two decades ago. Which naturally pleases him immensely. For all his mogulosity, Diller cherishes his image (in his own mind’s eye) as the scrappy underdog. “I have lived my life in situations where I’ve come from nonexistent or last and been able to find my way,” he says. Diller points out that IAC has as much financial muscle as anyone in the game (including $3 billion in cash). As for Google’s monopoly on high-end talent, his sarcasm is withering: “Is it really true that all the smart people are going to work there? That I can’t find anyone with a serviceable brain?”

Diller, not uniquely, has a bit of a Google fixation. “What comes to mind when you think of Google?” my friend John Battelle, Web 2.0’s impresario, asked him at the conference. “You mean the evil I would do to them?” Diller replied. (When Battelle then said, “I don’t mean it personally,” Diller muttered icily, “Everything is personal.”) To me, Diller goes so far as to claim that Ask is the superior search engine—and, hey, maybe it is for some people, but that’s really not the point.

The point, as Diller understands, is that he can’t make headway by trying to out-Google Google—he needs to counterprogram. This was Diller’s genius at the Fox network, remember. With The Simpsons, In Living Color, etc., he fashioned an alternative flavor of programming, and with it a distinctive brand. In the realm of search, however, the notion of programming falls outside the idiom. So what Diller says he’s seeking, in the lingo, is “differentiation.”

Within IAC, an argument rages as to what that might mean. Given Diller’s other Web properties, the duh move would be to think in terms of e-commerce—of using Ask as a way of ushering users from Match.com to Citysearch to Ticketmaster and back. Diller clearly finds this idea intriguing; he has taken to quoting Battelle to the effect that Ask could be the mortar between the bricks at IAC. But Diller, being Diller, is also thinking of something flashier.

Diller believes search is destined to be the de facto passageway to everything behind the screen. Today that means the computer screen, but not for long. Granted, the merger of TV and the Internet is a hoary theory. But increasingly, as both media become fully digital and driven by advertising, the commingling looks inevitable. As more and more video content is available on the Net, viewers will want to discover and display it on the tube. Diller tells me that video search is a big part of Ask’s future. As Battelle, author of a new book on search, has written, “The first search engine to get on Comcast’s interactive guide will have a huge leadership position . . . and with Diller, who can certainly navigate the cable world better than most, Ask has a shot at being that brand.”

On the Web, “the role of editorship is going to grow,” says Diller. “And editorship is what I’ve always been good at.”

The business implications here are hardly trivial. But Diller’s vision of where Ask and IAC are headed extends in an even more mediacentric direction. “I absolutely see my company getting involved in making product, in the vernacular,” he said at the conference. “Producing, financing, and distributing digital product in half-hour, hour, two-hour movie and television form.”

Diller isn’t alone in postulating this melding of old media and new. Up in his suite, I ask what he thinks of Murdoch’s $580 million purchase of the company behind the social-networking portal MySpace.com. “Any media imperialist trying to impose on another media is pursuing a lunatic strategy,” he says. “But Murdoch, because he’s such a player, in the best sense of player, and because he runs an utterly totalitarian enterprise, he may pull it off.”

So what exactly does this new thing look like, this marriage of search and video? Diller puts his feet on the coffee table and gropes for an answer. “I don’t know yet,” he says. “It’s all just speculation. I smell that we’re at a juncture point now. As tons of things, more than we can grasp, are available to us, the role of editorship is going to grow. And editorship is what I’ve always been fairly good at.”

From the moment Google began its rise, there has been a fault line dividing the players in search. On one side are Google and Microsoft, whose strategies revolve around technology. On the other side have been Yahoo and its ex-Hollywood CEO, Terry Semel, who see search as a media play. (For evidence, check the hiring of Lloyd Braun, former head of ABC Entertainment, and of an actual foreign correspondent.) That Diller would wind up on the same side as Semel is not surprising. But it provides vivid clarity about the nature of the next monster battle in the communications business.


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