That's not to say that Diller has figured out how to make all the far-flung units of his ungainly company work together. Forging connections between ad-driven entertainment and commerce-driven offerings - say, the Sci-Fi Channel and HSN - remains, according to Diller, an unmet goal.
But he and his executives are trying to unite what he calls the company's "two hearts." One example: This fall the USA Network will air a documentary on Jackie Onassis and, for the first time, accompany a program with infomercial-like sales pitches. Viewers will be able to buy replicas of Onassis' triple-strand pearl necklace and JFK's wedding bracelet gift of pearls, platinum and crystals, says USA Cable President Stephen Chao. To do that, his team will need to work closely with HSN for the first time.
Besides the logistical challenges, Chao says, the program will test whether viewers expecting a full-fledged show will keep watching when it starts to resemble the Home Shopping Network. "The grand test is ... [whether] one can really play in selling ... and make entertainment that is uncompromised," Chao says. "That's the point of the Jackie O show."
While Chao works that out, Diller is thinking bigger: He wants to get in the ring with media giants like AOL Time Warner, Bertelsmann and Viacom. The Expedia transaction gives USA a powerful partner in Microsoft, a fierce AOL Time Warner rival that now has a vested interest in Diller's venture. USA's minority shareholder, Vivendi Universal, is also quietly plotting its global media strategy by taking a larger interest in the U.S. market. Vivendi is sorely lacking in U.S. TV assets and may seek to leverage Diller's media prowess when the time comes. Diller, however, denies that he will play a larger role in Vivendi's North American media ambitions.
| THE URGE TO CONVERGE |
| How Diller rose from the mail room to moguldom. |
| 1959 Diller, 19, finds work as a mail room clerk at the William Morris Agency with the help of a neighbor, comedian Danny Thomas.
1964 to 1974 Diller climbs Hollywood's ranks, starting as a William Morris agent, moving to ABC as a programmer and on to Paramount, where he becomes chairman and CEO. 1974 to September 1984 As Paramount's top dog, Diller scores with films including Raiders of the Lost Ark and TV series such as Cheers and Taxi. His second in command is Michael Eisner, now chairman and CEO of Walt Disney Co. October 1984 to April 1992 As chairman and CEO of Fox, which became a unit of Rupert Murdoch's News Corp. in 1985, Diller builds a network that comes to rival ABC, CBS and NBC. At his resignation he says, "I want to own my own store." January 1993 to February 1995 As chairman and CEO of QVC, Diller fails to acquire Home Shopping Network, Paramount or CBS. QVC's biggest shareholder, Comcast, takes control and he departs. August 1995 to December 1996 Diller begins building his media empire, starting with a stake in Silver King Communications, which owns 39 television stations. He then merges Silver King with Home Shopping Network, which includes Internet Shopping Network, and becomes chairman and CEO of the new company, HSN Inc. 1997 to 1998 Diller goes shopping. HSN acquires Ticketmaster, then buys the USA and Sci-Fi channels, christening the new firm USA Networks. Meanwhile, Ticketmaster buys the CitySearch guides. 1999 to 2000 USA Networks fails to merge with Lycos, but it acquires the Hotel Reservations Network and Microsoft's Sidewalk city guides. It also establishes USA Electronic Commerce Solutions. 2000 More steps toward convergence: Diller buys customer service company Precision Response Corp. and a controlling stake in Web retailer Styleclick. 2001 USA Networks takes a 75 percent stake in Expedia. |
| Sources: USA Networks, published reports, The Standard |
