This story was written by Keith Dawson for the Media Unspun email newsletter and is Copyright 2002 by Keith Dawson.
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Diller the Contrarian

Barry Diller's USA Interactive made a $4.5 billion bid to take over complete ownership of three travel-related e-commerce companies it already controls: Expedia,, and Ticketmaster. Reporters turned in sprightly analyses of the deal, perhaps relieved to be covering a simple business story after scratching their heads over the shell games of an Enron or a Tyco. Barry Diller is a guy who just wants to be in charge, you know what we're sayin'? Investors should "find it easier to digest a company that has all its major businesses folded into one stock as opposed to four," wrote CNN/Money. The Washington Post's analyst said the proposed deal "smooths out (Diller's) company's complex subsidiary structure, which tends to frighten investors." How refreshing is that?

What USA Interactive is going after is so out of fashion that it amounts to big news. Diller (who made an unsuccessful attempt in 1999 to grab Lycos) has been remaking his conglomerate, which used to be called USA Networks, into an e-commerce roll-up play. Talk about contrarian. The New York Times' analyst said, "Barry is trying to put himself on the same page as eBay, Yahoo, and" MSNBC refreshed us on the logic behind Diller's move on travel-related sites: "Online travel is turning in growth numbers that remind investors of the bygone days of dot-com mania." And CNN/Money led its extensive analysis with the rhetorical question, "Has Barry Diller been sleeping for the past two years -- or just licking his chops?"

AtNewYork's coverage concentrated on Diller's plans to "lock up the pipes and infrastructure of online travel and leisure-related sales." Reporter Erin Joyce was one of the few to mention the ongoing launch of the USA Travel Channel, intended as Diller's "platform for uniting transactions, television, and travel with online travel sales."

USA Interactive offered 7.5% premiums above the stock prices of each of the three acquisition target companies. Wall Street reacted by buoying the stock of the targets and driving down that of the acquirer, "erasing the (USA's) gain for the year" as CNN/Money noted. Reporters had no difficulty interpreting the market's message -- Diller will have to offer more. The Times put it bluntly: "Investors deemed each of USA's bids as too low." The Seattle Post-Intelligencer and others reported that all three target companies plan to form committees of independent directors to evaluate the takeover offers. Typically such a committee "comes back and asks for more," a Lehman analyst told Dow Jones in a piece carried on And MSNBC's analyst called Diller's offer merely "a starting point." Still, don't count the man out. The Washington Post quoted a Morningstar analyst's caution that Diller "has a great track record of underpaying for assets." - Keith Dawson

Diller's deal

USA Interactive Bids for Total Control of Sites

Diller bets big on online travel sites

USA Interactive in $4.5B Buyout Bid

USA Interactive Bids for 3 Web Affiliates

USA Interactive also wants all of Ticketmaster and

Investors Bet Diller Will Sweeten Buyout Bids

Diller aims for online dominance (Bloomberg)