The Wall Street Journal’s Shira Ovide checks in with Barry Diller, who has finally chopped his hulking conglomerate IAC to pieces:
WSJ: Why did you decide to break up IAC?
Mr. Diller: Because I thought the company was overly complex and unmanageable. What I’ve learned over the years is that focus and singular purpose is the best approach for businesses. How can you function across 12 different businesses from financial services to dating?
If you’re going to run a public company, be absolutely certain of what the parameters are, what the clarity is, that you can explain it to yourselves and explain it externally.
Agreed! A logical follow-up question would have been, “Then why on earth did you keep that monstrosity glued together for six years, insisting all the while that diversification was an asset?” We’ll save that one for another day. (Actually, we won’t. At this point, we couldn’t care less.)
WSJ: If, as you say, having operations across multiple businesses didn’t work for IAC, why does it work for General Electric Co. or Walt Disney Co.?
Mr. Diller: Companies like GE and Procter & Gamble have been in business for a long time. Over decades or a century you’re bound to figure out a management structure that works. Disney is a single brand in essence, but then you can say, wait a minute, what about ESPN? Tell me why ESPN belongs in Disney. I don’t think it gives Disney anything. It gives Disney money, but I think that money is discounted. Its true value, I think Disney would say, is disguised.
I don’t have answers for anybody else. What I know is that internal complexity makes for superficiality. There’s never essentially a pure story unless there’s a pure product line that has its own shining clarity.
Fair enough. And enough on IAC. Barry also commented on the state of the newspaper business, which is appropriate given that he’s a director of the Washington Post Co (which, thankfully, is actually an education company, but don’t tell anyone).
WSJ: Newspapers are suffering as advertising moves online. You are a director of Washington Post Co. Do you think newspaper companies will survive?
Mr. Diller: If they call themselves newspaper companies they are probably going to be toast. It will depend absolutely on what the product is. We’re still at such an early period to talk about the death of journalism.
Catch that? Newspapers need to stop calling themselves “newspapers” and start calling themselves “Bloomberg” or “CNN” or something. That won’t fix the real problem–the business model that supports their still-vast newsrooms is imploding–but it’s a start.
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