Barry Diller on 'foolish' Microsoft, 'smart' AOL and much more

Microsoft's Bing may be the fastest-growing player in the search market, but IAC chairman Barry Diller doesn't seem to think much of its prospects.

Diller told attendees of the Goldman Sachs Communacopia conference on Wednesday that he believes trying to beat Google at its own game, as Bing is doing, is a losing proposition. "When you have two thirds of the business [as Google does], if you think you can be head-on with them, I think that's real foolishness," he said.

Of course, Diller's own company competes in the search market, but is a different kind of creature, he says, relying on human intelligence rather than algorithms. "It doesn't have a lot of share, but it has scale," he says. "I think over time, it really can compete."
Diller had nicer things to say about the strategy espoused by new AOL chairman Tim Armstrong, who is emphasizing the company's content efforts in anticipation of a spinoff from parent Time Warner. (DailyFinance is part of AOL, by the way.)

"I think that's a very smart direction for AOL," he said. Diller contrasted Armstrong's leadership with that of Time Warner, which, he said, lacked a vision for the Internet giant. "Basically, I think the attitude of Time Warner toward AOL was, Well, we'd love it if we could rub a lamp and make it go away, but we can't so we'll just leave it over there."

Diller said IAC has no interest in purchasing AOL, "but there are kinds of alliances for us that maybe will happen, maybe won't happen."

Asked about IAC's new venture with former NBC Universal programming honcho Ben Silverman, Diller was full of praise for the young executive, who managed to arouse considerable hostility during his brief tenure in network television. "I always thought Ben was miscast at NBC," he said. "I don't think that was the job for him."

"This is a person who actually figured out before anyone else did, he figured out that you could take these program formats from Britain, from Scandinavia, and he figured out that you could take them all over the world...So I think he's the perfect impresario for us, and, again, it's not a big cash investment for us."

Finally, Diller also addressed the question that has preoccupied just about everyone in the media business this year: whether there's any chance of getting web users to pay for news and other content. He thinks there is.

"There's this whole kind of mythology about the Internet being free," he said. "When the Internet began, the early adopters and the people who were promoting it were the people on the technical side, and the people on the technical side said, 'We don't care about copyrights. We want everything online.' But it's obviously an absurd proposition.

"People are going to, as they have, pay for things."
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