USA Chief Defends Values For Internet Stocks
(12/02/98, 7:29 p.m. ET)
By Reuters
ANAHEIM, Calif. - Barry Diller, home-shopping mogul and chairman of cable TV's USA Networks, defended the high values for Internet-related stocks on Wednesday, comparing Wall Street's current love affair with a similar phenomenon in the early stages of the cable and cellular telephone businesses.
"I think we have to value Internet companies just as we valued cable companies in the early days, or cellular companies when they first came out," Diller told an audience at the Western Show, the California Cable Television Association's annual convention. "There were no revenues, but we sat down and looked at models to see what it [cellular] would be like 10 years ahead."
"With Internet companies, you have to think about how they'll be in five or 10 years to figure out what to pay today," he said.
Diller's remarks came as an online ticket vendor affiliated with USA Networks was set to go public.
In yet another testament to the demand for Internet-related stocks, the expected price range on Ticketmaster Online-CitySearch's IPO was increased Wednesday to $11 to $13 a share from the original $8 to $10.
Ticketmaster-CitySearch's deal has been widely anticipated among IPO investors ever since the Ticketmaster Online affiliate of Diller's USA Networks and CitySearch announced merger plans this summer.
The news of the merger came shortly before CitySearch, an online guide to arts, entertainment, and events in various cities, was expected to go public. The companies said they would delay CitySearch's IPO plans, and go public later in the year as a combined company.
NationsBanc Montgomery Securities, the lead underwriter for the 7 million share IPO, said the deal was scheduled to price Thursday night, with the stock debuting on Nasdaq Friday.
Analysts said the new company holds extra appeal with investors because it is associated with Diller.
The combined company also is viewed as having an intriguing niche on the Internet, because it lets users buy tickets to shows in the cities they research online, analysts said.
Diller said he saw enormous potential for e-commerce because it's easy and saves time and energy.
"The truth is you go online and you don't need to drive to the theater and buy tickets. Ticketmaster started selling tickets online a year ago, and it's about 6 percent of sales," he said. Diller said he envisioned his company as the "cable-broadband hybrid service" of the future.
"We have the assets in the ground to work this out," he said. "We're both a programmer, a broadcaster, and very much in the world of e-commerce," he said.
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