InterActiveCorp. chairman and CEO Barry Diller believes the social networking craze has gone too far, but the Web is only in the early stages of fulfilling its true potential as an advertising medium.
Despite a recent deceleration in online display advertising growth momentum, he told an investor conference here Wednesday morning that he expects ad models based on traditional TV to play an increasing role online.
“We’re so early in this Internet process of what we have historically called advertising,” he said in kicking off the 17th annual Goldman Sachs Communacopia conference.
Video ads that are targeted and interrupt programming — in addition to pre- and post-rolls — will become more prevalent, he predicted. “We haven’t really begun with that yet as a pod on the Internet,” Diller said.
He also told investors that technology that serves up targeted ads “that really interest you and that you will act upon” will only get better.
Without being asked about them, he brought up potential privacy concerns. “Since there is no privacy, there is no use fooling around with it on the edges” in the Internet age, Diller said.
Asked about the slowing online ad momentum, he highlighted that display ads provide less than 10% of IAC’s revenue. “It’s just not the main thing we do,” but the company keeps an eye on the trend, he explained.
Asked about the state of user-generated content and social networking, Diller said all of IAC’s sites use them where appropriate.
“Pure social network sites is not something we have interest in,” he explained before slamming companies that have rushed to add such services. “They are imposing social networks (even where it doesn’t make sense)…It will lose its flavor of the month flavor.”
He also joked about how he uses his Facebook page, saying his friends tend to add everyone as a contact who requests to connect with them because they don’t want to reject people. “I just don’t respond,” because he is very selective about who he adds as a friend, Diller said.
Diller Wednesday also told the Goldman conference that he expects to sell IAC’s 30% stake in Japanese shopping network Jupiter Shop Channel to controlling shareholder Sumitomo over the next year.
John Malone’s Liberty Global last year said it sold its indirect stake in the channel to Sumitomo for about $860 million as part of a broader transaction.
Asked why a deal was slow to come by, he mentioned price considerations and the fact that Sumitomo doesn’t necessarily have to buy the stake.
But Diller also provided a cultural reason. “Japanese companies don’t act with particular swiftness,” he said.
Asked by The Hollywood Reporter after his conference appearance about his interest in a further expansion in China, he said some of the companies recently spun off from IAC are “very interested” in further moves. He particularly cited Expedia and Ticketmaster.
The newly focused IAC is in China with Match.com and is “beginning to develop things” and establish further services there, according to Diller.
He also said IAC will develop more country-specific content in China over the longer-term, but didn’t say what his near-term focus would be.