Here's the transcript from the Tina Brown show last night, in case you missed it:
9:00 PM ET - CNBC

April 30, 2003

TINA BROWN, host:
But my first guest is someone who keeps his head whatever the din in the neighborhood, Barry Diller, CEO of USA Interactive. I think of him as the daddy cool of American business.

Welcome, Barry.

And with him is the writer Malcolm Gladwell who wrote "The Tipping Point." When I heard that Malcolm was writing a new book about how decisions get made, I thought he was the perfect pairing with Barry because Barry knows a lot about decisions, and I'd like to hear them interact.

Barry, I'm going to start with you. You are known for your incredible smart, cool judgment. You don't get it wrong that often, OK?

Mr. BARRY DILLER (Chairman and CEO, USA Interactive): Oh, I get it wrong enough...

BROWN: Someone's...

Mr. DILLER: ...certainly enough to make it—to count.

BROWN: OK. Well, just tell me about one of those decisions that you made that you really regret, one of your most horrible decisions.

Mr. DILLER: Probably—I mean, a—a—a seminal bad decision was not buying Paramount when I had the chance.

BROWN: And why do you regret that so?

Mr. DILLER: It's not the mistake of it that gets me. It's what underlies it, which is I didn't have the guts for it.

BROWN: You lost your nerve...

Mr. DILLER: Yeah. I mean, it was...

BROWN: ...one of the few times.

Mr. DILLER: Well, yeah, in the clutch, I stood down.

BROWN: In the clutch. Interesting. Now you've written a lot about that, haven't you, Malcolm, the clutching as you call it? What do you think it is about making decisions that will suddenly make somebody just, you know, lose their nerve at the last second?

Mr. MALCOLM GLADWELL (The New Yorker Magazine): For—for businessmen, it's—it's interesting because I think it's very hard to answer that question, truthfully; that a lot of times when I—in the course of writing this book, I asked people that sort of question. And I get the sense that when they give an explanation for why they think they—they failed in the clutch or their nerve failed them, they're simply rationalizing after the fact that you—it's, really, you can't put your finger on it. It's some kind of...

Mr. DILLER: No, I put my finger quite on it.

Mr. GLADWELL: Oh, you did?

BROWN: And what was it, Barry?

Mr. GLADWELL: What was it?

Mr. DILLER: No. I mean, I think that the—the underlying reason for me—I mean, it—which may be a rationalization—Who knows what it is actually? So you'll probably tell me. But it was that I was kind of new to entrepreneurdom. And—and I didn't think that I could go beyond a boundary without losing the rug—I mean, the sense of having it pulled from under me. So it really was that I was—I wasn't solid in my shoes.

Mr. GLADWELL: Yeah.

Mr. DILLER: You know, it was just—it was—it was not an—it wasn't judgment. It wasn't any—it was just simply I wasn't essentially qualified for the job.

BROWN: Barry, a lot of people in the last couple of years seem to have lost that judgment, though. I mean, some terrible things have happened in companies. We've also seen the Internet bubble. It's all gone sort of haywire. Was it greed or was it just a particular sort of social pressure that came down that just made everybody seem to kind of lose their judgment at the same moment?

Mr. DILLER: Well, you know, it wasn't everybody. I mean, the truth is—is that—is that it was actually relatively few. And, I mean, everybody stretched boundaries, and they did that out of, you could call it, a—well, you could call it this—this period of—of—of fairly elongated excess. And that made people's judgment, you know, not—not great. But they were essentially well grounded. And while they stretched things, they didn't do anything bad or illegal. You had very few characters. Now they happened to be those characters who'd huffed and puffed some pretty large organizations.

BROWN: What do you think about it, Malcolm? Was it an epidemic that's now passed?

Mr. GLADWELL: Well, I—yeah, I think that there are—the number of cases is not as—it's not every company, you're right. It's a few examples.

Mr. DILLER: A few big...

Mr. GLADWELL: But they're big examples.

BROWN: A few big...

Mr. DILLER: ...juicy...

BROWN: ...big juicy...

Mr. GLADWELL: Yeah.

Mr. DILLER: ...juicy one's.

Mr. GLADWELL: They're enorm—I mean, they're—and I'm—I'm remind...

BROWN: And they vaporize like, you know, Baghdad buildings.

Mr. GLADWELL: Yeah.

Mr. DILLER: Yeah, but $6,000 shower curtain, that's—that's—that's—that's...

Mr. GLADWELL: That kind of stuff sticks in the...

Mr. DILLER: ...goo—good imagery.

Mr. GLADWELL: The—the thing that interests me about the—it's when you talk about how in certain periods people's judgment is kind of—the—the environment impairs judgment. I was talking to someone who's an art dealer. He worked for Sotheby's.

BROWN: Yeah.

Mr. GLADWELL: And he had a—he got a—a whole—an estate, 100 paintings—I've forgotten how many it was. Most of them were fine, but there was a Matisse that was a fake. And none of them could see the fake. All these people who had, you know, lived and breathed Matisse for years and years, they thought it was real because they other ones are real. It was in that kind of—in the context of all these wonderful paintings, they couldn't see the truth of it, until they—someone came from the outside and looked at it and said, 'You know, it's wrong.' And that is the sort of—strikes me very analogous to that era that we were just in.

BROWN: Barry, we seem to be in a very different era now. And one of the characteristics of this era is that it's—it's—we're going in this kind of big right-wing shift. I mean, we're seeing a lot of very interesting things happening right now between network T—TV and cable television. Cable television all seems to have gone very much, or is going—again I'm exaggerating, not all, but it's moving much more into this direction that has been sort of pushed by the success of the Fox network. What—what do you think—how much juice is there in this trend? I mean, is it going to get more and more so? We've just seen Rick Santorum, you know, do his crazy thing.

Mr. DILLER: You mean, are we going full right?

BROWN: Are we going full right?

Mr. DILLER: God, I hope not. But, I mean, there are—you know, the thing is is it's—it—it—it is right now the noisy side, meaning it—it's quite easy to be—to be extreme on the right whereas extreme on the left is felt to be some, you know, woosified. It's—it's—it's weak. It's all of these things. So...

BROWN: And seems not to make good television.

Mr. DILLER: ...you know, so—so once you do it on television—you know, it never happened on television. I mean, the—the—the—the incidents of Fox on television is a really interesting thing because up until then, you really did not have that. You know, wh—you—you—you didn't have those kind of pictures and those kinds of headlines and those kinds of things, except, you know, on—on—and not really even on "Entertainment Tonight."

BROWN: I know. It's true. I mean, when you launched the F—the Fox network, I mean, did you ever imagine that Fox in the end is going to become so synonymous with this kind of entertainment—entertainment news?

Mr. DILLER: O—oh, no.

BROWN: This is not what you had in mind.

Mr. DILLER: No, no, no. We—we launched with "Married...with Children."

BROWN: Yeah, that is true. Absolutely true.

Mr. DILLER: That—that was our brand and "The Simpsons."

BROWN: And "The Simpsons."

Mr. DILLER: And you can't—you know, I mean, "The Simpsons" is—it—you ca—you can't have a ge—a more genuinely pure liberal program in the most wonderful sense of—of liberalism than "The Simpsons."

BROWN: That's true. What do you think about this trend, Malcolm? Do you think that it's going to—you know, that we've—that we've reached a tipping point with the Republican shift in entertainment?

Mr. GLADWELL: It seems very faddish. If you—I've read a number of...

BROWN: You th—you think—you think it's the next bubble?

Mr. GLADWELL: I just—I do think it's about to burst. It—if you read—I mean, there are about five or six books out right now which are these indictments of liberal America, how liberals are ruining America. And if you read a number of them, as I've had the misfortune to do, you—you realize it's the same book being written over and over again, which is very—that's the kind of thing that happens at the end of a—of a—kind of a—a cultural moment. People start to repeat themselves and t—you know, tirelessly work the same formula, and that's a recipe for people getting sick of it, I think.

BROWN: We're going to take a quick break, but first, Barry, here's a question for you to think about. If the Democratic Party...

Mr. DILLER: Yes.

BROWN: ...were a company, would you buy it?

Mr. DILLER: Not if it were run by Terry McAuliffe.

BROWN: More of that when we come back.
(Announcements)

BROWN: Welcome back. So, Barry, you just said that you wouldn't buy the Democratic Party...

Mr. DILLER: Well...

BROWN: ...if Terry McAuliffe were running it.

Mr. DILLER: Well, 'cause he's head of DNC, but—and that's just—you know, it has nothing to do with whether you'd buy—of course I would buy it. I would fire him, but I would buy it. But of course I w—you would buy it because it's—you always buy things if they're a mess. And, you know, buying it at its not worst moment 'cause it isn't its worst moment, but—but, you know, in its—in it—in a tough period is great. That's when you should buy things.

BROWN: What would you do to fix it? I mean, you're very good at fixing companies.

Mr. DILLER: Oh, well, you know, don't...

BROWN: I mean, what do they need to do?

Mr. DILLER: I mean, you can't—you can't...

BROWN: Is there any one of these candidates who you think could rise to be the Barry Diller of the Democrats?

Mr. DILLER: That's an interesting thing to rise to be, but to lower, to get to, to around and the side of I would say that a few of them I—I like a lot. Yeah. I mean, a lot of them are—I—there—there—there are one or two I think possible could. It's too early.

BROWN: You've had a lot of dealings with the French, of course, with your company, Vivendi Universal. What advice do you give to George Bush about how to deal with the French? I mean, is there a real cultural sort of split here between these two cultures?

Mr. DILLER: Oh, my God, yes. I've—I've had good relationships with the French.

BROWN: OK. You're being very diplomatic. You recently said in one of your famous conference calls...

Mr. DILLER: Yes.

BROWN: ...that, 'If we didn't have a stake in Vivendi...'

Mr. DILLER: You mean, you want me to really tell you the staff?

BROWN: '...Universal that we have, we would have...'

Mr. DILLER: Is that what you want me to do?

BROWN: '...utterly no ambitions in this area.' Well, you're supposed to be the king of entertainment. I mean, are you really genuinely not interested in any part of this company, or are you just interested in bargains? Is it just that it's an over—overvalued asset?

Mr. DILLER: I've never just been interested in bargains. I mean, in—I mean, I'm interested in where my curiosity is. And I'm—I'm—I have a—certainly I have—part of me, I have an entertainment heart. That's part of my life. It will always be. I am certainly interested in it, but it no longer arouses my curiosity. How could it? You know, I've been doing it for a very long time. What—what does completely arouse my curiosity is—is interactivity, the Internet and the things that—that my company is doing. I mean, that—that captures me totally. It doesn't mean I don't have a little left over, but I have no...

BROWN: But you've given...

Mr. DILLER: ...I have no e...

BROWN: ...your heart now to the interactive world.

Mr. DILLER: ...I have no—I have no yearn for it.

BROWN: Malcolm, what do you think we learned from the whole Internet bubble experience?

Mr. GLADWELL: Well, we obviously—we learned lots of things. What—what interests me—one of the things that interests me is this idea that our definition of what good judgment is changed radically. I mean, we went from an obsession with being, you know, the 'first mover'—that was the big phrase that had meant so much—obsession with being aggressive and first to now this whole notion it looks like all the people who made out well in that whole bubble were the ones who were patient. I mean, if Jerry Levine had wait—waits—What?—six months to finalize that deal, all—he's a genius now, not a—not someone who's, you know, out on the street.

BROWN: So process is king.

Mr. GLADWELL: Well, it's just—I mean, it's—it's left me a little confused about what exactly we want from a CEO. I mean, do we—do we want aggression or do we want patience?

BROWN: Barry.

Mr. DILLER: You want some of this and some of that. I mean, the thing is is that it's totally true that in the—you know, in the moment of things, if you pay attention to the morning line of it, then, in fact, you usually do the dumb thing. The truth is—is that most of th—this first mover stuff—first mover is great if you have a great idea. If you're Jeff Bezos, you're driving across country and you say, 'Books on the Internet,' fantastic.
But two trillion people and as much money or more did the same thing with every birdbrain idea because they locked it to this theory that you've got to get out there and spend money and market it and do all that. It didn't have anything to do with anything. So, you know, it's not—it—it—it is—when you talk about judgment, it—it—it is that there—if you're in the forces of things, you usually—the forces educate you rather than the thing educating you and...

BROWN: And what did you see then in the—in the Internet bubble, 'cause you've come out of it extremely well with USA Interactive...

Mr. DILLER: Well, because I started—I actually started—and it's—you know, I mean, I started lucky in a sense that I—I was curious about interactivity. I mean, that's the rea—that's just the simpleness of it. I—I—I thought, 'Oh, you do this, and somebody reacts to it.' It was a new way to use a screen 'cause I'd always thought it was narrative. That's all—what I learned is you use screens—movie screens, television screens—to tell stories. So when I found out you could, you know, do something here, it could react here and bounce back, which I found out with Home Shopping, I went, 'Huh, that's interesting.'

BROWN: So you...

Mr. DILLER: I followed the lead.

BROWN: So the key was transaction.

Mr. DILLER: I just followed the lead and—and, you know, making the mistakes you make, bouncing off the walls as you do in a totally new medium, which is what the Internet really is. It is a new—it is a new way of doing things. And so that's, you know, the—that...

BROWN: In—in a sense, you know, I feel that the times that we live in right now has been almost hostile to the whole notion of process. I mean, you see people—things are closed. People are kicked off the air, probably this show.

Mr. DILLER: You can't be kicked off. You know, it's just begun.

BROWN: Well, no, now it could—it could happen.

Mr. DILLER: No, no, don't worry. It won't happen.

BROWN: Before things had even had a chance to breathe, it's declared over. You know, movie opens, it didn't catch on, it's closed. How do we get back to revering process? Is this something that we have to try for?

Mr. DILLER: I say absolutely. I mean, everybody who knows me knows I use that word—overuse that word endlessly. I mean, I think that—that—that—that, of course—you know, of course, yes, full stop.

BROWN: And do you think that we're going in that direction, Malcolm?

Mr. GLADWELL: Well, this is, I think, the sort of—this is the healthy reaction to the kind of bubble bursting, which is people understanding that we erred too far on that opposite direction of being sort of obsessed with this losing our kind of sense of patience. But, I—I mean, I'm curious with you whether—was there ever a moment, though, at the height of all the craziness where you felt this—that, 'Maybe I'm losing—I'm missing out on something, or maybe I should be jumping in?'

Mr. DILLER: No, I got reinforced.

Mr. GLADWELL: You got rein...

Mr. DILLER: Absolutely. I did, 'cause my—and—and again, it's just that—it's—it—it—it—it's just that the grounding was good. In other words, I—I knew what interactivity was about from the very—talk about process, from the very beginning of building blocks. So I didn't come in it listening essentially to anybody. So I...

Mr. GLADWELL: Yeah.

Mr. DILLER: ...you know, I—I wasn't there. But one thing that I remember at the height of it, somebody said to me—some big per—player said, 'Speed is life.' And I heard it and cringed, you know? I thought, 'If this is true, I'm dead,"cause I go very slow.

Mr. GLADWELL: Yeah.

BROWN: 'Speed is life.'

Mr. DILLER: And—and...

Mr. GLADWELL: Yeah.

Mr. DILLER: ...and it—but—and by the way, an inch thereafter, the bubble did break.

Mr. GLADWELL: Yeah. Yeah.

BROWN: Barry, you've—you know, you're such a contrarian and you've worked with some of the big sort of opinion-formers and opinion-makers and dec—opinion—decision-makers around. I mean, I'd love you just to tell us, you know, in one word what do you think of some of these big people that you've worked with, worked against? I mean, Marvin Davis, for instance. Don't say fat.

Mr. DILLER: I do—no, no, no.

BROWN: Don't say fat.

Mr. DILLER: No, no, no, no. I would not. I would not. That was—you know, I was—it was the end of a lunch and I was...

BROWN: One word, Barry.

Mr. DILLER: ...I was bored with myself...

BROWN: Another word.

Mr. DILLER: ...and I wanted to laugh.

BROWN: OK.

Mr. DILLER: So I did it.

BROWN: Another word for Marvin Davis that isn't fat.

Mr. DILLER: Crafty.

BROWN: Crafty. OK. Michael Eisner?

Mr. DILLER: Great creative executive.

BROWN: Sumner Redstone.

Mr. DILLER: Willful.

BROWN: OK. Edgar Bronfman.

Mr. DILLER: Smart.

BROWN: Interesting. Malcolm, one word for Barry Diller?

Mr. DILLER: He doesn't even know me.

Mr. GLADWELL: Oh, please, you can't put me on the spot like that. You know, well-dressed.

Mr. DILLER: Thank you. I agree.

Mr. GLADWELL: Engaging.

BROWN: Thank you.

Mr. DILLER: Well-dressed is perfectly appropriate.

BROWN: Thank you. Thank you, Barry, and thank you, Malcolm.

Mr. DILLER: I can't...

BROWN: When we come back, a surprise drop-in, the 900-pound gorilla of cable news: Bill O'Reilly.