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HSN on rebound, Diller assures

New "breakthrough" product lines are showing promise.

By MARK ALBRIGHT, Times Staff Writer
Published September 19, 2007

The worst of HSN's stalled revival is past, the parent company's chairman and chief executive assured investors on Tuesday.

"The turnaround has not been pretty, but since July 1, the trends in every area we look at are good," said Barry Diller, chief executive of IAC/InterActiveCorp.

Several product lines unveiled by the St. Petersburg e-commerce retailer "have absolutely shown they will be breakthrough," he said.

Diller offered few details. But the TV shopping network, which gets 25 percent of sales now online from hsn.com, faces easier sales comparisons going forward from its dreary performance a year ago.

Delivered at a Goldman Sachs investor conference in New York, Diller's comments were another vote of confidence for Mindy Grossman, the former Nike executive who took over HSN and made wholesale changes in people and products that turned off some longtime customers.

HSN's lackluster performance has been such a drag on IAC stock that Diller described it as "the elephant in the room" while he talked up the growth potential of his e-commerce conglomerate's other far-slung, far smaller Internet strategies. While IAC owns 60 brands, HSN accounts for almost half of the company's revenues.

The latest acquisition announced Tuesday was GarageGames, a Eugene, Ore., start-up Web site that offers downloadable video games, development tools and a large online community of gamers.

Diller also shed some light on HSN's new click-and-buy option that has been rolled out to 15-million cable and satellite homes. The technology offers HSN viewers an option of automated purchasing using their remote control devices.

"In places where it's been available at least a year, half of households have tried it at least once," he said.

Diller also confirmed that he has been in lengthy talks with John Malone's Liberty Media Corp., IAC's biggest shareholder which owns QVC outright, regarding stock transactions that would enable Liberty to "get more credit'" from investors for large cable TV assets it controls. Liberty has seats on the IAC board.

The most recent chapter of the talks ended with no deal. But Diller, who votes most of Liberty's stake in IAC, said it is "inevitable" that someday Liberty's ownership will be increased. Liberty once owned HSN, then lured Diller to take over in 1995 by awarding him enough shares and voting power to take control.

IAC shares closed Tuesday at $28.05, up 93 cents.

Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.

[Last modified September 18, 2007, 22:10:40]