03/28/2008 02:46 am ET | Updated May 25, 2011

Twilight Of The Media Moguls

If the enemy of my enemy is my friend, as the old chestnut says, then it makes perfect sense that Barry Diller would host a swanky soiree last summer for his former boss Rupert Murdoch. They once had been on the outs: after building the Fox television network for Murdoch in the 1980s, Diller stormed off when Murdoch refused to make him a partner in his News Corp. media empire. But 15 years later, here was Diller--now a full-fledged mogul in his own right after building up the Internet company IAC/InterActive--hosting the crème of Manhattan aboard his yacht to celebrate Murdoch's successful bid for Dow Jones and its iconic Wall Street Journal. When Diller and his wife, fashion designer Diane von Furstenberg, welcomed Murdoch and his wife, Wendi, aboard their yacht, moored on the Hudson near Diller's new Frank Gehry-designed headquarters, the two moguls found themselves in the same boat in more ways than one. They now had a common nemesis: cable titan John Malone, who'd eased his way into each of their companies with big, friendly investments.

The cost of appeasing John Malone--the man Al Gore once called Darth Vader because of his stranglehold on the cable industry--can be steep. Fourteen months ago Murdoch agreed to give Malone control of DirecTV to make peace, a transaction valued at $11 billion. Diller's fee may be even stiffer personally: it may cost him his job as CEO of IAC/InterActive, which owns, Ticketmaster and Home Shopping Network. Malone, who actually controls IAC, is seeking to oust Diller, accusing him in a lawsuit of maneuvering to dilute Malone's ownership. This follows Diller's own suit to affirm what he says is his right to break up IAC and rid himself of more than a decade of Malone's commanding influence. Diller has called Malone and his fellow executives at Liberty Media "insane." Reached late Friday, a Liberty spokesman declined to comment, saying the company "will leave the colorful language to Barry."

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