SAN FRANCISCO — The billionaire media mogul behind such popular sites as Expedia, Match.com and HomeAdvisor has a one-word forecast for traditional media conglomerates concerned about being replaced by tech giants: serfdom.
“They, like everyone else, are kind of going to be serfs on the land of the large tech companies,” IAC (IAC) chairman Barry Diller said.
Diller offered that prediction regarding Facebook (FB), Google (GOOG, GOOGL) and other pillars of the digital industry at the Virtuous Circle conference put on by a Washington-based trade group, the Internet Association.
The media mogul’s advice to established media firms wondering how to deal with ever-more-powerful tech titans — “You can be a serf on their land!” — may not have been what you’d expect from somebody in his line of work. But it also fits with growing concerns about the reach and influence of those online firms, and what that’s doing to our access to information and entertainment.
He, for one, welcomes our new tech overlords
Monday morning, Diller told CNBC’s Julia Boorstin that the giants of traditional media should accept that their best case is riding off into the sunset and into somebody else’s property.
“They’re not going away, but where they dominated the world of media they will essentially be supplicants… doing okay,” he said.
That’s because Google and Facebook not only have such massive user bases but also dominate online advertising.
“Google and Facebook are consolidating,” Diller said. “They are the only mass advertising mediums we have.”
Another Virtuous Circle speaker, Reddit co-founder Steve Huffman, concurred in an interview with Boorstin later Monday: “Facebook and Google control 90% of the ad market, so you can’t sell ads without competing with Facebook and Google.”
That seems to be an overstatement: In September, the research firm eMarketer calculated that the two would control 63.1% of all digital advertising investment worldwide. That’s an immense amount of power.
Yahoo Finance’s parent group Oath, the media division of Verizon (VZ), is among the firms competing with Facebook and Google.
Regulation may come next
Diller didn’t call these companies evil — he even expressed sympathy for Facebook’s attempts to combat unprecedented, large-scale Russian influence operations. But then he said something surprising.
He expects Facebook, Google and maybe Amazon (AMZN) to face government regulation, simply because of their immense size.
“At a certain point in size, you must,” he said. “It’s inevitable.”
Diller didn’t get into what exact size would qualify a company for this level of regulation, and subsequent Virtuous Circle speakers didn’t offer much more clarity.
“There is probably a point at which big is just too big,” Cox Communications president Pat Esser mused to Axios tech correspondent Ina Friend Monday afternoon. “When is big too big?”
But Diller’s mention of the “extraordinary” $268.9 billion in cash Apple (AAPL) now holds suggested that a company need not dominate online advertising or online retail to earn extra attention from Washington.
He did, however, outline one positive for Big Tech getting so gargantuan. Big Telecom no longer has the economic leverage to roll back today’s net-neutrality norms, in which internet providers don’t try to charge sites extra for access to their subscribers.
“I think it’s hard to overturn practically,” he said. “It is the accepted system.”