What should Barry Diller do? The IAC boss is being hung, slowly, by his largest shareholder. And for good reason: although online commerce and advertising is growing, the internet conglomerate has shrunk in value from $22bn to just over $7bn over five years. Barry Diller's reputation as a canny businessman, built up over decades in the movie and TV business, is tarnished. IAC has proven completely unable to build new businesses; and the New York group has had little success with the assets it bought. Let us count the fuckups.

  • Ask. Diller said he planned to spend $100m developing and promoting IAC's flagship search engine. After an impenetrable advertising campaign, touting Ask's New Jersey algorithm, what's the impact on the search engine's market share? Nothing measurable. The chief executive, a Diller favorite, is out.
  • Vimeo. Josh Abramson and Ricky Van Veen's College Humor remains popular among college students and those whose humor remains frozen in sophomore year. But IAC's bigger interest was the online video site, a precursor to Youtube, which the College Humor techies set up in the spare time. Vimeo creator and Julia Allison cheater, Jakob Lodwick, was fired late last year. Vimeo's traffic is hardly measurable beside Youtube.
  • VSL (a highbrow email newsletter of cultural recommendations dreamed up by Kurt Andersen and Diller's content guru, Michael Jackson) is close to Diller's heart. "Without Very Short List, I would be much diminished," said Diller. Unfortunately, the internet as a whole would not be. Last time I checked, the subscription list was only some 20,000 people. (I'm told the base has grown several hundred percent since then.) Culturally-literate email-reading billionaires are in short supply.
  • 23/6, IAC's stab at political humor with the help of the Huffington Post, is stillborn. Michael Jackson's other joint venture, a business site done in collaboration with Dow Jones, may never even get off the ground. Says one insider: "It's obvious it won't work somewhat from the outside but the inside scoop is zero progression/movement. As Sanchez (IAC's foul-mouthed head of corporate communications) might have said, just a lot of wanking."
  • Lending Tree will be spun off for less than half the price Diller paid for it. This is not the best moment in the cycle to sell a mortgage broker. And the mogul did himself no favors by alienating Rich Barton, an IAC board member, who left aggrieved after Diller spun out Expedia, his online travel agent. Barton founded a competitor, Zillow.

IAC holds some prospering and substantial businesses such as Ticketmaster, the online ticketing site, and Match, the online dating exchange. But even these have been forced uncomfortably to walk in lockstep with IAC's other businesses, even when the logic has been flimsy. The unvarnished truth is that Diller, who built up Fox into the fourth television network for Rupert Murdoch, has a dismal track record in running internet businesses. No amount of Diller's brutal charm can obscure that.

What the mogul does have is the contrarian courage of a great investor, and a mastery of the dark arts of corporate infighting. He acquired e-commerce assets during the downturn, when other investors had written off the internet as a blip. And he's playing hardball with as much skill and ruthlessness as his disgruntled shareholder, John 'Darth Vader' Malone.

That raises the question. Why does Diller, a 65-year-old who enjoys his yacht and parties he throws with his hostess, fashion designer Diane Von Furstenberg, even pretend to run these businesses? He should not be the plucky entrepreneur fighting off the evil corporate raider. Diller is on the wrong side of that eternal conflict. He has certain skills and the temperament, just none suited to a managerial role. The detached and machinating capitalist played in the current struggle by John Malone? That should be, in the next business life at least, Diller himself.