USA gets e-tail edge

Diller's company buys 75% of Styleclick.com

Barry Diller’s USA Networks broadened its stake in the online retailing game Tuesday, buying 75% of Web site creator Styleclick.com for $500 million in cash, advertising time and other assets.

Los Angeles-based Styleclick.com creates and operates a network of Web sites that sell brand name apparel and furniture online.

In the coming months, USA said, it plans to merge Styleclick.com with its USA Internet Shopping Network to form a new, publicly traded banner to operate its combined auction and shopping e-tailing properties. They include FirstAuction.com and FirstJewelry.com. New company will operate under the Styleclick moniker.

Styleclick.com co-chief exec Maurizio Vecchione will be the new company’s CEO, while Bill Lane, chief operating officer of ISN, will become prexy and vice chairman.

For USA, the deal will boost its inhouse Web site incubator, USA Electronic Commerce and Services. Company already operates popular ticketing and city guide service Ticketmaster Online-CitySearch.

In return, USA’s interest will help Styleclick emerge from the online competition to help traditional brick-and-mortar merchants set up online shops. Rivals include ShopNow.com, Bluefly.com and Fashionmall.com.

The ultimate goal is to tap into the Internet’s growing e-commerce sector. Online shopping is expected to increase to $184 billion in 2004 from about $20 billion in 1999, according to market researcher Forrester Research.

The deal comes one week after USA acquired Miami-based customer service firm Precision Response for $650 million in stock.

USA plans to give Styleclick $10 million toward on-air promotions over USA Network’s cable channels, which include the Home Shopping Network.

USA will also invest $40 million in cash to help fund the company’s growth and will provide a $10 million loan.

“In its new capacity, Styleclick will be a unique proposition to both consumers and retailers — one that will offer both constituencies the highest level of technology, customization and reliability,” USA Networks Interactive prexy Dara Khosrowshahi said.

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