Diller Eyes T-Commerce Companion

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USA Networks Inc. is developing a transactional/t-commerce companion service
to its USA Travel Channel project.

Both are likely candidates for the proposed interactive-TV offerings Vivendi
Universal will provide first to direct-broadcast satellite distributor EchoStar
Communications Corp. The services would then migrate to cable operators.

USA CEO Barry Diller confirmed the initiative after announcing the company's
plan to merge its cable-network and TV/film-production units within Vivendi's
entertainment operations for $10.3 billion in cash and stock Monday.

The result: Vivendi Universal Entertainment will leave Home Shopping Network,
Ticketmaster, Citysearch and Hotel Reservations Network operating under a
separate company, renamed USA Interactive.

Under the new structure, Diller will serve as CEO of both Vivendi Universal
Entertainment and USA Interactive.

The name and focus of the new transactional cable network will be announced
before March 30, Diller said.

As for USA Travel Channel -- which has run hour-long pilot programs on HSN
since August -- that service will be launched full-time next summer.

DirecTV Inc., with its merger agreement with EchoStar just beginning to face
regulatory review, has a deal to carry USA Travel. No cable affiliates have been
announced yet.

Diller noted that USA Travel and the second transaction channel could be
components of the Vivendi/EchoStar interactive-service package announced last
week as part of Vivendi's deal to invest $1.5 billion in EchoStar.

The package could also include interactive gaming, movies, sports, education
and music services, with the entire package available on EchoStar -- and to
cable operators -- within three years after consummation of the equity
agreement.

Separately, Vivendi would provide EchoStar with five new basic and niche
channels next fall on a nonexclusive basis, leaving the door open to cable
distribution.

'We have a fantastic opportunity inside of [USA Interactive],' Diller said.
'The areas we're in are the enormous growth futures of the world, and I have
enormous belief in their prospects.'

Also, Diller declared that the leadership of USA's cable networks 'will
remain in place' when the Vivendi Universal merger pact is completed.

Doug Herzog heads USA Network. Bonnie Hammer runs Sci Fi Channel, while
Patrick Vien leads the company's emerging-networks division, comprising Trio,
Newsworld International and the upcoming Crime service.

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