THE WEB'S MIDDLEMAN

By MICHAEL KRANTZ

So you're buying a car, and you can't afford to make a mistake. What do you do? Consult your friends and your Ouija board? Pore over newspapers and magazine ads? Endure dealership pitches and test drives? Lie awake at night worried you'll screw up? All of the above?

Wouldn't it be nice if instead an automotive expert asked you a series of questions and used your answers to winnow down the field to a few dream machines? And used the same format to help you decide how to finance the purchase? And did this all in an hour, free?

Barry Diller sure thinks so. Two long years after the architect of the Fox Network departed his perch at QVC for exile in the Media Mogul Wilderness, the poker-faced, once-and-future content king is ready to reveal his latest card. It is Consumer's Edge, a software developer based in La Jolla, California, that hopes to earn a slice of the online commerce pie by offering what CEO Steve Tomlin calls "deep interviews"--extensive Q&As that match consumers with pretty much any product known to the free market.

Log on to the Consumer's Edge Website when it launches next month, and click on the car channel, for instance. The program informs you that there are 746 possible cars. Then it starts asking questions: How much do you want to spend? What styles do you like? How much space do you need? How important is power? Safety? Legroom? Air conditioning? Sun roof? Cup holders? Valve configuration?

And so on, in as much--or as little--detail as you desire. The answers aren't just yes or no; you can express gradations of preference by using your mouse to slide a dial to the left or right--I like antilock brakes this much. You can revise your answers as you go along. At last the program reduces the field to a small number of appropriate cars. Then you click on a page devoted to each lucky car, where you find a buying guide, customer reviews and perhaps a sales offer from the company that made it.

That's where things get really interesting. The Web was supposed to eliminate the great American middleman (not to mention the great American middleman's markup), but it is merely changing his nature. Those Industrial Age intermediaries between consumer and manufacturer--the auto dealer, the record-shop owner, the stockbroker--are giving way to their Information Age equivalents, whose raison d'etre is to help consumers navigate the Web's bewildering oceans of data.

A Forrester Research report calls these new electronic agents "content-focused matchmakers" (CFMs) and says they must solve three consumer problems: a) a huge selection of products (it's hard to decide what to buy); b) large numbers of vendors (it's hard to decide whom to buy it from); and c) infrequent purchases (you need lots of info that you're going to use only once, which makes it hard to deliver this info cost-effectively). The deep-interview concept, says Tomlin, is based on the belief that "the future was unlimited choice across the Web, and this was going to be an unmitigated mess."

Consumer's Edge wants to tidy things up. The operating principle: distill exhaustive product research down to an elegant and simple Q&A format, and you've got a great way to match advertisers with customers who are ready to buy. "We're an extension of what companies are already doing with direct-marketing campaigns," says Tomlin, "only we can do it more effectively." That's because the consumer does most of the work. The payoff for Consumer's Edge? "If you join an auto-buying service or order a mutual-fund report, we'll get a little piece of the transaction. If you get a loan or a lease, we'll get a finder's fee."

The company's potential to match buyers and sellers is what caught Diller's eye. Diller and Tomlin first worked together at QVC; Diller was the chairman, Tomlin a high-tech executive who had phoned looking for a job after reading how much Diller loved his Powerbook. Both left QVC in the fall of 1994; a few months later, Diller recalls, Tomlin called him again: "'I've found these two guys in a garage.'"

The guys in question, Tom Sammon and Brad Scurlock, wanted to release an early iteration of their deep-interview software on CD-ROM and invited Diller to invest 5% or 10% of the necessary capital. Diller tested the product and counteroffered: he'd put in 100% if they would return to the garage until he deemed their product ready for prime time.

Prime time turned out to be the Web. Next month, fueled by a second cash infusion from investors that include Vulcan Ventures, SoftBank, American Express and the Washington Post, Consumer's Edge will unveil its site, with channels focused on cars, mutual funds, colleges, bicycles, home-office equipment, restaurants and choosing a city to call home. By year's end Tomlin hopes to have 20 channels, including ones devoted to travel, careers, entertainment and consumer electronics.

They won't be alone. For the moment, deep interviews look like the hottest CFM software going, but the Web changes very, very quickly, and potent players already occupy several key markets. Car buyers, for instance, can try Auto-By-Tel or Microsoft's CarPoint; computer shoppers are using Netbuyer; and financial-services advice is available on the Quicken Financial Network. Perennial content giants like AOL are sure to step up to the plate as well.

All of which leads to what may be the most intriguing question of all: How does Consumer's Edge fit into Diller's long-range goals, which for big thinkers like him tend to amount to total world domination? Two years after his painful failures to merge QVC first with Paramount and then with CBS, Diller operates from a power base called Silver King Communications. It's a grab bag of second-tier media properties that includes the nation's sixth largest group of TV stations; the Home Shopping Network (HSN); the dormant production studio Savoy Pictures; and the Internet Shopping Network, a Website for computer purchases. He isn't discussing his future plans, but the Web is surely central to them. "It is absolutely clear as a bell to me," Diller says, "that server technology and wide bandwidth will transform the way we acquire all of our information and our entertainment and very much of how we purchase goods and services. When you have the infrastructure in place, it's completely transforming. The dominoes will fall."

But will Diller be one of the CEOs who set them up? One can imagine--albeit with a bit of effort--some interactively televised descendant of Consumer's Edge and HSN merging with Silver King's stations and studio to become a force in 21st century media. In the absence of a brand name like Paramount or cbs, though, that would be a trick on a par with Diller's last one: building a fourth network on the backs of The Simpsons and Married...with Children.