InterActive Corp. (NASDAQ: IACI) has a head honcho with some meaty chops in the entertainment and publishing business. Barry Diller, who has spearheaded television, movies and now internet entertainment (among many other areas) was interviewed recently for his take on the past and his prowess on inventing the future, so to speak. Diller's claim to fame as he put it? Try this: "The only thing that's ever driven me is curiosity."

Diller's internet empire stretches from Expedia.com (travel) to Ask.com (search). It also has other properties that hang somewhat in the balance, like LendingTree.com and TicketMaster.com. One of his most recent deals was plunking down $50 million for a majority stake in GarageGames so that consumers can play graphically rich games on their PCs not needing those PC-priced videogame consoles.

Lloyd Grove of Portfolio.com interview of Diller covers many subjects, the most fascinating of which are Diller's takes on how the internet is changing everything and why newspapers are on their way out. These are two items that I follow quite closely so when someone with Diller's track record voices his opinion on them, I'm interested.

A few morsels: 1) IACI's stock in the last 10 years has done well despite turbulences in the last three to five years. 2) Wall Street doesn't understand InterActive since it is such a complex megamachine in a zillion business units, and 3) why web-based news aggregation and value-adding has not really been done yet (and why newspapers are quasi-doing that, but going downhill as a distribution medium).

Diller's perspective is worth reading, whether you agree with him or not. He does get some plugs in for the companies he's involved with (what good leader wouldn't), but his interview is an entertaining read nonetheless.

MOST NOTEWORTHY: CKE Restaurants (CKR), Capella Education (CPLA), IAC/InterActiveCorp (IACI), Liberty Media (LINTA) and BWAY Holding (BWY) were today's noteworthy initiations:

• JP Morgan started CKE Restaurants (NYSE: CKR) with a Neutral rating, citing near-term margin concerns.

• Barrington believes Capella Education (NASDAQ: CPLA) is one of the fastest growing companies within its group in every aspect including enrollment, earnings and revenue.

• Stifel started IAC/InterActiveCorp (NASDAQ: IACI) with a Buy rating, believing there is a 60% chance of a material event occurring within the next 6 months. Stifel believes QVC is the best interactive retailing operator given its 22% EBITDA margins and 16% operating margins.

• Banc of America initiated BWAY Holding (NYSE: BWY) with a Neutral rating, citing a balanced risk/reward. JP Morgan started shares of BWY with an Overweight rating on valuation...

OTHER INITIATIONS:

• Lehman initiated Huntington Bancshares (NASDAQ: HBAN) with an Underweight rating.

• Montgomery initiated Sigma Designs (NASDAQ: SIGM) with a Buy rating.

• Stifel initiated Overstock.com (NASDAQ: OSTK) with a Hold rating.

• JMP Securities started BFC Financial (AMEX: BFF) with a Market Outperform rating.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: The Wet Seal (WTSLA), Brocade Communications Systems(BRCD), IAC/InteractiveCorp (IACI), CME Group (CME) and Rogers Communications (RCI) were today's noteworthy initiations:

• Merriman believes the turnaround at Arden B is well underway and both it and the Wet Seal chains have tremendous opportunities for long-term growth, initiating The Wet Seal (NASDAQ: WTSLA) with a Buy rating.

• Pacific Growth is positive on Brocade's (NASDAQ: BRCD) diversification into new products and services, starting shares with a Buy rating.

• Banc of America initiated shares of InterActiveCorp (NASDAQ: IACI) with a Neutral rating.

• William Blair believes the newly-formed CME Group (NYSE: CME) has an even more dominant competitive position within the growing futures exchange industry, reinstating shares with an Outperform rating.

• JP Morgan said Canada is an attractive wireless market and that Rogers Communications (NYSE: RCI) is well positioned, starting shares with an Overweight rating...

OTHER INITIATIONS:

• Deutsche Bank initiated Waters Corp (NYSE: WAT) with a Hold rating.

• Goldman started Infinera Corp (NASDAQ: INFN) with an Equal Weight.

• Kaufman reinstated Savvis (NASDAQ: SVVS) with a Hold.

• Pacific Growth initiated Network Appliance (NASDAQ: NTAP) with a Buy.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Fortress Investment (NYSE: FIG) volatility flat. Investors compare FIG to Blackstone (NYSE: BX). FIG, a global alternative asset manager with approximately $36 billion assets under management, has a market cap of $10.5 billion. Blackstone, a private equity firm, initial public offering was priced at $31 a share, valuing BX at about $33.6 billion. BX manages $88.4 billion, including $19.6 billion in its most recent buyout fund according to Bloomberg. FIG overall option implied volatility of 38 is near its 21-week average according to Track Data.

IAC/InterActive (NASDAQ: IACI) option implied volatility flat at 27. IACI closed at $35. Stifel Nicolaus said on 6/20/07 that it was "upgrading shares of IACI to Buy from Hold and initiating a $42 12-month target price. Our upgrade of IACI is based on 60% probability of a material corporate event occurring within the next 6-months." IACI overall option implied volatility of 27 is near its 26-week average of 25 according to Track Data, suggesting non-directional price fluctuations.

Daily Option Update is provided by Stock Options Specialist Paul Foster of theflyonthewall.com.

MOST NOTEWORTHY: The auto parts retail sector, Electronics Arts (ERTS), Cinemark Holdings (CNK) and Monster Worldwide (MNST) were today's more noteworthy initiations:

• Wachovia initiated coverage on AutoZone (NYSE: AZO), Advance Auto Parts (NYSE: AAP) and O'Reilly Automotive (NASDAQ: ORLY) with Outperform ratings. The firm sees upside for AutoZone from share buybacks, Advance Auto Parts from improved cost control and margins, and O'Reilly Automotive from share gains and fundamental performance.

• First Albany started Electronic Arts (NASDAQ: ERTS) with a Buy rating and sees significant upside in the first-half of 2008.

• BMO Capital started Cinemark (NYSE: CNK) with an Outperform rating, citing Cinemark's internal growth opportunities as well as its international opportunities in Latin America.

• American Tech started Monster Worldwide (NASDAQ: MNST) with a Neutral rating, saying fundamentals and the macro backdrop remain uncertain...

OTHER INITIATIONS:

• Bernstein initiated coverage on Google (NASDAQ: GOOG) and eBay (NASDAQ: EBAY) with Outperform ratings and a $635 target and $39 target, respectively, and Amazon.com (NASDAQ: AMZN), InterActive Corp (NASDAQ: IACI) and Yahoo! (NASDAQ: YHOO) with Market Perform ratings and a $65 target, $38 target and $29 target, respectively.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

DOW JONES & COMPANY (NYSE: DJ)

Could it happen? Could News Corporation (NYSE: NWS) pull its offer? They could, and the fear is absolutely there. That's why the stock has fallen. For one, the Bancroft family, which controls the majority of Dow Jones' shares, hasn't formally accepted Rupert Murdoch's $5B, $60 a share offer. And no one else has come forward with a competing bid. But it does seem that both sides are moving together in the same direction. Okay, but somebody should make up their mind -- either way -- and stop fiddling around.

EXPEDIA INC (NASDAQ: EXPE), IAC/INTERACTIVECORP (NASDAQ: IACI)

Barry Diller is back at it. The chairman and CEO of IAC/InteractiveCorp, who is also chairman of the board and a senior advisor to Expedia, is working to take online travel firm Expedia private at $30 a share. Part of any deal will involve Expedia's TripAdvisor being spun off with about 400 jobs being lost in that shuffle.

PENN NATIONAL GAMING INC (NASDAQ: PENN)

After many, many laps around the track, this race is over, as race track and casino operator Penn agreed to be acquired today by Fortress Investment Group LLC (NYSE: FIG) and private equity firm Centerbridge Partners. All cash, baby, in a deal worth $8.9B that includes $2.8B of assumed debt. Everyone to the Winner's Circle.

As Doug McIntyre wrote yesterday, Google Inc. (NASDAQ: GOOG) increased its web search popularity in the U.S. pretty dramatically in March. While Google continues to make headway with web search volume (and making quite a bit of money within that market), Yahoo! Inc. (NASDAQ: YHOO) and Microsoft Corp. (NASDAQ: MSFT) have (so far) shown that they are not making any solid gains on Google. A distant player, Ask.com, owned by Barry Diller's InterActive Corp. (NASDAQ: IACI), maintains about 4% of the web search marketplace.

Will any other search engine ever seriously challenge Google? For the near future, probably not. Yahoo! is in the business of building relationships with paying customers (Terry Semel's vision, I think) and Microsoft has a pretty diversified product and revenue stream, although Windows and Office are the main cash cows. Do they need to complete with Google better? They should be (although not a die-hard requirement), and both companies are probably tired of Google riding off into the sunset with all that cash. Microsoft's constant claim that its Live.com search engine is central to its strategy may be fine, but actions speak louder than words. Where are the actions?

Google has an enormous first-mover advantage here. Not because it was first with a search engine index, but because it was first with a search engine with text ads that customers not only found unobtrusive, but helpful in many cases. That alone is why Google is where it is, and why the other companies can't keep up.

One of my best informants has whispered to me a startling rumor. You may wish to pay attention because this is the same source who gave me the tip some months ago about wireless data feed from PC to television. You may have noticed that Apple Inc. (NASDAQ: AAPL) just introduced a nice consumer friendly version of that concept.

This time, the rumor is a bit more powerful. It involves General Electric Co.'s (NYSE: GE) NBC taking interactive television to a whole new level. If you thought that American Idol was something to brag about as far as viewer involvement, you'd best hold on to your hat because if some form of what I'm about to reveal to you comes to pass, televised entertainment shall never be the same.

What's even more exciting is that this possibility presents the opportunity to create powerful cooperation between current televised programming dynamics and the explosive internet video venues such as Google Inc.'s (NASDAQ: GOOG) YouTube. The two media could come to mutually benefit from these scenarios. Neither the new standard nor the old guard would need bow to the other. Now, here's some faceting of the concept.

In August, theflyonthewall suggested that investors should take a look at InterActiveCorp (NASDAQ:IACI) stock. Today, the stock is at $37, up 50%.

CEO Barry Diller said during a mid-summer conference call that the company reported seven good quarters in a row and got "no respect."

Yesterday, InterActive launched www.zwinky.com, a customizable social avatar that helps people create and express their online brand or persona. According to the company, since its beta introduction in June 2006, Zwinky has become one of the fastest-growing sites on the Internet with more than two million unique users.

Diller is a master programmer. InterActive's Ask.com, although not about to take on Google (NASDAQ: GOOG), improves its content monthly. Also, InterActive owns LendingTree.com, which offers a low-cost way for consumers to get home loans.

It appears Diller has gotten his stock going in the right direction.

Google has initiated a multitude of ideas, features, partnerships, services, campaigns, strategies, promotions -- and only one revenue stream. I like the revenue stream best of all -- and so does Google.

The company has not given any indication of what it hopes to generate in revenue with each "exciting" new announcement, but each deal is clear about what's in it for their partners. Two things seem to be certain: All of Google's activities up until now are meant to drive incremental revenue to the mother ship: advertising (good idea -- just like network TV). Also clear: that Google will keep a corporate veil over the details of whatever it does, permitting some translucence but no transparency (poor idea). Google has admitted substantial increases in capital expenditures (at a rate faster than projected earnings) to support all of its initiatives. But many of its initiatives are free so its model is still all about traffic growth and advertising.

No harm in being focused, but the web is constantly being diluted by new offerings so that is hard to do. MySpace (acquired by News Corps) is the latest example of a site coming from nowhere to capture the time and attention of a massive amount of viewers/users. What would have happened to the major networks like NBC, CBS, and ABC if a competitor like Fox popped up over and over again in the early years, diluting the market? The networks would not have had the oligopoly that they enjoyed for so long. Now they all feel embattled losing advertising market share and earning capacity. This is a fact of life on the web.

Each of the major players AOL, MSN, Yahoo, Ebay, Amazon, Interactive and the others, struggle to maintain their foundation of support and grow while their shorelines are eroding from the constant pounding of the waves of competitors. We are very early in the life of the Internet as a commercial enterprise and it is going to be both wrenching and marvelous to watch it develop and see how it all plays out. Regardless of how many true Google believers there are supporting the share price, or any of the other Internet companies, it is apparent from observing the behavior of each company that they know time is not on their side and they must act quickly to establish themselves and hold everyone else at bay. Look for continued aggregation of sites and companies even in the absence of true mergers and acquisitions.

Google, like no other company, will be under the microscope come its Fall earnings report. I know this for a 'fact' because all of the Google supporters condemning my conservative view have told me to stay tuned for that occasion. So we will all stay tuned. Until then, in the absence of any earnings data, Google just bounces around.

Sheldon Liber is the CEO of a small private investment company and the vice president for Design and Research of an Architecture & Planning firm.