Barry Diller's Grand Acquisitor

Shana Fisher pursues new web markets for the internet mogul who has (almost) everything. Her latest acquisition: a small outfit that could change video games in a big way.

"Come play!"

Shana Fisher emails this challenge from her eighth-floor perch at IAC headquarters, a sleek, white Frank Gehry jewel on Manhattan's west side. Her office is immaculate, with four white leather chairs, a pink door, and a magnificent view of the Hudson River. Not that she notices on this Friday afternoon. She's trying to navigate a blue marble across a virtual obstacle course without getting bumped off into the clouds.

"No mercy," warns one of her opponents, a hard-core gamer in Eugene, Oregon.

"As usual," she fires back.

Fisher, 37, is senior vice president of strategy and mergers and acquisitions at IAC, Barry Diller's Internet conglomerate. She's playing a beta version of MarbleBlast Online, created by her latest find, GarageGames.

Fisher has become a star at IAC by ferreting out undervalued companies and emerging markets. In 2005, she engineered the nearly $2 billion purchase of the all-but-forgotten search engine AskJeeves, now Ask.com, which Diller describes as the glue holding together his dozens of disparate brands. "It's Barry's company, but she was the driving force on the deal," says Ask.com executive vice president Mark Stein.

Earlier this year, PC World even named her one of the most important people on the Web. At No. 14, she ranked ahead of Amazon 's Jeff Bezos, eBay's Meg Whitman, and Yahoo's Jerry Yang.

Fisher's acquisition acumen is especially critical now, as IAC recasts itself as a smaller company, more focused on the emerging Internet businesses that are her specialty. (See "The New IAC ") Fisher's latest move is a foray into the nearly $40 billion video-game industry. In September, IAC announced that it had obtained a majority stake in GarageGames, a deal reportedly worth about $80 million. The Eugene-based outfit has developed the technology to bring 3-D multiplayer, Xbox-quality action games to the Web browser. Fisher is convinced it will be a game changer, creating an untapped market worth about $2 billion a year.

"This is one person's vision," says Diller. Fisher has a "willfulness" that he admires, perhaps relates to. She's "not duplicable," he says. "She has both true intelligence and curiosity, and she also has the energy and ability to claim her space at a crowded table."

"She has both true intelligence and curiosity, and she also has the energy and ability to claim her space at a crowded table."

"Like A Bulldog"

Growing up in Philadelphia, Fisher thought she'd be an artist, like her father. At Hampshire College in Massachusetts, she triple-majored in sculpture, philosophy, and linguistics. But her budding art career soon took a backseat to a budding interest in Web design, which led to a job at Microsoft as a product manager. "I decided I liked meritocracies," she says.

Microsoft taught Fisher how to go after a new market, build a product, and run a project team. When she moved on to Allen & Co., the New York investment bank, she learned how to analyze industries and develop conviction by investing her own money as well as the firm's. That, she says, creates a "different shopping experience."

At IAC she applies the same exacting standard. "She's good at building a compelling case," says Ask.com's Stein. "Once she believes in something, she is like a bulldog."

Fisher adamantly believes in GarageGames. The company spent two years developing high-end 3-D game technology for Web browsers in secret--"a very, very, very hard problem," she says--before IAC came along and provided the resources to launch a game portal.

She also believes in 27-year-old Josh Williams, GarageGames's CEO. They met over brunch in Manhattan in the fall of 2006, while Fisher was on maternity leave. Williams says he expected "a New York shark," but found a disarmingly down-to-earth deal maker who shared his passion. It was almost eerie, he wrote later on his blog, how an outsider had developed the same vision that GarageGames had.

"This," Fisher told him, "is my other baby."

"Low Volume, High Return"

Scouting for new Web markets, Fisher's mission at IAC, is "a low volume, high return" business, she says, one that requires patience. "It's not every day you find an industry that hasn't been transformed by the Internet." She routinely kills ideas because the market isn't big enough, a company is overcapitalized, or she senses "it doesn't capture Barry's imagination."

It takes an imaginative leap to see nascent niches and overlooked companies, but her insight is grounded in research. Building on her experience in investment banking, Fisher helped IAC create algorithms that trawl the Web, calculate what she terms a "metabolic rate" for thousands of sites in various industries, and screen the best candidates. She and her team meet weekly to interpret the latest rankings. "The screens help us see growth companies before others see them," she says.

Fisher has been studying the video-game business for years, looking for the right opening in a mature industry. She has talked to the major players and dozens of independent developers and read everything she could get her hands on. She owns an Xbox 360, a PlayStation 2, and a Wii and tries out the new releases. ("The new Halo was mind-blowing," she says.) What the industry lacked, she discovered, was complex, 3-D multiplayer action games to play through a browser, without pricey consoles or downloading hassles. When industry insiders told her such games were too complicated for the Web, she was unconvinced.

Then GarageGames--which was creating not only games, but also popular development tools for independent game ­makers--showed up on the screens last year. Fisher sent Andy Yang, 29, a longtime gamer and computer-science whiz she'd recruited from Ask.com, to approach the company at the Austin Game Conference. When Yang asked the GarageGames folks if they planned to apply the tools to online games, they were coy. "That told us what we needed to know," says Fisher.

GarageGames is due to launch its InstantAction host site with several games in early 2008. Dozens of independent developers--including Alex Seropian, the executive producer of the megahit Halo--are working on new releases for the site. "This could have a watershed effect on the industry," Seropian says. For gamers, Instant-Action offers a convenient place to play games as sophisticated as those for consoles. For independent developers, it promises faster, cheaper, friendlier distribution (developers retain intellectual property rights), plus the ability to continuously tweak the software to improve the experience, which could boost the bottom line. This iterative development also allows GarageGames to experiment with subscriptions, advertising, and microtransactions. "Now the presentations are over," Fisher says. "It has to be a good business."

In Friday's MarbleBlast match, Williams and Yang make short work of Fisher. Although she manages to score a lone point, she's nonetheless pleased. The graphics look vivid. The game is fun to play. She may have lost her marble, but she found a promising business.

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