Barry Diller Bets on Media Veterans to Turn Around The Daily Beast

The Daily Beast has long been an outlier in the digital empire of the billionaire Barry Diller. As sites like Match.com and Expedia made millions over the years, Mr. Diller’s digital tabloid lost money, publishing scoop after scoop but struggling to turn a profit.

Now, Mr. Diller is making a major push to change that, and he’s brought in Ben Sherwood, the former president of Disney ABC Television Group, and Joanna Coles, the former chief content officer of Hearst Magazines, to help.

Mr. Sherwood and Ms. Coles will be granted an equity stake equivalent to roughly half of The Daily Beast, with IAC keeping the majority, according to a person familiar with the matter. That will allow them to participate in the financial success of the website if they can grow its business. They will each be paid salaries. Mr. Sherwood, 60, will be its chief executive and publisher, and Ms. Coles, 61, will be chief creative and content officer.

IAC declined to provide detail on the specific financial terms.

The decision to bring in Mr. Sherwood and Ms. Coles came after Mr. Diller considered a sale of The Daily Beast and had conversations with various suitors. One potential deal with Janice Min, the founder of the Hollywood newsletter company Ankler Media and the former top editor of The Hollywood Reporter, didn’t work out.

“When Ben and Joanna made this presentation, I’d really gotten to the point where I was kind of skeptical that anything would work out, other than selling it,” Mr. Diller said. “But I was so impressed with their concept, their energy and their interest.”

Mr. Sherwood said that the plan for revitalizing The Daily Beast would take inspiration from other publications that have achieved profitability through a mix of subscriptions, advertising and events. After building and selling another business, a youth sports company called Mojo, Mr. Sherwood — who also headed ABC News — said he found himself gravitating back to journalism, where he felt he could make the greatest contributions.