Powerful New Linkup in Emerging Technologies : Ex-Wall Street Journal Executive Editor Pearlstine Forms Media-Entertainment Partnership

Former Wall Street Journal Executive Editor Norman Pearlstine has formed a partnership with Barry Diller’s QVC Networks, Paramount Communications and Texas financier Richard Rainwater to develop and acquire media properties.

People familiar with the partnership said Paramount, QVC and Rainwater will back Pearlstine’s plans to explore business opportunities in emerging technologies such as electronically delivered news and information, as well as more traditional media and entertainment businesses.

Pearlstine resigned from the Wall Street Journal last year, saying he wanted to take some time off before going into business for himself.

Since then, Pearlstine, 50, has been a consultant to Smart Money, a magazine owned by Journal publisher Dow Jones & Co. and Hearst Corp., and Selling, a new magazine launched by Capital Cities/ABC Inc.

“It’s a testament of our confidence in Norm’s ability to create something new and exciting,” Paramount Communications Chairman Martin S. Davis said. He said the partnership could entail “almost anything” in the media and entertainment world.

Pearlstine has spent much of the last year studying the future of the news and information business, just as Diller took time off to ponder the future of the television business after he resigned as chairman of the Fox studio last year.

In this regard, Pearlstine is said to be looking toward the day when subscribers can custom design “electronic newspapers” that would be delivered over telephone or cable TV into a home or office computer.

It is in these high-tech areas that Paramount and QVC could be of particular help. Davis is eager to get Paramount further involved in the emerging interactive programming area through both the company’s Paramount Pictures and Simon & Schuster subsidiaries.

Last December, Diller bought a 3% stake in West Chester, Pa.-based QVC Network for $25 million and plans to use the home shopping channel as a springboard into interactive television. Diller is being backed by Denver-based TeleComunications Inc. and Philadelphia’s Comcast Corp., two of the largest cable TV operators in the country.

Diller has been known as an innovator throughout his career. He invented the movie-the-week at ABC an later launched the fourth television network at Fox. Pearlstine resigned from the journal four months after Diller left Fox.

QVC is the leading home shopping channel and has already pioneered interactive television. Diller wants QVC to play a larger role in both the booming home retailing industry and the convergence of the home computer, television and telephone markets.

Rainwater, a former financial adviser to the Bass family, is a Dallas-based investor.