NEWS ANALYSIS : Diller Creating New Type of Network to Rival Majors : TV: Investment in Silver King is the latest move in his quest to be counted in the elite league of media moguls.

If anyone else had made a small $6-million investment in an obscure and weak collection of television stations that run home shopping programs, the transaction would have gone largely unnoticed, and possibly drawn some sneers.

But Barry Diller is not your everyday investor, and on Friday Wall Street and Hollywood were trying to unravel the mystery of what the secretive media mogul has in mind by obtaining control of Silver King Communications Inc.

What Diller wants to do is create a new type of television network to rival the majors, including the Fox Broadcasting Co. that he built for Rupert Murdoch’s News Corp. in the late 1980s. This is the latest move in Diller’s quest to be counted in the elite league of media moguls that includes his old boss Murdoch, Viacom’s owner Sumner Redstone, and his new partner in Silver King, John Malone, who controls the nation’s largest cable operator, Tele-Communications.

But the obstacles in financing and finding programming for such a venture are formidable.

For many, it was enough that Diller acted after months on the sidelines while the entertainment industry has been transformed by huge deals.

“It’s not always clear to the rest of us where he’s going, but for his entire career, Barry Diller has been a pioneer and a visionary--able to see over the horizon,” said Jeffrey Katzenberg, a co-founder of DreamWorks SKG. “He’s building another network that will be neither conventional or predictable. When Barry steps up to the plate, he hits a grand slam.”

Certainly Wall Street quickly bet on a home run, despite what at this point is nothing more than a hint of a plan. The stock price of Silver King soared more than $13 a share on Friday, to close at $39 3/8 after the official announcement that Diller would buy a 20% equity stake in the St. Petersburg, Fla., company. He would also control about 70% of the voting stock if the Federal Communications Commission approves of the deal.

“There’s a new word on Wall Street,” said Mario Gabelli, who invests in media stocks through the Gabelli Fund. “Dillerizing means hiring an energetic C.E.O.”

By way of explaining the run-up in the stock, Dennis Bovin, a vice chairman at Bear Stearns & Co., said: “The media industry is at a point of maximum uncertainty. People don’t know what’s going to define the future so they focus on individuals with track records who they think know more than they do.”

The stakes are getting higher in the television network business as Time Warner and Viacom sponsor upstart networks to join the big four and studios such as the Walt Disney Co. enter the fray.

Indeed, because most of the best television stations are already affiliated with one of the five networks in the biggest cities, Diller will use a relatively novel approach of combining weaker stations in those markets and cable pickup to get coverage.

While he built Fox using VHF stations, Diller has a weaker base of 12 UHF and 27 lower-powered stations at Silver King.

“These stations reach 30% of the U.S. households,” said Diller, calling from an airplane telephone on Friday.

He added, offhandedly, as if it were a simple thing to do, “You establish local broadcast stations with entertainment, news and sports and as that is taking place, you begin network service.”

Diller said he was too rushed to provide more details, on his way to a full day of meetings in a city he would not disclose.

What he will do with Silver King is far from clear. But for starters, sources said he would scrap the home shopping programming now being carried and perhaps ally with a studio that could give him access to high-quality fare.

Since leaving Fox in 1992 with a severance package of an estimated $150 million, Diller has been lusting for a network. He invested about $25 million in QVC Network Inc. in 1993, hoping to use the home shopping channel to help his two partners, TCI and Comcast Corp., another cable operator, expand their programming options. Using QVC, they launched an expensive and unsuccessful hostile takeover of Paramount Communications against Viacom Inc.

Diller struck out again last year when he tried to merge QVC Inc. with CBS only to be foiled by his own shareholder, Comcast, who had second thoughts about the idea and waged a tender offer for the shares of QVC it didn’t already own. Diller cashed out his ownership of QVC in February for what analysts estimate was more than $100 million in profits.

Diller has kept a lower profile than usual in recent weeks, causing former colleagues and friends to suspect that he was close to hatching a plan.

Under the complex series of transactions signed Friday, Diller would take control of Silver King from Liberty Media Corp., the cable programming company controlled by Malone. Silver King, which has stations in the major markets of New York, Los Angeles and Chicago, was formed in 1986 as an arm of Home Shopping Network to distribute the channel’s programming. It was spun off to the public in 1992 for $2 a share by Home Shopping’s new owners, Liberty Media.

Diller has acquired 20% of Silver King at a price of $22.625 a share and immediately becomes its chairman and chief executive. Liberty Media will transfer control of an option for about 70% of Silver King’s voting stock after the station licenses are approved for transfer to Diller by the FCC, which could take several months.

It was not clear what Malone would get for his voting interest in Silver King, although as part of the deal, Diller will join the board of Home Shopping Network, which has experienced financial difficulties recently in an attempt to dump old inventory and upgrade its merchandising image to compete more directly with the spiffed-up QVC. Tele-Communications owns interests in a constellation of cable programmers, including Home Shopping Network, QVC Network, Turner Broadcasting Systems, the Discovery Channel and Black Entertainment Network.

Malone, in recent weeks, is said to have offered Diller an equity interest in Home Shopping in an attempt to turn it around. But sources said Diller was unwilling to accept Malone’s price, and did not want to appear that he was simply trading his QVC post for one at the more troubled Home Shopping Network.

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