Diller says Internet valuations inflated

By Michael Flaherty

NEW YORK (Reuters) - IAC/InterActiveCorp. (IACI.O: Quote, Profile, Research, Stock Buzz) is staying on the sidelines for now in terms of big acquisitions as many Internet sector companies are overpriced, Chief Executive Barry Diller said on Monday.

"We don't see anything big to buy," Diller told the Reuters Media Summit in New York. "We think that prices right now for most things Internet ... are very overpriced at various stages from early capitalization to venture capital stage."

For IAC, a big purchase would be a deal worth at least $300 million to $400 million, he said. The company is still interested in making smaller purchases, he said, adding that he is especially fond of virtual retailers.

Diller said that IAC looked at buying Intermix and its popular social networking site MySpace.com, but passed. News Corp. NWS.N purchased Intermix last year for $580 million.

"We looked at them and decided we didn't want to go there, either dumbly, or not. Time will tell." Diller said.

Regarding another popular social networking Web site, Facebook.com, Diller said he thinks the company is not up for sale.

"My take is, much to his credit, I don't think he (Facebook founder Mark Zuckerberg) wants to sell it. I doubt he sells it. Now, someone may put an astronomical check in front of him, but that's just my take," Diller said.

On the flip side, Diller said, private equity suitors are frequently inquiring about Expedia (EXPE.O: Quote, Profile, Research, Stock Buzz), the travel Web site spun off from IAC last year. Diller is the chairman of Expedia.

In terms of either Expedia or IAC going private, Diller didn't rule it out, yet he also said he didn't see the wisdom of such a move right now.

"People have come and made their arguments to us. I can't tell you we wouldn't do it on either IAC or Expedia. I doubt we would," he said. "I can't say 'no,' because I don't know for sure. I've not yet met the compelling case why that makes sense for a company like ours."