Diller said he would resist investor demands to buy back stock and would use his company's cash pile to swoop on a number of internet and media companies at bargain prices, as the economy continues to deteriorate.
IAC currently owns the number-four search engine Ask.com, dating service Match.com, and Dictionary.com and Thesaurus.com. Diller also financially backs Tina Brown's news aggregate website The Daily Beast.
Diller said: "My sense is that we wouldn't be purchasers of our own stock and that's because tomorrow will present unknown opportunities."
IAC's cash levels are expected grow by $800m (£546m) by March of next year to $2.2bn (£1.5bn), potentially setting the company up for acquisitions worth more than $5bn (£3.4bn).
The internet and media veteran shunned the idea of acquiring a social networking website, but said he was open to the idea of consolidating his search business with some of the smaller companies in order to challenge Google's market share.
He said: "Google is such a force in search that without various forms of consolidation and growth I think it's going to be very difficult."
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