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Facebook IPO was not a failure: Diller

Facebook tried to make as much money as possible in its IPO – a good things, says media executive Barry Diller, who also praised CEO Zuckerberg's long-term strategy for Facebook.

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Barry Diller, chairman and CEO of InterActiveCorp, speaks at the Fortune Brainstorm Tech conference in Pasadena, Calif., in 2009. In a CNBC interview Tuesday, Mr. Diller praised the long-term strategy of Facebook.

Fred Prouser/Reuters/File

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The Facebook initial public offering was not the failure it’s been made out to be, Barry Diller, chairman of IAC/Interactive told CNBC’s “Squawk Box” on Tuesday. Diller said it made sense for Facebook to get as high a price for the stock as possible.

“If you're going to sell stock and somebody wants to buy it at a price and that price is not a price you dictate, but demand dictates, sell it to them now,” he said of Facebook’s $38 offering price.

 Diller said that most of the investors who bought at the IPO were probably speculating and not in the stock for the long-term. “In which case, they deserve whatever they get, good or bad,” he said. (Read More: Google Shares Hit Record High as Facebook's Retreat.)

Facebook now needs to focus on future growth, Diller said, adding that Mark Zuckerberg is only running the company for the long-term.

 He also believes that the company’s strategy is the right one. “What they are doing is insatiably working to make their site better and get more people to use it and get them to use it more,” Diller said. “Secondarily, they are looking to get revenue from it, which is a natural outgrowth of taking care of your customers.”

 Diller also addressed the questions about making money of mobile. He told CNBC the only issue for mobile is the “fairly small” form factor, “so your ability to put a lot of stuff on the page, advertising opportunities, is more limited, but that forces you to therefore create new ways of getting revenue.”

 While Diller had a largely positive view on Facebook, he did suggest that other social media companies like Zynga and Groupon are overvalued.

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Turning to the IAC/Interactive business, Diller also said now is the perfect time to get into the book publishing business given the “ossified” practices at the legacy publishing houses and the industry’s ongoing digital transformation. But IAC doesn’t plan to take a run at Amazon.com, which Diller said would be “a fool’s run.”

 “I like businesses in transition, first of all. If ever there were a business in transition, it is publishing,” Diller said.

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