"What goes up,
Must come down,
Spinnin' wheel,
Got to go round" - Blood, Sweat and Tears, Spinning Wheel

According to Venture Beat and Tech Crunch, Facebook's board has rejected two financing offers for the company, one at $2 billion valuation and one at $4 billion valuation.  Sillicon Alley Insider puts their revenue for 2008 somewhere near $365 million (it's an educated guess... don't go quoting it). Turning down money in a valuation range of 6 to 12x last year's revenue?  Has anyone let their Board know that the world nearly ended 6 months ago?  They do have around $200 million in the bank, but still...

Let's contrast this with Barry Diller of IAC, sitting on $2 billion in cash and hungry for more Internet media properties.  According to an interview on CNBC today, that valuation expectations between buyers and sellers are still very far apart.  From Silicon Alley Insider:

"We've seen the finance sector and we've seen all of the chaos that's come of that. We haven't seen it yet relative to real estate, relative to corporate debt, things like overleveraging. The same kind of overleveraging that went on in financial institutions God knows went on in acquisitions and re-capitalizing companies. That hasn't yet waded itself through. I think the prices of things will continue to come down."

So who is right?  Is that fact that Facebook is holding out for a better price in this market a gaffe?  Or is Barry just pre-negotiating with anyone he is looking to buy?  Personally, I think Barry is right.  Valuations are still re-setting.  And he has the cash, so I guess we listen.