While Activision Blizzard's annual report, released last Monday, revealed news about this week's Infinity Ward shake up that's not all that can be found in an otherwise dry report. It states that the Blizzard side of the operation is working on, among other things, "sequels to the Diablo franchise."
Yes that does suggest that Blizzard is working on more than one game in their action-RPG franchise. At the moment, the developer has only admitted to working on Diablo 3, a game that won't be out until sometime in 2011 at the earliest. It's possible that the Activision Blizzard report means that expansion packs to Diablo 3 are in the works, much like two more StarCraft II games will be released the one that's coming out later in 2010.

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This is most likely referencing Diablo 3 and its inevitable expansion, rather than another sequel. I seriously doubt a fourth Diablo is even in pre-pre-pro at this point.
But who knows. This is Activision. Maybe they can figure out a way to make Diablo a FPS, and re-release it every year with a new name. On consoles.Posted at 10:13PM on Mar 3rd 2010 by asfm