Social Networks are overvalued

I completely agree with Daniel Gross of Slate. Social Networks are overvalued and companies may loose big money in the process; however, the fall would be less severe than that during dot-com bubble time.

Here are few interesting stats from the same article:

“The “social-networking” gold rush continues. Last year, MySpace was acquired by News Corp. for $580 million in cash. Now the other big social-networking sites are the subject of rumors, deals, and transactions. Yahoo! was interested in acquiring Facebook for $1 billion, but the company’s youthful founders are holding out for more. Warner Music earlier this month cut a revenue-sharing deal with YouTube. In August, Google and MySpace struck a $900-million agreement for Google to sell ads on MySpace.”

Rohit Aggarwal