Dot-Com Bubble, Part II

Less than three years after emerging from nowhere, the super hot MySpace is on pace to be worth a whopping $15 billion in just three more years. Or is it?Is the much smaller Facebook, run by a 22-year-old, really worth the $900 million or more Yahoo! is reported to have offered for it? Maybe. Or maybe this is Dot-Com Bubble, Part II–with MySpace, Facebook, YouTube and the other new Internet phenoms destined for oblivion when the fad fades. See Andrew Metrick, finance professor at Wharton, analyses of the valuations.
One of the big uncertainties is that analysts can never be sure about any company’s future revenues and expenses, but the problem is even worse when dealing with these young companies as the assumptions used in any valuation model are ideally based on the experiences of at least six or seven competitors. But there is no good peer data in the new social-networking business.