At the risk of being tarred and feathered by online militants, I’d say this report from the Wall Street Journal Technology Alert has to be exhibit A in the case for an internet bubble:
Microsoft reached a deal to invest up to $250 million for a minority stake in Facebook, and will sell advertising on the site outside the U.S., beating Google in a closely watched contest. The companies have discussed a valuation for Facebook as high as $15 billion.
The agreement comes after intense lobbying by Microsoft and Google for Facebook’s hand. In recent weeks, executives including Microsoft Chief Executive Steve Ballmer have courted the three-year-old social-networking company, which this year expects a profit of $30 million on revenue of $150 million, according to people familiar with the company.
I’ll admit, Facebook is huge, it clearly will be a dominant online player for some period of time, maybe even for a long time (though the odds are very low), and the company warrants a high valuation. But $15 billion? As they say on the Weekend Update, “Really?!?” If the consensus is that we’re not in a bubble, then I’d hold up that majority opinion as Exhibit B in my case that we are, without a doubt, thick in the midst of Internet Bubble II.
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