There has been a lot of growth recently in the social networking and tech side of the internet, when we listen to how much Facebook is worth we have to wonder how it has become so valuable and why!
It appears that some of these famous internet brands are overvalued and this is dangerous as it could lead to the social networking bubble to burst being down the sector like a house of cards.
The only thing that is holding social networking up is users, investors are not buying sites for the revenue generated, they are in fact buying users and this is where the problem lies.
Certain sites have been valued not by revenues, but by how many people there are actually using the service and this can change quite literally over night.
Source [State of Search]