Let's Play the Social Network Valuation Game!

Following the rumors surrounding Fox’s attempt at merging their interactive division with Yahoo, bloggers have been postulating about what MySpace would be valued at. Fred Wilson suggests that Microsoft is going to have to now pay a premium for Yahoo! thanks to their ridiculous $15 billion valuation of Facebook. Today Henry Blodget posts about Microsoft potentially increasing their bid.

Regardless of the valuation that Yahoo! receives, social networks have become some of the largest entities on the web earning them outlandish valuations without even having an effective revenue model. All of this has happened in just a few years and brings back memories of the web portal days when everyone and their mother was working on creating a new web portal that would become the next Yahoo! Fortunately we are beyond those days but I’m still receiving inquiries from people that want their own social network.

So do you think the billion dollar valuations being thrown around are currently justifiable?

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