[bmxicle]

I would imagine that microsoft is getting access to a huge amount of facebooks stored information by buying such a small percent and thus deriving a valuation from that purchase is prolly irrelevant. Correct me if my logic is wrong.

The article in the economist is in this weeks issue. They go on to talk about how "graphing social patterns" can be very valuable and this is why some perceive them even to be the next google. However, the article went on to say that the information that face book collects is much less useful then the information that google collects for targeting it's advertising. The ads that google provides are useful to searchers, whereas the ads facebook are an annoyance. This statement makes sense to me because the main function of facebook is to foster social interaction, and not buying things etc, so advertising simply can't be as effective.

I think whenever something is such a stunning success, even if not in terms of revenue/profits, but in terms of sheer number in increase in users there is bound to be huge amounts of hype about it and thus crazy valuations are going to be thrown out there.