Dot-Com Bubble, Part II? Why It is So Hard to Value Social Networking Sites

Less than three years after emerging from nowhere, the hot social networking website MySpace is on pace to be worth a whopping $15 billion in just three more years. Or is it? And is the much smaller Facebook really worth the $900 million or more Yahoo is reported to have offered for it? The problem, say Wharton experts, is a dearth of information — including data on expected revenue generation and cost structure — to plug into the standard valuation models.

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