"Grabbing hands
Grab all they can
All for themselves
After all
It's a competitive world
Everything counts in large amounts"
So, how much do you value Facebook? Do you think that Silicon Alley Insider's fictional list of the most valuable web startups in the world comes close to at least some degree of accuracy, or do you think - an opinion I encounter daily - that most of these web companies aren't worth anything?
Indeed, what is Facebook besides a new way to send silly pictures and solve quizzes with your friends? Sure, a platform for fun that connects millions worldwide is worth something, but 9 billion? Or 15 billion, which is the valuation based on the price Microsoft paid for a stake in the company. That kind of money can build schools, hospitals, roads. Can a virtual playground really be worth billions?
The collective bet at this moment is that most forms of advertising will move to or somehow be connected to the internet, and that whoever builds the best platform for delivering ads online will tap into an enormous source of wealth. This is why Facebook is worth billions, and this is why Microsoft's brass are currently bashing their heads trying to think of a way to take over Yahoo for 44 billion dollars.
Many of the startups from SAI's list - from any such list, in fact - are hanging by a thread. Twitter may be worth millions now, but should Google somehow turn Jaiku (not likely) into a "better" Twitter, its value might plummet towards zero. That's how things work if you're a web startup, but it can happen even if you're in the business of selling shovels, however solid the market may seem at the moment.
The question, of course, is are we overestimating the future here? We count everything in large amounts now, but it only takes one dark shadow of doubt or a disruptive new technology to reduce all those hopes and dreams to rubble. Well, perhaps not our hopes and dreams, since not many web startups have gone public; but certainly the hopes and dreams of VCs and other investors.
No one can really give an answer now. Until these companies (well, some do, but many don't) start earning money, paying dividends, and showing solid financial growth over a couple of years, they could be valued anywhere between zero and couple of billions. One thing is certain: if you bet big, you either lose big, or win big. It's still time to think big; the height of web 2.0's irrational exuberance may be close, but we're not quite there yet. If it all crumbles down like it did the first time around, at least it won't be our money.