Facebook has been such a phenomenal issue over the past few months. Just a social network craze, supposedly spark by the rise of Friendster over the past 2 years. can create such a big hoo-haa.

Everyday you get emails from Friendster/Facebook telling you that your friends' profile has been updated or someone left you a note. I get them frequently too. Then in facebook you start to have your own groups and start inviting same people again, with the many fun applications they have, there are even more invites coming to your email. Slowly they start to pile up and everyday probably they take up 20% of your new messages or for those who dont really use email to communicate would be worst, up to 80% or the only email you receive daily is from them. This also caused creations of many other social network websites to surface, such as Myspace and wholivesnearyou namely.

This very social network has a very huge possibility to cause the 2nd Dot-Com burst in the coming years. What is a dot-com burst? In short it is something like an economy becoming over heating and then it bursts. Same principle applies.

The 1st Dot-Com burst came about in year 2001. Dot-Com was then a VERY POPULAR and HOT issue around the world. Everyone wants to be like the next Amazon.com and others online site. Some small companies became millionaires overnight ON PAPER. Everyone wants to jump into this sector, people throwing money into flimsy plans, over-evaluated companies, starting to wear hats bigger than their heads. Examples are like people start thinking the fibre optics cable prices are going to rise, Service Providers ended up with too many empty slots as the amount of subscribers do not match their prediction. As these start to accumulate, companies start going into the Red Zone and then slowly into bankruptcy and closing down. Levis is one company to escape the situation with monetary losses mostly and also given Levis portfolio, Yes they can support the lost. Levis also tried to sell things online just like Amazon.com and cutting out the middle man but customers are either only coming in small orders or have complaints and shipping issues which in turn gave them more trouble than easy-ness. Everyone forgotten that Amazon.com DID NOT clear out the middle man. They are in fact THE MIDDLE MAN. They are the middle man between the authors and the readers, artistes and the listeners. As such many people often mistook the issue.
---------- This is how the 1st Dot-Com burst came about. ----------

Moving on to this Facebook issue. Facebook's financial evaluation is starting to get shady and inaccurate. Many professionals start evaluating all these online sites and Facebook's nett worth is actually US$15Billion which is around SGD $29-30 Billion. WHICH is nearly half the worth of Yahoo. For a social network to have a valuation of this amount is starting to get worrying. There's no stable financial support behind Facebook and most of the investors are made up of advertiser's. Google's stock is also rising up very fast and overtook IBM. IBM's revenue is approximately 8 times more than Google BUT Google's stock is rising to a point that it has overtook IBM.
Problem now is that investors are starting to over evaluate the whole market and soon it might become the craze that happened in year 2001 where everyone starts their own online stores and went burst because they could not sustain. Soon things will start to get overpriced and half shit companies will start popping out thinking just because they can attract their own audience thus they can carve a niche.

From my opinion, the Facebook issue is just a temporarily craze which will die out very soon and many investors will suffer, these applies to other similar small companies starting out in the same line. It's just like Friendster.com . Once people starts to get bored of them, thats basically the end of them. Nothing they can do to revive themselves. Look at friendster now, coming up with so much gimmick such as fangroups, mediabox, internal blogs, trying to overturn facebook and myspace but somehow people just do not bother to turn back to take a look at them again. I think web log(blog) sites are also becoming like them, blogspot.com, wordpress.com, nutang even. All these have a chance to fall if the growing bubble were to burst so hard that no one actually knows what hit them.

My very 1+1 cents worth of thoughts written.

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