You couldn't miss the big news this week about Facebook's $1 billion acquisition of the popular photo-sharing app Instagram. But that billion dollars -- for a company which boasts a fiercely loyal following but no revenue source -- has some analysts wondering if we're in a new tech bubble.
During tech bubbles, stocks soar and company valuations start to seem outrageous -- except to other investors and companies, who pour even more money in, hoping that a lot of hype means a big payday down the road.
The newest social media darling, Pinterest, which, like Instagram, has no real business model, nonetheless has no shortage of venture capitalists circling and a rumored valuation in that magical billion-dollar range as well. And, of course, Facebook's own IPO in May could see its valuation exceed $100 billion dollars.
So are we in a tech bubble? Or is social media such a different animal that we need to redefine the whole idea of what a company is worth?
And this week's Social Media Shorthand: open source software. You might be using it already!
Didn't catch last week's episode? Check it out here, and tune in next week for another fix of social media news!
Follow Shawn Amos on Twitter: www.twitter.com/ShawnAmos