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Shawn Amos

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WATCH: 60 Seconds of Social Media

Posted: 04/13/2012 2:06 pm

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!

 
 
 

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