Social Media and Money, A New Bubble or Sustainable Industry?

Again, my love for Slate keeps directing me in new issues surrounding social media. While we all understand the value and potential for social media, the actual financial value is rather shocking. Many new social media start ups are receiving billions of dollars in investment, despite their current income. Are investors creating another tech bubble or will social media prove to be a sustainable industry?

FourSquare, for instance, grew 3,400 percent in 2010, and the company hit a valuation of $250 million. Zynga, makers of Farmville, are at a valuation somewhere near $6.2 billion! And Groupon, which recently turned down a $6 billion buyout offer from Google, is expected to be worth $15 billion after it goes public.

The craziest part is that many of these companies didn't even exist 5 years ago. What are your thoughts? I think this article is interesting in addressing the similar behaviors of previous bubbles (and we are still baring the scar of many of them). However, I believe that social media is here to stay. It isn't difficult for users to adapt to each media platform, nor is there anything discouraging them from joining them all. The demand seems to be continuous, and will support the industry (and not to mention, yield nice returns for those lucky investors.)

maybe I should buy some stock....