The secondary market valuations were also predicated on the assumption that there was nothing very special to what Google were doing in online advertising and similar models could be applied to other high-visitor brands.

There is now some rethinking of that assumption as more financial information from these brands is made public.

i am an early stage "guy" and I can assure you i never "convinced" a later stage investor of anything. they did all the convincing to themselves. it was like feeding pigs at a trough.

I don't think you directly told anyone that Facebook would be a $100B company. There are plenty of wall street analysts (like Lou Kerner from Wedbush, who called for $200B facebook) to do that dirty work.

But if some analysts are pumping Facebook and no one from the silicon valley is trying to temper expectations, people assume that the valley believes the same valuation numbers. The result is long-term damage to the credibility of SV and a contraction of the investment supply. After all, if someone comes up next year and describes DuckDuckGo as a $100B company, why would anyone believe the valuation? Everyone would point to Facebook and give it a much lower valuation even if it probably deserves a much higher one.

To make it clear, I think that this type of chicanery from wall street is scorned yet expected in the eyes of most people. We have all accepted the fact that they will pump stocks, especially at the top (http://www.scribd.com/doc/86194691/Long-Good-Buy was Goldman's paper which essentially gave a bullish case for equities at the top). But there is still some credibility lent to silicon valley, which people should not squander in the interest of one investment.