[knowsnothing613]

Facebook is extremely overvalued. You cannot rationalize a 80B market cap for facebook on annual revenues of 2-3B, considering how Zynga's business model is faltering (social gaming fad waning), and a large part of facebook revenue comes from Zynga.

Also, Tumblr is becoming the new 'it' social network site. And Google & Apple & Amazon will continue to launch social products to erode market share (measured by social activity, and not eyeballs).

Lastly, since common folk are pulling out of equities, and the US economy is following Japan's deflationary path, after her property bubble, P/E should likely converge to a value of 8, which was seen in Japan.

Therefore Facebook @ 16-21B is a better valuation, but still overpriced in a deflationary macro environment.