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>> "Google is still essentially a better AltaVista/Hotmail and Facebook is still essentially a better MySpace."

Not sure I agree here. There's much more to both companies than simply google.com the search engine and facebook.com the social network. Both firms have invested heavily in companies and technology that they feel will be leaders in future industries. And by 'future industries' I mean industries that are literally in their infancy right now but are poised for explosive growth in this century (robotics, aerial technology, virtual reality, artificial intelligence, etc). To tie into Thiel's thesis, they are likely preparing and planning to become monopolistic forces in these new fields as well, which is probably a very sound strategy.