Insane valuations

I was on the phone with an entrepreneur friend of mine and he was saying that valuations out there are getting pretty frothy and they are indeed!  It's no wonder that ebay finally had to take a $2.6 billion writedown on its skype acquisition.  No wonder indeed. And today at breakfast I heard that the rumour mill had Microsoft valuing a 5% stake in Facebook at $300 to $500 million, which places the value of Facebook at roughly $6 to $10 billion! Read about it here. Note that I wrote about this deal weeks ago and feel that I actually played a role in starting the rumour ;-)