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The billion dollar club is white hot. Instagram, the photosharing app with zero income sells to Facebook for $1 Billion. Apple stock hovers at $650 a share. Facebook set to IPO at $100 Billion. Do these funny numbers sound familiar? In a recent New York Times article, the intimate relationship between Instagram, Facebook and Twitter sure seemed a little too cozy for comfort. They shared engineers, advisors, investors and even the same fraternity at Stanford. In the heat of the internet gold rush, the excitement of Billion dollar overnight wins and massive valuation for these social sharing sites makes everyones pulse race. But is it real? The theory is that these deeply dimensional personal records- in the case of Facebook-ones friends, habit, likes and interactions creates a valuable record for --who exactly? They would tell you Advertisers. Mobile phone sellers. Car companies. Financial services firms. That's in theory. In reality, its all future potential. Valuations. Speculation. Harvard researchers years ago developed a theory based on this type of bandwagon investment know as the greater fool theory. As long as there is a greater fool willing to bet on more gain in an overpriced market, the market works. But when no greater fool exists-or folks finally wise up--the market tanks. I have yet to hear of a global advertiser so enamored with the power of social media that is makes this Ad driven model pay off. Sure its growing- but it seems more like a hungry investment community looking for something to get the Trillions in sidelined investor dollars back into the market. Image from Jean-Paul Rodrigue/Wikimedia Commons Read more [...]