David Piccione is not the first but the latest to speculate that a Dot Bomb 2.0 is coming.

Here are my thoughts (posted in his comments):

I agree with many of the above commenters that Friendster was a special situation. Not saying Facebook won’t someday face a correction (perhaps to a lesser extent), but they have gone beyond Friendster with their Facebook dev platform.

Also, who’s to say where Friendster would be today if they had gotten past the performance hurdle, added features like MySpace (for bands & customization) and a Facebook-like Developers Platform. They could be bigger than MySpace.

Anyway, I digress –

Let’s say Facebook really is on track to do $100 million a year in revenue. I don’t agree that it’s all a Ponzi scheme as some above have suggested. Facebook users are more savvy than your average netizen, but that will change too.

It’s still early-going for FB, if they climb to $200 million in revenue in 1-2 years, why wouldn’t they be worth $2 billion?
To get a similar sense of what the market will bear, see Google. GOOG is currently trading at a market cap of $160bln on 2006 revenues of $10billion, or 16 times trailing year’s earnings.

There’s definitely a correction brewing in the next 1-3 years, but an overall collapse like Bubble 1.0 — I just don’t see it. (that is, unless the IPO market goes ballistic again)

Private Equity (VC, etc) Market

Don’t have the link handy but a recent blog post speculated that we are seeing the highest levels of VC investment since 2001, just before the crash hit.

If anything, the VC market will correct and a bunch of unprofitable, private startups will hit the skids. But many of these will have already been forgotten by then! Grandma won’t go broke this time like she did when she put her retirement in Pets.com on the advice of her Starbucks barista in 1998.