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Facebook's $1 billion acquisition of Instagram, a photo sharing app that costs zero dollars to use and has no source of revenue, sure feels like a social networking tech bubble. At least under this definition of economic bubbles from a July New York Times column about LinkedIn's possible over-valuation. "There’s widespread agreement that bubbles occur when a speculative mania causes the price of an asset to soar far above its intrinsic worth," wrote The Times' James B. Stewart. "After the mania runs its course, and investors finally recognize the divergence, the bubble typically bursts, causing prices to plunge." Some of that parallels what's going on with Instagram and Facebook. $1 billion is "far above" Instagram's "intrinsic worth." But, then again, what does "intrinsic value" mean for a social networking company anyway?

For social media companies in general, "value" comes from advertising or getting people to buy things. Zynga, for example, makes money selling its games, and access to certain parts of those games. Facebook advertises to its hundreds of millions of members. Some have questioned the real "value" of these business models. But at least there's an attempt at making money. Instagram has none of that. In fact, it has no business model, really, at all.This is when all the tech bubble speak starts to sound reminiscent of the dot-com era, during which companies were wildly overvalued both on the stock market and among other companies, which overpaid for now-defunct companies like GeoCities, which Yahoo bought for $3.57 billion in 1999.