Nowadays, you hear about the IPO plans of online social sites like Linkedin, Groupon, Facebook, Twitter ... and Chinese copycat versions like RenRen, Tudou..
Now do you remember names like Ariba, CommerceOne, Broadvision, Vignette ... during the dotcom era in the late nineties ?
I am of the opinion that most of the social networking sites are ultimately not going to be able to make any significant amount of money to justify their lofty valuations. The story to tell in dotcom v1 is that as long as you get the eyeballs, you are ok, never mind about profits. The story for dotcom v2 seems to be about membership, as long as you can get a large number of active users, you are ok, never mind about how to generate income from these members.
My advice, the game is currently being played by the private bankers who try to get slice of the lucrative iPO business. By the time it get to the retail investors, holding those shares are the equivalent of holding live grenades on your hands. They are going to blow up in your faces.