Bear Stearns: Yahoo Must Form A Social Networking Strategy

How humiliating. A stock broker telling Yahoo what their strategy should be. The concept is so weird the title's hard even to parse.

They'd never dare offer Google such advice, though it's entertaining to imagine what G's reaction would be if they tried.

I wonder what W Street analyst track records are? If I remember correctly a W Street analyst predicted that PS3 would slaughter everything and that the Nintendo Wii would be a distant 3rd....

Correct me if I'm wrong, but do these bear stearn analysts have their heads up their asses? Yahoo has already been following a social networking strategy (how successful is another subject) - they've already acquired a lot of s-networking sites like delicious and flickr (which ironically happens to be a recommended buy in the bear sterns report - wtf: did I read that incorrectly or do they not know what has already happend in years past?)

Am I completely off base or are these guys full of it?

I think the Facebook valuation is a bit much at $4.5 to $7 billion.

My reasons:

+Web startups should not be valued over 10 yrs, this is demonstrably much longer than most significant startups last Also consumers in the web world have short attention spans.

+Esitmated Prime page views aren't validated

+Prime CPM growth rate increases 400+% over 10 years, which even after adjusting for inflation seems to be a strech.

I think facebook will lose value over the coming year. If they wish to sell, they must do it soon. This is because the industries understanding of the valuations for acquisitions such as DoubleClick will correct. The multiples are too high.