Yes, we're experiencing a social media bubble

There are many ways to identify a bubble. The one I like best is to eyeball the self-importance of its participants and their tendency to congregate in cultish packs; make inflated claims about the revolutionary nature of their ideas; and assume that anyone who criticizes it “doesn’t get it.” By this measure, we have a bubble right now among social media companies…

But – here’s another big difference from the last tech bubble — today’s social media entrepreneur is thinking of and usually getting some profits. And, notably – as every venture capitalist will tell you – the big social media companies are actually earning money. They’re creating Web sites to connect thousands, and in several cases, millions of people.

The problem is that venture capitalists can’t throw any more money at Facebook or Twitter, so they’re piling it on many start-ups that are in the same sector, but don’t have the same record of accomplishment. Facebook is unique.