The Web is going to capture an increasing share of people's attention, and billions of dollars are going to flow in. What Web 2.0 is about is harnessing those dollars in highly leverageable ways.
All markets have boom and bust cycles, and I think venture capital market has even more exaggerated boom and bust cycles.
So many folks in the venture capital business are sheep that just want to follow the herd. They are momentum investors purchasing highly illiquid investments. That is a recipe for disaster.
Facebook is not an unstoppable juggernaut. There are a lot of other things people can do on the web.
Facebook, Twitter, and Tumblr are all 'User First, Brands Second' services. The brands are all over these services now. But for the most part, these services didn't do much to bring them. The engaged users did.
When people laugh at a company or say, 'This is the stupidest thing I have ever heard,' you are listening.