I don't think Facebook's valuation is "bubbly". However, the valuations of many early stage startup companies are inherently speculative, because they are based on projections which rely on assumptions, and only time will show whether this assumptions were true or false. This bubble is only as "bubbly" as these assumptions are overly optimistic. This is why investors learned to bet on people and teams, rather then on ideas, because the quality of the team is a better predictor of its success then the business idea.