Is the inflated value of ‘social’ internet sites such as YouTube, MySpace and now Facebook going to precipitate another financial crisis on the internet?

Slate’s Daniel Gross certainly thinks it’s a possibility.

He notes startling similarities with the dotcom boom and bust of the late 1990s and early 2000s, including over-valued websites, poor income and, most of all, hype, hype and hype.

The interesting feature reveals a myriad of dodgy financial calculations including the discovery by CNN’s Dierdre Terry that Sony purchased YouTube-wannabe Grouper (no, I’d never heard of it before either) for a staggering US$70 per user. Even better, the founders of Facebook turned down a billion dollars (a thousand million) to sell out to Yahoo - because they wanted more.

Gross does note some differences between the late 90s and now, but on one level it would be rather satisfying to see it all fall away: these sites, puffed-up with their own sense of importance about how they are ‘revolutionising’ the media are actually making their money by convincing people to produce the material for them for free.

Consider the massive Murdoch copyright land grab that is MySpace, there are issues here that need to be thought about. It’s one thing to give away your music, art or writing for free but it’s quite another to suddenly find that it’s not yours anymore. If you want to find out more about the murky world of sub-licencing, start here with Billy Bragg.

Moreover, by surrounding the works in question with advertising these sites are attempting to profit from creativity without paying a single bean to the creative people whose work is attracting an audience.

Clearly this model can work for music, particularly in the fast-paced and style-obsessed teenage demographic. Whether or not it will work for other forms of art and creative activity, or indeed music aimed at more mature audiences, remains to be seen. And I remain sceptical.