Another bubble waiting to burst ?

Conversation today morning veered towards various aspects of social networking and started off with my (and a few others’) inability to understand and appreciate Twitter. What is the business model ? What is the practical use ? To those in the know, forgive this ignoramus but I just can’t figure out why do people want to Tweet at all !! Needless to say, I would appreciate a ‘Twitter for Dummies’ post and/or discussion.

So on we went to who funds these etc and the next pit-stop was if what we are seeing in the internet space and the high valuations is another bubble waiting to burst !! Are investors becoming a victim of the bandwagon effect and investing in businesses that have no solid business models ?

This led to a remark that we will inevitably see another shake-out in the dot.com space– few established players with proven revenue models and others fallen by the wayside.  Is this possible ? 

I think this is unlikely and more a wishful thought - largely due to the discomfort with this constant state of flux and the need for stability. We will continue to witness a constant proliferation of new ideas/models, the old being regenerated and the existing revamped. This constantly changing state is the hallmark of the internet and will continue to remain so.