Valuations in Silicon Valley are not based on some rational price to earnings multiple. It is based on what investors think a large monopoly like SAP, MSFT, GOO

Valuations in Silicon Valley are not based on some rational price to earnings multiple. It is based on what investors think a large monopoly like SAP, MSFT, GOOG, CRM, etc would pay for it. Even the 8 times revenue is not a good benchmark anymore. The buyer will have umpteen ways to justify the price- new users, complementary products, etc. Just see SAP buying travel expense app for $8B.