Full disclosure: I have a horse in this race (Appleseed). I used to think that the problem was that Facebook wasn't worth what it was valued at. Now, I'm sta

Full disclosure: I have a horse in this race (Appleseed). I used to think that the problem was that Facebook wasn't worth what it was valued at. Now, I'm starting to rethink that, but not in a positive direction. I think maybe Facebook may be cursed by it's valuation. Right now, Facebook is like a developer-oriented gravy train. They can work on cool features, do redesigns on a whim, play with heavy scale, and there's enough investment to keep it going in every which direction they want. But profits aren't there, not on this level. And remember that, for as indispensable as Facebook is, most people can survive without it, and the achilles heel of social networks is that the trickle of users leaving can quickly become a flood. Myspace found this out, and they were twice as profitable, per user, as Facebook is (although they did have many problems that Facebook hasn't, terrible engineers being one of them). What I'm wondering is, will the valuation force Facebook to make the kind of hard decisions they're putting off right now. Are ads lucrative enough to appease the investors? If not, where do they go? Do they start heavy data mining? Do they push the boundaries of privacy even further? I'm starting to consider the fact that these astronomical valuations may end up contributing to Facebook's eventual demise by setting expectations that they cannot meet without fundamentally alienating their users. We'll see.