I actually thought those were some of the worst quotes in the article, not because the conclusion is wrong (IMHO, I don't have enough information to tell), but because the reasoning is wrong. For example:

"With social networking sites the amount spent is zero - and the loyalty corresponds."

Except they put time and emotional investment into the site. That often holds users to a site more than money.

Take a look at the recent fanfiction/LiveJournal kerfuffle. LiveJournal is essentially saying "We don't want you here, and we will suspend and delete your journals until you leave." There has been discontent - both technical and business - with LiveJournal's policies for the past 2 years. There is a widespread belief among many users that LiveJournal has lost out to FaceBook, and FB is now the superior offering. And yet the bulk of my friends are unwilling to leave, because LiveJournal has been a major part of their life for 5 years. It's too much of a logistical hassle to bring all their friends over.

(Strangely, it was not much of an issue 5 years ago when my friends all abandoned DeadJournal for LiveJournal. Perhaps it's because they were mostly 13-15 year olds then, and mostly 20-somethings now. Adults don't deal well with change.)

"Facebook and mySpace are only as valuable as the next big thing. In other words: they are fads. Now, fads can be successful if they're managed right, but they all share one thing in common - they won't be around tomorrow. If you need proof, look no further than Frendster."

That's a non-sequitor. The reasoning is the same as "Google won't be around for long; for proof, look no further than AltaVista" or "Microsoft Word won't be around for long; for proof, look no farther than WordStar and WordPerfect" or "Excel won't be around for long; for proof, look no further than Lotus 1-2-3 or Visicalc".

A product is vulnerable only so long as they have left consumer needs unmet. Early word processors did, but now MS word does a pretty good job for most users. Early search engines did, but now Google does a pretty good job for most users. Whether FaceBook meets everyone's social networking needs is an open question; IMHO they don't, but they're rapidly filling the gaps with the FaceBook platform.

"Let's put this into perspective: We have a product that has a monetary value of zero to its users being used to build further products of negligible value - and these products are actually being sold or invested in!"

Users and customers can often be two disjoint sets. Broadcast TV provides significant value to its viewers, but its viewers aren't the customers; the advertisers are. Bond rating services provide significant value to bond buyers, but bond buyers aren't the customers; bond issuers are. Facebook provides significant value to its users; there's a lot of potential to monetize that through local ads, distribution partnerships, etc.

I also think the reasoning behind this line is quite flimsy:

"I'm sorry to those that are caught up in the madness, but you have to have a few screws lose to think that we're not in the middle of a bubble."

What's that, argument-by-repeated-assertion? Personally, I think we're in the beginning of a bubble - but I can think of several points that suggest we're not in one at all. I certainly think it's premature to dismiss anyone who doesn't believe so as "a few screws loose".

Remember - Greenspan gave his "irrational exuberance" speech in December 1996. The bubble burst in early 2000. That was 3 years between "We're in a bubble" to "Uh-oh, the bubble's bursting."

Other bubbles have had similar timescales - my friends were saying "We're totally in a housing bubble" as of 2003 (it peaked in 2005 and is bursting now), people were saying "We're in a dot-com bubble" in 1997 (burst 2000), people said "Japan is undergoing an asset bubble" in 1986 (burst 1989), Warren Buffett got out of the stock market in 1969 (burst 1973), and the 1920s stock market boom started in early 1927 (burst 1929).