Looking back since 2008 or so, with the possible exception of groupon, I can't think of a single $5+ billion dollar web 2.0 company that has crashed and burned.

A significant number of these web 2.0 companies seem to have defied the ‘crash and burn’ that characterized the first boom. Pets.com and Webvan were pretty much failures from inception, but sites like Pinterest and Airbnb keep getting more successful and more valuable.

I think there will be no shortage of private investors who want a piece of pie and would cough up monies to that end. It's similar to properties. Real estate in Kensington, London is valuable but the market is ever dynamic so investors don't go by the historic trends but rather short term trends when deciding the value of property.

I think it's less ridiculous than most startup valuations tbh