The hot money is back.  After having burnt to a frizzle the internet equities markets in the late nineties and early aughts, investors seem to believe, this time, things really are different.

So it is with today’s LinkedIn IPO, which started the day at $45/share and is now trading over $100/share.

And how much cash flow is supporting that over $10 billion valuation?  Not much, according to the Wall Street Journal:

In 2010, revenue at LinkedIn doubled to $243 million and net income was $15.4 million, compared with a loss of $4 million a year earlier. In the first quarter of 2011, revenue also doubled to $94 million and net income rose 14% to $2.1 million from a year earlier.

The company expects its revenue growth rate to slow and warns that it won’t be profitable in 2011 as it invests in what it calls future growth, such as technology and product development. It also warns that it expects that its results in the future could become more cyclical and seasonal.

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Thus, a company that has yet to break $50 million in total profits, and by its own admission, doesn’t expect to do so anytime soon, is today worth over 200 times that much? 

But it’s not just LinkedIn.  According to NYPPEX, which tracks the valuation of privately-held social networking companies like Facebook, LinkedIn and Groupon, valuations in the first quarter of 2011 are through the roof:

Zynga Inc. and Facebook Inc. led a 51 percent surge in the private market valuations of top Web companies in the first quarter, according to NYPPEX,LLC.

Zynga, maker of the “CityVille” and “FarmVille” online games, rose 81 percent in value from the fourth quarter to about $8 billion, NYPPEX said today in an e-mail. Facebook, the world’s largest social network, climbed 57 percent to about $65 billion. The valuations are based on transactions among institutional investors.

Real estate sinks and internet mania returns.  How predictable.  This won’t end any less miserably than before.  When the social networking sites finally fall from the weight of being dependent on not charging their customers to use them, it remains a mystery what might come next.  But surely the manic-depressive American (and international) investor will find something new to lose money on, if he still has any left to lose. 

Social networking mania is apt to be especially short-lived, given the latent economic weakness into which it spreads.  Or, maybe not.  Hanging out on Facebook is a great way to waste time if you haven’t got a job.  But it’s hard to see how providing free web hosting for the banal musings of a bunch of people with neither jobs nor money could be a good business model.  But wait.  Isn’t that Facebook’s model about now?  Better get in on the ground floor before that IPO pops.