Today’s Observer column.

That left only Facebook as a focus for irrational exuberance. But how much was the preppy social-networking site ‘worth’? Arcane formulae were deployed by investment analysts to rationalise a range of fantastic valuations. Then Microsoft blew them out of the water by paying $240m for a 1.6% stake in the company. Here at last was a real number that people could latch on to. Even newspaper columnists could do the calculation: if 1.6% is worth $240m then 100% equals $15bn.

QED? Er, no. Even in those far-off days when a billion dollars was real money it was a preposterous valuation. But it entered the culture as a hard fact. After all (so the reasoning went) if those boys at Microsoft thought that 1.6% of Facebook was worth $240m, then it must be an exceedingly valuable company…