• D: All Things Digital, Wednesday, October 3, 2007 10:45 AM

Silicon Valley Insider Henry Blodget, a former Wall Street analyst who was banned from the securities industry for life for giving Web companies' valuations he knew were outrageous, started a blog war on Tuesday. He outlandishly predicted that Google, nearing $600 per share, could be on its way to $2,000. According to Blodget, "$2,000 a share would mean a market cap of about $750 billion, which-given a reasonable time horizon-just isn't that far-fetched."

Both Kara Swisher of D: All Things Digital and Michael Arrington of TechCrunch had strong reactions to his post. "Um, Henry, it is far-fetched, as to be borderline fanciful," said Swisher, while Arrington called the post irresponsible.

Indeed, Google has plenty of problems, says Swisher, including the possibility of the DoubleClick deal not going through, what to do with YouTube, high employee and R&D costs, the specter of a recession and the emergence of social networking.

It's one thing to peg a privately owned company like Facebook with a $20 billion valuation, but it's another to say the sky's the limit for a publicly traded company like Google, especially when a blog is read by thousands. This calls into question the ethics (or lack) of blogging. Many people read blogs for their amusing hyperbole, but should those that cover specific industries be held to a higher standard?

Read the whole story at D: All Things Digital »