Is Blodget Back to His Old Tricks?

Henry Blodget must be feeling a little lonely.

On the eve of the Google's tough-ticket "consumer technology" party at the company's Chelsea headquarters, disgraced former Wall Street analyst Henry Blodget is displaying the type of attention-seeking behavior reminiscent of the last tech boom.

Yesterday, he made the outlandish suggestion that Google will be valued at $2,000 per share—a claim which would be funny if it wasn't Blodget speaking. He's was thrown out of the securities industry and made to pay a $4 million fine for hyping stocks during the last tech bubble.

One month ago, in an exclusive two-part interview with Portfolio.com [Part 1 here. Part 2 here.] Blodget suggested "low-cost index funds." Now he's telling Google's millions of shareholders—and the rest of the investing public—that Google shares will quadruple. Anyone see a pattern here?

Industry insiders speculate that the cause of Blodget's attention-seeking behavior is two-fold.

1. He is trying to pump up his new venture Silicon Alley Insider.

2. He is sore because Alley Insider was unceremoniously uninvited from tonight's Google party in Chelsea.

The irony on the first point is that he doesn't have to pump up Alley Insider. He's hired some great talent—particularly Peter Kafka and the great Dan Frommer—and the site consistently provides good commentary and analysis on tech issues in New York City and beyond.

But the hype-prevention mechanism in Blodget must be permanently disabled, because he continues to spout absurd claims. Today's gem was that TechCrunch, Michael Arrington's blog on Silicon Valley, could be sold to CNET for over $100 million. With all due respect to Arrington, to paraphrase Lloyd Bentson: "I know CNET, and TechCrunch is no CNET."

As new media blog properties take on journalists in a bid for credibility, they should resist succumbing to delusions of grandeur. Blogs are not worth $80 million or $100 million. If we're going to make it through this iteration of tech euphoria—call it Web 2.5?—bloggers should focus on reporting the news and providing analysis, not playing an inbred game of scurrilous valuation hype.

by Sam Gustin