Even more fictitious than Facebook's revenues is its valuation. A market value, after all, requires a willing buyer and a willing seller, and Facebook CEO Mark Zuckerberg, and his board members have repeatedly said they don't want to sell. (Facebook has a valuation as a private company, of course, but trust me, it's nothing near the numbers insiders are bandying about.) So why make up multi-billion-dollar valuations for the company, seemingly out of whole cloth? Because it saves them from having to hear out lowball offers, I imagine — and it also sounds mighty fine in the press. Here's a thought for newly hired number-fudger Gideon Yu, however, as well as that stock-plan administrator Facebook wants to hire: The higher a private company's value, the harder it is to dole out lucrative options to new employees. After the jump, my theory on what Facebook's worth, and why.

"Mo money, mo problems," says a Facebook insider. The wisdom of the late Biggie Smalls explains, in a nutshell, why Facebook has found itself in court. A judge in Boston is considering at a hearing today whether to let a lawsuit filed by the founders of ConnectU — the Dickensian-named twins, Cameron and Tyler Winklevoss, and Divya Narendra — against Facebook CEO Mark Zuckerberg and his company proceed. This lawsuit, of course, only exists because of Facebook's supposed success, and the inflated valuations bandied about by board members tired of fending off buyout offers. I'll be covering this story throughout the day, but if you need to catch up, here's the full coverage.

Valleywag was chuffed to receive an email from Leah Borromeo, a producer at Sky News, the Rupert Murdoch-controlled British news service. "Jolly good!" we thought. "A bit of British TV time!" Or at least a change from our all-CNBC-all-the-time broadcast schedule (not that we mind). Alas, turns out Borromeo was looking for comment from Facebook CEO Mark Zuckerberg on his legal battle with ConnectU. We hear that Valleywag's very popular in the offices of the red-hot social network. Nonetheless, it seems like sending Valleywag an email is a rather convoluted method of inviting Zuckerberg on air. We don't know what's more amusing: Borromeo's cheek in saying she loves "seeing Harvard boys battle it out," or her presumption in thinking that Zuckerberg's PR handlers would ever allow him to comment on live TV about a pending legal case. After the jump, the misdirected missive.

Earlier this week, CNBC asked me to come on the air to discuss Facebook's legal woes. Click to viewI've spent days immersed in legal filings, and the clip, above, just scratches the surface of what I've learned. Next week comes a critical moment for Facebook, the red-hot social network that has captured Silicon Valley's imagination, and its founder and CEO, Mark Zuckerberg. After the jump, I explain why Zuckerberg will face a moment of reckoning next Wednesday, July 25, and detail a timeline of Facebook's legal battles.

Hate to say it, but Jason Calacanis had it right: NYT gadget reviewer David Pogue's "iPhone: The Musical" was a trite, derivative, and boring piece of Apple propaganda. But a group of San Francisco webheads have come up with a pitch-perfect take on the iPhone phenomenon. Behold the glory that is "Dontcha Wish Your Cell Phone Was Hot Like Me?" — and after the jump, my take on why this spoof gets it right while Pogue's flopped.

Portfolio.com has interviewed Tyler Winklevoss, one of the Harvard graduates who has charged Facebook CEO Mark Zuckerberg with stealing the idea behind the hot social network. Winklevoss, who founded HarvardConnection, a college-networking site now known as ConnectU, appears to be a very angry, bitter young man. We love those types! Here's what Winklevoss had to say to Portfolio about Zuckerberg's actions: "Premeditated, well thought out, duplicitous and conniving." Winklevoss adds, "He messed with the wrong guys." Of course, Winklevoss is more than a bit duplicitous himself in the interview.

Facebook CEO Mark Zuckerberg has a Q&A with Time Magazine. Revealed: Facebook isn't about meeting people online, instead it's about digitizing relationships you already have. Also, Zuckerberg is one of those bastards who doesn't need an alarm clock. [Time Magazine]

As Facebook's theoretical value soars, the interest of its hangers-ons grows practical indeed. I think that's why Cameron Winklevoss, Tyler Winklevoss, and Divya Narendra are pursuing their lawsuit against sandal-sporting Facebook CEO Mark Zuckerberg with such tireless vigor. But the three Harvard school chums, who say they hired Zuckerberg to work on their competing ConnectU site before he launched what became Facebook, are far from the only ones pressing a claim to have been present at Facebook's creation. (For the record, long-suffering Facebook PR chief Brandee Barker says the company's official cofounders are Zuckerberg, Chris Hughes, and Dustin Moskowitz.) After the jump, a gallery of everyone who's not an official founder — but who'd like to be.

A legal dispute from Mark Zuckerberg's past is not going away. Three years ago, fellow Harvard students Tyler Winklevoss, Cameron Winklevoss and Divya Narendra sued Facebook CEO Mark Zuckerberg, claiming he'd taken code he'd written for ConnectU to launch his rival site. Now, legal filings reveal, the lawsuit is rolling forward, with motions to dismiss set to be heard on July 25. While it's likely that the case will keep wending its way through the courts for a while, I'm betting Facebook will settle, probably with Facebook shares rather than cash, before an IPO. After all, a lawsuit against the CEO is one of those pesky things investors don't like to see in an S-1 filing.

Everyone's still talking about Henry Blodget's facile guess on his Internet Outsider blog that Microsoft might offer $6 billion for Facebook, the social network of the moment. And Facebook investor Jim Breyer, the Accel Partners venture capitalist who's on Facebook's board, tried to stoke hopes for such an outsized valuation by casually mentioning at Fortune's iMeme conference that Facebook was on track to do $100 million in revenues and turn an operating profit, by some financial measures, this year. But you shouldn't buy Blodget's musings, or Breyer's shilling, for a moment. Here's why.

If Mark Zuckerberg is the new Steve Jobs (hint: yes), then the Facebook creator's Adidas flip-flops are the heir to the Apple founder's black turtleneck. Nearly every news item about the 23-year-old fratrepreneur mentions (among other signs of youth) the black and white sandals, which Mark wears with every outfit. The Globe and Mail barely avoided predicting he'd wear them to the mogul summer camp soon taking place in Sun Valley. (Answer: he's not going.) But we've heard bad news about Mark's favorite sandals: they're getting discontinued. Here's a photographic retrospective on the love between a boy and his flip-flops.

Today, I don't think Randi Jayne, director of market development at Facebook and sister of CEO Mark Zuckerberg, would sing quite so gleefully about "startups [that] get the rag ... from Valleywag." Because now comes her employer's turn. The Reach Students blog notes that a campaign on Facebook drew a 0.04% click-through rate — a dismal response that's far from uncommon in advertisers' experiences. No wonder the site is scraping the bottom of the barrel to find advertisers. If Zuckerberg is to maintain his site's precious independence, he will have to figure out better ways for his company — and its advertisers — to profit from its rapidly swelling user base. Should he consider placing ads on his sister's show tunes instead? They'd get better click-throughs.

The moguls wandering through Sun Valley, Idaho, in the hopes of running into Facebook CEO Mark Zuckerberg, will be sorely disappointed. Contrary to reports, he's not attending the conference, appearing instead at Fortune's iMeme conference in San Francisco. Sun Valley will have to settle for Facebook COO Owen Van Natta. Though they might not mind the substitution. Van Natta comes with several years of experience as Amazon's vice president of worldwide business and corporate development, where his duties included brokering deals with the same Hollywood types now clogging Sun Valley's streets.

What to make of Chamath Palihapitiya's hire by Facebook? Immediately before joining the red-hot social network, he worked as a venture capitalist for the Mayfield Fund. And last February, he attracted controversy for his comments about the privileged society of Silicon Valley in an art film, Living Pictures/Men in Gold." Palihapitiya, who's Indian Sri Lankan, spoke of his intention to break through the old boys' club. But in going from a venture capital firm to Facebook, it would seem he's just going from the old boys' club to the new boys' club.

Sun Valley, the quiet Idaho ski resort town, is about to get a charge from Silicon Valley. Allen & Co., the New York investment bank, has been holding an exclusive conference there for 25 years, but until recently, the invite list has been limited to old-media moguls. On the invite list for this year's conference, which kicks off tonight: Jay Adelson, CEO of Digg, the social-news website, which he cofounded with Kevin Rose. Here's why we think Adelson's on the list — and who else might show up.

The 23-year-old CEO of Facebook likes to blather on about his social networking site's privacy settings. But if he thinks Facebook's protections are so great, why does he maintain a secret second profile, designed to be hard to find? If you're logged on to Facebook, go ahead and search for "Mark Zucerberg" [sic]. The misspelling, of course, makes it hard to find through a search, and the profile is so locked-down that only "Zucerberg"'s Facebook friends and work colleagues can see it. A Valleywag tipster stumbled across the listing, however, and took a screenshot (after the jump).

Just in case you had any remaining doubts that Facebook is going public — a fact that Mark Zuckerberg's sister, Randi Jayne, profanely sings about in a video that's since been taken down — check out this job listing:

I've always said that if there's one thing Silicon Valley needs, it's more show tunes. Which is why I'm such a sucker for the oeuvre of Randi Jayne and Jennifer Lee, the comedic duo behind such hits as "How to Get a Guy in Silicon Valley" and "Failure Is Fun (Valleyfreude)." (Jayne, newly solo, has come out with another brilliant number, "Crackberry," which you must go watch immediately.) But if you want to review Jayne's past works, you'll be stymied. "Valleyfreude" has gone missing. "It's a take-down," Jayne's site reads. I can't imagine that the disappearance of "Valleyfreude" anything to do with the fact that Jayne has a day job at Facebook. And that she's the sister of Facebook CEO Mark Zuckerberg. And that Facebook's getting ready for an IPO. Oh, wait. I can imagine that.

Slide executive Keith Rabois, one of the many new converts to Facebook in Silicon Valley, asks how much a Facebook app user is worth. The increasingly popular social network lets other Web companies plant applications, like Slide's photo-sharing service, on its site. But it's not clear how much loyalty users of such add-ons have to any site besides Facebook. So Rabois's question is apt, if a bit tardy: One wonders why Rabois didn't ponder such matters before Slide CEO Max Levchin got up on stage with Facebook CEO Mark Zuckerberg to swear fealty to Facebook's platform.

Mark Zuckerberg drops in, like a rockstar in a small-town club, to a developer meeting in New York. [CNET]