There have been some extraordinary events in May that makes me feel it will be seen as a defining month for the cloud (as opposed to evidence of a second internet bubble as some have been saying).

Firstly, we had the Microsoft acquisition of Skype for $8.5B – more than three times what the previous investors paid only two years ago and around 10x 2010 revenues. Whether you think Microsoft overpaid for Skype or not (and only time will tell – see my post) what it does show is the huge value they placed on internet-based voice and video communications of which Skype is not only the clear leader but also the verb that’s used to describe it. It also showed the huge cash reserves the big technology companies have and how much of it they’re prepared to spend to stay competitive in world that is moving more and more into the cloud – a world that is in danger of passing them by.

Secondly, we had LinkedIn’s IPO delivering results that exceeded virtually all expectations. Their shares opened at the higher end of the expected range at around $40 and reached $94 at the end of the first day reflecting a 109% increase. The company’s valuation had reached almost $9B and nearly 20x current year revenues (expected to be in the $450-500M region). Whether this is sustainable or not (probably not) it shows the level of excitement and belief in the potential of social networking and, more broadly, of cloud computing.

Lastly, we saw Salesforce, the leader in the SaaS market, report record quarterly results with revenues up 34% to $504M and on track to be the first SaaS company to exceed $2B for the year. Marc Benioff, Salesforce’s outspoken CEO, talked about being a top 5 software company overall showing how cloud companies are now starting to measure themselves against the whole market rather than just within their category; he also had some sharp words to say about Microsoft:

‘Customers continue to want visionary products that give them a competitive advantage, not the me-too Zune-type products locking them into these old, proprietary, desktop-driven platforms that are dying off.’

There has been so much talk recently about the new generation of social network companies and how they are not only attracting huge user bases but also huge valuations. On the one side, there is talk of multi-billion dollar valuations and on the other that this signals the start of another bubble with valuations expected to come crashing down in the not too distant future.

So I thought I’d try to break down the numbers and look at six of the hottest companies side by side to see what we can learn. I’m not interested in looking at each business individually – that’s been done to death. What I want to do is to look at the numbers relatively to see how they compare against one another and what can be learned from that.

I believe there is no doubt that some of these companies will justify their huge valuations and go on to be very large public companies and a brand that is part of our lives for many years to come. But there will be others that will be exposed as unsustainable and will end up either being sold or their growth trajectory will come to a grinding halt as they are either unable to scale or are overtaken by a competitor they didn’t see coming. I think it’s only in comparing these companies that we can start to predict who the lasting brands will be and what these businesses need to do to live up to the hype.

I’ve taken six of the most highly valued social network companies and looked at both user and revenue numbers and then followed that through to value. In all cases I’ve tried to take data that has been released by the business itself, but in the absence of that, I’ve used the most credible sources I could find or a blended version of various numbers.

While these numbers are still only estimates, and are also changing rapidly, I think it is still interesting to look at them alongside each other and there are various points that stand out for me.

I have a few predictions for 2011 and it struck me that the main theme is a more mobile and more social internet. It used to be that you needed a number of things to have a good internet experience – namely a PC, a broadband connection and a web browser (preferably Explorer). But now with the growth of new smartphone and tablet devices, much improved 3G/4G mobile networks and the amazing array of apps available you don’t need any of these things and truly have the internet everywhere. It’s amazing how quickly the PC/Microsoft/Intel stranglehold on our IT lives has loosened and I think this is good for us, the consumers, as there is now greater competition and more choice than ever before.

With the meteoric rise of social networks like Facebook and Twitter, who now have over 500M and 100M users respectively, we are now able to find, filter and share content and connections within self-selected networks of people, making the internet a more personal and relevant experience. Increasingly, our on-line experiences are defined first through our social networks and second through the internet itself.

Now more than a third of people are accessing their Facebook and Twitter pages via their mobiles and that’s what gets you to the convergence of a more mobile and social internet that I believe will be the big theme for 2011.

Here are my top 5 predictions:

Smartphone and tablet explosion
2011 will be the year that smartphones and tablets become truly mainstream products and, at the same time, an increasingly important means of accessing the internet which truly rivals the PC. Any internet service that is not optimized for smartphones and tablets will start to struggle in the face of this megatrend.

Social Networking for business
During 2011 business will move from experimenting with social networking to making it an integrated part of their marketing, communications and customer services efforts. This will mean more dedicated resources and budgets being devoted to social media, principally Facebook and Twitter. There are already nearly 100,000 corporate pages on Facebook with more than 5000 fans and this number is thought to be growing by at least 15% a month making it the fastest growing part of the Facebook machine.