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Previously derided as a "Facebook for losers," LinkedIn's cheap clothes valuation suggests founder Reid Hoffman--now reportedly worth over $800 million--may be having the last laugh. At the same time however, it raises questions about the sustainability of cheap clothes online, and whether the bubble could burst.

So are investors paying far too much for wholesale clothing--essentially a modern Rolodex--and will the company come to look less like Google, which continues to rake in cash, and more like the failed web firms of the 1990s?

The company, which has over wholesale designer clothing registered users, boasts three sources of revenue: online ads, premium subscriptions, and charging business for recruiting tools, or what the company calls "cheap clothing stores."