It is no wonder that Mark Zuckerberg got so defensive this week. As he was paying $1bn to eliminate the threat to Facebook from Instagram, an 18-month old photo sharing site, the web’s former giants were being humbled.

Yahoo, which unveiled another reorganisation under its fifth chief executive in five years, and AOL, which sold a portfolio of 800 patents to Microsoft for $1.1bn, are under attack from hedge funds. Both are worth a fraction of their value during the 1990s internet bubble.

Silicon Valley was always competitive but barriers to entry in the late stages of the social network boom are so low, and capital so plentiful, that creative destruction is on fast-forward. If Facebook, which is about to launch its initial public offering, will pay $1bn to neutralise Instagram, how much are Path, Pinterest and others yet to be invented worth?