Ad Deals Lacking Logic

You know something's off when people keep talking about tipping points.

So it was earlier this month, when WPP bought 24/7 Real Media , an Internet ad company. WPP CEO Martin Sorrell said, "You can call it a tipping point if you want, but I think there has been a tipping point in terms of the realization of the impact of these technologies."

Two days later, Microsoft paid $6 billion for aQuantive (AQNT - Cramer's Take - Stockpickr), another Internet ad company. A Microsoft executive, Steve Berkowitz, talked about hitting a "tipping point" -- where the mix of the two companies could be leveraged into higher profit.

A day later, when the The New York Times weighed in, one observer said "We've reached a tipping point" of ad dollars flooding online."

I hate to buck a good cliché, so here goes my hat into the ring: This frenzy of online-ad firm buyouts, from Google's absurdly valued $3 billion purchase of DoubleClick to Microsoft's absurdly priced $6 billion purchase of aQuantive, mark a tipping point away from value and toward speculation.

OK, it's not really my tipping point. I stole it from investing legend Ben Graham, who wrote in his 73-year-old book, "An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative."