I wish I could say the same about Facebook ( FB). Sure, the social network has seen its share price rally by close to 50% in the last six months. And sure, the firm's ability to maintain profitability is a big positive. But Facebook still needs to answer some big questions if it wants to justify the huge price premium it's currently trading for. Institutions clearly don't agree with me there; they picked up 375 million shares of Facebook last quarter, boosting their stake in the firm to $21 billion. Facebook's stats are impressive: It boasts more than 900 million monthly users and 500 million daily users. But its why those users turn to Facebook that's troubling; generally speaking, users to go Facebook to communicate with friends. While that provides the firm with a mountain of targeted advertising information, actually putting it to use requires FB's advertisers to divert users from what they came to the site to do. That's a fundamental business model problem. That doesn't mean that there's not value there. Users spend inordinate amounts of time on Facebook, and there are better ways to monetize that. Games are one big one -- they generate revenues without trying to distract users in the process. For now, the firm generates attractive revenue numbers for its cost structure, but that doesn't justify its lofty valuation.