Speaking at the Monaco Media Forum this weekend, Levy said that "far too many people are building plans based on advertising and they may well be disappointed because there is not enough money for everyone".
Levy predicted that the overvaluation of online businesses could trigger a replay of dotcom boom and bust.
"It's exactly the same situation as we saw at the end of the 1990s, when everyone thought that because he had a website he'd get the valuation," Levy said. "Now everyone building a Web 2.0 operation believes he will receive the advertising."
Despite these comments, Levy said that web advertising would continue to rise even as the rest of the economy experienced a slowdown.
Levy's comments repeat concerns raised by as Barry Diller, head of US new-media business InterActiveCorp.
Diller contested the $15bn valuation of social networking site Facebook suggested by Microsoft's willingness to pay $240m for a 1.6% stake in the business. "It doesn't mean anything, it is a phantom, false valuation," he said at the Monaco Media Forum. "Let them sell for $14.9bn and then I'll believe them."
By comparison, News Corp bought Facebook rival MySpace for $580m in 2005.