Media companies looking to acquire internet sensations Facebook or YouTube would need to take a “big leap of faith” to pull the trigger on a deal at the valuations of close to $1bn being discussed, said Dick Parsons, chairman and chief executive officer of Time Warner.

Mr Parsons, speaking to the Financial Times, said Yahoo, Microsoft’s MSN and Time Warner’s AOL as well as more traditional media companies were all looking to increase traffic to their websites in an effort to compete with Google.