The Wallstreet Journal recently published an article proclaiming the end of internet investing. Author James Altucher’s wholesale dismissal of “the internet,” from MySpace to Time Warner’s selling of AOL to the troubles of Facebook and Twitter to monetize their platforms, is both alarming and interesting.
I would agree with Altucher that “the internet” is dead as destination websites are suffering due to decreases in advertising revenue across the board, but Marketing across social media has skyrocketed at a meteoric rate and offers the best opportunity to reach consumers. I would go so far as to say that most brands waste millions of dollars designing and driving traffic to fancy destination home pages when they could invest significantly less to reach consumers in the communities where they “live” online such as Facebook, Twitter, YouTube, forums, and across the blogosphere.
The truth is, there is no “internet,” there is a vast ecosystem of billions of people connecting with one another and contributing to a radical de-centralization of media publishing. Recognition that consumers are now content creators helps contextualize the reasons why properties such as MySpace and AOL have failed. MySpace ran itself into the ground by not protecting the privacy of its users from SPAM and has effectively become little more than a default homepage for musicians and artists, with little semblance of a real online community. AOL similarly ran into the ground because, after being acquired, it did little to add value to its members. Both properties along with numerous others proved to be unprofitable in the long run because short-term gains of expensive advertising were not balanced with long-term commitments to producing quality content and adding value to their audience.
Most “internet” acquisitions are based on traffic volume, reach, and other performance-driven metrics which do not take into account that quantitative analytics are a measure of strong commitments to qualitatively pleasing their consumers. In contrast, online properties, like nightclubs or fashion brands, cycle and burn out. They’re usually “hot” among tastemakers and influencers and once they get on an investor’s radar most likely they have already peaked.
As the “cool kids” – broadly speaking – move on to other things, masses flood in and owners need to cash out. The continual impulse to squeeze every dollar out of an online community in the form of advertising across internet properties needs to be tempered by respect and ongoing effort to add value and retain users. Blanket dismissals of “the internet” in publications like the Wall Street Journal are unfortunate, because they place an overly simplistic set of assumptions on something they do not understand.
I for one, will not be a hypocrite, though I would like to know from the Wall Street Journal and writers like Altucher whether I should abandon equally dismissive assumptions about the financial industry and investment bankers.
As of now, it seems to me like they’re a bunch of greedy and manipulative bastards who set the country on a disastrous course for their own personal gain. I’d like to think finance is more comlex than “the internet,” but perhaps it’s not if we look at short-term botton line and disregard the interests of consumers and share holders. 
