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The Internet Is Dead (As An Investment) - WSJ

online.wsj.com — Op-Ed : Run for the hills when it comes to investing in Internet companies, writes portfolio manager James Altucher. In this economy, it's back to the basics.

Who dugg this? Made popular Jul 19, 2009

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  • socivitus, on 07/19/2009, -1/+48We should all invest in textiles, that's where the real money is nowadays!
  • IgorUnchained, on 07/19/2009, -3/+46Rupert Murdoch is losing money on MySpace and his other attempts at monopolies on the web.....so he is going to use his media monopoly to scare everyone else off too. Clever!


    "WAR, FAMINE, DEATH, AIDS, HOMELESS, RECESSION, DEPRESSION. WAR, FAMINE, DEATH, AIDS, HOMELESS...Then, you look out your window. "Where's all this ***** happening? Ted Turner's making this ***** up! Jane Fonda won't sleep with him, he runs to a typewriter: 'By 1992, we will all die of AIDS; read that on the air. I don't get laid, no one gets laid!'" I'm writing Jane Fonda: 'Will you ***** this guy so we can get some good news, please?' I want to see a well-laid Ted Turner newscast: "Hey, it's all going to work out. Here's sports."
    ----Bill Hicks
  • moothemagiccow, on 07/19/2009, -3/+36I'm not taking any financial advice from someone who uses the phrase "in this economy"
  • spriggig, on 07/19/2009, -0/+29Free advice is worth what you pay for it--or worse.

    All of these pieces are blatant attempts to manipulate the market. In other words, this guy is short-selling internet stocks.
  • GalacticRerun, on 07/19/2009, -0/+28Damnit I just bought 5000 shares in the internet

    SELL SELL SELL!
  • whatthefu, on 07/19/2009, -1/+27"Time Warner would rather keep their legacy old-media businesses like People magazine than hold onto one of the biggest Internet companies out there, AOL. And News Corp. is shaking up its MySpace business as it figures out its next steps." AOL and MySpace are poorly run pieces of *****.
  • crashbang, on 07/19/2009, -2/+21This guy sounds like he has some sound advice.
    What we should all do is start a business where people who really don't know exactly what is their talking about tell other people they should invest their money in something their not really sure about because the math used to figure out what it is their talking about investing in is faulty at best, and just plain false at worse.
  • Gleemonex, on 07/19/2009, -1/+19Once again the conservative sandwich-heavy portfolio pays off for the hungry investor!
  • siggyfawn, on 07/19/2009, -0/+16It's funny this is on digg.

    Digg basically tried to sell 2 years too late. The last two years it's been a lot of

    Digg: Hey we're for sale!
    Buyer: Cool. Tell us about your business.
    Digg: We get lots of hits!
    Buyer: How much do you make?
    Digg: Make? We lose money.
    Buyer: Hmm...
    Digg: But we're growing!
    Buyer: When and how will you make money?
    Digg: We get a ***** ton of hits!
    Buyer: <walks out of room>

    The whole "lets get popular then figure out how to make money" business plan has pretty much bombed. The "make money" part was sellling the site to a big company before you tried to make money (and usually failed).

    If a company was in any other sector, who was losing money, no idea how to ever make money, people would laugh at them. But on the internet, everyone thinks they can figure out how to get people to pay for free *****. If Digg became members only, $5 a month, it's alexa rank would drop from 141 to 141,000 in a week. Lots of people like it better then other free sites, but not enough to actually pay for it.

    When the VC trolls come around, they don't ask how many unique hits you get anymore. They don't ask about sign-ups. It's "how much money do you make?". And the old answer of "we're going to leverage our userbase down the road" doesn't really fly anymore.

    So it comes down to profit, or a technology no one else can duplicate. Which is how it should be. And he was pretty much on point the entire article. A large, free community site whose users wouldn't pay to use, is a tough nut to crack. And no one has really cracked it beyond "datamine it and target market the ***** out of it". Ehhh.



  • joshmoney, on 07/19/2009, -2/+16"Don't just ask me. Ask the best. Nobody can figure out a business model." So because no one can currently figure out a successful business strategy it is therefore "dead as an investment"? Am I one of the only one's who thinks we've still only hit the tip of the iceberg?
  • pingpants, on 07/19/2009, -2/+15"One word: Asphalt."
  • NiftyG, on 07/19/2009, -0/+13I just want to say one word to you - just one word.

    Are you listening?

    Plastics.
  • RATM4EVER, on 07/19/2009, -0/+12+1 internets for you good sir.

    ...Oh wait....
  • protogenxl, on 07/19/2009, -0/+10I'm following Monty Burns' advice and investing in Confederated Slaveholdings, Transatlantic Zeppelin, Amalgamated Spats, Congreve's Inflammable Powder, U.S. Hay, and the up-and-coming Baltimore Opera Hat Company
  • snafoo972, on 07/19/2009, -0/+10Actually, internet based companies are a great investment... when they are profitable in a traditional sense. When you buy stock in a company that runs off investment capital and does not have a profitable business model, it is going to be very risky (Digg for example).

    Chasing some nebulous idea of profits with a massively expanding user base can work, but probably won't.

    Things look peachy these days compared to the ones following the dot com bust. The problem is that the people with the millions to invest are very out-of-touch with the bleeding edge world of the Web.

    They need to stop reading the Wall Street Journal and go have a meeting with the twenty-somethings in their IT department. Just my two cents.
  • sdipaola, on 07/19/2009, -0/+9Missing the point, we are leaving the industry age behind and moving into the information age. All business models will change and this has already begun (RIAA, and film dinosaurs in turmoil, fame & eyeballs can be big as making money, open source, ...). So of course one of the dinosaurs ( writer in a newpaper) will see the internet as "no biz model" since he is thinking of old industrial age biz models. This is the same mentality that the dinosaur TimeWarner had buying AOL ( basically a big old non broadband isp) for billions thinking it was a way to these new information age economy.
  • MikeSobe, on 07/19/2009, -0/+9This article is interesting, because the article itself is rather simple and obvious but it touches on some interesting points. What I got from it is that it's hard to make money from 'The Internet' as a few very popular websites such as Facebook and MySpace have been unable to turn a profit (notice that they offer the same service) and sometimes it's better to invest in a less glamorous company because there is a real demand for their product and real money being invested into the industry. (Currently this applies to instructor companies because of Obama)

    OK that is all and well, the tech boom and bust has happened, I think everyone knows that not everything on the Internet is gold. The more interesting aspect of the article, which the author fails to address completely, is that there HAS to be a shift in how websites such as Facebook, Hulu, Twitter... and others operate. Mark Cuban has had a few posts about this. I'm curious how all of these free sites on the internet are going to shift in the next couple years. I think it's pretty clear that not every website can be fully supported by ads and continuous private investment.
  • SpykerSpeed, on 07/19/2009, -9/+18Krugman is a retard who believes printing money fixes all economic problems.
  • Wisgary, on 07/19/2009, -0/+9Finally my degree in 18th century agrarian business is gonna be put to use. Are you at all concerned about an uprising?
  • yocouchdigga, on 07/19/2009, -1/+9I can't stand you.
  • yocouchdigga, on 07/19/2009, -0/+8James Altucher is an idiot.
  • mcwattersm, on 07/19/2009, -1/+9Too bad he doesn't know what he is talking about.
  • phatfiend, on 07/19/2009, -0/+7Woob Woob Woob Woob Woob! *skuttle*
  • smord, on 07/19/2009, -0/+7Not sure what you're talking about but I like what I hear.
  • MikeSobe, on 07/19/2009, -0/+6Alley Insider had a contest on what would you do to improve Digg (from a money making standpoint). Here is a link to the winner. http://www.businessinsider.com/2009/1/our-email-to ...
  • mrfuzz, on 07/19/2009, -5/+10Worth a read. (and my digg ) Guy says it's paving the actual Highway, not the "information Super highway."
  • quomen, on 07/19/2009, -0/+5Plastics.
  • inkswamp, on 07/19/2009, -2/+7"Nobody can figure out a business model."

    WTF?! Gee, yeah, Google seems to be barely scraping by nowadays. iTunes... really hurting. Amazon, eBay... ouch and ouch. And there are thousands of smaller successes out there too.

    Declaring the Internet dead as an investment is a little circular. Remove all that investment money and *of course* it's going to look like nobody can figure it out because fewer people will be trying. I hate how everyone looks at the Internet like it's all settled and done. IT HAS JUST STARTED! The Web is still in its Golden Age. There's so much unclaimed territory out there still. Just because things are still in flux or Twitter and Facebook can't get their heads out of their asses, doesn't mean it's a lost cause.

    Dumb ***** article, dumb ***** attitude... exactly why you should expect from the old media.
  • inactive, on 07/19/2009, -0/+5dug for fapfapfaphentai.
  • yocouchdigga, on 07/19/2009, -1/+6use reply.
  • yocouchdigga, on 07/19/2009, -0/+5grow up.
  • crashbang, on 07/19/2009, -0/+5I would say its worthwhile to do both.
  • kaosethema, on 07/19/2009, -0/+51995 all over again
  • Super6, on 07/19/2009, -0/+5+1 yard tartan wool for you, good sir
  • kolop1, on 07/19/2009, -1/+6Really? Put a store on every corner and most fail? Really?
  • Tarmogoyf, on 07/19/2009, -1/+5Legalization.
  • 4AntiStupid, on 07/19/2009, -0/+4This article is from the Wall Street Journal.
  • Gleemonex, on 07/19/2009, -0/+4Shhh, let these idiots keep their venture capital to themselves. They can invest it in print media or payphone factories or something. Then once we get a good business model figured out we'll all be rich! Rich as Nazis!
  • DiggMeUpPlz, on 07/19/2009, -0/+4Digg is the last place to go for financial info...
  • 4AntiStupid, on 07/19/2009, -0/+4The maturing of the Internet is it becoming a tool just like any other. You might start up a company that builds patio decks but you wouldn't start up a "hammer using company". Everyone uses the Internet in their business, so there's nothing special about it anymore. In fact I'd worry about any company that does not include the Internet in their business plan in some form.
  • smord, on 07/19/2009, -0/+4Yeah I hate all those corporate websites run by companies like Facebook, Twitter, Google, and oh yeah, Digg.
  • DiggMeUpPlz, on 07/19/2009, -0/+3Pave the Information Super highway...???
  • DonAlfred, on 07/19/2009, -2/+5Great. The internet should never been seen upon as a thing which companies should invest in. The corporate world should just keep their greedy fingers far far away from my internet.
  • digghasnoethics, on 07/19/2009, -1/+4You know what's really dead? Treating economists as anything other than charlatans, hucksters and know nothings. The first question to them is "show me where you were warning of an economic collapse in 2006. No? Then sod off, you're proven useless and your advice worthless.

  • macmcraeart, on 07/19/2009, -0/+3two words porta potties
  • parabola9, on 07/19/2009, -0/+3He didn't write this.
  • dawnraid101, on 07/19/2009, -0/+3I liked digg better when it was used for technology and science stories instead of cats and meme's.
  • Moralogic, on 07/19/2009, -0/+3According to the article you are giving him nothing of worth pretty much. Give him 1 Wii point instead.
  • BigLeeThree, on 07/19/2009, -0/+3Thank God porn lives on.
  • MrCheerios, on 07/19/2009, -0/+3Why can't it still be used for science? The internet can be for anything, especially porn.
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