Internet Bubble 2.0?

The so-called Internet bubble or dot-com bubble a decade ago was a prime example of how not to invest money. Back then the bubble burst because the highly hyped companies actually had no business models and consequently could not make profits. Investors just invested in thin air.

Then came the so-called Web 2.0 era: This time the world was truly interconnected, especially with the advent of social networking services. The user became the producer as well. The business model that should have brought in money was advertising. The search engine Google and the social network Facebook profited the most from this, but only to a certain degree because advertisements have not earned the internet giant its anticipated profits. These days Internet use has shifted from PCs to cellular phones, a platform on which profit margins for advertising are still much narrower than on the old “breadboxes” in the living room. What else is useful to make money? Well, Facebook and its advertisers still have an ace up their sleeve: customer data. But, should Facebook try to make massive money off the data, users are warning that the company could lose its business: A dilemma and possibly a new Internet bubble.