The Internet is the Destroyer of Worlds

i graduated college in 1997. when i did, everyone was saying the internet was creating all this value.

when i graduated college in June 1997, the dow was about 7800. today, the dow is 6600. so what happened?

i'm not particularly smart but i like to follow people who are. in april 2000, Warren Buffet said, "For society, the internet's a wonderful thing. But for capitalists it's probably a net negative."

and that's exactly what happened. the internet is a lubricant of transactions. it disintermediates. the middleman is gone. margins have to be compressed. and that's what's happened across the board. the advent of the internet caused margins to be compressed. how can best buy charge a lot for something when when amazon has the same thing for less or better yet, ebay has it used for even less.

the credit bubble enabled some financial shenanigans to keep companies profits up for a bit, but it was inevitable that rather than creating value, the internet was going to destroy margins and therefore companies.

sure, google and ebay and amazon and other internet companies that have survived have created a lot of shareholder value, but when you look at the value destruction of newspapers and circuit city and KB Toys and others, you quickly realize, that the internet is the destroyer of worlds.