Remember the dot com bubble? It was to the mortgage bubble what World War I was to WWII. Just as WW the 1st was supposed to be the war to end all wars, so dot bomb was supposed to cure us all of bubble-headedness. The cause was the same for both these speculative stupidities (as it has been for every bubble in the last millennia, see This Time Is Different: Eight Centuries of Financial Folly). People who should have known better thought the laws of financial gravity had been repealed and that value could only go up. 

The dot com version of this delusion was that eyeballs = dollars. If enough people view it then money will magically appear! Now both The Huffington Post and Twitter are hoping they can do an alchemy no one else has been able to. 

Daniel Lyons of Newsweek writes, “A closer look at HuffPo’s financials shows just how tough that future is turning out to be. HuffPo has a big audience, but like most Web sites, it can’t monetize it very well. Right now, HuffPo generates just over $1 per reader per year. That’s nothing compared with the mainstream-media outlets that HuffPo hopes to displace.” Lyon is well aware of the irony of this appearing in the beleaguered Newsweek, as he notes: “Yes, money is gushing out of old media—nobody knows this better than NEWSWEEK, which is struggling financially and has been put up for sale.”

Twitter faces the same dilemma. It’s a service everyone loves but also everyone figures they can do without. This is clear in the results of a new Annenberg study which found that an astounding 0% (as in ZERO PERCENT) of users surveyed would be willing to pay anything for the service. This must be particularly bad news for Twitter as it has already rejected on the only business model that made sense: Getting bought by Google. (Twitter has always had a bizarre sense of itself. See: Twitter valued at $1 Billion say people with a vested interest in Twitter.) 

So what’s the take away from all this? I don’t know. Maybe just that you shouldn’t confuse popular with valuable.