How The Internet Killed Profit

Great article. How Internet retail works: you lose money but make up for it in volume! Is a second dot com crash coming when investors finally figure this out?

TechCrunch

Editor’s note:Tom Goodwin is the founder of Tomorrow Group, a marketing and advertising consultancy for the post-digital age.

New eras in technology have always brought a fear of job losses and the devastation of legacy industries, but the Internet has taken us beyond “creative destruction.” It’s destroying the very foundations of business.

Software is indeed eating the world, in Marc Andreessen’s words, and we’re presented with an abundance of value being generated for consumers, but what if it’s killing the profit margin? It was Heraclitus who thought that nothing new ever came into our lives without a hidden curse, and from the steam age to the electrical age to the early Internet, we’ve long heard the cries of Luddites or neo-Luddites angry at the change.

They’ve had a point: Whether it was the industrialization of agriculture or the long decline of the postal industry, we’ve seen job losses on…

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