If it acts like a bubble, and sounds like a bubble, when will we realize it’s a bubble?

When inflated beliefs about future value come into conflict with actual underlying value, conditions are right to create a bubble. Housing prices will always go up! Having a dot.com in your name will always increase value! If you can get to scale, you’ll win the digital battle! If you don’t invest in Crypto now, you’ll miss a once-in-a-lifetime opportunity! Let’s consider the evidence with respect to targeted Internet advertising.

Inflection points always come along gradually, then suddenly

In my book “Seeing Around Corners,” I make the point that inflection points, those events that change reality by a factor of 10, are often burbling along for ages, sometimes for decades. Then, when they pass a tipping point, the general reaction is “oh, this came completely out of the blue!” Take, for example, the COVID-19 pandemic.

People, just because you’re not paying attention doesn’t mean the signals aren’t there. Consider this Wall Street Journal article from 2017. Called “Predicting the Next Pandemic,” its first line is literally “Where will the next pandemic come from? Likely from bats.”

Which brings me to the subject of Internet advertising. The kind of advertising that uses personal information about you, freely given or…