James Altucher penned a column in today's WSJ titled The Internet Is Dead (As An Investment). James is a fund manager and well read columnist on investing and he is entitled to his opinion. He puts his money where his mouth is. But so do I and since we continue to invest heavily in the Internet, I thought I'd take the opposite side of this debate.

We (my partners and I at Union Square Ventures) think the Internet is one of those transformative technologies that changes everything. We see it like the industrial revolution or the invention of the printing press. It is a huge game changer. The Internet has been a commercial technology for about fifteen years now. And we are beginning to see the impact of it on everything around us. The industrial revolution and the Renaissance before it lasted a century or more. It takes a long time for such fundamental changes to work their way through the system and produce a new "normal".

Periods of great change produce fantastic investment opportunities and also destroy stable predictable businesses. Investors have the choice to take a chance on the new opportunities, stick with the stable predictable businesses, or sit on the sidelines. I prefer to do the former.

James says:

These are the "stable predictable businesses" that might be destroyed by the changing dynamic. I am not saying they will be. But they could be. The fact that Time Warner is selling AOL and holding on to magazines doesn't convince me that it is going to be a long term survivor. AOL itself is a business that has been negatively impacted by the Internet. AOL was never a pure Internet business. It was a dial-up access business connected to a proprietary online service.

And James goes on to say:

I'll leave Twitter out of this because it is too close for comfort. But Google can easily monetize its huge and growing apps business (which is a huge threat to Microsoft) and also its local franchise. Who doesn't use Google Maps these days? And Facebook is going to produce $550mm in revenues this year, is EBITDA profitable, and has a self serve ad system that is growing like weeds and giving local advertisers the best local targeting around right now.

And what about Amazon, eBay, and Craigslist? And international businesses like Baidu, Lastminute, Vente-Privee, Tencent, and Sohu? There are easily a dozen and probably two dozen worldwide Internet businesses that investors should own today and for the long haul.

I expect that number will grow over the next couple decades to include hundreds of large global Internet businesses that investors can own and make money with. Yes, barriers to entry on the Internet are low and there are no regulated monopolies that James likes to own. But network effects, data leverage, and scale are huge economic advantages online and if you look for businesses that have them, you can and will make a lot of money as the Internet revolution changes business, society, and the world around us. I think you have no other choice other than keeping your money under your mattress.

Jason Kinkaid has an interesting post on Techcrunch today about the summer TV doldrums and the opportunity this time of year presents for catching up on earlier seasons of shows you like.

I like to watch what my kids do, particularly as it relates to entertainment, as it gives me a clue about where things are going. And my kids are doing exactly what Jason suggests. They are catching up on prior seasons of Friday Night Lights, The Office, and Weeds.

This is not new behavior for them. They've been using the off season to do this for a few years and they used to purchase the older seasons on iTunes and watch them on their laptops.

That would drive me crazy because often one or two or all three kids would purchase the exact same season of shows on their respective computers. I would push them to share their purchased shows and often they would do that, but not always.

So I am happy to report that they've moved on from iTunes and are now watching these older seasons on Netflix Watch Instantly, both via the browser and on Boxee (the photo above is Netflix on Boxee in our family room).

The other interesting development is they are moving away from watching these older seasons on their laptops. They still do that quite a bit, but I've noticed that more and more they are opting to watch on the Mac Minis we've got connected to big screen TVs in our home. When they have friends over, it used to be the set top box was the device they'd watch TV on the most. Now its the Mac Mini.

Last week, some on Wall Street got all crazy about a research report written by a 15 year old intern at Morgan Stanley.  I read the research report as it was sent to me by about a half dozen friends who work on Wall Street and indeed it had some interesting insights in it. But not all 15 year olds are alike. Just as it is dangerous to read too much into what my kids do, it is dangerous to read too much into what a 15 year old in London does. But it is absolutely critical to pay attention to what teens all over the world, particularly the developed world, are doing. And one thing they are doing is changing their media consumption habits quickly.

My kids have moved from the set top box to iTunes to Netflix in less than a couple years and are now watching much of their TV streamed over the Internet. I expect they are not alone. It's a trend worth watching.

Our portfolio company Meetup has big potential for its API and platform and is looking for a super strong engineer to lead its efforts in this area. Meetup is located in NYC and is a strong, well funded leader in its category.

Last week I wrote a post saying that I view the exclusive contracts that carriers negotiate with handset manufacturers as anti-competitive. I really don't want to see the government wade into this market if there is another way to unwind this practice.

There was an interesting debate in the comments to my post yesterday on active and non-active users.

Gian Fulgoni, Chairman and co-founder of comScore said:

And Steve Goldstein, CEO and co-founder of Alacra agreed with Gian and said:

Now, these are two entrepreneurs who I backed over 10 years ago who have both built profitable and valuable businesses. So they know a thing or two about business.

But I think they are both missing an important insight. When I think of online retailing, I think of three kinds of users; non-active users, active users, and active users/transactors.

As Gian points out, for a business to succeed, it needs to have a healthy number of transactors. But looking at your user base as either non-active or transactors is the wrong way to think online (and maybe offline too). Just like bookstores use cafes to bring potential purchasers in the store, online retailers should intentionally cultivate an active non-transactor user base.

Our portfolio company Etsy does a good job of this. Many of the visits to Etsy are to read The Storque, participate in the conversations in the forums, or to build up lists of your favorite things. There are literally millions of people who do these things every month. Some of them choose to transact during these visits, but many do not.

So I'd advise all online retailers to focus on making users active first and foremost and give them a lot of things they can do on your website beside transact. By doing that you increase the number of monthly visits and therefore the total amount of potential transactors.