When the web was first started it was purely a means for people to communicate data. No consideration was really given to it being any richer of a medium than text and numbers. Once it had been discovered that there was considerable interest from the general population, people with bigger ideas started taking advantage.
Around 1994 a web service called “geocities” was launched. It allowed people to have an “address” online. This was interpreted literally as someone’s page would be for example “www.geocities.com/RodeoDrive/2432″. The idea was that people would create an address, and could use simple software to create thier own web page. Little HTML know-how was required. Within 4 years they had over a million users.
In 1998 they went public with an IPO of $17 per share. Inside a year that stock price had risen to $100, and the site was the 3rd most visited on the web, behind AOL and Yahoo!. In 1999 Yahoo! bought out Geocities for a whopping $3.57 billion.
This was right at the peak of the web 1.0 bubble, and the money being spent on the web VASTLY out weighed the money being made. The first year of Yahoo!’s acquisition posted an $8 million loss.
Despite having millions of users, and very high page views, the site was never profitable.
Stories like this were rampant during that time, and contributed to the downfall of the web in it’s first iteration. It took a long time for people to understand that members and page views are not the whole story.