While using the Internet has greatly increased the level of connectivity between people, it has also had an adverse impact on the volume and nature of social interaction. It is especially so for younger generations who have been reporting unhappiness and been struggling with depression. It is unclear how specific individual and interpersonal variables interact with increased usage. The aim of this study was to take a closer look at this area. The research examined the effect of internet use on subjective well-being (happiness and life-satisfaction) while controlling for known predictors of subjective well-being: satisfaction with income, subjective health, employment and gender. Age groups for the five generations were created to gauge inter-generational differences. Additionally, a social score was calculated based on the intensity of real-life social interactions of the respondents. Results show that net-use intensity has a negative effect on one's reported happiness and life satisfaction, a higher effect on the latter one. Having extensive social ties and real-life interaction on the other hand increases subjective well-being. A generational gap is apparent as Generation Z is the least happy of the five generations.