The ex-President was quizzed by Prince Harry for Radio 4’s Today programme this morning and seized the opportunity to take a swipe at Mr Trump.
Mr Obama said people in a position of power should be careful with what they write on social media and spreading misinformation.
Although he did not mention Mr Trump by name, it appeared to be a clear swipe at his successor’s provocative tweets.
It comes as the US President ran into trouble by sharing tweets by Britain First, causing a trans-Atlantic splat with Theresa May.
Mr Obama said: “One of the dangers of the internet is that people can have entirely different realities.
“They can be cocooned in information that reinforces their current biases.”
And he warned: “The question has to do with how do we harness this technology in a way that allows a multiplicity of voices, allows a diversity of views, but doesn’t lead to a Balkanisation of society and allows ways of finding common ground.
“Social media is an important tool for people of common interests to get to know each other and connect.
“Then it’s important for them to get offline, meet in a pub. Meet at a place of worship, a neighbourhood and get to know each other.
“On the internet everything is simplified. When you meet people face to face, it turns out that people are complicated.”
Mr Obama admitted he had mixed feelings about handing over power to the new President and regretted “all the work that was still undone”.
And Harry appeared to almost steer into politics himself, when he told the President: “2017 hasn’t exactly been easy for the world, many are worried about the direction it’s going in.”
Prince Harry was guest editing the Today show this morning, using it as an opportunity to talk about issues like climate change and mental health.
During a packed show, he found time to interview the Prince of Wales.
And he was also quizzed by the radio hosts on fiancee Meghan Markle’s “fantastic” Christmas with the Royals and whether Mr Obama would be a wedding guest.
Harry said: “I don’t know about that, we haven’t even put the invite or the guest list together, who knows if he’s going to be invited or not.
“I wouldn’t want to ruin that surprise.”
Harry has been advised not to invite Mr Obama because it might upset Mr Trump, who is expected to visit the UK early in the New Year.