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> Facebook is already more profitable non-inflation adjusted than what Microsoft was at the height of its power As a nit, what's the point of using a non-infla

by boulos 9y ago

> Facebook is already more profitable non-inflation adjusted than what Microsoft was at the height of its power As a nit, what's the point of using a non-inflation adjusted comparison? You wouldn't say have compared Facebook to Standard Oil :). It turns out that 1998 to today is only a 50% change according to CPI [1] and MSFT had $4.5B in net income for FY 1998 [2]. So your point still stands given Facebook's massive ~$10B FY2016 net income [3]. [1] https://www.bls.gov/data/inflation_calculator.htm https://www.bls.gov/data/inflation_calculator.htm [2] https://www.microsoft.com/investor/reports/ar98/fins.htm https://www.microsoft.com/investor/reports/ar98/fins.htm [3] https://investor.fb.com/investor-news/press-release-details/2017/facebook-Reports-Fourth-Quarter-and-Full-Year-2016-Results/default.aspx https://investor.fb.com/investor-news/press-release-details/...

adventured 9y ago
Ok, serious answer. I used the non-inflation adjustment specifically because while I recognized enough time had passed to cause a not-entirely-trivial adjustment, I didn't regard it as enough time to matter enough to warrant a distraction to the more core points. Inflation adjustment precision is a notoriously disagreed upon thing, the more near term you get the less valuable the matter becomes. I knew that someone might lodge that point, so I wanted to potentially preempt it (hoping that it would make the responding comment not worth bothering with, that the person writing it would be too lazy to bother writing a comment just to argue inflation adjustment numbers for ~1997-2017). Why bother making the point at all then? Because it highlights Facebook's growing financial power. If their net income isn't beyond Microsoft's on an inflation adjusted basis today, it will be very soon (perhaps by the end of fiscal 2017 or mid 2018 on a run rate). Further, I suspected most people realize that while there has been some inflation since the late 1990s, it's not N hundred percent.
- boulos 9y ago
  No problem! I'm notoriously incapable of guessing how much inflation has happened in the last {20, 30, 50} years. I was surprised it was only 1.5x (I had predicted ~2). I agree that CPI is a particularly clumsy measure (not mentioned is the fudge factor in how accounting for stock/option-based compensation has changed). Your comment had the desired (ultimate) effect though: I really haven't been watching how much cash Facebook has been generating, and it's amazing to compare it to Microsoft at peak monopoly.

by boulos 9y ago

adventured 9y ago

Ok, serious answer. I used the non-inflation adjustment specifically because while I recognized enough time had passed to cause a not-entirely-trivial adjustment, I didn't regard it as enough time to matter enough to warrant a distraction to the more core points. Inflation adjustment precision is a notoriously disagreed upon thing, the more near term you get the less valuable the matter becomes. I knew that someone might lodge that point, so I wanted to potentially preempt it (hoping that it would make the responding comment not worth bothering with, that the person writing it would be too lazy to bother writing a comment just to argue inflation adjustment numbers for ~1997-2017). Why bother making the point at all then? Because it highlights Facebook's growing financial power. If their net income isn't beyond Microsoft's on an inflation adjusted basis today, it will be very soon (perhaps by the end of fiscal 2017 or mid 2018 on a run rate). Further, I suspected most people realize that while there has been some inflation since the late 1990s, it's not N hundred percent.

boulos 9y ago
No problem! I'm notoriously incapable of guessing how much inflation has happened in the last {20, 30, 50} years. I was surprised it was only 1.5x (I had predicted ~2). I agree that CPI is a particularly clumsy measure (not mentioned is the fudge factor in how accounting for stock/option-based compensation has changed). Your comment had the desired (ultimate) effect though: I really haven't been watching how much cash Facebook has been generating, and it's amazing to compare it to Microsoft at peak monopoly.