4 ms·

So the problem of these companies that are many billions of dollars having "most of their value tied up in their brand" is that the brand becomes... kind of in

So the problem of these companies that are many billions of dollars having "most of their value tied up in their brand" is that the brand becomes... kind of inextricable from the operations. Who would buy a $10B brand? Much less a $30B one or whatever? The answer is almost exclusively "companies that already have a better brand than you do." Like, Apple could buy Uber, and then do its own ride-sharing service, and brand that ride-sharing service Uber... but they don't need to. They're Apple. Any potential ride-sharing service that would like to build its own operations and the bootstrap itself to wider name recognition by buying Uber's brand won't be paying tens of billions of dollars. So what's left? We and Uber need to reform their own operations to make money, which is the exact problem that nobody thinks they can do. What does their supposedly powerful brand get them?

alasdair_ 7y ago
>Who would buy a $10B brand? Phillip Morris (a cigarette company) paid over $13BN for Kraft Foods, the vast majority of which was simply for the "Kraft" brand. And this was a long time ago. Brands have enormous value.
- edoceo 7y ago
  It wasn't for all the money they make from selling food products? Kraft generates predictable revenue and profit.
  - alasdair_ 7y ago
    >It wasn't for all the money they make from selling food products? Kraft generates predictable revenue and profit. Not really for that, no. In GAAP accounting "goodwill" is the generic term for "extraneous stuff that we can't quantify" i.e. the brand - the vast majority of the purchase price for Kraft was labled "goodwill" in the public accounting statements Phillip Morris issued. There is a pretty good writeup on this in Naiomi Klein's book "No Logo"
- puranjay 7y ago
  Brand names matter more in food and health verticals. People are far more brand driven when it comes to putting things in their body than they are about ridesharing or office space

alasdair_ 7y ago

>Who would buy a $10B brand? Phillip Morris (a cigarette company) paid over $13BN for Kraft Foods, the vast majority of which was simply for the "Kraft" brand. And this was a long time ago. Brands have enormous value.

edoceo 7y ago
It wasn't for all the money they make from selling food products? Kraft generates predictable revenue and profit.
- alasdair_ 7y ago
  >It wasn't for all the money they make from selling food products? Kraft generates predictable revenue and profit. Not really for that, no. In GAAP accounting "goodwill" is the generic term for "extraneous stuff that we can't quantify" i.e. the brand - the vast majority of the purchase price for Kraft was labled "goodwill" in the public accounting statements Phillip Morris issued. There is a pretty good writeup on this in Naiomi Klein's book "No Logo"
puranjay 7y ago
Brand names matter more in food and health verticals. People are far more brand driven when it comes to putting things in their body than they are about ridesharing or office space