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I'm curious why you think revenue matters more than profits. Take two hypothetical companies, say ebay` and amazon`. They both provide a marketplace, but sligh

I'm curious why you think revenue matters more than profits. Take two hypothetical companies, say ebay` and amazon`. They both provide a marketplace, but slightly differently. ebay` allows manufacturers to list directly on their market for a fee. Amazon` buys from manufacturers and sells on their market for a markup equivalent to ebay's fee. Are these two companies substantially different? I don't think so but the revenue frame of reference says they are,

jariel 7y ago
Revenue will give an indication of the size of the business activity. Valuation is just a measure of profits, which can vary a lot. From an economic standpoint, what matters more will be revenue, it's a better indication of how meaningful what is done impacts the world. As for Ebay vs. Amazon - for 3rd party listings, it doesn't matter that much, it's all accounting, but when Amazon actually does buy and sell stuff, it's very material because of a) cash flows: they send off cash (or get huge credit) to buy stuff b) they have inventory, warehouses, workers c) they are the merchant of record and take on chargeback risk, returns etc.. At the scale that is meaningful. But I don't think that this comparison really highlights the difference between 'high margin' and 'high revenue' so much as for example AirBnB vs. Toyota. Even though Toyota is not worth that much more than AirBnB, it's considerably important to the economy whereas AirBnB is almost irrelevant.