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Google had $30 billion in revenues in 2010. Facebook has an estimated $2 billion. 15x the revenue, but only 2.4x market cap. Google also had a reported $8 bi

Google had $30 billion in revenues in 2010. Facebook has an estimated $2 billion. 15x the revenue, but only 2.4x market cap. Google also had a reported $8 billion in profits, and it's been suggested that Facebook's profits are meager. Google also operates in a segment of the industry that is much less fad-driven.

prostoalex 16y ago
Why do people get excited about profits of a company that never pays dividends? Is it about preservation of capital? Or a hope to see a trickle down effect of dividend payments at some point?
- hendzen 16y ago
  The retained profits (much of which go to productive activities such as R&D) add to the value of the company. Theoretically, the market should see this and then revalue shares accordingly.