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I have to wonder how much investing in some of today's tech behemoths comes down to viewing them more as a holding company / investment firm and less about thei

I have to wonder how much investing in some of today's tech behemoths comes down to viewing them more as a holding company / investment firm and less about their original core products. Microsoft has lost tons of desktop share over the last decade, this should have been a death signal for them but instead amazing acquisitions like Mojang, GitHub, ActBliz have pushed them to an amazing market cap. Similar with FB loosing use as a social media platform but staying in business with Instagram/WeChat etc.

gogopuppygogo 5y ago
Losing market share on the desktop is by design to shrug off regulators while they flex into new growing markets. Their cloud has been a boon to their bottom line extending their reach into government/corporate clients while Xbox has kept Sony from dominating the living room/home. Diversification is good for any large entity not just an investment firm.
shadowgovt 5y ago
In a rapidly-changing marketplace, a certain level of diversification helps increase the odds of survival (it can be overdone; too much diversification, and a company finds itself in charge of a host of projects in industries it doesn't know enough about to compete, which is what put Marvel on the rocks so badly that Disney was able to snap them up back in the day). Not unlike in nature, a monoculture corporation lives and dies by their business being at all relevant in general, and the market (especially in the entertainment sector) is fickle.
Nbox9 5y ago
I hold Microsoft shares because I think they have a special talent for doubling down on a good investment. Microsoft has no problems investing $$$ into risky but plausible product lines. They bombed Windows Phone, but their sass offerings were in a perfect place to take advantage of 2020.
kristjansson 5y ago
Once you have billions and billions in profits to reinvest there's hardly a choice, is there? At some point, the firm has to invest in new product lines to support or supplant its tentpoles, and restricting the space of investment opportunities to those generated internally unnecesarily limits its options (viz. AAPL with more cash that it can spend)
jmnicolas 5y ago
Facebook own WeChat?
- xhrpost 5y ago
  My bad, I meant WhatsApp, can't edit
  - jmnicolas 5y ago
    Oh OK for a moment I though "how could I'v missed that ???" :)
zjaffee 5y ago
This is truthfully not a big problem in the tech industry when compared to other industries, the big exceptions to this in the tech industry are the much older tech giants like IBM, Cisco or HP whose entire growth model is acquisitions. Compare tech to big pharma, and you'll see one industry still innovating inside big companies and another which is totally acquisition driven.

gogopuppygogo 5y ago

Losing market share on the desktop is by design to shrug off regulators while they flex into new growing markets. Their cloud has been a boon to their bottom line extending their reach into government/corporate clients while Xbox has kept Sony from dominating the living room/home. Diversification is good for any large entity not just an investment firm.

shadowgovt 5y ago

In a rapidly-changing marketplace, a certain level of diversification helps increase the odds of survival (it can be overdone; too much diversification, and a company finds itself in charge of a host of projects in industries it doesn't know enough about to compete, which is what put Marvel on the rocks so badly that Disney was able to snap them up back in the day). Not unlike in nature, a monoculture corporation lives and dies by their business being at all relevant in general, and the market (especially in the entertainment sector) is fickle.

Nbox9 5y ago

I hold Microsoft shares because I think they have a special talent for doubling down on a good investment. Microsoft has no problems investing $$$ into risky but plausible product lines. They bombed Windows Phone, but their sass offerings were in a perfect place to take advantage of 2020.

kristjansson 5y ago

Once you have billions and billions in profits to reinvest there's hardly a choice, is there? At some point, the firm has to invest in new product lines to support or supplant its tentpoles, and restricting the space of investment opportunities to those generated internally unnecesarily limits its options (viz. AAPL with more cash that it can spend)

jmnicolas 5y ago

Facebook own WeChat?

xhrpost 5y ago
My bad, I meant WhatsApp, can't edit
- jmnicolas 5y ago
  Oh OK for a moment I though "how could I'v missed that ???" :)

zjaffee 5y ago

This is truthfully not a big problem in the tech industry when compared to other industries, the big exceptions to this in the tech industry are the much older tech giants like IBM, Cisco or HP whose entire growth model is acquisitions. Compare tech to big pharma, and you'll see one industry still innovating inside big companies and another which is totally acquisition driven.