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This narrative is ridiculous. Isn’t it sad that USA’s most valuable companies are advertising agencies? Isn’t it sad that some of the most valuable companies

by mrtksn 4y ago

This narrative is ridiculous. Isn’t it sad that USA’s most valuable companies are advertising agencies? Isn’t it sad that some of the most valuable companies are renting middlemen(AirBnB, Uber)? I don’t know, it’s a stock market. At some point the market decided that some game CD retail shop is orders of magnitude more valuable than previously thought. I wouldn’t read much into this and look for metrics which indicate something tangible like.

marcosdumay 4y ago
> Isn’t it sad that some of the most valuable companies are renting middlemen(AirBnB, Uber)? Hum... That one is expected. If you improve commerce, you create a huge amount of surplus, and you will certainly be able to take a bit of it. What is sad is that the current crop of middlemen is so uncreative and risk-free. That means our commerce is so restricted that anybody bold enough to defy the government makes a revolution.
- zamnos 4y ago
  That one is expected, but rather than take a negative take on it, they are trumphs of capitalism - the Internet was supposed to get rid of middlemen and optimize selling, but instead it created whole new markets to more efficiently allocate resources. Gone are the days of timeshares. Now it's all AirBNBs.
jonas21 4y ago
> Isn’t it sad that USA’s most valuable companies are advertising agencies? Huh? Which ad agencies are among the most valuable companies in the US? There's Omnicom, but they're not even in the top 100.
- DubiousPusher 4y ago
  I believe they mean Facebook and Google.
- itsyaboi 4y ago
  I think they mean Google/Facebook. edit: jinx
onlyrealcuzzo 4y ago
Not sure why it's sad that LVMH is the largest company in Europe and outstanding that a luxury hardware manufacturer - Apple - is the largest public company in the world (by a decent margin).
- deleted 4y ago
  [deleted]
- nindalf 4y ago
  Can’t comment on HN with my LVMH handbag. - Sent from my iPhone.
  - sogen 4y ago
    Don't try to reply while driving your Lambo!
- mcv 4y ago
  My response to a comment that has been deleted while I wrote this: > One is significantly harder and has more utility than the other, indicating an achievement in knowledge and application of that knowledge rather than using figuring out ways to sell people status signals. But which is which? Because this could apply in both directions. Bags are undeniably useful, even if LVMH's are ridiculously overpriced. But people have also always complained that Apple is overpriced, and mostly selling people status signals. And Apple is the most respectable of the Big US companies, because Tesla is all hype, Google blatantly abandoned its "don't be evil" creed, and Amazon is known for its inhuman labour conditions. I don't think any of these are companies to be proud of. We need better. And better is probably not bigger.
- mannerheim 4y ago
  Weird how Apple is considered a luxury brand when they have half of the smartphone market in the US.
  - anonymouskimmer 4y ago
    Is that new, new and used, or total current in-use phones? I can't find the median, but the average new car price in the US got close to $50k. Which certainly doesn't come close to the average price paid per car currently on the road.
DubiousPusher 4y ago
The other problem here is that it doesn't account for differences between industrial sectors. Different industrial sectors have different amounts of consolidation. This lends itself to higher valuations. Certainly European engineering as a sector is worth far more than luxury fashion. But engineering has more resistance to consolidation. Some of this even comes down to how the different sectors are differently regulated. Consolidation in many sectors will face more intense scrutiny than in others. Lastly, we have to account for how global a sector is able to become. Certain sectors like construction, in large struggle to sell their services in a global market this limiting their size. Fashion, like movies is exactly the kind business you would expect to attain a global reach. I will agree on one point though. As an export, LV demonstrates a grossly uncraftsman-like aptitude. My wife rebuilds and repairs designer bags. Late LV is some of the cheapest and most shoddily made shit she works on. The older bags are great. But since the 90s, the bags have declined tremendously. The same is true of Gucci. I think this is pretty clearly the product of those two brands absolute explosion in demand over the same period. Most other designer brands are tiny in comparison to these two. Except Hermes, which my wife rarely gets hold of so I'm not sure if they've suffered the same decline with scale. But no joke, if you're looking for quality, Michael Kors is a far better bag.
- bionsystem 4y ago
  How does Hermès rates in terms of quality ?
  - antoniuschan99 4y ago
    I hear still very high. Even Chanel is not handmade anymore.
- WastingMyTime89 4y ago
  Both LVMH and in some measure Kering somehow managed to keep luxury margins while having their entry-level bags bought by a ton of women especially in China which is an humongous market for them. As far as I know, Hermes never played fast and loose with quality like the other two but remains considerably more expensive. Note that I mean that in the context of luxury products - quality remains high and I'm not sure I agree that Michael Kors is currently higher quality than Vuitton.
mcv 4y ago
It is sad that all the big tech companies have basically become advertising companies. That said, I do think those tech companies are still more interesting than a company that makes luxury bags. So I figured I'd check what the other largest European companies are. In order: LVMH, Novo Nordisk, L'Oréal, ASML. #4, ASML, is of course the pride of the Dutch tech industry. That's a company that's innovative on tech and making its profits entirely by making the best chip manufacturing machines. #3 L'Oréal is primarily known for shampoo and cosmetics and that sort of stuff. #2 I hadn't heard of. Apparently they mostly provide diabetes care. That's awfully specific for such a big company. No idea if they're big because they're incredibly innovative in that field, or that they're monopolising healthcare. LVMH's name suggests it's not a company that grew this big naturally, but it rather the result of several mergers. An artificially inflated moloch. I think most people here would be happier with ASML in the top spot.
- pjc50 4y ago
  Novo Nordisk manufacture insulin; that's an absolutely enormous business!
- GreedClarifies 4y ago
  Novo Nordisk must be a huge fan of the food pyramid. A company riding the wave of humans eating themselves to death. The world is an amazing place!
  - alephnerd 4y ago
    They do way more than diabetes/insulin medication - they make and R&Ded recombinants, oesteoperosis medication, menopause medication, and hemophilia medication. They're one of the Big Pharma firms like Pfizer and GSK, and the only reason Denmark (and specifically Aarhaus) is on the map for bioinformatics. Separately, why are so many new HN commentators snarky asshats.
    - ftxbro 4y ago
      > They're the only reason Denmark (and specifically Aarhaus) is on the map for bioinformatics. That's a sick burn of the Aarhus University Bioinformatics Research Centre https://birc.au.dk/ https://birc.au.dk/ but maybe that research is only there because of that company too?
908B64B197 4y ago
> Isn’t it sad that USA’s most valuable companies are advertising agencies? Google and Meta sure, what about Apple, Microsoft, Tesla and Amazon? > Isn’t it sad that some of the most valuable companies are renting middlemen(AirBnB, Uber)? Not at all. They are first and foremost marketplaces that are actually cutting out middlemen from the equation. Remember taxi medallions?
KoftaBob 4y ago
Of the 10 largest US companies, only Google and FB could accurately be described as “advertising agencies”. For the rest, the bulk of their revenue comes from: - Apple => hardware sales - Amazon => e-commerce and cloud services - Microsoft => windows + office + azure cloud - Nvidia => semiconductors - berkshire hathaway => diversified investments - johnson & johnson => pharmaceuticals - Tesla => automotive + energy
fnordpiglet 4y ago
I’m not sure it’s as ridiculous as you seem to say. Apple is the worlds most valuable company, and it is not an advertising company but a pretty straight up technology company. Google is certainly advertising, but the science, math, and technology that go into their product is amazing - and the advertising but subsidizes all its research. Amazon isn’t an advertiser, while it’s a retail and logistics platform, it’s mostly planet scale technology infrastructure company. Then you’ve got Boeing, Tesla, etc. That the EU doesn’t have a meaningful (in terms of revenue production) technology or engineering industry and the top company is a company that makes money by stamping logos on handbags should be concerning and not dismissed. I wish Europe had more innovation, we would all benefit from more people and more companies innovating.
- pjc50 4y ago
  > That the EU doesn’t have a meaningful (in terms of revenue production) technology or engineering industry I don't know what definition you're using here, but I think describing e.g. Airbus as "not meaningful revenue" is surprising. What _do_ you mean (not just you but all the "EU has no industry" people) both by "meaningful" and a definition of the industry sector?
- alephnerd 4y ago
  The EU lags in software R&D, but they are still a massive player in ONG, Energy, Automotive, Pharma, Defense, and Manufacturing R&D. A lot of this is country dependent though - eg. Denmark/France are big Pharma players, Norway/Netherlands are major energy sector players, Sweden/France/Germany are major Defense Players, etc.
  - fnordpiglet 4y ago
    Fair enough. I’m also being unfair, Mercedes, BMW, Rolls Royce, et al are also engineering powerhouses. I guess it’s really software, hardware, and technology services that seem to lag. SAP is the only significant European software company that comes to mind, and I can’t think of any Intel, Arm, nvidia, AMD, etc.
    - 4y ago
victor106 4y ago
> Isn’t it sad that USA’s most valuable companies are advertising agencies? really??? Apple is not an advertising company. Amazon is primarily AWS, The retail division does have advertising but its not its primary business although it is growing. Microsoft has Bing but its by no means anywhere close to having revenue close to its other products. Google is the only company that is advertising focused.
- deleted 4y ago
  [deleted]
- HDThoreaun 4y ago
  Advertising is absolutely Amazon retails entire business. They've completely pivoted strategy to being a logistics platform that sells and delivers at cost and makes all the profit on high margin ads 3rd party sellers are forced to buy if they want their page seen.
  - acchow 4y ago
    You're focusing on Amazon's retail side while most of Amazon's profits are from AWS. AWS is not an advertising business
    - scrum-treats 4y ago
      Let's take a step back. How does AWS capture Cloud marketshare today? Advertising. AWS can push out the newest weird-named redundant product all they want, but no one will even hear of it without Advertising.
- mrtksn 4y ago
  That's not the point. This wasn't a slam against the American economy or something. Obviously the US has some of the greatest tech companies, beyond the "tech" companies.
Fauntleroy 4y ago
It's sad because it means most disposable wealth is tied up in the trade of overpriced-just-because fashion products for the hyper wealthy.
pb7 4y ago
Which are advertising agencies? Meta which owns WhatsApp that Europe is entirely dependent on? Or Google that owns Search, YouTube, and Android that Europe is entirely dependent on? The US could send Europe to the dark ages overnight by turning off all of its software. That’s real value, not luxury handbags.
acchow 4y ago
#1 is Apple, #2 Microsoft, #4 Amazon (most of their profits are from AWS), #5 Berkshire, #6 Nvidia, #8 Tesla, #9 Johnson & Johnson, #10 Visa. Of the top 10, only #3 Google and #7 Meta could be called "advertising agencies", and even then they do a lot more.

by mrtksn 4y ago

marcosdumay 4y ago

> Isn’t it sad that some of the most valuable companies are renting middlemen(AirBnB, Uber)? Hum... That one is expected. If you improve commerce, you create a huge amount of surplus, and you will certainly be able to take a bit of it. What is sad is that the current crop of middlemen is so uncreative and risk-free. That means our commerce is so restricted that anybody bold enough to defy the government makes a revolution.

zamnos 4y ago
That one is expected, but rather than take a negative take on it, they are trumphs of capitalism - the Internet was supposed to get rid of middlemen and optimize selling, but instead it created whole new markets to more efficiently allocate resources. Gone are the days of timeshares. Now it's all AirBNBs.

jonas21 4y ago

> Isn’t it sad that USA’s most valuable companies are advertising agencies? Huh? Which ad agencies are among the most valuable companies in the US? There's Omnicom, but they're not even in the top 100.

DubiousPusher 4y ago
I believe they mean Facebook and Google.
itsyaboi 4y ago
I think they mean Google/Facebook. edit: jinx

onlyrealcuzzo 4y ago

Not sure why it's sad that LVMH is the largest company in Europe and outstanding that a luxury hardware manufacturer - Apple - is the largest public company in the world (by a decent margin).

deleted 4y ago
[deleted]
nindalf 4y ago
Can’t comment on HN with my LVMH handbag. - Sent from my iPhone.
- sogen 4y ago
  Don't try to reply while driving your Lambo!
mcv 4y ago
My response to a comment that has been deleted while I wrote this: > One is significantly harder and has more utility than the other, indicating an achievement in knowledge and application of that knowledge rather than using figuring out ways to sell people status signals. But which is which? Because this could apply in both directions. Bags are undeniably useful, even if LVMH's are ridiculously overpriced. But people have also always complained that Apple is overpriced, and mostly selling people status signals. And Apple is the most respectable of the Big US companies, because Tesla is all hype, Google blatantly abandoned its "don't be evil" creed, and Amazon is known for its inhuman labour conditions. I don't think any of these are companies to be proud of. We need better. And better is probably not bigger.
mannerheim 4y ago
Weird how Apple is considered a luxury brand when they have half of the smartphone market in the US.
- anonymouskimmer 4y ago
  Is that new, new and used, or total current in-use phones? I can't find the median, but the average new car price in the US got close to $50k. Which certainly doesn't come close to the average price paid per car currently on the road.

DubiousPusher 4y ago

The other problem here is that it doesn't account for differences between industrial sectors. Different industrial sectors have different amounts of consolidation. This lends itself to higher valuations. Certainly European engineering as a sector is worth far more than luxury fashion. But engineering has more resistance to consolidation. Some of this even comes down to how the different sectors are differently regulated. Consolidation in many sectors will face more intense scrutiny than in others. Lastly, we have to account for how global a sector is able to become. Certain sectors like construction, in large struggle to sell their services in a global market this limiting their size. Fashion, like movies is exactly the kind business you would expect to attain a global reach. I will agree on one point though. As an export, LV demonstrates a grossly uncraftsman-like aptitude. My wife rebuilds and repairs designer bags. Late LV is some of the cheapest and most shoddily made shit she works on. The older bags are great. But since the 90s, the bags have declined tremendously. The same is true of Gucci. I think this is pretty clearly the product of those two brands absolute explosion in demand over the same period. Most other designer brands are tiny in comparison to these two. Except Hermes, which my wife rarely gets hold of so I'm not sure if they've suffered the same decline with scale. But no joke, if you're looking for quality, Michael Kors is a far better bag.

bionsystem 4y ago
How does Hermès rates in terms of quality ?
- antoniuschan99 4y ago
  I hear still very high. Even Chanel is not handmade anymore.
WastingMyTime89 4y ago
Both LVMH and in some measure Kering somehow managed to keep luxury margins while having their entry-level bags bought by a ton of women especially in China which is an humongous market for them. As far as I know, Hermes never played fast and loose with quality like the other two but remains considerably more expensive. Note that I mean that in the context of luxury products - quality remains high and I'm not sure I agree that Michael Kors is currently higher quality than Vuitton.

mcv 4y ago

It is sad that all the big tech companies have basically become advertising companies. That said, I do think those tech companies are still more interesting than a company that makes luxury bags. So I figured I'd check what the other largest European companies are. In order: LVMH, Novo Nordisk, L'Oréal, ASML. #4, ASML, is of course the pride of the Dutch tech industry. That's a company that's innovative on tech and making its profits entirely by making the best chip manufacturing machines. #3 L'Oréal is primarily known for shampoo and cosmetics and that sort of stuff. #2 I hadn't heard of. Apparently they mostly provide diabetes care. That's awfully specific for such a big company. No idea if they're big because they're incredibly innovative in that field, or that they're monopolising healthcare. LVMH's name suggests it's not a company that grew this big naturally, but it rather the result of several mergers. An artificially inflated moloch. I think most people here would be happier with ASML in the top spot.

pjc50 4y ago
Novo Nordisk manufacture insulin; that's an absolutely enormous business!
GreedClarifies 4y ago
Novo Nordisk must be a huge fan of the food pyramid. A company riding the wave of humans eating themselves to death. The world is an amazing place!
- alephnerd 4y ago
  They do way more than diabetes/insulin medication - they make and R&Ded recombinants, oesteoperosis medication, menopause medication, and hemophilia medication. They're one of the Big Pharma firms like Pfizer and GSK, and the only reason Denmark (and specifically Aarhaus) is on the map for bioinformatics. Separately, why are so many new HN commentators snarky asshats.
  - ftxbro 4y ago
    > They're the only reason Denmark (and specifically Aarhaus) is on the map for bioinformatics. That's a sick burn of the Aarhus University Bioinformatics Research Centre https://birc.au.dk/ https://birc.au.dk/ but maybe that research is only there because of that company too?

908B64B197 4y ago

> Isn’t it sad that USA’s most valuable companies are advertising agencies? Google and Meta sure, what about Apple, Microsoft, Tesla and Amazon? > Isn’t it sad that some of the most valuable companies are renting middlemen(AirBnB, Uber)? Not at all. They are first and foremost marketplaces that are actually cutting out middlemen from the equation. Remember taxi medallions?

KoftaBob 4y ago

Of the 10 largest US companies, only Google and FB could accurately be described as “advertising agencies”. For the rest, the bulk of their revenue comes from: - Apple => hardware sales - Amazon => e-commerce and cloud services - Microsoft => windows + office + azure cloud - Nvidia => semiconductors - berkshire hathaway => diversified investments - johnson & johnson => pharmaceuticals - Tesla => automotive + energy

fnordpiglet 4y ago

I’m not sure it’s as ridiculous as you seem to say. Apple is the worlds most valuable company, and it is not an advertising company but a pretty straight up technology company. Google is certainly advertising, but the science, math, and technology that go into their product is amazing - and the advertising but subsidizes all its research. Amazon isn’t an advertiser, while it’s a retail and logistics platform, it’s mostly planet scale technology infrastructure company. Then you’ve got Boeing, Tesla, etc. That the EU doesn’t have a meaningful (in terms of revenue production) technology or engineering industry and the top company is a company that makes money by stamping logos on handbags should be concerning and not dismissed. I wish Europe had more innovation, we would all benefit from more people and more companies innovating.

pjc50 4y ago
> That the EU doesn’t have a meaningful (in terms of revenue production) technology or engineering industry I don't know what definition you're using here, but I think describing e.g. Airbus as "not meaningful revenue" is surprising. What _do_ you mean (not just you but all the "EU has no industry" people) both by "meaningful" and a definition of the industry sector?
alephnerd 4y ago
The EU lags in software R&D, but they are still a massive player in ONG, Energy, Automotive, Pharma, Defense, and Manufacturing R&D. A lot of this is country dependent though - eg. Denmark/France are big Pharma players, Norway/Netherlands are major energy sector players, Sweden/France/Germany are major Defense Players, etc.
- fnordpiglet 4y ago
  Fair enough. I’m also being unfair, Mercedes, BMW, Rolls Royce, et al are also engineering powerhouses. I guess it’s really software, hardware, and technology services that seem to lag. SAP is the only significant European software company that comes to mind, and I can’t think of any Intel, Arm, nvidia, AMD, etc.
  - 4y ago

victor106 4y ago

> Isn’t it sad that USA’s most valuable companies are advertising agencies? really??? Apple is not an advertising company. Amazon is primarily AWS, The retail division does have advertising but its not its primary business although it is growing. Microsoft has Bing but its by no means anywhere close to having revenue close to its other products. Google is the only company that is advertising focused.

deleted 4y ago
[deleted]
HDThoreaun 4y ago
Advertising is absolutely Amazon retails entire business. They've completely pivoted strategy to being a logistics platform that sells and delivers at cost and makes all the profit on high margin ads 3rd party sellers are forced to buy if they want their page seen.
- acchow 4y ago
  You're focusing on Amazon's retail side while most of Amazon's profits are from AWS. AWS is not an advertising business
  - scrum-treats 4y ago
    Let's take a step back. How does AWS capture Cloud marketshare today? Advertising. AWS can push out the newest weird-named redundant product all they want, but no one will even hear of it without Advertising.
mrtksn 4y ago
That's not the point. This wasn't a slam against the American economy or something. Obviously the US has some of the greatest tech companies, beyond the "tech" companies.

Fauntleroy 4y ago

It's sad because it means most disposable wealth is tied up in the trade of overpriced-just-because fashion products for the hyper wealthy.

pb7 4y ago

Which are advertising agencies? Meta which owns WhatsApp that Europe is entirely dependent on? Or Google that owns Search, YouTube, and Android that Europe is entirely dependent on? The US could send Europe to the dark ages overnight by turning off all of its software. That’s real value, not luxury handbags.

acchow 4y ago

#1 is Apple, #2 Microsoft, #4 Amazon (most of their profits are from AWS), #5 Berkshire, #6 Nvidia, #8 Tesla, #9 Johnson & Johnson, #10 Visa. Of the top 10, only #3 Google and #7 Meta could be called "advertising agencies", and even then they do a lot more.