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“Google sees nearly 3x ROI from paying to be the default search engine on Safari”

• hollerith 3y ago
  That's not even close to the actual meaning of return on investment.
  • hotnfresh 3y ago
    It’s for-sure at least close. To the meaning, anyway. (You’re right that putting it through the proper formula, the figure that comes out is more like a 2x return—I was a bit hasty. The total value is 3x, not what Google sees)
    • hollerith 3y ago
      Investment has a precise meaning in accounting, and the money Google pays Apple does not satisfy that definition. You can tell because Google did not receive any stocks, equity shares, notes or bonds in exchange for the money given. It is a marketing expense is not an investment. Whether it helpful to Google's bottom line for Google to incur the expense depends on all the other expenses entailed in pursuing the revenue opportunity. Programmer salaries for instance. Investments don't have that quality where the attractiveness of the investment depends on many other investment amounts. Financial accounting is not hard to learn. It is not quantum physics. Is it too much to ask that if you have not yet learned it, then please do not use terms with technical meanings such as "return on investment" or ROI?
      • hotnfresh 3y ago
        It’s used in a less-technical sense all the time in business, and that usage doesn’t seem to cause problems. [edit] example: using the term ROI where the “investment” is COGS is downright common. [edit edit] I’ve verified my observation that this is a common usage in marketing circles, specifically, too. I think this is an example of “incorrection”: “you’re wrong! (if I define the context to be one in which you’re wrong, and different from the one you were clearly operating in)”