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1. It is pointless to compare total company value with an annual payment. 2. It isn't an exclusive license. There are dozens of companies training language mod

by paxys 3y ago

1. It is pointless to compare total company value with an annual payment. 2. It isn't an exclusive license. There are dozens of companies training language models, and if they are all forced to pay the same amount then that's some serious cash.

Scoundreller 3y ago
It’s going to be a sad day when /u/cumbuster69 doesn’t get the attribution they deserve for their excellent financial advice
tyingq 3y ago
>1. It is pointless to compare total company value with an annual payment. Mozilla being an exception, I suppose?
- asadotzler 3y ago
  Mozilla has a billion in the bank and half a billion annual revenue with a 19 year track record on that contract. They spend most of that revenue each year, but any that's left over finds its way into the bank growing that sum. I'd wager Mozilla is worth considerably more than a single year of revenue if that's what you were suggesting. At a minimum they're worth their cash on hand, and some multiple of that revenue, perhaps 10x or even 20x so that would put Mozilla's company value at least around $6B, and I'd expect the Mozilla Foundation could easily get that kind of money for MoCo+Firefox if it decided to sell. Mozilla doesn't have growth, but it's got regular and significant income and has had that for longer than most of today's SV companies earning similar amounts.
  - tyingq 3y ago
    I'm not suggesting they are worth a single year of revenue. But 80+% of their revenue, and probably the highest margin bit of revenue, comes from that Google payment. So whatever their value is, hinges on that contract payment. Thus, the multiple is interesting....where you might "compare total company value with an annual payment" to see what that mathematical relationship is. Especially given their rapidly declining market share.
coffeemug 3y ago
I thought that's really cheap too. Tacking on "wiki" and "reddit" probably accounts for ~50+% of my google searches now. From that perspective $60M annually feels really low-- reddit search is probably a quarter of the value that google search offers me as a consumer.
- paxys 3y ago
  Reddit data is already part of Google's search index for free, and there is zero chance they are going to block that. This added payment is specifically for training AI models.
steveBK123 3y ago
Companies are generally valued based on cash flows, and some multiples based on profit/growth/etc.

by paxys 3y ago

Scoundreller 3y ago

It’s going to be a sad day when /u/cumbuster69 doesn’t get the attribution they deserve for their excellent financial advice

tyingq 3y ago

>1. It is pointless to compare total company value with an annual payment. Mozilla being an exception, I suppose?

asadotzler 3y ago
Mozilla has a billion in the bank and half a billion annual revenue with a 19 year track record on that contract. They spend most of that revenue each year, but any that's left over finds its way into the bank growing that sum. I'd wager Mozilla is worth considerably more than a single year of revenue if that's what you were suggesting. At a minimum they're worth their cash on hand, and some multiple of that revenue, perhaps 10x or even 20x so that would put Mozilla's company value at least around $6B, and I'd expect the Mozilla Foundation could easily get that kind of money for MoCo+Firefox if it decided to sell. Mozilla doesn't have growth, but it's got regular and significant income and has had that for longer than most of today's SV companies earning similar amounts.
- tyingq 3y ago
  I'm not suggesting they are worth a single year of revenue. But 80+% of their revenue, and probably the highest margin bit of revenue, comes from that Google payment. So whatever their value is, hinges on that contract payment. Thus, the multiple is interesting....where you might "compare total company value with an annual payment" to see what that mathematical relationship is. Especially given their rapidly declining market share.

coffeemug 3y ago

I thought that's really cheap too. Tacking on "wiki" and "reddit" probably accounts for ~50+% of my google searches now. From that perspective $60M annually feels really low-- reddit search is probably a quarter of the value that google search offers me as a consumer.

paxys 3y ago
Reddit data is already part of Google's search index for free, and there is zero chance they are going to block that. This added payment is specifically for training AI models.

steveBK123 3y ago

Companies are generally valued based on cash flows, and some multiples based on profit/growth/etc.