5 ms·

So... Groupon, which has already hitted the bottom and there are articles everywhere explaining how they are losing money, seems profitable. And Kickstarted, Gr

So... Groupon, which has already hitted the bottom and there are articles everywhere explaining how they are losing money, seems profitable. And Kickstarted, Grooveshark and Instagram which seem to be doing just fine, are not profitable... Somthing seems strange...(but I really wonder how Instagram makes money)

lmm 14y ago
Groupon isn't going to give its (recent) investors a return on what they put in, but they've always been profitable; their overheads are tiny, and they take 50% of the revenue from each deal for themselves. I have no idea how Grooveshark ever made or plans to make any money (heck, when I worked at last.fm we were celebrating our most successful year ever in which we'd only lost $1m. 5/6 of our income had come from advertising, and 5/6 of that from targeted ads, which IIRC Grooveshark doesn't do). Kickstarter appears to be deliberately set up as a non-profit organization.
- duiker101 14y ago
  I didn't know Kickstarter was a non-profit organization, I didn't find it on their website, would you mind pointing it to me? For Groupon, for me a profit is making more money than you spend and as you said they keep 50% of each deal but then they have to spend money to pay everything and also need a lot of advertisement. Therefore afaik they have no actual profit, which would mean returning money to the investors.
  - cocoflunchy 14y ago
    I'd like to know too about Kickstarter, it doesn't seem to appear on their website. Wouldn't they want to publicize it more if it was the case?
    - duiker101 14y ago
      Unless it's a rumour someone spread. It would be a smart move. Makes you look better and gain more traction.
  - marcusdoran 14y ago
    Kickstarter received Venture funding from USV (Fred Wilson et al). Since Non-profits don't generally have shareholders I would assume this means that Kickstarter is a For-profit corporation. http://content.usv.com/pages/kickstarter http://content.usv.com/pages/kickstarter
  - ImprovedSilence 14y ago
    Not necessarily true. They have profit, just not as much profit as their investors would have liked, or expected.
  - lmm 14y ago
    >I didn't know Kickstarter was a non-profit organization, I didn't find it on their website, would you mind pointing it to me? I meant that was how I read the OP site. Seems like it's not true, in which case I don't understand what the site is actually saying about kickstarter. >For Groupon, for me a profit is making more money than you spend and as you said they keep 50% of each deal but then they have to spend money to pay everything and also need a lot of advertisement. Therefore afaik they have no actual profit, which would mean returning money to the investors. What I meant was I believe they're operating at a profit, but their stock price is collapsing because it was buoyed up by expectations of growth that hasn't materialized. So investors have lost a lot of money, even though the company's income exceeds its expenditure.
- nostrademons 14y ago
  Groupon has over 10,000 employees, roughly 2.5 times as many as Facebook, more than Bing or Google Search, and a good 1/3 as many as Google had pre-Motorola-acquisition. https://www.google.com/finance?q=NASDAQ%3AGRPN https://www.google.com/finance?q=NASDAQ%3AGRPN They claim to make a modest profit this quarter (if their earnings don't get restated), but they operated at a loss for every previous quarter: https://www.google.com/finance?q=NASDAQ%3AGRPN&fstype=ii https://www.google.com/finance?q=NASDAQ%3AGRPN&fstype=ii

lmm 14y ago

Groupon isn't going to give its (recent) investors a return on what they put in, but they've always been profitable; their overheads are tiny, and they take 50% of the revenue from each deal for themselves. I have no idea how Grooveshark ever made or plans to make any money (heck, when I worked at last.fm we were celebrating our most successful year ever in which we'd only lost $1m. 5/6 of our income had come from advertising, and 5/6 of that from targeted ads, which IIRC Grooveshark doesn't do). Kickstarter appears to be deliberately set up as a non-profit organization.

duiker101 14y ago
I didn't know Kickstarter was a non-profit organization, I didn't find it on their website, would you mind pointing it to me? For Groupon, for me a profit is making more money than you spend and as you said they keep 50% of each deal but then they have to spend money to pay everything and also need a lot of advertisement. Therefore afaik they have no actual profit, which would mean returning money to the investors.
- cocoflunchy 14y ago
  I'd like to know too about Kickstarter, it doesn't seem to appear on their website. Wouldn't they want to publicize it more if it was the case?
  - duiker101 14y ago
    Unless it's a rumour someone spread. It would be a smart move. Makes you look better and gain more traction.
- marcusdoran 14y ago
  Kickstarter received Venture funding from USV (Fred Wilson et al). Since Non-profits don't generally have shareholders I would assume this means that Kickstarter is a For-profit corporation. http://content.usv.com/pages/kickstarter http://content.usv.com/pages/kickstarter
- ImprovedSilence 14y ago
  Not necessarily true. They have profit, just not as much profit as their investors would have liked, or expected.
- lmm 14y ago
  >I didn't know Kickstarter was a non-profit organization, I didn't find it on their website, would you mind pointing it to me? I meant that was how I read the OP site. Seems like it's not true, in which case I don't understand what the site is actually saying about kickstarter. >For Groupon, for me a profit is making more money than you spend and as you said they keep 50% of each deal but then they have to spend money to pay everything and also need a lot of advertisement. Therefore afaik they have no actual profit, which would mean returning money to the investors. What I meant was I believe they're operating at a profit, but their stock price is collapsing because it was buoyed up by expectations of growth that hasn't materialized. So investors have lost a lot of money, even though the company's income exceeds its expenditure.
nostrademons 14y ago
Groupon has over 10,000 employees, roughly 2.5 times as many as Facebook, more than Bing or Google Search, and a good 1/3 as many as Google had pre-Motorola-acquisition. https://www.google.com/finance?q=NASDAQ%3AGRPN https://www.google.com/finance?q=NASDAQ%3AGRPN They claim to make a modest profit this quarter (if their earnings don't get restated), but they operated at a loss for every previous quarter: https://www.google.com/finance?q=NASDAQ%3AGRPN&fstype=ii https://www.google.com/finance?q=NASDAQ%3AGRPN&fstype=ii