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> And it was "only" ~$20 billion. Inflation can't be this high. While I'm not sure about this buy, Cursor does at least have revenue. WhatsApp was basically ru

> And it was "only" ~$20 billion. Inflation can't be this high. While I'm not sure about this buy, Cursor does at least have revenue. WhatsApp was basically running on VC/private money (they had an extremely nominal fee, but I never had to pay it), and was sold to buy its userbase into the Facebook fold. I don't think you can compare that to a business that at least has some decent revenue.

dminik 6mo ago
If Whatsapp is burning through say ~$1B yearly with zero revenue and Cursor is burning through say ~$2B with a ~$1B revenue, they're both still in the hole. I wish people would stop talking about just revenue. It's mostly meaningless without knowing their expenses.
- abustamam 6mo ago
  I think revenue is common to talk about because profit is also meaningless when a company spends every penny it earns to grow (new engineers, marketing, etc). Iirc Amazon made zero profit for quite some time. Also revenue is a signal for product market fit. Is it a great one? Dunno. But for example I'd be hard pressed to sell $1billion of anything, even if I had something everyone wanted. But I think your point about burn rate is important. How long can they have this attrition on cash before they collapse?
  - dminik 6mo ago
    I mean, the financials just don't look great either way. Their main product is part VSCode, which is a market that's almost impossible to make money in, and part reselling already expensive LLM tokens. You can look at more parameters and judge how well a company could do in the future. For Amazon, you can predict that once they stop growing, they can make a pretty penny. But with Cursor that doesn't seem likely. Even if they had the talent for training models from scratch, which I don't think they do, and IF inference makes money, which is not clear at all, training models is still a huge money sink. So, for them getting bought out by xAi which has a base model they can use makes sense. But what does xAi get here? Another endless money pit?
    - r_lee 6mo ago
      they get their own platform like how Anthropic has Claude Code from which they can push out Grok and get training data (from free users or whatever) whether that actually gets them ahead, that's another question....
    - abustamam 6mo ago
      You're right. I was commenting mostly on "why companies usually talk about revenue than profit" I think the truth is that it's a new frontier. No one knows if any of this will make money. Investors are just betting that someone else will learn to monetize sometime soon.
oheyadam 6mo ago
WhatsApp was actually profitable pre-acquisition and they never needed the VC money. It was still in the bank + more when they got acquired

dminik 6mo ago

If Whatsapp is burning through say ~$1B yearly with zero revenue and Cursor is burning through say ~$2B with a ~$1B revenue, they're both still in the hole. I wish people would stop talking about just revenue. It's mostly meaningless without knowing their expenses.

abustamam 6mo ago
I think revenue is common to talk about because profit is also meaningless when a company spends every penny it earns to grow (new engineers, marketing, etc). Iirc Amazon made zero profit for quite some time. Also revenue is a signal for product market fit. Is it a great one? Dunno. But for example I'd be hard pressed to sell $1billion of anything, even if I had something everyone wanted. But I think your point about burn rate is important. How long can they have this attrition on cash before they collapse?
- dminik 6mo ago
  I mean, the financials just don't look great either way. Their main product is part VSCode, which is a market that's almost impossible to make money in, and part reselling already expensive LLM tokens. You can look at more parameters and judge how well a company could do in the future. For Amazon, you can predict that once they stop growing, they can make a pretty penny. But with Cursor that doesn't seem likely. Even if they had the talent for training models from scratch, which I don't think they do, and IF inference makes money, which is not clear at all, training models is still a huge money sink. So, for them getting bought out by xAi which has a base model they can use makes sense. But what does xAi get here? Another endless money pit?
  - r_lee 6mo ago
    they get their own platform like how Anthropic has Claude Code from which they can push out Grok and get training data (from free users or whatever) whether that actually gets them ahead, that's another question....
  - abustamam 6mo ago
    You're right. I was commenting mostly on "why companies usually talk about revenue than profit" I think the truth is that it's a new frontier. No one knows if any of this will make money. Investors are just betting that someone else will learn to monetize sometime soon.

oheyadam 6mo ago

WhatsApp was actually profitable pre-acquisition and they never needed the VC money. It was still in the bank + more when they got acquired