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You can't compare amazon with facebook. Amazon is fundamentally low margin business. FB can at achieve/ maintain profitability levels of high margin google like
by ameyamk 14y ago
You can't compare amazon with facebook. Amazon is fundamentally low margin business. FB can at achieve/ maintain profitability levels of high margin google like ad business. Both companies are investing heavily for the future, and that reflects on their bottom line. The more important metric is revenue growth, and unless bottom line is not too red, generally speaking market is only paying attention to the top line growth.
- dasil003 14y agoWhy should social be high margin? How do we know it's not fundamentally low margin like Amazon's business? This is the disconnect between Silicon Valley and Wall Street. The OA says that Facebook's profits will never be "significant", yet is completely dismissive of the fact that Facebook has claimed more user time than probably any single company's creation in the history of mankind. If they can do this and making 9 or 10 figure profits then I think it's one of the greatest success stories in the history of capitalism. That is, the theory that capitalism is a way of allocating capital to create value. Ah but if the investors who bought into Goldman Sachs' hype machine don't see their cash return then Facebook must be nothing more than another failed attempt to create something "significant".