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> "Ballmer did exactly what our capitalist system dictate he do: he maximized profits to the benefit of Microsoft’s shareholders. The implications of suggesting

> "Ballmer did exactly what our capitalist system dictate he do: he maximized profits to the benefit of Microsoft’s shareholders. The implications of suggesting he was a failure are far more profound than most of his many critics likely realize." I'm not sure I get this point. Are Apple and Amazon not also running successfully under a Capitalist Marketplace?

hyperbovine 13y ago
Apple of course prints money, far more of it than Microsoft, so I don't really see where this author is coming from. Amazon is more interesting; Amazon famously posts loss after loss, preferring to reinvest it all in R&D an infrastructure. It's on open question as to why their stock retains such a high valuation (see e.g. http://www.slate.com/blogs/moneybox/2012/12/12/amazon_s_zero_profit_business_strategy_it_s_amazing_but_someday_we_may_all.html http://www.slate.com/blogs/moneybox/2012/12/12/amazon_s_zero...). I think the answer for most people (including myself) is that a) I don't want my Prime going anywhere and b) Jeff Bezos is a genius.
- hga 13y ago
  A very good point, although in the table I was able to find (http://www.streetinsider.com/ec_earnings.php?q=amzn http://www.streetinsider.com/ec_earnings.php?q=amzn) they've actually only reported two losing quarters going back 2 years, plus one that was 1 cent per share. 6 estimate misses, though, as many times as they exceeded expectations. So it's clear they're not buying "traction" by grossly under pricing their offerings. So given that so many of us know for an absolute fact it's a well run company, and the obvious potential, if not likelyhood of becoming the next Sears and Roebuck (that was a good thing in my lifetime :-), well, they have a way above average story.
- deleted 13y ago
  [deleted]
  - hga 13y ago
    My goodness, it really has been that long. 18 years since they opened their website, and 17 and a bit less than 2 months since my first order, which they did not drop on the floor in the intervening years. Which by itself says a lot. And it's still very useful data, I'm still in the market for every sort of book I bought, every author ... although I hope to never program in C++ again ^_^. Anyone who's noticed that they didn't lose their old sales data like so many others will recognize yet another bit of their excellence.
- kalininalex 13y ago
  Amazon has been operating at near breakeven point for a long time. Most of the years the make some money, sometimes they lose a bit. Their stock holds up because they increase their revenue, and market share, at a huge speed. This is reasonable. In fact, that's what most startup companies do after raising Series A, B, C, etc. funding - they usually spend a lot more than they make (i.e. "burn" cash) with the goal to grow the market share as quickly as possible. Amazon is a public company with significant cashflows, so they use internal funds to grow. Here're the latest approximate revenue/profits number from Amazon (all in billion): 2007: $14 / $0.5 2008: $19 / $0.6 2009: $24 / $0.9 2010: $34 / $1.1 2011: $48 / $0.6 2012: $61 / $(0.04) (loss of $40 million) This is a very impressive growth (in revenue) for a large company. Having said that, one day it will stop, so by then Amazon will need to show impressive earnings, or its stock may get punished.
jhawk28 13y ago
The point is that because Microsoft is focused on making money, they don't have time to change the world. Since Apple has "changed the world" multiple times, they end up making more money total, but they don't maximize the profits. Amazon is expected to also make more in the future while they have not made that much profit in the past.
michalu 13y ago
It's a false statement, if he did increase the shareholder value the share price wouldn't stay flat. And share values not just about profits but future potential as well.
rxp 13y ago
The way I read it, the author is asserting that Microsoft did exactly what a corporation is "supposed" to do, by focusing on maximizing shareholder value, and in the process stagnated. Meanwhile, Apple and Amazon are held up as examples of companies which culturally value customers more than shareholders, and as a result do better for shareholders as well. This would imply that doing what's best for shareholders in the short term looks very different from the long term.

hyperbovine 13y ago

Apple of course prints money, far more of it than Microsoft, so I don't really see where this author is coming from. Amazon is more interesting; Amazon famously posts loss after loss, preferring to reinvest it all in R&D an infrastructure. It's on open question as to why their stock retains such a high valuation (see e.g. http://www.slate.com/blogs/moneybox/2012/12/12/amazon_s_zero_profit_business_strategy_it_s_amazing_but_someday_we_may_all.html http://www.slate.com/blogs/moneybox/2012/12/12/amazon_s_zero...). I think the answer for most people (including myself) is that a) I don't want my Prime going anywhere and b) Jeff Bezos is a genius.

hga 13y ago
A very good point, although in the table I was able to find (http://www.streetinsider.com/ec_earnings.php?q=amzn http://www.streetinsider.com/ec_earnings.php?q=amzn) they've actually only reported two losing quarters going back 2 years, plus one that was 1 cent per share. 6 estimate misses, though, as many times as they exceeded expectations. So it's clear they're not buying "traction" by grossly under pricing their offerings. So given that so many of us know for an absolute fact it's a well run company, and the obvious potential, if not likelyhood of becoming the next Sears and Roebuck (that was a good thing in my lifetime :-), well, they have a way above average story.
deleted 13y ago
[deleted]
- hga 13y ago
  My goodness, it really has been that long. 18 years since they opened their website, and 17 and a bit less than 2 months since my first order, which they did not drop on the floor in the intervening years. Which by itself says a lot. And it's still very useful data, I'm still in the market for every sort of book I bought, every author ... although I hope to never program in C++ again ^_^. Anyone who's noticed that they didn't lose their old sales data like so many others will recognize yet another bit of their excellence.
kalininalex 13y ago
Amazon has been operating at near breakeven point for a long time. Most of the years the make some money, sometimes they lose a bit. Their stock holds up because they increase their revenue, and market share, at a huge speed. This is reasonable. In fact, that's what most startup companies do after raising Series A, B, C, etc. funding - they usually spend a lot more than they make (i.e. "burn" cash) with the goal to grow the market share as quickly as possible. Amazon is a public company with significant cashflows, so they use internal funds to grow. Here're the latest approximate revenue/profits number from Amazon (all in billion): 2007: $14 / $0.5 2008: $19 / $0.6 2009: $24 / $0.9 2010: $34 / $1.1 2011: $48 / $0.6 2012: $61 / $(0.04) (loss of $40 million) This is a very impressive growth (in revenue) for a large company. Having said that, one day it will stop, so by then Amazon will need to show impressive earnings, or its stock may get punished.

jhawk28 13y ago

The point is that because Microsoft is focused on making money, they don't have time to change the world. Since Apple has "changed the world" multiple times, they end up making more money total, but they don't maximize the profits. Amazon is expected to also make more in the future while they have not made that much profit in the past.

michalu 13y ago

It's a false statement, if he did increase the shareholder value the share price wouldn't stay flat. And share values not just about profits but future potential as well.

rxp 13y ago

The way I read it, the author is asserting that Microsoft did exactly what a corporation is "supposed" to do, by focusing on maximizing shareholder value, and in the process stagnated. Meanwhile, Apple and Amazon are held up as examples of companies which culturally value customers more than shareholders, and as a result do better for shareholders as well. This would imply that doing what's best for shareholders in the short term looks very different from the long term.