4 ms·
This makes this tweet[1] from Chris Dixon hilarious: "Which strategy wins the future: stock buybacks or investing in AI + robots + smart devices?" I mean it r
by IBM 13y ago
This makes this tweet[1] from Chris Dixon hilarious:
"Which strategy wins the future: stock buybacks or investing in AI + robots + smart devices?"
I mean it really shouldn't surprise anyone that a VC would be cheerleading expensive acquisitions with no regard for shareholder value or whether it has any hope of making a significant return.
But the real answer to his question is: organic growth. And if you are confident in your ability to create organic growth, then the best way to use large amounts of cash to create shareholder value over the long-term is stock buybacks (assuming you have the cash to fund that organic growth and your shares are undervalued, which in Apple's case, both are true).
[1]https://twitter.com/cdixon/status/427602474086584320 https://twitter.com/cdixon/status/427602474086584320
- mediaman 13y agoI know Google is trying to break out of their traditional business, but it seems like they've been trying to do that for years and nearly all their revenue is still ads. Just because very smart entrepreneurs are able to capitalize on an opportunity (search) and turn it into one of the world's largest companies, doesn't mean they can arbitrarily do it again.
- sliverstorm 13y agoTo my eyes, Google has been looking for the "Next Google" since at least 2004 or so.
- jerf 13y agoHas any company the size of Google ever successfully pulled of this sort of diversification? (Honest question, there may well be answers I'm not thinking of. But I do mean very large companies, I know smaller ones diversify all the time successfully (and unsuccessfully).) For context, you think about a company like Microsoft or Google "diversifying", and, you know, for them it's not enough to "merely" build a $250 million/year business for it to be considered a leg of the metaphorical company stool, instead of just a "hobby". How can you hope to scale up a new core competency to the requisite levels? (It seems "merely" having vast resources is no guarantee of success.)
- crucifiction 13y agoAmazon has done it a couple of times (Kindle, AWS).
- discodave 13y agoThose two things are still a tiny fraction of revenue from the main retail store.
- clarky07 13y agoUm, Apple? Microsoft gets a lot of flack but frankly it has done pretty well. It makes a lot of money in several different divisions outside of windows and office.
- rjbez17 13y agoApple has always been a consumer electronics company...they may have a diverse set of consumer electronics, but they aren't truly diveresified. I think a truly diversified company is more like GE, 3M, Samsung, Honda, etc.
- clarky07 13y agoI don't think you have to be a conglomerate to have diversified product lines. They were just a PC company for 20 years. Then they added iPod, then iPhone, then iPad. On top of that they have itunes and apps which are by themselves a large growing business. 5 different billion dollar businesses is pretty good. Google on the other hand has ads. If you want to be generous you can break it out to search and YouTube. Android is obviously huge, but they don't really make money on it. The interesting thing IMO is that they likely would be making more money if they just stayed friendly with Apple. If apple had 80% market share google would be getting far more search traffic.
- justin66 13y ago> Has any company the size of Google ever successfully pulled of this sort of diversification? How many companies the size of Google are NOT heavily diversified? Think GE, 3M, etc.