Hacker News new | past | comments | ask | show | jobs | submit login

Airlines may have pretty big revenues, but their profit margins are tiny, and at the end of the day, net profit is what matters to investors. In 2010, Google only made $30 billion in revenue, which is only a tiny bit more than Delta airlines made. But Google is worth $184 billion, while Delta is only worth $8 billion.

The costs of servers scale extremely well, while the costs of airplanes and jet fuel don't. So web companies have much higher potential profits than airlines, and they're consequently worth a lot more.




net profit is what matters to investor

...that was the point all along.

So web companies have much higher potential profits than airlines, and they're consequently worth a lot more.

This isn't a competition between tech companies and airlines. Airlines merely act as an example an industry which, at least as of 1995 when Buffett first brought them up, had a net loss over the entirety of the industry's existence. What's the net lifetime profit of the tech sector? What will be the lifetime profit of social websites in another ten years?




Consider applying for YC's Spring batch! Applications are open till Feb 11.

Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: