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Chris Anderson
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5 ヶ月 ago
in When Talking About Business Models, Remember That Profits Equal Revenues Minus Costs on A VC
Mary, as Christopher rightly pointed out, you're confusing revenues and profits. "Make" means profit. Also, the WSJ site does have comments. They're just on the second tab.
2 replies
mary hodder
I was thinking of the word, "make" as in normal conversation, not accounting lingo. YT, FB and Digg all make revenues, not profits. To me, you made a distinction between them, and I don't see one, other than that YT and FB have in the high hundred's of employees and Digg doesn't. All three have the same problem, they can't make enough revenues to cover costs.
Richard Webb
If you ask me, "make" is deliberate obfuscation. I make $80 grand a year at my job. Is that profit? If I'm living beyond my means, it's not because I don't make anything.
I also think that Fred's large point totally needs to be made - these companies should be focusing on profitability. But revenue is super important too. The methods of controlling costs in web 2.0 aren't opaque, and they aren't rocket science. Having a unique, steady, healthy revenue stream, though, is still a rarity. If you have that, someone, somewhere, should be able to get your costs in line to achieve profitability.
I also think that Fred's large point totally needs to be made - these companies should be focusing on profitability. But revenue is super important too. The methods of controlling costs in web 2.0 aren't opaque, and they aren't rocket science. Having a unique, steady, healthy revenue stream, though, is still a rarity. If you have that, someone, somewhere, should be able to get your costs in line to achieve profitability.
