YouTube is hemorraging red ink, if it wasn't suppprted by the rest of Alphabet it would quickly become unsustainable. Kinda hard to call that a "successful" acquisition.
Citation please. Everything I've seen is a mix of "breaking even", "still unprofitable", and "adding billions to their bottom line". I.e. nobody really knows because Google doesn't break out YouTube financials.
In any case, I still think calling the largest, most successful video serving site on the web "not successful" is laughable.
I guess it depends on how you define success. If I made a company was used by the entire world at some point, I'd probably be pretty proud and consider it a success even if it failed.
My second point would be to say, is a business only successful if it always makes profits? How many years does it need to be in business to be a success? If I made a company that has a good run for 20 years then tanked, was it a success. Does it need to be run by my grandkids before it's a success?
Uber has never made a profit. If I had a business that everyone used selling dollar bills for 95 cents would you consider it successful? That’s basically what Uber is doing.
Except that Uber is not doing that at all. They do make a gross profit on each ride. Its more like asking if you were successful if you were generating a lot of revenue by selling people dollar bills for $1.15/each, but losing money because of very high operations costs. The answer would be "it depends".
Yes and WeWork was profitable when you use their made up metric "Community Adjusted Ebitda".
Isn't that true for every money losing company? They make money as long as you ignore expenses?
The usual retort is "our addressable market that we have only started to penetrate will allow us to have a large enough marginal profit to cover our fixed cost".
But isn't that also in the pitch deck of every startup looking for funding? "There are x number of dog owners in the world. The total addressable market is ten gajillion if we capture 10% of that we will be worth $some_outrageous_number"
There is a lot of truth to that, and that is a big part of what makes it so difficult to filter out the companies that are criticized legitimately from the ones that are criticized wrongly.
I've been around long enough to recognize that the criticisms often look virtually identical for both cases, so you really have to do a lot of the legwork yourself.
The one thing that I'm confident of with Uber is that they take in more from me as a customer than they pay the driver. Is it enough more to build a sustainable business? Considering the volumes and margin, one would hope so, and frankly I find it hard to understand how their spending is so high. But I've never tried to do the math...
If its not profitable. Revenue without profit is meaningless without it being part of some larger platform play. Besides that, how much is YouTube benefiting from getting to take advantage of below market access to Google’s infrastructure?
