Ask HN: So do these companies make actual money or they just have revenue?

8 points by globalrev 17 years ago | 3 comments

A lot of web companies raise loads of money and you often read claims of profit or at least enormous revenue.

But do they actually make a profit? I have searched and tried to figure this out and there doesn't seem to be a clear answer.

Now if 1 in 20 people in the whole world use your product and you're backed by the heaviest VCs then perhaps you don't need to makemoney right away but still...

So I'm thinking about first and foremost: The giants: * Skype * Facebook * Youtube Smaller ones: * Digg * Reddit * Delicious

Secondly: * All HN-startups and similar kind of startups.Why a lot of them perhaps are useful it just seems like stuff people would stop using as soon as it costs money.

noodle 17 years ago |

skype - got acquired. users buy service

facebook - advertising revenue

youtube - got acquired. primarily advertising revenue

digg - advertising revenue, sells stuff.

reddit - got acquired. displays some ads, but mostly for its parent company.

delicious - got acquired.

most startups have a plan that consists of one or more of the major 4 plans - sell something, ad revenue, license out your product, cross your fingers and hope to be bought out.

a good business relies on one or more of the first 3. the more of the first 3, the better.

il 17 years ago | |

More specifically: skype-profitable, but hemorrhaging money for ebay, ebay $1B in the hole facebook-not profitable, needs new investment youtube - not profitable, hemorrhaging money for google digg - not profitable, can't find a buyer reddit- acquired for a pittance, can't find advertisers delicious- don't know

See a pattern here? Other than the big search engines, I can't think of very many startups that are cash flow positive. Unless you're selling something or licensing, simple mathematics will tell you it's very hard to make millions from ad revenue alone.

callmeed 17 years ago |

I don't mean nitpick your title, but "revenue" is "making money" (actual money, even).

When the company is public (or acquired by a public company) you can usually find out if they're profitable.

For example, YouTube is not profitable. It generates revenue via advertising but not enough to cover its costs. http://rochakchauhan.com/blog/2008/08/09/youtube-not-profita...

Skype, it appears, is a profitable venture for eBay. Search "skype profitable" and you'll find that it has been since '07.

Because Facebook is a private company, you'll find less specifics about their revenue and profit. My understanding, however, is that they're not profitable yet. IIRC Marc Andreessen told Charlie Rose that they could be profitable if they put ads on the home page.

I don't know enough about the other ...