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0 pointsAlexx12y ago0 comments

Yeah, that's what I meant by the total hollywood economic value. Google makes money from multiple services and products too, and in the context of new companies coming in and taking a slice of the pie it makes sense to look at hollywood as a whole. Content (TV, Movies, whatever) and Merchandise (Parks, toys etc) got hand in hand. You can buy angry birds plush toys because once any company establishes a brand they are going to find multiple avenues to exploit it, and any companies coming into the market will be in that position too.

Edit: And you're right Google is a 'better business' than making movies most likely. But that doesn't mean it's not of interest to VC. After all, oil is clearly a 'better business' than Google!

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maxerickson12y ago

I disagree that oil is a better business than Google. Each dollar of gross profit for a company like Exxon requires a lot more operations than each dollar of gross profit for a company like Google (It's something like 50% more now, even after Google has captured a significant majority of online advertising and begun dithering around looking for more businesses to get into). Microsoft's licensing power gives it a nearly silly position in this comparison (but that has long since ceased to be a major growth industry, disappointing investors).

Energy certainly provides an opportunity to establish a huge operation and make huge profits, but it also requires a huge amount of capital.

AlexxOP12y ago

Tech has a higher profit margin, but is a smaller industry. So depends which metric you want to use to define better- Efficiency or total profit. Comparatively the largest pure tech (none hardware) company Google is valued at $290bn publicly, and the Financial Times estimates the largest pure oil company Saudi Aramco privately at $2000-$7000bn based on the size of it's reserves.

It's a fruitless argument either way. I simply meant the fact industries with larger figures exist, doesn't mean VCs just look at the random top-line numbers and ignore an industry because it's 'not big enough' when you're dealing with billions of dollars.

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maxerickson12y ago

Energy certainly provides an opportunity to establish a huge operation and make huge profits, but it also requires a huge amount of capital.

AlexxOP12y ago

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