People might object to that characterization because it's so "standard". That's how you get these notions that cash flow is "better" than profit -- the language gets tortured so that profit doesn't mean profit any more because the ledger is a fantasy.
In cash method accounting, profit is profit. In accrual accounting, profit is whatever number you pencil in.
To be clear, I'm talking about money in your hands, not someone else's.
> Supposedly Groupon is making nearly $2 billion a year in revenue.
Of which somewhere between $1 and $1.5 billion are pass-through, going to local merchants.
Assuming actual revenue is the more widely-reported $500m, I'm not sure how far that goes when you have 3000 employees.
Recall that MySpace was putting up similar revenue numbers but with only a single profitable quarter, making something like $10m.
Revenue alone is meaningless. I can increase my revenue at any time by selling things at a loss. What's the profit?
I assume GroupOn must have real profits in order to turn down that much cash. We've seen just as often though that companies are deluded, like PointCast or Digg. It would be easy to settle this point by looking at profits. Curious how companies jealously guard that information but loudly trumpet "Revenues!"
That alone should be enough to convince anyone how meaningless revenues are.
> I would sum this point up by saying that mainstream companies do not want to find themselves aligned with high-profile situations skirting the edge of the law.
That's what I thought until YouTube was bought by Google. With all the furor over music and movies and Napster and all the rest, I wouldn't have expected YouTube to last 5 minutes considering the massive amount of copyrighted content that they hosted.
Clearly companies have no problem skirting the law, and in fact any number of large companies do that regularly with impunity (e.g. Monsanto and the over 50 Superfund sites it is responsible for contaminating; AT&T and its assistance with warrantless wiretapping; BP and the spill aftermath).
Large corporations skirt the law and/or flip off the government all the time, even in cases of well-settled legislation.
Here we have a situation which is FAR from settled -- the 1917 Espionage Act and its amendments with the 1918 Sedition Act which were upheld at the time would never have passed muster in the face of later recognitions of First Amendment protections. The Pentagon Papers case supposedly "left the question open", but with 9 separate opinions filed, the government (having failed with prior restraint) apparently didn't feel at all confident about pursuing criminal, after-the-fact penalties, despite having decades to do so.
It's quite clear that this has nothing to do with law; it has to do with unofficial pressure -- extrajudicial pressure coming from many quarters. It's as if to say, "Poisoning the hoi polloi is one thing, but you messed with OUR stuff, and now it's personal."
I feel for Amazon and even the evil PayPal in this case, because how are you supposed to run a business when the government can send in its bogeymen to make you comply without even bothering with the courts? It makes for an extra set of unofficial laws to bully you with -- bully, because clearly it doesn't actually achieve the purported aim (the horse has left the barn) but is simply a show of force to make everyone kowtow.
Kind of like Mean Girls. The Queen Bee was shown up, and she can't undo it but she can take it out on her clique and make them not talk about it.
http://www.toolkit.com/small_business_guide/sbg.aspx?nid=P06...
People might object to that characterization because it's so "standard". That's how you get these notions that cash flow is "better" than profit -- the language gets tortured so that profit doesn't mean profit any more because the ledger is a fantasy.
In cash method accounting, profit is profit. In accrual accounting, profit is whatever number you pencil in.
To be clear, I'm talking about money in your hands, not someone else's.