
Business Insider Turns A $2,127 Profit On $4.8 Million In Revenue - pclark
http://techcrunch.com/2011/03/07/business-insider-4-8-million-profit/?utm_source=twitterfeed&utm_medium=twitter
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randall
The original post is much more insightful.

[http://www.businessinsider.com/business-insider-the-full-
mon...](http://www.businessinsider.com/business-insider-the-full-monty-2011-3)

and

<http://news.ycombinator.com/item?id=2297351>

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wheels
The important thing noted there, contrary to the vibe of the headline, is that
they're in their growth phase and _not even attempting_ to be profitable now.
It was an unintentional fluke.

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mkramlich
accidentally profitable! i approve :)

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jmilloy
1\. profit

2\. ?

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trotsky
As a private company, are there any laws that restrict me from lying to the
public about my financials? As long as I'm not defrauding an investor or lying
to the tax man or various regulatory bodies I can say anything I want, right?

I only ask because Blodget has proven himself very willing to do just that
kind of thing in the past, though I'm unsure what the angle would be.

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akashs
can't directly lie, but people play games with accounting numbers all the
time. for all we know, a large chunk of that revenue could be going to pay
year-end bonuses.

but given they have 45 people, after salaries and benefits, and after all the
costs of running the site, that kind of net profit doesn't seem entirely
unreasonable on $4.8M rev.

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trotsky
oops - reposting the [deleted]

What law are you talking about that would penalize me if I sent out a press
release tomorrow claiming my company is taking in $100bn a quarter?

Why vet the first number off of the second? Surely if you're willing to
misrepresent one...

To be clear, I have no specific reason to doubt the numbers except that he's
an unreliable source and that public disclosures of private company financials
are so uncommon. If your brother in law got convicted of running a boiler room
you're not going to take his stock picks at face value, right?

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stoney
I'm not sure how meaningful "profit" is in the context of a privately owned
company. Ok, so they only had $2,127 left over at the end of the year after
costs, which sounds pretty small compared to the revenue number, but that's
after paying the salaries of 45 employees, which presumably includes the
owner. It seems slightly arbitrary where you draw the line between "profit"
and "owners salary".

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jonknee
They have stock options for employees and a lot of VC capital, so the "owners
salary" is hard to define. I'm sure the founders receive a nice salary, but
the investors aren't going to be happy with having $2k left at the end of the
year to split.

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pclark
Business Insider is the only news service I follow on Twitter, I rather like
their content and frequency, I do however think that they go rather overboard
on their slideshows.

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gfodor
My guess is the goal of this catchy headline is to make readers thing "wow,
how could they have turned such a small profit with all that revenue?" Of
course, the lesson to be learned here is that revenue is an absolutely
ridiculous way to gauge the health of a company. That's why it's so bizarre to
see people talking about high valuations for companies like Facebook and using
their revenue metrics as part of their arguments.

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dskhatri
I think it's okay to use revenue as a measure of valuation as long as there is
strong growth. A company may have 0 profit now but as it grows, it can control
costs and hence turn a profit (economies of scale).

