Microsoft to Invest About $100M in Startup Uber

[qrazhan]

http://finance.yahoo.com/news/microsoft-considers-funding-uber-50-193613435.html

[Rainymood]

Does anyone know if Uber is currently profitable? I heard they weren't and I'm wondering how they will cope with jacking up prices later on.

[joshmn]

Can someone explain to me why on earth Uber would need this cash, and, why MSFT would give them such a small amount at that valuation (.002%)

[jeffmould → joshmn]

I have no specifics, but I can make a few guesses:

1. They are stockpiling cash to afford lengthy, costly, legal battles for their business model. Although there is a huge potential this could backfire entirely and investors will be out millions.

2. They are stockpiling cash in expectation of having to pay drivers as employees and provide benefits, etc... to those drivers.

3. I am sure there is a good amount of money earmarked for marketing/sales efforts to take on new markets.

4. I would expect that they have several "on-demand" products in the works (i.e. same day/hour delivery service) that will require upfront capital.

[xur17 → joshmn]

At that valuation, Microsoft owns 0.2%.