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Car makers have a very low profit margin. Toyota has about 7% (and that's very high for cars -- GM has like 1%). Google has about 30% profit margin. There's def
by jetpack 19y ago
Car makers have a very low profit margin. Toyota has about 7% (and that's very high for cars -- GM has like 1%). Google has about 30% profit margin. There's definitely a lot more money in cars in general (in terms of revenue), but Google's net income for 2006 was $1 billion more than GM, despite GM having about $197 billion more in revenue. Having high revenues doesn't mean you're making a lot in profit, which is what counts.
- ajkates 19y agoThough, GM is probably not the best example...it's bleeding cash at the moment, and has even had negative earnings some quarters. If you want to play the profit game, compare Google's profit to Wal-Mart, Exxon-Mobil, and CitiGroup. We're not even in the same league here. In fact, we're not even in the same order of magnitude! Again, Google making that list (and having a high market cap) is much more an effect of it's expected growth (and high multiple) than it's actual present value as a company.
- ctkrohn 19y agoJust nitpicking here, but Citigroup turned a loss this past quarter due to mortgage-backed security writedowns. I think Google actually turned a respectable profit.