Comparing Internet Companies' Productivity

Useful chart from JPMorgan analysts Wednesday comparing major Internet stocks on the basis of per-employee productivity on a revenue/person basis:

JPMorgan uses the chart to make the point that Yahoo has considerable room to improve, reinforcing the layoff argument.

Comments

[fedup:]

Is there a scale that shows how much they are paid versus how much they actually do? If so, where would Yang and others fall on that scale? Sure, he only makes $1 a year (wink) but what about some of those others? Surely a pruning off the top is worth more than a huge chunk out of the trunk of the tree. Probably where the cuts really need to made, since this is a company that seems to lack any decent leadership or management. They could save millions of dollars. The kind like those already wasted on Semel, and so many others smart enough to have cut and run already.

2008 Jan 23 03:11 PM

[Long-Short Guy:]

Interesting table, but revenue per employee might not be the right metric as it boosts Amazon and Expedia which have far higher cost of goods sold. Better metric might be gross margin dollars per employee or even net margin dollars. Yahoo would look much better on that metric, as it has virtually no cost of goods sold.

2008 Jan 23 03:33 PM

[Michael Eis...:]

i agree with Long Short Guy. The only relevant metric is either gross margin or net margin per employee. Also, if you assume that this revenue per employee was a key determinant of stock value, you would expect to see a higher stock price for CNET based on the above table.

2008 Jan 23 04:27 PM