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Comment by jvalencia | Hacker News Reader

One slight adjustment to your thinking, tech titans create massive value: "In 2021, the Big Five tech giants—Apple, Amazon, Google (Alphabet), Meta, and Microsoft—generated a combined $1.4 trillion in revenue."

https://www.visualcapitalist.com/how-big-tech-makes-their-bi...

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Advertising creates revenue, but does it create value? Imagine Coca-Cola pays Google a bunch of money to run ads. You are thirsty and go to a store and decide between a Dr. Pepper and a Coke. You choose the Coke. Has this process created value?

I would argue that they create a secondary item. The same way lumber is created from wood, and then picture frames from lumber. Value is added, and this creates revenue. Here, the value is virtual, but it's still value -> the market says so. I could argue this is just a service, but if that were true it would be worth less and the market would correct.

Of course advertising creates value. It connects buyers and sellers. It generates demand for products that are built and created by other people. You can disdain advertising all you want, but occasionally an ad connects with you and presents you with what you're looking for. In aggregate, that has tremendous value.

Advertising would create value if it would only serve to connect buyers and sellers, but instead modern advertising serves to "generate demand", as you mentioned. That means making you, artificially, usually using emotions and psychological tricks, spend money on something that you wouldn't and shouldn't spend money.

We can thank Edward Bernays for single-handledly ruining the world.

The parent's point is that revenue is not equal to value. Determining actual value generated by tech companies is tricky

Agreed. How much value do we place on entertainment? stimulation? storefronts?

Have you thought about why it's tricky? Maybe because each person on this thread has a different perception of what the word 'value' even means. If you start with an unclear definition, you cannot hope to arrive at a clear answer.

Only if one assumes that revenue is the same thing as "value" in this context, which it clearly isn't.

So what is "value" then? Seems like you're hinting that it's some subjective, personal impression more than anything else.

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