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Comment by pfarnsworth | Hacker News Reader

Well, Netflix is $3 million, FB is $1.7 million and Google is $1.3 million (it turns out LinkedIn is ~$400,000), so relative to its peers it's low.

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How are these numbers calculated though? I want to know how what percentage of these companies' total workforce is outsourced to contractors that are not included when coming up with the above figures. A company may be off loading a large chunk of the work to third parties while getting sweet gains and producing relatively higher per employee revenues.

If you factor in the people-hours behind the AWS services Netflix uses, I'm sure their number looks a lot different.

Do you mean to say that we should include the people who make the products consumed by Netflix?

That's a very odd way of looking at it. Is that because there are entire teams at AWS supporting Netflix, which makes them more like contractors?

The logic is that if you outsource your ops team to AWS you have less people but your revenue is still the same, you're just paying AWS instead of salaries.

So if we take the revenue per person number as anything significant then netflix skews that by using AWS.

Ultimately it's a number without much meaning.

Well, then, couldn't you subtract the cost of their AWS bill (or some fraction of that cost) from their revenue, to adjust for the lower headcount?

It would be difficult so no one bothers. How many "people" is monthly use of S3, DynamoDB, RDS, Route 53, etc. equivalent to? Its not easy or worthwhile to estimate. Revenue per employee can be a bit of a vanity metric.

well, the obvious solution is using profit/people rather than revenue/people, isn't it?

EDIT: ah, as another commenter mentioned, it is also true that you might be growing fast with low profit so I guess both measures make sense (or not) in different contexts.

It's because revenue isn't meaningful, profit is.

Profit is not always meaningful either. Running at full Op Ex (eg, hiring a larger team) can reduce profit to near zero, but if it leads to growth it's money well spent.

>but if it leads to growth it's money well spent.

...provided that the growth leads to more profit at some point in the future.

Turtles all the way down.

Depends a bit on perspective. The content that Google indexes (and puts ads on) is mostly created by third parties. Some for Facebook.

Earnings/employee is a much better metric than revenue. Netflix is higher up because they are primarily reselling, which usually translates to higher revenue and lower margins.

You're talking about some of the most successful companies in the field. Most companies will be low compared to them.

I think, you have mixed terms for revenue, earnings and profit.

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