Re: It's everywhere
Doctor Syntax,
Profit doesn't always have to increase. Or even stay stupidly high. This is just where people mistake news about the tech sector for how economics works in the rest of the economy. Which doesn't have vast untapped resources of venture capital money - or come to that vast untapped numbers of hubristic "thought-leaders" eager to relieve those VCs of some of that cash and launch massive start-ups. Some of which even have a rough idea how they might just make a profit in twenty years time.
Most small and medium sized companies, in mature industries, just bimble along doing what they've always done. With plans to maybe grow a bit, or launch a new product (maybe even start a new division) - but not expecting the market to change a huge amount over the next decade. They tend to take on a few new projects and new staff, and get a bit fatter, up until a recession comes, then if that's not working out, might cut costs a bit, but in general aren't trying to re-invent the wheel.
What's unusual about, say Google, is that they started off small, but with huge ambition, and access to loads of money. A quick (ahem!) Google suggests that they started off with $100k of initial funding and within a year had had two more rounds and got first $1m and then $25m. Try raising that kind of money to start a building services engineering firm or a small chain of restaurants? Of course it wouldn't make sense to invest that money, because even if they were successful, the returns wouldn't be big enough to justify it. Whereas initial investors in Google did pretty well for themselves.
But those other kinds of businesses (and whole industries) carry on nicely on making their steady profits. The problem for Google is that the people at the top probably don't know how to settle for what they've got. Just accept that you've build a huge search monopoly, keep taking the profits, take a healthy cut and give the rest to your shareholders as dividends. Partly they were quite right to invest in smartphones. There could have been a competitor, with all that smartphone data, access to the advertisers and the possibility of doing things like local search and so competing successfully with Google and damaging their search monopoly.
But how much cash have they poured into self-driving cars? Or starting a social network. Or building a basic, but not very profitable, office suite. They still make 90% of their profits from placing adverts next to search results.
I guess here we might praise Apple? At one point they had a $150 billion cash pile. But managed to resist temptation to blow it on a buying-spree of other companies. And although there are often rumours that they're looking at launching into new markets, they've mostly stuck to their knitting, making computers, plus tablets and phones. Admittedly the correct response to having that huge a pile of cash is to only do it if you have a reason to use it, or return it to your shareholders. So at least they might do something useful with it. But at leas they didn't blow it on buying Facebook or trying to re-invent the car or something.