Sign up to receive 5 free days of our daily summary for tech news.

Try The Information for just $10/month for your first 3 months.

Read this article for free.

Already a subscriber? Log in here

Amazon Google Facebook

Don’t Be Fooled by Boatloads of Cash

You hear it a lot in the technology sector these days. Company X is flailing, but don’t worry: “They have a lot of cash. They’ll figure it out.” Cash in the bank, the theory goes, can reverse a company’s fortunes by helping it buy its way to relevance. And tech companies have plenty of it, even deducting the stockpiles stuck overseas they aren’t willing to repatriate.

But I think the tech industry is far too quick to turn to cash as a silver bullet.

Historically speaking, companies generally haven’t bought relevance, through big deals or little ones, and so there’s little reason to think it can reliably happen.

I believe that’s even more true today when companies’ dominance can be disrupted so quickly. It’s nice that Facebook had the cash (and stock currency) to buy Instagram and WhatsApp. But that strategy won’t help it for long if the next potential competitor—Snapchat, for example—never wants to sell.

What Is The Information?

Notes bb3aa5069205d702dda37fc71dc6f1c59df2310c4379304e9f1199f052af4884

Exclusive Articles

We broke it first. Receive original reporting you won't read anywhere else from the largest newsroom in tech.

Notebook b5103017ee163370a1667c9ce59ab0ef023875a17888105d26c185cadf31bb69

Daily news analysis

Every weeknight, we'll send you our reporters’ views on the day’s top tech news—distilled into one email.

Conference calls c9e664e8b96ee347d3e92b8309938f268422b9db98cfabca5c826fbb75054b23

Conference calls

Get access to our reporters and other top executives with monthly deep-dive calls into topics like startups and autonomous vehicles.

Events 499acedd16cffc41445edd76bfd302b2836c2a27419890f17130a6b10e2aa3df

Special Events

For no extra fee, get access to more than a dozen events yearly, from intimate dinners to larger gatherings with marquee speakers.

What else is included in my subscription?

Become a contributor

Share your views and find other subscribers by completing your profile. You’ll be listed in our contributor directory.

Slack community

Discuss topics and current events with our subscriber-only Slack group and share news about your company with other subscribers.

Annual Subscriber only benefits:

Org Charts

Access the only collection of tech company org charts. Our expanding database includes companies like Amazon, Snap, and Uber.

Crypto Newsletter

Our experts investigate the latest in the crypto world to keep you in-the-know about the movements of digital currencies.

Stay up to date on Silicon Valley

Sign up for Jessica Lessin’s (The Information’s CEO & Founder) free Saturday newsletter and also receive a complimentary week of our daily afternoon tech commentary email.

Already a subscriber? Log in here

Recent Articles

Crypto Facebook

What We Still Don’t Know About Libra

By Jon Victor

Crypto Facebook Entertainment

On the Market: Veterans of Facebook, HBO and Coinbase

By The Information Staff


How ByteDance Founder Is Building a Global Tech Giant From China

By Juro Osawa and Yunan Zhang is one interesting cash case study. The company holds very little cash, with only about $5.3 billion in cash and cash equivalents on hand at the end of its most recent quarter.