Some companies' revenues are permanently associated with rising cost of revenue to the point where they are permanently unprofitable -- e.g. Pandora makes less ad revenue per play than the licensing cost of the song.
So What? “Companies whose revenue is directly related to cost of revenues (e.g. „traffic- acquisition costs‟) may see increases in revenue but still never achieve profitability.” - Dr. Augustine FouMay 24, 2012 12
Dr. Augustine Fou – Chief Digital Strategist “I advise clients on building new high margin products and evolving business and pricing models to thrive in the new digital world.” FORMER CHIEF DIGITAL OFFICER, HCG (OMNICOM) MCKINSEY CONSULTANT CLIENT SIDE / AGENCY SIDE EXPERIENCE PROFESSOR AND COLUMNIST ENTREPRENEUR / SMALL BUSINESS OWNER PHD MATERIALS SCIENCE (MIT 95) AT AGE 23 ClickZ Articles: http://www.slideshare.net/augustinefou LinkedIn: http://www.linkedin.com/in/augustinefouMay 24, 2012 13 email@example.com