Does this account for how much those companies offload to contractors / staffing agencies?

The economy of scale - at FAANG(MAANG?) scale you can have extremely efficient money making features that only takes a few engineer to support thousands.

For things that are completely software, it does not surprise me that millions per employee in earnings is realized - that's just what happens when you operate at that scale. And that's accounting for all of the overhead in personnel that scale entails.

True. The number of engineers is not linearly correlated with the number of customers, but the number of features. If you have a relatively simple product and you can somehow still compete (niche market, patents etc), you can get away with a very low head count. WhatsApp famously had only 35 engineers and ~450M users when Facebook acquired them.

If they wanted, they can expand easily to a lot more - which is probably what happened to them inside facebook anyways.

Even then, they can still be insanely profitable per engineer.

> which is probably what happened to them inside facebook anyways

I think initially they only expanded to ~50 engineers until 900M users. Even today they are estimated to have only ~500 employees (no idea what percentage of that are engineers).

LinkedIn lists 1823 people working at Whatsapp, not sure how accurate that number is, probably self-reported so could be lower/higher, but ~500 seems off. Employee count seems to grow 1-5% month-to-month.

Engineering is listed as 25% of those 1823, operations 8%, education 6% and business development 6%.

Given recent name changes, MAANG works, but it can be MANGA or MAGNA now.

I like "MAGNAM" if you include Microsoft.

Ahem, and the G stands for Alphabet? :)

I can’t believe there was a time where Microsoft wasn’t considered as big of a tech company as Netflix.

It wasn’t about size but about fast appreciating tech stocks. This was pre cloud boom MSFT

Exactly. Ten years ago people thought of MSFT more like INTC or IBM than GOOGL or AMZN

You shouldn't believe it; there never was such a time.

If F => M then doesn't G => A? Which is good, we don't want to have to go around calling them MAGNA!

Every one of the Facebook companies is a household name with hundreds of millions of users. The same cannot be said for the Alphabet companies aside from Google.

YouTube and Fitbit come to mind

Both are subsidiaries of Google, not Alphabet.

Chromecast Android ChromeOS

I think Oculus is much more similar to Stadia than something else too.

Additionally, all of those platforms you mention du the same thing: chat and share pics.

You listed three Google products. Those are not alphabet companies. No one is trying to say Google is smalltime. Rather the point is, “Meta as an entity is comparable to Google, not Alphabet because it’s Units are Interesting”

I listed 4 actually, all with their OWN household name with plenty of users.

Under the Google umbrella or alphabet is the same. Just like under Facebook or Meta.

Nobody cares about the exact legal construction of those products. Plenty of people still say FANG, where it's short for Google and not Alphabet.

Nice nitpick, but you obviously mispositioned your initial comment by putting the emphasis on household names and not on the legal structure, which is a strange argument fyi.

Oculus does not have hundreds of million users.

You prefer MAAAN?

While I'm doing a low-content post, here's a tangential fun fact: the Latin sequence "gn" (as in, say, "magna cum laude") was pronounced with the G nasalized. If magna were rendered in English spelling, it'd be "mangna". (Or, well, "mongna".)

OT: if you want to start with M, then the correct name would be MAANA

I don’t know. I do know that “number of employees” metric is a shorthand way of measuring the operational weight of an organisation. As long as it is measured consistently, it’s a good proxy for size-of-tech-company. It might not work so well when comparing a pharmaceutical manufacturer to a main st retailer though.

Depends if you count Facebook's moderators, Uber's drivers, Apple's shop assistants, Netflix's film crews and so on.

Some of these measures make it look like Google's zero-customer-support approach is the 'efficient' way to run a business but for a lot of companies it'd be a false economy.

They have lots of contractors though , ppl that censor posts, etc. You're probably not taking them into consideration.

One might argue that those are costs, not head count. By the same logic we can also assume that they use contractors who bake pizzas for Facebook employees when they order from Domino's.

I guess a somewhat better metric would be "profit per employee" instead of revenue.

"contractors who bake pizzas for Facebook employees when they order from Domino's"

Clearly keeping facebook platform from breaking the law on childporn is pretty central to their business, but pizza is not

Maybe. But the point is, ad absurdum, you can do business with zero employees and all contractors, or with zero contractors and all employees. It's not possible to measure efficiency with a simple "revenue over employee count" metric.

>Compare with APPL and FB doing $2.5M per employee per quarter.

your math if off - FB is $500K/employee/quarter, APPL is ~600K/employee/quarter. That still of course a boatload of money allowing them to pay $600K+/year to the engineers.

I'm guessing that was a typo and he meant per year since the comparison number was also annual revenue.

Point stands, but I'm not sure how you get that much for FB and AAPL. In 2020 (4 quarters) they made, per employee, ~$1.2M and $0.7M in gross profit, $1.5M and $1.9M in revenue. I didn't cross check the table but did get the same number for FB.

https://twitter.com/investing_city/status/142301690347634278...

I think a lot of startups could be a little more lean than they are right now.

> Hiring engineers away from FAANG is incredibly expensive.

That seems to be changing, as the employees at those companies are starting to re-evaluate the ethical choice of staying or leaving a company they thought was "good".