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by meheleventyone 932 days ago
I guess the way to look at it is does Starbucks sell coffee to make profit or does it sell coffee to get people to buy gift cards to make profit. The idea of a loss leader being part of the core visible business isn’t that strange. Even better if you can make money on both though!

Hopefully there is enough nuance in the world to recognise that they are both coffee shops and a bank. In the same way Google is both a search company and ads company.

1 comments

This arguments feels like it's trying to be an inch too smart.

Consider the following: Amazon isn't really an online retail company; it doesn't really sell goods to the consumer. What it does is use "goods" that it delivers as a loss leader to get people to click on buttons to give Amazon money.

Starbucks is a coffee company, that introduces an optional extra step of gift cards for other consumer convenience reasons. The fact that there is a comically large amount of money held in the gift cards system is just that: a slightly comical fact.

Your attempted example isn’t the same though. It’s much more apparent if you look at the search example. Without search there would be no ads business (to a degree)but search itself only loses money and gets compromised in favor of the ads business