Building a time machine for John Gruber with the aid of Wolfram Alpha

John Gruber remarked on Thursday, in the context of “What could you buy for $8bn?” (following on from Microsoft’s acquisition of Skype – a purchase that I’ve already said won’t add $8bn of value to Microsoft, yet which I also think is a wise move…. unless you’re a shareholder) that

For just $7.5 billion, you could have bought Apple — in January 2004. That leaves $1 billion to create your time machine.

Oh, John, John. If, like I am, you were writing a book about the tangled history of Apple, Microsoft, and Google, and all their business battles down the years (PCs – very briefly, search, music players, smartphones and – I realised with horror as my deadline approaches – tablets too) then you’d have gotten into the habit of querying each and every fact that you write down, and resolving that you have to figure it out.

(To anyone late to this party, which I know includes a lot of people: yes, I am writing a book, tentatively titled The Rivals, which I’m aiming to deliver in the next couple of months to publishers Kogan Page, who will turn it into something beautiful by cutting out the rubbish, and then print it in 2012. If you’ve worked for Apple, Microsoft or Google, then yes, I’d love to hear from you: get in touch. And yes, I have found out some very interesting things about precisely why the iPhone succeeded, what happened to search inside Microsoft, what Googlers think of Microsoft, and why tablets are like wars fought with air power. There’s lots to tell. Be patient.

As part of the research, I’ve done stuff like going back over every single Apple quarterly report to 1994 (thank you commenters who pointed me to it), Microsoft’s quarterly reports to the same period (stunningly uninformative), and of course Google’s financials (nicely laid out).

But when you want to look at figures like market capitalisation – which, let’s remind ourselves, is the market’s guess at a company’s total future profits (perhaps on a discounted cash flow basis, ie allowing for inflation) – then there’s only one search engine you need: Wolfram Alpha.

The magical thing about WA (as I’ll call it) is that it stores all sorts of financial data, and it will also calculate market cap without blinking.

Personally, I think that buying Apple in January 2004 wasn’t the smart time to do it. Why not have a look at another famous time for buying Apple – the day when Michael Dell suggested shutting down the company and giving the money back to the shareholders?

That day was, according to a famous search engine, 6 October 1997. OK, we know that – but what was the market cap for Apple at the time? None of the articles seem to mention it. (Or if they do, it’s buried along with all sorts of junk.)

No matter – fire up Wolfram Alpha and ask it:

Apple market cap 6 October 1997. Hit return.

Answer: $2.733bn. Plus a nice little graph:

Wolfram Alpha output of Apple market cap, 1997

Which means that with $8bn, you’ve got $5.3bn to build your time machine, John.

In fact it even offers the insight that the real time to get in there was to buy it on 2 July 1997 – when it was worth just $1.627bn. You could build that time machine and have money left over.

About charlesarthur

Freelance journalist - technology, science, and so on. Author of "Digital Wars: Apple, Google, Microsoft and the battle for the internet".
This entry was posted in Uncategorized. Bookmark the permalink.

1 Response to Building a time machine for John Gruber with the aid of Wolfram Alpha

  1. john says:

    Discounted cash flow reflects the time value of money not inflation, the denominator is the working average cost of capital.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s