Matthew Yglesias asks an interesting question today: why are the big tech companies sitting on so much cash? These are big companies full of smart people, is there no way for them to invest that money to earn a greater return than it is just sitting there? What’s that say about the state of the industry?
It’s not as though companies aren’t shipping new product — Apple has increased its cash reserves by around $13 billion over the past year even as it developed the next generation of the OS X for the iPhone and created the iPad.
Is it a lack of talent? Could these companies be moving forward on more fronts if there were more engineers they could hire to build cool new stuff? Is it that it’s so much easier to build big things with small teams that these companies don’t need to invest big dollars to build products? These days teams of five or ten people are building cool products on a shoestring, and big companies are acquiring them for small amounts relative to their cash reserves.
Any other ideas?