Tech companies do not care about up cycles and down cycles. They grow in both.

I fail to remember when cash helped struggling tech company. Sun? Yahoo? Who could make better use of cash in the time of struggle than they could in the time of growth and ability?

Tech companies do not need to hoard cash. They never die because of lack of cash. They always get murdered by more able competitor or innovation in their field. Thus, preferring to keep cash instead of investing is basically a crime for one.

If you cate about assets and cushions, maybe you should invest in your pillow instead?

Microsoft's online business, for example, struggles, but cash helps to assuage the fears. Same with Yahoo, unimpressive performance and growth overall, sweet cash from Alibaba transaction kept investors excited and allowed them to grow via acquisitions.

Apple, for one, negotiates better manufacturing deals due to the wide knowledge of them having a fat checking account http://www.quora.com/Apple-Inc-2/What-would-be-a-good-use-of... A lot of dealings in the offline world (datacenter leases, procuring manufacturing capacity, loans of credit, bond issuance, contracting suppliers) is easier if you have a fat account to show.

please put a disclaimer about quora's log in requirement shenanigans. I "signed" up using one of my gmail acct, not sure if my contacts got spammed and ended up never seeing the actual post because the pop up never closed.

Web Inspector is your friend. Just delete the div id=_modal_signup_wrapper and the overlay is gone.

If you add ?share=1 to the URL, it won't have a sign-up requirement.

"They never die because of lack of cash. They always get murdered by more able competitor or innovation in their field."

Yet cash allows them to respond to those competitors as necessary. I see Facebook's acquisition of Instagram as both a strategic and defensive move. Strategic because they see photos as the primary focus of what gets shared on their social network. Defensive to prevent Google or Apple or someone else from jump-starting their own social platform. Cash affords a company the ability to be agile when necessary.

If you respond you're losing already. What you should be doing is innovating, running circles around other companies and make them respond to you by bleeding cash.

Having cash is nice, but if you can invest in raw growth makes zero sense not to.

By that logic any company with more than one acquisition is a failure.

Build vs buy analysis still applies, and "running circles around" could get expensive, as at early stage it's difficult to tell which innovations will pan out and which will fail.

I don't think it is possible to be a "winning" company all the time. If that were so, then only a single winner would be dominating the entire industry.

Is this a joke? Do you realize many dot-coms went under because of the bubble bursting and not being able to raise money in the capital markets? Venture capital money dried up and they weren't profitable so they had no cash.