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The Power of Market Capitalization
by Felix Salmon
Jan 07, 2008
Jan 07, 2008
What is the correlation between a company's size, as measured by market capitalization, and its power? I'm not sure how one would measure power, but I don't think that market cap is a good proxy for it. ADM is worth $29 billion; Halliburton is worth $33 billion. Both, I think, have more power than, say, Procter & Gamble ($228 billion), and they surely have more power than Berkshire Hathaway ($218 billion) - although since "power" remains undefined, such determinations will always be a bit fuzzy.
All the same, it's not surprising that Ken Auletta uses Google's market capitalization as an indicator of its power:
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