meaning the share of revenue growth that falls to the bottom line as profits. Any amateur could see that the three Chinese portals all had negative margins; put simply, they were losing money. But a pro would know to focus on the incremental picture, and this looked spectacularly positive. As revenues grew, costs grew much less, so most of the additional income showed up as profits. It followed that growth would soon drive the three portals into the black. By thinking incrementally, Shleifer could see into the future.
