I read today that the five largest oil companies profited a combined $31 billion this past quarter. Together, they'll profit more than $100 billion again this year. It's ridiculous. I'm proud of the profit their making but our country is fighting an oil crisis and the citizens of our country are at the mercy of the oil companies. Together, they essentially control the pricing. Where are all of their profits going? It's not into further research and development like they might want you to believe. R&D is how businesses build long-term success. If you're not advancing your technology as a business, chances are your competition is and it'll catch up to you sooner or later. This is typically a very true principle, although it hardly applies to the oil companies.
Why, you ask? Well, virtually every car, truck, and SUV on the road today runs on gasoline. Even the hybrids require gas so whose responsibility is it to discover new technologies? The automakers? Why is it their responsibility when they're having a hard enough time surviving because of the unions, poor marketing, poor management, and numerous other problems? Exxon spends less than 1/2 of 1% of their total revenue on R&D. In contrast, Microsoft spends between 10-15% of their total revenue on research and development.
Why does Microsoft do this? Because they have to. They face competition from Google, Apple, IBM, etc. and if they don't continue to constantly improve and look ahead, then their competitors will pass them. When you're looking to invest in a company which develops products or technologies, look for one which realizes R&D spending is required for continued success.
It's unfortunate the oil companies don't face the same type of competition and they simply do their job (drill oil and distribute it) and then set a price that's more than their cost. It's that easy. Their business is cake, no wonder they're making a combined $100 billion + annually. Who's paying for it? Our economy. Our citizens. Unlike other businesses, it's unfortunate that it's pretty hard for us to quit buying their products.