Understanding Internet Valuations

Abstract

In 1999, many of our Private Equity clients were struggling with the spiraling valuation levels of Internet and e-business entities. It was then L.E.K. first published this article and the three Internet firms were analyzed. Ten months later, the volatile stock prices of Amazon.com, eBay, and Yahoo! are down 62%, 28% and 66% respectively.The results published in this article were a snapshot in time and are less applicable after the corrections of 2000. However, it is interesting to note that the market has agreed with our findings. The point now, as it was a year ago, is not to challenge market valuations, but rather to emphasize the importance of identifying the key drivers of value and understanding the long-term performance expectations implied in valuations.

Importance of Managerial Accounting from High Growth Online Company Valuation Perspective

“…The new economy is commonly believed to have started in the late 1990s as the high-tech tools, such as the internet and increasingly powerful computers, began penetrating the consumer and business marketplaces. Rosner (2013) identifies two basic types of internet companies: those using modern, online channels to sell goods or services, and Internet portals that have various revenue streams, including those from advertising. The presented paper will analyse one specific type of internet business, nowadays extremely popular and attractive from the investors' perspective -metasearches and online resellers.…”