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Internet Companies (internet + company)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	80%

Selected Abstracts

Rational Pricing of Internet Companies Revisited

FINANCIAL REVIEW, Issue 4 2001
Eduardo S. Schwartz
G12 Abstract In this article we expand and improve the Internet company valuation model of Schwartz and Moon (2000) in numerous ways. By using techniques from real options theory and modern capital budgeting, the earlier paper demonstrated that uncertainty about key variables plays a major role in the valuation of high growth Internet companies. Presently, we make the model more realistic by providing for stochastic costs and future financing, and also by including capital expenditures and depreciation in the analysis. Perhaps more importantly, we offer insights into the practical implementation the model. An important challenge to implementing the original model was estimating the various parameters of the model. Here, we improve the procedure by setting the speed of adjustment parameters equal to one another, by tying the implied half-life of the revenue growth process to analyst forecasts, and by inferring the risk-adjustment parameter from the observed beta of the company's stock price. We illustrate these extensions in a valuation of the company eBay. [source]

STRATEGY AND SHAREHOLDER VALUE CREATION: THE REAL OPTIONS FRONTIER

JOURNAL OF APPLIED CORPORATE FINANCE, Issue 2 2000
Martha Amram
The current interest in real options reflects the dramatic increase in the uncertainty of the business environment. Viewed narrowly, the real options approach is the extension of financial option pricing models to the valuation of options on real (that is, nonfinancial) assets. More broadly, the real options approach is a way of thinking that helps managers formulate their strategic options,the future opportunities that are created by today's investments,while considering their likely effect on shareholder value. But if the real options framework promises to link strategy more closely to shareholder value creation, there are some major challenges on the frontier of application. In the first part of this paper, the authors tackle the question, "What is really new about real options, and how does the approach differ from other wellestablished ways to make strategic decisions under uncertainty?" This article provides a specific definition of real options that relies on the ability to track marketpriced risk. Using examples from oil exploration and pharmaceutical drug development, the authors also show how specific features of the industry and the application itself determine the usefulness of the real options approach. The second part of the paper addresses the question: Given the many differences between real and financial options, how should a real options application be framed? The authors examine the use of real options in the valuation of Internet companies to demonstrate the required judgment and tradeoffs in the framing of real options applications. The case of Webvan, an online grocer, is used to illustrate the inter-action between strategy, execution, and valuation. [source]

Optimal timing to invest in e-commerce

PSYCHOLOGY & MARKETING, Issue 4 2006
Jow-Ran Chang
The timing of investment in e-commerce remains hotly debated in both the academic and investment communities. This study develops a framework for analyzing the optimal timing for a company to invest in e-commerce for conducting its business-to-business (B2B) or business-to-consumer (B2C) transactions. This study applies a real option theory to assess a new risk,reward dynamic for investing in e-commerce. The numerical results demonstrate that the optimal timing of investment in e-commerce depends on uncertainties regarding future cash flows and the opportunity costs associated with e-commerce. Implications with regard to the behavior of Internet companies from a financial perspective are discussed. © 2006 Wiley Periodicals, Inc. [source]

Places of Privileged Consumption Practices: Spatial Capital, the Dot-Com Habitus, and San Francisco's Internet Boom

CITY & COMMUNITY, Issue 3 2008
Ryan Centner
Drawing from interviews and fieldwork with former dot-com workers in San Francisco, this article examines how their spatialized consumption practices formed exclusionary places of privilege during the city's millennial boom of internet companies. I focus especially on the personalized deployment of uneven social power in situations where space is at stake. After considering how this group differed from a history of other urban newcomers, I develop a framework for addressing their spatial effects as gentrification involving privileged consumption practices that surpass residential encroachments. I argue there is an exertion of spatial capital that represents the misrecognition of territorial claims, enabling this cohort to literally take place. I show this through several consumption practices that convert to and from economic, cultural, and social capital. A concluding discussion reflects on the usefulness of this case and framework for reinvigorating key urban-sociological analytics while confronting influential but unsociological characterizations of contemporary city life. [source]