Internet Company Valuation Method And Application

With the vigorous development of China’s Internet industry, the investment value of Internet companies have become stock investors to focus on the problem. Many global Internet giants are at a loss as a starting point, and gradually formed a mature system, such as Amazon. The reason why investors are optimistic about these companies, because they will profit a lot of cash into technology development, the mode of innovation. How to profit or loss less reasonable valuation of Internet companies, it is still a more difficult problem.The core issue of this paper is to assess the value of the network economy in the Internet business. Specifically, there are two aspects of the following research questions: (1) What is the life cycle and causes the formation of the Internet company’s unique business model is? (2) In addition to financial indicators, factors that affect the value of Internet companies have? Based on the theory of network economy carding, forming a unique understanding of the root causes of the life cycle and the business model of Internet companies. And use it as a starting point to analyze factors that affect the value of Internet companies. Through customer value method of understanding and learning, we found its source of value and valuation Thought Network Economy business related. Therefore, this network-based economic theory, based on user value method to assess the value of Internet companies. And it explains financial indicators in addition to the network-specific indicators and other factors affect the value of Internet companies.In this paper, research ideas into four steps:First, the network-related economic theory a general description. These include:the basic characteristics of the principle of competition, as well as sources of value enterprises; secondly, through the elaboration of the Internet enterprise business models and life cycle, found its unique life cycle with the network economy theories about; again, through the user value and other estimates Learn the value of the method, we find sources of value reflected in its valuation Thought network economy enterprises; and finally, we use case analysis of customer value analysis and application method, and the importance of the Internet companies to assess the economic impact of the network considered.In this paper, the difference between existing ideas and research:the research on the valuation of companies is mostly limited to the level of financial indicators, usually on improving existing research abroad, ignoring the non-financial indicators of the Online Economy intrinsic value of Internet companies. This will combine the actual situation of the cases studied, taking into account the economic impact of the network on the enterprise value, and customer value analysis and application.We find that the following two points:First, the Internet company’s unique business model and life cycle, and the value of the source of the network economy business related. Second, the user size and liquidity of the enterprises of the network economy of its value is large.The main conclusions of this study:the traditional valuation methods can not be explained by the high valuation of the phenomenon, the network should consider the impact on the economic value of the non-financial corporate level, and then to have intrinsic value but is not currently profitable business valuation.Innovation and Application Implications of this article:innovation of this paper lies in three aspects. First, the factors that influence the value of the network economy enterprise valuation from the viewpoint of the ideological level. Secondly, according to the network economies of scale in the role of the user, on the importance of the Internet user business value. Thirdly, the network elements and other indicators combined with the user through innovative valuation methods-to assess the value of Internet business users value method. And incorporates herein the case of innovative valuation methods for analysis and application.Through this study we recognize that the valuation of Internet companies can not ignore the value of its source, and to a correct understanding of the value of the user’s Internet economy.