The Research On The Valuation Method Of Internet Company

In the past 20 years, the Internet has brought great changes to everyone’s daily life. As of December 2013, China’s annual number of new Internet users reached 53 million. Along with this trend, Internet business activities in capital markets have become increasingly frequent. The investors pay more attention to the evaluation of Internet companies.With the in-depth study of business valuation, business valuation theory has improved, but still the traditional valuation model cannot give a reasonable explanation to Internet companies. Most Internet companies with advanced technology and unstable business model are still in the startup stage or rapid growth stage, which means these companies involve high growth opportunity and high risk at the same time. This article narrated the difficulty in Internet company evaluation, the elements investors need to pay attention to in assessing different Internet companies, and the general rules on valuation of the same type of Internet companies.Firstly, the relevant researches on the valuation of Internet companies have been summarized. Secondly, the article introduces some traditional valuation methods, clarified the advantages and disadvantages of each method. Subsequently, the paper classifies Internet companies into certain types and summarizes the valuation of difficulty compared to traditional Internet business enterprises. Finally, this article makes a research on the general rules of Internet e-commerce enterprise and social networking companies and guides the future investment in Internet companies.