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Coffee & DoughNets, December 15, 1999:

Science, Art or Sorcery?

Figure 1: Discounted Cash Flow

- Apply Reasonable value multiple (e.g., 25x P/E, 12x EBITDA) to 2004 results

- "Discount" the future value to the present at 30%-40% annual rate

Example: Company worth $100 Million in 2004 is worth $27 million today.

 

Figure 2: 
Portal Revenue And Unique Visitor Transaction Multiples
Entity Enterprise Value ($millions) Revenues ($millions) Unique Monthly (millions) Enterprise Value Revenue Multiple Enterprise Value Unique Monthly Visiter Multiple
Alexa Internet 250.0 0.4 0.7 625.0 x 344.4 x
HeadHunter.NET 150.0 1.1 0.8 136.4 x 199.4 x
Salon Internet 120.6 1.2 1.2 104.3 x 100.5 x
Talk City 253.5 1.5 2.3 174.5 x 112.2 x
Big Charts 166.0 2.1 1.6 79.0 x 103.8 x
Internet.com 434.5 3.5 1.7 124.1 x 252.8 x
HotJobs.com 514.2 3.5 1.2 146.4 x 427.8 x
Go2Net 555.6 4.8 3.3 115.7 x 169.1 x
Launch Media 322.9 5.0 0.9 64.4 x 353.6 x
           
© Bond & Pecaro 1999. All rights reserved. http://www.CyberValuation.com  

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Figure 3: 
Summary of 1999 Internet Company Valuation Multiples

(Through Third Quarter 1999)
Range of Valuation Multiples ISPs Portals Internet Retailers B2B
Range of Weighted Average Revenue Multiples 10 to 14x 84 to 88x 28 to 49x 25 to 36x
Range of Weighted Average Revenue Multiples For IPOs 32 to 36x 100 to 110x 56 to 75x 43 to 52x
Range of Weighted Average Revenue Multiples For M&A Transactions 4 to 5x 49 to 67x 16 to 20x 7 to 9x
Range of Weighted Average Subscriber and Monthly Unique Visitor Multiples $1,308 to $1,935 per subscriber $385 to $397 per subscriber N/A N/A
         
Bond & Pecaro 1999. All rights reserved. http://www.CyberValuation.com

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