Valuation of Internet-Related Companies

19 Pages Posted: 15 Apr 2001 Last revised: 3 May 2023

Date Written: May 2, 2023


La versión española de este artículo se puede encontrar en:

This paper will analyze the evolution of a number of companies (Terra, Amazon, America Online, Microsoft, B2B companies, online brokers...), although our focus will be the valuation of Amazon. We compare Damodaran's valuation by cash flow discounting ($35/share), Copeland's valuation by scenarios and cash flow discounting ($66/share) and our valuation by simulation and cash flow discounting: $21/share.

It is very interesting to compare and try to differentiate what Internet may signify in the first years of the 21st century with the revolutionary effect on society that the railways, freeways, airlines, radio, television and the telephone had when they first appeared. We also urge the reader to analyze the history of companies such as Levitz, Home Shopping Network, MCI, LTCM and Boston Chicken.

A website is not necessarily a business. Selling below cost gets you lots of customers, but not much money.

Keywords: Internet, Valuation, Amazon, Microsoft

JEL Classification: G12, G31, M21

Suggested Citation

Fernandez, Pablo, Valuation of Internet-Related Companies (May 2, 2023). Available at SSRN: or

Pablo Fernandez (Contact Author)

IESE Business School ( email )

Avenida Pearson 21
Barcelona, 08034
+34 91 357 0809 (Phone)
+34 91 357 2913 (Fax)


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