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Internet & Technology

The digital economy offers enormous opportunities for companies, but it also brings unparalleled uncertainty.  Computer software and hardware companies deal with the demands of a rapidly changing market on a daily basis.  eBusiness has revolutionized the way companies in every industry operate. Keeping pace in the digital world requires not only keeping pace with ever-changing technology but with innovative performance measurements and cutting edge valuation methodologies.

After the bubble burst following April 2000, the internet sector has been recovering due to the presence of some big and well-capitalized companies, a break-even potential without an exorbitant cash-burn rate, and market attention to those companies with sound business models.  The Internet sector has been expanding broadly by converting the information and communication activities (already expanded with the help of new access devices) into e-commerce opportunities.  Keeping pace in the technological world requires innovative thinking backed by equally innovative investment strategies. In a sector as dynamic as internet and technology, corporate valuation is constantly under the spotlight as companies take on or abandon projects, restructure, merge, acquire and divest operations.

The Real Options Group can help internet, computer hardware and software and other high tech companies gain a better understanding of exactly where the value is within their projects or businesses and how managerial flexibility can be quantified by valuing the option to defer the project, stage investment or abandon it early, expand or contract, or to switch from one technology to another.  We can also model the impact of competitor responses and quantify their impact on the value of the project.

ROG can help digital economy/internet companies address critical issues and questions such as:

         How should our (e.g., portal) strategy evolve as the business environment evolves?

         How can we exploit new channels, acquire new customers, or cross-sell new services to our existing customer base?

         Should we enter a licensing agreement, and on which terms?

         Should we make an acquisition, alliance or partnership to expand our offerings or enter new areas?

         How much is this new technology worth? How can we value intellectual property rights?

         Should we invest in the leading technology or in several options?

         How can we prioritize our product development or capital allocation efforts under budget constraints? When should we abandon projects or divisions, expedite, expand or redirect our activities?

         How can we achieve a balanced portfolio of cash-generating vs growth opportunities?

         How would our strategic investment affect our competitors, how might they respond, and what impact would their reaction have on our value?