The impact of financial and non-financial performance measures on online social networks’ value

Abstract

The main goal of the Master Thesis is to determine what financial and non-financial performance measures influence market value of Internet firms, and to discover whether these indicators vary across the different types of Internet business models. The research highlighted that different business models of Internet firms have different financial and non-financial value drivers and it is essential to distinguish them. Additionally, the study suggested that there are variations in market valuations of Internet business models that are not related solely to financial performance measures, and that the relatively large valuations posted by online social networks cannot be explained by financial measures alone. Results indicate that, financial measures of performance mostly impact on mature Internet companies, while non-financial performance measures have explanatory power on young Internet companies such as online social networks. This study makes contributions to the body of knowledge and provides some techniques for Internet executives.