Objectives of knowledge management

Valuing Internet start- ups
Desmet 
et al
. (2000) apply traditional discounted cash flow techniques to assess the potential 
value of Internet start‑ ups or dot‑ coms. They point out that traditional techniques do not work 
well when profitability is negative, but revenues are growing rapidly. They suggest that for new 
companies the critical factors to model when considering the future success of a company are:
1 
The cost of acquiring a customer through marketing.
2 
The contribution margin per customer (before acquisition cost).
3 
The average annual revenues per year from customers and other revenues such as banner 
advertising and affiliate revenues. These are often measured as ARPU or average revenue 
per user, as reported for companies like Betfair, eBay and Facebook in Chapter 1.