Comparing the valuations of Freeserve and Yahoo may be "apples to oranges." The national U.S. ISPs all have a valuations in excess of $1,500 per subscriber and are not bench marketed against Yahoo. Different business models. Regardless of its impact on XSNI, the Freeserve offering should be interesting, if for no other reason than to see if our "mania" is transferable to our more laid back U.K. brothers and sisters. From internetnews.com
internetnews.com
Dixons Dips as Freeserve Value Questioned July 15, 1999
International News Archives
Shares in retailer Dixons Plc, home of soon-to-be-floated Internet service provider Freeserve, dipped on Thursday after a leading IT merger specialist questioned Dixons' valuation of Freeserve.
The shares shed 34 pence or 2.43 percent to 13.65 pounds by 0934 GMT, making it the second largest decliner in a rising FTSE 100 index.
The Financial Times newspaper reported Broadview, the acquisition specialists, as saying Freeserve was valued higher than Yahoo!, the leading US-based Web portal, and that Freeserve could not justify this lofty price without changing its format and boosting its content to retain users.
However, analysts said they were not unduly concerned at the airing of these latest valuation comments.
"There are naturally divergent views in the market as to how to price it... The shares are very volatile and are responding to the latest press comment," CCF Charterhouse analyst Mark Charnock said.
He added that volatility would continue as long as "people seem to be taking subscriber numbers and applying multiples as they see fit."
Freeserve is being valued at about $1,500 for each of its 1.3 million users compared to Yahoo!'s $1,140 per user.
"One day we might return to old-fashioned principles like profit and revenue," Charnock said. |
