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Revenue and Valuation of Companies with Digital Platform Business Models

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  • Pomykalski Przemysław

    (Lodz University of Technology, Lodz, PolandORCID: 0000-0002-9327-8479)

Abstract

Multisided, digital platforms attract considerable attention in business and academic circles. Seven out of the ten most valuable companies in the world derive much of their value from multisided platforms. The problem of defining and measuring value remains a major challenge in management literature. In this paper I analyze the relationship between the sales (revenue) and market capitalization of companies with digital platform business models. Data was used from a sample of 19 companies that used platform business models in 2017. To assess the correlation, Pearson correlation coefficient was applied. The results indicate that there was a significant positive relationship between revenue and market capitalization in 2017. This suggests that revenue may be used as the main variable in the valuation of companies using platform business models. The results point to future research problems that may be addressed using casebased methodology.

Suggested Citation

  • Pomykalski Przemysław, 2019. "Revenue and Valuation of Companies with Digital Platform Business Models," Management Sciences. Nauki o Zarządzaniu, Sciendo, vol. 24(1), pages 11-18, March.
    • Handle: RePEc:vrs:mansci:v:24:y:2019:i:1:p:11-18:n:2
    DOI: 10.15611/ms.2019.1.02
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    References listed on IDEAS

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    More about this item

    Keywords

    platforms; business model; valuation;
    All these keywords.

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • M16 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - International Business Administration
    • M15 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - IT Management
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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