Valuation of online social networks - An economic model and its application using the case of Xing.com
Online social networks are gaining increasing economic importance in light of the rising number of
members. The numerous recent acquisitions priced at enormous amounts illustrate this development.
Therefore, the growing relevance of online social networks in science as well as in practise revealed
the need for adequate valuation models, which take into account the networks’ specific
characteristics. Thus, this article develops an economic model for valuation of online social networks.
The model allows the evaluation of whether the purchase prices on the market, which recently
amounted to millions, are justifiable. Finally, the practical application of the model is illustrated by an
example of the major European online social network XING.com.
Gneiser, Martin; Heidemann, Julia; Klier, Mathias; and Weib, Christian, "Valuation of online social networks - An economic model and its application using the case of Xing.com" (2009). ECIS 2009 Proceedings. 442.