SAMPLE Entertainment, Media and Technology (EMT) Program New York University

B10.3355.20: Accounting and Valuation Issues in the EMT Industries Spring 2004 Professor Stephen Ryan (10-87 KMC, 998-0020, Fax 995-4004, [email protected]) Office Hours: MW 4:30-6 and by appointment Classroom: KMC 5-140, MW 3:00-4:20

Description: In this course, we will discuss financial economic, financial accounting, and valuation issues that pertain to the entertainment, media, and technology (EMT) industries. It is useful to analyze the EMT industries together because they exhibit common characteristics and are jointly evolving and in some respects converging because of digital technology. Digital technology has had and will continue to have a profound effect on the production, distribution, and consumption of the services provided by EMT firms.

The EMT industries exhibit following common characteristics, among others:

1) complex cost structures: i) large up-front fixed or sunk costs ii) complementarities among various types of costs 2) highly uncertain or skewed demand 3) complicated contractual (e.g., compensation and financing) arrangements to share risks, provide incentives, etc... 4) investments are real options in that they: i) pay off big with low probabilities, ii) are made over time and yield information about subsequent payoffs, and iii) are specialized and irreversible. 5) path dependencies that cause demand to depend on: i) random events, ii) technological lock-in, and iii) other consumers’ choices. 6) subscriber bases that churn or grow, 7) libraries with multiple revenue streams, and 8) largely intangible economic assets.

Because of these characteristics, accounting – while distinctly limited – is richly tied to the operations and valuation of EMT firms. In this course, we will explore this richness, focusing on salient, generalizable examples of EMT firms. A primary goal of the course is to adapt standard methods of financial analysis to the analysis of EMT firms, either by adjusting accounting numbers or by supplementing accounting numbers with non-financial measures. Readings and Non-Graded Assignments: There is no assigned text for the course. I will hand out class notes for each session and other materials such as articles, problems, and cases. All material should be read and thought about prior to the class session.

For the student who wants background material, a diffuse but occasionally quite insightful introduction to the EMT industries, Entertainment Industry Economic: A Guide for Financial Analysis, Fifth Edition, Harold L. Vogel (Cambridge University Press, 2001) is well worth a read.

Grading: There will be two take-home exams that will each determine 30% of your grade. These exams will be handed out after the end of the sessions on subscribers and accounting-based valuation. Assuming I stay on schedule (by no means a sure thing), these exams will be handed out in class on 3/10 and 4/21 and will be due one week later (spring break week does not count for the first take-home). You may discuss these exams among yourselves, but they should be completed individually, with no exchange of written work in any form.

There will be a group project, discussed further below, that will determine 40% of your grade. The group project is due in the final exam slot assigned for the course. Class participation of the productive sort is encouraged and will be rewarded by one-quarter of a letter grade increase. I emphasize that productive participation does not require being either an expert or correct; for example, asking good questions is sufficient.

Group Project: The group project should be a case study or report related to a specific accounting or valuation issue for an EMT firm or industry. Flexibility is allowed and encouraged in the choice of topic. Relevant readings (e.g., articles from the popular press or academic journals, contract, financial statements) should be attached, as they can be useful to me in incorporating materials into subsequent courses. The text of the case study should be 5-10 (double-spaced, 12 point font, 1 inch margin) pages.

Groups can be any size from 1 to 5 students. I prefer the groups not to be 1 in size, but I recognize that group work can be difficult for some students.

I recommend that groups have a brief discussion with me about their topic for the group project before they expend substantial effort. You should be thinking about potential topics throughout the course (e.g., as you read the paper) rather than waiting until the last minute. The group project is due on 5/3 (the last day of class) at 6 pm.

Web Access to Materials/Blackboard: While I will hand out all materials needed for the course in class, the materials that are in electronic form will be available on Blackboard. I do not use Blackboard for any other purpose.

2 Outline of Sessions (Tentative)

1/26 Organizational Session and Overview

Read: Class Notes

Articles on the history of, trends in, and predictions about the EMT Industries:

“Movies Meet New Technology: The Sequel to the Sequel”, New York Times, September 20, 2000 “A Cable Network of Their Own”, New York Times, November 2, 2003 “Rupert’s World”, Business Week, January 19, 2004 “Merger Brief: One House, Many Windows”, The Economist, August 19, 2000 “The Outer Limits of Optimism”, New York Times, October 14, 2002 “The Technology Sector’s Rise and Fall is a Tale as American as the Model T”, New York Times, December 14, 2000 “Telecom Wreck Provides and Opening for AT&T”, New York Times, September 1, 2002 “Cellphones: An Industry Watches Japan’s Experience”, New York Times, December 29, 2003 “Time Warner Deal Raises Ante in Cable Bid for Phone Market”, New York Times, December 9, 2003 “A Debate on Web Phone Service”, New York Times, January 5, 2004 “Heavyweights Are Choosing Sides in Battle over Next DVD Format”, December 29, 2003 “The Owners of Culture vs. the Free Agents”, New York Times, January 18, 2003

3 Part I: Financial Economic Issues and Discounted Cash Flow Valuation

1/28-2/2 Large Fixed Costs and Complementarities Between Fixed and Variable Costs

Read: Class Notes

Various industries: “Major Stars Not so Crucial as Concept Trumps Celebrity”, New York Times, June 23, 2003 “More Companies Pay Heed to Their ‘Word of Mouse’ Reputation”, New York Times, June 23, 2003

Theater: “Off B’way Pumps up Prices”, Weekly Variety, February 19-25, 2001 "Why Neil Simon Decided to Turn His Back on Broadway", New York Times, 1994 “It’s Broadway. Well, Virtually.”, NewYork Times, March 18, 2003

Film: “Gambling on a Film Fantasy”, New York Times, December 12, 2001 "The $75 Million Difference", New York Times Magazine, November 16, 1997 “With ‘Sand and Fog,’ Can Year be Salvaged?”,New York Times, December 15, 2003 “Even Blockbusters Find Fame Fleeting in a Multiplex Age”, New York Times, August 13, 2001 “Digital Production of Films is Coming. Now, Who Pays?”, New York Times, October 13, 2003 “Movie Theaters Build Themselves into a Corner”, New York Times, September 4, 2000 “For a Theater Chain, A Revival May be Near”, New York Times, January 27, 2002

Television: “‘Law & Order, A Hot Franchise, Seeks a Rich Deal Early from NBC”, New York Times, June 2, 2003 “What Price Touchdowns?”, Wall Street Journal, January 3, 2003 “Following HBO, Networks Test Short-Run Series”, New York Times, January 19, 2004 “Reality Shows Alter Way TV Does Business”, New York Times, January 25, 2003

4 Music: “No. 1 With a Bullet: Madonna Opens Big, and She’d Better”, New York Times, May 11, 2003 “Tune Biz Gets Its Game Face On”, Weekly Variety, February 3-9, 2003 “Ticketmaster Auction Will Let Highest Bidder Set Concert Prices”, New York Times, September 1, 2003

Museums/Fine Arts: “The Guggenheim’s Scaled-Back Ambition”, New York Times, January 20, 2002

Book Publishing: “Publishing Trends Go Beyond E-Books”, New York Times, December 18, 2000

Internet/e-Commerce: “Microsoft’s $1 Billion Bet on Xbox Network”, New York Times, May 20, 2002 “Amazon’s Risky Christmas”, New York Times, November 28, 1999

Telecommunications: “Europe’s Wireless Vision in Dashed”, New York Times, December 17, 2001 “Telecommunications Industry Too Devastated Even for Vultures”, December 17, 2001 “Fiber, Fiber Everywhere...”, New York Times, November 19, 2001 “Globalstar, Bankrupt Satellite Company, to Be Sold for $55 Million”, New York Times, January 16, 2003

Prepare: Fixed Costs Problem Evolving Cost Complementarities in Theater Problem Up-front Costs, Efficiency, Option Value, and Risk Problem

5 2/4-2/9 Compensation Contracts and Definitions of Gross and Net Profits

Read: Class Notes

Read at least one of the following 2 lengthy articles (the article by Weinstein has a more complete historical treatment of profit-sharing contracts while the article by Goldberg has a more interesting conceptual edge) “Profit-Sharing Contracts in Hollywood: Evolution and Analysis”, Weinstein, Journal of Legal Studies, January 1998. “The Net Profits Puzzle”, Goldberg, Columbia Law Review, March 1997

“Big Hollywood Hits Don’t Ensure Big Profits”, New York Times, September 2,\ 2002 “Columbia Pictures to Share Movie Profits with Writers”, New York Times, February 6, 1999 “Strike Fears Grip Hollywood as Unions Flex New Muscle”, New York Times, October 1, 2000 “Screenwriters Adjust to Being Bit Players Again”, New York Times, December 9, 2001 “Music Stars Complain about Stringent Contracts”, New York Times, September 6, 2001 “Spit Out By the Star-Making Machinery”, New York Times, February 3, 2002 “Selective Accounting”, Forbes, December 14, 1998 “Will Today’s Huge Rewards Devour Tomorrow’s Earnings?” New York Times, April 2, 2000 “A New Route to Riches at Adelphia”, New York Times, January 8, 2003 “SEC Tells Concerns to Disclose Cancellations of Stock Purchases”, New York Times, February 1, 2001 “Amazon Offer Links Profit to Share Price”, New York Times, February 1, 2001

Prepare: Fixed Costs, Compensation, and Financing Problem, Part II

No classes on 2/15, Presidents Day

6 2/11-2/23 Financing Contracts and the Sharing of Risk and Ownership Rights

Read: Class Notes

Film: “The Five Major Film Finance/Distribution Scenarios”, “Types of Distribution Deals”, and selections from “Standard Production-Financing/Distribution Agreement”, Cones, The Feature Film Distribution Deal, (Southern Illinois University Press, 1997), pp. 29-33. “Hollywood gets warm and runny for...Other People's Money”, Weekly Variety, February 17-23, 1997 “New Pics Fix: Grin & Share It”, Weekly Variety, November 19-25, 2001 “Regency Wins at Risky Business”, Weekly Variety, November 5-11, 2001 “Stabler’s Destination: ‘Fill the Void’”, Weekly Variety, October 19, 1998 “Indie Reaches Final Destination”, Weekly Variety, February 26-March 4, 2001 “Independents Find Money’s Available, for the Right Price”, Weekly Variety, March 2, 1998 “H’w’d Frets Over Foreign Aid”, Weekly Variety, February 12-18, 2001 “Ad Flap on Tap”, Weekly Variety, February 26-March 4, 2001

Television: “ABC and Affiliate Stations Reach Financial Agreement”, New York Times, June 29, 1999 “A Struggle for Control”, New York Times, April 23, 2001 “B’busters Get Double Teamed”, Weekly Variety, December 7-13, 1998 “Double Play: Double”, Weekly Variety, November 12-18, 2001 “To Stay Afloat, Unlikely Ties in TV News”, New York Times, November 27, 2000 “Wheels Come off the Deals”, Weekly Variety, December 3-9, 2001. “NBC in Syndie Revolution”, Weekly Variety, December 2000. “Having the Last Laugh, Forbes, February 21, 2000 “Media Companies Succeed in Easing Ownerships Rights”, New York Times, April 16, 2001 “B Sky B Will Write Off a German Pay Television Investment”, New York Times, February 9, 2002 “German Bank Offers to Buy Kirch Asset”, February 13, 2002

Media: “Vivendi Universal, with its complex balance sheet, meets distrust from investors shaken by accounting scandals”, New York Times, February 11, 2002

7 Technology and Telecommunications: “As Web Sites Seek an Attractive Mix of Content, a New Type of Business is Providing the Right Stuff”, New York Times, September 25, 2000 “Behind ‘Name Your Own Price’ Lies a Mesh of Partners”, New York Times, March 29, 2000 “Time Warner Joins Forces with AT&T”, New York Times, February 2, 1999 “AT&T Takes Full Control of At Home Cable Venture”, New York Times, March 30, 2000 “AT&T Faces Hard Choices over its Debt”, New York Times, November 20, 2000 “Bond Believers See Prelude to a Fall”, New York Times, November 19, 2000 “Court Allows Iridium Creditors to Sue Motorola for Billions”, New York Times, March 7, 2001. “Lucent Seeks $1 Billion Through Securities Sale”, New York Times, August 1, 2001 “Nortel Networks Plans to Sell $1 Billion of Convertible Bonds”, New York Times, August 9, 2001 “Tracking Stocks’ Luster Masks Risk and Conflicts of Interest”, New York Times, December 12, 2000 “In Europe, Wireless Mergers Losing Ground to Alliances”, New York Times, August 25, 2000 “The New-Economy Vultures”, The Economist, December 8, 2001 “If Earnings Depend on Investing, Watch Out”, New York Times, January 21, 2001 “Dangerous Qwest”, Barron’s, March 4, 2002

Securitization: “You Too Can be Rated AAA”, New York Times, June 7, 1998 “TVT Makes Securitization Deal”, Billboard, March 6, 1999 “The Princess and the Pearl”, The Economist, December 8, 2001

Prepare: Fox Entertainment Group IPO Case, Part I Blockbuster’s Revenue Sharing Kirch Group’s Put Options and Control problem Qwest for Financing problem

8 2/25-3/3 Real Options and Path Dependence: Implications for Optimal Investment Timing and Industry Convergence

Read: Class Notes

Path Dependence: “Qwerty Spells a Saga of Market Economics”, Wall Street Journal, February 24, 1998 “Lock and Key”, The Economist, September 18, 1999 “Knowledge is Power”, The Economist, September 23, 2000

Microsoft Vs. World: “In Software Development, a True Ardor for Java”, New York Times, April 20, 1998 “For Sale: Free Software”, New York Times, September 28, 1998 “Linux Backers Plan Assault on Microsoft”, New York Times, August 14, 2000 “Little-Known Project Developing Alternative Software to Windows”, New York Times, January 18, 1999 “Tomorrow’s Internet”, The Economist, November 13, 1999 “Bill’s Big Roll-Out”, The Economist, September 18, 1999 “Microsoft is Set to be Top Foe of Free Code”, New York Times, May 3, 2001 “Extending its Tentacles”, The Economist, October 20, 2001 “Microsoft is Putting its Muscle Behind Web Programming Tools”, New York Times, February 13, 2002 “Settlement Talks in the Microsoft Case Hinge on a Question: Are the Laws of Government or Software Supreme?” New York Times, December 6, 1999 “Microsoft Seeks a Long Penalty Process”, New York Times, September 21, 2001 Summary of November 11, 2001 Department of Justice Settlement with Microsoft by Nick Economides “In AOL’s Suit Against Microsoft, the Key Word is Access”, New York Times, January 24, 2002

Standards and Patents: “Holy War’ Over the Future of Wireless”, N.Y. Times, February 15, 1999 “Teething Trouble”, The Economist, December 22, 2001 “Federal Agency Rethinks Internet Patents”, New York Times, March 20, 2000 “Injunction Against Barnesandnoble.com is Overturned”, New York Times, February 15, 2001 “Europe Offers a Patent Law for Software”, New York Times, February 21, 2002 “Motorola to Sell Inner Workings of Cell Phones to Rivals”, New York Times, July 22, 2001 “Cast Aside”, The Economist, January 27, 2001

Optimal Investment Timing:

9 “Empty Pipes”, Forbes, November 30, 1998 “Fiber Optic Data Transmission Technology Arouses Skepticism in the Industry”, New York Times, November 2, 1998 “Motorola Drops Plan for Its Own Data Satellites”, New York Times, May 22, 1998 “The Real Retail Revolution: It’s Wal-Mart, Not the Net”, New York Times, December 20, 1999 “A Digital Darwinism Thins the Number of Online Toy and Craft Stores”, New York Times, May 29, 2000 “A Cautious Sibling Waits to See What Works”, New York Times, March 13, 2001 “A Report Indicates that Companies See Little Reason to Move Quickly into Buying Over the Internet”, New York Times, March 5, 2001 “As the Shakeout Proceeds, Some Business-to-Business Marketplaces Show their Staying Power”, New York Times, July 16, 2001 “Success Using Contrary Notions: Grow Modestly and Actually Make Money Doing Business on the Web”, New York Times, June 20, 2001 “For a Variety of Reasons, Bloomingdales.com Backs Away from its Aggressive Internet Sales Strategy”, New York Times, January 21, 2002 “Weak Reception”, New York Times, January 29, 2001 “The Crashing of Gears”, The Economist, September 22, 2001 “Telecomeback”, Forbes, January 21, 2002 “The Most Valuable Square Foot in America”, Fortune, April 1, 2002

Industry Convergence: “Bill Gates goes Vertical”, Gabler, New York Times, June 12, 1997 “Media Convergence”, New York Times, June 29, 1998 “Behemoths in a Jack-be-Nimble Economy”, New York Times, September 12, 1999 “The Net Gets Real”, The Economist, January 15, 2000 “As the Information, Entertainment, and Communications Industries Converge, Concern over Access is Growing”, New York Times, January 31, 2000 “A Rancher with an Appetite”, The Economist, November 24, 2001 “Veni, Vidi, Vivendi”, The Economist, December 22, 2001

Prepare: Optimal Investment Problem Optimal Investment Timing in e-Commerce problem Optimal Investment Timing in Cable TV problem

10 3/8-3/10 Discounted Cash Flow Valuation 1: Subscriber Bases and Churn

Read: Class Notes “Planning the Digital Smorgasbord”, New York Times, June 11, 2001 “Despite Rising Number of Subscribers, There is Some Concern over AOL’s Revenue Growth”, New York Times, October 30, 2001 “Online Matchmakers are Helping to Bolster the Finances of their Corporate Parents as they Raise the Romantic Hopes of Clients”, New York Times, February 4, 2002 “Peering Round the Corner”, The Economist, October 13, 2001 “For Wireless Services, Talk Gets Far Cheaper as Competition Rages”, Wall Street Journal, April 27, 1998 “AT&T Plan is a Search for Loyalty”, N.Y. Times, February 1, 1999 “The Battle over Instant Messaging is another Case of a Company Clinging to Customers like Flypaper”, New York Times, August 2, 1999 “A Man of Words is Still Partial to One: Loyalty”, New York Times, December 29, 1999 “Web Site Publishers and Advertising Agencies Square Off on Ownership of Data on Customers”, New York Times, November 8, 1999 “DoubleClick’s Competitors Breathe a Sigh of Relief as an Uproar over Privacy Abates, at Least for the Moment”, New York Times, March 6, 2001 “Cox Is in Deal with Gannett for Cable-TV Subscribers”, New York Times, July 28, 1999 “Lost and Found: SafeCard’s Accounting Rates a Hard Look”, Briloff, Barrons, July 6, 1981 “Broadband Gains Should Boost Earthlink Shares”, Barrons, March 15, 2002

Prepare: Cable Valuation problem Subscribers and Market Penetration problem Cost Complementarities and the Value of Sticky Subscribers problem Earthlink Subscriber problem Briloff meets PEte problem

First take-home exam handed out at the end of the class above and due one week later (not including spring break if I am on schedule)

11 3/22 Discounted Cash Flow Valuation 2: Libraries and Ancillary Revenues

Read: Class Notes “In Warner Brothers’ Strategy, A Movie is Now a Product Line”, New York Times, February 11, 2002 “H’wood Hits Paydirt in Playtime”, Weekly Variety, December 18-31, 2000 “Tarzan Puts Grinch in Vidlock”, Weekly Variety, January 8-14, 2001 “The Force is with the DVD”, New York Times, June 22, 2001 “Real Magic”, The Economist, November 24, 2001 “P’Gram Library Card Stays in Play”, Weekly Variety, October 26, 1998 “Indies Throw Cash at Pix Stash”, Weekly Variety, October 5, 1998 “MGM’s Owner Is Again Seeking a Buyer”, New York Times, January 16, 2002 Various tables from Vogel, Entertainment Industry Economics “Can Oldies Save Slipped Discs?”, Weekly Variety, December 3-9, 2001 “NBC Discovers New Strategy in ‘The 60’s’”, N.Y. Times, February 15, 1999 “Berry Gordy Sells EMI a Stake in Catalogue of Motown Songs”, New York Times, July 2, 1997 Various stories related to Beatles’ Song Catalog from www.nme.com “Viewers Flee Summer Reruns and Networks Grow Alarmed”, New York Times, August 6, 2001 “Comparison-Shopping Sites Have Felt the Shakeout but Hope that a Diversified Source of Revenues May Serve as a Buffer”, New York Times, February 5, 2001

12 Part II: Financial Accounting Issues and Accounting-Based Valuation

3/24-3/31 Intangible Assets

Read: Class Notes

Excerpts from AOL Time Warner’s annual report “America Online Plans $385 Million Charge”, Wall Street Journal, 10/31/96 “A Tale of Two Writeoffs: American Online & Allegiance”, Jack Cieselski, The Analyst’s Accounting Observer, November 21, 1996 “America Online’s Strategy Raises Eyebrows”, New York Times, February 13. 1997 “America Online’s Triumvirate in Cyberspace”, New York Times, February 16, 1998 “AOL Pays a Fine to Settle a Charge that it Inflated Profits”, New York Times, May 16, 2000 “Internet Providers Look for Profit in Free Access”, New York Times, March 6, 2000 Excerpts (paragraphs 33-40) from AICPA Statement of Position 93-7 on GAAP accounting for direct response advertising costs “Brand Values and Capital Market Valuation”, Barth, Clement, Foster, and Kaznik, Review of Accounting Studies, forthcoming, [read pp. 1-14 and the appendix carefully] “F.C.C.to Promote a Market to Sell Airwaves”, New York Times, March 13, 2000

Prepare: “America Online: Online or Off-Track” case, Brown and Stickney, 1998

13 4/5-4/7 Revenue Recognition and Expense Matching

Read: Class Notes

film: “What’s the Problem with Film Industry Reporting?” Londoner, Journal of Financial Statement Analysis, Spring 1996 “For Sony, Too Little Information Proved to Be a Dangerous Thing”, New York Times, August 6, 1998 “Orion Pictures Corporation: Lessons from its Demise”, Brown, Corporate Controller, May/June, 1992 “Hollywood Mystery: Woes at Orion Stayed Invisible for Years”, Wall Street Journal, 10/16/91

theater: “Gambling on a Trip from ‘Ragtime’ to Riches”, New York Times, 2/19/98

e-business “Presto Chango! Sales are Huge!”, Fortune, March 20, 2000 “New Currency for the New Economy: Where’s the Cash?” Jane Adams, Credit Suisse/First Boston, November 20, 2000 “Priceline Shares Fall on Word Sales Won’t Meet Forecasts”, New York Times, September 28, 2000

telecommunciations: “The Fiber Optic Fantasy Slips Away”, New York Times, February 17, 2002 “Enron’s Swap with Quest is Questioned”, New York Times, March 29, 2002

software: “PeopleShell?”, Forbes, January 21, 2002 “MicroStrategy’s Curious Success”, Forbes, March 6, 2000 “A Hard Fall as a Highflier Revises Figures”, New York Times, March 21, 2000 “Failed Audit: The Humiliation of PricewaterhouseCoopers”, New York Times, March 24, 2000 Excerpts from CFRA Reports on MicroStrategy

Prepare: “Orion Pictures Corporation: Silence of the Accountants” case, Abarbanell, 1997 Priceline Revenue Recognition case MicroStrategy Revenue Recognition case

14 4/12-4/14 Write-offs

Read: Class Notes

“SEC Crackdown on Technology Write-offs”, New York Times, September 29, 1998 “A Company Tested and Found Wanting”, New York Times, June 17, 2001 “Behind a Closed Door”, New York Times, July 1, 2001 “JDS Set the Record, but It May Not Be 2001’s Biggest Loser”, New York Times, December 28, 2001 “Unloading Goodwill: The Rush to Write Off”, New York Times, January 13, 2002 “Big Blue Haze”, Briloff, Barrons, 12/23/96 “A Tale of Two Write-offs” The Analyst’s Accounting Observer, November 21, 1996 “MCI Will Cut Its Write-off on Acquisition”, New York Times, September 30, 1998 “The Valuation of Acquired R&D”, Zhen Deng and Baruch Lev, April 1998

Prepare: Valuation of and Accounting for Purchased Research and Development Technology: IBM’s Acquisition of Lotus Case, Francis, 1996 Netscape-Excite Marketing Agreement Case AT&T problem from White, Sondhi, Fried, The Analysis and Use of Financial Statements

15 4/19-4/21 Accounting-Based Valuation, Alternative Measures of Book Value and Income (EBITDA)

Read: Class Notes

“AOL Time Warner and the Sorceror’s Stock”, New York Times, December 9, 2001 “Parson’s Numbers”, New York Times, January 10, 2002 “SEC Sounds a Warning on Pro Forma Financial Information”, Jane Adams, Credit Suisse/First Boston, December 4, 2001

Prepare: AOL Time Warner’s Segments Case

Second take-home exam handed out at the end of the above class and due one week later.

4/26-4/28 The Limitations of Financial Accounting; Rethinking Financial Analysis

Read: Class Notes “How Much Are Your Eyeballs Worth?”, Fortune, February 21, 2000 “What’$ it Worth?” business2.com, December 9, 1998 “How Did They Value Stocks? Count the Absurd Ways”, New York Times, March 18, 2001 “Funny Business”, New York Times Magazine, December 19, 1999 “Red Face for the Internet’s Blue Chip”, New York Times, March 11, 2001 “Yahoo Charts the Spread of the News by E-Mail...”, New York Times, January 29, 2001 “Internet Companies Reinvent Math, Contending that Each Losing Transactions Succeeds as ‘Volume’”, New York Times, March 29, 1999 “Value-Relevance of Nonfinancial Information: The Wireless Communications Industry”, Amir and Lev, Journal of Accounting and Economics, 1996

Prepare: Non-Financial Measures and Valuation: Yahoo vs. Lycos Case

5/3 Intellectual Property

Read: Class Notes

Group project due on 5/3 at 6:00 pm.

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