Measuring Profitability and Marketability in Internet Companies

Due to the dot com crash in 2000, evaluating the performance of dot com firms has become a critical issue over the past few years. This paper presents a study which uses an innovative two-stage data envelopment analysis model that separates profitability and marketability to evaluate the performance of 69 U.S listed dot com firms. The empirical result shows that 10 out of 69 dot com firms are CCR-efficient on profitability and 23 out of 69 dot com firms are CCR-efficient on marketability. The result also shows that there is no apparent correlation between profitability and marketability.