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Brand Capitalization

Market capitalization reflects the equity value of a company only; it does not necessarily reflect its true market value. Whereas market capitalization represents a single measure of what a company is worth, market value takes numerous factors into account to create a broader picture of a company’s financial standing.

One of the key measures of a brand name lies in the value of its internet domain name. The metrics used to determine this value are predominantly “user interaction” based. One such example is the recently acquired cars.com an online car magazine / sales portal. Shortly put, it sold for US$825 million and it is “just a website”. Anyone can register a .com domain name for under R200. Why was it sold for such a high price? See page 80 on this report. It is the biggest sale in internet history.

Here are some others to compare with.

Facebook paid $ 19 billion for Whatsapp. Makes one think why breaches arefairly common.

Whatsapp’s main competitor, Telegram is only worth

It was not “just a website” it was a “brand name” with a clear and long standing history on the internet. Any still, many people only learned of it when the sale was reported on News channels.

The valuation of the Cars.com domain name is currently at US$ 92 000 000. Yet, “webuycars” who regularly advertise on South African Radio stations are nowhere near that value at US$210 000.

This is just one comparison of Brand Capital growth.

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