Archive for March, 2008
Valuation of companies - A communications perspective
Valuation - “The process of determining the current worth of an asset or company. There are many techniques that can be used to determine value, some are subjective and others are objective.”
Communication - “Communication is a process that allows organisms to exchange information by several methods. Communication requires that all parties understand a common language that is exchanged.”
I have been back at University last week for a course on company valuation. It really served to demystify the valuation process, which is something I think anyone working within a communications role should make the time and effort to understand. There often isn’t a common language across Comms and Finance, an area where there really should be.
While a great deal of the valuation process involves complex formula and mathematics which might make you want to run for the hills, I found out from this course there is a lot more to valuation that meets the eye and it is a lot more exciting than a few mathematical equations.
A valuation model is only as strong as its assumptions and fundamental to any valuation exercise is an understanding of a company’s business, strategy, competitive advantages and drivers that affect its cash flows. The more people involved with these insights and expertise, the deeper the scope and depth of the valuation.
For those focusing on a career within communications, I believe there is a lot to be gained from being able to read a valuation report from front to back and not being blinded by any terminology, acronyms, art or science. If you understand how your company (assets, operations, competitive advantages, opportunities) are valued then you will know what it is important to communicate to the market and in what way. We communicate externally to communicate the value of the business.
This way you also have a strong enough understanding to be able to ask critical questions and challenge the model and the assumptions that lie behind the formula. This is not a negative thing but a key iterative process to get to an optimal end point.
During the course we looked at such things as principles of valuation, different valuation methods, relationships between different methods, how to derive the cost of capital and how to apply appropriate discounts in arriving at a final valuation.
I have written before about self teaching and how in this information/online age all the content we need to upskill is at our fingertips. In this instance, with completely new and foreign content I found it was great to have the solid focus of a classroom setting under the instruction of an expert, so if you get the opportunity to do it this way take it.
Alternatively, I just came across a good series of articles on the Motley Fool Website. I quite liked this quote in the intro,
“Supposedly, only sell-side brokerage analysts have the requisite experience and intestinal fortitude to go out into the churning, swirling market and predict future prices. Valuation, however, is no abstruse science that can only be practiced by MBAs and CFAs. Requiring only basic math skills and diligence, any Fool can determine values with the best of them.”
Introduction to valuation (Motley Fool)
This white paper opens with a quote contradicting the Motley Fool idea above, “What is the business worth?” Although a simple question, determining the value of any business in today’s economy requires a sophisticated understanding of financial analysis as well as sound judgment from market and industry experience.” Which do you agree with?
Read Valuation Methodologies (Wall St Training) (in context of M&A)
I think I will be talking about valuation of companies and interrelationships with communications (both online and offline) a lot more here in the future. I am still getting my head around all the concepts and where the pieces fit but it is a very fascinating area and one I want to learn much more about.
Brain busy with incessant information: 24,7!
Does this resonate with anyone else? I have just have a relatively technology free and very rejuvenating weekend. Maybe thats why it struck a chord.
“Now these empty moments are increasingly being saturated with productivity, communication and the digital distractions presented by an ever-expanding array of slick mobile devices.” Read My Ipod ate my Brain Here
1 commentListen and Learn - Webstock 2008 Podcasts online today
The recordings from the fabulous Webstock 2008 conference in Wellington NZ are now online. I would highly recommend tuning in and learning from these. A few from my favourite list were:
-Kelly Goto: “Getting Unstuck” - This is far beyond techy webness (which is great in itself but you need to understand your audience!) and dabbles in the realm of organisational culture and health. This is a fantastic presentation and will give you a lot to think about around application to your own role and context.
-Amy Hoy: “Usability for Evil” - Again this was all about people. The presentation was focused on principles of human psychology; understanding how we actually function, process information and basic motivations before thinking about anything else, that including what is on a website and how it is designed.
I ended up missing Russell Brown’s presentation, so looking forward to listening to that one as very much in my sphere of interest. Will also be good to catch up on those missed when I had to make a tough choice at the break out sessions!
All Webstock 2008 presentations are available online here
How to: Make it easy for search engines to find (and read) your press release
- Do your homework on keywords
-Research your what your business/ products keywords are. understand why these are important and why this is a worthwhile time investment. This is a communications job, not IT realm exclusively.
-Keywords these should be nouns or adjectives. Not verbs.
-Craft “keyword phrases” rather than using a single keyword. This will increase search engine findability.
- Use keywords liberally
Always be sure to include your keywords in the title of your release as well as in the lead paragraph.
- Write for both new and traditional media
Online releases need to be written for both bloggers/new media channels as well as traditional media. The new media channels keep evolving so don’t get too set in your process as if it doesn’t constantly change you aren’t doing it right.
-Point links listed in the release to relevant pages, not homepage. Think social media release!!!
- Use search engine friendly wire services
Not all news wire services are search engine friendly. Recommended from Social Media today…. PrimeNewsWire, Marketwire, PRWeb, BusinessWire.
- Watch your metrics!
Count your clips and start counting the blog results from your release. Analytics!
State of the News Media 2008 Report Released - Problems different than expected
“It appears the fundamental issue for the future of journalism is not audiences splintering away to citizen media, corporate PR and other non-news venues. In many ways the audience for news—and for what traditional newsrooms produce—appears to be growing. Nor are journalists failing to adapt. There are more signs in 2008 than ever that news people embrace the new technology and want to innovate.
“The problem, it is increasingly clear, is a broken economic model—the decoupling of advertising and news. Advertisers are not migrating to news websites with audiences, and online, news sites are already falling financially behind other kinds of web destinations.”
Will cover more of the findings and insights later, in the meanwhile:
No commentsNews re-invented - Now an experience you control
A few weeks ago I wrote a post linking to Scott Karp’s Publishing 2.0 Blog where he talked about Reinventing journalism - links as news, links as reporting
I just came across this article “Opening Bell: The economy’s toxic blend” in the Columbia Journalism review today, which is a stunning example of this in action. While not a warm, fuzzy topic, it is an example of bringing depth and breadth to a story and creating a controlled experience for the reader, with exit points to further educate yourself right along the way. This article can take 5 mins or 50 mins to read, you can learn 5 things or 50, its up to you - this is journalism reinvented.
No comments10 Ways Digital Can Help You Thrive in A Recession
- Live by the rules of a beta economy
- Leverage existing platforms
- Switch Tubes
- Don’t just entertain, engage
- Orchestrate infinite touch points
- Prototype often
- Trade focus groups for digital ethnography
- Think outside the banner
- Embrace delight by functionality
- Listen.
A shift to Online Education - Resources, tutorials, open education initiatives
The last few posts I have written have been about teaching yourself something, as it is necessary to with digital media if you are to stay up to date with the overnight, hourly, constant developments in the space. It would be impossible to develop course materials on such a topic as they would have expired by the times the course notes were printed.
Something I have got into recently is iTunesU, where Universities publish full courses in audio and print format online. Read about it here. You can download podcasts and listen at your own hours and in your own realms of interest.
MIT announced an online initiative in 2001 called Open-CourseWare, to “advance knowledge and educate students . . . to best serve the world.” OCW shares free lecture notes, exams, and other resources from more than 1800 courses spanning MIT’s entire curriculum. Have a look at MIT offerings here
I think these resources are brilliant. They hold such potential to reach the masses that can not afford the money or time for lectures, and really break down the barriers to entry for those who are willing to knuckle down and do this on their own time with only initiative to keep you on task.
The fundamental question in many minds though is what about the missing piece of paper? How does an online course sit on a CV without grades, attendance records, assignment marks or the piece of paper at the end? Well, we are going for the paperless office, so why not a shift to paperless degrees?
Employers may at this early stage of online education’s existence question the validity of these courses. In my opinion, if you have completed a course and you are confident in your learnings and the value this brings to your role and workplace then make sure you communicate this, then deliver on it.
It is a new concept, but one I think that will gain momentum, particularly for those that have completed university are in the workplace and want to continue to upskill and expand knowledge into new areas that you may not have had access to through formal education.
I found a great resource today called “More than 100 Free Places to learn online and counting” - it includes
- Online tutorial and How-to sites
- Big Idea and Debate sites
- Higher Education and Open Education initiatives
- Business and Professional skills
- Language, spelling and grammar
- Web skillsAnd a whole lot more. Have a look here
Understanding the economics of your life
Tim Harford wrote a book I am currently reading, The Undercover Economist and writes a column for the Financial Times and my fave Slate, answering questions such as “why do I only have odd socks?” with the tools of economics. Have a look at the column “Dear Economist” here. Tim blames economists for the fact that people view economics as the “dismal science”, the early books on popular economics he says took it as a matter of pride to shock and offend people. Tim says another factor is the boring forecasters such as investment banks hiring “old talking heads” to talk on TV thats going up, thats going down. This is what people see, but these phenomena are not representative of what economics are about.
Tim’s view is that everything involves economics on a day by day, minute by minute basis. Economists think about everyday decisions, more efficient government, shopping, starting a family… And apparently enjoy a joke as much as everybody else. A lot of people don’t understand what economics is and what it can explain for them. Listen to a full interview with Tim Harford here
With this in mind, I thought I would dig out a few resources for those who want to get their head around this stuff. Enough to understand the Newspaper business pages, the cited economic indicators within these stories. What this stuff means for you now and what it could mean in the future.
Starter - What is economics?
1) Article: Beginners guide to economic indicators here
2) Investopedia Tutorials: Economics Basics
3) Three Economists and their theories: Smith (Invisible Hand), Marx (Its exploitation!) and Keynes (Govt should help the economy)
4) YouTube - Ali G Talks to the Chief Economics Advisor to Ronald Regan, “Economics, it’s well important innit?”
5) YouTube - Principles of Economics translated
And lets finish with the Freakonomics Blog (The Hidden side of everything) from the NY Times
No commentsWeb Technology Trends - 2008 and Beyond
- Web 3.0 and what it includes
- Semantic Web
- Semantic Apps
- Open Data
- Mobile Web
- Mobile Web Apps
- Recommendation Engines
- Also, some web predictions for the future and other resources
View Slideshow presentation from Readwriteweb’s Richard Macmanus on Slideshare
No comments