Saturday, June 18, 2011

Internet Start-Ups Find New Metrics to Look Profitable; - NYTimes.com

Check the article link below for a timely Bubble 2.0 start-up innovative accounting reality check

Short for “adjusted consolidated segment operating income,” Acsoi is one of three yardsticks that Groupon, the online coupon giant, recommends investors use to determine how it is performing. It is essentially operating profit minus the company’s large online marketing and acquisition expenses — a highly nonstandard approach that had many scratching their heads.

Yet without it, Groupon would appear steeped in red ink.

The use of such metrics has come with a meteoric rise in valuations for companies like Groupon, LinkedIn and Facebook that has invited skepticism from analysts and people in the industry. They are questioning whether some business models — be they a social network aimed at professionals or a maker of online farm games — can endure.

Internet Start-Ups Find New Metrics to Look Profitable; - NYTimes.com

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