We test the impacts of profit and user base on platform valuation. Our findings support Silicon Valley’s method of valuation dependent on user base, but also remind investors to pay attention to the importance of today’s profitability of the platform.
Zhou Zhou is a doctoral candidate at the Questrom School of Business, Boston University. His research field is platform valuation. Zhou studies economic moats of platforms, including how platforms build their economic moats and how the economic moats impact their valuations.