Exclusive: egaming businesses' data to be valued by LSE 21/05/2009
Jon Parker
The London School of Economics (LSE) claims to have produced a means of putting an exact cash value on the user data held by egaming businesses.
Dr Alexander Grous, an academic in the Information Systems and Innovation department at the LSE, yesterday unveiled plans for the launch of an algorithm product to value what he terms ‘identity capital’, or “the capital asset value of well-structured, standardised data”.
This will enable users to place an exact monetary value on the volume and quantity of data held by online businesses, he said.
Launching the findings of a two-year study into data use at a conference in London hosted by ID authentication business GB Group, Grous argued that the use of information in company valuation is changing from a ‘surface data’ model to one defined by sharp increases in the volume of information known about customers, the amount of information that is externally verified and in the frequency with which information is updated.
Potential acquirers of egaming companies and other online businesses are responding by demanding higher quality customer data from targets, he said, to avoid buying businesses that are overvalued due to their having inflated customer multiples.
Speaking to eGaming Review, Grous said: “Acquirers are saying to targets that when it comes to knowing who uses their products, they just won’t take their word for it as they would have done to some extent in the past. They want information on users that is detailed, up-to-date and robust, and if you can’t provide them with robust, recently-sanitised data, then they will walk away.”
Deficiencies in identity management are also “costly both in terms of financial penalties and reputational risk”, he added. As reported on EGRmagazine.com last week, more than three quarters of British adults believe that online fraud is increasing (more).
Grous said the research would also help businesses that are seeking acquisition by allowing them to see which areas of their data management were weak and address those. “Most businesses are unaware how of they are doing in their identity management,” he said.
The product will be launched officially within the next six months.
The identity capital concept is based on four components: information provided by customers that is unverified, information provided by customers that is verified via electronic and hard-copy sources, information that is verified by third-party sources such as databases, and behavioural data gained by capturing internet browsing online purchasing data.
Other speakers at the day-long event yesterday included Virgin Games chief executive Simon Burridge.
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Posted: 21/05/2009
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