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Describes the business model for online market makers, firms that use the Internet to organize a marketplace, providing participants with a virtual "place" to trade, rules to govern their exchanges, and infrastructure to support trading. First it proposes a definition of market making and presents different ways to categorize online market makers. Next it describes how online market makers create value for market participants. Then it examines the economics of market making, focusing on revenue and cost drivers, using both online and offline examples. Building on that analysis, the final section examines the risks and potential payoffs to online market makers from pursuing aggressive growth strategies. Explores the value proposition offered by these companies and the economic imperatives they face. Finally, seeks to provide a framework for evaluating whether the adoption of aggressive growth strategies is prudent for online market makers.

This case provides a technical overview of different valuation techniques for use in valuing companies in corporate restructuring. Techniques covered include adjusted present value, WACC, capital cash flow, and discounted cash flow valuation. Specific numerical examples are provided.

Describes the online portal business model. Analyzes the model, focusing on the tactics used to acquire new users, turn new users into repeat visitors, and monetize user traffic. Explains portals' revenue and cost drivers and their implications for pursuing aggressive growth strategies. Finally, explores the challenges facing companies that aspire to develop portals for new online access technologies, such as wireless data and interactive television. To accompany teaching cases on online portals in courses on Internet strategies and e-commerce. Provides background on the online portal business model, and explains how it differs from other Internet business models. Examines the strategic choices that portals typically face. Also describes how portals can add value as consumers adopt emerging technologies, such as wireless data and interactive television.

This leadership exercise asks students to reflect on their family values and to begin to write them down. The exercise is useful in a leadership or career-management course when students need to consider their own values, assumptions, beliefs, and expectations about the way the world should be and then reexamine them. The exercise builds on the work of Mihalyi Csikszentmihalyi and his notion of transcender (the Evolving Self) and Richard Dawkins's concept of memes. The results of the exercise can be used as a springboard to discuss students' becoming transcenders as opposed to those who simply live out the values imprinted on them early in life. The exercise includes a table with examples to help students get started.

This technical note introduces students to the use of earnouts and other forms of incentive payments in the context of mergers and acquisitions. The note describes the use of incentive payments in M&A, recent deals in which earnouts were used, the trend and volume of earnout deals, the benefits and disadvantages of earnout structures. The large concept in the evaluation of earnouts is their similarity to call options. This conceptual approach provides the foundation for considering how an earnout might best be structured, and how its value might be estimated. The note concludes with a generic valuation example and refers the reader to a spreadsheet model that might serve as a template for future assessments of earnouts.

Describes online retailers, companies that use the Internet to sell physical goods. Defines online retailers and describes different ways to categorize them. Explores their economic model and value proposition for consumers in comparison with offline retailers. Next, explores the payoff to online retailers from pursuing a "Get Big Fast" strategy--i.e., investing aggressively in customer acquisition and brand building--and identifies best practices that online retailers might employ to maximize their chances of success. Lastly, discusses implications of shopping "bots," and the prospects for disintermediation by retailers by manufacturers.

Describes three performance measures for "plants" or businesses: cost centers, revenue centers, and profit centers. Discusses what should be done if a function outside of the "controllability" of the manager affects the performance measure and therefore compensation.

Discusses the shortcomings of the current "rules of thumb" for intellectual asset valuation in the context of intellectual property licensing transactions. As an alternative to the present scheme, this note proposes quantitative methods for such valuations in order to better inform the parties negotiating the elements of an IP transaction.

Provides a framework for thinking systematically about innovations in philanthropy. To be successful and sustainable, innovative approaches to philanthropy need to create value for donors and recipients, as well as for society. Three historical innovations in society are professional foundations, federated community campaigns, and community foundations. Even the most innovative program contains threads of the old. Modern innovations include charitable giving funds, e-philanthropy, and venture philanthropy. The most successful innovations are those that expand the volume of donated funds in a sustainable way while improving the productivity of those funds through increases in efficiency or effectiveness. The challenge of the philanthropic project is, at the most basic level, to keep pace with changing needs and opportunities facing the social sector.

Summarizes selected research on music and its impact on mood and shopping behavior, and its impact on the communication of ideas.

Discusses revenue recognition and reporting rules, guidelines, and issues. A rewritten version of an earlier note.

Challenges conventionally held views of negotiations, arguing that they are simplistic, static, and sterile. Develops seven propositions about real-world negotiations emphasizing the impact of complexity and the need for learning and adaption.

Challenges the notion that pre-negotiation preparation is the most important determination of success. Examines two fundamental problems with current thinking about preparation: the boundaries problem and the limits problem. Proposes an alternative model of negotiation as a cyclical process of learning, planning, and acting.

Requires participation in a team research project. Each team should have three to four members. The goal of the project is to acquire first-hand knowledge of how a particular business process is managed at a small company.

Provides a brief overview of employee stock ownership plans (ESOPs) and phantom stock plans for owners of closely held companies. ESOPs can be used as a tool of corporate financing, and can provide employees with ownership interests. Phantom stock plans can reward executives for value creation without giving up ownership. Covers typical company motives for establishing such plans, regulation, tax advantages, administrative costs, issues of corporate governance, and payment of plan benefit. Includes a two-page bibliography with references to further sources of legal and tax information.

Facilitates the teaching of cases on variance analysis and flexible budgeting. Uses algebra, diagrams, and numerical examples to illustrate the calculation of price, quantity, and mix variances for revenues and costs, and a flexible budget for analyzing indirect and support costs.

Describes a process for managing customers for profit.

Describes the challenges a firm faces in building and sustaining a value proposition over time. Describes major ways in which the marketing environment changes over time and the methods a firm can use to protect its market position.

Provides an introduction to key product policy issues.

This note describes the Capabilities Module in the core-curriculum Operations Management course at the Darden School.