A case study in the valuation of a database
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Kelvin King heads his own firm, Valuation Consulting. He spent his early career with the British Government’s Share Valuation Division (SVD), which is responsible for all of the private company, business, intellectual property, and intangible asset valuation requirements of government. He left the government after 17 years to establish a Valuation Unit for a large accountancy practice and, before the founding of Valuation Consulting, was the MD of a specialist valuation company within a major international Swiss bank. He has undertaken corporate finance work for most of his working life. As well as founding the Society of Share and Business Valuers in the UK he is a contributor to journals, television and radio. He is a contributor to books and his book Valuation and Exploitation of Intellectual Property and Intangible Assets was published by EMIS Professional Publishing. He has been a Law Society UK Expert Witness in the area of intellectual property and intangible asset valuation for many years, is a founding expert of Lord Woolf’s Expert Witness Institute, and a member of the Licensing Executive Society, Chartered Institute of Patent Agents (Associate) and the International Association of Consultants, Valuers and Analysts.
Keywords
database, valuation, intangible assets, IPR
Abstract Intellectual capital is recognised as the most important asset of many of the world’s largest and most powerful companies; it is the foundation for the market dominance and profitability of leading corporations. The role of intangible assets in business is insufficiently understood and there are major categories that are marketingrelated (trademarks, brands, trade names, trade dress, internet domain names, newspaper mastheads, non-compete agreements, etc) and customer-related, which are those utilised in the development procurement, management and maintenance of a company’s customers (customer lists, order or production backlog, customer contracts and related relationships, non-contractual customer relationships, etc). Assets such as a database are viewed by many from a financial background as simply a cost, whereas in truth this asset may well be the highest generator of worth and hence the most valuable within the business. If you do not know the cost and value of your intellectual capital, how can you manage it? The following case study in the valuation of a database will help readers to understand that such assets are capable of robust valuation using widely accepted traditional methodologies. Journal of Database Marketing & Customer Strategy Management (2007) 14, 110–119. doi:10.1057/palgrave.dbm.3250041
Kelvin King Valuation Consulting 90 Chancery Lane, London WC2A 1EU, UK Tel: + 44 20 7338 4830 Fax: + 44 20 7403 5556 e-mail: kelvin.king@atisreal. co.uk Website: www.valuationconsulting.co.uk
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GENERAL INTRODUCTION The valuation scenario discussed below is a typical example of the valuation of a database. The context of the valuation is presented, the information considered in forming a valuation opinion is listed and t
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