Net Valley : Sleeping Giants: IBM

e-commerce? iFactor!

Glossary

Web influence describes a company's ability to build brand-name recognition on the Web.

Web influence data can be determined by a number of criteria, including the number of hyperlinks to the company’s Web site from external domains.

Studies have shown that the most common way that Internet users find Web pages is through external hyperlinks. Companies with a strong base of external hyperlinks on the Internet are more likely to see strong traffic from Internet-savvy customers than those who do not.

It is a wide-spread illusion that it is an easy task to evaluate a company’s Web influence through the use of external hyperlinks, but analysts who attempt to duplicate the Web influence evaluations run by Net Valley are less able to distinguish between legitimate links and those that are noise, generated by companies’ affiliates, artificial computer programs and other misleading methods.

Net Valley technology utilizing hyperlink mechanics can differentiate between these different forms of hyperlinks through a multi-level link measurement procedure. The mere tabulation of hyperlinks is a simple and widely known procedure, but nobody except Net Valley has yet provided a selective type of measurement separating the significant links from the noise-inducing references.

iFactor

The iFactor is a quotient comparing a company’s current level of Web influence to its current level of sales. As E-commerce becomes a greater portion of a company’s overall sales, the company’s Web influence level will command a greater effect on the company’s bottom line.

As the company e-commerce relative marketplace (industry e-commerce rank) becomes more close to the Web Influence one

An iFactor of 1.0 would show that the company has the identical ranking in both Web influence and in industry e-commerce sales. An iFactor of greater than 1.0 shows a company with a stronger Web influence level than that of sales, recognizing the company’s strong conditions for e-commerce growth. An iFactor of less than 1.0 would express a deficiency in Web influence that would impede further e-commerce growth.

To determine a company’s iFactor, the company’s ranking by sales is compared with that of the company that shares the same position in sales as the first company holds in Web influence.

For instance, in 1997, IBM sold more than $78 billion, ranking it first among its peers. But the company’s Web influence ranked only sixth in the same study. In this case, the sales data for the sixth-largest company, Compaq (with $24 billion in sales), would be divided by IBM’s data, resulting in an iFactor of .313 for the industry giant.

IVB

The Net Valley Benchmark is a tool that relates companies Web influence levels against one another, showing not only that one is higher than another, but by how much, to allow comparisons within and across industries.

The benchmark for the IVB is the Web influence level of Net Valley itself. Created in 1995, Net Valley has accumulated a strong and stable level of Web influence.

An IVB of 1.0 shows that a company’s Web influence level is equal to that of Net Valley Inc, while scores higher than 1.0 will show a greater level of Web influence, and an IVB of less than 1.0 will show a company’s Web influence level of less than Net Valley .

An IVB level of 1.0 will demonstrate a strong web influence level, as a score of 1.0 can place a company in the middle range when compared to the top members of different industries, including the Top 100 Information Technology Companies, Top 100 Banks, Top 100 Magazines, which Net Valley has studied since 1995 . For all of them the goal to reach the IVB level equal means to become a member of the Top 100 in their industry. So the IVB is now the most convenient standard for an industry benchmark.

Companies in different industries can compare their relative level of the Web influence by using the IVB, as the benchmark remains steady, whether compared to the online banking industry or Internet-based companies.