Measuring DEA efficiency in internet companies

  • Authors:
  • Carlos Serrano-Cinca;Yolanda Fuertes-Callén;Cecilio Mar-Molinero

  • Affiliations:
  • Departamento de Contabilidad y Finanzas, Fac. CC Económicas y Empresariales, Universidad de Zaragoza, Gran Vía 2, Zaragoza (50.005), Spain;Departamento de Contabilidad y Finanzas, Fac. CC Económicas y Empresariales, Universidad de Zaragoza, Gran Vía 2, Zaragoza (50.005), Spain;Instituto de Organización y Control, Universidad Politécnica de Cataluña, Barcelona, Spain

  • Venue:
  • Decision Support Systems
  • Year:
  • 2005

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Abstract

This paper uses Data Envelopment Analysis (DEA), a non-parametric approach to the estimation of production functions, in order to assess efficiency in dot corn firms. These firms have two objectives: to make an impact in the Internet and to obtain revenues from their activities. For this reason, the outputs have been two: unique visitors--a web metric--and revenues. DEA efficiencies have been obtained under various input/output combinations. A ranking of dot com firms in terms of relative efficiency has been obtained. A method based on multivariate analysis has been proven to be successful at showing the strengths and weaknesses of individual dot com firms. It is shown that there is a relationship between the type of e-business (e-tailers, search/portal, content/communities), and the way in which efficiency is obtained. The paper suggests a new approach to the problem of deciding which inputs and outputs the model should contain.