Should You Spin Off Your Internet Business?
2000; Wiley; Volume: 11; Issue: 2 Linguagem: Inglês
10.1111/1467-8616.00134
ISSN1467-8616
AutoresRick Chavez, Mark Leiter, Tom Kiely,
Tópico(s)ICT Impact and Policies
ResumoThe purpose of most corporate spin‐offs is to unlock the shareholder value of a business unit that is not critical to the parent company's success. Internet spin‐offs raise additional problems, partly because they are so new. This article sets out a multi‐dimensional framework to help managers decide how to structure their internet businesses: whether to keep them integrated into the parent company, to establish them as wholly‐owned subsidiaries or to spin them off ‘wholly or partially’. The authors argue that companies must weigh the trade‐offs between what they call the ‘three Cs’: control, currency and culture. The collapse of internet stock prices in April/May 2000 reduced but did not eliminate then ‘currency’ attraction of the spin‐off option. But issues of control and culture were always just as important. Above all, the decision must be made in the context of a company's total ‘digital agenda’: that is, as part of a company's overall strategy for creating and sustaining value in the new economy.
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