Valuators encounter this question a lot, in executing purchase price allocations, in calculating damages, etc.: how much are customers worth, in the form of a customer list or customer relationships?
The New York Times reports PhoneDog calculates its customer lists to be worth $2.50 per month per follower (Twitter accounts), for eight months. In explaining a recent lawsuit against a former employee who allegedly absconded a 17,000 follower list developed while at PhoneDog, a spokesperson said, “The costs and resources invested by PhoneDog Media into growing its followers, fans and general brand awareness through social media are substantial and are considered [intangible] property of PhoneDog Media,” and PhoneDog Media intends to “aggressively protect our customer lists and confidential information, intellectual property, trademark and brands.”
This case will be hardly precedential, but it highlights the need for data. In the next three months BVR will be compiling data gleaned from several databases to assist valuators in determining useful lives of classes of intangible property. If you would like to discuss this in advance or contribute in any way, contact Randy Cochran at firstname.lastname@example.org.