Impact of Web Portal Announcements on Market Valuations: An Event Study

Despite so much research done on benefits of web portals to companies, no research exists that looks into impact of adoption of web-portals on company’s market valuation. This paper looks into impact of web-portal announcements on company’s stock prices (market value). Using event-study methodology, we provide empirical evidence on the effect of announcements of web portals on the market valuation of the company for a sample of 25 publicly traded companies in year 2008. The study examines stock data to access investors and shareholders’ reactions to web portal announcements. Published results indicate that web portal announcements does significantly positively influence investors’ perceptions about the financial worth and future prospects of the company. The authors discuss these findings in detail and present implications for both research and practice. The findings of this study offer insights that can be used by managers and executives in understanding the role and effect of such announcements on companies’ market value.