Do Web Mergers Create Value? An Examination of Mergers and Acquisitions of Internet Firms

While there is an increasing number of mergers and acquisitions (M&A) involving internet firms, there is little research that has examined this phenomenon.The nature and the extent of the impact of such mergers and acquisitions on the firms involved in such deals is ambiguous.This research examines the value created by merger and acquisition activities involving internet firms using an event study methodology.We examine the stock market reactions to 84 M&A deals in 1999.The results indicate a significant and positive wealth creation for the shareholders of acquiring firms.The implications of the results and ideas for future research are discussed.