How to evaluate the value of an online business in Romania

Through the Interactive Advertising Bureau Romania (IAB Romania), I have received several queries about how to evaluate the value of an online business in Romania. The answer is an interesting problematic. However, I shall endeavor to provide my honest opinion of the current situation. But I’m not quite sure how my colleagues in Bucharest will feel about my candor.

Below, something relevant from Bob Dylan to set the tone of my honest opinion.



Online Acquisitions

Elsewhere in the world, acquisitions can be a good model for growth and market moves. Not so in Romania. If you don’t build it yourself, it’s not likely be be worth much- if anything. This is especially true for online businesses and online advertising agencies. New Century, an American investment company that got some great buys in real estates and the rail road, is still learning about the mistakes it made in online aquisitions via it’s subsidiary, Netbridge.

According to Romanian headlines, Netbridge and New Century are pursuing legal remedies against former managers such as Orlando Nicoara and Silviu Sirbu. It’s not a paradox, however, that the new management continues to work closely with the so-called rats of the past. Don’t be fooled by the bad press, the things they’ve done were far worse than was reported and the snow jobs they hope to pull off together in the future represent interests thicker than blood.

The unfortunate fact is that there is no way to properly evaluate the value of an online business in Romania. You can’t even trust most of the third parties, because everyone knows everyone – especially in Bucharest. Yes, you can’t even trust the big international consulting companies operating in Bucharest because most of their people can not be trusted. And if they brought in an outside analyst, they would never get the data needed for analysis.

It’s a problem that won’t be solved in the next five years. It could be longer.


Although reported revenues on any legally registered Romanian company are available for public scrutiny, these numbers do not represent the actual revenues of most Romanian companies because most barter or deal in cash to avoid taxes. While that almost sounds like a good thing, these companies are also using barter and cash to pay unregistered salaries to avoid salary taxes and to pay for other services for day to day operations.


The value of employees is hard to evaluate because most companies lack performance evaluations and other measures of productivity. Since business in Romania is primarily a function of who you know and how much you pay them for them giving you work, people are not quite the assets that talent can be understood to be elsewhere. Too often, the people actually represent the dead weight the company needs to have in order to look good for a future acquisition. Regarding employee loyalty, what’s that?!

Intellectual Property

Whether we are talking about published online content, software, or the business idea, most of it will be stolen, borrowed or copied. The rampant problem of copy, translate and past in online publishing is an issue that will not be solved in Romania for many years. Worse, the liability of pirated software used for commercial purposes is  significant. This is especially true of online businesses and the online advertising agencies.

Business Plan

Business Plan? What’s that?! I’m sure that anyone can come up with a business plan in a week, but can they come up with a business plan that they have been following for two years, show you the milestones and disappointments, and show how the numbers matched up with goals and business objectives? Off the cuff, the answer is likely to be no. But if you give them a few more weeks, I guess they can come up with something.

Build it yourself

The hot shots will ask unsuspecting foreign investment groups for millions. They may even come to the negotiation table wearing sunglasses and interrupting the conversation with a phone call to their sugar. In their opinion, their future seems so bright. If you are serious about capturing the deep advantages of the online market in Romania, you won’t waste your time with these kinds of surreal scenarios.

Build a business on value, best practice and business fundamentals. Don’t hire the hot shots either. They often ask foreign start ups for ridiculous salaries that they would never have got from a Romanian owned business. If you can, bring in as many outsiders with knowledge, experience and talent. Once things are set up and ready to go, you can hire locally to interface with the business community.

Find trustworthy ex-pat consultants to help you coordinate the set up, hiring, and operation. Doing business in Romania can be tricky and perplexing as much as it can be greatly rewarding. Labor laws and taxes can be challenging. Few Romanian attorneys know what they are talking about and their legal advice is often worthless when push comes to shove.

Of course, some things will have to be handled in a special way or with a special handshake.

Below, a dedication to the online hot shots in Bucharest; Johnny Cash, God’s Gonna Cut You Down



Stan Faryna
August 10, 2007
Fairfax, Virginia

About Stan Faryna

Stan Faryna is a member of the IAB European Leadership Council and National Director of the Interactive Advertising Bureau Romania. He is the founder and co-founder of several technology, design and communication companies in the United States and Europe including Faryna & Associates, Inc., Halo Interactive, and others.

His political, scholarly, social and technical opinions have appeared in The Chicago Defender, Jurnalul National, The Washington Times, Sagar, Saptamana Financiara, Social Justice Review, and other publications.

Mr. Faryna is editor-in-chief of Black and Right (Praeger Press, 1996), a landmark collection of socio-political essays by important American thinkers including U.S. Supreme Court Justice Clarence Thomas.


Copyright 1996 to 2008 by Stan Faryna.

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