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Slide 1: SOFTWARE & SERVICES 17 NOVEMBER 2009 WEB 2.O WEEKLY FINANCINGS PICK UP…IN LINE WITH TREND CA P IT AL M AR K ET S AC T I VIT Y P IC K S U P S U DD E NL Y DAVID SHORE, CFA, MBA 416.860.6784 david.shore@researchcapital.com Damian Wojcichowsky, CFA (Associate), 416.860.7652 November picks up: Total transaction value in the W eb 2.0 universe for November is $131.9 million. November has shown improvement with number of financings up to 14 averaging $9.4 million each (vs. an average of $7.4 million last week). In comparison, total capital raised in October was $171.3 million, averaging $6.3 million (27 deals); September was $232.8 million, averaging $9.0 million (26 deals); and August was $221.6 million, averaging $7.6 million (29 deals). Financing Activity Last Twelve Months 400.0 14.6 350.0 14.0 16.0 300.0 11.1 12.0 250.0 9.0 (US$m) 9.4 10.0 200.0 7.1 6.7 150.0 4.9 6.5 6.6 6.2 5.6 7.6 8.0 6.3 6.0 100.0 4.0 50.0 2.0 0.0 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Total Jun-09 Average Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 0.0 *May-09 includes $200m FB investment Market pull-back: Sixteen companies in our universe had positive stock price performances over the past week (for stocks with prices greater than $1) (Figure 6), while 30 companies showed negative 1-week returns. Openw ave S y s tems Inc . G igaMedia L td. Y nk K orea Inc . Tenc ent Holdings L td. A ctoz S oft Co., L td. NEOWIZ G ames Corporation Changy ou. c om L imited Modern Times G roup Mtg A B G amania Digital Entertainment Chines e G amer International S K Communic ations Co., L td. IA C/InterA c tiveCorp. S hutterfly, Inc . XING A G TheS treet. com, Inc . CDC Corp. Fluid Mus ic Canada, Inc . Eolith Co. L td. V alueClic k Inc . PNI Digital Media Inc . Neteas e.c om Inc . United Online Inc . S ohu.c om Inc . NetDragon WebS of t, Inc . Open Tex t Corp. My riad G roup A G S handa Interac tive S park Netw orks , Inc . Frogs ter Interactive Pic tures Cy berplex Inc . DA DA S pA G iant Interac tive G roup, Inc . HanbitS of t, Inc . K ings of t Co. L td. W ebz en Inc . L ookS mart, L td. G ameOn Co L td. Northgate Technologies L imited The9 L imited Tree.Com, Inc . G ravity Co. , L td Quepas a Corp. Perfec t World Co., L td. Y D Online Corp. Ngi G roup Inc . -13. 2% Mix i, Inc . -15.6% A Q Interac tive, Inc . G ree, Inc . -17.7% -0.2 -0. 15 1 Wee k P rice P erformance 6. 7% 6.5% 5. 9% 9.0% (US$m) 15.8% 14.1% -1.0% -1. 1% -1.2% -1.3% -1.6% -1. 9% -2.0% -2. 3% -2.5% -2.6% -3. 3% -3. 6% -3. 6% -3.7% -3.8% -3.8% -4.2% -4.3% -5. 4% -5.5% -6.0% -6. 2% -7. 0% -7.1% -7.6% -8.4% -9.8% 4. 1% 3. 7% 3.2% 3.0% 2.0% 1. 6% 1.4% 1. 2% 1. 2% 0. 8% 0. 0% 0. 0% -0.1 -0.05 0 0. 05 0.1 0. 15 0. 2 This report has been created b y Anal ysts that are emplo yed b y Research Capital Corporation, a Canadian Investment Dealer. For further disclosures, please see last page of this report. T o ro n t o 4 1 6 . 8 6 0 . 7 6 0 0 Montreal 514.399.1500 w w w . r e s e a rc h c a p i t a l . c o m Vancouver 604.662.1800 Calgary 403.265.7400 Regina 306.566.7550
Slide 2: Page 2 THE WEB 2.0 UNIVERSE Eighty-nine public Web 2.0 companies: Our W eb 2.0 universe contains 89 companies, with a combined market cap of approximately $72 billion (Figure 1). The median market cap for the group is $41 million, with average trailing revenue of $163 million (median $56 million). The companies are also generally profitable with a median EBITDA margin of 11.6%. On a valuation basis, the overall average is 5.1x trailing revenue (median 1.7x) and 11.1x trailing EBITDA (median 7.8x). Twenty of the companies have more than 500 employees. C omparable C ompany Analys is > Web 2.0 C ompany Name Accelerize New Media , Inc. Actoz S oft C o. , Ltd. AQ Interactive, Inc. As s ociated Media Holdings Inc. B igs tring C orp. B eta wave C orporation B eyond C ommerce, Inc. B right T hings plc B roa dW ebAs ia Inc. C DC C orp. #R E F ! C hina G a teway C orporation C hines e G amer Interna tiona l C LIC K E R Inc. C ornerW orld C orpora tion C yberplex Inc. DADA S pA DXN Holdings B hd Dibz International, Inc. DigitalP os t Interactive, Inc. DigitalT own, Inc. Dolphin Digital Media , Inc. E olith C o. Ltd. E xtens ions , Inc. F luid Mus ic C a nada , Inc. F rogs ter Interactive P ictures AG G ama nia Digita l E ntertainment C o., Ltd. G ameOn C o Ltd. G eoS entric O yj G iant Interactive G roup, Inc. G iga Media Ltd. G ravity C o., Ltd G ree, Inc. G ungHo O nline E ntertainment, Inc. HanbitS oft, Inc. IAC /InterActiveC orp. IAS E nergy, Inc. is eemedia Inc. J umbuck E nterta inment Limited K AB Dis tribution Inc. K ings oft C o. Ltd. Lingo Media C orporation LiveW orld Inc. LookS mart, Ltd. Magnitude Information S ys tems Inc. Mixi, Inc. Modern T imes G roup Mtg AB MO K O .mobi Limited Myriad G roup AG NE O W IZ G ames C orpora tion NetDragon W ebS oft, Inc. Neteas e. com Inc. NeuLion Incorporated NeXplore C orporation Ngi G roup Inc. Northgate T echnologies L imited O pen T ext C orp. O penwave S ys tems Inc. P erfect W orld C o. , Ltd. P NI Digital Media Inc. Q uepa s a C orp. O AO R B C Information S ys tems S handa Interactive E nterta inment Ltd. S hutterfly, Inc. S K C ommunications C o., Ltd. S NAP Interactive, Inc. S NM G loba l Holdings S ocial Media V entures Inc. S ocialwis e, Inc. S ohu. com Inc. S park Networks , Inc. S pectrumDNA, Inc. T encent Holdings Ltd. T he P arent C ompany T he9 Limited T heS treet. com, Inc. T ree.C om, Inc. Unis erve C ommunica tions C orp. United O nline Inc. UOMO Media, Inc V alueC lick Inc. V OIS , Inc. W ebzen Inc. W izzard S oftwa re C orporation W orlds . com Inc. W ynds torm C orpora tion XING AG Y D O nline C orp. Y nk K orea Inc. High Low Average Median L TM as of Ticker 6/30/2009 6/30/2009 6/30/2009 6/30/2007 6/30/2009 6/30/2009 6/30/2009 3/31/2009 9/30/2008 6/30/2009 9/30/2009 9/30/2008 9/30/2009 5/31/2009 7/31/2009 6/30/2009 6/30/2009 8/31/2009 NA 6/30/2009 8/31/2009 6/30/2009 12/31/2008 6/30/2009 6/30/2009 6/30/2009 9/30/2009 6/30/2009 6/30/2009 6/30/2009 3/31/2009 6/30/2009 9/30/2009 6/30/2009 6/30/2009 9/30/2009 4/30/2009 6/30/2009 6/30/2009 6/30/2009 6/30/2009 6/30/2009 9/30/2009 9/30/2009 6/30/2009 9/30/2009 9/30/2009 6/30/2009 6/30/2009 12/31/2008 6/30/2009 6/30/2009 6/30/2009 6/30/2009 6/30/2009 6/30/2009 9/30/2009 9/30/2009 6/30/2009 6/30/2009 6/30/2009 12/31/2007 6/30/2009 9/30/2009 12/31/2008 6/30/2009 9/30/2008 12/31/2008 6/30/2009 9/30/2009 9/30/2009 6/30/2009 6/30/2009 8/2/2008 12/31/2008 3/31/2009 9/30/2009 8/31/2009 9/30/2009 7/31/2009 9/30/2009 6/30/2009 6/30/2009 6/30/2009 6/30/2009 NA 6/30/2009 12/31/2007 12/31/2008 AC LZ A052790 3838 AS MH BS GC B W AV B Y OC AIM: B G T BWBA C HIN. A C Y OU CGWY G T S M: 3083 C LK Z CWR L T S X :C X C M: DA DX N DIB Z DG LP DG T W DP DM A041060 E XT I T S X :F MN FRG 6180 3812 G E O 1V GA G IG M GR VY T S E : 3632 3765 A047080 IAC I IAS A. E IE E AS X :J MB T S X :K AB 3888 T S X V :LM LVW D L OO K MAG Y 2121 MT G B MK B MY R N A095660 777 NT E S T S X :NLN NX P C 2497 590057 OT E X OP W V PWRD T S X V :P N QP S A R BCI S NDA S FLY A066270 S TVI S NMN S MV I S C LW S O HU L OV S P XA 700 K IDS . Q NC T Y TS CM TR E E T S X V :US S UNT D UO MO V C LK V O IS W ZE N W ZE W DDD W Y ND O 1B C A052770 A023770 E xc hange OT C B B K OS E TS E OT C P K OT C B B OT C B B OT C B B AIM OT C P K Na s daqG S Na s daqG S OT C P K GTS M OT C B B OT C B B TS X CM K LS E OT C P K OT C B B OT C B B OT C B B K OS E OT C P K TS X XT R A GTS M TS E HL S E NY S E Na s daqG S Na s daqG M TS E OS E K OS E Na s daqG S OT C B B T S XV AS X TS X S E HK T S XV OT C P K Na s daqG M OT C B B TS E OM AS X SWX K OS E S E HK Na s daqG S TS X OT C P K TS E BSE Na s daqG S Na s daqG S Na s daqG S T S XV OT C B B R TS Na s daqG S Na s daqG S K OS E OT C B B OT C P K OT C P K OT C B B Na s daqG S AME X OT C B B S E HK OT C P K Na s daqG S Na s daqG M Na s daqG M T S XV Na s daqG S OT C B B Na s daqG S OT C B B Na s daqG M AME X OT C B B OT C P K XT R A K OS E K OS E Trading C urrency HQ US D KR W JPY US D US D US D US D GBP US D US D US D US D TWD US D US D C AD E UR MY R US D US D US D US D KR W US D C AD E UR TWD JPY E UR US D US D US D JPY JPY KR W US D US D C AD AUD C AD HK D C AD US D US D US D JPY SEK AUD C HF KR W HK D US D C AD US D JPY INR US D US D US D C AD US D US D US D US D KR W US D US D US D US D US D US D US D HK D US D US D US D US D C AD US D US D US D US D US D US D US D US D E UR KR W KR W United S ta tes S outh K orea J a pan United S ta tes United S ta tes United S ta tes United S ta tes United K ingdom United S ta tes Hong K ong C hina United S ta tes T aiwa n United S ta tes United S ta tes C anada Italy Ma la ys ia United S ta tes United S ta tes United S ta tes United S ta tes S outh K orea United S ta tes United S ta tes G ermany T aiwa n J a pan F inland C hina T aiwa n S outh K orea J a pan J a pan S outh K orea United S ta tes C anada C anada Aus tralia C anada C hina C anada United S ta tes United S ta tes United S ta tes J a pan S weden Aus tralia S witzerland S outh K orea C hina C hina C anada United S ta tes J a pan India C anada United S ta tes C hina C anada United S ta tes R us s ia C hina United S ta tes S outh K orea United S ta tes United S ta tes United S ta tes United S ta tes C hina United S ta tes United S ta tes C hina United S ta tes C hina United S ta tes United S ta tes C anada United S ta tes C anada United S ta tes United S ta tes S outh K orea United S ta tes United S ta tes United S ta tes G ermany S outh K orea S outh K orea C urrent P rice 0. 73 16,450 40,000 0. 76 0. 03 0. 04 0. 06 0. 01 0. 07 2. 54 34. 50 0. 00 458 0. 01 0. 06 1 7. 09 0. 62 0. 00 0. 06 1. 20 0. 33 570 0. 30 1. 80 18. 05 46. 50 68,300 0. 06 7 4. 36 1. 46 4,450 169,000 3,445 19. 93 0. 12 0. 17 0. 33 0 7 0. 99 0. 03 1. 12 0. 02 642000. 00 335. 00 0. 09 4. 68 41550. 00 5 41. 48 0. 72 1 24000. 00 29. 15 38. 24 2. 49 45. 37 1. 74 1 1. 60 49. 13 15. 76 7290. 00 0 0. 00 0 0. 51 56. 94 3 0 148 0. 01 7. 41 2. 48 7. 30 0. 04 8. 22 0 10 0 2. 96 0. 49 0. 10 0. 10 32. 70 6520. 00 4380. 00 US D Market C ap ($m) 20. 4 119. 5 24. 3 32. 9 1.9 1.0 3.0 5.1 5.9 269. 2 1,897. 5 0.0 1,186. 5 0.6 5.7 81. 1 168. 2 40. 5 0.0 4.6 32. 8 17. 7 34. 6 13. 3 86. 8 67. 7 217. 8 73. 9 78. 9 1,587. 4 237. 7 40. 6 2,227. 9 216. 5 63. 2 2,630. 2 8.5 8.2 14. 0 0.6 1,033. 9 11. 3 1.0 19. 2 8.6 1,106. 3 3,170. 3 8.3 200. 7 734. 0 344. 4 5,368. 6 77. 1 38. 5 33. 2 21. 2 2,156. 0 208. 0 2,286. 3 54. 7 16. 6 222. 0 3,304. 2 404. 6 255. 8 2.2 0.0 0.0 22. 6 2,189. 7 53. 5 7.3 34, 735.2 0.2 185. 9 75. 9 79. 6 0.8 695. 3 5.9 882. 4 5.5 35. 1 24. 6 5.2 1.8 252. 5 82. 0 19. 6 34, 735.2 0.0 808.7 40. 5 US D L TM Total R ev ($m) 4. 4 108.7 66. 1 0. 1 0. 1 9. 4 11. 7 0. 0 0. 0 361.6 255.3 6. 7 68. 3 2. 5 6. 8 89. 8 241.9 77. 3 NA 1. 0 0. 0 0. 6 15. 4 NM 5. 3 9. 6 151.2 81. 9 5. 4 198.5 183.6 49. 1 210.3 119.5 60. 7 1, 359. 6 0. 0 1. 7 16. 7 67. 9 139.1 1. 2 10. 4 54. 0 0. 1 139.6 2, 002. 6 0. 7 63. 0 207.3 89. 3 472.4 21. 5 1. 7 93. 0 82. 9 814.5 190.5 255.6 21. 0 0. 2 157.4 629.0 223.1 192.7 3. 5 2. 0 0. 1 0. 0 501.0 47. 5 0. 1 1, 391. 6 112.0 250.6 67. 0 217.1 16. 1 996.8 0. 8 545.7 0. 0 23. 2 5. 3 0. 1 NA 58. 9 57. 4 11. 9 2,002. 6 0. 0 163.0 55.7 US D L TM Total E B ITDA ($m) (3.7) 25. 9 (2.0) (2.3) (1.5) (12. 6) (12. 8) (2.7) (4.6) 25. 1 157.4 (6.6) 39. 6 (1.2) NM 9.7 31. 8 (84. 0) NM (1.4) (1.8) (3.4) (3.6) NM (5.1) (4.5) 24. 9 20. 1 (17. 4) 124.1 NM 16. 6 122.2 26. 6 1.4 82. 4 (0.6) (4.5) 7.2 4.0 61. 4 (1.9) 0.4 (4.5) (2.5) 46. 2 282.9 (2.4) 3.4 55. 7 25. 7 297.4 (13. 0) (13. 3) 6.9 (41. 5) 211.1 6.2 142.2 2.3 (10. 6) 20. 6 296.7 27. 0 12. 5 0.9 (0.7) (0.1) (5.6) 218.4 10. 0 (2.5) 680.3 (13. 5) 85. 5 1.9 9.7 0.1 214.9 (0.4) 130.8 (1.0) 2.3 (4.5) (0.7) NM 17. 0 12. 4 1.3 680. 3 -84.0 39.4 1. 7 E B ITDA % -83. 3% 23. 8% -2.9% NM NM NM NM NM NM 6.9% 61. 7% -98. 9% 58. 0% -45. 8% NM 10. 8% 13. 1% NM NM NM NM NM -23. 6% NM -95. 2% -47. 0% 16. 5% 24. 5% NM 62. 5% NM 33. 9% 58. 1% 22. 2% 2.3% 6.1% NM NM 42. 8% 5.8% 44. 2% NM 4.1% -8.4% NM 33. 1% 14. 1% NM 5.4% 26. 8% 28. 7% 63. 0% -60. 3% NM 7.4% -50. 0% 25. 9% 3.3% 55. 6% 11. 0% NM 13. 1% 47. 2% 12. 1% 6.5% 27. 0% -34. 8% -60. 6% NM 43. 6% 21. 0% NM 48. 9% -12. 0% 34. 1% 2.9% 4.5% 0.9% 21. 6% -54. 2% 24. 0% NM 9.9% -84. 9% NM NM 28. 8% 21. 6% 10. 5% 63. 0% -98. 9% 6.3% 11. 6% TE V/L TM R evenue 5. 7x 0. 8x 0. 0x 47.2x 0. 8x 0. 7x 6. 2x 0. 0x 16.2x 0. 3x 2. 4x 0. 7x 0. 9x 0. 7x 6. 6x 32.1x 2. 4x 15.4x 6. 9x 1. 3x 14.5x 0. 9x 10.1x 1. 5x 0. 8x 0. 7x 4. 7x 0. 5x 7. 4x 8. 7x 7. 0x 1. 9x 10.6x 3. 1x 3. 5x 2. 2x 3. 1x 25.0x 0. 3x 2. 7x 0. 5x 0. 8x 2. 5x 0. 0x 1. 3x 1. 3x 0. 2x 1. 1x 4. 5x 3. 3x 1. 0x 27.6x 0. 2x 0. 2x 0. 2x 0. 3x 1. 0x 8. 0x 1. 3x 4. 8x 3. 4x 1. 6x 47.2x 5.1x 1. 6x TE V/L TM E B ITDA 3. 4x 10. 5x 10. 1x 27. 9x 6. 3x 6. 8x 7. 8x 17. 4x 6. 9x 35. 1x 12. 0x 1. 1x 16. 7x 21. 1x 13. 1x 13. 0x 7. 7x 10. 5x 16. 6x 1. 4x 22. 8x 0. 4x 10. 8x 20. 4x 0. 6x 7. 5x 5. 0x 5. 8x 5. 5x 36. 4x 4. 4x 5. 5x 11. 8x 7. 3x 36. 4x 11.1x 7. 8x E mployees 11 NA NA 3 4 51 101 NA 46 2, 227 628 37 NA 22 16 NA NA NA NA 7 3 NA NA 2 NA NA NA NA 115 1, 570 751 469 NA NA NA 3, 200 NA NA 79 NA 2, 463 NA NA 90 14 NA 2, 969 NA 405 NA 3, 109 3, 109 237 NA NA NA 3, 900 590 2, 096 NA 74 NA 3, 124 514 NA 11 33 NA NA 3, 197 183 7 6, 421 347 1, 626 310 700 NA 1, 469 NA 1, 189 4 328 110 1 NA 246 NA NA 6, 421 1 945 246 Figure 1. Web 2.0 Universe Summary Source. Capital IQ
Slide 3: Page 3 C A P I T A L M A R K E T S A C T I V I T Y (M & A A N D F I N A N C I N G ) November picks up: Total transaction value in the W eb 2.0 universe for November is $131.9 million. November has shown improvement with number of financings up to 14 averaging $9.4 million each (vs. an average of $7.4 million last week). In comparison, total capital raised in October was $171.3 million, averaging $6.3 million (27 deals); September was $232.8 million, averaging $9.0 million (26 deals); and August was $221.6 million, averaging $7.6 million (29 deals). Financing Activity Last Twelve Months 400.0 14.6 350.0 14.0 16.0 300.0 11.1 12.0 250.0 9.0 (US$m) 9.4 10.0 200.0 7.1 6.7 150.0 4.9 6.5 6.6 6.2 5.6 7.6 8.0 6.3 6.0 100.0 4.0 50.0 2.0 0.0 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Total Jun-09 Average Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 0.0 *May-09 includes $200m FB investment Figure 2. Financings, Last Twelve Months Source. Company reports (US$m)
Slide 4: Page 4 eal round-up for November start: The large deal highlights for the month include: • Playfish – the UK-based social gaming company – was acquired by Electronic Arts in a deal potentially valued up to $400 million. Playfire – the social gaming company – raised $43 million in its first round of venture financing. Sezmi – maker of set top box tech – raised $25 million in a third round of VC funding. Motley Fool – the financial information site – raised $25 million in an unattributed financing. Phoenix New Media – the subsidiary of Phoenix Television, a popular Chinese news portal and media site – raised $25 million from Intel Capital and Bertelsmann Asia Investment Fund. • • • • All other deals in the month were in the amount of $10 million or less. For additional details on financings, see Figures 23 and 24 (at end of note). Financing & M/A Summary - Last Three Months 200.0 180.0 160.0 140.0 120.0 (US$m) Nov-09 100.0 Oct-09 Sep-09 80.0 60.0 40.0 20.0 0.0 Skype PlayFish Mint Twitter Playdom DailyMotion Sezmi Phoenix New Media Motley Fool Yext NowPublic PopCap Games Ensequence Engine Yard Ecast Network Millennial Media HubSpot Livebookings Dopplr Jive Software Spigit Evernote Mzinga Ooyala FeedRoom InXpo ScanScout Jobvite Riot Games CubeTree NextBio wooga Box.net Aviary Reality Mobile Vuclip HiveLive Alice.com Eventbrite Imeem Watercooler YuMe AppNexus Booyah Altruik Vdopia NeoEdge Sometrics Scout Labs Amie Street Alliance Health Networks Unisfair Conduit Labs Credit Karma Mocapay ViVu Fwix Vantrix Fizzback Blekko Overtone MashLogic Godengo Playfire Greystripe Technorati Loomia FourSquare EduFire Tiny Pictures Onehub DataSync Prosper.com Hot Potato DailyBooth Linkedex StatusNet IngBoo Chango Fluther Adfonic TransGaming Inc. Scoopler Listia Gamelab.com Aurora Feint VEVO OnLive Figure 3. Capital Market Activity, Last Three Months Source. Company reports
Slide 5: Page 5 Social Networks the most active sector: Social Networks experienced the most financing activity among our W eb 2.0 sector categories in the past three months by number of transactions (9). Collaboration-related companies have been hot recently, garnering the second highest number of deals (7). Advertising continues to be among the highest activity sectors in the past quarter (7 deals) (Figure 4). The $2.0 billion acquisition of Skype skews the dollars transacted to the SMS/Voice segment, while the $400 million acquisition of Playfish brings the Virtual W orlds segment to the second highest total. Finally, the $170 million acquisition of Mint brings the Vertical Communities segment into third place. Capital Market Activity by Sector - Last Three Months 200.0 180.0 160.0 140.0 120.0 (US$m) 100.0 80.0 60.0 40.0 20.0 2,025.0 417.1 0.0 Vertical Communities Gaming Collaboration Documents Enterprise Mobile Microblog Media Infrastructure SMS/Voice Mobile Ad Social Networks Virtual World Advertising Search Video Crowdsourced Content Analytics 178.3 100.9 93.3 87.0 57.0 51.4 45.5 44.9 37.5 30.0 25.6 18.6 17.2 16.2 13.0 10.0 9.9 Social Commerce 6.4 Classified 6.0 Music 4.0 Financial Services 3.6 Aggregation 2.2 Publishing 1.5 Comment/Reputation 1.3 Online Learning 1 # companies 1 4 2 2 6 6 3 9 7 7 3 4 2 3 2 5 4 1 2 2 1 3 2 1 1 Figure 4. Capital Market Activity, by Sector, Last Three Months Source. Company reports
Slide 6: Page 6 C A P I T A L M A R K E T S A C T I V I T Y (P R I C E P E R F O R M A N C E ) Web 2.0 index continues to outpace NASDAQ recovery: Our W eb 2.0 index (market-cap weighted) essentially mirrored the performance of the NASDAQ composite index from mid-2008 until Q1/09. Since then, the index has diverged in a much stronger recovery relative to the NASDAQ index (Figure 5). Web 2.0 Index Price Performance 250 200 150 100 50 0 1/12/2009 1/26/2009 2/23/2009 3/23/2009 4/20/2009 5/18/2009 6/15/2009 6/29/2009 7/13/2009 7/27/2009 8/10/2009 8/24/2009 9/21/2009 12/1/2008 10/5/2009 11/17/2008 12/15/2008 12/29/2008 10/19/2009 11/2/2009 2/9/2009 3/9/2009 4/6/2009 5/4/2009 6/1/2009 9/7/2009 11/16/2009 Index: Web 2.0 (Market Cap) Figure 5. Web 2.0 Price Performance Source. Capital IQ ^COMP - Share Pricing
Slide 7: Page 7 Market pull-back: Sixteen companies in our universe had positive stock price performances over the past week (for stocks with prices greater than $1) (Figure 6), while 30 companies showed negative 1-week returns. Openw ave S y s tems Inc. G igaMedia Ltd. Y nk K orea Inc. Tencent Holdings Ltd. A ctoz S of t Co., Ltd. NEOWIZ Games Corporation Changy ou.com Limited Modern Times G roup Mtg A B G amania Digita l Entertainment Chines e Gamer International S K Communications Co., Ltd. IA C/InterA ctiveCorp. S hutterfly , Inc. XING A G TheS treet.com, Inc. CDC Corp. Fluid Mus ic Cana da, Inc. Eolith Co. Ltd. V alueClick Inc. PNI Digital Media Inc. Neteas e.com Inc. United Online Inc. S ohu.com Inc. NetDragon WebS of t, Inc. Open Tex t Corp. My riad Group A G S handa Interactive S park Netw orks , Inc. Frogs ter Interactive Pictures Cy berplex Inc. DA DA S pA Giant Interac tive G roup, Inc. HanbitS of t, Inc. K ings of t Co. Ltd. Webz en Inc. LookS mart, Ltd. G ameOn Co Ltd. Northgate Technologies Limited The9 Limited Tree.Com, Inc. G ravity Co., Ltd Quepas a Corp. Perfect World Co., Ltd. Y D Online Corp. Ngi G roup Inc. -13.2% Mix i, Inc. A Q Interactive, Inc. -15.6% G ree, Inc. -17.7% -0.2 Figure 6. 1-Week Price Performance Source. Capital IQ 1 Week P rice P erformance 6.7% 6.5% 5.9% 9.0% 15.8% 14.1% -1.0% -1.1% -1.2% -1.3% -1.6% -1.9% -2.0% -2.3% -2.5% -2.6% -3.3% -3.6% -3.6% -3.7% -3.8% -3.8% -4.2% -4.3% -5.4% -5.5% -6.0% -6.2% -7.0% -7.1% -7.6% -8.4% -9.8% 4.1% 3.7% 3.2% 3.0% 2.0% 1.6% 1.4% 1.2% 1.2% 0.8% 0.0% 0.0% -0.15 -0.1 -0.05 0 0.05 0.1 0.15 0.2
Slide 8: Page 8 P U B L I C C O M P A N Y I N D U S T R Y N E W S (P A R T N E R S H I P S , F I N A N C I A L R E S U L T S , N E W P R O D U C T S ) K ey Developments C ompany DigitalFX International, Inc . (OTC B B : DG FX) Hunan TV & B roadc as t Intermediary C o., L td. (S ZS E : 000917); S handa Interac tive E ntertainment L td. (Nas daqG S : S NDA) Quepas a C orp. (OTC B B : QP S A) Headline Digita lF X Interna tional F iles F orm 15 Notes DigitalF X Interna tiona l, Inc. has a nnounced tha t it ha s filed a F orm 15 with the S ecurities a nd E xcha nge C ommis s ion to volunta rily deregis ter its common s tock under the S ecurities E xcha nge Act of 1934, a s a mended. T he par va lue of the common s tock is $0. 001 per s ha re. S ha nda Intera ctive E nterta inment L td. a nd Huna n T V & B roa dca s t Intermedia ry C o. L td. ha ve partnered to launch a joint venture. S ha nda will inves t $100 million in the new J V , for which L ong will be a ppointed chief opera ting officer (C E O ). No officia l la unch da te ha s been dis clos ed. S ha nda Interactive E ntertainment, Huna n T V to L a unch J oint V enture Quepas a C orp. Appoints T ony P a tti a s Director of Delivera bilty Quepa s a C orp. a nnounced the forma tion of a cros s -functiona l tea m dedica ted to e-ma il ma nagement a nd delivera bility. As pa rt of this initiative, the company hired T ony P a tti a s Director of Delivera bilty. T ony is a recognized lea der in the field of ema il delivera bility. W ith a record of s ucces s s pa nning over a deca de, T ony ha s developed focus ed, cus tomized deliverability s olutions for s uch bra nds a s T ra velocity.com a nd T rue.com, helping them a chieve unprecedented delivery-to-inbox ra tes . As a n expert in e-ma il ma rketing, IS P rela tions , a nd the la tes t in indus try trends a nd s ta ndards , T ony's delivera bility s tewa rds hip ens ures tha t Quepas a's vita l ma rketing inves tment pa ys -ins tea d of being los t in s pa m filters . Open Text C orp. (Nas daqG S : OTE X) Open T ext C orp. announced tha t it ha s developed enterpris e fa x functiona lity s ea mles s ly integra ted with Micros oft E xcha nge S erver 2010. T his ens ures that enterpris es ca n migra te to E xcha nge S erver 2010, pres erve their inves tments in networkba s ed fa x ca pa bility and unified mes s a ging s ys tems and provides the ability to a cces s faxing from mobile devices . Open T ext is a Micros oft G old C ertified P a rtner a nd 2009 IS V L ine of B us ines s P artner of the Y ea r fina lis t. F a xing continues to be a critica l requirement for many bus ines s es tha t need s igna tures , dra wings , a nd other pa per-bas ed content. In indus tries a nd bus ines s es s uch a s ba nking, hea lthca re, mortga ge compa nies , and patent offices , fa xes a re recognized a s importa nt lega l documents a nd vita l to bus ines s opera tion. W ith O pen T ext F a x S erver, R ightF ax E dition a nd E xcha nge S erver 2010, faxing becomes an integra l pa rt of the overall enterpris e infra s tructure, providing a s trong return on inves tment a nd reducing or elimina ting the need for phys ical fa x ma chines . Micros oft E xcha nge S erver 2010 is now a va ila ble for bus ines s es worldwide a nd will help orga niza tions reduce cos ts , protect communica tions a nd improve us er productivity. Open T ext F a x S erver is well-proven in the ma rketpla ce a nd it gives cus tomers a fa x s olution tha t s ea mles s ly connects with E xcha nge S erver 2010 Unified Mes s a ging. W orking Open T ext C orp. Develops E nterpris e F a x F unctiona lity S ea mles s ly Integra ted with Micros oft E xcha nge S erver 2010 clos ely with Micros oft, the compa ny developed the E xcha nge C onnector for E xchange S erver 2010, which routes fa xes into a nd out of the E xcha nge S erver 2010 s ys tem us ing O pen T ext F a x S erver, R ightF a x E dition, a s olution offered a s part of the Open T ext E C M S uite. W hen a fa x comes into a n enterpris e, E xcha nge S erver 2010 Unified Mes s a ging forwa rds it to the O pen T ext F a x S erver, which proces s es the document s o it ca n be tra ns mitted to a nd viewed within Micros oft O ffice Outlook a s a na tive fa x mes s a ge. It then routes the fa x through E xcha nge S erver to the recipient's Outlook inbox. T he origina l fa x a ppea rs a s a n e-mail a tta chment tha t a us er ca n s elect a nd view. Us ers ca n a ls o s end e-ma il mes s a ges and a tta chments to the F ax S erver from their Outlook inbox for fa xing to recipients outs ide the enterpris e. A s ignifica nt adva nta ge of Open T ext F a x S erver, is tha t fa xes a re digita lly protected, helping to prevent los s or a uthorized viewing of documents . L ogging a nd a uditing fea tures provide the a bility to review a nd tra ck a ll fa xes from s ender to recipient. VOIS , Inc . (OTC B B : VOIS ) V OIS Inc. P la ns to Introduce Apple iP hone App During the F irs t Qua rter of 2010 V OIS Inc. a nnounced plans to introduce its Apple iP hone a pplica tion during the firs t quarter of 2010. T he new a pp is to be des igned to ena ble members of V OIS to ea s ily pos t projects , bid on projects , a nd s ocia lize the s a me wa y they currently do on the V OIS web pla tform, but cus tomized to iP hone s pecifica tions . In a dva nce of the iP hone a pp V O IS is offering a V OIS webclip. T his will open up 3 buttons . Figure 7a. Key Developments Source. Capital IQ
Slide 9: Page 9 K ey Developments C ompany IAC /InterAc tiveC orp. (Nas daqG S : IAC I) IA C /InterActivecorp. Announces E xecutive C hanges Headline Notes IAC /InterA ctiveC orp. a nnounced tha t J oey Levin, currently IA C 's S enior V ice P res ident, Mergers & Acquis itions and F inance, ha s been na med C hief E xecutive Officer of Minds pa rk Intera ctive Network. S ha na F is her, currently S V P , Mergers & A cquis itions a nd S tra tegy of IA C will a s s ume J oey's M& A res pons ibilities in a ddition to her own. C urrent V ice P res ident of IAC F ina ncial P la nning & Ana lys is Ma rk S chneider will a s s ume J oey's fina nce res pons ibilities , reporting to E V P a nd C F O T om McInerney. S pectrumDNA , Inc. (OT C B B : S P XA ) s igned a letter of intent to a cquire R evyver on November 10, 2008. T he fina ncia l terms of the trans a ction were not dis clos ed. A fter the tra ns a ction R evyver will opera te a s s ubs idia ry of S pectrumDNA , Inc. On November 9, 2009, S ocia lwis e, Inc. has entered into a n a mendment of the 12% S enior Note between the compa ny a nd G emini Ma s ter F und, L td. da ted Ma rch 31, 2009. T he a mendment cha nged the prior requirement under the Note for ma nda tory ea rly repa yment to the following: T he compa ny will ma ke a ca s h pa yment of $250, 000 to the Holder on or before November 20, 2009 (in a ddition to the $25, 000 pa id by the compa ny on or a bout November 3, 2009) a nd a n a dditional ca s h pa yment to the Holder of $100,000 on or before December 15, 2009. If the compa ny s ucces s fully ma kes both of the previous two pa yments , then the compa ny, in its s ole dis cretion, ma y extend the ma turity da te until F ebrua ry 28, 2010 in cons idera tion for 75, 000 s ha res of common s tock, provided tha t there is no brea ch or default or event of defa ult under this Note. DigitalF X Interna tiona l, Inc’s common s tock ha s been deleted from O T C B ulletin B oa rd effective November 11, 2009 on a ccount of its filing form 15. T he compa ny ha s been a dded other NB B . 30, 2009. F or the qua rter, the compa ny reported revenue of $28.2 million was a n increa s e of 156% over the $11. 0 million genera ted during the s a me period a yea r a go. T his growth res ulted from the performa nce of the W eb A dvertis ing divis ion a nd by focus ing on k ey bus ines s vertica ls a nd through interna tiona l ma rket expa ns ion. C omprehens ive income was $919,996 or $0. 01 per ba s ic a nd diluted s ha re compa red to comprehens ive income of $633,167 or $0. 01 per ba s ic a nd diluted s ha re a year ago. Income before a mortiza tion of capita l a s s ets a nd inta ngible a s s ets wa s $1, 067,274 compa red to $752,513 a yea r a go. Income from opera tions wa s $954, 984 compa red to $645, 003 a yea r a go. Net income wa s $712, 371 compa red to $633, 167 a yea r a go. R evyver, L L C ; S pec trumDNA, Inc . (OTC B B : S P XA) S ocialwis e, Inc . (OTC B B : S C L W ) S pectrumDNA, Inc. (O T C B B : S P XA) ca ncelled the a cquis ition of R evyver. Socialwise, Inc. Enters Amendment of the 12% Senior Note DigitalFX International, Inc . (OTC B B : DG FX) C yberplex Inc . (TS X: C X) DigitalFX International Deleted From OTCBB Cyberplex Inc. Announces Unaudited Consolidated Financial Results for the Third Quarter and C yberplex Inc. a nnounced una udited cons olida ted fina ncia l res ults for the third quarter a nd nine months ended S eptember C yberplex Inc . (TS X: C X) Nine Months Ended September 30, 2009 Cyberplex Inc. Reports Unaudited Consolidated Financial Results for the Third Quarter and C yberplex Inc. reported una udited cons olidated fina ncia l res ults for the third qua rter a nd nine months ended S eptember 30, 2009. F or the qua rter, the compa ny reported income before taxes of $1. 0 million aga ins t $0.6 million for s a me period a yea r a go. E a rnings before a mortization, interes t, ta xes a nd foreign excha nge was $2. 7 million or 4 cents per s ha re. F or nine months , the compa ny reported income before ta xes of $6.2 million a ga ins t $0. 9 million for s a me period a yea r a go. NeuL ion Incorporated (TS X: NL N) Nine Months Ended September 30, 2009 NeuLion Incorporated Reports Unaudited Condensed Consolidated Earnings for the Third NeuL ion Incorporated reported unaudited condens ed cons olida ted ea rnings for the third qua rter a nd nine months ended S eptember 30, 2009. F or the qua rter, the compa ny reported opera ting los s of $5, 408, 414, net los s a nd comprehens ive los s of $7, 463, 951 or $0. 07 per bas ic a nd diluted s ha re on revenue of $6, 061, 302 a gains t opera ting los s of $1, 352, 218, net los s a nd comprehens ive los s of $1, 377, 667 or $0. 03 per bas ic a nd diluted s ha re on revenue of $2,699, 041 for the s a me period a year ago. C as h provided by opera ting a ctivities wa s $1,937, 748 a gains t $49, 431 for the s ame period a yea r a go. P roperty, pla nt and equipment expenditures were $362,108 a ga ins t $182, 918 for the s a me period a year ago. F or the nine months , the compa ny reported opera ting los s of $15,513, 615, net los s a nd comprehens ive los s of $18,185, 960 or $0.16 per ba s ic a nd diluted s ha re on revenue of $19,097,767 a ga ins t opera ting los s of $3,411, 255, net los s a nd comprehens ive los s of $4, 413, 792 or $0.10 per ba s ic and diluted s hare on revenue of $7,635,789 for the s ame period a yea r a go. C a s h provided us ed in opera ting a ctivities wa s $7,186, 903 a ga ins t $148,559 for the s a me period a yea r a go. P roperty, p Quarter and Nine Months Ended September 30, 2009 Tencent Holdings L td. (S E HK : 700) Tencent Holdings Ltd., Board Meeting, Nov 11, 2009 is eemedia Inc . (TS XV: IE E ) T encent Holdings L td., B oa rd Meeting, Nov 11, 2009 Agenda : T o a pprove the una udited third qua rter res ults a nd a nnouncement of the compa ny a nd its s ubs idiaries for the three a nd nine months ending 30 S eptember 2009 a nd cons idering the pa yment of a dividend, if a ny. is eemedia Inc. a nnounced tha t it ha s begun deployment of a n S MS -ba s ed pus h-ma il s ervice with T ata Indicom a nd T a ta Docomo, the C DMA and G S M offering res pectively of T a ta T eles ervices L td. T he commercia l la unch is expected to be completed by November 2009. T he cons umer ema il will join enterpris e ema il as a s ta nda rd s ervice on mobile devices in the coming years . T T S L is pos itioning this s ervice to ca pture a s izea ble s ha re of the ra pidly growing us er s egment us ing On-T heG o ema il s ervices , us ing the is eemedia s olution. the qua rter, the company reported tota l revenues were R MB 3, 368.9 million (US D 493. 3 million), a n increa s e of 17. 0% over the s econd qua rter of 2009 or a n increas e of 66. 4% to R MB 2, 024. 5 million for the third qua rter of 2008. O perating profit wa s R MB 1, 680. 3 million (US D 246. 1 million), an increas e of 20. 1% qua rter on qua rter or an increas e of 107. 3% yea r on yea r compa red to R MB 810.5 million for the s a me qua rter a yea r a go. P rofit a ttributable to equity holders of the compa ny wa s R MB 1, 419. 9 million (US D 207. 9 million), an increas e of 19. 1% qua rter on qua rter or an increas e of 92. 6% year on yea r or R MB 0. 767 per diluted s ha re compa red to profit a ttributa ble to equity holders of the compa ny of R MB 737. 1 million or R MB 0. 400 per diluted s ha re for the s a me qua rter a yea r a go. P rofit before income ta x wa s R MB 1,683 million compa red to R MB 802.4 million for the s a me qua rter a yea r a go. C a pita l expenditure was R MB 269. 1 million for the third qua rter of 2009 a s compa red with R MB 191.3 million for the previous qua rter. Openwa ve S ys tems Inc. a nnounced the Openwa ve(R ) Mobile Internet R ea dyS et, a low-cos t, prepa cka ged pla tform tha t provides opera tors with a centra l point from which to offer new, revenue genera ting, mobile internet s ervices . Openwa ve will demons tra te its R ea dyS et s olution, a s well a s its la tes t mobile internet, mes s aging a nd loca tion s oftwa re a pplica tions a nd infras tructure a t A frica C om C ongres s & E xhibition loca ted in C a pe T own, S outh Africa on November 11-12, 2009. Openwa ve's R ea dyS et provides a complete mobile internet s olution cons is ting of tra ffic ma nagement tools including content a da pta tion and a cceleration, ba ndwidth optimis ation, and s ervice promotion and billing, in a s ingle pa cka ge. W ith very lowcos t hardwa re a nd s ta ndard pre-configured deployment options , R ea dyS et is idea l for s ma ller operators a nd newer ma rkets which require a quick return on inves tment for minima l ca pita l outla y. Additiona lly, R ea dyS et is s ca la ble a nd will expand to meet s ubs criber growth a nd dema nds both in terms of increa s ed numbers a nd increa s ed us er expecta tion. iseemedia Inc. Provides SMS-Based Push-Mail Service to Tata Indicom and Tata Docomo Tencent Holdings L td. (S E HK : 700) Tencent Holdings Ltd. Reports Unaudited Consolidated Earnings Results for the Third Quarter T encent Holdings L td. reported una udited cons olida ted earnings res ults for the third qua rter ended S eptember 30, 2009. F or Ended September 30, 2009 Openwave S ys tems Inc . (Nas daqG S : OP WV) Openwave Introduces Mobile Internet Readyset Solution for Operators in Emerging Markets Tencent Holdings L td. (S E HK : 700) S hutterfly, Inc . (Nas daqG S : S FL Y) Tencent Holdings L td. (S E HK : 700) T encent Holdings L td., Q3 2009 E a rnings C a ll, Nov-11-2009 Tencent Holdings Ltd., Q3 2009 Earnings Call, Nov-11-2009 S hutterfly, Inc. - C onference P res enta tion C a lls Shutterfly, Inc. - Conference Presentation Call Tencent Holdings Ltd. Reports Unaudited Consolidated Earnings Results for the Nine Months T encent Holdings L td. reported una udited cons olida ted earnings res ults for the nine months ended S eptember 30, 2009. F or the nine months , the compa ny reported profit of R MB 3, 688. 56 million a nd profit attributa ble to equity holders of the compa ny was R MB 3, 647. 70 million or R MB 1.980 per s ha re on revenues of R MB 8,751. 69 million compa red to profit of R MB 1, 939. 50 million a nd profit attributa ble to equity holders of the compa ny wa s R MB 1, 915.480 million or R MB 1.040 per s ha re on revenues of R MB 5,057,163 million for the s a me period a yea r a go. P rofit before income ta x wa s R MB 4,254. 91 million compa red to R MB 2, 168. 06 million for the s a me period a yea r a go. Opera ting profit wa s R MB 4, 243.83 million compa red to R MB 2, 313. 12 million for the s a me period a yea r a go. Net ca s h flows genera ted from opera ting a ctivities wa s R MB 5, 741. 80 million compared to R MB 2, 087.18 million for the s a me period a yea r a go. C yberplex Inc. , Q3 2009 E a rnings C a ll, Nov-12-2009 S ha nda Intera ctive E nterta inment L td. a nd G olden E agle B roa dcas ting (G B S ) a nnounced s trategic coopera tion in S hangha i on November 12, 2009. Under the a greement, S ha nda a nd G B S will s et up a joint venture with a n inves tment of C N Y 600 million. T he venture will be enga ged in film a nd T V pla yer ma king, dis tribution, a nd other rela ted s ervices . T he coopera tion with G B S ena bles S ha nda to ma ke inroa ds into the film s ector, a pa rt from bus ines s es like online ga mes , litera ture, a s well a s mus ic. DigitalP os t Intera ctive Inc. announced the s igning of a contra ct with T he P icture P eople Inc. T his pa rtners hip will expa nd DigitalP os t's dis tribution cha nnel a long with providing potential revenue growth. P icture P eople plans to enha nce its online pres ence by a dapting a nd re-bra nding Digita lP os t's fa mily webs ite pla tform for their cus tomer ba s e. T his new platform provides a s tunning vis ual dis pla y a nd eas y-to-us e a dminis tra tion fea tures tha t will ena ble T he P icture P eople to enter new ma rkets with Digita lP os t's a ward winning photo/video-s haring technology. C yberplex Inc . (TS X: C X) G olden E agle B roadc as ting; S handa Interac tive E ntertainment L td. (Nas daqG S : S NDA) Ended September 30, 2009 Cyberplex Inc., Q3 2009 Earnings Call, Nov-12-2009 Shanda Interactive Entertainment Ltd. and Golden Eagle Broadcasting to Set Up Joint Venture DigitalP os t Interactive, Inc . (OTC B B : DG L P ); The P icture P eople, Inc . DigitalPost Interactive Signs Agreement with the Picture People, Inc Figure 7b. Key Developments – continued Source. Capital IQ
Slide 10: Page 10 K ey Developments C ompany MOK O.mobi L imited (AS X: MK B ) Headline Notes MO K O. mobi L imited has s ecured a contra ct with V eriz on W ireles s . MOK O.mobi on V eriz on will be s upported with an integra ted billing model tha t will include monthly s ubs cription and premium MMS (picture a nd video content upload from the mobile device). T echnica l a nd product integration is s cheduled to begin immedia tely a nd a la unch is expected in the firs t qua rter 2010. MOKO.mobi Limited Secures Contract with Verizon Wireless B etawave C orporation (OTC B B : B WAV) Betawave Corporation and Silicon Valley Bank Enter Waiver and Third Amendment to Loan O n November 9, 2009, B eta wa ve C orporation a nd S ilicon V a lley B ank entered into a waiver a nd third amendment to loa n a nd s ecurity a greement. Under the terms of the wa iver a nd a mendment, S V B a greed: to wa ive a n event of defa ult exis ting a s a res ult of the compa ny's viola tion of a minimum ta ngible net worth covena nt under the exis ting loan a nd s ecurity a greement, da ted a s of Ma rch 28, 2009, between the compa ny a nd S V B a nd tha t s uch minimum ta ngible net worth covena nt would not a pply from October 1, 2009 to November 23, 2009. In a ddition, the wa iver a nd a mendment amended the loan a greement to, a mong other things : a dd a covena nt to the loa n a greement that requires the compa ny to ma intain a t leas t $1. 5 million in unres tricted ca s h on depos it in the compa ny's unres tricted opera ting, s weep a nd other a ccounts with S V B a nd its affilia tes a nd reduce the borrowing ba s e a va ila ble under the loan a greement from $4 million to the les s er of the s um of 80% of eligible a ccounts a nd, a t S V B 's dis cretion, 60% of extended eligible a ccounts a nd $1.5 million. In connection with the waiver a nd a mendment, the compa ny a nd S V B a ls o entered into a n a cknowledgement a nd rea ffirma tion of loan a nd s ecurity a corporation tha t reincorporated into Delawa re a s of S eptember 21, 2009, a cknowledged a nd rea ffirmed its obliga tions under the loan a greement. and Security Agreement IB 3 Networks , Inc . (OTC B B : IB NW ) IB3 Networks, Inc., Annual General Meeting, Nov 13, 2009 Ac c elerize New Media, Inc . (OTC B B : AC L Z) IB 3 Networks , Inc., Annua l G enera l Meeting, Nov 13, 2009, a t 09: 00 US E a s tern T ime. Loca tion: offices of C a rlile P a tchen & Murphy L L P , 366 E as t B roa d S treet, C olumbus , OH 43215, United S ta tes . A genda : T o elect a board of two directors to s erve until the next Annual Meeting of S tockholders or until their s ucces s ors ha ve been duly elected a nd qua lified; a nd; to cons ider - S uch other procedura l ma tters a s may properly come before the Annua l Meeting or a ny adjournment or pos tponement thereof. A ccelerize New Media , Inc. a nnounced ea rnings res ults for the third quarter a nd nine months ended S eptember 30, 2009. F or the quarter, the compa ny's revenues decreas ed by $295,394, or 27. 4% to $783, 946 compared to $1,079,340 for the compa ra ble period in 2008. T he compa ny's net los s decrea s ed $2,131,902 or 87. 4% to $306, 091, or $0. 01 per s ha re, compa red to $2, 437, 993, or $0.09 per s ha re for the three month period ended S eptember 30, 2008. T he compa ny's net cas h us ed in opera ting a ctivities a mounted to $161, 734, a decreas e of $327, 445 or 66. 9% from $489, 209 for the compa ra ble period in 2008. F luid Mus ic C a na da , Inc. reported una udited cons olida ted ea rnings res ults for the third qua rter a nd nine months ended S eptember 30, 2009. F or the quarter, the compa ny reported net income a nd comprehens ive income of $184,276 on tota l revenue of $1, 507, 545 compared to net los s a nd comprehens ive los s of $2, 908, 798 or $0. 06 per ba s ic a nd diluted s ha re on total revenue of $1, 269, 945 a yea r ago. T he compa ny reported income from opera tions of $130,963, income before provis ion for income taxes of $184, 276 compa red to los s from opera tions of $2,909,062, los s before provis ion for income ta xes of $2, 908, 798 a yea r a go. Net ca s h provided by operating activities was $318, 772, a nd purcha s e of fixed a s s ets wa s $365,287 a gains t net ca s h us ed in opera ting a ctivities of $2, 527, 049, a nd purcha s e of fixed as s ets of $94, 126 a year a go. P erfect W orld C o. , L td., Annua l G enera l Meeting, Nov 14, 2009, a t 15: 00 C C T - C hina C oa s t, US S R Zone 7. L oca tion: Unit 1701, 17/F , O vers ea s T rus t B a nk, 160 G louces ter R oad, W an C ha i, Hong K ong. Agenda : T o amend S ection 3.1 (a ) of the a mended a nd res tated S ha re Incentive P lan of the compa ny; to a mend S ection 5. 2 (a) (ii) and (iii) of the a mended a nd res ta ted S ha re Incentive P la n of the compa ny; to ra tify the a ppointment of Mr. Ha n Zha ng a nd Mr. Daniel Dong Y ang as a n independent director of the company;to ra tify the a ppointment of the Independent Auditor P ricewa terhous eC oopers for the fis cal yea r 2008;to ra tify the a ppointment of the Independent Auditor P ricewa terhous eC oopers for the fis ca l year 2009; to a mend Article 1 of the a mended and res ta ted Memora ndum a nd A rticles of A s s ocia tion of the company;to a mend Article 111 of the a mended and res tated Memora ndum and Articles of A s s ocia tion of the compa ny; to include fina ncia l s ta tements of fis ca l yea r 2008 in the compa ny's 2008 annua l report; and to authoriz e ea ch of the directors to ta ke a ny a nd every a ction tha t might be neces s a ry to effect the foregoing res olutions 1to 9 a s s uch director, in his a bs olute dis cretion, thinks fit. P erfect W orld C o. , L td. a nnounced tha t a t its a nnua l general meeting held on November 14, 2009, the compa ny a pproved ra tifica tion of the a ppointment of Mr. Ha n Zha ng a nd Da niel Dong Y a ng a s independent directors of the compa ny. Accelerize New Media, Inc. Announces Earnings Results for the Third Quarter and Nine F luid Mus ic C anada, Inc . (TS X: F MN) Months Ended September 30, 2009 Fluid Music Canada, Inc. Reports Unaudited Consolidated Earnings Results for the Third Quarter and Nine Months Ended September 30, 2009 P erfec t World C o., L td. (Nas daqG S : P W R D) Perfect World Co., Ltd., Annual General Meeting, Nov 14, 2009 P erfec t World C o., L td. (Nas daqG S : P W R D) P erfec t World C o., L td. (Nas daqG S : P W R D) Perfect World Co., Ltd. Ratifies Appointment of Directors; Approves Amendment of Article of Association Perfect World Co., Ltd. Reports Consolidated Unaudited Earnings Results for the Third Quarter Ended September 30, 2009 ; Provides Earnings Guidance for the Fourth Quarter of P erfect W orld C o. , L td. reported cons olida ted una udited ea rnings res ults for the third qua rter ended S eptember 30, 2009. F or the quarter, tota l revenues were R MB 589, 994, 239 a ga ins t R MB 381, 802, 248 a yea r a go. Operating profit wa s R MB 297,665,297 a ga ins t R MB 200, 004, 263 a year a go. P rofit before ta x wa s R MB 300,066,077 a ga ins t R MB 207, 573, 759 a yea r ago. Net income wa s R MB 289,013,119 a ga ins t R MB 198, 803, 747 a year a go. Net income a ttributable to the compa ny's s ha reholders wa s R MB 288, 321, 111 or R MB 1. 10 per bas ic and diluted s hare a ga ins t R MB 198, 803, 747 or R MB 0. 67 per ba s ic a nd diluted s hare a yea r ago. Net ea rnings per ADS diluted were R MB 5. 50 a ga ins t R MB 3. 34 a yea r ago. Net cas h provided by opera ting a ctivities wa s R MB 326,332,320 a ga ins t R MB 265, 481, 664 a year a go. C a pital expenditure on purcha s e of property, equipment, a nd s oftware was R MB 59, 754, 724 a gains t R MB 62, 749, 284 a year a go. Non-G AAP opera ting profit wa s R MB 317, 891, 325 a gains t R MB 213, 364, 826 a yea r a go. Non-G AAP net income attributable to the compa ny's s ha reholders wa s R MB 308, 547, 139 a gains t R MB 212, 164, 310 a yea r a go. Non-G AAP net ea rnings per ADS Diluted wa s R 2009 Figure 7c. Key Developments – continued Source. Capital IQ
Slide 11: Page 11 VALUATION Online Gaming companies lead market-cap charts: Fourteen companies in our W eb 2.0 universe top US$1 billion in market capitalization (Figure 8). Fifty-eight of the 89 companies have market caps under US$100 million, with 39 under US$25 million. Online gaming companies dominate the top of the list, led by Tencent Holdings (SEHK:700) with a market cap of approximately US$34.8 billion. Market C ap (US D m) Tenc ent Holdings Ltd. Neteas e.c om Inc . S handa Interac tive Entertainment Ltd. Modern Times G roup Mtg A B IA C/InterA c tiveCorp. Perfec t World Co., Ltd. Gree, Inc . S ohu.c om Inc . Open Tex t Corp. Changy ou.c om Limited Giant Interactive Group, Inc . Chines e G amer International Mix i, Inc . K ings oft Co. Ltd. V alueClic k Inc . NEOWIZ G ames Corporation United Online Inc . S hutterfly , Inc . NetDragon WebS of t, Inc . CDC Corp. S K Communic ations Co., Ltd. XING A G G igaMedia Ltd. OA O R B C Information S y s tems Gamania Digital Entertainment Co., Ltd. G ungHo Online Entertainment, Inc . Openw ave S y s tems Inc . My riad G roup A G The9 Limited DA DA S pA A c toz S oft Co., Ltd. Fluid Mus ic Canada, Inc . Y D Online Corp. Cy berplex Inc . Tree.Com, Inc . G eoS entric Oy j NeuLion Inc orporated TheS treet.c om, Inc . G ameOn Co Ltd. Frogs ter Interac tive Pic tures A G HanbitS of t, Inc . PNI Digital Media Inc . S park Netw orks , Inc . Gravity Co., Ltd DXN Holdings B hd NeXplore Corporation Webz en Inc . Eolith Co. Ltd. Ngi Group Inc . A s s oc iated Media Holdings Inc . DigitalTow n, Inc . Wiz z ard S of tw are Corporation A Q Interac tive, Inc . S oc ialw is e, Inc . Northgate Tec hnologies Limited A c c eleriz e New Media, Inc . Y nk K orea Inc . LookS mart, Ltd. Dolphin Digital Media, Inc . Quepas a Corp. Jumbuc k Entertainment Limited Ex tens ions , Inc . Lingo Media Corporation Magnitude Inf ormation S y s tems Inc . IA S Energy , Inc . MOK O.mobi Limited is eemedia Inc . S pec trumDNA , Inc . B roadW ebA s ia Inc . UOMO Media, Inc CornerWorld Corporation V OIS , Inc . Worlds .c om Inc . B right Things plc DigitalPos t Interac tive, Inc . B ey ond Commerc e, Inc . S NA P Interac tive, Inc . B igs tring Corp. Wy nds torm Corporation B etaw ave Corporation LiveW orld Inc . Unis erve Communic ations Corp. K A B Dis tribution Inc . CLICK ER Inc . The Parent Company China G atew ay Corporation Dibz International, Inc . S NM G lobal Holdings S oc ial Media V entures Inc . 0 Figure 8. Market Cap Rankin Source. Capital IQ 34735.2 5368.6 3304.2 3170.3 2630.2 2286.3 2227.9 2189.7 2156.0 1897.5 1587.4 1186.5 1106.3 1033.9 882.4 734.0 695.3 404.6 344.4 269.2 255.8 252.5 237.7 222.0 217.8 216.5 208.0 200.7 185.9 168.2 119.5 86.8 82.0 81.1 79.6 78.9 77.1 75.9 73.9 67.7 63.2 54.7 53.5 40.6 40.5 38.5 35.1 34.6 33.2 32.9 32.8 24.6 24.3 22.6 21.2 20.4 19.6 19.2 17.7 16.6 14.0 13.3 11.3 8.6 8.5 8.3 8.2 7.3 5.9 5.9 5.7 5.5 5.2 5.1 4.6 3.0 2.2 1.9 1.8 1.0 1.0 0.8 0.6 0.6 0.2 0.0 0.0 0.0 0.0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000
Slide 12: Page 12 TEV/Revenue (LTM) averages 5.1x: The overall average TEV/Revenue (LTM) multiple for our group is 5.1x (vs. 5.4x last week) (Figure 9). W e continue to see four companies trading above 25x revenue – Bigstring Corp. (OTCBB:BSGC) at 47.2x, Dolphin Digital Media, Inc. (OTCBB:DPDM) at 32..1x, NexPlore Corporation (OTCPK:NXPC) at 27.6x, and Tencent Holdings Ltd. (SEHK:700) at 25.0x. The median of 1.8x compares with 1.8x last week. Note that we exclude multiples greater than 50x. Twenty-one companies have multiples under 1.5x. T E V/L T M R evenue (x) 50. 0 45. 0 40. 0 35. 0 30. 0 25. 0 20. 0 15. 0 10. 0 A vera ge, 5.1 5. 0 0. 0 3.3 3.4 3.5 2.5 2.7 3.1 3.1 1.5 1.6 1.6 1.9 2.2 2.4 2.4 0.8 0.8 0.9 0.9 1.0 1.0 1.1 1.3 1.3 1.3 1.3 0.0 0.0 0.0 0.2 0.2 0.2 0.2 0.3 0.3 0.3 0.5 0.5 0.7 0.7 0.7 0.7 0.8 0.8 8.0 6.6 6.9 7.0 7.4 5.7 6.2 8.7 15.4 14.5 10.110.6 16.2 32.1 27.6 25.0 47.2 4.5 4.7 4.8 Figure 9. TEV/Revenue Ranking Source. Capital IQ TEV/Revenue (LTM) by country/exchange: W e have also calculated multiples based on where the companies are listed or domiciled. Figure 10 shows the average TEV/Revenue multiples by stock exchange. The OTCBB has the largest number of companies (18), trading at an average multiple of 11.5x (vs. 12.4x last week). On a geographic basis, the United States has the most companies (38), trading at an average of 6.6x revenue (vs. 7.3x last week) (Figure 11). Ten of the companies are Canadian (average 7.9x revenue). Average TEV/LTM Revenue - By Exchange 16.0 14.5 14.0 12.4 12.0 11.5 10.0 (x) 8.0 6.0 4.0 2.0 OTCBB OTCPK GTSM 0.0 SEHK HLSE TSX (x) 16.0 14.0 12.0 10.0 NasdaqGM TSE CM NasdaqGS KOSE OSE RTS OM XTRA AMEX TSXV KLSE SWX ASX BSE Germany Hong Kong Finland China Canada India 1 Australia # Companies 1 3 18 2 4 11 5 2 2 4 1 2 1 14 6 1 1 1 1 5 1 # Companies 1 10 38 3 2 2 6 10 Switzerland 1 1 8 1 1 Malaysia Sweden South Korea Taiwan 1 Figures 10 & 11. TEV/Revenue Ranking (Exchange, Country) Source. Capital IQ Russia 1 United States Japan Italy C hina G ateway C orporation AQ Interactiv e, Inc. O AO R B C Information S y s tems S N AP Interactive, Inc. T heS treet.com, Inc. T he P arent C ompa ny T ree.C om, Inc. C L IC K E R Inc. Northga te T echnologies Limited Unis erve C ommunications J umbuck E ntertainment Limited O penwav e S y s tems Inc. DX N H oldings B hd C y berplex Inc. IAC /InterActiv eC orp. C DC C orp. P erfect World C o., L td. B ey ond C ommerce, Inc. Actoz S oft C o., Ltd. HanbitS oft, Inc. G iga Media L td. DADA S pA United O nline Inc. S park Network s , Inc. S NM G lobal H oldings G ama nia Digital E ntertainment S hutterfly , Inc. V alueC lick Inc. S K C ommunic ations C o., L td. G ungH o O nline E nterta inment, Y nk K orea Inc. Y D O nline C orp. Modern T imes G roup Mtg AB N etDragon WebS oft, Inc. C ornerWorld C orporation E olith C o. L td. P NI Digita l Media Inc. O pen T ex t C orp. NeuLion Incorporated My riad G roup AG S ohu.com Inc. XING AG N E O WIZ G a mes C orpora tion S oc ial Media V entures Inc. is eemedia Inc. Wiz z ard S oftwa re C orporation Acc eleriz e N ew Media, Inc. C hangy ou.c om Limited DigitalP os t Interactive, Inc. F rogs ter Interactive P ictures Mix i, Inc. K ings oft C o. L td. UO MO Media, Inc L ingo Media C orporation G ree, Inc. MO K O .mobi Limited G eoS entric O y j F luid Mus ic C ana da, Inc. C hines e G amer International NeXplore C orporation T encent H oldings L td. Dolphin Digital Media, Inc. B igs tring C orp. Average TEV/LTM Revenue - By Country 14.5 8.7 6.4 6.2 5.7 5.5 5.1 4.1 3.1 2.9 1.9 1.8 1.7 1.5 0.9 0.7 8.0 6.0 4.0 7.9 6.6 6.1 5.5 5.1 4.7 3.8 0.3 0.2 3.1 1.9 1.7 0.9 0.7 0.7 0.3 0.0 0.0 2.0 0.0
Slide 13: Page 13 TEV/EBITDA (LTM) averages 11.6x: The average multiple for the 35 companies with positive EBITDA (and multiples under 100x) is 11.6x LTM EBITDA (vs. 11.8x last week), led by HanbitSoft, Inc. (KOSE:A047080) 36.4x multiple (Figure 12). Thirteen companies have EBITDA multiples under 7x. The median multiple is 11.6x (vs. 9.6x last week). T E V/L T M E B IT DA (x) 40. 0 35. 1 35. 0 30. 0 25. 0 20. 4 21. 1 20. 0 14. 9 15. 0 10. 0 5. 0 0. 0 3. 4 1. 4 0. 4 0. 6 1. 1 J umbuck E ntertainment L imited NE O WIZ G ames C orporation G amania Digital E ntertainment C o. , Ltd. G ungH o O nline E ntertainment, Inc . P NI Digital Media Inc . C hines e G amer International U nis erve C ommunications C orp. O AO R B C Information S y s tems C hangy ou. c om L imited S K C ommunic ations C o. , Ltd. T ree. C om, Inc . C DC C orp. Modern T imes G roup Mtg AB S NAP Interac tive, Inc . T heS treet. c om, Inc . U nited O nline Inc . S park Network s , Inc . O pen T ex t C orp. NetDragon WebS oft, Inc. IAC /InterAc tiveC orp. Y D O nline C orp. S ohu. c om Inc . V alueC lic k Inc . C yberplex Inc. P erfec t World C o. , L td. O penwave S y s tems Inc. G ree, Inc . XING AG Mix i, Inc . Actoz S oft C o. , L td. K ings oft C o. L td. H anbitS oft, Inc. Y nk K orea Inc. S hutterfly , Inc. DADA S pA A verage, 11. 6 6. 8 6. 9 7. 3 5. 5 5. 5 5. 8 6. 3 4. 4 5. 0 7. 5 7. 7 7. 8 10. 1 10. 5 10. 5 10. 8 11.8 12.0 13.0 13.1 16. 6 16. 7 17. 4 22. 8 27. 9 36. 4 Figure 12. TEV/EBITDA Ranking Source. Capital IQ TEV/EBITDA (LTM) by country/exchange: Figure 13 shows the average TEV/EBITDA multiples by stock exchange. The OTCBB has the largest number of companies (18), trading at an average multiple of 0.6x. On a geographic basis, the United States has the most companies (38), trading at an average of 7.4x EBITDA (Figure 14). Ten of the companies are Canadian (average 19.0x EBITDA). Average TEV/LTM EBITDA - By Exchange 35.0 29.6 30.0 25.0 (x) 20.0 15.0 10.0 5.0 GTSM NasdaqGS SEHK TSE KOSE OSE 0.0 TSXV OM XTRA CM TSX 19.2 17.9 15.9 Average TEV/LTM EBITDA - By Country 20.0 18.0 16.0 14.0 12.0 19.0 17.9 15.9 15.1 13.1 13.1 12.2 11.8 (x) 8.9 6.9 6.8 6.3 5.7 5.0 NasdaqGM AMEX 1.1 0.6 0.4 OTCBB RTS ASX 10.0 8.0 6.0 4.0 2.0 0.0 11.8 10.5 8.7 7.4 6.8 1.1 0.4 Germany Japan China Hong Kong Canada # Companies 4 5 2 6 1 3 2 14 1 1 4 5 2 2 18 1 # Companies 10 3 8 6 1 2 1 10 38 1 Australia 2 Taiwan Sweden Figures 13 & 14. TEV/EBITDA Ranking (Exchange, Country) Source. Capital IQ Russia 1 United States South Korea Italy
Slide 14: Page 14 P/E (LTM) averages 19.4x: The average multiple for the 33 companies with positive earnings (and multiples under 100x) is 19.4x LTM EPS (vs. 18.6x last week), led by Tencent Holdings Ltd. (SEHK:700) with a 70.9x multiple (Figure 15). Fourteen companies have P/E multiples under 10x. The median is 13.3x. P /E L T M (x) 80.0 70.9 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 0.0 0.0 G ravity C o., Ltd W ebz en Inc. A verage, 19.4 12.8 13.3 14.0 11.2 11.3 8.7 9.4 5.9 7.3 7.4 16.9 17.0 17.7 20.0 20.6 25.9 38.2 36.4 37.7 46.8 47.0 55.2 65.3 23.2 3.8 4.0 1.9 2.1 2.3 3.0 3.2 J umbuck E ntertainment Limited G iant Interactive G roup, Inc. T he9 Limited S handa Interactive E ntertainment Ltd. S NAP Interactive, Inc. Neteas e.com Inc. P erfect World C o., Ltd. NE O W IZ G ames C orporation G amania Digital E ntertainment C o., Ltd. G ungH o O nline E ntertainment, Inc. Modern T imes G roup Mtg AB C hines e G amer International DXN H oldings B hd C hangy ou.com Limited G ameO n C o Ltd. O pen T ex t C orp. C y berplex Inc. NetDragon W ebS oft, Inc. Figure 15. P/E Ranking Source. Capital IQ P/E (LTM) by country/exchange: Figure 16 shows the average P/E multiples by stock exchange. The OTCBB has the largest number of companies (18), trading at an average multiple of 11.9x. On a geographic basis, the United States has the most companies (38), trading at an average of 23.6x earnings (Figure 17). Ten of the companies are Canadian (average 27.2x EPS). Average P/E - By Exchange 70.0 65.3 60.0 50.0 (x) 40.0 30.0 20.0 10.0 OTCPK OTCBB GTSM 0.0 SEHK KOSE NasdaqGS OSE TSE XTRA AMEX OM 46.8 (x) 40.0 35.0 30.0 25.0 Average P/E - By Country 36.8 27.2 25.9 35.2 33.4 23.6 29.8 20.0 15.0 23.0 17.0 14.4 12.5 5.9 4.0 25.9 18.8 17.7 17.0 11.9 11.6 7.3 5.9 KLSE TSX 10.0 4.0 NasdaqGM 1.9 0.0 NYSE ASX 5.0 0.0 Germany Canada Japan United States China Malaysia 1 Taiwan South Korea Sweden # Companies 11 1 3 5 2 2 6 2 1 18 14 4 1 2 1 5 # Companies 6 10 2 38 3 1 10 8 Figures 16 & 17. P/E Ranking (Exchange, Country) Source. Capital IQ Australia 2 T encent H oldings Ltd. G igaMedia Ltd. S park Network s , Inc. IAC /InterActiveC orp. Y D O nline C orp. Worlds .com Inc. S ohu.com Inc. H anbitS oft, Inc. G ree, Inc. XING AG Mix i, Inc. Actoz S oft C o., Ltd. K ings oft C o. Ltd. LiveW orld Inc.
Slide 15: Page 15 UPCOMING EVENTS E arnings C alendar C ompany Netease.com Inc. (NasdaqGS:NTES) The9 Limited (NasdaqGS:NCTY) Giant Interactive Group, Inc. (NYSE:GA) NetDragon WebSoft, Inc. (SEHK:777) Figure 18. Earnings Calendar Source. Company reports Date 18-Nov-09 23-Nov-09 25-Nov-09 25-Nov-09 Time 8:00 p.m. EST 8:00 p.m. EST 8:00 p.m. EST 7:00 a.m. EST Quarter Q3/09 Q3/09 Q3/09 Q3/09 C onf C all Details 877-941-1427 800-884-5695 866-510-0712 800-130-0399
Slide 16: Page 16 C omparable C ompany Analys is > Web 2.0 P rice P erformanc e C ompany Name Accelerize N ew Media, Inc. Actoz S oft C o., Ltd. AQ Interactive, Inc. As s ociated Media Holdings Inc. B igs tring C orp. B etawave C orpora tion B eyond C ommerce, Inc. B right T hings plc B roa dW ebAs ia Inc. C DC C orp. C hangyou.com Limited C hina G a teway C orporation C hines e G amer International C LIC K E R Inc. C ornerW orld C orpora tion C yberplex Inc. DADA S pA DXN Holdings B hd Dibz Internationa l, Inc. Digita lP os t Interactive, Inc. Digita lT own, Inc. Dolphin Digital Media, Inc. E olith C o. Ltd. E xtens ions , Inc. F luid Mus ic C a nada, Inc. F rogs ter Interactive P ictures AG G ama nia Digital E ntertainment C o., Ltd. G ameOn C o Ltd. G eoS entric O yj G iant Interactive G roup, Inc. G iga Media Ltd. G ravity C o., L td G ree, Inc. G ungHo Online E nterta inment, Inc. H anbitS oft, Inc. IAC /InterActiveC orp. IAS E nergy, Inc. is eemedia Inc. J umbuck E ntertainment L imited K A B Dis tribution Inc. K ings oft C o. Ltd. L ingo Media C orpora tion L iveW orld Inc. L ookS mart, Ltd. Magnitude Information S ys tems Inc. Mixi, Inc. Modern T imes G roup Mtg AB MO K O.mobi Limited Myria d G roup A G N E OW IZ G a mes C orporation N etDragon W ebS oft, Inc. N eteas e.com Inc. N euL ion Incorporated N eXplore C orporation N gi G roup Inc. N orthga te T echnologies Limited O pen T ext C orp. O penwa ve S ys tems Inc. P erfect W orld C o., L td. P N I Digital Media Inc. Q uepas a C orp. O AO R B C Information S ys tems S handa Intera ctive E ntertainment Ltd. S hutterfly, Inc. S K C ommunica tions C o., L td. S N AP Intera ctive, Inc. S N M G loba l Holdings S ocia l Media V entures Inc. S ocia lwis e, Inc. S ohu.com Inc. S park Networks , Inc. S pectrumDNA , Inc. T encent Holdings Ltd. T he P arent C ompany T he9 Limited T heS treet.com, Inc. T ree. C om, Inc. U nis erve C ommunica tions C orp. U nited O nline Inc. U OMO Media , Inc V a lueC lick Inc. V O IS , Inc. W ebzen Inc. W izzard S oftware C orpora tion W orlds .com Inc. W ynds torm C orporation XING AG Y D O nline C orp. Y nk K orea Inc. H igh L ow Average Median C urrency US D KR W JPY US D US D US D US D GBP US D US D US D US D TWD US D US D C AD E UR MY R US D US D US D US D KR W US D C AD E UR TWD JPY E UR US D US D US D JPY JPY KR W US D US D C AD AU D C AD HK D C AD US D US D US D JPY SEK AU D C HF KR W HK D US D C AD US D JPY INR US D US D US D C AD US D US D US D US D KR W US D US D US D US D US D US D US D HK D US D US D US D US D C AD US D US D US D US D US D US D US D US D E UR KR W KR W Ticker A C LZ A 052790 3838 A S MH B S GC B W AV B YOC A IM:B G T BWBA C HIN.A C YOU CGW Y G T S M:3083 C LK Z CWR L T S X:C X C M:DA DXN DIB Z DG L P DG T W DP DM A 041060 E XT I T S X:F MN FR G 6180 3812 G E O 1V GA G IG M GR VY T S E :3632 3765 A 047080 IAC I IAS A .E IE E A S X:J MB T S X:K AB 3888 T S XV :L M LV W D L OO K MA G Y 2121 MT G B MK B MY R N A 095660 777 NT E S T S X:NL N N XP C 2497 590057 OTE X OP W V PWR D T S XV :P N QP S A R BCI S NDA S FLY A 066270 S TVI S NMN S MV I S C LW S OHU L OV S P XA 700 K IDS .Q NC T Y TS CM TREE T S XV :U S S U NT D U OMO V C LK V OIS W ZE N W ZE W DDD W Y ND O 1B C A 052770 A 023770 E xchange OTCB B K OS E TS E OTCP K OTCB B OTCB B OTCB B AIM OTCP K Na s da qG S Na s da qG S OTCP K GTS M OTCB B OTCB B TS X CM K LS E OTCP K OTCB B OTCB B OTCB B K OS E OTCP K TS X XT R A GTS M TS E HL S E NY S E Na s da qG S Na s da qG M TS E OS E K OS E Na s da qG S OTCB B T S XV AS X TS X S E HK T S XV OTCP K Na s da qG M OTCB B TS E OM AS X SWX K OS E S E HK Na s da qG S TS X OTCP K TS E BS E Na s da qG S Na s da qG S Na s da qG S T S XV OTCB B RTS Na s da qG S Na s da qG S K OS E OTCB B OTCP K OTCP K OTCB B Na s da qG S AME X OTCB B S E HK OTCP K Na s da qG S Na s da qG M Na s da qG M T S XV Na s da qG S OTCB B Na s da qG S OTCB B Na s da qG M AME X OTCB B OTCP K XT R A K OS E K OS E US D Market C ap ($m) 20. 4 119.5 24. 3 32. 9 1.9 1.0 3.0 5.1 5.9 269.2 1,897. 5 0.0 1,186. 5 0.6 5.7 81. 1 168.2 40. 5 0.0 4.6 32. 8 17. 7 34. 6 13. 3 86. 8 67. 7 217.8 73. 9 78. 9 1,587. 4 237.7 40. 6 2,227. 9 216.5 63. 2 2,630. 2 8.5 8.2 14. 0 0.6 1,033. 9 11. 3 1.0 19. 2 8.6 1,106. 3 3,170. 3 8.3 200.7 734.0 344.4 5,368. 6 77. 1 38. 5 33. 2 21. 2 2,156. 0 208.0 2,286. 3 54. 7 16. 6 222.0 3,304. 2 404.6 255.8 2.2 0.0 0.0 22. 6 2,189. 7 53. 5 7.3 34,735.2 0.2 185.9 75. 9 79. 6 0.8 695.3 5.9 882.4 5.5 35. 1 24. 6 5.2 1.8 252.5 82. 0 19. 6 C urrent P ric e 0.73 16, 450 40, 000 0.76 0.03 0.04 0.06 0.01 0.07 2.54 34.50 0.00 457.50 0.01 0.06 1.35 7.09 0.62 0.00 0.06 1.20 0.33 570.00 0.30 1.80 18.05 46.50 68, 300 0.06 7.01 4.36 1.46 4, 450 169, 000 3, 445 19.93 0.12 0.17 0.33 0.01 7.33 0.99 0.03 1.12 0.02 642,000.00 335.00 0.09 4.68 41,550.00 5.05 41.48 0.72 0.69 24,000.00 29.15 38.24 2.49 45.37 1.74 1.30 1.60 49.13 15.76 7,290.00 0.20 0.00 0.01 0.51 56.94 2.60 0.15 148 0.01 7.41 2.48 7.30 0.04 8.22 0.07 10.30 0.01 2.96 0.49 0.10 0.10 32.70 6,520.00 4,380.00 1 Wk 4.3% 6.5% -15.6% 8344.4% -3. 0% 11.1% -14.3% 0.0% 133. 3% 0.8% 4.1% -86.7% 3.0% 7.7% 0.0% -3. 6% -3. 6% -1. 6% 20.0% 31.1% -20.0% -17.5% 0.0% 20.0% 0.0% -3. 3% 3.2% -5. 4% 0.0% -3. 7% 14.1% -7. 0% -17.7% -17.7% -3. 8% 1.6% 9.2% -10.5% -2. 9% -50.0% -3. 8% 1.0% 0.0% -4. 3% 111. 1% -13.2% 3.7% 4.7% -2. 3% 5.9% -1. 9% -1. 2% 5.9% -8. 0% -9. 8% -5. 5% -2. 0% 15.8% -7. 6% -1. 1% -7. 1% 0.0% -2. 5% 1.4% 2.0% -50.0% -33.3% -20.8% -7. 3% -1. 6% -2. 6% 0.0% 6.7% 0.0% -6. 0% 1.2% -6. 2% -30.0% -1. 3% -15.0% -1. 0% -12.0% -4. 2% 3.7% 0.0% 0.0% 1.2% -8. 4% 9.0% 8344.4% -86.7% 92.5% -1. 3% 1 Mth 21.7% 4.1% -18.4% 5328.6% -17.9% -31.4% -50.4% -14.5% 133.3% 3.3% 15.8% -86.7% -3.7% -12.5% 0.0% 8.0% -6.8% -5.3% NM 0.0% -40.0% -8.3% -17.4% -14.3% 30.4% 0.3% -7.7% -24.1% 20.0% -1.3% -10.5% -14.1% -7.7% -23.2% -15.9% 4.8% 20.1% 13.3% -13.2% -99.2% -2.5% 0.0% -22.0% -10.4% 58.3% 0.0% 4.2% 12.5% 2.4% 12.1% 2.0% 7.8% -16.3% 15.0% -11.1% -19.7% -5.0% -3.1% 7.5% 1.8% -5.8% 6.7% 3.1% -1.5% -12.9% -42.9% -47.4% -76.4% -16.4% -12.0% 5.7% 7.1% 8.0% 0.0% -6.6% -17.1% -5.6% -12.5% -6.9% -40.9% -23.7% 32.0% 12.6% 10.8% 0.0% 0.0% -11.6% -20.1% 13.5% 5328.6% -99.2% 54.9% -4.3% 3 Mth 28.1% -22.2% -21.3% 5328.6% 62.4% -42.6% -66.7% -14.5% -69.6% -3. 8% -6. 9% -86.7% 16.3% 27.3% 0.0% -17.7% 15.8% 22.8% 20.0% 7.3% -7. 7% -13.2% -30.5% 275. 0% 50.0% 25.2% -17.0% -35.3% 20.0% -9. 4% -6. 2% -31.5% 11.7% -26.5% -14.2% 7.4% -19.9% 240. 0% -12.0% -99.2% -10.2% -1. 0% -46.7% -9. 0% 192. 3% 5.4% 14.3% 28.6% 8.8% 33.2% -16.8% 0.2% -37.9% -1. 4% -24.5% -16.4% -1. 7% -16.2% 14.7% 4.8% -7. 1% 52.4% 3.8% 7.0% -25.5% -50.0% -50.0% -94.8% -22.7% -7. 1% 20.1% -34.8% 29.2% -53.3% -12.0% 6.4% -21.7% -22.2% 11.8% -62.2% -0. 8% 20.0% 13.0% -0. 5% 11.1% 0.0% 20.0% -25.5% -2. 7% 5328.6% -99.2% 59.6% -3. 8% 6 Mth 82.5% -0.3% -26.5% 50566.7% 39.1% -61.1% -95.1% -24.7% -76.5% 81.4% 17.3% 0.0% 48.1% 133.3% -33.3% -25.8% 16.3% 59.0% -88.0% 293.3% -40.0% -50.7% -40.6% 100.0% 89.5% 125.6% 7.6% -25.8% 20.0% -13.3% -28.6% 32.7% 65.7% -2.8% -38.5% 28.1% -54.7% 78.9% -21.4% -98.6% 44.6% -13.9% -54.3% -20.0% 58.3% 46.6% 39.0% 28.6% -21.2% 30.0% -8.2% 43.0% -7.7% -1.4% -20.4% -32.9% 21.6% 39.9% 127.3% -3.3% 26.2% 62.4% -9.5% 11.5% -29.2% -62.3% -69.7% -1.0% -36.3% 4.3% 15.6% -65.9% 86.5% -44.0% -20.0% 27.2% -42.9% -12.5% 19.1% -91.4% -1.1% -26.7% -33.0% -15.9% -33.3% 11.1% 2.2% -40.7% -41.7% 50566.7% -98.6% 572.2% -2.8% 1 Yr 82.5% 85.2% 20.1% 25233. 3% 39.1% -83.3% -94.3% -1.3% -41.7% 262.9% NM -80.0% 511.6% -90.0% -70.0% 285.7% 10.7% 69.9% -97.6% 47.5% -40.0% -56.0% 14.0% 471.4% 500.0% 336.0% 272.0% -52.2% 50.0% 16.3% 15.0% 108.6% NM 69.3% 18.4% 33.5% 140.2% 183.3% -21.4% -99.4% 266.5% -16.1% -54.3% -5.5% 58.3% 8.6% 157.7% 125.0% -19.3% 556.9% 107.8% 160.9% 132.3% -44.8% -59.1% -44.8% 47.5% 398.0% 188.4% 50.0% -39.3% 6.7% 115.9% 146.3% 68.0% -73.2% -99.3% -99.3% -71.7% 51.8% -14.5% -37.5% 270.5% -99.2% -32.1% -18.7% 225.9% -80.6% 47.6% -56.1% 87.6% -12.0% 294.7% -26.1% -28.6% -50.0% 26.8% 20.7% -26.9% 25233. 3% -99.4% 351.3% 18.4% 52 Week -8. 8% -54.3% -51.8% 0.0% -43.9% -87.9% -96.8% -52.4% -97.6% -35.2% -28.7% -93.3% -11.8% -97.0% -87.2% -32.2% -13.5% -10.1% -97.6% -40.4% -65.7% -63.3% -50.9% -70.3% -16.3% -16.0% -32.4% -55.1% 0.0% -26.7% -43.6% -44.5% -22.1% -39.6% -48.1% -6. 3% -57.1% -37.0% -34.0% -99.4% -22.6% -32.2% -87.2% -38.1% -36.7% -18.8% -1. 5% -14.3% -34.2% -7. 5% -29.4% -14.5% -44.6% -52.4% -68.0% -60.9% -7. 7% -20.4% -10.1% -19.1% -44.7% -5. 9% -24.4% -13.1% -43.3% -81.5% -99.5% -99.8% -72.7% -21.2% -17.5% -66.7% -3. 1% -99.3% -55.5% -33.7% -44.1% -65.0% -13.1% -93.6% -26.1% -71.3% -36.7% -71.8% -56.5% -80.4% -13.9% -47.4% -49.7% 0.0% -99.8% -44.3% -40.4% 808.7 Figure 19. Price Performance Source. Capital IQ
Slide 17: Page 17 C omparable C ompany Analys is > Web 2.0 Valuation Multiples C ompany Name Accelerize New Media, Inc. Actoz S oft C o., Ltd. AQ Intera ctive, Inc. As s ocia ted Media Holdings Inc. B igs tring C orp. B etawave C orpora tion B eyond C ommerce, Inc. B right T hings plc B roadW ebAs ia Inc. C DC C orp. C hangyou.com Limited C hina G atewa y C orpora tion C hines e G amer Interna tional C L IC K E R Inc. C ornerW orld C orporation C yberplex Inc. DA DA S pA DXN Holdings B hd Dibz Interna tiona l, Inc. DigitalP os t Interactive, Inc. DigitalT own, Inc. Dolphin Digital Media, Inc. E olith C o. L td. E xtens ions , Inc. F luid Mus ic C a nada, Inc. F rogs ter Interactive P ictures A G G amania Digital E ntertainment C o., Ltd. G ameO n C o Ltd. G eoS entric Oyj G iant Interactive G roup, Inc. G igaMedia Ltd. G ravity C o., Ltd G ree, Inc. G ungH o O nline E nterta inment, Inc. Ha nbitS oft, Inc. IAC /InterActiveC orp. IAS E nergy, Inc. is eemedia Inc. J umbuck E ntertainment Limited K A B Dis tribution Inc. K ings oft C o. Ltd. Lingo Media C orpora tion LiveW orld Inc. LookS ma rt, L td. Magnitude Information S ys tems Inc. Mixi, Inc. Modern T imes G roup Mtg AB MOK O .mobi Limited Myriad G roup AG NE OW IZ G ames C orporation NetDra gon W ebS oft, Inc. Netea s e.com Inc. NeuLion Incorporated NeXplore C orporation Ngi G roup Inc. Northgate T echnologies Limited O pen T ext C orp. O penwave S ys tems Inc. P erfect W orld C o., Ltd. P N I Digital Media Inc. Q uepa s a C orp. O AO R B C Information S ys tems S handa Interactive E nterta inment Ltd. S hutterfly, Inc. S K C ommunications C o., Ltd. S N AP Interactive, Inc. S N M G lobal Holdings S ocial Media V entures Inc. S ocialwis e, Inc. S ohu.com Inc. S park N etworks , Inc. S pectrumDN A, Inc. T encent Holdings Ltd. T he P a rent C ompany T he9 L imited T heS treet.com, Inc. T ree.C om, Inc. Unis erve C ommunications C orp. United Online Inc. UO MO Media, Inc V a lueC lick Inc. V O IS , Inc. W ebzen Inc. W izzard S oftware C orporation W orlds .com Inc. W ynds torm C orporation XIN G AG Y D Online C orp. Y nk K orea Inc. High Low Average Median S ec tor Direct Marketing G aming G aming Mobile Ins ta nt Mes s aging Media S ocial Networking S ocial Networking S ocial Networking G aming G aming Mobile G aming Direct Marketing C ontent A dvertis ing S ocial Networking S ocial Networking S NS Apps C ontent S ocial Networking S ocial Networking G aming C ontent Media G aming G aming G aming Mobile G aming G aming G aming S ocial Networking Media G aming Media V ideo C ontent S ocial Networking C ontent G aming L earning S ocial Networking Direct Marketing S ocial Networking S ocial Networking Media S ocial Networking Mobile G aming G aming G aming V ideo C ontent Media Direct Marketing C ollabora tion Mobile G aming Digita l Ima ging S ocial Networking Media G aming Digita l Ima ging S earch Dating Media S ocial Networking S ocial Networking G aming S ocial Networking Media P orta l Media G aming Media P orta l S ocial Networking Media Media Media S ocial Networking G aming P odca s ting C ontent C ontent S ocial Networking G aming G aming C ountry U nited S ta tes S outh K orea J apan U nited S ta tes U nited S ta tes U nited S ta tes U nited S ta tes U nited K ingdom U nited S ta tes H ong K ong C hina U nited S ta tes T a iwa n U nited S ta tes U nited S ta tes C ana da Italy Mala ys ia U nited S ta tes U nited S ta tes U nited S ta tes U nited S ta tes S outh K orea U nited S ta tes U nited S ta tes G erma ny T a iwa n J apan F inland C hina T a iwa n S outh K orea J apan J apan S outh K orea U nited S ta tes C ana da C ana da Aus tra lia C ana da C hina C ana da U nited S ta tes U nited S ta tes U nited S ta tes J apan S weden Aus tra lia S witzerla nd S outh K orea C hina C hina C ana da U nited S ta tes J apan India C ana da U nited S ta tes C hina C ana da U nited S ta tes R us s ia C hina U nited S ta tes S outh K orea U nited S ta tes U nited S ta tes U nited S ta tes U nited S ta tes C hina U nited S ta tes U nited S ta tes C hina U nited S ta tes C hina U nited S ta tes U nited S ta tes C ana da U nited S ta tes C ana da U nited S ta tes U nited S ta tes S outh K orea U nited S ta tes U nited S ta tes U nited S ta tes G erma ny S outh K orea S outh K orea P rimary E xc hange OTCB B K OS E TS E OTCP K OTCB B OTCB B OTCB B AIM OTCP K N as da qG S N as da qG S OTCP K GTS M OTCB B OTCB B TS X CM K LS E OTCP K OTCB B OTCB B OTCB B K OS E OTCP K TS X XT R A GTS M TS E H LS E NY S E N as da qG S N as da qG M TS E OS E K OS E N as da qG S OTCB B T S XV AS X TS X S E HK T S XV OTCP K N as da qG M OTCB B TS E OM AS X SWX K OS E S E HK N as da qG S TS X OTCP K TS E BS E N as da qG S N as da qG S N as da qG S T S XV OTCB B R TS N as da qG S N as da qG S K OS E OTCB B OTCP K OTCP K OTCB B N as da qG S AME X OTCB B S E HK OTCP K N as da qG S N as da qG M N as da qG M T S XV N as da qG S OTCB B N as da qG S OTCB B N as da qG M AME X OTCB B OTCP K XT R A K OS E K OS E Ticker AC LZ A052790 3838 AS MH BSGC B W AV B YOC AIM:B G T BWBA C HIN.A C Y OU CGW Y G T S M:3083 C LK Z CW R L T S X: C X C M:DA DXN DIB Z DG L P DG T W DP DM A041060 E XT I T S X:F MN FR G 6180 3812 G E O1V GA G IG M GR VY T S E : 3632 3765 A047080 IAC I IAS A.E IE E AS X:J MB T S X:K AB 3888 T S XV : LM LV W D L OOK MA G Y 2121 MT G B MK B MY R N A095660 777 NT E S T S X:NL N NXP C 2497 590057 OT E X OP W V PWRD T S XV :P N QP S A R BCI S NDA S FLY A066270 S TVI S NMN S MV I S CLW S O HU L OV S P XA 700 K IDS .Q NC T Y TS CM TREE T S XV :US S U NT D UO MO V CLK V OIS W ZE N W ZE W DDD W Y ND O1B C A052770 A023770 US D Market C ap ($m) 20.4 119.5 24.3 32.9 1.9 1.0 3.0 5.1 5.9 269.2 1,897.5 0.0 1,186.5 0.6 5.7 81.1 168.2 40.5 0.0 4.6 32.8 17.7 34.6 13.3 86.8 67.7 217.8 73.9 78.9 1,587.4 237.7 40.6 2,227.9 216.5 63.2 2,630.2 8.5 8.2 14.0 0.6 1,033.9 11.3 1.0 19.2 8.6 1,106.3 3,170.3 8.3 200.7 734.0 344.4 5,368.6 77.1 38.5 33.2 21.2 2,156.0 208.0 2,286.3 54.7 16.6 222.0 3,304.2 404.6 255.8 2.2 0.0 0.0 22.6 2,189.7 53.5 7.3 34,735.2 0.2 185.9 75.9 79.6 0.8 695.3 5.9 882.4 5.5 35.1 24.6 5.2 1.8 252.5 82.0 19.6 34,735.2 0.0 808.7 40.5 TE V/L TM R evenue 5.7x 0.8x 0.0x 47.2x 0.8x 0.7x 6.2x 0.0x 16.2x 0.3x 2.4x 0.7x 0.9x 0.7x 6.6x 32.1x 2.4x 15.4x 6.9x 1.3x 14.5x 0.9x 10.1x 1.5x 0.8x 0.7x 4.7x 0.5x 7.4x 8.7x 7.0x 1.9x 10.6x 3.1x 3.5x 2.2x 3.1x 25.0x 0.3x 2.7x 0.5x 0.8x 2.5x 0.0x 1.3x 1.3x 0.2x 1.1x 4.5x 3.3x 1.0x 27.6x 0.2x 0.2x 0.2x 0.3x 1.0x 8.0x 1.3x 4.8x 3.4x 1.6x 1.6x 47.2x 0.0x 5.1x 1.6x TE V/ NTM R evenue 0.8x 5.1x 16.5x 0.9x 1.2x 14.7x 1.6x 0.9x 5.9x 0.7x 0.5x 6.0x 5.7x 1.8x 2.7x 1.5x 2.4x 0.5x 3.7x 2.1x 1.0x 1.2x 2.8x 18.0x 0.2x 0.2x 0.2x 1.0x 1.4x 2.6x 1.2x 18.0x 0.2x 3.4x 1.5x TE V/L TM E B ITDA 3. 4x 10.5x 10.1x 27.9x 6. 3x 6. 8x 7. 8x 17.4x 6. 9x 35.1x 12.0x 1. 1x 16.7x 21.1x 13.1x 13.0x 7. 7x 10.5x 16.6x 1. 4x 22.8x 0. 4x 10.8x 20.4x 0. 6x 7. 5x 5. 0x 5. 8x 5. 5x 36.4x 4. 4x 5. 5x 11.8x 7. 3x 14.9x 36.4x 0. 4x 11.6x 10.1x TE V/NTM E B ITDA 7.4x 7.9x 26.8x 6.2x 4.2x 10.8x 5.1x 1.2x 11.6x 17.9x 12.9x 9.1x 4.3x 8.8x 5.2x 7.0x 6.8x 5.7x 6.2x 6.3x 33.9x 12.8x 6.5x 3.9x 5.4x 8.3x 4.3x 33.9x 1.2x 9.1x 6.8x P /L TM E P S 16.9x 12.8x 36.4x 7.3x 5.9x 23.2x 7.4x 1.9x 9.4x 0.0x 37.7x 46.8x 11.3x 11.2x 4.0x 20.6x 65.3x 55.2x 17.0x 38.2x 14.0x 3.0x 47.0x 3.2x 2.3x 3.8x 13.3x 17.7x 70.9x 2.1x 0.0x 20.0x 25.9x 8.7x 70.9x 0.0x 19.4x 13.1x P /NTM E P S 11.1x 22.6x 19.3x 1.3x 7.7x 14.6x 8.8x 21.3x 29.2x 2.9x 15.5x 43.1x 16.3x 13.2x 11.2x 16.7x 1.2x 12.8x 35.1x 14.3x 13.9x 6.5x 13.7x 93.3x 14.7x 44.6x 91.8x 6.0x 16.8x 17.6x 6.2x 93.3x 1.2x 20.7x 14.6x P /TangB V 1.9x 0.4x 0.2x 9.9x 17.4x 3.2x 0.8x 3.1x 8.2x 8.3x 2.8x 0.9x 65.2x 0.3x 2.0x 0.0x 17.9x 16.1x 1.8x 1.3x 16.3x 1.3x 0.0x 5.7x 20.3x 0.4x 0.8x 7.1x 8.5x 19.3x 1.8x 0.9x 5.5x 0.6x 2.9x 1.5x 19.1x 0.9x 2.4x 1.2x 4.0x 24.1x 72.8x 31.6x 0.1x 1.0x 1.2x 4.8x 34.7x 0.0x 8.1x 2.7x 1.0x 72.8x 0.0x 8.8x 2.7x Figure 20. Valuation Comparison Source. Capital IQ
Slide 18: Page 18 C omparable C ompany Analys is > Web 2.0 S ummary by C ountry C ompany Name United S tates C a na da C hina S outh K orea J a pa n T a iwa n Aus tralia G erma ny S witzerla nd Hong K ong F inla nd Ita ly United K ingdom India S weden R us s ia Ma lays ia Norwa y G rand Total 38 10 10 8 6 3 2 2 1 1 1 1 1 1 1 1 1 1 89 US D Market C ap ($m) C hina U nited S ta tes J a pan S weden C anada T a iwa n S outh K orea G ermany Hong K ong Ita ly R us s ia S witzerla nd F inland Malays ia India Aus tralia U nited K ingdom Norway G rand Total 49, 633. 4 5, 811. 3 3, 871. 5 2, 974. 2 2, 488. 2 1, 733. 6 1, 527. 4 317. 0 294. 6 165. 4 160. 9 92. 0 65. 9 39. 8 31. 0 22. 1 6. 0 0. 1 69,234.6 Avg US D Market C ap ($m) C hina S weden J apan T aiwan Hong K ong C anada S outh K orea Ita ly R us s ia G ermany U nited S ta tes S witzerla nd F inland Malays ia India Aus tralia U nited K ingdom Norway G rand Total 4,963. 3 2,974. 2 645. 3 577. 9 294. 6 248. 8 190. 9 165. 4 160. 9 158. 5 152. 9 92. 0 65. 9 39. 8 31. 0 11. 0 6. 0 0. 1 777.9 US D L TM Total R ev ($m) C hina United S tates S weden C a na da S outh K orea J a pa n T a iwa n Hong K ong Ita ly R us s ia India Ma lays ia G erma ny S witzerla nd Aus tralia F inla nd Norwa y United K ingdom G rand Total 4,152. 4 3,887. 3 1,982. 6 1,015. 0 707. 3 634. 4 385. 8 361. 6 242. 6 156. 2 82. 8 77. 1 68. 7 40. 0 17. 8 5. 5 2. 3 0. 0 13,819.5 US D L TM Total E B ITDA ($m) C hina S weden United S tates C a na da J a pa n S outh K orea T a iwa n Ita ly Hong K ong R us s ia G erma ny Ma lays ia Aus tralia S witzerla nd Norwa y United K ingdom F inla nd India G rand Total 2, 070. 2 304. 6 290. 0 200. 0 186. 0 121. 9 59. 8 31. 9 25. 1 20. 4 12. 5 11. 1 4. 5 0. 8 -1. 1 -2. 7 -17. 5 -41. 4 3,276.1 E B ITDA % C hina A us tralia T aiwan J apan S weden Mala ys ia Italy R us s ia S outh K orea Hong K ong S witzerla nd C anada G ermany U nited S ta tes India Norway U nited K ingdom F inland G rand Total 48. 8% 42. 8% 37. 1% 24. 2% 15. 4% 14. 4% 13. 1% 13. 1% 12. 7% 6. 9% 1. 9% -8. 5% -9. 1% -21. 9% -50. 0% -50. 6% NA NA 5.1% Figure 21. Comparison by Country Source. Capital IQ C omparable C ompany Analys is > Web 2.0 S ummary by E xc hange C ompany Name OT C B B Na s daqG S OT C P K K OS E TS E Na s daqG M TS X T S XV S E HK AME X AS X XT R A GTS M SWX HL S E CM BS E NY S E OS E AIM OM RTS K LS E OT C NO G rand Total 18 14 11 6 5 5 4 4 3 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 89 US D Market C ap ($m) S E HK Nas da qG S TS E OM NY S E K OS E GTS M XT R A OS E Nas da qG M TS X OT C B B CM R TS SWX T S XV AME X HLS E OT C P K K LS E BS E AS X AIM OT C NO G rand Total 31, 520. 4 24, 385. 7 3, 569. 2 2, 974. 2 1, 750. 4 1, 437. 0 1, 430. 0 317. 0 302. 3 279. 7 243. 6 230. 9 165. 4 160. 9 92. 0 76. 6 68. 5 65. 9 65. 8 39. 8 31. 0 22. 1 6. 0 0. 1 69,234.6 Avg US D Market C ap ($m) S E HK OM NY S E Nas da qG S GTS M TSE OS E K OS E CM R TS XT R A SWX HLS E TSX Nas da qG M K LS E AME X BS E T S XV OT C B B AS X AIM OT C P K OT C NO G rand Total 10,506. 8 2,974. 2 1,750. 4 1,741. 8 715. 0 713. 8 302. 3 239. 5 165. 4 160. 9 158. 5 92. 0 65. 9 60. 9 55. 9 39. 8 34. 2 31. 0 19. 1 12. 8 11. 0 6. 0 6. 0 0. 1 777.9 US D L TM Total R ev ($m) OM S E HK Na s daqG S CM NY S E RTS OS E K OS E TS E GTS M BSE Na s daqG M K LS E TS X SWX XT R A AME X OT C P K T S XV AS X HL S E OT C B B OT C NO AIM G rand Total 1,982. 6 540. 0 498. 6 242. 6 198. 5 156. 2 116. 1 106. 0 103. 7 101. 1 82. 8 82. 4 77. 1 46. 4 40. 0 34. 3 27. 9 16. 5 12. 0 8. 9 5. 5 2. 3 2. 3 0. 0 13,819.5 US D L TM Total E B ITDA ($m) Na s daqG S S E HK OM TS E NY S E K OS E GTS M CM OS E RTS Na s daqG M XT R A K LS E AME X AS X SWX OT C NO AIM TS X T S XV HL S E OT C P K BSE OT C B B G rand Total 1, 796. 0 767. 5 304. 6 160. 2 124. 1 103. 2 59. 8 31. 9 25. 8 20. 4 15. 6 12. 5 11. 1 6. 2 4. 5 0. 8 -1. 1 -2. 7 -4. 3 -4. 6 -17. 5 -34. 1 -41. 4 -62. 4 3,276.1 E B ITDA % NY S E AS X S E HK GTS M Nas da qG S TSE OS E OM K LS E CM R TS K OS E Nas da qG M T S XV S WX XT R A A ME X TSX OTCB B OTCP K BSE O T C NO A IM HLS E G rand Total 62. 5% 42. 8% 40. 6% 37. 1% 30. 4% 24. 6% 22. 2% 15. 4% 14. 4% 13. 1% 13. 1% 9. 6% 7. 7% 5. 6% 1. 9% -9. 1% -31. 8% -34. 7% -38. 8% -41. 5% -50. 0% -50. 6% NA NA 5.1% Figure 22. Comparison by Exchange Source. Capital IQ
Slide 19: Page 19 F inanc ing - L as t Three Months (US $ m) F in. Amount (Million) Month S ep-09 C ompany Name Twitter E ns equence L ivebookings Mzinga InXpo J obvite R iot Games NextB io Imeem Vuclip Y uMe B ooyah NeoE dge Alliance Health Networks Unis fair C onduit L abs Moc apay F wix Vantrix Mas hL ogic G reys tripe L oomia F ourS quare E duF ire F luther Trans G aming Inc. OnL ive S ep-09 Total Oct-09 DailyMotion P opC ap Games E ngine Yard HubS pot J ive S oftware S pigit Ooyala S c anS cout B ox.net R eality Mobile W atercooler Vdopia S ometric s Amie S treet ViVu F izzbac k Technorati Onehub DataS ync DailyB ooth Hot P otato L inkedex S tatus Net IngB oo C hango C redit K arma L is tia Oct-09 Total Nov-09 P laydom S ezmi Millennial Media E vernote C ubeTree Alic e.c om E ventbrite AppNexus Altruik B lekko C redit K arma P layfire Adfonic S c oopler Nov-09 Total G rand Total US A US A US A US A US A US A US A US A US A US A US A UK UK US A 0.6 0.5 1.1 6.2 2.0 52.3 110.1 24.0 132.7 52.0 147.3 2.5 27.6 110.0 2.5 2.1 4.7 2.5 10. 0 8.0 6.0 6. 0 5. 0 US A UK C a na da US A C a na da US A 0.5 0.4 4.5 40.9 43.0 25. 0 16. 0 56.5 67.4 2.0 US A US A US A 1.0 0.9 0.8 0.7 1.0 1.0 US A US A UK US A US A 1.3 1.2 3.0 2.6 2.0 US A US A US A US A 4.7 4.0 3.9 US A US A US A 6.5 5.5 F rance US A US A US A US A US A 12. 0 10. 0 10. 0 8.5 7. 1 22.5 19. 0 16. 0 US A UK US A US A US A US A US A US A US A US A US A US A US A US A US A US A US A C ana da US A US A US A US A US A US A C ana da US A 0.6 2.0 16.9 52.3 27.9 25. 3 23.1 110.0 232.8 25.3 22.5 19.0 16.0 12.0 10.0 10.0 8. 5 7. 1 6. 5 5. 5 4. 7 4. 0 3. 9 3. 0 2. 6 2. 0 1. 3 1. 2 1. 0 1. 0 1. 0 0. 9 0. 8 0. 7 0. 5 0. 4 171.3 43.0 25.0 16.0 10.0 8. 0 6. 0 6. 0 5. 0 4. 7 2. 5 2. 5 2. 1 0. 6 0. 5 131.9 536.0 0.6 0. 5 1. 5 1.4 1.3 2.5 2. 0 2.8 2. 6 3.0 3. 0 5.0 4. 0 3. 3 3.1 6.0 6.0 5. 0 9.0 8.3 8.0 8. 0 16. 0 10. 0 20.0 C ountry Type of financing Angel/S eed Debt financing S eries A S eries B S eries C S eries D S eries E 100.0 G rand Total 100.0 20.0 16.0 10.0 9. 0 8. 3 8. 0 8. 0 6. 0 6. 0 5. 0 5. 0 4. 0 3. 3 3. 1 3. 0 3. 0 2. 8 2. 6 2. 5 2. 0 1. 5 1. 4 1. 3 0. 6 0. 5 Figure 23. Financing, Last Three Months Source. Company reports
Slide 20: Page 20 C ompany Des c riptions - C urrent Month C apital Market Ac tivity C ompany Alice.com Altruik AppNexus HQ United S ta tes United S ta tes United S ta tes Webs ite www. alice. com www. altuik. com www. appnexus . com Des cription Alice. com, Inc. owns and operates an online reta il platform that offers hous ehold products . T he company wa s founded in 2008 and is bas ed in Middleton, W is cons in. Altruik , Inc. provides s earch engine optimization s olutions for optimiz ing the W ebs ite content to ens ure vis ibility and page rank ing. T he company was founded in 2006 and is bas ed in New Y ork, New Y ork. AppNexus , Inc. develops and manages online ad exchange in the United S tates and the United K ingdom. It provides on-dema nd production infras tructure. It als o offers AppNexus cloud, an ecos ys tem in which enterpris es collaborate a nd s hare indus try-s pecific information without the latency, bandwidth, and s ecurity is s ues of the public Internet. T he company was founded in 2007 and is bas ed in New Y ork, New Y ork. B lek ko, Inc. provides internet s earch s olutions . B lekk o, Inc. was founded in 2007 a nd is bas ed in United S tates . C redit K arma is the cons umer’s advoca te for demys tifying credit and has a ra nge of tools a nd information res ources to help them monitor a nd manage the credit as pect of their financial hea lth. C redit K a rma’s goal is to help cons umers eas ily diges t the contents of their credit report and unders tand what makes up their credit s core. C redit K arma works with a range of partners , including mortgage lenders , credit card providers , bank s , and wireles s providers . C ubeT ree, Inc. provides s ocial networking s oftware. It offers C ubeT ree AP I, a R E S T W eb s ervices AP I, which allows applications to query a nd manipulate the res ources provided by the C ubeT ree W eb application. C ubeT ree provides its s oftware as s ervice. T he compa ny was founded in 2008 and is bas ed in R edwood C ity, C alifornia. Mollyguard C orpora tion, doing bus ines s as E ventbrite, provides online regis tra tion s olutions to event organizers . It offers online event management and ticketing s ervices . T he company a ls o engages in publis hing branded event pages ; promoting events online; and s elling event tick ets through the pers onalized event regis tration W eb page. In addition, it offers an online events marketplace that enables individuals , bus ines s es , and organiza tions of various s izes mana ge, promote, and s ell their events . T he compa ny s erves event organizers , a s well as various non-profits , univers ities , libra ries , and organiz ations . Mollyguard C orporation was founded in 2006 and is ba s ed in S an F rancis co, C alifornia. E vernote C orporation offers handwriting recognition and digital ink s oftware and technologies for us ers , s ys tem integrators , va lue added res ellers , and original equipment ma nufacturers in C alifornia. T he company’s products include riteP en, a handwriting recognition and navigation s oftware for Micros oft W indows -bas ed pen-ena bled computers , which converts text for us e in various W indows applications , including W ord, E xcel, Outlook, and others ; and riteF orm, a s oftware developer tool for multi-pla tform ha ndwriting recognition on penenabled devices , as well a s for the mobile enterpris e and s mall bus ines s markets . Its products als o compris e riteS hape, a protected s ha pe a nd chart recognition technology that recognizes , improves , a nd aligns geometrica l s hapes or polylines created in freehand drawings ; and riteS cript, a natural ha ndwriting recognition technology, which runs locally and s erver-s ide for proces s ing of digital ink notes tak en on penenabled devices and recognition of online forms . T he company wa s formerly known as E vernote, LL C and changed its name to E vernote C orpora tion in S eptember 2004, as a res ult of the merger between P en& Internet, Inc. and E vernote, LLC . E vernote C orpora tion is ba s ed in Mountain V iew, C alifornia. Millennial Media , Inc. operates as a mobile media networks company. Its products a nd s olutions include MB rand, a mobile advertis ing network; Decktrade, a performance-bas ed mobile advertis ing network, which enables us ers to build, adjus t, a nalyze, and mana ge their campaigns on cos t-per-click bas is ; Motion, a media mobile a dvertis ing; and Decktrade network that enables us ers to target by content, geography, carrier, device capability, and hands et, for various mobile products or s ervices . T he company was founded in 2006 and is ba s ed in B altimore, Maryland. It has offices in New Y ork, New Y ork; C hicago, Illinois ; a nd Los Angeles , C a lifornia . B lekko C redit K arma United S ta tes United S ta tes www. blekko.com www. creditkarma. com C ubeTree United S ta tes www. cubetree. com E ventbrite United S ta tes www. eventbrite. com E vernote United S ta tes www. evernote. com Millennial Media United S ta tes www. millennialmedia. com Motley F ool United S ta tes www. fool. com T he Motley F ool, Inc. operates as a multimedia financial-s ervices company. T he compa ny provides financia l s olutions for various inves tors . It reaches people each month through its W ebs ite, books , news paper column, televis ion appea rances , and s ubs cription news letter s ervices . T he company’s s ervices include s ubs cription inves tment news letter that provides information on blue-chips , mutual funds , undis covered s mall caps , and growth s tocks , as well as delivers s tock and fund recommendations ; and F ool.com that publis hes articles to offer news , a nalys is , and commentary through a range of dis tribution partners hips primarily with Y a hoo! , MS N, and AO L. Its s ervices als o compris e C AP S , a Motley F ool community members ’ s tock-rating s ervice; a weekly news paper column; books in print on inves ting and pers onalfinance; independent analys is and engaging commentary for bus ines s reporters , as well as radio a nd T V producers ; F ool UK , a financial W ebs ite in the United S tates ; a nd cons umer finance advices that range from buying a home to dealing with taxes , and from managing creditcard debt to s aving for retirement. Its products and s ervices further include credit cards ; online news letter as an inves tment guide; and reports on s ma value s tock res earch, million dollar portfolio s ervice, different portfolios , and s tock advis ory. T he company als o provides information on bonds , broker comparis on, E T F s , index funds , mutual funds , and s tock ideas ; and s aving and s pending, credit and debt, home a nd real es tate, death and T axes , a nd IR As . T he Motley F ool was founded in 1994 a nd is bas ed in Alexandria, V irginia. P hoenix New Media Ltd. operates Internet portals which provide news and entertainment content. P hoenix New Media Ltd. was founded in 2005 and is bas ed in C hina. P hoenix New Media Ltd. operates as a s ubs idiary of P hoenix S atellite T elevis ion Holdings Ltd. P laydom, Inc. offers s ocial games through the Internet. T he company delivers games on F acebook, MyS pace, hi5, T agged, and iP hone. P laydom, Inc. was founded in 2008 and is bas ed in Mountain V iew, C alifornia. P layfis h Limited, a s ocial games company, develops and publis hes video games for s ocial networks . It creates games for people to play together us ing s ocial networks , s uch as F acebook, MyS pace, B ebo, Y ahoo! , iP hone, and iP od touch. T he company als o offers a dvertis ing opportunities , including in-game video ads and s pons ors hips packages . P layfis h Limited wa s founded in 2007 and is headquartered in L ondon, the United K ingdom with additional offices in B eijing, C hina; S an F rancis co, C alifornia; and T roms o, Norway. As of November 9, 2009, P layfis h Limited operates as a s ubs idia ry of E A Interactive. S coopler, Inc. , a real-time s earch engine, aggregates and organiz es content being s ha red on the internet as it happens . It offers s earch options on entertainment, technology, s ports , world a nd bus ines s , s cience, gaming, politics , and lifes tyle topics . T he company wa s incorporated in 2008 and is ba s ed in S an F rancis co, C a lifornia . S ez mi C orporation markets and dis tributes digita l broadca s t and broadband s olutions to the cons umer s ector. T he company provides digita l media receivers and home entertainment content s ervices . It offers equipment and s olutions to integrate cable network programming, on demand movies , Internet bas ed videos , and live broa dcas ting s ervices . S ez mi C orporation wa s founded in 2003 as B uilding B , Inc. and changed its name to S ezmi C orporation in May 2008. T he company is bas ed in B elmont, C alifornia with additiona l offices in S anta Monica, C alifornia and F ort L auderda le, F lorida. wooga G mbH develops and markets cas ua l games for s ocial networks . T he company wa s founded in 2009 and is bas ed in B erlin, G erma ny. P hoenix New Media P laydom P layF is h C hina United S ta tes UK NA www. playdom. com S coopler United S ta tes www. s coopler. com S ezmi United S ta tes www. s ezmi. com wooga G ermany www. wooga. net Figure 24a. Company Descriptions Source. Company reports, Capital IQ, Crunchbase
Slide 21: Page 21 RELEVANT DISCLOSURES APPLICABLE TO: NONE LIST OF DISCLOSURE TERMS: 1. None applicable. ANALYST CERTIFICATION Each analyst of Research Capital Corporation whose name appears in this report hereby certifies that (i) the recommendations and opinions expressed in this research report accurately reflect the analyst’s personal views and (ii) no part of the research analyst’s compensation was or will be directly or indirectly related to the specific conclusions or recommendations expressed in this research report. I n f o r ma t i o n a b o u t Re s e a r ch C a p i t a l C o r p o r a t i o n ’ s Ra t i n g S y s t e m, t h e d i s t r i b u t i o n o f o u r r e s e a r ch t o cl i e n t s a n d t h e p e r ce n t a g e o f r e c o m me n d a t i o n s wh i c h a r e i n e a c h o f o u r r a t i n g c a t e g o r i e s i s a v a i l a b l e o n o u r we b si t e a t ww w. r e s e a r ch c a p i t a l . c o m. T h e i n f o r ma t i o n c o n t a i n e d i n t h i s r e p o r t h a s b e e n d r a wn f r o m s o u r c e s b e l i e ve d t o b e r e l i a b l e b u t i t s a c cu r a c y o r co mp l e t e n e ss i s n o t g u a r a n t e e d , n o r i n p r o vi d i n g i t d o e s R e s e a r c h Ca p i t a l C o r p o r a t i o n a s s u me a n y r e sp o n si b i l i t y o r l i a b i l i t y . R e s e a r ch C a p i t a l C o r p o r a t i o n , i t s d i r e ct o r s , o f f i c e r s a n d o t h e r e mp l o y e e s ma y , f r o m t i me t o t i me , h a v e p o si t i o n s i n t h e s e cu r i t i e s me n t i o n e d h e r e i n . Co n t e n t s o f t h i s r e p o r t c a n n o t b e r e p r o d u c e d i n wh o l e o r i n p a r t wi t h o u t t h e e xp r e ss e d p e r mi s si o n o f R e se a r ch C a p i t a l C o r p o r a t i o n . ( U . S . I n s t i t u t i o n a l Cl i e n t s — Re s e a r ch C a p i t a l U . S. A . I n c. ( a wh o l l y o wn e d s u b si d i a r y o f R e s e a r c h C a p i t a l Co r p o r a t i o n ) a cc e p t s r e s p o n si b i l i t y f o r t h e c o n t e n t s o f t h i s r e p o r t s u b je c t t o t h e t e r ms & l i mi t a t i o n s s e t o u t a b o v e . F i r ms o r i n s t i t u t i o n s r e ce i vi n g t h i s r e p o r t s h o u l d e f f e ct t r a n s a ct i o n s i n s e c u r i t i e s d i sc u s se d i n t h e r e p o r t t h r o u g h R e s e a r ch C a p i t a l U . S . A . I n c. , a B r o k e r - D e a l e r R e g i s t e r e d wi t h t h e U n i t e d S t a t e s S e cu r i t i e s a n d E xc h a n g e C o m mi s si o n ) . Tor on to 4 16. 8 60. 76 00 M ontr eal 51 4. 39 9. 150 0 V anco u ver 60 4. 66 2. 180 0 C al gar y 40 3. 26 5. 740 0 R egi na 306. 566. 7550 www.researchcapital.com