SOFTWARE & SERVICES
9 SEPTEMBER 2009
WEB 2.O WEEKLY
SKYPE SALE LARGEST TRANSACTIO N IN 2009
E BA Y S EL L S SK Y P E; S H AN D A T O L I ST G AM E S U NIT
DAVID SHORE, CFA, MBA 416.860.6784
david.shore@researchcapital.com
Almost four years to the day of announcing the acquisition of Skype, eBay announced last week that it had sold 65% of its Skype unit to a group of private equity investors, led by Silver Lake Partners, for $1.9 billion in cash and a $125 million note. eBay had acquired Skype for over $4 billion in September 2005. Following the successful IPO of Sohu’s Changyou unit in April (+155% since IPO), Shanda announced the proposed $800 million IPO of its Shanda Games unit. Shanda Games generates the vast majority of its revenue from the sale of virtual goods and is highly profitable (31% net profit margin 1H/09). Slow start to financing activity for new school year: W ith only five financing transactions to start September, the largest transaction thus far is the $5 million financing for YuMe (Advertising). The total for September so far is just $12.2 million, averaging $2.4 million per financing. Total capital raised in August was $208.5 million, averaging $7.7 million (27 deals), July on 35 transactions was $191.4 million, averaging $5.5 million, and June (42 deals) was $204.7 million (averaging $4.9 million).
Financing Activity Last Twelve Months
400.0 16.2 350.0 14.6 14.0 300.0 16.0 18.0
12.0 250.0 9.7 (US$m) 200.0 7.7 7.0 150.0 7.0 6.5 7.1 6.6 6.2 5.5 4.9 100.0 4.0 2.4 50.0 2.0 6.0 8.0 10.0 (US$m) 0.0 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Total Apr-09 Average May-09 Jun-09 Jul-09 Aug-09 Sep-09
0.0
*May-09 includes $200m FB investment
A mixed price performance week: Twenty-seven of the companies in our universe had positive stock price performances over the past week (for stocks with prices greater than $1) (Figure 6), with 21 companies showing negative returns on the week. DigitalTown (OTCBB:DGTW ) led the group with a 25.0% return, while Cyberplex (TSX:CX) had the worst return, dropping 14.8% in the week.
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
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THE WEB 2.0 UNIVERSE Ninety-one public Web 2.0 companies: Our W eb 2.0 universe contains 91 companies, with a combined market cap of ~$67 billion (Figure 1). The median market cap for the group is ~$66 million, with average trailing revenue of ~$160 million (median $58 million). The companies are also generally profitable, with a median EBITDA margin of 13.1%. On a valuation basis, the overall average is 6.0x trailing revenue (median 2.1x) and 12.7x trailing EBITDA (median 10.0x). Nineteen 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. C hangyou. com L imited 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 enures , 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 ota l S port O nline AS 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 oozyF ly, Inc. W ynds torm C orpora tion XING AG Y eda ngO 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 9/30/2008 9/30/2008 6/30/2009 6/30/2009 9/30/2008 3/31/2009 5/31/2009 4/30/2009 6/30/2009 6/30/2009 5/31/2009 NA 6/30/2009 5/31/2009 6/30/2009 12/31/2008 6/30/2009 6/30/2009 12/31/2008 6/30/2009 6/30/2009 6/30/2009 6/30/2009 3/31/2009 6/30/2009 6/30/2009 6/30/2009 6/30/2009 6/30/2009 1/31/2009 3/31/2009 6/30/2009 6/30/2009 6/30/2009 3/31/2009 6/30/2009 6/30/2009 6/30/2009 6/30/2009 6/30/2009 12/31/2008 12/31/2008 12/31/2008 6/30/2009 6/30/2009 6/30/2009 6/30/2008 6/30/2009 6/30/2009 6/30/2009 6/30/2009 6/30/2009 6/30/2009 6/30/2009 12/31/2007 6/30/2009 6/30/2009 12/31/2008 6/30/2009 9/30/2008 12/31/2008 6/30/2009 6/30/2009 6/30/2009 6/30/2009 6/30/2009 8/2/2008 12/31/2008 3/31/2009 3/31/2006 6/30/2009 2/28/2009 6/30/2009 4/30/2009 6/30/2009 6/30/2009 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 T OS O 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 ZY F 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 O T C NO 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 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 NO K US D C AD US D 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 Norway 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 United S ta tes G ermany S outh K orea S outh K orea
C urrent P rice
0. 57 17,850 51,000 0. 01 0. 02 0. 07 0. 21 0. 01 0. 23 2. 38 39. 05 0. 02 461 0. 01 0. 06 1 6. 42 0. 57 0. 00 0. 06 1. 75 0. 44 1,035 0. 20 1. 27 19. 20 50. 40 100,600 0. 04 8 4. 79 1. 80 8,120 240,000 4,010 18. 78 0. 14 0. 05 0. 40 1 9 1. 00 0. 05 1. 17 0. 01 538000. 00 300. 00 0. 08 4. 56 38050. 00 6 42. 52 1. 10 1 27800. 00 49. 95 34. 73 2. 80 39. 83 1. 75 1 1. 05 49. 69 13. 34 9000. 00 1 0. 00 0 0. 56 62. 63 2 0 128 0. 01 7. 72 2. 43 0. 03 7. 47 0. 05 7. 32 0 10 0 2. 89 0. 43 0. 10 0. 15 0. 10 32. 25 9,080 4,260
US D Market C ap ($m)
15. 8 124. 8 29. 8 0.6 1.3 2.0 9.7 6.1 19. 5 252. 2 2,147. 8 0.3 1,180. 6 0.6 5.7 73. 3 149. 2 36. 9 0.0 4.2 47. 9 23. 6 60. 8 8.9 62. 0 69. 5 233. 1 104. 5 51. 5 1,732. 3 261. 1 50. 0 1,953. 5 295. 5 71. 3 2,486. 5 9.5 2.4 16. 7 84. 6 1,225. 4 11. 6 1.5 20. 0 4.1 891. 0 2,778. 9 5.7 91. 7 649. 4 400. 3 5,503. 2 116. 7 30. 7 37. 0 35. 8 1,950. 1 233. 3 1,958. 9 55. 7 17. 8 145. 7 3,317. 7 339. 6 305. 8 5.4 0.0 0.0 24. 8 2,400. 9 46. 3 10. 7 29, 970.5 0.3 193. 7 74. 4 0.1 80. 7 1.0 613. 7 12. 0 895. 1 4.1 34. 3 21. 7 5.2 2.6 1.8 243. 7 110. 4 18. 5 29, 970.5 0.0 739.6 65. 7
US D L TM Total R ev ($m)
4. 4 105.3 63. 5 0. 1 0. 1 9. 4 11. 7 0. 3 0. 0 361.6 241.2 6. 7 56. 2 2. 5 3. 9 90. 8 236.8 76. 3 NA 1. 0 NM 0. 6 14. 9 NM 5. 3 3. 3 138.9 78. 7 5. 3 198.5 183.6 47. 5 149.9 114.9 58. 8 1, 392. 3 0. 0 1. 6 16. 4 68. 6 139.1 1. 0 10. 6 56. 8 0. 1 131.5 1, 929. 6 1. 2 40. 0 200.8 89. 3 472.4 21. 5 0. 7 89. 4 81. 9 785.7 191.7 255.6 21. 3 0. 2 150.5 629.0 218.6 186.6 3. 5 2. 0 0. 1 0. 0 485.1 50. 5 0. 1 1, 391. 6 112.0 250.6 67. 0 2. 2 216.6 24. 2 949.8 0. 9 563.6 0. 0 22. 4 5. 3 0. 1 NM NA 57. 6 55. 6 11. 5 1,929. 6 0. 0 161.4 57.6
US D L TM Total E B ITDA ($m)
(3.7) 25. 1 (1.9) (2.3) (1.5) (12. 6) (12. 8) (1.8) (4.6) 25. 1 147.2 (6.6) 31. 5 (1.2) NM 9.8 31. 1 11. 0 NM (1.4) (2.5) (3.4) (3.5) NM (5.1) (6.3) 24. 6 19. 3 (17. 1) 124.1 NM 16. 1 90. 1 25. 5 1.4 52. 7 (0.8) (5.1) 7.0 4.0 61. 4 (1.6) (0.1) (4.4) (2.5) 44. 4 296.5 (2.5) 0.8 53. 9 30. 0 297.4 (13. 0) (6.2) 6.6 (40. 9) 205.1 5.3 142.2 2.3 (10. 6) 19. 7 296.7 27. 3 12. 1 0.9 (0.7) (0.1) (5.6) 209.6 10. 8 (2.5) 680.3 (13. 5) 85. 5 1.9 (1.1) (0.7) 0.1 203.2 (0.5) 99. 0 (1.0) 2.2 (4.5) (0.7) NM NM 16. 6 12. 0 1.2 680. 3 -40.9 38.8 2. 3
E B ITDA %
-83. 3% 23. 8% -2.9% NM NM NM NM NM NM 6.9% 61. 0% -98. 9% 56. 0% -45. 8% NM 10. 8% 13. 1% 14. 4% NM NM NM NM -23. 6% NM -95. 2% NM 17. 7% 24. 5% NM 62. 5% NM 33. 9% 60. 1% 22. 2% 2.3% 3.8% NM NM 42. 8% 5.8% 44. 2% NM -1.2% -7.8% NM 33. 8% 15. 4% NM 1.9% 26. 8% 33. 6% 63. 0% -60. 3% NM 7.4% -50. 0% 26. 1% 2.8% 55. 6% 11. 0% NM 13. 1% 47. 2% 12. 5% 6.5% 27. 0% -34. 8% -60. 6% NM 43. 2% 21. 3% NM 48. 9% -12. 0% 34. 1% 2.9% -50. 6% -0.3% 0.2% 21. 4% -53. 2% 17. 6% NM 9.9% -84. 9% NM NM NM 28. 8% 21. 6% 10. 5% 63. 0% -98. 9% 6.0% 13. 1%
TE V/L TM R evenue
4. 7x 0. 9x 0. 1x 15.6x 37.5x 1. 3x 22.4x 0. 7x 7. 8x 0. 0x 19.8x 0. 3x 4. 1x 0. 6x 0. 8x 0. 7x 6. 3x 42.3x 4. 2x 10.1x 20.6x 1. 5x 0. 4x 9. 7x 1. 0x 12.3x 2. 3x 1. 0x 0. 5x 0. 9x 0. 6x 9. 0x 10.9x 0. 0x 5. 9x 1. 7x 3. 6x 2. 5x 3. 2x 2. 9x 5. 0x 49.2x 0. 4x 2. 5x 0. 6x 0. 6x 2. 5x 0. 0x 1. 3x 1. 6x 1. 1x 1. 1x 4. 5x 3. 9x 0. 9x 23.7x 0. 2x 0. 1x 4. 6x 0. 4x 0. 2x 0. 9x 14.4x 1. 3x 4. 3x 3. 3x 2. 1x 49.2x 0. 0x 6.0x 2. 1x
TE V/L TM E B ITDA
3. 7x 9. 9x 12. 7x 35. 4x 5. 4x 6. 3x 4. 7x 8. 6x 1. 7x 20. 4x 10. 3x 42. 5x 14. 2x 1. 5x 20. 3x 17. 5x 11. 3x 11. 9x 8. 7x 9. 6x 23. 4x 1. 0x 23. 0x 0. 2x 10. 1x 25. 2x 4. 0x 9. 0x 4. 1x 48. 4x 5. 1x 4. 3x 7. 7x 11. 6x 9. 9x 48. 4x 0. 2x 12.7x 10. 0x
E mployees
11 NA NA 3 4 51 101 9 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, 271 NA NA 90 14 NA 2, 969 NA 405 NA 2, 426 3, 109 237 NA NA NA 3, 411 NA 2, 096 NA 74 NA 3, 124 514 NA 11 33 NA NA 3, 197 183 7 6, 421 347 1, 626 310 16 700 NA 1, 469 NA 1, 189 4 328 110 1 NA NA 246 NA NA 6, 421 1 890 376
Figure 1. Web 2.0 Universe Summary Source. Capital IQ
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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 ) Slow start to financing activity for new school year: W ith only five financing transactions to start September, the largest transaction thus far is the $5 million financing for YuMe (Advertising). The total for September so far is just $12.2 million, averaging $2.4 million per financing. Total capital raised in August was $208.5 million, averaging $7.7 million (27 deals), July on 35 transactions was $191.4 million, averaging $5.5 million, and June (42 deals) was $204.7 million (averaging $4.9 million).
Financing Activity Last Twelve Months
400.0 16.2 350.0 14.6 14.0 300.0 16.0 18.0
12.0 250.0 9.7 (US$m) 200.0 7.7 7.0 150.0 7.0 6.5 7.1 6.6 6.2 5.5 4.9 100.0 4.0 2.4 50.0 2.0 6.0 8.0 10.0 (US$m) 0.0 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Total Apr-09 Average May-09 Jun-09 Jul-09 Aug-09 Sep-09
0.0
*May-09 includes $200m FB investment
Figure 2. Financings, Last Twelve Months Source. Company reports
(US$m) 100.0 120.0 140.0 160.0 180.0 200.0 20.0 40.0 60.0 80.0 0.0
eBay sells Skype in largest M&A deal this year: transaction this year was announced on September million note. In other acquisition news, Canadian additional details on financings, see Figures 23 and
Figure 3. Capital Market Activity, Last Three Months Source. Company reports
Financing & M/A Summary - Last Three Months
Skype People Media Super Rewards Turbine Friends Reunited AdLink Internet Media Pandora Media Smith & Tinker NowPublic iLike xoopit MediaMath Kontera Ltd. Ning Mint RichRelevance QuickPlay Media Traffiq Causes Edo Interactive Bill.com Outspark ConnectEdu Acquia, Inc SBNation InnoCentive OneRiot Balihoo Metaversum iMemories Invodo Boxee Polyvore Fanbase MOG Jambool YuMe Quikr India Pvt. Ltd. OPEN Sports network Nexage StyleCaster TweetDeck OurStage Z2Live KODA Scoreloop Busca ProtonMedia MashLogic Akademos Roblox Greystripe iSocket Tremor Media iLoop Mobile Comunitae RightsFlow Aloqa Lat49 Plista FourSquare EduFire ChessCube Thread Tributes.com CoTweet Cognitive Match Limited Cellufun Clikthrough Linksify People Capital BookFresh iSyndica Masher Media Gigpark
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W hile financing activity has been slow so far, by far the largest M&A 1, with eBay selling 65% of Skype for $1.9 billion in cash plus a $125 company NowPublic was acquired for a rumoured $25 million. For 24 (at end of note).
Jul-09
Aug-09
Sep-09
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Advertising remains the most active sector: Advertising related companies continue to see the most activity by number of transactions (10), followed by the Gaming sector (seven transactions) and the Social Network sector, also with seven transactions (Figure 4). The $2.0 billion acquisition of Skype skews the dollars transacted to the SMS/Voice segment.
Capital Market Activity by Sector - Last Three Months
200.0 180.0 160.0 140.0 120.0 (US$m) 100.0 80.0 60.0 40.0 20.0 2,025.0 100.1 0.0 Gaming Online Dating SMS/Voice Music Infrastructure Social Networks Virtual World Advertising Crowdsourced Content 90.5 80.0 76.0 64.9 64.5 40.0 37.3 19.3 Vertical Communities 18.2 Video 17.7 Mobile 12.5 Comment/Reputation 12.0 Online Learning 10.0 Enterprise 8.6 Media 8.0 Blog 7.0 Search 5.0 Virtual Goods 4.1 Classified 4.0 Mobile Ad 3.2 Microblog 1.0 Analytics 0.5 Online Lending 0.5 Online Calendar 1
# companies
1 10 7 1
7
4
5
5
3
3
4
4
1
3
3
2
1
1
1
1
2
1
1
1
Figure 4. Capital Market Activity, by Sector, Last Three Months Source. Company reports
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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 earlier this year. However, the index has recently had a much stronger recovery relative to the NASDAQ index (Figure 5).
Web 2.0 Index Price Performance
160
140
120
100
80
60
40
20
0 9/8/2008 2/9/2009 3/9/2009 4/6/2009 5/4/2009 10/20/2008 11/17/2008 12/15/2008 12/29/2008 9/22/2008 1/12/2009 1/26/2009 2/23/2009 3/23/2009 4/20/2009 5/18/2009 6/1/2009 6/15/2009 6/29/2009 7/13/2009 7/27/2009 8/10/2009 8/24/2009 10/6/2008 11/3/2008 12/1/2008
^COMP - Share Pricing
Figure 5. Web 2.0 Price Performance Source. Capital IQ
Index: Web 2.0 (Market Cap)
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A mixed price performance week: Twenty-seven of the companies in our universe had positive stock price performances over the past week (for stocks with prices greater than $1) (Figure 6), with 21 companies showing negative returns on the week. DigitalTown (OTCBB:DGTW ) led the group with a 25.0% return, while Cyberplex (TSX:CX) had the worst return, dropping 14.8% in the week.
DigitalTow n, Inc. Northgate Technologies Limited NEOWIZ G ames Corporation Chines e G amer International X ING A G Tencent Holdings Ltd. Eolith Co. Ltd. United Online Inc. Frogs ter Interactive Pictures A G G ravity Co., Ltd My riad G roup A G K ings oft Co. Ltd. G ungHo Online Entertainment, Inc. Modern Times Group Mtg A B Changy ou.com Limited Y nk K orea Inc. Y edangOnline Corp. A Q Interactive, Inc. Tree.Com, Inc. NetDra gon WebS oft, Inc. Neteas e.com Inc. HanbitS oft, Inc. Openw ave S y s tems Inc. IA C/InterA ctiveCorp. GigaMedia Ltd. Perf ect World Co., Ltd. S ohu.com Inc. Quepas a Corp. LookS mart, Ltd. G amania Digital Entertainment Co., DA DA S pA Webz en Inc. G iant Interactive G roup, Inc. S park Netw orks , Inc. V alueClick Inc. Open Tex t Corp. G ree, Inc. S handa Interactive Entertainment S K Communications Co., Ltd. CDC Corp. PNI Digital Media Inc. G ameOn Co Ltd. TheS treet.com, Inc. A ctoz S oft Co., Ltd. The9 Limited NeuLion Incorporated Ngi G roup Inc. Fluid Mus ic Canada, Inc. S hutterfly , Inc. Mix i, Inc. Cy berplex Inc. -20.0%
Figure 6. 1-Week Price Performance Source. Capital IQ
1 Week P rice P erformance
11.2% 11.0% 10.7% 13.5% 19.1%
25.0% 23.6%
-14.8% -15.0%
-8.3% -8.9% -9.3% -9.7% -10.6% -10.0%
-5.8% -5.9%
-0.3% -1.0% -2.0% -2.2% -2.3% -2.4% -2.4% -2.9% -3.2% -3.3% -3.3% -3.5% -3.6%
4.1% 3.4% 3.1% 2.9% 2.4% 2.0% 2.0% 1.2% 1.2% 1.1% 0.9% 0.7% 0.6% 0.4% 0.3% 0.3% 0.0% 0.0% 0.0%
7.2% 6.1% 5.9% 5.8%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
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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
L ingo Media C orporation (TS XV: L M)
Headline
L ingo Media C orporation R eports Una udited C ons olida ted E a rnings R es ults for the S econd Q ua rter a nd S ix Months E nded J une 30, 2009
Notes
Lingo Media C orpora tion reported una udited cons olida ted ea rnings res ults for the s econd qua rter and s ix months ended J une 30, 2009. F or the quarter, the compa ny's net los s wa s C AD 691, 389 compa red with C AD 491, 229 for the s a me period a year a go. L os s per s ha re from continued opera tion wa s C AD 0. 06 compa red with C AD 0. 04 for the s a me period a yea r a go. T he compa ny's revenue was C AD 654, 358 compa red with C A D 393, 709 for the s a me period a yea r a go. L os s from continuing operations was C AD 691, 389 compa red with C AD 392, 010 for the s a me period a yea r a go. Net cas h flow provided by opera ting a ctivities wa s C AD 135, 926 compa red with net ca s h flow us ed in opera ting a ctivities of C AD 235, 683 for the s a me period a year a go. T he compa ny inves ted on purcha s e of property a nd equipment wa s C AD 23, 818 compa red with C AD 147 for the s ame period a yea r ago. F or the s ix months , the compa ny's net los s wa s C AD 795, 416 compa red with C AD 944, 782 for the s ame period a yea r a go. L os s per s ha re from continued opera tion wa s C AD 0. 09 compa red with C AD 0. 08 for the s a me period a yea r a go. T he compa ny's revenue wa s C AD 709, 678 compa red with C AD 393, 709 for the s a me period a yea r a go. L os s from continuing opera tions wa s C AD 1, 146, 524 compa red with C A
Northgate Tec hnologies L imited (B S E : 590057)
Northga te T echnologies Limited, B oa rd Meeting, S ep 01, Northga te T echnologies L imited, B oa rd Meeting, S ep 01, 2009 Agenda: T o convene a nnua l genera l meeting of the compa ny on S eptember 2009 30, 2009 and to clos e the regis ter of members a nd s ha re tra ns fer books of the compa ny from S eptember 28, 2009 to S eptember 30, 2009 inclus ive of both da ys for the purpos e of a nnua l genera l meeting of the compa ny. Myria d G roup Appoints J a mes B odha as New C hief F ina ncial O fficer Myria d G roup AG a nnounced the a ppointment of J a mes B odha a s its new C hief F ina ncia l Officer (C F O), effective S eptember 2, 2009. B ringing both s ignifica nt interna tional experience a nd deep indus try knowledge of the mobile s ector, his prima ry res pons ibility will be to ens ure that Myria d's fina ncia l opera tions ma na gement evolves in line with the growth of the compa ny. P rior to joining Myria d, B odha wa s G roup C F O a t Aircom Interna tiona l. During his more tha n 3 yea rs in that role, he wa s res pons ible for building a nd lea ding a globa l finance organis a tion in line with tha t compa ny's 1, 300 s ta ff in 18 worldwide offices , a nd improving the compa ny's fina ncial s ys tems a nd interna l control proces s es . B right T hings plc (AIM: B G T ) a nnounced a s ubs equent placing of 75, 200, 000 common s ha res a t £0. 0125 per s hare for gros s proceeds of £0. 94 million on S eptember 2, 2009. Dominic W hea tley, C hief E xecutive Officer of the compa ny, and Ia n L ivings tone, C ha irma n of the compa ny will pa rticipa te in the tra ns a ction and will hold 69, 005, 102 s ha res , repres enting 25. 5% s ta ke a nd 11, 998, 880 s hares , repres enting 4. 4% s ta ke res pectively. Ins titutiona l inves tors a ls o pa rticipa ted in the tra ns a ction. As ta ire S ecurities P lc will a ct a s a broker to the compa ny. T he s ha res ha ve been pla ced to the ins titutiona l inves tors by As ta ire S ecurities P lc a nd S ocialG O s ta ff members . T he s ha res will be s ubs equently lis ted on London S tock E xcha nge AIM Ma rket. E ffective Augus t 28, 2009, Ma nu O hri res igned a s the C hief E xecutive O fficer of C L IC K E R Inc. O n S eptember 1, 2009, Mr. Albert Aimers wa s a ppointed a s the C ompa ny's Interim C hief F ina ncia l O fficer. Mr. Aimers ha s been C ha irma n of the B oa rd a nd C hief E xecutive Officer of the C ompa ny s ince J a nua ry 2006. F rom 2003-2006, Mr. Aimers wa s P res ident a nd C E O of Digita l W a llS treet Inc. a nd the founder of W a lls t. net a nd F ina ncia l P ublis hing compa ny.
Myriad G roup AG (S W X: MYR N)
B right Things plc (AIM: B G T)
B right T hings plc a nnounced it expects to receive £0. 94 million in funding.
C L IC K E R Inc . (OTC B B : C L K Z)
C L IC K E R Inc. Announces Ma na gement C ha nges
K AB Dis tribution Inc . (TS X: K AB ) B eyond C ommerce, Inc. (OTC B B : B YOC ) S handa Interac tive E ntertainment L td. (Nas daqG S : S NDA)
K AB Dis tribution Inc. Decla res C a s h Dis tribution P a yable K AB Dis tribution Inc. a nnounced tha t a ca s h dis tribution of $0. 65 per common s ha re will be pa id on S eptember 22, 2009 to s ha reholders of on S eptember 22, 2009 record on S eptember 17, 2009 a s a return of ca pita l, s ubject to court a pprova l. B eyond C ommerce L a unches in Aus tra lia B eyond C ommerce Inc. a nnounced its new geogra phica lly-ta rgeted online s ervices benefit loca l bus ines s es a cros s the United S ta tes a nd now Aus tra lia . Around Aus tra lia , loca l compa nies , often s ma ll a nd medium enterpris es , will benefit from the interna tiona l la unch of US -ba s ed Loca lAdL ink's geogra phically-targeted online loca l a dvertis ing s ervices .
S ha nda Intera ctive E nterta inment L td. R eports Una udited S handa Intera ctive E nterta inment L td. reported una udited cons olida ted ea rnings res ults for the s econd qua rter a nd s ix months ended J une C ons olida ted E a rnings R es ults for the S econd Q ua rter 30, 2009. F or the qua rter, the compa ny reported opera ting profit of R MB 513. 4 million, income from opera tion of R MB 513. 4 million, net a nd S ix Months E nded J une 30, 2009 income of R MB 430. 7 million, net income a ttributable to ordina ry s ha reholders of R MB 426. 9 million or R MB 3. 07 diluted per s ha re on tota l net revenues of R MB 1, 237. 2 million a ga ins t opera ting profit of R MB 335. 6 million, income from opera tion of R MB 335. 6 million, net income of R MB 281. 9 million, net income a ttributa ble to ordina ry s ha reholders of R MB 279. 8 million or R MB 1. 90 diluted per s ha re on tota l net revenues of R MB 837. 6 million for the s a me period a yea r a go. According to Non-G AAP , opera ting profit of R MB 531. 5 million, net income attributa ble to ordina ry s ha reholders of R MB 445. 0 million or R MB 6. 40 diluted per s ha re a ga ins t opera ting profit of R MB 350. 7 million, net income a ttributa ble to ordinary s ha reholders of R MB 294. 9 million or R MB 4. 00 diluted per s ha re for the s a me period a yea r a go. F or the s ix months , the compa ny reported income from opera tion of R MB 969. 1 million, net income of R MB 797. 5 million, net income a ttributa
DigitalTown, Inc . (OTC B B : DGTW ); The DigitalT own Inc. Announces P a rtners hip with T he Active Network, Inc Ac tive Network, Inc.
On S eptember 01, 2009, the B oard of Directors of Digita lT own Inc. a pproved a L etter of Intent to move forwa rd with a partners hip with T he Active Network Inc. T he L OI calls for Digita lT own a nd Active to pa rticipa te in J oint P romotion, J oint T echnology, New Hyper-L oca l A d T echnology a nd revenue s ha ring of the Digita lT own 14, 700 on-line content a nd news hub for s chool s pirit s ites ; this will expa nd to a ll of Digita lT own’s 27, 000 s ites . In S ocia l Networking-Active will es ta blis h a DigitalT own-bra nded and ta ilored s ection of the Active community, providing a common interfa ce for current Active members as well a s new Digita lT own members . In C ontent-Active will provide content tha t will include H. S . footba ll, ba s ketball, la cros s e a nd more with s chedules , s cores , ra tings , ra nkings , game previews and recaps a s s ocia ted with ea ch individua l H. S . tea m. It wa s reported tha t S ha nda Intera ctive E nterta inment L td. pla ns to ra is e a s much a s $800 million in a U. S . IP O for its games unit. C hen T ia nqia o, S ha nda ’s founder s aid in the pa s t tha t he would like to ultima tely tra ns form his compa ny into a divers ified media firm. T he firm s a id tha t it will us e the IP O proceeds to fund a cquis itions a nd joint ventures , a s well a s for ca pital expenditure.
S handa Interac tive E ntertainment L td. (Nas daqG S : S NDA)
S ha nda Intera ctive Mulls Acquis itions
S handa Interac tive E ntertainment L td. (Nas daqG S : S NDA)
S ha nda Intera ctive E nterta inment L td. P rovides E a rnings S handa Intera ctive E nterta inment L td. provided ea rnings guida nce for the third qua rter of 2009. T he compa ny expected tha t cons olida te net G uida nce for the T hird Q uarter of 2009 revenues for third qua rter of 2009 to increa s e by a rate in the ra nge of 8% to 11% qua rter over qua rter. T he company expect opera ting ma rgin for the third qua rter 2009 to be s imila r to tha t of s econd qua rter 2009, both on a non-G AAP ba s is . C ha ngyou. com L imited ha s filed a S helf R egis tra tion in the a mount of $381. 30 million. Netea s e. com Inc. , Annua l G eneral Meeting, S ep 04, 2009 C ha ngyou. com L imited ha s filed a S helf R egis tra tion in the a mount of $381. 30 million. Neteas e. com Inc. , Annua l G enera l Meeting, S ep 04, 2009, at 10: 00 C C T -C hina C oa s t, US S R Zone 7. L oca tion: 26/F , S P T ower D, T s inghua S cience P a rk B uilding 8, No. 1 Zhonggua ncun E a s t R oad, Ha idia n Dis trict, B eijing, P eople's R epublic of C hina 100084, C hina . Agenda : T o re-elect s even directors to s erve for the ens uing yea r or until their s ucces s ors a re elected a nd duly qua lified; to ra tify the a ppointment of P ricewa terhous eC oopers Zhong T ia n C P As L imited compa ny a s independent a uditor for the fis ca l yea r ending December 31, 2009; a nd to tra ns a ct s uch other bus ines s a s ma y properly come before the 2009 a nnua l genera l meeting of s ha reholders or a ny a djournment or pos tponement thereof.
C hangyou.c om L imited (Nas daqG S : C YOU) Neteas e.c om Inc . (Nas daqGS : NTE S )
NetDragon W ebS oft, Inc . (S E HK : 777) S handa Interac tive E ntertainment L td. (Nas daqG S : S NDA)
NetDra gon W ebS oft, Inc. , 0. 082 (HK D), C a s h Dividend, NetDra gon W ebS oft, Inc. , 0. 082 (HK D), C as h Dividend, S ep-07-2009 S ep-07-2009 S ha nda Intera ctive E nterta inment L td. Announces B oa rd S handa Intera ctive E nterta inment L td. a nnounced the res igna tion of B runo W u from the B oa rd of Directors of the C ompa ny, effective C ha nges S eptember 1, 2009. C oncurrently, the C ompa ny a nnounced the a ppointment of Mr. K a i Zha o to the B oa rd of Directors of the C ompa ny, effective immedia tely. Mr. Zha o previous ly s erved a s dea n of the J ourna lis m S chool of F uda n Univers ity, s ecreta ry genera l of the C hina C ommunis t P a rty (C C P ) committee of W enhui-X inmin United P res s News pa per G roup, chief editor of L ibera tion Da ily a nd s ecreta ry genera l of the C C P committee of S ha ngha i Municipa l R a dio, F ilm a nd T elevis ion B urea u a s well a s in va rious ma na gerial roles a t S ha ngha i Municipa l R a dio a nd T elevis ion B urea u, Orienta l R a dio S ta tion, S ha ngha i P eople's R a dio S ta tion a nd Qingha i Da ily.
Figure 7. Key Developments Source. Capital IQ
Page 9
VALUATION Online Gaming companies lead market-cap charts: Thirteen companies in our W eb 2.0 universe top US$1 billion in market capitalization (Figure 8). Fifty-seven of the 91 companies have market caps under US$100 million, with 26 under US$10 million. Online gaming companies dominate the top of the list, led by Tencent Holdings with a market cap near US$30 billion.
Market C ap (US D m)
Tencent Holdings L td. Neteas e.c om Inc. S ha nda Interactiv e Entertainment L td. Modern Times Group Mtg A B IA C/InterA ctiveCorp. S ohu.c om Inc. Changy ou.com Limited Perfect World Co. , L td. G ree, Inc. Open Tex t Corp. Gia nt Interac tive Group, Inc. K ings of t Co. L td. Chines e Gamer Internationa l V a lueClick Inc. Mix i, Inc. NEOWIZ Games Corpora tion United Online Inc. NetDra gon WebS of t, Inc. S hutterf ly, Inc. S K Communica tions Co. , L td. G ungHo Online Enterta inment, Inc. Giga Media L td. CDC Corp. XING A G Openw av e S y s tems Inc. G ama nia Digital Entertainment Co., The9 Limited DA DA S pA OA O R B C Inf ormation S y s tems A c toz S of t Co., L td. NeuL ion Incorporated Y eda ngOnline Corp. G ameOn Co L td. Myriad Group A G K A B Dis tribution Inc. Tree. Com, Inc. TheS treet.com, Inc. Cy berplex Inc. HanbitS of t, Inc. Frogs ter Interac tive Pic tures A G Fluid Mus ic Canada, Inc. Eolith Co. L td. PNI Digital Media Inc. GeoS entric Oy j Grav ity Co., L td DigitalTow n, Inc. S park Netw orks , Inc. Ngi Group Inc. DXN Holdings B hd Northgate Technologies Limited Webz en Inc. NeXplore Corpora tion A Q Intera ctiv e, Inc. S ocia lw is e, Inc. Dolphin Digita l Media, Inc. W iz z a rd S of tw are Corpora tion LookS ma rt, L td. B roadWebA s ia Inc. Y nk K orea Inc. Quepa s a Corp. J umbuck Entertainment Limited A c celeriz e New Media, Inc. UOMO Media, Inc L ingo Media Corpora tion S pec trumDNA , Inc. B ey ond Commerc e, Inc. IA S Energy, Inc. Ex tens ions , Inc. B right Things plc CornerWorld Corpora tion MOK O.mobi Limited S NA P Intera ctiv e, Inc. Worlds .c om Inc. DigitalPos t Intera ctiv e, Inc. V OIS , Inc. Magnitude Information S y s tems Inc. Wooz yFly, Inc. is eemedia Inc. B etaw a ve Corpora tion Wy nds torm Corpora tion Liv eWorld Inc. B igs tring Corp. Unis erve Communications Corp. A s s oc ia ted Media Holdings Inc. CL ICK ER Inc. China G atew ay Corpora tion The Parent Compa ny Total S port Online A S S NM G loba l Holdings Dibz International, Inc. S ocia l Media V enures , Inc. 0
Figure 8. Market Cap Ranking Source. Capital IQ
29970. 5 5503.2 3317.7 2778.9 2486.5 2400.9 2147.8 1958.9 1953.5 1950.1 1732.3 1225.4 1180.6 895.1 891.0 649.4 613.7 400.3 339.6 305.8 295.5 261.1 252.2 243.7 233.3 233.1 193.7 149.2 145.7 124.8 116.7 110.4 104.5 91.7 84.6 80.7 74.4 73.3 71.3 69.5 62.0 60.8 55.7 51.5 50.0 47.9 46.3 37.0 36.9 35.8 34.3 30.7 29.8 24.8 23.6 21.7 20.0 19.5 18.5 17.8 16.7 15.8 12.0 11.6 10.7 9.7 9.5 8.9 6.1 5.7 5.7 5.4 5.2 4.2 4.1 4.1 2.6 2.4 2.0 1.8 1.5 1.3 1.0 0.6 0.6 0.3 0.3 0.1 0.0 0.0 0.0 500 1,000 1,500 2,000 2, 500 3,000 3,500 4,000
Page 10
TEV/Revenue (LTM) averages 6.0x: The overall average TEV/Revenue (LTM) multiple for our group is 6.0x (vs. 5.3x last week) (Figure 9). Three companies trade at more than 25x revenue – Bigstring Corp. (OTCBB:BSGC) at 37.5x, Dolphin Digital Media, Inc. (OTCBB:DPDM) at 42.3x, and NeXplore Corp (OTCPK:NXPC). The median is only 2.1x. Note that we exclude multiples greater than 50x. Thirty companies have multiples under 1.5x.
T E V/L T M R evenue (x)
60. 0
50. 0
49.2
42.3
40. 0
37.5
30. 0
23.7 22.4 19.820.6 15.6 14.4 12.3 10.9 10.1 9.7
20. 0
A10. 0 verage, 6.0
5.9 6.3 4.5 4.6 4.7 5.0 3.3 3.6 3.9 4.1 4.2 4.3 2.5 2.5 2.5 2.9 3.2 1.3 1.3 1.3 1.5 1.5 1.6 1.7 2.1 2.3 0.1 0.1 0.2 0.2 0.3 0.4 0.4 0.4 0.5 0.6 0.6 0.6 0.6 0.7 0.7 0.8 0.9 0.9 0.9 0.9 1.0 1.0 1.1 1.1
7.8
9.0
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 (19), trading at an average multiple of 12.4x (vs. 12.7x last week). On a geographic basis, the United States has the most companies (39), trading at an average of 7.6x revenue (vs. 5.9x last week) (Figure 11). Ten of the companies are Canadian (average 4.6x revenue).
Average TEV/LTM Revenue - By Exchange
25.0 22.4 20.0 15.0 (x) 10.0 5.0 OTCBB OTCPK GTSM 0.0 AIM SEHK HLSE 12.4 12.0 11.9 10.7 10.1 9.7 5.2 4.74.6 3.6 2.6 2.5 2.3 2.2 OTCNO TSX TSE OSE XTRA AMEX TSXV SWX 2.1 1.9 1.7 NasdaqGS OM 0.8 0.7 CM KLSE
(x)
NasdaqGM
KOSE ASX
RTS
BSE
Germany
United
United
China
AQ Intera ctive, Inc . T heS treet.com, Inc . U nis erve C ommunications C orp. T he P a rent C ompany C LIC K E R Inc. G a meO n C o Ltd. T ree.C om, Inc. N orthgate T echnologies L imited IAC /InterAc tiveC orp. P erfect World C o., Ltd. C y berplex Inc . J umbuc k E nterta inment L imited O penwave S y s tems Inc . DXN Holdings B hd C DC C orp. DADA S pA is eemedia Inc . S pa rk N etwork s , Inc . Ac toz S oft C o. , Ltd. United O nline Inc . H anbitS oft, Inc . G igaMedia Ltd. S N M G loba l Holdings S NAP Intera ctive, Inc . S hutterfly , Inc . B ey ond C ommerc e, Inc. V alueC lic k Inc . G a mania Digital E ntertainment C o., Y nk K orea Inc . S K C ommunica tions C o., Ltd. Modern T imes G roup Mtg AB Y edangO nline C orp. G ungHo O nline E ntertainment, Inc. My riad G roup AG O pen T ex t C orp. P N I Digital Media Inc. NetDra gon WebS oft, Inc . NE O WIZ G ames C orporation XIN G AG MO K O .mobi L imited S ohu.com Inc . C ornerWorld C orporation E olith C o. Ltd. Wiz z ard S oftware C orporation S ocial Media V enures , Inc . T otal S port O nline AS Acceleriz e New Media , Inc . NeuLion Inc orporated Mix i, Inc . DigitalP os t Intera ctive, Inc. C hangy ou.com L imited K ings oft C o. Ltd. G eoS entric O y j F luid Mus ic C a nada , Inc. Lingo Media C orporation G ree, Inc . UO MO Media, Inc As s ociated Media Holdings Inc . C hines e G amer Interna tional F rogs ter Intera ctiv e P ic tures AG B right T hings plc T encent Holdings Ltd. B igs tring C orp. Dolphin Digital Media, Inc. NeX plore C orporation
0. 0
Average TEV/LTM Revenue - By Country
25.0 22.4 20.0 15.0 10.0 5.0
0.4 0.3 0.0
12.0 9.7 8.0 7.6 7.5 4.6 4.6 4.2
2.5 2.2 2.1 1.7 South Australia Switzerland Sweden
0.0 Canada Finland Japan Taiwan Norway
0.8 0.7 Hong Kong Italy
0.7 0.4 0.0 Malaysia Russia 1 India 1
# Companies
1 19 2 3 2 11 1 4 5 1 4 2 1 1 6 2 14 1 1 1 1 5 1
# Companies
1
2
1
10 39
3
10
1
6
1
8
2
1
1
1
1
Figures 10 & 11. TEV/Revenue Ranking (Exchange, Country) Source. Capital IQ
Page 11
TEV/EBITDA (LTM) averages 12.7x: The average multiple for the 35 companies with positive EBITDA (and multiples under 100x) is 12.7x LTM EBITDA (vs. 12.4x last week), led by Tencent Holdings (SEHK-700) 48.4x multiple (Figure 12). Twelve companies have EBITDA multiples under 7x. The median multiple is 9.9x (vs. 9.8x last week).
T E V/L T M E B IT DA (x)
60. 0 48. 4 42. 5 40. 0 35. 4
50. 0
30. 0 23. 0 23. 4 20. 3 20. 4 20. 0 A verage, 12.7 10. 0 1. 0 0. 0 P erfec t World C o. , L td. 1. 5 J umbuck E ntertainment L imited 1. 7 G ameO n C o L td. 3. 7 4. 0 4. 1 4. 3 4. 7 5. 1 5. 4 6. 3 7. 7 8. 6 8. 7 9. 0 9. 6 9. 9 12. 7 11. 3 11. 6 11. 9 9. 9 10. 1 10. 3 14. 2 14. 5 17. 5
25. 2
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 .
Modern T imes G roup Mtg AB
S K C ommunic ations C o. , L td.
C hines e G amer International
DXN Holdings B hd
C hangy ou. c om L imited
S NAP Interac tive, Inc .
T heS treet. c om, Inc .
U nited O nline Inc .
O pen T ex t C orp.
C DC C orp.
NetDragon WebS oft, Inc .
O penwave S y s tems Inc .
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 (19), trading at an average multiple of 4.0x. On a geographic basis, the United States has the most companies (39), trading at an average of 9.1x EBITDA (Figure 14). Ten of the companies are Canadian (average 12.7x EBITDA).
Average TEV/LTM EBITDA - By Exchange
30.0 25.8 25.0 20.0 (x) 15.0 10.0 5.0 GTSM 0.0 SEHK TSXV NasdaqGS KOSE OSE TSE OM XTRA 23.022.0 18.6 (x) 13.2 11.6 11.3 10.3 10.2 6.3 5.4 5.1 4.7 4.1 4.0 NasdaqGM OTCBB CM 25.0 20.0
Average TEV/LTM EBITDA - By Country
22.0 18.6 15.0 10.0 1.5 0.2 ASX RTS 5.0 0.0 Germany Canada Japan United States China Hong Kong Malaysia Taiwan South Korea Italy Sweden 16.7 12.7 12.5 11.6 11.3 9.9 9.1 6.3 4.7 1.5 Australia 0.2 Russia 1 0.0 Switzerland 1
TSX
# Companies
3
4
2
6
5
2
1
1
14
1
4
5
1
AMEX
KLSE
2
19
2
1 # Companies 3 8 10 10 6 2 1
1
39
1
1
2
Figures 13 & 14. TEV/EBITDA Ranking (Exchange, Country) Source. Capital IQ
T enc ent Holdings L td.
IAC /InterAc tiveC orp.
Mix i, Inc .
S park Network s , Inc .
V alueC lic k Inc .
C yberplex Inc .
S ohu. c om Inc .
G ree, Inc .
XING AG
Y edangO nline C orp.
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
Page 12
P/E (LTM) averages 18.4x: The average multiple for the 33 companies with positive earnings (and multiples under 100x) is 18.4x LTM EPS (vs. 18.1x last week), led by GungHo Online Entertainment’s (OSE:3765) 66.5x multiple (Figure 15). Eleven companies have P/E multiples under 10x. The median is just 13.1x.
P /E L T M (x)
70.0 61.2 60.0 66.5
50.0 43.1 40.0 32.5 30.0 20.0 A verage, 18.4 13.7 14.2 14.7 11.8 12.1 12.7 13.1 9.6 10.3 10.9 2.1 G iant Interactive G roup, Inc. 0.0 2.2 T he9 Limited 2.4 S handa Interactive E ntertainment Ltd. 2.8 P erfect World C o., Ltd. 3.1 Neteas e.com Inc. 4.9 6.2 6.5 18.3 20.0 20.3 24.5 25.6 16.3 35.0
45.0 45.6
10.0
J umbuck E ntertainment Limited
NE O W IZ G ames C orporation
G amania Digital E ntertainment C o., Ltd.
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 (19), trading at an average multiple of 14.8x. On a geographic basis, the United States has the most companies (39), trading at an average of 13.5x earnings (Figure 17). Ten of the companies are Canadian (average 19.5x EPS).
Average P/E - By Exchange
70.0 66.5 60.0 50.0
(x)
45.0 40.0 35.0 30.0
Average P/E - By Country
41.4
(x)
40.0 30.0 20.0 10.0
34.0 33.0 33.0 25.6 19.6 14.8 13.7 12.7 10.4 6.5 NasdaqGS OM
25.0 20.0 15.0 10.0
25.6 25.4
19.5 14.4 13.7 13.5 13.1 6.2 4.9 0.0 0.0
6.2 4.9 KLSE ASX
2.1 NasdaqGM 0.0 NYSE
5.0 0.0 Germany United States China Malaysia Japan Canada Taiwan South Korea Sweden
OTCBB
GTSM
KOSE
SEHK
OSE
TSE
Australia
AMEX
XTRA
TSX
# Companies
1
3
5
2
2
6
19
1
2
14
4
1
2
1
5
# Companies
6
2
3
10
10
1
39
8
1
2
Switzerland 1
Figures 16 & 17. P/E Ranking (Exchange, Country) Source. Capital IQ
India 1
0.0
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
S NAP Interactive, Inc.
G ameO n C o Ltd.
O pen T ex t C orp.
NetDragon W ebS oft, Inc.
T encent H oldings Ltd.
G igaMedia Ltd.
C y berplex Inc.
S park Network s , Inc.
IAC /InterActiveC orp.
S ohu.com Inc.
Worlds .com Inc.
Y edangO nline C orp.
H anbitS oft, Inc.
Actoz S oft C o., Ltd.
K ings oft C o. Ltd.
G ree, Inc.
XING AG
Mix i, Inc.
Page 13
UPCOMING EVENTS
E arnings C alendar
C ompany
NA
Figure 18. Earnings Calendar Source. Company reports
Date & Time
NA
Quarter
NA
C onf C all Deta ils
NA
Page 14
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 enures , 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 otal S port O nline AS 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 oozyF ly, Inc. W ynds torm C orporation XING AG Y edangOnline 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 N OK US D C AD US D 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 T OS O 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 ZY F 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 O T C NO 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 OTCB B OTCP K XT R A K OS E K OS E US D Market C ap ($m) 15. 8 124.8 29. 8 0.6 1.3 2.0 9.7 6.1 19. 5 252.2 2,147. 8 0.3 1,180. 6 0.6 5.7 73. 3 149.2 36. 9 0.0 4.2 47. 9 23. 6 60. 8 8.9 62. 0 69. 5 233.1 104.5 51. 5 1,732. 3 261.1 50. 0 1,953. 5 295.5 71. 3 2,486. 5 9.5 2.4 16. 7 84. 6 1,225. 4 11. 6 1.5 20. 0 4.1 891.0 2,778. 9 5.7 91. 7 649.4 400.3 5,503. 2 116.7 30. 7 37. 0 35. 8 1,950. 1 233.3 1,958. 9 55. 7 17. 8 145.7 3,317. 7 339.6 305.8 5.4 0.0 0.0 24. 8 2,400. 9 46. 3 10. 7 29,970.5 0.3 193.7 74. 4 0.1 80. 7 1.0 613.7 12. 0 895.1 4.1 34. 3 21. 7 5.2 2.6 1.8 243.7 110.4 18. 5 C urrent P ric e 0.57 17, 850 51, 000 0.01 0.02 0.07 0.21 0.01 0.23 2.38 39.05 0.02 461.00 0.01 0.06 1.21 6.42 0.57 0.00 0.06 1.75 0.44 1,035.00 0.20 1.27 19.20 50.40 100, 600 0.04 7.65 4.79 1.80 8, 120 240, 000 4, 010 18.78 0.14 0.05 0.40 1 9 1.00 0.05 1.17 0.01 538,000.00 300.00 0.08 4.56 38,050.00 5.87 42.52 1.10 0.55 27,800.00 49.95 34.73 2.80 39.83 1.75 1.40 1.05 49.69 13.34 9,000.00 1 0.00 0.15 0.56 62.63 2 0 128 0.01 7.72 2.43 0.03 7.47 0.05 7.32 0.14 10.27 0.01 2.89 0.43 0.10 0.15 0.10 32.25 9, 080 4, 260 1 Wk 1.8% -5. 8% 2.0% -30.0% 10.0% -6. 7% 23.5% -5. 2% -22.8% -3. 3% 2.9% -25.0% 13.5% 25.0% 9.1% -14.8% -0. 3% 2.7% 20.0% -15.4% 25.0% 15.8% 10.7% 150. 0% -9. 3% 6.1% 0.0% -3. 5% -20.0% -2. 0% 0.4% 5.9% -2. 4% 3.4% 0.9% 0.6% 3.8% 11.1% 8.1% 0.0% 4.1% 11.1% 0.0% 0.0% 0.0% -10.6% 3.1% 2.7% 5.8% 19.1% 1.2% 1.1% -8. 3% -11.3% -8. 9% 23.6% -2. 4% 0.7% 0.3% -3. 3% 0.0% 0.0% -2. 9% -9. 7% -3. 2% 25.0% -53.3% 36.4% 0.0% 0.3% -2. 2% -2. 2% 11.0% -21.4% -5. 9% -3. 6% 0.0% 1.2% 0.0% 7.2% -6. 7% -2. 3% -16.7% -1. 0% -8. 5% 11.1% 0.0% 0.0% 11.2% 2.0% 2.4% 150. 0% -53.3% 2.0% 0.0% 1 Mth 26.7% -24.2% -13.0% -30.0% -12.0% -6.7% -41.7% -8.3% -22.8% -28.5% -2.4% 650.0% 7.2% 25.0% 20.0% -28.8% 6.1% 28.4% NM 22.2% 16.7% 10.0% 27.8% 150.0% 27.0% 32.4% -15.9% -2.3% -20.0% -7.6% -8.1% 7.1% 2.4% 18.8% -8.9% 3.6% 10.7% -28.6% 8.1% 1.6% 9.5% -13.0% -9.1% -16.4% 38.5% -12.2% 3.6% 18.5% 6.0% 15.8% 0.2% -6.7% 37.5% -15.4% -13.1% 36.1% -9.3% 12.9% 7.4% 16.7% 16.7% 16.7% -0.8% -13.4% -8.4% 25.0% -58.0% -50.0% -26.3% -0.4% -11.4% 57.1% 20.0% 10.0% -21.2% 18.5% 0.0% -22.8% 0.0% -18.8% 0.0% -3.2% -2.0% -14.1% -14.0% -16.7% NM 0.0% 15.6% -4.0% -13.1% 650.0% -58.0% 9.0% 0.0% 3 Mth 14.0% -35.4% -28.2% 833. 3% -12.0% -6. 7% -79.2% 5.0% -54.9% 53.5% 0.6% 650. 0% 35.4% 97.4% -33.3% -21.9% 5.4% 48.7% 20.0% 243. 8% -30.0% -26.7% 28.6% 33.3% 81.4% 146. 2% -9. 7% -6. 9% -20.0% -17.7% -24.0% 51.3% 31.0% 2.4% -13.1% 15.1% -32.5% -28.6% -4. 8% 6.6% 63.3% -4. 8% -41.2% -10.0% -30.8% 21.4% 37.9% 2.7% -8. 8% 17.1% 14.9% 12.1% 44.7% 10.0% -15.0% -3. 0% 0.7% 47.4% 70.5% 16.7% 77.2% 6.6% -20.2% -5. 9% -21.7% -33.3% 5.0% 1400.0% -23.3% -7. 9% -5. 9% -40.5% 49.4% -37.1% -32.9% 24.6% 0.0% -36.3% -25.0% 4.1% -30.0% -9. 0% 42.9% -32.2% -36.8% 0.0% 0.0% 233. 3% -3. 7% -1. 3% -38.2% 1400.0% -79.2% 40.0% 0.0% 6 Mth 62.9% 70.0% 61.9% 180.0% 78.9% -41.7% -58.0% -8.3% -77.2% 213.2% NM 650.0% 223.5% -70.0% -60.0% 245.7% 38.7% 101.8% -88.0% 1275. 0% -30.6% -13.7% 88.2% 0.0% 284.8% 324.8% 90.2% 25.8% 0.0% 7.1% -0.8% 181.3% 69.2% 108.7% 25.3% 33.1% 92.9% -37.5% -11.1% 71.1% 223.0% 14.9% 25.0% 19.4% -52.6% 84.9% 131.2% 28.3% 18.1% 103.5% 79.5% 102.0% 189.5% -42.1% 68.3% 63.0% 15.8% 270.9% 266.8% 9.4% 50.5% 238.7% 59.0% 72.8% 20.5% -47.4% 110.0% -87.5% 40.0% 42.4% -7.8% 10.0% 166.4% 10.0% -18.7% 32.1% -25.0% 88.2% -10.0% 80.3% 100.0% 75.9% 25.0% 133.1% -2.3% -28.6% 0.0% -16.7% 29.1% 39.7% 23.1% 1275. 0% -88.0% 77.6% 39.7% 1 Yr -9.5% 100.6% -55.4% -30.0% -63.3% -72.0% -91.6% -8.9% -84.7% -3.3% NM -50.0% 553.9% -98.6% -90.2% 101.7% -42.6% 48.7% -97.6% 10.0% -56.3% -39.7% 50.0% 100.0% -17.5% 224.9% 143.5% -23.2% -33.3% -4.5% -51.5% 34.3% NM 16.1% 6.9% 10.2% -50.0% -66.7% -20.0% -8.5% 227.8% -45.9% -80.0% -59.7% -54.5% -28.5% -3.5% 126.5% -46.4% 242.0% 15.6% 84.0% NM 10.0% -72.9% -81.4% 11.2% 95.8% 82.0% -41.7% -58.2% -86.2% 77.9% 26.6% -26.8% -43.8% -99.7% -40.0% -77.3% 3.8% -48.6% -62.7% 112.1% -99.4% -56.5% -60.9% -40.0% -6.0% -78.6% -28.4% -57.6% -6.6% -68.8% 57.9% -68.6% -70.6% NM -83.3% 0.8% 14.2% -58.6% 553.9% -99.7% -4.2% -29.2% 52 Week -13.6% -50.4% -59.8% -72.0% -68.6% -79.4% -92.8% -44.3% -92.1% -39.3% -19.3% -57.1% -11.2% -98.7% -90.2% -39.2% -45.2% -0. 9% -97.6% -44.4% -61.1% -61.1% -10.8% -80.2% -20.6% -3. 4% -26.7% -34.2% -42.9% -20.1% -58.3% -31.6% -7. 2% -14.3% -39.6% -4. 0% -51.8% -73.7% -34.4% -23.5% -7. 9% -46.2% -80.0% -61.5% -70.0% -33.5% -9. 9% -23.0% -53.5% -9. 4% -17.9% -9. 4% -15.4% -62.1% -78.2% -84.0% -13.6% -10.5% -5. 0% -48.5% -59.4% -86.6% -23.6% -19.3% -30.0% -53.7% -99.8% -97.0% -78.5% -11.6% -49.6% -61.4% -1. 4% -99.4% -61.1% -66.3% -40.0% -42.8% -82.0% -32.8% -86.8% -17.5% -78.3% -38.2% -75.1% -71.4% -96.3% -83.3% -6. 3% -26.8% -65.6% -0. 9% -99.8% -47.0% -44.8%
739.6
Figure 19. Price Performance Source. Capital IQ
Page 15
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 enures , 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 otal S port Online AS 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 oozyF ly, Inc. W ynds torm C orporation XIN G AG Y eda ngO nline 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 Media P orta l S ocial Networking Media Media Media S ocial Networking G aming P odca s ting C ontent S ocial Networking 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 N orway 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 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 O T C NO 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 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 T OS O TREE T S XV :US S U NT D UO MO V CLK V OIS W ZE N W ZE W DDD W ZY F W Y ND O1B C A052770 A023770
US D Market C ap ($m)
15.8 124.8 29.8 0.6 1.3 2.0 9.7 6.1 19.5 252.2 2,147.8 0.3 1,180.6 0.6 5.7 73.3 149.2 36.9 0.0 4.2 47.9 23.6 60.8 8.9 62.0 69.5 233.1 104.5 51.5 1,732.3 261.1 50.0 1,953.5 295.5 71.3 2,486.5 9.5 2.4 16.7 84.6 1,225.4 11.6 1.5 20.0 4.1 891.0 2,778.9 5.7 91.7 649.4 400.3 5,503.2 116.7 30.7 37.0 35.8 1,950.1 233.3 1,958.9 55.7 17.8 145.7 3,317.7 339.6 305.8 5.4 0.0 0.0 24.8 2,400.9 46.3 10.7 29,970.5 0.3 193.7 74.4 0.1 80.7 1.0 613.7 12.0 895.1 4.1 34.3 21.7 5.2 2.6 1.8 243.7 110.4 18.5 29,970.5 0.0 739.6 49.0
TE V/L TM R evenue
4.7x 0.9x 0.1x 15.6x 37.5x 1.3x 22.4x 0.7x 7.8x 0.0x 19.8x 0.3x 4.1x 0.6x 0.8x 0.7x 6.3x 42.3x 4.2x 10.1x 20.6x 1.5x 0.4x 9.7x 1.0x 12.3x 2.3x 1.0x 0.5x 0.9x 0.6x 9.0x 10.9x 0.0x 5.9x 1.7x 3.6x 2.5x 3.2x 2.9x 5.0x 49.2x 0.4x 2.5x 0.6x 0.6x 2.5x 0.0x 1.3x 1.6x 1.1x 1.1x 4.5x 3.9x 0.9x 23.7x 0.2x 0.1x 4.6x 0.4x 0.2x 0.9x 14.4x 1.3x 4.3x 3.3x 2.1x 1.5x 49.2x 0.0x 6.0x 2.1x
TE V/ NTM R evenue
0.7x 6.0x 0.5x 1.6x 9.0x 1.0x 0.5x 1.7x 2.2x 0.6x 2.8x 2.1x 1.2x 3.4x 0.2x 0.2x 0.9x 1.4x 9.0x 0.2x 2.0x 1.3x
TE V/L TM E B ITDA
3. 7x 9. 9x 12.7x 35.4x 5. 4x 6. 3x 4. 7x 8. 6x 1. 7x 20.4x 10.3x 42.5x 14.2x 1. 5x 20.3x 17.5x 11.3x 11.9x 8. 7x 9. 6x 23.4x 1. 0x 23.0x 0. 2x 10.1x 25.2x 4. 0x 9. 0x 4. 1x 48.4x 5. 1x 4. 3x 7. 7x 11.6x 9. 9x 14.5x 48.4x 0. 2x 12.7x 9. 9x
TE V/NTM E B ITDA
6.9x 10.4x 4.1x 4.8x 4.4x 12.7x 8.0x 5.6x 5.4x 6.9x 6.3x 7.5x 12.9x 6.2x 3.7x 5.4x 12.9x 3.7x 7.0x 6.3x
P /L TM E P S
18.3x 14.7x 45.6x 6.5x 6.2x 20.3x 10.9x 2.1x 10.3x 0.0x 43.1x 66.5x 13.1x 11.8x 4.9x 24.5x 45.0x 13.7x 35.0x 16.3x 3.1x 32.5x 2.8x 2.4x 9.6x 14.2x 12.7x 61.2x 2.2x 0.0x 20.0x 25.6x 12.1x 66.5x 0.0x 18.4x 13.1x
P /NTM E P S
13.2x 7.3x 1.8x 13.8x 9.6x 35.7x 14.9x 17.0x 12.3x 43.8x 12.9x 13.9x 12.7x 17.0x 42.1x 10.5x 16.0x 43.8x 1.8x 17.3x 13.8x
P /TangB V
2.0x 0.5x 0.4x 14.6x 17.1x 2.9x 0.8x 5.7x 5.7x 9.4x 3.1x 1.3x 43.5x 0.3x 2.2x 0.0x 19.9x 22.9x 2.1x 1.2x 1.9x 1.6x 1.0x 6.8x 11.7x 0.7x 0.8x 6.2x 4.0x 4.0x 17.7x 2.1x 0.9x 8.5x 0.7x 3.4x 1.3x 19.2x 0.9x 2.0x 3.0x 4.7x 47.3x 27.3x 0.1x 1.0x 1.0x 5.8x 26.3x 0.0x 8.0x 3.8x 0.9x 47.3x 0.0x 7.3x 3.0x
Figure 20. Valuation Comparison Source. Capital IQ
Page 16
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 39 10 10 8 6 3 2 2 1 1 1 1 1 1 1 1 1 1 90 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 Hong K ong G ermany Ita ly R us s ia S witzerla nd F inland Malays ia India Aus tralia U nited K ingdom Norway G rand Total 46, 938. 8 5, 255. 6 3, 494. 2 2, 901. 8 2, 409. 0 1, 500. 4 1, 270. 9 278. 7 268. 1 148. 1 145. 7 90. 4 64. 3 34. 8 28. 3 20. 5 4. 0 0. 1 64,853.7 Avg US D Market C ap ($m) C hina S weden J apan T aiwan Hong K ong C anada S outh K orea Ita ly R us s ia U nited S ta tes G ermany S witzerla nd F inland Malays ia India Aus tralia U nited K ingdom Norway G rand Total 4,693. 9 2,901. 8 582. 4 500. 1 278. 7 240. 9 158. 9 148. 1 145. 7 134. 8 134. 0 90. 4 64. 3 34. 8 28. 3 10. 3 4. 0 0. 1 720.6 US D L TM Total R ev ($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 4,080. 4 3,887. 4 1,950. 0 1,015. 7 672. 3 616. 5 379. 1 361. 6 236. 5 150. 9 81. 9 76. 5 60. 8 40. 0 16. 3 6. 1 2. 2 0. 3 13,634.4 US D L TM Total E B ITDA ($m) C hina S weden United S tates C a na da J a pa n S outh K orea T a iwa n Ita ly Hong K ong R us s ia Ma lays ia G erma ny Aus tralia S witzerla nd Norwa y United K ingdom F inla nd India G rand Total 2, 038. 8 299. 6 289. 4 200. 3 181. 5 94. 2 56. 2 31. 1 25. 1 19. 7 11. 0 10. 3 3. 1 0. 8 -1. 1 -1. 9 -15. 7 -40. 9 3,201.5 E B ITDA % C hina A us tralia T aiwan G ermany J apan S weden Mala ys ia Italy R us s ia S outh K orea Hong K ong S witzerla nd C anada U nited S ta tes India Norway U nited K ingdom F inland G rand Total 49. 4% 37. 2% 36. 9% 28. 8% 25. 0% 15. 4% 14. 4% 13. 1% 13. 1% 7. 9% 6. 9% 1. 9% -12. 1% -21. 9% -50. 0% -50. 6% NA NA 5.0%
Figure 21. Comparison by Country Source. Capital IQ
C omparable C ompany Analys is > Web 2.0
S ummary by E xc hange
C ompany Name OT C B B Na s daqG S OT C P K K OS E TS E Na s daqG M TS X T S XV S E HK AME X AS X XT R A GTS M SWX HL S E CM BS E NY S E OS E AIM OM RTS K LS E OT C NO G rand Total 19 14 11 6 5 5 4 4 3 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 90 US D Market C ap ($m) S E HK Nas da qG S TS E OM NY S E GTS M K OS E TS X OS E Nas da qG M XT R A 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 29, 755. 1 22, 686. 9 3, 199. 8 2, 901. 8 1, 754. 9 1, 242. 6 1, 171. 1 362. 0 294. 3 285. 5 268. 1 197. 6 148. 1 145. 7 90. 4 69. 6 66. 9 64. 3 61. 3 34. 8 28. 3 20. 5 4. 0 0. 1 64,853.7 Avg US D Market C ap ($m) S E HK OM NY S E Nas da qG S TSE GTS M OS E K OS E CM R TS XT R A TSX SWX HLS E Nas da qG M K LS E AME X BS E T S XV OT C B B AS X OT C P K AIM OT C NO G rand Total 9,918. 4 2,901. 8 1,754. 9 1,620. 5 640. 0 621. 3 294. 3 195. 2 148. 1 145. 7 134. 0 90. 5 90. 4 64. 3 57. 1 34. 8 33. 4 28. 3 17. 4 10. 4 10. 3 5. 6 4. 0 0. 1 720.6 US D L TM Total R ev ($m) OM S E HK Na s daqG S CM NY S E RTS OS E TS E K OS 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 1,950. 0 535. 7 494. 4 236. 5 198. 5 150. 9 109. 0 101. 5 100. 6 97. 7 81. 9 81. 8 76. 5 46. 7 40. 0 30. 4 27. 9 16. 5 12. 0 8. 1 6. 1 2. 3 2. 2 0. 3 13,634.4 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 RTS OS E Na s daqG M K LS E XT R A 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, 760. 5 772. 0 299. 6 161. 9 124. 1 79. 3 56. 2 31. 1 19. 7 19. 6 11. 7 11. 0 10. 3 6. 2 3. 1 0. 8 -1. 1 -1. 9 -4. 2 -4. 4 -15. 7 -34. 1 -40. 9 -63. 5 3,201.5 E B ITDA % NY S E S E HK AS X GTS M Nas da qG S XT R A TSE OS E OM K LS E CM R TS Nas da qG M T S XV K OS E S WX A ME X TSX OTCP K OTCB B BSE O T C NO HLS E A IM G rand Total 62. 5% 43. 0% 37. 2% 36. 9% 30. 3% 28. 8% 26. 4% 18. 0% 15. 4% 14. 4% 13. 1% 13. 1% 6. 4% 5. 6% 4. 4% 1. 9% -31. 8% -34. 7% -41. 5% -45. 1% -50. 0% -50. 6% #DIV /0! #DIV /0! 5.0%
Figure 22. Comparison by Exchange Source. Capital IQ
Page 17
F inanc ing - L as t Three Months (US $ m)
F in. Amount (Million) Month J ul-09 C ompany Name Pandora Media K ontera Ltd. Ning QuickPlay Media C aus es Outs park C onnectE du Ac quia, Inc S B Nation MediaMath Metavers um iMemories Invodo J ambool Quikr India P vt. L td. OP E N S ports network S tyleC as ter Nexage TweetDeck B us ca Akademos ProtonMedia iL oop Mobile C omunitae Aloqa L at49 Thread Tributes .com C oTweet C ellufun C likthrough C ognitive Match L imited B ookF res h People C apital Mas her Media J ul-09 Total Aug-09 Turbine S mith & Tinker Mint R ic hR elevance Traffiq MediaMath B ill.com E do Interac tive InnoC entive OneR iot B alihoo B oxee Polyvore F anbas e MOG Z2L ive OurS tage K ODA S c oreloop R oblox iS oc ket Tremor Media R ights F low Plis ta C hes s C ube L inks ify iS yndic a Aug-09 Total S ep-09 YuMe Mas hL ogic G reys tripe F ourS quare E duF ire S ep-09 Total G rand Total 90.8 US A US A US A US A US A 1. 4 1. 3 5.2 27.8 114.4 7.0 102.1 77.0 2. 5 2. 0 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 US A US A US A G erma ny US A US A US A US A G erma ny S outh Africa US A US A 1. 3 0. 5 0. 4 25.8 11.5 77.6 43.6 5. 0 50.0 1. 5 1. 4 2. 2 2. 0 2. 0 3. 0 2. 8 3. 0 3. 0 5. 0 5. 0 6. 0 5. 6 8. 5 7. 3 7. 0 7. 0 10. 0 8. 5 12. 5 10. 0 29. 0 14. 1 C ountry US A Is rael US A C anada US A US A US A US A US A US A G erma ny US A US A US A India US A US A US A UK US A US A US A US A S pain G erma ny C anada US A US A US A US A US A UK US A US A US A 0. 3 65.0 11.1 36.8 51.5 27.0 50. 0 0. 5 0. 5 1. 0 1. 0 1. 1 1. 0 1. 2 1. 2 2. 0 1. 7 1. 5 1. 5 2. 5 2. 5 4. 0 3. 2 2. 6 4. 1 4. 0 4. 0 8. 0 6. 6 6. 3 6. 2 6. 0 5. 0 8. 0 10. 0 8. 3 8. 2 Type of financing Angel/S eed 15. 5 15. 0 12. 0 S eries A S eries B S eries C 35. 0 S eries D G rand Total 35. 0 15. 5 15. 0 12. 0 10. 0 8. 3 8. 2 8. 0 8. 0 6. 6 6. 3 6. 2 6. 0 5. 0 4. 1 4. 0 4. 0 4. 0 3. 2 2. 6 2. 5 2. 5 2. 0 1. 7 1. 5 1. 5 1. 2 1. 2 1. 1 1. 0 1. 0 1. 0 0. 5 0. 5 0. 3 191.4 50. 0 29. 0 14. 1 12. 5 10. 0 10. 0 8. 5 8. 5 7. 3 7. 0 7. 0 6. 0 5. 6 5. 0 5. 0 3. 0 3. 0 3. 0 2. 8 2. 2 2. 0 2. 0 1. 5 1. 4 1. 3 0. 5 0. 4 208.5 5. 0 2. 5 2. 0 1. 4 1. 3 12.2 412.0
Figure 23. Financing, Last Three Months Source. Company reports
Page 18
C ompany Des c riptions - C urrent Month C apital Market Ac tivity
C ompany
E duF ire
HQ
United S ta tes
Webs ite
www. edufire. com
Des cription
E duca tion R evolution, Inc. operates as an online community that provides online live video tutoring s ervices . It offers tutoring s ervices for s tudents covering various langua ges and preparing s tudents for exams on video chat s es s ions . T he company was founded in 2007 and is bas ed in S anta Monica , C alifornia. F ours quare S olutions Inc. des igns and develops s oftware for iphones . F ours quare S olutions Inc. is bas ed in New Y ork , New Y ork. G reys tripe, Inc. operates an ad-s upported mobile games and applications dis tribution platform. T he company provides online gaming and ingame advertis ing s olutions through publis her s ites . Its AdW R AP product s uite ena bles brand advertis ers to communica te their brand mes s ages to mobile audience; publis hers to s erve ads through their games ; and cons umers to download games , as well as delivers images , videos , and s crolling banners to mobile games and applications . T he company’s s olutions a ls o include AdW R AP C ampaign Ma nager, an a dvertis ing W eb interfa ce that allows advertis ing agencies a nd ad res ellers to crea te and monitor mobile in-ga me a d campaigns ; AdW R AP C atalog P rogram, which enables partners to dis tribute a mobile game ca talog; and AdW R AP for P ublis hers platform that provides mobile game publis hers an automa ted proces s , which ad-enables mobile games and applications . It s erves developers , carriers and dis tributors , game players , and cons umer W eb s ites . T he company is bas ed in S an F rancis co, C alifornia. Mas hLogic Inc. offers mas hes to pers ona lize the applications for the us ers and bloggers . It adds relevant links to W ebs ites , pers onaliz es W eb pages , increas es vis ibility and reach of content and bra nd, and enriches W eb with links to s ources . T he company was founded in 2007 a nd is bas ed in Menlo P ark, C a lifornia . NowP ublic T echnologies , Inc. , a participatory news network, owns and operates NowP ublic. com platform for citizen journalis m. T he company provides politics , culture, enterta inment, and life photos and video headlines . It s erves Internet us ers , bloggers , a nd photography enthus ias ts . T he company was founded in 2005 a nd is bas ed in V ancouver, C anada. As of S eptember 2, 2009, NowP ublic T echnologies , Inc. operates as a s ubs idiary of T he W as hington E xaminer. S kype T echnologies S . A. provides S kype, a s oftware that enables individua ls and bus ines s es to ma ke free video and voice calls , s end ins tant mes s ages , and s ha re files with other S kype us ers . It als o enables to make calls to landlines and mobiles internationa lly. T he company als o provides heads ets , W ebca ms , and phones through its online s hop. It s erves us ers in Argentina, B raz il, C hile, C olombia, Mexico, P eru, and V enez uela. T he company was founded in 2003 and is bas ed in Luxembourg. As of October 14, 2005, S kype T echnologies S . A. is a s ubs idiary of eB ay Inc. Y uMe, Inc. operates a s a video advertis ing network on W eb. It offers ad mana gement s ys tem tha t enables a dvertis ers and publis hers to identify, clas s ify, and track content through digital media platforms , s uch a s W eb, downloads , mobile, a nd IP T V . T he company als o enables publis hers to organize video on their s ite into content channels , s uch as automotive, financial s ervices , lifes tyle, news , mus ic, s ports , entertainment, and fa mily friendly. In addition, it offers real-time targeting, mea s urement, and optimization; content dis tribution and viral a dvertis ing opportunities ; a s uite of intera ctive ad placements ; a nd video monetiz ation s ervices . F urther, the company provides a beha viora l targeting s ys tem that enables advertis ers to target their mes s ages to viewers on a nationa l s cale bas ed on video viewing interes ts a nd purchas e intent. Y uMe, Inc. was founded in 2004 and is headquartered in R edwood C ity, C alifornia.
F ourS quare G reys tripe
United S ta tes United S ta tes
www. fours quare.com www. greys tripe. com
Mas hL ogic
United S ta tes
www. ma s hlogic. com
NowPublic
C a nada
www. nowpublic. com
S kype
Luxembourg
www. s kype. com
YuMe
United S ta tes
www. yumenetwork s . com
Figure 24. Company Descriptions Source. Company reports, Capital IQ, Crunchbase
Page 19
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
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