Web 2.0 Weekly - Sep. 22, 2009

SOFTWARE & SERVICES 22 SEPTEMBER 2009 WEB 2.O WEEKLY HOW VALUABLE ARE UNIQUE VISITORS? DAVID SHORE, CFA, MBA 416.860.6784 david.shore@researchcapital.com Damian Wojcichowsky, CFA (Associate), 416.860.7652 T WIT T E R’ S V AL U E QU A D RU PL E S S IN C E F E B RU A R Y; DO E S S PI K E IN U S E R S J U ST IF Y T H E I NC R EA S E? Twitter is rumoured to be raising a new $50 million round of funding at a $1 billion valuation. The company most recently raised $35 million at a rumoured $250 million valuation in February. W hile the increase in value seems extraordinary, when looking at the valuation per unique visitor (UV), the increase is less impressive – from $29 to $42 (+47%). Note that we would of course prefer comparing valuation based on financial metrics such as cash flow or even revenue. However, Twitter has not yet started generating any revenue. Value per unique vis itor (UV) 1, 200, 000, 000 S ep 09 T witter, $42 L inkedin, $88 1, 000, 000, 000 800, 000, 000 B ebo, $22 (T ota l V a lua tion $) 600, 000, 000 400, 000, 000 C lub P enguin, $29 F eb 09 T witter, $29 Mint. com, $113 S tumbleU pon, $5 F riends R eunited, $2 (200, 000, 000) $(50) P eople Media , $20 F riendF eed, $48 P la xo, $200 200, 000, 000 P la xo Mint. com L inkedin F riendF eed T witter C lub P enguin T witter B ebo P eople Media S tumbleU pon F riends R eunited $- $50 $100 (V a lue per U nique V is itor) $150 $200 $250 B ubble s ize de note s numbe r of U V S ource : C ompany re ports , C ompe te .com Deal flow picks up: Total transaction value in the W eb 2.0 universe for September nearly doubled to $74.2 million, up from $37.4 million last week. Another 4 financings were announced this week, bringing the month-to-date total to 13 transactions averaging $5.7 million each (compared with 9 trades averaging $4.7 million last week). The largest transaction stands at $20 million for Ensequence (provider of software and services to manage interactive television content). Deal flow in prior months was as follows: August, $208.5 million, averaging $7.7 million over 27 deals; July, $191.4 million, averaging $5.5 million over 35 deals; and June, $204.7 million, averaging $4.9 million over 42 deals. Broad-based price improvement: Twenty-nine of the companies in our universe had positive stock price performances over the past week (for stocks with prices greater than $1) while twelve companies showed negative one-week returns. Volatile price swings continue for DigitalTown (OTCBB:DGTW ), rising 76% this week following a 14% decline the previous week. Frogster International (XTRA:FRG) experienced the largest decline at -8.8%. 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 Page 2 THE WEB 2.0 UNIVERSE Ninety public Web 2.0 companies: Our W eb 2.0 universe contains 90 companies, with a combined market cap of approximately $69 billion (Figure 1). The median market cap for the group is $49 million, with average trailing revenue of $161 million (median $54 million). The companies are also generally profitable, with a median EBITDA margin of 11.8%. On a valuation basis, the overall average is 5.4x trailing revenue (median 2.1x) and 13.2x trailing EBITDA (median 10.3x). 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 ocia ted Media Holdings Inc. B igs tring C orp. B eta wave 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 ateway C orporation C hines e G amer Interna tional C LIC K E R Inc. C ornerW orld C orporation 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 anada, Inc. F rogs ter Intera ctive P ictures AG G ama nia Digital E nterta inment C o. , Ltd. G ameO n C o L td. 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 ntertainment Limited K AB Dis tribution Inc. K ings oft C o. Ltd. Lingo Media C orpora tion 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 orporation NetDragon W ebS oft, Inc. Neteas 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 NI Digital Media Inc. Q uepa s 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 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 L td. T he P arent C ompa ny T he9 Limited T heS treet. com, Inc. T ota l S port O nline AS T ree.C om, Inc. U nis erve C ommunications C orp. U nited O nline Inc. U OMO Media, Inc V alueC lick Inc. V OIS , Inc. W ebzen Inc. W izzard S oftware C orpora tion W orlds . com Inc. W ynds torm C orporation 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 3/31/2009 9/30/2008 6/30/2009 6/30/2009 9/30/2008 6/30/2009 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 6/30/2009 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 6/30/2009 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 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 XTI T S X: F MN FR G 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 XV : LM LV W D LO O 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 PWR D T S XV : P N QP S A R BCI S NDA S F LY A066270 S TVI S NMN S MV I S C LW S O HU LO V S P XA 700 K IDS .Q NC T Y TS CM T OS O TR E E T S XV : U S S U NT D U O 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 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 P K XT R A K OS E K OS E Trading C urrency HQ US D KRW 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 KRW US D C AD E UR TWD JPY E UR US D US D US D JPY JPY KRW 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 KRW 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 KRW US D US D US D US D US D US D US D HK D US D US D US D NOK US D C AD US D US D US D US D US D US D US D US D E UR KRW KRW U nited S tates S outh K orea J apa n U nited S tates U nited S tates U nited S tates U nited S tates U nited K ingdom U nited S tates Hong K ong C hina U nited S tates T a iwan U nited S tates U nited S tates C a nada Italy Malays ia U nited S tates U nited S tates U nited S tates U nited S tates S outh K orea U nited S tates U nited S tates G ermany T a iwan J apa n F inla nd C hina T a iwan S outh K orea J apa n J apa n S outh K orea U nited S tates C a nada C a nada Aus tralia C a nada C hina C a nada U nited S tates U nited S tates U nited S tates J apa n S weden Aus tralia S witzerland S outh K orea C hina C hina C a nada U nited S tates J apa n India C a nada U nited S tates C hina C a nada U nited S tates R us s ia C hina U nited S tates S outh K orea U nited S tates U nited S tates U nited S tates U nited S tates C hina U nited S tates U nited S tates C hina U nited S tates C hina U nited S tates Norway U nited S tates C a nada U nited S tates C a nada U nited S tates U nited S tates S outh K orea U nited S tates U nited S tates U nited S tates G ermany S outh K orea S outh K orea C urrent P ric e 0. 65 19, 950 52, 500 0. 01 0. 02 0. 07 0. 17 0. 01 0. 23 2. 78 38.29 0. 02 458 0. 01 0. 06 1 6. 95 0. 61 0. 00 0. 06 2. 64 0. 40 875 0. 25 1. 40 17.13 51.70 100, 800 0. 05 8 5. 57 1. 95 9, 850 243, 000 4, 050 20.63 0. 15 0. 09 0. 40 0 8 1. 00 0. 05 1. 28 0. 01 599000.00 312.50 0. 07 4. 46 42000. 00 6 43.79 0. 93 1 26750. 00 42.65 39.45 2. 70 43.98 1. 89 2 1. 16 53.53 17.71 9310.00 1 0. 00 0 0. 58 68.86 2 0 128 0. 01 8. 46 2. 72 0. 03 7. 79 0. 04 8. 26 0 13 0 3. 05 0. 46 0. 10 0. 10 32.75 9020.00 4215.00 US D Market C ap ($m) 18. 2 142.6 31. 0 0.6 1.1 2.0 7.9 6.0 19. 5 294.6 2, 106.0 0.3 1, 187.8 0.4 5.7 76. 6 165.4 39. 8 0.0 4.6 72. 2 21. 5 52. 6 11. 1 68. 0 63. 5 242.1 105.8 65. 9 1, 750.4 303.7 54. 2 2, 394.2 302.3 73. 6 2, 731.5 10. 6 4.3 16. 8 0.6 1, 141.2 11. 5 1.5 21. 9 4.5 1, 002.2 2, 974.2 5.2 92. 0 732.8 394.2 5, 667.6 98. 3 30. 7 36. 0 31. 0 2, 215.1 225.4 2, 163.0 59. 9 22. 1 160.9 3, 574.1 450.8 323.4 5.4 0.0 0.0 25. 7 2, 639.7 45. 3 10. 7 29, 985. 0 0.2 212.3 83. 2 0.1 84. 2 0.9 692.5 10. 5 1, 109.5 2.5 36. 2 23. 2 5.2 1.8 253.5 112.1 18. 7 29, 985. 0 0.0 769.5 48. 9 US D L TM Total R ev ($m) 4. 4 107. 6 64.2 0. 1 0. 1 9. 4 11.7 0. 0 0. 0 361. 6 241. 2 6. 7 61.6 2. 5 3. 9 90.5 242. 6 77.1 NA 1. 0 NM 0. 6 15.3 NM 5. 3 9. 7 140. 6 79.6 5. 5 198. 5 183. 6 48.6 151. 5 116. 1 60.1 1, 392. 3 0. 0 1. 6 16.6 68.4 139. 1 1. 2 10.6 56.8 0. 1 132. 8 1, 982. 6 1. 2 40.0 205. 2 89.3 472. 4 21.5 0. 7 90.3 82.8 785. 7 191. 7 255. 7 21.2 0. 2 156. 2 629. 0 218. 6 190. 8 3. 5 2. 0 0. 1 0. 0 485. 1 50.5 0. 1 1, 391. 6 112. 0 250. 6 67.0 2. 3 216. 6 24.1 949. 8 0. 9 563. 6 0. 0 22.9 5. 3 0. 1 NA 59.0 56.8 11.8 1,982. 6 0.0 160.8 53.7 US D L TM Total E B ITDA ($m) (3.7) 25. 6 (1.9) (2.3) (1.5) (12. 6) (12. 8) (2.7) (4.6) 25. 1 147. 2 (6.6) 34. 7 (1.2) NM 9.8 31. 9 11. 1 NM (1.4) (2.5) (3.4) (3.6) NM (5.1) (4.5) 25. 1 19. 5 (17. 5) 124. 1 NM 16. 5 91. 0 25. 8 1.4 52. 7 (0.8) (5.1) 7.1 4.0 61. 4 (1.9) (0.1) (4.4) (2.5) 44. 8 304. 6 (2.6) 0.8 55. 1 25. 7 297. 4 (13. 0) (6.2) 6.7 (41. 4) 205. 1 4.9 142. 2 2.3 (10. 6) 20. 4 296. 7 27. 3 12. 4 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) 2.3 (4.5) (0.7) NM 17. 0 12. 2 1.2 680.3 -41.4 38.6 1. 2 E B ITDA % -83. 3% 23. 8% -2.9% NM NM NM NM NM NM 6.9% 61. 0% -98. 9% 56. 2% -45. 8% NM 10. 8% 13. 1% 14. 4% NM NM NM NM -23. 6% NM -95. 2% -47. 0% 17. 9% 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% 28. 7% 63. 0% -60. 3% NM 7.4% -50. 0% 26. 1% 2.6% 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 28. 8% 21. 6% 10. 5% 63. 0% -98. 9% 5.2% 11. 8% TE V/L TM R evenue 5.2x 1.0x 0.2x 15. 6x 34. 6x 1.2x 0.8x 7.6x 0.0x 18. 1x 0.2x 4.1x 0.6x 0.9x 0.7x 6.7x 38. 6x 3.6x 11. 4x 6.4x 1.6x 0.4x 12. 1x 1.3x 15. 0x 2.3x 1.0x 0.7x 2.1x 0.6x 8.3x 8.8x 0.0x 6.7x 1.8x 3.2x 2.4x 3.5x 2.9x 4.1x 49. 2x 0.4x 2.9x 0.6x 0.7x 2.7x 0.0x 1.8x 1.7x 1.1x 1.1x 4.5x 4.4x 0.9x 23. 7x 0.2x 0.3x 4.6x 0.4x 0.2x 1.0x 12. 6x 1.7x 4.6x 3.4x 2.1x 49. 2x 5.4x 2.1x TE V/L TM E B ITDA 4. 3x 11.6x 12.4x 32.2x 5. 8x 6. 7x 4. 9x 8. 7x 1. 7x 25.0x 10.4x 43.0x 18.8x 1. 5x 18.7x 19.7x 11.7x 13.1x 9. 9x 10.9x 23.8x 1. 2x 24.9x 0. 3x 14.2x 26.1x 4. 0x 10.2x 4. 0x 48.4x 9. 6x 4. 7x 9. 8x 11.8x 9. 9x 48.4x 13.2x 10.3x 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, 271 NA NA 90 14 NA 2, 969 NA 405 NA 2, 426 3, 109 237 NA NA NA 3, 411 590 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 246 NA NA 6,421 1 901 242 Figure 1. Web 2.0 Universe Summary Source. Capital IQ 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 ) Deal flow picks up: Total transaction value in the W eb 2.0 universe for September nearly doubled to $74.2 million, up from $37.4 million at time of publication last week. This week has brought another four financings to the sector, bringing the month-to-date total to thirteen transactions averaging $5.7 million each (compared with our month-to-date average of $4.7 million last week over nine transactions). The largest transaction is a $20 million financing of Ensequence (provider of software and services to manage interactive television content). The Ensequence trade exceeds the previous transaction value high in September set by the $9 million financing of InXpo (Virtual Worlds). In comparison, total capital raised in August was $208.5 million, averaging $7.7 million (27 deals); for July (35 deals) $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 7.9 7.0 150.0 7.0 6.5 7.1 6.6 6.2 5.5 4.9 100.0 4.0 5.7 6.0 8.0 10.0 (US$m) 2.0 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 50.0 0.0 *May-09 includes $200m FB investment Figure 2. Financings, Last Twelve Months Source. Company reports Page 4 Quiet After Mint: Following Intuit’s acquisition of Mint.com for $170 million last week, financing and M&A headlines were more muted with the $20 million series D financing of Ensequence making the top headline in the W eb 2.0 space. Fwix, a local news search application developer, announced a $2.8 million series A raise. NextBio, a life sciences collaboration products company, announced $8.0 million in series C financing. Finally, Mocapay, a mobile payments services concern, is raising $3 million in a series C financing. For additional details on financings, see Figures 23 and 24 (at end of note). Financing & M/A Summary - Last Three Months 200.0 180.0 160.0 140.0 120.0 (US$m) Sep-09 100.0 Aug-09 Jul-09 80.0 60.0 40.0 20.0 0.0 Skype Mint People Media Super Rewards Turbine Friends Reunited AdLink Internet Media Pandora Media Smith & Tinker NowPublic Ensequence xoopit iLike MediaMath Kontera Ltd. Ning Zoove RichRelevance QuickPlay Media Traffiq Causes InXpo Edo Interactive Bill.com Outspark Jobvite ConnectEdu NextBio Riot Games Acquia, Inc SBNation InnoCentive OneRiot Balihoo Metaversum iMemories HiveLive Invodo Boxee Polyvore YuMe Fanbase MOG Jambool Quikr India Pvt. Ltd. StyleCaster OPEN Sports network Nexage TweetDeck Mocapay KODA Conduit Labs OurStage Z2Live Scoreloop Fwix Busca Akademos MashLogic ProtonMedia Roblox iLoop Mobile iSocket Tremor Media Greystripe Comunitae Aloqa RightsFlow Lat49 Plista FourSquare Tiny Pictures EduFire ChessCube Tributes.com Thread CoTweet Clikthrough Cognitive Match Limited Cellufun BookFresh People Capital Linksify iSyndica Masher Media Gigpark Figure 3. Capital Market Activity, Last Three Months Source. Company reports Page 5 Advertising remains the most active sector: Advertising-related companies continue to see the most activity by number of transactions (10), followed by Social Networks (9), and Gaming (8) (Figure 4). The $2.0 billion acquisition of Skype skews the dollars transacted to the SMS/Voice segment, while the $170 million acquisition of Mint brings the Vertical Communities segment to the second highest total. Capital Market Activity by Sector - Last Three Months 200.0 180.0 160.0 140.0 120.0 (US$m) 100.0 80.0 60.0 40.0 20.0 2,025.0 197.5 100.1 Vertical Communities 0.0 SMS/Voice Advertising 98.5 Gaming 85.0 Social Networks 80.0 Online Dating 73.9 Virtual World 64.5 Music 40.0 Infrastructure 38.2 Video 37.3 Crowdsourced Content 20.7 Mobile 13.2 Advertising/Mobile 12.5 Comment/Reputation 12.0 Online Learning 10.0 Enterprise 8.6 Media 8.0 Collaboration 8.0 Blog 7.0 Search 5.0 Virtual Goods 4.1 Classified 4.0 Mobile Ad 3.2 Microblog 2.8 Aggregation 1.0 Analytics 0.5 Online Lending 1 0.5 Online Calendar 1 # companies 1 5 10 8 9 1 5 5 5 5 3 5 1 1 3 3 2 1 1 1 1 1 2 1 1 1 Figure 4. Capital Market Activity, by Sector, Last Three Months Source. Company reports 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 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 180 160 140 120 100 80 60 40 20 0 9/22/2008 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 10/20/2008 11/17/2008 12/15/2008 12/29/2008 9/21/2009 10/6/2008 11/3/2008 12/1/2008 2/9/2009 3/9/2009 4/6/2009 5/4/2009 6/1/2009 9/7/2009 Index: Web 2.0 (Market Cap) Figure 5. Web 2.0 Price Performance Source. Capital IQ ^COMP - Share Pricing Page 7 Broad-based price improvement: Twenty-nine of the companies in our universe had positive stock price performances over the past week (for stocks with prices greater than $1) (Figure 6) while twelve companies showed negative one-week returns. Volatile price swings continue for DigitalTown (OTCBB:DGTW ), rising 76% this week following a 14% decline the previous week. Frogster International (XTRA:FRG) experienced the largest decline at -8.8% for the week. DigitalTow n, Inc. S hutterf ly , Inc. G igaMedia Ltd. Gravity Co., Ltd V alueClick Inc. G ama nia Digital Entertainment A c toz S oft Co., Ltd. Chines e G amer Internationa l Open Tex t Corp. LookS mart, Ltd. Modern Times G roup Mtg A B NEOWIZ G ames Corporation IA C/InterA ctiveCorp. United Online Inc. S ohu.com Inc. S handa Interactive Y nk K orea Inc. Webz en Inc. The9 Limited S K Communications Co., Ltd. Neteas e.c om Inc. G iant Interactive G roup, Inc. TheS treet. com, Inc. Eolith Co. Ltd. Perf ect World Co., Ltd. S park Netw orks , Inc. Tencent Holdings Ltd. PNI Digital Media Inc. CDC Corp. Lingo Media Corporation Cy berplex Inc. X ING A G Tree.Com, Inc. Quepas a Corp. My riad G roup A G NetDragon WebS oft, Inc. K ings of t Co. Ltd. Y edangOnline Corp. DA DA S pA HanbitS oft, Inc. Changy ou.com Limited Openw ave S y s tems Inc. Frogs ter Interac tive Pictures A G -0.2 Figure 6. 1-Week Price Performance Source. Capital IQ 1 Week P rice P erformance 19.2% 15.3% 14.0% 13.8% 12.5% 10.8% 10.6% 10.6% 9.4% 7.9% 7.4% 6.3% 5.9% 4.6% 4.1% 3.8% 3.7% 3.5% 3.3% 2.9% 2.7% 2.6% 2.3% 1.3% 0.9% 0.9% 0.5% 0.4% 0.0% 0.0% -0.3% -0.5% -0.6% -0.9% -1.4% -1.9% -2.0% -2.3% -3.6% -5.6% -5.9% -8.8% -0.1 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 76.0% 0.8 0.9 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 Compa ny S hutter fly, Inc . (Nas da qGS : S F LY ) Headline S hutte rfly Inc . Appoints B ria n S we tte to the B oa rd Notes O n S eptember 8 , 20 09, B rian S wette wa s appointed to the B oa rd of D irec tors of S hutterfly Inc . Mr. S wette will a ls o s erv e on the A udit C ommittee of the B oa rd. M r. S we tte has s erved on the B oard of B urge r K ing s ince 2 003, a nd be ca me Non -E xe cutive C ha irma n in 20 06. Mr. S wette a ls o s erv es on the B o ard of Dire ctors for J amba Ju ice, C B L P artners , F R S C o mpa ny a nd C a re . com. S hutterfly I nc . an nounc ed tha t it has a cquired T iny P ic tures . T iny P ictures 's found er and C E O , J ohn P ois s on, a long with the T iny P ictures te am, will join S h utte rfly. C orn erW orld C orpora tion reported earnings res ults for the firs t quarter e nde d J uly 3 1, 2 009 . F or th e quarter, the compa ny reported net los s of $33 4, 5 55, down $107 , 57 1 for the sa me qua rter the prev ious ye a r 20 08. G iant Inte ra ctiv e G roup Inc. 's sha reho lde rs res olutions a dopted a t its a nnua l gene ra l mee ting of s hareholders held in S ha ngha i on S eptember 11 , 20 09. T he c ompa ny 's s hareholders a ppo inted E rns t & Y oung Hua M ing as th e compa ny' s ind epe nden t au ditors for the f is c al year e nding D ecember 31 , 20 09. Myria d G roup AG (S W X: MY R N ) ac qu ired X umii, Inc . on S eptember 15 , 20 09. T he f ina ncia l terms of the de a l were not dis c los ed. A ll 17 employees o f Xu mii will be pa rt of Myria d G roup. T he tra ns ac tion is not ex pec te d to ha ve a ma teria l impa ct to Myria d re venue or E B IT DA for the full fis ca l yea r 2009 . Myria d G roup AG (S W X: MY R N ) completed the ac quis ition of Xumii, Inc. on S eptember 15 , 20 09. O n S eptember 9 , 20 09, S ta cey G iama lis , G eneral C ouns el a nd S enior V ice P res ident, a nd L ook S ma rt Ltd. determined tha t Ms . G ia malis would s epara te from the C o mpany ef fec tive S e ptembe r 15, 200 9. O n 0 9/1 5/20 09, IA S E ne rgy, Inc . a nno unc ed tha t the y will be una ble to file the ir next 10-Q by the de a dline requ ired by the S E C . K ings oft C o. Ltd. reporte d ea rnings res ults for th e first ha lf of 20 09. F or the firs t ha lf, the company reaped total revenues of C NY 476 million, ris ing 37% yea r on yea r. G ross profit arriv ed a t C N Y 417 million, jumping 40% from firs t half of 200 8. G ros s ma rgin reache d 88 % . IA S E nergy, Inc' s common s toc k ha s been delete d from O T C B ulletin B oard effe ctiv e S eptember 16 , 20 09 on a ccount of its fa ilure to comply with N AS D 6 530. T he compa ny ha s been added to NB B . Ne tDragon W e bS o ft I nc. an nou nc ed the la unc h of Demon R is ing, a n ew C h ine se ex pans ion pac k for its fla gs hip E u demons O nline ga me. De mon R is ing marks the fifth E P re lea s ed f or E udemons O n line s inc e the g ame wa s initia lly la unc hed in J une 200 6, a nd will introduce a s erie s of six co mpre hens ive insta nc ed a ctivities . E ffe ctive S eptember 14 , 20 09, Ju lia C oope r was termina ted as V P of S ales a nd O pe ra tions of IB 3 Ne twork s Inc. T he P re sident of T ence nt H olding s Ltd. , C hi-ping L a u s a id that the compa ny will a cc elerate the pace of its merge a nd a cquis ition and may cond uct direct inves tment a nd joint inve stme nt to ex pa nd overs eas . L au noted tha t Te nc ent will ke ep scouting for pote ntia l foreign M& A opportunities a nd h as a lrea dy o pene d repre se ntative o ffice s in V ietna m, India , S outh K orea, a nd the U. S . T e nc ent would lik e to s eiz e opportunities in the g loba l fina ncia l meltdown and pa rtner with other c ompanie s in re la ted f ie lds tha t ha s grea t potentia l, sa id La u. Howe ve r, T ence nt will not lower its crite ria for potentia l M &A de a ls a t a time when mo re and more M& A opportun ities a re being thrown up bec aus e of the global fin ancial crisis . T he firm will e xa mine the fe a s ibility o f the de a ls by ev alua ting its o wn te chnology , tale nt a nd bus in es s performance , ac cording to L au. O pe n T ex t C orp. ha s extende d its pa rtners hip with L ogica , with L ogic a joining th e O pen T ex t G lo ba l P a rtne r P rogra m for S A P C ompe tence . Under th e ag re ement, Logica will deliv er a nd s upport the O pe n T ex t E nte rpris e C ontent Ma nagement (E C M) s uite for S A P s olutions. T he compa nie s, togethe r with S AP , will colla bora te on the implementa tion o f joint mark et o fferings , bas ed on the O pen T e xt E C M s uite for S A P s olutions , in co njunction with a range of cons ulting, s ys tems integra tion, a pplica tio n mana gement and manag ed operation s ervices from Lo gica . T o pres ent outlining c ompa ny's vis ion for produc ts , ma rk ets a nd growth stra tegy T ree. C om Inc. and Morte ch Inc. hav e res olv ed their laws uit to the mutu al s atisf ac tio n of both partie s, a nd the la ws uit ha s been dismiss ed. G iant Inte ra ctiv e G roup Inc. a nnounced tha t it will integra te Dolby(R ) A xon, th e 3D voice technolog y developed by Do lby L a bora tories I nc. , into its f la gs hip ma s sively multipla ye r online role playin g ga me (MMO R P G ) ZT O nline . Z T O nline will incorporate Dolby A xon 3D voice to MO K O .mobi Limite d (L oo p M obile) reported return on e quity res ults for th e year e nded J une 30, 200 9. for the ye a r, th e compa ny re ported los s on equity of 271 . 2% and los s on as s ets o f 18 4. 3% c ompared to los s on equity of 18 3. 5% and lo ss o n as s ets of 1 50. 4 % for the sa me S hutter fly, Inc . (Nas da qGS : S F LY ) C or nerW or ld C or poration (O TC B B : C W R L ) G iant Inte rac tiv e G roup, Inc . (NYS E : GA) Jo hn P ois son to J oin in S hutterfly, Inc C ornerW orld C orpora tion R eports E a rning s R es ults for the F irs t Q ua rte r E nded J uly 31 , 20 09 Gian t Interac tive Group I nc. A ppoints E rns t & Y oung Hua Ming a s the C ompa ny's I ndependent Auditors C M C a pita l Inv es tments ; Myri ad G roup My riad G roup A G ( S W X : M Y R N ) a c quire d Xumii, Inc. AG (S W X : MY R N); S outhe rn C ros s V enture Par tners ; Xumi i, Inc. L ookS mart, L td. (Nas da qG M: L O O K ) IA S E ne rgy, I nc . (O T C B B : IA S A.E ) K ings oft C o. L td. (S E HK : 38 88) S ta ce y G ia malis to Le a ve L ook S ma rt L td. as G ene ra l C ounse l a nd S en ior V ice P re sident IAS E ne rgy, Inc. a nnou nc ed delay ed 1 0-Q filing K ings oft C o. Ltd. R e ports E arnings R e sults f or the F irs t Ha lf of 200 9 IAS E ne rgy D ele ted F ro m OT C B B NetDra gon W ebS oft Inc . La unches Demon R ising IA S E ne rgy, I nc . (O T C B B : IA S A.E ) NetDr agon W e bS oft, Inc. (S E HK : 77 7) IB 3 Network s , Inc . (O T C B B : IB NW ) T ence nt Holdings Ltd. (S E HK : 700) IB 3 Networks I nc . T ermin ates J ulia C ooper a s V P of S a les a nd O pera tions T enc ent A ggres s ively S couting F or O verse a s M& A L ogic a ; O pen T ext C orp. (Nas da qG S : O T E X ) Open T e xt C orp. E x tends P a rtners hip with L ogica O penwav e S ys tems Inc . (Nas da qG S : O P W V) T re e.C om, Inc . (N as daqG M: T R E E ) Dolby L a boratori es Inc. (NY S E : DL B ); G iant Inte rac tiv e G roup, Inc . MO K O .mobi L i mited (AS X : MK B ) Openwa ve S ys tems Inc . - C onfe re nce P res entation C a ll T re e.C om I nc. an d M ortech I nc. R e solve L aws uit Gian t Interac tive to U tiliz e Dolby(R ) A xon 3D V oice T echnology in ZT Online MO K O .mobi L imited R eports R eturn on E qu ity R e sults for the Y ea r E nde d J un e 30 , 20 09 Figure 7. Key Developments Source. Capital IQ Page 9 VALUATION Online Gaming companies lead market-cap charts: Fifteen companies in our W eb 2.0 universe top US$1 billion in market capitalization (Figure 8), up from thirteen last week. Fifty-eight of the ninety-one companies have market caps under US$100 million, with 37 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) Tenc ent Holdings Ltd. Neteas e.c om Inc . S handa Interac tive Entertainment Modern Times Group Mtg A B IA C/InterA ctiv eCorp. S ohu.c om Inc . G ree, Inc . Open Tex t Corp. Perf ec t W orld Co., L td. Cha ngyou. com L imited Gia nt Interac tive Group, Inc . Chines e G amer Interna tional K ings of t Co. Ltd. V a lueClic k Inc . Mix i, Inc . NEOWIZ G ames Corpora tion United Online Inc . S hutterf ly, Inc . NetDragon WebS oft, Inc . S K Communic ations Co., Ltd. G iga Media Ltd. GungHo Online Entertainment, Inc . CDC Corp. XING A G Ga ma nia Digita l Enterta inment Co., Openw a ve S y s tems Inc . The9 L imited DA DA S pA OA O R B C Information S y s tems A ctoz S of t Co., Ltd. Y edangOnline Corp. Ga meOn Co Ltd. NeuL ion Incorpora ted My ria d Group A G Tree. Com, Inc . TheS treet.c om, Inc . Cy berplex Inc . HanbitS oft, Inc . Digita lTow n, Inc . Fluid Mus ic Canada, Inc . GeoS entric Oyj Frogs ter Interac tive Pic tures A G PNI Digita l Media Inc . Grav ity Co., Ltd Eolith Co. Ltd. S pa rk Netw orks , Inc . DXN Holdings B hd Webz en Inc . Ngi Group Inc . A Q Intera ctiv e, Inc . Northgate Tec hnologies L imited NeXplore Corpora tion S ocia lw is e, Inc . Wiz z a rd S oftw are Corpora tion Quepa s a Corp. LookS mart, L td. Dolphin Digita l Media, Inc . B roa dWebA s ia Inc . Y nk K orea Inc . A c celeriz e New Media, Inc . J umbuc k Entertainment L imited Lingo Media Corpora tion Ex tens ions , Inc . S pec trumDNA , Inc . IA S Energy, Inc . UOMO Media , Inc B eyond Commerc e, Inc . B right Things plc CornerWorld Corpora tion S NA P Intera ctiv e, Inc . MOK O.mobi L imited Worlds .c om Inc . Digita lPos t Intera ctiv e, Inc . Ma gnitude Inf orma tion S y s tems Inc . is eemedia Inc . V OIS , Inc . B eta w av e Corpora tion W ynds torm Corpora tion LiveWorld Inc . B igs tring Corp. Unis erv e Communic ations Corp. K A B Dis tribution Inc . A s s oc iated Media Holdings Inc . CL ICK ER Inc . China Ga tew a y Corpora tion The Parent Company Tota l S port Online A S S NM Globa l Holdings Dibz Interna tiona l, Inc . S oc ia l Media V enures , Inc . 0 Figure 8. Market Cap Ranking Source. Capital IQ 29985.0 5667.6 3574.1 2974.2 2731.5 2639.7 2394.2 2215.1 2163.0 2106.0 1750.4 1187.8 1141.2 1109.5 1002.2 732.8 692.5 450.8 394.2 323.4 303.7 302.3 294.6 253.5 242.1 225.4 212.3 165.4 160.9 142.6 112.1 105.8 98.3 92.0 84.2 83.2 76.6 73.6 72.2 68.0 65.9 63.5 59.9 54.2 52.6 45.3 39.8 36.2 36.0 31.0 31.0 30.7 25.7 23.2 22.1 21.9 21.5 19.5 18.7 18.2 16.8 11.5 11.1 10.7 10.6 10.5 7.9 6.0 5.7 5.4 5.2 5.2 4.6 4.5 4.3 2.5 2.0 1.8 1.5 1.1 0.9 0.6 0.6 0.4 0.3 0.2 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 5.4x: The overall average TEV/Revenue (LTM) multiple for our group is 5.4x (vs. 5.2x last week) (Figure 9). Three companies trade at more than 25x revenue – Bigstring Corp. (OTCBB:BSGC) at 34.6x, Dolphin Digital Media, Inc. (OTCBB:DPDM) at 38.6x, and NeXplore Corporation (OTCPK:NXPC) at 49.2x. The median of 2.1x is up from 1.7x last week. Note that we exclude multiples greater than 50x. Twenty-seven companies have multiples under 1.5x. T E V/L T M R evenue (x) 60. 0 49.2 50. 0 40. 0 38.6 34.6 30. 0 23.7 20. 0 8.3 8.8 6.4 6.7 6.7 7.6 18.1 15.0 15.6 12.6 11.4 12.1 5.2 3.5 3.6 4.1 4.1 4.4 4.5 4.6 4.6 2.7 2.9 2.9 3.2 3.4 1.5 1.6 1.7 1.7 1.8 1.8 2.1 2.1 2.3 2.4 0.2 0.2 0.2 0.3 0.4 0.4 0.4 0.6 0.6 0.6 0.7 0.7 0.7 0.8 0.9 0.9 1.0 1.0 1.0 1.1 1.1 1.2 1.3 10. 0 A vera ge, 5.4 0. 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 (18), trading at an average multiple of 10.1x (vs. 11.5x last week). On a geographic basis, the United States has the most companies (38), trading at an average of 7.4x revenue (vs. 5.6x last week) (Figure 11). Ten of the companies are Canadian (average 4.3x revenue). Average TEV/LTM Revenue - By Exchange 14.0 12.0 10.0 (x) 8.0 6.0 4.0 2.0 XTRA OTCNO OTCBB OTCPK GTSM 0.0 SEHK HLSE TSE TSX TSXV 12.1 11.6 11.6 10.1 9.8 5.6 (x) NasdaqGM KOSE OSE NasdaqGS ASX RTS OM CM AMEX KLSE BSE SWX AIM Germany United China Canada Finland Japan Russia 1 U nis erve C ommunications C orp. C LIC K E R Inc. T he P a rent C ompany T heS treet.com, Inc . N orthgate T echnologies L imited G a meO n C o Ltd. T ree.C om, Inc. O penwave S y s tems Inc . C y berplex Inc . J umbuc k E nterta inment L imited P erfect World C o., Ltd. DXN Holdings B hd IAC /InterAc tiveC orp. C DC C orp. S pa rk N etwork s , Inc . DADA S pA H anbitS oft, Inc . United O nline Inc . Ac toz S oft C o. , Ltd. S N M G loba l Holdings S NAP Intera ctive, Inc. B ey ond C ommerc e, Inc. G igaMedia Ltd. Y nk K orea Inc . G a mania Digital E ntertainment C o., Ltd. S K C ommunica tions C o., Ltd. V alueC lic k Inc . S hutterfly , Inc . Modern T imes G roup Mtg AB is eemedia Inc . Y edangO nline C orp. G ungH o O nline E ntertainment, Inc. My riad G roup AG P N I Digital Media Inc. O pen T ex t C orp. NetDra gon WebS oft, Inc . MO K O .mobi L imited XIN G AG N E O WIZ G ames C orporation E olith C o. Ltd. C ornerWorld C orporation NeuLion Inc orporated S ohu.com Inc . S ocial Media V enures , Inc . Wiz z ard S oftware C orporation T otal S port O nline AS Acceleriz e New Media , Inc . F rogs ter Intera ctiv e P ic tures AG Mix i, Inc . DigitalP os t Intera ctive, Inc. C ha ngy ou.com L imited K ings oft C o. Ltd. Lingo Media C orporation F luid Mus ic C a nada , Inc. G eoS entric O y j UO MO Media, Inc G ree, Inc . As s ociated Media Holdings Inc . C hines e G amer Interna tional T encent Holdings Ltd. B igs tring C orp. Dolphin Digital Media, Inc. NeX plore C orporation Average TEV/LTM Revenue - By Country 14.0 12.0 10.0 8.0 6.0 4.0 7.9 7.4 7.0 4.9 4.9 4.6 4.3 2.4 2.2 1.9 1.8 0.9 South Australia Sweden Italy 0.8 0.7 Hong Kong Malaysia 12.1 5.4 4.9 4.6 3.4 2.7 2.4 2.3 2.2 2.1 1.9 1.8 0.9 0.7 0.4 0.4 0.00.0 2.0 0.0 Taiwan Norway 0.4 0.0 0.0 United 1 India 1 # Companies 1 3 18 11 2 5 4 2 1 4 2 1 1 6 14 2 1 1 1 1 5 1 1 # Companies 1 10 38 3 6 2 1 10 Switzerland 1 8 2 1 1 1 1 Figures 10 & 11. TEV/Revenue Ranking (Exchange, Country) Source. Capital IQ Page 11 TEV/EBITDA (LTM) averages 13.6x: The average multiple for the 36 companies with positive EBITDA (and multiples under 100x) is 13.6x LTM EBITDA (vs. 13.1x last week), led by Tencent Holdings (SEHK-700) 43.4x multiple (Figure 12). Eleven companies have EBITDA multiples under 7x. The median multiple is 10.7x (vs. 10.6x last week). T E V/L T M E B IT DA (x) 60. 0 48. 4 43. 0 40. 0 32. 2 30. 0 18. 7 18. 8 19. 7 A verage, 13.6 10. 0 1. 2 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. 4. 0 4. 0 4. 3 5. 8 6. 7 8. 7 9. 6 9. 8 9. 9 13. 1 14. 2 14. 3 11. 6 11. 7 11. 8 12. 4 9. 9 10. 2 10. 4 10. 9 26. 1 23. 8 24. 9 25. 0 50. 0 20. 0 4. 7 4. 9 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 C hangy ou. c om L imited DXN Holdings B hd 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 (18), trading at an average multiple of 4.0x. On a geographic basis, the United States has the most companies (38), trading at an average of 11.1x EBITDA (Figure 14). Ten of the companies are Canadian (average 13.9x EBITDA). Average TEV/LTM EBITDA - By Exchange 30.0 25.7 25.0 20.0 (x) 15.0 10.0 5.0 NasdaqGM GTSM 0.0 SEHK TSXV NasdaqGS KOSE TSE OSE XTRA OM CM 24.9 20.5 19.3 15.5 11.8 11.8 11.7 10.4 9.6 (x) 25.0 20.0 Average TEV/LTM EBITDA - By Country 20.5 19.3 15.0 10.0 16.8 14.2 13.9 11.8 11.7 11.6 11.1 6.7 4.9 1.5 Germany Canada Japan United States China Hong Kong Malaysia Taiwan South Korea Italy Australia Sweden 0.3 Russia 1 0.0 Switzerland 1 6.7 5.8 4.9 4.0 4.0 OTCBB 1.5 0.3 ASX RTS 5.0 0.0 # Companies 3 4 2 6 5 2 14 1 1 5 1 4 1 AMEX KLSE TSX 2 18 2 1 # Companies 3 8 10 6 10 2 1 1 38 1 1 2 Figures 13 & 14. TEV/EBITDA Ranking (Exchange, Country) Source. Capital IQ T enc ent Holdings L td. S park Network s , Inc . IAC /InterAc tiveC orp. V alueC lic k Inc . C yberplex Inc . S ohu. c om Inc . Y edangO nline C orp. 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 Page 12 P/E (LTM) averages 19.2x: The average multiple for the 33 companies with positive earnings (and multiples under 100x) is 19.2x LTM EPS (vs. 18.4x last week), led by GungHo Online Entertainment’s (OSE:3765) 67.3x multiple (Figure 15). Eleven companies have P/E multiples under 10x. The median is 13.2x. P /E L T M (x) 80.0 70.0 61.2 60.0 50.1 50.0 42.2 40.0 30.0 20.0 10.0 2.4 0.0 T he9 Limited S handa Interactive E ntertainment Ltd. Neteas e.com Inc. P erfect World C o., Ltd. 2.6 A verage, 19.2 20.0 20.5 20.9 15.6 16.1 12.9 13.2 14.2 14.5 10.9 12.0 12.0 12.4 9.6 22.8 26.0 36.9 38.6 52.3 67.3 3.1 3.2 4.9 J umbuck E ntertainment Limited 6.6 6.8 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 (18), trading at an average multiple of 14.8x. On a geographic basis, the United States has the most companies (38), trading at an average of 13.7x earnings (Figure 17). Ten of the companies are Canadian (average 21.9x EPS). Average P/E - By Exchange 80.0 70.0 60.0 (x) 40.0 30.0 20.0 10.0 OTCBB GTSM 0.0 TSE SEHK OSE KOSE XTRA 37.8 33.4 31.5 (x) 67.3 50.0 26.0 21.1 14.8 14.2 12.4 11.5 6.8 NasdaqGS OM AMEX TSX 6.6 KLSE 4.9 ASX 2.1 NasdaqGM 0.0 NYSE 50.0 45.0 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0 Average P/E - By Country 45.1 26.0 25.0 21.9 14.4 14.2 14.1 13.7 6.6 4.9 0.0 0.0 Germany Switzerland 1 Hong Kong 1 United States Malaysia Japan Canada China South Korea Australia Taiwan Sweden # Companies 1 5 3 2 2 6 18 1 2 14 4 1 2 1 5 # Companies 6 2 3 10 10 1 8 38 1 2 Figures 16 & 17. P/E Ranking (Exchange, Country) Source. Capital IQ 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. S NAP Interactive, Inc. O pen T ex t C orp. NetDragon W ebS oft, Inc. T encent H oldings Ltd. C y berplex Inc. G igaMedia Ltd. S park Network s , Inc. IAC /InterActiveC orp. Worlds .com Inc. S ohu.com Inc. Mix i, 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 Page 13 UPCOMING EVENTS E arnings C alendar C ompany Myria d G roup AG (S W X : MY R N) T ree. C om, Inc. (Nas da qG M: T R E E ) Figure 18. Earnings Calendar Source. Company reports Date & Time W ednes da y, S eptember 23, 2009 9: 00 AM (C E T ) F rida y, O ctober 30, 2009 11: 00 AM (E DT ) Quarter Q2 2009 Q3 2009 C onf C all Details NA 888-428-9470 Page 14 C omparable C ompany Analys is > Web 2.0 P ric e P erformanc e C ompany Name A ccelerize New Media, Inc. A ctoz S oft C o. , L td. A Q Interactive, Inc. A s s ocia ted Media H oldings Inc. B igs tring C orp. B eta wave C orporation B eyond C ommerce, Inc. B right T hings plc B roadW ebA s ia Inc. C DC C orp. C ha ngyou.com L imited C hina G a tewa y C orporation C hines e G a mer International 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 Intera ctive, Inc. DigitalT own, Inc. Dolphin Digital Media, Inc. E olith C o. Ltd. E xtens ions , Inc. F luid Mus ic C anada , Inc. F rogs ter Intera ctive P ictures A G G amania Digita l E nterta inment C o. , Ltd. G ameO n C o Ltd. G eoS entric Oyj G ia nt Interactive G roup, Inc. G igaMedia Ltd. G ra vity C o., L td G ree, Inc. G ungH o Online E nterta inment, Inc. H anbitS oft, Inc. IAC /InterA ctiveC orp. IAS E nergy, Inc. is eemedia Inc. J umbuck E nterta inment L imited K AB Dis tribution Inc. K ings oft C o. Ltd. L ingo Media C orpora tion L iveW orld Inc. L ookS mart, L td. Ma gnitude Informa tion 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 NetDra gon W ebS oft, Inc. Neteas e. com Inc. NeuLion Incorpora ted NeXplore C orpora tion Ngi G roup Inc. Northgate T echnologies L imited O pen T ext C orp. O penwa ve S ys tems Inc. P erfect W orld C o., L td. P NI Digital Media Inc. Q uepa s a C orp. O AO R B C Informa tion S ys tems S ha nda Intera ctive E nterta inment L td. S hutterfly, Inc. S K C ommunications C o., Ltd. S NA P Intera ctive, Inc. S NM G loba l H oldings S ocial Media V enures , Inc. S ocialwis e, Inc. S ohu.com Inc. S pa rk Networks , Inc. S pectrumDNA, Inc. T encent H oldings Ltd. T he P a rent C ompa ny T he9 L imited T heS treet.com, Inc. T ota l 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 alueC lick Inc. V OIS , Inc. W ebzen Inc. W izzard S oftwa re C orporation W orlds .com Inc. W ynds torm C orporation XING A G Y edangO nline C orp. Y nk K orea Inc. H igh L ow Average Media n 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 NOK 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 AC LZ A052790 3838 AS MH BS GC B W AV B Y OC AIM:B G T BWBA C H IN.A CY OU CGW Y G T S M:3083 CLK Z CW R L T S X: C X C M: DA DXN DIB Z DG LP 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 IA C I IA S A .E IE E AS X:J MB T S X: K A B 3888 T S XV :L M LV W D LO O K MAG 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 F LY A066270 S TVI S NMN S MV I S C LW S O HU LO V S P XA 700 K IDS .Q NC T Y TS CM TOS O TR E E T S XV :U S S UNT D UO MO V C LK V O IS W ZE N W ZE W DDD W Y ND O1B C A052770 A023770 E xc hange OTC B B K OS E TSE OTC P K OTC B B OTC B B OTC B B A IM OTC P K Nas da qG S Nas da qG S OTC P K GTS M OTC B B OTC B B TSX CM K LS E OTC P K OTC B B OTC B B OTC B B K OS E OTC P K TSX XT R A GTS M TSE H LS E NY S E Nas da qG S Nas da qG M TSE OS E K OS E Nas da qG S OTC B B T S XV AS X TSX S E HK T S XV OTC P K Nas da qG M OTC B B TSE OM AS X S WX K OS E S E HK Nas da qG S TSX OTC P K TSE BSE Nas da qG S Nas da qG S Nas da qG S T S XV OTC B B R TS Nas da qG S Nas da qG S K OS E OTC B B OTC P K OTC P K OTC B B Nas da qG S A ME X OTC B B S E HK OTC P K Nas da qG S Nas da qG M O T C NO Nas da qG M T S XV Nas da qG S OTC B B Nas da qG S OTC B B Nas da qG M A ME X OTC B B OTC P K XT R A K OS E K OS E US D Market C ap ($m) 18.2 142.6 31.0 0. 6 1. 1 2. 0 7. 9 6. 0 19.5 294.6 2,106.0 0. 3 1,187.8 0. 4 5. 7 76.6 165.4 39.8 0. 0 4. 6 72.2 21.5 52.6 11.1 68.0 63.5 242.1 105.8 65.9 1,750.4 303.7 54.2 2,394.2 302.3 73.6 2,731.5 10.6 4. 3 16.8 0. 6 1,141.2 11.5 1. 5 21.9 4. 5 1,002.2 2,974.2 5. 2 92.0 732.8 394.2 5,667.6 98.3 30.7 36.0 31.0 2,215.1 225.4 2,163.0 59.9 22.1 160.9 3,574.1 450.8 323.4 5. 4 0. 0 0. 0 25.7 2,639.7 45.3 10.7 29,985.0 0. 2 212.3 83.2 0. 1 84.2 0. 9 692.5 10.5 1,109.5 2. 5 36.2 23.2 5. 2 1. 8 253.5 112.1 18.7 C urrent P ric e 0.65 19,950 52,500 0.01 0.02 0.07 0.17 0.01 0.23 2.78 38.29 0.02 458.00 0.01 0.06 1.27 6.95 0.61 0.00 0.06 2.64 0.40 875.00 0.25 1.40 17.13 51.70 100,800 0.05 7.73 5.57 1.95 9,850 243,000 4,050 20.63 0.15 0.09 0.40 0.01 8.11 1.00 0.05 1.28 0.01 599, 000.00 312.50 0.07 4.46 42, 000.00 5.78 43.79 0.93 0.55 26, 750.00 42.65 39.45 2.70 43.98 1.89 1.74 1.16 53.53 17.71 9, 310.00 0.50 0.00 0.08 0.58 68.86 2.20 0.22 128 0.01 8.46 2.72 0.03 7.79 0.04 8.26 0.12 12.73 0.00 3.05 0.46 0.10 0.10 32.75 9, 020.00 4, 215.00 1 Wk 8. 3% 10.8% -1.1% -30.0% -2.6% 0. 0% -15.0% -0.4% -22.8% 0. 4% -5.6% -25.0% 10.6% -9.1% 0. 0% 0. 0% -2.3% 4. 3% 20.0% 9. 1% 76.0% 6. 4% 2. 3% 38.9% -5.4% -8.8% 12.5% 0. 0% 0. 0% 2. 7% 15.3% 14.0% 16.6% -6.1% -3.6% 6. 3% 0. 0% 50.0% 8. 1% -99.2% -1.9% 0. 0% 25.0% 9. 4% 8. 7% 6. 4% 7. 9% 0. 0% -0.9% 7. 4% -1.4% 2. 9% -9.7% -8.3% -12.0% -1.2% 10.6% -5.9% 1. 3% 0. 5% -0.6% 10.5% 4. 1% 19.2% 3. 3% 25.0% 81.0% 0. 0% 18.4% 4. 6% 0. 9% 0. 0% 0. 9% -9.1% 3. 5% 2. 6% 0. 0% -0.5% -11.1% 5. 9% -11.7% 13.8% -25.0% 3. 7% -16.4% 0. 0% 0. 0% -0.3% -2.0% 3. 8% 81.0% -99.2% 2.7% 0. 2% 1 Mth 14.0% 0.3% 5.6% -30.0% 6.7% -12.5% -12.8% -1.8% -22.8% 9.0% -0.9% 650.0% 24.5% 0.0% 9.1% -19.6% 11.6% 21.0% NM 0.0% 95.6% 9.6% 5.4% 212.5% -3.4% 4.8% 5.3% -4.6% -16.7% 0.7% 18.5% -21.7% 21.3% -0.2% 1.0% 5.8% 0.0% 38.5% 11.1% -99.2% 0.4% 6.4% 0.0% -2.3% 53.8% -0.5% 3.6% 0.0% 2.8% 36.6% -6.0% 3.0% -12.3% -8.3% -14.4% 20.5% 2.9% -7.2% 12.6% 17.4% 16.0% 10.5% 10.2% 16.8% -0.9% 25.0% 90.0% -27.3% -3.3% 7.4% 4.8% -4.3% 11.1% -33.3% -1.1% 17.7% 0.0% -16.2% -11.1% 12.5% -22.9% 16.5% -50.0% 7.0% 0.0% 11.1% 0.0% 19.1% 5.9% 3.7% 650.0% -99.2% 13.0% 3.0% 3 Mth 62.5% -23.6% -29.6% 833.3% -32.1% -22.2% -76.7% 5. 8% -54.9% 105.9% 4. 7% 650.0% 26.2% 78.6% 0. 0% -23.0% 18.2% 59.2% 20.0% 114.3% 32.0% -27.3% 4. 2% 66.7% 122.2% 115.5% -9.9% -6.6% 25.0% -4.1% 1. 1% 77.3% 47.9% 3. 8% -6.9% 30.2% -25.0% -10.0% 2. 6% -99.2% 57.5% 0. 0% -50.0% 2. 4% -16.7% 21.0% 55.1% -6.7% -7.1% 23.7% 15.4% 28.8% 31.0% -21.4% -22.7% 11.2% 13.2% 39.2% 47.4% 17.4% 155.9% 16.0% 5. 3% 35.1% -13.8% -23.1% -45.7% 700.0% -15.9% 11.0% -5.2% -4.3% 50.2% -60.0% -18.5% 32.0% 0. 0% -18.0% -42.9% 44.2% -21.9% 21.7% -66.7% -7.6% -28.1% 0. 0% 185.7% 10.5% 9. 2% -32.0% 833.3% -99.2% 35.2% 4. 4% 6 Mth 225. 0% 80.5% 60.6% 180. 0% 26.7% -63. 2% -67. 3% -8.3% -77. 2% 157. 4% NM 650. 0% 142. 3% -50. 0% -57. 1% 67.1% 42.0% 116. 1% -88. 0% 200. 0% 5.6% -33. 3% 65.1% 66.7% 300. 0% 137. 9% 53.0% 26.0% 25.0% 11.9% -8.4% 204. 7% 113. 7% 112. 2% 21.6% 38.6% 233. 3% 0.0% -20. 0% -98. 6% 170. 3% 17.6% -66. 7% 28.0% -41. 2% 84.3% 117. 0% -6.7% 11.5% 101. 4% 37.9% 75.9% 111. 4% -26. 7% 52.1% 32.0% 13.0% 225. 3% 227. 5% 27.7% 70.6% 262. 5% 35.9% 99.0% 14.7% -2.0% 280. 0% -93. 3% 45.0% 65.2% -6.0% 15.8% 131. 9% -33. 3% -34. 0% 30.1% -25. 0% 55.8% -20. 0% 85.2% -6.9% 58.5% 150. 0% 60.5% 2.8% -44. 4% -16. 7% 15.3% 3.9% 9.6% 650. 0% -98. 6% 58.4% 32.0% 1 Yr 18.2% 123.4% -23.2% -30.0% -52.5% -76.7% -93.2% 9. 9% -84.7% 29.9% NM -50.0% 627.0% -98.0% -70.0% 119.0% -22.8% 59.2% -97.6% -7. 7% -12.0% -64.3% 43.4% 150.0% 4. 5% 231.3% 203.2% -25.3% 0. 0% 14.7% -28.7% 89.3% NM 20.2% 24.0% 21.4% -9. 1% -10.0% -32.2% -99.4% 265.3% -43.5% -79.2% -52.8% -52.4% -21.3% 18.6% 27.3% -51.5% 306.8% 18.0% 95.9% NM -52.2% -77.1% -83.5% 11.2% 132.8% 88.7% -9. 1% -45.6% -78.7% 98.8% 95.9% -21.8% -43.8% -99.1% -85.5% -73.4% 16.6% -44.4% -45.0% 126.1% -99.1% -54.3% -54.7% -40.0% 40.6% -76.5% -15.1% -58.3% 25.5% -70.3% 99.3% -68.9% -70.6% -54.5% 10.6% 24.8% -64.4% 627.0% -99.4% 6.0% -21.8% 52 Week 0. 0% -44.6% -36.7% -72.0% -70.8% -79.4% -93.5% -44.3% -92.1% -29.1% -20.8% -57.1% -11.8% -98.8% -87.2% -36.2% -33.7% -0.8% -97.6% -39.4% -34.0% -64.6% -24.6% -75.2% -6.0% -13.8% -24.9% -33.7% -16.7% -19.2% -37.8% -25.9% 0. 0% -13.2% -39.0% -1.1% -46.4% -43.8% -34.4% -99.2% -14.4% -43.5% -80.0% -54.1% -66.7% -25.5% -4.4% -30.0% -53.1% -5.6% -19.2% -6.7% -28.5% -62.1% -79.0% -84.1% -1.8% -13.7% -2.6% -22.9% -46.5% -85.2% -17.6% -2.3% -27.5% -53.7% -99.4% -98.4% -77.3% -4.7% -47.4% -51.1% -2.1% -99.4% -56.4% -60.5% 0. 0% -40.4% -82.6% -22.1% -88.6% -0.1% -87.0% -34.8% -73.4% -71.4% -83.3% -4.8% -27.3% -66.0% 0. 0% -99.4% -43.4% -38.4% 769.5 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 Interactive, Inc. As s ociated Media Holdings Inc. B igs tring C orp. B etawave C orporation B eyond C ommerce, Inc. B right T hings plc B roadW ebAs ia Inc. C DC C orp. C hangyou. com L imited C hina G ateway 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 International, Inc. DigitalP os t Intera ctive, Inc. DigitalT own, Inc. Dolphin Digital Media , Inc. E olith C o. Ltd. E xtens ions , Inc. F luid Mus ic C ana da, Inc. F rogs ter Intera ctive P ictures AG G amania Digita l E nterta inment C o., L td. G ameO n C o L td. G eoS entric Oyj G iant Intera ctive G roup, Inc. G igaMedia L td. G ravity C o., Ltd G ree, Inc. G ungHo O nline E ntertainment, Inc. H anbitS oft, Inc. IAC /InterActiveC orp. IAS E nergy, Inc. is eemedia Inc. J umbuck E nterta inment L imited K A B Dis tribution Inc. K ings oft C o. L td. L ingo Media C orporation L iveW orld Inc. L ookS mart, Ltd. Magnitude Information S ys tems Inc. Mixi, Inc. Modern T imes G roup Mtg AB MOK O.mobi L imited Myria d G roup AG N E OW IZ G ames C orporation N etDragon W ebS oft, Inc. N etea s e.com Inc. N euL ion Incorporated N eXplore C orporation N gi G roup Inc. N orthgate T echnologies Limited O pen T ext C orp. O penwa ve S ys tems Inc. P erfect W orld C o. , Ltd. P N I Digita l Media Inc. Q uepas a C orp. O AO R B C Information S ys tems S handa Interactive E ntertainment Ltd. S hutterfly, Inc. S K C ommunications C o., Ltd. S N AP Interactive, Inc. S N M G lobal H oldings S ocial Media V enures , Inc. S ocialwis e, Inc. S ohu. com Inc. S park N etworks , Inc. S pectrumDNA, Inc. T encent H oldings L td. 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. U nis erve C ommunica tions C orp. U nited Online Inc. U OMO Media, Inc V a lueC lick Inc. V O IS , Inc. W ebzen Inc. W izzard S oftwa re C orpora tion W orlds .com Inc. W ynds torm C orpora tion XING A G Y eda ngO nline C orp. Y nk K orea Inc. H igh L ow Average Median S ec tor Direct Ma rketing 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 Ma rketing C ontent Advertis ing S ocial Networking S ocial Networking S N S 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 Learning S ocial Networking Direct Ma rketing S ocial Networking S ocial Networking Media S ocial Networking Mobile G aming G aming G aming V ideo C ontent Media Direct Ma rketing C ollabora tion Mobile G aming Digital Ima ging S ocial Networking Media G aming Digital Ima ging S earch Da ting Media S ocial Networking S ocial Networking G aming S ocial Networking Media P ortal Media G aming Media Media P ortal 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 apa n 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 aiwan U nited S ta tes U nited S ta tes C ana da Italy Ma lays 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 ermany T aiwan J apa n F inla nd C hina T aiwan S outh K orea J apa n J apa n S outh K orea U nited S ta tes C ana da C ana da A us tralia C ana da C hina C ana da U nited S ta tes U nited S ta tes U nited S ta tes J apa n S weden A us tralia S witzerland S outh K orea C hina C hina C ana da U nited S ta tes J apa n 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 G ermany S outh K orea S outh K orea P rimary 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 Nas daqG S Nas 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 HLS E NY S E Nas daqG S Nas daqG M TS E OS E K OS E Nas daqG S OT C B B T S XV AS X TS X S E HK T S XV OT C P K Nas daqG M OT C B B TS E OM AS X SWX K OS E S E HK Nas daqG S TS X OT C P K TS E BSE Nas daqG S Nas daqG S Nas daqG S T S XV OT C B B R TS Nas daqG S Nas daqG S K OS E OT C B B OT C P K OT C P K OT C B B Nas daqG S AME X OT C B B S E HK OT C P K Nas daqG S Nas daqG M OT C N O Nas daqG M T S XV Nas daqG S OT C B B Nas daqG S OT C B B Nas daqG M AME X OT C B B OT C P K XT R A K OS E K OS E Tic ker 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 CLK 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 IA S A.E IE E AS X:J MB T S X:K A B 3888 T S XV :L M LV W D LO OK MAG Y 2121 MT G B MK B MY R N A095660 777 NT E S T S X:NLN NXP C 2497 590057 OT E X OP W V PWRD T S XV :P N QP S A R BCI S N DA S F LY A066270 STVI S NMN S MV I S CLW S O HU LO V S P XA 700 K IDS . Q NC T Y TS CM T OS O TR E E T S XV :US S UN T D UO MO V C LK V OIS W ZE N W ZE W DDD W Y ND O1B C A052770 A023770 US D Market C ap ($m) 18. 2 142. 6 31. 0 0. 6 1. 1 2. 0 7. 9 6. 0 19. 5 294. 6 2,106. 0 0. 3 1,187. 8 0. 4 5. 7 76. 6 165. 4 39. 8 0. 0 4. 6 72. 2 21. 5 52. 6 11. 1 68. 0 63. 5 242. 1 105. 8 65. 9 1,750. 4 303. 7 54. 2 2,394. 2 302. 3 73. 6 2,731. 5 10. 6 4. 3 16. 8 0. 6 1,141. 2 11. 5 1. 5 21. 9 4. 5 1,002. 2 2,974. 2 5. 2 92. 0 732. 8 394. 2 5,667. 6 98. 3 30. 7 36. 0 31. 0 2,215. 1 225. 4 2,163. 0 59. 9 22. 1 160. 9 3,574. 1 450. 8 323. 4 5. 4 0. 0 0. 0 25. 7 2,639. 7 45. 3 10. 7 29,985. 0 0. 2 212. 3 83. 2 0. 1 84. 2 0. 9 692. 5 10. 5 1,109. 5 2. 5 36. 2 23. 2 5. 2 1. 8 253. 5 112. 1 18. 7 29,985. 0 0. 0 769.5 48. 9 TE V/L TM R evenue 5. 2x 1. 0x 0. 2x 15.6x 34.6x 1. 2x 0. 8x 7. 6x 0. 0x 18.1x 0. 2x 4. 1x 0. 6x 0. 9x 0. 7x 6. 7x 38.6x 3. 6x 11.4x 6. 4x 1. 6x 0. 4x 12.1x 1. 3x 15.0x 2. 3x 1. 0x 0. 7x 2. 1x 0. 6x 8. 3x 8. 8x 0. 0x 6. 7x 1. 8x 3. 2x 2. 4x 3. 5x 2. 9x 4. 1x 49.2x 0. 4x 2. 9x 0. 6x 0. 7x 2. 7x 0. 0x 1. 8x 1. 7x 1. 1x 1. 1x 4. 5x 4. 4x 0. 9x 23.7x 0. 2x 0. 3x 4. 6x 0. 4x 0. 2x 1. 0x 12.6x 1. 7x 4. 6x 3. 4x 2. 1x 1. 5x 49.2x 0. 0x 5.4x 2. 1x TE V/ NTM R evenue 0. 9x 5. 9x 0. 5x 1. 4x 10.2x 1. 2x 0. 7x 2. 4x 0. 6x 3. 4x 2. 3x 1. 7x 3. 8x 0. 2x 0. 3x 0. 4x 1. 0x 1. 8x 10.2x 0. 2x 2.2x 1. 3x TE V/L TM E B ITDA 4.3x 11. 6x 12. 4x 32. 2x 5.8x 6.7x 4.9x 8.7x 1.7x 25. 0x 10. 4x 43. 0x 18. 8x 1.5x 18. 7x 19. 7x 11. 7x 13. 1x 9.9x 10. 9x 23. 8x 1.2x 24. 9x 0.3x 14. 2x 26. 1x 4.0x 10. 2x 4.0x 48. 4x 9.6x 4.7x 9.8x 11. 8x 9.9x 14. 3x 48. 4x 0.3x 13.6x 10. 7x TE V/NTM E B ITDA 8.1x 10.2x 5.9x 5.8x 9.1x 5.3x 6.6x 7.5x 8.9x 8.5x 12.8x 8.1x 4.0x 7.0x 12.8x 4.0x 7.7x 7.8x P /L TM E P S 20.5x 14.5x 42.2x 6. 8x 6. 6x 20.9x 10.9x 2. 1x 12.0x 0. 0x 52.3x 67.3x 13.2x 12.9x 4. 9x 22.8x 50.1x 14.2x 38.6x 16.1x 3. 2x 36.9x 3. 1x 2. 6x 9. 6x 15.6x 12.4x 61.2x 2. 4x 0. 0x 20.0x 26.0x 12.0x 67.3x 0. 0x 19.2x 13.2x P /NTM E P S 12.9x 7. 7x 1. 6x 14.0x 11.2x 39.2x 17.5x 14.0x 42.2x 15.1x 13.7x 18.7x 50.1x 6. 3x 19.9x 50.1x 1. 6x 18.9x 14.0x P /TangB V 2. 3x 0. 5x 0. 4x 14.3x 20.4x 3. 0x 0. 8x 4. 8x 6. 3x 7. 9x 3. 1x 1. 3x 54.3x 0. 3x 2. 6x 0. 0x 24.2x 23.2x 2. 1x 1. 3x 3. 5x 1. 6x 0. 0x 6. 3x 20.5x 0. 7x 0. 8x 6. 8x 3. 6x 4. 0x 19.5x 2. 1x 0. 9x 7. 2x 0. 7x 3. 3x 1. 4x 20.8x 1. 0x 2. 7x 3. 0x 5. 2x 46.3x 27.3x 0. 1x 1. 1x 1. 1x 7. 2x 15.8x 0. 0x 8. 1x 3. 8x 0. 9x 54.3x 0. 0x 7.6x 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 anada C hina S outh K orea J apan T aiwan Aus tralia G ermany S witzerland Hong K ong F inland Italy United K ingdom India S weden R us s ia Malays ia Norway 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 United S tates J apa n S weden C a na da T aiwan S outh K orea G ermany Hong K ong Ita ly R us s ia S witz erla nd F inla nd Ma lays ia India Aus tra lia United 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 ($m) C hina S weden J a pa n T a iwan Hong K ong C a nada S outh K orea Ita ly R us s ia G ermany United S tates S witzerla nd F inla nd Ma la ys ia India Aus tralia United K ingdom Norway G rand Total 4,963.3 2,974.2 645.3 577.9 294.6 248.8 190.9 165.4 160.9 158.5 152.9 92.0 65.9 39.8 31.0 11.0 6.0 0.1 777.9 US D L TM Total R ev ($m) C hina United S ta tes S weden C anada S outh K orea J apan T aiwan Hong K ong Italy R us s ia India Malays ia G ermany S witzerland Aus tralia F inland Norway 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 ($m) C hina S weden United S tates C a na da J a pa n S outh K orea T a iwan Ita ly Hong K ong R us s ia G ermany Ma la ys ia Aus tralia S witz erla nd Norway United K ingdom F inla nd India G rand Total 2, 070. 2 304. 6 290. 0 200. 0 186. 0 121. 9 59. 8 31. 9 25. 1 20. 4 12. 5 11. 1 4. 5 0. 8 -1. 1 -2. 7 -17. 5 -41. 4 3,276.1 E B ITDA % C hina Aus tra lia T aiwan J apa n S weden Ma lays ia Ita ly R us s ia S outh K orea Hong K ong S witz erla nd C a na da G ermany United S tates India Norway United K ingdom F inla nd G rand Total 48. 8% 42. 8% 37. 1% 24. 2% 15. 4% 14. 4% 13. 1% 13. 1% 12. 7% 6. 9% 1. 9% -8. 5% -9. 1% -21. 9% -50. 0% -50. 6% #DIV /0! #DIV /0! 5.1% Figure 21. Comparison by Country Source. Capital IQ C omparable C ompany Analys is > Web 2.0 S ummary by E xc hange C ompany Name OT C B B Na s daqG S OT C P K K OS E TS E Na s daqG M TS X T S XV S E HK AME X AS X XT R A GTS M SWX HL S E CM BSE NY S E OS E AIM OM RTS K LS E O T C NO G rand Total 18 14 11 6 5 5 4 4 3 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 89 US D Market C ap ($m) S E HK Na s daqG S TS E OM NY S E K OS E GTS M XT R A OS E Na s daqG M TS X OT C B B CM RTS SWX T S XV AME X HL S E OT C P K K LS E BSE AS X AIM O T 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 ($m) S E HK OM NY S E Nas da qG S GTS M TS E OS E K OS E CM R TS XT R A SWX HLS E TS X Nas da qG M K LS E AME X BSE T S XV OT C B B AS X AIM OT C P K O T C NO G rand Total 10, 506. 8 2, 974. 2 1, 750. 4 1, 741. 8 715. 0 713. 8 302. 3 239. 5 165. 4 160. 9 158. 5 92. 0 65. 9 60. 9 55. 9 39. 8 34. 2 31. 0 19. 1 12. 8 11. 0 6. 0 6. 0 0. 1 777.9 US D L TM Total R ev ($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 O T 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 da qG S S E HK OM TS E NY S E K OS E GTS M CM OS E R TS Na s da qG M XT R A K LS E AME X AS X SWX O T 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 TS E OS E OM K LS E CM R TS K OS E Nas da qG M T S XV SWX XT R A AME X TS X OT C B B OT C P K BSE O T C NO AIM 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% #DIV /0! #DIV /0! 5.1% Figure 22. Comparison by Exchange Source. Capital IQ Page 17 Financing - L as t Three Months (US $ m) F in. Amount (Million) Month J ul-09 C ompany Name P andora Media K ontera L td. Ning Quic kP lay Media C aus es Outs park C onnectE du Acquia, 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 TweetDec k B us ca Akademos P rotonMedia iL oop Mobile C omunitae Aloqa L at49 Thread Tributes .com C oTweet C ellufun C likthrough C ognitive Matc h L imited B ookF res h P eople C apital Mas her Media J ul-09 Total Aug-09 Turbine S mith & Tinker Mint Zoove R ic hR elevanc e Traffiq MediaMath B ill.c om E do Interactive InnoC entive OneR iot B alihoo B oxee P olyvore Fanbas e MOG OurS tage Z2L ive K ODA S coreloop R oblox Tremor Media iS oc ket R ights Flow P lis ta C hes s C ube L inks ify iS yndic a Aug-09 Total 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 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 63.2 2. 0 1. 5 1. 4 2. 2 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 13. 2 C ountry US A Is rael US A C a na da 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 pa in G erma ny C a na da 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 financ ing 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 13. 2 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. 4 221.6 Page 18 Financing - L as t Three Months (US $ m) F in. Amount (Million) Month S ep-09 C ompany Name E ns equenc e InXpo J obvite NextB io R iot G ames YuMe Moc apay C onduit L abs Fwix Mas hL ogic G reys tripe FourS quare E duFire S ep-09 Total G rand Total 90.8 C ountry 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 1. 4 1. 3 16.9 39.5 19.3 133.6 18.0 113.1 20.0 110.2 2. 8 2. 5 2. 0 3. 0 8. 0 5. 0 3. 0 Type of financ ing Angel/S eed S eries A 9. 0 8. 3 8. 0 S eries B S eries C S eries D 20. 0 G rand Total 20. 0 9. 0 8. 3 8. 0 8. 0 5. 0 3. 0 3. 0 2. 8 2. 5 2. 0 1. 4 1. 3 74.2 487.1 Figure 23. Financing, Last Three Months Source. Company reports Page 19 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. E ns equence, Inc. offers interactive televis ion and digital broadcas ting s ervices . T he company’s platform ena bles online download, online a dvertis ing, and viewer res pons e meas urement s ervices . Additionally, it provides s ys tem implementation and integration, audience mea s urement, and cus tomer care s ervices . T he compa ny’s clientele include MT v, E S P N, B B C , Dis covery C hannel, J etix, HS N, Dis ney, F ord, Nike, HP , V is a , R eebok, T oyota, G eico, T ime W arner, C omcas t, and S ky. E ns equence, Inc. was founded in 2000 and is headqua rtered in P ortland, O regon with a dditional offices in New Y ork, C alifornia, and the United K ingdom. 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. F wix, Inc. owns a nd opera tes as an online portal which collects articles from different s ources and provides current information about a local a rea, including photos , videos , events , articles , reviews , and mus ic. T he company was founded in 2008 and is bas ed in Menlo P ark, C reys tripe, G alifornia. 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. E ns equence United S ta tes www. ens equence. com F ourS quare F wix G reys tripe United S ta tes United S ta tes United S ta tes www. fours quare.com www. fwix. com www. greys tripe. com HiveL ive United S ta tes www. hivelive. com HiveLive Inc. provides enterpris e s ocial s oftware platforms . T he company’s on-demand s oftware enables companies to deploy cus tom-fit enterpris e communities built around people, rela tions hips , and s ha red knowledge. It offers LiveC onnect, provides a building-block approach for creating cus tom-fit online cus tomer communities ; and Hives , which are W eb 2. 0 building blocks tha t combine people, information, and permis s ions to create information res ources . HiveLive Inc. was founded in 2006 and is bas ed in B oulder, C olorado. InX po is the leading provider of priva tely-bra nded virtual events , including V irtua l T rade S hows , V irtual C areer F airs and V irtua l C orporate E vents , as well a s Audio and V ideo W ebcas ts . T hes e virtual s olutions dramatically reduce tra vel time and related cos ts , in addition to making the world a greener place to live. InXpo’s V irtual E vents provide P ublis hers with new online revenue opportunities and C orporations with the ability to generate leads , communicate, educate and network by connecting more effectively with their communities . J obvite, Inc. offers recruitment application that allows to collaborate on making hires . It s erves HR and s ta ffing executives , recruiters , hiring managers , executives , employees , and jobs eekers . T he company was founded in 2003 as F orumJ obs a nd changed its name to J obvite, Inc. in 2006. J obvite, Inc. 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 . Mint S oftware, Inc. provides a W eb-bas ed s olution for online fina ncial mana gement. It offers money mana gement, debt management, expens e tracking, inves tment ma nagement, budget management, mutual fund, IR A management, a nd financial pla nning s ervices . T he company als o provides s ugges tions bas ed on us er’s s pending patterns and a utomatic categorization of purcha s es . Mint S oftware, Inc. was founded in 2006 and is bas ed in Mountain V iew, C a lifornia . Mocapa y, Inc. provides a mobile commerce pla tform tha t s upports integrated mobile payments , marketing, and dis tribution at point-of-s ale. It offers a ma rketing engine, which enables mes s aging cons umers before, during, a nd after a retail s tore trans action. T he company was formerly known a s F E E D and changed its name to Mocapay, Inc. in 2007. Mocapa y, Inc. was founded in 2006 and is bas ed in B oulder, C olorado. NextB io, Inc. provides s oftware a s a s ervice bas ed s earch s olutions to life s cience res earchers . It offers NextB io B as ic, a W eb application tha t provides acces s to a databas e of public data; NextB io P rofes s ional that allows the individual res earcher or groups of res earchers to exploit publicly available and internally generated experimental data to enable and accelerate new s cientific dis coveries ; and NextB io E nterpris e that provides collaboration acros s therapeutic groups and geographic boundaries for pharma ceutica l and biotechnology companies , commercial and non-profit res ea rch and development organiz ations , a nd academic ins titutions . T he company als o provides NextB io P latform that provides ontology-ba s ed s emantic fra mework that connects heterogeneous data a nd textual information, as well a s data analys is and curation, training, and s upport s ervices . NextB io, Inc. was founded in 2004 and is ba s ed in C upertino, C alifornia. It has s ales offices in New J ers ey; B os ton, Mas s achus etts ; and S an F rancis co, C alifornia. InXpo United S ta tes www. inxpo. com J obvite United S ta tes www. jobvite. com Mas hL ogic United S ta tes www. ma s hlogic. com Mint.com United S ta tes www. mint. com Mocapay United S ta tes www. mocapay. com NextB io United S ta tes www. nextbio. com NowPublic C a nada www. nowpublic. com 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. R iot G ames , Inc. develops and publis hes online video games . It offers online titles for cons oles and the P C s . T he company was founded in 2006 and is bas ed in Los Angeles , C alifornia. 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. T iny P ictures , Inc. provides a s ervice for s haring of camera phone pictures and videos between friends . It offers R adar, a s ervice that enables us ers to s hare camera phone pictures and videos with friends . T he company was founded in 2005 a nd is bas ed in S an F rancis co, C alifornia. As of S eptember 10, 2009, T iny P ictures , Inc. operates as a s ubs idia ry of S hutterfly, 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. R iot G ames S kype United S ta tes Luxembourg www. riotgames . com www. s kype. com Tiny P ictures United S ta tes www. tinypictures . us YuMe United S ta tes www. yumenetwork s . com Figure 24. Company Descriptions Source. Company reports, Capital IQ, Crunchbase Page 20 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