Web 2.0 Weekly - Oct. 15, 2009 by dapshore

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									SOFTWARE & SERVICES

15 OCTOBER 2009

WEB 2.O WEEKLY
VIRTUAL GOODS THAT GENERATE REAL DO LLARS
SO CI AL G AMI NG POT E NT IAL L Y A $1. 6 BIL L IO N M AR K ET B Y 201 0

DAVID SHORE, CFA, MBA 416.860.6784
david.shore@researchcapital.com Damian Wojcichowsky, CFA (Associate), 416.860.7652

Based on data from Inside Virtual Goods, the market for virtual goods – that is, the non-physical objects associated with social networks and online gaming, which are purchased and exchanged on the internet – will soon exceed $1 billion, up 50% year-over-year. Zynga, maker of Farmville, is rumoured to be generating $200 million in revenue, while Playdom, maker of Café W orld, reportedly has generated $50 million in sales, and Playfish is rumoured to have reached the $75 million revenue level. Not coincidentally, in the past three months, gaming has become the top financing draw in our universe. Given the gains in monthly users that social networking sites that run many of these games are reporting (see ”Top 20 Games of the W eek”), and noting the significant positive valuation impact of a rapidly growing unique user base that we have discussed frequently in this periodical, we speculate that funds will continue to flow in the direction of these developers. Indeed, rumours abound that Electronic Arts is poised to announce the acquisition of one or more of the top social gaming developers. TOP 20 GAMES OF THE WEEK
Monthly Average G ame Café World Farmville Pet Society (Lil) Farm Life YoVille My Fishbowl Country Story Restaurant City ____ Bejeweled Blitz Friend Facts Texas HoldEm Poker Brain Buddies Jungle Jewels Animal Paradise Sunshine Ranch Mobsters 2: Vendetta Friends For Sale! Hug Me Quiztastic!
Source. Inside Social Games

W eekly G ain 8,598,277 2,422,800 623,927 419,702 381,688 374,545 373,398 321,128 264,965 229,411 217,380 201,301 193,344 179,730 167,284 149,484 135,239 107,961 107,455 104,032 C hange % 573.1 4.5 3.3 9.7 2.1 7.9 5.3 2.0 7.6 3.1 6.7 1.1 3.7 24.9 5.3 8.0 4.8 1.7 3.3 14.3

Us ers 10,098,584 56,122,407 19,512,235 4,737,693 18,917,129 5,143,462 7,425,779 16,200,404 3,761,044 7,688,337 3,467,673 18,092,599 5,378,231 900,423 3,310,592 2,030,705 2,966,508 6,558,440 3,409,953 833,167

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 Eighty-nine public Web 2.0 companies: Our W eb 2.0 universe contains 89 companies, with a combined market cap of approximately $70 billion (Figure 1). The median market cap for the group is $50 million, with average trailing revenue of $163 million (median $57 million). The companies are also generally profitable, with a median EBITDA margin of 12.5%. On a valuation basis, the overall average is 4.6x trailing revenue (median 1.9x) and 11.8x trailing EBITDA (median 10.0x). Twenty of the companies have more than 500 employees.
C omparable C ompany Analys is > Web 2.0
C ompany Name
Accelerize New Media, Inc. Actoz S oft C o. , Ltd. AQ Interactive, Inc. As s ociated Media Holdings Inc. B igs tring C orp. B etawa ve C orporation 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 ateway C orporation C hines e G amer Interna tional C L IC K E R Inc. C ornerW orld C orporation C yberplex Inc. DADA S pA DX N Holdings B hd Dibz Internationa l, Inc. DigitalP os t Interactive, Inc. DigitalT own, Inc. Dolphin Digita l 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 a mania Digital E nterta inment C o. , Ltd. G a meO n C o Ltd. G eoS entric O yj G iant Interactive G roup, Inc. G igaMedia Ltd. G ravity C o., Ltd G ree, Inc. G ungHo O nline E ntertainment, Inc. Ha nbitS 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. L td. 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 MOK O . mobi L imited Myriad G roup AG NE O W IZ G ames C orpora tion NetDra gon W ebS oft, Inc. Neteas e.com Inc. NeuLion Incorporated NeXplore C orporation Ngi G roup Inc. Northgate T echnologies L imited Open T ext C orp. Openwave S ys tems Inc. P erfect W orld C o., Ltd. P NI Digita l Media Inc. Quepas a C orp. OAO R B C Information S ys tems S handa Interactive E nterta inment Ltd. S hutterfly, Inc. S K C ommunications C o., Ltd. S NAP Interactive, Inc. S NM G loba l Holdings S ocial Media V entures Inc. S ocialwis e, Inc. S ohu.com Inc. S park Networks , Inc. S pectrumDNA, Inc. T encent Holdings Ltd. T he P arent C ompany T he9 L imited T heS treet.com, Inc. T ree. C om, Inc. Unis erve C ommunications C orp. United Online Inc. UO MO Media, Inc V a lueC lick Inc. V O IS , Inc. W ebzen Inc. W izzard S oftware C orporation W orlds .com Inc. W ynds torm C orporation XING AG Y D O nline C orp. Y nk K orea Inc. High Low Average Median

L TM as of Tic ker
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 7/31/2009 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 4/30/2009 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 6/30/2009 6/30/2009 12/31/2008 6/30/2009 6/30/2009 6/30/2009 6/30/2009 6/30/2009 6/30/2009 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 6/30/2009 5/31/2009 6/30/2009 7/31/2009 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 BSGC B W AV B Y OC AIM:B G T BWBA C HIN. A C Y OU CGW Y G T S M: 3083 C LK Z CWR 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 O 1V GA G IG M GRVY 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 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 OTE X OP W V PWR D T S X V :P N QP S A R BCI S NDA S F LY A066270 S TVI S NMN S MV I S C LW S OHU LO V S P XA 700 K IDS . Q NC T Y TSCM TRE E T S X V :U S S U NT D U OMO V C LK V OIS W ZE N W ZE W DDD W Y ND O 1B C 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 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 TS XV AS X TS X S E HK TS 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 BS E Nas daqG S Nas daqG S Nas daqG S TS XV OT C B B RTS 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 Nas daqG M TS 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

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 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 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 Hong K ong C hina U nited S ta tes T aiwan U nited S ta tes U nited S ta tes C anada Italy Malays 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 apan F inland C hina T aiwan S outh K orea J apan J apan S outh K orea U nited S ta tes C anada C anada Aus tralia C anada C hina C anada U nited S ta tes U nited S ta tes U nited S ta tes J apan S weden Aus tralia S witzerland S outh K orea C hina C hina C anada U nited S ta tes J apan India C anada U nited S ta tes C hina C anada U nited S ta tes R us s ia C hina U nited S ta tes S outh K orea U nited S ta tes U nited S ta tes U nited S ta tes U nited S ta tes C hina U nited S ta tes U nited S ta tes C hina U nited S ta tes C hina U nited S ta tes U nited S ta tes C anada U nited S ta tes C anada 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

C urrent Pric e
0. 60 16, 000 49, 000 0. 01 0. 04 0. 08 0. 14 0. 01 0. 03 2. 53 31. 90 0. 00 445 0. 01 0. 06 1 7. 89 0. 67 0. 00 0. 06 2. 50 0. 40 700 0. 35 1. 35 18. 09 49. 15 89, 800 0. 05 7 4. 82 1. 85 4, 790 227, 900 4, 150 19. 04 0. 11 0. 15 0. 38 0 8 0. 81 0. 04 1. 16 0. 01 658000. 00 326. 50 0. 08 4. 54 38900. 00 5 39. 99 0. 90 1 27510. 00 36. 90 40. 55 2. 67 44. 10 1. 80 1 1. 60 49. 16 16. 14 8460. 00 0 0. 00 0 0. 61 65. 38 2 0 138 0. 01 7. 40 3. 08 8. 10 0. 04 8. 99 0 14 0 2. 63 0. 43 0. 10 0. 10 36. 90 8130. 00 3750. 00

US D Market C ap ($m)
16.8 115. 6 29.8 0. 6 2. 3 2. 3 6. 5 5. 9 2. 5 268. 1 1, 754. 5 0. 0 1, 154. 1 0. 7 5. 7 74.9 187. 3 43.9 0. 0 4. 6 68.4 21.5 42.5 15.6 65.1 67.9 230. 2 97.1 65.8 1, 548. 9 262. 8 51.4 2, 398. 1 292. 0 76.1 2, 520. 9 7. 7 7. 1 16.2 0. 6 1, 070. 8 9. 3 1. 3 19.9 5. 0 1, 133. 8 3, 089. 9 5. 8 194. 6 687. 2 341. 0 5, 175. 8 94.4 39.0 38.1 26.8 2, 276. 8 222. 9 2, 168. 9 56.6 17.6 222. 0 3, 306. 3 410. 9 296. 9 3. 8 0. 0 0. 0 27.0 2, 506. 3 49.8 6. 8 32,300.4 0. 2 185. 7 94.3 87.5 0. 9 753. 7 9. 5 1, 193. 1 3. 7 31.2 21.7 5. 2 1. 8 284. 9 102. 1 16.8 32,300.4 0. 0 788.0 49.8

US D L TM Total R ev ($m)
4. 4 108. 7 66.1 0. 1 0. 1 9. 4 11.7 0. 0 0. 0 361. 6 241. 2 6. 7 61.6 2. 5 6. 8 89.8 241. 9 77.1 NA 1. 0 NM 0. 6 15.4 NM 5. 3 9. 6 140. 6 81.9 5. 4 198. 5 183. 6 49.1 156. 0 119. 5 60.7 1, 392. 3 0. 0 1. 6 16.7 67.9 139. 1 1. 2 10.6 56.8 0. 1 136. 8 1, 971. 4 0. 7 63.0 207. 3 89.3 472. 4 21.5 1. 7 93.0 82.9 785. 7 191. 7 255. 6 21.0 0. 2 157. 4 629. 0 218. 6 192. 7 3. 5 2. 0 0. 1 0. 0 485. 1 50.5 0. 1 1, 391. 6 112. 0 250. 6 67.0 216. 6 17.1 949. 8 0. 8 563. 6 0. 0 23.2 5. 3 0. 1 NA 58.9 57.4 11.9 1,971.4 0.0 163.1 57. 4

US D L TM Total E B ITDA ($m)
(3.7) 25. 9 (2.0) (2.3) (1.5) (12. 6) (12. 8) (2.7) (4.6) 25. 1 147.2 (6.6) 34. 7 (1.2) NM 9.7 31. 8 11. 1 NM (1.4) (2.5) (3.4) (3.6) NM (5.1) (4.5) 25. 1 20. 1 (17. 4) 124.1 NM 16. 6 93. 7 26. 6 1.4 52. 7 (0.6) (5.0) 7.2 4.0 61. 4 (1.9) (0.1) (4.4) (2.5) 46. 2 302.9 (2.4) 3.4 55. 7 25. 7 297.4 (13. 0) (13. 3) 6.9 (41. 5) 205.1 4.9 142.2 2.3 (10. 6) 20. 6 296.7 27. 3 12. 5 0.9 (0.7) (0.1) (5.6) 209.6 10. 8 (2.5) 680.3 (13. 5) 85. 5 1.9 (0.7) (0.2) 203.2 (0.4) 99. 0 (1.0) 2.3 (4.5) (0.7) NM 17. 0 12. 4 1.3 680.3 -41.5 39.0 1. 7

E B ITDA %
-83. 3% 23. 8% -2. 9% NM NM NM NM NM NM 6. 9% 61. 0% -98. 9% 56. 3% -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 5. 4% 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% -0. 3% -1. 0% 21. 4% -54. 2% 17. 6% NM 9. 9% -84. 9% NM NM 28. 8% 21. 6% 10. 5% 63. 0% -98. 9% 6.1% 12. 5%

TE V/L TM R evenue
4. 9x 0. 8x 0. 1x 15.6x 1. 0x 0. 7x 6. 1x 0. 0x 17.6x 0. 3x 2. 4x 0. 6x 1. 0x 0. 8x 6. 6x 38.6x 2. 9x 10.9x 6. 9x 1. 5x 0. 3x 12.1x 1. 0x 14.6x 2. 2x 1. 0x 0. 6x 3. 9x 0. 6x 7. 7x 7. 0x 0. 0x 7. 4x 1. 9x 6. 9x 3. 0x 3. 3x 2. 2x 3. 9x 25.3x 0. 3x 2. 9x 0. 6x 0. 7x 2. 6x 0. 0x 1. 6x 1. 5x 0. 6x 1. 1x 4. 5x 4. 1x 0. 9x 25.6x 0. 2x 0. 4x 0. 4x 0. 2x 1. 1x 12.6x 1. 9x 4. 3x 3. 9x 1. 9x 38.6x 4.6x 1. 9x

TE V/L TM E B ITDA
3.2x 10. 5x 10. 0x 31. 2x 5.7x 7.4x 5.3x 8.3x 1.1x 24. 3x 9.7x 44. 3x 14. 8x 1.4x 17. 4x 21. 9x 12. 1x 12. 2x 7.6x 11. 2x 23. 3x 1.2x 23. 6x 0.4x 12. 7x 23. 7x 2.3x 9.5x 4.5x 15. 3x 5.0x 10. 7x 13. 7x 9.0x 44. 3x 11.8x 10. 0x

E mployees
11 NA NA 3 4 51 101 NA 46 2, 227 628 37 NA 22 16 NA NA NA NA 7 3 NA NA 2 NA NA NA NA 115 1, 570 751 469 NA NA NA 3, 200 NA NA 79 NA 2, 463 NA NA 90 14 NA 2, 969 NA 405 NA 3, 109 3, 109 237 NA NA NA 3, 411 590 2, 096 NA 74 NA 3, 124 514 NA 11 33 NA NA 3, 197 183 7 6, 421 347 1, 626 310 700 NA 1, 469 NA 1, 189 4 328 110 1 NA 246 NA NA 6, 421 1 936 246

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 ) October off to a decent start: Total transaction value in the W eb 2.0 universe for October is $89.5 million. This week has brought 10 financings to the sector, bringing the total for October to 12 transactions averaging $9.0 million each – inline with the September average. The largest transaction in the week was a $22.5 million financing of PopCap Games, an online gaming developer. The biggest deal in the month is Yext at $25 million. In comparison, total capital raised in September was $232.8 million, averaging $9.0 million (26 deals); August was $208.5 million, averaging $7.7 million (27 deals); and July (35 deals) $191.4 million, averaging $5.5 million.

Financing Activity Last Twelve Months
400.0 14.6 350.0 14.0 16.0

300.0

12.0

250.0

9.7 9.0 9.0

10.0

(US$m)

7.9 200.0 7.0 7.0 6.5 150.0 4.9 7.1 6.6 6.2 5.5 6.0 8.0

100.0

4.0

50.0

2.0

0.0 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 Total May-09 Average Jun-09 Jul-09 Aug-09 Sep-09 Oct-09

0.0

*May-09 includes $200m FB investment

Figure 2. Financings, Last Twelve Months Source. Company reports

(US$m)

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Deal round-up for October (to date): The large deal highlights for the month include: • • Yext – an online directory provider – raised $25 million. PopCap Games – a developer of casual games played on multiple types of devices – raised $22.5 million in its first round of funding. DailyMotion – a French online video content provider – raised $22.1 million through a Series C financing. Engine Yard – provider of managed hosting and deployment solutions for Ruby and Rails applications – raised $19 million in a Series C financing. FeedRoom – provider of W eb video solutions – was acquired for $10 million by KIT Digital. Ooyala – an online video management and analytics company – raised $10 million in a Series B financing.

• •

• •

All other deals in the month involved less than $10 million in funding. 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) Oct-09 100.0 Sep-09 Aug-09 80.0

60.0

40.0

20.0

0.0 Skype Mint Twitter Turbine Friends Reunited Smith & Tinker Yext NowPublic PopCap Games DailyMotion Ensequence iLike Engine Yard Livebookings Dopplr Zoove RichRelevance Ooyala FeedRoom Mzinga MediaMath Traffiq InXpo Bill.com Edo Interactive Jobvite NextBio Riot Games InnoCentive OneRiot Balihoo Reality Mobile Imeem Vuclip Boxee HiveLive Polyvore Booyah MOG YuMe Fanbase NeoEdge Amie Street Alliance Health Unisfair ViVu Z2Live Conduit Labs KODA OurStage Mocapay Scoreloop Fwix Vantrix MashLogic Roblox iSocket Greystripe Tremor Media RightsFlow Loomia Plista FourSquare EduFire Tiny Pictures ChessCube DataSync Linkedex Fluther Linksify TransGaming Inc. Listia iSyndica Gigpark Gamelab.com OnLive

Figure 3. Capital Market Activity, Last Three Months Source. Company reports

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Gaming, Social Networks most active sectors: Gaming companies, along with Social Networks, experienced the most financing activity among our W eb 2.0 sector categories in the past three months by number of transactions (8). Advertising was the next most active (7), followed by Video (6) (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 0.0 Vertical Communities Gaming Microblog Enterprise Mobile Collaboration Music SMS/Voice Search Infrastructure Social Networks Video Crowdsourced Content Advertising Virtual World 192.3 116.5 100.0 85.4 67.1 39.4 37.9 35.5 32.0 30.0 26.1 17.1 15.8 14.5 14.0 Comment/Reputation 13.2 Advertising/Mobile 6.0 Media 3.9 Social Commerce 2.8 Aggregation 2.0 Mobile Ad 1.3 Online Learning 1.0 Analytics 0.4 Classified 1

# companies
1 3 8 1

8

6

7

4

5

2

3

4

3

5

2

2

1

1

1

1

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
200 180 160 140 120 100 80 60 40 20 0 1/20/2009 2/17/2009 3/17/2009 3/31/2009 4/14/2009 4/28/2009 5/12/2009 5/26/2009 6/23/2009 7/21/2009 8/18/2009 9/15/2009 10/14/2008 10/28/2008 11/11/2008 11/25/2008 12/23/2008 9/29/2009 12/9/2008 1/6/2009 2/3/2009 3/3/2009 6/9/2009 7/7/2009 8/4/2009 9/1/2009 10/13/2009

Index: Web 2.0 (Market Cap)
Figure 5. Web 2.0 Price Performance Source. Capital IQ

^COMP - Share Pricing

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Broad-based price improvement: Twenty-seven companies in our universe had positive stock price performances over the past week (for stocks with prices greater than $1) (Figure 6), while 23 companies showed negative 1-week returns. Volatile price swings continue for DigitalTown (OTCBB:DGTW ), up 24%, having fallen 24% the prior week, risen 76% the week before that, and declined 14% the week before that.

DigitalTow n, Inc. DA DA S pA United Online Inc. Tencent Holdings Ltd. GungHo Online Entertainment, Inc. Modern Times G roup Mtg A B Ngi G roup Inc. Open Tex t Corp. Openw ave S y s tems Inc. Tree.Com, Inc. TheS treet.com, Inc. K ings of t Co. Ltd. G ree, Inc. G ameOn Co Ltd. Webz en Inc. Mix i, Inc. A Q Interactiv e, Inc. LookS mart, Ltd. S park Netw orks , Inc. My riad Group A G CDC Corp. Cy berplex Inc. V alueClick Inc. G igaMedia Ltd. Y D Online Corp. S handa Interactive Entertainment Ltd. Gamania Digital Entertainment Co., XING A G S K Communications Co., Ltd. A ctoz S of t Co., Ltd. Y nk K orea Inc. S hutterf ly , Inc. Quepas a Corp. IA C/InterA ctiveCorp. G ravity Co., Ltd Frogs ter Interactiv e Pictures A G Perfect World Co., Ltd. NEOWIZ Games Corporation Eolith Co. Ltd. Giant Interactive G roup, Inc. HanbitS of t, Inc. S ohu.com Inc. Fluid Mus ic Canada , Inc. NetDragon WebS of t, Inc. The9 Limited Chines e Gamer International Changy ou.com Limited Northgate Technologies Limited PNI Digital Media Inc. Neteas e.com Inc. -0.15
Figure 6. 1-Week Price Performance Source. Capital IQ

1 Week P rice P erformance
8.8% 8.4% 7.4% 6.2% 5.9% 5.5% 5.5% 4.4% 4.3% 4.1% 3.5% 3.1% 3.1% 2.9% 2.7% 2.5% 2.3% 1.2% 0.8% 0.7% 0.6% 0.6% 0.4% 0.3% 12.9% 15.0%

24.4%

-10.0%

-7.7%

-0.1% -0.5% -0.6% -0.8% -1.3% -1.4% -1.6% -2.1% -2.2% -2.4% -2.8% -2.8% -2.8% -3.5% -3.5% -3.6% -3.8% -4.1% -5.5% -5.5% -5.6%

-0.1

-0.05

0

0.05

0.1

0.15

0.2

0.25

0.3

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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
S oc ial Media Ventures Inc . (OTC P K : S MVI)

Headline
S ocia l Media V enures Inc. J oins Marketing Affilia te P rogram with www. OfficialP etHotels . com

Notes
S ocia l Media V entures Inc. a nnounced that it ha s entered into a ma rketing affilia te agreement with www.O fficialP etHotels . com. According to the terms of the marketing a ffiliate a greement, S MV I will advertis e www. O fficia lP etHotels .com on its networking s ite for pets , www.P ets P laces .com in exchange for a commis s ion for ea ch member of P ets places .com tha t books a hotel us ing the s ervice provided by O ffica lP etHotels .com. P erfect W orld C o. , L td. a nnounced that its in-hous e 3D web game has offered a new edition named Merma id Legend. T he vers ion is the third extens ion pa ckage of the game, following P erfect W orld, la unched in November 25 in 2005, and P erfect W orld Interna tiona l E dition. S AP AG a nd O pen T ext C orp. a nnounced a nother expa ns ion of their s ucces s ful s tra tegic relations hip. S AP ha s s elected O pen T ext E xtended E C M for S AP for res a le under the na me the S AP ® E xtended E nterpris e C ontent Management (S AP E xtended E C M) a pplica tion by O pen T ext. Hors eR a cing T V , Inc. and NeuL ion a nnounced the debut of a new s ervice dedica ted to the s port and lifes tyle of hors e racing. W ith a cces s to over 70 tra cks from a cros s the country a nd a round the world, HR T V brings the thrill of live racing to viewers online through a uniquely bra nded video portal where fans ca n a cces s all the bes t hors e ra cing action. P owered by NeuLion technology, a lea ding s ervice provider of live a nd on demand s ports a nd interna tiona l progra mming, HR T V 's broadba nd s ervice gives ra cing fans the a bility to watch live ra ce covera ge, the HR T V channel a nd unpa ra lleled a cces s to ra cing's greates t circuits , on a 24 hours per da y, s even da ys a week bas is . T he oneof-a-kind s ervice features live ra ces , video-on-demand, audience polling and more. Additiona lly, s ubs cribers ha ve acces s to va rious content a nd a full complement of the network's a wa rd-winning origina l progra mming including: 'Ins ide Information, ' 'P urs uit of the C up,' 'Aga ins t the O dds , ' 'Acros s T he B oa rd' a nd more. Neteas e. com Inc. - C onference P res enta tion C alls

P erfect W orld C o., L td. (Nas daqG S : P WR D) Open Text C orp. (Nas daqGS : OTE X); S AP AG (DB : S AP ) NeuL ion Inc orporated (TS X: NL N)

P erfect W orld C o., Ltd. R elea s es New E dition for its InHous e G ame S AP AG and Open T ext C orp. E xpa nd G lobal R es eller Agreement NeuL ion Incorpora ted and Hors eR a cing T V , Inc. Announce Debut of a New S ervice

Neteas e.com Inc. (Nas daqGS : NTE S ) is eemedia Inc . (TS XV: IE E )

Netea s e.com Inc. - C onference P res enta tion C a ll

is eemedia Inc. Delivers B la ckberry-Like S ervice to Ma s s - is eemedia Inc. announced the a vaila bility of is eema il(T M), a new B lackberry-like s ervice that elimina tes the need for expens ive data plans or Ma rket Mobile P hones high-end phones to receive emails a nd rich atta chments on the go. T he s olution will be s pecifica lly a ttra ctive to wireles s s ervice providers a nd O E Ms who s upport almos t two billion mobile phone s ubs cribers in emerging ma rkets where the penetration of s ma rtphones is virtually non-exis tent. T he C ompany a ls o a nnounced tha t a s oon-to-be-dis clos ed carrier is now implementing the is eemedia s ervice in India. Informa predicts there will be 4.81 billion mobile phone s ubs cribers by 2012, with the majority of the next billion s ubs cribers coming from emerging markets . P ortio R es earch further s ta tes tha t nine of the top ten highes t growth markets over this period ha ve one key defining factor in common - they are a ll low income per-capita ma rkets . T herefore hands ets s old into thes e emerging ma rkets will continue to be mainly lowerpriced devices .

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). Fifty-seven of the 89 companies have market caps under US$100 million, with 28 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 Interactiv e Enterta inment Ltd. Modern Times G roup Mtg A B IA C/InterA ctiveCorp. S ohu.c om Inc . Perfec t World Co. , Ltd. G ree, Inc . Open Tex t Corp. Changyou.com Limited G ia nt Interactiv e G roup, Inc . Chines e G amer International V alueClick Inc. Mix i, Inc . K ings oft Co. Ltd. NEOWIZ G ames Corporation United Online Inc . S hutterf ly, Inc. NetDragon WebS of t, Inc. S K Communic ations Co. , Ltd. XING A G G ungHo Online Enterta inment, Inc . CDC Corp. G iga Media Ltd. G ama nia Digita l Entertainment Co. , Ltd. Openw a ve S y s tems Inc. OA O R B C Informa tion S y s tems My riad G roup A G The9 Limited DA DA S pA A ctoz S of t Co. , Ltd. Y edangOnline Corp. NeuLion Inc orporated G ameOn Co Ltd. TheS treet.com, Inc . Tree.Com, Inc . HanbitS of t, Inc . Cyberplex Inc . Fluid Mus ic Ca nada, Inc. Frogs ter Interactiv e Pic tures A G G eoS entric Oyj PNI Digital Media Inc . DigitalTow n, Inc . G ra vity Co., Ltd S pa rk Netw orks , Inc. Eolith Co. Ltd. DXN Holdings B hd NeXplore Corporation Ngi G roup Inc . Webz en Inc. A Q Interactiv e, Inc . Northgate Tec hnologies Limited S oc ia lw is e, Inc . Wiz z a rd S oftw are Corporation Dolphin Digital Media, Inc . B roa dWebA s ia Inc . LookS ma rt, Ltd. Quepas a Corp. J umbuck Enterta inment Limited A c celeriz e New Media, Inc . Y nk K orea Inc . L ingo Media Corporation B ey ond Commerc e, Inc . UOMO Media, Inc S pectrumDNA , Inc. Ex tens ions , Inc . B right Things plc is eemedia Inc . CornerWorld Corporation Worlds .c om Inc. MOK O.mobi Limited DigitalPos t Interactiv e, Inc . IA S Energy, Inc. Ma gnitude Informa tion S y s tems Inc . S NA P Interactiv e, Inc . V OIS , Inc . L iv eWorld Inc . B igs tring Corp. B etaw av e Corporation Wy nds torm Corporation Unis erve Communica tions Corp. K A B Dis tribution Inc. A s s oc ia ted Media Holdings Inc. CL ICK ER Inc . The Pa rent Company China G a tew ay Corporation S NM G lobal Holdings Dibz International, Inc. S ocial Media V enures , Inc . 0
Figure 8. Market Cap Ranking Source. Capital IQ

28,711.6 5,565.3 3,337.9 2,716.1 2,548.7 2,509.0 2,250.1 2,142.8 2,097.2 1,818.9 1,512.6 1,255.2 1,127.8 970. 1 968. 2 676. 6 659. 8 399. 7 341. 0 308. 1 284. 5 277. 4 264. 9 261. 7 225. 2 208. 7 208. 1 192. 5 189. 7 159. 7 124. 6 105. 5 98.6 93.0 87.5 83.1 76.7 74.9 73.3 68.4 65.8 59.8 55.0 52.0 47.1 45.2 39.4 36.3 33.4 32.1 29.6 29.4 27.0 23.5 19.9 19.5 19.5 19.1 17.0 16.8 16.8 12.1 11.3 10.4 9.7 8.9 5.9 5.9 5.7 5.2 4.9 4.5 4.2 4.1 3.8 3.3 2.5 2.1 2.0 1.8 0.9 0.6 0.6 0.6 0.3 0.0 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 4.6x: The overall average TEV/Revenue (LTM) multiple for our group is 4.6x (vs. 4.2x last week) (Figure 9). Having recovered from a negative end of month in September, we now see three companies trading above 25x revenue – Dolphin Digital Media, Inc. (OTCBB:DPDM) at 38.6x, Tencent Holdings Ltd. (SEHK:700) at 25.6x, and NexPlore Corporation (OTCPK:NXPC) at 25.3x. The median of 1.9x is down from 1.7x at last publication. Note that we exclude multiples greater than 50x. Twenty-nine companies have multiples under 1.5x.

T E V/L T M R evenue (x)
45. 0 40. 0 35. 0 30. 0
25.325.6 38.6

25. 0 20. 0 15. 0
10.9 15.6 14.6 12.112.6

17.6

10. 0 A verage, 4.6 5. 0 0. 0

6.1 6.6 4.9 3.9 3.9 3.9 4.1 4.3 4.5

7.7 6.9 6.9 7.0 7.4

3.3 2.4 2.6 2.9 2.9 3.0 1.5 1.6 1.9 1.9 1.9 2.2 2.2 0.7 0.8 0.8 0.9 1.0 1.0 1.0 1.0 1.1 1.1 1.3 1.5 0.1 0.2 0.2 0.3 0.3 0.3 0.4 0.4 0.6 0.6 0.6 0.6 0.6 0.7

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 8.4x (vs. 8.2x last week). On a geographic basis, the United States has the most companies (38), trading at an average of 5.2x revenue (vs. 4.3x last week) (Figure 11). Ten of the companies are Canadian (average 4.2x revenue).
Average TEV/LTM Revenue - By Exchange
14.0 12.0 10.0 (x) 8.0 6.0 4.0 2.0 OTCBB OTCPK GTSM 0.0 SEHK HLSE TSE OSE TSX ASX XTRA AMEX TSXV SWX 12.1 11.8 9.5 8.4
(x) 14.0 12.0 10.0 8.0 6.0 4.0 7.7 6.7 5.4 5.2 4.9 4.2 3.7 3.0 1.9 1.9 1.0 0.8 0.7 0.3 Germany United States Japan Hong Kong Finland China Canada India 1 Switzerland South Korea Sweden Australia Malaysia Taiwan Italy 0.0 0.0 Russia United Kingdom 1 1

NasdaqGM

CM

NasdaqGS

KOSE OM

RTS

BSE

AIM

# Companies

1

3 2 18 11 5 2 4 2 4

1 2 1 14 6 1 1 1 5

1 1 1 1
# Companies 1 10 3 2 38 6 10 2

NYSE

KLSE

Figures 10 & 11. TEV/Revenue Ranking (Exchange, Country) Source. Capital IQ

AQ Interactive, Inc. T he P arent C ompany Unis erv e C ommunic ations C orp. G ameO n C o Ltd. C LIC K E R Inc. Northgate T echnologies Limited T heS treet.c om, Inc. T ree.C om, Inc. IAC /InterActiv eC orp. J umbuck E ntertainment Limited O penwav e S y s tems Inc. C y berplex Inc. S N AP Interactive, Inc. P erfect World C o., L td. C DC C orp. DX N H oldings B hd Actoz S oft C o., L td. S park Network s , Inc. DADA S pA G igaMedia L td. HanbitS oft, Inc. B ey ond C ommerce, Inc. S NM G lobal H oldings U nited O nline Inc. Y nk K orea Inc. G amania Digital E ntertainment S K C ommunications C o., Ltd. S hutterfly , Inc. Modern T imes G roup Mtg AB V alueC lick Inc. Y D O nline C orp. G ungHo O nline E ntertainment, N etDragon WebS oft, Inc. C ornerWorld C orpora tion P NI Digital Media Inc. E olith C o. L td. O pen T ex t C orp. My riad G roup AG NE O WIZ G a mes C orpora tion is eemedia Inc. N euLion Incorpora ted XING AG S ohu.c om Inc. Wiz z ard S oftwa re C orporation S ocial Media V entures Inc. Acc eleriz e N ew Media, Inc. C hangy ou. com Limited DigitalP os t Interactive, Inc. MO K O . mobi Limited F rogs ter Interactive P ictures Lingo Media C orpora tion Mix i, Inc. K ings oft C o. L td. F luid Mus ic C ana da, Inc. G eoS entric O y j U O MO Media , Inc G ree, Inc. As s ociated Media H oldings Inc. C hines e G amer International N eXplore C orpora tion T encent H oldings L td. Dolphin Digita l Media, Inc.

Average TEV/LTM Revenue - By Country
12.1

6.7 5.6

5.4 5.2

3.73.4 3.0 2.6 2.2

1.9 1.9 1.9 1.0 0.8

0.4 0.3

0.0 0.00.0

2.0 0.0

1

8

1

1

1

1

Page 11

TEV/EBITDA (LTM) averages 12.2x: The average multiple for the 35 companies with positive EBITDA (and multiples under 100x) is 12.2x LTM EBITDA (vs. 12.1x last week), led by Tencent Holdings (SEHK:700) 44.3x multiple (Figure 12). Nine companies have EBITDA multiples under 7x. The median multiple is 10.0x (vs. 10.4x last week).
T E V/L T M E B IT DA (x)
50. 0 45. 0 40. 0 35. 0 30. 0 25. 0 20. 0 15. 0 10. 0 5. 0 0. 0 G ameO n C o L td. P erfec t World C o. , L td. 1. 1 1. 2 1. 4 J umbuck E ntertainment L imited 2. 3 S NAP Interac tive, Inc . 3. 2 4. 5 5. 0 5. 3 A verage, 12. 2 5.7 7.4 7.6 8.3 9.0 9.5 12. 7 12. 7 13. 7 11. 2 12. 1 12. 2 9.7 10. 0 10. 5 10. 7 14. 8 15. 3 17. 4 21. 9 23. 3 23. 6 23. 7 24. 3 31. 2 44. 3

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. , Ltd.

C hines e G amer International

DXN Holdings B hd

C hangy ou. c om L imited

C DC C orp.

S park Network s , Inc .

NetDragon WebS oft, Inc.

T heS treet. c om, Inc .

U nited O nline Inc .

O pen T ex t C orp.

IAC /InterAc tiveC orp.

S ohu. c om Inc .

Mix i, Inc .

Y D O nline C orp.

C yberplex Inc.

V alueC lic k Inc .

O penwave S y s tems Inc.

G ree, Inc .

XING AG

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 2.3x. 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 9.2x EBITDA).
Average TEV/LTM EBITDA - By Exchange
25.0 23.6 20.0 15.0 (x) 10.0 5.0 GTSM NasdaqGM 0.0 TSXV SEHK NasdaqGS KOSE OSE TSE OM CM 19.7 18.5 15.8 15.3 13.7 12.5 12.1

Actoz S oft C o. , L td.

Average TEV/LTM EBITDA - By Country
25.0 19.7 20.0 18.5 15.0

10.9 9.7

(x)

14.3

7.4

5.7 5.3 4.5 2.3 OTCBB AMEX TSX KLSE

10.0
1.4 0.4

13.7 13.5 12.1 11.1

K ings oft C o. L td.

10.5 9.2 7.4 5.3 1.4 0.4 Russia 1

5.0
XTRA ASX RTS

0.0 Germany Japan United States Hong Kong China Malaysia Canada South Korea Italy Taiwan Sweden

# Companies

4

2

6

5

5

2

3

1

14

1

1

4

1

2

18

2

1

# Companies

3

8

6

2

10

1

38

1

10

1

1

Figures 13 & 14. TEV/EBITDA Ranking (Exchange, Country) Source. Capital IQ

Australia 2

H anbitS oft, Inc.

Y nk K orea Inc.

S hutterfly , Inc.

DADA S pA

Page 12

P/E (LTM) averages 18.8x: The average multiple for the 33 companies with positive earnings (and multiples under 100x) is 18.8x LTM EPS (vs. 18.0x last week), led by Tencent Holdings Ltd. (SEHK:700) with a 65.9x multiple (Figure 15). Twelve companies have P/E multiples under 10x. The median is 13.6x.

P /E L T M (x)
70.0 63.1 60.0 50.9 50.0 41.0 40.0 30.0 20.0 A verage, 18.8 11.9 12.0 9.7 10.4 10.8 13.6 13.6 13.9 14.8 14.8 19.8 20.0 16.4 21.4 29.3 35.7 37.9 55.1 65.9

10.0 0.0 0.0 0.0 G ravity C o., Ltd W ebz en Inc. 1.8 2.1 G iant Interactive G roup, Inc. T he9 Limited 2.3 2.9 3.1 S handa Interactive E ntertainment Ltd. Neteas e.com Inc. P erfect World C o., Ltd.

4.6 J umbuck E ntertainment Limited

6.7

6.7 7.3

NE O W IZ G ames C orporation

G amania Digital E ntertainment C o., Ltd.

G ungH o O nline E ntertainment, Inc.
7.3 Malaysia 1

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.

NetDragon W ebS oft, Inc.

IAC /InterActiveC orp.

S park Network s , Inc.

O pen T ex t C orp.

C y berplex Inc.

G igaMedia 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 13.3x. On a geographic basis, the United States has the most companies (38), trading at an average of 13.1x earnings (Figure 17). Ten of the companies are Canadian (average 22.3x EPS).

Average P/E - By Exchange
70.0 60.0 50.0
(x)

50.0 45.0 40.0 35.0 30.0

Average P/E - By Country
44.7

63.1

(x)

40.0 30.0 20.0 10.0

38.5

29.3

33.7 30.4

29.3 19.1 14.8 13.6 13.3 10.8 7.3 OTCBB NasdaqGS

25.0 20.0 15.0 10.0

23.7

22.3 14.8 14.0 13.1 12.8 4.6

6.7 TSX

4.6 ASX

1.8 NasdaqGM 0.0 NYSE

GTSM

0.0 SEHK OSE TSE

KOSE

OM

XTRA

AMEX

KLSE

5.0 0.0 Germany Canada Japan United States China Taiwan South Korea Australia 2 Sweden

# Companies

1

5

3

2

2

6

1

2

18

14

1

4

2

1

5

# Companies

6

2

3

10

1

10

38

8

Figures 16 & 17. P/E Ranking (Exchange, Country) Source. Capital IQ

T encent H oldings Ltd.

Y D O nline C orp.

S ohu.com Inc.

Worlds .com Inc.

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
Changyou.com Limited (NasdaqGS:CYOU) Sohu.com Inc. (NasdaqGS:SOHU) IAC/InterActiveCorp. (NasdaqGS:IACI) Open Text Corp. (NasdaqGS:OTEX) Shutterfly, Inc. (NasdaqGS:SFLY) Tree.Com, Inc. (NasdaqGM:TREE)
Figure 18. Earnings Calendar Source. Company reports

Date & Time
Monday, October 26, 2009, 7:00 a.m. EDT Monday, October 26, 2009, 8:00 a.m. EDT Tuesday, October 27, 2009, 11:00 a.m. EDT Tuesday, October 27, 2009, 5:00 p.m. EDT Wednesday, October 28, 2009, 5:00 p.m. EDT Friday, October 30, 2009, 11:00 a.m. EDT

Quarter
Q 3 2009 Q 3 2009 Q 3 2009 Q 1 2010 Q 3 2009 Q 3 2009

C onf C all Details
1-866-314-5050 1-800-901-5248 www. iac. com/inves tors 1-800-814-4861 719-325-4880 1-888-428-9470

Page 14

C omparable C ompany Analys is > Web 2.0
Pric 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 ociated Media H oldings Inc. B igs tring C orp. B eta wave C orpora tion B eyond C ommerce, Inc. B right T hings plc B roadW ebA s ia Inc. C DC C orp. C ha ngyou.com Limited 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 Interna tional, Inc. DigitalP os t Intera ctive, Inc. DigitalT own, Inc. Dolphin Digital Media, Inc. E olith C o. L td. E xtens ions , Inc. F luid Mus ic C anada, Inc. F rogs ter Intera ctive P ictures AG G amania Digita l E ntertainment C o., L td. G ameO n C o L td. G eoS entric Oyj G ia nt Interactive G roup, Inc. G igaMedia L td. G ra vity C o., Ltd G ree, Inc. G ungH o Online E ntertainment, Inc. H anbitS oft, Inc. IAC /InterA ctiveC orp. IAS E nergy, Inc. is eemedia Inc. J umbuck E ntertainment Limited K AB Dis tribution Inc. K ings oft C o. L td. L ingo Media C orpora tion L iveW orld Inc. L ookS mart, L td. Ma gnitude Information S ys tems Inc. Mixi, Inc. Modern T imes G roup Mtg AB MO K O .mobi L imited Myriad G roup AG NE O W IZ G ames C orporation NetDra gon W ebS oft, Inc. Netea s e. com Inc. NeuLion Incorpora ted NeXplore C orpora tion Ngi G roup Inc. Northgate T echnologies Limited O pen T ext C orp. O penwa ve 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 ha nda Interactive E nterta inment L td. S hutterfly, Inc. S K C ommunications C o. , L td. S NA P Intera ctive, Inc. S NM G loba l H oldings S ocial Media V entures 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 ompany T he9 L imited T heS treet.com, Inc. T ree.C om, Inc. U nis erve C ommunica tions C orp. U nited O nline Inc. U OMO Media, Inc V alueC lick Inc. V OIS , Inc. W ebzen Inc. W izzard S oftwa re C orporation W orlds .com Inc. W ynds torm C orpora tion XING A G Y D Online C orp. Y nk K orea Inc. H igh L ow Average Media n C urrenc y US D KR W JPY US D US D US D US D GB P US D US D US D US D TWD US D US D C AD E UR MY R US D US D US D US D KR W US D C AD E UR TWD JPY E UR US D US D US D JPY JPY KR W US D US D C AD AU D C AD HK D C AD US D US D US D JPY SEK AU D C HF KR W HK D US D C AD US D JPY INR US D US D US D C AD US D US D US D US D KR W US D US D US D US D US D US D US D HK D US D US D US D US D C AD US D US D US D US D US D US D US D US D E UR KR W KR W Tic ker AC L Z A052790 3838 AS MH BSGC B W AV B Y OC AIM:B G T BWBA C H IN.A C Y OU CGWY 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 AB 3888 T S XV :LM LV W D LO OK 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 CLW S O HU LO V S P XA 700 K IDS . Q NC T Y TS CM TR E E T S XV :US S UNT D UO MO V CLK V O IS W ZE N W ZE W DDD W Y ND O1B 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 A IM OT C P K Nas da qG S Nas da qG 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 H LS E NY S E Nas da qG S Nas da qG M TS E OS E K OS E Nas da qG S OT C B B T S XV AS X TS X S E HK T S XV OT C P K Nas da qG M OT C B B TS E OM AS X S WX K OS E S E HK Nas da qG S TS X OT C P K TS E BSE Nas da qG S Nas da qG S Nas da qG S T S XV OT C B B R TS Nas da qG S Nas da qG S K OS E OT C B B OT C P K OT C P K OT C B B Nas da qG S A ME X OT C B B S E HK OT C P K Nas da qG S Nas da qG M Nas da qG M T S XV Nas da qG S OT C B B Nas da qG S OT C B B Nas da qG M A ME X OT C B B OT C P K XT R A K OS E K OS E US D Market C ap ($m) 16.8 115.6 29.8 0.6 2.3 2.3 6.5 5.9 2.5 268.1 1, 754.5 0.0 1, 154.1 0.7 5.7 74.9 187.3 43.9 0.0 4.6 68.4 21.5 42.5 15.6 65.1 67.9 230.2 97.1 65.8 1, 548.9 262.8 51.4 2, 398.1 292.0 76.1 2, 520.9 7.7 7.1 16.2 0.6 1, 070.8 9.3 1.3 19.9 5.0 1, 133.8 3, 089.9 5.8 194.6 687.2 341.0 5, 175.8 94.4 39.0 38.1 26.8 2, 276.8 222.9 2, 168.9 56.6 17.6 222.0 3, 306.3 410.9 296.9 3.8 0.0 0.0 27.0 2, 506.3 49.8 6.8 32,300. 4 0.2 185.7 94.3 87.5 0.9 753.7 9.5 1, 193.1 3.7 31.2 21.7 5.2 1.8 284.9 102.1 16.8 C urrent P ric e 0.60 16, 000 49, 000 0.01 0.04 0.08 0.14 0.01 0.03 2.53 31.90 0.00 445.00 0.01 0.06 1.25 7.89 0.67 0.00 0.06 2.50 0.40 700.00 0.35 1.35 18.09 49.15 89, 800 0.05 6.84 4.82 1.85 4, 790 227, 900 4, 150 19.04 0.11 0.15 0.38 0.01 7.60 0.81 0.04 1.16 0.01 658,000.00 326.50 0.08 4.54 38,900.00 5.00 39.99 0.90 0.70 27,510.00 36.90 40.55 2.67 44.10 1.80 1.38 1.60 49.16 16.14 8,460.00 0.35 0.00 0.05 0.61 65.38 2.42 0.14 138 0.01 7.40 3.08 8.10 0.04 8.99 0.11 13.69 0.00 2.63 0.43 0.10 0.10 36.90 8,130.00 3,750.00 1 Wk 0. 0% -0.6% 2. 9% -30.0% 2. 6% 12.9% -30.0% 0. 0% -87.0% 1. 2% -5.5% -86.7% -5.5% 28.6% 0. 0% 0. 8% 15.0% 11.7% 20.0% -6.3% 24.4% 5. 3% -2.8% 40.0% -3.6% -2.2% 0. 3% 3. 5% 0. 0% -2.8% 0. 6% -2.1% 4. 1% 8. 4% -3.5% -1.6% 83.3% 25.0% -5.0% -50.0% 4. 3% -17.3% -48.8% 2. 7% 22.2% 3. 1% 7. 4% 15.2% 2. 3% -2.8% -3.8% -10.0% -5.3% 7. 7% 6. 2% -5.6% 5. 9% 5. 5% -2.4% -7.7% -1.4% 6. 7% 0. 4% -1.3% -0.5% -30.0% 58.3% -52.6% 0. 0% -3.5% 2. 5% -30.0% 8. 8% -50.0% -4.1% 4. 4% 5. 5% 0. 0% 12.9% -13.4% 0. 7% 12.5% 3. 1% -14.0% 11.1% 0. 0% -0.1% 0. 6% -0.8% 83.3% -87.0% -1.5% 0. 0% 1 Mth 0.0% -11.1% -5.0% -30.0% 100.0% 12.9% -30.0% -0.4% -87.0% -8.7% -21.3% -86.7% 7.5% 63.6% 0.0% -1.6% 11.0% 18.6% NM 7.3% 42.9% 6.4% -18.1% 94.4% -4.9% -3.7% 7.0% -11.4% 0.0% -9.2% -0.2% 8.2% 10.1% -12.0% -1.2% -1.9% -26.7% 150.0% 2.7% -99.2% -8.1% -19.0% 2.5% -0.9% 19.6% 18.3% 12.8% 8.6% 0.9% -0.5% -14.7% -6.1% -12.6% 16.7% -5.9% -18.5% 13.6% -7.0% 1.6% -4.3% -21.1% 52.4% -4.4% 8.6% -6.1% -12.5% -9.5% -43.8% 24.5% -0.7% 11.0% -36.4% 8.6% -53.3% -9.4% 16.2% 3.4% -11.1% 15.3% -19.7% 22.3% 7.1% -10.5% -21.8% -9.1% 0.0% 12.3% -11.6% -7.6% 150.0% -99.2% -0.4% -1.0% 3 Mth 9.1% -39.4% -14.0% 833.3% -9.3% -1.3% -58.8% -14.1% -87.0% 30.4% -25.6% -86.7% -5.8% 23.3% 20.0% -19.9% 31.5% 71.8% 20.0% 96.7% 25.0% -11.1% -9.1% 337.5% 50.0% 54.6% -16.4% -15.3% 25.0% -6.3% -9.9% 15.6% 51.6% 14.0% -7.9% 12.5% -38.9% 66.7% 0.0% -99.2% 25.4% -26.4% 17.1% 5.5% 22.2% 3.8% 41.6% 26.7% -5.4% 28.8% -10.2% 4.2% 5.9% 55.6% -10.1% 12.8% 10.3% -3.3% 40.0% 12.5% 38.0% 113.3% -12.7% 17.0% -7.5% -22.2% 18.8% -85.9% -18.7% 3.2% -1.2% -6.7% 49.8% -75.9% -14.7% 54.8% -15.4% -50.0% 9.1% 0.0% 21.5% -27.4% -20.3% -14.0% -28.6% 0.0% 32.3% 2.4% -37.2% 833.3% -99.2% 15.6% 2.4% 6 Mth 57.9% 8. 8% 4. 3% 180.0% 182.6% -43.6% -90.3% -8.3% -93.3% 75.7% 18.5% 0. 0% 137.3% 80.0% -57.1% 0. 8% 56.1% 116.1% -88.0% 293.3% -9.1% -11.1% 12.0% 133.3% 285.7% 112.8% 54.1% -2.6% 25.0% -9.0% -28.7% 86.9% 75.8% 87.1% -0.2% 14.1% -54.2% 50.0% -24.0% -98.6% 113.5% -19.0% -59.0% -1.7% 10.0% 74.5% 90.4% 1. 3% 12.1% 39.9% 9. 4% 32.8% 50.0% 0. 0% 0. 1% -14.2% 12.8% 115.3% 166.0% 12.5% 75.1% 220.0% 2. 9% 45.3% -6.9% -53.3% 850.0% -70.0% 64.9% 36.6% 9. 5% -6.7% 109.4% -65.0% -30.8% 25.2% 43.9% 0. 0% 86.5% 37.5% 36.6% 50.0% -1.1% -29.5% -41.2% -41.2% 27.8% -14.5% -15.5% 850.0% -98.6% 39.6% 12.1% 1 Yr 20.0% 92.8% 41.6% -30. 0% 59.2% -56. 1% -93. 2% 44.7% -95. 0% 65.4% NM -80. 0% 556. 3% -95. 5% -70. 0% 150. 0% 3.3% 91.4% -97. 6% -1.7% -16. 7% -57. 9% 29.6% 250. 0% 237. 5% 302. 0% 239. 0% 25.8% 25.0% 4.9% -26. 0% 131. 3% NM 125. 6% 32.2% 24.6% -44. 7% 114. 3% -35. 0% -99. 4% 289. 7% -50. 9% -68. 5% -37. 6% -45. 0% 2.5% 85.0% 58.3% -26. 8% 422. 1% 66.1% 83.1% NM 32.1% -63. 7% -46. 1% 54.6% 233. 8% 109. 6% -5.3% -42. 5% -60. 0% 76.1% 130. 6% 17.2% 75.0% -99. 3% -95. 5% -72. 1% 20.0% -19. 3% -12. 5% 177. 0% -99. 1% -46. 4% -16. 1% 243. 2% -77. 8% 14.1% -38. 9% 82.5% -40. 0% 195. 5% -46. 9% -54. 5% -50. 0% 23.0% 29.0% -53. 6% 556. 3% -99. 4% 35.1% 9.5% 52 Week -13.0% -55.6% -41.0% -72.0% -31.6% -72.8% -93.5% -44.3% -99.0% -35.5% -34.1% -93.3% -14.3% -97.8% -87.2% -37.2% -3.7% -1.5% -97.6% -40.4% -28.6% -63.6% -39.7% -65.3% -15.6% -9.0% -28.6% -40.9% -16.7% -28.5% -38.8% -29.7% -10.1% -18.6% -37.5% -10.5% -60.7% -6.3% -37.7% -99.2% -19.7% -52.6% -83.6% -41.7% -63.3% -11.9% -0.5% -24.0% -42.9% -13.4% -30.1% -17.5% -30.8% -51.7% -69.1% -60.3% 0.9% -14.7% -12.7% -22.4% -50.7% -79.6% -24.4% -11.0% -34.2% -67.6% -99.3% -99.1% -72.8% -9.6% -27.8% -68.9% -0.1% -99.4% -58.3% -31.1% -38.0% -77.8% -5.0% -89.6% -1.8% -80.4% -43.8% -75.1% -58.3% -80.4% -2.8% -34.4% -57.6% 0.9% -99.4% -43.7% -38.0%

788.0

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 entures Inc. S ocialwis e, Inc. S ohu.com Inc. S park N etworks , Inc. S pectrumDN A, Inc. T encent Holdings Ltd. T he P a rent C ompany T he9 L imited T heS treet.com, Inc. T ree.C om, Inc. Unis erve C ommunications C orp. United Online Inc. UO MO Media, Inc V a lueC lick Inc. V O IS , Inc. W ebzen Inc. W izzard S oftware C orporation W orlds .com Inc. W ynds torm C orporation XIN G AG Y D Online C orp. Y nk K orea Inc. High Low Average Median

S ec tor
Direct Marketing G aming G aming Mobile Ins ta nt Mes s aging Media S ocial Networking S ocial Networking S ocial Networking G aming G aming Mobile G aming Direct Marketing C ontent A dvertis ing S ocial Networking S ocial Networking S NS Apps C ontent S ocial Networking S ocial Networking G aming C ontent Media G aming G aming G aming Mobile G aming G aming G aming S ocial Networking Media G aming Media V ideo C ontent S ocial Networking C ontent G aming L earning S ocial Networking Direct Marketing S ocial Networking S ocial Networking Media S ocial Networking Mobile G aming G aming G aming V ideo C ontent Media Direct Marketing C ollabora tion Mobile G aming Digita l Ima ging S ocial Networking Media G aming Digita l Ima ging S earch Dating Media S ocial Networking S ocial Networking G aming S ocial Networking Media P orta l Media G aming Media P orta l S ocial Networking Media Media Media S ocial Networking G aming P odca s ting C ontent C ontent S ocial Networking G aming G aming

C ountry
U nited S ta tes S outh K orea J apan U nited S ta tes U nited S ta tes U nited S ta tes U nited S ta tes U nited K ingdom U nited S ta tes H ong K ong C hina U nited S ta tes T a iwa n U nited S ta tes U nited S ta tes C ana da Italy Mala ys ia U nited S ta tes U nited S ta tes U nited S ta tes U nited S ta tes S outh K orea U nited S ta tes U nited S ta tes G erma ny T a iwa n J apan F inland C hina T a iwa n S outh K orea J apan J apan S outh K orea U nited S ta tes C ana da C ana da Aus tra lia C ana da C hina C ana da U nited S ta tes U nited S ta tes U nited S ta tes J apan S weden Aus tra lia S witzerla nd S outh K orea C hina C hina C ana da U nited S ta tes J apan India C ana da U nited S ta tes C hina C ana da U nited S ta tes R us s ia C hina U nited S ta tes S outh K orea U nited S ta tes U nited S ta tes U nited S ta tes U nited S ta tes C hina U nited S ta tes U nited S ta tes C hina U nited S ta tes C hina U nited S ta tes U nited S ta tes C ana da U nited S ta tes C ana da U nited S ta tes U nited S ta tes S outh K orea U nited S ta tes U nited S ta tes U nited S ta tes G erma ny S outh K orea S outh K orea

P rimary E xc hange
OTCB B K OS E TS E OTCP K OTCB B OTCB B OTCB B AIM OTCP K N as da qG S N as da qG S OTCP K GTS M OTCB B OTCB B TS X CM K LS E OTCP K OTCB B OTCB B OTCB B K OS E OTCP K TS X XT R A GTS M TS E H LS E NY S E N as da qG S N as da qG M TS E OS E K OS E N as da qG S OTCB B T S XV AS X TS X S E HK T S XV OTCP K N as da qG M OTCB B TS E OM AS X SWX K OS E S E HK N as da qG S TS X OTCP K TS E BS E N as da qG S N as da qG S N as da qG S T S XV OTCB B R TS N as da qG S N as da qG S K OS E OTCB B OTCP K OTCP K OTCB B N as da qG S AME X OTCB B S E HK OTCP K N as da qG S N as da qG M N as da qG M T S XV N as da qG S OTCB B N as da qG S OTCB B N as da qG M AME X OTCB B OTCP K XT R A K OS E K OS E

Ticker
AC LZ A052790 3838 AS MH BSGC B W AV B YOC AIM:B G T BWBA C HIN.A C Y OU CGW Y G T S M:3083 C LK Z CW R L T S X: C X C M:DA DXN DIB Z DG L P DG T W DP DM A041060 E XT I T S X:F MN FR G 6180 3812 G E O1V GA G IG M GR VY T S E : 3632 3765 A047080 IAC I IAS A.E IE E AS X:J MB T S X:K AB 3888 T S XV : LM LV W D L OOK MA G Y 2121 MT G B MK B MY R N A095660 777 NT E S T S X:NL N NXP C 2497 590057 OT E X OP W V PWRD T S XV :P N QP S A R BCI S NDA S FLY A066270 S TVI S NMN S MV I S CLW S O HU L OV S P XA 700 K IDS .Q NC T Y TS CM TREE T S XV :US S U NT D UO MO V CLK V OIS W ZE N W ZE W DDD W Y ND O1B C A052770 A023770

US D Market C ap ($m)
16.8 115.6 29.8 0.6 2.3 2.3 6.5 5.9 2.5 268.1 1,754.5 0.0 1,154.1 0.7 5.7 74.9 187.3 43.9 0.0 4.6 68.4 21.5 42.5 15.6 65.1 67.9 230.2 97.1 65.8 1,548.9 262.8 51.4 2,398.1 292.0 76.1 2,520.9 7.7 7.1 16.2 0.6 1,070.8 9.3 1.3 19.9 5.0 1,133.8 3,089.9 5.8 194.6 687.2 341.0 5,175.8 94.4 39.0 38.1 26.8 2,276.8 222.9 2,168.9 56.6 17.6 222.0 3,306.3 410.9 296.9 3.8 0.0 0.0 27.0 2,506.3 49.8 6.8 32,300.4 0.2 185.7 94.3 87.5 0.9 753.7 9.5 1,193.1 3.7 31.2 21.7 5.2 1.8 284.9 102.1 16.8 32,300.4 0.0 788.0 49.8

TE V/L TM R evenue
4.9x 0.8x 0.1x 15.6x 1.0x 0.7x 6.1x 0.0x 17.6x 0.3x 2.4x 0.6x 1.0x 0.8x 6.6x 38.6x 2.9x 10.9x 6.9x 1.5x 0.3x 12.1x 1.0x 14.6x 2.2x 1.0x 0.6x 3.9x 0.6x 7.7x 7.0x 0.0x 7.4x 1.9x 6.9x 3.0x 3.3x 2.2x 3.9x 25.3x 0.3x 2.9x 0.6x 0.7x 2.6x 0.0x 1.6x 1.5x 0.6x 1.1x 4.5x 4.1x 0.9x 25.6x 0.2x 0.4x 0.4x 0.2x 1.1x 12.6x 1.9x 4.3x 3.9x 1.9x 1.3x 38.6x 0.0x 4.6x 1.9x

TE V/ NTM R evenue
0.1x 0.8x 4.7x 16.5x 0.5x 0.9x 1.4x 9.7x 1.0x 8.0x 0.6x 0.6x 6.3x 6.4x 1.8x 2.9x 2.5x 0.6x 3.4x 2.2x 1.0x 1.5x 3.5x 19.5x 0.2x 0.5x 0.4x 1.0x 2.0x 3.0x 1.5x 19.5x 0.1x 3.4x 1.5x

TE V/L TM E B ITDA
3. 2x 10.5x 10.0x 31.2x 5. 7x 7. 4x 5. 3x 8. 3x 1. 1x 24.3x 9. 7x 44.3x 14.8x 1. 4x 17.4x 21.9x 12.1x 12.2x 7. 6x 11.2x 23.3x 1. 2x 23.6x 0. 4x 12.7x 23.7x 2. 3x 9. 5x 4. 5x 15.3x 5. 0x 10.7x 13.7x 9. 0x 12.7x 44.3x 0. 4x 12.2x 10.5x

TE V/NTM E B ITDA
7.4x 8.2x 26.9x 4.3x 6.3x 4.8x 13.2x 4.5x 1.7x 12.0x 20.3x 13.3x 10.1x 9.4x 5.2x 6.3x 7.1x 5.7x 8.2x 7.9x 46.4x 12.8x 8.4x 4.3x 7.5x 8.2x 5.0x 46.4x 1.7x 10.2x 7.9x

P /L TM E P S
16.4x 12.0x 41.0x 6.7x 7.3x 19.8x 9.7x 1.8x 10.4x 0.0x 50.9x 63.1x 13.6x 11.9x 4.6x 21.4x 55.1x 14.8x 35.7x 13.9x 2.9x 37.9x 3.1x 2.3x 6.7x 14.8x 13.6x 65.9x 2.1x 0.0x 20.0x 29.3x 10.8x 65.9x 0.0x 18.8x 13.6x

P /NTM E P S
8.8x 10.8x 24.5x 7.6x 17.7x 1.6x 14.3x 9.7x 33.7x 33.3x 4.5x 15.4x 48.0x 15.9x 9.3x 16.1x 1.5x 14.4x 33.4x 14.0x 14.4x 5.1x 13.5x 17.9x 55.1x 52.1x 6.8x 21.4x 16.8x 55.1x 1.5x 18.5x 14.4x

P /TangB V
1.8x 0.5x 0.5x 11.9x 19.8x 3.0x 0.9x 3.9x 6.1x 8.3x 3.0x 1.2x 54.3x 0.3x 2.2x 0.0x 23.5x 21.8x 2.1x 1.2x 5.8x 1.5x 0.0x 5.9x 16.6x 0.5x 0.8x 7.5x 7.2x 18.1x 1.8x 0.8x 6.9x 0.7x 3.2x 1.4x 19.8x 0.9x 2.5x 2.1x 4.9x 50.9x 68.0x 29.3x 0.1x 1.2x 1.1x 7.8x 23.7x 0.0x 9.1x 3.4x 0.8x 68.0x 0.0x 8.9x 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 Mala ys 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 ($m) C hina United S ta tes J apan S weden C anada T aiwa n S outh K orea G erma ny Hong K ong Italy R us s ia S witzerland F inland Malays ia India Aus tralia United K ingdom Norwa y G rand Total 49, 633.4 5, 811.3 3, 871.5 2, 974.2 2, 488.2 1, 733.6 1, 527.4 317.0 294.6 165.4 160.9 92.0 65.9 39.8 31.0 22.1 6.0 0.1 69,234.6 Avg US D Market C ap ($m) C hina S weden J a pan 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 inland 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 ($m) C hina United S tates S weden C a na da S outh K orea J a pa n T a iwan Hong K ong Ita ly R us s ia India Ma la ys ia G ermany S witzerla nd Aus tra lia F inla nd Norway United K ingdom G rand Total 4, 152.4 3, 887.3 1, 982.6 1, 015.0 707.3 634.4 385.8 361.6 242.6 156.2 82.8 77.1 68.7 40.0 17.8 5.5 2.3 0.0 13,819.5 US D L TM Total E B ITDA ($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 tra lia S witzerla 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 tralia T aiwan J apan S weden Malays ia Italy R us s ia S outh K orea Hong K ong S witzerland C anada G ermany United S tates India Norway United K ingdom F inland G rand Total 48. 8% 42. 8% 37. 1% 24. 2% 15. 4% 14. 4% 13. 1% 13. 1% 12. 7% 6. 9% 1. 9% -8. 5% -9. 1% -21.9% -50.0% -50.6% NA NA 5.1%

Figure 21. Comparison by Country Source. Capital IQ

C omparable C ompany Analys is > Web 2.0
S ummary by E xc hange
C ompany Name OT C B B Nas daqG S OT C P K K OS E TS E Nas daqG M TS X T S XV S E HK AME X AS X XT R A GTS M SWX HLS E CM BSE NY S E OS E AIM OM R TS 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 ($m) S E HK Nas daqG S TS E OM NY S E K OS E GTS M XT R A OS E Nas daqG M TS X OT C B B CM R TS SWX T S XV AME X HLS E OT C P K K LS E BSE AS X AIM O T C NO G rand Total 31, 520.4 24, 385.7 3, 569.2 2, 974.2 1, 750.4 1, 437.0 1, 430.0 317.0 302.3 279.7 243.6 230.9 165.4 160.9 92.0 76.6 68.5 65.9 65.8 39.8 31.0 22.1 6.0 0.1 69,234.6 Avg US D Market C ap ($m) S E HK OM NY S E Na s da qG S GTS M TS E OS E K OS E CM RTS XT R A SWX HL S E TS X Na s 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 ($m) OM S E HK Na s da qG S CM NY S E RTS OS E K OS E TS E GTS M BSE Na s da qG M K LS E TS X SWX XT R A AME X OT C P K T S XV AS X HL S E OT C B B O T C NO AIM G rand Total 1, 982.6 540.0 498.6 242.6 198.5 156.2 116.1 106.0 103.7 101.1 82.8 82.4 77.1 46.4 40.0 34.3 27.9 16.5 12.0 8.9 5.5 2.3 2.3 0.0 13,819.5 US D L TM Total E B ITDA ($m) Na s da qG S S E HK OM TS E NY S E K OS E GTS M CM OS E RTS 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 daqG S TS E OS E OM K LS E CM R TS K OS E Nas daqG 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% NA NA 5.1%

Figure 22. Comparison by Exchange Source. Capital IQ

Page 17

Financ ing - L as t Three Months (US $ m)
F in. Amount (Million) Month Aug-09 C ompany Name Turbine S mith & Tinker Mint Zoove R ichR elevance 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 ocket R ights Flow P lis ta C hes s C ube L inks ify iS yndica Aug-09 Total S ep-09 Twitter E ns equenc e L ivebookings Mzinga InXpo J obvite R iot G ames NextB io Imeem Vuc lip YuMe B ooyah NeoE dge Allianc e Health Networks Unis fair C onduit L abs Mocapay Fwix Vantrix Mas hL ogic G reys tripe L oomia FourS quare E duFire Fluther Trans Gaming Inc. OnL ive S ep-09 Total Oct-09 P opC ap G ames DailyMotion E ngine Yard Ooyala R eality Mobile Amie S treet ViVu DataS ync L inkedex L is tia Oct-09 Total G rand Total US A F ra nce US A US A US A US A US A US A UK US A 1. 0 0. 4 1.4 27.8 2.0 33.2 61.6 13.9 143.7 41.1 112.6 86.3 110.0 3.0 1.2 6.5 3.9 10.0 US A US A UK US A US A US A US A US A US A US A US A US A US A US A US A US A US A US A C anada US A US A US A US A US A US A C anada US A 0.6 2.0 16.9 22.5 22.1 19.0 52.3 27.9 23.1 110.0 232.8 22. 5 22. 1 19. 0 10. 0 6.5 3.9 3.0 1.2 1.0 0.4 89.5 543.9 0. 6 0. 5 1. 5 1.4 1.3 2.5 2.0 2.8 2.6 3.0 3.0 5.0 4.0 3.3 3. 1 6.0 6.0 5.0 9.0 8.3 8.0 8.0 16.0 10. 0 20. 0 C ountry 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 63.2 100.0 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 Type of financ ing Angel/S eed Debt financ ing S eries A S eries B 29.0 14.1 13. 2 S eries C S eries D 50. 0 S eries E Grand Total 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 0.4 221.6 100. 0 20. 0 16. 0 10. 0 9.0 8.3 8.0 8.0 6.0 6.0 5.0 5.0 4.0 3.3 3.1 3.0 3.0 2.8 2.6 2.5 2.0 1.5 1.4 1.3 0.6 0.5

Figure 23. Financing, Last Three Months Source. Company reports

Page 18

C ompany Des c riptions - C urrent Month C apital Market Ac tivity
C ompany
Amie S treet DailyMotion

HQ
United S ta tes F rance

Webs ite
www. amies treet. com www. dailymotion. com

Des cription
Amie S treet, Inc. , a W eb bas ed s ocial mus ic s tore, enables members to dis cover, download, and s hare mus ic. T he company wa s founded in 2006 and is bas ed in L ong Is la nd C ity, New Y ork . Dailymotion S AR L provides on-line video content in F rance and E urope. It operates a video entertainment W ebs ite tha t provides video s haring s ervices . T he company a ls o ena bles s ha ring of official and profes s iona l contents . Dailymotion S AR L was founded in 2005 and is bas ed in P aris , F rance. DataS ync C orporation develops open s ource cons olidation s oftware. T he company develops DataS ync S uite, a s oftware pla tform that integrates core applications into an open s ource s oftware-a s -a-s ervice web porta l. Data S ync C orporation wa s founded in 2005 and is bas ed in S ioux F a lls , S outh Dakota. E ngine Y a rd, Inc. provides managed hos ting a nd deployment s olutions for R uby and R ails applications . T he company offers a clus ter computing platform, deployment s upport, and data center s ervices . It helps its clients in building s ites and a pplica tions on-dema nd. E ngine Y ard, Inc. was founded in 2006 and is bas ed in S a n F ra ncis co, C alifornia with additiona l locations in the United S tates , C anada, E urope, Is ra el, the P hilippines , Aus tralia, and New Zealand. T he F eedR oom, Inc. provides W eb video s olutions and technology for corporations , media/publis hing organiz ations , and government a gencies . It offers broadband video dis tribution for W eb, s ea rch engines , and podcas ting; broadband video encoding, ma nagement, and delivery; performance reporting; broadband video application des ign and development; media advertis ing s ervices ; s ubs cription a nd regis tration tools ; email video a lert delivery a nd tracking; a nd original content development and production. T he company wa s founded in 1999 and is bas ed in New Y ork, New Y ork . As of S eptember 30, 2009, T he F eedR oom, Inc. opera tes as a s ubs idiary of K IT digital, Inc. B as ed in L ondon and S an F rancis co, L inkedex aims to help companies a nalys e the proces s by which s earch engines deliver their res ults a nd achieve higher rankings in na tural (non-pa id-for) s earch for their brands a nd s ervices . L is tia, which launched in Augus t 2009, is eB ay for free s tuff. Us ers get a certain number of credits which they bid for the item, s o whoever wins the auction is the pers on who wanted it the mos t. Us ers get credits in three ways : every us er gets a certa in number automa tically, and you can get more by auctioning items , by referring friends , and by buying them. T he company is bas ed in S unnyvale, C alifornia. O oya la is a video technology company that provides indus try-leading s olutions for managing, dis tributing and monetiz ing high-quality video online. F ounded by former G oogle engineers in April 2007, Ooyala takes a novel approach at delivering video, ta rgeting ads and collecting video a nalytics . S ince launching its flags hip product, B acklot, in December of 2007, O oyala has s igned up over 1000 paying cus tomers including W arner B rothers , AOL /B ebo, National G eogra phic, T V G uide a nd the G lam network. T he company is bas ed in Mountain V iew, C opC ap G ames , Inc. develops and publis hes cas ual games . Its games a re played on the W eb, des ktop computers , cell phones , P alifornia. s martphones , P DAs , pock et P C s , iP ods , iP hones , ga me cons oles , and in-flight entertainment s ys tems . T he compa ny offers its products to W eb portals , retail s tores , mobile operators and developers , and game device manufacturers . P opC ap G ames , Inc. was founded in 2000 a nd is bas ed in S eattle, W as hington. It has operations in C hicago, Illinois ; S an F rancis co, C a lifornia; S hanghai, C hina; Dublin, Ireland; and V ancouver, B . C .L C anada . mobile video and data s haring technology. T he company was founded in 2003 and is bas ed in Herndon, R eality Mobile L , C provides V irginia. develops participative event platform that enables live video pa rticipation from a pers onal computer, Mac, a nd L inux without any iV u, Inc. proprietary downloa ds . It offers a s olution for event organiz ers to create, publis h, a nd manage quality video events . T he company provides its products for on-s ite deployment, online meetings and events , s ales pres entations , live interactive training, online events , IT helpdes k s upport, and cus tomer s upport, as well as for face-to-face meetings , ca lendar invitations , outlook integration, e-learning, and video collaboration s ervices . In addition, it offers its s olutions that are us ed in remote training cours es , s ales training on new products , and remote live video caller participation during W ebcas ts . T he company was incorporated in 2008 and is bas ed in S unnyvale, C alifornia. Y ext, Inc. provides online directories . It focus es on repres enting va rious bus ines s es acros s the United S tates . T he company wa s founded in 2006 and is bas ed in New Y ork, New Y ork .

DataS ync

United S ta tes

www. datas yncs uite. com

E ngine Yard

United S ta tes

www. engineyard. com

F eedR oom

United S ta tes

www. feedroom. com

L inkedex L is tia

UK United S ta tes

NA www. lis tia. com

Ooyala

United S ta tes

www. ooya la. com

P opC ap G ames

United S ta tes

www. popcap.com

R eality Mobile ViVu

United S ta tes United S ta tes

www. realitymobile. com www. vivu. tv

Yext

United S ta tes

www. yext. 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

www.researchcapital.com


								
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