Web 2.0 Weekly - Sep. 30, 2009

SOFTWARE & SERVICES 30 SEPTEMBER 2009 WEB 2.O WEEKLY SHANDA IPO – NOT ALL FUN AND G AMES BI GG E ST I PO OF T H E Y E AR F AL T E R S AT ST A RT I NG L I NE DAVID SHORE, CFA, MBA 416.860.6784 david.shore@researchcapital.com Damian Wojcichowsky, CFA (Associate), 416.860.7652 Shanda Games Ltd. (Nasdaq: GAME) raised $1.04 billion in the largest US-listed IPO for 2009 – but ended its first trading day down 14% from its initial price of $12.50 per share. The company, a spin-off of Shanda Interactive Entertainment Ltd. (Nasdaq: SNDA) which was founded in 2008, grew revenue 43% y/y in the first half of 2009 to $322 million (implying an annualized Price/Revenue multiple of 6.7x) while net income rose 75% y/y in the same period (implying an annualized Price/Earnings multiple of 5.5x). These valuation multiples compare to our comparable group averages for LTM TEV/Revenue and P/E of 5.6x and 18.6x, respectively. Given that Shanda went public at a modest 20% premium to our W eb 2.0 comparable group average LTM TEV/Revenue multiple while experiencing strong top line growth, we would expect a better first-day performance for the stock. W e speculate that key drivers behind the poor early performance of this IPO include the heavy media coverage for the IPO (“the biggest IPO of the year”) and the likelihood that investors panicked as their first day’s losses mounted. Financing Activity Last Twelve Months 400.0 16.2 350.0 14.6 14.0 300.0 16.0 18.0 12.0 250.0 9.7 (US$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 5.4 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 Deal flow steady: Total transaction value in the Web 2.0 universe for September rose to $96.6 million, up from $74.2 million at this time last week. This week has brought another four financings to the sector, bringing the month-to-date total to 18 transactions averaging $5.4 million each (compared with our month-to-date average of $5.7 million last week over thirteen transactions). The largest transaction in the week was a $10 million financing of social network, Mzinga. This compares to the month high of $20 million for Ensequence. 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). 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 $66 billion (Figure 1). The median market cap for the group is $46 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 5.6x trailing revenue (median 2.1x) and 12.6x trailing EBITDA (median 10.2x). Twenty of the companies have more than 500 employees. C omparable C ompany Analys is > Web 2.0 C ompany Name Accelerize New Media , Inc. Actoz S oft C o. , Ltd. AQ Interactive, Inc. As s ociated Media Holdings Inc. B igs tring C orp. B eta wave C orporation B eyond C ommerce, Inc. B right T hings plc B roa dW ebAs ia Inc. C DC C orp. C hangyou. com L imited C hina G a teway C orporation C hines e G amer Interna tiona l C LIC K E R Inc. C ornerW orld C orpora tion C yberplex Inc. DADA S pA DXN Holdings B hd Dibz International, Inc. DigitalP os t Interactive, Inc. DigitalT own, Inc. Dolphin Digital Media , Inc. E olith C o. Ltd. E xtens ions , Inc. F luid Mus ic C a nada , Inc. F rogs ter Interactive P ictures AG G ama nia Digita l E ntertainment C o., Ltd. G ameOn C o Ltd. G eoS entric O yj G iant Interactive G roup, Inc. G iga Media Ltd. G ravity C o., Ltd G ree, Inc. G ungHo O nline E ntertainment, Inc. HanbitS oft, Inc. IAC /InterActiveC orp. IAS E nergy, Inc. is eemedia Inc. J umbuck E nterta inment Limited K AB Dis tribution Inc. K ings oft C o. Ltd. Lingo Media C orporation LiveW orld Inc. LookS mart, Ltd. Magnitude Information S ys tems Inc. Mixi, Inc. Modern T imes G roup Mtg AB MO K O .mobi Limited Myriad G roup AG NE O W IZ G ames C orpora tion NetDragon W ebS oft, Inc. Neteas e. com Inc. NeuLion Incorporated NeXplore C orporation Ngi G roup Inc. Northgate T echnologies L imited O pen T ext C orp. O penwave S ys tems Inc. P erfect W orld C o. , Ltd. P NI Digital Media Inc. Q uepa s a C orp. O AO R B C Information S ys tems S handa Interactive E nterta inment Ltd. S hutterfly, Inc. S K C ommunications C o., Ltd. S NAP Interactive, Inc. S NM G loba l Holdings S ocial Media V enures , Inc. S ocialwis e, Inc. S ohu. com Inc. S park Networks , Inc. S pectrumDNA, Inc. T encent Holdings Ltd. T he P arent C ompany T he9 Limited T heS treet. com, Inc. T ota l S port O nline AS T ree.C om, Inc. Unis erve C ommunica tions C orp. United O nline Inc. UOMO Media, Inc V alueC lick Inc. V OIS , Inc. W ebzen Inc. W izzard S oftwa re C orporation W orlds . com Inc. W ynds torm C orpora tion XING AG Y eda ngO nline C orp. Y nk K orea Inc. High Low Average Median L TM as of Ticker 6/30/2009 6/30/2009 6/30/2009 6/30/2007 6/30/2009 6/30/2009 6/30/2009 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 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 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 BS GC B W AV B Y OC AIM: B G T BWBA C HIN. A C Y OU CGWY G T S M: 3083 C LK Z CWR L T S X :C X C M: DA DX N DIB Z DG LP DG T W DP DM A041060 E XT I T S X :F MN FRG 6180 3812 G E O 1V GA G IG M GR VY T S E : 3632 3765 A047080 IAC I IAS A. E IE E AS X :J MB T S X :K AB 3888 T S X V :LM LVW D L OO K MAG Y 2121 MT G B MK B MY R N A095660 777 NT E S T S X :NLN NX P C 2497 590057 OT E X OP W V PWRD T S X V :P N QP S A R BCI S NDA S FLY A066270 S TVI S NMN S MV I S C LW S O HU L OV S P XA 700 K IDS . Q NC T Y TS CM T OS O TR E E T S X V :US S UNT D UO MO V C LK V O IS W ZE N W ZE W DDD W 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 KR W JPY US D US D US D US D GBP US D US D US D US D TWD US D US D C AD E UR MY R US D US D US D US D KR W US D C AD E UR TWD JPY E UR US D US D US D JPY JPY KR W US D US D C AD AUD C AD HK D C AD US D US D US D JPY SEK AUD C HF KR W HK D US D C AD US D JPY INR US D US D US D C AD US D US D US D US D KR W US D US D US D US D US D US D US D HK D US D US D US D NO K US D C AD US D US D US D US D US D US D US D US D E UR KR W KR W United S ta tes S outh K orea J a pan United S ta tes United S ta tes United S ta tes United S ta tes United K ingdom United S ta tes Hong K ong C hina United S ta tes T aiwa n United S ta tes United S ta tes C anada Italy Ma la ys ia United S ta tes United S ta tes United S ta tes United S ta tes S outh K orea United S ta tes United S ta tes G ermany T aiwa n J a pan F inland C hina T aiwa n S outh K orea J a pan J a pan S outh K orea United S ta tes C anada C anada Aus tralia C anada C hina C anada United S ta tes United S ta tes United S ta tes J a pan S weden Aus tralia S witzerland S outh K orea C hina C hina C anada United S ta tes J a pan India C anada United S ta tes C hina C anada United S ta tes R us s ia C hina United S ta tes S outh K orea United S ta tes United S ta tes United S ta tes United S ta tes C hina United S ta tes United S ta tes C hina United S ta tes C hina United S ta tes Norway United S ta tes C anada United S ta tes C anada United S ta tes United S ta tes S outh K orea United S ta tes United S ta tes United S ta tes G ermany S outh K orea S outh K orea C urrent P rice 0. 52 19,200 48,550 0. 01 0. 03 0. 09 0. 12 0. 01 0. 23 2. 63 37. 75 0. 02 452 0. 01 0. 06 1 6. 86 0. 60 0. 00 0. 06 2. 64 0. 47 740 0. 24 1. 16 18. 01 48. 00 92,000 0. 05 8 5. 34 1. 91 4,900 226,000 4,410 20. 87 0. 07 0. 13 0. 39 0 7 0. 90 0. 05 1. 15 0. 01 589000. 00 308. 50 0. 08 4. 50 43100. 00 5 44. 09 0. 98 1 24200. 00 43. 25 37. 55 2. 60 44. 80 1. 90 2 1. 16 48. 22 17. 24 8800. 00 0 0. 00 0 0. 60 67. 21 2 0 122 0. 02 7. 81 2. 89 0. 03 7. 37 0. 04 8. 16 0 13 0 2. 98 0. 51 0. 10 0. 10 33. 68 8850. 00 3750. 00 US D Market C ap ($m) 14. 6 138. 7 29. 5 0.6 2.0 2.6 5.7 5.9 19. 5 278. 7 2,076. 3 0.3 1,172. 2 0.7 5.7 77. 3 162. 9 39. 1 0.0 4.9 72. 2 25. 2 44. 9 10. 7 56. 0 66. 6 224. 8 99. 5 65. 8 1,752. 7 291. 1 53. 1 1,226. 6 289. 5 80. 9 2,763. 2 4.9 6.1 16. 6 0.6 994. 9 10. 7 1.5 19. 7 4.1 1,014. 9 2,919. 5 5.8 192. 9 761. 4 343. 1 5,706. 4 102. 8 30. 7 33. 5 31. 4 2,108. 4 217. 1 2,203. 3 59. 8 21. 8 160. 9 3,219. 6 438. 9 308. 8 3.8 0.0 0.0 26. 6 2,576. 4 48. 0 6.3 28, 657.5 0.4 196. 0 88. 5 0.2 79. 6 0.9 684. 1 10. 9 1,126. 9 3.7 35. 3 25. 7 5.2 1.8 260. 1 111. 1 16. 8 28, 657.5 0.0 734.1 46. 4 US D L TM Total R ev ($m) 4. 4 108.7 66. 1 0. 1 0. 1 9. 4 11. 7 0. 0 0. 0 361.6 241.2 6. 7 61. 6 2. 5 6. 8 89. 8 241.9 77. 1 NA 1. 0 NM 0. 6 15. 4 NM 5. 3 9. 6 140.6 81. 9 5. 4 198.5 183.6 49. 1 156.0 119.5 60. 7 1, 392. 3 0. 0 1. 6 16. 7 67. 9 139.1 1. 2 10. 6 56. 8 0. 1 136.8 1, 971. 4 0. 7 40. 0 207.3 89. 3 472.4 21. 5 0. 7 93. 0 82. 9 785.7 191.7 255.6 21. 0 0. 2 157.4 629.0 218.6 192.7 3. 5 2. 0 0. 1 0. 0 485.1 50. 5 0. 1 1, 391. 6 112.0 250.6 67. 0 2. 3 216.6 23. 9 949.8 0. 8 563.6 0. 0 23. 2 5. 3 0. 1 NA 58. 9 57. 4 11. 9 1,971. 4 0. 0 161.0 53.7 US D L TM Total E B ITDA ($m) (3.7) 25. 9 (2.0) (2.3) (1.5) (12. 6) (12. 8) (2.7) (4.6) 25. 1 147.2 (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. 8 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) 0.8 55. 7 25. 7 297.4 (13. 0) (6.2) 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 (1.2) (0.7) 0.1 203.2 (0.4) 99. 0 (1.0) 2.3 (4.5) (0.7) NM 17. 0 12. 4 1.3 680. 3 -41.5 38.6 1. 3 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 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% -54. 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 4. 4x 1. 0x 0. 1x 15.6x 48.2x 1. 0x 0. 8x 7. 5x 0. 0x 17.9x 0. 3x 2. 4x 0. 6x 0. 9x 0. 7x 6. 9x 45.1x 3. 0x 9. 1x 6. 8x 1. 4x 0. 3x 12.1x 1. 2x 7. 1x 2. 1x 1. 1x 0. 7x 3. 3x 0. 6x 7. 1x 8. 1x 0. 0x 6. 5x 1. 8x 6. 9x 5. 0x 3. 6x 2. 2x 4. 4x 49.2x 0. 4x 2. 7x 0. 6x 0. 7x 2. 8x 0. 0x 1. 7x 1. 6x 0. 6x 1. 1x 4. 5x 4. 3x 0. 9x 22.6x 0. 2x 0. 4x 4. 6x 0. 4x 0. 2x 1. 0x 14.3x 1. 8x 5. 0x 3. 5x 2. 1x 49.2x 5.6x 2. 1x TE V/L TM E B ITDA 4. 1x 10. 9x 12. 2x 31. 7x 5. 9x 6. 7x 4. 9x 8. 0x 1. 2x 11. 8x 9. 6x 47. 7x 19. 4x 1. 4x 16. 0x 19. 4x 11. 5x 13. 5x 7. 7x 10. 4x 22. 1x 1. 3x 25. 0x 0. 3x 13. 7x 24. 6x 2. 3x 9. 9x 4. 3x 46. 2x 12. 3x 4. 7x 10. 0x 12. 2x 9. 7x 47. 7x 12.6x 10. 2x 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 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 ) Page 3 Deal flow steady: Total transaction value in the W eb 2.0 universe for September rose to $96.6 million, up from $74.2 million at this time last week. This week has brought another four financings to the sector, bringing the month-to-date total to 18 transactions averaging $5.4 million each (compared with our month-to-date average of $5.7 million last week over thirteen transactions). The largest transaction in the week was a $10 million financing of social network, Mzinga. This compares to the month high of $20 million for Ensequence. 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 5.4 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 Small deal flow continues: Intuit’s acquisition of Mint.com for $170 million two weeks ago and the $1.04 billion IPO of Shanda aside, deal flow in the past two weeks has consisted of several small trades. The highlights of the week include: • TransGaming – a gaming tools and content development company – raised $0.5 million in a convertible note/ warrant issue funded by Intel Capital’s venture arm, Middlefield Ventures. Mzinga – a social network for collaborative business environments – raised $10 million in a Series E transaction. Vuclip – a mobile video search site – raised $6 million through a Series B financing. Dopplr – a social network for travel itinerary sharing – was acquired by Nokia for between $15 and $22 million. • • • Financing & M/A Summary - Last Three Months 200.0 180.0 160.0 140.0 120.0 (US$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. Dopplr Ning Zoove RichRelevance QuickPlay Media Traffiq Mzinga Causes InXpo Edo Interactive Bill.com Outspark Jobvite ConnectEdu NextBio Riot Games Acquia, Inc SBNation InnoCentive OneRiot Balihoo Metaversum iMemories Vuclip HiveLive Boxee Invodo Polyvore YuMe Fanbase MOG Jambool Quikr India Pvt. Ltd. Nexage StyleCaster OPEN Sports network Alliance Health TweetDeck KODA Mocapay Conduit Labs OurStage Z2Live Scoreloop Fwix Vantrix Busca MashLogic Akademos ProtonMedia Roblox iLoop Mobile Tremor Media iSocket Greystripe Comunitae Aloqa RightsFlow Lat49 Plista FourSquare Tiny Pictures EduFire ChessCube Thread Tributes.com CoTweet Cellufun Cognitive Match Clikthrough TransGaming Inc. People Capital Linksify BookFresh iSyndica Masher Media Gigpark Figure 3. Capital Market Activity, Last Three Months Source. Company reports Page 5 Advertising remains the most active sector: Social networks saw the most financing activity by number of transactions (12), followed by Advertising (10), and Gaming (9) (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 2,025.0 197.5 113.3 100.1 Vertical Communities 0.0 SMS/Voice Social Networks Advertising 99.0 Gaming 80.0 Online Dating 73.9 Virtual World 64.5 Music 40.0 Infrastructure 38.2 Video 37.3 Crowdsourced Content 29.3 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 12 10 9 1 5 5 5 5 3 7 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 12 companies showed negative 1-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. HanbitS of t, Inc. TheS treet.com, Inc. S park Netw orks , Inc. Frogs ter Interactiv e Pictures A G Cy berplex Inc. XING A G NEOWIZ Games Corporation Perfect World Co., Ltd. V alueClick Inc. IA C/InterA ctiveCorp. My riad Group A G Neteas e.com Inc. PNI Digital Media Inc. Giant Interactive G roup, Inc. G ree, Inc. United Online Inc. Modern Times G roup Mtg A B DA DA S pA Chines e Gamer International Changy ou.com Limited Mix i, Inc. Quepas a Corp. Y edangOnline Corp. G ravity Co., Ltd Webz en Inc. S ohu.com Inc. S hutterf ly , Inc. Openw ave S y s tems Inc. A ctoz S of t Co., Ltd. G igaMedia Ltd. Tencent Holdings Ltd. Open Tex t Corp. Tree.Com, Inc. CDC Corp. S K Communications Co., Ltd. GungHo Online Entertainment, Inc. Gamania Digital Entertainment Co., A Q Interactiv e, Inc. The9 Limited G ameOn Co Ltd. Ngi G roup Inc. S handa Interactive Entertainment Ltd. LookS mart, Ltd. Y nk K orea Inc. K ings of t Co. Ltd. NetDragon WebS of t, Inc. Eolith Co. Ltd. Fluid Mus ic Canada , Inc. -0.2 Figure 6. 1-Week Price Performance Source. Capital IQ 1 Week P rice P erformance 6.3% 5.9% 5.1% 4.9% 8.9% -12.8% -13.0% -15.4% -17.1% -0.15 -7.0% -7.2% -7.5% -7.7% -8.7% -9.5% -9.9% -10.2% -11.0% -0.5% -1.2% -1.3% -1.3% -1.3% -1.4% -1.7% -1.7% -1.9% -2.1% -2.3% -2.4% -2.7% -3.7% -3.8% -4.1% -4.5% -4.8% -5.4% -5.4% -5.5% 2.8% 2.6% 1.9% 1.6% 1.2% 0.9% 0.7% 0.5% 0.1% -0.1 -0.05 0 0.05 0.1 0.15 Page 8 P U B L I C C O M P A N Y I N D U S T R Y N E W S (P A R T N E R S H I P S , F I N A N C I A L R E S U L T S , N E W P R O D U C T S ) K ey Developments C ompany S ohu.c om Inc. (Nas daqG S : S OHU) Headline Y ouku.com F iles L aws uits Agains t S ohu. com Inc Notes Y ouku. com has filed two laws uits a ga ins t S ohu. com Inc. Y ouku filed the s uits in res pons e to the news that the S ohu-led C hines e Online V ideo Anti-P ira cy Allia nce intends to file copyright infringement grieva nces agains t Y ouku. Y ouku s erved S ohu with two s uits -one for defama tion and the s econd for copyright infringement-on T hurs day morning in the B eijing Ha idia n Dis trict C ourt. W ithin the filings , Y ouku claims tha t S ohu has long broa dcas t exclus ively copyrighted Y ouku videos and has dama ged Y ouku's reputa tion, for which it is owed a n a pology. T he motions come da ys a fter s everal local news s ources reported that the C hines e Online V ideo Anti-P ira cy Alliance, reportedly hea ded by S ohu, J oy.cn and Union V oole T echnology C ompa ny, plans to s ue Y ouku for the pira cy of more than 500 T V epis odes and movies . UOMO Media Inc. reported ea rnings res ults for the firs t quarter ended J uly 31, 2009. Net los s for the quarter wa s $77,310, up $104, 169 for the s a me quarter the previous yea r. O n S eptember 18, 2009, the B oa rd of Directors of C ornerW orld C orporation a ppointed V . C has e McC rea III a s the C hief F ina ncial Officer. P rior to Mr. McC rea ’s appointment, S cott N. B eck, the compa ny’s C hief E xecutive O fficer, ha d a ls o been functioning a s the company’s principal fina ncial officer. Mr. McC rea , 41, is with over 18 years of experience working with a nd for public companies s erving in a variety of capacities . S ince J uly 2007, Mr. McC rea ha d s erved a s the Interim C hief F ina ncial Officer and V ice P res ident of F ina nce of Home S olutions of America Inc. T he boa rd of the directors of NetDragon W ebS oft Inc. a nnounced that G rant T hornton LL P have res igned as a uditors of the compa ny and its s ubs idiaries with effect from S eptember 17, 2009. F or the purpos e of ma inta ining good corporate governance, the B oard cons iders tha t the company's a uditors s hould be changed a fter an a ppropria te time. S ince G ra nt T hornton ha ve been a uditors of the G roup for four fina ncial years , the B oa rd would wis h to cha nge the a uditors of the compa ny for the year ending December 31, 2009. T he B oa rd further a nnounced tha t Deloitte T ouche T ohmats u ha ve been a ppointed a s a uditors of the company to fill the ca s ual vacancy following the res igna tion of Mes s rs . G rant T hornton, a nd to hold office until the conclus ion of the next annual general meeting of the compa ny. NetDragon W ebS oft Inc. a nnounced the launch of open beta tes ting for the Ara bic vers ion of its s ucces s ful ga me 'C onquer O nline' a t 9 a .m. B eijing time, S eptember 22, 2009. Q uepa s a C orp. a nnounced the releas e of its virtual currency, QDollars and Q P oints , to be us ed for virtual gifting a cros s the popular s ocial networking s ite. Q uepa s a us ers ca n now buy Q Dolla rs or earn Q P oints on the s ite a nd us e that currency to s end a broa d range of virtual gifts from the Quepas a s torefront. Over the next s everal months , Quepas a pla ns to expand the us es of the virtual currency with more premium gifts , pa yment methods a nd applications tha t ca n facilita te virtua l gifting a mong Quepa s a 's us er bas e. C L IC K E R Inc. a nnounced the introduction of vers ion 2. 0 of www. F orW ant. com. on Oct. 12, 2009 with enhanced s ea rch capabilities and a lerts applications for its us ers . Additiona l a pplications included in vers ion 2. 0 a re to be announced a nd included in the above mentioned a lerts application, which a llows s pecific brands to benefit from unique pos itioning capabilities not offered to us ers of competing porta ls . www. F orW a nt. com a llows its us ers to focus on s pecified s earch criteria rather tha n s orting through pa ges of extraneous pos tings . T he company a ls o incorpora tes the outrea ch capabilities of s ocia l networking s ites a nd reward properties to levera ge content, commerce ca pa bilities and a dvertis ing campa igns for the next generation of globa l Internet us ers . Myria d G roup AG , Q2 2009 E arnings C a ll, S ep 23 2009 S hutterfly Inc. la unched its S imple P a th P hoto B ook crea tion proces s , which a utoma tically creates a P hoto B ook in one click. S mart fea tures ins tantly organize and arrange photos into a P hoto B ook tha t looks profes s ionally des igned. C ons umers ca n order a s is or further pers ona lize their book in jus t minutes us ing 21 exclus ive s tyle templa tes a nd eas y-to-us e editing tools . All S hutterfly P hoto B ooks ca n be s ha red with family a nd friends via S hutterfly's popular S ha re s ites a nd s ocial networking s ites like F acebook a nd MyS pa ce. C us tom P a th a nd Digita l S cra pbooks ca n als o be uploa ded to S hutterfly's G allery C ommunity. S imple P a th P hoto B ooks ca n a ccommoda te between 20 a nd 400 photos a nd a re ava ilable in all five P hoto B ook s izes : 5x7, 7x9, 8x8, 8x11 and 12x12. S imple P ath P hoto B ooks s ta rt at $12. 99. S hutterfly Inc. a nnounced a new vers ion of its popula r S hutterfly iP hone Applica tion, a free photo-s ha ring a pp for the iP hone tha t gives cus tomers the power to upload, view a nd s ha re their S hutterfly photos wherever they are. T he upda te is a vaila ble a s a free downloa d beginning from Apple's App S tore. T he S hutterfly iP hone App enha ncements give cus tomers increas ed interaction with their S hutterfly a ccounts a nd grea ter s ha ring ca pa bilities on their iP hones a nd iP od T ouches . C us tomers ca n s hare pictures from their S hutterfly accounts with a nyone in their iP hone contacts , pos t photos from their S hutterfly a ccounts to S hutterfly S hare s ites and s a ve pictures in their S hutterfly a ccounts back to their iP hone camera rolls or to iP hone contacts . S hutterfly has als o enabled us ers to delete unwa nted photos from their S hutterfly a ccounts a nd s eamles s ly upload photos from their iP hones into any of their S hutterfly albums . J umbuck E ntertainment Limited a nnounced the ava ilability of its popula r mobile cha t and flirt s ervice, P ower C hat(T M), for B la ckB erry(R ) s martphones . B ecaus e it ta ps into J umbuck's globa l us er ba s e, P ower C hat us ers with B lackB erry s martphones now have a cces s to a divers e mobile community cons is ting of millions of people a round the world, even people who are not us ing a B la ckB erry s ma rtphone. P ower C hat delivers immedia te a cces s to a mas s ive mobile community for chatting and s ha ring photos . P ower C ha t ha s become the leading chat a nd flirt s ervice ava ilable for us e on mobile phones worldwide through J umbuck's long-s ta nding rela tions hips with more tha n 80 ca rriers a round the world, including top U. S . ca rriers . It is now ava ila ble to B la ckB erry s ma rtphone us ers as a download on B lackB erry App W orld(T M). Ngi G roup Inc. , ¥ 70. 0, C a s h Dividend, S ep-25-2009 UOMO Media Inc. announced the s igning of new client to s ub-divis ion AdUO MO . AdUO MO crea tes product placements a nd celebrity endors ement opportunities within enterta inment properties . T he firs t client is C olga te to promote their Ma xF res h T oothpas te 'G E T F R E S H! a nd Da nce' competition. C ertain American Depos itary S hares of C hangyou. com L imited are s ubject to a Lock-Up Agreement E nding on 28-S E P -2009. T hes e s ha res will be under lockup for 180 da ys s tarting from 01-AP R -2009 to 28-S E P -2009. T he9 Limited a nnounced that the Audit C ommittee of its B oa rd of Directors ha s engaged the s ervices of Deloitte T ouche T ohmats u C P A Ltd. a s the company's independent regis tered public accounting firm for the fis cal yea r ending December 31, 2009. DT T C replaces the company's previous independent regis tered accounta nt, P ricewa terhous eC oopers Zhong T ian C P As L imited C ompa ny, effective immediately. P erfect W orld C o. , L td. a nnounced that it will la unch the open beta tes ting for its firs t 2D turn-ba s ed MMO R P G 'F a ntas y Zhu X ian' on O ctober 22, 2009. 'F a ntas y Zhu X ian' is bas ed on a popula r internet fa ntas y novel 'Zhu Xia n, ' a nd runs on the C ompany's proprietary E P AR C H 2D engine, bringing entirely new gaming experiences to players . In this open beta tes ting vers ion, 'F a ntas y Zhu X ian' conta ins many innova tive fea tures a nd lots of new content, including a n innova tive flying s ys tem that introduces the concept of altitude into a 2D game, a built-in P P -C hat friend making s ys tem, pla yer vs . pla yer turn-bas ed ba ttlefields a nd s uch s ys tems a s light effect of weaponry, s uper pets , advanced equipment a nd production and the NP C voice s ys tem. All thes e fea tures cater to pla yers ' preferences . UOMO Media, Inc (OTC B B : UOMO) C ornerWorld C orporation (OTC B B : C WR L ) UO MO Media Inc. R eports E arnings R es ults for the F irs t Quarter E nded J uly 31, 2009 C ornerW orld C orporation Appoints V . C has e Mccrea III as C hief F inancial Officer NetDragon WebS oft, Inc. (S E HK : 777) NetDragon W ebS oft Inc. Announces C hange of Auditors NetDragon WebS oft, Inc. (S E HK : 777) Quepas a C orp. (OTC B B : QP S A) NetDragon La unches Open B eta T es ting for 'C onquer Online' Ara bic V ers ion Quepas a C orp. Introduces V irtua l G ifting and V irtua l C urrency S tra tegy Us ing QDollars a nd Q P oints C L IC K E R Inc . (OTC B B : C L K Z) C L IC K E R Inc. L aunches V ers ion 2. 0 of www. F orW ant. com Myriad G roup AG (S WX: MYR N) S hutterfly, Inc. (Nas daqG S : S F L Y) Myria d G roup AG , Q2 2009 E a rnings C all, S ep-23-2009 S hutterfly Inc. La unches S imple P ath P hoto B ooks S hutterfly, Inc. (Nas daqG S : S F L Y) S hutterfly Inc. Announces New V ers ion of its P opular S hutterfly iP hone Application J umbuck E ntertainment L imited (AS X: J MB ) J umbuck L aunches P ower C hat for B lackberry S ma rtphones Ngi G roup Inc. (TS E : 2497) UOMO Media, Inc (OTC B B : UOMO) Ngi G roup Inc. , ¥ 70. 0, C as h Dividend, S ep-25-2009 UO MO Media, IncUO MO Media Inc.'s AdUO MO a nd C olga te J oin for MaxF res h T oothpa s te P romotion C erta in America n Depos ita ry s hares of C hangyou. com Limited a re s ubject to a L ock-Up Agreement E nding on 28-S E P -2009. T he9 Limited S elects Deloitte T ouche T ohma ts u a s its Independent R egis tered P ublic Accounting F irm R epla cing P ricewaterhous eC oopers Zhong T ian C P As Limited C ompany P erfect W orld to L aunch Open B eta T es ting for 'F a nta s y Zhu X ian' C hangyou.c om L imited (Nas daqG S : C YOU) The9 L imited (Nas daqGS : NC TY) P erfect W orld C o., L td. (Nas daqG S : P WR D) Figure 7. Key Developments Source. Capital IQ Page 9 VALUATION Online Gaming companies lead market-cap charts: Fourteen companies in our W eb 2.0 universe top US$1 billion in market capitalization (Figure 8), down from 15 last week. Fifty-six of the 91 companies have market caps under US$100 million, with 26 under US$10 million. Online gaming companies dominate the top of the list, led by Tencent Holdings with a market cap near US$30 billion. Market C ap (US D m) Tenc ent Holdings L td. Neteas e. c om Inc . S handa Interac tive Entertainment Modern Times G roup Mtg A B IA C/InterA ctiveCorp. S ohu. c om Inc . Perfec t World Co. , L td. Open Tex t Corp. Changy ou. com L imited Giant Interac tive Group, Inc . Gree, Inc . Chines e G amer International V alueClick Inc . Mix i, Inc . K ings oft Co. L td. NEOWIZ G ames Corporation United Online Inc . S hutterfly , Inc . NetDragon WebS oft, Inc . S K Communications Co. , L td. GigaMedia L td. GungHo Online Entertainment, Inc . CDC Corp. XING A G Gamania Digital Entertainment Co. , Openw ave S y s tems Inc . The9 L imited My riad Group A G DA DA S pA OA O R B C Information S ys tems A c toz S of t Co. , L td. Y edangOnline Corp. NeuL ion Incorporated G ameOn Co L td. TheS treet.c om, Inc . HanbitS oft, Inc . Tree. Com, Inc . Cy berplex Inc . DigitalTow n, Inc . Frogs ter Interac tive Pic tures A G GeoS entric Oy j PNI Digital Media Inc . Fluid Mus ic Canada, Inc . G ravity Co. , L td S park Netw orks , Inc . Eolith Co. L td. DXN Holdings B hd Webz en Inc . Ngi G roup Inc . Northgate Technologies L imited NeXplore Corporation A Q Interactive, Inc . S ocialw is e, Inc . Wiz z ard S oftw are Corporation Dolphin Digital Media, Inc . Quepas a Corp. L ookS mart, L td. B roadWebA s ia Inc . Y nk K orea Inc . J umbuc k Entertainment L imited A cc eleriz e New Media, Inc . UOMO Media, Inc Ex tens ions , Inc . L ingo Media Corporation S pec trumDNA , Inc . is eemedia Inc . B right Things plc MOK O. mobi L imited CornerWorld Corporation B ey ond Commerce, Inc . Worlds . c om Inc . IA S Energy , Inc . DigitalPos t Interactive, Inc . Magnitude Information S y s tems Inc . S NA P Interactive, Inc . V OIS , Inc . B etaw ave Corporation B igs tring Corp. Wy nds torm Corporation L iveWorld Inc . Unis erve Communic ations Corp. CL ICK ER Inc . K A B Dis tribution Inc . A s s ociated Media Holdings Inc . The Parent Company China Gatew ay Corporation Total S port Online A S S NM Global Holdings Dibz International, Inc . S oc ial Media V enures , Inc . 0 Figure 8. Market Cap Ranking Source. Capital IQ 28657. 5 5706.4 3219.6 2919.5 2763.2 2576.4 2203.3 2108.4 2076.3 1752.7 1226.6 1172.2 1126.9 1014.9 994. 9 761. 4 684. 1 438. 9 343. 1 308. 8 291. 1 289. 5 278. 7 260. 1 224. 8 217. 1 196. 0 192. 9 162. 9 160. 9 138. 7 111. 1 102. 8 99. 5 88. 5 80. 9 79. 6 77. 3 72. 2 66. 6 65. 8 59. 8 56. 0 53. 1 48. 0 44. 9 39. 1 35. 3 33. 5 31. 4 30. 7 29. 5 26. 6 25. 7 25. 2 21. 8 19. 7 19. 5 16. 8 16. 6 14. 6 10. 9 10. 7 10. 7 6. 3 6. 1 5. 9 5. 8 5. 7 5. 7 5. 2 4. 9 4. 9 4. 1 3. 8 3. 7 2. 6 2. 0 1. 8 1. 5 0. 9 0. 7 0. 6 0. 6 0. 4 0. 3 0. 2 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 5.6x: The overall average TEV/Revenue (LTM) multiple for our group is 5.6x (vs. 5.4 last week) (Figure 9). Three companies trade at more than 25x revenue – Bigstring Corp. (OTCBB:BSGC) at 48.2x, Dolphin Digital Media, Inc. (OTCBB:DPDM) at 45.1x, and NeXplore Corporation (OTCPK:NXPC) at 49.2x. The median of 2.1x is flat week-over-week. 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) 60. 0 49.2 48.2 45.1 50. 0 40. 0 30. 0 22.6 20. 0 8.1 9.1 6.5 6.8 6.9 6.9 7.1 7.1 7.5 17.9 15.6 14.3 12.1 10. 0 A vera ge, 5.6 0. 0 5.0 5.0 3.5 3.6 4.3 4.4 4.4 4.5 4.6 2.7 2.8 3.0 3.3 1.3 1.4 1.6 1.7 1.8 1.8 2.1 2.1 2.2 2.4 0.2 0.2 0.3 0.3 0.4 0.4 0.4 0.6 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 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 13.7x (vs. 10.1x last week). On a geographic basis, the United States has the most companies (38), trading at an average of 8.0x revenue (vs. 7.4x last week) (Figure 11). Ten of the companies are Canadian (average 4.5x revenue). Average TEV/LTM Revenue - By Exchange 16.0 14.0 12.0 10.0 (x) 8.0 6.0 4.0 2.0 OTCBB OTCPK GTSM 0.0 HLSE SEHK XTRA 13.7 12.1 10.6 10.1 9.6 5.1 5.0 4.7 4.63.7 3.6 3.5 3.0 2.1 2.1 2.1 1.8 0.9 NasdaqGS KOSE OSE OM CM 14.0 12.0 10.0 (x) 8.0 6.0 4.0 8.0 7.4 6.8 5.1 5.0 4.6 4.5 TSX OTCNO NasdaqGM TSE AMEX KLSE RTS BSE Germany AIM Finland Hong Kong Malaysia United China Canada Japan Switzerland Australia Taiwan Norway # Companies 18 1 3 11 2 2 1 4 1 2 4 5 2 1 14 6 1 1 1 5 1 1 1 # Companies 1 38 10 3 2 1 1 10 2 6 8 Sweden 1 1 1 1 1 Russia 1 Figures 10 & 11. TEV/Revenue Ranking (Exchange, Country) Source. Capital IQ United 1 SWX TSXV South ASX India Italy U nis erve C ommunications C orp. T he P a rent C ompany G a meO n C o Ltd. C LIC K E R Inc. T heS treet.com, Inc . N orthgate T echnologies L imited T ree.C om, Inc. O penwave S y s tems Inc . J umbuc k E nterta inment L imited S NAP Intera ctive, Inc. C y berplex Inc . DXN Holdings B hd P erfect World C o., Ltd. IAC /InterAc tiveC orp. C DC C orp. DADA S pA S pa rk N etwork s , Inc . Ac toz S oft C o. , Ltd. B ey ond C ommerc e, Inc. United O nline Inc . S N M G loba l Holdings H anbitS oft, 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. S hutterfly , Inc . V alueC lic k Inc . Modern T imes G roup Mtg AB Y edangO nline C orp. G ungHo O nline E ntertainment, Inc. NetDra gon WebS oft, Inc . C ornerWorld C orporation O pen T ex t C orp. P N I Digital Media Inc. E olith C o. Ltd. is eemedia Inc . XIN G AG N E O WIZ G ames C orporation S ohu.com Inc . NeuLion Inc orporated Acceleriz e New Media , Inc . S ocial Media V enures , Inc . T otal S port O nline AS Wiz z ard S oftware C orporation My riad G roup AG Mix i, Inc . F rogs ter Intera ctiv e P ictures AG MO K O .mobi L imited DigitalP os t Intera ctive, Inc. K ings oft C o. Ltd. G ree, Inc . C hangy ou.com L imited Lingo Media C orporation F luid Mus ic C a nada , Inc. G eoS entric O y j UO MO Media, Inc As s ociated Media Holdings Inc . C hines e G amer Interna tional T encent Holdings Ltd. Dolphin Digital Media, Inc. B igs tring C orp. NeX plore C orporation Average TEV/LTM Revenue - By Country 12.1 3.7 0.7 0.4 2.0 3.2 2.1 1.8 0.9 0.4 0.00.0 0.8 0.7 0.0 0.4 0.0 0.0 Page 11 TEV/EBITDA (LTM) averages 13.6x: The average multiple for the 36 companies with positive EBITDA (and multiples under 100x) is 12.9x LTM EBITDA (vs. 13.6x last week), led by Tencent Holdings (SEHK-700) 47.7x multiple (Figure 12). Eleven companies have EBITDA multiples under 7x. The median multiple is 10.7x (vs. 10.7x last week). T E V/L T M E B IT DA (x) 60. 0 50. 0 46. 2 47. 7 40. 0 31. 7 30. 0 22. 1 20. 0 A verage, 12.9 10. 0 1. 2 0. 0 G ameO n C o L td. P erfec t World C o. , L td. 1. 3 1. 4 2. 3 J umbuck E ntertainment L imited S NAP Interac tive, Inc . 4. 1 4. 3 4. 9 5. 9 6. 7 7. 7 8. 0 9. 6 9. 7 13. 5 13. 7 11. 5 11. 8 12. 2 12. 2 12. 3 12. 7 9. 9 10. 0 10. 4 10. 9 19. 4 19. 4 16. 0 24. 6 25. 0 4. 7 G amania Digital E ntertainment C o. , Ltd. G ungH o O nline E ntertainment, Inc . NE O WIZ G ames C orporation P NI Digital Media Inc . S K C ommunic ations C o. , Ltd. Modern T imes G roup Mtg AB C hines e G amer International C hangy ou. c om L imited DXN Holdings B hd 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. S ohu. c om Inc . V alueC lic k Inc . G ree, Inc . O penwave S y s tems Inc. T enc ent Holdings L td. 1 IAC /InterAc tiveC orp. C yberplex Inc. Y edangO nline C orp. XING AG Y nk K orea Inc. Mix i, 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 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 13.8x EBITDA). Average TEV/LTM EBITDA - By Exchange 30.0 25.0 25.0 20.0 (x) 15.0 10.0 5.0 NasdaqGM GTSM TSE NasdaqGS SEHK KOSE OSE 0.0 TSXV OM XTRA 23.3 19.919.9 12.312.2 11.5 11.5 10.8 9.6 (x) 25.0 20.0 15.0 10.0 19.9 19.9 15.6 13.8 12.2 11.5 11.1 10.9 10.5 6.7 4.9 1.4 Germany China Hong Kong Malaysia Canada United States Japan South Korea Taiwan Italy Australia Sweden 0.3 Russia 0.0 Switzerland Actoz S oft C o. , L td. Average TEV/LTM EBITDA - By Country 6.7 5.9 4.9 4.3 2.3 OTCBB CM KLSE TSX AMEX 1.4 0.3 ASX RTS 5.0 0.0 # Companies 4 3 6 2 5 2 1 14 5 1 1 4 1 2 18 2 1 # Companies 8 3 10 10 2 1 38 K ings oft C o. L td. 1 6 1 1 2 1 Figures 13 & 14. TEV/EBITDA Ranking (Exchange, Country) Source. Capital IQ H anbitS oft, Inc. S hutterfly , Inc. DADA S pA Page 12 P/E (LTM) averages 18.6x: The average multiple for the 33 companies with positive earnings (and multiples under 100x) is 18.6x LTM EPS (vs. 19.2x last week), led by GungHo Online Entertainment’s (OSE:3765) 62.6x multiple (Figure 15). Twelve companies have P/E multiples under 10x. The median is 14.0x. P /E L T M (x) 70.0 62.6 60.0 49.3 50.0 39.6 40.0 30.0 20.0 A verage, 18.6 9.9 10.0 2.2 0.0 T he9 Limited S handa Interactive E ntertainment Ltd. Neteas e.com Inc. P erfect World C o., Ltd. 2.3 3.2 3.2 4.7 6.5 6.7 6.9 15.2 13.1 13.1 14.0 14.1 14.3 14.4 11.5 11.8 19.4 19.7 19.9 20.0 26.7 35.1 41.6 52.0 58.5 J umbuck E ntertainment Limited NE O W IZ G ames C orporation G amania Digital E ntertainment C o., Ltd. Figure 15. P/E Ranking Source. Capital IQ P/E (LTM) by country/exchange: Figure 16 shows the average P/E multiples by stock exchange. The OTCBB has the largest number of companies (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 13.2x earnings (Figure 17). Ten of the companies are Canadian (average 21.0x EPS). Average P/E - By Exchange 70.0 60.0 50.0 (x) 26.7 (x) 62.6 40.0 30.0 20.0 10.0 37.1 30.8 30.5 21.4 14.1 13.3 13.1 11.1 6.9 OTCBB NasdaqGS 6.5 KLSE 4.7 ASX 2.1 NasdaqGM 0.0 NYSE GTSM 0.0 SEHK OSE TSE KOSE OM AMEX XTRA TSX 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 43.5 26.7 24.2 21.0 14.3 14.1 13.5 13.2 6.5 4.7 0.0 0.0 Germany Malaysia Canada China Japan United States South Korea Australia Taiwan Sweden Switzerland India # Companies 1 5 3 2 2 6 1 18 2 14 4 1 2 1 5 # Companies 6 2 3 10 8 1 10 38 1 2 1 1 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 T ree. C om, Inc. (Nas daqG M: T R E E ) Figure 18. Earnings Calendar Source. Company reports Date & Time F riday, O ctober 30, 2009 11: 00 AM (E DT ) Quarter Q 3 2009 C onf C all Details 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 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 ompany T he9 L imited T heS treet.com, Inc. T ota l S port Online A S 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 eda ngOnline 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 NO K 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 T OS O 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 O T C NO 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) 14.6 138.7 29.5 0.6 2.0 2.6 5.7 5.9 19.5 278.7 2, 076.3 0.3 1, 172.2 0.7 5.7 77.3 162.9 39.1 0.0 4.9 72.2 25.2 44.9 10.7 56.0 66.6 224.8 99.5 65.8 1, 752.7 291.1 53.1 1, 226.6 289.5 80.9 2, 763.2 4.9 6.1 16.6 0.6 994.9 10.7 1.5 19.7 4.1 1, 014.9 2, 919.5 5.8 192.9 761.4 343.1 5, 706.4 102.8 30.7 33.5 31.4 2, 108.4 217.1 2, 203.3 59.8 21.8 160.9 3, 219.6 438.9 308.8 3.8 0.0 0.0 26.6 2, 576.4 48.0 6.3 28,657. 5 0.4 196.0 88.5 0.2 79.6 0.9 684.1 10.9 1, 126.9 3.7 35.3 25.7 5.2 1.8 260.1 111.1 16.8 C urrent P ric e 0.52 19, 200 48, 550 0.01 0.03 0.09 0.12 0.01 0.23 2.63 37.75 0.02 452.00 0.01 0.06 1.29 6.86 0.60 0.00 0.06 2.64 0.47 740.00 0.24 1.16 18.01 48.00 92, 000 0.05 7.74 5.34 1.91 4, 900 226, 000 4, 410 20.87 0.07 0.13 0.39 0.01 7.07 0.90 0.05 1.15 0.01 589,000.00 308.50 0.08 4.50 43,100.00 5.03 44.09 0.98 0.55 24,200.00 43.25 37.55 2.60 44.80 1.90 1.71 1.16 48.22 17.24 8,800.00 0.35 0.00 0.10 0.60 67.21 2.33 0.13 122 0.02 7.81 2.89 0.03 7.37 0.04 8.16 0.13 12.93 0.00 2.98 0.51 0.10 0.10 33.68 8,850.00 3,750.00 1 Wk -20.0% -3.8% -7.5% -30.0% 73.7% 28.6% -27.1% 0. 0% -22.8% -5.4% -1.4% -25.0% -1.3% 86.0% 0. 0% 4. 9% -1.3% -1.7% 20.0% 5. 0% 76.0% 17.5% -15.4% 20.0% -17.1% 5. 1% -7.2% -8.7% 0. 0% 0. 1% -4.1% -2.1% -0.5% -7.0% 8. 9% 1. 2% -56.2% 44.4% -2.5% -50.0% -12.8% -14.3% 0. 0% -10.2% -10.0% -1.7% -1.3% 8. 6% 0. 9% 2. 6% -13.0% 0. 7% -2.0% -8.3% -9.5% 1. 4% -4.8% -3.7% 1. 9% 0. 5% -1.7% 10.5% -9.9% -2.7% -5.5% -12.5% -60.5% 25.0% 3. 4% -2.4% 5. 9% -40.9% -4.5% 50.0% -7.7% 6. 3% 0. 0% -5.4% 0. 0% -1.2% 4. 1% 1. 6% 12.5% -2.3% 10.9% 0. 0% 0. 0% 2. 8% -1.9% -11.0% 86.0% -60.5% -0.4% -1.4% 1 Mth -8.8% -0.8% -6.5% -30.0% 65.0% 20.0% -27.1% -5.2% -22.8% 6.9% -0.5% 650.0% 9.2% 55.0% 9.1% -9.2% 3.8% 8.2% NM -3.1% 95.6% 23.7% -28.8% 200.0% -17.1% -1.9% -5.0% -10.2% 0.0% -0.9% 11.9% 12.4% 21.6% -4.0% 13.1% 11.8% -53.3% 188.9% -4.9% -99.2% -17.6% -18.2% 25.0% -1.7% 0.0% -3.6% 4.2% 1.3% 0.4% 34.5% -17.7% 4.9% -18.3% -11.3% -22.6% 9.6% 5.5% -6.5% 12.8% 5.0% 22.1% 10.5% -5.7% 16.6% -5.8% -12.5% -66.7% -9.1% 7.1% 7.6% 1.3% -40.9% 6.1% 7.1% -4.8% 14.7% 0.0% -0.1% -11.1% 19.5% -16.0% 23.0% 0.0% 2.1% 8.5% 11.1% 0.0% 12.6% 1.0% -6.9% 650.0% -99.2% 11.7% 0.0% 3 Mth 30.0% -19.2% -32.6% 833.3% 1.5% -10.0% -75.2% 10.0% -54.9% 71.9% -1.6% 650.0% 7.6% 244.4% 0.0% -21.8% 7.4% 54.5% 20.0% 90.9% 32.0% -6.0% 3.5% 140.0% 46.8% 71.5% -15.9% -17.3% 25.0% -4.7% -9.2% 73.6% 39.2% -14.8% 1.1% 30.0% -65.0% 73.3% 0.0% -99.2% 30.7% -25.0% -16.7% -13.5% -3.2% 2.6% 43.8% 1.3% -8.9% 34.7% -0.6% 25.3% 34.2% -9.8% -34.1% 8.0% 3.1% 16.1% 56.6% 23.4% 137.5% 16.0% -7.9% 23.6% -7.8% -46.2% -78.6% 400.0% -10.4% 7.0% 1.3% -35.0% 35.2% -50.0% -23.1% 38.3% 0.0% -23.2% -20.0% 25.3% -16.0% 22.9% -50.0% -8.3% 0.0% -23.1% 185.7% 13.3% 4.1% -45.7% 833.3% -99.2% 30.5% 1.4% 6 Mth 48.6% 53.0% 29.5% 180.0% 94.1% -48.6% -80.9% 4. 2% -77.2% 136.9% NM 650.0% 156.8% 3. 3% -57.1% 51.8% 48.3% 85.9% -88.0% 425.0% 5. 6% -31.9% 39.6% 60.0% 93.3% 164.9% 44.1% 2. 2% 25.0% 12.5% -5.2% 176.8% 75.3% 78.1% 37.4% 33.4% 55.8% 44.4% -22.0% -98.6% 119.6% 12.5% -61.5% 9. 5% -47.1% 59.2% 115.7% -16.5% 2. 5% 83.4% 21.5% 66.7% 58.1% -8.3% 15.2% 30.9% 13.9% 143.0% 222.3% 19.5% 61.3% 262.5% 18.2% 75.9% 12.1% -56.3% 50.0% -91.7% 71.4% 54.0% 1. 3% -13.3% 108.3% -25.0% -39.7% 43.8% -25.0% 49.5% -20.0% 77.4% 40.0% 49.1% 275.0% 54.4% 8. 5% -47.4% -16.7% 23.1% 5. 7% -4.7% 650.0% -98.6% 48.0% 33.4% 1 Yr 10.6% 125. 1% 12.6% -30. 0% -10. 8% -69. 5% -95. 1% 14.6% -84. 7% 55.6% NM -50. 0% 579. 7% -97. 7% -70. 0% 134. 5% -22. 7% 56.6% -97. 6% 25.7% -12. 0% -54. 4% 28.7% 140. 0% 93.3% 250. 4% 185. 7% -8.0% 0.0% 21.5% -22. 0% 67.5% NM 46.1% 30.1% 30.0% -58. 8% 44.4% -36. 1% -99. 4% 238. 3% -47. 1% -66. 7% -55. 8% -64. 0% -1.2% 32.1% 38.2% -45. 1% 339. 8% 7.0% 120. 5% NM -26. 7% -74. 4% -77. 1% 18.2% 145. 3% 110. 0% -7.3% -42. 5% -78. 7% 88.0% 122. 7% -17. 8% -60. 7% -99. 5% -83. 6% -73. 3% 22.1% -39. 8% -56. 7% 139. 8% -98. 5% -51. 4% -43. 2% -40. 0% 82.4% -66. 7% -9.8% -49. 6% 44.5% -47. 1% 132. 8% -55. 3% -66. 7% -54. 5% 12.3% 23.9% -65. 9% 579. 7% -99. 5% 12.5% -10. 8% 52 Week -20.0% -46.7% -41.5% -72.0% -49.2% -73.5% -95.1% -44.3% -92.1% -32.9% -22.0% -57.1% -12.9% -97.7% -87.2% -35.2% -27.7% -2.5% -97.6% -36.4% -34.0% -58.4% -36.2% -76.2% -22.1% -9.4% -30.2% -39.5% -16.7% -19.1% -32.2% -27.4% -8.1% -19.3% -33.6% -1.9% -75.0% -18.8% -36.1% -99.2% -25.3% -49.2% -80.0% -57.9% -70.0% -26.7% -5.7% -24.0% -51.5% -3.1% -29.7% -9.1% -24.6% -62.1% -79.6% -81.7% -6.6% -16.9% -11.3% -18.5% -46.9% -85.2% -25.8% -4.9% -31.5% -67.6% -99.8% -98.0% -75.9% -7.0% -41.8% -71.1% -7.2% -99.0% -57.8% -51.8% -40.0% -43.6% -77.8% -16.8% -88.1% -4.5% -80.4% -36.3% -70.5% -66.7% -83.3% -6.7% -28.6% -69.8% -1.9% -99.8% -45.1% -37.9% 734.1 Figure 19. Price Performance Source. Capital IQ Page 15 C omparable C ompany Analys is > Web 2.0 Valuation Multiples C ompany Name Accelerize New Media, Inc. Actoz S oft C o., Ltd. AQ Intera ctive, Inc. As s ocia ted Media Holdings Inc. B igs tring C orp. B etawave C orpora tion B eyond C ommerce, Inc. B right T hings plc B roadW ebAs ia Inc. C DC C orp. C hangyou.com Limited C hina G atewa y C orpora tion C hines e G amer Interna tional C L IC K E R Inc. C ornerW orld C orporation C yberplex Inc. DA DA S pA DXN Holdings B hd Dibz Interna tiona l, Inc. DigitalP os t Interactive, Inc. DigitalT own, Inc. Dolphin Digital Media, Inc. E olith C o. L td. E xtens ions , Inc. F luid Mus ic C a nada, Inc. F rogs ter Interactive P ictures A G G amania Digital E ntertainment C o., Ltd. G ameO n C o Ltd. G eoS entric Oyj G iant Interactive G roup, Inc. G igaMedia Ltd. G ravity C o., Ltd G ree, Inc. G ungH o O nline E nterta inment, Inc. Ha nbitS oft, Inc. IAC /InterActiveC orp. IAS E nergy, Inc. is eemedia Inc. J umbuck E ntertainment Limited K A B Dis tribution Inc. K ings oft C o. Ltd. Lingo Media C orpora tion LiveW orld Inc. LookS ma rt, L td. Magnitude Information S ys tems Inc. Mixi, Inc. Modern T imes G roup Mtg AB MOK O .mobi Limited Myriad G roup AG NE OW IZ G ames C orporation NetDra gon W ebS oft, Inc. Netea s e.com Inc. NeuLion Incorporated NeXplore C orporation Ngi G roup Inc. Northgate T echnologies Limited O pen T ext C orp. O penwave S ys tems Inc. P erfect W orld C o., Ltd. P N I Digital Media Inc. Q uepa s a C orp. O AO R B C Information S ys tems S handa Interactive E nterta inment Ltd. S hutterfly, Inc. S K C ommunications C o., Ltd. S N AP Interactive, Inc. S N M G lobal Holdings S ocial Media V enures , Inc. S ocialwis e, Inc. S ohu.com Inc. S park N etworks , Inc. S pectrumDN A, Inc. T encent Holdings Ltd. T he P a rent C ompany T he9 L imited T heS treet.com, Inc. T otal S port Online AS T ree.C om, Inc. Unis erve C ommunications C orp. United Online Inc. UO MO Media, Inc V a lueC lick Inc. V O IS , Inc. W ebzen Inc. W izzard S oftware C orporation W orlds .com Inc. W ynds torm C orporation XIN G AG Y eda ngO nline C orp. Y nk K orea Inc. High Low Average Median S ec tor Direct Marketing G aming G aming Mobile Ins ta nt Mes s aging Media S ocial Networking S ocial Networking S ocial Networking G aming G aming Mobile G aming Direct Marketing C ontent A dvertis ing S ocial Networking S ocial Networking S NS Apps C ontent S ocial Networking S ocial Networking G aming C ontent Media G aming G aming G aming Mobile G aming G aming G aming S ocial Networking Media G aming Media V ideo C ontent S ocial Networking C ontent G aming L earning S ocial Networking Direct Marketing S ocial Networking S ocial Networking Media S ocial Networking Mobile G aming G aming G aming V ideo C ontent Media Direct Marketing C ollabora tion Mobile G aming Digita l Ima ging S ocial Networking Media G aming Digita l Ima ging S earch Dating Media S ocial Networking S ocial Networking G aming S ocial Networking Media P orta l Media G aming Media Media P orta l S ocial Networking Media Media Media S ocial Networking G aming P odca s ting C ontent C ontent S ocial Networking G aming G aming C ountry U nited S ta tes S outh K orea J apan U nited S ta tes U nited S ta tes U nited S ta tes U nited S ta tes U nited K ingdom U nited S ta tes H ong K ong C hina U nited S ta tes T a iwa n U nited S ta tes U nited S ta tes C ana da Italy Mala ys ia U nited S ta tes U nited S ta tes U nited S ta tes U nited S ta tes S outh K orea U nited S ta tes U nited S ta tes G erma ny T a iwa n J apan F inland C hina T a iwa n S outh K orea J apan J apan S outh K orea U nited S ta tes C ana da C ana da Aus tra lia C ana da C hina C ana da U nited S ta tes U nited S ta tes U nited S ta tes J apan S weden Aus tra lia S witzerla nd S outh K orea C hina C hina C ana da U nited S ta tes J apan India C ana da U nited S ta tes C hina C ana da U nited S ta tes R us s ia C hina U nited S ta tes S outh K orea U nited S ta tes U nited S ta tes U nited S ta tes U nited S ta tes C hina U nited S ta tes U nited S ta tes C hina U nited S ta tes C hina U nited S ta tes N orway U nited S ta tes C ana da U nited S ta tes C ana da U nited S ta tes U nited S ta tes S outh K orea U nited S ta tes U nited S ta tes U nited S ta tes G erma ny S outh K orea S outh K orea P rimary E xc hange OTCB B K OS E TS E OTCP K OTCB B OTCB B OTCB B AIM OTCP K N as da qG S N as da qG S OTCP K GTS M OTCB B OTCB B TS X CM K LS E OTCP K OTCB B OTCB B OTCB B K OS E OTCP K TS X XT R A GTS M TS E H LS E NY S E N as da qG S N as da qG M TS E OS E K OS E N as da qG S OTCB B T S XV AS X TS X S E HK T S XV OTCP K N as da qG M OTCB B TS E OM AS X SWX K OS E S E HK N as da qG S TS X OTCP K TS E BS E N as da qG S N as da qG S N as da qG S T S XV OTCB B R TS N as da qG S N as da qG S K OS E OTCB B OTCP K OTCP K OTCB B N as da qG S AME X OTCB B S E HK OTCP K N as da qG S N as da qG M O T C NO N as da qG M T S XV N as da qG S OTCB B N as da qG S OTCB B N as da qG M AME X OTCB B OTCP K XT R A K OS E K OS E Ticker AC LZ A052790 3838 AS MH BSGC B W AV B YOC AIM:B G T BWBA C HIN.A C Y OU CGW Y G T S M:3083 C LK Z CW R L T S X: C X C M:DA DXN DIB Z DG L P DG T W DP DM A041060 E XT I T S X:F MN FR G 6180 3812 G E O1V GA G IG M GR VY T S E : 3632 3765 A047080 IAC I IAS A.E IE E AS X:J MB T S X:K AB 3888 T S XV : LM LV W D L OOK MA G Y 2121 MT G B MK B MY R N A095660 777 NT E S T S X:NL N NXP C 2497 590057 OT E X OP W V PWRD T S XV :P N QP S A R BCI S NDA S FLY A066270 S TVI S NMN S MV I S CLW S O HU L OV S P XA 700 K IDS .Q NC T Y TS CM T OS O TREE T S XV :US S U NT D UO MO V CLK V OIS W ZE N W ZE W DDD W Y ND O1B C A052770 A023770 US D Market C ap ($m) 14.6 138.7 29.5 0.6 2.0 2.6 5.7 5.9 19.5 278.7 2,076.3 0.3 1,172.2 0.7 5.7 77.3 162.9 39.1 0.0 4.9 72.2 25.2 44.9 10.7 56.0 66.6 224.8 99.5 65.8 1,752.7 291.1 53.1 1,226.6 289.5 80.9 2,763.2 4.9 6.1 16.6 0.6 994.9 10.7 1.5 19.7 4.1 1,014.9 2,919.5 5.8 192.9 761.4 343.1 5,706.4 102.8 30.7 33.5 31.4 2,108.4 217.1 2,203.3 59.8 21.8 160.9 3,219.6 438.9 308.8 3.8 0.0 0.0 26.6 2,576.4 48.0 6.3 28,657.5 0.4 196.0 88.5 0.2 79.6 0.9 684.1 10.9 1,126.9 3.7 35.3 25.7 5.2 1.8 260.1 111.1 16.8 28,657.5 0.0 734.1 46.4 TE V/L TM R evenue 4.4x 1.0x 0.1x 15.6x 48.2x 1.0x 0.8x 7.5x 0.0x 17.9x 0.3x 2.4x 0.6x 0.9x 0.7x 6.9x 45.1x 3.0x 9.1x 6.8x 1.4x 0.3x 12.1x 1.2x 7.1x 2.1x 1.1x 0.7x 3.3x 0.6x 7.1x 8.1x 0.0x 6.5x 1.8x 6.9x 5.0x 3.6x 2.2x 4.4x 49.2x 0.4x 2.7x 0.6x 0.7x 2.8x 0.0x 1.7x 1.6x 0.6x 1.1x 4.5x 4.3x 0.9x 22.6x 0.2x 0.4x 4.6x 0.4x 0.2x 1.0x 14.3x 1.8x 5.0x 3.5x 2.1x 1.3x 49.2x 0.0x 5.6x 2.1x TE V/ NTM R evenue 0.1x 0.8x 5.8x 16.8x 0.5x 1.7x 8.1x 1.1x 4.0x 0.7x 0.6x 5.8x 5.6x 1.7x 3.1x 2.3x 0.6x 3.6x 2.3x 1.7x 3.7x 17.3x 0.2x 0.4x 0.4x 1.0x 1.8x 2.7x 17.3x 0.1x 3.4x 1.8x TE V/L TM E B ITDA 4. 1x 10.9x 12.2x 31.7x 5. 9x 6. 7x 4. 9x 8. 0x 1. 2x 11.8x 9. 6x 47.7x 19.4x 1. 4x 16.0x 19.4x 11.5x 13.5x 7. 7x 10.4x 22.1x 1. 3x 25.0x 0. 3x 13.7x 24.6x 2. 3x 9. 9x 4. 3x 46.2x 12.3x 4. 7x 10.0x 12.2x 9. 7x 12.7x 47.7x 0. 3x 12.9x 10.7x TE V/NTM E B ITDA 7.6x 10.0x 27.3x 5.6x 7.0x 6.0x 1.4x 11.0x 17.9x 12.5x 11.0x 8.7x 4.9x 6.8x 7.5x 8.6x 8.1x 41.0x 12.9x 7.7x 4.0x 7.1x 7.4x 41.0x 1.4x 10.5x 7.7x P /L TM E P S 19.7x 14.3x 41.6x 6.9x 6.5x 19.4x 9.9x 2.1x 11.5x 0.0x 52.0x 62.6x 14.4x 13.1x 4.7x 19.9x 49.3x 14.1x 39.6x 14.0x 3.2x 35.1x 3.2x 2.3x 6.7x 15.2x 13.1x 58.5x 2.2x 0.0x 20.0x 26.7x 11.8x 62.6x 0.0x 18.6x 14.0x P /NTM E P S 8.7x 12.7x 25.3x 7.8x 1.9x 14.0x 10.7x 20.2x 36.6x 3.6x 14.3x 43.1x 14.9x 9.6x 17.7x 1.7x 13.3x 40.6x 15.2x 3.7x 13.0x 18.2x 48.9x 47.4x 6.2x 20.2x 15.3x 48.9x 1.7x 18.0x 14.3x P /TangB V 2.2x 0.5x 0.5x 14.1x 20.1x 3.1x 0.8x 4.1x 5.2x 8.3x 2.9x 1.2x 54.3x 0.3x 2.5x 0.0x 24.1x 21.6x 2.3x 1.3x 5.0x 1.5x 0.0x 5.5x 18.4x 0.7x 0.8x 6.7x 7.2x 4.0x 20.0x 1.8x 0.9x 7.5x 0.7x 3.1x 1.5x 20.9x 0.9x 2.6x 2.1x 5.0x 49.0x 63.1x 26.0x 0.1x 1.1x 1.0x 7.3x 23.7x 0.0x 8.3x 3.7x 0.8x 63.1x 0.0x 8.7x 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 J ul-09 C ompany Name P andora Media K ontera L td. Ning QuickP 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. OPE N S ports network S tyleC as ter Nexage TweetDeck B us c a Akademos P rotonMedia iL oop Mobile C omunitae Aloqa L at49 Thread Tributes .c om 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 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 E ns equenc e Mzinga InXpo J obvite NextB io R iot G ames Vuc lip YuMe Allianc e Health Networks Mocapay C onduit L abs Fwix Vantrix Mas hL ogic G reys tripe FourS quare E duFire Trans Gaming Inc. S ep-09 Total G rand Total 90.8 US A US A US A US A C ana da 0. 5 0.5 0.5 16.9 39.5 25.3 139.6 23.9 119.0 20.0 110.2 10.0 10.0 1.4 1.3 US A US A US A US A US A C ana da 2.5 2.0 2.8 2.6 3.0 US A US A US A US A US A 8.0 6.0 5.0 3.3 3.0 US A US A 9.0 8.3 8.0 Type of financ ing C ountry US A Is rael US A C anada US A US A US A US A US A US A G erma ny US A US A US A India US A US A US A UK US A US A US A US A S pain G erma ny C anada US A US A US A US A US A UK US A US A US A 0. 3 65.0 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 20. 0 10. 0 Angel/S eed 15. 5 Debt financ ing S eries A S eries B S eries C 35.0 S eries D S eries E Grand Total 35. 0 15. 5 15. 0 12. 0 10. 0 8.3 8.2 8.0 8.0 6.6 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 11.1 36.8 51.5 27.0 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 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 20. 0 10. 0 9.0 8.3 8.0 8.0 6.0 5.0 3.3 3.0 3.0 2.8 2.6 2.5 2.0 1.4 1.3 0.5 96.6 509.6 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 Dopplr HQ F inla nd Webs ite www. dopplr. com Des c ription Dopplr, L td. provides an online s ervice for frequent travelers . It offers beta , a n online s ervice that ena bles s ha ring future tra vel plans with a group of fellow tra velers us ing a pers onal computer and mobile phone. T he compa ny is ba s ed in Hels inki, F inla nd. As of S eptember 28, 2009, Dopplr L td. opera tes as a s ubs idia ry of Nokia C orp. E ducation R evolution, Inc. operates a s an online community tha t provides online live video tutoring s ervices . It offers tutoring s ervices for s tudents covering va rious la ngua ges a nd prepa ring s tudents for exa ms on video cha t s es s ions . T he compa ny was founded in 2007 a nd is ba s ed in S anta Monica , C alifornia. E ns equence, Inc. offers intera ctive televis ion a nd digita l broa dca s ting s ervices . T he compa ny’s pla tform ena bles online downloa d, online advertis ing, and viewer res pons e meas urement s ervices . Additionally, it provides s ys tem implementation and integra tion, a udience meas urement, a nd cus tomer care s ervices . T he compa ny’s clientele include MT v, E S P N, B B C , Dis covery C ha nnel, J etix, HS N, Dis ney, F ord, Nike, HP , V is a, R eebok, T oyota , G eico, T ime W a rner, C omca s t, a nd S ky. E ns equence, Inc. wa s founded in 2000 and is hea dquartered in P ortland, Oregon with a dditiona l offices in New Y ork, C a lifornia , a nd the United K ingdom. F ours qua re S olutions Inc. des igns a nd develops s oftwa re for iphones . F ours qua re S olutions Inc. is ba s ed in New Y ork, New Y ork. F wix, Inc. owns and opera tes as a n online porta l which collects a rticles from different s ources a nd provides current information about a local area , including photos , videos , events , articles , reviews , and mus ic. T he compa ny was founded in 2008 a nd is bas ed in Menlo P a rk, C a lifornia . Inc. opera tes an a d-s upported mobile games a nd applications dis tribution pla tform. T he compa ny provides online ga ming and inG reys tripe, ga me a dvertis ing s olutions through publis her s ites . Its AdW R AP product s uite enables bra nd a dvertis ers to communica te their bra nd mes s a ges to mobile a udience; publis hers to s erve a ds through their ga mes ; a nd cons umers to download ga mes , a s well as delivers images , videos , a nd s crolling ba nners to mobile ga mes a nd a pplications . T he compa ny’s s olutions als o include AdW R AP C a mpa ign Ma nager, a n advertis ing W eb interface; AdW R AP C a ta log P rogra m, which ena bles pa rtners to dis tribute a mobile ga me ca ta log; a nd AdW R AP for P ublis hers pla tform . T he company is bas ed in S an F rancis co, C alifornia. E duFire United S tates www. edufire. com E ns equenc e United S tates www. ens equence. com FourS quare Fwix G reys tripe United S tates United S tates United S tates www. fours quare. com www. fwix. com www. greys tripe. com HiveL ive United S tates www. hivelive. com HiveLive Inc. provides enterpris e s ocial s oftwa re pla tforms . T he company’s on-dema nd s oftwa re ena bles compa nies to deploy cus tom-fit enterpris e communities built around people, rela tions hips , and s ha red knowledge. It offers L iveC onnect, provides a building-block a pproa ch for crea ting cus tom-fit online cus tomer communities ; and Hives , which a re W eb 2. 0 building blocks tha t combine people, information, a nd permis s ions to crea te information res ources . HiveL ive Inc. was founded in 2006 a nd is ba s ed in B oulder, C olora do. InX po is the lea ding provider of priva tely-bra nded virtua l events , including V irtual T rade S hows , V irtua l C areer F a irs and V irtua l C orporate E vents , a s well a s Audio a nd V ideo W ebca s ts . T hes e virtua l s olutions dra ma tically reduce travel time a nd related cos ts , in a ddition to ma king the world a greener place to live. InX po’s V irtua l E vents provide P ublis hers with new online revenue opportunities and C orpora tions with the a bility to genera te lea ds , communica te, educa te and network by connecting more effectively with their communities . J obvite, Inc. offers recruitment application tha t a llows to collabora te on making hires . It s erves HR and s ta ffing executives , recruiters , hiring ma na gers , executives , employees , a nd jobs eekers . T he compa ny was founded in 2003 a s F orumJ obs a nd changed its name to J obvite, Inc. in 2006. J obvite, Inc. is ba s ed in S an F ra ncis co, C alifornia. Mas hL ogic Inc. offers mas hes to pers ona lize the applications for the us ers a nd bloggers . It a dds relevant links to W ebs ites , pers ona lizes W eb pa ges , increa s es vis ibility a nd rea ch of content and brand, a nd enriches W eb with links to s ources . T he company wa s founded in 2007 and is ba s ed in Menlo P a rk, C a lifornia . Mint S oftwa re, Inc. provides a W eb-ba s ed s olution for online financia l ma nagement. It offers money mana gement, debt ma nagement, expens e tracking, inves tment ma na gement, budget ma na gement, mutua l fund, IR A ma nagement, a nd financia l pla nning s ervices . T he compa ny a ls o provides s ugges tions ba s ed on us er’s s pending pa tterns a nd automa tic ca tegoriza tion of purcha s es . Mint S oftwa re, Inc. wa s founded in 2006 a nd is ba s ed in Mountain V iew, C a lifornia . Moca pay, Inc. provides a mobile commerce pla tform tha t s upports integra ted mobile pa yments , ma rketing, a nd dis tribution a t point-of-s ale. It offers a marketing engine, which ena bles mes s a ging cons umers before, during, and a fter a retail s tore tra ns action. T he compa ny was formerly known as F E E D a nd cha nged its na me to Mocapa y, Inc. in 2007. Moca pay, Inc. was founded in 2006 a nd is bas ed in B oulder, C olora do. provides online bus ines s s ocia l media a nd workforce s olutions tha t ena ble bus ines s es to ha rnes s the collective intelligence of Mzinga , Inc. employees , cus tomers , pa rtners , a nd s hareholders . It offers hos ted and s oftware-a s -a -s ervice s olutions for informa l communication, knowledge s haring, employee tra ining a nd development, a nd community members ’ interaction. T he compa ny a ls o provides O mniS ocia l, a s oftwa re s olution tha t ena bles orga niz ations to connect, communica te, collabora te, a nd a tta in bus ines s va lue from s ocia l intera ctions with their employees , cus tomers , a nd pa rtners us ing a s ingle environment. Its bus ines s s ocia l media and lea rning s olutions ena ble ma rketing a nd cus tomer s ervice profes s ionals to enga ge a nd interact with pros pects and cus tomers ; a nd workforce communities and lea rning s olutions empower huma n res ources a nd corpora te lea rning profes s ionals to enha nce enterpris e-wide communication and colla boration. T he compa ny s erves its clients in broa dca s t media, e-commerce a nd e-C R M, educa tion, entertainment, fina ncia l s ervices , genera l indus try, hea lth ca re, ma nufacturing, print media , online media, s ports a nd ga ming, a nd technology s ectors , a s well as profes s iona l as s ocia tions and pr InXpo United S tates www. inxpo. com J obvite United S tates www. jobvite. com Mas hL ogic United S tates www. ma s hlogic. com Mint.com United S tates www. mint. com Moc apay United S tates www. mocapa y. com Mzinga United S tates www. mzinga . com NextB io United S tates www. nextbio. com NextB io, Inc. provides s oftwa re a s a s ervice ba s ed s earch s olutions to life s cience res ea rchers . It offers NextB io B as ic, a W eb application tha t provides a cces s to a da ta ba s e of public data ; NextB io P rofes s ional tha t a llows the individua l res earcher or groups of res earchers to exploit publicly ava ila ble a nd interna lly genera ted experimenta l da ta ; a nd NextB io E nterpris e that provides colla bora tion a cros s therapeutic groups a nd geogra phic bounda ries . T he compa ny als o provides NextB io P la tform tha t provides ontology-bas ed s emantic fra mework that connects heterogeneous data a nd textua l informa tion, a s well a s da ta a na lys is a nd curation, tra ining, a nd s upport s ervices . NextB io, Inc. wa s founded in 2004 a nd is ba s ed in C upertino, C a lifornia. NowP ublic T echnologies , Inc. , a pa rticipatory news network, owns a nd opera tes NowP ublic. com pla tform for citizen journa lis m. T he compa ny provides politics , culture, enterta inment, a nd life photos and video hea dlines . It s erves Internet us ers , bloggers , a nd photogra phy enthus ia s ts . T he compa ny was founded in 2005 a nd is bas ed in V a ncouver, C a nada . As of S eptember 2, 2009, NowP ublic T echnologies , Inc. operates a s a s ubs idia ry of T he W as hington E xaminer. R iot G a mes , Inc. develops a nd publis hes online video games . It offers online titles for cons oles a nd the P C s . T he compa ny was founded in 2006 and is ba s ed in L os Angeles , C alifornia . S kype T echnologies S . A. provides S kype, a s oftware tha t ena bles individuals a nd bus ines s es to ma ke free video a nd voice ca lls , s end ins ta nt mes s a ges , a nd s ha re files with other S kype us ers . It a ls o ena bles to ma ke ca lls to la ndlines a nd mobiles interna tiona lly. T he compa ny a ls o provides heads ets , W ebca ms , a nd phones through its online s hop. It s erves us ers in Argentina, B razil, C hile, C olombia , Mexico, P eru, a nd V enezuela . T he company wa s founded in 2003 and is ba s ed in Luxembourg. As of October 14, 2005, S kype T echnologies S . A. is a s ubs idia ry of eB a y Inc. T iny P ictures , Inc. provides a s ervice for s ha ring of camera phone pictures and videos between friends . It offers R ada r, a s ervice that ena bles us ers to s ha re camera phone pictures and videos with friends . T he company wa s founded in 2005 a nd is ba s ed in S an F ra ncis co, C a lifornia . As of S eptember 10, 2009, T iny P ictures , Inc. opera tes a s a s ubs idiary of S hutterfly, Inc. T ra ns G a ming Inc. engages in the development, s a le, a nd licens ing of portability technologies for the video games indus try. Its products include C edega , which a llows windows ga mes to run on the Linux opera ting s ys tem; C ider tha t a llows windows ga mes to be deployed on the Intel Ma cintos h computers ; G a meT reeOnline. com, a digita l dis tribution porta l, which provides Ma c gaming products and s ervices for retail and online game releas es ; a nd S wiftS hader, a proprietary s oftwa re 3D rendering product that exploits the move to multi-core central proces s ing units (C P Us ), and the convergence of C P U a nd G P U technologies . T he company is further involved in mobile ga me development and online video game s a les . T he compa ny ha s a s trategic colla bora tion with Intel C orpora tion to s upport its on-dema nd ga ming s ervice, G a meT ree. tv. T rans G a ming Inc. wa s founded in 2000 and is hea dquartered in T oronto, C ana da . XinL a b, Inc. , doing bus ines s a s V uC lip, opera tes a s a mobile video s earch s ite. It provides mobile video s ea rch a nd delivery s olution tha t allows its cus tomers to a cces s va rious videos on the Internet a nd wa tch it on the video-ena bled phone. T he compa ny’s s olutions a ls o ena ble online publis hers a nd content owners to mobilize their video content through its V uclip V ideo AP I P rogra m. In a ddition, it offers mobile video s trea ming with a rich multimedia experience in va rious wireles s networks a nd ha nds ets . T he company wa s founded in 2000 and is ba s ed in Milpita s , C a lifornia with additiona l offices in B eijing, C hina ; a nd Delhi, India . Y uMe, Inc. opera tes a s a video a dvertis ing network on W eb. It offers a d ma nagement s ys tem tha t ena bles a dvertis ers a nd publis hers to identify, cla s s ify, a nd tra ck content through digita l media pla tforms , s uch a s W eb, downloa ds , mobile, a nd IP T V . T he compa ny als o ena bles publis hers to orga niz e video on their s ite into content cha nnels , s uch a s automotive, fina ncia l s ervices , lifes tyle, news , mus ic, s ports , enterta inment, a nd family friendly. In a ddition, it offers rea l-time targeting, mea s urement, and optimiza tion; content dis tribution a nd vira l advertis ing opportunities ; a s uite of intera ctive a d pla cements ; and video monetiza tion s ervices . F urther, the compa ny provides a beha vioral targeting s ys tem tha t enables a dvertis ers to ta rget their mes s a ges to viewers on a national s cale ba s ed on video viewing interes ts a nd purchas e intent. Y uMe, Inc. wa s founded in 2004 a nd is hea dqua rtered in R edwood C ity, C a lifornia . NowP ublic C ana da www. nowpublic. com R iot G ames S kype United S tates L uxembourg www. riotga mes . com www. s kype. com Tiny P ic tures United S tates www. tinypictures . us Trans G aming C ana da www. tra ns ga ming. com Vuclip United S tates www. vuclip. com YuMe United S tates www. yumenetworks . 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