¢
J
< get local in one click >
Product Launch Summary of Opportunity
June 6 2000
Millions of times each clay across the globe, someone whether a resident, tourist or business
new in town, frustrated
traveler, becomes
and intirnidated
from not knowing
first-hand
where to sta_; eat or
shop. Even savvy local residents frequently
need a helping hand in
finding the nearest flower shop, book store or ATM.
LocallOl's mission is to be the premium
interactive
location
guide for metropolitan and other specific geographical locations throughout the world by providing an indispensable and readily-accessible destination utility travelers, tourists and businesses.
_ew YorkLocal 101 is a user-friendly, graphically-intuitive digital mapping with their surroundings
for residents,
business
destination
locator. Based on a highly
accurate and detailed proprietary familiarize themselves
system, it is designed to provide users the ability to
quickly and easily.
Lor_dor_ _,,LocallO1 _ unique product will be accessible to millions through the Internet as well as off-line in PDAs and in travel, leisure, hospitality and entertainment venues through WebWV, kiosks and other special platforms. Its product implemented in hundreds is not limited by national or cultural boundaries, but will be of different languages and metropolitan areas throughout the world.
Tokyo o LocallO1rovides a service unlike any product in the world. p
It is a quicker, more costeffective and more comprehensive alternative to traditional printed maps and guide books. And it is far more user-friendly, accurate and appealing to use than current on-line mapping services.
LO© a
LocallOl.com
Business
Summary,
confidential,
not
for
distribution
f
Our
currently
distinct
advantages.
This by the
Local 101 is a multi-faceted
interactive location guide unlike any other location guiding system
available. It is applicable to many different markets across the globe and is capable of
generating multiple revenue streams simultaneously utilizing the same basic product. dramatically reduces cost and time of entry into the various markets and is supported following distinct advantages: P_Gduct _s _u_t_faceted fo_ _ both o_o a_ offo,_e
uses
Local 101_ technologies
are adaptable for use on multiple platforms both on and off the Internet clients. This flexibility enhances its access to new and
for a variety of customer types and industry additional revenue streams.
Focus is oF_ _arkets with hicjI_ coHcentFa£_on of usage and revenue Unlike current on-line location systems that are attempting to map the entireworld and thus compromise the abilityto targetspecificmarkets, Local lO] focuses on building brand loyaltyin metropolitan areas where themajority ofa nation_ purchasing ower and advertising p dollars are concentrated. _m_h_y targeted consumer ac:_verlhis_ Through theuseofnew,uniqueadvertising concepts, Local 101isdesigned target advertising to its toward users - demarcated by specific demographics, geographies and consumption preferences. Custo_zed branding Local 's I(31platform iscustomizable allows and ouron-line nd off-line a customers and strategic partnersoextendtheir t own branding throughthelookand feel f oursoftware.ocal]O] o L canbe adapted and modifiedfor private labeling, strategic partnerships promotionalurposes. and p This increases thevalue ofLocal toour businessustomers. 101 c Spee@ ar_4 ease-of=use Local 101_ uniquely designed, dynamically generated vector images and intuitive graphical interface make Local101 faster and easier to understand and use than competing location guides. Local101 's speed and ease-of-use will accelerate brand image, customer for on- and off-line private labeling. Tecbr_o_o<3_ca_ edge ae, c! accu_ac_ of usage and loyalty, and marketability
da_a
iocall0l's guides are the most accurate available because they are based on detailed address information captured from local agencies in conjunction with local experts. Local 101's proprietary software MapDB allows for easy content updates and modifications to effectively maintain an accurate and concise database in metro areas that change on a constant basis. This is unlike other mapping sites that use the U.S. Census Bureau data that is frequently inaccurate, out-of-date and rarely modified.
LocallOl.com
Business
Summary,
confidential,
not
for
distribution
f
Loca_il©l How Locall01 Works Local 101 Products
T_@ 1 2 3 4-5 6 7-8
PFoduc£
Market Uses Vertical and Horizontal Expansion
Product Rollout Technology Overview
Competition
9-10
Local101 Management
T_se
Organizations 11-12 14 15-16 17-22 23-28
and Resources Facilities Funding Request
Proof-of-Concept
Budget
Three Year Projections
LocallOl.com
Business
Summary,
confidential
not
for
distribution
1.
Home page features a one-point interface.
Premium Ad Space or Corporate Private Labeling Opportunity can be
placed on the right panel - perfect space for a partnership Time Out. with Zagat's or
Streaming Local News and Traffic is highlighted in the center + the Palm
Version for Downloading.
2.
Advertising is placed strategically between screens so that the user can be targeted on a point-to-point basis
3.
Excellent information management and GUI design allows the user to view an overview of where they are in the city, in the neighborhood and the
exact cross streets. They also have the power to navigate around the map, mail it to a friend, change views, and get directions including public transportation.
4.
Once they find the location, the client can explore the neighborhood search by categories shops,and restaurants. including and bars,
LocallOl.com
Business Summary confidentiat not for distribution
1
Locall01 is an exciting new interactive location guide to be used on- and o ffline. It is a unique combination of maps designed by award-winning information designers, proprietary software that is fast and reliable, and accurate local information. This flexible solution can run on many different platforms including the internet, PDAs, WebTV, kiosks, and in-flight video monitors. The L ocall01 database is custom built and operates quickly as a result of using combined technologies. The user's request returns the exact location, a neighborhood and regional view, directions and a location guide that is relevant to and based upon their destination. These are all presented on one screen. Locall01's location guides are extremely fast because the dynamically generated vector images don't have to reload from the server each time the user requests a new location. Additionally they are more accurate due to our proprietary database, MapDB, which allows us to easily, affordably and constantly refine information.
Vertical markets can take advantage of our product because Locall01'splatform usage is highly customizable and allows our customers to extend their brand into the look and feel of our software. Local101 will be available on the following platforms:
L_cal ]()Lvom is an interactive, other mapping fact that the dynamically
Internet
based location guide that is fast and easier to use than any of the available due to the
sites that are currently generated
vector images don't
have to reload from the server each time the user requests a new location. The interface design is unique and intuitive because of its original display of animated mapping reposition information. The user can interactively that it the demarcation the map and control the information public transportation,
displays including
of specific stores, bars, restaurants, proprietary updated, changing database,
public facilities, and
parks. At it's core, Local 101 software consists of a called "MapDB," of streets and utility, to meet the streets and roadways. This software is also used to consistently that the information is reliable. Locall01.com is into their web sites. reference points that can be easily and constantly using an administration conditions of urban transportation, for integration
update local listings and places of interests guaranteeing also available to subscribers
!_{,1{:_101 Mobile Co_l_i_i_ G is the PDAversion of our location guide. It fbr contains all of the same features as Locall01.com. It will be downloadable from our web site and can be customized hospitality and entertainment to be distributed industries. will provide premium industries interactive location guides for exist. It will plus the as a premium item for the travel,
|,ocal 1{}![bt \/(',r_i(:al Markets the travel, hospitality provide all of the functionality
and entertainment
where none currently
and features of our internet and
PDA versions
the ability to run on WebTV, kiosks and in-flight monitors and will support customer_ brand identity through seamless integration.
LocallOl.com
Business
Summary,
confidential,
not
for
distribution
2
LocallOl'sbasic
markets. Within
product has multiple market uses. It can be utilized within both on-line and off-line, vertical each of these markets is broad-based or highly targeted advertising potential. Also within for private label sales, branding and licensing.
each market is the potential
On-line
Markets
Int_rnet
(
/
C_FA I
I I \
Ci_- B I Gt_-c I ('_:i_ D
-,
_4_r
,......
o_nt--razt,
\
.....I..... I/
Off-line,
WeDT_ PD_,
Vertioal
Kisoks, In-flight
IWlarkets
video monitors
LocallOl.com
Business
Summar_
confidentia_
not
for
distribution
3
Vertical
Locall01's numerous
and
Horizontal
Expansion
flexibility allows it to be customized and adapted in many different ways to supply the needs of markets for premium m apping and location information. This allows L ocall01 to expand both creating a variety of simultaneous revenue streams.
vertically and horizontally,
By its nature, Local101 is able to accurately target a highly responsive consumer base, lowering cost-ofacquisition to advertisers, increasing their conversion rates and increasing transaction volumes. From this, Local101 can expand horizontally by supplementing its adve rtising with highly targeted geographic and context sensitive promotions, discount membership consumers on behalf of our advertising clients. Our ad revenue is based on a new a dvertising programs, website links or informational content to
paradigm.
This new approach
has three significant
advantages:
1) Increased value per ad through highly targeted, local impressions that dramatically increase percentage of foot traffic to local businesses; 2) The ability to widen existing advertising markets by offering local brick and mortar operations to take advantage of Internet advertising; _' technology. 3) Increased branding and awareness per impression using our proprietary Inline Advertising
In addition, we will apply an aggressive, proactive sales approach to selling advertising. When combined with this new advertising paradigm will allow us to increase our annual advertising revenues by as much as 5 00% over existing online entities.
Many potential customers - both on- and of f-line - are seeking ways to provide their own customer or mem bet base with interactive location services in an effort to d ifferentiate, but do not have the wherewithal to build a custom solution. L oca1101 can expand vertically by offering a premium private label solution to these customers. There exists huge untapped sales potential in the h ospitality, travel and entertainment industries including hotels, airlines, air terminals and train stations, amusement parks and cruise lin es/ports-of-calls.
Businesses are seeking ways to affordably obtain customers and promote offer businesses the opportunity to leverage our extensive ad campaign
products and services. Local 10I can and receive demarcation within all
Locall01 products for a minimum fee and the requirement that they offer a d iscount or service to our end user. The end user can purchases a membership to take advantage of a discounted local marketplace where they will receive benefits at every business participating in our program. By creating a membership program that benefits the consumer and the business owner at an extremely low cost point, we are left with a legitimate win-win situation that can be easily replicated.
In an effort to leverage off its brand awareness and loyalty as well as mar ketability and ease-of-use,
Locall01 to
would pursue busi hess part nerships with local and national businesses that offer services that correspond and compliment Locall01k business objectives and capabilities. For example: Z_s._'_:_f_ - An international restaurant guide that offers unique customer based reviews. Locall01 plans to form an exclusive partnership deal which allows us to be the destination information provider for visitors to Zagats.com, both by allowing Zagats.com to embed Local 101 software into the site and by 'click-outs' to Locall01.com for more travel info.
LocallOl.com
Business
Summar_
confidential,
not
for
distribution
4
"_'_ic/|,_b_'m_o_
}_li(_
- Local talk radio stations that provides traffic and weather. Locall01
is working toward an exclusive business partnership in which Local 101 will provide live streaming services of the radio programs from their website in retum for the rights to broadcast traffic and weather from Local 101.com. ']'ime Om - A listings guide for the metropolitan areas for art, theatre, restaurants, and anything else happening in the cities. Time Out Inc. has listings guides for 29 international cities. Local 101 is planning on partnering with Time Out Inc. to provide exclusive mapping and destination information for their New York online presence Timeoutnycom and utilizing this relationship as a springboard to expansion. The above business partnerships and others are enticing business propositions for our partners b eca use the
Locall01 does not provide competing content but rather a complimentary effectiveness and usefulness of the partners' websites to their customers.
improvement
that increases
StreetScout.com
Business
Summary
confidential
not for distribution
5
f
i
Local1Ol'sgoal
is to roll out a product
for most of the major metropolitan
cities of the United States by the
year 2002 and of the world by the year 2003. This would encompass approximately 25 cities in the United States and up to 30 cities and regions on other continents, primarily Europe, Asia and Australia.
The
roll-out the Internet.
of each cities' product would occur in phases, starting with an introduction of the product on Some of the later phases may not occur in any part icular order, and many of these phases would with similar phases of a roll-out in other cities. For example:
occur simultaneously Phase 1
Launch New York city guide on website. Secure advertising sponsors for website platform. Broadly advertise introduction.
Phase 2
Begin promotion Begin membership
campaigns
for individual campaign.
website sponsors.
Phase 3 Phase 4
promotional
Forge business partnerships to integrate product
with location-related
content
providers
(i.e., Zagat_, On-Time)
into their websites.
Phase 5
Secure licensing agreements or service provider contracts with of f-line customers with broad customer bases (i .e., travel and hospitality industries). Develop private branding initiatives. Begin off-line promotional Begin implementation campaigns with business partners (i.e.,
Ptlase 6 Phase 7
PDAs).
(train
of off-line
placement
of kiosks and other special platforms
stations, airports, coffee shops, malls). Each phase of the roll-out results in a new revenue stream for essentially the same, basic product developed for the Internet launch. Further, each new mapping location results in a replication of the multi-faceted revenue stream model in most, if not all, phases. Local 101 will focus its i nitial product launch on the mapping locations with the greatest potential for widespread, multi-purpose use,and h ighest advertising and licensing dollars. The criteria used to select these sites will include, but not limited to, city population, density, tourist traffic,commercial activity, number and type of hotel chains, public transportation and volume and diversity of leisure and entertainment venues. For example, some of the initial product launch destinations would include San Francisco, London, Hong Kong, Washington, D.C., Chicago, Boston, Tokyo, Paris, Berlin and Moscow. Additional launches would occur in less pop ulated cities - or even regions - that are pop ular tourist destinations. For these, Locall01 would likely be launched as a promotional oppo rtunity for various strategic partners with some customer stake in the location - such as hand-held computers, hotel chains or rental car companies. Some of these destinations would include Las Vegas, Orlando/Disneyworld, Miami and popular tourist regions in Europe and Hawaii. Disney Land Paris, New Orleans, Sydney,
LocallOl.com
Business
Summary,
confidential,
not
for
distribution
6
,, _O _i _i_i _ i_
Because Local 101_ mapping database is custom built for specific geographic interaction and animated regions, it is easily customized areas, our maps
as well as accurate and scalable. In addition, are custom created to offer more user-friendly
because we focus on specific densely populated display
At it's core, Locall01 software consists of a proprietary
database, called "MapDB
_'," of streets and reference
points that can be easily and constantly updated, using an administration utility, to meet the changing conditions of urban transportation, streets and roadways. Our narrow focus on a specific geographic region allows us to create custom databases that better serve the end user by providing intimate details that would not be practical or efficient with large sets of information.
The Local101 System Architecture :: l)_tn_: i :_re:aii.:i ] ,::o: C_t:, ] ] !_(i)::_'L[_t'!_!i]' I"tJa*7_ _*_t,
/
Sitting on top of this database is the mining and extraction layer built using the Java Media Framework. Becauseour solution is dependent on on this framework to deliver content, Local 101 requires a robust Java enabled environment on the client side. This means that the number c Java enabled browsers in use by consumers, today and in the future, is crucial to our acceptance utility arket. m Accordingto Stat Market, out of a dailysample of and growth within the Inu
_:: ]
/
arefourth Machines. This percentage fits within our Java Virtual generationor higher incorporatingadvanced "window of technology determine technology, Local 101. Within our media framework lies proprietary modules adoption," a process we use to new Z_ the success of a solution when integrating
_
,
.
34,747,734 internet
giving us the "green light" for use within users, 94.89% are using browsers that
Server
that handle both the generation
and serving of dynamic
and custom built, vector based maps and streaming audio.
MP3
Our framework also contains our mapping engine which is perhaps the single most distinguishing trait of Locall0L Built on a combination of "open standards" and proprietary geographical In December movement software, mapping Local101 is poised to offer and ease of use in localized and display. joined the open software to create custom Flash file format.
LocallO1Lcom Business Summar_
unprecedented
flexibility
R
confidential not for distribution 7
of '99, Macromedia
by publishing
the source code to the Shockwave published
Flash Player, opening
the opportunity
solutions using their previously
i
i
According October
to independent
Intemet
market research firms, at least
83% of
browsers are Flash enabled Research, viewable across
and
over 185 million people can view graphics and animation
created with Flash (source:NPD are consistently platforms.
1999).Web
Windows,
solutions that are built using Flash technology Solaris, Linux, and additional Web-appliance high-impact Netscape,
Macintosh,
In addition, the Flash Player Prodigy, Earthlink, Network
is the most widely distributed software products Computer, products dynamic acceptance, making Gateway, Compaq,
Web site viewer in use today and popular Web hardware and America Online, Apple, WebTV, to other platforms. Flash technology built into their
from Microsoft,
Disney, and many others already have Flash technology
Local 101 scalable and portable user environment,
Because of this overwhelming into the Local 101 solution for creating a mindshare.
we feel strongly about incorporating
and stimulating
the direct result being an increase in consumer
LocallO_Lcom
Business
Summary,
confidential
not
for
distribution
8
i
i
Online mapping services such as MapQuest and Zip2 (see fig.l-3) must support a large national database created from US Census data and, therefore, must sacrifice customization and limit information specifc to geographic areas in order to provide their service. navigate densely populated Because of this "least common denominator" approach,
the competition and efficiently a destination
will never be able to provide the local, highly specialized urban environments.
knowledge
required to effectively
In addition, because they can not anticipate
location, they must request more information
to provide their service which often leads to _ .................. _ 7
more complicated forms and slower response time. Any additional city specific information is usually accessed from a completely different area of the web site and requires additional to be submitted. information
Inaccuracies completely
in the
Competition's returned
Sites to the user is
In a worse case scenario, the information
_w ._ _Se# : _:_:." I_ _:_
_......... : ....... 2........... _.............. _*._ ..... _-, _,z----x _-e_÷a
incorrect, displaying a map location that does not
correspond to the physical address ( see fig. to leadinghas obvious 4) This results ranging from missed appointments users into unfamiliar and potentiallydangerouslocations. Primary Competitors content Local and transaction services
Fig.1.The Zip2 approach. Requesting mapping information requires the user to fill in 6 different form fields.
The market for local interactive are highly competitive. company Company, Corporation. wholly-owned Microsoft Currently
i?
101_primary
competitors
with respect to the Local 101 service include Digital City, Inc., a by America Online, Inc. and Tribune (Sidewalk - recently purchased CitySearch, and Zip2 Corporation
by TicketMaster
Online/CitySearch), companies
Locall01 will also compete against search engine and which primarily serve to local content such as Excite, Inc. Fig.2. Aftersubmitting therequest,he user t
dumped into a US overview and must additional request for city views. make
other site aggregation
aggregate links to sites providing
(City.Net), Lycos, Inc. (Lycos City Guide) and, Yahoo! (Yahoo! Local). In addition, the Local 101 service will compete against offerings from media companies, Inc. and Knight-Ridder, telecommunications Communications, including Cox Interactive and Internet Media, Inc., as well as offerings from several service such as SBC
is
and cable companies
ii'_,_:_'_ _
.....
_-._
providers that provide local interactive (DiveIn). Local 101 may also compete television, promotional Online Companies
programming
Inc. (At Hand) and Media One Group, Inc. with online services and media such as total
other Web site operators, as well as traditional budgets. Maps such as Mapquest
radio and print, for a share of advertisers'
excel in giving driving directions directly with OEM style arrangements
Rg.3 City specific accessed fron a completely
transportationnformation i section of is different
and overall geographic
data. These services are delivered
thesiterequiringadditionalinforroatio_.
via Local 101 site and through
LocallOl.com
Business
Summary,
confidential,
not
for
distribution
9
_ _uu:0 ¢,_¢, x_¢_::_:s _'=,*_,*_*_i_u
¸ _¸ _:: cu ;0 _1
popular destination
sites. The primary
drawback
is that they focus on
_.- _ -_ ......... ..-_cJ_
;_ _
_r.-._
raw geographic data over consumer-oriented geographic-related information. Also, by serving entire regions and countries, the level of detailthese services rovide p islimited.
====_l=_k._ .................
"Feet on the street" is a key competitive advantagefor traditional players developing online local content sites, because it can leverage existing advertising relationships and offer bundled sales of off-line and online media. Local content efforts from telecommunications operators uniquely properties online strength (e.g., Pacific Bell_ At Hand) and off-line newspapers positioned for this. The degree to which traditional and compensation) and alternative will determine players, have well-known can successfully harness their traditional of this advantage. newspapers In addition, traditional weeklies, are local the , [_:
..... _ . ..... ....
Fig.4. hen we searched W usingExciteJMapquest,
actual
for
tim
66 west12thstreet, star,indicating the
sales forces to sell
address,sat 12thAve. nd23rdSt.However, location i is 5th Ave and 12th St. a the
(through training
particularly
brands that are strongly associated with local content. afford to slowly and meticulously
As a result, players such as The New York Times can strategy. by their level of expertise in
develop their online local content are constrained
Primary drawbacks are that most of these companies developing and operating interactive consumer sensitive information City Directories
content
and the extreme focus that delivering geographicplayers lack.
requires - both of which traditional - Online and Offline
New media companies such as city networks properties--and, Sidewalk, CitySearch,
do not have the brand recognition
of established
off-line in early, budgets
therefore, need to advance quickly, essentially buying their way in. By getting and Digital City have been able to proceed without the enormous on the brand-building
marketing battlefront.
that eventually will be required to wage war against newspapers The trend among city networks of entertainment R.H. Donnelley has been outsourcing.
Sidewalk has enlisted CUC International
(purveyors
coupon books) and its 1,200-person to conduct
sales force. CUC reps are located in the 120 largest has tapped basis, and it work on a commission
markets, in which Sidewalk has used from 75 to 100 sales persons. Digital City, meanwhile, sales for its service. Both sales organizations remains to be seen how great the conflict will be between
the sellers' online and off-line duties. Drawbacks
to all current city directories are their focus on editorial content over more basic, yet needed, geographicallysensitive event and commerce information.
LocallOl.com
Business
Summary,
confidential,
not
for
distribution
10
Key
Organizational A_good,
Personnel Founder, CEO & Director of Marketing
_ache_
Localt01's director of marketing, creative development and manager is Rachel Allgood. Ms. Allgood holds a BFA from the Savannah College of Art and Design and has studied business at New York University. After working in advertising as a creative director and producer, Ms. Allgood co-founded and remained a partner in the agency Corsair Studios from 1991 to 1996 where she created innovative on- and offline solutions for IBM, Pepsi, and Becton Dickinson, and also graphics for many commercials and films including work for Spike Lee, Nick Gomez, and Butch Robinson. In 1996 she left to found Studio A, Inc. She has driven the company to generate business and communication solutions for clients that are bu fit on the principals of innovation and applied creative strat egy. AUgood's Studio A is a vital component of the overall business development for its clients from marketing and advertising to identifying potential sources of revenue. Clients include _lexaco, Ellen _l_acy, SpyCat.com, FreeAgent.com, IBM, and SEI Investments. Studio A has created several products including Inline Ads DynaPress and is currently developing an ecommerceolution, etail s R
TM, TM TM.
Geoff
Co_._nc_,
Founder
and
Vice
President. managing
Technology Locall01's
Development Mr. Council began his
Geoff Council
is Vice President
and is currently
technology.
quest to use technology as a medium for communication within the corporate structure as Creative Director for GRC associates where he quickly brought them into the digital revolution. By designing and implementing template based process for direct mail and adve rtising, GRC was able to reduce the time of delivery as well as costs of frequent mailings. In 1996,Council made the switch to new media design and communication with c2o-Interactive Architects, a business unit of digital-integration-powerhouse, EDS. There he developed successful digital communication tools using Internet standards and served as ate am member of an Internet task force whose duties included identifying value add and branding services using new media technologies and developing consumer and trade advertising strategies for services and seminars. Council joined Studio A, Inc. in September of 1997 and has built Interactive, Studio A_ new media division with projects for IBM, SEI Investments, Free Agent.corn, Spycat.com, Art-Ex.com, AMBI and Faucher Artist Representative. Davic_ V_o_fe, CFONP Business Development
David Wolfe is a Director in the Financial Advisory Services group of Pri ceWaterhouse Coopers, where he has been consulting with clients on business related matters for eleven years. David advises clients on matters related to their operational performance and strategic direction, especially as it pertains to minimizing financial risk, enhancing and protecting revenue growth, and increasing operational efflciencies and effectiveness. Prior to PriceWaterhouse Coopers, David held positions as a financial analyst and accountant with two Fortune 500 corporations and as an auditor for a "Big Five" accounting firm. David is a Certified Public Accountant and has a M asters of Business Administration from the University of Chicago Graduate School of Business.
LocallOl.com
Business
Summary,
confidential,
not
for
distribution
1 1
Outs d®
Ae] s
s s or
Financial Deirdre Ronald Jeff
Industry Carey Duswalt, Flynn, Vice President, Deutsche Bank President, Comprehensive Financial Solutions
Dygert,
Vice President, Chase Manhattan
Direct Dan Greg
Marketing, Kendall, Council,
Promotions, Manager
Retailing
Vice President, FOX Broadcasting of Market and Business Strategy, Priva_eek
Strategy and Market Development Sal Rasa, Vice President, Maritz Performance Improvement Company Dennis Mallen Director of Indirect Channel Sales, Prism Communications Chris Barkley, Vice President of Product Marketing, Avid Networks
(RED Connect)
(formerly of CitySearch)
Technology Philip Ringli, Founder, Sichtwerk (Flash Integrators/Specialists)
LocallOl.conl
Business
Summary,
confidential
not for distribution
12
,
i
Key Susan
Team A,
Members Povich, Legal Counsel clients in the emerging media, computer and
Ms. Povich has built her own practice counseling entertainment industries
on legal and business matters ranging from content,
talent and technology
agreements to corporate acquisitions and financing since 1904. Ms. Povich also counsels a wide variety of businesses on general legal matters including commercial litigation, corporate formation, structure, employment and marketing issues. Ms. Povich merged her practice with the law office of Debra Kelly to form POVICH KELLY/ASSOCIATES P.C.asof May 1998.
Prior to launching her practice, Ms. Povich was a litigation associate at Paul, Weiss, Rifkin, Wharton and Garrison where she represented clients in connection with trademark, copyright, franchise, environmental and federal securities matters.
Ms. Povich began her legal career as a law clerk in the United States Court of Ap peals for the Second Circuit. She received her J.D., cum laude ,from the Harvard Law School in 1988 where she was a member of the Women's Law Jo urual, the Harvard Law Record and the Prison Legal Assistance Project. Ms. Povich clerked
during law school for the Hon. Marie Jackson-Thompson, then of the Cambridge District Court. Her study on the treatment of domestic violence cases in the Cambridge District Court was adopted by the Massachusetts Governor's office as a prototype for a stat ewide study leading to significant Bar A ssociation and a recipient system-side reform. Marshall
Ms. Povich is a member Award for exemplary Ms. Povich is admitted
of the New York Women's
of the Thurgood
service in the area of capital d efense,conferred to the New York State bar, and the Southern
by the Bar of the City of New York. and Eastern Districts of New York.
LocallOl.com
Business
Sumrnar_
confidential,
not
for
distribution
1 3
Locall01 is housed one block below Wall Street in New York's financial district in a which includes a state-of-the-art Macs, Windows, digital production and broadband and Unix development stations for full spectrum testing.
2600 sq.
ft. loft facility with
studio. The facilities are equipped
LocallOl.com
Business
Summary
confidential,
not
for
distribution
14
in
LocallOl's world. product mission is to become the preferred location
eq
guiding
e
users throughout quality build and implement the and a
system by everyday up-to-da
To accomplish for hundreds
this goal, LocallO1 must remain of key metmpolitan
innovative,
te, of the highest
accuracy, adaptable
to new technologies
and user platforms, and tourist attraction
and, most importantly, locations.
F_ndi_g for Product. Concept However, prior to its extensive launch nationally and globally, Locall01 requires a short period of time to further refine and "test market" its product concept. During this stage, Locall01 will launch a pilot of New York City, undergo focused advertising, stage user focus groups for product feedback, develop various off-line demonstration models, market to select customers and strategic partners, and test limited membership promotions. We project an approximate six month period of time for the duration of this stage.
During this stage, our focus will be on readying the concept for market, and thus, revenues will be minimal. Therefore, funding is needed to cover the costs of product development and operations during this stage. Primarily, this includes development costs related to readying the product for off-line demonstrations and marketing; to complete the development of the mapping product for New York; and costs related to the test marketing activities and management oversight. Relatively little funding will be needed for acquiring or developing physical plant or fixed assets and hardware. Our funding requirements, net of any potential revenues, are projected at $15million* and are detailed in the following pages.
* This figure is based utilizing Studio A_existing network; minimum hardware and software purchaseswill be required forstage 1. Funding for Global Product Launch Following the Product Concept stage, should the product
prove viable, the next stage would encompass During
the
widespread, multi-location product development and product launch stage of Locall01. the primary costs of operations will relate to three main categories: 1) product research and development, i.e., obtaining the data for the numerous product locations; 2) mapping software development and testing; 3) development of strategic partnerships; 4) extensive marketing, advertising and promotion; and 5) management administration. These costs are discussed furt her below. Again, to launch and operate,
this stage,
Locall01 does not require a sizeable,
capital-intensive physical plant or substantial fixed assets. Outside of advertising and promotion expenses, the majority of Local 101'soperational cost structure relates to labor costs associated with product design and programming, data research and verification, sales and marketing and management administration. F-_rod_ct [_esearch and _eve_oprnent The underlying software platform for LocallO]
has already been developed and is fun ctional.
However, location. and for
significant funds are needed for the research and collection of mapping data for each new product Funds are also needed for refining the software to incorporate new features and functions,
customizing the product for off-line strategic partners. The majority of the funds will be s pent on labor services related to the product development, namely the technical and research staff, including the creative staff, programmers, designers, systems architects and data entry personnel.
LocallOl.com
Business
Summary,
confidential,
not
for
distribution
15
|
•
_-_,t_e_t._e_ 9 _._td _-_o_i_%e_s ©ewei;opr:q._nt Locall01's product incubation period is minimal. Simultaneous with the initial widespread launch of Locall01, management can begin to aggressively market the product to off-line users, licensees and strategic partners for the mapping locations available. Headed by the Vice President of Marketing and Business Development, Locall01 would staff a marketing and sales department with the task of building brand awareness; building the Local 101 audience; and acquiring customer service contracts.
_la r_gemer,_t Ad_n_str_t_on General and administrative expenses
would
be the typical
expenses
associated
with normal
o perations
of a
small, but growing organization. This would include salaries for the managerial positions related to finance, accounting, office operations and support and human r esources. Other costs would include the typical supporting costs of operating an organization office equipment and insurance. including travel, legal and accounting services, facilities rent,
For the first year, the company will focus on following the completion of the product concept stage, and preparation for launch into additional cities. We expect a reduction in cost for additional cities once we conclude our initial R&D and establish our production process. In the second year, our
R&D
efforts will be focused on entering
the mobile and vertical markets
for existing
Local 101 cities utilizing a variety of existing platforms. By the end of Year 2, we fully expect revenues operating and development costs. from all the various multi-faceted streams to surpass an nual
LocallOl.com
Executive
Summary,
confidential,
not
for
distribution
16
Overall
Budget
9 Month Expense
Personnel General and Administrative Prod uct Development Marketing/Advertisement
$997,750 $192,650 $128,400 $194,500
Total
$1,513,300
General
and Administrative
9 Month Expense
Facilities Office Lease Security Systems Utilities Insurance $36,000 $1,050 $2,700 $1,500 $41,250
Office Operations and Communications Supplies Phone and Fax Mail and Courier Internet: Data Services Publications and Research
$9,000 $9,000 $3,000 $6,300 $6,000 $33,300
Professional
Fees $30,000 $12,400 $42,400
Legal Services Accounting Services
Other Travel and Entertainment
$88,350 $151,400
Total
$192,650
Personnel
9 Month Expense
Executive Staff CEO/CCO/VP of Marketing* COO/CFO/VP of Business Development* $112,500 $138,750 $251,250
Marketing and Sales Sales Consultant/Business
Development*
$36,000 $36,000
Technical Staff V.P., Technical & Product Development* Lead Software Engineer Application Programmer (contract services) Application Programmer (contract services) Database Developer (contract services)* Flash Developer WebDeveloper Data Entry Data Entry $75,000 $60,000 $52,500 $48,750 $52,500 $60,O00 $30,000 $22,500 $22,500 $423,750
Design/Marketing Staff Art Director (last quarter only) Design/Production Asst. (last quarter only)
$10,000 $9,000 $19,0OO
Adrninstrative Bookkeeper (part-time) Administrative Asst. $15,000 $22,500 $37,500 $767,500 $153,500 $76,750 $997,750
Subtotal Benefits @20% Payroll Taxes Total
Technology
9 Month
Expense
Q1
Q2
Q3
Internet Hardware Server Desktops Other
Products $48,000 $24,000 $ 4,500 $ 76,500 $16,000 $8,000 $1,500 $25,500 $16,000 $8,000 $1,500 $25,500 $16,000 $8,000 $1,500 $25,500
Software Software Other Licenses $22,500 $4,500 $27,000 $7,500 $1,500 $9,000 $7,500 $1,500 $9,000 $7,500 $1,500 $9,000
Hosting Remote Hosting Remote ack-up B $9,000 $900 $9,900 $15,000 $3,000 $300 $3,300 $5,000 $3,000 $300 $3,300 $5,000 $3,000 $300 $3,300 $5,000
Off-Line
Products*
Total
$128,400
$42,800
$42,800
$42,800
Marketing/Advertising/PR MARKET
for NEW YORK
Expense
Corporate Identity Corporate Identity Package Printing Company Brochure SalesPresentationKit
$3,500 $15,000 $10,000 $28,500
Advertising Ad Creation and Placement: Print/Radio
$80,000 $80,000
Public Relations Press Kit Fees:Writer, Freelancer Sponsorship/Events
$6,000 $10,000 $10,000 $26,000 $30,000
Internet Visibility
Campaign
Guerrilla Tactics CoastersDistributed NY bars to Scouts in Key Locations Giving Directions Strategic Partnerships/Trades
$6,000 $12,000 $12,000 $30,000
Total
$194,500
Billboards? Focus Groups? Development of off-line models? Development of Palm Pilot models? Membership Promotions? Guerilla Tactics in Prod Dev Stage??
Airfare David Events Cost/event Total Rachel Events Cost/event Total Geoff Events Cost/event Total Others Meetings nddemonstrations a $ $ 1,000 5,000 5 $ $ $ $ $ $ 30 500 15,OOO $ $
Lod_lin_l 90 150 13,500 $ $
Meals 90 15 1,350 $
Other
Total
1,O00
$
30,850
10 1,000 1 O,OOO $ $
30 150 4,500 $ $
1 O0 75 7,500 $ $ 3,600 $ 22,000
20 150 3,000 $ $
1 O0 75 7,500 $ $ 3,600 $ $ $ 15,500 10,000 10,000
$
88,350
al,
Local101 .com Three-Year Projections summary of Revenues
2001 Internet Revenues $ 7,734,400 200,000 Fees $ 750,000 8,684,400 $ $ 29,837,500 1,000,000 5,000,000 35,837,500 $ $ 78,832,813 3,000,000 22,500,000 104,332,813 2002 2003
lnternet Advertising User Memberships Cross-site Integration
TOTAL INTERNET
Off-line
Revenues (1)* $ $ 3,992,188 3,992,188 $ $ 15,968,750 15,968,750 $ $ 47,906,250 47,906,250
Service Provider Contracts TOTAL OFF-LINE
TOTAL REVENUES
$
1 2,676,588
$
51,806,250
$
152,239,063
(1) Does not include any revenues from stationary kiosks, advertising, multi-product revenues or specialty services. *This is one financial example of an off-line source of revenue: the hotel industry. We are not able to reasonably project revenue in the other off-line markets until after the trial period is complete.
DISCUSSION DRAFT - Subject to Change
Confidential
Internal Projections
As of 6/8/00
Local1 01 .corn Three-Year Revenue From Internet
Projections
Advertising
2001
2002
2003
City Sponsors Visitors per City Charge per 1,000 visitors Geo Sector (Neighborhood) Sponsor [a]
$ $
973,333 60 58,400
$ $
3,650,000 75 273,750
$ $
9,733,333 94 912,500
34.8%
AvgNumber Geo of Sectors Visitors per Sector Chargeer1,000visitors p Category Sponsor Number Geo of Sectors Number f Categories erGeoSector o p Charge per Category per Geo Sector Customer Spots - Infosite Number f Customers seebelow o Chargeper Cust(Yellowpages CardListing) Customer Spots - Web Links Number of Customers (50% of total) Charge per Cust (Yellowpages Display Ad) Basic Rotating Ads - Search screen Number of Visitors per Year Percentage Space old of S Charge per 1,000 visitors
$ $ [a] [b] $ $ [c] $ $ [c] $ $ [d] $ $ $
10 97,333 60 $ 5,840 $ 10 15 2,000 $ 300,000 $ 1500 200 300,000 750 1O0 75,000 973,333 50% 60 $ 29,200 $ 768,440 10 $ $ $ $ $
10 365,000 75 $ 27,375 $ 10 15 2,500 $ 375,000 $ 2250 250 562,500 1125 125 140,625 3,650,000 40% 75 $ 109,500 $ 1,488,750 20 $ $ $ $ $
10 973,333 94 91,250 3.5% 10 15 3,125 468,750 17.9% 2250 313 703,125 1125 156 175,781 9,733,333 30% 94 273,750 10.4% 2,625,156 30 6.7% 26.8%
TOTAL ADVERTISING PER CITY Number Cities of
DISCUSSIONDRAFT - Subject to Change
Confidential
Internal Projections
As of 6/8/00
Worldwide
Homepage
Sponsor
$ $
50,000 7,734,400
$ $
62,500 29,837,500
$ $
78,125 78,832,813
TOTAL ADVERTISING
Number of Viewers per Major City (key variables Average population per major city Percentage Number ProductUsers(*) of Number of Users (*) User Frequency per Day - see below Total Visitors per Day Number of Days/Year Number of Visits per Year per City (*) includes out-of-town visitors connecting Average User frequency IUser Averacje User frequency Frequency per month per day
in Red) 4,000,000 1,0% 40,000 0.0667 2,667 [d] from hotels 365 973,333 and non-residents visiting 2 [e] 0.0667 0.1000 4,000,000 2.5% 100,000 0.1000 10,000 365 3,650,000 site prior to trip 3 0.1333 4,000,000 5.0% 200,000 0.1333 26,667 365 9,733,333
[e]
remotely
4 I
Number of Geo Sectors Number of Categories per Geo Sector Number Customers of perCategory Number of Customers per Major City Total
[a] [b] [c]
10 15 10 1500
10 15 1__55 2250
10 15 15 __11 22
DISCUSSION DRAFT - Subject to Change
Confidential
Internal Projections
As of 6/8/00
Local101 .corn Three-Year Projections Revenue From User Memberships
2001 2002 2003
Total Number of Users per City Percentage Memberships of perUsers Total Number of Members Charge per Member, net of commissions Total Revenue per City Number of Cities TOTAL $ $ $
40,000 5% 2,000 10 20,000 10 200,000 $ $ $
100,000 5% 5,000 10 50,000 20 1,000,000 $ $ $
200,000 5% 10,000 10 100,000 30 3,000,000
DISCUSSION DRAFT - Subject to Change
Confidential
Internal Projections
As of 6/8/00
Local101 .corn Three-Year Projections Revenue From Cross-site Integration Fees
2001 Number SiteCustomerserCity of p Fee per Customer Total Number Cities of TOTALREVENUE $ $ $ 30 2,500 75,000 10 750,000 $ $ $ 2002 50 5,000 250,000 20 5,000,000 $ $ $ 2003 100 7,500 750,000 30 22,500,000
Potential
Site Customers
Real Estate Agents Rental Agents Hotels Zagat's On-Time Location Retailers
Guides
DISCUSSION DRAFT - Subject to Change
Confidential
Internal Projections
As of 6/8/00
Local1 01 .com Three-Year Projections Revenue From WebTV Sites
2001 Number of Hotel Rooms per City (1) Percentage of Penetration 70,000 5.0% 3,500 $0.313 365 $ 399,219 10 $ Travel Research, Sales & Marketing Management 3,992,188 $ $
2002 70,000 10.0% 7,000 $0.313 365 798,438 20 15,968,750 $ $
2003 70,000 20.0% 14,000 $0.313 365 1,596,875 30 47,906,250
Total Number of Hotel Room Users Charge per Room per Day Number Days of Total per City Number ofCities TOTAL REVENUE (11 Source: Smith
Charge
per Room per Day $125 0.25% $0.313 $125 0.25% $0.313 $125 0.25% $0.313
Average Room Rate, Gross Fee as a Percentage of Room Rate Total Fee per Day
DISCUSSION DRAFT - Subject to Change
Confidential
Internal Projections
As of 6/8/00
i
Local101 .com Three-Year summary
Projections
2001 Total Revenues Direct Costs Sales and Marketing per City per City 1,800,000 200,000 24,000 $ Number ofCities $ 2,024,000 10 20,240,000 $ $ $ 12,676,588 $
2002 51,806,250 $
2003 152,239,063
Advertising,
1,800,000 200,000 24,000 2,024,000 20 40,480,000 $ $
1,200,000 200,000 24,000 1,424,000 30 42,720,000
Data Collection and Implementation Subsequent Data Maintenance
Operating
Expenses (25% of revenues) 3,169,147 500,000 3,669,147 12,951,563 750,000 13,701,563 38,059,766 1,000,000 39,059,766
General and Administrative Research and Development
Net Profits
$
(11,232,559)
$
(2,375,313)
$
70,459,297
DISCUSSIONDRAFT - Subject to Change
Confidential
Internal Projections
As of 6/8/00
L©oait
> ,_
c_ _
.... ... .
li!iii!!!!i!!ili _
< get loc_l in one click >
98Greenwich Street S
.-4 O3
New York, 10006 NY tel212 240 9947 fax 212 240 9951 www.local 101. com
o3 03
@