SOFTWARE & SERVICES
14 APRIL 2009
WEB 2.O WEEKLY
COLLECTIVE MEDIA LEADS PICK-UP IN FINANCING
ACT I VIT Y P E RK S U P I N S E CO ND WE E K OF A P RIL
DAVID SHORE, CFA, MBA 416.860.6784
david.shore@researchcapital.com Arun Thomas (Associate) 416.860.7666
Month-to-date, April finished with nine financings totalling $66.3 million, a run-rate that could potentially make it a better month for capital market activity than March. A total of three deals greater than $10 million each helped the overall statistics. Although April activity has picked up from a total dollars raised perspective, the number of transactions month-to-date (nine) is well below numbers for March (21) and February (25).
Financing Activity Last Three Months
200.0 8.0
180.0 7.0 160.0 6.0 140.0 5.0 120.0 (US$m) (US$m)
100.0
4.0
80.0 3.0 60.0 2.0 40.0 1.0 20.0
0.0 Feb-09 Mar-09 Total Average Apr-09
0.0
Capital Market Activity: The second week of April saw seven companies raising money, with Collective Media raising $20 million (behind Twitter which raised $35 million in February). The month-to-date total of total capital raised stands at $66 million. The Rubicon Project (ad network sector) and Cellufun (gaming sector) followed Collective Media, raising $13 million and $10 million, respectively. Price Performance: Gaming company Hanbitsoft Inc. (A047080-KOSE) was the top price performer for the week, returning 45.6%, closely followed by NEOW IZ Games Corp. (A095660-KOSE). Sitesearch Corp. (STPC-OTCBB) returned the least at -30.0%. Of the 48 companies (with stock price greater than $1), sixteen companies on our list had price performance greater than 10%. Eight companies returned more than 20%.
This report has been created b y Anal ysts that are emplo yed b y Research Capital Corporation, a Canadian Investment Dealer. For further disclosures, please see last page of this report.
T o ro n t o 4 1 6 . 8 6 0 . 7 6 0 0 Montreal 514.399.1500 w w w . r e s e a rc h c a p i t a l . c o m Vancouver 604.662.1800 Calgary 403.265.7400 Regina 306.566.7550
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THE WEB 2.0 UNIVERSE Ninety-tw o public Web 2.0 companies identified: Our W eb 2.0 universe contains 92 companies, with a combined market cap of $40 billion (Figure 1). The average market cap for the group is ~$437 million (but a median of only $46 million), with average trailing revenue of $144 million (median $52 million). The companies are also generally profitable, with a median EBITDA margin of 17.6%. On a valuation basis, the overall average is 4.7x trailing revenue (median 1.3x) and 8.9x trailing EBITDA (median 6.7x). Twelve of the companies have more than 500 employees.
C omparable C o mpany A nalys is > W eb 2.0
C om pany Nam e
Acce le rize N ew Me dia, Inc. Actoz S of t C o., L td. AQ Inte ractive , Inc. As s ocia ted Media H oldings Inc. B igstring Corp. B e tawave Co rpora tion B e yond Commerce, Inc. B right T hings plc B roa dW ebAs ia Inc. C D C C orp. C hina G ate wa y C orpora tion C hine s e G amer International C ornerW orld C orporation C yberplex Inc. D AD A S pA D XN Holdings B hd D ibz Inte rnational, Inc. D igitalP ost Inte ra ctive , Inc. D igitalT own, Inc. D olphin D igital Me dia, Inc. E olith C o. L td. E xte ns ions , Inc. F inancia l Med ia G roup, Inc. F luid Mus ic Ca nada, Inc. F rogs te r Inter active P icture s AG G a ma nia D igital E ntertainment C o., L td. G a me On C o L td. G e oS e ntric O yj G iant Intera ctive G roup, Inc. G iga Media Ltd. G ravity C o., L td G ree, Inc. G ungH o O nline E ntertainment, Inc. H anbitS of t, Inc. IAC /InterActiveC orp. IAS E nergy, Inc. IdeaE dge, Inc. is ee media Inc. J umbuck E ntertainment P ty Ltd. J umpT V Inc. K a boos e Inc. K ings oft Co. Ltd. Lingo Media Corporation Live World Inc. LookS mart, Ltd. Magnitude Information S ys tems Inc. Mixi, Inc. Mode rn Times G roup Mtg AB Moggle , Inc MOK O.mobi L imited N E OW IZ G ames C orpora tion N etD ragon W ebS oft, Inc. N ete as e.com I nc. N eXplore Co rpora tion N gi G roup Inc. N orthgate Te chnologies L imited Open T e xt Co rp. Openwave S ys tems Inc. P e rf ect W orld C o., Ltd. P hotoChannel N etwork s Inc. Quepa s a C or p. OA O R B C Information S ys tems S handa Inter active E ntertainme nt L td. S hutte rf ly, Inc. S K C ommun ications Co., Ltd. S N AP Inte ra ctive , Inc. S N M G lobal H oldings S ocia l Media V e nures , Inc. S ohu. com Inc. S ite s earch C orporation S park N etworks , Inc. S pectrumDN A, Inc. T encent Hold ings L td. T he P arent C ompany T he 9 L imited T he S treet.com, Inc. T otal S port O nline A S T ree.C om, In c. U nis erve C ommunications Corp. U nited Online Inc. U OMO Media , Inc V a lueC lick Inc. V O IS , Inc. W ebze n Inc. W izza rd S of twa re Corpora tion W oozyF ly, Inc. W orlds .com Inc. W ynds torm C orporation XIN G AG Y e dangOnline Corp. Y nk K orea Inc. ZipLocal Inc. H igh Low A vera ge Median
L TM as o f T ic ker
1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 8 6 /30 /200 7 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 8 9 /30 /200 8 9 /30 /200 8 9 /30 /200 8 9 /30 /200 8 1 2/31 /200 8 1 /31 /200 9 1 2/31 /200 8 9 /30 /200 8 1 1/30 /200 8 NA 9 /30 /200 8 1 1/30 /200 8 NA 1 2/31 /200 7 9 /30 /200 8 1 1/30 /200 8 9 /30 /200 8 6 /30 /200 8 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 8 9 /30 /200 8 6 /30 /200 8 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 8 1 /31 /200 9 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 8 9 /30 /200 8 1 2/31 /200 8 1 2/31 /200 8 9 /30 /200 8 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 7 1 2/31 /200 8 1 2/31 /200 8 9 /30 /200 7 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 7 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 7 1 2/31 /200 8 9 /30 /200 8 1 2/31 /200 8 1 2/31 /200 8 1 /31 /200 9 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 8 8/2/2008 1 2/31 /200 8 1 2/31 /200 8 3 /31 /200 6 1 2/31 /200 8 1 1/30 /200 8 1 2/31 /200 8 1 /31 /200 9 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 8 9 /30 /200 8 9 /30 /200 8 NA 1 2/31 /200 8 1 2/31 /200 7 1 2/31 /200 7 1 2/31 /200 8 AC LZ A0 527 90 38 38 AS MH BS GC B W AV B Y OC AIM:B G T BW BA C HIN .A C GW Y G T S M:308 3 C WR L T S X:C X C M:D A D XN D IB Z D G LP DGT W DPDM A0 410 60 E XT I F NG P T S X:F MN F RG 61 80 38 12 G E O1 V GA G IG M GR VY T S E : 363 2 37 65 A0 470 80 IAC I IAS C.A OT C B B :ID AE IE E AS X:J MB T S X:J T V T S X:K AB 38 88 T S XV : LM LV WD LOOK MA G Y 21 21 MT G B MMOG MK B A0 956 60 77 7 NT E S N XP C 24 97 59 005 7 OT E X OP W V PW R D T S XV : P N QP S A R BC I S NDA S F LY A0 662 70 S T VI S N MN S MV I S OH U S T PC LOV S P XA 70 0 K ID S .Q N CT Y TSCM T OS O TR EE T S XV : US S U NT D U OMO V C LK V OIS W ZE N W ZE W ZY F W DD D W YND O1B C A0 527 70 A0 237 70 T S XV : ZIP
E xc h ange
OT C B B K OS E TSE OT C P K OT C B B OT C B B OT C B B AIM OT C P K N as da qG S OT C B B GTSM OT C B B TSX CM KL SE OT C P K OT C B B OT C B B OT C B B K OS E OT C P K OT C B B TSX XT R A GTSM TSE H LS E NYS E N as da qG S N as da qG M TSE OS E K OS E N as da qG S OT C B B OT C B B T S XV AS X TSX TSX S E HK T S XV OT C P K N as da qG M OT C B B TSE OM OT C B B AS X K OS E S E HK N as da qG S OT C P K TSE BS E N as da qG S N as da qG S N as da qG S T S XV N as da qC M R TS N as da qG S N as da qG S K OS E OT C B B OT C P K OT C P K N as da qG S OT C B B AME X OT C B B S E HK OT C P K N as da qG S N as da qG M OT C NO N as da qG M T S XV N as da qG S OT C B B N as da qG S OT C B B N as da qG M AME X OT C B B OT C B B OT C B B XT R A K OS E K OS E T S XV
Trading Currenc y H Q
US D KR W JPY US D US D US D US D GBP US D US D US D TWD US D C AD EUR MY R US D US D US D US D KR W US D US D C AD EUR TWD JPY EUR US D US D US D JPY JPY KR W US D US D US D C AD AU D C AD C AD HKD C AD US D US D US D JPY S EK US D AU D KR W HKD US D 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 HKD US D US D US D NOK US D C AD US D US D US D US D US D US D US D US D US D EUR KR W KR W C AD 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 U nited S ta tes T aiwan U nited S ta tes C ana da Ita ly Ma la 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 U nited S ta tes G ermany T aiwan J apan F inland C hina T aiwan S outh K orea J apan J apan S outh K orea U nited S ta tes C ana da U nited S ta tes C ana da Aus tra lia C ana da 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 U nited S ta tes Aus tra lia S outh K orea C hina C hina 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 C hina U nited S ta tes 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 orwa y U nited S ta tes C ana da U nited S ta tes C ana da U nited S ta tes U nited S ta tes S outh K orea U nited S ta tes U nited S ta tes U nited S ta tes U nited S ta tes G ermany S outh K orea S outh K orea C ana da
Current P ric e
0 .38 14 800 .00 43 200 .00 0 .00 0 .01 0 .13 1 .28 0 .01 0 .45 1 .26 0 .00 190 . 00 0 .12 1 .22 4 .29 0 .30 0 .00 0 .02 2 .50 0 .57 700 . 00 0 .15 0 .01 0 .33 7 .72 34 .40 93 000 .00 0 .03 7 .57 6 .18 0 .94 5 700 .00 127 500 . 00 5 030 .00 16 .60 0 .07 0 .39 0 .11 0 .48 0 .58 0 .58 3 .24 0 .80 0 .08 1 .19 0 .01 385 000 . 00 155 . 50 2 .30 0 .09 70 000 .00 4 .16 29 .37 0 .90 27 400 .00 43 .25 35 .11 1 .34 16 .99 1 .70 0 .92 0 .53 52 .18 10 .75 10 200 .00 0 .70 0 .00 0 .88 50 .00 3 .50 2 .25 0 .15 61 .80 0 .02 13 .25 2 .12 0 .04 5 .50 0 .04 5 .36 0 .11 10 .11 0 .30 2 .89 0 .69 0 .15 0 .17 0 .17 28 .28 9 810 .00 5 500 .00 0 .01
U S D Market C ap ($m)
1 0.4 9 4.7 2 3.4 0 .1 0 .7 3 .8 5 2.9 4 .3 3 8.2 13 5.9 0 .0 47 9.6 7 .7 5 3.5 9 2.6 1 8.9 0 .0 1 .1 6 7.9 2 7.7 2 4.6 1 4.2 0 .5 1 4.2 2 4.2 15 5.1 8 9.6 3 5.8 1,7 10.8 33 3.6 2 6.1 1,2 67.3 14 5.6 8 2.9 2,3 39.7 4 .9 1 6.6 4 .6 1 7.3 5 4.0 6 6.4 44 8.9 8 .4 2 .5 2 0.3 4 .4 58 9.1 1,2 51.5 8 3.5 5 .5 50 6.3 28 3.7 3,6 14.0 5 0.2 3 3.7 3 0.3 1,8 22.2 11 1.6 89 6.3 4 7.6 1 1.7 7 2.8 3,6 20.4 27 0.5 31 5.4 7 .6 0 .0 0 .0 1,9 05.8 2 8.2 4 6.2 7 .3 14,3 60. 1 0 .4 35 5.3 6 4.7 0 .2 5 4.9 0 .8 44 0.3 9 .4 87 7.1 2 .5 3 4.3 3 2.5 2 .6 8 .9 3 .1 19 3.0 11 5.4 1 0.1 0 .3 14,3 60. 1 0 .0 437.0 4 6.2
U S D LT M To tal R ev ($m)
3.8 70. 2 60. 1 0.1 0.1 7.7 1.8 0.2 0.0 428 .1 6.7 46. 3 1.3 46. 8 226 .0 76. 5 NA 0.4 NM NA 18. 8 NM 6.8 4.2 5.4 111 .9 74. 4 5.8 233 .3 190 .4 36. 8 29. 3 112 .1 52. 3 1 ,44 5.1 0.0 0.0 1.2 13. 0 13. 4 67. 0 120 .1 3.3 11. 8 65. 0 0.1 116 .9 1 ,60 8.2 NM 1.1 135 .6 87. 2 451 .2 NM 98. 0 135 .4 769 .3 199 .6 210 .2 16. 3 0.1 141 .9 522 .1 213 .5 155 .9 3.0 2.0 0.1 429 .1 NM 57. 3 0.1 1 ,04 6.6 112 .0 249 .9 71. 9 2.0 228 .6 24. 4 669 .4 0.6 625 .8 0.0 21. 4 6.1 0.0 0.1 NA 46. 5 51. 6 14. 7 2.7 1 ,608 .2 0.0 144.4 51. 9
US D L TM T otal E B ITDA ($m)
(4 .8) 1 4.0 4 .8 (2 .3) (2 .1) (1 1. 8) (8 .6) (1 .7) (4 .6) 1 8.8 (6 .6) 2 3.4 NM 3 .9 3 6.1 1 0.2 NM (3 .3) (2 .5) NM (0 .1) NM 1 .2 (8 .6) (3 .2) 1 6.2 1 9.2 (1 3. 1) 14 4.4 4 6.0 7 .1 1 0.5 2 0.0 (1 4. 7) 6 4.6 (0 .8) (4 .6) (4 .9) 4 .9 (8 .4) 6 .7 4 6.3 (1 .4) (0 .5) (2 .0) (3 .2) 4 4.5 25 9.4 (1 .1) (2 .2) 3 6.4 3 9.9 29 3.4 (4 .9) 3 0.2 2 3.8 19 5.0 (1 0. 2) 11 3.8 (0 .8) (1 1. 4) 1 8.5 23 9.9 2 8.4 1 4.7 0 .9 (0 .7) (0 .1) 18 0.5 (1 .1) 1 2.3 (2 .5) 51 1.9 (1 3. 5) 8 4.2 7 .0 (1 .0) (2 3. 9) 0 .1 15 3.9 (0 .5) 11 3.6 (1 .3) (4 .2) (6 .0) NM NM NM 1 4.9 1 1.5 (1 .1) (2 .8) 51 1. 9 -23.9 32.0 1 .2
E BITDA %
NM 20 .0% 8 .0% NM NM NM NM NM NM 4 .4% -9 8.9% 50 .5% NM 8 .4% 16 .0% 13 .3% NM NM NM NM -0 .3% NM 18 .3% NM -6 0.6% 14 .5% 25 .9% NM 61 .9% 24 .2% 19 .2% 36 .0% 17 .8% -2 8.2% 4 .5% NM NM NM 37 .2% -6 2.6% 9 .9% 38 .5% -4 2.5% -4 .3% -3 .1% NM 38 .0% 16 .1% NM NM 26 .9% 45 .7% 65 .0% NM 30 .8% 17 .6% 25 .3% -5 .1% 54 .1% -4 .9% NM 13 .1% 46 .0% 13 .3% 9 .4% 31 .4% -3 4.8% -6 0.5% 42 .1% NM 21 .5% NM 48 .9% -1 2.0% 33 .7% 9 .7% -5 0.6% -1 0.4% 0 .4% 23 .0% -7 8.2% 18 .2% NM -1 9.8% -9 8.2% NM NM NM 32 .0% 22 .4% -7 .6% NM 65 .0% -9 8.9% 6.9% 17 .6%
TE V/LT M R evenue
3.9 x 1.0 x 8.4 x 23.6 x 30.8 x 17.2 x 0.4 x 7.0 x 1.1 x 0.6 x 0.5 x 5.0 x 1.3 x 4.4 x 1.2 x 0.5 x 4.8 x 1.4 x 41.2 x 1.1 x 1.3 x 0.4 x 2.5 x 1.0 x 2.9 x 1.1 x 3.0 x 2.7 x 0.1 x 4.2 x 1.1 x 4.3 x 3.7 x 1.6 x 0.2 x 2.5 x 0.1 x 2.9 x 0.0 x 0.2 x 0.9 x 2.0 x 2.0 x 0.1 x 3.7 x 0.8 x 14.9 x 0.2 x 4.6 x 0.3 x 0.1 x 1.1 x 15.4 x 1.2 x 5.4 x 2.9 x 2.2 x 0.7 x 0.6 x 41.2 x 41.2 x 4 .7x 1.3 x
T E V/LT M E B IT DA
4.8x 1 0.2 x 1 3.2 x 3.8x 3.8x 8.4x 1.8x 5.6x 6.3x 9.1x 2.6x 1 1.1 x 7.9x 1 0.9 x 6.7x 1 3.6 x 3.4x 1.3x 1 0.0 x 0.1x 0.5x 6.4x 2 1.5 x 6.4x 8.8x 3.8x 3 0.4 x 2 9.5 x 4.9x 6.6x 9.1x 9.9x 3 0.4 x 3 0.4 x 8.9x 6.7x
E mployees
11 NA NA 3 4 45 NA 3 ,12 5 37 NA NA NA 574 NA NA 11 3 6 NA 2 22 29 NA NA NA NA NA NA 636 NA NA NA 3 ,20 0 NA NA NA 72 NA NA 2 ,27 1 NA NA 90 13 NA NA 3 NA NA NA NA 19 NA 286 3 ,40 0 627 NA NA 74 NA NA 514 NA 11 33 NA 3 ,19 7 15 183 7 6 ,19 4 347 NA 310 16 700 NA 1 ,46 9 NA 1 ,18 9 4 NA 110 14 1 NA 174 NA NA NA 2 0,22 2 20 ,22 2 0 1,071 142
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Figure 1. Web 2.0 Universe Summary Source. Capital IQ
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C A P I T A L M A R K E T S A C T I V I T Y (M & A A N D F I N A N C I N G ) April run-rate building up: The first two weeks of April has had nine financings, with the month-to-date total capital raise of $66.3 million. The month of April (so far) has registered three deals greater than or equal to $10 million and one deal greater than $15 million. The month of March registered 22 financings (total $130.7 million, average $5.9 million) compared to 25 financings announced in February, totalling $185.5 million, or $7.4 million on average (Figure 2). The average value for February was above the $6.8 million average for January, with four financings over $15 million in February (Twitter, Synthasite, Tremor Media, and Offerpal Media) vs. no deals over $15 million in January.
Financing Activity Last Three Months
200.0 8.0
180.0 7.0 160.0 6.0 140.0 5.0 120.0 (US$m) (US$m)
100.0
4.0
80.0 3.0 60.0 2.0 40.0 1.0 20.0
0.0 Feb-09 Mar-09 Total Average Apr-09
0.0
Figure 2. Financings, Last Three Months Source. Company reports
Collective Media largest deal in April: Two weeks into April and Collective Media tops the list with a $20 million raise, followed by The Rubicon Project and Cellufun with $13 million and $10 million, respectively (Figure 3). For additional details, see Figures 23 and 24 (at end of note).
(US$m) 10.0 15.0 20.0 25.0 30.0 35.0 40.0 0.0 5.0
Figure 3. Capital Market Activity, Last Three Months Source. Company reports
Financing Summary - Last Three Months
Twitter Collective Media Synthasite Tremor Media Vidyo Offerpal Media Imagini The Rubicon Project Buzznet Emergent Game Outbrain LendingClub SendMe Inc. Miva Auditude Cellufun Glam Media Visible Measures SuperSecret Tvtrip GoViral ScanScout Tongxue Oodle Greystripe Wamba DoubleTwist OMGPOP Socialtext TextDigger OneSpot Apture Simulmedia Mixpo FetchDog Virtual Fairground Tynt AnySource Media Pixazza TubeMogul 7 Billion People FamilyLink.com WhistleBox Hunch Outright Mendeley Sports Composite DE Bit.ly Tvinci Socialcast Filtrbox Scan & Target MMO Life AdultSpace Myngle Cake Financial 33Across fav.or.it Three Melons Apr-09 Mar-09 Feb-09
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Video continues to be the most active sector: Activity over the last three months was busiest in the video sector, with eight companies raising over $63.4 million (Figure 4). Social networking companies have the next highest totals, with 11 companies raising $54.4 million.
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Capital Market Activity by Sector - Last Three Months
70.0
60.0
50.0
40.0 (US$m)
30.0
63.4 54.4
20.0
41.9
41.4 37.0 30.6 22.5
10.0
20.0
16.0
15.0
12.0
12.0
9.0 Travel
5.5 Mobile Ad
4.3 Search
4.1 Publishing
Comment/Reputation
0.0 Gaming Wiki Mobile Media Microblog Social Networks Virtual Goods Lending Aggregation Video Ad Network Analytics
4.0 Virtual World
3.9 Infrastructure
3.1 Visual Commerce
2.0 Crowdsourced Content
2.0 Financial Services
1.4
1.3 SAS
1.3 Online Learning 1
# companies
8
11
5
7
2
4
4
1
3
1
1
1
1
1
1
1
1
1
1
1
1
1
1
Figure 4. Capital Market Activity, by Sector, Last Three Months Source. Company reports
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 ) Price Performance: Our W eb 2.0 index (market-cap weighted) underperformed the NASDAQ composite index from mid 2008 until recently when it has moved higher than the NASDAQ index (Figure 5).
Web 2.0 Index Price Performance
140
120
100
80
60
40
20
0 6/9/2008 7/7/2008 8/4/2008 9/1/2008 1/5/2009 2/2/2009 4/14/2008 4/28/2008 5/12/2008 5/26/2008 6/23/2008 7/21/2008 8/18/2008 9/15/2008 9/29/2008 1/19/2009 2/16/2009 3/2/2009 3/16/2009 3/30/2009 10/13/2008 10/27/2008 11/10/2008 11/24/2008 12/22/2008 4/13/2009 12/8/2008
^COMP - Share Pricing
Index: Web 2.0 X (Market Cap)
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Figure 5. Web 2.0 Price Performance Source. Capital IQ
A positive week: Most of the companies in our universe had positive stock price performances over the past week (for stocks with prices greater than $1) (Figure 6), with 34 companies showing positive returns on the week. HanbitSoft Inc. (A047080-KOSE) led the group with a 45.6% return over the past week. Sitesearch Corporation (STPC-OTCBB) had the worst return, dropping 30.0% in the week.
HanbitS of t, Inc. NEOWIZ Games Corporation Cy berplex Inc. Webz en Inc. Eolith Co. Ltd. S handa Interactive Entertainment Ltd. Y nk K orea Inc. Ngi Group Inc. A ctoz S of t Co., Ltd. Moggle, Inc Y edangOnline Corp. S K Communications Co., Ltd. CDC Corp. G igaMedia Ltd. Frogs ter Interactive Pictures A G S hutterf ly , Inc. V alueClick Inc. Northgate Technologies Limited S ohu. com Inc. Openw ave S y s tems Inc. Chines e Gamer International Tree. Com, Inc. TheS treet.com, Inc. PhotoChannel Netw orks Inc. United Online Inc. Perfect World Co., Ltd. G ree, Inc. Open Tex t Corp. Giant Interactive G roup, Inc. IA C/InterA ctiveCorp. Neteas e. com Inc. Tencent Holdings Ltd. GameOn Co Ltd. Gamania Digital Entertainment Co., Ltd. S park Netw orks , Inc. A Q Interactive, Inc. B ey ond Commerce, Inc. XING A G LookS mart, Ltd. Modern Times Group Mtg A B K ings of t Co. Ltd. Mix i, Inc. GungHo Online Entertainment, Inc. NetDragon WebS of t, Inc. The9 Limited DA DA S pA DigitalTow n, Inc. S ites earch Corporation -40. 0%
1 Week P rice P erformance
28. 4% 26. 1% 22. 2% 20.6% 20.1% 35.6%
45. 6% 42.6%
-0.8% -0.8% -0.8% -1.0% -1.5% -1.5% -1.5% -3.3% -6.4% -8. 7% -30. 0% -30.0% -16. 7% -20.0% -10. 0%
15. 6% 15.0% 13. 9% 10.9% 10. 5% 10. 5% 10.3% 10.3% 9. 9% 8. 8% 8. 2% 8. 1% 8. 0% 7. 4% 6. 5% 6. 2% 5. 7% 5.2% 5.2% 4.4% 4.3% 2.9% 2.7% 2. 5% 2. 3% 1.8% 0. 0% 0. 0%
0.0%
10. 0%
20.0%
30.0%
40. 0%
50. 0%
Figure 6. 1-Week Price Performance Source. Capital IQ
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INDUSTRY NEWS (PARTNERSHIPS, FINANCIAL RESULTS, NEW PRODUCTS)
K ey Developments
C ompany Headline Notes
O pen T ext C orp. (Na s daqG S : O T E X ) ac quired V izible Corporation from AT & T , Inc. (NY S E : T) a nd other sha reholders on April 8, 2009. O pen T ext will a dd the V i zible tea m to the company 's Digital M edia G roup. V izible emp loyees will remain in the T oronto area a t O pen T ext's R ic hmond H ill, O nta rio offic e. O pen T ext C orp. (Na s daqG S : O T E X ) completed the a cquisition of V izible Corporation from AT & T , Inc. (N Y S E : T ) a nd other sha reholders on April 8, 2009. B eyond Commerce Inc . a nnounc ed the appointment of R onald L . L oveles s, who owns and manages I ntegrity M a rketing and Cons ulting in R ogers , AR . , to the B oard of D irectors . He is a retired exec utive of W al-M art S tores Inc. H e s erved four years in the U S A ir F orce Intelligenc e S ervice and bega n his ca reer with W al-M a rt in 1964. G igaMedia L td. ann ounced that it will be la unching W a rhammer O nli ne: Age of R ec koning clos ed beta in T a iwa n. T he ga me wa s originally launched in N orth Americ a, E urope, a nd A ustra lia in S eptember 2008 a nd R uss ia in F ebrua ry 2009. J umpTV I nc. and U nivers ity of N ebra s ka a nnounced the debut of a grand sla m n ew video service dedicated to Nebras ka H usk ers ba s eba ll. B eginning immediately this online s ervic e will a ir all home baseball ga mes free to fa ns through the res t of this s ea son. T he onl ine des tination showca s es a sleek look and feel and delive rs the most c omplete a nd comprehensiv e v ideo covera ge of N ebra sk a baseball. H us kers .com is the single des tina tion for Nebras ka baseba l l fans to wa tc h live games with a ll the bes t content a nd features in one centra l l ocation. T he University of Nebras k a is the firs t J umpT V C ollegiate P artner to use NeuL ion technology . Nebra s ka, in conjunction with N euL ion, will offer exc lusiv e free live video strea ms of a ll home ba seba ll ga mes through H usk erV isi on, the athletic depa rtment's televis ion production group. J umpTV I nc. annou nced the launc h of a new online video portal dedicated to the Indy Ca r S eries . T he Indy ca r.c om Media C enter gives auto racing fa ns a cros s the globe a n opportunity to tune into their favorite multimedi a c ontent and on-demand programs online. P owered by lea ding s ports tec hnology compa ny N euLion, the I ndyc ar.com M edia C enter is an a ll-in-one online media s olution for both the Indy Ca r S eries a nd F irestone Indy L ights. T his is the firs t and only dedicated onli ne network that gives Indy Car S eries fans worldwide one central l ocation to a cc ess all things entertainment. The Media C enter u ses the la tes t NeuL ion technology a nd serv ice to deliver popula r Up to S peed segments, race highlights , vinta ge races , 2008 a rchiv es , podca s ting and all other v ideo ass ets . T he M edia C enter will a ls o provide live online event strea mi ng of I ndyC a r S eries a nd F irestone Indy L ights prac tic e a nd qua lifying ses si ons. T he I ndyC ar. com M edia C enter inc ludes a n integrated s earch feature that allows fans to view archived video by s ea rc hing by driver, tra ck , video title, etc. I t a ls o includes a built-i n option a llowing fa ns to easily s hare a udio and video clips on their pers ona l F ac ebook, M yS p a ce, twitter, d igg, or more than 20 other top soc ial networ L iveW orld Inc. reported preliminary earnings res ults for the firs t quarter of 2009. F or the quarter, the company wa s cas h flow pos itive by a pproxima tely $65, 000 for the firs t quarter of 2009. This is an improvement of a pprox ima tely $162, 000 compared to the firs t qua rter of 2008 a nd a pprox imately $97, 000 when c ompared to the fourth quarter of 2008. T he revenue for the fi rs t quarter was approximately $2.5 million. T his repres ented a decreas e of 15% compared to $3. 0 million in revenue for the fi rs t qua rter of 2008 and a 16% decrease compared to the $3.0 mi llion in revenue for the fourth quarter of 2008. Modern Times G roup MT G AB expec ts to initia te a s ha re repurc ha s e progra m to be approv ed a t its Annua l G eneral Meeting to be held on Ma y 11, 2009. U nder the proposal, M odern T imes will repurchase its o wn C las s C sha res . T he repurc hase ma y only be e ffected through a public offer directed to al l holders of C la s s C shares and s hall comprise all outs ta nding C la ss C s hares . T he purcha s e may be effected at a purchas e pric e corres ponding to not less tha n S E K 5 a nd not more than S E K 5. 1. T he total price will not exc eed S E K 1.88 milli on. P ayment for the C la s s C s hares s hall be ma de in ca s h. T he purpos e of the repurchas e is to ens ure the deliv ery of Cla s s B s hares under the P lan. The Company would a ls o s eek approva l to repurc ha se C la s s A and/or Cl a ss B s ha res that the Company's holding does not a t a ny time ex ceed 10% of the tota l number of shares in the C ompany. T he repurchas e of s ha res s hall take pla ce on the N asda q O MX S toc kholm a nd may only occ ur at a price within the s ha re price interva l regis tered at that time, where s hare pric e in terv al means the differenc e between the highes t buying price and l owest selling pric e. The purpose of the authoriza tion is to give the B oard of Di rec tors increas ed flex ibility to continuously dec A T&T , Inc . (NYS E : T); Open Text Corp. O pen T ext C orp. (N asdaqG S : O T E X ) a cquired V izible (Nas daqG S : OT E X); Viz ible C orporation Corpora tion from AT &T , Inc . (N Y S E : T) and other sha reholders .
B eyond Commerc e, Inc . (OT CB B: B Y OC) G igaMedia L td. (Nas daqG S : G IG M) J u mpTV Inc . (TS X : J TV)
B eyond Commerce I nc. Appoi nts R ona ld L . Loveles s to the B oa rd of Direc tors G igaMedia L td. to L aunch W a rhammer O nline Clos ed B eta in Ta iwan University of N ebrask a A thletics Teams Up with J umpTV Inc . for E x clus ive Live O nline V ideo S ervic e
J u mpTV Inc . (TS X : J TV)
Indy C ar S eries and JumpT V I nc. Announces New P a rtners hip
L iveWorld Inc . (OT CPK :L VWD )
L iveW orld Inc. R eports P rel imina ry E arnings R es ults for the F irst Q ua rter of 2009
Modern Times G ro up Mtg AB (OM: MTG Modern Times G roup MT G AB M ulls an E quity B uy back B)
Modern Times G ro up Mtg AB (OM: MTG Modern Times G roup Mtg A B P ropos es Amendment to B) its Artic les of As so ciation; P ropos es Div idend
Modern Times G roup Mtg AB announced at A nnual G enera l Meeting to be held on M a y 11, 2009, to propos e a mendment of the A rtic les of Ass ocia tion. T he company propos ed a dividend of S E K 5. 00 per share. T he record date is propos ed to be M ay 14, 2009. Modern Times G ro up Mtg AB (OM: MTG Upda te to Modern T imes G roup Mtg AB ’ s E quity B uybac k As of D ecember 31, 2008, Modern Times G roup Mtg A B ha s ma de no repurchases under the plan. B) Open T ext C orp. (Nas daqG S : OT E X) L ock heed Ma rtin Aeronautics E xtends Us e of O pen O pen T ext C orp. announced L oc kheed Ma rtin Aeronautic s J oint-S erv ice T echnical D a ta (J T D ) I ntegrated P roduct T ea m (I P T), based in F ort T ex t's D igital As set M a na gement S olution W orth, T exas , extended its us e of O pen T ext's Digital As s et Management (D AM) solution to ma na ge graphic s and rich media content for F 35 Lightning I I T echnic al Da ta . T he F -35 L ightning I I, or J oint S trike F ighter (J S F ), is a DoD multi -s ervice/mul ti-na tiona l effort to create a nextgeneration stea lth fighter plane. T he company behind the des ign of the J T D I P T s ys tem, and the J oint-S ervice Technica l D ata IP T team selec ted O pen Tex t to complement a n exis ting X ML -ba s ed content management s ys tem (C M S ). W ith its J av a E nterpris e E dition (JE E ) a rchitecture and open interfac e, the DAM s oftware from O pen T ext is seamles sly integra ted with a complex array of unique F -35 P rogra m T echnical D a ta development a nd support authoring work flows. Open T ext C orp. (Nas daqG S : OT E X) P erfec t World C o. , Ltd. (Nas daqG S : PW R D) Anthony G allo to J oin O pen T ext C orp. as V ice P res ident of Digi ta l Media E xperiences P erfect W orld L aunches Hot D a nce P arty 3.0 - B a by P l a n E xpa ns ion P ack O pen T ext C orp. announced tha t it ha s ac quired V izible Corpora tion. Anthony G a llo, former F ounder and C hief T echnology O fficer of V izi ble, who will join O pen T ex t a s V ic e P res ident of D igital M edia E x periences . P erfect W orld Co. L td. announced it launc hed 'H ot Dance P arty 3. 0-B aby P la n' e xpa nsion pac k. 'H ot Da nc e P a rty ' was P erfec t W orld's firs t 3D online ca s ual ga me. T he game ha s been well-received by online game play ers s ince its la unch beca us e of its excellent graphic des ign, innovative ga me s ys tems a nd continued introduction of new fea tures . I n 'Hot Dance P arty 3. 0-B aby P la n,' a 'B a by R ea ring S y stem' is a dded to the exis ting c la ss ic pla y mode, enhancing the fun of players ' game life. P la y ers who ha ve paired up through the game's 'P a rtnership S ys tem' ca n be bes towed a baby by an angel a nd enjoy the fun of rais ing the baby in game together. O n April 7, 2009, T encent Holdings L imited a nnounc ed that it’s B oard of Directors would seek a pprov al in the c ompany’s Annua l G eneral Meeting on May 13, 2009 , to commence a share buybac k progra m. Under the program, the C ompany will repurchas e up to 10% of the a ggrega te of th e nominal amount of the iss ued s hare capita l of the Compa ny a s a t the date of pass ing this res olution and the s a id approv al sha ll be limited ac cordingly. T he s hare buyba ck progra m s hall ex pire at the conclusio n of the nex t annual genera l meeting of the C ompany, the expiration of the period within which the next a nnua l general meeting of the C ompa ny is required by the Articles of As s ociation of the Company or any a p plicable la w to be h eld and the date on which the authority set out i n this resolu tion is revok ed or v aried by a n ordina ry resolution of the sha reholders in genera l meeting.
T enc en t Ho ldings Ltd. (S E H K: 700)
T enc ent H oldings Limited Mulls a s ha re buy back
Figure 7. Key Developments Source. Capital IQ
Page 9
VALUATION MMOG companies lead market-cap charts: Nine companies in our Web 2.0 universe top US$1 billion in market capitalization (Figure 8). Sixty-five of the 90 companies have market caps under US$100 million, with 28 under $10 million. Online gaming companies dominate the top of the list with four of the top five by market cap.
Market C ap (US D m)
Tencent Holdings L td. S handa Interac tive Entertainment L td. Neteas e.c om Inc . IA C/InterA c tiveCorp. S ohu.c om Inc . Open Tex t Corp. Giant Interactiv e Group, Inc . Gree, Inc . Modern Times G roup Mtg A B Perf ec t World Co., L td. V alueClick Inc . Mix i, Inc . NEOWIZ Games Corporation Chines e Gamer International K ings of t Co. L td. United Online Inc . The9 L imited GigaMedia L td. S K Communic ations Co., L td. NetDragon WebS of t, Inc . S hutterf ly, Inc . XING A G Gamania Digital Entertainment Co. , GungHo Online Entertainment, Inc . CDC Corp. Y edangOnline Corp. Openw ave S ys tems Inc . A c toz S of t Co., L td. DA DA S pA GameOn Co L td. Moggle, Inc HanbitS of t, Inc . OA O R B C Inf ormation S y s tems DigitalTow n, Inc . K aboos e Inc . TheS treet.com, Inc . Tree.Com, Inc. J umpTV Inc . Cyberplex Inc. B eyond Commerc e, Inc . NeXplore Corporation PhotoChannel Netw orks Inc . S park Netw orks , Inc . B roadWebA s ia Inc . G eoS entric Oy j Webz en Inc . Ngi Group Inc . Wiz z ard S of tw are Corporation Northgate Tec hnologies L imited S ites earc h Corporation Dolphin Digital Media, Inc . G ravity Co., L td Eolith Co. L td. Frogs ter Interactiv e Pictures A G A Q Interactiv e, Inc . L ookS mart, L td. DXN Holdings B hd J umbuck Entertainment Pty L td. IdeaEdge, Inc . Fluid Mus ic Canada, Inc . Ex tens ions , Inc . Quepas a Corp. A c celeriz e New Media, Inc . Y nk K orea Inc . UOMO Media, Inc Worlds .c om Inc . L ingo Media Corporation CornerW orld Corporation S NA P Interactiv e, Inc . S pectrumDNA , Inc . MOK O. mobi L imited IA S Energy, Inc . is eemedia Inc . Magnitude Inf ormation S ys tems Inc. B right Things plc B etaw av e Corporation Wy nds torm Corporation Wooz yFly, Inc . V OIS , Inc . L iveWorld Inc . DigitalPos t Interactiv e, Inc . Unis erve Communic ations Corp. B igs tring Corp. Financial Media Group, Inc . The Parent Company ZipLocal Inc . Total S port Online A S A s s oc iated Media Holdings Inc . China G atew ay Corporation S ocial Media V enures , Inc . Dibz International, Inc . S NM Global Holdings 0
Figure 8. Market Cap Ranking Source. Capital IQ
589.1 506.3 479. 6 448.9 440.3 355. 3 333.6 315.4 283.7 270.5 193. 0 155.1 145. 6 135.9 115. 4 111. 6 94.7 92.6 89.6 83.5 82.9 72. 8 67.9 66.4 64.7 54.9 54.0 53.5 52.9 50.2 47.6 46.2 38. 2 35.8 34.3 33.7 32.5 30.3 28. 2 27. 7 26. 1 24. 6 24. 2 23.4 20.3 18.9 17.3 16.6 14.2 14.2 11.7 10.4 10.1 9. 4 8. 9 8. 4 7. 7 7. 6 7. 3 5. 5 4. 9 4. 6 4. 4 4. 3 3. 8 3. 1 2. 6 2. 5 2. 5 1. 1 0. 8 0. 7 0. 5 0. 4 0. 3 0. 2 0. 1 0. 0 0. 0 0. 0 0. 0 500
896.3 877.1
1267.3 1251.5
1905.8 1822.2 1710.8
2339.7
3620. 4 3614.0
1,000
1,500
2,000
2,500
3, 000
3, 500
4,000
Page 10
TEV/Revenue (LTM) averages 4.2x: The overall average TEV/Revenue (LTM) multiple for our group is 4.2x – up from 3.6x last week (Figure 9). However, this is skewed by Gree (3633-TSE) at 41.2x and Beyond Commerce Inc. (BYOCOTCBB) at 30.8x. The median is only 1.3x. Note that we exclude multiples greater than 50x. Thirty-two companies have multiples under 1.5x.
T E V/L T M R evenue (x)
45. 0 40. 0 35. 0 30. 8 30. 0 25. 0 20. 0 15. 0 10. 0 8.4 9.2 7. 0 5.0 5.4 4.64.8 A verage, 4.2 3. 73.7 3.94.24.34.4 5. 0 2.52.52.7 2.92.92.9 3.0 1.41.6 2.02.02.2 0.40.40.50.50.60.60.7 0.80.91. 01.01.11.11.11.11.1 1.21.21.31. 3 0.00.00.00.10.10.10.10. 20.20.20.3 0. 0 23.6 17.2 15.4 14.9
41.2
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 (22), trading at an average multiple of 5.7x (down from 8.6x last week). On a geographic basis, the United States has the most companies (41), trading at an average of 4.8x revenue (up from 3.4x last week) (Figure 11). Eleven of the companies are Canadian (average 8.5x revenue).
Average TEV/LTM Revenue - By Exchange
20.0 17.2 18.0 16.0 14.9 14.0 14.9 12.0 10.0 6.9 8.0 5.7 5.0 6.0 4.3 4.1 3.0 1.9 1.9 1.7 1.4 4.0 1.3 0.9 0.6 0.4 0.4 2.0 0.2 0.1 0.0 OTCBB OTCPK NasdaqGM NasdaqGS NasdaqCM GTSM TSE KOSE RTS HLSE XTRA KLSE OSE OM TSX AMEX BSE AIM TSXV ASX
20.0 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0
(x)
(x)
Germany
United Kingdom
Malaysia
South Korea Hong Kong 9 1
United States
Japan
China
Canada
Finland
# Companies
1
5
2 13 22 1
1
9
2
5
4
5
1
2
1
2
1
7
1
1
# Companies
1
3
11
1
41
1
9
6
1
Australia
Taiwan
Sweden
2
Russia
1
2
Figures 10 & 11. TEV/Revenue Ranking (Exchange, Country) Source. Capital IQ
TEV/EBITDA (LTM) averages 8.8x: The average multiple for the 30 companies with positive EBITDA (and multiples under 100x) is 8.8x LTM EBITDA (slightly down from 9.1x last week), led by Tencent Holdings Ltd.’s (700-SEHK) 30.4x multiple
India 1
S N M G loba l Holdings C hina G atewa y C orporation O AO R B C Information S y s tems S ocial Media V enures , Inc . L iveWorld Inc . U nis erve C ommunications C orp. O penwave S y s tems Inc . N orthgate T echnologies L imited T he P a rent C ompany S handa Interac tive E ntertainment Ltd. T ree.C om, Inc. IAC /InterAc tiveC orp. C DC C orp. G a meO n C o Ltd. DXN Holdings B hd ZipLoca l Inc . DADA S pA Y nk K orea Inc . S pa rk N etwork s , Inc . S hutterfly , Inc . Ac toz S oft C o. , Ltd. J umbuck E nterta inment P ty L td. Modern T imes G roup Mtg AB K aboos e Inc . C y berplex Inc . G ungH o O nline E ntertainment, Inc. United O nline Inc . V alueC lic k Inc . G a mania Digital E ntertainment C o., Ltd. H anbitS oft, Inc . E olith C o. Ltd. G igaMedia Ltd. NetDra gon WebS oft, Inc . S NAP Intera ctive, Inc. S K C ommunica tions C o., Ltd. Y edangO nline C orp. is eemedia Inc . O pen T ex t C orp. Lingo Media C orporation P hotoC ha nnel Network s Inc. J umpT V Inc . XIN G AG K ings oft C o. Ltd. N E O WIZ G ames C orporation S ohu.com Inc . Acceleriz e New Media , Inc . Mix i, Inc . MO K O .mobi L imited F rogs ter Intera ctiv e P ic tures AG T otal S port O nline AS G eoS entric O y j DigitalP os t Intera ctive, Inc. Wiz z ard S oftware C orporation C ornerWorld C orporation As s ociated Media Holdings Inc . C hines e G amer Interna tional T encent Holdings Ltd. UO MO Media, Inc B right T hings plc B igs tring C orp. B ey ond C ommerc e, Inc. G ree, Inc .
Average TEV/LTM Revenue - By Country
17.2
15.7 8.5 5.0 4.8 4.3 1.9
1.4
1.4
1.3 0.9 0.6
0.5
0.4 0.1
Page 11
(Figure 12). Seventeen of the companies have EBITDA multiples under 7x. The median multiple is 6.7x (vs. 8.0x last week).
T E V/L T M E B IT DA (x)
35.0 30.0 25.0 21.5 20.0 15.0 10.0 5. 0 0.1 O AO R B C Information S y s tems 0. 0 0.5 S handa Interac tiv e E ntertainment L td. 1. 3 Northgate T ec hnologies L imited 1.8 G ameO n C o L td. A v erage, 8.8 4.8 4.9 5.6 6.3 6. 4 6.4 6.6 6.7 8.4 8. 8 9.1 9.1 10.9 11. 1 9.9 10.0 10.2 13.2 13.6 18.3 29. 5 30. 4
7.9
2.6
3.4
3.8
3.8
3. 8
G amania Digital E ntertainment C o., Ltd.
G ungHo O nline E ntertainment, Inc.
J umbuc k E ntertainment P ty Ltd.
NE O WIZ G ames C orporation
C hines e G amer International
Unis erv e C ommunic ations C orp.
DX N Holdings B hd
C DC C orp.
Modern T imes G roup Mtg AB
S K C ommunications C o. , L td.
S NAP Interac tive, Inc .
U nited O nline Inc .
IAC /InterAc tiveC orp.
O pen T ex t C orp.
G igaMedia Ltd.
NetDragon WebS oft, 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 (22), trading at an average multiple of 7.6x. On a geographic basis, the United States has the most companies (41), trading at an average of 8.3x EBITDA (Figure 14). Eleven of the companies are Canadian (average 10.5x EBITDA).
Average TEV/LTM EBITDA - By Exchange
35.0 30.4 30.0 25.0 (x) 20.0 10.0 9.7 9.1 7.6 7.4 7.2 6.7 6.4 5.6 5.1 2.4 OTCBB OTCPK NasdaqGM OSE RTS TSE HLSE NasdaqGS KOSE TSX ASX
(x) 35.0 30.0 29.5
Average TEV/LTM EBITDA - By Country
29.5 15.2 13.2
25.0 20.0 15.0 10.0 5.0 0.0 Canada China Hong Kong United States Japan Russia Finland Australia Norway Taiwan South Korea 13.2 12.6 10.5 10.2 9.6 8.3 7.2 6.4 5.6 3.7 1.8 Germany 2 0.0 India 1
15.0 10.0 5.0 OTCNO
1.8 0.5 NasdaqCM XTRA
# Companies
2
1
5
GTSM
0.0 AMEX
TSXV
2
5
13
1
22
5
2
4
1
1
9
7
2
1
# Companies
1
3
9
11
1
6
41
2
1
1
9
Figures 13 & 14. TEV/EBITDA Ranking (Exchange, Country) Source. Capital IQ
P/E (LTM) averages 15.8x: The average multiple for the 32 companies with positive earnings (and multiples under 100x) is 15.8x LTM EPS (slightly down from 16x last week), led by TheStreet.com’s (TSCM-NASDAQ) 68.3x multiple (Figure 15). Fourteen of the companies have P/E multiples under 10x. The median is just 10.9x.
T encent Holdings Ltd.
S park Network s , Inc.
V alueC lic k Inc.
S ohu.c om Inc.
Mix i, Inc.
Y edangO nline C orp.
Actoz S oft C o., L td.
K ings oft C o. L td.
S hutterfly , Inc .
C y berplex Inc.
XING AG
K aboos e Inc.
DADA S pA
Page 12
P /E LT M (x)
80. 0 70. 0 60. 8 60. 0 50. 0 40. 8 40. 0 30. 0 20. 0 10. 0 1. 1 0. 0 Northgate T echnologies L imited G iant Interac tive G roup, Inc . DXN Holdings B hd Modern T imes G roup Mtg AB T he9 L imited S handa Interac tive E ntertainment L td. Neteas e. com Inc . Worlds . com Inc . P erfect World C o. , L td. DADA S pA 1. 6 1. 7 2. 0 2. 4 A verage, 15.8 5. 4 7. 7 9. 3 9. 4 15. 7 17. 4 20. 1 20. 1 24. 9 27. 6 28. 9 37. 2 68. 3
11. 7 12. 3 13. 1 9. 9 10. 1 10. 6 11.1 11. 2
3. 0
3. 3
3. 6
3. 7
J umbuc k E ntertainment P ty L td.
G amania Digital E ntertainment C o. , L td.
NE O WIZ G ames C orporation
C hines e G amer International
G ameO n C o L td.
S NAP Interactive, Inc .
O pen T ex t C orp.
Ngi G roup Inc .
NetDragon WebS oft, Inc .
T encent Holdings L td.
S park Network s , Inc .
IAC /InterAc tiveC orp.
Y edangO nline C orp.
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 (22), trading at an average multiple of 12.9x. On a geographic basis, the United States has the most companies (41), trading at an average of 17.7x earnings (Figure 17). Eleven of the companies are Canadian (average 21.3x EPS).
Average P/E - By Exchange
80.0 70.0 60.0 50.0 (x) 40.0 30.0 20.0 10.0 OTCPK OTCBB NasdaqGM GTSM 0.0 RTS TSXV OSE TSE HLSE AMEX TSX 68.3 60.8 28.9 27.5
Actoz S oft C o. , Ltd.
70.0 60.0 50.0
19.5 17.4 12.9 11.8 11.2 10.6 9.4 9.3 XTRA 8.2 NasdaqGS
Average P/E - By Country
60.8
(x)
22.0
40.0 30.0 20.0 10.0 0.0 Germany Canada Finland Japan Russia United States China Australia Taiwan South Korea 9 Norway 1 21.3 18.8 17.7 11.2 10.6 9.4 9.3 7.4
T heS treet. com, Inc .
G igaMedia L td.
C yberplex Inc .
S ohu. com Inc .
K ings oft C o. Ltd.
XING AG
Mix i, Inc .
S hutterfly , Inc .
ASX
6.0 0.0
# Companies
5
1
5
9
2
5
1
22
4
2
1
2
2
13
# Companies
1
11
6
41
3
1
2
2
9
Figures 16 & 17. P/E Ranking (Exchange, Country) Source. Capital IQ
Page 13
UPCOMING EVENTS
E arnings Calendar
C ompany
S hutterfly , Inc . (N asdaqG S : S F L Y ) I AC /I nterAc tiveC orp. (Nas daqG S :I AC I) T ree. C om, Inc . (N asdaqG M :T R E E )
Figure 18. Earnings Calendar Source. Company reports
D ate & T ime
W ednes day, April 29, 2009 5:00 P M (E D T) W ednes day, April 29, 2009 11:00 AM (E D T) F riday, M ay 01, 2009 11:00 AM (E DT )
Qu arter
Q 1 2009 Q 1 2009 Q 1 2009
Conf Call D etails
877-591-4956 NA 877-407-0782
Page 14
C omparable C ompany Analys is > W eb 2 .0
P ric e P erformanc e
C ompa ny Na me Acce le riz e N ew Me dia, Inc. Actoz S of t C o., L td. AQ Inte ractive , Inc. As s ocia ted Media H oldings Inc. B igstring Corp. B e tawave Corpora tion B e yond Commerce, Inc. B right T hings plc B roa dW ebAs ia Inc. C DC C orp. C hina G ate wa y C orpora tion C hine s e G amer International C ornerW orld C orporation C yberplex Inc. D ADA S pA D XN Holdings B hd D ibz Inte rnational, Inc. D igitalP ost Inte ra ctive , Inc. D igitalT own, Inc. D olphin Digital Me dia, Inc. E olith C o. L td. E xte ns ions , Inc. F inancia l Media G roup, Inc. F luid M us ic Ca nada, Inc. F rogs te r Interactive P icture s AG G a ma nia Digital E ntertainment C o., L td. G a me On C o L td. G e oS e ntric O yj G iant Intera ctive G roup, Inc. G iga Media Ltd. G ravity C o., L td G ree, Inc. G ungH o O nline E ntertainment, Inc. H anbitS oft, Inc. IAC /InterActiveC orp. IAS E nergy, Inc. IdeaE dge, Inc. is ee media Inc. J umbuck E ntertainment P ty Ltd. J umpT V Inc. K a boos e Inc. K ings oft Co. Ltd. Lingo Media Corporation Live World Inc. LookS mart, Ltd. M agnitude Information S ys tems Inc. M ixi, Inc. M ode rn Times G roup Mtg AB M oggle , Inc M OK O.mobi L imited N E OW IZ G ames C orpora tion N etDragon W ebS oft, Inc. N ete as e.com I nc. N eXplore Corpora tion N gi G roup Inc. N orthgate Te chnologies L imited Open T e xt Corp. Openwave S ys tems Inc. P e rfect W orld C o., Ltd. P hotoChannel N etwork s Inc. Quepa s a C orp. OA O R B C Information S ys tems S handa Interactive E ntertainme nt L td. S hutte rf ly, Inc. S K C ommunications Co., Ltd. S N AP Inte ra ctive , Inc. S N M G lobal H oldings S ocia l Media V e nures , Inc. S ohu. com Inc. S ite s earch C orporation S park N etworks , Inc. S pectrumDN A, Inc. T encent Holdings L td. T he P arent C ompany T he 9 L imited T he S treet.com, Inc. T otal S port Online A S T ree.C om, Inc. U nis erve C ommunications Corp. U nited Online Inc. U OMO Media , Inc V a lueC lick Inc. V O IS , Inc. W ebze n Inc. W iz za rd S of twa re Corpora tion W oozyF ly, Inc. W orlds .com Inc. W ynds torm C orporation XIN G AG Y e dangOnline Corp. Y nk K orea Inc. ZipLocal Inc. H igh Low A vera ge M edian C ur rency US D KR W JPY US D US D US D US D GBP US D US D US D TWD US D C AD E UR MY R US D US D US D US D KR W US D US D C AD E UR TWD JPY E UR US D US D US D JPY JPY KR W US D US D US D C AD AU D C AD C AD HKD C AD US D US D US D JPY SE K US D AU D KR W HKD US D US D JPY IN R 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 HKD US D US D US D N OK US D C AD US D US D US D US D US D US D US D US D US D E UR KR W KR W C AD T ic ker A CL Z A 052 790 3 838 A S MH B S GC B W AV B Y OC A IM:B G T B W BA C H IN .A CGWY G TS M:3 083 CWR L T S X:CX C M :DA DXN DIB Z DG L P DG T W DP DM A 041 060 E XT I F NGP T S X:F MN FR G 6 180 3 812 G E O1V GA G IG M G RV Y T S E :36 32 3 765 A 047 080 I ACI I AS C .A O TC B B :ID AE IEE A S X:J M B T S X:J T V T S X:K AB 3 888 T S XV :LM L VW D L OOK M AG Y 2 121 MT G B M MOG MKB A 095 660 7 77 NT E S N XP C 2 497 5 900 57 O TE X O PW V P W RD T S XV :P N Q PSA R BC I S NDA S F LY A 066 270 S T VI S NM N S MVI S OH U S TPC L OV S P XA 7 00 K IDS .Q NC TY T S CM T OS O TR EE T S XV :U S S UNTD U OMO V CL K V OIS W ZE N W ZE W ZY F W DDD W YND O 1B C A 052 770 A 023 770 T S XV :ZIP E x change OT C B B KO SE TSE OT C P K OT C B B OT C B B OT C B B AI M OT C P K N as da qG S OT C B B GT S M OT C B B TSX CM KL SE OT C P K OT C B B OT C B B OT C B B KO SE OT C P K OT C B B TSX XT R A GT S M TSE H LS E NYS E N as da qG S N as da qG M TSE OS E KO SE N as da qG S OT C B B OT C B B T S XV AS X TSX TSX S E HK T S XV OT C P K N as da qG M OT C B B TSE OM OT C B B AS X KO SE S E HK N as da qG S OT C P K TSE BS E N as da qG S N as da qG S N as da qG S T S XV N as da qC M R TS N as da qG S N as da qG S KO SE OT C B B OT C P K OT C P K N as da qG S OT C B B AM E X OT C B B S E HK OT C P K N as da qG S N as da qG M OT C N O N as da qG M T S XV N as da qG S OT C B B N as da qG S OT C B B N as da qG M AM E X OT C B B OT C B B OT C B B XT R A KO SE KO SE T S XV U S D Ma rket C ap ($m) 1 0.4 9 4.7 2 3.4 0 .1 0 .7 3 .8 5 2.9 4 .3 3 8.2 13 5.9 0 .0 47 9.6 7 .7 5 3.5 9 2.6 1 8.9 0 .0 1 .1 6 7.9 2 7.7 2 4.6 1 4.2 0 .5 1 4.2 2 4.2 15 5.1 8 9.6 3 5.8 1,7 10. 8 33 3.6 2 6.1 1,2 67. 3 14 5.6 8 2.9 2,3 39. 7 4 .9 1 6.6 4 .6 1 7.3 5 4.0 6 6.4 44 8.9 8 .4 2 .5 2 0.3 4 .4 58 9.1 1,2 51. 5 8 3.5 5 .5 50 6.3 28 3.7 3,6 14. 0 5 0.2 3 3.7 3 0.3 1,8 22. 2 11 1.6 89 6.3 4 7.6 1 1.7 7 2.8 3,6 20. 4 27 0.5 31 5.4 7 .6 0 .0 0 .0 1,9 05. 8 2 8.2 4 6.2 7 .3 14, 360 .1 0 .4 35 5.3 6 4.7 0 .2 5 4.9 0 .8 44 0.3 9 .4 87 7.1 2 .5 3 4.3 3 2.5 2 .6 8 .9 3 .1 19 3.0 11 5.4 1 0.1 0 .3 C urrent Pric e 0.3 8 1 4,80 0.0 0 4 3,20 0.0 0 0.0 0 0.0 1 0.1 3 1.2 8 0.0 1 0.4 5 1.2 6 0.0 0 19 0.0 0 0.1 2 1.2 2 4.2 9 0.3 0 0.0 0 0.0 2 2.5 0 0.5 7 70 0.0 0 0.1 5 0.0 1 0.3 3 7.7 2 3 4.4 0 9 3,00 0.0 0 0.0 3 7.5 7 6.1 8 0.9 4 5,70 0.0 0 12 7,50 0.0 0 5,03 0.0 0 1 6.6 0 0.0 7 0.3 9 0.1 1 0.4 8 0.5 8 0.5 8 3.2 4 0.8 0 0.0 8 1.1 9 0.0 1 38 5,00 0.0 0 15 5.5 0 2.3 0 0.0 9 7 0,00 0.0 0 4.1 6 2 9.3 7 0.9 0 2 7,40 0.0 0 4 3.2 5 3 5.1 1 1.3 4 1 6.9 9 1.7 0 0.9 2 0.5 3 5 2.1 8 1 0.7 5 1 0,20 0.0 0 0.7 0 0.0 0 0.8 8 5 0.0 0 3.5 0 2.2 5 0.1 5 6 1.8 0 0.0 2 1 3.2 5 2.1 2 0.0 4 5.5 0 0.0 4 5.3 6 0.1 1 1 0.1 1 0.3 0 2.8 9 0.6 9 0.1 5 0.1 7 0.1 7 2 8.2 8 9,81 0.0 0 5,50 0.0 0 0.0 1 1 Wk 18.8 % 15.6 % 0.0 % 42.9 % -6.7 % 0.0 % -0.8 % -14. 5% -11. 8% 10.5 % 1 00. 0% 8.0 % -14. 3% 35.6 % -8.7 % 5.4 % -90. 0% -25. 0% -16. 7% -14. 9% 26.1 % -25. 0% -15. 8% -45. 0% 10.3 % 1.8 % 2.3 % -25. 0% 4.3 % 10.5 % 10.6 % 5.2 % -1.5 % 45.6 % 2.9 % 55.6 % 14.7 % 10.0 % -4.0 % 5.5 % 0.0 % -1.5 % -3.6 % -38. 5% -0.8 % -33. 3% -1.5 % -1.0 % 15.0 % 20.0 % 42.6 % -3.3 % 2.7 % 20.0 % 20.1 % 8.8 % 4.4 % 8.1 % 5.2 % 6.2 % -7.1 % 28.0 % 22.2 % 10.3 % 10.9 % -6.7 % -100 .0% -26. 7% 8.2 % -30. 0% 0.0 % -21. 1% 2.5 % 59.1 % -6.4 % 6.5 % 0.0 % 7.4 % -20. 0% 5.7 % 37.5 % 9.9 % 30.4 % 28.4 % 50.0 % 0.0 % 0.0 % 41.7 % -0.8 % 13.9 % 20.6 % -66. 7% 1 00. 0% -100 .0% 3.3% 3.6 % 1 Mth 7 2.7 % 3 2.7 % 3 0.9 % 4 2.9 % 3.7% -27. 8% 1 32.7 % -14. 5% -40. 0% 3 8.5 % 1 00.0 % 2 4.2 % -14. 3% 1 65.2 % -13. 2% 5.4% -90. 0% 2 75.0 % 2 5.0 % 1 6.3 % 2 1.7 % -25. 0% -36. 0% 0.0% 1 08.6 % 1 7.8 % 1 5.8 % 0.0% 2.9% 9.5% 5 1.6 % 1 0.0 % 1 0.9 % 4 9.3 % 1 3.8 % 0.0% -2.5 % 3 7.5 % 6.7% 3 8.1 % 6 5.7 % 2 0.9 % -11. 1% -60. 0% 1 9.0 % -47. 4% 2 2.2 % 2 3.9 % 1 5.0 % 5 0.0 % 7 9.3 % 2 4.6 % 3 2.1 % 5 5.2 % 5 7.5 % 4 2.5 % 1 0.5 % 7 1.8 % 3 7.8 % 4.9% -18. 6% 1 18.8 % 4 3.7 % 2 0.9 % 3 7.8 % -26. 3% -100 .0% -26. 7% 3.2% NM -1.7 % -25. 0% 3 1.5 % 7 5.0 % 1 4.1 % 9.3% 0.0% 2 9.4 % -20. 0% 3 1.1 % 8 3.3 % 5 6.3 % -25. 0% 9 2.7 % 7 2.5 % 0.0% -5.6 % 4 1.7 % 1 3.1 % 4 0.1 % 5 7.6 % -66. 7% 2 75.0 % -100 .0% 23.8% 1 9.0 % 3 Mth 8 .6% 48 .0% 50 .0% -8 0.0% -1 7.6% -3 5.0% 25 .5% 17 .6% -1 8.2% 12 .5% 0 .0% 10 6.5% -5 2.0% 24 8.6% -3 9.6% -1 9.2% -9 0.0% -4 0.0% -2 3.1% -2 7.8% 18 .6% 18 5.7% -9 0.0% -5 .7% 28 .7% 52 .5% -2 4.3% -2 5.0% 28 .3% -1 0.2% 59 .3% 14 .9% 17 .1% 51 .1% 12 .4% 25 0.0% -5 3.0% -1 2.0% 23 .1% 93 .3% 46 .8% 17 .8% -2 0.0% 6 .7% -2 0.7% -6 3.0% -3 0.5% -5 .2% 53 .3% 80 .0% 24 9.1% 42 .5% 60 .7% -1 0.0% -4 6.0% -1 8.1% 12 .3% 83 .6% 0 .1% -2 .9% -4 9.7% -1 2.5% 94 .3% 43 .5% 63 .2% -3 3.3% -10 0.0 % -1 5.4% 22 .9% NM -1 2.5% 0 .0% 43 .7% -7 0.8% -6 .1% -3 7.5% -2 0.0% 32 .9% 0 .0% -1 3.8% 57 .1% 62 .5% -2 5.0% 20 1.0% -1 0.4% NM 13 .3% 41 .7% -6 .6% 42 .6% 27 .5% -5 0.0% 25 0.0% -10 0.0 % 15.7% 0 .1% 6 Mth -2 4.0 % 74 .9% 8 .3% -7 5.0 % -4 8.1 % -3 8.1 % -3 9.0 % 56 .4% -6 9.8 % -1 3.1 % -8 6.7 % 18 1.5% -4 0.0 % 17 1.1% -3 6.5 % -1 5.7 % -9 8.0 % -5 7.1 % -4 1.2 % -3 7.4 % 6 .1% 50 .0% -9 7.3 % -1 7.5 % 69 .7% 12 5.6% 25 .2% -2 5.0 % 24 .9% -3.5% 13 .3% NM 15 .2% 52 .4% 14 .4% -5 0.0 % -8 1.4 % 57 .1% -2.0% -1 9.4 % -2 1.6 % 88 .4% -5 2.4 % 14 .3% -3 3.1 % -5 0.0 % -4 0.3 % -9.3% NM 63 .6% 30 3.5% 30 .0% 40 .5% 30 .4% -6 4.9 % -4 2.9 % 37 .4% 59 .5% -8.2% -1 5.0 % -6 2.1 % -8 6.9 % 10 1.6% 64 .9% 12 .2% 25 0.0% -1 00.0 % 44 .3% 1 .2% NM -1 9.9 % -2 5.0 % 37 .0% -9 8.4 % -1 3.9 % -4 3.5 % -2 0.0 % 14 4.4% -5 0.0 % -3 2.2 % -4 2.1 % 49 .1% -6 0.0 % 18 9.0% -1 8.8 % NM -2 2.7 % -3 2.0 % 13 .6% 45 .3% -3 3.7 % -7 5.0 % 30 3.5% -1 00.0 % 4.3% -1 5.4 % 1 Yr -47 .2% 91.7 % -78 .2% 81.8 % -92 .2% -55 .2% -44 .3% -41 .2% -85 .0% -66 .1% -96 .7% 74.3 % -84 .0% 62.7 % -66 .7% -46 .8% -98 .0% -92 .9% 13.6 % NM -33 .0% 0.0 % -96 .0% NM 71.9 % 9.9 % -8. 8% -50 .0% -35 .5% -59 .2% -35 .2% NM -47 .7% 9.3 % -61 .0% -69 .6% -45 .1% -65 .6% -20 .0% -3. 3% -58 .3% 13.7 % -58 .3% -50 .0% -67 .9% -47 .4% -58 .5% -62 .6% NM 2 46. 2% 1 06. 2% -57 .9% 44.4 % NM -81 .2% -89 .1% 1.4 % -44 .9% -38 .0% -51 .8% -68 .8% -94 .2% 73.9 % -26 .4% -33 .1% 0.0 % -100 .0% NM -11 .5% NM -47 .3% NM 32.6 % -99 .5% -34 .2% -77 .1% -33 .3% NM -88 .6% -48 .8% -72 .5% -46 .1% NM -3. 7% -68 .5% NM -62 .2% NM -22 .5% -9. 2% -58 .5% -96 .3% 2 46. 2% -100 .0% -33.2% -47 .3% 52 We ek -51. 3% -7.5 % -81. 6% -96. 0% -93. 6% -69. 0% -61. 2% -65. 4% -84. 5% -68. 0% -95. 6% -4.0 % -85. 0% 8.9 % -73. 5% -47. 3% -98. 0% -94. 6% -59. 0% -49. 6% -44. 9% -85. 1% -99. 2% -83. 8% -1.7 % -6.9 % -43. 1% -57. 1% -56. 0% -68. 9% -53. 0% -9.5 % -70. 7% -28. 2% -67. 1% -80. 0% -86. 2% -69. 4% -26. 7% -54. 7% -59. 4% -24. 8% -63. 6% -89. 3% -75. 2% -66. 7% -59. 8% -65. 8% 0.0 % -10. 0% -3.3 % -69. 4% 2.2 % -37. 9% -83. 6% -90. 8% -10. 2% -47. 5% -49. 3% -59. 0% -73. 4% -94. 3% 12.0 % -40. 2% -48. 2% -35. 2% -100 .0% -82. 4% -45. 4% -30. 0% -51. 6% -75. 0% -14. 2% -99. 6% -53. 5% -77. 7% -60. 0% -50. 5% -91. 1% -57. 1% -86. 3% -51. 9% -94. 6% -35. 1% -70. 6% -96. 3% -62. 2% -80. 0% -39. 4% -21. 8% -64. 3% -97. 5% 12.0 % -100 .0% -57.6% -60. 6%
437.0
Figure 19. Price Performance Source. Capital IQ
Page 15
C omparable C ompany A nalys is > W eb 2.0
V aluatio n Multiples C om pany Nam e
Acce le rize N ew Me dia, Inc. Actoz S of t C o., L td. AQ Inte ractive , Inc. As s ocia ted Media H oldings Inc. B igstring Corp. B e tawave Corpora tion B e yond Commerce, Inc. B r ight T hings plc B r oa dW ebAs ia Inc. C D C C orp. C hina G ate wa y C orpora tion C hine s e G amer International C ornerW orld C orporation C yberplex Inc. D AD A S pA D XN Holdings B hd D ibz Inte rnational, Inc. D igitalP ost Inte ra ctive , Inc. D igitalT own, Inc. D olphin D igital Me dia, Inc. E olith C o. L td. E xte ns ions , Inc. F inancia l Media G roup, Inc. F luid M us ic Ca nada, Inc. F rogs te r Interactive P icture s AG G a ma nia D igital E ntertainment C o., L td. G a me O n C o L td. G e oS e ntric O yj G iant Intera ctive G roup, Inc. G iga Media Ltd. G ravity C o., L td G ree, Inc. G u ngH o O nline E ntertainment, Inc. H anbitS of t, Inc. IAC /InterActiveC orp. IAS E nergy, Inc. IdeaE dge, Inc. is ee media Inc. J umbu ck E ntertainment P ty Ltd. J umpT V Inc. K a boos e Inc. K ings oft Co. Ltd. Lingo M edia Corporation Live World Inc. LookS mart, Ltd. Magnitu de Information S ys tems Inc. Mixi, Inc. Mode rn Times G roup Mtg AB Moggle , Inc MOK O.mobi L imited N E OW IZ G ames C orpora tion N etD ragon W ebS oft, Inc. N ete as e.com I nc. N eXplore Corpora tion N gi G roup Inc. N orthgate Te chnologies L imited Open T e xt Corp. Openwave S ys tems Inc. P e rf ect W or ld C o., Ltd. P hotoChannel N etwork s Inc. Qu epa s a C orp. OA O R B C Information S ys tems S handa Interactive E ntertainme nt L td. S hutte rf ly, Inc. S K C ommunications Co., Ltd. S N AP Inte ra ctive , Inc. S N M G lobal H oldings S ocia l Media V e nures , Inc. S ohu. com Inc. S ite s earch C orporation S park N etworks , Inc. S pectrumDN A, Inc. T encent Holdings L td. T he P arent C ompany T he 9 L imited T he S treet.com, Inc. T otal S port Online A S T r ee.C om, Inc. U nis erve C ommu nications Corp. U nited Online Inc. U OMO Media , Inc Va lueC lick Inc. VO IS , Inc. W ebze n Inc. W iz za rd S of twa re Corpora tion W oozyF ly, Inc. W orlds .com Inc. W ynds torm C orporation XIN G AG Y e dangOnline Corp. Y nk K orea Inc. ZipLocal Inc. H igh Low A verage Median
S ec to r
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P r imary E xc hange
OT C B B K OS E TSE OT C P K OT C B B OT C B B OT C B B AIM OT C P K N as da qG S OT C B B GT S M OT C B B TSX CM KL SE OT C P K OT C B B OT C B B OT C B B K OS E OT C P K OT C B B TSX XT R A GT S M TSE H LS E NYS E N as da qG S N as da qG M TSE OS E K OS E N as da qG S OT C B B OT C B B T S XV AS X TSX TSX S E HK T S XV OT C P K N as da qG M OT C B B TSE OM OT C B B AS X K OS E S E HK N as da qG S OT C P K TSE BS E N as da qG S N as da qG S N as da qG S T S XV N as da qC M R TS N as da qG S N as da qG S K OS E OT C B B OT C P K OT C P K N as da qG S OT C B B AM E X OT C B B S E HK OT C P K N as da qG S N as da qG M OT C NO N as da qG M T S XV N as da qG S OT C B B N as da qG S OT C B B N as da qG M AM E X OT C B B OT C B B OT C B B XT R A K OS E K OS E T S XV
Tic ker
AC LZ A 052 790 3 838 AS MH BS G C B WA V BYO C AIM :B G T B WB A C HIN .A CG W Y G T S M :308 3 CWR L T S X:C X CM:DA D XN D IB Z DGLP D G TW DP DM A 041 060 E XT I F NGP T S X:F MN F RG 6 180 3 812 G E O1V GA G IG M G R VY T S E :3 632 3 765 A 047 080 IAC I IA S C .A OT C B B :IDA E IE E AS X:J MB T S X:J T V TS X:K AB 3 888 TS XV :LM LV W D L OOK MAG Y 2 121 MT G B MMO G MK B A 095 660 777 NT E S N XP C 2 497 59 005 7 O TE X OP W V PW R D T S XV :P N QP S A R B CI S NDA S FL Y A 066 270 S T VI S N MN S MV I S OH U STPC L OV S P XA 700 K ID S .Q NC TY TSCM T OS O TR E E T S XV :U S S U N TD U OMO VC LK V OIS W ZE N W ZE W ZY F W DD D W YND O 1B C A 052 770 A 023 770 T S XV:ZIP
US D Market Cap ($m)
10. 4 94. 7 23. 4 0. 1 0. 7 3. 8 52. 9 4. 3 38. 2 1 35. 9 0. 0 4 79. 6 7. 7 53. 5 92. 6 18. 9 0. 0 1. 1 67. 9 27. 7 24. 6 14. 2 0. 5 14. 2 24. 2 1 55. 1 89. 6 35. 8 1,7 10. 8 3 33. 6 26. 1 1,2 67. 3 1 45. 6 82. 9 2,3 39. 7 4. 9 16. 6 4. 6 17. 3 54. 0 66. 4 4 48. 9 8. 4 2. 5 20. 3 4. 4 5 89. 1 1,2 51. 5 83. 5 5. 5 5 06. 3 2 83. 7 3,6 14. 0 50. 2 33. 7 30. 3 1,8 22. 2 1 11. 6 8 96. 3 47. 6 11. 7 72. 8 3,6 20. 4 2 70. 5 3 15. 4 7. 6 0. 0 0. 0 1,9 05. 8 28. 2 46. 2 7. 3 14,3 60. 1 0. 4 3 55. 3 64. 7 0. 2 54. 9 0. 8 4 40. 3 9. 4 8 77. 1 2. 5 34. 3 32. 5 2. 6 8. 9 3. 1 1 93. 0 1 15. 4 10. 1 0. 3 14,3 60. 1 0. 0 437. 0 34. 0
TE V/LT M R evenu e
3.9 x 1.0 x 8.4 x 23.6 x 30.8 x 17.2 x 0.4 x 0.0 x 9.2 x 7.0 x 1.1 x 0.6 x 0.5 x 5.0 x 1.3 x 4.4 x 1.2 x 0.5 x 4.8 x 1.4 x 41.2 x 1.1 x 1.3 x 0.4 x 2.5 x 1.0 x 2.9 x 1.1 x 3.0 x 2.7 x 0.1 x 4.2 x 1.1 x 4.3 x 3.7 x 1.6 x 0.2 x 2.5 x 0.1 x 2.9 x 0.0 x 0.2 x 0.9 x 2.0 x 2.0 x 0.1 x 3.7 x 0.8 x 14.9 x 0.2 x 4.6 x 0.3 x 0.1 x 1.1 x 15.4 x 1.2 x 5.4 x 2.9 x 2.2 x 0.7 x 0.6 x 41.2 x 4.2x 1.3 x
TE V/ NTM R evenu e
0.5x 0.8x 1.4x 0.4x 1.0x 1.1x 2.3x 0.1x 1.9x 1.2x 0.9x 3.2x 0.3x 0.7x 1.4x 3.2x 0.1x 1.1x 1.0x
TE V/LT M E BITDA
4.8 x 10.2 x 18.3 x 13.2 x 3.8 x 3.8 x 8.4 x 1.8 x 5.6 x 6.3 x 9.1 x 2.6 x 11.1 x 7.9 x 10.9 x 6.7 x 13.6 x 3.4 x 1.3 x 10.0 x 0.1 x 0.5 x 6.4 x 21.5 x 6.4 x 8.8 x 3.8 x 30.4 x 29.5 x 4.9 x 6.6 x 9.1 x 9.9 x 30.4 x 0.1 x 8.8x 6.7 x
TE V/NTM E BITDA
8.4x 8.8x 5.7x 3.5x 6.2x 8.1x 8.7x 2.4x 6.0x 2.8x 5.8x 7.4x 3.1x 5.7x 8.8x 2.4x 5.9x 5.9x
P /LT M E P S
15 .7x 24 .9x 11 .2x 5. 4x 3. 7x 20 .1x 9. 3x 1. 7x 10 .6x 17 .4x 7. 7x 11 .7x 28 .9x 3. 6x 27 .6x 9. 4x 2. 4x 10 .1x 2. 0x 37 .2x 1. 6x 3. 0x 60 .8x 9. 9x 12 .3x 11 .1x 40 .8x 1. 1x 68 .3x 3. 3x 20 .1x 13 .1x 68 .3x 1. 1x 15.8x 10 .9x
P /NT M E P S
1 9.4 x 1 2.2 x 1 2.6 x 9.7x 2 8.5 x 8.5x 1 5.2 x 1 4.7 x 4 4.7 x 8.3x 2 2.0 x 1 7.5 x 1 2.2 x 9.1x 7.4x 1 7.0 x 4 4.7 x 7.4x 16.2x 1 3.6 x
Figure 20. Valuation Comparison Source. Capital IQ
Page 16
C omparable C ompany A nalys is > W eb 2.0
Su mmary b y C ountry
C om pany Nam e U nited S ta tes C a na da C hina S outh K orea J a pa n T a iwa n A ustra lia G ermany N orwa y H ong K ong F inla nd I ta ly U nited K ingdom I ndia S weden R us sia M a la ys ia G rand To tal 41 11 9 9 6 3 2 2 1 1 1 1 1 1 1 1 1 92 U S D Market Cap ($m) C hina U nited S ta tes J a pan C a na da S weden S outh K orea T a iwa n G erma ny H ong K ong I ta ly R uss ia F inland I ndia Aus tra lia M a lays ia U nited K ingdom N orwa y G rand T otal 27, 195.3 4, 726.8 2, 148.8 2, 072.2 1, 251.5 1, 209.8 968.3 217.2 135.9 92.6 72.8 35.8 30.3 22.8 18.9 4.3 0.2 40, 203.5 Avg US D Market C ap ($m) China S weden J a pa n Ta iwan Ca na da Hong K ong S outh K orea United S ta tes G erma ny Ita ly R us sia Finla nd India Ma la ysia Austra lia United K ingdom Norwa y G rand To tal 3,021. 7 1,251. 5 358. 1 322. 8 188. 4 135. 9 134. 4 115. 3 108. 6 92. 6 72. 8 35. 8 30. 3 18. 9 11. 4 4. 3 0. 2 437. 0 U S D LT M T otal R ev ($m) U nited S ta tes C hina S weden C a na da S outh K orea J a pa n H ong K ong T a iwa n I ta ly R uss ia I ndia M ala ys ia G erma ny Aus tra l ia F inla nd N orwa y U nited K ingdom G rand T otal 3, 744. 3 3, 349. 5 1, 608. 2 945. 2 557. 2 490. 8 428. 1 348. 6 226. 0 141. 9 135. 4 76. 5 51. 9 14. 1 5. 8 2. 0 0. 2 12, 125.7 U S D LT M To tal E B IT DA ($m) C hina S weden U nited S ta tes C ana da J a pa n T a iwa n S outh K orea I ta ly I ndia H ong K ong R uss ia G erma ny M a la ys ia Aus tra lia N orwa y U nited K ingdom F inla nd G rand T otal 1,654. 1 259. 4 240. 1 186. 1 129. 2 85. 6 63. 6 36. 1 23. 8 18. 8 18. 5 11. 7 10. 2 2. 7 -1. 0 -1. 7 -13. 1 2,724. 2 E B IT DA % C hina Aus tra l ia T a iwa n J a pa n I ndia S weden I ta ly M a la ys ia R uss ia S outh K orea H ong K ong U nited S ta tes G erma ny C a na da N orwa y U nited K ingdom F inla nd G rand T otal 48. 4% 37. 2% 29. 7% 26. 1% 17. 6% 16. 1% 16. 0% 13. 3% 13. 1% 4.7% 4.4% -11.0% -14.3% -18.0% -50.6% NA NA 6.9%
Figure 21. Comparison by Country Source. Capital IQ
C omparable C ompany A nalys is > W eb 2.0
Su mmary b y Ex c hange
C om pany Nam e OT C BB N a s da qG S OT C P K K OS E TSE N a s da qG M T S XV TSX S E HK A ME X XT R A ASX GTSM O T C NO H LS E NYSE CM B SE N a s da qCM OS E A IM OM R TS K LS E G rand To tal 22 13 9 7 5 5 5 4 3 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 92 U S D Market Cap ($m) N a sda qG S S E HK TSE NYS E OM K OS E GT S M O T CB B XT R A N a sda qG M TSX OS E O T CP K CM AM E X R TS T S XV HLS E BSE AS X K LS E N a sda qC M AI M O T CN O G rand T otal 16, 722.8 15, 092.7 2, 003.2 1, 710.8 1, 251.5 1, 149.4 634.7 351.8 217.2 200.3 188.1 145.6 105.6 92.6 78.7 72.8 61.8 35.8 30.3 22.8 18.9 11.7 4.3 0.2 40, 203.5 Avg US D Market C ap ($m) S E HK NY S E Na s da qG S OM TS E G TS M K OS E OS E XT R A CM RTS TS X Na s da qG M AME X HL S E BSE K LS E O TC B B TS X V O TC P K Na s da qCM AS X AIM O TC NO G rand To tal 5,030. 9 1,710. 8 1,286. 4 1,251. 5 400. 6 317. 3 164. 2 145. 6 108. 6 92. 6 72. 8 47. 0 40. 1 39. 4 35. 8 30. 3 18. 9 16. 0 12. 4 11. 7 11. 7 11. 4 4. 3 0. 2 437. 0 U S D LT M T otal R ev ($m) OM N a sda qG S S E HK NYS E CM R TS BSE OS E N a sda qG M GT S M K LS E TSE K OS E TSX AM E X XT R A O T CP K T S XV AS X HLS E O T CN O O T CB B AI M N a sda qC M G rand T otal 1, 608. 2 492. 6 417. 9 233. 3 226. 0 141. 9 135. 4 112. 1 84. 7 79. 1 76. 5 75. 7 71. 3 32. 9 31. 7 25. 9 21. 0 9. 6 7. 0 5. 8 2. 0 1. 9 0. 2 0. 1 12, 125.7 U S D LT M To tal E B IT DA ($m) N asda qG S SEHK OM NYSE TSE K OS E GTSM CM BSE OS E R TS X TR A K LS E AM E X AS X O T CN O AI M TSX T S XV N asda qC M H LS E N asda qG M O T CP K O T CB B G rand T otal 1,521. 9 598. 0 259. 4 144. 4 109. 2 60. 7 39. 6 36. 1 23. 8 20. 0 18. 5 11. 7 10. 2 6. 3 2. 7 -1. 0 -1. 7 -6. 4 -9. 8 -11. 4 -13. 1 -16. 1 -26. 5 -52. 5 2,724. 2 E B IT DA % NYS E S E HK AS X GT S M TSE N a sda qG S OS E BSE OM CM K LS E R TS K OS E N a sda qG M XT R A TSX T S XV O T CP K O T CB B AM E X O T CN O AI M N a sda qC M HLS E G rand T otal 61. 9% 44. 4% 37. 2% 32. 5% 27. 7% 26. 8% 17. 8% 17. 6% 16. 1% 16. 0% 13. 3% 13. 1% 6.1% -0. 9% -14.3% -14.8% -15.6% -27.9% -31.8% -38.3% -50.6% NA NA NA 6.9%
Figure 22. Comparison by Exchange Source. Capital IQ
Page 17
Financing - Last Three Months (US$ m)
Month Feb-09 Company Name Twitter Synthasite Tremor Media Offerpal Media Imagini Emergent Game Technologies Outbrain Tvtrip Tongxue Oodle TextDigger OneSpot Mixpo FetchDog Virtual Fairground 7 Billion People FamilyLink.com WhistleBox Mendeley Outright Tvinci Filtrbox MMO Life Cake Financial fav.or.it Feb-09 Total Mar-09 Vidyo Buzznet LendingClub SendMe Inc. Auditude USA USA USA USA USA 12.0 12.0 10.5 10.0 10.0 5.5 5.0 4.1 4.0 3.9 3.2 3.1 2.0 2.0 2.0 1.3 1.3 0.8 1.3 Collective Media The Rubicon Project Cellufun ScanScout DoubleTwist Socialtext TubeMogul Socialcast USA USA USA USA USA USA USA USA 8.0 8.1 5.0 4.5 3.0 1.4 1.3 9.4 8.0 4.4 40.0 4.5 1.3 0.6 0.6 32 .3 30.3 20.0 5.0 10.0 43.0 12.0 10.0 Country USA South A frica USA USA UK USA Israel France China USA USA USA Canada USA Netherlands USA USA USA UK USA Israel USA Netherlands USA UK Angel/Seed Debt financing
PIPE
S eries A
Series B 20.0
Series C 35.0 18.0
Series D
Series E
Grand Total 35.0 20.0 18.0 15.0 13.5 12.5 12.0 9.0 6.0 5.6 4.3 4.2 4.0 4.0 4.0 3.0 2.9 2.3 2.0 2.0 1.6 1.4 1.3 1.3 0.7 185.5 15.0 12.5 12.0 12.0 10.5 10.0 10.0 5.5 5.0 4.1 4.0 3.9 3.2 3.1 2.0 2.0 2.0 1.3 1.3 0.8 0.6 130.7 20.0 13.0 10.0 8.1 5.0 4.5 3.0 1.4 1.3 66.3
15.0 13.5 12.5 12.0 9.0 6.0 5.6 4.3 4.2 4.0 4.0 4.0 3.0 2.9 2.3 2.0 2.0 1.6 1.4 1.3 1.3 0.7 24 .8
13.3
76.4
58.6 15.0 12.5
12.5
Glam Media Visible Measures
Greystripe OMGP OP Apture Simulmedia Tynt AnySource Media
U SA U SA
USA USA USA USA Canada USA
Pixazza
Sports Composite DE Hunch
U SA
USA USA
Bit.ly
AdultSpace Myngle 33Across
U SA
USA Netherlands USA
Three Melons
Mar-09 Total Apr-09
Argentina
Scan & Target
Apr-09 Total
France
Figure 23. Financing, Last Three Months Source. Company reports
Page 18
C ompany Des c riptio ns - C urrent Mo nth C apital Market A c tivity
C ompany
C ellu fun , LL C
HQ
U nited S ta tes
W ebs ite
www. cellufun. com
Des criptio n
C ellufun, LL C opera tes as a n ad s ponso red mobile ga ming portal. The company’ s portal provides free enterta inment content, a s well a s cas ua l, connected, a nd multiplay er games for ex isting a nd next-generation W eb-ena bled mobile phones . It a l so offers free s ingle-pla yer games, a s well as multi-player vers ions on a s ubs cription ba s is . The c ompany ena bles subs cribers to persona liz e their ga ming profile; sa ve scores ; crea te tea ms; partic ipa te in tournaments ; a nd sha re informa tion rela ted to tips , trick s, a nd bra gging rights . C ellufun wa s founded in 2005 and is bas ed in New Y ork, N ew Y ork. C ollective Media , I nc. opera tes a s a n online a dvertising network tha t specializ es in audienc e ta rgeting a nd optimiz ation s olutions for publishers a nd a dvertis ers in the United S ta tes. I t provides con text, beha v ior, re-ta rgeting, demogra phic, a nd geogra phic ta rgeting; a nd dashboard, a reporting interfac e that pres ents a nd ma nipula tes ad performa nce da ta generated by ca mpa igns. T he compa ny a ls o offers a network of online news s ites , a s well as enterta inment, s ports , a nd health si tes . In addition, it provides bra nd a dvertis ing a nd direct ma rketing services . T he company wa s founded in 2005 a nd is bas ed in N ew Y ork, New Y ork . doubleTwist C orpora tion des igns a nd develops entertai nment s oftwa re a pplica tions . T he company applica tions s hares a nd s y nchroniz es pictures , video, and audio to medi a dev ices . I t offers doubleT wis t desk top, a n a pplica tion tha t ena bles c lients to tra ns fer, sha re, a nd sy nc persona l media ; a nd Twis t me! , a network applica tion tha t a llows us ers to share photos, video, and audio files from the c lient’s profile pages. doubleTwist C orpora tion wa s founded in 2007 a nd is ba s ed in S an F ra nc isco, Ca li fornia with an a dditiona l office in O s lo, Norway. S ca n & Target provides a S a a S s olution for the rea l-time analy s is of tex t us er genera ted conten t (UG C ). S ca n & Target s olutions a re a imed a t publis hers of community a nd s ocia l network s, moderation s ervice pro viders , providers of tec hnica l s olutions for Web 2. 0 (forums , blogs , cha t, s ocial buying, etc.) a nd profes siona l s ervices (C R M and conta ct centers). S ca nS cout, Inc. opera tes as a n online video advertising network. I t s erves publis hers , advertise rs , a nd ad network s . The company was founded in 2005 a nd is ba s ed in B oston, M ass a chus etts with additiona l offic es in New Y ork a nd L os Angeles . S oci a lcas t provides soc ial network ing pla tforms a nd s olutions for both consumer-fa cing clients and enterpris e cus tomers . The compa ny wa s founded in 2005 a nd is ba s ed in Irv ine, C al ifornia . S oci a ltext Inc orpora ted develops enterpris e s oc ia l s oftware. T he company focus es on offering c olla bora tion platform tha t a llows organizations to c ollaborate. It offers P eople, whic h ena bles users to integra te s oc ial network ing with enterprise colla bora tion; W eblog tha t supports colla bora tiv e a nd ongoing conv ersa tions a mong collea gues ; W orks pa c e, an enterpris e wiki for sea rc hing informa tion and people; a nd S ig na ls tha t a mplifies, cla rifies, and complements other c ollabora tion ac tiv ities , a s well a s prov ides a medium for information s ha ring. The c ompa ny a ls o provides D ashboa rd, which aggrega tes content from S oc ialtex t wik i pa ges , the W eb, a nd enterprise sy stems; an d S oci a lC alc s preadsheets tha t inc lude informa tion from other sprea ds heets or works pace pa ges . The compa ny wa s founded in 2002 a nd is based in P a lo Alto, C a lifornia . R ubic on P roject, I nc. , an a dv ertis ing technology c ompa ny , provides online a dv ertis ing solutions to W eb publishers a nd a d networks . I t also offers a d network optimiz a tion serv ices , a s well a s ad qua lity protection progra ms . In a ddition, the company prov ides solutions to s top unwa nted a ds in tra ck s by protecting W eb publis hers. T he compa ny was founded in 1998 a nd is ba sed in Los Angeles, Ca lifornia. TubeM ogul, I nc. opera tes as a n online video ana lytics a nd dis tribution company worldwide. It focuses on prov iding v ideo publis hing tools . The c ompa ny provides a single point for deploy ing uploads to the video s haring s ites , a nd a nalytics on who, wha t, a nd how v ideos are being viewed. It serv es content produc ers, media companies , a d a ge ncies , digita l consulta nts, record la be ls, film s tudios , politicians , c onsumer products orga niz a tions , and corporations. The compa ny wa s founded in 2006 a nd is ba sed in B erkeley , C alifornia.
C ollec tive Media, Inc .
U nited S ta tes
www. collective-media . com
do ubleT wis t Corpo ration
U nited S ta tes
www. doubletwis t. com
S c an & Target
F rance
www. s cana ndta rget. c om
S c anS co ut, In c. S ocialcas t S ocialtext In corporated
U nited S ta tes U nited S ta tes U nited S ta tes
www. s cans cout. com www. s ocialca st. com www. s ocialtext.com
R ubicon P roject, Inc .
U nited S ta tes
www. rubiconproject.com
T ubeMogul, Inc.
U nited S ta tes
www. tubemogul. c om
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