Web 2.0 Weekly 09-05-05

SOFTWARE & SERVICES 5 MAY 2009 WEB 2.O WEEKLY VIDEO SECTOR LEADS ACTIVITY IN APRIL – DISNEY INVESTS IN HULU ACT I VIT Y SL O W ED I N AP RIL – SL OW E ST MO NT H I N 2 009 DAVID SHORE, CFA, MBA 416.860.6784 david.shore@researchcapital.com Arun Thomas (Associate) 416.860.7666 The month of April saw 21 financings totalling $144.5 million, with not enough transactions (volume and size) to boost levels above any month in 2009. In perspective, February and March closed off at $185.5 mm and $159.5 million, respectively. On a much more positive note, we saw the announcement from Disney taking a significant position in Hulu - a strategic move in W eb-TV distribution. This brings together three of the biggest broadcast and cable network owners under the same banner. Additionally, we would like to highlight that from a sector perspective, video saw the most amount of capital raised at $75.4 million (Figure 4) over a 3-month period. Is this an indication of things to come? Financing by Month 800.0 737.1 700.0 653.9 35 40 600.0 30 500.0 461.7 (US$mm) 25 400.0 361.3 335.0 308.3 300.0 244.0 225.8 200.0 192.6 138.1 193.0 132.3 73.6 20 15 129.0 111.0 100.0 24.4 15.4 21.4 23.9 13.2 12.5 8.0 0.0 87.3 57.7 56.3 43.4 42.0 40.5 38.8 18.8 16.5 85.5 69.0 45.6 30.0 71.5 38.6 127.4 114.6 101.1 185.5 10 159.5 144.5 5 47.5 38.8 0 M ay -0 7 Ju l -0 7 Se p07 N ov -0 7 M ay -0 8 M ay -0 6 No v06 No v08 No v05 Ja n07 M ar -0 7 Ja n08 M ar -0 8 Capital Market Activity: The month of April closed with 21 companies raising money, with GOOM Radio and Collective Media leading the list with $16 million and $20 million, respectively. The Rubicon Project (ad network sector) and Marin Software (Ad Networks sector) followed GOOM Radio, raising $13 million. Price Performance: Most of the companies in our universe had positive stock price performances over the past week (for stocks with prices greater than $1) (Figure 12), with 19 companies showing positive returns on the week.Tree.com (TREE-NASDAQ) led the group with a 62.3% return, while Beyond Commerce Inc. (BYOC-OTCBB) had the worst return, dropping 10.7% in the week. Four companies had better than 20% price increases last week. 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 Ju l -0 8 Se p08 Ju l -0 5 Se p05 Ju l -0 6 Se p06 Ja n09 M ar -0 9 Ja n06 M ar -0 6 (#) Page 2 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 ~$45 billion (Figure 1). The average market cap for the group is ~$493 million (but a median of only $47.8 million), with average trailing revenue of $148.0 million (median $54.4 million). The companies are also generally profitable, with a median EBITDA margin of 15.9%. On a valuation basis, the overall average is 4.7x trailing revenue (median 1.4x) and 9.7x trailing EBITDA (median 8.5x). Fifteen of the companies have more than 500 employees. C o m p a r a bl e C o m pa n y A na l ys i s > W e b 2 .0 C om pa n y N a m e A c c e le riz e N ew Me dia , Inc . 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IA C /In ter A c tiv eC or p. IA S E n erg y, Inc . Id ea E d ge, Inc . is ee med ia Inc . J um bu c k E nt er ta inm ent P ty L t d. J um pT V Inc . K a boo s e In c. K in gs oft C o . L td . L in go M edia C o rp or a tion L iv e W o rld Inc . L o ok S m a r t, L td. M a gn itu de Infor m a tion S y s tem s Inc . M ix i, In c. M ode rn T im es G r ou p Mt g A B M ogg le , Inc M O K O .m obi L im ited N E O W IZ G a m es C or po ra tion N etD r a go n W eb S oft , Inc . N ete a s e. c o m I nc . N eX p lo re C o rp ora tion N gi G r oup Inc . N or thg a te T e c hno lo gies L im ited O p en T e xt C o rp . O p enw a v e S ys t em s Inc . P e rf ec t W or ld C o., L td. P h oto C h a nn el N etw ork s Inc . Q u epa s a C or p. O A O R B C Infor m a tion S y s tem s S h a nd a In ter a c tiv e E nter ta in me nt L td. S h utte rf ly , In c . S K C om mun ic a tions C o . , L td. S N A P Inte ra c tiv e , Inc . S N M G loba l H old in gs S o c ia l Med ia V e nur es , In c . S o hu. c om Inc . S ite s ea r c h C or po ra t io n S p a r k N etw or k s , Inc . S p ec tr um DN A , Inc . T en c ent Ho ld in gs L td. T he P a r en t C om pa n y T he 9 L im ited T he S tr eet . c om , Inc . T ot a l S po rt O nline A S T r ee. C om , In c . U nis er v e C om mu nic a tion s C o rp . U nited O nline Inc . U O MO Med ia , Inc V a lueC lic k Inc . V O IS , In c. W eb ze n In c . W iz za rd S of twa re C o rp ora tion W or lds . c om In c. W y nds to rm C or por a tio n X IN G A G Y e da n gO nline C o rp . Y n k K or ea Inc . Z ipL o c a l Inc . 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A C YOU CGWY G T S M : 308 3 C WR L T S X :C X C M:D A DXN D IB Z D G LP DGTW DPDM A 0 410 60 E XTI F NG P T S X : F MN FRG 61 80 38 12 G E O1 V GA G IG M G R VY T S E : 363 2 37 65 A 0 470 80 IA C I IA S C . A O T C B B : ID A E IE E A S X : J MB T S X :J T V T S X :K AB 38 88 T S XV : LM LV WD LO OK MA G Y 21 21 MT G B MM O G MK B A 0 956 60 77 7 NTES NXPC 24 97 59 005 7 OTEX OPW V PW R D T S XV : P N QPS A R BCI S NDA S F LY A 0 662 70 S T VI S N MN S MVI S OHU S T PC LO V S P XA 70 0 K ID S . 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USD USD USD USD KR W USD USD C AD EUR TW D JPY EUR USD USD USD JPY JPY KR W USD USD USD C AD AU D C AD C AD HKD C AD USD USD USD JPY S EK USD AU D KR W HKD USD USD JPY INR USD USD USD C AD USD USD USD USD KR W USD USD USD USD USD USD USD HKD USD USD USD NO K USD C AD USD USD USD USD USD USD USD USD EUR KR W KR W C AD HQ U nited S ta tes S o uth K or ea J ap an U nited S ta tes U nited S ta tes U nited S ta tes U nited S ta tes U nited K ing dom U nited S ta tes H ong K on g C hina U nited S ta tes T a iw a n U nited S ta tes C a na 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 o uth K or ea U nited S ta tes U nited S ta tes U nited S ta tes G er m a ny T a iw a n J ap an F inla nd C hina T a iw a n S o uth K or ea J ap an J ap an S o uth K or ea U nited S ta tes C a na da U nited S ta tes C a na da A u s tra lia C a na da C a na da C hina C a na da U nited S ta tes U nited S ta tes U nited S ta tes J ap an S w ed en U nited S ta tes A u s tra lia S o uth K or ea C hina C hina U nited S ta tes J ap an Ind ia C a na da U nited S ta tes C hina C a na da U nited S ta tes R us s ia C hina U nited S ta tes S o uth K or ea 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 or wa y U nited S ta tes C a na da U nited S ta tes C a na da U nited S ta tes U nited S ta tes S o uth K or ea U nited S ta tes U nited S ta tes U nited S ta tes G er m a ny S o uth K or ea S o uth K or ea C a na da C u rr e nt P r ic e 0 . 44 14, 150 46 , 950 . 00 0 0 . 02 0 1 . 33 0 0 . 30 1 32 .62 0 224 .50 0 1 . 72 7 0 . 40 0 0 . 02 3 0 . 55 885 0 . 15 0 0 . 55 9 34 .55 96, 600 0 . 04 8 6 . 16 1 5 , 520 .00 1 37, 700 4 , 485 .00 16 0 . 27 0 0 . 09 0 0 . 65 1 3 . 53 1 0 . 13 1 0 . 01 4 53, 000 220 .00 2 0 . 07 60, 100 5 . 23 31 0 . 45 36, 800 39 .80 33 1 . 26 18 1 . 50 1 0 . 99 52 13 .12 9, 720 0 . 67 0 0 . 01 58 3 . 50 3 0 . 25 69 0 . 01 10 2 . 14 0 9 . 48 0 5 . 68 0 11 .00 0 2 . 87 1 0 . 17 0 29 .90 8, 810 6 , 030 .00 0 U S D M a rk e t C a p ($ m ) 1 2. 0 9 5. 0 2 5. 7 0 .1 1 .1 3 .2 5 5. 0 6 .6 2 5. 3 14 1. 2 1, 6 71. 8 0 .0 57 7. 6 6 .4 7 8. 2 14 8. 7 2 6. 0 0 .0 1 .3 7 8. 5 2 7. 1 5 0. 1 1 4. 2 0 .2 2 4. 5 2 7. 3 15 8. 8 9 4. 0 4 7. 8 1, 8 62. 2 33 2. 8 2 7. 2 1, 2 40. 4 15 8. 8 7 7. 5 2, 4 19. 2 1 8. 9 1 8. 1 3 .9 1 7. 0 6 2. 7 7 1. 2 48 9. 6 9 .8 4 .0 2 1. 9 6 .1 70 0. 2 1, 8 30. 3 8 3. 5 4 .7 45 6. 3 35 6. 7 3, 7 85. 1 2 5. 1 4 5. 8 2 8. 0 1, 6 88. 3 10 5. 0 97 0. 2 4 3. 5 1 1. 4 13 6. 6 3, 6 37. 7 33 0. 3 31 5. 2 7 .2 0 .0 0 .0 2, 2 02. 1 2 8. 2 5 4. 5 1 2. 2 16,0 34. 1 0 .3 25 9. 1 6 5. 5 0 .1 9 4. 6 0 .8 47 1. 6 1 2. 0 95 4. 3 2 .7 3 4. 0 2 9. 2 8 .9 0 .5 20 4. 4 10 8. 7 1 1. 7 0 .3 16,0 34. 1 0 .0 49 3.4 4 7. 8 U S D L T M To ta l R e v ($ m ) 3. 8 73. 6 60. 7 0. 1 0. 1 7. 7 1. 8 0. 2 0. 0 428 . 1 201 . 8 6. 7 47. 2 1. 3 48. 6 226 . 2 78. 6 NA 0. 4 NM NA 19. 7 NM 6. 8 4. 2 5. 4 114 . 0 75. 1 5. 8 233 . 6 190 . 4 38. 6 29. 6 113 . 2 54. 8 1 , 44 5. 1 0. 0 0. 0 1. 3 13. 2 13. 4 69. 5 120 . 2 3. 4 11. 8 65. 0 0. 1 118 . 1 1 , 66 2. 4 NM 1. 1 142 . 2 87. 3 451 . 8 NM 99. 0 135 . 8 769 . 3 199 . 6 210 . 5 16. 9 0. 1 144 . 1 522 . 8 213 . 5 163 . 5 3. 0 2. 0 0. 1 429 . 1 NM 57. 3 0. 1 1 , 04 8. 0 112 . 0 250 . 2 71. 9 2. 1 228 . 6 25. 3 669 . 4 0. 6 625 . 8 0. 0 22. 5 6. 1 0. 1 NA 46. 6 54. 1 15. 4 2. 8 1 , 662 . 4 0. 0 148 .0 54. 4 US D L T M T ota l E B I TDA ($ m ) (4 . 8) 1 4. 7 4 .9 (2 . 3) (2 . 1) (1 1. 8) (8 . 6) (1 . 7) (4 . 6) 1 8. 8 11 8. 0 (6 . 6) 2 3. 8 NM 4 .1 3 6. 1 1 0. 5 NM (3 . 3) (2 . 5) NM (0 . 1) NM 1 .2 (8 . 6) (3 . 3) 1 6. 5 1 9. 4 (1 3. 1) 14 4. 6 4 6. 0 7 .4 1 0. 6 2 0. 2 (1 5. 5) 6 4. 6 (0 . 8) (4 . 6) (5 . 0) 4 .9 (8 . 4) 6 .9 4 6. 6 (1 . 5) (0 . 5) (2 . 0) (3 . 2) 4 4. 9 26 8. 2 (1 . 1) (2 . 2) 3 8. 2 3 9. 9 29 3. 8 (4 . 9) 3 0. 5 2 3. 9 19 5. 0 (1 0. 2) 11 3. 9 (0 . 8) (1 1. 4) 1 8. 8 24 0. 2 2 8. 4 1 5. 4 0 .9 (0 . 7) (0 . 1) 18 0. 5 (1 . 1) 1 2. 3 (2 . 5) 51 2. 6 (1 3. 5) 8 4. 3 7 .0 (1 . 0) (2 3. 9) 0 .1 15 3. 9 (0 . 5) 11 3. 6 (1 . 3) (4 . 4) (6 . 0) NM NM 1 4. 9 1 2. 1 (1 . 2) (2 . 9) 51 2. 6 - 23. 9 33 .2 1 .1 E B I TD A % NM 20 . 0% 8 . 0% NM NM NM NM NM NM 4 . 4% 58 . 5% -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% 10 . 0% 38 . 7% -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 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 32 . 0% 22 . 4% -7 . 6% NM 0 . 0% 65 . 0% -9 8.9% 7 .4% 15 . 3% T E V /L T M R e v e nu e 4. 3 x 0. 9 x 8. 1 x 29. 8 x 31. 9 x 26. 6 x 0. 5 x 8. 3 x 0. 0 x 11. 1 x 6. 0 x 1. 6 x 0. 9 x 0. 6 x 5. 4 x 2. 5 x 2. 5 x 5. 0 x 1. 2 x 0. 5 x 6. 9 x 1. 4 x 39. 8 x 1. 2 x 1. 1 x 0. 5 x 1. 8 x 0. 9 x 3. 5 x 1. 1 x 3. 4 x 3. 1 x 0. 3 x 5. 0 x 1. 4 x 3. 5 x 3. 1 x 2. 5 x 0. 2 x 2. 4 x 0. 1 x 2. 5 x 0. 0 x 0. 2 x 1. 1 x 1. 9 x 1. 9 x 1. 1 x 0. 0 x 4. 4 x 1. 0 x 16. 7 x 0. 2 x 4. 6 x 0. 4 x 0. 1 x 1. 2 x 19. 4 x 1. 3 x 4. 8 x 3. 2 x 2. 0 x 0. 8 x 0. 6 x 39. 8 x 0. 0 x 4 .7x 1. 4 x T E V /L T M E B IT DA 4. 5x 1 0. 5 x 1 4. 2 x 2 2. 0 x 1 8. 7 x 5. 3x 4. 4x 8. 5x 2. 0x 5. 6x 6. 8x 1 0. 3 x 2. 5x 1 1. 2 x 8. 8x 1 3. 3 x 8. 7x 1 1. 7 x 5. 5x 1. 2x 9. 3x 0. 2x 0. 5x 8. 5x 2 0. 5 x 6. 1x 1 0. 5 x 4. 4x 3 4. 1 x 2 9. 5 x 5. 1x 7. 3x 9. 9x 8. 9x 3 4. 1 x 0. 2x 9 .7x 8. 5x E m p l oy e e s 11 NA NA 3 4 45 43 9 46 3 , 12 5 628 37 NA NA NA 574 NA NA 11 3 6 NA NA 22 29 NA NA NA 94 NA NA 636 NA NA NA 3 , 20 0 NA NA NA 72 237 NA NA NA NA 90 13 NA 2 , 96 9 3 NA NA 2 , 42 6 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 1 NA 174 NA NA NA 6 , 194 1 678 174 Figure 1. Web 2.0 Universe Summary Source. Capital IQ Page 3 C A P I T A L M A R K E T S A C T I V I T Y (M & A A N D F I N A N C I N G ) April activity slow est month year-to-date: The month of April closed with 21 financings totalling $144.5 million. Seven of the 21 deals were greater than or equal to $10 million and two deals were greater than $15 million. The month of March registered 23 financings (total $159.5 million, average $6.5 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 $15 million in January. Financing Activity Last Three Months 200.0 7.6 180.0 7.4 160.0 7.2 140.0 7.0 120.0 (US$m) 6.8 (US$m) 100.0 6.6 80.0 6.4 60.0 6.2 40.0 6.0 20.0 5.8 0.0 Feb-09 Mar-09 Total Average Apr-09 5.6 Figure 2. Financings, Last Three Months Source. Company reports Collective Media largest deal in April: Collective Media topped the list in April with a $20 million raise, followed by Goom Radio with $16 million. There were five deals greater than or equal to $10 million (Figure 3). For additional details, refer to Figures 29 and 30 (at end of note). (US$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 Kaixin001.com Collective Media Synthasite Tremor Media GOOM Radio Vidyo Offerpal Media Imagini Marin Software The Rubicon Project Buzznet Emergent Game Technologies FreeWheel Outbrain LendingClub SendMe Inc. Miva Auditude Conductor Inc. Cellufun Glam Media Visible Measures SuperSecret Tvtrip GoViral ScanScout Batanga Tongxue Oodle Greystripe Wamba DoubleTwist OMGPOP IMShopping Socialtext TextDigger OneSpot Mixercast Apture FetchDog Mixpo Simulmedia Virtual Fairground Tynt SoundCloud AnySource Media Pixazza 7 Billion People TubeMogul FamilyLink.com Tribal Nova WhistleBox Sports Composite DE Bit.ly Tripbase Hunch Outright Mendeley Tvinci Filtrbox Socialcast Brandtology Scan & Target AdultSpace MMO Life Cake Financial Myngle Jodange 33Across fav.or.it Three Melons Foodista Apr-09 Mar-09 Feb-09 Page 4 Video and Social Networks continue to be the most active sectors: Activity over the last three months was busiest in the Video sector with nine companies raising over $75.4 million, closely followed by Social Networks with $74.4 million on 12 deals. (Figure 4). Page 5 Capital Market Activity by Sector - Last Three Months 80.0 70.0 60.0 50.0 (US$m) 40.0 75.4 74.4 57.4 30.0 54.9 41.4 20.0 37.0 22.5 20.6 10.0 17.4 15.0 14.3 12.0 12.0 11.0 Travel 6.5 Virtual World 5.5 Mobile Ad 4.7 Social Commerce Comment/Reputation 0.0 Gaming Microblog Media Wiki Mobile Search Social Networks Virtual Goods Lending Aggregation Video Ad Network Analytics 4.1 Widget 4.1 Publishing 3.9 Infrastructure 3.1 Visual Commerce 2.6 2.0 Crowdsourced Content 2.0 Financial Services 1.3 SAS 1 1.3 Online Learning 1 # companies 9 12 7 6 7 2 4 2 4 1 2 1 1 2 2 1 1 1 1 1 1 2 1 1 Figure 4. Capital Market Activity, by Sector, Last Three Months Source. Company reports Average round size decreases: On a trailing 12-month basis, total financing dollars fell as of April 2009, with average round sizes decreasing slightly (Figure 5). Page 6 LTM Financing 4,000.0 18.0 3,500.0 16.0 14.0 3,000.0 12.0 2,500.0 10.0 (US$m) 2,000.0 8.0 1,500.0 6.0 (US$m) 4.0 2.0 0.0 May-06 May-07 May-08 Mar-06 Mar-07 Mar-08 Nov-05 Nov-06 Nov-07 Nov-08 Sep-05 Sep-06 Sep-07 Sep-08 Mar-09 Jan-06 Jan-07 Jan-08 Jan-09 Jul-05 Jul-06 Jul-07 Jul-08 Total Average 1,000.0 500.0 0.0 Figure 5. Financings, Last 12 Months Source. Company reports Cumulative total nears $6.2 billion: Overall, on a cumulative basis, W eb 2.0 financings have totalled nearly $6.2 billion, with the majority of the financing coming in late 2007 and the first three quarters of 2008 (Figure 6). Financing for the first quarter of 2009 passed that raised in the fourth quarter of 2008 – reversing the downtrend since the second quarter last year. However, for the period ended Q1/CY09, total capital raised was below the Q1/CY08 level (at $748.2 million). Page 7 Web 2.0 Financing (cumulative) 1,400.0 7,000.0 1,331.1 1,200.0 6,000.0 1,000.0 969.4 834.4 5,000.0 800.0 (US$m) 4,000.0 (US$m) Israel 3.0% France 2.2% 600.0 574.9 570.8 3,000.0 400.0 360.1 343.1 2,000.0 200.0 88.3 38.8 20.1 0.0 61.5 47.5 33.5 22.2 41.9 126.4 135.6 172.7171.8 93.0 144.5 1,000.0 0.0 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 2004 2005 2006 2007 2008 2009 Figure 6. Financing, Cumulative Source. Company reports U.S. remains dominant: U.S. companies continue to dominate capital market activity – with 67.9% of financings/M&A involving U.S. companies (based on dollars) (Figure 7). Based on number of transactions, the U.S. leads with 73.1% of deals, while Canada is third in number of financings at 4.5% (Figure 8). Financing/M&A by Country - LTM ($) China 15.7% Russia 3.8% UK 2.2% Financing/M&A by Country - LTM (#) Canada UK 4.5% 4.9% France 3.4% Israel 1.8% Denmark 1.5% ROW 11.0% ROW 4.9% USA 73.1% USA 67.9% Figures 7 & 8. Financing/M&A, by Country (LTM, $, #) Source. Company reports Larger volume of early-stage funding (by count): Almost half of financings in the last 12 months are for early-stage companies (Angel/Seed or Series A) (Figure 9). Series B rounds are 28.7% of the total, with later-stage (Series D, E and PIPE) deals accounting for just 8.8%. Page 8 Financing by Type - LTM Series B 28.7% Series C 15.1% Series D 4.7% Angel/Seed 11.6% Series A 35.3% PIPE 1.9% Debt financing 2.7% Figure 9 Financing, by Type (LTM, #) Source. Company reports Equity financings smaller over last 12 months: In the last 12 months, the average size of Series A, B, C and D rounds has all been lower than the overall average (Figure 10). Average financing round size 40.0 36.1 35.0 30.6 30.0 26.7 25.0 21.6 (US$m) 20.0 29.7 18.3 15.0 11.6 11.6 10.0 7.9 5.8 5.0 3.3 5.4 7.0 10.8 10.8 2.6 0.0 Angel/Seed Debt financing PIPE Series A LTM Average Size Series B Overall Average Series C Series D Series E Figure 10. Average Size per Round Source. Company reports Page 9 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 mid2008 until recently when it has moved sharply higher than the NASDAQ index (Figure 11). Web 2.0 Index Price Performance 120 100 80 60 40 20 0 5/5/2008 6/2/2008 9/8/2008 2/9/2009 3/9/2009 4/6/2009 10/20/2008 11/17/2008 12/15/2008 12/29/2008 5/19/2008 6/16/2008 6/30/2008 7/14/2008 7/28/2008 8/11/2008 8/25/2008 9/22/2008 1/12/2009 1/26/2009 2/23/2009 3/23/2009 4/20/2009 10/6/2008 11/3/2008 12/1/2008 5/4/2009 ^COMP - Share Pricing Figure 11. Web 2.0 Price Performance Source. Capital IQ Index: Web 2.0 X (Market Cap) Tree.com leads; Beyond Commerce falls: Most of the companies in our universe had positive stock price performances over the past week (for stocks with prices greater than $1) (Figure 12), with 19 companies showing positive returns on the week. Tree.com (TREE-NASDAQ) led the group with a 62.3% return, while Beyond Commerce Inc. (BYOC-OTCBB) had the worst return, dropping 10.7% in the week Page 10 1 Week P rice P erformance Tree.Com, Inc. Cy berplex Inc. S hutterf ly , Inc. Changy ou.com Limited United Online Inc. S park Netw orks , Inc. DA DA S pA S ohu.com Inc. V alueClick Inc. CDC Corp. S handa Interactive Entertainment Ltd. Perfect World Co., Ltd. Openw ave S y s tems Inc. The9 Limited Modern Times G roup Mtg A B Webz en Inc. Neteas e.com Inc. IA C/InterA ctiveCorp. XING A G Open Tex t Corp. Giant Interactive G roup, Inc. PhotoChannel Netw orks Inc. Frogs ter Interactiv e Pictures A G LookS mart, Ltd. G igaMedia Ltd. TheS treet.com, Inc. B ey ond Commerc e, Inc. -20.0% Figure 12. 1-Week Price Performance Source. Capital IQ 62.3% 39.8% 29.4% 21.7% 19.6% 17.8% 17.6% 13.9% 13.5% 11.9% 10.8% 9.6% 5.9% 4.9% 3.8% 3.2% 1.7% 0.7% 0.4% -3.0% -3.1% -3.2% -4.0% -5.3% -8.7% -8.9% -10.7% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% Page 11 INDUSTRY NEWS (PARTNERSHIPS, FINANCIAL RESULTS, NEW PRODUCTS) K ey Developments C ompany A c celeriz e New Media, In c. (OT CB B: A CL Z) Headline Acceleriz e N ew Media Inc. to T erminate C hris M eredith a s Chi ef T ec hnology O fficer, E ffec tive April 30, 2009 Notes O n April 24, 2009 the B oard o f Directors of the Acceleriz e N ew Media Inc. decided to termina te the employment of C hris Meredith, the company's C hief T echnology O fficer. T he termina tion of employment is effec tive as of April 30, 2009. M r. Meredith will c onti nue to s erve a s a member of the company 's B oard of D irectors until he res igns, i s removed or repla ced by a vote of the sha reholders . NetDragon W ebS oft Inc. announced tha t T he W a rlords, the E nglis h v ersion of Tou M ing Z hua ng O nline, entered its open beta testing on April 24. T he W arlords is a 2. 5 D MM O R P G ga me jointly crea ted by NetDragon a nd C hina Film G roup, sharing the s a me story a s the film titled T he Wa rlords . I t exhibits traditiona l C hines e martial arts through c omplica ted stories s et in the late Q ing D ynas ty . B eyond Commerce Inc . a nnounc ed the official launc h of Loca lAdL ink .com, a low cos t provider of online a dvertising for loca l bus iness es a cros s the na tion. L oc alAdL ink is a provider of services tha t ena bl e loca l bus ines ses to re a ch loca l c ustomers with targeted Internet a dvertising. T he cus tomer fac ing W eb s ite, L oc alAdLink .com, is a local search directory and a cts a s the c entra l hub for the Loca lAdL ink tec hnology. W hen a cus tomer vis its L o calAdLink .com, proprieta ry geo-targeting s oftwa re identifies the cus tomer's loc ation and dis pla y s releva nt loca l b usines s lis tings . I n a ddition, L oc alAdLink ha s c reated an Adv ertising Network tha t publis hes loc al bus iness listings on its owned a nd opera ted s ites, as well as pa rtner sites . W orlds. com Inc . has a nnounc ed that it ha s s igned a n agreement with P ea rson plc to dev elop a s eries of 3D vi rtual worlds tha t ma y be utiliz ed for implementa tion within ex isting P earson educa tiona l a nd digital programs . T erms of the agreement were not released. P ea rs on has stated that it is c ommitted to investments tha t c omplement the goal s of its programs , particula rly to enh ance student a chievement. W ith W orlds. com's virtua l world capability and 15 y ears of experience, P ea rs on will ex plore opportunities to enhance s tudent lea rning a nd enga gement. W orld's us ers crea te av atars that na viga te through v irtual worlds as well as build their own worlds on a P 2P network . T he company is building on ex isting forma ts to improve web capabilities in the 3D online environment. P hotoC ha nnel N etworks Inc . a nnounces that former C FO , R obert C hisholm, ha s joined the B oa rd of D irectors, effective immediately. Mr. Chis holm ha d been P N I's C FO for more than sev en y ears, until Ma rc h 26th, 2009 when he left to purs ue other opportunities. At that time, S imon B ody more wa s promoted to C FO . W izza rd S oftwa re C orporation a nnounc ed the releas e of Alchemy 2. 1 with seamles s integration into the L ibs ynP R O /W iz za rd Media Advertising Network . N ow, advertis ing c ampaigns run in podc ast downloa ds ca n automa tic ally play through the W iz za rd Media flas h pla yer with a dv anced tra ck ing a nd interac tive capabilities . No need to use separa te s y stems to run a ds in downloaded media an d s trea ming media . T he same ads pla y when downloaded in i T unes , pla yed throu gh mobile iT unes on the iP hone and pla y ed online through the flas h ba s ed media player. T he Alchemy 2. 1 implementation of the W izz ard M edia flas h play er a dheres to the IAB V AS T (V ideo Ad S erving T emplate) sta ndard tha t a llows for simple plug-n-play for third party advertising s ys tem integra tion. T he new s ys tem work s with AO L 's P latform A a nd ADT E CH a nd W izz a rd plans to expand the c apabilities to include DoubleC lic k and Atla s in the nea r future. T he mea suring of advertis ements , cons umer click throughs to advertis er's web s ites and a udienc e feedbac k res ponses are all tra cked us ing N ielsen//N etR a ting. NeuL ion Inc. announced the la unch of a new s tate-of-the-art I P T V network for R omanian audiences in North Americ a. iT V R S N provides viewers an ex tens ive selection of R oma nia n televis ion progra ms from R oma nia . iTV R S N's content offering i ncludes more tha n 25 televis ion programs with exc lus ive distributio n rights outs ide R oma nia . T his is a long a wa ited solution for R oma nian expa triates and R oma nian speak ers in the U. S . a nd Canada interes ted in wa tching telev is ion from home. The s et-top-box service provides the R omania n community with c ontent de livered in high digita l qua lity direct to the televis ion s et throug h the I nternet. iT V R S N 's content offering inc ludes: C onstanta T V , T araf T V , E TN O T V , N eptun T V , G ameX, B ra va T V , R omania n T elevis ion Network (R T N ), R oma nian Chris tia n T V , Antena I nterna tiona l, F avorit TV , K anal D , MT V , N 24, Na tiona l T V , P rima TV , P roT v I nternational, R ea lita tea T V , T elesport, T V R Cultural, T V R Internatio nal, T V R 3, T rinita s T V , U T V and others. Digita lP ost Intera ctive I nc. s igned a $340, 000 c ontra ct to ins ta ll a cus tom-des igned intera ctive-media management sy stem for a leading Internet se arch compa ny prov iding ins ta nt rich media I nternet visibi lity for their bus ines s pa rtners . T he c ontent ma nagement s ys tem, scheduled for delivery by S eptember 30, 2009, i s the infras tructure for a new interactive media pla tform that will ena ble the customer to offer a broad ra nge of i ntera ctive digital media c apabilities for its bus ines s cus tomers . T his is the s econd c ontra ct awa rded to DigitalP os t by this industry leader. E ric As hman notified T heS treet. com In c. on April 27, 2009 tha t he will resign from his pos ition a s C hief Fina nc ial O fficer of the C ompany , effective May 8 , 2009, in order to purs ue other bus ines s interes ts. M r. As hman ha s advised the company tha t he will remain in his position through the fi ling of the c ompa ny's F orm 10-Q for the qua rter ended Ma rc h 31, 2009 a nd pa rticipate in the compa ny 's quarterly ea rnings c all with I nterim CE O , D aryl O tte. NetDrago n W ebS oft, Inc. (S E HK :777) NetDragon L aunc hes O pen B eta T es ting for T he W a rlords in North Americ a B eyond Commerc e, Inc . (OT CB B: B Y OC) B eyond Commerce I nc. Announces the La unch of L ocalA dlink P ears o n plc (L S E : PS ON); Wo rlds .co m Inc. (OTC BB : W DD D) W orlds. com Inc . S igns A greement with P ears on plc P hotoC han nel N etworks Inc. (T S XV: PN) W izz ard S oftware Co rporation (A ME X: WZE ) P hotoC ha nnel Network s Inc . Appoints R obert C his holm to I ts B oard W izz ard Announc es the R elea se of Alc hemy 2.1 J u mpTV Inc . (TS X : J TV) NeuL ion L aunc hes New I P T V N etwork for R omania n Audienc es in N orth America DigitalPo s t Interac tive, In c. (OT CB B: DG L P) Digita lP os t Intera ctiv e S igns $340,000 Contract with a L eading I nternet S earch Co mpa ny T heS treet.c om, Inc . (Nas daqG M: T S CM) E ric As hman to R esign a s C hief Fina nc ial O fficer of T heS treet.com, Inc IAC /InterAc tiveC orp. (Nas daqG S : IAC I) IAC /InterAc tiveC orp. (Nas daqG S : IAC I) Upda te to IAC /I nte rA ctiveC orp’s E quity B uybac k on April O n April 29, 2009, I AC /I nterAc tiv eC orp. announced tha t durin g the quarter ending March 31, 2009, it ha s repurchase d 2, 400,000 sha res for a total c os t of $35.95 million under the program. As of M arch 31, 2009, I AC ha s repurchase d approximately 9,980, 754 sha res for an 29, 2009 a pproxima te cos t of $446. 03 million under the program. Upda te to IAC /I nte rA ctiveC orp’s E quity B uybac k on April O n April 29, 2009, I AC /I nterAc tiv eC orp. announced tha t durin g the quarter ending March 31, 2009, it ha s repurchase d 2, 400,000 sha res for a 29, 2009 total c os t of $35.95 million under the program. As of M arch 31, 2009, I AC ha s repurchase d approximately 9,980, 754 sha res for an a pproxima te cos t of $446. 03 million under the program. O penwa ve S y stems Inc. R eports E arnings R es ults for T hird Q ua rter a nd Nine Months E nded Ma rch 31, 2009 O penwa ve S y stems Inc. announced tha t revenues for the thi rd fisc al q uarter ended M arch 31, 2009 were $44.7 milli on, compared with $48. 1 million in the prior quarter end ed D ecember 31, 2008 a nd $47.0 million in the M arch qua rter in the preceding year. B ookings for the qua rter were $37.6 mill ion. O n a G AAP ba sis , net los s for the third fis ca l qua rter ended March 31, 200 9 wa s $7.8 million, or $0. 09 per s ha re, compared with $64. 2 million, or $0.77 per s hare, in the prior qua rter, and $14.7 million, or $0.18 per s ha re, in the Marc h quarter in the preceding year. G A AP net los s for the Dec ember quarter includes an impa irment to goodwill of $59.5 milli on. O n a non-G AAP basis , net income, whi ch excludes restructuring cos ts, the impairment of goodwill, amortiz ation of inta ngibles and other a cquis ition-related cos ts , s tock based compens a tion, cos ts as s ociated with the s toc k option lawsuit a nd s pecia l inves tigation, dis c ontinued opera ti ons, a nd other-tha ntempora ry impa irment of inves tments, for the third qua rter ended March 31, 2009 was $385,000, or $0.00 per sha re, c ompared with a net income of $1.4 million, or $0. 02 per s ha re, in the prior quarter and a net loss of $7.2 million, or $0. 09 per s ha re, during the Ma rc h qua rter of th Unis erve C ommunications C orp. reported unaudited c onsolida ted ea rnings results for the third qua rter and nine months ended F ebruary 28, 2009. F or the qua rter, the compa ny reported operating loss of C AD 399, 846, los s before income ta x es of C AD 693,831, net loss a n d comprehens ive loss of CAD 693, 831 or CA D 0.03 diluted los s per s hare on rev enues of CA D 4,427, 506 c ompa red to the opera ting loss of CAD 579, 560, los s before inc ome tax es of C AD 1,283, 566, net los s a nd comprehens ive loss of CAD 1, 151, 266 or CAD 0. 05 di luted loss per sha re on rev enues of C AD 8,266, 102 for the sa me qua rter year ago. F or the quarter, the compa ny reported ca s h pro vided by operating a ctivities of C AD 46,097 compared to the C AD 816, 888 for the s ame quarter y ear a go. F or the nine months period, the company reported opera ting los s of C A D 1,923, 120, income before inc ome taxes of C AD 1,295, 122, net income and c omprehens ive income of C AD 1,269, 058 or C AD 0.04 diluted los s per share on rev enues of C AD 17,900, 566 compa red to the opera ting loss of CAD 630, 550, los s before inc ome taxes of C AD 2, 240,379, net los s a nd comprehens ive los s of CAD 2, 288, 079 or CAD 0.10 diluted los s per s hare on revenues of CA D 25,410, 903 for the sa me period y ea r a go. F or the period, the c ompany reported ca s h us ed in Openwave S ys tems Inc . (Nas daqG S : OPW V) U nis erve C ommun ic ation s C orp. (T S XV: U S S ) Unis erve C ommunic ations C orp. R eports U naudited Cons olida ted E arnings R es ults for the T hird Q uarter a nd Nine Months E nded Februa ry 28, 2009 A c celeriz e New Media, In c. (OT CB B: A CL Z) Acceleriz e N ew Media Inc. E nters La unches P roprieta ry L ead G enera tion P la tform Accelerize New M edia I nc. announced the public lau nch of its proprietary lea d generation platform. K ey adva ntages of the proprietary pla tform a re its s c alability a nd vertica l independence, us ing s ma rt tec hnology to provide optimal va lue to buy ers a nd sellers . T he fully a utoma ted lead genera tion pla tform a cc epts and va lida tes lea ds from more tha n 50 compa ny-owned web s ites and 125 third-pa rty publishers . L ea ds are then s cored and dis tributed into a queu e ma na ger, which a llows for rea l-time s ale of qua lified leads. The pla tform's proprietary predic tiv e c oncurrent router efficiently deliv ers leads utilizin g c utting edge technologies , lik e predictive purcha s ing and dynamic pricing. Page 12 IAC /InterActiveC orp. (Nas daqGS : IAC I) IAC /InterActiveC orp. R eports Unaudited C ons olidated E a rnings R es ults for the F irs t Q ua rter E nded Ma rch 31, 2009 ; Announces Impa irment C harges for the F irs t Quarter of 2009 IAC /InterActiveC orp. reported una udited cons olida ted ea rnings res ults for the firs t quarter ended Ma rch 31, 2009. F or the quarter, the company reported opera ting los s of $33.12 million, los s from continuing opera tions before income taxes of $32. 56 million, net los s of $28. 64 million a nd net los s a ttributa ble to the company s ha reholders of $28. 38 million or $0.19 per diluted s ha re on revenue of $332. 01 million compared to opera ting los s of $11.11 million, ea rnings from continuing opera tions before income taxes of $0. 58 million, net ea rnings of $52.48 million a nd net ea rnings a ttributa ble to the company s ha reholders of $52. 82 million or $0.38 per diluted s hare on revenue of $370. 65 million for the s ame period a year ago. O perating los s before amortiza tion wa s $3. 2 million compared to opera ting income before a mortiza tion of $18. 6 million reported a year ago. T he company reported los s from continuing operations of $29. 88 million or $0.20 per diluted s ha re compa red to $3.45 million or $0. 02 per diluted s ha re for the s a me period a year ago. Adjus ted net los s was $3. 0 million or $0. 02 per diluted s ha re compared to a djus ted net income of $10.6 million or $0.07 per diluted s hare for the s a me period a yea r a go. Net ca s h S hutterfly Inc. reported earnings res ults for the firs t qua rter ended Ma rch 31, 2009. F or the qua rter, the reported los s before income taxes of $9, 160, 000, net los s of $6, 232, 000 or $0. 25 per s hare on net revenues of $36,012,000 agains t los s before income taxes of $7,112, 000, net los s of $3, 639, 000 or $0. 15 per s hare on net revenues of $34,338,000 for the s ame period a yea r ago. According to Non-G aa p, the compa ny reported opera ting los s of $6, 156, 000, net los s of $2, 951, 000 or $0. 12 diluted los s per s ha re, nega tive adjus ted E B IT DA of $728,000 a gains t opera ting los s of $6, 135, 000, net los s of $4, 139, 000 or $0.16 diluted los s per s hare, nega tive adjus ted E B IT DA of $114,000 for the s ame period a yea r ago. Net cas h us ed by operating activities of $19,258, 000 agains t net ca s h us ed by operating a ctivities of $12, 030,000 for the s ame period a yea r ago. S hutterfly, Inc. (Nas daqG S : S F L Y) S hutterfly Inc. R eports E a rnings R es ults for the F irs t Quarter E nded Ma rch 31, 2009; P rovides E a rnings G uida nce for the S econd Quarter a nd F ull Y ear of 2009 GigaMedia L td. (Nas daqGS : G IG M) G igaMedia Ltd. Announces R es igna tion Daniel W u as C hairman a nd Director Lobla w C ompa nies S elects Open T ext E C M S uite T he compa ny provides ea rnings guidance for the s econd qua rter of 2009. Net revenues to range from $34 million to $37 million, a year-overyear cha nge of (4% ) to 4% . G AAP opera ting los s to ra nge from $13 million to $11 million. Non-G AAP operating los s to ra nge from $10 million to $8 million. G AAP diluted net los s per s ha re to ra nge from $0. 30 to $0. 14. Non-G AAP diluted net los s per s ha re to range from $0.41 to $0.20. G iga Media L td. a nnounced the res ignation of its chairman a nd director Da niel W u for pers onal reas ons . Mr. W u became cha irma n of the boa rd of directors in J uly 2003 and s ubmitted his res igna tion citing pers ona l a nd fa mily obliga tions . T he res ignation is effective April 29, 2009. O pen T ext C orp. announced tha t L oblaw C ompanies L imited ha s chos en Open T ext's E C M S uite. T he a rchiving and records ma nagement capabilities of the Open T ext E C M S uite will ena ble L obla w us ers to more effectively ens ure s torage a nd a cces s ibility of da ta and informa tion, according to their value, acros s the entire retention period, while helping to reduce da ta s torage cos ts . P hotoC hannel Networks Inc. a nnounced that it ha s been s elected by F red Meyer a nd K ing S oopers (both K roger companies ) to deliver their next genera tion online photo s ite a nd kios k. T he compa ny will deliver two new photo s ites bra nded for F red Meyer and K ing S oopers , as well a s over 700 kios k s oftwa re deployments . T he kios k s oftware is part of the company's 'C onnected K ios k' progra m a nd was recently a cquired a s pa rt of the purcha s e of W orks Media, now integrated to the P NI P la tform. B es ides providing 1-hour print ca pa bilities , both the online s ite a nd the kios ks will be fully outfitted with a large s election of gift products . T he new s ervices will s tart being deployed in the current quarter. Open Text C orp. (Nas daqGS : OTE X) P hotoC hannel Networks Inc. (TS XV: P N) F red Meyer and K ing S oopers S elect P hotoC ha nnel Networks Inc. to Deliver their Next G enera tion O nline P hoto S ite and K ios k DigitalFX International, Inc . (OTC B B : DG FX) Digita lF X International Inc. La unches new W eb P ortal for Digita lF X Interna tiona l Inc. a nnounced that its V Mdirect unit la unched a new W eb porta l www. vmdirect. com which ena bles its members and E -Ma rketing T ools Ava ila ble to the P ublic at the C lick of a the public to more ea s ily acces s and take advanta ge of its unique internet marketing platform and program opportunity. T he V Mdirect new us er-friendly porta l provides a s ingle central ga tewa y for the varied and us eful tools , deta iled compens a tion plan informa tion a nd other Mous e res ources that V Mdirect offers to its Affiliates , including its highly prized 'T ake C ha rge' s emina rs . T he intuitive web marketing tools a nd their wide range of us a ge res pond to ma rket manda te for s olutions which enha nce s a les , efficiency, cus tomer s ervice and accountability. T he porta l will guide us ers to the new C omF 5 S uite ('F 5') product line, a s ta te of the art e-marketing tool powered by AttainR es pons e LL C that will ena ble s mall and medium bus ines s es to ea s ily create and dis tribute ema il ma rketing ca mpa igns at an a ffordable price. S ervice T ermina l a nd a few individua ls a cquired 98.2% s ta ke in R B C B ank from OAO R B C Informa tion S ys tems (R T S : R B C I) for R UB 300 S ervice T erminal and a few individuals acquired 98. 2% s take in R B C B ank from O AO R B C Information S ys tems million on April 30, 2009. S ervice T ermina l a nd a few individua ls completed the acquis ition of 98. 2% s take in R B C B a nk from OAO R B C Information S ys tems (R T S : (R T S : R B C I) for R UB 300 million. R B C I) on April 30, 2009. B eyond C ommerce, Inc. has filed a S helf R egis tration in the amount of $4.73 million. Lingo Media C orporation R eports E arnings R es ults for the F ourth Q ua rter and F ull Y ear E nded December 31, 2008 B eyond C ommerce, Inc. ha s filed a S helf R egis tra tion in the a mount of $4. 73 million. L ingo Media C orpora tion reported earnings res ults for the fourth quarter a nd full year ended December 31, 2008. F or the qua rter, the company reported revenue from continuing opera tions were C AD 534,311 compared to C AD 617, 531 in 2007. Net los s from continuing opera tions was C AD 746, 568 or C AD 0. 07 per s ha re compared to C AD 167, 802 or C AD 0. 02 per s hare in 2007. T his includes a nonrecurring cha rge of C AD 340,000 for a write-off of a n impa ired inves tment. F or the full yea r, the compa ny reported revenue from continuing opera tions increas ed by 10% in 2008 to C AD 969, 128 compa red to C AD 879,626 in the previous yea r. Net los s from continuing opera tions was C AD 2, 311, 474 or C AD 0.22 per s ha re compared to C AD 632, 192 or C AD 0.11 per s ha re in 2007. Net los s wa s C AD 3, 882,843 or C AD 0.37 per s ha re compa red to a net los s of C AD 925,040 or C AD 0. 16 per s ha re in 2007. OAO R B C Information S ys tems (R TS : R B C I); R B C B ank; S ervic e Terminal B eyond C ommerc e, Inc. (OTC B B : B YOC ) L ingo Media C orporation (TS XV: L M) United O nline Inc. Decla res Q ua rterly C a s h Dividend, P a yable on Ma y 29, 2009 IAC /InterActiveC orp. (Nas daqGS : IAC I); IAC In T a lks T o Acquire Y ahoo! P ers onals Yahoo! Inc. (Nas daqGS : YHOO); Yahoo! P ers onals United Online Inc. (Nas daqGS : UNTD) United Online Inc. a nnounced that its B oard of Directors has declared a quarterly cas h dividend of $0.10 per s ha re. T he dividend is paya ble on Ma y 29, 2009 to s ha reholders of record on May 14, 2009. IAC /InterActiveC orp. reported 10% drop in firs t-qua rter revenues of $332 million. IAC s tated tha t the company is in ta lks to a cquire Y ahoo! P ers onals in order to s upplement its Match.com bus ines s . C E O of the compa ny, B a rry Diller s a id: “W e are very interes ted. W e’d love to have Y a hoo! P ers ona ls and I think there is s ome initia l dis cus s ions about tha t, whether they’re going awa y or not is of cours e enormous ly s peculative. B ut I think, Y ahoo! ha s s aid tha t it’s not a n abs olute core a s s et their future a nd it is core to us . W e’re a lea der in the category. S o, we’re very aggres s ive behind Ma tch and a ny pos s ibilities for increa s ing its future money in the world. ” Y a hoo! Inc is looking a t dives ting its non-core properties a nd IAC is likely to be a buyer of other a s s ets too. C hangyou. com L imited reported unaudited cons olidated ea rnings res ults for the firs t quarter ended March 31, 2009. F or the qua rter, the company's tota l revenues increas ed 6% qua rter-over-qua rter and 50% year-over-year to $61. 6 million compa red to total revenue of $41 million for the s ame qua rter a yea r ago. T he increas es were mainly a ttributa ble to a n increas e in T L B B revenues as a res ult of us er bas e expa ns ion and enhanced us er loya lty, a s well a s increas ed revenues from B lade O nline ('B O'). Operating profit increa s ed 12% quarter-overqua rter and 79% year-over-yea r to $37. 9 million compared to opera ting profit of $21.2 million for the s a me quarter a year a go. Net income increa s ed 15% quarter-over-qua rter and 120% yea r-over-year to $33.5 million compa red to net income of $15.2 million for the s a me quarter a year a go. Non-G AAP net income increa s ed 13% quarter-over-qua rter and 100% yea r-over-year to $34.4 million compa red to net income of $17.2 million for the s ame qua rter a year a go. B as ic a nd fully diluted earnings per ADS were $0. 71, compared to $0. 32 in the firs t quarter of 2008. Non-G AAP fully diluted earnings per ADS were $0.72, compa red to $0.36 in the firs t qua rter of 2008. Income before income ta x expens C hangyou.c om L imited (Nas daqG S : C YOU) C hangyou. com Limited R eports Una udited C ons olidated E a rnings R es ults for the F irs t Q ua rter E nded Ma rch 31, 2009; P rovides E arnings G uida nce for the S econd Quarter of 2009 S ohu.c om Inc. (Nas daqG S : S OHU) S ohu. com Inc. R eports Una udited C ons olida ted E a rnings R es ults for the F irs t Quarter E nded Ma rch 31, 2009 ; P rovides E a rnings G uidance for the S econd Q ua rter of 2009 S ohu.com Inc. reported unaudited cons olidated ea rnings res ults for the firs t qua rter ended March 31, 2009. G AAP net income of $44.6 million or $1. 15 per fully diluted s hare. G AAP net income wa s 2. 1 times tha t of firs t quarter 2008. G AAP net income included $33. 5 million of G AAP net income contributed by online game bus ines s with a 15% qua rter-on-qua rter increa s e or a 120% year-on-yea r increa s e. Non-G AAP net income (i. e., excluding s ha re-ba s ed compens a tion expens e) of $46.9 million, or $1. 20 per fully diluted s hare, exceeding the high end of company guidance of $1. 10 by 10 cents . Non-G AAP net income increa s ed 87% yea r-on-year. Non-G AAP net income included $34. 4 million of Non-G AAP net income contributed by online ga me bus ines s with a 13% quarter-on-quarter increa s e or a 100% year-on-year increas e. T ota l revenues were $115. 7 million, repres enting a decreas e of 5% s equentia lly a nd increas e of 36% yea r-on-yea r. T he company a ls o reported opera ting profit of $50, 037, 000, income before income ta x expens e of $51, 160, 000 a nd income from continuing operations of $44,574, 000 agains t operating profit of $30, 531,000, income before income tax expens e of $30, 740,000 a nd income from continuing opera tions of $21 Figure 13. Key Developments Source. Capital IQ VALUATION MMOG companies lead market-cap charts: Ten companies in our W eb 2.0 universe top US$1 billion in market capitalization (Figure 14). Sixty-two of the 92 companies have market caps under US$100 million, with 24 under US$10 million. Online gaming companies dominate the top of the list. Page 13 Market C ap (US D m) Tencent Holdings Ltd. Neteas e. com Inc . S handa Interac tiv e Enterta inment IA C/InterA ctiveCorp. S ohu.com Inc . Gia nt Interac tiv e Group, Inc . Modern Times G roup Mtg A B Open Tex t Corp. Changyou.c om L imited G ree, Inc . Perf ec t World Co., Ltd. V alueClick Inc . Mix i, Inc . Chines e G amer International K ings oft Co. Ltd. United Online Inc . NEOWIZ G ames Corpora tion NetDra gon WebS oft, Inc . G iga Media Ltd. S hutterf ly, Inc . S K Communic a tions Co., Ltd. The9 L imited XING A G G ungHo Online Enterta inment, Inc . G ama nia Digital Enterta inment Co., DA DA S pA CDC Corp. OA O R B C Inf orma tion S y s tems Y edangOnline Corp. Openw a ve S y s tems Inc . A ctoz S oft Co., Ltd. Tree.Com, Inc . G a meOn Co Ltd. Moggle, Inc Digita lTow n, Inc . Cyberplex Inc . HanbitS oft, Inc . K a boos e Inc . TheS treet.c om, Inc . J umpTV Inc . B ey ond Commerc e, Inc . S park Netw orks , Inc . Eolith Co. Ltd. G eoS entric Oyj Ngi G roup Inc . PhotoChannel Netw orks Inc . Webz en Inc . Wiz z a rd S of tw are Corpora tion S ites ea rc h Corpora tion Northga te Technologies L imited Frogs ter Intera ctive Pictures A G Grav ity Co., Ltd Dolphin Digital Media, Inc . DXN Holdings B hd A Q Interac tiv e, Inc . B roadWebA s ia Inc . NeXplore Corpora tion Fluid Mus ic Canada, Inc . LookS ma rt, Ltd. IA S Energy, Inc . IdeaEdge, Inc . J umbuc k Entertainment Pty Ltd. Ex tens ions , Inc . S pec trumDNA , Inc . A c c eleriz e New Media, Inc . UOMO Media, Inc Y nk K orea Inc . Quepa s a Corp. L ingo Media Corpora tion Worlds . com Inc . S NA P Interac tiv e, Inc . B right Things plc CornerWorld Corpora tion Ma gnitude Information S y s tems Inc . MOK O.mobi L imited L iv eWorld Inc . is eemedia Inc . B eta w av e Corpora tion V OIS , Inc . Digita lPos t Interac tiv e, Inc . B igs tring Corp. Unis erve Communica tions Corp. Wy nds torm Corpora tion Z ipL oc al Inc . The Parent Company Fina nc ial Media Group, Inc . Total S port Online A S A s s oc ia ted Media Holdings Inc . China G atew a y Corpora tion S NM G lobal Holdings Dibz International, Inc . S oc ial Media V enures , Inc . 0 2419.2 3785.1 3637.7 970.2 954. 3 700. 2 577. 6 489.6 471.6 456.3 356. 7 332.8 330.3 315.2 259.1 204. 4 158.8 158.8 148.7 141.2 136.6 108.7 105.0 95.0 94.6 94.0 83. 5 78. 5 78. 2 77. 5 71. 2 65.5 62.7 55.0 54.5 50.1 47.8 45.8 43.5 34.0 29.2 28.2 28.0 27.3 27.2 27.1 26.0 25.7 25.3 25.1 24.5 21.9 18.9 18.1 17.0 14. 2 12. 2 12. 0 12. 0 11. 7 11. 4 9.8 8.9 7.2 6.6 6.4 6.1 4.7 4.0 3.9 3.2 2.7 1.3 1.1 0.8 0.5 0.3 0.3 0.2 0.1 0.1 0.0 0.0 0.0 0.0 500 1, 000 1240.4 1862.2 1830. 3 1688. 3 1671. 8 2202.1 1,500 2,000 2,500 3,000 3,500 4,000 Figure 14. Market Cap Ranking Source. Capital IQ TEV/Revenue (LTM) averages 4.7x: The overall average TEV/Revenue (LTM) multiple for our group is 4.7x (up from 4.2x last week) (Figure 15). However, this is skewed by Gree (3633-TSE) at 39.8x and Beyond Commerce Inc. (BYOC-OTCBB) at 31.9x. The median is only 1.8x. Note that we exclude multiples greater than 50x. Thirty companies have multiples under 1.5x 15. 0 20. 0 25. 0 30. 0 35. 0 40. 0 45. 0 Figure 15. TEV/Revenue Ranking Source. Capital IQ # Companies (x) 10.0 15.0 20.0 25.0 0.0 5.0 30.0 26.6 15.1 12.4 7.5 6.9 6.2 1 AIM TSE 5 21 3 OTCBB SEHK 1 HLSE 2 GTSM 1 OTCNO 2 XTRA 2 Figures 16 & 17. TEV/Revenue Ranking (Exchange, Country) Source. Capital IQ AMEX Average TEV/LTM Revenue - By Exchange 4.6 4.1 2.9 2.2 2.2 1.9 1.9 1.8 1.6 1.2 0.9 1.4 11.1 8. 18.3 10. 0 6.9 5.46.0 A verage, 4.7 4.34.44.64.85.05.0 5. 0 2.52.52.52.53.13.13.23.43.53. 5 2.4 1.11.11. 11.11.21.21.21.31.4 1.41.61.8 1. 91.92.0 0.00.10.10.20.20.20.30. 4 0.50.50.50.60.60.8 0.90.90.91.0 0. 0 TEV/Revenue (LTM) by country/exchange: W e have also calculated multiples based on where the companies are listed or domiciled. Figure 16 shows the average TEV/Revenue multiples by stock exchange. The OTCBB has the largest number of companies (21), trading at an average multiple of 12.4x (up from 6.0x last week). On a geographic basis, the United States has the most companies (40), trading at an average of 4.9x revenue (slightly up from 4.8x last week) (Figure 17). Eleven of the companies are Canadian (average 3.6x revenue). 2 0.6 0.4 (x) 10.0 15.0 20.0 25.0 30.0 0.0 5.0 26.6 11.7 6.9 5.9 4.9 4.6 4.6 4.1 3.6 ASX TSX 4 14 9 NasdaqGS OTCPK 7 KOSE 5 TSXV 1 OM T E V/L T M R evenue (x) 1 OSE 1 CM 1 KLSE 5 NasdaqGM # Companies 1 United Kingdom Average TEV/LTM Revenue - By Country 6 2.2 1.8 1.4 0.9 0.6 0.5 Japan 1 Finland 10 China 40 United States 1 Norway 3 Taiwan 2 Germany 11 Canada 2 Australia 9 South Korea 1 Sweden 19.4 16.7 1 Italy 26.6 Page 14 1 Malaysia 31. 9 29.8 1 TEV/EBITDA (LTM) averages 9.7x: The average multiple for the 34 companies with positive EBITDA (and multiples under 100x) is 9.7x LTM EBITDA (up from 9.0x last week), led by Tencent Holdings Ltd.’s (700-SEHK) 34.1x multiple (Figure 18). Fourteen of the companies have EBITDA multiples under 7x. The median multiple is 8.8x (vs. 7.6x last week). O AO R B C Information S y s tems O penwave S y s tems Inc . U nis erve C ommunications C orp. N orthgate T echnologies L imited T he P a rent C ompany S handa Interac tive E ntertainment Ltd. L iveWorld Inc . T ree.C om, Inc. IAC /InterAc tiveC orp. C DC C orp. G a meO n C o Ltd. ZipLoca l Inc . DXN Holdings B hd Y nk K orea Inc . DADA S pA Ac toz S oft C o. , Ltd. J umbuck E nterta inment P ty L td. S pa rk N etwork s , Inc . S N M G loba l Holdings H anbitS oft, Inc . K aboos e Inc . S hutterfly , Inc . United O nline Inc . G ungH o O nline E ntertainment, Inc. G a mania Digital E ntertainment C o., Ltd. V alueC lic k Inc . G igaMedia Ltd. Modern T imes G roup Mtg AB C y berplex Inc . is eemedia Inc . S NAP Intera ctive, Inc. S K C ommunica tions C o., Ltd. Y edangO nline C orp. O pen T ex t C orp. NetDra gon WebS oft, Inc . P hotoC ha nnel Network s Inc. F luid Mus ic C a nada , Inc. E olith C o. Ltd. Lingo Media C orporation N E O WIZ G ames C orporation XIN G AG K ings oft C o. Ltd. MO K O .mobi L imited J umpT V Inc . Acceleriz e New Media , Inc . S ohu.com Inc . T otal S port O nline AS Wiz z ard S oftware C orporation F rogs ter Intera ctiv e P ic tures AG Mix i, Inc . DigitalP os t Intera ctive, Inc. C ornerWorld C orporation G eoS entric O y j As s ociated Media Holdings Inc . C ha ngy ou.com L imited 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 . 39.8 Hong Kong Page 15 T E V/L T M E B IT DA (x) 40.0 35.0 30.0 25.0 20.5 20.0 15.0 A v era ge, 9.7 10.0 5.0 0.5 0.0 S handa Interactive E ntertainment L td. 1.2 Northgate T echnologies L imited 4.4 2.0 G ameO n C o Ltd. 2.5 G amania Digital E ntertainment C o., L td. G ungHo O nline E ntertainment, Inc. J umbuck E nterta inment P ty Ltd. NE O WIZ G ames C orporation C hines e G amer International 4.4 4. 5 5.1 5. 3 5.5 5.6 6.1 6.8 7.3 8.5 8.5 8.7 8.8 8. 9 9.3 13.3 14.2 18.7 29.5 34.1 22.0 11.2 11. 7 9.9 10.3 10.5 10.5 Unis erve C ommunications C orp. C hangy ou.com L imited DXN Holdings B hd Modern T imes G roup Mtg AB S K C ommunica tions C o., Ltd. United O nline Inc. S NAP Intera ctive, Inc. O pen T ex t C orp. C DC C orp. XING AG Mix i, Inc. IAC /InterActiveC orp. C y berplex Inc. S ohu.com Inc. NetDragon WebS oft, Inc. Figure 18. TEV/EBITDA Ranking Source. Capital IQ TEV/EBITDA (LTM) by country/exchange: Figure 19 shows the average TEV/EBITDA multiples by stock exchange. The OTCBB has the largest number of companies (21), trading at an average multiple of 6.1x. On a geographic basis, the United States has the most companies (40), trading at an average of 7.0x EBITDA (Figure 20). Eleven of the companies are Canadian (average 17.2x EBITDA). Average TEV/LTM EBITDA - By Exchange 35.0 29.5 30.0 25.0 (x) 20.0 15.0 10.0 5.0 GTSM 0.0 SEHK TSXV KOSE TSX XTRA 16.115.2 15.0 (x) 20.0 18.0 16.0 14.0 12.0 Average TEV/LTM EBITDA - By Country 17.2 12.2 12.0 11.4 10.5 9.9 8.7 11.4 9.9 8.7 8.2 7.6 6.8 6.1 5.3 4.4 4.4 2.5 OTCBB NasdaqGS OSE TSE OM CM AMEX KLSE ASX 1.2 0.2 RTS BSE 10.0 8.0 6.0 4.0 2.0 0.0 7.4 7.0 5.3 4.4 2.5 1.2 India 1 Germany Canada United States Malaysia 1 South Korea Hong Kong Japan China Taiwan Italy T enc ent Holdings Ltd. S pa rk Network s , Inc. G igaMedia Ltd. V alueC lic k Inc. Y edangO nline C orp. Actoz S oft C o. , Ltd. K ings oft C o. Ltd. S hutterfly , Inc. K aboos e Inc. DADA S pA # Companies 5 3 2 4 7 2 1 14 5 1 21 1 1 2 2 1 1 # Companies 11 10 3 9 1 2 1 6 40 1 Figures 19 & 20. TEV/EBITDA Ranking (Exchange, Country) Source. Capital IQ P/E (LTM) averages 17.0x: The average multiple for the 33 companies with positive earnings (and multiples under 100x) is 17.0x LTM EPS (from 16.4x last week), led by Shutterfly Inc’s (SFLY-NASDAQ) 74.2x multiple (Figure 21). Thirteen of the companies have P/E multiples under 10x. The median is just 12.7x. Australia 2 Sweden Page 16 P /E L T M (x) 80.0 70.0 60.0 50.0 40.0 29.5 30.0 20.2 21. 2 20.0 10.0 1. 7 0.0 G iant Interac tive G roup, Inc . DXN Holdings B hd Northgate T ec hnologies L imited S handa Interac tive E ntertainment L td. Modern T imes G roup Mtg AB Neteas e.c om Inc . Worlds . c om Inc . P erfec t World C o., Ltd. 1. 8 1.8 2.5 A verage, 17.0 7.4 8. 7 9.5 15. 8 16.8 13.6 14.2 14.3 15. 1 11.8 11.8 12.7 13. 1 9.7 10. 6 23. 7 34.0 34.5 45. 6 68.9 74.2 3. 0 3. 3 4.9 5.1 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. C hangy ou.c om L imited S NAP Interac tive, Inc . NetDragon WebS oft, Inc . IAC /InterAc tiveC orp. S park Network s , Inc . T enc ent Holdings Ltd. Y edangO nline C orp. T heS treet. com, Inc . 7.4 Ngi G roup Inc . K ings oft C o. L td. O pen T ex t C orp. G igaMedia Ltd. S ohu. c om Inc . C y berplex Inc . XING AG Mix i, Inc . Figure 21. P/E Ranking Source. Capital IQ P/E (LTM) by country/exchange: Figure 22 shows the average P/E multiples by stock exchange. The OTCBB has the largest number of companies (21), trading at an average multiple of 6.4x. On a geographic basis, the United States has the most companies (40), trading at an average of 31.0x earnings (Figure 23). Eleven of the companies are Canadian (average 25.1x EPS). Average P/E - By Exchange 80.0 70.0 60.0 50.0 (x) 30.0 20.0 10.0 NasdaqGM GTSM 0.0 SEHK TSE NasdaqGS KOSE CM XTRA AMEX TSX 19.1 (x) 25.0 25.1 Ac toz S oft C o. , L td. 68.9 35.0 30.0 Average P/E - By Country 31.0 40.0 24.8 23.3 21.2 20.0 15.0 10.0 5.0 21.2 20.1 19.1 17.3 16.8 16.8 10.8 8.7 15.8 13.1 8.7 7.4 6.4 OTCBB 5.1 OM 4.9 KLSE 5.1 S hutterfly , Inc. 4.9 Malaysia 1 Sweden 1 DADA S pA ASX 0.0 Germany United States Canada Japan China Taiwan South Korea Italy 1 Australia 2 # Companies 5 2 3 2 5 14 7 4 2 1 2 21 1 1 # Companies 40 11 2 3 6 9 10 Figures 22 & 23. P/E Ranking (Exchange, Country) Source. Capital IQ Page 17 UPCOMING EVENTS E arnings Calendar C ompany T heS treet. com, I nc. (Na s da qG M: TS C M) V a lueClic k Inc . (N a sda qG S : V C L K ) U nited O nline Inc . (N a sda qG S : UN TD ) Open T ext C orp. (Na s da qG S : O TE X ) P hotoC ha nnel N etworks I nc. (TS X V : P N) Figure 24. Earnings Calendar Source. Company reports D ate & T ime T uesda y , May 05, 2009 4: 30 P M (E D T ) T uesda y , May 05, 2009 4: 30 P M (E D T ) T uesda y , May 05, 2009 2: 00 P M (P D T ) W ednes da y, M a y 06, 2009 5:00: 00 P M (E D T ) W ednes da y, M a y 13, 2009 4:30 P M (E DT ) Qu arter Q 1 2009 Q 1 2009 Q 1 2009 Q 3 2009 Q 2 2009 C onf C all D etails NA 818-575-4677 877-681-3374 800-733-7571 888-300-8196 Page 18 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 ha ngyou. com Limite d 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 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 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 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 C Y OU 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 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 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 XT R A KO SE KO SE T S XV U S D Ma rket C ap ($m) 1 2.0 9 5.0 2 5.7 0 .1 1 .1 3 .2 5 5.0 6 .6 2 5.3 14 1.2 1,6 71. 8 0 .0 57 7.6 6 .4 7 8.2 14 8.7 2 6.0 0 .0 1 .3 7 8.5 2 7.1 5 0.1 1 4.2 0 .2 2 4.5 2 7.3 15 8.8 9 4.0 4 7.8 1,8 62. 2 33 2.8 2 7.2 1,2 40. 4 15 8.8 7 7.5 2,4 19. 2 1 8.9 1 8.1 3 .9 1 7.0 6 2.7 7 1.2 48 9.6 9 .8 4 .0 2 1.9 6 .1 70 0.2 1,8 30. 3 8 3.5 4 .7 45 6.3 35 6.7 3,7 85. 1 2 5.1 4 5.8 2 8.0 1,6 88. 3 10 5.0 97 0.2 4 3.5 1 1.4 13 6.6 3,6 37. 7 33 0.3 31 5.2 7 .2 0 .0 0 .0 2,2 02. 1 2 8.2 5 4.5 1 2.2 16, 034 .1 0 .3 25 9.1 6 5.5 0 .1 9 4.6 0 .8 47 1.6 1 2.0 95 4.3 2 .7 3 4.0 2 9.2 8 .9 0 .5 20 4.4 10 8.7 1 1.7 0 .3 C urrent Pric e 0.4 4 1 4,15 0.0 0 4 6,95 0.0 0 0.0 0 0.0 2 0.1 1 1.3 3 0.0 2 0.3 0 1.3 2 3 2.6 2 0.0 0 22 4.5 0 0.1 0 1.7 2 6.8 8 0.4 0 0.0 0 0.0 2 2.9 0 0.5 5 88 5.0 0 0.1 5 0.0 0 0.5 5 8.7 0 3 4.5 5 9 6,60 0.0 0 0.0 4 8.2 4 6.1 6 0.9 8 5,52 0.0 0 13 7,70 0.0 0 4,48 5.0 0 1 6.0 3 0.2 7 0.4 3 0.0 9 0.4 7 0.6 5 0.6 0 3.5 3 0.9 0 0.1 3 1.2 8 0.0 1 45 3,00 0.0 0 22 0.0 0 2.3 0 0.0 7 6 0,10 0.0 0 5.2 3 3 0.7 6 0.4 5 3 6,80 0.0 0 3 9.8 0 3 2.5 3 1.2 6 1 8.3 9 1.5 0 0.9 0 0.9 9 5 2.4 3 1 3.1 2 9,72 0.0 0 0.6 7 0.0 0 0.0 1 5 7.5 5 3.5 0 2.6 5 0.2 5 6 9.0 0 0.0 1 9.6 6 2.1 4 0.0 3 9.4 8 0.0 4 5.6 8 0.1 4 1 1.0 0 0.3 2 2.8 7 0.6 2 0.1 7 0.0 3 2 9.9 0 8,81 0.0 0 6,03 0.0 0 0.0 1 1 Wk -10. 2% -4.1 % -0.3 % 0.0 % 53.3 % 0.9 % -10. 7% 36.4 % -33. 8% 11.9 % 21.7 % 1 00. 0% 11.7 % -16. 7% 39.8 % 17.6 % 23.4 % -90. 0% -10. 5% 45.0 % 3.8 % 33.1 % -25. 0% -18. 9% 37.5 % -4.0 % 7.5 % 5.0 % 0.0 % -3.1 % -8.7 % 8.9 % -2.3 % -0.9 % -0.2 % 0.7 % 8.0 % -3.4 % -10. 0% 0.0 % 18.2 % 1.7 % -7.1 % 0.0 % 85.7 % -5.3 % -6.7 % -6.2 % 3.8 % 15.0 % -12. 9% 1.0 % 18.3 % 1.7 % -40. 0% 1.4 % -12. 7% -3.0 % 5.9 % 9.6 % -3.2 % 3.4 % 51.5 % 10.8 % 29.4 % -2.8 % 3.1 % -50. 0% -93. 3% 13.9 % -30. 0% 17.8 % 25.0 % 6.6 % 4.0 % 4.9 % -8.9 % 0.0 % 62.3 % -20. 0% 19.6 % 1 33. 3% 13.5 % 6.7 % 3.2 % 12.5 % 0.0 % -66. 7% 0.4 % -10. 4% 26.9 % 0.0 % 1 33. 3% -93. 3% 4.8% 1.2 % 1 Mth 2 5.7 % 2 9.2 % 2 5.2 % 7.1% 3 1.3 % -30. 6% -4.3 % 7 0.5 % -33. 8% 1 3.8 % NM 1 00.0 % 2 5.1 % -28. 6% 7 9.2 % 4 6.3 % 3 1.7 % -90. 0% 7 0.0 % 1 6.0 % -8.3 % 7 1.8 % -25. 0% -57. 1% -8.3 % 2 7.8 % 3.8% 7.3% 0.0% 1 3.3 % 7.7% 1 6.7 % -1.3 % 8.5% 3 8.9 % 0.8% 5 75.0 % 1 1.8 % -10. 0% -7.0 % 1 2.1 % 5.3% 9.3% 8.4% 0.0% 2.6% -6.7 % 2 2.4 % 3 7.9 % 1 5.0 % -18. 7% 3 0.7 % 2 6.9 % 1 2.8 % -26. 2% 7 5.2 % 2 7.2 % -3.1 % 1 0.5 % 2 1.9 % -2.6 % -9.1 % 1 59.2 % 2 2.3 % 3 1.9 % 2 9.4 % -10. 7% 14 00. 0% -99. 2% 2 7.9 % NM 1 5.2 % 6 6.7 % 2 0.2 % -31. 6% -30. 6% 6.5% -25. 0% 7 9.9 % -20. 0% 1 4.7 % 4 0.0 % 1 5.3 % 3 9.1 % 4 2.1 % 3 7.6 % -10. 5% -66. 7% 2.0% 5.4% 6 2.1 % -66. 7% 14 00. 0% -99. 2% 34.0% 1 2.5 % 3 Mth 25 .7% 25 .8% 34 .1% -7 0.0% 23 .5% -4 4.5% 51 .1% 77 .2% -7 0.5% 80 .8% NM 0 .0% 14 8.6% -7 5.6% 34 1.0% 22 .8% 11 .3% -9 0.0% -1 5.0% -3 .3% -1 9.1% 71 .8% 18 5.7% -8 5.0% 37 .5% 76 .1% 60 .3% -2 0.5% 33 .3% 44 .8% -7 .2% 36 .5% -8 .9% 29 .2% 43 .1% 8 .8% 98 0.0% 6 .2% 12 .5% -3 .1% 47 .7% 39 .5% 29 .3% -1 4.3% 16 0.0% -5 .0% -4 6.2% -1 1.2% 59 .7% 53 .3% 85 .0% 15 9.1% 92 .3% 61 .1% -2 5.0% -3 .9% 1 .1% -6 .7% 55 .6% 26 .9% -9 .1% -5 2.6% 21 7.7% 75 .9% 10 0.0% 31 .4% -3 2.3% 20 0.0% -9 9.2% 45 .6% NM 15 .7% 15 0.0% 42 .6% -5 0.0% -3 5.4% -2 5.4% -2 5.0% 13 7.0% 0 .0% -1 .9% 75 .0% 72 .7% -5 7.3% 10 8.9% -1 5.2% -2 2.7% -7 6.0% 0 .5% 21 .0% 56 .2% -7 5.0% 98 0.0% -9 9.2% 38.7% 23 .1% 6 Mth 10 .0% 65 .1% -0.9% -8 1.3 % -1 6.0 % -2 8.4 % -3 1.8 % 56 .3% -7 7.9 % 3 .1% NM -8 6.7 % 17 9.9% -5 0.0 % 30 9.5% -1 0.9 % 12 .9% -9 8.0 % -5 1.4 % 16 .0% -3 8.9 % 63 .9% 50 .0% -9 9.3 % 37 .5% 11 5.9% 14 3.3% 46 .4% 0 .0% 29 .2% 1 .1% 22 .5% NM 44 .0% 54 .1% -6.5% 21 7.6% -7 7.0 % -3 0.8 % 9 .4% 14 .0% 17 .6% 76 .5% -2 4.4 % 0 .0% -2 6.3 % 16 .7% -2 1.4 % 12 .2% NM 54 .2% 36 7.7% 56 .1% 39 .5% -4 7.1 % -4 8.1 % -4 9.8 % 12 .6% 55 .6% -0.3% -3 3.3 % -5 8.7 % -3 4.3 % 10 5.9% 74 .2% 91 .3% 48 .9% -9 8.3 % -9 9.7 % 4 .9% NM -1 1.4 % 4 .2% 25 .5% -9 8.5 % -2 8.3 % -4 1.4 % -4 0.0 % 30 0.0% -5 0.0 % -1 6.5 % -1 2.5 % 63 .7% -5 7.3 % 18 4.2% -3 4.8 % -2 9.2 % -8 5.0 % 24 .0% 46 .8% 2 .7% -5 0.0 % 36 7.7% -9 9.7 % 14.8% 1 .9% 1 Yr -38 .9% 75.8 % -79 .2% 36.4 % -86 .9% -68 .3% -45 .7% -25 .0% -86 .8% -61 .1% NM -96 .7% 99.6 % -80 .4% 1 02. 4% -52 .3% -22 .5% -98 .0% -91 .1% -1. 7% NM -11 .5% 0.0 % -99 .3% NM 1 02. 3% 6.0 % -13 .8% -42 .9% -47 .1% -62 .2% -34 .7% NM -55 .7% -0. 3% -62 .8% 8.0 % -41 .8% -66 .7% -24 .4% -15 .6% -40 .0% 1.4 % -50 .0% -50 .0% -71 .0% -30 .0% -46 .0% -50 .3% NM 80.5 % 76.8 % -57 .5% 32.3 % NM -71 .3% -90 .5% -9. 6% -37 .3% -40 .4% -59 .5% -67 .3% -88 .3% 46.5 % 4.7 % -35 .2% -15 .2% -99 .9% NM -24 .1% NM -39 .8% NM 20.6 % -99 .4% -55 .8% -71 .4% -70 .0% NM -88 .6% -49 .8% -68 .2% -42 .9% NM 5.5 % -70 .5% -55 .3% -92 .5% -23 .5% -25 .7% -57 .2% -96 .4% 1 02. 4% -99 .9% -35.2% -45 .7% 52 We ek -43. 6% -11. 6% -80. 0% -97. 0% -89. 5% -73. 6% -59. 7% -35. 7% -89. 7% -65. 3% -2.6 % -95. 6% -4.9 % -87. 5% 13.9 % -57. 5% -28. 8% -98. 0% -93. 9% -52. 5% -51. 3% -15. 3% -85. 1% -99. 7% -73. 0% -12. 1% -6.5 % -40. 9% -42. 9% -52. 1% -69. 0% -51. 0% -12. 4% -68. 3% -36. 0% -68. 3% -22. 9% -85. 0% -74. 3% -29. 0% -49. 2% -52. 0% -18. 1% -55. 0% -68. 3% -73. 3% -53. 3% -52. 6% -51. 6% 0.0 % -26. 0% -18. 1% -61. 5% -2.3 % -69. 0% -78. 0% -91. 5% -16. 8% -42. 2% -45. 1% -63. 9% -74. 0% -89. 2% -2.7 % -13. 0% -50. 7% -38. 0% -99. 9% -99. 8% -37. 1% -30. 0% -43. 0% -58. 3% -4.2 % -99. 6% -66. 1% -73. 6% -70. 0% -14. 6% -91. 1% -54. 6% -82. 5% -47. 6% -94. 3% -35. 5% -73. 7% -57. 5% -96. 5% -35. 9% -29. 8% -60. 8% -97. 1% 13.9 % -99. 9% -53.9% -53. 9% 493.4 Figure 25. Price Performance Source. Capital IQ Page 19 C omparable C ompany Analys is > Web 2.0 Valuation Multiples C ompany Name Accelerize New Media, Inc. Actoz S oft C o., Ltd. AQ Intera ctive, Inc. As s ociated Media Holdings Inc. B igs tring C orp. B eta wave C orporation B eyond C ommerce, Inc. B right T hings plc B roa dW ebAs ia Inc. C DC C orp. C ha ngyou.com L imited C hina G ateway C orporation C hines e G a mer International C ornerW orld C orporation C yberplex Inc. DADA S pA DXN Holdings B hd Dibz International, Inc. Digita lP os t Interactive, Inc. Digita lT own, Inc. Dolphin Digita l Media, Inc. E olith C o. Ltd. E xtens ions , Inc. F inancial Media G roup, Inc. F luid Mus ic C ana da, Inc. F rogs ter Interactive P ictures AG G ama nia Digita l E ntertainment C o., Ltd. G ameOn C o L td. G eoS entric Oyj G iant Interactive G roup, Inc. G iga Media Ltd. G ra vity C o., Ltd G ree, Inc. G ungHo Online E ntertainment, Inc. HanbitS oft, Inc. IA C /InterActiveC orp. IA S E nergy, Inc. IdeaE dge, Inc. is eemedia Inc. J umbuck E nterta inment P ty Ltd. J umpT V Inc. K aboos e Inc. K ings oft C o. Ltd. Lingo Media C orporation LiveW orld Inc. LookS ma rt, Ltd. Magnitude Information S ys tems Inc. Mixi, Inc. Modern T imes G roup Mtg AB Moggle, Inc MOK O.mobi Limited NE OW IZ G ames C orporation NetDragon W ebS oft, Inc. Neteas e.com Inc. NeXplore C orporation Ngi G roup Inc. Northgate T echnologies Limited Open T ext C orp. Openwave S ys tems Inc. P erfect W orld C o., L td. P hotoC hannel Networks Inc. Quepas a C orp. OAO R B C Information S ys tems S handa Interactive E ntertainment Ltd. S hutterfly, Inc. S K C ommunications C o., L td. S NAP Intera ctive, Inc. S NM G loba l Holdings S ocia l Media V enures , Inc. S ohu.com Inc. S ites earch C orpora tion S park Networks , Inc. S pectrumDNA, Inc. T encent Holdings Ltd. T he P arent C ompany T he9 Limited T heS treet.com, Inc. T otal S port O nline AS T ree.C om, Inc. Unis erve C ommunications C orp. United Online Inc. UOMO Media, Inc V alueC lick Inc. V OIS , Inc. W ebzen Inc. W izzard S oftware C orporation W orlds .com Inc. W ynds torm C orporation XING AG Y edangO nline C orp. Y nk K orea Inc. ZipLocal Inc. High Low Average Median S ec tor Direct Marketing G aming G aming Mobile Ins tant Mes s aging Media S ocial Networking S ocial Networking S ocial Networking G aming G aming Mobile G aming C ontent Advertis ing S ocial Networking S ocial Networking S NS Apps C ontent S ocial Networking S ocial Networking G aming C ontent Direct Marketing Media G aming G aming G aming Mobile G aming G aming G aming S ocial Networking Media G aming Media V ideo S ocial Networking C ontent S ocial Networking V ideo C ontent G aming Learning S ocial Networking Direct Marketing S ocial Networking S ocial Networking Media G aming S ocial Networking G aming G aming G aming C ontent Media Direct Marketing C ollaboration Mobile G aming Digital Imaging S ocial Networking Media G aming Digital Imaging S earch Dating Media S ocial Networking G aming S ocial Networking S ocial Networking Media P orta l Media G aming Media Media P orta l S ocial Networking Media Media Media S ocial Networking G aming P odca s ting C ontent C ontent S ocial Networking G aming G aming Directory C ountry United S tates S outh K orea J apan United S tates United S tates United S tates United S tates United K ingdom United S tates Hong K ong C hina United S tates T aiwan United S tates C anada Italy Mala ys ia United S tates United S tates United S tates United S tates S outh K orea United S tates United S tates United S tates G ermany T aiwan J apan F inland C hina T aiwan S outh K orea J apan J apan S outh K orea United S tates C anada United S tates C anada Aus tralia C anada C anada C hina C anada United S tates United S tates United S tates J apan S weden United S tates Aus tralia S outh K orea C hina C hina United S tates J apan India C anada United S tates C hina C anada United S tates R us s ia C hina United S tates S outh K orea United S tates United S tates United S tates C hina United S tates United S tates United S tates C hina United S tates C hina United S tates Norwa y United S tates C anada United S tates C anada United S tates United S tates S outh K orea United S tates United S tates United S tates G ermany S outh K orea S outh K orea C anada P rimary E xc hange OT C B B K OS E TS E OT C P K OT C B B OT C B B OT C B B AIM OT C P K Na s daqG S Na s daqG S OT C B B GTS M OT C B B TS X CM K LS E OT C P K OT C B B OT C B B OT C B B K OS E OT C P K OT C B B TS X XT R A GTS M TS E HL S E NY S E Na s daqG S Na s daqG M TS E OS E K OS E Na s daqG S OT C B B OT C B B T S XV AS X TS X TS X S E HK T S XV OT C P K Na s daqG M OT C B B TS E OM OT C B B AS X K OS E S E HK Na s daqG S OT C P K TS E BSE Na s daqG S Na s daqG S Na s daqG S T S XV Na s daqC M R TS Na s daqG S Na s daqG S K OS E OT C B B OT C P K OT C P K Na s daqG S OT C B B AME X OT C B B S E HK OT C P K Na s daqG S Na s daqG M OT C N O Na s daqG M T S XV Na s daqG S OT C B B Na s daqG S OT C B B Na s daqG M AME X OT C B B OT C B B XT R A K OS E K OS E T S XV Tic ker AC LZ A052790 3838 AS MH BS GC B W AV B Y OC AIM:B G T BWBA C HIN.A CYOU CGWY G T S M:3083 CWR L T S X:C X C M:DA DXN DIB Z DG LP DG T W DP DM A041060 E XT I F NG P T S X: F MN FR G 6180 3812 G E O1V GA G IG M GR VY T S E :3632 3765 A047080 IAC I IAS C .A OT C B B : IDAE IE E AS X:J MB T S X:J T V T S X:K AB 3888 T S XV :LM LV W D LOO K MAG Y 2121 MT G B MMOG MK B A095660 777 NT E S NXP C 2497 590057 OTE X OP W V PWRD T S XV :P N QP S A RBCI S NDA S F LY A066270 S TVI S NMN S MV I S OHU S TPC LOV S P XA 700 K IDS .Q NC T Y TS CM T OS O TR E E T S XV :US S UNT D UOMO V C LK V O IS W ZE N W ZE W DDD W Y ND O 1B C A052770 A023770 T S XV :ZIP US D Market C ap ($m) 12.0 95.0 25.7 0.1 1.1 3.2 55.0 6.6 25.3 141.2 1,671.8 0.0 577.6 6.4 78.2 148.7 26.0 0.0 1.3 78.5 27.1 50.1 14.2 0.2 24.5 27.3 158.8 94.0 47.8 1,862.2 332.8 27.2 1,240.4 158.8 77.5 2,419.2 18.9 18.1 3.9 17.0 62.7 71.2 489.6 9.8 4.0 21.9 6.1 700.2 1,830.3 83.5 4.7 456.3 356.7 3,785.1 25.1 45.8 28.0 1,688.3 105.0 970.2 43.5 11.4 136.6 3,637.7 330.3 315.2 7.2 0.0 0.0 2,202.1 28.2 54.5 12.2 16,034.1 0.3 259.1 65.5 0.1 94.6 0.8 471.6 12.0 954.3 2.7 34.0 29.2 8.9 0.5 204.4 108.7 11.7 0.3 16,034.1 0.0 493.4 38.8 TE V/L TM R evenue 4. 3x 0. 9x 8. 1x 29.8x 31.9x 26.6x 0. 5x 8. 3x 0. 0x 11.1x 6. 0x 1. 6x 0. 9x 0. 6x 5. 4x 2. 5x 2. 5x 5. 0x 1. 2x 0. 5x 6. 9x 1. 4x 39.8x 1. 2x 1. 1x 0. 5x 1. 8x 0. 9x 3. 5x 1. 1x 3. 4x 3. 1x 0. 3x 5. 0x 1. 4x 3. 5x 3. 1x 2. 5x 0. 2x 2. 4x 0. 1x 2. 5x 0. 0x 0. 2x 1. 1x 1. 9x 1. 9x 1. 1x 0. 0x 4. 4x 1. 0x 16.7x 0. 2x 4. 6x 0. 4x 0. 1x 1. 2x 19.4x 1. 3x 4. 8x 3. 2x 2. 0x 0. 8x 0. 6x 39.8x 0. 0x 4.7x 1. 8x TE V/ NTM R evenue 0.5x 1.1x 1.8x 1.4x 0.5x 1.0x 1.3x 2.1x 0.1x 1.7x 1.2x 1.1x 3.8x 0.4x 0.8x 1.5x 3.8x 0.1x 1.3x 1.2x TE V/L TM E B ITDA 4.5x 10.5x 14.2x 22.0x 18.7x 5.3x 4.4x 8.5x 2.0x 5.6x 6.8x 10.3x 2.5x 11.2x 8.8x 13.3x 8.7x 11.7x 5.5x 1.2x 9.3x 0.2x 0.5x 8.5x 20.5x 6.1x 10.5x 4.4x 34.1x 29.5x 5.1x 7.3x 9.9x 8.9x 34.1x 0.2x 9.7x 8.6x TE V/NTM E B ITDA 7.1x 12.1x 5.7x 4.8x 6.3x 10.6x 8.1x 1.5x 5.4x 2.7x 7.0x 8.7x 3.3x 6.4x 12.1x 1.5x 6.4x 6.3x P /L TM E P S 15.1x 14.3x 29.5x 15.8x 8.7x 4.9x 20.2x 9.7x 1.8x 10.6x 16.8x 7.4x 12.7x 34.0x 5.1x 23.7x 11.8x 2.5x 13.6x 1.8x 34.5x 1.7x 3.0x 74.2x 9.5x 14.2x 13.1x 45.6x 0.8x 68.9x 3.3x 21.2x 11.8x 74.2x 0.8x 17.0x 12.7x P /NTM E P S 30.0x 15.6x 13.5x 10.9x 36.2x 12.9x 15.3x 13.6x 34.1x 9.0x 23.1x 16.8x 12.9x 10.5x 7.9x 18.8x 36.2x 7.9x 17.6x 14.5x P /TangB V 1.7x 0.4x 0.3x 9.9x 16.2x 0.5x 1.9x 2.5x 2.2x 1.3x 4.9x 0.4x 3.0x 19.4x 2.4x 1.1x 13.2x 2.1x 1.9x 3.3x 3.0x 1.8x 0.8x 5.5x 3.8x 14.0x 1.9x 0.7x 0.7x 1.4x 0.5x 9.2x 8.5x 1.4x 1.9x 4.7x 6.8x 40.1x 18.4x 18.6x 0.1x 0.7x 1.4x 9.3x 6.0x 0.0x 5.5x 5.5x 40.1x 0.0x 5.4x 2.3x Figure 26. Valuation Comparison Source. Capital IQ Page 20 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 tates C anada C hina S outh K orea J a pa n T a iwa n A ustra lia G ermany N orway 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 40 11 10 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 tates J a pan C anada S weden S outh K orea T a iwa n G erma ny I ta ly H ong K ong R uss ia F inland I ndia M alays ia Aus tra lia U nited K ingdom N orway G rand T otal 31, 268.6 5, 003.2 2, 264.9 1, 989.8 1, 830.3 1, 175.8 1, 069.3 231.6 148.7 141.2 136.6 47.8 28.0 26.0 21.7 6.6 0.1 45,390.2 Avg US D Mar ket C ap ($m) China S weden Japan Ta iwa n Ca na da Ita ly Hong K ong R us sia S outh K orea United S tates G erma ny Finland India Malay sia Australia United K ingdom Norway G rand Total 3,126. 9 1,830. 3 377. 5 356. 4 180. 9 148. 7 141. 2 136. 6 130. 6 125. 1 115. 8 47. 8 28. 0 26. 0 10. 9 6. 6 0. 1 493.4 U S D LT M T otal R ev ($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 aiwan I ta ly R uss ia I ndia M a la ys ia G ermany Aus tra l ia F inla nd N orwa y U nited K ingdom G rand T otal 3, 744. 3 3, 555. 3 1, 662. 4 951. 1 584. 3 495. 8 428. 1 351. 7 226. 2 144. 1 135. 8 78. 6 52. 0 14. 3 5. 8 2. 1 0. 2 12,432.2 U S D LT M Total E B IT DA ($m) C hina S weden U nited S ta tes C a na da J apan T a iwan S outh K orea I taly I ndia R uss ia H ong K ong G erma ny M alays ia Aus tralia N orway U nited K ingdom F inland G r and T otal 1,774. 4 268. 2 240. 1 186. 1 130. 5 86. 4 66. 7 36. 1 23. 9 18. 8 18. 8 11. 7 10. 5 2. 7 -1. 0 -1. 7 -13. 1 2,859.1 E B IT DA % C hina Aus tral ia T aiwa n J a pa n I ndia S weden I ta ly M a la ys ia R uss ia H ong K ong C anada S outh K orea U nited S ta tes N orway G ermany U nited K ingdom F inla nd G rand T otal 41. 0% 37. 2% 29. 7% 26. 1% 17. 6% 16. 1% 16. 0% 13. 3% 13. 1% 4.4% -2. 8% -7. 4% -10.2% -10.4% -19.1% #DI V /0! #DI V /0! 7.4% Figure 27. Comparison by Country Source. Capital IQ C omparable C o mpan y A nalys is > W eb 2.0 Su mmary b y Ex c hange C om pan y Nam e OT C B B N a s daqG S OT C P K K OS E TSE N a s daqG M T S XV TSX S E HK A ME X XT R A ASX GT S M OT C NO HLS E NY S E CM BSE N a s daqC M OS E A IM OM R TS K LS E Gr an d To tal 21 14 9 7 5 5 5 4 3 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 92 U S D Market Cap ($m) N a sdaqG S S E HK TSE NYS E OM K OS E GT SM O T CB B N a sdaqG M TSX XT RA OS E CM R TS AM E X O T CP K T S XV HLS E BSE K LS E AS X N a sdaqC M AI M O T CN O G rand T otal 18, 968.6 16, 880.4 2, 106.0 1, 862.2 1, 830.3 1, 114.5 736.5 383.3 243.3 236.6 231.6 158.8 148.7 136.6 83.7 69.0 58.4 47.8 28.0 26.0 21.7 11.4 6.6 0.1 45, 390.2 Avg US D Market C ap ($m) S E HK NY S E OM Nas daqG S TS E G TS M K OS E OS E CM RTS XT R A TS X Nas daqG M HL S E AME X BSE K LS E O TC B B TS X V Nas daqC M AS X O TC P K AIM O TC NO G ran d To tal 5,626. 8 1,862. 2 1,830. 3 1,354. 9 421. 2 368. 2 159. 2 158. 8 148. 7 136. 6 115. 8 59. 1 48. 7 47. 8 41. 8 28. 0 26. 0 18. 3 11. 7 11. 4 10. 9 7. 7 6. 6 0. 1 493. 4 U S D LT M T otal R ev ($m) OM N asdaqG S S EHK NYS E CM R TS BSE OS E N asdaqG M GTS M K LS E TSE K OS E TSX AM E X XT R A OT CP K T S XV AS X H LS E OT CN O OT CB B AI M N asdaqC M G rand T otal 1, 662. 4 472. 0 418. 5 233. 6 226. 2 144. 1 135. 8 113. 2 85. 3 80. 6 78. 6 76. 5 74. 8 33. 9 31. 7 26. 0 21. 0 9. 9 7. 1 5. 8 2. 1 2. 0 0. 2 0. 1 148. 0 U S D LT M To tal E B IT DA ($m) N a sdaqG S S E HK OM NYS E TSE K OS E GT S M CM BSE OS E R TS X TR A K LS E AM E X AS X OT CNO AI M TSX T S XV N a sdaqC M HLS E N a sdaqG M OT CP K OT CB B G rand T otal 1,641. 0 599. 1 268. 2 144. 6 110. 3 63. 7 40. 4 36. 1 23. 9 20. 2 18. 8 11. 7 10. 5 6. 3 2. 7 -1. 0 -1. 7 -6. 0 -10. 1 -11. 4 -13. 1 -15. 9 -26. 5 -52. 5 2,859. 1 E B IT DA % NYS E AS X GT S M TSE S E HK N a sdaqG S OS E BSE OM CM K LS E R TS OT CB B K OS E T S XV OT CNO TSX OT CP K XT RA N a sdaqG M HLS E AM E X N a sdaqC M AI M G rand T otal 61. 9% 37. 2% 32. 5% 27. 7% 24. 1% 20. 3% 17. 8% 17. 6% 16. 1% 16. 0% 13. 3% 13. 1% 4.3% 3.4% -6. 1% -10.4% -14.7% -16.5% -19.1% -26.5% #DI V /0! #DI V /0! #DI V /0! #DI V /0! 7.4% Figure 28. Comparison by Exchange Source. Capital IQ Page 21 Financing - Last Three Months (US$ m) Month F eb-09 C ompany Name Twitter S ynthas ite Tremor Media Offerpal Media Imagini E mergent G ame Technologies Outbrain Tvtrip Tongxue Oodle TextDigger OneS pot Mixpo F etchDog Virtual F airground 7 B illion P eople F amilyL ink.com Whis tleB ox Mendeley Outright Tvinci F iltrbox MMO L ife C ake F inancial fav.or.it F eb-09 Total Mar-09 K aixin001.com Vidyo B uzznet L endingC lub S endMe Inc. Auditude G lam Media S uperS ecret G oViral G reys tripe OMG P OP Apture S imulmedia Tynt AnyS ource Media P ixazza B it.ly Hunc h S ports C ompos ite DE AdultS pace Myngle 33Acros s Three Melons Mar-09 Total Apr-09 C ollective Media G OOM R adio Marin S oftware The R ubicon P roject F reeWheel C ellufun C onductor Inc. S canS c out DoubleTwis t IMS hopping S oc ialtext Mixercas t S oundC loud TubeMogul Tribal Nova Tripbas e S oc ialcas t B randtology S can & Target J odange F oodis ta Apr-09 Total US A F rance US A US A US A US A US A US A US A US A US A US A G ermany US A C ana da US A US A S ingapore F rance US A US A 1. 3 1. 2 10.6 8.0 0. 6 45.3 52.5 16.1 12.0 2. 0 1. 4 1. 4 3. 3 3. 0 2. 5 4. 1 4. 7 4. 5 8. 1 5. 0 10. 0 10. 0 8. 0 16. 0 13. 0 5. 0 12. 0 C hina US A US A US A US A US A US A US A UK US A US A US A US A C ana da US A US A US A US A US A US A Netherlands US A Argentina 1.3 1.3 0. 6 0.6 41.1 1. 3 1. 3 0. 8 50.3 20. 0 43.0 12.0 10.0 4. 1 4. 0 3. 9 3. 2 3. 1 2. 0 2. 0 2. 0 5. 0 10. 0 8. 8 5. 5 10. 5 10. 0 12. 0 12. 0 C ountry US A S outh Africa US A US A UK US A Is ra el F rance C hina US A US A US A C ana da US A Netherlands US A US A US A UK US A Is ra el US A Netherlands US A UK 13.3 1. 3 1. 3 0. 7 24.8 76.4 20. 0 15. 0 12. 5 58.6 12.5 2. 0 2. 0 1. 6 1. 4 2. 3 4. 0 3. 0 2. 9 4. 0 4. 3 4. 2 4. 0 6. 0 5. 6 12. 0 9. 0 15. 0 13. 5 12. 5 20. 0 18. 0 Angel/S eed Debt financ ing PIP E S eries A S eries B S eries C 35. 0 S eries D S eries E G rand 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 20. 0 15. 0 12. 5 12. 0 12. 0 10. 5 10. 0 10. 0 8. 8 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. 6 159.5 20. 0 16. 0 13. 0 13. 0 12. 0 10. 0 10. 0 8. 1 5. 0 4. 7 4. 5 4. 1 3. 3 3. 0 2. 5 2. 0 1. 4 1. 4 1. 3 1. 2 0. 6 144.5 Figure 29. Financing, Last Three Months Source. Company reports Page 22 C ompany Des c riptio ns - C urrent Mo nth C apital Market A c tivity C ompany B atanga HQ U nited S ta tes W ebs ite www. ba ta nga .c om Des criptio n B atanga, Inc. opera tes a s a media a nd enterta inment c ompany for His pa nic s. I t offers online entertainment, suc h as Internet ra dio, mus ic videos , artist interviews, a nd L atin-centric enterta inment c ontent, a s well a s s ocia l network ing. T he compa ny publishes ma ga z ines, a s well as promotes a nd executes cus tom and s ponsor driven music -oriented ev ents . I t a lso owns a d network ta rgeting His panic s. T he company wa s founded in 1999 a nd is ba s ed in C oral G ables , Florida with an a dditional offic e in N ew Y ork. As of Dec ember 2, 2005, B a ta nga , I nc . operates a s a subs idiary of Hi spa nic M edia, I nc. 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. F reeW heel Media , Inc . offers online video a dvertis ing s olutions . I t offers the M onetiz a ti on R ights M a nagement (MR M) suite to sy ndicate video. F reeW heel's platform s erves video a nd c ompa nion a ds . I ts clients include c ontent owners, dis tributors , a nd third-pa rty a d s ellers a nd a d network sa. The compa ny rec ipes, food, compaooking. R better to a dvertis ers a nd nd edited .in hewik i in a ny is bas ed in S a n numerousa lifornia F oodis ta is W iki pedia for helps media a nd c nies s ell eci pes are contributed a a gencies T a c ompa n a ttempt to avoid M ateo, C repeats of the s ame rec ipe. The s ite ta k es a structured da ta a pproa ch a ki n to I MD B , where every ingredient, c ooking technique, utens il, and dis h links to Medi a other mention on the ssta tions . I t broa dc asts music , wea ther, news , a nd music news through I nternet. In addition, the c ompany G o O n every opera tes digita l radio ite. opera tes a community for interaction between the c reators of ra di os. T he c ompa ny was founded in 2007 a nd is ba sed in S aint C loud, F ra nc e. IM S hopping helps ma k e finding products eas ier by employ ing rea l people who sea rc h out dea ls , rea d reviews a nd s ha re this v alua ble informa tion with you a nd the greater community . T he compa ny is ba sed S anta C la ra , C a lifornia a nd is bac k ed by S K T elecom V entures . Ma rin S oftware I ncorporated provides pa id sea rch ma na gement a pplic ation to adv ertis ers a nd a gencies . It offers Ma rin S earch M a rketer, a hosted search ma na gement a pplic ation tha t address es the work flow, a naly sis , a nd optimiza tion needs of profess ional s ea rc h ma rk eters , as well a s provides a n interfa ce to create, mana ge, a nd optimize paid sea rc h ca mpaigns. T he company als o prov ides support services . Mari n S oftware I ncorporated was founded in 2006 a nd is ba s ed in S an F ra nc isco, C a lifornia . Mix erca s t, I nc . provides s oc ial mark eting a pplic ation pla tform that ena bles c ontent pub lishers a nd a dvertis ers to rea ch a udienc es a cross the soc ia l W eb. It offers MC ast P latform that includes a s et of tools and s ervi ces to c reate, distribute, monetiz e, a nd track va rious types of social ma rk eting a pplic a tions, inc luding widgets, ma s h-ups, F a c ebook a nd M yS pac e apps, and portab le c ontent or bra nd experienc es. M ixerc ast, Inc . wa s formerly k nown a s Na noc ast L a bs, I nc . The compa ny wa s founded in 2005 and is ba s ed in S a n M a teo, C alifornia . S ca n & Target provides s oftwa re a s a serv ice solution for the ana lys is and filtering of tex t user genera ted content. I t offers its a na lys is solution for va rious a pplica tions, s uc h a s modera ting and monetiz ing us er generated content, routing and qua lity c ontrol, v alida ting a ds a nd listings , a nd populating cus tomer relations hip ma na gement da ta bases . T he compa ny provides its s olution in various platforms , suc h as Internet, mobile, a nd intera ctive televis ion for pub lishers of onl ine communities, modera ting s ervice providers , a nd suppliers of technology solutions . S ca n & Ta rget wa s founded in 2007 and is ba s ed in P utea ux, F rance. 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 . S oundC loud L td. provides an online audio pla tform for recei ving, s ending, and distributing music for a rtis ts , record la bels , a nd other music profes s iona ls. T he compa ny was founded in 2007 a nd is ba sed in B erlin, G erma ny . 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. Tripbas e is a tra vel webs ite that gives you unbiased recommenda tions a bout where to go o n y our next trip based on wha t y ou lik e. Triba l Nov a , I nc. dev elops a nd ma rk ets Internet s ites , online ga mes , intera ctive televis ion programs , a nd cellula r telephony c ontent for children. It produc es a n arra y of ga mes ranging from educ a tiona l pres chooler online ga mes , s uch a s Ca i llou to multiplayer online role pla yi ng game for teens, suc h as Ma gi Na tion. The compa ny opera tes at the internationa l level in E urope and N orth America . T riba l Nova , Inc . wa s founded in 2004 a nd is ba s ed in Montrea l, Ca nad a. 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 ellu fun , LL C U nited S ta tes www. cellufun. com 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 F reewheel F o odis ta G o On Media IM s h oppin g Marin S o ftware U nited S ta tes U nited S ta tes F rance U nited S ta tes U nited S ta tes www. freewheel. tv www. foodista .com www. goomradio.c om www. imshopping. com www. marinsoftwa re.com Mixerc as t, In c . U nited S ta tes www. mixerc a st.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 S oundClou d L td. R ubicon P roject, Inc . G erma ny U nited S ta tes s oundc loud.c om www. rubiconproject.com T ripbas e T ribal No va, In c. U nited S ta tes C a nada www. tripba se. com www. triba lnova. com/en/ T ubeMogul, Inc. U nited S ta tes www. tubemogul. c om Figure 30. Company Descriptions Source. Company reports, Capital IQ, Crunchbase Page 23 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