Web 2.0 Weekly - June 2, 2009

SOFTWARE & SERVICES 2 JUNE 2009 WEB 2.O WEEKLY DAVID SHORE, CFA, MBA 416.860.6784 david.shore@researchcapital.com Arun Thomas (Associate) 416.860.7666 SOCIAL NETWORKS LEAD ACTIVITY – DIGITAL SKY TECHNOLOGIES INVESTS IN FACEBOOK MA Y CL O S E S AT H IG H E S T L E V EL I N OV E R T W EL V E MO NT H S The month of May saw 20 financings totalling $327.1 million, buoyed by Digital Sky Technologies’ $200 million investment in Facebook. W ithout this transaction, May would have been the lowest month for financing year-to-date at $127.1 million in 2009. From a sector perspective, excluding the Facebook transaction, Ad Network saw the highest level of activity over the last three months, with Media, Gaming, Video, and Social Network attracting the most level of interest. The other transaction of size that gained much real estate on business news was Disney’s investment in Hulu. Both transactions highlight traditional companies marrying into new business models that are testing the frontiers of how consumers choose and use media. Financing by Month 800.0 750.6 40 700.0 653.9 35 600.0 30 500.0 461.7 (U $m ) S m 25 400.0 351.4 361.3 327.1 308.3 300.0 244.0 225.8 200.0 192.6 144.9 198.0 185.5 162.5 149.5 127.4 125.6 101.1 73.6 20 15 10 129.0 111.0 100.0 24.4 23.9 21.4 15.4 13.2 12.5 9.4 0.0 S ep -0 5 N ov -0 5 M ar -0 6 Ja n06 Ju l-0 5 132.3 87.3 66.3 57.7 48.0 43.4 40.5 38.8 32.3 21.5 88.5 84.9 57.1 79.7 5 47.5 38.8 47.6 30.0 0 M ay -0 8 M ay -0 6 M ay -0 9 M ay -0 7 S ep -0 7 N ov -0 6 S ep -0 8 S ep -0 6 M ar -0 8 M ar -0 7 N ov -0 7 N ov -0 8 M ar -0 9 Ja n07 Ja n08 Ja n09 Ju l-0 7 Ju l-0 8 Ju l-0 6 Capital Market Activity: The month of May closed with 20 financings totalling $327.1 million led by the $200 million investment by Digital Sky Technologies in Facebook. Excluding the Facebook transaction, May would have been the lowest month in CY2009. The Facebook transaction aside, four transactions (One Net Ent., Cyberplex, Peer39, and OpenX) were greater than or equal to $10 million. The average value in May is $15.6 million (and $6.4 million excluding the Facebook transaction), greater than the average value for April of $6.2 million on 21 financings. The March average was $6.5 million on 24 financings. 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 29 companies showing positive returns on the week. GameOn co. Ltd (3812-TSE) led the group with a 28.2% return, while eolith Co. Ltd. (A041060-KOSE) had the worst return, dropping 13.7% in the 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 (#) Page 2 THE WEB 2.0 UNIVERSE Ninety-three public Web 2.0 companies identified: Our W eb 2.0 universe contains 93 companies, with a combined market cap of ~$53 billion (Figure 1). The average market cap for the group is ~$577 million (but a median of only $50.9 million), with average trailing revenue of $152.1 million (median $54.3 million). The companies are also generally profitable, with a median EBITDA margin of 14.2%. On a valuation basis, the overall average is 4.9x trailing revenue (median 2.0x) and 10.0x trailing EBITDA (median 9.6x). Fourteen of the companies have more than 500 employees. C omparable C o mpany A nalys is > W eb 2.0 C om pan y Nam e Acce le rize N ew Me dia, Inc. Actoz S of t C o., L td. AQ Inte ractive , Inc. As s o cia ted Media H oldings Inc. B igstring Co rp. B e tawave Corpora tion B e yo nd Commerce, In c. 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 orpo ra tion C hine s e G amer International C ornerW orld C orporation C yberplex Inc. DADA S pA DXN Holdings B hd Dibz Inte rnational, Inc. DigitalP ost Inte ra ctive , Inc. DigitalT own, In c. Dolphin D igital Me dia, Inc. E o lith C o. L td. E xte ns ions , Inc. F inancia l Media G roup, Inc. F luid Mus ic Ca nada, In c. F rogs te r Interactive P ictu re s AG G a ma nia Digital E ntertainmen t C o., L td. G a me On C o L td. G e oS e ntric O yj G ian t Intera ctive G roup, Inc. G iga Media Ltd. G ravity C o., L td G ree, Inc. G u ngH o O nline E ntertainment, Inc. H anbitS of t, Inc. IAC /InterActiveC orp. IAS E n ergy, 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. Lin go M edia Corporation Live Wo rld Inc. Lo okS mart, Ltd. Magnitu de Information S ys tems Inc. Mixi, In c. Mode rn Times G rou p Mtg AB Moggle , Inc MOK O.mobi L imited Myriad G rou p AG N E OW IZ G ames C orpora tion N etD rago n W ebS oft, Inc. N ete as e.com I nc. N eXplo re Co rpora tion N gi G roup Inc. N orthgate Te chno lo gies L imited Open T e xt Corp. Openwave S ys tems Inc. P e rf ect W orld C o., Ltd. P h otoChann el N etwork s Inc. Qu epa s a C orp. OA O R B C Information S ys tems S h anda In teractive E ntertainme nt L td. S h utte rf ly, In c. S K C ommun ications Co., Ltd. S N AP Inte ra ctive , Inc. S N M G lobal H oldings S o cia l Media V e nures , In c. S o cia lwis e, Inc. S o hu. com Inc. S ite s earch C orpo ration S park N etworks , Inc. S pectrumDN A, Inc. T encent Holdin gs L td. T he P aren t C ompan y T he 9 L imited T he S treet.com, Inc. T otal S po rt Online A S T ree.C om, Inc. U nis erve C ommu nication s Co rp. U nited Online Inc. U OMO Media , Inc V a lueC lick Inc. V O IS , Inc. W ebze n Inc. W izza rd S of twa re Corpora tion W orlds .com In c. W ynds torm C orporatio n XIN G AG Y e dangOnline Co rp. Y n k K orea Inc. ZipLocal Inc. H igh Lo w A vera ge Median L TM as of T icker 3 /31 /200 9 3 /31 /200 9 1 2/31 /200 8 6 /30 /200 7 3 /31 /200 9 3 /31 /200 9 3 /31 /200 9 9 /30 /200 8 9 /30 /200 8 3 /31 /200 9 3 /31 /200 9 9 /30 /200 8 3 /31 /200 9 1 /31 /200 9 3 /31 /200 9 9 /30 /200 8 2 /28 /200 9 NA 3 /31 /200 9 2 /28 /200 9 3 /31 /200 9 1 2/31 /200 8 3 /31 /200 9 2 /28 /200 9 3 /31 /200 9 6 /30 /200 8 3 /31 /200 9 3 /31 /200 9 3 /31 /200 9 3 /31 /200 9 1 2/31 /200 8 9 /30 /200 8 6 /30 /200 8 1 2/31 /200 8 3 /31 /200 9 3 /31 /200 9 1 /31 /200 9 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 8 3 /31 /200 9 3 /31 /200 9 1 2/31 /200 8 3 /31 /200 9 3 /31 /200 9 3 /31 /200 9 3 /31 /200 9 3 /31 /200 9 3 /31 /200 9 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 8 3 /31 /200 9 3 /31 /200 9 9 /30 /200 7 1 2/31 /200 8 3 /31 /200 9 3 /31 /200 9 3 /31 /200 9 3 /31 /200 9 3 /31 /200 9 3 /31 /200 9 1 2/31 /200 7 1 2/31 /200 8 3 /31 /200 9 1 2/31 /200 8 3 /31 /200 9 9 /30 /200 8 1 2/31 /200 8 3 /31 /200 9 3 /31 /200 9 1 /31 /200 9 3 /31 /200 9 3 /31 /200 9 3 /31 /200 9 8/2/2008 1 2/31 /200 8 3 /31 /200 9 3 /31 /200 6 3 /31 /200 9 2 /28 /200 9 3 /31 /200 9 1 /31 /200 9 3 /31 /200 9 3 /31 /200 9 3 /31 /200 9 3 /31 /200 9 3 /31 /200 9 NA 3 /31 /200 9 1 2/31 /200 7 1 2/31 /200 7 3 /31 /200 9 AC LZ A0 527 90 38 38 AS MH BS GC B W AV B Y OC AIM:B G T BW BA C HIN .A C Y OU C GW Y G T S M:308 3 C WR L T S X:C X C M:D A DXN DIB Z DG LP DG T W DP DM A0 410 60 E XT I F NG P T S X:F MN FRG 61 80 38 12 G E O1 V GA G IG M GR VY T S E : 363 2 37 65 A0 470 80 IAC I IAS C.A IE E AS X:J MB T S X:J T V T S X:K AB 38 88 T S XV : LM LV WD LOOK MA G Y 21 21 MT G B MMOG MK B MY R N A0 956 60 77 7 NT E S N XP C 24 97 59 005 7 OT E X OP W V PW R D T S XV : P N QP S A R BCI S N DA S F LY A0 662 70 S T VI S N MN S MV I S C LW S OH U S T PC LOV S P XA 70 0 K IDS .Q N CT Y TSCM T OS O TR EE T S XV : US S U NT D U OMO V C LK V OIS W ZE N W ZE W DD D W YND O1B C A0 527 70 A0 237 70 T S XV : ZIP E xc hange OT C B B K OS E TSE OT C P K OT C B B OT C B B OT C B B AIM OT C P K N as da qG S N as da qG S OT C P K GTSM OT C B B TSX CM KLSE OT C P K OT C B B OT C B B OT C B B K OS E OT C P K OT C B B TSX XT R A GTSM TSE H LS E NYS E N as da qG S N as da qG M TSE OS E K OS E N as da qG S OT C B B 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 SWX K OS E S E HK N as da qG S OT C P K TSE BS E N as da qG S N as da qG S N as da qG S T S XV N as da qC M R TS N as da qG S N as da qG S K OS E OT C B B OT C P K OT C P K OT C B B N as da qG S OT C B B AME X OT C B B S E HK OT C P K N as da qG S N as da qG M OT C NO N as da qG M T S XV N as da qG S OT C B B N as da qG S OT C B B N as da qG M AME X OT C B B OT C B B XT R A K OS E K OS E T S XV Trading Cu rrency H Q USD KR W JPY USD USD USD USD GBP USD USD USD USD TWD USD C AD EUR MY R USD USD USD USD KR W USD USD C AD EUR TWD JPY EUR USD USD USD JPY JPY KR W USD USD C AD AU D C AD C AD HKD C AD USD USD USD JPY S EK USD AU D C HF 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 USD HKD USD USD USD NOK USD C AD USD USD USD USD USD USD USD USD EUR KR W KR W C AD U nited S ta tes S outh K orea J apan U nited S ta tes U nited S ta tes U nited S ta tes U nited S ta tes U nited K ingdom U nited S ta tes H ong K on g C hina U nited S ta tes T aiwan U nited S ta tes C ana da Ita ly Ma la ys ia U nited S ta tes U nited S ta tes U nited S ta tes U nited S ta tes S outh K orea U nited S ta tes U nited S ta tes U nited S ta tes G ermany T aiwan J apan F inland C hina T aiwan S outh K orea J apan J apan S outh K orea U nited S ta tes C ana da C ana da Aus tra lia C ana da C ana da C hina C ana da U nited S ta tes U nited S ta tes U nited S ta tes J apan S weden U nited S ta tes Aus tra lia S witzerla nd S outh K orea C hina C hina U nited S ta tes J apan India C ana da U nited S ta tes C hina C ana da U nited S ta tes R us s ia C hina U nited S ta tes S outh K orea U nited S ta tes U nited S ta tes U nited S ta tes U nited S ta tes C hina U nited S ta tes U nited S ta tes U nited S ta tes C hina U nited S ta tes C hina U nited S ta tes N orwa y U nited S ta tes C ana da U nited S ta tes C ana da U nited S ta tes U nited S ta tes S outh K orea U nited S ta tes U nited S ta tes U nited S ta tes G ermany S outh K orea S outh K orea C ana da Current P rice 0 .35 26, 300 80 ,000 .00 0 0 .02 0 1 .01 0 0 .30 2 35 .77 0 376 .50 0 1 .57 6 0 .40 0 0 .02 2 0 .53 725 0 .15 0 0 .75 7 58 .60 1 24, 000 0 .05 8 6 .19 1 5 ,630 .00 2 48, 000 5 ,290 .00 17 0 .23 0 0 .45 1 0 .61 5 1 .05 0 1 .30 0 458 ,000 .00 233 2 .30 0 5 .75 77, 100 5 .42 36 0 .70 34, 700 47 .05 36 1 .86 23 1 .54 1 1 .35 60 15 .13 12, 000 0 .79 0 0 .01 1 66 .25 3 2 .29 0 85 .60 0 9 .27 2 0 .03 11 0 .06 7 0 .16 11 0 .35 5 0 .55 0 0 .51 34 10 ,200 .00 7, 700 0 .01 U S D Market C ap ($m) 9 .7 18 2.2 4 5.0 0 .1 1 .0 2 .3 4 4.8 4 .8 2 5.3 18 0.4 1,9 67.4 0 .0 98 0.3 5 .8 7 7.4 13 6.7 2 6.2 0 .0 1 .1 5 4.2 2 7.4 4 2.8 1 4.2 0 .2 3 6.2 2 4.8 27 5.6 12 4.0 6 3.7 1,7 86.7 33 4.4 3 0.6 1,3 00.4 29 3.8 9 4.0 2,5 00.7 1 6.1 3 .8 1 8.0 8 3.7 7 8.5 73 1.5 1 2.4 2 .6 2 2.2 6 .8 72 8.2 2,0 68.2 8 3.5 4 .6 11 4.5 60 2.0 36 9.6 4,4 06.5 3 9.0 4 4.3 3 5.0 1,8 77.1 15 4.5 1,1 89.7 4 8.5 1 3.0 18 7.3 4,1 78.9 38 0.9 40 0.2 8 .5 0 .0 0 .0 3 0.3 2,5 35.0 2 8.2 4 7.1 1 8.0 19,9 07. 1 0 .4 24 8.6 6 0.0 0 .1 11 5.8 1 .2 58 1.7 1 3.7 98 0.1 2 .9 5 3.4 2 6.3 5 .2 9 .2 25 1.6 12 9.8 1 5.3 0 .4 19,9 07. 1 0 .0 577.0 5 0.9 U S D LT M To tal R ev ($m) 4.1 93. 7 62. 4 0.1 0.1 8.4 7.1 0.3 0.0 389 .9 222 .5 6.7 57. 2 1.3 74. 9 240 .4 79. 7 NA 0.7 NM 0.8 14. 9 NM 7.2 5.0 5.7 128 .3 76. 1 6.0 219 .1 190 .4 39. 7 30. 4 116 .3 56. 0 1 ,40 6.4 0.0 1.4 14. 5 13. 4 75. 7 129 .2 0.9 11. 4 60. 7 0.1 124 .7 1 ,81 7.2 NM 1.2 40. 0 200 .9 87. 0 470 .9 NM 101 .7 119 .4 782 .6 197 .2 228 .3 19. 9 0.1 154 .7 522 .6 215 .2 186 .7 3.3 2.0 0.1 0.0 460 .0 NM 54. 3 0.1 1 ,20 4.5 112 .0 250 .1 67. 0 2.2 215 .6 24. 0 811 .2 0.6 591 .7 0.0 23. 3 5.6 0.0 NA 53. 7 55. 6 15. 8 2.8 1 ,817 .2 0.0 152 .1 54. 3 US D L TM T otal E B ITDA ($m) (4 .4) 2 0.4 5 .0 (2 .3) (2 .0) (1 2.6) (9 .5) (1 .9) (4 .6) 3 0.8 13 5.1 (6 .6) 3 2.0 NM 7 .7 3 8.4 1 0.9 NM (2 .6) (3 .0) (3 .7) (3 .5) NM 2 .4 (6 .9) (3 .5) 2 1.3 1 8.0 (1 5.5) NM 4 6.0 7 .6 1 0.9 2 0.7 (1 5.0) 4 2.6 (0 .8) (5 .5) 5 .4 (8 .4) 9 .0 5 2.0 (1 .5) (0 .0) (3 .8) (3 .1) 4 4.2 27 8.4 NM (2 .4) 0 .8 5 3.9 3 4.4 30 6.0 (4 .9) 3 1.3 (2 8.0) 19 9.2 (2 .1) 12 4.7 0 .5 (1 0.8) 2 0.2 24 0.1 2 8.3 1 2.1 0 .9 (0 .7) (0 .1) (4 .8) 20 0.5 (1 .1) 1 1.8 (2 .6) 57 7.1 (1 3.5) 8 4.2 1 .9 (1 .1) (1 3.3) 0 .1 17 7.3 (0 .5) 10 5.5 (1 .1) (0 .4) (5 .1) (0 .8) NM 1 6.8 1 2.4 (1 .2) (2 .2) 57 7.1 -28.0 32.9 0 .6 E BITDA % NM 21 .7% 8 .0% NM NM NM NM NM NM 7 .9% 60 .7% -9 8.9% 56 .0% NM 10 .3% 16 .0% 13 .7% NM NM NM NM -2 3.6% NM 34 .1% NM -6 0.6% 16 .6% 23 .7% NM NM 24 .2% 19 .2% 36 .0% 17 .8% -2 6.8% 3 .0% NM NM 37 .2% -6 2.6% 11 .9% 40 .3% NM -0 .4% -6 .3% NM 35 .4% 15 .3% NM NM 1 .9% 26 .8% 39 .5% 65 .0% NM 30 .8% -2 3.5% 25 .5% -1 .0% 54 .6% 2 .3% NM 13 .1% 46 .0% 13 .2% 6 .5% 28 .0% -3 4.8% -6 0.5% NM 43 .6% NM 21 .7% NM 47 .9% -1 2.0% 33 .7% 2 .9% -5 0.6% -6 .2% 0 .2% 21 .9% -7 8.2% 17 .8% NM -1 .9% -9 1.5% NM NM 31 .2% 22 .4% -7 .6% -7 8.3% 65 .0% -9 8.9% 6 .0% 14 .2% TE V/LT M R evenu e 3.5 x 1.6 x 0.2 x 8.1 x 30.7 x 7.0 x 17.6 x 0.5 x 8.0 x 0.0 x 16.0 x 5.5 x 1.0 x 0.8 x 0.5 x 3.8 x 36.7 x 3.0 x 5.2 x 4.3 x 2.0 x 0.8 x 9.9 x 1.4 x 40.1 x 2.3 x 1.4 x 0.4 x 1.4 x 0.9 x 4.7 x 1.1 x 5.2 x 11.6 x 0.1 x 4.9 x 1.5 x 3.0 x 3.1 x 2.9 x 2.7 x 0.3 x 2.5 x 0.3 x 0.1 x 2.4 x 0.0 x 0.4 x 1.5 x 2.1 x 2.2 x 1.1 x 0.0 x 4.7 x 0.9 x 18.0 x 0.2 x 4.6 x 0.5 x 0.2 x 1.1 x 22.1 x 1.5 x 4.9 x 3.7 x 2.3 x 0.9 x 0.6 x 40.1 x 0.0 x 4.9x 2.0 x T E V/LT M E B IT DA 7.5x 3.0x 6.3x 1 3.2 x 2 8.5 x 9.5x 4.9x 3.9x 1 1.8 x 3.5x 5.6x 1 3.1 x 1 4.4 x 2.4x 9.3x 1 2.9 x 1 3.8 x 9.5x 1 1.0 x 6.8x 9.8x 0.1x 0.3x 0.8x 1 1.1 x 3 3.0 x 7.7x 1 0.8 x 4.0x 3 7.5 x 4.9x 8.3x 1 1.9 x 1 0.4 x 3 7.5 x 0.1x 10.0x 9.6x E mployees 11 NA NA 3 4 53 69 9 46 NA 628 37 NA NA NA 578 NA NA 7 3 NA NA 2 22 NA NA NA NA 108 NA NA 636 NA NA NA 3 ,20 0 NA NA 72 237 NA 2 ,27 1 NA NA 90 14 NA 2 ,96 9 3 NA 405 NA 2 ,42 6 NA 19 NA NA 3 ,40 0 630 NA NA 74 NA NA 514 NA 11 33 NA NA 3 ,19 7 15 183 7 6 ,19 4 347 NA 310 16 700 NA 1 ,46 9 NA 1 ,18 9 4 314 110 1 NA 239 NA NA NA 6 ,194 1 671 237 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 ) Activit y peaks in May – the highest in last 12 months and YTD CY2009: The month of May closed with 20 financings totalling $327.1 million led by the $200 million investment by Digital Sky Technologies in Facebook. The Facebook transaction aside, four transactions (One Net Ent., Cyberplex, Peer39, and OpenX) were greater than or equal to $10 million. The average value in May is $15.6 million (and $6.4 million excluding the Facebook transaction), greater than the average value for April of $6.2 million on 21 financings. The March average was $6.5 million on 24 financings. For the last three months, except for four deals (Kaixin001.com, Collective Media, One Net Entertainment, and Facebook), all were below $20 million and a total of six deals were greater than or equal to $15 million. Financing Activity Last Three Months 350.0 18.0 16.0 300.0 15.6 14.0 250.0 12.0 200.0 (US$m) 10.0 (US$m) 150.0 6.5 6.2 100.0 6.4 8.0 6.0 4.0 50.0 2.0 0.0 Mar-09 Apr-09 Total Average May-09 May-09 (excl FB) 0.0 Figure 2. Financings, Last Three Months Source. Company reports Facebook largest deal in April: Digital Sky Technologies announced a $200 million investment in Facebook last week, the largest deal so far in the last 12 months. The Facebook transaction aside, 14 of the 20 deals in the month are equal to or greater than $5 million. For additional details, see Figures 29 and 30 (at end of note). Also note that the spin-off of StumbleUpon from E-bay on a $29 million valuation occurred in May. E-bay had bought StumbleUpon for $75 million. Page 4 Financing & M/A Summary - Last Three Months 250.0 200.0 150.0 (US$m) May-09 Apr-09 Mar-09 100.0 50.0 0.0 Facebook StumbleUpon One Net Entertainment Kaixin001.com Collective Media GOOM Radio Vidyo Marin Software The Rubicon Project Cyberplex Buzznet SendMe Inc. FreeWheel LendingClub Miva Peer39 Auditude OpenX SuperSecret Conductor Inc. Cellufun Glam Media Visible Measures Imeem GoViral EveryZing ScanScout Batanga BlogHer Inc. Gist Fuhu Inc. Azuki Systems I Love Rewards Greystripe OMGPOP Viximo OLX TimeBridge DocuSign DoubleTwist IMShopping Socialtext Mixercast Apture Simulmedia Medialets Tynt SoundCloud AnySource Media Pixazza Topsy TubeMogul Tribal Nova Tripbase Resonate Networks Sports Composite DE Hunch Bit.ly VoxPop Mo'Minis Socialcast Brandtology Scan & Target AdultSpace Myngle Jodange Loop'd Network 33Across Three Melons Foodista Figure 3. Capital Market Activity, Last Three Months Source. Company reports Social Network remains the most active sector: Activity over the last three months was busiest in the Social Network sector, with eight companies raising over $249.3 million (Figure 4). The Ad Network sector has the next highest totals, with 12 companies raising $99.2 million. W e would note that the Facebook transaction at $200 million has skewed the results significantly in favour of Social Networks. Nevertheless, the following sectors continue to generate the most capital activity over the last few months: Ad Network, Media, Gaming, Video, and Social Networks. Page 5 Capital Market Activity by Sector - Last Three Months 300.0 250.0 200.0 (US$m) 150.0 249.3 100.0 50.0 99.2 63.4 50.6 49.5 30.2 Comment/Reputation 21.3 Search 14.4 Analytics 12.0 Lending 12.0 Mobile 10.4 Widget 8.9 Infrastructure 7.5 Virtual World 7.0 Blog 6.8 Aggregation 5.9 Enterprise 5.5 Mobile Ad 5.0 Collaboration 4.7 Social Commerce 4.1 Publishing 3.1 Visual Commerce 2.0 Crowdsourced Content 2.0 Microblog 2.0 Travel 1.3 SAS 1.3 Online Learning 1 0.6 Wiki 1 0.0 Social Networks Gaming 9 Media Ad Network Video 5 # companies 8 12 8 2 3 3 1 1 2 2 2 1 1 1 1 1 1 1 1 1 1 1 1 Figure 4. Capital Market Activity, by Sector, Last Three Months Source. Company reports Average round size decreases: On a trailing 12-month basis, total financing dollars fell as of May 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 May-09 Nov-05 Nov-06 Nov-07 Nov-08 Mar-06 Mar-07 Mar-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 Average 1,000.0 500.0 0.0 Total Figure 5. Financings, Last 12 Months Source. Company reports Cumulative total nears $6.8 billion: Overall, on a cumulative basis, W eb 2.0 financings have totalled nearly $6.8 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). The total capital raise in Q2-to-date was $477.1 million, buoyed by the $200 million Facebook transaction, and is well below Q2/CY08 totals ($1.3 billion). It does not seem likely the Q2/CY09 will be better on a Y/Y basis. Page 7 Web 2.0 Financing (cumulative) 1,600.0 8,000.0 1,400.0 1,344.6 7,000.0 1,200.0 6,000.0 1,000.0 (US$m) 977.6 857.6 5,000.0 (US$m) 800.0 4,000.0 600.0 579.9 573.8 477.1 3,000.0 400.0 378.6 354.1 2,000.0 200.0 88.3 38.8 24.7 0.0 61.5 47.5 33.5 22.2 43.3 178.7174.8162.4 126.4145.6111.5 1,000.0 0.0 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 2004 2005 2006 2007 2008 2009 Figure 6. Financing, Cumulative Source. Company reports U.S. remains dominant: U.S. companies continue to dominate capital market activity – with 70.0% of financings/M&A involving U.S. companies (based on dollars) (Figure 7). Based on number of transactions, the U.S. leads with 73.6% of deals, while Canada and UK each took 4.8% share of the total number of financings (Figure 8). Fi nancin g/M &A by Country - LTM ($) China 14.6% Russia 3.4% Financing/M&A by Country - LTM (#) UK 4.8% UK 2.3% Canada 4.8% Israel 3.1% France 3.1% Fr ance 1.9% Canada 1.7% Israe l 1 .6% ROW 10.6% ROW 4.5 % U SA 70.0% USA 73.6% Figures 7 & 8. Financing/M&A, by Country (LTM, $, #) Source. Company reports Page 8 Larger volume of early-stage funding (by count): Almost half of financings in the last 12 months are for early-stage companies (Angel/Seed or Series A) (Figure 9). Series B rounds are 29.3% of the total, with later-stage (Series D, E and PIPE) deals accounting for just 7.5%. Financing by Type - LTM Series C 14.7% Series B 29.3% Series D 4.5% Series E 1.1% Angel/Seed 11.3% Series A 34.2% Debt financing 3.0% PIPE 1.9% Figure 9 Financing, by Type (LTM, #) Source. Company reports Equity financings smaller over last 12 months: In the last 12 months, the average size of Series A, C, and D rounds has all been lower than the overall average (Figure 10). Page 9 Average financing round size 40.0 36.0 35.0 32.0 30.0 26.3 25.1 25.0 21.6 (US$m) 20.0 18.3 15.0 11.4 11.4 10.0 7.9 6.5 5.4 5.0 3.3 2.6 6.9 10.8 10.8 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 10 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 1 03.63 93.63 83.63 73.63 63.63 53.63 43.63 Index: Web 2.0 X (Market Cap Weights) Figure 11. Web 2.0 Price Performance Source. Capital IQ ^COMP - Share Pricing GameOn Co. Ltd. leads; eolith Co. Ltd. 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 29 companies showing positive returns on the week. GameOn Co. Ltd (3812-TSE) led the group with a 28.2% return, while eolith Co. Ltd. (A041060KOSE) had the worst return, dropping 13.7% in the week. Page 11 1 Week P rice P erformance G ameOn Co Ltd. Northgate Technologies Limited Changy ou.com Limited S ohu.com Inc. A ctoz S of t Co., Ltd. A Q Interactiv e, Inc. CDC Corp. S K Communications Co., Ltd. Perfect World Co., Ltd. Open Tex t Corp. V alueClick Inc. Gamania Digital Entertainment Co., S handa Interactive Entertainment Ltd. Tencent Holdings Ltd. Neteas e.com Inc. IA C/InterA ctiveCorp. Quepas a Corp. G ree, Inc. United Online Inc. S hutterf ly , Inc. Modern Times G roup Mtg A B G igaMedia Ltd. Openw ave S y s tems Inc. XING A G The9 Limited TheS treet.com, Inc. Ngi G roup Inc. LookS mart, Ltd. DA DA S pA Lingo Media Corporation Chines e Gamer International NEOWIZ Games Corporation NetDragon WebS of t, Inc. Webz en Inc. Mix i, Inc. Y nk K orea Inc. Giant Interactive G roup, Inc. HanbitS of t, Inc. Y edangOnline Corp. Frogs ter Interactiv e Pictures A G K ings of t Co. Ltd. G ravity Co., Ltd PhotoChannel Netw orks Inc. Cy berplex Inc. Tree.Com, Inc. B ey ond Commerc e, Inc. Eolith Co. Ltd. -20.0% Figure 12. 1-Week Price Performance Source. Capital IQ 28.2% 27.2% 23.3% 22.1% 20.9% 19.4% 18.9% 17.6% 16.6% 13.2% 12.4% 11.0% 9.6% 9.4% 9.3% 7.1% 6.3% 6.2% 6.1% 5.9% 5.4% 4.0% 3.6% 3.3% 3.3% 3.2% 2.1% 1.6% 0.3% 0.0% -9.9% -10.3% -12.0% -12.2% -13.7% -15.0% -0.4% -0.5% -0.6% -0.7% -2.6% -2.7% -4.1% -4.2% -5.6% -6.3% -6.6% -6.8% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% Page 12 INDUSTRY NEWS (PARTNERSHIPS, FINANCIAL RESULTS, NEW PRODUCTS) K ey Developments C ompany G eoS entric Oyj (HL S E : G E O1V ) Headline G eoS entric Oyj R eports U naudited G roup E a rnings R es ults for the F irst Quarter E nded M arch 31, 2009 Notes G eoS entric Oyj reported unaudited group ea rnings results for the firs t qua rter ended M arch 31, 2009. F or the qua rter, the company reported loss of E UR 3, 794,000, comprehensi ve income of E UR 3, 790,000 , loss before tax es of E UR 3 ,920, 000 and opera ting los s of E U R 3,827, 000 on net s ales of E U R 939, 000 compared to los s of E U R 2,590, 000, comprehens iv e inc ome of E U R 2,59 0,000, los s before taxes of E UR 2,717, 000 and opera ting los s of E U R 2,710, 000 on net s ales of E U R 1,085, 000 for the s ame period a y ea r a go. C ash fl ow us ed in opera tions , net of E U R 2, 816,000 compared to ca s h flow us ed in opera tions , net of E UR 1, 185,000 for the s ame period a y ea r a go. K ing s oft Co . Ltd. (S E HK: 3888) K ings oft C o. Ltd. announces a n E quity B uybac k K ingsoft C o. Ltd. (S E HK : 3888) was gra nted s hareholders a pproval to repurc ha se shares in the Annual G enera l Meeting held on May 25, 2009. Under the progra m, the compa ny intends to repurc ha s e up to 108,345, 183 shares , repres enting 10% of the iss ued sha re ca pital of the company. The Direc tors believe tha t it is in the interes ts of the C ompany a nd the S hareholders to hav e a general authority from the S hareholders to ena ble the Direc tors to repurchas e S hares on the S toc k E xc ha nge. S uc h repurcha s es may, depending on mark et conditions a nd funding a rrangements at the time, lea d to a n enha nc ement of the net as sets of the C ompany and/or its ea rnings per S ha re and will only be made when the Directors beli eve tha t s uc h purchases will benefit the C ompany a nd the S hareholders. T he program is valid until the earliest of the conclus ion of the ne xt annual general meeting of the C ompany or the ex piration of the period within which the C ompany i s required by the C ompa nies La w or the Articles to hold its next annual genera l meeting unles s the R epurchas e M a ndate is renewed by ordinary resolution pas s ed at tha t meeting or the R epurc ha se M anda te being revoked or va ried by an ordina ry res oluti on of the S ha reho lders in genera As of Marc h 31, 2009, G iant I ntera cti ve G roup I nc had re purc ha s ed a n aggrega te of 16, 517,985 AD S 's for a total considera tion of $106.9 million. Till Dec ember 31, 2008 G ia nt I nterac ti ve G roup, Inc . has repurc ha sed 14, 947,200 sha res for a total cost of $97.7 mill ion. G ian t Interactive G ro up, Inc . (NYS E : G A) K ing s oft Co . Ltd. (S E HK: 3888) Upda te to G iant Intera ctive G roup Inc ’s E quity B uy back on M arch 31, 2009 K ings oft C o. Ltd. , Annual G eneral Meeting, Ma y 25, 2009 K ingsoft C o. Ltd. , Annual G eneral M eeting, Ma y 25, 2009, a t 15:00 C C T -C hina C oa st, U S S R Zone 7. L oc ation: Zhuha i K ings oft S oftwa re C o. L td. , K ings oft T ower, # 8 Lia ns ha n Alley , J ingshan R oa d, Jida, Z huha i, P R C, 519015, G ua ngdong P rovince, C hina . Agenda: To rec eive and cons ider the audited cons olida ted financia l s tatements , the report of the di re ctors and the independent auditors ' report for the year ended December 31, 2008; to dec lare a fina l di vidend; to re-elec t direc tors a nd a uthorize the board of directors to fix the directors ' remunera tion; to re-appoint auditors a nd to a uthorize the board of directors to fix the a uditors' remunera tion a nd to c onsider; a nd to fit other res olution. P IC C P roperty and C a sualty T ea ms U p with K ings oft Co. P IC C P roperty and C a sualty C o. L td. ha s tea med up with K ingsoft Co. Ltd. to offer a subs c ri ption-bas ed, interne t security i nsura nc e pack a ge. F or J P Y 18 (HK D 20.48) a month, subs cribers are gua ra nteed indemnity of up to JP Y 5, 000 if their personal computers are L td. to Offer S ubscription-B as ed, I nternet S ecurity infected by a virus or a tta cked by a hac k er a fter usin g K ings oft's Internet S ec urity , C omputer I ns urance V ersi on s oftwa re. Ins urance P a ckage T he9 to S tart O pen B eta Tes t for Atla ntica on J une 3 T he9 Limi ted gained a lic ense for the operation of Atla ntica in M ainla nd China and is to kick off its open beta tes t on J une 3, 2009. Atla ntica is a 3D turn-bas ed ma s sively multipla y er online role-playing game (M MOR P G ) developed by S outh K orea n online game developer N doors . T he game, which hit the S outh K orea n ma rk et in Ja nuary 2008, ha s lured ov er 100 mil lion pla y ers so fa r. It will be a n importa nt ga me of T he9 in the firs t half of 2009. iB 3 N etworks I nc. and its wholly owned subs idiary iB ea m S olutions L LC a nnounc ed that it has recently completed a projec t for the Ohio R es ta urant A ss ociation (O.R .A. ) worth more than $30, 000. T he Ohio R es taura nt Ass ocia tion hired iB ea m to repla ce their a ging network wi th a new s tate of the a rt network compris ed of Dell servers, Microsoft W indows S erver platform, E xchange 2007 a s well as a number of other new fea tures. T he project a ls o involved the migra tion of s ubs tantia l a mounts of data a nd e-ma il from the old network to the new network . G ia nt Interac tiv e G roup, I nc . reported una udited c onsolidated financia l res ults for the first qua rter e nded M arch 31, 2009. F or the first qua rter 2009, the company reported tha t net inc ome was R M B 231. 9 million (US D 33.9 million), a dec reas e of 31. 5% from R MB 338. 7 million a y ea r a go. Net income dec lined yea r-over-y ea r due to the dis ruptions caus ed by the adjustments to ZT O nline's monetiza tion s tructure during the third quarter 2008. I ncome from operations for the period was R M B 231. 93 million compa red to R B M 320. 97 million for the s a me period a yea r ago. Inc ome before inc ome ta x expens es wa s R MB 257. 76 million compa red to R B M 378. 51 million for the s ame period a y ear ago. Diluted ea rnings per s hare for the period was R M B 0. 99 c ompared to R B M 1. 33 for the same perio d a yea r a go. Net revenue for the firs t quarter 2009 was R M B 373. 5 million (U S D 54.7 million), representing a 20. 8% decrea s e from R MB 471.6 million in the first qua rter 2008. B a sed on the current es timates, the company expec ts to genera te total net rev enue for the s econd qua rter 2009 in the ra nge of R MB 343 million to R MB 373 million. K ing s oft Co . Ltd. (S E HK: 3888); PICC P roperty and C as u alty C o. L td. (S E HK : 2328) T he9 L imited (Nas daqG S :NC TY) IB 3 Networks , Inc. (OT CB B: IB NW ); iB eam S o lu tions L LC iB 3 N etwork s Inc. C ompletes N etwork Des ign a nd T ra ns fer P rojec t fo r the O hio R es ta urant Ass oc iation G ian t Interactive G ro up, Inc . (NYS E : G A) G ia nt I nterac tiv e G roup, Inc . R eports U na udited Cons olida ted F ina ncia l R es ults for the F irst Qu arter E nded M a rch 31, 2009; P ro vides E arnings G uida nce for the S ec ond Quarter of 2009 S hutterfly, Inc . (Nas daqG S : S FL Y) S hutterfly Inc . Na mes N eil Da y a s S enior V ic e P res ident & C hief T echnology Officer S hutterfly I nc . a nnounced the appointment of Neil Day as S enior V i ce P resident a nd C hief Technology Offic er. Mr. Da y will be respons ible for S hutterfly 's technology s tra tegy and ex ecution and will lead the c ompany 's web engineering, products , servic es a nd e-commerc e engineering, Internet opera tions, q ua lity as sura nc e and progra m management teams . M r. Day will report to S hutterfly 's P resident and C E O, J effrey H ousen bold. Mr. D a y brings more tha n 25 ye ars of experience in s oftwa re development, sy stems architec ture and technol ogy opera tions to S hutterfly . Mos t recently , Mr. Day s erved a s S enior V ice P res ident and C TO a t S ears H oldings a nd was res pons ible for a rchitecture, technology s trategy a nd softwa re development with a n emphasis on e-commerc e a pplic ations. Open T ext C orp. announced tha t the Mini stry of G overnment S ervices , repres enting the G overnment of O nta rio, has established a 10-yea r contract for E CM s olution s. U nder the terms of the c ontra ct, O pen T ext's solutions will prov ide the founda tion for the government's enterprise informa ti on ma na gement stra tegy acros s all pro vinc ial government minis tries, a gencies a nd crown corporations . T he s olutions will include records and document management s oftware, workflow ma na gement, c ollaboration softwa re, W eb content ma na gement a nd document ima ging s olutions . O pen Text's s olutions will als o help the On tario G overnment incorpora te the latest s ocial media software des igned for enterpris es. The solutions wil l us e applica tions such a s wik is, blogs, forums and c ommunities to improv e worker productivity and collaboration, a nd provide innova tive wa y s for government agencies to enga ge constituents a nd interes t groups . IAC /I nterA ctiveC orp. a nnounc ed that K a ra N ortman ha s been appointed S enior V ice P res ident of P ublis hing at C ity s earch. S he previous ly served a s V ice P resident of Mergers & Ac quisitions for I AC, overs eeing a number of I AC 's rec ent moves i n the loca l spa ce including the a cquis ition s of Ins iderP ages a nd Urbans poon, as well as IAC 's inves tment in MerchantC irc le, where she currently holds a board s ea t. In her new role, Nortman will be respons ible for overs eeing the publisher side of the C ity search busines s, which focus es on developing the cons umer experienc e acros s C ity sea rch's collection of loca l webs ites , inc luding C ity search. com and its newly launc hed l ookbook blogs : MopS hots, L uc k yT oes, 3 B uc k B ites, S uga rB omber and V eggieThing, a s well a s New Y ork food blog, T he F eedbag. S he will als o b e respons ible for building out mobile applica tions and new content for C ity search and its pa rtner s ites including Ins iderP ages .com, Urbans poon, MerchantC irc le, My S pa ce Loca l a nd more. UO M O M edia I nc. a nnounced a joint venture with an Atla nta-based digital s trategy a nd c ommuni ca tions tea m to form B a ss line. T his joint venture mark s the la unch of U OMO Media 's new D igita l Media division, crea ti ng unique opportunities to levera ge and enha nc e the a pprecia ble a ss ets of UO MO's s uccess ful ta lent ma na gement, publis hing, recorded music divis ions, and film/v ideo s ubsidiary . T he newly formed company will be dev eloping full-s cale digital s trategies for U O MO clients , interna l and externa l, inclu ding R IA development, cus tom mobile a pps , search engine optimi zation, and s oc ia l network integratio n. A full online pres ence for U OMO's B a s sline bra nd is in development. Open T ext C orp. (Nas daqG S : OT E X) Ontario G overnment S el ects Open T ext C orp. a s E xclusiv e S ingle V endor of R ecord for E nterprise Informa tion Ma na gement IAC /InterAc tiveC orp. (Nas daqG S : IAC I) IAC /InterActiveC orp. N ames K a ra N ortma n S enior V ic e P resi dent of P ublis hing a t C ity s earch U OMO Media, Inc (OTC BB : U OMO) UO M O M edia P a rtners W ith D igita l S tra tegy & Communications T eam Page 13 G ian t Interactive G ro up, Inc . (NYS E : G A) G ia nt I nterac tiv e G roup I nc. to O pen B eta T es t of the L argest E xpa ns ion P ac k of Z T O nline in J uly 2009 G ia nt Interac tiv e G roup Inc . will launc h an open beta tes t of the ex pa nsion pac k of ZT O nline in Jul y 2009. S hi s a ys that pla y ers ha ve become a ccustomed to the new bi lling s ys tem and a dded fun ctions of Z T O nline, G iant I ntera ctive's ga me, in a cc orda nce with the company's firs t-quarter fisc al report. I n the firs t and second quarters, G iant Intera ctive is dedic ated to the development of new game products. S hi believ es that further a djus tments of the M MO R P G will help lengthen the ga me's lifecy cl e. O n M ay 21, 2009, L ook S ma rt, L td. and J ona tha n E wert, S enior V ic e P res ident, C orporate D evelop ment, determined tha t Mr. E wert would separate from the compa ny effectiv e J une 1, 20 09. L iveW orld Inc. announced v ersion 2.1 of its Community Center pla tform with doz ens of new fe a tures , user interfa ce upda tes and greater outof-the-box flex ibility for clients to change des ign, lay out, fea tures , c ontent i ntegration a nd applica tion extensions . B uilt on years of code development and the 48th tec hnology releas e of LiveW orld's ac cla imed social network ing pla tform, this new version is immedia tely a va ila ble. L iveW orld firs t introduced its integrated full soc ial network onl ine c ommunity platform in 2003 with MI N I Cooper a s th e first client. S ince then dozens of ma jor bra nds have s elected the LiveW orld C ommu nity C enter a s their priva te label s ocial network ing s olution. V ersi on 2. 1 brings a n array of new a nd powerful fea tures for bra nds and their cus tomers . O penwa ve S y stems Inc. announced tha t the compa ny will showca s e its la test mobile internet and mess aging software a pplic ations a nd infras tructure a t Ara bc om S ummit 2009 in B eirut, Leba non. Live produc t demonstra tions for O penwa ve's solutions inc lude, Integra - control the mobi le internet experience with a single, flexible platform. O penW eb - adapt a nd optimis e broa dband content for the mobile s creen. Accelerato r - reduce the volume of inte rnet back haul reques ts a nd da ta over the cellular network . P a ss port - offer time-based ac ces s plans a nd releva nt content a t the po int of interes t. R ic h M a il - transform y our webmail offering into a pers onalis ed, fea ture-ric h hub for all ty pes of mes s aging a nd content. S mart C all a nd V oic e S MS - giv e s ubs cribers the power to communicate when and how they wa nt. L o okS mart, Ltd. (Nas daqG M: LOOK ) L iveWorld Inc . (OT CPK :L VWD ) J onatha n E wert to L ea ve Look S ma rt, L td. as S enior V ice P resi dent, C orporate Dev elopment, E ffective J une 1, 2009 L iveW orld Inc. Announces V ers ion 2. 1 of Fla gs hip Community C enter S ocia l N etwork P latform Openwave S ys tems Inc . (Nas daqG S : OPW V) O penwa ve S howcas es L atest S olutions at Arabcom S ummit 2 009 IB 3 Networks , Inc. (OT CB B: IB NW ); iB eam S o lu tions L LC IB 3 N etwork s I nc. a nd iB ea m S olutions LL C S igns T hree IB 3 Network s I nc. and its wholly owned s ubsidiary iB eam S olutions L LC a nnounc ed that it rec ently finalized a three year serv ice c ontra ct with Y ear S ervice Agreement with O tB O uts ide the B ox T elec ommunica tions a nd T echnologi es, LL C (O tB ) of Columbus , O hio. iB eam S ol utions will be hos ting a full s erv er rac k at its da ta center to s upport operations for O utside the B ox T elecommunications a nd T ec hnologies . T heS treet. com, I nc., Annua l G eneral Meeting, Ma y 28, 2009, at 10:00 E as tern Da y light. Loca tion: H ughes Hubba rd & R eed L LP , O ne B a ttery P a rk P laz a, New Y ork , N Y 10004, U nited S tates . Agenda: T o elect three C la s s I direc tors for three-yea r terms ex piring a t the company's a nnua l meeting of s tockholders in 2012; to ra tify the appointment of K P MG L LP as the compa ny 's independent registered public a cc ounting firm for the y ear ending Dec ember 31, 2009; and to c ons ider s uch other matters a s ma y properly c ome before the a nnua l meeting or a ny adjournment or postponement thereof. T heS treet.c om, Inc . (Nas daqG M: T S CM) T heS treet.com, Inc., Annua l G eneral Meeting, M a y 28, 2009 L ing o Media C orporation (TS XV: L M) L ingo M edia C orporation Announces E a rnings R esul ts for L ingo M edia C orporation announced ea rnings res ults for the first qua rter ended M arch 31, 2009. F or the qua rter, the c ompany's revenue the F irst Q ua rter E nded M a rch 31, 2009 from continuing operations wa s CAD 55, 320. L os s from continuing operations for the qua rter wa s C AD 455, 135 or CAD 0. 04 per s ha re compared to a los s from operation s of C AD 394 ,019 or C AD 0.04 per sha re for the quarter ended Ma rc h 31, 2008. Net los s for the quarter wa s C AD 104,026 or C AD 0. 01 per s ha re compared to a net los s of C AD 45 3,552 or C AD 0.05 per sha re for the quarter ended Ma rc h 31, 2008. Upda te to P erfect W orld Co. , Ltd. 's E quity B uyback on J une 1, 2009 O n J une 1, 2009, P erfect W orld Co. , Ltd. announced tha t it ha s entere d into an a greement to repurchas e a tota l of 1, 203,812 s hare s of its Cla s s A ordinary sha res and 11, 296,188 sha res of its C la s s B ordinary s hares for $52. 4 million from S B Asia Inves tment F und I I, L . P . P erfec t World C o. , Ltd. (Nas daqG S : PW R D) Figure 13. Key Developments Source. Capital IQ VALUATION MMOG companies lead market-cap charts: Eleven companies in our W eb 2.0 universe top US$1 billion in market capitalization (Figure 14). Fifty-nine of the 93 companies have market caps under US$100 million, with 24 under US$10 million. Online gaming companies dominate the top of the list. Page 14 Market C ap (US D m) Tencent Holdings L td. Neteas e. com Inc. S handa Interactive Enterta inment L td. S ohu. com Inc. IA C/InterA ctiv eCorp. Modern Times G roup Mtg A B Changy ou. com L imited Open Tex t Corp. G ia nt Interactiv e G roup, Inc. Gree, Inc. Perf ec t World Co., L td. Chines e G amer International V alueClick Inc. K ings oft Co. L td. Mix i, Inc. NEOWIZ G ames Corpora tion United Online Inc. S K Communic ations Co., L td. S hutterf ly , Inc. NetDragon WebS of t, Inc. GigaMedia Ltd. GungHo Online Entertainment, Inc. G amania Digital Entertainment Co., L td. X ING A G The9 L imited OA O R B C Inf orma tion S y s tems A ctoz S of t Co., Ltd. CDC Corp. Openw a ve S y s tems Inc. DA DA S pA Y edangOnline Corp. G ameOn Co L td. Tree.Com, Inc. My riad G roup A G HanbitS of t, Inc. J umpTV Inc. Moggle, Inc K aboos e Inc. Cy berplex Inc. G eoS entric Oy j TheS treet.c om, Inc. DigitalTow n, Inc. Webz en Inc. PhotoChannel Netw orks Inc. S pa rk Netw orks , Inc. A Q Interactive, Inc. B ey ond Commerce, Inc. Ngi G roup Inc. Eolith Co. L td. NeXplore Corpora tion Fluid Mus ic Ca nada, Inc. Northgate Tec hnologies L imited G ra vity Co. , Ltd S oc ialw is e, Inc. S ites earch Corpora tion Dolphin Digital Media, Inc. Wiz z ard S oftw are Corpora tion DXN Holdings B hd B roadWebA s ia Inc. Frogs ter Interactiv e Pictures A G LookS mart, L td. S pectrumDNA , Inc. J umbuc k Entertainment Pty L td. IA S Energy , Inc. Y nk K orea Inc. Ex tens ions , Inc. UOMO Media, Inc Quepas a Corp. Lingo Media Corpora tion A cc eleriz e New Media, Inc. Wy nds torm Corpora tion S NA P Interactive, Inc. Magnitude Inf orma tion S y s tems Inc. CornerWorld Corpora tion Worlds . com Inc. B right Things plc MOK O.mobi L imited is eemedia Inc. V OIS , Inc. L iveWorld Inc. B eta w ave Corpora tion Unis erve Communica tions Corp. DigitalPos t Interactive, Inc. B igs tring Corp. ZipLoca l Inc. The Pa rent Company Financ ial Media G roup, Inc. Tota l S port Online A S A s s oc iated Media Holdings Inc. China G atew ay Corpora tion S NM G lobal Holdings Dibz International, Inc. S ocial Media V enures , Inc. 0 2535.0 2500.7 980.3 980.1 731. 728. 25 602. 0 581. 7 1300. 4 1189. 7 2068. 2 1967. 4 1877. 1 1786.7 400.2 380. 9 369.6 334.4 293.8 275. 6 251. 6 248. 6 187. 3 182. 2 180. 4 154. 5 136.7 129.8 124. 0 115. 8 114. 5 94. 0 83. 7 83. 5 78. 5 77.4 63. 7 60. 0 54. 2 53. 4 48. 5 47. 1 45. 0 44. 8 44. 3 42.8 39.0 36.2 35.0 30.6 30. 3 28. 2 27. 4 26. 3 26. 2 25. 3 24. 8 22. 2 18. 0 18. 0 16. 1 15. 3 14. 2 13. 7 13. 0 12. 4 9. 7 9. 2 8. 5 6. 8 5. 8 5. 2 4. 8 4. 6 3. 8 2. 9 2. 6 2. 3 1. 2 1. 1 1. 0 0. 4 0. 4 0. 2 0. 1 0. 1 0. 0 0. 0 0. 0 0. 0 500 1, 000 1, 500 2, 000 2,500 3, 000 3, 500 4,000 Figure 14. Market Cap Ranking Source. Capital IQ TEV/Revenue (LTM) averages 4.9x: The overall average TEV/Revenue (LTM) multiple for our group is 4.9x (down from 5.4x last week) (Figure 15). However, this is skewed by Gree (3633-TSE) at 40.1x and Dolphin Digital (OTCBB:DPDM) at 36.7x. The median is only 2.2x. Note that we exclude multiples greater than 50x. Twenty-eight companies have multiples under 1.5x Page 15 T E V/L T M R ev enue (x) 45. 0 40. 1 40. 0 35. 0 30. 7 30. 0 25. 0 20. 0 15. 0 22. 1 17.18. 0 6 16. 0 11. 6 9. 9 8. 08. 1 7. 0 5. 5 4. 64. 74. 74. 94. 95. 25. 2 3. 53. 73. 84. 3 2. 42. 52. 72. 93. 03. 03. 1 2. 02. 12. 22. 32. 3 90. 91. 01. 11. 11. 11. 41. 41. 41. 51. 51. 51. 6 0. 00. 00. 10. 10. 20. 20. 20. 30. 30. 40. 40. 50. 50. 50. 60. 80. 80. 90. China G ateway Corporation OAO R BC Information S ys tems Perfect World Co., Ltd. LiveWorld Inc. Unis erve C ommunications C orp. T he Parent Company AQ Interactive, Inc. Openwave S ys tems Inc. Northgate T echnologies Limited S handa Interactive IAC/InterActiveCorp. T ree.Com, Inc. CDC C orp. DXN Holdings Bhd ZipLocal Inc. DADA S pA G ameOn Co Ltd. S park Networks , Inc. J umbuck E ntertainment Pty Ltd. Ynk Korea Inc. Cyberplex Inc. S NM G lobal Holdings United Online Inc. Kaboos e Inc. G igaMedia Ltd. HanbitS oft, Inc. is eemedia Inc. Modern T imes G roup Mtg AB S hutterfly, Inc. ValueClick Inc. Actoz S oft C o., Ltd. G amania Digital E ntertainment S K Communications Co., Ltd. S NAP Interactive, Inc. YedangOnline C orp. G ungHo Online E ntertainment, PhotoChannel Networks Inc. Open T ext Corp. NetDragon WebS oft, Inc. NE OWIZ G ames Corporation MOK O.mobi Limited E olith C o. Ltd. Myriad G roup AG Acceleriz e New Media, Inc. XING AG DigitalPos t Interactive, Inc. F rogs ter Interactive Pictures AG T otal S port Online AS S ohu.com Inc. J umpT V Inc. Mixi, Inc. Wiz z ard S oftware Corporation F luid Mus ic C anada, Inc. Kings oft Co. Ltd. C ornerWorld C orporation Beyond C ommerce, Inc. Changyou.com Limited As s ociated Media Holdings Inc. G eoS entric Oyj Lingo Media C orporation C hines e G amer International Bright T hings plc T encent Holdings Ltd. UOMO Media, Inc Bigs tring C orp. Dolphin Digital Media, Inc. G ree, Inc. 36. 7 10. 0 A vera ge, 4. 9 5. 0 0. 0 Figure 15. TEV/Revenue Ranking Source. Capital IQ TEV/Revenue (LTM) by country/exchange: W e have also calculated multiples based on where the companies are listed or domiciled. Figure 16 shows the average TEV/Revenue multiples by stock exchange. The OTCBB has the largest number of companies (20), trading at an average multiple of 13.9x (down from 18.7x last week). On a geographic basis, the United States has the most companies (40), trading at an average of 5.2x revenue (slightly down from 5.9x last week) (Figure 17). Eleven of the companies are Canadian (average 4.8x revenue). Average TEV/LTM Revenue - By Exchange 20.0 17.6 18.0 16.0 13.9 14.0 11.5 12.0 9.9 10.0 9.0 8.6 8.0 6.0 4.6 4.0 3.23.1 3.0 2.9 2.3 4.0 2.0 1.9 1.9 1.6 1.5 0.8 0.5 2.0 0.5 0.3 0.0 0.0 OTCNO OTCBB OTCPK GTSM NasdaqGM TSE HLSE SEHK ASX NasdaqGS OSE KOSE XTRA TSXV AMEX KLSE SWX RTS TSX OM CM BSE AIM Average TEV/LTM Revenue - By Country 20.0 17.6 18.0 16.0 14.0 12.0 9.9 10.0 9.7 8.0 6.4 5.6 5.2 4.8 4.6 6.0 4.0 4.0 3.1 2.0 1.9 1.5 2.0 0.8 0.5 0.5 0.3 0.0 0.0 Germany Finland Canada Malaysia Switzerland Hong Kong Australia Taiwan Norway Sweden Russia 1 United United Japan China South India 1 Italy 1 (x) # Companies 1 20 5 1 2 3 1 2 5 1 4 2 1 7 2 14 10 1 1 1 5 1 1 # Companies 1 1 6 3 10 40 11 1 2 (x) 1 9 2 1 1 1 Figures 16 & 17. TEV/Revenue Ranking (Exchange, Country) Source. Capital IQ TEV/EBITDA (LTM) averages 10.0x: The average multiple for the 34 companies with positive EBITDA (and multiples under 100x) is 10.0x LTM EBITDA (up from 9.3x last week), led by Tencent Holdings Ltd.’s (700-SEHK) 37.5x multiple (Figure 18). Thirteen of the companies have EBITDA multiples under 7x. The median multiple is 9.4x (vs. 8.8x last week). Page 16 T E V/L T M E B IT DA (x) 40. 0 35. 0 30. 0 25. 0 20. 0 15. 0 A v erage, 10. 0 10. 0 5. 0 0. 1 0. 0 Perfect World Co., Ltd. 0. 3 OAO R BC Information S ys tems 0. 8 NE OWIZ G ames C orporation G amania Digital E ntertainment Co., Ltd. G ungHo Online E ntertainment, Inc. J umbuck E ntertainment Pty Ltd. Modern T imes G roup Mtg AB Chines e G amer International C hangyou.com Limited DXN Holdings Bhd S handa Interactive E ntertainment Ltd. S K C ommunications C o., Ltd. G ameOn C o Ltd. C DC Corp. United Online Inc. S NAP Interactive, Inc. Open T ext C orp. XING AG NetDragon WebS oft, Inc. T encent Holdings Ltd. S park Networks , Inc. IAC /InterActiveCorp. AQ Interactive, Inc. C yberplex Inc. ValueC lick Inc. S ohu.com Inc. G igaMedia Ltd. YedangOnline Corp. Kaboos e Inc. DADA S pA Actoz S oft Co., Ltd. Kings oft Co. Ltd. S hutterfly, Inc. Mixi, Inc. 2. 4 3. 0 3. 5 3. 9 4. 0 4. 9 4. 9 5. 6 6. 3 6. 8 7. 5 7. 7 8. 3 9. 3 9. 5 9. 5 13. 8 14. 4 12. 9 13. 1 13. 2 28. 5 33. 0 37. 5 11. 8 11. 9 10. 8 11. 0 11. 1 9. 8 10. 4 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 (20), trading at an average multiple of 7.7x. On a geographic basis, the United States has the most companies (40), trading at an average of 8.4x EBITDA (Figure 20). Eleven of the companies are Canadian (average 9.5x EBITDA). Average TEV/LTM EBITDA - By Exchange 25.0 20.0 15.0 (x) 10.0 5.0 OTCBB GTSM 0.0 TSE OSE NasdaqGS KOSE SEHK 19.1 15.4 13.1 20.2 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 Germany United States Canada Hong Kong Malaysia China Japan South Korea Italy Taiwan Sweden 15.4 15.3 11.9 11.7 9.5 9.5 Average TEV/LTM EBITDA - By Country 11.9 (x) 9.5 9.4 7.8 7.7 6.8 8.4 8.4 6.3 4.9 3.9 2.4 Australia 0.3 0.0 Russia 1 Switzerland 1 4.9 4.0 3.9 2.4 0.3 AMEX KLSE RTS ASX 0.0 0.0 NasdaqGM 5 SWX 1 OM # Companies 2 3 7 1 XTRA 2 1 TSX 4 14 20 5 CM 1 2 1 2 1 # Companies 9 3 2 10 1 11 40 6 1 1 1 2 Figures 19 & 20. TEV/EBITDA Ranking (Exchange, Country) Source. Capital IQ P/E (LTM) averages 16.7x: The average multiple for the 30 companies with positive earnings (and multiples under 100x) is 16.7x LTM EPS (from 15.3x last week), led by Tencent Holdings Ltd.’s (700-SEHK) 47.8x multiple (Figure 21). Ten of the companies have P/E multiples under 10x. The median is just 13.5x. Page 17 P /E L T M (x) 60. 0 50. 0 47. 8 40. 0 34. 1 30. 0 21. 3 20. 0 A vera ge, 16. 7 8. 8 10. 7 14. 2 14. 4 14. 6 12. 8 13. 1 13. 2 13. 5 13. 6 16. 5 23. 6 27. 1 28. 8 29. 3 37. 2 35. 4 36. 6 10. 0 0. 0 #NUM! 0. 0 0. 7 The9 Limited 1. 9 Perfect World Co., Ltd. 1. 9 Giant Interactive Group, Inc. 2. 7 Neteas e.com Inc. 3. 5 4. 3 5. 9 7. 2 7. 6 J umbuck Entertainment Pty Ltd. Gamania Digital E ntertainment Co., Ltd. NEOWIZ Games Corporation Modern T imes Group Mtg AB Shanda Interactive E ntertainment Ltd. Chines e Gamer International DXN Holdings Bhd Changyou.com Limited SNAP Interactive, Inc. GameOn Co Ltd. Ngi Group Inc. IAC/InterActiveCorp. Open Text Corp. S ohu.com Inc. XING AG Worlds .com Inc. Cyberplex Inc. GigaMedia Ltd. Mixi, Inc. NetDragon WebSoft, 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 (20), trading at an average multiple of 23.6x. On a geographic basis, the United States has the most companies (40), trading at an average of 20.7x earnings (Figure 23). Eleven of the companies are Canadian (average 19.0x EPS). Average P/E - By Exchange 35.0 33.0 30.0 25.0 (x) 20.0 15.0 10.0 5.0 OTCBB GTSM NasdaqGS KOSE SEHK TSE 0.0 CM OM AMEX XTRA TSX ASX 25.9 25.4 23.6 23.6 30.0 25.0 20.0 (x) 25.6 Average P/E - By Country 25.4 23.6 21.3 21.3 14.4 10.9 8.8 7.6 7.2 5.9 4.3 KLSE 20.7 15.0 10.0 5.0 19.0 11.6 7.6 7.2 5.9 4.3 0.0 1.9 0.0 NYSE SWX 0.0 Germany Canada Australia Malaysia 1 Japan United States China Taiwan South Korea Italy Sweden Tencent Holdings Ltd. Spark Networks , Inc. YedangOnline Corp. DADA SpA Kings oft Co. Ltd. Actoz Soft Co., Ltd. # Companies 2 3 7 20 2 5 2 14 4 1 2 1 1 1 1 # Companies 3 9 2 6 40 11 10 1 2 1 Figures 22 & 23. P/E Ranking (Exchange, Country) Source. Capital IQ Switzerland 1 Page 18 UPCOMING EVENTS E arnings Calendar C ompany S handa I nterac tiv e E ntertainment L td. (N asdaqG S :S N DA) L ions G ate E ntertainment Corp. (NY S E : L G F ) G i gaMedia L td. (N asdaqG S :G I G M) Figure 24. Earnings Calendar Source. Company reports D ate & T ime T uesday , J une 02, 2009 9:00 P M (E D T) T uesday , J une 02, 2009 9:00 AM (E D T) T uesday , J une 09, 2009 8:00 AM (E D T) Qu arter Q 1 2009 Q 4 2009 Q 1 2009 Conf Call D etails 1-800-299-0433 800-230-1059 NA Page 19 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. 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 M yriad G roup AG 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 ocia lwis e, 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 C AD AU D C AD C AD HKD C AD US D US D US D JPY SE K US D AU D C HF 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 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 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 MYR N 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 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.7 18 2.2 4 5.0 0 .1 1 .0 2 .3 4 4.8 4 .8 2 5.3 18 0.4 1,9 67. 4 0 .0 98 0.3 5 .8 7 7.4 13 6.7 2 6.2 0 .0 1 .1 5 4.2 2 7.4 4 2.8 1 4.2 0 .2 3 6.2 2 4.8 27 5.6 12 4.0 6 3.7 1,7 86. 7 33 4.4 3 0.6 1,3 00. 4 29 3.8 9 4.0 2,5 00. 7 1 6.1 3 .8 1 8.0 8 3.7 7 8.5 73 1.5 1 2.4 2 .6 2 2.2 6 .8 72 8.2 2,0 68. 2 8 3.5 4 .6 11 4.5 60 2.0 36 9.6 4,4 06. 5 3 9.0 4 4.3 3 5.0 1,8 77. 1 15 4.5 1,1 89. 7 4 8.5 1 3.0 18 7.3 4,1 78. 9 38 0.9 40 0.2 8 .5 0 .0 0 .0 3 0.3 2,5 35. 0 2 8.2 4 7.1 1 8.0 19, 907 .1 0 .4 24 8.6 6 0.0 0 .1 11 5.8 1 .2 58 1.7 1 3.7 98 0.1 2 .9 5 3.4 2 6.3 5 .2 9 .2 25 1.6 12 9.8 1 5.3 0 .4 C urrent Pric e 0.3 5 2 6,30 0.0 0 8 0,00 0.0 0 0.0 0 0.0 2 0.0 8 1.0 1 0.0 2 0.3 0 1.7 0 3 5.7 7 0.0 0 37 6.5 0 0.0 9 1.5 7 5.9 5 0.4 0 0.0 0 0.0 2 2.0 0 0.5 3 72 5.0 0 0.1 5 0.0 0 0.7 5 7.4 5 5 8.6 0 12 4,00 0.0 0 0.0 5 7.9 2 6.1 9 1.1 0 5,63 0.0 0 24 8,00 0.0 0 5,29 0.0 0 1 6.5 7 0.2 3 0.0 8 0.4 5 0.8 0 0.6 1 5.2 5 1.0 5 0.0 9 1.3 0 0.0 2 45 8,00 0.0 0 23 2.5 0 2.3 0 0.0 7 5.7 5 7 7,10 0.0 0 5.4 2 3 5.8 1 0.7 0 3 4,70 0.0 0 4 7.0 5 3 5.6 7 1.8 6 2 2.5 5 1.5 4 1.0 2 1.3 5 6 0.2 3 1 5.1 3 1 2,00 0.0 0 0.7 9 0.0 0 0.0 1 0.7 0 6 6.2 5 3.5 0 2.2 9 0.3 7 8 5.6 0 0.0 2 9.2 7 1.9 6 0.0 3 1 0.7 3 0.0 6 6.9 6 0.1 6 1 1.2 7 0.3 5 4.5 0 0.5 5 0.1 0 0.5 1 3 3.6 5 1 0,20 0.0 0 7,70 0.0 0 0.0 1 1 Wk -32. 7% 20.9 % 19.4 % 0.0 % -17. 4% -11. 1% -12. 2% 0.0 % -33. 8% 18.9 % 23.3 % 1 00. 0% -0.4 % 0.0 % -10. 3% 0.3 % -3.7 % -90. 0% -18. 9% 53.8 % -22. 1% -13. 7% -25. 0% -6.3 % 0.0 % -6.3 % 11.0 % 28.2 % 0.0 % -4.1 % 4.0 % -6.8 % 6.2 % 60.0 % -4.2 % 7.1 % -11. 5% -11. 1% 9.8 % 0.0 % 0.0 % -6.6 % 0.0 % 21.4 % 1.6 % 50.0 % -2.6 % 5.4 % 15.0 % 10.0 % -4.2 % -0.5 % -0.6 % 9.3 % 0.0 % 2.1 % 27.2 % 13.2 % 3.6 % 16.6 % -9.9 % 6.3 % 8.0 % 9.6 % 5.9 % 17.6 % 29.5 % 20.0 % -93. 3% -5.4 % 22.1 % -30. 0% 1.8 % -7.5 % 9.4 % 50.0 % 3.3 % 3.2 % 0.0 % -12. 0% 10.0 % 6.1 % -51. 5% 12.4 % -61. 1% -0.7 % -3.5 % -33. 3% 1 600 .0% 3.3 % -5.6 % -2.7 % 0.0 % 1 600 .0% -93. 3% 18.1% 0.0 % 1 Mth -20. 5% 8 5.9 % 7 0.4 % 7.1% -5.0 % -27. 3% -29. 4% -33. 3% -33. 8% 4 1.7 % 1 1.3 % 1 00.0 % 6 7.7 % -10. 0% 5.4% -10. 7% 2 3.4 % -90. 0% -11. 8% -14. 9% -10. 2% -18. 1% -25. 0% -33. 3% 8 2.9 % -17. 7% 6 9.6 % 2 8.4 % 2 5.0 % -5.0 % 6.9% 1 2.2 % 2.0% 8 1.3 % 1 7.9 % 3.4% -8.0 % -20. 0% -3.2 % 4 8.1 % 3.4% 4 8.7 % 1 9.3 % -34. 6% 2.4% 5 0.0 % 1.1% 5.4% 1 5.0 % -10. 8% 2 5.0 % 2 8.3 % 3.6% 1 9.5 % 5 5.6 % -5.7 % 1 8.2 % 8.4% 5 4.6 % 2 4.5 % 2.7% 2 7.5 % 3 7.1 % 2 0.0 % 2 2.6 % 2 3.5 % 9 7.5 % -25. 0% -99. 2% 9 4.4 % 1 6.7 % NM -0.4 % 8 5.0 % 2 4.1 % 2 0.0 % -0.9 % -3.9 % 0.0% 1 9.9 % 3 7.5 % 3 2.3 % 6 0.0 % 7.5% 1 6.7 % 6 3.6 % -3.5 % -41. 2% 2 00.0 % 1 2.2 % 1 5.8 % 2 7.7 % 0.0% 2 00.0 % -99. 2% 16.1% 1 1.7 % 3 Mth 12 .9% 16 4.3% 15 8.9% -7 0.0% 12 .4% -4 2.9% 62 .9% 0 .0% -7 0.5% 12 6.7% NM 0 .0% 18 3.1% -4 0.0% 34 8.6% 23 .7% 27 .4% -9 0.0% 15 0.0% -2 7.3% 17 .8% 39 .4% 18 5.7% -9 0.0% 50 .0% 10 2.4% 14 4.7% 36 .3% 66 .7% 23 .9% 26 .6% 61 .8% 32 .2% 11 2.0% 82 .4% 14 .0% 41 1.1% -1 5.8% 0 .0% 12 2.2% 52 .5% 11 9.7% 16 .7% 11 2.5% 19 .3% -1 6.7% 28 .7% 96 .2% 53 .3% 46 .7% 32 .2% 14 6.7% 91 .5% 71 .4% 7 .7% 75 .9% 42 .1% 17 .0% 12 6.2% 12 8.2% -4 .3% -1 2.8% 35 0.0% 93 .4% 99 .9% 10 0.0% -1 6.8% 20 0.0% -9 9.2% 59 .1% 54 .6% NM -1 0.2% 28 9.5% 93 .7% -6 .3% -9 .6% 15 .3% -2 5.0% 16 3.6% 10 .0% 66 .9% 12 8.6% 10 0.5% -5 3.3% 38 9.1% 7 .8% -1 6.7% 32 5.0% 18 .1% 50 .4% 12 4.5% 0 .0% 41 1.1% -9 9.2% 67.1% 46 .7% 6 Mth -1 2.5 % 14 4.7% 15 3.2% -5 0.0 % -5.0% -6 0.0 % -1 2.2 % 74 .4% -7 7.9 % 10 2.4% NM -8 6.7 % 35 0.4% -8 0.0 % 42 3.3% -1 3.7 % 12 .9% -9 8.0 % -2 5.0 % 0 .0% -3 3.8 % 34 .3% 50 .0% -9 7.7 % 97 .4% 86 .7% 34 5.6% -1 7.3 % 25 .0% 32 .0% 35 .4% 77 .4% NM 13 6.2% 74 .0% 10 .9% 66 6.7% 33 .3% 2 .3% 12 8.6% 11 7.9% 12 9.3% 4 .0% 18 3.3% -1 1.0 % -1 1.8 % -2 8.8 % 69 .7% NM 65 .0% -1 8.1 % 35 7.6% 58 .5% 87 .9% -4 6.2 % -3 0.6 % -7.9% 33 .2% 27 1.0% 21 .1% 30 .5% -5 2.6 % 62 .7% 14 0.9% 11 5.2% 18 4.4% 6 .9% -9 1.4 % -9 9.7 % -5 3.3 % 48 .1% NM -2 1.0 % 76 .2% 90 .2% -9 8.1 % -1 5.0 % -3 7.4 % -4 0.0 % 48 9.6% 37 .5% 12 .4% 14 .3% 77 .2% -5 3.3 % 49 2.1% -4 5.0 % -5 4.5 % 32 5.0% 40 .2% 72 .9% 55 .1% -5 0.0 % 66 6.7% -9 9.7 % 59.9% 30 .5% 1 Yr -53 .3% 2 18. 4% -53 .8% NM -85 .4% -73 .3% -63 .3% -34 .8% -86 .8% -45 .7% NM -96 .7% 2 28. 8% -83 .3% 96.3 % -54 .3% -10 .2% -98 .0% -91 .4% -42 .0% NM -22 .5% 0.0 % -99 .5% NM 57.5 % 67.4 % -7. 5% -16 .7% -40 .5% -63 .2% -17 .3% NM -22 .3% 18.6 % -61 .0% 7.0 % -61 .0% -28 .6% 1.3 % -33 .0% 43.4 % -44 .1% -75 .0% -70 .2% -16 .7% -43 .1% -43 .5% NM 32.0 % -42 .5% 1 30. 5% -46 .8% 52.7 % NM -74 .5% -87 .5% 0.7 % 2.5 % -6. 2% -62 .4% -60 .6% -85 .0% 94.4 % 1.8 % -33 .9% 14.5 % -99 .9% NM -40 .7% -20 .4% NM -47 .1% NM 25.1 % -99 .3% -64 .0% -74 .6% -70 .0% NM -82 .3% -40 .8% -74 .8% -39 .4% NM 22.3 % -72 .5% -71 .4% -15 .0% -11 .6% -16 .7% -46 .0% -96 .4% 2 28. 8% -99 .9% -27.2% -42 .0% 52 We ek -53. 3% 0.0 % -59. 8% -97. 0% -90. 5% -81. 0% -69. 4% -44. 4% -89. 7% -51. 3% -5.1 % -95. 6% -3.0 % -88. 6% -6.5 % -60. 8% -16. 8% -98. 0% -93. 2% -67. 2% -53. 1% -37. 5% -85. 1% -99. 7% -63. 2% -24. 7% -6.5 % -24. 2% -28. 6% -46. 1% -65. 4% -44. 7% -10. 6% -26. 6% -20. 3% -67. 2% -34. 3% -77. 1% -31. 3% -37. 5% -39. 0% -12. 1% -46. 7% -75. 0% -72. 3% -50. 0% -50. 3% -45. 2% 0.0 % -34. 0% -43. 9% -8.1 % -53. 3% 2.4 % -51. 7% -77. 0% -88. 8% -8.7 % -10. 0% -19. 7% -62. 7% -70. 5% -85. 2% 3.8 % 0.3 % -39. 1% -26. 9% -99. 9% -99. 8% -75. 3% -27. 6% -30. 0% -48. 7% -38. 3% -2.1 % -99. 5% -67. 5% -75. 0% -70. 0% -17. 9% -84. 3% -44. 3% -84. 9% -44. 2% -93. 8% -3.8 % -74. 8% -75. 0% -40. 0% -17. 7% -18. 7% -48. 3% -96. 9% 3.8 % -99. 9% -49.4% -48. 3% 577.0 Figure 25. Price Performance Source. Capital IQ Page 20 C omparable C ompany A nalys is > W eb 2.0 V aluatio n Multiples C om pany Nam e Acce le rize N ew Me dia, Inc. Actoz S of t C o., L td. AQ Inte ractive , Inc. As s ocia ted Media Holdings 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 D C 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 AD A S pA D XN Holdings B hd D ibz Inte rnational, Inc. D igitalP ost Inte ra ctive , Inc. D igitalT own, Inc. D olphin D igital Me dia, Inc. E olith C o. L td. E xte ns ions , Inc. F inancia l Media G roup, Inc. F luid Mus ic Ca nada, Inc. F rogs te r Interactive P icture s AG G a ma nia D igital E ntertainment C o., L td. G a me On C o L td. G e oS e ntric O yj G iant Intera ctive G roup, Inc. G iga Media Ltd. G ravity C o., L td G ree, Inc. G ungH o O nline E ntertainment, Inc. H anbitS of t, Inc. IAC /InterActiveC orp. IAS E nergy, Inc. is ee media Inc. J umbuck E ntertainment P ty Ltd. J umpT V Inc. K a boos e Inc. K ings oft Co. Ltd. Lingo Media Corporation Live World Inc. LookS mart, Ltd. Magnitude Information S ys tems Inc. Mixi, Inc. Mode rn Times G roup Mtg AB Moggle , Inc MOK O.mobi L imited Myriad G roup AG N E OW IZ G ames C orpora tion N etD ragon W ebS oft, Inc. N ete as e.com I nc. N eXplore Corpora tion N gi G roup Inc. N orthgate Te chnologies L imited Open T e xt Corp. Openwave S ys tems Inc. P e rf ect W 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 ocia lwis e, 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 Median S ec to r D irect Marketing G aming G aming Mobile Ins ta nt Mes s aging Me dia S ocia l Ne tworking S ocia l Ne tworking S ocia l Ne tworking G aming G aming Mobile G aming C ontent Advertis ing S ocia l Ne tworking S ocia l Ne tworking S NS A pps C ontent S ocia l Ne tworking S ocia l Ne tworking G aming C ontent D irect Marketing Me dia G aming G aming G aming Mobile G aming G aming G aming S ocia l Ne tworking Me dia G aming Me dia V ide o C ontent S ocia l Ne tworking V ide o C ontent G aming Le arning S ocia l Ne tworking D irect Marketing S ocia l Ne tworking S ocia l Ne tworking Me dia G aming S ocia l Ne tworking Mobile G aming G aming G aming C ontent Me dia D irect Marketing C ollaboration Mobile G aming D igital Imaging S ocia l Ne tworking Me dia G aming D igital Imaging S e arch D ating Me dia S ocia l Ne tworking S ocia l Ne tworking G aming S ocia l Ne tworking S ocia l Ne tworking Me dia P orta l Me dia G aming Me dia Me dia P orta l S ocia l Ne tworking Me dia Me dia Me dia S ocia l Ne tworking G aming P odcas ting C ontent C ontent S ocia l Ne tworking G aming G aming D irectory Co untry U nite d S tates S outh K ore a J a pan U nite d S tates U nite d S tates U nite d S tates U nite d S tates U nite d K ingdom U nite d S tates H ong K ong C hina U nite d S tates T a iwan U nite d S tates C anada Italy Malays ia U nite d S tates U nite d S tates U nite d S tates U nite d S tates S outh K ore a U nite d S tates U nite d S tates U nite d S tates G ermany T a iwan J a pan F inland C hina T a iwan S outh K ore a J a pan J a pan S outh K ore a U nite d S tates C anada C anada A us tralia C anada C anada C hina C anada U nite d S tates U nite d S tates U nite d S tates J a pan S we den U nite d S tates A us tralia S witz erland S outh K ore a C hina C hina U nite d S tates J a pan India C anada U nite d S tates C hina C anada U nite d S tates R us s ia C hina U nite d S tates S outh K ore a U nite d S tates U nite d S tates U nite d S tates U nite d S tates C hina U nite d S tates U nite d S tates U nite d S tates C hina U nite d S tates C hina U nite d S tates N orway U nite d S tates C anada U nite d S tates C anada U nite d S tates U nite d S tates S outh K ore a U nite d S tates U nite d S tates U nite d S tates G ermany S outh K ore a S outh K ore a C anada P rimary E xc hange OT C B B K OS E TSE OT C P K OT C B B OT C B B OT C B B AIM OT C P K N as da qG S N as da qG S OT C P K GTS M OT C B B TSX CM KL SE OT C P K OT C B B OT C B B OT C B B K OS E OT C P K OT C B B TSX XT R A GTS M TSE H LS E NYS E N as da qG S N as da qG M TSE OS E K OS E N as da qG S OT C B B 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 SWX K OS E S E HK N as da qG S OT C P K TSE BS E N as da qG S N as da qG S N as da qG S T S XV N as da qC M R TS N as da qG S N as da qG S K OS E OT C B B OT C P K OT C P K OT C B B N as da qG S OT C B B AME X OT C B B S E HK OT C P K N as da qG S N as da qG M OT C NO N as da qG M T S XV N as da qG S OT C B B N as da qG S OT C B B N as da qG M AME X OT C B B OT C B B XT R A K OS E K OS E T S XV Tic ker AC LZ A 052 790 3 838 AS MH BS G C B WA V BYO C AIM:B G T B WB A C HIN .A CY OU CG W Y G T S M:308 3 CWR L T S X:C X CM:DA D XN D IB Z DGL P D G TW DP DM A 041 060 E XT I F NGP T S X:F MN F RG 6 180 3 812 G E O1V GA G IG M GR VY T S E :3 632 3 765 A 047 080 IAC I IA S C .A IE E AS X:J MB T S X:J T V TS X:K AB 3 888 TS XV :LM LV W D L OOK MAG Y 2 121 MT G B MMO G MK B MY R N A 095 660 777 NT E S N XP C 2 497 59 005 7 O TE X OP W V PW R D T S XV :P N QP S A R B CI S NDA S FL Y A 066 270 S TVI S N MN S MV I S CL W S OH U STPC L OV S P XA 700 K ID S .Q NC T Y TSCM T OS O TR E E T S XV :U S S U N TD U OMO VC LK VOIS W ZE N W ZE W DD D W YND O 1B C A 052 770 A 023 770 T S XV :ZIP US D Market Cap ($m) 9. 7 1 82. 2 45. 0 0. 1 1. 0 2. 3 44. 8 4. 8 25. 3 1 80. 4 1,9 67. 4 0. 0 9 80. 3 5. 8 77. 4 1 36. 7 26. 2 0. 0 1. 1 54. 2 27. 4 42. 8 14. 2 0. 2 36. 2 24. 8 2 75. 6 1 24. 0 63. 7 1,7 86. 7 3 34. 4 30. 6 1,3 00. 4 2 93. 8 94. 0 2,5 00. 7 16. 1 3. 8 18. 0 83. 7 78. 5 7 31. 5 12. 4 2. 6 22. 2 6. 8 7 28. 2 2,0 68. 2 83. 5 4. 6 1 14. 5 6 02. 0 3 69. 6 4,4 06. 5 39. 0 44. 3 35. 0 1,8 77. 1 1 54. 5 1,1 89. 7 48. 5 13. 0 1 87. 3 4,1 78. 9 3 80. 9 4 00. 2 8. 5 0. 0 0. 0 30. 3 2,5 35. 0 28. 2 47. 1 18. 0 19,9 07. 1 0. 4 2 48. 6 60. 0 0. 1 1 15. 8 1. 2 5 81. 7 13. 7 9 80. 1 2. 9 53. 4 26. 3 5. 2 9. 2 2 51. 6 1 29. 8 15. 3 0. 4 19,9 07. 1 0. 0 577. 0 44. 8 TE V/LT M R evenue 3.5 x 1.6 x 0.2 x 8.1 x 30.7 x 7.0 x 17.6 x 0.5 x 8.0 x 0.0 x 16.0 x 5.5 x 1.0 x 0.8 x 0.5 x 3.8 x 36.7 x 3.0 x 5.2 x 4.3 x 2.0 x 0.8 x 9.9 x 1.4 x 40.1 x 2.3 x 1.4 x 0.4 x 1.4 x 0.9 x 4.7 x 1.1 x 5.2 x 11.6 x 0.1 x 4.9 x 1.5 x 3.0 x 3.1 x 2.9 x 2.7 x 0.3 x 2.5 x 0.3 x 0.1 x 2.4 x 0.0 x 0.4 x 1.5 x 2.1 x 2.2 x 1.1 x 0.0 x 4.7 x 0.9 x 18.0 x 0.2 x 4.6 x 0.5 x 0.2 x 1.1 x 22.1 x 1.5 x 4.9 x 3.7 x 2.3 x 0.9 x 0.6 x 40.1 x 0.0 x 4.9x 2.2 x TE V/ N TM R evenue 0.5x 6.0x 0.7x 4.3x 1.4x 0.5x 1.1x 1.4x 2.3x 0.3x 0.4x 1.7x 2.0x 4.1x 0.4x 0.9x 1.6x 6.0x 0.3x 1.7x 1.4x TE V/LT M E BITDA 7.5 x 3.0 x 6.3 x 13.2 x 28.5 x 9.5 x 4.9 x 3.9 x 11.8 x 3.5 x 5.6 x 13.1 x 14.4 x 2.4 x 9.3 x 12.9 x 13.8 x 9.5 x 11.0 x 6.8 x 9.8 x 0.1 x 0.3 x 0.8 x 11.1 x 33.0 x 7.7 x 10.8 x 4.0 x 37.5 x 4.9 x 8.3 x 11.9 x 10.4 x 37.5 x 0.1 x 10.0x 9.4 x TE V/NTM E BITDA 6.8x 6.3x 6.2x 4.0x 5.7x 1 1.4 x 8.5x 2.9x 0.8x 4.8x 4.5x 8.5x 9.4x 5.6x 3.5x 6.4x 1 1.4 x 0.8x 6.0x 6.0x P /LT M E P S 27 .1x 13 .5x 37 .2x 8. 8x 7. 6x 4. 3x 28 .8x 14 .6x 1. 9x 10 .7x 21 .3x 7. 2x 16 .5x 36 .6x 5. 9x 35 .4x 13 .2x 2. 7x 12 .8x 29 .3x 1. 9x 3. 5x 13 .1x 14 .2x 14 .4x 47 .8x 0. 7x 34 .1x 23 .6x 13 .6x 47 .8x 0. 7x 16.7x 13 .5x P /NT M E P S 1 2.3 x 9.4x 1 3.1 x 1 0.9 x 3 3.4 x 1 3.4 x 1 6.2 x 2 9.9 x 1 0.2 x 1 0.4 x 1 9.1 x 1 8.3 x 1 0.1 x 9.7x 1 7.9 x 3 3.4 x 9.4x 15.6x 1 3.1 x P /TangBV 3 .1x 0 .7x 0 .3x 1 2.2x 1 4.0x 8 .7x 0 .5x 4 .0x 3 .5x 2 .2x 3 .5x 1 .7x 1 0.7x 0 .3x 3 .0x 1 6.3x 2 .8x 1 .1x 1 .9x 1 .8x 4 .1x 4 .0x 9 .3x 1 .1x 0 .8x 5 .4x 3 .4x 5 .1x 1 7.9x 2 .0x 0 .8x 0 .7x 2 .2x 0 .7x 1 9.3x 1 .6x 2 .3x 5 .1x 3 9.5x 6 .8x 4 0.1x 4 7.1x 2 0.0x 0 .1x 0 .8x 1 .5x 8 .0x 1 0.1x 0 .0x 7 .9x 6 .3x 1 .7x 4 7.1x 0 .0x 7.1x 3 .2x Figure 26. Valuation Comparison Source. Capital IQ Page 21 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 S witz erla nd 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 N orway G rand To tal 40 11 10 9 6 3 2 2 1 1 1 1 1 1 1 1 1 1 93 U S D Market Cap ($m) C hina U nited S tates J a pan C anada S weden T a iwa n S outh K orea G erma ny R uss ia H ong K ong I ta ly S witz erla nd F inland I ndia M alays ia Aus tra lia U nited K ingdom N orway G rand T otal 37, 321.1 5, 339.5 2, 535.7 2, 212.7 2, 068.2 1, 590.4 1, 550.3 276.4 187.3 180.4 136.7 114.5 63.7 35.0 26.2 22.6 4.8 0.1 53,665.6 Avg US D Mar ket C ap ($m) China S weden Ta iwa n Japan Ca na da R us sia Hong K ong S outh K orea G erma ny Ita ly United S tates S witzerland Finland India Malay sia Australia United K ingdom Norway G rand Total 3,732. 1 2,068. 2 530. 1 422. 6 201. 2 187. 3 180. 4 172. 3 138. 2 136. 7 133. 5 114. 5 63. 7 35. 0 26. 2 11. 3 4. 8 0. 1 577.0 U S D LT M T otal R ev ($m) U nited S ta tes C hina S weden C a na da S outh K orea J a pa n H ong K ong T aiwan I ta ly R uss ia I ndia M a la ys ia G ermany S witz erla nd Aus tra l ia F inla nd N orwa y U nited K ingdom G rand T otal 3, 795. 5 3, 794. 1 1, 817. 2 996. 3 686. 7 511. 5 389. 9 375. 8 240. 4 154. 7 119. 4 79. 7 59. 4 40. 0 15. 6 6. 0 2. 2 0. 3 13,084.8 U S D LT M Total E B IT DA ($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 H ong K ong R uss ia G erma ny M alays ia Aus tralia S witz erland N orway U nited K ingdom F inland I ndia G r and T otal 1,754. 2 278. 4 244. 8 197. 5 130. 2 99. 4 86. 3 38. 4 30. 8 20. 2 13. 3 10. 9 3. 0 0. 8 -1. 1 -1. 9 -15. 5 -28. 0 2,861.7 E B IT DA % C hina Aus tral ia T aiwa n J a pa n I ta ly S weden M a la ys ia R uss ia H ong K ong S outh K orea S witz erla nd U nited S ta tes G ermany C anada I ndia N orway F inla nd U nited K ingdom G rand T otal 47. 9% 37. 2% 32. 3% 25. 3% 16. 0% 15. 3% 13. 7% 13. 1% 7.9% 4.1% 1.9% -9. 9% -14.7% -21.1% -23.5% -50.6% #DI V /0! #DI V /0! 6.0% Figure 27. Comparison by Country Source. Capital IQ C omparable C ompany A nalys is > W eb 2.0 Su mmary b y Ex c hange C om pany Nam e OT C B B N as da qG S OT C P K K OS E TSE N as da qG M T S XV TSX S E HK A ME X XT R A ASX GT SM S WX H LS E NYS E CM B SE N as da qC M OS E A IM OM R TS K LS E O T C NO G rand To tal 20 14 10 7 5 5 5 4 3 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 1 93 U S D Market Cap ($m) N asdaqG S SE HK TSE OM NYS E K OS E GTS M OT CB B OS E N asdaqG M XT R A TSX R TS CM SWX OT CP K AM E X T S XV H LS E BS E KLS E AS X N asdaqC M AI M OT CN O G rand T otal 21, 515.8 21, 008.3 2, 241.9 2, 068.2 1, 786.7 1, 466.4 1, 255.9 369.2 293.8 282.0 276.4 275.8 187.3 136.7 114.5 81.6 73.4 66.3 63.7 35.0 26.2 22.6 13.0 4.8 0.1 53,665.6 Avg US D Mar ket C ap ($m) S E HK OM NY S E Na s daqG S G TS M TS E OS E K OS E RT S XT R A CM SWX TS X HL S E Na s daqG M AME X BS E KLS E O TC B B TS X V Na s daqC M AS X O TC P K AIM O TC NO G rand Total 7,002. 8 2,068. 2 1,786. 7 1,536. 8 628. 0 448. 4 293. 8 209. 5 187. 3 138. 2 136. 7 114. 5 68. 9 63. 7 56. 4 36. 7 35. 0 26. 2 18. 5 13. 3 13. 0 11. 3 8. 2 4. 8 0. 1 577.0 U S D LT M T otal R ev ($m) OM N a sda qG S S E HK CM NYS E R TS BSE OS E GT S M K OS E N a sda qG M K LS E TSE TSX SWX AM E X XT RA OT CP K T S XV AS X HLS E OT CN O OT CB B AI M N a sda qC M G rand T otal 1, 817. 2 481. 4 473. 5 240. 4 219. 1 154. 7 119. 4 116. 3 92. 7 89. 1 81. 3 79. 7 79. 0 42. 3 40. 0 29. 9 29. 7 18. 9 9. 8 7. 8 6. 0 2. 2 2. 1 0. 3 0. 1 152.1 U S D LT M Total E B IT DA ($m) N a sdaqG S S E HK OM TSE K OS E GT S M CM OS E R TS XTR A K LS E AM E X AS X TSX SWX NYS E OT CN O AI M N a sdaqG M T S XV N a sdaqC M HLS E BSE OT CP K OT CB B G r and T otal 1,718. 4 663. 6 278. 4 109. 4 79. 1 53. 4 38. 4 20. 7 20. 2 13. 3 10. 9 6. 6 3. 0 1. 4 0. 8 0. 0 -1. 1 -1. 9 -8. 0 -8. 7 -10. 8 -15. 5 -28. 0 -32. 7 -49. 3 2,861.7 E B IT DA % S EHK AS X GT SM N asdaqG S TSE OS E CM OM K LS E R TS K OS E SWX N asdaqG M O T CB B TSX XT R A BSE T S XV AM E X O T CP K O T CN O N asdaqC M H LS E NYS E AI M G rand T otal 42. 6% 37. 2% 36. 3% 29. 7% 26. 8% 17. 8% 16. 0% 15. 3% 13. 7% 13. 1% 2.8% 1.9% 1.6% -5. 3% -13.5% -14.7% -23.5% -25.2% -34.9% -41.3% -50.6% #DI V /0! #DI V /0! #DI V /0! #DI V /0! 6.0% Figure 28. Comparison by Exchange Source. Capital IQ Page 22 Financ ing - Las t Three Months (US $ m) Mo nth Mar-09 Compan y N ame Kaixin 001.c om Vidyo Buzznet LendingClu b S endMe Inc . Auditude Glam Media Vis ible Meas ures S uperS ec ret GoViral Greys tripe OMGP OP Apture S imu lmedia Tynt AnyS ourc e Media Pixazza Tops y Hunc h S ports Compos ite DE Bit.ly AdultS pac e Myn gle 33Ac ros s Three Melons Mar-09 T otal A pr-09 Collec tive Media GOOM R adio Marin S oftware The R ubic o n P rojec t FreeW heel Cellu fun Conduc tor Inc . Batanga Viximo DoubleT wis t IMS h opping S oc ialtext Mixerc as t S oundCloud TubeMog ul Tribal Nova Tripbas e S oc ialc as t Brandtology S c an & Target J odang e Foodis ta A pr-09 T otal May-09 Fac ebook One Net E n tertainmen t Cyberplex Peer39 Open X Imeem E veryZing BlogHer Inc . Gis t Fuhu Inc . Azuki S ys tems I Love R ewards Doc uS ign TimeB ridge OLX Medialets Res o nate Networks Mo 'Min is VoxP op Loop'd Network May-09 T otal US A C hina C ana da US A UK US A US A US A US A US A US A C ana da US A US A US A US A US A I srael US A US A 0.8 13. 6 10.0 22. 9 16. 3 4.0 2. 0 1. 5 1. 5 18.7 40. 8 205.0 5. 0 5.0 6. 0 5. 9 5.0 6. 8 6. 3 8.8 8.3 7.0 10.0 10. 0 12. 9 10. 5 10. 0 US A F rance US A 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 15. 6 8. 0 1.3 1.2 0. 6 45. 3 52.5 16. 1 12. 0 200.0 2. 0 1. 4 1. 4 3. 3 3. 0 2. 5 4.1 5.0 5. 0 4. 7 4.5 10.0 10.0 7.5 8. 0 16. 0 13. 0 5. 0 12. 0 C ou ntry C hina US A 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 US A N etherlands US A Argentina 1.3 4. 3 0.6 0.6 41. 1 50.3 20.0 43. 0 12. 0 10. 0 1.3 1. 3 0. 8 3. 0 2. 0 2. 0 2. 0 4. 1 4. 0 3. 9 3. 2 3. 1 5. 0 10. 0 8. 8 5.5 10.5 10. 0 10. 0 12.0 12. 0 A ng el/S eed Debt financ ing PIPE S eries A S eries B 20.0 15. 0 12. 5 S eries C S eries D S eries E G rand T otal 20.0 15.0 12.5 12.0 12.0 10.5 10.0 10.0 10.0 8. 8 5. 5 5. 0 4. 1 4. 0 3. 9 3. 2 3. 1 3. 0 2. 0 2. 0 2. 0 1. 3 1. 3 0. 8 0. 6 162.5 20.0 16.0 13.0 13.0 12.0 10.0 10.0 7. 5 5. 0 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. 6 149.5 200. 0 20.0 12.9 10.5 10.0 8. 8 8. 3 7. 0 6. 8 6. 3 6. 0 5. 9 5. 0 5. 0 5. 0 4. 0 2. 0 1. 5 1. 5 0. 8 327.1 Figure 29. Financing, Last Three Months Source. Company reports Page 23 C ompany Des c riptio ns - C urrent Mo nth C apital Market A c tivity C ompany A zuki S ys tems B logHer Inc. HQ U nited S ta tes U nited S ta tes W ebs ite www. azuk is ys tems .com www. blogher. com Des criptio n P eerMeta provides web-e na bled mobile devic es a nd s ervices . The c ompa ny dev elops applic ations around iG oogle, F a c ebook, M yS pac e a nd Y ahoo. P eerM eta is bas ed in B oston, M a ss a chus etts . B logHer I nc. operates a n online community a nd media network for women. I t offers a s eries of live ev ents a nd conferenc es, as well a s an a dvertising network of blog a ffilia tes. The company ha s a stra tegic-partnership with iV illa ge. B logHer I nc. wa s founded in 2005 and is bas ed in R edwood C ity, Ca lifornia. C y berplex Inc . provid es W eb a dv ertis ing s olutions a nd on-line c ustomer ac quisition strategies for F ortune 1000 compa nies a nd s mall to midsiz ed bus ines ses in C anada a nd the Uni ted S ta tes . Its W eb A dvertising divis ion provides performance-ba s ed I nte rnet advertising s olutions to a cquire leads , drive sign-ups , downloa ds, inquirie s, or a cquire payi ng customers. T he c ompa ny’s T ec hnology S ervic es div ision compris es ma na gement and technology c onsu ltants to a s sis t clients in the a rea s of a pplica tions lifecy cle; and re-engineering a nd optimization of tec hnologies , developing a nd delivering a pplica tions us ing the productions a nd tec hnologies, a nd monito ri ng a nd supporting ap plications to ensure performa nce a nd reliability. C yberplex a ls o prov ides technology s olutions, s uc h a s s ys tem integra tion, enterprise c ontent ma na gement, data ma nagement a nd reporting, W eb content management, bus iness proces s ma na gement, enterprise s earch, a nd spec ial enga gement offerings; a nd W eb design s olutions , which include pre-designed, cus tom designed, an d ecommerce s olutions. I t s erves a dvertisers , publis hers, and agenc ies. The compa ny wa s formerly k nown a s NewP ath Ca pita l C orpora tion a nd cha nged its name to C yberplex Doc uS ign, I nc. p rov ides s oftwa re services for electronic s igna ture and electronic c ontra c t executi on (E C E ). It offers P rofess ional E d ition, which ena bles individua ls and bus iness es to s end their documents for signa ture; C orpora te E dition, a n elec tronic signature a nd c ontrac t execution s olution tha t a u toma tes the proces s of manua lly s ending, si gning, tra c ki ng, a nd s toring doc uments ; a nd D ocuS i gn C onnect, a suite of integration services to extend D ocuS ign P la tform ca pa bilities into exis ting s ys tems or new a pplica tions . The compa ny a ls o provides C onnec t for S ales forc e, which ena bles us ers to s end doc umen ts ; ca pture contra ct and env elope da ta ; view va rious contra ct s tatus a nd data in the dashboard tab enabling vis ibility into va rious contra ct ac tiv ity a cros s the entire orga niz a tion; a nd extent form data prov ided during the signing proc ess by a utoma tica lly injecting it into S a les force O bjects eliminating the need to rek ey data . I t s erves indus tries, s uc h as a griculture, bio-technology , bus iness s ervices , co nstruction, c onsulting, consumer electronics , debt s ettlement, educa tion, engineering, fina nc ia l services ga ming, gov ernment, hardwa re, healthc are, ins ura nce, lea sing, ma nufa cturing, mining, mortga ge, non-profit pharmac eutica l E very Zing C orp. is a podc as t sea rc h engine tha t lets the user s ea rch a udio of both a udio and video podca sts. The company wa s founded in 2006 as P odZinger Corp. a nd changed its na me to E veryZ ing C orp. in 2007. E veryZ ing is bas ed in C a mbridg e, Ma s sa chus etts. E veryZ ing C orp. is a s ubsidia ry of B B NT S olutions , LL C . F ac ebook , Inc . operates a s a socia l network ing Webs ite. It enables members to look up friend’s W eb pages, a nd s hare photos a nd videos . The c ompa ny was founded in 2004 a nd is ba s ed in P alo Alto, C alifornia. F U HU produc es v irtua l identity c ards a nd rich media web widgets . F U HU ’s miss ion is to give us ers control over their stuff (photos , content, identity, email a ddres ses ) by ma k ing it u nivers a lly a cc es sible, s ha reable a nd ma na gea ble a nywhere, anytime. G ist L td. prov ides s upply cha in s olutions for grocery , retail, elec tronics , ga s , and chemica l indus tries . It offers s trategic sup ply chain trans formation, s upply cha in planning, bus iness modeling, network design, wa rehouse s olutions , and distribution s olutions . T he c ompa ny a lso provide s inbound a nd outbound mana gement; network opera tions , such a s network design a nd optimiza tion, s oluti on deliv ery, s upply cha in opera tions, and prima ry distribution; cus tomer fulfilment, which inc ludes phys ic al replenis hment, rev erse logis tic s, and va lue-add services ; and cha nge management. T he company wa s formerly known a s B OC Dis tribution S ervices Limited and changed its na me to G ist L td. in J une, 2001. T he compa ny wa s inc orpora ted in 1951 and is hea dqua rtered in B a sings toke, U nited K ingdom. I t has opera tions in E urope, As ia, Aus tra la s ia, a nd North America . G ist L td. opera tes as a subs idia ry of T he B O C G roup L td. I Love R ewards, Inc ., an inc entiv e mark eting compa ny , engages in the design, development, a nd implementa tion of incentive s olutions for companies and bus iness es in the United S ta tes a nd C a na da. I t offers online rewards a nd employee recognition, s ales incentiv es, c us tomer loya lty, dea ler inc entiv es, not for profit, a nd cus tom solutions . The c ompany prov ides its solutions through a W eb-ba s ed engine a nd foc uses on employ ee moti va tion, cus tomer loya lty, and va lued beha viors. I L ove R ewa rds, I nc. was founded in 1995 a nd is bas ed in T oronto, C ana da with a n additional offic e in N ew Y ork, the United S ta te s. Imeem, I nc. opera tes as a n online communi ty for mus icia ns , direc tors , photogra phers, and groups. It ena bles users to c reate a udio, video, a nd photo pla ylis ts ; s ha re their fa vorites ; disc over new c ontent; tra ck their films; crea te a nd view pla y lists of their fav orite shots; tra ck their photos ; s ha re a lbums with their fri ends; hold group di sc uss ions ; cha nge their profile info; uploa d new photo albums; pos t new v ideos, or mu sic ; and write blogs , or comments . The compa ny wa s founded in 2004 is ba s ed in S an F ra ncis co, C a liforn ia. L oop’d N etwork is a n online network for a ction s ports. T he site provides a place for a th letes to promote themselves, connect with bra nds , get exc lusiv e dea ls on produc ts , a nd partic ipate in communities rooted in ac tion s ports . T he s ite is geared for both profess iona l and ama teur a thletes . Media lets is a creative a dv ertis ing network for na tiv e mobile a pplications . L a unched on J uly 11th, 2008, M edia lets works with a gencies, bra nds and application dev elopers to define a nd deploy a d formats tha t tap into a ll of the ca pabili ties of the iP hone. Medialy tics , Medialets ’ free a nalytic s and reporting solution, is the leading analy tics a nd a d vertising solution for the world’s mos t downloaded iP hone a pplica tions . Media lets is a privately-held compa ny with offic es in N ew Y ork , NY a nd S a n F rancis c o, C A Mo’M inis platform allows a dva nced a s well as non-s killed developers to ra pidly create origina l qua lity ga mes from sc ra tc h, without the need of programming, a nd ha ve them s ea mles s ly supported on a wide ra nge of mobile ha ndsets . F urthermore, developers ca n colla bora te, share game a s sets with Mo’M inis developers ’ c ommunity members and enjoy monetiza tion through Mo’M inis va rious dis tribution cha nnel s. O L X , Inc. opera tes a c la s sified site. Its s ite a llow us ers to sea rc h for sale produc ts , inc luding anima ls , babies, a rt products, books , ca meras , C D s, cell phones, clothes, computers , D V Ds , electronic s, hea lth a nd bea uty products , home produc ts , jewelry, musi ca l instruments , s porting goods, tic kets , toy s, a nd v ideo games, a s well as c ars, ca r pa rts , boats , motorc ycles , a nd other vehic les. T he compa ny’s site a ls o enables users to find a cc ounts, a dv erti sing, a rts, clerica l, customer s ervice, educ ation, engineering, hea lthc are, human res ource, Internet, legal, ma nua l la bor, ma nufa cturing, ma rketing, non-profit, rea l es tate, restaura nt, reta il, s ales , a nd tec hnical jobs ; and s ea rch for v arious serv ic es, suc h as babys itter, c a sting, ev ent, computer, hea lth, horos copes , moving, repa ir, writing, editing, and transla ting, a s well a s find personals ; community ac tivities; computer, la ngua ge, music , a nd tutor class es ; a nd a pa rtments , offices, a nd park ing s pots. O L X wa s founded in 2006 a nd is ba sed in N ew Y ork , New Y ork . B ased in B eijing, One Net E ntertainment is a wholly-owned s ubsidia ry of C hina Techfa ith Wi rel ess C ommunic atio n T echnology L imited (”Tec hF aith”) (NAS D AQ : C NT F). O ne Net E nterta inment is targeting both the mobile and online P C gaming markets through its webs ites www.798uu. c om a nd www.798ga me. com, res pectively . O ne Net E nterta inment is leveraging an integra ted model of us ing a combina tion of self-develop ed a s well a s c o-dev eloped a nd licens ed content, a s suc h s tra tegy is des igned to help i t launch ga mes fas ter a nd more efficiently . Three ma ss ive multiplay er online role-pla y ing ga mes (MM O R P G s) a re pla nned to la unch in 2009 for online P C us ers on www.798ga me. com. S ix teen titles are pla nned to la unch in J une for mobi le gamers on the compa ny ’s C hines e mobile ga mes webs ite www.798uu. c om. C yberplex C a nada www. cyberplex. com Docu S ign U nited S ta tes www. doc usign. com E veryZing U nited S ta tes www. every zing. com F aceboo k F u hu Inc . U nited S ta tes U nited S ta tes www. fa cebook .c om www. fuhu.c om G is t U nited S ta tes www. gis tworld.c om I Love R ewards U nited S ta tes www. iloverewards. c om Imeem C a nada www. imeem. c om L o op'd Netw ork U nited S ta tes www. loopd. com Medialets U nited S ta tes www. media lets . com Mo 'Min is I s ra el www. momini s. com OL X U nited S ta tes www. olx. c om On e Net E ntertainmen t C hina www. 798uu.c om Page 24 Open X P eer39 R es on ate Netwo rks T im eBridge V oxP o p U nited K ingdom U nited S ta tes U nited S ta tes U nited S ta tes U nited S ta tes www. openx. org www. peer39. com www. res onatenetwork s. com www. timebridge. c om www. vox pop.tv O penX Limited, a n open s ource advertising c ommunity, dev elops independent a d serv er and other s ervic es for W eb publishers to ma nage the online a dvertising. I t als o provides ad network pla tforms for ad network s , a d s a les hous es, and affilia te networks to deli ver advertising a cros s s ites tented same ntic Match™ penX M arket, whic h enables publis hers toproc ess ing a ndema ad network s a nd a genc ies . content P eer39's pa a t the S ema time; and O a lgorith ms is ba sed on natural la nguage trade a d spac to chine learning, unders tand In a ddition, the me aning and sentiment, a nd deliver the mos t releva nt a nd effec tiv e brand s a fe a dvertising at the pa ge level. The compa ny was incorpora ted ines ona tend etwo rk s isin n online advertising network tha t wa s crea ted to help public a ffa irs , political and corpora te adv ertis ers a nd a gencies R 2006 a N is based a New Y ork , New Y ork . mo re prec isely target and reach web users , bas ed on thei r a ttitudes and iss ue pos itions on a wide range of topic s . Timebridge, I nc. offers person al s cheduling ma na ger that ena bles profess iona ls to s c hedule their time. The compa ny ’s one-s tep sc heduling a llows s c heduling meetings with la rge groups or individua ls ac ros s time zones , c alenda ring s ys tems , and companies. It allows us ers to scheduleNetwork C orporation operates ila bilityonlineothers , a s well asompany. tI direc tly withn entertain,ing and intera cti ve a nd G oogle people to V oxP op meetings a nd share thei r a va a s a n with entertai nment c connec t provides a calenda rs inc luding O utlook pla tform for voic e opi nions on pop c ulture topic s , suc h a s celebrities, sports, fa s hion, a nd enterta inment. V ox P op N etwork is hea dquartered in S a n F ra nc is co, C a lifornia . Figure 30. Company Descriptions Source. Company reports, Capital IQ, Crunchbase Page 25 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