Web 2.0 Weekly - June 23, 2009

SOFTWARE & SERVICES 23 JUNE 2009 WEB 2.O WEEKLY DAVID SHORE, CFA, MBA 416.860.6784 david.shore@researchcapital.com Arun Thomas (Associate) 416.860.7666 SOCIAL MEDIA AND MICRO BLOG METRICS SHOW GROWTH BY LEAPS AND BO UNDS T WIT T E R G RO W S U S ER BA S E B Y 1,5 00 P E R CE NT IN M AY Traditional media such as Radio and Print continue their declines, affected both by the global economy as well as user preferences. TV, on the other hand, specifically specialty TV, continues to grow and is expected to do so at modest rates. The growth and decline observed on the various traditional platforms are due to people using new media (such as blogs, social networks, blogs, online video, online radio, etc.) to consume content. Further, revenue from advertising is affected by the current economic environment, as well as advertisers transferring dollars from traditional media to the new media. As a result, the traditional media revenue model is under tremendous pressure. For a full discussion on this trend, please read our report, published June 10, titled “Don’t Change the Channel: TV the Brightest Spot in the Canadian Market.” In our report, we profile a few companies, as well as offer a brief summary of many other participants. In the meantime, new media platforms such as Twitter and Facebook continue to post rapid growth on both their user base and time spent by an average user. Twitter’s user base grew by 1,500% Y/Y in May to 18.2 million users, according to Nielsen online. Further, users spent significantly more time on Twitter, from ~6 minutes in 2008 to ~17 minutes as of May 2009. Facebook topped the list among social networks with 144.3 million unique visitors globally in May. HI GHL IG HT S OF OU R W E B 2 .0 S E S SI O N T IT L E D “ V C F UN DI NG F O R W E B 2 . 0 C OM P AN I ES : NE C E S S A R Y? PO S S IBL E? L E SS O N S L E AR N E D” Our fifth W eb 2.0 session last Tuesday (June 16) was well attended, with over 40 participants from industry, institutional investors, and VCs. W e believe that the session was successful in bringing the various participants together and starting discussions on various topics that are at the heart of the community. The topics, being very broad and deserving attention (at a much larger scope), could not be concluded in a single session, but opened a platform for sharing what is near and dear to each representative of the community. Some of the discussion points were: 1. 2. 3. 4. 5. At what stage should a W eb 2.0 start-up approach a venture capitalist for funding? W hat are some of the factors that entrepreneurs should be mindful of when approaching venture capitalists? How many investments and how much can VCs effectively manage in their portfolios? W hat should VCs do differently when ~95% of them post only mediocre investment returns? Technology being a commodity, how can W eb 2.0 companies address their target markets and create a business model that generates revenues sooner? Is the VC system broken? Should VCs manage fewer but bigger investments? How should government in Canada support start-ups, as well as VCs? W hat should be done differently from today, such that government be in the business of creating industries versus being in direct competition to them? On the capital raise front, Sugar Inc. leads: Total capital raised three weeks into June is $125.5 million on a total of 24 transactions. It was led by Sugar Inc. raising $16.0 million, closely followed by Tumri ($15 million), Boku ($13 million), W imba ($12 million), and Grab Networks ($12 million). All other transactions were less than $10 million. The average value for the month-to-date is $5.0 million, below the average value for May of $6.4 million (excluding the $200 million investment in Facebook) on 16 financings. For additional details, see Figures 22 and 23 (at end of note). A w eak price performance week: The companies in our universe had mostly weak stock price performances over the past week (for stocks with prices greater than $1) (Figure 6), with 13 companies showing positive returns on the week. Gree Inc. (3632:TSE) led the group with a 17% return, while Openwave Systems Inc. (OPW V:NASDAQ) had the worst return, dropping 13% 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-One public Web 2.0 companies = $52.7 billion market cap: Our W eb 2.0 universe contains 91 companies, with a combined market cap of approximately $52.7 billion (Figure 1). The average market cap for the group is ~$579 million (but a median of only $49.6 million), with average trailing revenue of $151.7 million (median $54.0 million). The companies are also generally profitable, with a median EBITDA margin of 13.2%. On a valuation basis, the overall average is 4.5x trailing revenue (median 1.4x) and 9.6x trailing EBITDA (median 9.4x). Fourteen of the companies have more than 500 employees. C omparable C ompany A nalys is > W eb 2.0 C om pany Nam e 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 Co rp. 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 orpo ra tion C hine s e G amer In ternation al C ornerW orld C orporation C yberplex Inc. DADA S pA DXN Holdings B hd Dibz Inte rnation al, Inc. DigitalP o st Inte ra ctive , Inc. DigitalT own, In c. Dolph in D igital Me dia, In c. E o lith C o. L td. E xte ns ions , Inc. F inan cia l Media G roup, Inc. F luid Mus ic Ca nada, Inc. F ro gs 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 iant Intera ctive G roup, Inc. G iga Media Ltd. G ravity C o., L td G ree, Inc. G u ngH o O nline E n tertainment, In c. H anbitS of t, Inc. IAC /In terActiveC orp. IAS E nergy, Inc. is ee media Inc. J umbu ck E ntertainment P ty Ltd. J umpT V Inc. K A B D is tribu tion In c. K in gs oft Co . Ltd. Lin go Media Co rporation Live World Inc. Lo okS mart, Ltd. Magn itude Information S ys tems Inc. Mixi, Inc. Mode rn Times G roup Mtg AB Moggle , Inc MOK O.mobi L imited Myriad G rou p AG N E OW IZ G ames C orpo ra tion N etDrago n W ebS oft, Inc. N ete as e.com I nc. N eXplore Co rpora tion N gi G roup Inc. N orthgate Te chno logies L imited Open T e xt Corp. Openwave S ys tems Inc. P e rfect W orld C o., Ltd. Qu epa s a C orp. OA O R B C Information S ys tems S h anda Interactive 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 park N etworks , Inc. S pectrumDN A, Inc. T en cent Ho ldin gs L td. T he P arent C ompany 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 ommunications Co rp. U nited Online Inc. U OMO Media , Inc V a lueC lick Inc. V O IS , In c. W ebze n Inc. W iz za rd S of twa re Co rpora tion W orlds .com In c. W ynds to rm C orporation XIN G AG Y e dan gOnline Co rp. Y n k K orea Inc. ZipLo cal Inc. H igh Lo w A vera ge Median L TM as o f T icker 3 /31 /200 9 3 /31 /200 9 3 /31 /200 9 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 3 /31 /200 9 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 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 9 /30 /200 8 6 /30 /200 8 3 /31 /200 9 3 /31 /200 9 3 /31 /200 9 1 /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 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 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 3 /31 /200 9 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 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 8 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 CGWY 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 QP S A R BCI S N DA S F LY A0 662 70 S T VI S N MN S MVI S C LW S OH U 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 xchange 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 GT SM OT C B B TSX CM KL S 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 TSX XT R A GT SM TSE H LS E NY S 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 OT C P K 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 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 Currenc y HQ USD KR W J PY USD USD USD USD G BP USD USD USD USD TWD USD C AD E UR MY R USD USD USD USD KR W USD USD C AD E UR TWD J PY E UR USD USD USD J PY J PY KR W USD USD C AD AU D C AD C AD HKD C AD USD USD USD J PY S EK USD AU D C HF KR W HKD USD USD J PY INR USD USD USD USD USD USD USD KR W USD USD USD USD USD USD USD HKD USD USD USD NOK USD C AD USD USD USD USD USD USD USD USD E UR KR W KR W C AD U nited S ta tes S o uth K orea J apan U nited S ta tes U nited S ta tes U nited S ta tes U nited S ta tes U nited K ingdom U nited S ta tes H ong K ong C hina U nited S ta tes T 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 o uth 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 o uth K orea J apan J apan S o uth K orea U nited S ta tes C ana da C ana da Au s 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 Au s tra lia S witz erla nd S o uth K orea C hina C hina U nited S ta tes J apan India C ana da U nited S ta tes C hina U nited S ta tes R us s ia C hina U nited S ta tes S o uth K orea U nited S ta tes U nited S ta tes U nited S ta tes U nited S ta tes C hina U nited S ta tes U nited S ta tes C hina U nited S ta tes C hina U nited S ta tes N 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 o uth K orea U nited S ta tes U nited S ta tes U nited S ta tes G ermany S o uth K orea S o uth K orea C ana da Current Price 0 .40 28 000 75 200 0 .02 0 .03 0 .08 0 .80 0 .02 0 .23 1 .39 35 .20 0 .02 339 .50 0 .06 1 .60 5 .85 0 .38 0 .00 0 .03 2 .05 0 .50 820 .00 0 .20 0 .00 0 .63 7 .95 54 .00 116 400 0 .04 8 .02 5 .49 1 .11 7 170 234 000 4 600 16 .17 0 .23 0 .06 0 .39 0 .69 0 .63 5 .20 1 .03 0 .10 1 .32 0 .01 523 000 192 2 .30 0 .08 5 .00 34 250 5 .16 33 .62 0 .61 36 850 37 .30 35 .29 2 .00 28 .34 0 .60 1 .00 51 .78 12 .97 11 650 0 .65 0 .01 0 .01 0 .70 61 .20 2 .40 0 89 0 .03 10 .50 2 .21 0 .03 8 .97 0 .07 6 .15 0 .17 10 .52 0 .35 3 .60 0 .66 0 .10 0 .05 30 .00 8 810 .00 6 350 .00 0 .01 U S D Market C ap ($m) 1 1.1 18 8.0 4 2.6 0 .9 1 .5 2 .3 3 5.5 4 .8 1 9.5 14 7.5 1,9 36.1 0 .4 86 6.9 3 .9 8 7.3 13 1.5 2 4.8 0 .0 2 .2 5 5.5 2 5.8 4 6.8 8 .9 0 .2 2 8.7 2 5.9 24 9.0 11 7.4 4 9.8 1,8 09.3 29 9.3 3 0.9 1,6 69.9 27 9.5 7 9.1 2,4 40.3 1 6.1 2 .7 1 5.3 6 8.1 7 6.4 72 7.9 1 1.5 3 .1 2 2.6 5 .5 83 8.5 1,5 77.6 8 3.5 5 .1 9 8.1 51 7.3 35 1.9 4,1 37.0 3 4.0 4 7.5 2 6.7 1,8 57.1 16 6.6 1,3 78.4 7 .6 13 8.7 3,5 92.6 32 6.5 38 3.1 7 .0 0 .0 0 .0 3 0.3 2,3 41.6 4 9.4 1 1.2 20,6 94. 5 0 .6 28 1.6 6 7.6 0 .1 9 6.8 1 .5 51 4.0 1 4.6 91 4.9 2 .9 4 2.7 3 1.5 5 .2 0 .8 21 9.3 10 8.5 2 6.6 0 .3 20,6 94. 5 0 .0 579.2 4 9.6 U S D LT M To tal R ev ($m) 4.1 90. 6 64. 5 0.1 0.1 8.4 7.1 0.3 0.0 389 .9 222 .5 6.7 56. 1 1.3 70. 6 233 .0 78. 1 NA 0.7 NM 0.8 14. 5 NM 7.2 5.0 3.2 125 .8 76. 7 5.9 218 .9 183 .6 38. 4 30. 6 107 .5 54. 2 1 ,40 6.4 0.0 1.5 14. 2 18. 1 71. 4 129 .0 0.9 11. 4 60. 7 0.1 125 .7 1 ,68 2.9 NM 1.1 40. 0 194 .3 86. 9 470 .4 NM 92. 1 115 .2 782 .6 197 .2 228 .1 0.1 151 .2 569 .9 215 .2 180 .6 3.3 2.0 0.1 0.0 460 .0 54. 3 0.1 1 ,20 3.2 112 .0 249 .8 67. 0 2.0 215 .6 22. 6 811 .2 0.6 591 .7 0.0 22. 6 5.6 0.0 NA 52. 5 53. 8 11. 2 2.6 1 ,682 .9 0.0 151.7 54. 0 US D L TM T otal E B ITDA ($m) (4 .4) 1 9.7 4 .1 (2 .3) (2 .0) (1 2.6) (9 .5) (1 .8) (4 .6) 3 0.8 13 5.1 (6 .6) 3 1.4 NM 7 .3 4 3.3 1 0.7 NM (2 .6) (3 .0) (3 .7) (3 .4) NM 2 .4 (6 .9) (6 .1) 2 0.9 1 8.2 (1 5.2) NM NM 7 .4 1 1.0 1 9.3 (1 4.5) 4 2.6 (0 .8) (4 .8) 5 .3 (1 1.8) 8 .5 5 2.0 (1 .5) (0 .0) (3 .8) (3 .1) 4 4.5 25 7.8 NM (2 .3) 0 .8 5 2.2 3 4.4 30 5.7 (4 .9) 1 1.0 (2 7.0) 19 9.2 (2 .1) 12 4.6 (1 0.8) 1 9.7 26 0.8 2 8.3 1 1.7 0 .9 (0 .7) (0 .1) (4 .8) 20 0.5 1 1.8 (2 .6) 57 6.6 (1 3.5) 8 4.2 1 .9 (1 .0) (1 3.3) 0 .1 17 7.3 (0 .5) 10 5.5 (1 .1) (0 .4) (5 .3) (0 .8) NM 1 6.4 1 2.0 1 .2 (2 .0) 57 6.6 -27.0 33.2 0 .9 E BITD A % NM 21 .7% 6 .3% NM NM NM NM NM NM 7 .9% 60 .7% -9 8.9% 56 .0% NM 10 .3% 18 .6% 13 .7% NM NM NM NM -2 3.6% NM 34 .1% NM NM 16 .6% 23 .7% NM NM NM 19 .2% 36 .0% 18 .0% -2 6.8% 3 .0% NM NM 37 .2% -6 5.2% 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 12 .0% -2 3.5% 25 .5% -1 .0% 54 .6% NM 13 .1% 45 .8% 13 .2% 6 .5% 28 .0% -3 4.8% -6 0.5% NM 43 .6% 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 4.5% NM NM 31 .2% 22 .4% 10 .5% -7 8.3% 65 .0% -9 8.9% 6.8% 13 .2% T E V/LT M R evenue 3.9x 1.8x 0.2x 1 9.2 x 3 9.0 x 5.7x 1 7.6 x 0.4x 7.9x 0.1x 1 4.3 x 4.1x 1.2x 0.8x 0.5x 5.3x 3 4.7 x 3.4x 3.9x 7.6x 1.8x 0.7x 7.8x 1.2x 2.3x 1.2x 0.4x 1.2x 0.7x 3.2x 1.1x 5.2x 1 1.7 x 0.2x 5.7x 1.3x 3.5x 2.7x 2.6x 2.4x 0.1x 0.2x 2.5x 0.3x 0.2x 0.0x 0.1x 1.2x 2.1x 1.7x 1.1x 0.0x 4.3x 0.9x 1 8.7 x 0.2x 0.0x 4.6x 0.4x 0.2x 1.0x 2 3.5 x 1.4x 5.9x 3.2x 2.2x 2.3x 0.6x 3 9.0 x 0.0x 4 .5x 1.4x TE V /L TM E BITDA 8. 1x 3. 3x 5. 2x 12 .9x 25 .5x 11 .4x 4. 2x 3. 8x 10 .8x 3. 1x 13 .0x 13 .0x 2. 0x 9. 6x 12 .8x 16 .2x 8. 2x 9. 7x 6. 2x 0. 6x 9. 7x 0. 4x 0. 2x 0. 1x 9. 2x 32 .6x 6. 0x 9. 8x 4. 2x 39 .0x 1. 6x 4. 5x 7. 7x 10 .2x 9. 9x 21 .9x 39 .0x 0. 1x 9.6 x 9. 4x E mplo yees 11 NA NA 3 4 53 69 9 46 NA 6 28 37 NA NA NA 5 78 NA NA 7 3 NA NA 2 22 NA NA NA NA 1 08 NA NA 6 36 NA NA NA 3, 200 NA NA 72 2 37 NA 2, 271 NA NA 90 14 NA 2, 969 3 NA 4 05 NA 2, 426 NA 19 NA NA 3, 400 6 30 NA 74 NA NA 5 14 NA 11 33 NA NA 3, 197 1 83 7 6, 194 3 47 NA 3 10 16 7 00 NA 1, 469 NA 1, 189 4 3 14 1 10 1 NA 2 39 NA NA NA 6,1 94 1 685 2 38 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 ) June month-to-date capital raise totals $125.5 million: Total capital raised three weeks into June is $125.5 million on a total of 24 transactions. It was led by Sugar Inc. raising $16.0 million, closely followed by Tumri ($15 million), Boku ($13 million), W imba ($12 million), and Grab Networks ($12 million). All other transactions were less than $10 million. The average value for the month-to-date is $5.0 million, below the average value for May of $6.4 million (excluding the $200 million investment in Facebook) on 16 financings. The April average was $6.2 million on 23 financings. Financing Activity Last Three Months 155.0 7.0 6.2 150.0 6.4 6.0 145.0 5.0 140.0 5.0 135.0 (US$m) 4.0 (US$m) 130.0 3.0 125.0 2.0 120.0 1.0 115.0 110.0 Apr-09 May-09 (excl FB) Total Average Jun-09 0.0 Figure 2. Financings, Last Three Months Source. Company reports Sugar Inc. leads capital raise: The capital raise from Sugar Inc. for $16 million was the largest deal for the first two weeks of June. Five of the 16 deals in the month were greater than $10 million. For additional details, see Figures 22 and 23 (at end of note). Page 4 Financing & M/A Summary - Last Three Months 250.0 200.0 150.0 (US$m) Jun-09 May-09 Apr-09 100.0 50.0 0.0 Facebook StumbleUpon One Net Entertainment Collective Media Sugar Inc. GOOM Radio Tumri Boku Marin Software The Rubicon Project Cyberplex Wimba Grab Networks FreeWheel Peer39 OpenX Cellufun Conductor Inc. Imeem EveryZing ScanScout beeTV I Love Rewards Batanga WonderHill BlogHer Inc. Gist Fuhu Inc. Zoosk Azuki Systems Gather Taomee DoubleTwist TimeBridge Viximo DocuSign OLX IMShopping Socialtext Animoto GameGround Mixercast Medialets RingRevenue SoundCloud TubeMogul YuMe eRepublik Tribal Nova Inigral AdEx Media OneTXT my6sense Resonate Networks Tripbase VoxPop Cliqset Mo'Minis Socialcast Brandtology Scan & Target Jodange Picaboo LiquidPlanner AdWhirl Loop'd Network Foodista MashLogic Jaxtr Figure 3. Capital Market Activity, Last Three Months Source. Company reports Social Network remains the most active sector in dollars raised, while Ad Network remains the most active in number of transactions: Following recent trends, Social Networks as a sector saw the most activity in dollars raised ($234.8 million), largely attributed to the $200 million investment by Digital Sky Technologies in Facebook. However, it was the Ad Network sector that saw the most transactions (14), raising $118.7 million (Figure 4). The Media sector has the next highest totals, with six companies raising $45.8 million. The following sectors continue to generate the most capital activity over the last few months: Ad Network, Media, Gaming, and Social Networks. Page 5 Capital Market Activity by Sector - Last Three Months 250.0 200.0 150.0 (US$m) 234.8 100.0 118.7 50.0 45.8 0.0 Gaming Media Social Networks Ad Network 35.8 30.2 Comment/Reputation 28.4 Video 23.0 Blog 19.5 Virtual World 18.3 Search 17.0 Collaboration 13.0 Mobile Payment 11.0 Infrastructure 10.4 Widget 8.7 Enterprise 6.8 Aggregation 4.7 Social Commerce 4.4 Analytics 2.0 Mobile 2.0 Travel 1.3 SAS 1 # companies 10 14 6 6 2 3 2 4 2 3 1 4 2 3 1 1 2 1 1 Figure 4. Capital Market Activity, by Sector, Last Three Months Source. Company reports C A P I T A L M A R K E T S A C T I V I T Y (P R I C E P E R F O R M A N C E ) Web 2.0 index outpaces NASDAQ recovery: Our W eb 2.0 index (market-cap weighted) essentially mirrored the performance of the NASDAQ composite index from mid-2008 until recently. However, the index has recently had a much stronger recovery relative to the NASDAQ index (Figure 5). Web 2.0 Index Price Performance 98.1 8 88.1 8 78.1 8 68.1 8 58.1 8 48.1 8 Index: Web 2.0 X (Market Cap Weights) ^COMP - Share Pricing Figure 5. Web 2.0 Price Performance Source. Capital IQ Page 6 A mixed price performance week: The companies in our universe had a weak stock price performances over the past week (for stocks with prices greater than $1) (Figure 6), with 13 companies showing positive returns on the week. Gree Inc. (3632:TSE) led the group with a 17% return, while Openwave Systems Inc. (OPW V:NASDAQ) had the worst return, dropping 13% in the week. 1 Week P rice P erformance G ree, Inc. Perfect World Co., Ltd. Mix i, Inc. Chines e Gamer International Eolith Co. Ltd. S park Netw orks , Inc. S K Communications Co., Ltd. NEOWIZ Games Corporation NetDragon WebS of t, Inc. A ctoz S of t Co., Ltd. Ngi G roup Inc. G ameOn Co Ltd. The9 Limited Tencent Holdings Ltd. -0.3% Frogs ter Interactiv e Pictures A G -0.4% K ings of t Co. Ltd. -0.6% G igaMedia Ltd. -0.7% IA C/InterA ctiveCorp. -0.7% Y nk K orea Inc. -0.8% Open Tex t Corp. -1.1% A Q Interactiv e, Inc. -2.1% DA DA S pA -2.5% HanbitS of t, Inc. -2.5% Giant Interactive G roup, Inc. -2.7% Gamania Digital Entertainment Co., -2.9% S hutterf ly , Inc. -3.7% Neteas e.com Inc. -4.1% S handa Interactive Entertainment Ltd. -4.8% Y edangOnline Corp. -5.2% United Online Inc. -6.0% S ohu.com Inc. -7.2% Changy ou.com Limited -8.8% Lingo Media Corporation -8.8% CDC Corp. -10.3% Cy berplex Inc. -11.1% XING A G -11.2% Northgate Technologies Limited -11.3% Modern Times G roup Mtg A B -11.3% V alueClick Inc. -12.7% Openw ave S y s tems Inc. -13.0% -15.0% Figure 6. 1-Week Price Performance Source. Capital IQ 17.0% 16.4% 13.7% 8.8% 7.9% 6.7% 5.9% 3.9% 3.2% 2.8% 2.1% 1.8% 0.4% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% Page 7 INDUSTRY NEWS (PARTNERSHIPS, FINANCIAL RESULTS, NEW PRODUCTS) K ey Developments C ompany S hutterfly, Inc . (Nas daqG S : S FL Y) Headline Notes S hutterfly Introduces P rivate V ideo S ha ring S ervice for its S hutterfly I nc . a nnounced the launc h of S hutterfly V ideo, whic h ma k es it eas y to sha re video priva tely a nd sa fely with friends , fa mily Award W inning S h a re S ites members and groups on S hutterfly S ha re s ites . P owered by M otionbox , S hutterfl y V ideo enables u sers to upload and post video c lips from their digita l c amera or ca mcorder to their own priv ate or public S hutterfly S ha re s ites . W ith S hutterfly V ideo, us ers c an upload a nd post up to 10 free video clips to their persona liz ed websites. Us ers ha ve the option to upgrade to a P remium video a ccount, whic h g ives them unlimited video sharing a nd s torage a t a n introductory annual s ubs cription fee of $29.99. P remium video a cc ount us ers a lso will enjoy H D-qua lity pla ybac k, hi gher file s ize limits a nd video downloa ds. All videos ca n be ea sily s ha red to soc ia l network ing sites lik e F a cebook , M yS pac e, T witter a nd B logger. O penwa ve I ntroduces N ew G ua rdian S erv ice to H elp O perators P rovide a S ec ure Mobile Internet E xperienc e O penwa ve S y stems Inc. announced O penwa ve(R ) G uardia n, the lates t s erv ice ena bler for O penwav e(R ) Integra a next generation mobile internet s ervice management pla tform. O penwa ve G ua rdian gives mobile opera tors the power to protec t their networks from v irus es and sec urity threa ts, a nd to protect their subs cribers from ina ppropria te a nd unwanted content. B y implementing multiple defens es a ga inst unwa nted content, mobile opera tors c an deliver the high quality mobile internet us er ex perience that their subs cribers expect while confidently l a unching new a nd innova tiv e s ervices . G uardia n is part of O penwa ve's Mobile I nternet va lue-added s ervic es that are a va ila ble for the Integra Mobile Internet S erv ice P la tform. Integra's plug-in framework means tha t a ll da ta tra ffic routed through I ntegra ca n benefit from G uardi a n. The G uardian s erv ice a rchitecture a lso a llows add itiona l sec urity applications to be quick ly a dded as new mobile s ecurity threa ts emerge. E qually, Integra 's intelligent workflow engine ensures that the mobile opera tor has full c ontrol over how a nd when the fea tures within the G ua rdia n s ervic e are utilized. G ravity Co. L td. a nnounc ed that at its extraordina ry general meeting of shareholders held on J une 12, 2009, the s ha reholders a pprov ed the a ppointment of one new director, M r. Jong G yu Hwa ng. At the boa rd meeting, M r. J ong G y u H wang, the new independen t director of the company, wa s appointed as a new audit c ommittee member a nd Mr. K a z uki Moris hita , who had been a n a u dit committee member s inc e S eptember 5, 2008, resig ned from the a udit committee. T he boa rd of directors als o appointed M r. Jong G y u H wa ng to the direc tor nomination committee and the c ompens ation c ommittee to repla ce M r. K a z uki Moris hita. T he sha reholders also approved the propos ed amendments to the Artic les of I ncorpo ration. Openwave S ys tems Inc . (Nas daqG S : OPW V) G ravity Co., L td (N as daqG M: G R VY ) G ravity Co. L td. Announc es M anagement Changes ; Approves Amendments to the Articles of Inc orporation IAC /InterAc tiveC orp. (Nas daqG S : IAC I); T he New Y ork O bserv er, LL C and IAC /I nterActiveC orp. Announce J oint V enture T he New Yo rk Obs erver, LL C IAC /I nterA ctiveC orp. a nd T he New Y ork O bs erver, L LC a nnounced that IAC ha s contributed the as sets of V ery S hort Lis t (V S L) to a joint venture with O bserv er M edia G rou p. O bserv er M edia G roup will ac quire majority control of the venture and IA C will ma intain a noncontrolling s take. Addi tiona l terms ha ve not been dis clos ed. IAC /InterAc tiveC orp, Very S ho rt Lis t; T he New Y ork O bserv er, LL C ac quired 80% sta k e in V ery T he New Y ork O bs erv er, LL C acquired 80% sta ke in V ery S hort Lis t from IAC /I nterA ctiveC orp. (Na s daqG S : I ACI ) on J une 15, 2009. The IAC /InterAc tiveC orp. (Nas daqG S : IAC I); S hort Lis t from IAC /I nterActiveC orp. (Na s daqG S : I ACI ). fina nc ia l terms of the dea l were not dis clos ed. T he New Yo rk Obs erver, LL C T he New Y ork O bs erv er, LL C completed the ac quis ition of 80% sta k e in V ery S hort Lis t from IAC /I nterActiveC orp. (Na s daqG S : I ACI ) on J une 15, 2009. T ree. Com, Inc . (Nas daqG M: TR E E ) T ree. Com, I nc. La unches N ew C us tomer R etention P roduct T ree. Com, I nc. ha s introduc ed a new offering to help bank s a nd mortga ge compa nies retain c us tomers who are seek ing refinancing options with other lenders . L endingT ree's C us tomer R etention product uses proprietary filtering tec hnology to identify c us tomers by loan a mount, loa n-to-va lue ra tio, loa n purpose and F I CO scores, and ena bles ba nk s and lenders to lev erage the mark eting ca pability a nd bra nd pres ence of LendingTree. com to k eep v aluable cus tomers within their loan portfol ios. L endingT ree's Cus tomer R etention produc t offers a proven, eas yto-implement method for lenders to eas ily s ervice and retain c ustomers who are in-ma rket, ready to transa ct and activ ely looking for new fina nc ing options . Open T ext C orp. (Nas daqG S : OT E X) F ederal Computing C enter U ses O pen Tex t Corp. 's E C M O pen T ext C orp. announced tha t Aus tria's F edera l C omputing C enter is now offering E nterprise C ontent M a na gement (E CM ) as a s hared S uite to P rov ide eG overnment S ervic es service by us ing the E C M S uite from O pen T ex t. O pen T ex t's s cal a bility a nd its brea dth of E C M s olutions and expertis e for S AP a pplica tions contributed to the center's dec is ion to implement the O pen Tex t E C M S uite to help ma na ge more tha n 30 million documents annually . T he O pen T ext E C M S uite is als o used to manage meta da ta, allowing meta da ta extra ction and management to be fully automa ted. I n all, the center us es O pen T ex t to manage more than 5 tera bytes of information and s upports 15 applica tions that are tightly integra ted with S AP a nd ma infra me a pplic ati ons. T o help lower c osts and red uce IT burdens on indiv idual agencies , the center has moved to a n a pplic ation s ervic e provider (AS P ) or s hared s ervices model. T his means tha t E C M s ervices are invoic ed to the v arious organiz ations or c ustomers using the a pplications ba s ed on their ac tua l usa ge patterns . T enc ent H as $877 M illion Wa r C hest F or Ac quis itions T enc ent Holdin gs Ltd pla ns to lis t in China a fter regula tors modify current rules . M a H uateng, T enc ent’s E x ecutive s ta ted that at end-M arch the compa ny had a wa r c hest of about $877 million in ca s h, whic h i t could use for a cquisitions . He s a id: "T h e C ompany is retaining the ca sh for mergers a nd a cquisitions . W e've been doing some sma ll sca le ac quis itions , wi th some inves ting directly and others in c oopera tion with private equity. W e will s eek opportunities in China a nd Asia , with a focus on ha nds et a pplic ati ons a nd online ga me development a nd other tec hnology projec ts ." NE O W I Z G a mes Corporation, 2 : 1, S tock S plit or S ignifica nt S toc k D ividend, J un-16-2009 S ohu.com I nc. announced the introduction of a 3G cha nnel, bas ed on S ohu's media platform, whic h will a ct as a dedicated broa dcas ter of 3G -rela ted information for us ers . B esid es, S ohu would provide s ome ba s ic information s ervices s uch as a 3G ma p and product tria l s through its 3G c ha nnel. The new chan nel wi ll join hands with S ohu's sports and financia l c ha nnels . G ravity Co. , Ltd a nnounc ed that the C ompany rec eived a NAS D AQ S ta ff L etter, dated J une 12, 2009, noting that the C ompany ha s regained complia nc e with NAS D AQ Listing R ule 5605(c)(2)(A) (the R ule) which requi res the Company to ha ve an a udit c ommittee of a t leas t three independent directors . As previ ously announced on Ma y 21, 2009, the Company ha d receiv ed a N AS DAQ S ta ff D eficiency Letter, da ted M a y 15, 2009, indicating tha t the C ompany was not in complia nce with the a udit committee composi tion requirement for continued listing under the R ule. O n J une 12, 2009, Mr. K a z uki Moris hita res igned from the C ompany's a udit committee a nd Mr. J ong G y u H wa ng was appointed to the C ompa ny's B oa rd of D irectors and a udit committee. As a res ult of the appointment of Mr. H wa ng, the Compa ny ha s an audit committee compris ed of three independe nt directors and receiv ed the N AS D AQ S taff L etter noting tha t the C ompa ny complies with the R ule and tha t the matter is now clos ed. T enc en t Ho ldings Ltd. (S E H K: 700) NE OW IZ G ames C orpo ratio n (K OS E : A095660) S ohu. c om Inc . (Nas daqG S : S OHU) NE O W I Z G a mes Corporation, 2 : 1, S tock S plit or S ignifica nt S toc k Div idend, J un-16-2009 S ohu.com I nc. Announces Introduction of a 3G Cha nnel G ravity Co., L td (N as daqG M: G R VY ) G ravity R ega ins C omplia nc e W ith N AS DA Q Page 8 DigitalT own , Inc . (OT CB B :D G TW ) Digita lT own I nc . Names Arlo Hennings as Direc tor of B usi ness D evelopment, America 's P rodigy Digita lT own I nc. named Arlo Hennings to the new position of Direc tor of B us iness D evelopment for D igita lTown's Americ a's P rodigy div ision, a premier talent dis cov ery s ite for high school s tudents . Hennings currently is Mana ger for A& M recording artis t S ha wn P hillips where he propelled a five-year public relations and ma rk eting ca mpaign that revitalized the ca reer of the former interna tiona l mus ic bests eller. In a ddition to S ha wn P hillips , as D irector of T alent Acquis ition and co-publis her N orth America fo r P oly G ra m Mus ic I nternational (Universa l Mus ic) the Arlo Hennings P ub lishing Compa ny wa s born. Hennings s igned a nd dev eloped s ongwriters for major label rec ording compa nies. His s uc ces s inc ludes ma j or la bel contra cts with W a rner B ros and I nters cope records. O n J une 18, 2009, Modern Times G roup MT G A B a nnounc ed that it has iss ued a nd immediately repurc ha sed 370,000 new C l a ss C s hares . T he sha res have been is sued and repurchas ed in a ccordance with the terms of the performance-based incentive progra m, whic h wa s a pproved by the MT G A nnual G enera l Meeting of shareholders held on May 11, 2009. N ordea B ank AB subs cribed for the entire is s ue of new Cla s s C s hares at a s ubs cription price of S E K 5.00 per s ha re. T he entire is s ue of C las s C sha res has then been repurchas ed by M TG for S E K 5.00 per s hare. G igaMedia L td. and M ythic E nterta inment Inc . a nnounced tha t the highly a cc la imed fa nta s y MM O R P G W arhammer(R ) O nline: Age of R eckoning(R ) (W AR ) will la un ch in T aiwan on J une 25th. T he ga me will be a va ila ble on G igaM edia 's ga me pla tform, F unTown, in T a iwan, Hong K ong, and Ma ca u, where pla yers will now be a ble to choos e a s ide in the growing battle between O rder a nd D es truction a nd help decide the outcome of the W AR acros s the globe! L aunc hed in North A meric a, E urope a nd O ceania in S eptember of 2008 and i n R uss ia in F ebruary of 2009, W arha mmer O nli ne: Age of R eckoning is a n epic fantas y MM O R P G based on the popula r ta bletop ga me from G a mes W orks hop. F ea turing innovative R ealm vs . R ea lm(T M) gamepla y a nd P ublic Q ues ts(T M), play ers are i mmers ed in a world of perpetual conflict between the armies of O rder and Des truc tion. Novice MM O play ers a nd v etera ns a like will apprec iate the incredible depth and variety a va ila ble in W AR . E xtensions , I nc. s ta ted that it requires a dditiona l fina ncing. T he company s ta ted: “S evera l c onditions and ev ents c ast doubt a bout the company's a bility to continue as a "going concern". T he c ompany incurred indetermina te net loss es prior to O ctober 1, 2003, ha s a liquidity problem, a nd requires additional financing in order to fina nc e its bus ines s activities on an ongoing ba s is. T he company is a ctively pursui ng a lternative financing and ha s had dis cus s ions with v arious third pa rties, although no firm commitments ha ve been obta i ned. T he compa ny 's future c apita l requirements will depend on numerous fa ctors including, but not limited to, continued progres s in finding a merger ca ndidate a nd the purs uit of bus ines s opportunities .” The compa ny added: “W e may determine it is appropria te to ra is e a dditiona l capita l for work ing capita l a nd general corpora te purpos es . If we need, or elec t, to obtain a dditiona l debt or equity fina nc ing, but there c an be no ass ura nce tha t a dditional finan cing will be a va ila ble on rea s ona ble terms, if a t a ll. W ithout a dditiona l fina nc ing, we ha ve ins ufficient funds to carry out our busines s pla n for the next twelve months. ” T heS treet. com Inc. announced tha t it ha s a ppointed R ich B ro itman a s Chief Ac counting O ffic er. Mr. B roitma n had previous ly been the Company's Acting C hief Accounting O ffi cer, a position he took in May 2009. M r. B roitma n joined the Compa ny as its C ontroller in J uly 2000 a nd was a ppointed V ic e P res ident of F ina nce in O ctober 2007. B efore joining the Compa ny, he wa s Controller of Indiv idua l I nves tor G roup, a n online a nd print media c ompa ny . P rior to tha t, Mr. B roitma n was D irector of I nterna tiona l R oy alties for B ertels ma nn M usic G roup. P erfect W orld Co. L td. revis ed revenue guida nce for the s econd quarter of 2009. F or the quarter, the compa ny now ra ises its revenue guida nce to be between R MB 489 million and R MB 510 million, which repres ents a s equentia l increa s e of 15% to 20% . T his compares to the previous ly announced s equentia l guidance of a 2% decline to a 2% increa se in revenue. Modern Times G ro up Mtg AB (OM: MTG Upda te to Modern T imes G roup MT G AB ’ s E quity B) B uybac k in the amount of 370, 000 new C lass C s ha res on J une 18, 2009 G igaMedia L td. (Nas daqG S : G IG M); Mythic E ntertain ment, Inc. G igaMedia L td. a nd M ythic E nterta inment I nc. to La unch W a rhammer O nline: Age of R ec k oning in Ta iwan E xtens ions , In c. (OT CP K : E XTI) E xtensions S eeks Additiona l F inancing T heS treet.c om, Inc . (Nas daqG M: T S CM) T heS treet.com I nc. Appoi nts R ich B roitma n as C hief Accounting O ffi cer P erfec t World C o. , Ltd. (Nas daqG S : PW R D) P erfect W orld Co. L td. R evis ed R evenue G uida nc e for the S ec ond Q uarter of 2009 Figure 7. Key Developments Source. Capital IQ Page 9 VALUATION Online Gaming companies lead market-cap charts: Eleven companies in our W eb 2.0 universe top US$1 billion in market capitalization (Figure 8). Fifty-nine of the 91 companies have market caps under US$100 million, with 25 under US$10 million. Online gaming companies dominate the top of the list, led by Tencent Holdings with a market cap over US$18 billion. Market C ap (US D m) Tenc ent Holdings L td. Neteas e.c om Inc. S ha nda Intera ctiv e Entertainment L td. IA C/InterA c tiveCorp. S ohu.c om Inc. Changyou. com L imited Open Tex t Corp. Giant Interac tive Group, Inc. G ree, Inc. Modern Times Group Mtg A B Perf ec t W orld Co. , L td. V a lueClick Inc. Chines e G amer Internationa l Mix i, Inc. K ings of t Co. L td. NEOWIZ G ames Corpora tion United Online Inc. S K Communications Co. , L td. NetDragon WebS of t, Inc. S hutterf ly, Inc. G igaMedia L td. The9 Limited GungHo Online Entertainment, Inc. Gamania Digita l Enterta inment Co., XING A G A ctoz S of t Co. , L td. Openw a ve S ys tems Inc. CDC Corp. OA O R B C Information S y s tems DA DA S pA Ga meOn Co L td. Y edangOnline Corp. My ria d G roup A G Tree.Com, Inc. Cy berplex Inc. Moggle, Inc Ha nbitS of t, Inc. K A B Dis tribution Inc. J umpTV Inc. TheS treet.com, Inc. Digita lTow n, Inc. GeoS entric Oy j S pa rk Netw orks , Inc. Ngi Group Inc. Eolith Co. L td. Webz en Inc. A Q Intera ctiv e, Inc. B ey ond Commerc e, Inc. NeXplore Corpora tion Wiz z ard S oftw are Corpora tion Grav ity Co., L td S ocialw is e, Inc. Fluid Mus ic Canada, Inc. Northga te Tec hnologies L imited Y nk K orea Inc. Frogs ter Interac tive Pic tures A G Dolphin Digita l Media, Inc. DXN Holdings B hd LookS ma rt, L td. B roa dWebA s ia Inc. IA S Energy, Inc. J umbuc k Enterta inment Pty L td. UOMO Media, Inc Lingo Media Corpora tion S pectrumDNA , Inc. A cc eleriz e New Media, Inc. Ex tens ions , Inc. Quepa s a Corp. S NA P Intera ctiv e, Inc. Magnitude Inf orma tion S ys tems Inc. Worlds .c om Inc. MOK O.mobi Limited B right Things plc CornerWorld Corpora tion LiveWorld Inc. V OIS , Inc. is eemedia Inc. B eta w av e Corpora tion Digita lPos t Intera ctiv e, Inc. B igs tring Corp. Unis erv e Communic ations Corp. A s s ociated Media Holdings Inc. Wynds torm Corpora tion The Parent Compa ny China Ga tew a y Corpora tion ZipLoca l Inc. Fina nc ial Media Group, Inc. Tota l S port Online A S S NM Globa l Holdings Dibz Interna tional, Inc. S oc ial Media V enures , Inc. 0 Figure 8. Market Cap Ranking Source. Capital IQ 1936.1 1857.1 1809. 3 1669.9 1577. 6 1378.4 914. 866. 9 9 838. 5 727.9 2440. 3 2341. 6 3592.6 517.3 514.0 383. 1 351.9 326.5 299. 3 281.6 279.5 249.0 219. 3 188. 0 166.6 147.5 138.7 131.5 117. 4 108. 5 98.1 96.8 87.3 83. 5 79. 1 76.4 68.1 67.6 55.5 49. 8 49. 4 47. 5 46. 8 42.7 42.6 35.5 34.0 31.5 30.9 30.3 28.7 26.7 26.6 25.9 25.8 24.8 22.6 19.5 16. 1 15. 3 14. 6 11. 5 11. 2 11. 1 8.9 7.6 7.0 5.5 5.2 5.1 4.8 3.9 3.1 2.9 2.7 2.3 2.2 1.5 1.5 0.9 0.8 0.6 0.4 0.3 0.2 0.1 0.0 0.0 0.0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 Page 10 TEV/Revenue (LTM) averages 4.5x: The overall average TEV/Revenue (LTM) multiple for our group is 4.5x (versus 5.3x last week) (Figure 9). One company trades at more than 35x revenue – Bigstring Corp. (OTCBB:BSGC) at 39x – closely followed by with Dolphin Digital (OTCBB:DPDM) at 34.7x. The median is only 2.0x. Note that we exclude multiples greater than 50x. Thirty-five companies have multiples under 1.9x. T E V/L T M R evenue (x) 45. 0 40. 0 35. 0 30. 0 25. 0 20. 0 15. 0 10. 0 23.5 18.19.2 7 17.6 14.3 11. 7 7.67.87.9 5.25.35.75.75.9 3.93.94.14.34.6 3.23.23.43.5 2.12. 22.32.32. 42.52.62. 7 0.91.01.11. 11.21.21. 21.21.21. 31.41.71. 81.8 0.10.10.10.20.20.20.20.20.20.30.40.40.40.50.60.70.70.8 C hina G ateway C orpora tion S handa Interac tive Ngi G roup Inc. Liv eWorld Inc. Unis erv e C ommunic ations C orp. P erfec t World C o., Ltd. AQ Interactive, Inc. T he P arent C ompany Northgate T echnologies Limited O penwa ve S y s tems Inc. IAC /InterActiveC orp. T ree.C om, Inc. C DC C orp. DX N H oldings B hd Z ipLocal Inc. J umbuck E ntertainment P ty Ltd. G ameO n C o Ltd. DADA S pA S park Network s , Inc. U nited O nline Inc. S NM G lobal Holdings K AB Dis tribution Inc. HanbitS oft, Inc. is eemedia Inc. C y berplex Inc. S hutterfly , Inc. G igaMedia Ltd. Modern T imes G roup Mtg AB V a lueC lick Inc. S NAP Interac tive, Inc. Actoz S oft C o., L td. G amania Digital E ntertainment S K C ommunications C o., Ltd. Y edangO nline C orp. Y nk K orea Inc. G ungHo O nline E ntertainment, NetDragon WebS oft, Inc. O pen T ex t C orp. NE O WIZ G a mes C orporation My ria d G roup AG J umpT V Inc. X ING AG E olith C o. Ltd. MO K O .mobi Limited Ac celeriz e New Media, Inc. F luid Mus ic C anada, Inc. C ornerWorld C orpora tion S ohu.c om Inc. T otal S port O nline AS K ings oft C o. L td. Digita lP os t Interac tive, Inc. B ey ond C ommerce, Inc. Mix i, Inc. Wiz z a rd S oftware C orporation F rogs ter Interac tive P ictures AG G eoS entric O y j C hangy ou.com Limited Lingo Media C orpora tion C hines e G a mer International B right T hings plc T enc ent H oldings Ltd. As s oc iated Media H oldings Inc. U O MO Media , Inc Dolphin Digita l Media, Inc. B igs tring C orp. 39.0 34. 7 A verage, 4.5 5. 0 0. 0 Figure 9. TEV/Revenue Ranking Source. Capital IQ TEV/Revenue (LTM) by country/exchange: W e have also calculated multiples based on where the companies are listed or domiciled. Figure 10 shows the average TEV/Revenue multiples by stock exchange. The OTCBB has the largest number of companies (19), trading at an average multiple of 14.7x (versus. 14.6x last week). On a geographic basis, the United States has the most companies (39), trading at an average of 5.7x revenue (versus 6.1x last week) (Figure 11). Ten of the companies are Canadian (average 5.0x revenue). Average TEV/LTM Revenue - By Exchange 20.0 17.6 18.0 16.0 14.7 14.0 12.0 8.8 10.0 8.0 8.0 7.8 5.4 6.0 4.6 3.5 3.43.4 2.7 2.3 2.3 2.2 2.1 4.0 1.7 1.3 1.7 0.8 0.5 2.0 0.2 0.2 0.0 0.0 OTCNO OTCBB OTCPK TSXV GTSM NasdaqGM SEHK HLSE KOSE ASX NasdaqGS TSE OSE AMEX XTRA KLSE SWX TSX RTS OM CM BSE AIM Average TEV/LTM Revenue - By Country 20.0 17.6 18.0 16.0 14.0 12.0 7.8 10.0 5.8 8.0 5.7 5.5 5.4 5.0 4.6 6.0 4.0 2.7 2.2 2.1 1.8 1.3 2.0 0.8 0.5 0.4 0.2 0.0 0.0 Germany United United Malaysia Hong Kong Finland Canada Australia Taiwan Norway Switzerland Sweden Russia 1 China Japan South India 1 Italy 1 (x) (x) # Companies 1 19 3 2 1 2 1 11 4 2 1 4 1 7 2 14 5 1 1 1 1 5 1 # Companies 1 1 3 39 10 2 10 1 1 9 2 6 1 1 1 Figures 10 & 11. TEV/Revenue Ranking (Exchange, Country) Source. Capital IQ Page 11 TEV/EBITDA (LTM) averages 9.6x: The average multiple for the 36 companies with positive EBITDA (and multiples under 100x) is 9.6x LTM EBITDA (vs. 10.2 last week), led by Tencent Holding’s (700-SEHK) 39.0x multiple (Figure 12). Fifteen of the companies have EBITDA multiples under 7x. The median multiple is 8.7x (vs. 9.6x last week). T E V/L T M E B IT DA (x) 45. 0 40. 0 35. 0 30. 0 25. 5 25. 0 20. 0 15. 0 A verage, 9. 6 10. 0 5. 0 0. 0 S handa Interac tive E ntertainment Ltd. 1. 6 0. 1 0. 2 0. 4 0.6 O AO R B C Information S y s tems T heS treet. c om, Inc . Ngi G roup Inc . P erfec t W orld C o. , L td. 2. 0 J umbuc k E ntertainment P ty Ltd. 5. 2 6.0 4. 2 4. 2 4. 5 3. 1 3. 3 3. 8 6. 2 7. 7 8.1 8. 2 9. 2 9. 6 9. 7 9. 7 9. 8 10. 8 11. 4 9. 9 10.2 12. 8 12. 9 13. 0 13. 0 16.2 21. 9 32.6 39. 0 NE O W IZ G ames C orporation G amania Digital E ntertainment C o. , Ltd. G ungHo O nline E ntertainment, Inc . C hines e G amer International C DC C orp. S K C ommunic ations C o. , L td. G ameO n C o L td. DXN Holdings B hd Modern T imes G roup Mtg AB C hangy ou. c om L imited S NAP Interac tive, Inc . U nited O nline Inc . S park Network s , Inc. O pen T ex t C orp. NetDragon W ebS oft, Inc. Figure 12. TEV/EBITDA Ranking Source. Capital IQ TEV/EBITDA (LTM) by country/exchange: Figure 13 shows the average TEV/EBITDA multiples by stock exchange. The OTCBB has the largest number of companies (19), trading at an average multiple of 6.0x (vs. 6.6x last week). On a geographic basis, the United States has the most companies (19), trading at an average of 6.6x EBITDA (Figure 14). Ten of the companies are Canadian (average 10.2x EBITDA). Average TEV/LTM EBITDA - By Exchange 25.0 20.0 15.0 (x) 10.0 5.0 OTCBB GTSM 0.0 SEHK KOSE OSE NasdaqGS TSE OM 18.2 16.4 13.0 19.4 20.0 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 Average TEV/LTM EBITDA - By Country 18.2 16.4 11.6 10.2 10.2 (x) 10.510.2 8.2 7.3 6.0 5.8 8.2 7.2 6.6 5.2 4.2 3.8 2.0 0.2 Russia 1 0.0 Switzerland 1 4.2 4.2 3.8 2.0 1.6 NasdaqGM AMEX CM KLSE ASX 0.2 0.0 RTS SWX XTRA TSX Germany Hong Kong Malaysia 1 Japan China Canada United States South Korea Italy T enc ent Holdings L td. AQ Interac tive, Inc. V alueC lic k Inc. S ohu.c om Inc. IAC /InterActiveC orp. K AB Dis tribution Inc . Y edangO nline C orp. C yberplex Inc. XING AG Mix i, Inc. Ac toz S oft C o. , L td. K ings oft C o. L td. Y nk K orea Inc . S hutterfly, Inc . DADA S pA # Companies 3 2 7 1 4 2 1 14 19 5 2 1 1 2 5 1 1 # Companies 3 9 10 2 10 1 6 39 1 1 Figures 13 & 14. TEV/EBITDA Ranking (Exchange, Country) Source. Capital IQ P/E (LTM) averages 17.0x: The average multiple for the 29 companies with positive earnings (and multiples under 100x) is 17.0x LTM EPS (vs. 16.7x last week), led Tencent Holding’s (700-SEHK) 49.7x multiple (Figure 15). Nine of the companies have P/E multiples under 10x. The median is just 13.2x. Australia 2 Taiwan Sweden Page 12 P /E L T M (x) 60.0 49.7 50.0 41.8 40.0 31.5 30.0 20.8 21.0 20.0 A verage, 17.0 8.9 0.8 0.0 T he9 Limited 1.9 G iant Interactive G roup, Inc. 2.3 P erfect World C o., Ltd. 2.5 Neteas e.com Inc. 2.8 S handa Interactive E ntertainment Ltd. 4.1 4.9 6.2 12.6 13.2 13.2 13.7 10.8 11.8 11.8 15.1 16.4 22.5 26.6 28.8 29.0 33.6 34.1 10.0 G amania Digital E ntertainment C o., Ltd. J umbuck E ntertainment P ty Ltd. NE O W IZ G ames C orporation Modern T imes G roup Mtg AB C hines e G amer International C hangy ou.com Limited DXN H oldings B hd G ameO n C o Ltd. S NAP Interactive, Inc. O pen T ex t C orp. Worlds .com Inc. NetDragon W ebS oft, Inc. Figure 15. P/E Ranking Source. Capital IQ P/E (LTM) by country/exchange: Figure 16 shows the average P/E multiples by stock exchange. The OTCBB has the largest number of companies (19), trading at an average multiple of 22.4x. On a geographic basis, the United States has the most companies (39), trading at an average of 20.2x earnings (Figure 17). Ten of the companies are Canadian (average 19.0x EPS). Average P/E - By Exchange 35.0 30.0 25.0 (x) 20.0 15.0 10.0 5.0 OTCBB GTSM TSE NasdaqGS KOSE SEHK 0.0 CM AMEX XTRA TSX ASX 27.7 26.2 24.0 22.5 22.4 21.0 15.1 10.7 8.9 6.2 30.1 30.0 25.0 20.0 (x) 15.0 10.0 27.7 Average P/E - By Country 24.0 24.0 22.5 21.0 20.2 19.0 11.5 6.2 4.9 4.1 0.0 Malaysia 1 Switzerland 1 4.9 4.1 KLSE 1.9 0.0 NYSE SWX 5.0 0.0 Germany Japan United States Canada South Korea China Italy Australia Taiwan OM # Companies 2 5 3 7 1 19 2 2 14 4 2 1 1 1 1 # Companies 6 9 3 1 2 39 10 10 2 Figures 16 & 17. P/E Ranking (Exchange, Country) Source. Capital IQ Sweden 1 T encent H oldings Ltd. C y berplex Inc. G igaMedia Ltd. S park Network s , Inc. IAC /InterActiveC orp. S ohu.com Inc. Y edangO nline C orp. K ings oft C o. Ltd. XING AG DADA S pA Actoz S oft C o., Ltd. Mix i, Inc. Page 13 C omparable C ompany A nalys 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 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 M us ic Ca nada, Inc. F rogs te r Interactive P icture s AG G a ma nia D igital E ntertainment C o., L td. G a me 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 B D is tribution 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. Quepa s a C orp. OA O RB 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 Holdings S ocia l Media V e nures , Inc. S ocia lwis e, Inc. S ohu. com Inc. 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 C ur rency USD KR W JPY USD USD USD USD G BP USD USD USD USD TW D USD C AD EUR MY R USD USD USD USD KR W USD USD C AD EUR TW D 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 SE K USD AU D C HF KR W HKD USD USD JPY IN R USD USD USD USD USD USD USD KR W USD USD USD USD USD USD USD HKD USD USD USD N OK USD C AD USD USD USD USD USD USD USD USD EUR 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 C GW Y G TS M:3 083 CWR L T S X:CX C M:DA D XN D IB Z DGL P DGT W DPDM 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 MB T S X:J T V T S X:K AB 3 888 T S XV :LM L VW D L OOK MAG Y 2 121 MT G B MMOG MK B MY R 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 Q PSA R BC I S ND A S F LY A 066 270 S T VI S NMN S MV I S CL W S OH U L OV S P XA 7 00 K IDS .Q NC T Y T S CM T OS O TR EE T S XV :U S S UNT D 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 P K 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 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 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 OT C P K 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 OT C B B N as da qG S 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 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 AME X OT C B B OT C B B XT R A KO SE KO SE T S XV USD Market C ap ($m) 1 1.1 18 8.0 4 2.6 0 .9 1 .5 2 .3 3 5.5 4 .8 1 9.5 14 7.5 1,9 36. 1 0 .4 86 6.9 3 .9 8 7.3 13 1.5 2 4.8 0 .0 2 .2 5 5.5 2 5.8 4 6.8 8 .9 0 .2 2 8.7 2 5.9 24 9.0 11 7.4 4 9.8 1,8 09. 3 29 9.3 3 0.9 1,6 69. 9 27 9.5 7 9.1 2,4 40. 3 1 6.1 2 .7 1 5.3 6 8.1 7 6.4 72 7.9 1 1.5 3 .1 2 2.6 5 .5 83 8.5 1,5 77. 6 8 3.5 5 .1 9 8.1 51 7.3 35 1.9 4,1 37. 0 3 4.0 4 7.5 2 6.7 1,8 57. 1 16 6.6 1,3 78. 4 7 .6 13 8.7 3,5 92. 6 32 6.5 38 3.1 7 .0 0 .0 0 .0 3 0.3 2,3 41. 6 4 9.4 1 1.2 20, 694 .5 0 .6 28 1.6 6 7.6 0 .1 9 6.8 1 .5 51 4.0 1 4.6 91 4.9 2 .9 4 2.7 3 1.5 5 .2 0 .8 21 9.3 10 8.5 2 6.6 0 .3 C urrent Pric e 0.4 0 2 8,00 0.0 0 7 5,20 0.0 0 0.0 2 0.0 3 0.0 8 0.8 0 0.0 2 0.2 3 1.3 9 3 5.2 0 0.0 2 33 9.5 0 0.0 6 1.6 0 5.8 5 0.3 8 0.0 0 0.0 3 2.0 5 0.5 0 82 0.0 0 0.2 0 0.0 0 0.6 3 7.9 5 5 4.0 0 11 6,40 0.0 0 0.0 4 8.0 2 5.4 9 1.1 1 7,17 0.0 0 23 4,00 0.0 0 4,60 0.0 0 1 6.1 7 0.2 3 0.0 6 0.3 9 0.6 9 0.6 3 5.2 0 1.0 3 0.1 0 1.3 2 0.0 1 52 3,00 0.0 0 19 1.5 0 2.3 0 0.0 8 5.0 0 3 4,25 0.0 0 5.1 6 3 3.6 2 0.6 1 3 6,85 0.0 0 3 7.3 0 3 5.2 9 2.0 0 2 8.3 4 0.6 0 1.0 0 5 1.7 8 1 2.9 7 1 1,65 0.0 0 0.6 5 0.0 1 0.0 1 0.7 0 6 1.2 0 2.4 0 0.2 3 8 8.9 0 0.0 3 1 0.5 0 2.2 1 0.0 3 8.9 7 0.0 7 6.1 5 0.1 7 1 0.5 2 0.3 5 3.6 0 0.6 6 0.1 0 0.0 5 3 0.0 0 8,81 0.0 0 6,35 0.0 0 0.0 1 1 Wk 14.3 % 2.8 % -2.1 % 1 233 .3% 0.0 % -20. 0% -12. 1% 0.0 % -22. 8% -10. 3% -8.8 % 1 00. 0% 8.8 % -14. 3% -11. 1% -2.5 % -5.0 % -90. 0% 36.4 % -18. 0% -5.7 % 7.9 % 33.3 % 7.7 % -11. 3% -0.4 % -2.9 % 1.8 % 0.0 % -2.7 % -0.7 % -7.5 % 17.0 % 4.0 % -2.5 % -0.7 % 0.0 % -20. 0% -2.5 % -5.5 % 1.6 % -0.6 % -8.8 % -33. 3% 5.6 % 20.0 % 13.7 % -11. 3% 15.0 % 15.4 % 0.2 % 3.9 % 3.2 % -4.1 % -12. 9% 2.1 % -11. 3% -1.1 % -13. 0% 16.4 % -3.2 % -25. 9% -4.8 % -3.7 % 5.9 % -7.1 % 3 66. 7% 0.0 % 0.0 % -7.2 % 6.7 % -8.0 % -0.3 % -24. 2% 0.4 % 4.7 % 0.0 % -10. 1% 40.0 % -6.0 % 3.0 % -12. 7% 0.0 % -0.6 % 1.5 % 11.1 % -91. 2% -11. 2% -5.2 % -0.8 % 0.0 % 1 233 .3% -91. 2% 15.5% -0.7 % 1 Mth 0.0% 2 8.7 % 2 1.3 % 12 33. 3% 2 6.1 % -11. 1% -30. 4% 0.0% -22. 8% -2.8 % 2 1.3 % 9 00.0 % -4.0 % -33. 3% -4.2 % -1.2 % -7.3 % -90. 0% 6 2.2 % 3 6.7 % -26. 5% -11. 4% 3 3.3 % -6.7 % -33. 7% -3.5 % 9.3% 2 7.9 % -20. 0% -2.9 % -7.7 % 0.9% 3 3.5 % 4 5.3 % -23. 3% 4.5% -11. 5% -33. 3% -4.9 % -13. 8% 5.0% -6.0 % -1.9 % 4 2.9 % -5.7 % 2 0.0 % 1 4.7 % -15. 1% 1 5.0 % 7.1% -15. 8% -11. 0% -6.0 % 2.7% -12. 9% 2 2.8 % 5.8% 1 2.0 % 1 1.7 % 4 6.5 % -37. 5% -20. 0% -5.7 % -9.2 % 9.9% -18. 8% 1 80.0 % 0.0% -5.4 % 1 2.8 % 6.7% -32. 4% 1 4.1 % 1 00.0 % 1 7.1 % 1 3.3 % 0.0% -29. 9% 4 0.0 % -6.2 % -48. 5% 4.9% -61. 1% -18. 6% 1 5.8 % -33. 3% -91. 2% -5.4 % -22. 4% -23. 1% 0.0% 12 33. 3% -91. 2% 23.7% -2.8 % 3 Mth 73 .9% 14 6.7% 12 5.8% 132 8.6 % 81 .3% -4 6.7% 56 .9% -1 4.3% -5 4.9% 23 .0% NM 190 0.0 % 78 .7% -5 7.1% 11 0.5% 14 .5% 40 .7% -9 0.0% 10 0.0% -1 8.0% -1 6.7% 51 .9% 33 .3% -7 8.5% 80 .0% 24 .2% 63 .6% 33 .0% 33 .3% 14 .6% -6 .0% 73 .4% 56 .6% 10 4.4% 34 .9% 9 .9% 41 1.1% -3 3.3% -2 2.0% 72 .5% 57 .5% 69 .9% 21 .2% -5 0.0% 33 .3% -7 .7% 58 .5% 35 .6% 53 .3% 50 .0% 25 .0% 62 .3% 21 .4% 35 .8% 1 .7% 76 .3% 18 .4% 2 .5% 13 8.1% 11 6.3% -4 4.4% 33 4.8% 38 .4% 57 .6% 48 .8% -3 0.9% 60 0.0% -9 9.2% 75 .0% 49 .2% 6 .7% 21 .1% 51 .8% 66 .7% -1 7.8% 12 .2% -2 5.0% 93 .3% 40 .0% 46 .4% 30 .8% 33 .3% -1 2.5% 99 .8% 65 .0% -4 4.4% -6 2.5% 7 .9% 7 .0% 73 .7% -6 6.7% 190 0.0 % -9 9.2% 78.0% 35 .2% 6 Mth 14 .3% 15 6.9% 16 4.8% 56 6.7% 52 .6% -6 3.6 % 0 .0% 30 .4% -7 7.2 % 33 .7% NM 90 0.0% 27 3.1% -8 7.2 % 37 0.6% -1 6.4 % 0 .0% -9 8.0 % 50 .0% -3 6.9 % -3 7.5 % 45 .1% 90 .5% -9 6.0 % 15 7.1% 43 .8% 17 0.7% -4.8% 0 .0% 34 .8% -4.4% 85 .0% 31 .8% 11 3.7% 40 .0% 2 .5% 66 6.7% -7.7% 0 .0% 72 .5% 14 2.3% 11 6.7% 3 .0% 18 5.7% -1 7.5 % -2 0.0 % -6.9% 18 .2% NM 25 .0% -2 1.5 % 24 2.5% 80 .4% 61 .9% -3 9.0 % -2 8.2 % -4 1.9 % 16 .4% 26 3.6% 78 .4% -5 8.9 % 66 .7% 71 .4% 93 .3% 12 5.8% -7.1% -3 0.0 % -9 9.1 % -1 7.6 % 43 .5% -8.7% 9 .5% 78 .3% -8 8.6 % -1 8.1 % -3 3.0 % -4 0.0 % 26 3.2% 75 .0% 10 .6% 54 .5% 58 .4% 16 .7% 27 8.9% -2 1.4 % -5 0.0 % -6 2.5 % 11 .1% 46 .6% 27 .0% 0 .0% 90 0.0% -9 9.1 % 61.7% 18 .2% 1 Yr -46 .7% 2 59. 9% -45 .1% NM -79 .3% -78 .4% -75 .4% -31 .8% -84 .7% -44 .4% NM 33.3 % 2 78. 9% -85 .4% 1 46. 2% -55 .0% -2. 6% -98 .0% -72 .7% -31 .7% NM -3. 5% 33.3 % -99 .7% -64 .4% 53.8 % 83.7 % -1. 4% -33 .3% -32 .8% -56 .6% -17 .2% NM -0. 4% 29.6 % -57 .3% 28.5 % -82 .9% -31 .6% 19.0 % -29 .2% 30.0 % -44 .3% -50 .0% -66 .8% -45 .5% -23 .5% -46 .9% NM 50.0 % -51 .2% 1 42. 5% -50 .8% 62.5 % -28 .2% -63 .2% -89 .9% 11.1 % 41.8 % 12.3 % -73 .7% -88 .9% 92.6 % 4.1 % -30 .4% -5. 8% -99 .5% NM -64 .8% -14 .5% -42 .9% NM 48.2 % -98 .6% -53 .3% -67 .5% -70 .0% NM -74 .1% -38 .6% -48 .5% -31 .0% -92 .6% -0. 6% -66 .2% -67 .7% -93 .6% -11 .0% -22 .7% -52 .8% -95 .5% 2 78. 9% -99 .7% -22.2% -42 .9% 52 We ek -46. 7% -22. 2% -57. 0% -60. 0% -85. 5% -81. 0% -75. 8% -40. 0% -92. 1% -56. 2% -21. 5% -42. 9% -13. 6% -92. 4% -19. 6% -57. 3% -19. 1% -98. 0% -82. 4% -66. 4% -55. 8% -29. 3% -80. 2% -99. 7% -68. 5% -19. 7% -13. 9% -28. 8% -42. 9% -40. 3% -63. 1% -44. 2% 7.0 % -16. 4% -30. 7% -68. 0% -34. 3% -82. 9% -37. 1% -46. 1% -33. 7% -12. 9% -46. 4% -68. 8% -68. 6% -60. 0% -43. 2% -51. 0% 0.0 % -25. 0% -51. 2% -18. 5% -51. 3% -13. 2% -57. 9% -71. 1% -90. 3% -9.7 % -17. 7% -5.5 % -82. 7% -89. 0% -20. 3% -15. 0% -37. 4% -39. 8% -99. 6% -99. 8% -75. 3% -30. 5% -46. 2% -61. 7% -3.9 % -99. 1% -63. 2% -69. 9% -70. 0% -31. 4% -76. 7% -49. 8% -84. 0% -39. 5% -93. 8% -23. 1% -67. 0% -75. 0% -93. 6% -16. 6% -29. 0% -54. 8% -96. 4% 7.0 % -99. 8% -51.1% -51. 0% 579.2 Figure 18. Price Performance Source. Capital IQ Page 14 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 B D is tribution 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. 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 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 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 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 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 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 OT C P K 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 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 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 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) 11. 1 1 88. 0 42. 6 0. 9 1. 5 2. 3 35. 5 4. 8 19. 5 1 47. 5 1,9 36. 1 0. 4 8 66. 9 3. 9 87. 3 1 31. 5 24. 8 0. 0 2. 2 55. 5 25. 8 46. 8 8. 9 0. 2 28. 7 25. 9 2 49. 0 1 17. 4 49. 8 1,8 09. 3 2 99. 3 30. 9 1,6 69. 9 2 79. 5 79. 1 2,4 40. 3 16. 1 2. 7 15. 3 68. 1 76. 4 7 27. 9 11. 5 3. 1 22. 6 5. 5 8 38. 5 1,5 77. 6 83. 5 5. 1 98. 1 5 17. 3 3 51. 9 4,1 37. 0 34. 0 47. 5 26. 7 1,8 57. 1 1 66. 6 1,3 78. 4 7. 6 1 38. 7 3,5 92. 6 3 26. 5 3 83. 1 7. 0 0. 0 0. 0 30. 3 2,3 41. 6 49. 4 11. 2 20,6 94. 5 0. 6 2 81. 6 67. 6 0. 1 96. 8 1. 5 5 14. 0 14. 6 9 14. 9 2. 9 42. 7 31. 5 5. 2 0. 8 2 19. 3 1 08. 5 26. 6 0. 3 20,6 94. 5 0. 0 579. 2 42. 7 TE V/LT M R evenue 3.9 x 1.8 x 0.2 x 19.2 x 39.0 x 5.7 x 17.6 x 0.4 x 7.9 x 0.1 x 14.3 x 4.1 x 1.2 x 0.8 x 0.5 x 5.3 x 34.7 x 3.4 x 3.9 x 7.6 x 1.8 x 0.7 x 7.8 x 1.2 x 2.3 x 1.2 x 0.4 x 1.2 x 0.7 x 3.2 x 1.1 x 5.2 x 11.7 x 0.2 x 5.7 x 1.3 x 3.5 x 2.7 x 2.6 x 2.4 x 0.1 x 0.2 x 2.5 x 0.3 x 0.2 x 0.0 x 0.1 x 1.2 x 2.1 x 1.7 x 1.1 x 0.0 x 4.3 x 0.9 x 18.7 x 0.2 x 0.0 x 4.6 x 0.4 x 0.2 x 1.0 x 23.5 x 1.4 x 5.9 x 3.2 x 2.2 x 2.3 x 0.6 x 39.0 x 0.0 x 4.5x 1.8 x TE V/ N TM R evenue 0.4x 6.1x 0.9x 3.2x 1.2x 0.4x 1.1x 1.2x 2.3x 0.3x 1.0x 0.3x 3.7x 0.1x 0.4x 0.8x 1.5x 6.1x 0.1x 1.5x 1.0x TE V/LT M E BITDA 8.1 x 3.3 x 5.2 x 12.9 x 25.5 x 11.4 x 4.2 x 3.8 x 10.8 x 3.1 x 13.0 x 13.0 x 2.0 x 9.6 x 12.8 x 16.2 x 8.2 x 9.7 x 6.2 x 0.6 x 9.7 x 0.4 x 0.2 x 0.1 x 9.2 x 32.6 x 6.0 x 9.8 x 4.2 x 39.0 x 1.6 x 4.5 x 7.7 x 10.2 x 9.9 x 21.9 x 39.0 x 0.1 x 9.6x 8.7 x TE V/NTM E BITDA 5.6x 7.5x 5.8x 3.6x 5.9x 9.9x 8.4x 3.7x 1.9x 0.7x 7.0x 8.5x 4.6x 3.3x 5.9x 9.9x 0.7x 5.5x 5.8x P /LT M E P S 28 .8x 13 .2x 33 .6x 8. 9x 22 .5x 4. 1x 26 .6x 13 .7x 1. 9x 11 .8x 20 .8x 6. 2x 16 .4x 41 .8x 4. 9x 31 .5x 12 .6x 2. 5x 29 .0x 2. 3x 2. 8x 10 .8x 13 .2x 15 .1x 49 .7x 0. 8x 34 .1x 21 .0x 11 .8x 49 .7x 0. 8x 17.0x 13 .2x P /NT M E P S 1 0.1 x 1 2.7 x 1 0.5 x 1 3.3 x 1 1.0 x 3 1.9 x 1 0.3 x 1 5.2 x 1 3.4 x 3 1.7 x 1 1.1 x 1 4.5 x 1 6.9 x 1 4.4 x 7.6x 1 6.7 x 3 1.9 x 7.6x 15.1x 1 3.4 x P /TangBV 3 .3x 0 .7x 0 .3x 1 2.0x 1 2.6x 8 .9x 0 .5x 4 .5x 2 .9x 3 .9x 3 .2x 1 .6x 8 .6x 0 .3x 2 .5x 2 0.8x 3 9.7x 2 .4x 1 .1x 2 .3x 1 .6x 4 .1x 3 .9x 1 2.0x 1 .3x 0 .9x 6 .2x 3 .9x 4 .4x 1 5.9x 1 .9x 0 .7x 1 .1x 2 .4x 0 .9x 1 .1x 1 .9x 4 .2x 3 9.5x 6 .3x 2 9.3x 2 0.7x 0 .1x 0 .9x 1 .3x 7 .4x 1 0.1x 0 .0x 7 .0x 4 .1x 1 .4x 3 9.7x 0 .0x 6.4x 3 .2x Figure 19. Valuation Comparison Source. Capital IQ Page 15 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 39 10 10 9 6 3 2 2 1 1 1 1 1 1 1 1 1 1 91 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 H ong K ong R uss ia 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, 250.9 5, 018.6 2, 995.4 2, 135.6 1, 577.6 1, 422.8 1, 415.3 245.2 147.5 138.7 131.5 98.1 49.8 26.7 24.8 20.4 4.8 0.1 52,703.8 Avg US D Mar ket C ap ($m) China S weden Japan Ta iwa n Ca na da S outh K orea Hong K ong R us sia Ita ly United S tates G erma ny S witzerland Finland India Malay sia Australia United K ingdom Norway G rand Total 3,725. 1 1,577. 6 499. 2 471. 8 213. 6 158. 1 147. 5 138. 7 131. 5 128. 7 122. 6 98. 1 49. 8 26. 7 24. 8 10. 2 4. 8 0. 1 579.2 U S D LT M T otal R ev ($m) C hina U nited S ta tes 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, 838. 9 3, 795. 5 1, 682. 9 970. 9 660. 0 497. 1 389. 9 365. 5 233. 0 151. 2 115. 2 78. 1 55. 7 40. 0 15. 3 5. 9 2. 0 0. 3 12,897.3 U S D LT M Total E B IT DA ($m) C hina S weden U nited S ta tes C a na da J apan S outh K orea T a iwan I taly H ong K ong R uss ia M alays ia G erma ny Aus tralia S witz erland N orway U nited K ingdom F inland I ndia G r and T otal 1,773. 8 257. 8 245. 7 193. 6 108. 2 85. 8 52. 3 43. 3 30. 8 19. 7 10. 7 10. 3 2. 9 0. 8 -1. 0 -1. 8 -15. 2 -27. 0 2,790.6 E B IT DA % C hina Aus tral ia T aiwa n G ermany J a pa n I ta ly S weden M a la ys ia R uss ia H ong K ong S outh K orea S witz erla nd U nited S ta tes I ndia C anada N orway U nited K ingdom F inla nd G rand T otal 47. 9% 37. 2% 36. 3% 31. 2% 21. 9% 18. 6% 15. 3% 13. 7% 13. 1% 7.9% 6.1% 1.9% -10.1% -23.5% -24.8% -50.6% #DI V /0! #DI V /0! 6.8% Figure 20. Comparison by Country Source. Capital IQ C omparable C ompany A nalys is > W eb 2.0 Su mmary b y Ex c hange C om pany Nam e OT C B B N as da qG S OT C P K K OS E TSE N as da qG M TSX T S XV S E HK A ME X ASX XT R A GT SM S WX H LS E CM B SE NYS E OS E A IM OM R TS K LS E O T C NO G rand To tal 19 14 11 7 5 5 4 4 3 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 91 U S D Market Cap ($m) SE HK N asdaqG S TSE NYS E OM K OS E GTS M OT CB B OS E N asdaqG M TSX XT R A R TS CM SWX AM E X OT CP K H LS E BS E KLS E AS X T S XV AI M OT CN O G rand T otal 21, 774.3 20, 333.5 2, 715.9 1, 809.3 1, 577.6 1, 349.3 1, 116.0 315.3 279.5 260.6 260.5 245.2 138.7 131.5 98.1 80.9 75.0 49.8 26.7 24.8 20.4 16.0 4.8 0.1 52,703.8 Avg US D Mar ket C ap ($m) S E HK NY S E OM Na s daqG S G TS M TS E OS E K OS E RT S CM XT R A SWX TS X Na s daqG M HL S E AME X BS E KLS E O TC B B AS X O TC P K AIM TS X V O TC NO G rand Total 7,258. 1 1,809. 3 1,577. 6 1,452. 4 558. 0 543. 2 279. 5 192. 8 138. 7 131. 5 122. 6 98. 1 65. 1 52. 1 49. 8 40. 5 26. 7 24. 8 16. 6 10. 2 6. 8 4. 8 4. 0 0. 1 579.2 U S D LT M T otal R ev ($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 AS X T S XV HLS E OT CB B OT CN O AI M G rand T otal 1, 682. 9 484. 2 473. 1 233. 0 218. 9 151. 2 115. 2 107. 5 90. 9 85. 6 80. 9 78. 1 77. 9 41. 3 40. 0 29. 9 27. 8 16. 5 7. 7 6. 9 5. 9 2. 1 2. 0 0. 3 151.7 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 R TS OS E K LS E XTR A AM E X AS X SWX NYS E OT CN O AI M TSX N a sdaqG M T S XV HLS E BSE OT CP K OT CB B G r and T otal 1,692. 5 662. 9 257. 8 88. 9 78. 9 52. 3 43. 3 19. 7 19. 3 10. 7 10. 3 6. 4 2. 9 0. 8 0. 0 -1. 0 -1. 8 -2. 9 -8. 2 -8. 3 -15. 2 -27. 0 -43. 4 -48. 3 2,790.6 E B IT DA % S EHK AS X GT SM XT R A N asdaqG S TSE CM OS E OM K LS E R TS K OS E SWX N asdaqG M O T CB B TSX BSE AM E X T S XV O T CP K O T CN O H LS E NYS E AI M G rand T otal 42. 6% 37. 2% 36. 3% 31. 2% 30. 1% 22. 7% 18. 6% 18. 0% 15. 3% 13. 7% 13. 1% 5.4% 1.9% 1.6% -5. 3% -14.3% -23.5% -36.4% -39.0% -41.3% -50.6% #DI V /0! #DI V /0! #DI V /0! 6.8% Figure 21. Comparison by Exchange Source. Capital IQ Page 16 Financ ing - Las t Three Months (US $ m) Mo nth A pr-09 Co mpany N ame Co llec tive Media GOOM R adio Marin S oftware The R ubic o n Projec t FreeW heel Cellu fun Co nduc tor Inc . S c anS c out Batanga Viximo Do ubleT wis t IMS h opping S oc ialtext Mixerc as t S ou ndCloud TubeMog ul Tribal No va Tripbas e S oc ialc as t Brandtolog y S c an & Target J odange Foodis ta A pr-09 T otal May-09 Fac ebook One Net E n tertainment Cyberplex Peer39 OpenX Imeem E veryZing WonderHill BlogHer Inc . Fuhu Inc . Azuki S ys tems I Love R ewards TimeBridge OLX Do c uS ign Medialets Res o nate Netwo rks Mo 'Min is VoxP op Loop'd N etwork May-09 T otal J un-09 S ug ar Inc . Tumri Bo ku Wimba Grab N etworks beeT V Zoos k Gather Taomee Animoto GameG roun d RingR evenue YuMe eRepublik In igral AdE x Media OneT XT my6s ens e I Love R ewards Cliqs et AdW h irl Pic aboo LiquidPlann er Mas hLog ic J un-09 T otal USA USA USA USA USA USA USA USA C hina USA I srael USA USA S pain USA USA USA I srael C anada USA USA USA USA USA 1.0 0.5 34.2 15.3 7.5 29.2 34.0 5.3 1.5 1.0 1. 0 2.9 2.8 2.4 2. 3 2.0 2.0 1. 8 4.1 3.5 5.0 4. 4 12.0 8. 0 6. 0 5.3 13. 0 12.0 15.0 USA C hina C anada USA UK USA USA USA USA USA USA C anada USA USA USA USA USA I srael USA USA 0.8 13.6 10.0 22.9 23. 3 4.0 2.0 1.5 1. 5 18.7 40.8 16.0 205.0 6.0 5. 9 5. 0 5. 0 5.0 6. 3 7.0 7. 0 8.8 8. 3 10.0 10.0 12.9 10.5 10.0 C ountry USA F ra nce USA USA USA USA USA USA USA USA USA USA USA USA G ermany USA C anada USA USA S inga pore F ra nce USA USA 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 4.7 4.5 5.0 5. 0 8.1 7.5 10.0 10.0 8. 0 16. 0 13. 0 5. 0 12.0 An ge l/S eed Debt financ ing PIPE S eries A S eries B 20.0 S eries C S eries D G rand Total 20. 0 16. 0 13. 0 13. 0 12. 0 10. 0 10. 0 8.1 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 7.0 6.3 6.0 5.9 5.0 5.0 5.0 4.0 2.0 1.5 1.5 0.8 334.1 16. 0 15. 0 13. 0 12. 0 12. 0 8.0 6.0 5.3 5.0 4.4 4.1 3.5 2.9 2.8 2.4 2.3 2.0 2.0 1.8 1.5 1.0 1.0 1.0 0.5 125.5 Figure 22. Financing, Last Three Months Source. Company reports Page 17 C ompany Des c riptio ns - C urrent Mo nth C apital Market A c tivity C ompany A dE x media HQ U nited S ta tes W ebs ite www.adex.com Des criptio n Adex Media , I nc . operates a s an integrated I nternet ma rk eting, a dvertis ing, a nd lea d genera tion publisher, a s well as developer, ma rk eter, a nd dis tributor of con sumer produc ts in the U nited S tates . I ts mark eting platform prov ides v a rious services , including sea rc h mark eting, displa y mark eting, lea d genera tion, a nd a ffilia te ma rketing; and offers pa y-per-performa nce pricing/cost-per-action/pay-per-a ction based services . T he company also provides O vernight G enius , a computer learning cours e for MS W indows , MS O ffic e, eB a y , and others; R is ing S ta r L earning, a ma th a nd la nguage arts educa tional produc t for c hildren; D ebt S nap, a n audio s eminar to help consumers ma na ge their Animoto, I nc. provides a W eb appli cation tha t a utoma tic a lly generates profes siona lly produced videos us ing i ts own cinematic artifi cial intellige nce technology a nd high-end moti on des ign. Its technology enables videos to get cus tomiz ed orches tration of us er-s elected images a nd mus ic. T he company wa s founded in 2006 and is based in New Y ork , New Y ork with a n additiona l office in S a n Franc isc o, C alifornia . AdW hirl, I nc. develops online advertisement pla tform for iP hone a pplication developers . The compa ny wa s founded in 2009 and is ba s ed in Menlo P a rk , C a lifornia . A nimoto U nited S ta tes www.animoto.com A dW hirl U nited S ta tes www.adwhirl.com beeTV U nited S ta tes www.bee.tv B oku U nited S ta tes www.boku.com beeTV is y our v iewer’s own pers ona l c ha nnel tha t a ntic ipa tes their viewi ng needs a nd desi res while ta k ing i nto context their sc hedule, beha viors a nd even their mood. I t uses a rev olutionary , proprietary, contex tual matching algorithm inc orpora ti ng “huma n unders tanding” to offer y our viewer a n entertaining, person alized “cha nnel” a cces sible from a ll three sc reens - T V , mobile and P C . beeTV s ervices I P TV , ca ble, satellite, mo bile, internet a nd D TT platforms . It is a complement to your exis ting na viga tion sy stem. It is a find engine rather tha n a s ea rch engine. B O K U, Inc. provides online pa y men ts s ervices to pay for virtua l and digital goods with the mobile phone. I t s erves cus tomers in the United S ta tes and interna tionally . The company was incorporated in 2008 a nd is ba sed in S a n F ra ncis co, C a lifornia with a dditiona l offices in E urope, Asi a, a nd L atin A meric a . C liqs et, Inc . provides an online pla tform tha t allows developers a nd us ers to crea te, orga niz e, retrieve, s hare, and manipulate s ocia l informa tion on the W eb, des ktop, a nd mobile env ironments. It brings together photos, bookmarks , a nd locations . The compa ny ’s pla tform cons is ts of AP Is for managing va rious aspec ts of users ’ soc ia l identity giving the a bility to build s oc ial applic ations without recrea ting the wheel. C liqs et, I nc. wa s founded in 2008 and is bas ed i n J a ck s onville, F lorida. S C E R P K W E B S A provides online ga ming a nd s ocia l network s ervices. I ts social network allows us ers or citizens to interac t a nd crea te original content and to follow politica l, economic, and or milita ry as pira tions . T he company wa s founded i n 2007 and is bas ed in B ucha res t, R oma nia. G a meG round dev elops an onl ine s ocia l network for gamers . The compa ny is bas ed in I srael. G a ther, Inc . opera tes a s ocia l network ing s ite for adults. I t ena bles us ers to s hare thoughts, c onv ers a tions, v ideo, information, pictures , ideas, a nd a udio. G a ther, I nc. wa s formerly k nown as S uffic iently Adva nced T ec hnology Corporation a nd cha nged its na me to G ather, I nc. in J uly 2005. The compa ny wa s incorpora ted in 2004 and is hea d quartered in B os ton, Ma s sac hus etts. G a ther, I nc. opera tes as a s ubsidia ry of American P ublic M edia G roup. G ra b N etworks , I nc. di stributes a nd monetiz es vi deo content on the I nternet. G ra b Network s, I nc. was formerly known as Any S trea m, I nc . a nd c ha nged its name to G rab N etworks , I nc. in S eptember 2008. T he c ompany was founded i n 2000 a nd is headqua rtered in D ulles, V Love R. ewards I nc. opera tes as a W eb-ba sed incentive ma rk eting compa ny . It des igns , develops , and imple ments online points -based I irginia employee rewards a nd recognition programs for compa nies a nd busines s es in N orth America . The compa ny prov ides employ ee recognition, sales incentives , rec ess ion pa ck age, a nd enga ge generation Y s olutions . I t serves communic a tions , informa tion tec hnology, ins ura nc e, profes s iona l s ervices , reta il/cons umer goods , hos pita lity, food services , manufac turing, a nd tra ns port industries . I Love R ewards I nc. was founded in 1995 a nd is ba s ed in Toronto, C a na da . C liqs et U nited S ta tes www.cliqset.com eR epu blik S pa in www.erepublik.com G am eG roun d G ath er Inc . I s ra el U nited S ta tes www.gameground.com www.gather.com G rab N etworks I Love R ewards In c. U nited S ta tes C a nada www.grabnetworks.com www.iloverewards.com Inigral L iqu idPlan n er Mas h Logic m y6s ens e On eTX T P ic aboo R ing R evenu e S ugar In c. U nited S ta tes U nited S ta tes U nited S ta tes I s ra el U nited S ta tes U nited S ta tes U nited S ta tes U nited S ta tes www.inigral.com wwww.liquidpl anner.com www.mashlogic.com www.my6sense.com www.onetxt.com www.picaboo.com www.ringrevenue.com www.sugarinc.com Inigra l, Inc. engages in the development of s oc ial network ing website for students , their peers a nd their ins tru ctors. I nigra l, I nc. is based in P alo A lto, C alifornia . L iquidP la nner, I nc. offers online projec t ma na gement tools . I t offers a sy stem for c apturing es tima tes and crea ting proba bilis tic schedules . The c ompa ny was formerly k nown a s Team46, I nc. The company was founded in 2006 a nd is ba s ed in B ellevue, Was hington. Ma s hLogic I nc. enga ges in developing cus tomized web brows ers. The company was founded in 2007 a nd is ba sed in Menlo P ark, C alifornia. my 6s ense Inc . prov ides mobi le technology s olutions. I t offers D igita l I ntuition tha t c onnec ts us ers with content providing wa y to experienc e informa tion on mobile and desk top. The compa ny wa s founded in 2007 a nd is ba s ed in Herz liya P itua ch, I s ra el. O neTX T prov ides a pa yments proces sing a lterna tiv e for s oc ia l network s, onl ine ga mes to a ccept pa yments , c reate loyalty progra ms, a nd send marketing mes sa ges . P ic aboo C orporation provides onli ne photo book s a nd cards . I t offers a software progra m tha t turns photos into photo book s. The company was founded in 2002 a nd is ba sed in M enlo P a rk , C a lifornia . R ing R ev enue, I nc. prov ides online call trac k ing s ervices . The company was incorporated in 2009 a nd is ba sed in S a n ta B arba ra , C a lifornia . S uga r, I nc. operates a s an online media compa ny . It operates lifes ty le a nd enterta inment W ebsites that cov er celebrity, fa s hion, shopping, bea uty , entertainment, food, a nd hea lth topics . T he c ompany also offers a shopping engine for fa s hion and beauty categories . S ugar, I nc. , formerly k nown as S uga r P ublishing, I nc ., wa s founde d in 2006 and is hea dqua rtered in S a n Francisc o, C alifornia. S uga r, I nc. operates a s an online media compa ny . It operates lifes ty le a nd enterta inment W ebsites that cov er celebrity, fa s hion, shopping, bea uty , entertainment, food, a nd hea lth topics . T he c ompany also offers a shopping engine for fa s hion and beauty categories . S ugar, I nc. , formerly k nown as S uga r P ublishing, I nc ., wa s founde d in 2006 and is hea dqua rtered in S a n Francisc o, C alifornia. Tumri, I nc. provides online dis pla y a dvertising sol utions . The c ompa ny ’s s olution, the AdP od, ena bles a dv ertis ers to c rea te a nd del iver ta rgeted online dis play a ds to consumers . It serves a dvertis ers , crea tiv e and media buy ing agencies , and publishers . The compa ny wa s founded in 2004 a nd is ba s ed in Mountain V iew, C a lifornia . W imba , Inc . provides learning s oftwa re a pplic a tions a nd s ervices to the educ a tion indus try in the Un ited S ta tes and the United K ingdom. The company offers D iploma , a qu estion authoring an d management tool tha t allows ins truc tors to c reate or edit ques tions; C la s sroom 5. 2, a clas s room environment with va rious features that include audio, vid eo, a pplica tion sharing, and c ontent dis pla y; and C ollabora tion S uite tha t a llows ins titutions to bridge the gap between technology a nd peda gogy by s upplementing cours e management s ys tems . It a ls o provides C reate, a content authori ng tool, which c onverts M icros oft W ord doc uments into content for online cours es; P ronto, an a ca demic mes saging pla tform, whic h is designed for educ ators to a dva nc e and promote lea rning; V oic e, a W eb-ba s ed voic e s olution th at fa cilita tes and promotes voc al in struction, colla bora tion, c oa c hing, a nd a s s ess ment; and C M S Integra tion. I t s erves univ ersities , community colleges , s chool districts , a nd educ ation ins titutions. T he company was formerly known as H orizon W imba , Inc . a nd changed its na me to W imba , I nc. in April 2007. W imba , Inc . wa s founded in 1998 and is ba sed in N ew Y ork , New Y ork with additiona l offic es in C a mbridge, U nited K ingdom; a nd A tlanta , G eorgia. Y uMe, I nc . operates a s a v ideo a dvertis ing network on W eb. I t offers a d mana gement sy stem tha t enables a dvertis ers a nd publishers to identify, cla s sify , a nd tra ck content throu gh digita l media pla tforms, s uch a s W eb, downloads, mobile, a n d I P TV . The compa ny a ls o enables publishers to orga nize video on their site i nto content cha nnels, s uch a s automotiv e, fi na ncial serv ices , lifesty le, news , music , s ports , enterta inment, a nd family friendly. In a ddition, it offers rea l-time ta rgeting, mea s urement, and optimiza tion; c ontent distribution and vira l a dvertising opportunities ; a suite of intera ctiv e a d plac ements ; a nd v ideo monetiza tion s ervices . F urther, the c ompany provides a beha viora l ta rgeting sy stem tha t enables advertis ers to target their mess ages to v iewers on a na tional sc a le ba s ed on v ideo v iewing interes ts and purchas e intent. Y uMe, Inc . wa s founded in 2004 a nd is hea dquartered in R edwood C ity, C alifornia . Zoos k , Inc. opera tes a s an online s ocia l da ting network . The c ompa ny was founded in 2007 a nd is ba s ed in S an F ra nc isco, C a lifornia . T aoMee C hina www.taomee.com T um ri U nited S ta tes www.tumri.co W imba Inc U nited S ta tes www.wimba.com Yu Me U nited S ta tes www.yumenetworks.com Z o os k U nited S ta tes www.zoosk.com Figure 23. Company Descriptions Source. Company reports, Capital IQ, Crunchbase Page 18 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