Web 2.0 Weekly - July 21, 2009

SOFTWARE & SERVICES 21 JULY 2009 WEB 2.O WEEKLY DAVID SHORE, CFA, MBA 416.860.6784 david.shore@researchcapital.com Arun Thomas (Associate) 416.860.7666 VENTURE CAPITAL INVESTMENT PICKS UP, BUT STILL DO WN FROM LAST YEAR H EAL T H C AR E I N T H E U NIT E D ST AT E S L E AD S IN S E CT O R IN V E ST M E NT S In a report last week, VentureSource (a research unit of VentureW ire Publisher Dow Jones & Co.), states that venture capital investment in the United States has picked up from its first quarter low, led by a strong rebound from the health sector. It reported that 1,078 U.S venture-backed companies raised $9.28 billion in the first half of 2009. This was 44% less than $16.47 billion raised by 1,459 companies in the first half of 2008. In the second quarter, 595 companies raised $5.27 billion compared with 483 companies raising $4 billion in the first quarter. The report goes on to state that, for the second quarter, health care as a sector attracted $2.23 billion and surpassed the $1.89 billion raised by the traditionally largest sector – information technology. Software as a sector (within IT) raised $1.41 billion in the first half of 2009 ($696 million in Q2 and $715 in Q1) and was 41% below last year’s total. Biopharmaceuticals, medical devices, health care services, and medical software and information services attracted the most investment in healthcare. Online Media companies lead financing: Two online media companies, Pandora (Internet Radio) and QuickPlay (Mobile Video), have secured the largest financing transactions thus far in July ($35 million and $12 million, respectively). Total capital raised so far in July is $114.2 million through 17 transactions, averaging $6.3 million per transaction. June closed with $180 million in financing on 36 transactions. The averages for the months of May (excluding the Facebook transaction) and June were $6.6 million and $4.9 million, respectively. Financing Activity Last Three Months 200.0 6.6 180.0 6.3 6.0 160.0 7.0 140.0 4.9 5.0 120.0 4.0 (US$m) 100.0 3.0 80.0 (US$m) 2.0 1.0 20.0 0.0 May-09 (excl FB) Jun-09 Total Average Jul-09 60.0 40.0 0.0 A strong price performance week: Most of the companies in our universe had strong stock price performances over the past week (for stocks with prices greater than $1) (Figure 6), with only eight companies showing negative returns on the week. CDC Corp. (NasdaqGS:CHIN.A) led the group with a 54.9% return, while GigaMedia Ltd. (NasdaqGS:GIGM) had the worst return, dropping 5.7% 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 two public Web 2.0 companies identified: Our W eb 2.0 universe contains 92 companies, with a combined market cap of ~$61.2 billion (Figure 1). The average market cap for the group is ~$679.9 million (but a median of only $50.4 million), with average trailing revenue of $151.1 million (median $55.0 million). The companies are also generally profitable, with a median EBITDA margin of 13.2%. On a valuation basis, the overall average is 6.1x trailing revenue (median 2.1x) and 9.3x trailing EBITDA (median 9.6x). Twenty of the companies have more than 500 employees. C omparable C ompany Analys is > Web 2.0 C ompany Name Accelerize New Media , Inc. Actoz S oft C o. , Ltd. AQ Interactive, Inc. As s ociated Media Holdings Inc. B igs tring C orp. B eta wave C orporation B eyond C ommerce, Inc. B right T hings plc B roa dW ebAs ia Inc. C DC C orp. C hangyou. com L imited C hina G a teway C orporation C hines e G amer Interna tiona l C LIC K E R Inc. C ornerW orld C orpora tion C yberplex Inc. DADA S pA DXN Holdings B hd Dibz International, Inc. DigitalP os t Interactive, Inc. DigitalT own, Inc. Dolphin Digital Media , Inc. E olith C o. Ltd. E xtens ions , Inc. F luid Mus ic C a nada , Inc. F rogs ter Interactive P ictures AG G ama nia Digita l E ntertainment C o., Ltd. G ameOn C o Ltd. G eoS entric O yj G iant Interactive G roup, Inc. G iga Media Ltd. G ravity C o., Ltd G ree, Inc. G ungHo O nline E ntertainment, Inc. HanbitS oft, Inc. IAC /InterActiveC orp. IAS E nergy, Inc. is eemedia Inc. J umbuck E nterta inment P ty Ltd. K AB Dis tribution Inc. K ings oft C o. Ltd. Lingo Media C orporation LiveW orld Inc. LookS mart, Ltd. Magnitude Information S ys tems Inc. Mixi, Inc. Modern T imes G roup Mtg AB MO K O .mobi Limited Myriad G roup AG NE O W IZ G ames C orpora tion NetDragon W ebS oft, Inc. Neteas e. com Inc. NeuLion Incorporated NeXplore C orporation Ngi G roup Inc. Northgate T echnologies L imited O pen T ext C orp. O penwave S ys tems Inc. P erfect W orld C o. , Ltd. P NI Digital Media Inc. Q uepa s a C orp. O AO R B C Information S ys tems S handa Interactive E nterta inment Ltd. S hutterfly, Inc. S K C ommunications C o., Ltd. S NAP Interactive, Inc. S NM G loba l Holdings S ocial Media V enures , Inc. S ocialwis e, Inc. S ohu. com Inc. S park Networks , Inc. S pectrumDNA, Inc. T encent Holdings Ltd. T he P arent C ompany T he9 Limited T heS treet. com, Inc. T ota l S port O nline AS T ree.C om, Inc. Unis erve C ommunica tions C orp. United O nline Inc. UOMO Media, Inc V alueC lick Inc. V OIS , Inc. W ebzen Inc. W izzard S oftwa re C orporation W orlds . com Inc. W oozyF ly, Inc. W ynds torm C orpora tion XING AG Y eda ngO nline C orp. Y nk K orea Inc. ZipLocal Inc. High Low Average Median L TM as of Ticker 3/31/2009 3/31/2009 3/31/2009 6/30/2007 3/31/2009 3/31/2009 3/31/2009 9/30/2008 9/30/2008 3/31/2009 3/31/2009 9/30/2008 3/31/2009 2/28/2009 1/31/2009 3/31/2009 3/31/2009 2/28/2009 NA 3/31/2009 5/31/2009 3/31/2009 12/31/2008 3/31/2009 3/31/2009 12/31/2008 3/31/2009 3/31/2009 3/31/2009 3/31/2009 3/31/2009 3/31/2009 6/30/2008 3/31/2009 3/31/2009 3/31/2009 1/31/2009 3/31/2009 12/31/2008 3/31/2009 3/31/2009 3/31/2009 3/31/2009 3/31/2009 3/31/2009 3/31/2009 3/31/2009 12/31/2008 12/31/2008 12/31/2008 3/31/2009 3/31/2009 3/31/2009 6/30/2008 3/31/2009 3/31/2009 3/31/2009 3/31/2009 3/31/2009 3/31/2009 3/31/2009 12/31/2007 3/31/2009 3/31/2009 12/31/2008 3/31/2009 9/30/2008 12/31/2008 3/31/2009 3/31/2009 3/31/2009 3/31/2009 12/31/2008 8/2/2008 12/31/2008 3/31/2009 3/31/2006 3/31/2009 2/28/2009 3/31/2009 1/31/2009 3/31/2009 3/31/2009 3/31/2009 3/31/2009 3/31/2009 3/31/2009 NA 3/31/2009 12/31/2007 3/31/2009 3/31/2009 AC LZ A052790 3838 AS MH BS GC B W AV B Y OC AIM: B G T BWBA C HIN. A C Y OU CGWY G T S M: 3083 C LK Z CWR L T S X :C X C M: DA DX N DIB Z DG LP DG T W DP DM A041060 E XT I T S X :F MN FRG 6180 3812 G E O 1V GA G IG M GR VY T S E : 3632 3765 A047080 IAC I IAS C . A IE E AS X :J MB T S X :K AB 3888 T S X V :LM LVW D L OO K MAG Y 2121 MT G B MK B MY R N A095660 777 NT E S T S X :NLN NX P C 2497 590057 OT E X OP W V PWRD T S X V :P N QP S A R BCI S NDA S FLY A066270 S TVI S NMN S MV I S C LW S O HU L OV S P XA 700 K IDS . Q NC T Y TS CM T OS O TR E E T S X V :US S UNT D UO MO V C LK V O IS W ZE N W ZE W DDD W ZY F W Y ND O 1B C A052770 A023770 T S X V :ZIP E xc hange OT C B B K OS E TS E OT C P K OT C B B OT C B B OT C B B AIM OT C P K Na s daqG S Na s daqG S OT C P K GTS M OT C B B OT C B B TS X CM K LS E OT C P K OT C B B OT C B B OT C B B K OS E OT C P K TS X XT R A GTS M TS E HL S E NY S E Na s daqG S Na s daqG M TS E OS E K OS E Na s daqG S OT C B B T S XV AS X TS X S E HK T S XV OT C P K Na s daqG M OT C B B TS E OM AS X SWX K OS E S E HK Na s daqG S TS X OT C P K TS E BSE Na s daqG S Na s daqG S Na s daqG S T S XV OT C B B R TS Na s daqG S Na s daqG S K OS E OT C B B OT C P K OT C P K OT C B B Na s daqG S AME X OT C B B S E HK OT C P K Na s daqG S Na s daqG M O T C NO Na s daqG M T S XV Na s daqG S OT C B B Na s daqG S OT C B B Na s daqG M AME X OT C B B OT C B B OT C P K XT R A K OS E K OS E T S XV Trading C urrency HQ 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 US D C AD E UR MY R US D US D US D US D KR W 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 AUD C AD HK D C AD US D US D US D JPY SEK AUD C HF KR W HK D US D C AD US D JPY INR US D US D US D C AD US D US D US D US D KR W US D US D US D US D US D US D US D HK D US D US D US D NO K US D C AD US D US D US D US D US D US D US D US D US D E UR KR W KR W C AD United S ta tes S outh K orea J a pan United S ta tes United S ta tes United S ta tes United S ta tes United K ingdom United S ta tes Hong K ong C hina United S ta tes T aiwa n United S ta tes United S ta tes C anada Italy Ma la ys ia United S ta tes United S ta tes United S ta tes United S ta tes S outh K orea United S ta tes United S ta tes G ermany T aiwa n J a pan F inland C hina T aiwa n S outh K orea J a pan J a pan S outh K orea United S ta tes C anada C anada Aus tralia C anada C hina C anada United S ta tes United S ta tes United S ta tes J a pan S weden Aus tralia S witzerland S outh K orea C hina C hina C anada United S ta tes J a pan India C anada United S ta tes C hina C anada United S ta tes R us s ia C hina United S ta tes S outh K orea United S ta tes United S ta tes United S ta tes United S ta tes C hina United S ta tes United S ta tes C hina United S ta tes C hina United S ta tes Norway United S ta tes C anada United S ta tes C anada United S ta tes United S ta tes S outh K orea United S ta tes United S ta tes United S ta tes United S ta tes G ermany S outh K orea S outh K orea C anada C urrent P rice 0. 57 27,250 55,000 0. 02 0. 04 0. 12 0. 35 0. 02 0. 23 2. 20 45. 29 0. 02 501 0. 01 0. 05 2 5. 98 0. 43 0. 00 0. 04 2. 00 0. 33 790 0. 08 0. 89 12. 20 67. 00 106,000 0. 04 8 5. 11 1. 59 6,780 210,000 4,650 17. 27 0. 11 0. 10 0. 38 1 7 1. 20 0. 05 1. 12 0. 01 686000. 00 238. 00 0. 06 4. 52 31900. 00 6 40. 98 0. 91 0 32650. 00 36. 00 36. 84 2. 93 35. 00 1. 50 1 0. 75 60. 19 14. 11 9550. 00 0 0. 00 0 0. 80 64. 90 2 0 107 0. 03 8. 80 1. 99 0. 03 9. 98 0. 10 8. 14 0 11 0 3. 54 0. 48 0. 14 0. 15 0. 10 28. 50 7,940 5,920 0. 01 US D Market C ap ($m) 15. 8 188. 6 31. 6 0.9 2.2 3.4 15. 7 4.8 19. 5 233. 4 2,491. 0 0.3 1,286. 1 0.9 3.2 90. 7 137. 8 27. 7 0.0 2.6 54. 2 17. 1 46. 0 3.6 42. 2 40. 8 310. 6 108. 3 51. 1 1,750. 3 278. 6 44. 2 1,604. 3 254. 3 81. 8 2,606. 3 7.7 4.6 15. 2 79. 7 969. 5 13. 5 1.4 19. 1 4.1 1,114. 9 2,019. 9 4.2 90. 1 539. 1 410. 6 5,263. 0 93. 8 25. 1 42. 7 26. 0 1,938. 6 244. 1 1,702. 3 46. 4 12. 1 104. 0 4,018. 8 355. 2 321. 3 4.9 0.0 0.0 34. 7 2,483. 3 49. 8 7.3 24, 804.2 0.7 224. 5 60. 9 0.1 107. 8 2.2 680. 3 9.4 988. 0 5.0 42. 0 22. 9 7.3 2.6 1.8 213. 6 100. 1 25. 4 0.4 24, 804.2 0.0 679.9 50. 4 US D L TM Total R ev ($m) 4. 1 92. 7 65. 3 0. 1 0. 1 8. 4 7. 1 0. 3 0. 0 389.9 222.5 6. 7 56. 4 7. 2 1. 3 73. 6 238.9 78. 1 NA 0. 7 NM 0. 8 14. 8 NM 5. 0 3. 3 126.5 77. 8 6. 0 219.1 183.6 46. 0 31. 1 108.9 55. 4 1, 406. 4 0. 0 1. 5 14. 6 74. 4 129.1 0. 9 11. 4 60. 7 0. 1 127.4 1, 733. 7 1. 2 40. 0 198.8 87. 0 470.7 18. 1 0. 7 93. 4 116.2 782.6 197.2 228.2 19. 6 0. 1 152.7 570.3 215.2 184.8 3. 3 2. 0 0. 1 0. 0 460.0 54. 3 0. 1 1, 047. 2 112.0 250.5 67. 0 2. 1 215.6 23. 5 811.2 0. 6 591.7 0. 0 23. 1 5. 6 0. 0 NM NA 53. 8 55. 0 10. 6 2. 7 1,733. 7 0. 0 151.1 55.0 US D L TM Total E B ITDA ($m) (4.4) 20. 1 4.1 (2.3) (2.0) (12. 6) (9.5) (1.9) (4.6) 30. 8 135.1 (6.6) 31. 6 2.4 NM 7.6 34. 9 10. 8 NM (2.6) (2.5) (3.7) (3.5) NM (6.9) (6.2) 21. 0 18. 4 (15. 6) NM NM 12. 6 11. 2 19. 6 (14. 9) 42. 6 (0.8) (5.0) 5.4 8.8 52. 0 (1.6) (0.0) (3.8) (3.1) 45. 2 265.6 (2.4) 0.8 53. 4 34. 4 305.9 (12. 0) (6.2) 11. 2 (27. 3) 199.2 (2.1) 124.6 0.5 (10. 8) 19. 9 261.0 28. 3 12. 0 0.9 (0.7) (0.1) (4.8) 200.5 11. 8 (2.6) 512.2 (13. 5) 85. 4 1.9 (1.1) (13. 3) 0.1 177.3 (0.5) 105.5 (1.1) (0.5) (5.3) (0.8) NM NM 16. 8 11. 9 (0.8) (2.1) 512. 2 -27.3 33.0 0. 8 E B ITDA % NM 21. 7% 6.3% NM NM NM NM NM NM 7.9% 60. 7% -98. 9% 56. 0% 34. 1% NM 10. 3% 14. 6% 13. 8% NM NM NM NM -23. 6% NM NM NM 16. 6% 23. 7% NM NM NM 27. 5% 36. 0% 18. 0% -26. 8% 3.0% NM NM 37. 2% 11. 9% 40. 3% NM -0.4% -6.3% NM 35. 4% 15. 3% NM 1.9% 26. 8% 39. 5% 65. 0% -66. 6% NM 12. 0% -23. 5% 25. 5% -1.0% 54. 6% 2.3% NM 13. 1% 45. 8% 13. 2% 6.5% 28. 0% -34. 8% -60. 5% NM 43. 6% 21. 7% NM 48. 9% -12. 0% 34. 1% 2.9% -50. 6% -6.2% 0.2% 21. 9% -78. 2% 17. 8% NM -2.4% -94. 5% NM NM NM 31. 2% 21. 6% -7.6% -78. 3% 65. 0% -98. 9% 8.2% 13. 2% TE V/L TM R evenue 5. 1x 1. 7x 0. 0x 19.2x 49.9x 2. 9x 17.6x 0. 6x 10.4x 0. 0x 21.6x 0. 0x 3. 6x 1. 2x 0. 8x 0. 5x 5. 8x 23.3x 3. 2x 6. 6x 11.9x 2. 3x 0. 6x 7. 8x 1. 1x 49.0x 2. 1x 1. 2x 0. 5x 2. 4x 0. 7x 1. 1x 7. 3x 13.3x 0. 0x 7. 8x 1. 5x 2. 6x 2. 5x 2. 7x 3. 2x 4. 6x 41.2x 0. 0x 0. 2x 2. 6x 0. 7x 0. 4x 2. 3x 0. 0x 0. 2x 1. 3x 1. 7x 1. 0x 1. 1x 4. 6x 4. 6x 0. 9x 26.2x 0. 2x 4. 6x 0. 5x 0. 2x 1. 2x 15.4x 1. 5x 4. 3x 3. 0x 2. 0x 49.9x 49.9x 0. 0x 6.1x 2. 1x TE V/L TM E B ITDA 7. 9x 0. 5x 8. 0x 17. 1x 38. 6x 0. 1x 11. 4x 5. 4x 3. 8x 13. 7x 2. 5x 11. 5x 16. 9x 1. 9x 9. 6x 18. 1x 22. 0x 9. 7x 9. 9x 8. 1x 0. 2x 10. 1x 0. 7x 0. 2x 0. 4x 10. 2x 26. 7x 3. 7x 10. 6x 4. 3x 5. 4x 8. 4x 9. 6x 9. 3x 38. 6x 38. 6x 0. 1x 9.3x 9. 6x E mployees 11 NA NA 3 4 53 69 9 46 2, 227 628 37 NA 22 NA NA 578 NA NA 7 3 NA NA 2 NA NA NA NA 108 1, 570 751 469 NA NA NA 3, 200 NA NA 72 NA 2, 271 NA NA 90 14 NA 2, 969 NA 405 NA 2, 426 3, 109 237 NA NA NA 3, 400 630 2, 096 NA 74 NA 3, 124 514 NA 11 33 NA NA 3, 197 183 7 6, 194 347 1, 626 310 16 700 NA 1, 469 NA 1, 189 4 NA 110 1 NA NA 239 NA NA NA 6, 194 1 901 437 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 ) Online Media companies lead financing: Two online media companies, Pandora (Internet Radio) and QuickPlay (Mobile Video), have secured the largest financing transactions thus far in July ($35 million and $12 million, respectively). Total capital raised so far in July is $114.2 million through 17 transactions, averaging $6.3 million per transaction. June closed with $180 million in financing on 36 transactions. The averages for the months of May (excluding the Facebook transaction) and June were $6.6 million and $4.9 million, respectively. Financing Activity Last Three Months 200.0 6.6 180.0 6.3 6.0 160.0 7.0 140.0 4.9 5.0 120.0 4.0 (US$m) 100.0 3.0 80.0 (US$m) 2.0 1.0 20.0 0.0 May-09 (excl FB) Jun-09 Total Average Jul-09 60.0 40.0 0.0 Figure 2. Financings, Last Three Months Source. Company reports (US$m) 100.0 150.0 200.0 250.0 50.0 0.0 Pandora raises $35 million: Pandora had the largest raise so far in July, securing a $35 million round. Recently, copyright holders reached agreement with a group of webcasters regarding royalty rates. Pandora, which derives most of its revenue from advertising, indicated that it would be joining the new agreement as well. For additional details on financings, see Figures 23 and 24 (at end of note). Figure 3. Capital Market Activity, Last Three Months Source. Company reports Financing & M/A Summary - Last Three Months Facebook People Media AdLink Internet Media Pandora Media StumbleUpon One Net ConnectEdu Sugar Inc. Tumri Boku Cyberplex QuickPlay Media Wimba Grab Networks Peer39 AdChina Causes OpenX Intent Media Imeem Goojet SAS Outspark EveryZing AdMeld Inc. beeTV SBNation I Love Rewards BlogHer Inc. WonderHill Gist blueKiwi Software SA Nokeena Metaversum Fuhu Inc. Azuki Systems Invodo Sense Networks Zoosk Gather OLX MojoPages TimeBridge DocuSign Taomee Animoto GameGround Medialets Nexage StyleCaster RingRevenue TweetDeck Crowdcast YuMe eRepublik ProtonMedia ClickFuel Newser LLC Inigral AdEx Media GROU.PS Resonate Networks Yapta OneTXT my6sense Mo'Minis Cliqset Lat49 Aloqa VoxPop Tributes.com CoTweet Glubble Picaboo Clikthrough AdWhirl TodaCell LiquidPlanner Loop'd Network People Capital MashLogic Jaxtr Jul-09 Jun-09 May-09 Page 4 Page 5 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 ($250.5 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 (16), raising $137.7 million (Figure 4). Capital Market Activity by Sector - Last Three Months 300.0 250.0 200.0 (US$m) 150.0 250.5 100.0 137.7 50.0 80.0 35.0 0.0 Online Dating Music Blog Social Networks Ad Network 31.0 29.0 Comment/Reputation 26.6 Virtual World 26.4 Video 25.8 Gaming 21.5 Mobile 19.3 Enterprise 18.9 Online Learning 17.5 Infrastructure 17.0 Collaboration 16.5 Media 13.3 Search 13.0 Mobile Payment 6.8 Aggregation 6.3 Widget 5.2 Vertical Communities 3.2 Microblog 1.0 Publishing 1.0 Mobile Ad 1 # companies 12 16 1 1 3 1 4 4 5 4 6 3 5 3 3 2 1 1 1 2 1 1 Figure 4. Capital Market Activity, by Sector, Last Three Months Source. Company reports Page 6 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). 120 Web 2.0 Index Price Performance 110 100 90 80 70 60 50 40 8/4/2008 9/1/2008 1/5/2009 2/2/2009 3/2/2009 6/8/2009 10/13/2008 10/27/2008 11/10/2008 11/24/2008 12/22/2008 7/21/2008 8/18/2008 9/15/2008 9/29/2008 1/19/2009 2/16/2009 3/16/2009 3/30/2009 4/13/2009 4/27/2009 5/11/2009 5/25/2009 6/22/2009 7/6/2009 7/20/2009 12/8/2008 ^COMP - Share Pricing Index: Web 2.0 X (Market Cap Weights) - Index Value Figure 5. Web 2.0 Price Performance Source. Capital IQ Page 7 A strong price performance week: Most of the companies in our universe had strong stock price performances over the past week (for stocks with prices greater than $1) (Figure 6), with only 8 companies showing negative returns on the week. CDC Corp. (NasdaqGS:CHIN.A) led the group with a 54.9% return, while GigaMedia Ltd. (NasdaqGS:GIGM) had the worst return, dropping 5.7% in the week. 1 Week P rice P erformance CDC Corp. Openw ave S y s tems Inc. K ings oft Co. Ltd. Northgate Technologies Limited Tencent Holdings Ltd. Perf ect World Co., Ltd. G amania Digital Entertainment Co., Ltd. Changy ou.com Limited S hutterf ly , Inc. Neteas e.com Inc. Chines e G amer International United Online Inc. S handa Interactive Entertainment Ltd. S ohu.com Inc. G ravity Co., Ltd V alueClick Inc. Webz en Inc. Modern Times G roup Mtg A B HanbitS oft, Inc. IA C/InterA ctiveCorp. Frogs ter Interactive Pictures A G NetDragon WebS oft, Inc. A ctoz S oft Co., Ltd. S K Communica tions Co., Ltd. Eolith Co. Ltd. Tree.Com, Inc. PNI Digital Media Inc. NEOWIZ G ames Corporation G iant Interactive G roup, Inc. Open Tex t Corp. The9 Limited S park Netw orks , Inc. Y edangOnline Corp. TheS treet.c om, Inc. L ookS ma rt, Ltd. Cy berplex Inc. DA DA S pA My riad G roup A G Y nk K orea Inc. X ING A G G igaMedia Ltd. 54.9% 27.9% 26.5% 23.9% 22.3% 21.6% 21.4% 20.4% 17.6% 17.1% 16.5% 16.3% 16.2% 10.1% 9.7% 9.5% 7.9% 7.7% 7.5% 7.2% 6.1% 5.8% 5.6% 5.5% 4.6% 4.1% 3.4% 2.9% 2.6% 2.3% 1.7% 0.8% 0.5% -0.3% -1.8% -2.5% -2.8% -3.8% -4.5% -5.4% -5.7% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% -10.0% Figure 6. 1-Week Price Performance Source. Capital IQ Page 8 INDUSTRY NEWS (PARTNERSHIPS, FINANCIAL RESULTS, NEW PRODUCTS) K ey Developments C ompany GigaMedia L td. (Nas daqGS : G IG M) Headline Notes G iga Media L td. has filed a S helf R egis tra tion in the amount of $15. 28 million. MOK O. mobi L imited has completed a contra ct to provide MO K O .mobi on the Ma xx W ireles s Alltel O pen P ortal pla tform. Alltel ha s a cus tomer ba s e of a round 15 million and is a s ubs idiary of V erizon W ireles s . T he s ervice is ba s ed on a us er-pays s ubs cription and premium a ctivity bus ines s model, where MO K O .mobi is paid a s ha re of thes e revenues from the mobile operator. T his contract follows other internationa l deployments of MOK O .mobi in recent months , including India, P hilippines a nd Mala ys ia . O pen T ext C orp. announced tha t C anopius ha s s elected the Open T ext E C M S uite to improve proces s es , reduce filing cos ts a nd, more importa ntly, s upport the implementation of electronic trading. R ea lizing the ever-increas ing ma rket demand for electronic tra ding, C a nopius unders ta nds the need for a document ma na gement a nd workflow s ys tem that would enable the orga nization to excha nge informa tion electronica lly with brokers and third pa rties around the world. F ollowing a rigorous evaluation proces s , C a nopius chos e the Open T ext E C M S uite, pa rticula rly for its bus ines s proces s ma na gement a nd document ma na gement capabilities . O ne of the key factors in the decis ion wa s tha t O pen T ext could offer a n integrated document ma na gement a nd bus ines s proces s mana gement s olution, reducing s ys tem integration concerns . E ffective J uly 16, 2009, J umpT V Inc. will change its T S X s tock ticker s ymbol to NL N from J T V . S a int Michael's Medical C enter ha s implemented O pen T ext C orp. 's connectivity s olution, Hos tE xplorer, to replace its exis ting termina l emula tor. Hos tE xplorer helps to provide organizations with a wa y of protecting their inves tment in lega cy data, while letting them benefit from the la tes t in des ktop a nd web-bas ed technologies . W ith Hos tE xplorer, S a int Michael's was a ble to repla ce its exis ting termina l emula tion s olution with lower a cquis ition cos ts , due to a flexible maintena nce contra ct, a nd a learning curve that elimina ted the need to retra in the entire orga niza tion. According to O pen T ext, a s ecure web-to-hos t a nd P C -to-hos t s olution, Hos tE xplorer fa cilitates acces s to bus ines s critica l informa tion s tored on legacy s ys tems , s uch as ma inframes and AS /400. It offers a low-ris k deployment s tra tegy and a n integration path to compa nies tha t are cons idering moving a wa y from their current emula tion s olutions . S handa Intera ctive E ntertainment Ltd. (Nas daqG S : S NDA) made a non binding indicative propos a l to a cquire a 51% s take in Hurra y! Holding C o. Ltd. (Na s daqG M: HR AY ) for $40. 3 million in ca s h on April 13, 2009. S ha nda Intera ctive E nterta inment agreed to a cquire 11. 2 million ADS a t $3. 6 per ADS . On April 19, 2009, S handa Interactive E ntertainment revis ed the offer price to $3.48 per ADS . T his changed the tota l dea l va lue to $39 million. S handa Intera ctive E ntertainment s igned a term s heet to a cquire a 51% s take in Hurray! Holding C o. L td. (Nas da qG M: HR AY ) on April 22, 2009. S ha nda Interactive E nterta inment L td. (Nas da qG S : S NDA) s igned a definitive a greement to a cquire a 51% s take in Hurray! Holding C o. L td. (Nas da qG M: HR AY ) for $39. 6 million in cas h on J une 8, 2009. S handa Intera ctive E ntertainment will commence a tender offer to a cquire 51% of the tota l outs ta nding ordina ry s ha res of Hurra y! on a fully diluted bas is a t a price of $4 per ADS or $0. 04 per ordina ry s hare. S ha nda Interactive E nterta inment will acquire 11.55 million ADS of Hurray Holdings . One ADS of Hurra y Holding repres ents 100 ordina ry s ha res of Hurra y Holdings . T he trans action will be fina nced through cas h in ha n G igaMedia Ltd. ha s filed a S helf R egis tration in the amount of $15. 28 million. Alltel C orporation; MOK O.mobi L imited MOK O .mobi Limited Announces Agreenment with Alltel C orpora tion (AS X: MK B ) Open Text C orp. (Nas daqGS : OTE X) C a nopius S elects O pen T ext E C M S uite NeuL ion Inc orporated (TS X: NL N) Open Text C orp. (Nas daqGS : OTE X) J umpT V Inc. will C ha nge its T icker to NL N from J T V S a int Micha el's Medical C enter Implements O pen T ext's C onnectivity S olution Hurray! Holding C o. L td. S handa Interactive E ntertainment L td. (Na s daqG S : (Nas daqG M: HR AY); S handa Interactive S NDA) completed the acquis ition of a 51% s take in E ntertainment L td. (Nas daqGS : S NDA) Hurra y! Holding C o. Ltd. (Na s daqG M: HR AY ). GeoS entric Oyj (HL S E : G E O1V) G eoS entric O yj Announces C hina Unicom C hoos es G yP S ii for 3G Mobile S ocial Networking in C hina G eoS entric Oyj announced its partners hip with C hina Unicom's S ha ngha i Unicom, to become the premier mobile s ocial network s olution for its new cons umer 3G S NS S ervice, UniS pa ce. T his roll out will expand to 130 +million s ubs cribers in C hina . As part of the G yP S ii community, UniS pa ce members ca n immedia tely s tart to crea te 'geota gged' content for s ha ring in 'real-time' with friends , family and the growing globa l community of G yP S ii members . T he content tha t UniS pace members create becomes true Internet-s earcha ble des tinations a nd experiences , ava ilable for a ll G yP S ii friends and communities acros s the globe to immediately find, s hare a nd comment on. G yP S ii us es va rious hands et location technologies -including G P S , A-G P S and cell ID-to a llow S ha nghai Unicom cus tomers to a utoma tically ta g their loca tion with photos , video, s ta tus updates a nd other informa tion, for s haring their experiences in rea l-time. Gamania Digital E ntertainment C o., L td. (GTS M: 6180) G a ma nia Digita l E nterta inment C o. Ltd. R eports S a les G ama nia Digita l E ntertainment C o. L td. reported s a les res ults for the month a nd s ix months ended J une 2009. T he company s aw revenue R es ults for the Month and S ix Months E nded J une 2009 ; grow 68.7% year on yea r in J une to T W D 470 million, due to game fans ' s upport for the firm's new product, Atlantica , and to the popula r online ga me ca lled L inea ge. P rovides S a les G uida nce for the T hird Quarter of 2009 F or the s ix months period, the compa ny recorded cons olida ted s ales of T W D 2. 69 billion, up 42. 10% from a year ea rlier In the third qua rter of 2009, the compa ny is likely to s ee revenues exceeding the T W D 1. 37 billion recorded in the firs t qua rter. Giant Interactive G roup, Inc . (NYS E : GA) G ia nt Intera ctive G roup Inc. to La unch New E xpa ns ion P a ck for ZT Online G iant Interactive G roup Inc. is s cheduled to la unch S heng E r Y u Nv, the bigges t expans ion pa ck for its popular game ZT O nline, on J uly 17, 2009. T he new ZT O nline expa ns ion vers ion will introduce dozens of a dditiona l fea tures s uch a s ga me-pla ying directions a nd tips , bringing thrilling experience to gamers . G ia nt Interactive will beef up product promotion a fter la unching the new expa ns ion vers ion of ZT O nline. T he online ga me developer wa s dedica ted to the R & D of the new expa ns ion pack in the firs t quarter. G ia nt Intera ctive is s et to roll out four online games current year, of which three are mas s ively multipla yer online role playing ga mes (MMOR P G s ) a nd the remainder one is a webga me. Digita lT own Inc. reported ea rnings res ults for the firs t qua rter ending May 31, 2009. Net los s for the quarter wa s $419, 954, up from $905, 003 for the s a me quarter in the previous year (2007-2008). P NI Digital Media Inc. announced tha t it has tea med up with W al-Ma rt C a na da C orp. to offer a ra nge of printing s ervices a nd products to fit the needs of s mall bus ines s es . P art of the W alma rt P hoto C entre loca ted a t www. wa lmartphotocentre. ca, B us ines s P rinting ena bles s ma ll bus ines s owners a nd cons umers to ea s ily order ma rketing a nd bus ines s materia ls us ing des igns provided by P NI Digital Media . P roducts include bus ines s ca rds , notepa ds , letterhea ds , envelopes , fliers and pos ters . W almart B us ines s P rinting a ls o offers s ervices s uch as color, black & white copy s ervices and coil-bound printing s ervices . F urthermore, the P NI-powered B us ines s P rinting s ervice offers a broa d ra nge of promotional products s uch a s cus tomized calendars , fridge magnets , golf ba lls and mugs upon which companies can print their logos and other information on. E a ch product is a vaila ble in a ra nge of s tanda rd s izes , a nd all orders are ava ilable for home or office delivery, or pick up at any of W almart's 312 s tores acros s C a na da. W ith more than 100 new des ign s ets , the W a lmart P hoto C entre ca n offer print a nd bra nding s olutions for a broa d ra nge of markets from Hea lth C a re to B ath a nd B eauty to R ea l E s ta te. Digita lT own Inc. R eports E a rnings R es ults for the F irs t Quarter E nding Ma y 31, 2009 P NI Digital Media Inc . (TS XV: P N); Wal- P NI Digita l Media a nd W a l-Mart C anada T eam Up to Offer Online P rinting S ervices for S mall B us ines s es Mart C anada C orp. DigitalTown, Inc . (OTC B B : DGTW) DigitalP os t Interac tive, Inc . (OTC B B : DG L P ) Digita lP os t Interactive Inc. to Develop R ebra nd of F a mily Digita lP os t Interactive Inc. s igned two contra cts during the month of J uly; a rebra nd of their family webs ite pla tform na med F a milyDrive. com W ebs ite P la tform and B as eball P hotogra phy S ite a nd a ls o the development of a s pecia lized ba s eba ll photogra phy webs ite. Figure 7. Key Developments Source. Capital IQ Page 9 VALUATION Online Gaming companies lead market-cap charts: Thirteen companies in our W eb 2.0 universe top US$1 billion in market capitalization (Figure 8). Fifty-nine of the 92 companies have market caps under US$100 million, with 28 under US$10 million. Online gaming companies dominate the top of the list, led by Tencent Holdings with a market cap over US$20 billion. Marke t C ap (US D m) Tenc ent Holdings L td. Netea s e. c om Inc . S ha nda Intera c tiv e E nterta inment IA C/InterA c tiv eCorp. Cha ngy ou. c om L imited S ohu. c om Inc . Modern Times G roup Mtg A B Open T ex t Corp. G ia nt Intera c tiv e G roup, Inc . Perf ec t W orld Co. , L td. G r ee, Inc . Chines e G a mer Interna tiona l Mix i, Inc . V a lueClic k Inc . K ings of t Co. L td. United Online Inc . NEOW IZ G a mes Corpora tion NetDra gon W ebS of t, Inc . S hutterf ly , Inc . S K Communic a tions Co. , L td. G a ma nia Digita l Enterta inment Co. , G iga Media L td. G ungHo Online Enter ta inment, Inc . Openw a v e S y s tems Inc . CDC Corp. The9 L imited X ING A G A c toz S of t Co. , L td. DA DA S pA G a meOn Co L td. Tr ee. Com, Inc . OA O R B C Inf or ma tion S y s tems Y eda ngOnline Corp. NeuL ion Inc orpora ted Cy berplex Inc . My ria d G roup A G Ha nbitS of t, Inc . K A B Dis tribution Inc . T heS tr eet. c om, Inc . Digita lTow n, Inc . G eoS entric Oy j S pa rk Netw orks , Inc . PNI Digita l Media Inc . E olith Co. L td. G r a v ity Co. , L td Ngi G roup Inc . Fluid Mus ic Ca na da , Inc . W ebz en Inc . Fr ogs ter Intera c tiv e Pic tur es A G S oc ia lw is e, Inc . A Q Intera c tiv e, Inc . DX N Holdings B hd Northga te Tec hnologies L imited Y nk K orea Inc . NeX plore Corpora tion W iz z a rd S of tw a re Corpora tion B roa dW ebA s ia Inc . L ookS ma rt, L td. Dolphin Digita l Media , Inc . A c c eleriz e New Media , Inc . B ey ond Commer c e, Inc . J umbuc k Enterta inment Pty L td. L ingo Media Corpora tion Quepa s a Corp. UOMO Media , Inc IA S Energy , Inc . W orlds . c om Inc . S pec tr umDNA , Inc . V OIS , Inc . S NA P Intera c tiv e, Inc . B right Things plc is eemedia Inc . MOK O. mobi L imited Ma gnitude Inf orma tion S y s tems Inc . Ex tens ions , Inc . B eta w a v e Corpora tion CornerW orld Corpora tion W ooz y F ly , Inc . Digita lPos t Intera c tiv e, Inc . B igs tring Corp. Unis erv e Communic a tions Corp. W y nds torm Corpora tion L iv eW orld Inc . CL ICK ER Inc . A s s oc ia ted Media Holdings Inc . The Pa rent Compa ny Z ipL oc a l Inc . China G a tew a y Corpora tion Tota l S port Online A S S oc ia l Media V enur es , Inc . S NM G loba l Holdings Dibz Interna tiona l, Inc . 0 2606. 3 2491. 0 2483. 3 1286. 1 680. 3 539. 1 410. 6 355. 2 321. 3 310. 6 278. 6 254. 3 244. 1 233. 4 224. 5 213. 6 188. 6 137. 8 108. 3 107. 8 104. 0 100. 1 93. 8 90. 7 90. 1 81. 8 79. 7 60. 9 54. 2 51. 1 49. 8 46. 4 46. 0 44. 2 42. 7 42. 2 42. 0 40. 8 34. 7 31. 6 27. 7 26. 0 25. 4 25. 1 22. 9 19. 5 19. 1 17. 1 15. 8 15. 7 15. 2 13. 5 12. 1 9. 4 7. 7 7. 3 7. 3 5. 0 4. 9 4. 8 4. 6 4. 2 4. 1 3. 6 3. 4 3. 2 2. 6 2. 6 2. 2 2. 2 1. 8 1. 4 0. 9 0. 9 0. 7 0. 4 0. 3 0. 1 0. 0 0. 0 0. 0 500 1114. 9 988. 0 969. 5 2019. 9 1938. 6 1750. 3 1702. 3 1604. 3 1, 000 1, 500 2, 000 2, 500 3, 000 3, 500 4, 000 Figure 8. Market Cap Ranking Source. Capital IQ TEV/Revenue (LTM) averages 6.1x: The overall average TEV/Revenue (LTM) multiple for our group is 6.1x (versus 5.3x last week) (Figure 9). Two companies trade at more than 40x revenue – Bigstring Corp. (OTCBB:BSGC) at 49.9x, closely followed by Gree (TSE:3632) at 49.0x. The median is only 2.3x. Note that we exclude multiples greater than 50x. Twentynine companies have multiples under 1.5x. Page 10 T E V/L T M R ev enue (x) 60. 0 49.9 49.0 50. 0 41 .2 40. 0 30. 0 26.2 23.3 21 .6 1 9.2 20. 0 1 0.4 1 .9 1 1 7.6 15.4 1 3.3 10. 0 A v era ge, 6. 1 6.6 7.3 7.8 7.8 5.1 5.8 3.6 4.3 4.6 4.6 4.6 4.6 2.6 2.6 2.7 2.9 3.0 3.2 3.2 3.2 .7 1 .3 1 1 1.7 1 2.0 2.12.3 2.3 2.4 2.5 .5 .5 .2 .2 .0 1 1 1 1.2 1 1 .1 .1 .1 0.2 0.2 0.2 0.4 0.5 0.5 0.5 0.6 0.6 0.6 0.7 0.7 0.8 0.9 1 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 11.9x (versus. 12.7x last week). On a geographic basis, the United States has the most companies (39), trading at an average of 4.8x revenue (versus 5.8x last week) (Figure 11). Ten of the companies are Canadian (average 4.8x revenue). (x) XTRA OTCNO OTCBB OTCPK NasdaqGM GTSM NasdaqGS OSE SEHK KOSE HLSE TSE AMEX KLSE TSXV SWX ASX RTS OM TSX CM BSE AIM (x) Germany Unis erve Communications Corp. Northgate T echnologies Limited T he Parent Company Perfect World Co., Ltd. T ree.Com, Inc. IAC/InterActiveCorp. DXN Holdings Bhd GameOn Co Ltd. ZipLocal Inc. CDC Corp. J umbuck Entertainment Pty Ltd. Openwave S ys tems Inc. DADA S pA Spark Networks , Inc. SNAP Interactive, Inc. SNM Global Holdings GigaMedia Ltd. KAB Dis tribution Inc. Cyberplex Inc. HanbitS oft, Inc. United Online Inc. Shutterfly, Inc. Modern Times Group Mtg AB ValueClick Inc. Actoz Soft Co., Ltd. SK Communications Co., Ltd. YedangOnline Corp. GungHo Online Entertainment, Inc. Gamania Digital Entertainment Co., Ltd. PNI Digital Media Inc. is eemedia Inc. Myriad Group AG Open Text Corp. MOKO.mobi Limited NEOWIZ Games Corporation Beyond Commerce, Inc. XING AG NetDragon WebSoft, Inc. Ynk Korea Inc. Eolith Co. Ltd. CornerWorld Corporation Wizzard Software Corporation Social Media Venures , Inc. NeuLion Incorporated T otal Sport Online AS Sohu.com Inc. Accelerize New Media, Inc. DigitalPos t Interactive, Inc. Fluid Mus ic Canada, Inc. Kings oft Co. Ltd. GeoSentric Oyj Mixi, Inc. Changyou.com Limited Frogs ter Interactive Pictures AG Lingo Media Corporation UOMO Media, Inc Bright Things plc As s ociated Media Holdings Inc. Chines e Gamer International Dolphin Digital Media, Inc. Tencent Holdings Ltd. NeXplore Corporation Gree, Inc. Bigs tring Corp. 0. 0 Average TEV/LTM Revenue - By Exchange 20.0 17.6 18.0 16.0 12.2 14.0 12.0 12.0 11.9 10.0 11.59.5 8.0 7.8 7.5 6.0 4.64.6 3.4 2.6 2.5 2.1 2.1 1.7 1.5 4.0 2.1 0.8 0.5 2.0 0.5 0.2 0.0 0.0 Average TEV/LTM Revenue - By Country 20.0 17.6 18.0 16.0 14.0 12.0 9.9 10.0 8.3 7.8 7.5 8.0 7.5 7.3 6.0 4.8 4.6 4.0 2.5 2.1 1.7 1.5 2.0 0.8 0.6 0.5 0.2 0.0 0.0 Finland Canada Malaysia Switzerland Hong Kong Taiwan Australia Norway Sweden Russia 1 United United Japan China South India 1 Italy 1 # Companies 1 3 2 19 5 11 1 2 1 4 4 2 1 6 14 1 2 1 1 1 5 1 1 # Companies 1 6 3 1 2 10 39 10 1 1 8 2 1 1 1 Figures 10 & 11. TEV/Revenue Ranking (Exchange, Country) Source. Capital IQ TEV/EBITDA (LTM) averages 9.3x: The average multiple for the 35 companies with positive EBITDA (and multiples under 100x) is 9.3x LTM EBITDA (vs. 9.2x last week), led by Chinese Gamer International (3083-GTSM) 38.6x multiple (Figure 12). Thirteen of the companies have EBITDA multiples under 7x. The median multiple is 8.8x (vs. 8.0x last week). Page 11 T E V/L T M E B IT DA (x) 45. 0 40. 0 35. 0 30. 0 25. 0 20. 0 15. 0 A v era ge, 9. 3 10. 0 5. 0 0. 0 #NU M! 0. 0 0. 1 C LIC K E R Inc . 0. 2 Ngi G roup Inc . 0. 2 O AO R B C Informa tion S y s tems 0. 4 S handa Intera ctive E nterta inment L td. 0. 5 AQ Intera ctive, Inc . 0. 7 P erfect World C o., Ltd. 1. 9 J umbuck E nterta inment P ty Ltd. 2. 5 3. 7 3. 8 4. 3 5. 4 5. 4 7. 9 8. 0 8. 1 8. 4 9. 3 9. 6 9. 6 9. 7 13. 7 11. 4 11. 5 9. 9 10. 1 10. 2 10. 6 16. 9 17. 1 18. 1 22. 0 26. 7 38. 6 NE O WIZ G a mes C orporation G ungHo O nline E nterta inment, Inc . G a mania Digital E nterta inment C o., Ltd. 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 1.9x (vs. 2.0x last week). On a geographic basis, the United States has the most companies (39), trading at an average of 7.0x EBITDA (Figure 14). Ten of the companies are Canadian (average 10.3x EBITDA). Average TEV/LTM EBITDA - By Exchange 30.0 26.2 25.0 20.0 (x) (x) 30.0 25.0 20.0 Average TEV/LTM EBITDA - By Country 26.2 15.0 10.0 5.0 GTSM 0.0 13.513.1 11.5 15.0 10.0 13.5 10.3 9.7 9.6 9.2 8.0 7.3 7.0 5.4 3.8 1.9 Germany China Japan Canada Hong Kong United States Malaysia Taiwan South Korea Italy Australia Sweden 0.2 Russia 1 0.0 Switzerland 1 10.5 9.7 9.6 8.8 6.3 5.4 4.3 3.8 1.9 1.9 0.2 OTCBB AMEX RTS KLSE ASX 0.0 0.0 SWX BSE 5.0 0.0 NasdaqGS KOSE SEHK OSE TSE OM TSX # Companies 2 6 3 1 4 1 XTRA 2 14 5 CM 1 2 1 19 2 1 1 1 # Companies 3 8 10 1 2 10 1 6 39 1 1 2 Figures 13 & 14. TEV/EBITDA Ranking (Exchange, Country) Source. Capital IQ S K C ommunica tions C o. , L td. Modern T imes G roup Mtg AB C hines e G amer Interna tional NetDragon WebS oft, Inc . C hangy ou.c om L imited DXN Holdings B hd G ameO n C o L td. S NAP Interac tive, Inc . U nited O nline Inc . C DC C orp. O pen T ex t C orp. S pa rk Network s , Inc . V alueC lic k Inc . C yberplex Inc . IAC /InterAc tiveC orp. S ohu. c om Inc . Y edangO nline C orp. XING AG K AB Dis tribution Inc. S hutterfly, Inc. Ac toz S oft C o. , L td. K ings oft C o. L td. DADA S pA Mix i, Inc . Page 12 P/E (LTM) averages 11.0x: The average multiple for the 30 companies with positive earnings (and multiples under 100x) is 11.0x LTM EPS (same as last week), led Tencent Holdings Ltd (SEHK-700) 70.3x multiple (Figure 15). Eleven of the companies have P/E multiples under 10x. The median is just 14.3x. P /E L T M (x) 80. 0 70. 3 70. 0 60. 0 50. 0 40. 0 30. 0 20. 0 A v era ge, 11. 0 10. 0 1. 9 Giant Interactive Group, Inc. 0. 0 2. 5 T he9 Limited 2. 9 Perfect World Co., Ltd. 3. 0 Neteas e.com Inc. 3. 2 Shanda Interactive E ntertainment Ltd. 4. 9 6. 0 6. 1 7. 4 8. 7 14. 7 15. 3 12. 5 14. 0 10. 6 11. 0 17. 0 19. 9 30. 2 28. 1 29. 3 21. 8 22. 2 23. 0 47. 8 49. 6 54. 8 32. 9 NEOWIZ G ames Corporation G amania Digital E ntertainment Co., Ltd. J umbuck E ntertainment Pty Ltd. Modern Times Group Mtg AB Chines e Gamer International DXN Holdings Bhd Changyou.com Limited SNAP Interactive, Inc. G ameOn Co Ltd. Open Text Corp. XING AG NetDragon WebSoft, 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 27.6x. On a geographic basis, the United States has the most companies (39), trading at an average of 23.2x earnings (Figure 17). Ten of the companies are Canadian (average 19.5x EPS). Average P/E - By Exchange 45.0 41.3 40.0 35.0 35.6 33.6 30.0 27.6 25.0 23.0 22.7 20.0 19.9 15.0 15.3 11.8 8.7 6.1 10.0 5.0 0.0 OTCBB GTSM NasdaqGS KOSE SEHK TSE CM AMEX XTRA TSX ASX 40.0 35.0 30.0 25.0 (x) 20.0 15.0 10.0 33.6 31.2 Average P/E - By Country (x) 23.2 23.0 19.9 19.5 17.0 15.1 6.1 6.0 4.9 0.0 Germany Canada Australia Malaysia 1 Switzerland 1 6.0 4.9 OM KLSE 1.9 NasdaqGM 0.0 NYSE 5.0 0.0 Japan United States Taiwan South Korea China Italy Sweden # Companies 2 3 5 19 1 6 2 2 14 4 2 1 1 1 5 # Companies 6 3 39 1 2 10 8 10 2 1 Figures 16 & 17. P/E Ranking (Exchange, Country) Source. Capital IQ Tencent Holdings Ltd. IAC/InterActiveCorp. GigaMedia Ltd. Worlds .com Inc. Cyberplex Inc. S ohu.com Inc. S park Networks , Inc. YedangOnline Corp. Kings oft Co. Ltd. DADA SpA Actoz S oft Co., Ltd. Mixi, Inc. Page 13 UPCOMING EVENTS E arnings C alendar C ompany C hangyou. com L imited (Nas daqG S : C Y O U) S ohu. com Inc. (Nas daqG S : S O HU) IAC /InterActiveC orp. (Nas daqG S : IAC I) S hutterfly, Inc. (Nas daqG S : S F L Y ) T heS treet. com, Inc. (Nas daqG M: T S C M) O penwave S ys tems Inc. (Nas daqG S : O P W V ) T ree. C om, Inc. (Nas daqG M: T R E E ) V alueC lick Inc. (Nas daqG S : V C L K ) O pen T ext C orp. (Nas daqG S : O T E X) Figure 18. Earnings Calendar Source. Company reports Date & Time Monday, J uly 27, 2009 7: 00 AM (E DT ) Monday, J uly 27, 2009 8: 30 AM (E DT ) W ednes day, J uly 29, 2009 11: 00 AM (E DT ) W ednes day, J uly 29, 2009 5: 00 P M (E DT ) W ednes day, J uly 29, 2009 4: 30 P M (E DT ) T hurs day, J uly 30, 2009 2: 00 P M (P DT ) T hurs day, J uly 30, 2009 11: 00 AM (E DT ) T ues day, Augus t 04, 2009 4: 30 P M (E DT ) T hurs day, Augus t 20, 2009 5: 00 P M (E DT ) Quarter Q 2 2009 Q 2 2009 Q 2 2009 Q 2 2009 Q 2 2009 Q 4 2009 Q 2 2009 Q 2 2009 Q 4 2009 C onf C all Details 1-866-202-3048 1-866-730-5764 NA 913-312-0641 NA 877-941-8416 877-723-9523 818-575-4677 416-644-3415 Page 14 C omparable C ompany Analys is > W eb 2 .0 P ric e P erformanc e C ompa ny Na me Acce le riz e N ew Me dia, Inc. Actoz S of t C o., L td. AQ Inte ractive , Inc. As s ocia ted Media H oldings Inc. B igstring Corp. B e tawave Corpora tion B e yond Commerce, Inc. B right T hings plc B roa dW ebAs ia Inc. C DC C orp. C ha ngyou. com Limite d C hina G ate wa y C orpora tion C hine s e G amer International C LIC K E R Inc. 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 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. K A B Dis tribution 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 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 euLion Incorporate d 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 N I D igital Media 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 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 oozyF ly, 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 US D C AD E UR MY R US D US D US D US D KR W 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 HKD C AD US D US D US D JPY SE K AU D C HF KR W HKD US D C AD US D JPY IN R US D US D US D C AD US D US D US D US D KR W US D US D US D US D US D US D US D HKD US D US D US D N OK US D C AD US D US D US D US D US D US D US D US D US D E UR KR W KR W C AD T ic ker A CL Z A 052 790 3 838 A S MH B S GC B W AV B Y OC A IM:B G T B W BA C H IN .A C Y OU CGWY G TS M:3 083 C L KZ 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 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:K AB 3 888 T S XV :LM L VW D L OOK M AG Y 2 121 MT G B MKB MYR N A 095 660 7 77 NT E S T S X:NL N N XP C 2 497 5 900 57 O TE X O PW V P W RD T S XV :P N Q PSA R BC I S NDA S F LY A 066 270 S T VI S NM N S MVI S CL W S OH U L OV S P XA 7 00 K IDS .Q NC TY T S CM T OS O TR EE T S XV :U S S UNTD U OMO V CL K V OIS W ZE N W ZE W DDD W ZY F 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 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 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 S E HK T S XV OT C P K N as da qG M OT C B B TSE OM AS X SWX KO SE S E HK N as da qG S TSX 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 OT C B B 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 AM E X OT C B B S E HK OT C P K N as da qG S N as da qG M OT C N O N as da qG M T S XV N as da qG S OT C B B N as da qG S OT C B B N as da qG M AM E X OT C B B OT C B B OT C P K XT R A KO SE KO SE T S XV U S D Ma rket C ap ($m) 1 5.8 18 8.6 3 1.6 0 .9 2 .2 3 .4 1 5.7 4 .8 1 9.5 23 3.4 2,4 91. 0 0 .3 1,2 86. 1 0 .9 3 .2 9 0.7 13 7.8 2 7.7 0 .0 2 .6 5 4.2 1 7.1 4 6.0 3 .6 4 2.2 4 0.8 31 0.6 10 8.3 5 1.1 1,7 50. 3 27 8.6 4 4.2 1,6 04. 3 25 4.3 8 1.8 2,6 06. 3 7 .7 4 .6 1 5.2 7 9.7 96 9.5 1 3.5 1 .4 1 9.1 4 .1 1,1 14. 9 2,0 19. 9 4 .2 9 0.1 53 9.1 41 0.6 5,2 63. 0 9 3.8 2 5.1 4 2.7 2 6.0 1,9 38. 6 24 4.1 1,7 02. 3 4 6.4 1 2.1 10 4.0 4,0 18. 8 35 5.2 32 1.3 4 .9 0 .0 0 .0 3 4.7 2,4 83. 3 4 9.8 7 .3 24, 804 .2 0 .7 22 4.5 6 0.9 0 .1 10 7.8 2 .2 68 0.3 9 .4 98 8.0 5 .0 4 2.0 2 2.9 7 .3 2 .6 1 .8 21 3.6 10 0.1 2 5.4 0 .4 C urrent Pric e 0.5 7 27 ,25 0 55 ,00 0 0.0 2 0.0 4 0.1 2 0.3 5 0.0 2 0.2 3 2.2 0 4 5.2 9 0.0 2 50 1.0 0 0.0 1 0.0 5 1.5 5 5.9 8 0.4 3 0.0 0 0.0 4 2.0 0 0.3 3 79 0.0 0 0.0 8 0.8 9 1 2.2 0 6 7.0 0 106 ,00 0 0.0 4 7.7 5 5.1 1 1.5 9 6 ,78 0 210 ,00 0 4 ,65 0 1 7.2 7 0.1 1 0.1 0 0.3 8 1 7 1.2 0 0.0 5 1.1 2 0.0 1 68 6,00 0.0 0 23 8.0 0 0.0 6 4.5 2 3 1,90 0.0 0 6.0 2 4 0.9 8 0.9 1 0.4 5 3 2,65 0.0 0 3 6.0 0 3 6.8 4 2.9 3 3 5.0 0 1.5 0 0.9 5 0.7 5 6 0.1 9 1 4.1 1 9,55 0.0 0 0 0.0 0 0.3 2 0.8 0 6 4.9 0 2 0 10 7 0.0 3 8.8 0 1.9 9 0.0 3 9.9 8 0.1 0 8.1 4 0.1 1 1 1.3 6 0.0 1 3.5 4 0.4 8 0.1 4 0.1 5 0.1 0 2 8.5 0 7 ,94 0 5 ,92 0 0.0 1 1 Wk 3.6 % 5.6 % -6.0 % 1 233 .3% 5.0 % 43.8 % -12. 8% 15.4 % -22. 8% 54.9 % 20.4 % -25. 0% 16.5 % -29. 4% -16. 7% -2.5 % -2.8 % 21.4 % -90. 0% -12. 5% -2.4 % -26. 7% 4.6 % -60. 0% 36.9 % 6.1 % 21.4 % -4.1 % 0.0 % 2.6 % -5.7 % 9.7 % -1.7 % -3.0 % 7.5 % 7.2 % -31. 3% 0.0 % 0.0 % 0.0 % 26.5 % 20.0 % -18. 2% -1.8 % -3.2 % 10.3 % 7.7 % -14. 3% -3.8 % 2.9 % 5.8 % 17.1 % 30.0 % -22. 4% -1.1 % 23.9 % 2.3 % 27.9 % 21.6 % 3.4 % -5.0 % -18. 7% 16.2 % 17.6 % 5.5 % 0.0 % -77. 1% 28.0 % 0.0 % 10.1 % 0.8 % -25. 0% 22.3 % 40.0 % 1.7 % -0.3 % 0.0 % 4.1 % 42.9 % 16.3 % 4.8 % 9.5 % -40. 0% 7.9 % -5.9 % -6.7 % 0.0 % 1 50. 0% -5.4 % 0.5 % -4.5 % 0.0 % 1 233 .3% -90. 0% 16.6% 2.0 % 1 Mth 4 2.5 % 0.2% -28. 5% 12 33. 3% 4 0.0 % 1 5.0 % -58. 5% 0.0% -22. 8% 4 5.7 % 1 7.5 % 6 50.0 % 5 7.8 % 3 28.6 % -16. 7% -11. 9% -1.8 % 1 1.8 % -90. 0% 0.0% -20. 0% -34. 0% -10. 2% -46. 7% 4 1.3 % 5 4.8 % 3 2.7 % -2.2 % 0.0% -7.4 % -7.1 % 4 3.2 % 1 2.3 % -14. 2% 0.9% 5.0% -50. 0% 3 3.3 % -9.5 % 1.6% 2 8.6 % 1 4.3 % -55. 0% -15. 2% -37. 9% 4 1.7 % 1 5.5 % -20. 0% -9.6 % -7.5 % 2 2.1 % 1 5.9 % 3 0.0 % -35. 7% -15. 9% -6.1 % 3.6% 2 3.6 % 1 9.9 % NM 5 5.7 % -44. 4% 9.3% 2.2% -18. 7% -35. 7% 6.7% 31 00. 0% 1 4.3 % 0.5% -0.8 % -34. 8% 1 7.7 % 1 2.0 % -12. 2% -10. 0% 0.0% 1 1.3 % 4 2.9 % 2 9.4 % -35. 3% 0.9% 7 1.4 % -1.7 % -26. 2% 5 5.6 % NM -80. 4% -10. 9% -8.5 % -1.3 % 0.0% 31 00. 0% -90. 0% 60.9% 0.4% 3 Mth 16 .3% 86 .0% 17 .0% 132 8.6 % 20 6.6% -1 7.9% -7 7.5% -1 4.3% -5 4.9% 91 .3% 82 .9% 65 0.0% 17 4.5% 14 0.0% -6 4.3% 29 .2% 21 .2% 41 .7% -9 0.0% 75 .0% -2 0.0% -3 4.0% 17 .9% -4 6.7% 15 4.3% 44 .4% 11 8.2% 15 .0% 0 .0% -3 .0% -2 4.3% 63 .9% 24 .4% 71 .7% 0 .6% 6 .0% -5 4.2% 0 .0% -1 7.4% 8 .6% 82 .6% 20 .0% -5 5.0% -1 0.4% -4 0.0% 82 .0% 45 .1% -2 9.4% 8 .9% 8 .3% 36 .8% 35 .7% 75 .0% -3 5.7% 18 .8% -1 8.1% 7 .6% 14 2.1% 11 9.0% -3 .2% 6 .7% 50 .0% 27 .4% 30 .0% -3 .5% -3 5.7% 70 0.0% 11 3.3% 12 8.6% 39 .2% 8 .0% 0 .0% 66 .4% 13 3.3% -6 .5% -1 3.1% 0 .0% 66 .6% 15 0.0% 69 .2% 37 .5% 15 .1% 10 0.0% 32 .1% -1 8.6% -1 7.6% 0 .0% -4 1.2% 6 .3% -1 7.6% 30 .7% 0 .0% 132 8.6 % -9 0.0% 56.5% 16 .7% 6 Mth 62 .9% 17 3.9% 94 .3% 56 6.7% 14 0.0% -4 7.7 % -6 3.3 % 20 .0% -7 7.2 % 14 4.4% NM 65 0.0% 45 4.8% -6 0.0 % -8 0.0 % 34 2.9% -8.0% 19 .7% -9 8.0 % 45 .8% -2 5.9 % -5 2.9 % 51 .9% -8 4.6 % 18 2.5% 16 4.6% 21 0.9% -6.2% 0 .0% 36 .0% -2 2.1 % 17 4.1% 22 .8% 10 6.9% 52 .0% 15 .1% 42 3.8% 25 .0% -2 0.8 % 77 .5% 15 5.4% 21 .2% 50 .0% -1 3.2 % -6 6.7 % 21 .8% 76 .6% 20 .0% -2 4.7 % 22 3.9% 11 8.1% 13 2.8% 20 3.3% -4 7.1 % -3 6.4 % -2 2.7 % 17 .6% 37 2.6% 13 3.5% -7.4% -5 1.3 % 31 .6% 11 5.6% 12 1.9% 36 .4% -5 5.9 % 30 0.0% -6 9.2 % 2 .6% 61 .2% -1.2% -2 1.1 % 13 0.5% -3 0.0 % -4 5.1 % -3 5.0 % -2 5.0 % 14 4.0% 81 .8% 33 .4% 46 .7% 90 .3% 50 .0% 15 2.8% -3 5.1 % -6.7% 0 .0% -1 6.7 % 0 .0% 16 .8% 48 .0% -7 5.0 % 65 0.0% -9 8.0 % 67.0% 22 .8% 1 Yr -12 .3% 2 44. 5% -64 .1% NM -58 .0% -50 .0% -89 .3% 0.0 % -84 .7% -14 .7% NM -50 .0% 5 23. 9% -98 .6% -91 .8% 1 71. 9% -45 .0% 10.4 % -98 .0% -61 .1% -33 .3% NM -8. 1% NM -49 .1% 1 34. 6% 1 45. 9% -23 .7% -33 .3% -24 .1% -58 .7% 63.9 % NM 32.0 % 18.2 % -51 .4% -45 .0% -41 .2% -33 .3% -18 .2% 1 04. 1% -33 .0% -77 .5% -63 .2% -52 .9% 7.9 % -34 .2% 46.3 % -54 .8% 1 57. 8% -35 .5% 79.2 % NM -30 .8% -58 .0% -87 .9% 25.8 % 1 18. 7% 31.3 % -53 .1% -53 .9% -90 .5% 1 44. 8% 23.8 % -33 .2% -25 .0% -99 .9% 28.0 % -70 .4% -21 .6% -40 .8% NM 59.7 % -98 .4% -62 .1% -68 .2% -40 .0% NM -44 .4% -26 .5% -71 .8% 2.7 % -85 .0% 29.7 % -71 .9% -41 .7% NM -66 .7% -6. 6% -17 .9% -42 .8% -95 .5% 5 23. 9% -99 .9% -9. 3% -33 .3% 52 We ek -18. 6% -24. 3% -65. 4% -60. 0% -61. 8% -66. 3% -89. 4% -40. 0% -92. 1% -30. 6% -3.3 % -57. 1% -3.5 % -98. 6% -93. 7% -22. 1% -52. 0% -9.6 % -98. 0% -70. 6% -67. 2% -70. 8% -31. 9% -92. 1% -55. 3% -4.3 % 0.0 % -35. 2% -42. 9% -30. 6% -62. 1% -20. 1% -12. 1% -25. 0% -30. 0% -65. 8% -68. 6% -60. 0% -38. 7% -30. 8% -1.6 % -37. 5% -85. 9% -66. 8% -70. 0% -25. 5% -39. 1% -40. 0% -55. 7% -24. 0% -39. 7% 2.2 % -16. 5% -69. 0% -74. 4% -88. 6% -5.8 % -2.3 % 3.2 % -58. 6% -72. 5% -90. 9% -7.4 % -7.5 % -38. 0% -58. 3% -99. 9% -93. 6% -70. 9% -26. 2% -45. 7% -75. 0% -0.4 % -98. 9% -69. 1% -72. 9% -40. 0% -23. 6% -60. 0% -33. 6% -89. 6% -18. 9% -85. 9% -24. 4% -72. 7% -63. 2% -96. 3% -83. 3% -20. 8% -36. 0% -52. 3% -95. 5% 3.2 % -99. 9% -48.6% -48. 9% 679.9 Figure 19. Price Performance Source. Capital IQ Page 15 C omparable C ompany A nalys is > W eb 2.0 V aluatio n Multiples C om pany Nam e Acce le rize N ew Me dia, Inc. Actoz S of t C o., L td. AQ Inte ractive , Inc. As s ocia ted Media 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 LIC K E R Inc. 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 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. 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 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 euLion Incorporate d 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 N I D igital Media 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 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 oozyF ly, 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 D irect Marketing 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 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 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 S ocia l Ne tworking Mobile G aming G aming G aming V ide o 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 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 S ocia l Ne tworking 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 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 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 hina C anada U nite d S tates U nite d S tates U nite d S tates J a pan S we den A us tralia S witz erland S outh K ore a C hina C hina C anada 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 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 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 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 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 S E HK T S XV OT C P K N as da qG M OT C B B TSE OM AS X SWX K OS E S E HK N as da qG S TSX 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 OT C B B 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 OT C P K 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 C LK Z 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 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 TS X:K AB 3 888 TS XV :LM LV W D L OOK MAG Y 2 121 MT G B MK B MY R N A 095 660 777 NT E S T S X:N LN 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 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 ZY F W YND O 1B C A 052 770 A 023 770 T S XV :ZIP US D Market Cap ($m) 15. 8 1 88. 6 31. 6 0. 9 2. 2 3. 4 15. 7 4. 8 19. 5 2 33. 4 2,4 91. 0 0. 3 1,2 86. 1 0. 9 3. 2 90. 7 1 37. 8 27. 7 0. 0 2. 6 54. 2 17. 1 46. 0 3. 6 42. 2 40. 8 3 10. 6 1 08. 3 51. 1 1,7 50. 3 2 78. 6 44. 2 1,6 04. 3 2 54. 3 81. 8 2,6 06. 3 7. 7 4. 6 15. 2 79. 7 9 69. 5 13. 5 1. 4 19. 1 4. 1 1,1 14. 9 2,0 19. 9 4. 2 90. 1 5 39. 1 4 10. 6 5,2 63. 0 93. 8 25. 1 42. 7 26. 0 1,9 38. 6 2 44. 1 1,7 02. 3 46. 4 12. 1 1 04. 0 4,0 18. 8 3 55. 2 3 21. 3 4. 9 0. 0 0. 0 34. 7 2,4 83. 3 49. 8 7. 3 24,8 04. 2 0. 7 2 24. 5 60. 9 0. 1 1 07. 8 2. 2 6 80. 3 9. 4 9 88. 0 5. 0 42. 0 22. 9 7. 3 2. 6 1. 8 2 13. 6 1 00. 1 25. 4 0. 4 24,8 04. 2 0. 0 679. 9 43. 5 TE V/LT M R evenue 5.1 x 1.7 x 0.0 x 19.2 x 49.9 x 2.9 x 17.6 x 0.6 x 10.4 x 0.0 x 21.6 x 0.0 x 3.6 x 1.2 x 0.8 x 0.5 x 5.8 x 23.3 x 3.2 x 6.6 x 11.9 x 2.3 x 0.6 x 7.8 x 1.1 x 49.0 x 2.1 x 1.2 x 0.5 x 2.4 x 0.7 x 1.1 x 7.3 x 13.3 x 0.0 x 7.8 x 1.5 x 2.6 x 2.5 x 2.7 x 3.2 x 4.6 x 41.2 x 0.0 x 0.2 x 2.6 x 0.7 x 0.4 x 2.3 x 0.0 x 0.2 x 1.3 x 1.7 x 1.0 x 1.1 x 4.6 x 4.6 x 0.9 x 26.2 x 0.2 x 4.6 x 0.5 x 0.2 x 1.2 x 15.4 x 1.5 x 4.3 x 3.0 x 2.0 x 3.2 x 0.6 x 49.9 x 0.0 x 6.1x 2.3 x TE V/ N TM R evenue 0.7x 7.8x 0.9x 4.4x 1.1x 0.5x 1.1x 2.4x 0.8x 2.1x 1.6x 0.9x 1.3x 4.0x 0.2x 0.4x 1.0x 1.6x 7.8x 0.2x 1.8x 1.1x TE V/LT M E BITDA 7.9 x 0.5 x 8.0 x 17.1 x 38.6 x 0.1 x 11.4 x 5.4 x 3.8 x 13.7 x 2.5 x 11.5 x 16.9 x 1.9 x 9.6 x 18.1 x 22.0 x 9.7 x 9.9 x 8.1 x 0.2 x 10.1 x 0.7 x 0.2 x 0.4 x 10.2 x 26.7 x 3.7 x 10.6 x 4.3 x 5.4 x 8.4 x 9.6 x 9.3 x 38.6 x 0.1 x 9.3x 8.8 x TE V/NTM E BITDA 9.8x 1 3.3 x 7.5x 5.2x 4.6x 5.9x 1 1.7 x 7.7x 4.0x 4.7x 2.0x 7.8x 9.1x 1 3.1 x 5.2x 4.0x 6.5x 1 3.3 x 2.0x 7.2x 6.5x P /LT M E P S 28 .1x 17 .0x 49 .6x 8. 7x 23 .0x 4. 9x 32 .9x 12 .5x 1. 9x 11 .0x 0. 0x 22 .2x 6. 1x 21 .8x 54 .8x 6. 0x 29 .3x 14 .7x 3. 0x 30 .2x 2. 9x 3. 2x 7. 4x 14 .0x 15 .3x 70 .3x 2. 5x 47 .8x 19 .9x 10 .6x 70 .3x 0. 0x 19.1x 14 .3x P /NT M E P S 7 1.0 x 1 6.3 x 1 0.1 x 1 2.9 x 1 0.3 x 3 3.7 x 1 2.8 x 1 8.1 x 1 3.9 x 4 6.5 x 1 3.4 x 1 6.8 x 1 2.1 x 1 0.8 x 1 8.1 x 7 1.0 x 1 0.1 x 21.1x 1 3.9 x P /TangBV 3 .2x 0 .5x 0 .5x 1 5.5x 1 8.6x 8 .6x 0 .6x 4 .3x 4 .1x 6 .0x 4 .0x 1 .4x 8 .6x 0 .3x 2 .4x 0 .0x 1 9.7x 3 5.6x 2 .5x 1 .2x 3 .9x 1 .5x 5 .3x 1 4.0x 0 .6x 0 .7x 8 .1x 3 .1x 4 .0x 1 4.8x 2 .2x 0 .9x 5 .4x 0 .9x 3 .5x 1 .1x 1 8.8x 1 .3x 2 .1x 2 .9x 4 5.1x 6 .7x 1 9.1x 2 8.7x 0 .1x 0 .8x 1 .4x 8 .0x 1 7.1x 0 .0x 6 .7x 3 .7x 1 .2x 4 5.1x 0 .0x 7.1x 3 .6x Figure 20. Valuation Comparison Source. Capital IQ Page 16 C omparable C ompany A nalys is > W eb 2.0 Su mmary b y C ountry C om pany Nam e U nited S 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 8 6 3 2 2 1 1 1 1 1 1 1 1 1 1 90 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 H ong K ong I ta ly R uss ia S witz erla nd F inland M alays ia I ndia Aus tra lia U nited K ingdom N orway G rand T otal 44, 117.5 5, 422.9 3, 156.2 2, 286.7 2, 019.9 1, 875.4 1, 362.9 254.4 233.4 137.8 104.0 90.1 51.1 27.7 26.0 19.5 4.8 0.1 61,190.5 Avg US D Mar ket C ap ($m) China S weden Ta iwa n Japan Hong K ong Ca na da S outh K orea United S tates Ita ly G erma ny R us sia S witzerland Finland Malay sia India Australia United K ingdom Norway G rand Total 4,411. 8 2,019. 9 625. 1 526. 0 233. 4 228. 7 170. 4 139. 0 137. 8 127. 2 104. 0 90. 1 51. 1 27. 7 26. 0 9. 7 4. 8 0. 1 679.9 U S D LT M T otal R ev ($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, 796. 2 3, 684. 7 1, 733. 7 994. 9 670. 6 503. 9 389. 9 366. 5 238. 9 152. 7 116. 2 78. 1 57. 1 40. 0 15. 7 6. 0 2. 1 0. 3 12,847.5 U S D LT M Total E B IT DA ($m) C hina S weden U nited S ta tes C a na da J apan S outh K orea T a iwan I taly H ong K ong R uss ia M alays ia G erma ny Aus tralia S witz erland N orway U nited K ingdom F inland I ndia G r and T otal 1,711. 2 265. 6 244. 8 196. 2 109. 6 91. 1 52. 6 34. 9 30. 8 19. 9 10. 8 10. 6 3. 0 0. 8 -1. 1 -1. 9 -15. 6 -27. 3 2,736.4 E B IT DA % C hina Aus tral ia T aiwa n G ermany J a pa n S weden I ta ly M a la ys ia R uss ia H ong K ong S outh K orea S witz erla nd U nited S ta tes C anada I ndia N orway U nited K ingdom F inla nd G rand T otal 48. 1% 37. 2% 36. 3% 31. 2% 21. 9% 15. 3% 14. 6% 13. 8% 13. 1% 7.9% 6.4% 1.9% -10.1% -13.5% -23.5% -50.6% #DI V /0! #DI V /0! 8.2% Figure 21. Comparison by Country Source. Capital IQ C omparable C ompany A nalys is > W eb 2.0 Su mmary b y Ex c hange C om pany Nam e OT C B B N as da qG S OT C P K K OS E TSE N as da qG M TSX T S XV S E HK A ME X ASX XT R A GT SM S WX H LS E CM B SE NYS E OS E A IM OM R TS K LS E O T C NO G rand To tal 19 14 11 6 5 5 4 4 3 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 90 U S D Market Cap ($m) SE HK N asdaqG S TSE OM NYS E GTS M K OS E TSX N asdaqG M XT R A OS E OT CB B CM R TS SWX AM E X T S XV OT CP K H LS E KLS E BS E AS X AI M OT CN O G rand T otal 26, 184.3 23, 507.4 2, 901.9 2, 019.9 1, 750.3 1, 596.8 1, 276.8 306.4 274.0 254.4 254.3 210.2 137.8 104.0 90.1 72.7 66.7 53.2 51.1 27.7 26.0 19.5 4.8 0.1 61,190.5 Avg US D Mar ket C ap ($m) S E HK OM NY S E Na s daqG S G TS M TS E OS E K OS E CM XT R A RT S SWX TS X Na s daqG M HL S E AME X KLS E BS E TS X V O TC B B AS X AIM O TC P K O TC NO G rand Total 8,728. 1 2,019. 9 1,750. 3 1,679. 1 798. 4 580. 4 254. 3 212. 8 137. 8 127. 2 104. 0 90. 1 76. 6 54. 8 51. 1 36. 4 27. 7 26. 0 16. 7 11. 1 9. 7 4. 8 4. 8 0. 1 679.9 U S D LT M T otal R ev ($m) OM N a sda qG S S E HK CM NYS E R TS BSE OS E K OS E GT S M N a sda qG M TSE K LS E 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 G rand T otal 1, 733. 7 484. 3 421. 1 238. 9 219. 1 152. 7 116. 2 108. 9 100. 3 91. 4 82. 5 79. 0 78. 1 42. 8 40. 0 29. 9 28. 5 16. 6 11. 4 7. 9 6. 0 2. 1 2. 0 0. 3 151.1 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 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 1,694. 3 598. 6 265. 6 90. 1 79. 0 52. 6 34. 9 19. 9 19. 6 10. 8 10. 6 6. 4 3. 0 0. 8 0. 0 -1. 1 -1. 9 -2. 5 -3. 1 -6. 0 -15. 6 -27. 3 -34. 0 -58. 6 2,736.4 E B IT DA % S EHK AS X GT SM XT R A N asdaqG S TSE OS E OM CM K LS E R TS K OS E N asdaqG M SWX T S XV O T CB B TSX BSE AM E X O T CP K O T CN O NYS E AI M H LS E G rand T otal 42. 9% 37. 2% 36. 3% 31. 2% 30. 2% 22. 7% 18. 0% 15. 3% 14. 6% 13. 8% 13. 1% 4.4% 3.1% 1.9% 1.3% -5. 3% -14.8% -23.5% -36.4% -41.3% -50.6% #DI V /0! #DI V /0! #DI V /0! 8.2% Figure 22. Comparison by Exchange Source. Capital IQ Page 17 Financ ing - L as t Three Months (US $ m) Month May-09 C ompany Name F ac ebook One Net E ntertainment C yberplex P eer39 OpenX Intent Media Imeem E veryZing C onnec tE du B logHer Inc . WonderHill G is t F uhu Inc . Azuki S ys tems I L ove R ewards Doc uS ign TimeB ridge OL X Medialets R es onate Networks VoxP op Mo'Minis L oop'd Network May-09 Total J un-09 S ugar Inc . Tumri B oku Wimba G rab Networks AdC hina G oojet S AS AdMeld Inc . beeTV Nokeena S ens e Networks Zoos k G ather MojoP ages Taomee Animoto G ameG round R ingR evenue C rowdcas t YuMe eR epublik News er L L C C lic kF uel Inigral AdE x Media G R OU.P S Yapta my6s ens e OneTXT I L ove R ewards C liqs et AdW hirl P icaboo G lubble TodaC ell L iquidP lanner Mas hL ogic J un-09 Total US A US A US A US A US A C hina F rance US A US A US A US A US A US A US A C hina US A Is ra el US A US A US A S pa in US A US A US A US A US A US A Is ra el US A C ana da US A US A US A Netherla nds Is ra el US A US A 1. 0 0. 5 39.3 15.3 28.5 67.8 34.0 5.3 1. 0 1. 5 1. 0 1. 0 1. 0 2. 0 2. 0 1. 8 2. 1 2. 0 2. 4 2. 3 3. 0 2. 9 2. 8 2. 5 2. 5 4. 1 3. 5 5. 0 4. 4 5. 0 12. 0 10. 0 8. 5 8. 0 8. 0 6. 5 6. 0 6. 0 5. 3 13. 0 12. 0 15. 0 C ountry US A C hina C ana da US A UK US A US A US A 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 US A Is ra el US A 0. 8 13.6 10.0 22.9 32.3 26.9 40.8 16. 0 205.0 1. 5 4. 0 2. 0 1. 5 5. 0 5. 0 6. 0 5. 9 5. 0 7. 0 6. 8 6. 3 8. 2 7. 0 8. 8 8. 3 9. 0 10. 0 10. 0 12. 9 10. 5 10. 0 Angel/S eed Debt financ ing P IP E S eries A S eries B S eries C S eries D 200. 0 G rand Total 200. 0 20. 0 12. 9 10. 5 10. 0 9. 0 8. 8 8. 3 8. 2 7. 0 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. 8 351.3 16. 0 15. 0 13. 0 12. 0 12. 0 10. 0 8. 5 8. 0 8. 0 6. 5 6. 0 6. 0 5. 3 5. 0 5. 0 4. 4 4. 1 3. 5 3. 0 2. 9 2. 8 2. 5 2. 5 2. 4 2. 3 2. 1 2. 0 2. 0 2. 0 1. 8 1. 5 1. 0 1. 0 1. 0 1. 0 1. 0 0. 5 190.1 Page 18 Month J ul-09 C ompany Name P andora Media QuickP lay Media C aus es Outs park C onnec tE du S B Nation Metavers um Invodo Nexage S tyleC as ter TweetDeck P rotonMedia Aloqa L at49 Tributes .com C oTweet C likthrough P eople C apital C ountry US A C a nada US A US A US A US A G erma ny US A US A US A UK US A G erma ny C a nada US A US A US A US A Angel/S eed Debt financ ing P IP E S eries A S eries B S eries C 35.0 S eries D 12.0 G rand Total 35. 0 12. 0 10. 0 8.3 8.2 8.0 6.3 6.0 4.0 4.0 3.2 2.5 1.5 1.5 10. 0 8. 3 8. 2 8. 0 6. 3 6. 0 4. 0 4. 0 3. 2 2. 5 1. 5 1. 5 1. 2 1. 1 1. 0 26.7 79.5 10.0 38.2 10.1 51.9 0. 5 14.0 108.6 51.5 126.3 12.0 222.3 1.2 1.1 1.0 0.5 114.2 636.7 J ul-09 Total G rand Total Figure 23. Financing, Last Three Months Source. Company reports Page 19 C ompany Des c riptions - C urrent Month C apital Market Ac tivity C ompany AdL ink Internet Media AG HQ G ermany Webs ite www.adlink.net Des c ription AdLINK Internet Media AG , through its s ubs idiaries , provides digita l marketing s olutions in E urope a nd internationa lly. T he compa ny s pecializes in dis play, affiliate, permis s ion, direct, a nd doma in ma rketing. Its Dis pla y Ma rketing s egment provides online, direct a nd dia loguebas ed, a nd permis s ion/ema il ma rketing s olutions . T his s egment’s portfolio compris es 4, 000 W eb s ites with a dvertis ing environment for regiona l, na tiona l, and interna tional ca mpaigns . T he company’s Affiliate Ma rketing s egment operates as a broker between advertis ers a nd W eb s ite publis hers . T his s egment a ls o offers profes s ional cons ulta tion, promotion options , a nd works hops . AdLINK Internet Media ’s Doma in Ma rketing s egment operates a tra ding pla tform for the domain market, a s well as acts as a broker between doma in owners a nd a dvertis ers . T he company wa s formerly known a s AdL INK Internet Media G mbH E urope and changed its name to AdL INK Internet Media AG in 2000. AdLINK Internet Media wa s founded in 1996 a nd is hea dquartered in Montabaur, G ermany. AdLINK Internet Media AG is a s ubs idiary of U nited Internet A G . Aloqa G mbH provides a mobile s ervice tha t notifies interes ting places , events , and F a cebook friends in real time. It s upports va rious pos itionfinding proces s es , s uch a s cell ID, G P S , W L AN, and G S M fingerprinting; a nd enables a pplications and s ervices to tra ck us er location in rea l time for moving or s ta tionary objects . T he compa ny s erves publis hers , a dvertis ers , mobile opera tors , a nd developers . Aloqa G mbH was founded in 2007 and is ba s ed in Munich, G erma ny with a n additional loca tion in P a lo Alto, C alifornia . C likthrough’s intera ctive media technology ma kes videos intera ctive and changes videos into online points of s a le to a cces s untapped revenue. C onnectE du, Inc. , a technology compa ny, provides W eb-ba s ed s olutions to naviga te educa tion a nd employment tra ns itions . It offers C onnect! , a W eb-ba s ed s olution that provides us ers with informa tion and guidance in curriculum, college, a nd career pla nning, a s well a s online tools and res ources to na viga te their high s chool, college, a nd ca reer life cycles ; a nd P rep HeadQ uarters , a s et of Internet-ba s ed tools to enhance high s chool guida nce, a nd ma ke college a nd career prepa ra tion. T he company s erves s tudents , pa rents , guida nce couns elors , a dmis s ion officers , trans fer advis ors , enrollment managers , and employers . It has s tra tegic partners hips with Na tiona l C ollegiate Athletic As s ociation; a a l S olutions ; C ouncil of North C entral T wo Y ea r C olleges ; Marcia B renner As s ocia tes ; Ma ine S tate G E AR UP ; W eidenha mmer; S kyward; C omputer Ma na gement T echnologies ; S chools O P E N, L . L . C . ; S chool Information S ys tems , Inc. ; a nd S oftwa re T echnology, Inc. C onnectE du, Inc. was founded in 2002 and is ba s ed in B os ton, Ma s s achus etts . C oT weet is a bus ines s front-end for T witter, enabling compa nies to engage in proa ctive ma rketing a nd res pons e-oriented cus tomer s ervice a ctivities . Hi-Media S . A. opera tes a s a n advertis ing ma na gement compa ny in F ra nce. It markets a dvertis ing s pa ce to a dvertis ers on the Internet. T he compa ny a ls o offers a ra nge of s ervices to digita l media publis hers , including direct ma rketing s ervices , which compris e direct marketing media planning, email, mail, S MS a ddres s es lea s ing, a nd implementing intera ctive T V ca mpa igns ; a nd micro-pa yment technica l pla tform a nd s ervices . In a ddition, it provides s ervices for pros pecting a nd canvas s ing of a dvertis ers . Hi-Media S . A. wa s founded by C yril Zimmerma nn in 1996. It was formerly known as Hi-Media Multimedia and changed its name to Hi-Media S . A. in 2000. T he compa ny is ba s ed in P a ris , F ra nce. Invodo, Inc. offers s ecure client-controlled and two-way excha nges of corpora te and us er genera ted video communications between compa nies , employees , and cus tomers . It provides s yndication, reporting and s ta ts , a nd cus tomer s ervices ; a nd a ccount management s ervices , including video production and editing, video product pod crea tion, UP C /S K U ma pping a nd integra tion, and video content review. T he compa ny a ls o offers video production s ervices tha t compris e producing, directing, film a nd video photogra phy, HDT V , crew pla cement, production management, loca tion s ound, non-linea r editing, audio pos t and mus ic production, and s trea ming media . It s erves ma nufa cturers a nd reta ilers . T he compa ny was founded in 2006 and is ba s ed in Aus tin, T exas . IDE LIX S oftware, Inc. opera tes a n online a dvertis ing network of intera ctive maps . Its network of online map properties provides loca l a nd brand advertis ers a n interactive medium for delivering geo-ta rgeted a nd contextual dis play a dvertis ements . T he compa ny s erves a dvertis ers , W eb s ite publis hers , a nd us ers . IDE LIX S oftware, Inc. was formerly known as Advanced Numerical Methods , L td. a nd cha nged its na me to IDE LIX S oftware, Inc. in 2001. T he compa ny was founded in 1996 and is hea dqua rtered in V ancouver, C a na da . Aloqa G ermany www.aloqa.com C likthrough C onnec tE du United S tates United S tates www.clikthrough.com www.connectedu.net C oTweet United S tates www.cotweet.com Hi-Media S .A. F ra nce wwww.hi-media.com Invodo, Inc. United S tates www.invodo.com L at49 (Idealix s oftware) C ana da www.lat49.com Metavers um G ermany www.metaversum.com Metavers um G mbH develops a nd opera tes T winity, a 3D online pla tform. T he T winity allows members to create a pers ona l a vatar, explore virtua l cities , move into a 3D home, cha t with friends , a nd work together in E urope a nd internationa lly. Meta vers um G mbH has a s tra tegic media pa rtners hip with zitty; and a s tra tegic pa rtners hip with B igpoint. T he compa ny wa s founded in 2006 and is bas ed in B erlin, G erma ny with additional offices in K iev a nd S inga pore. Nexage United S tates www.nexage.com NE X AG E , Inc. opera tes a s a wireles s a nd multimedia s oftwa re and s ervices compa ny in the United S ta tes a nd internationa lly. It focus es on providing hos ted white la bel mobile video enterta inment, a dvertis ement, and s ocial networking s olutions for media compa nies , content providers , a nd ca rriers . T he company offers P honeC a s t-P ro, which provides for the automa tic content inges tion, encoding, management, publis hing, and delivery of s treaming mobile video content; P honecas t C lick-to-V ideo, a mobile advertis ing s olution for ad a gencies and a dvertis ers to create mobile W eb pa ges and load videos for a mobile advertis ing ca mpaign; a nd MyC orner, a bra nded mobile video s ervice with content for opera tors . NE X AG E , Inc. was founded in 2005 and is ba s ed in F remont, C alifornia. OutS park, Inc. P andora Media United S tates United S tates www.outspark.com www.pandora.com O utS park, Inc. , a n entertainment s ervices company, publis hes a nd opera tes enga ging online multipla yer ga mes . T he company was founded in 2006 and is ba s ed in S a n F ra ncis co, C a lifornia with a s ubs idiary office in S eoul, K orea. P a ndora Media , Inc. , a n Internet radio compa ny, provides mus ic dis covery s ervices in the United S ta tes . T he compa ny taps mus ica l collection to deliver s ervice on computer, in the home, a nd on mobile devices . It collects melody, ha rmony, ins trumentation, rhythm, vocals , a nd lyrics of a s ong. P andora Media, Inc. was formerly known as S a va ge B ea s t T echnologies . T he compa ny wa s founded in 2000 a nd is bas ed in O a kland, C a lifornia . P eople C apital P eople Media P rotonMedia United S tates United S tates United S tates www.people2capital.com www.peoplemedia.com www.protonmedia.com T he P eople C a pital peer-to-peer s tudent loan lending pla tform facilita tes lending decis ions bas ed on a s tudent’s “potentia l” rather than credit payment his tory. T he P more tha n 20 vertica lly focus ed liquidity in the ma rket by matching a towards with a P eople Media operates eople C apital platform generates online communities primarily gea red ll lendersdating. ll borrowers , not jus t “fa mily and P rotonMedia LL C provides 3D virtua l world technology, and corpora te tra ining and developing s oftware for enterpris es . It offers P rotoS phere, a private virtual world environment for colla bora tion and learning, a nd a s uite of communica tions a nd s ocia l networking tools des igned to overcome linear communications and crea tes a networked learning orga nization. T he compa ny’s tools als o ena ble tra iners a nd employees to intera ct a nd colla bora te us ing the s ys tem's built-in application s ha ring, voice over IP , text chat, and video broa dca s ting fa cilities . Its clients include bus ines s a nd education s ectors . P rotonMedia LL C was founded in 1998 and is ba s ed in L ans da le, P enns ylva nia . Page 20 Quic kP lay Media C ana da www.quickplaymedia.com Q uickP lay Media, Inc. provides media ma na gement a nd dis tribution s olutions for mobile televis ion (T V ) and video s ervice compa nies . It provides O penV ideo, a platform tha t offers a pplica tion integra tion for mobile opera tors , media companies , and technology pa rtners in North America a nd E urope. T he compa ny a ls o offers managed s ervices , including inges tion a nd dis tribution of content, media ma nagement, a pplica tion development, a nd reporting a nd s ettlement s ervices , a s well a s live a nd on-dema nd content s ervices . In a ddition, it provides hos ted s olutions that integra te mobile T V /video s ervices into on-deck and off-deck mobile Internet s ites , a nd content s yndica tion s ervices . T he compa ny was founded in 2004 and is hea dqua rtered in T oronto, C a nada. It has local s a les offices in North America and E urope. S ports blogs , Inc. , doing bus ines s as S B Na tion, engages in building s ports s ites on the W eb. It offers bas eba ll, ba s ketba ll, college, footba ll, a nd hockey blogs , a s well a s genera l blogs , s uch as fa ntas y s ports , cycling, a uto ra cing, golf, fitnes s , fighting, a nd mis cellaneous . T he compa ny wa s incorpora ted in 2004 a nd is bas ed in W as hington, Dis trict O f C olumbia . S tyleC a s ter Media G roup, L L C provides online fa s hion-lifes tyle informa tion s ervices . T he compa ny is ba s ed in New Y ork, New Y ork. T ributes , Inc. opera tes T ributes . com, a n online res ource for current local and na tional obitua ry news . T he company operates as a n online community to provide s upport during times of los s and grieving. It als o ena bles the vis itors to light ca ndles or place online gifts on va rious current a nd his torical obitua ries ava ila ble on the na tional obitua ry news s ite, a s well as to s ha re photos , videos , recollections , a nd other a rtifacts . In addition, the company’s obitua ry and online memoria l s ervice informa tion helps people to come together online and offline to remember a nd s ha re the s tories of the people in their lives who ha ve pas s ed awa y. It has s tra tegic partners hips with E ons , Inc. ; and Dow J ones & C ompa ny. T he company wa s founded in 2008 a nd is ba s ed in B os ton, Mas s a chus etts . T ributes , Inc. opera tes a s a s ubs idia ry of E ons , Inc. T weetDeck, Inc. offers a des ktop a pplica tion to brea k twitter feeds into mana geable bite s ized pieces . Its application ena bles us ers to s plit their main feed into topic or group s pecific columns a llowing a broader overview of the tweets . T he compa ny was founded in 2008 and is bas ed in L ondon, the United K ingdom. S B Nation (S ports blogs Inc .) United S tates www.sbnation.com S tyleC as ter Tributes United S tates United S tates www.stylecaster.com www.tributes.com Tweetdec k United K ingdom www.tweetdeck.com Figure 24. Company Descriptions Source. Company reports, Capital IQ, Crunchbase Page 21 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