Sample Business Plan WOWtown

1 CONFIDENTIAL W_er_ _ll 41,=_ ,6 @ WO Wto wn. com I I I I I ,c n m BUSINESSPLAN November 2000 This business plan is the propertyofWOWtown.com and is strictlyconfidential.It containsinformationintendedonly for the personto whom it is transmitted.With receiptof this plan, recipientacknowledgesand agrees that: i) in the event recipientdoes notwish to pursuethis matter, thisdocumentwill be immediatelyreturnedto the address listed without the expressed written consent of WOWtown.com iii) all of the information here-in will be treated as below ii) the recipientwillno lesscare than that affordedto yourown company'sconfidential material.This or in part, confidentialmaterialwith not copy, fax, reproduce,divulge, or distributethis confidential plan, in whole document does notconstitutean offerto sell, or a solicitationof an offer to purchase. I This Business Plan (includingwithout limitation the following Risk Factors) contains forward-looking statements I 1934) regardingthe Companyand itsbusiness,financialcondition,results of operationsand prospects.Words such (withinthe meaning of Section 27A of the SecuritiesAct of 1933 and Section 21E of the Securities ExchangeAct of as "expects","anticipates","intends","plans", "believes", "seeks", "estimates" andsimilar expressions variationsof or such words are intended to identify forward-lookingstatements, but are not the exclusive means of identifying development of new services, technologyenhancements, possible changes in legislation and other statements forward-lookingstatements in this Business Plan. Additionally, statements concerningfuture matters such as the regardingmatters that are nothistoricalare forward lookingstatements. I DavidB,3ack_on, CEO I i "_ ";.-33<.-333-25_,3 ..-o,.,:-,_-Z,._ I _-.:- ,;_a_;_c:._v,:c, wL.sw:;.cc:._ ' _-_--:/' _"_.__c-___';,,s,;,-._:._'-. c .......... cc,_ :%::::(_C-',.)3B3-03.1.5 F_.x: (33<,) 3,33-33:,-5 Stephen C 3ackson, Executive Vice President (2,_r_.c::) HeadOffice:Suite _100-- 800RI_ Avenue, SeaWe WA,98104 DevelopmentOffice: Suite 450- 999Wes_ I-lasUngs Sl_ee¢, Vancouver, BriUsh olumbia, C Canada 6¢2W2 V ! ! 1 I C 0 N FID EN TIA L I TABLE OF CONTENTS i WO Wto wn. co m Section 2 -- CORPORATE OVERVIEW ...................................................................................................... 4 Section t-- TABLE OF CONTENTS [] What is WOWtown.com? .............................................................................................................. 4 WOWtown TM -- THE HOTTEST LOCAL INTERNET MARKETING PORTALS ON THE PLANET TM ............. 4 The Wowtown TM Initiative Is Simple But Comprehensive .......................................................................... 5 u L7 How do Businesses participate?.................................................................................................. Where E-commerce meets its roots with '_-commerce'. ............................................................. The WOWtown Net Savings Card TM .............................................................................................. How does WOWtown plan to generate revenues? ....................................................................... 7 6 7 7 8 7 8 10 11 E! Revenue Summary........................................................................................................................ B2B - B2C - C2C........................................................................................................................................ E How does WOWtown market itself? ............................................................................................. E! How does WOWtown expand into new communities?............................................................... Section 3 m BUSINESS PLAN.................................................................................................................. 2.0 1.0 3.0 4.0 5.0 4.1 5.1 5.2 5.4 5.3 6.0 7.0 8.0 9.0 8.1 10.0 11.0 I 11.2 11.1 11.3 11.4 11.5.1 11.5 11.6 11.6.1 11.7 12.0 11.8 13.0 13.1 I 15.0 14.0 16.0 16.1 16.2 16.4 16.3 16.5 17.0 WOWtown Brings the Power of the Internet to the Local Community ....................................... 11 WOWTOWN TM Summary ............................................................................................................. 12 WOWtown adds Value to Businesses, Advertiser & Members .................................................. 12 Significant Rise in Small-Business Presence on the Web in 2000............................................. 13 WOWtown provides its Small-Business on the Web is growingmarket ..................................... Dun & Bradstreet says Partners with value-added features to ................................................ Opt-in for Permission-Based e-mail ........................................................................................... WOWtown's permission-based e-mail........................................................................................ Utilizing E-mail to Build Traffic & Generate Leads via Permission Marketing ........................... Utilizing E-mail to Build Traffic ................................................................................................... WOWtown's Reseller Partners & Generate Leads via Permission Marketing ........................... Proof of Concept -- SeattleWOW.com & VancouverWOW.com .............................................. The Market .................................................................................................................................. Astronomical Ad Growth............................................................................................................. B2B Growth Projections ............................................................................................................ WOWtown's "Local, Bottom-up" Approach -- '@-commerce TM ................................................ Marketing Plan ............................................................................................................................ Brand Recognition & Promotion ................................................................................................ Rapid Implementation ................................................................................................................. Attracting Members by Building Web Traffic ............................................................................. Banner Advertising and Keyword Buys ..................................................................................... CommisionJunction.com -- Referral/Affiliate Program .......................................................... Referral/AffiliateRankings ............................................................................................................ Search Engine Based Systems to Build Site Traffic................................................................ Mamma.corn ............................................................................................................................. Utilizing Community Auctions to Drive Repeat Traffic to the Network:..................................... Creating Lifetime Cardinto Customers - User Friendly Websites .............................................. Converting Prospects Members ................................................................................................ Relationship Management: Profiling and Personalizing ............................................................ Push I Pull Interactive Advertising ............................................................................................. WOWtown- A Unique Concept ................................................................................................ Website Measurement & Analysis .............................................................................................. WOWtown's Value-added Strategy ............................................................................................. NETWORK CAPITAL ................................................................................................................... HYPERMARKETING .................................................................................................................... BuySellBid.com -- Immediate Online Content........................................................................... Exclusive Partnerships ThinkView.com -- Local News, Sports and Entertainment........................................................ IMPLEMENTATION...................................................................................................................... 14 14 15 15 16 15 16 17 18 19 19 21 21 22 22 23 23 24 23 24 25 25 27 27 27 29 30 30 31 31 31 32 31 32 33 33 33 33 34 35 34 36 i Phase I -- Back End Development........................................................................................................... 17.1 Corporate Development.............................................................................................................. Phase II -- Community Expansion........................................................................................................... Phase III -- Integration ............................................................................................................................. I 17.2 Formation of WOWtown Europe ................................................................................................. Phase IVFormation of WOWtown Brazil Limited ...................................................................................... -- Global Expansion ................................................................................................................. 17.3 2 ! I I I C0 NFID EN TIA L 17.4 17.5 10.0 20.0 19.0 21.0 22.0 22.2 22.1 23.0 23.1 23.2 24.0 23.3 25.0 25.1 26.0 25.2 27.0 27.1 26.0 29.0 29.1 29.2 29.3 30.0 31.0 31.1 31.2 33.0 32.0 34.0 35.0 36.0 36.2 36.1 36.3 36,4 WO Wto wn. c o m 37 37 37 30 38 39 41 42 41 43 43 43 44 43 44 44 47 46 47 47 47 48 48 48 49 50 50 50 51 50 51 51 51 52 51 52 52 52 52 53 53 53 53 54 55 55 56 56 56 56 56 56 56 57 57 Formation of WOWtown Latin America Limited ......................................................................... Ongoing Marketing and Sales Campaigns ................................................................................. WOWtown's Competitive Advantages ........................................................................................ Benefits: Personal Memberships ................................................................................................ Benefits: Exclusive Resellers, Media & Sales Partners, Businesses & Advertisers ................. Revenue Generating Strategies .................................................................................................. Exclusive Reseller Agreements .................................................................................................. Local Sales Partners ................................................................................................................... Local Media Partners .................................................................................................................. Exclusive Local Partner Agreements ......................................................................................... Class 'A' Local Partner ............................................................................................................... Class 'B' Local Partner ............................................................................................................... Sales of BannerPartner ............................................................................................................... Class 'C' Local Advertising ....................................................................................................... WOWtown Products .................................................................................................................... Secure Broadband ...................................................................................................................... Business-to-Business Product Packs ........................................................................................ Interpass Net Technologies, INC. n Prepaid Internet Access Cards ........................................ Independent Agent Commission Sales Potential....................................................................... Independent Agent Commission •Income Potential.................................................................... "rim • WOW-U m WOWtown University ............................................................................................ WOWtown's Online Magazine TM Business Directory and Membership ..................................... Magazine Content ....................................................................................................................... WOWtown's Permission-based Newsletters .............................................................................. Business Directories .................................................................................................................. WOWtown Net Savings Card ................................................................................................... Value Added Features for the WOWtown Net Savings Card TM .................................................. Smart Card Technology .............................................................................................................. Magnetic Strip Integration .......................................................................................................... i I I I | - WOWtown Membership Services ............................................................................................... WOWtown Network Benefits ....................................................................................................... WOWtown Customer Loyalty Program ....................................................................................... The Development Team .............................................................................................................. WOWtown's Corporate Alliances ............................................................................................... VisualCommerce ......................................................................................................................... eConquest Technologies ............................................................................................................ NextHosLcom ............................................................................................................................. Hostopia.com .............................................................................................................................. WOWtown Domain Name Registration ....................................................................................... WOWtown Strategic Alliances .................................................................................................... Competitive Factors.................................................................................................................... Projected Earnings ..................................................................................................................... WOWtown Advisory Board ......................................................................................................... Projected profits from all areas of operation: (US$)................................................................... ManagemenL............................................................................................................................... Corporate Information ................................................................................................................ Legal Counsel ............................................................................................................................. Banking....................................................................................................................................... Auditor ........................................................................................................................................ Transfer Agent ............................................................................................................................ Additional Company Information ................................................................................................ Development Office .................................................................................................................... Head Office ................................................................................................................................. Investor Relations....................................................................................................................... Shares Listed .............................................................................................................................. Conclusion .................................................................................................................................. Capitalization .............................................................................................................................. I 36.0 37.0 39.0 40.0 41.0 40.1 42.0 43.0 43.1 43.3 43.2 43.4 44.0 44.2 44.1 44.3 44.4 45.0 44.5 I I I 3 u I I ,C O m Section 2 _. CORPORATE ,, What is WOWtown.com? OVERVIEW WOWtown.com, Inc. (OTC BB: IWOW) is a development stage; intemational, web-based marketing medium that provides targeted communication between businesses and consumers. focus of the Intemet down to a local market level, creating an international network of global The WOWtown TM initiative is simple but comprehensive. It concentrates on bringing the Local Internet Marketing Portals. WOWtown links the consumer with retail merchants and other businesses that provide services in the neighborhoods where these consumers live and travel to. I offered byenjoy spedal features, discounts,using their freeon countless Net Savings Card TM. Members partidpating advertisers when and savings WOWtown products and services The Net Savings CardTM is exclusiveto WOWtown members, who must first sign up online through any I each Net Savings cardholder with accessto discounts and savings offered to them from merchants and WOWtown portal same communities. The Card isalso l_ansportable, encouraging use in other communities. businessesin the across the network to gain accessto valuable member benefits. Membership provides functions as the primary database hub for the organization. Site activities and online transactions are WOWtown's communitydatabase referenced for from the corporate website at this hub are linked allwhich recorded, gathered and portal network is linked the entire organization. From www.wowtown.com of the other WOWtown communiUes across the network. EachWOWtown city operates as its own unique gateway to the respective community it serves. I The main homepage also provides direct links to keyinformation about the Company, including investment information; parl_ership opportunities in each local WOW-city portal site; and local business directories in each community. ! ! 4 I I I CON FID EN TIA L WO Wto wn. CO m All of the Company'scommunityportalsoperate independentlyprovidingwide-rangingprogramsof features and benefitsrelevant to WOWtown'smembership,offered by the business community and localmerchant advertisersin the same area. EveryWOWtown communityportal offers members and visitorsaccessto LocalResourceGuides, News, Entertainment, Sports and Weather for their own communities.Our Sites also provide an effective advertising and cross-promotional pportunity to local area businesses.Sincethe relative advertisingcosts o and enhance their customer-bases. are low compared to traditional marketing methods,businessessee recognizethe opportunity to expand Site content appears similarin appearance to other well-knownwebsites, however the difference between merchants within specificurban populationcenters and creates revenuesfrom the local-1stmarketing WOV_own's program and other informationalwebsitesisthat WOWtown targets online users and local approach. We concentrate on bringing the global focus of the Intemet I creaUng a network of community-l_ • I • down to a local market level, Internet Marketing Portals. WOWtownTM providesthe localgateway into communitiesfor local businesses and merchantsto target businessesin each Local Market region. online userswho live in the same neighborhoods andto drive onlinetraffic these "bricksand mortar" WOWtown isthe most unique,flexible, measurableand cost-effectiveform ofAdvertisingavailableon TM the Internet. offers a branded identity and a vehicleto match businessesand consumerstogether WOWtownTM creating a powerful advertising and marketing medium. • • WOWtownTM providesvalue-addedSavingsand Discountsto the Intemet user from businessesthat want their message deliveredto this massiveaudience. necessary WOWtown to provides community portal partner's in each area and markeUng TM atlxact the systems, idenUty, branding, tools programs • • Advertisingand Marketing firms. WOWtownTM conducts businessdirectly with localISP's,Media Properties, Web DesignCompanies or WOWtownTM increaseslocal membershipin each portalterritory and developsnew and profitable businessrelationships with area merchants. WOWtown hasestablishedthe pdmary network consistingof 62 community portals. The Company owns over 500 Internet domainsitesthat are scheduledto becomelocalcommunity portals underthe Company'sbrand. As new sites are spawnedand integrated into the network as local communities,it and serviceswill be phasedin over a time period that addressesthe Company'scapacity to maintain will broadenmembershipandadvertisersenhancingrevenueopportunities. Additionalportals, products controtledgrowth. • I • communities.All througha single gateway point of and other usersfind out them. WOWtown already WOWtown creates the connectionwhere members entry that is relevant to what's goingon in their generates millionsof hits acrossthe network with hundredsof thousandsof uniquevisitors. ! I CONFID EN TIA L WO Wto wn. co m ..... ' i; _ ]J - ihidl,,k i [__,; #"/,_,/_.d ! i _ _*"" a _-_ I _ Where E-commerce meets its roots with '@-commerce I whom to trust. WO_own has pioneered the new concept coined '@-commerce', where it's all about LOCALfoot E-commerceis all about GLOBALbuying, credit cards, and security issues,shipping challenges and choosing traffic @ local neighborhood Bdcks-and-Nortar businesses where people live, shop, play and visit @.We harness the power of the [nternet and introduce local residents and tourists to trusted and recognized businesseswithin each citythat relationship one step further and create incentives by offering our free Net Savings Card% which We take portal we develop. provides instant and repeatable discounts at participating local merchant's real world business establishments. No secure servers, cookies or technical hurdles, just good old-fashioned" @-commes_ce TM "; where and when people want it. WOWtown also supplies online E-commerceproducts and services that provide the tools for business and consumers to embrace the global marketplace. i I ! WOWtown wiilcapitalize onthis growthby provid:.ng real-worlde-commerce so,utions that integrate I _3,_cks-and-Hor_ar businesses. _,e evo,_ingneedsandexpectations the Zntemet serwith the solidfeaturesandbenefitsof of u :;__ ! 6 rllt r U I1r_vl_ ii 11 I I CONFIDENTIAL :_ How do Businesses participate? WO Wto wn. com audience.Unlike mostdirectories,these Bricks-and-Mortarbusinesses able to interactivelyoffer andmanage are Using the Internet as the advertising medium, merchants profiletheir establishmentsto of large potential specialsavingsand discountsvia their localcommunityWOWtown portal. At the option a eachadvertiser WOWtown can displayinteractivemaps, voicegreetings, or other timely messagesabout the advertiser. i Herchant advertisementsare highly measurable,very cost-effectiveand reachthe audienceon a 24/7 schedule. Thisdrives new and repeat trafficto participatingretailers and gives additionalincentivefor consumersto patronize local businesses located in their own communities or thosecities where they planto visit. Usingthe power of the Internet to match peoplewith businessesin the same community adds a powerful marketing tool do Bricks-and-Mortar for not yet have an effective andservices. Researchindicatesthat most of the small to medium sizedbusinesses shops web presence. I I _ The WOWtown Net Savings Card TM WOWtown membershipis offered free to Intemet usersby accessinganyWOWtown local communityportal and offered at participating local area merchants. Cards are currently mailed directly to each new member but the registeringplans to integrate point-of-sale distlibution programs that will rapidly expand membership in each local Company online. They are provided their own unique Net Savings CardTM entitling them to special benefits community. Consumerssimply present their Card to receivethe feature or benefit without having to use coupons, whichfrequently do not motivate customersto revisita business. t*'n_II J ;_L,:._=_ _,.__C_IL = I The Card is transportable, being accepted universally by participating merchants in all WOWtown community i and significantly raises the value of the program with respect to merchants because it has the potential to cities. This feature will reachfor Cardholderaccess to savingsand discounts in other locations whenthey travel expand the marketing give the businesses and advertisers. _ How does WOWtown plan to generate revenues? I WOVVtown'sbusiness model encompassesall the key areas of Internet commerce: Business-to-BusinessB2B), ( Business-to-Consumer (B2C) and Consumer-to-Consumer (C2C)sectors. WOWtown's revenues will be generated from a number of areas. Each portal acts as an Internet station to sell advertising to Bricks-and-Hortar community and will offer products and services useful to both business merchants and the public. businessesto the Company's membership and online viewers. The portals provide direct accessto the local We will also generate revenues through our exclusive WOW eSTORE an online comparison-shopping site TM, I I and online commerce enhances the Company's bottom line by not being limited to narrow revenue models. offering millionsof products sold online by the Intemet's most reputable merchants. Offering both real-world I I 7 1 I I CONFIDENTIAL WO Wto wn . c o m " The Company has also entered into revenue sharing and cross-promotion agreements _th well-rest-ted Intemet companies such as YesNail.com, Hamma.com, HapQuest.com, Inter_ss.net and AskHe.com. These applications.The Companywill seek out qualityaffiliate opportunitiesthat add valueto the sites, businesses Agreementscall for revenue sharingfrom the sales from bannerads, permission-baseduser groups and other and members. _ Revenue Summary o o o o o o Advertisingsales to onlineand Bricks-and-Mortarbusiness,includesassortedbundled options Exclusive Reseller Feesderived from granting portals and other territories to Local Market Partners, packages, Ongoing revenue sharing between the Company and its Local Market Partners, Revenue sharing between the Company and Affiliate Programs, Sales of Intemet products and services, i.e.: webpage design, site hosting, banner ads, etc., WOWtown and its Local Market Partners will share in the auction streams Transactions received from our planned local communityrevenue sites, created by the salesand marketing programs established by the Company. Revenues will expand as the number of new community portals increase, "real world"MerchantCenter where products, and services, all with a revenue l_usted onlineto WOWtown business applications, we provide our merchants with a host of stream back and WOWtown. I o i !:,.;:. i_ , _ /?,,_t/i_::,;../::_.,.. /t_.:i:.. REVENUES EXPENSES NET INCOME _733,898 $121439r771 $26,062,566 $68,874,471 ._2,561,511 IVlARGIN % 25 77 81 85 83 Year-1 Year-2 Year-3 Year-5 Year-4 $2,976_275 _16r 132t385 $32,057,980 $81,261,485 $51,426,125 _2,242,377 _;3r692r614 $5r995,414 $12,387,014 $8,864,614 i How does WOWtown market itself? WE WANT YOU ! , I I 8 CONFIDENTIAL WOWtown.com ' __ _'_" ____/ll_l___'rfL'ra' __ community portals to mainstream audiences. Radioand television commercials have been prepared WOWtown uses conventional advertising and promotionchannelsto disseminate the presenceof its to augment local print media advertisements to generate brand recognition in each market. The Company will aggressively market itself using creative push -pull advertising targeted at the local area, generating attention Planet" slogans: Where all the fun local portals and the WOWtown network. Plar/ceting Portals On The with its to create awareness of its is @r"and 7-heHott_st LocalIntemet J_r_ If_frl_ork Online advertising is combinedwith localarea membershipdrives,cross marketing, targeted promotional campaignswith establishedbusinesses and throughpartneringwith leadingcompaniesengaged in lnternet I to makeavailablea discountor savingsto WOWtown members. Membershipis alwaysfree, whichexpands activities. Bricks-and-Mortar usinesseslocatedin the communitiesare directlytargeted in sales campaigns b the overall membership ranks causingincentivefor increasedadvertising by all kinds of businesses. he T Companyplansto incorporatea free communityauctioninto each localportal to increasetraffic and create additionalawareness. We concentrate on bringing the global focus of the Internet down to a Locai Market level, creating a Global corporate _e_vork of l.ocai Internet Marketing Portals. Each Partner Portal benefits for the WOWtown _'_ Membership. operates independently while collectivelypro_ding wide-ranging programs" of features and i I • DesignCompanies,or establishedmarketing firmsto drive onlinetraffic to "bricks and mortar" WCW_o,_.._ conductsbusinessdirectly with localbusinessessuchas ISP's, Media Properties,Web TM businesses each LocalMarket region. in • • additional revenue streams for its Partners WOW_wn TM provides value-added Savings and Discounts to the Intemet user and creates WO_co_s:_ is the most unique, flexible, measurable and cost-effective form of Advertising TM available on the Internet. WO_"cownTM will increaselocal Membership in each Parmer's operating territories. WOW_o_.rn provides the tools, training and marketing necessary for its Local Market Partner's to TM their existing (and expanded) clientClients and new Membership, while enhancing profitability from attract new and profitable Business base. I • • I 9 i I CONFIDENTIAl WO Wto wn . com I _ How does WOWtown expand into new communities? l Americaand internationally.Prospectivepartnersare selected based on a number of key points:their local A syndicationof LocalPartners will replicatethe WOWtownTM community format in citiesacrossNorth area knowledge in a region, establishedmarketing and salesdepth in their community,and a demonstrated insightinto Internet commerce and associatedapplications. The Companywill activelyassista Local Market Partner arrangefor localarea marketingwith established materialand train key staff members. Each partner will to implement the WOWtown marketing support media groupsto implementthe portal branding.Developinga triangularrelationshipbetween WOWtown,a l costs in each city andcreate a dynamic method to developthe Brandand implementour programon a cityMedia Partner in each area andPartner hasthe capabilityto saturatethe community throughadvertisingthe by-city basis.Each LocalIVlediaa LocalSales Partnerwill substantiallyreduceWOWtown's localmarketing local WOWtown community benefits, while at the same time drivingbona fide leads to our Sales Partners. l This triangular-method form of advertising/markeldngwill generatea strong local presenceand awareness. . . ,,_2'_._ .._ i , ._-:.._,.._" ! | | I I 10 I CONFIDENTIAL WO Wto wn. co In U ! I I .c o m Section 3 -- BUSINESS PLAN !,o WOWTOWNTM Summary medium that provides targeted communication between businesses and consumers. Through a network of WOWtown.com, Inc. (OTC BB: IWOW) is an international, development-stage web-based marketing local portals, the Company arranges advertising for pa_cipating organiza_ons and offers a WOWtown Net Saving CardTM and Local ResourceGuide to customers. WO_own will activate more than 500 Intemet network to 62 community become portals under the Company's brand. WOVCcown domain sites, scheduled to portals. Additional WOWtown community portals will be phased inexpanded its recently over a time period that addresses the Company's capacity to maintain controlled growth. I I portals (gateways) in cities across North Network and internationally. This "community" Market Internet WOWtownTM is implementing its brandedAmerican of Company-controlled, affiliated Localof portals uses mainstream, time-tested advertising and marketing strategies, and various techniques to effectively connect online users with local area merchants in the same communities, driving real foot traffic to Bricks-andMortar establishments. Each local city-WOW site provides a community focused online Magazine, BusinessDirectory and Membership Program for Hospitality, Entertainment, Recreation, Tourism, Shopping, ProfessionalServices online membership through a web page presence linked through the local portal and agree to provide a and People in each local community. Participating merchants showcasetheirproviding an exclusive offer to saving, feature or benefit to WOWtown's local community membership. By establishments to WOWtown's WOWtown members companies gain more customers, increase their exposure and generate additional awareness.members receive a free WOWtown Net Savings CardTM -- a credit card-style membership card WOWtown that when presented at participating merchant locations rewards the holder with savings and discounts no coupons to clip and present to a merchant, making the b'ansaction very simple for the customer and offered exclusively to the membership. Member benefits are redeemable on a repeatable basis. There are business operator. Eachof the Company's portals combines a city name or regional identity with the 'WOW" brand to create a I I I i I unique identifying portal, which is tied to the WOWtown online community format. The Company's slogan -- ii ::-. _" "ii, _'::1 creates a community theme with a sense of anticipation about being a part of the WOWtown family. Tying-in the use of the familiar 'C._'symbol signifies r _ ' _ _: I Internet_C ;. -; , ,:,:" r,.;_ to highlight the Company's focus on community targeted Interact : marketing in " connectivity. WOWtown also actively promotes -- i i _, :_, ,' ' ,:,.'_..._/.:.::. :.::/_ _,_,:;": • i_, each portal region. I I 11 I CONFIDENTIAL 2.0 WOWtown WOWtown.com Brings the Power of the [nternet to the Local Community WWW.VancouverWOW.com vwwv.SanFranciscoWOW.com. Company The new Examples WOWtown and of communityportalsare www.SeattleWOW.com, planson implementing www.LasVe0asWOW.com, WOW-portals duringits firstyear of operation.All WOWtown communityportalscan be accessed at www.wowtown.com.SeeSection9 for a currentlist of WOWtown ( portaladdresses). Exclusive Reseller greementsare beingsoughtn our targetmarket locations a i with established, stableand financiallysolidbusiness entitiesthatare activeandfamiliarwith a particularcommunity areaor region.The Company maintainownership will and effective controlovercontentof eachportalthroughrevenuesharing agreements p eachlicensed Company's Revenue withour regional arl_ersto activelydevelop sharingbetweenWOWtown and its localpartnersencouragesterritory. the partnersto sell onlineadvertisingprogramsand otherproductsand services mainstreambusinesses. to Usingthe Intemet mortar business presenttheir goodsand servicesto consumers their neighbourhoods. basiccost to in The asthemedium,WOWtown provides unique programis as little as directtarget marketingfor bricksand a andmeasurable formof $29.95per month for a 24/7 online for a merchantto participatein the Company's presence. raditionalformsof advertising(print, radio andTV) are out of reachfor mostsmall to medium T sizedmerchantsand havelimitedfrequencyto attractviewers. "TheI_ makes mark,s more competi_ve becausebuyersandseJI_rs canfindeachothermore_sily..."Theearly adop_-_ers oftheInt_rnet redif_ret_fromthem_nstream a consum_-s whofottow.Ast_'_ IrP_ spreadsoa broader _ cross section f households, o thet_st_s reqL_r_,.n-_-_s and of average Inf,_met consumers willchange. companies Only that sen/_c_, undid ar_,d the diff_-e_ types in_.m_-consumers be able_ot_rg_ the rightl_opiewith the dghtprodud$, of will IVIBry Modah], VicePresid,_t ofRsse_rch, Fon'es_rR._e_rch, r_ I January000 2 _S." I 3.0 WOWtown adds Value to Businesses, Advertiser & Members WOWtown willdirectInternet usersto these"Bricks andMortar'; real-world businesses operating the in neighbourhoods hereconsumers w live.Throughthefadlitation of discounts anddealsofferedexclusively for effectivemanner,targetedto an audience that hasthe highestpotentialfor repeatsales. registeredWOWtown members,businesses listedonthe WOWtown networkwill be promoted a costin Thisall-Networkapproachwill give Bricksand Mortar merchants the localcommunitiesa powerful in marketingmedium,enablingthem to accessandtarget customers livingwithin eachlocal merchant's area of operation, ustifyingtheirownpersonalized, j reasonably-priced websitehostedby WOWtown Affiliates. Thiswill drive business thesemerchants give the consumerincentiveto patronizethesecompanies to and locatedin their area. Members Merchants and alikewill alsohaveaccess a muchwiderselectionof goods to American because locationsanshoponlineandaccess andtheir membershipasesacross WOWtown c otherWOWtown information otherlocations in the andservices Affiliates b situatedinotherNorth Network. CorporateSlogan The enormous _lUllll_lll IP_ _ designates establishments alsoto an Notonly there benefitsavailableto the4111lt i& @ TM Bricksand Mortarbusiness enjoyableexperience. the are but adve_sing induslTy, hichis alwaysin searchof new methodsto promotetheir clients"productsto w pinpointmarketgroupsand individuals through permission-based arketing.WOVCcown broadentheir m will consumers. andinter-businessonnec_ons, c they willbe ableto ability to goUsingWOWtown's local TM usingthe Networkservices Intemet'spowercombined with the abilityto generateawareness wherethe consumernormallyshops. ........ , ........ ., , ,, ,_ ,. , ,, ,_...... _ ..... 12 ... ._ ii':._/:_i_,:; .... ,:.:,/:..... _ ........, I .... I I I CONFID EN TIA L WO Wto wn. co m WOWtown's programs will level the playing field between online commerce and local community interaction1 usin_ the Internet as the medium, Participating businesses will be able to market to their local target audience over the Internet making the medium a pr_uc_ive marketing and sales tool= WOWtown will facilitate and foster a universeof interactivity and commerce throughthe WOWtown'" Brand. Havinga Networkof interdependentstand-alonePartnersin each community, offeringa virtual cost-effective,identifiableand measurable meansof marketing for all types ofin developingan actualized supermarket of real-worldproducts, servicesand information.This will result localcommunity businesses. Combiningthe Bricks-and-Hortarwodd with the connectivityof the lnternet will maximize salespotentialby developingparallel and dynamiconline solutionscombinedwith conventional promotionand marketing. Fora basicmonthlyfee -- far less than the price of a singleprint advertisement placement-- businesses can reachan expanding network of consumerswithin and outside their normal market areas. The Company's product offerings will augment business'ability to providean expanded set of features and accessto the WOWtown Permission-basedMembershipe-mail database, further expandingtheir market benefitsusingthe Intemet targeted at their localizedpopulation base. Additionally, businesses will have reach. I I August 2000.Inc. says "The portion of Americans usingthe Internet grew from 32.7% in 1998 to 44.4% in The Department of Commercenotes that if growth continues in thisfashion, morethen 50% eNarketer, of all Americanswill be usingthe Internet by 2001." All 26.2% 29.8% 4&1_o Bt ¢J¢ on-Hispanic = N 11.2% 23_s_ Asian AmeflcanandPacific ISlander i 38°01_ 1_'6_ i_i D_er _ • !_ lr • _ ._2.'0J_,_.t _J,_=l. IF.. 41.S% Hispanic t_9S _L6_,_ _._ _ r_n _ I August20oo '..LL_,_-:._ Uafff_l:elr.co _ T ! i 4.0 The Intemet has evolved in an explosivemanner, opening up the global community so that anyone with Internet accesscan sourceinformationon almostany topic and get information about productsand services offered around the world. WOWtown will link communitiestogether, providing an effective consumerlink. What the Intern_ has not y_t accomplished is the ability to target and generate retail sales for established store-front merchants -- especiaIly the small and medium sized businessessituated in every city and I surrounding area in North America and internationally. 13 Significant Rise in Sm_ll-Business Presence or_the Web in 2000 | I I I CONFZDEN TZAL 4.1 i/gO itO wit. cO m Dun & Bradstreet says Small-Business on the Web is growing a Web presence, up from 28 percent just a year ago. Not surprisingly, larger small businesses (those with "D&B found that small-businessWeb sites are on the rise, with 38 having theirsurvey respondents site, but between 26 and 100 employees) were much more likely to report percent of own Web page or reporting every size category showed an increase over last year (see chart below). Home-based businesses continued percent a year ago. Forty percent and 41 percent of minodty- and women-owned businesses, respectively, to lag behind in thishave Web still showedup significantlynearly a quarter in both cases. Web sites, vs. 16 indicated that they area, but pages, also growth, with from last year now boasting i I HasWeb Page/Site AllSmall Businesses 1-S empl. 6-25 empl, 26-100 empl. HomeBased I WomenOwned MinorityOwned I B 2000 380//0 28Ofo 470_O 6SO/D 240fO II 1999 28% 22% 45% 43% 16% i I 410fO 40% 22% 30% ! I Seventypercentofsmallbusinessesresponding the D&B to surveythis yearhave someaccessto the Internat.Thisis upfrom57percentinthe priorsurvey,whichwas inturnupfrom47 percenta yearearlier. work. This figure is consistent with last year." On average, approximately two-thirds of employees at these small businesseshave accessto the Web at Source: _._n B._ D & - 1¢3_:h annu_} _Jn& _b'eet I (D&B)Smag-Business Surw=y ! 5.0 WOWtown provides its Partners wi_:hvalue-added features to market WOWtown's growing membership is empowered by the WOWtown Net Savings Card TN. Members are entitled to specialsand features offered by the businesssector locallyand in other cities where the Companyoperates portals; Permission-based Newsletters;OnlineCommunityForums;ChatSites; and many I other user features and benefits will add to the value of the Company's program. Additionally, WOWtown is establishing stTategic alliances with leading-edge suppliers, whose ]ntemat products can be sold to the Network's businesses and consumer membership, providing a wide range of and enhancements are developed for the Interact, they will be made available for the Company's Partners features and benefits, eachgenerating wilt ensure stream back to WOWtown. As new systems, programs to implement on a regional basis. This a revenue the WOWtown network remains fresh and current with the latest technology. I , ' _" 1.7: ,,..,. ........ _: , ..... ............................ Anti-Virus E-mail Service(WAVt!S=); Corporate Intranets; Web based Merchant credit card processing; Custom scalable e-Commercesites; BackOffice AdministrationSolutions (site design, database integration, traffic generation, and secure hosting); ASDL and ISDN dedicated connectivity; Interact Real Audio and Video programming; Wizard-based e-Commerce development tools; Interne communication programs; and analysis and tracking utilities. These are products and services that the Company will focus greater attention on as the membership and retail merchant base grows in the cities where the Company has established a community portal. These products can be sold directly online or through traditional merchandizing avenues. ! ! 14 I I I CONFID EN TZ4L 5.1 Opt-in for Permission-Based e-mail WO WtO wn. co m found a strong and positiveresponsefor opt-in e-mail marketingin a recent survey. FIoNetwork, an online direct marketing applicationserviceprovider,in connectionwith NFOInteractive A surveyof 1,000 net usersfoundthat 94% of consumersopt-in for permission-based e-mail. Fully,89% of I among consumerswith existingrelationshipswith merchants,81% think that e-mail is a good way to those surveyed think that e-mail isa goodto way to get informationabout productsof interest to them. And communicatewith them. i policy, 54% of respondents saidthey would part with informationin exchangefor personalizedservice.This The survey also confirmsthat consumerswill trade personalinformationfor services.Givena clear privacy comparesto 22% that won't and 23% who are neutral on the issue.The survey also found that e-mail plays a significantrole in how consumers found products on the web i HoW OllllllO Buyers Find Out all)out NeW Products and Services Source: emarketer ! I i Jisi1'in_ ,_ _le_site eMail "_ 7_ _errnission-Based :rl@nd 3arHle r Ad )hyslc._l f,laql 1_ umolkll_ _ 12% I IIw. ,- 5.2 I WOWtown's permission-based e-mail When a member signs up throughone of the Company"localportals the agree to receivethis informative The Company providespermission-basedweeklyemail newsletters totheymembershipin each localmarket. updateon currentevents happeningin their region.This weekly update describesnew member benefits, new merchantsjoining the program and highlightsspecificmerchantofferingsof interestto the members in as aarea. to enhancehaving a listed websitewith the Companycan effectivelyadvertise through thisor new the way Merchants their businessesthroughthis online presence, and promote timely, seasonal medium productsand servicesdirectlyto the membership. I I 5.3 Utilizing E-mail to Build Traffic & Generate Leads via Permission Marketing E-mail is, without question, the most used application over the InternE. It is potentially the most powerful I "targeted tool' otten goes unused.yet, becauseof corporate concerns of being labelled "Spam", e-mail as a form of online, direct marketing; The business successof WOWtown is directly related to the willingness of the membership to communicate Member Company. TMand WOWtown (City) Around newsletters within be viewable online as a regular text with the Newsletter The Company will publishopt-in Town TM.They will each portal area; WOWtown (City) email or in html (Web Page) format. pa_cipating vendors' using WOWtown's online advertising banners. Both versions are printable and can be In the latter case, the Company a member. a highly visual and attractive promotional vehiclefor email-forwarded to others from can deliver 15 ! I CONFIDENTIAL I WO Wto w n. co m The Companywill also publisha seriesof corporate relatedNewslettersfor all participating merchants/advertisersand the investment public.These will focus on specificissuesand areas of interest pertainingto the end user recipient(Business,Advertiser, General membership). Merchantsin the localcommunitiescan advertise to the membershipthroughvariousfees for services programsoffered by the Company. Merchant'sonlinemarketing efforts enhancetheir other traditional advertising and marketing methods. In addition,WOWtownwill publisha regulare-mail newsletterto itsproprietaryMerchants,highlightingnew cost-effectiveonline and real-worldbusinessapplications,productsandservices availableto WOWtown members. I ! ! i I 5.4 Utilizing E-mail to Build Traffic & Generate Leads via Permission Marketing This agreement providesWOWtownTM with a provenstrategy to generate incremental revenuestreams by providingits membershipwith the opportunity to join YesMail'spermissionemail marketing systemthrough WOWtown'scommunity marketingportals. WOWtowncan receivesignificantrevenueearning potential from a well-establishedprogramthat brings together marketers with consumerswho have giventheir permissionto receiveemail-marketing messages that matchtheir interests.YesMailcurrentlyhas morethan 14 millionmembers in its databaseand isadding an average of 1.5 millionnew members per month. Yesmail.comworks with marketers to providea total management. WOWtown has integrated from acquisitionto retentionand ongoingrelationship CustomerValue Managementsolution-- the YesMailservice into its registrationprocessas an option for its users. I I membershipwith accessto provenvalue-added servicesthat are uniquelymatched to each individual's IncludingYesMail'sextensiveopt-in distdbution programsinto WOWtown's network presentsour lifestyleand needs.YesMail'sexceptionalresourceeffectivelydovetails into the Company'sfocus of linking onlineconsumerswith pertinent business solutionsat no costto our members. "We are pleased to welcome WOWtown.com to the YesMail Network," said Todd Love, Senior Vice President of Business Development for yesmail.com. "Emerging companies that offer exciting new market niches such as WOWtown.com are valuable network database." partners in our effort to expand the depth and scope of our permission email marketing WOWtown.com News Release -- May 22, 2000 I 6.0 WOWtown's Reseller Partners I Local Media Parl_ers.The Company will recruit Exclusive Reseller Partners" (Local Sales Partners)into TheWOWtownhas initiated a becomeExclusive the Company TM networkto campaign that focuseson two pdmary Partnerships: Local Sales Partners and Partners underthe WOWtown brand, and to offer the Company'sprogramsand benefits within specificterritories. I Discussionswith established Internet stations, indicate that these types properties, suchas WOWtown's community newspapers, radio and TVService Providers (£SPs)and mediaof entities recognize local unique value-added services are attractive add-ons because they can be bundled and sold in the markets that the Local Partners already service. WOWtown's unique advertising medium combines the t_aditional mix. methods of advertising and promotion with the WorldWide Web to provide a cohesive, affordable marketing 16 I ! I I CONFID EN TIA L 14/'0 Wto wn .CO m LocalPartnerswill be providedexclusiveterritoriesundercontractualarrangementswith the Company. Partners' fees are negotiated to offset the costsof developinga specificregion. This syndication of Local partners will replicatethe WOWtownTM community format in citiesacrossNorth Americaand internationally. establishedmarketingand salesdepth in their community,and a demonstratedinsightinto Internet Prospectivepartners are selected based on a numberof key points: their localarea knowledge in a region, commerce and associatedapplications. I The Companywill actively assista Each partner will implementthe WOWtown marketingsupport material and helptrain key staff members. LocalPartner to arrange for local area marketingwith establishedmedia groupsto implement the portal branding. WOWtown will own each portal but through its Partner program, both sidesshare in the revenue streamscreated. The Company assistsin providingawareness for its communitiesin the form of mass advertisingto generatea local presenceand awareness. The Companymay opt to retain certainchoicetarget regions under its own controlas _Company Licenses', rather than grantingthe area to a LocalPartner. These selectterritories will be consideredbasedon market size and ability to implement without a Partner's involvement. Master Partners are granted exclusive useof the WOWtownbrand name in each specificjurisdiction, with the right to further developtheir territories through sub-agreementsoffering additionalWOWtown affiliations within a predefined geographicregion. the synergydevelopedthrough the exclusivebranding WOWtownExclusiveResellerPartners will profitfrom and be able to passalong savingsand benefits in their constituencies byway of membership discountsand other features associated with the WOWtown network stimulus. The WOWtown rnonikerwill become synonymouswith value to its members; individualusers,associatedbusinesses and advertisers. WOWtown Advertisers and Businesses while developing the home-grown market. products and servicesto will benefit by being able to showcasetheir WOWtown will expand an increasingly wider Intemet audience the marketplace exponentially as additional Partners join the program. I I I i I I 7.0 Proof of Concept m SeattleWOW.com & VancouverWOW.com I II i I yancnMr z-rm .c,, n, SeattleWOW.com and VancouverWOW.comare the betatest portals used to developthe Company's business model. Through an extensive development program we have proven and implemented much of what is being incorporated into the WOWtown Network ProgramTM. The Company has identifiednumerous niche-sellingopportunities, which can maximize corporategrowth throughexpansioninto other locationsand markets. Asthe list of ExclusiveResellerParmers,Affiliates, businessalliances and subsequentuser-basegrows, expansionacrossNorth America and elsewhere will significantly augment membershipadvantagesthroughout the WOWtown Network. I I 1 l CONFID EN TL4L 8.0 The Market WO Wto wn. co m will market for the Companyis based upon developing Brand recognitionof the WOWtown name. through The define the Corporation's Network of portals and strategic alliances into a recognizable identity Branding the syndication of independent Exclusive Reseller Partners who will provide the WOWtown format across North America and in other countries. "Accordingto ActivMedia'sreport, Real NumbersBehind'Net Profits2000, e-commerce activity for year 2000 will reach $132 billion worldwide, double the $58 billion reported in 1999. This figures includesrevenues from B2C, occuring as e-commerce continues to mature globally. The report notes that ActivMedia points to changesB2Band internet services. although most new sites are based in the US, proportionally its share of new sites has shrunk in the past relative to Europe and Asia. Another sign of e-commerce's growth is the shift away from informational websites to transactional websites. The younger the website the more likely it is to generate revenues directly online versus indirect sales or as a result of marketing." Source eNarketer. September 2000 GemerMes dlneules directlyfr_n tlmewell_llte m Website Itmte.ue _eilelratlon by Years Online m Genermes salesladlredly/r_mlt of mwlketlnl atwebsllte 43% 379; m Ne rolesre_ a erl_e_eratecl fer _ coral)any 4|% eke lO% • ,_,,.... m2yws $_Jrc_: A_O_e_8,2000 • 3or years mo_ _E. _ m Using the Internet as the advertising medium, merchants profile their establishments to a large potential audience. Unlike most directories, these Bricks-and-Mortar businesses are able to interactively offer and adve_ser WOWtown can display interactive maps, voice greetings, or other timely messagesabout the manage special savings and discounts via highlylocal community WOWtown portal. At the option of eachon adve_ser. Merchant adveRtisementsare their measurable, very cost-effective and reach the audience a 2ht/7 schedule. m m This drives new and repeatlocated to their own communities or those additional incentive for to visit. Using patronize local businesses traffic in participating retailers andgives cities where they plan consumers to the power of the Internet to match people with businesses in the same community adds a powerful marking tool for Bricks-and-Mortar shops and services. Most of the small to medium sized businesses do not yet havean effective web presence. "Intemet commerce stands at the threshold of broad global acceptance." "Worldwide i-Commerce sales will reach as high as US $3.2 trillion in 2003, representing nearly 5% of all global sales." Source: Forrester Research Inc. m I I I CON FZDEN TZAL 8.1 B2B Growth Projections WO Wto wn . co m as a % of B2B Remnues, Worldwido TOtal eCommeme) 1_P8-2003 {in Billions and 1 1t_11 szql.1 o I 1 lm sTs.io(71.s'_) SlN Js (79.2%) i _tO02 _03 ss_=1 (=zsq,) 51255 22 87 0'i,: I Source: _at_fB r,20C0 _,v,_ ER C_Am "Small businesses,whichso far have been slow to adapt to B2B,will rush to catch up. Ninety-eig_ percent I 1999, only 8% of small businesses engaged in e-commerce, though many were online, but by 2003 this of medium and large firms are already connected to the internet with 41% engaging in e-commerce. In share will jump to 72%. i businessautomation. 'q'he entire integration of business automation into e-commerce is evolutionary, not 'q-he eCommerce: B2BReport adds that new intemet at eMarketer. '_l'heinternet has become the last piece revolutionary," states Steve Butler, e-business analyst strategies need to he combined with the full range of in the puzzle, tying communications and transactions together." eMarketer3uly 2000 ".lupiter Research reports that US B2B e-commerce will grow very rapidly over the next five years -- from but will represent 42% by 2005. Dominating B2Be-commerce during this period will be supply chain trade. $336 billion inUS Business-to-BusinessTrade Online B2Bactivity currently represents 3% of the B2Bmarket, In its report, 2000 to $6.3 trillion in 2005. Projections.lupiter highlights five industries which will conduct more than half buying and selling online by 2004. eHarketerOctoher 2000 I 9.0 Astronomical Ad Growth The explosivegrowth of the Internet has witnessedcorporationsand advertisers attempting to secure audiencegrows, marketers are attempting to capture the vast majority of Intemetmarketing. Asthe online greater market share and exposure in a linearfashionthrough one-by-one target users throughfree or discountedexclusive serviceoffers and by providingincentives for utilizingtheir particular portals. up from $4.3 advertising 1999. This would put $28 billion worldwide by 2005, "Total online billion in revenues will grow to 6% of all global advertising revenue on the web." I Source: .lupiter Communications The increase in online users justifies higher advertising revenues in a similar fashion to how traditional TV and Radio operates, the more viewers and listeners, the higher the audience, hence the ability to charge higher rates. 19 I I I CONFIDENTIAL WO Wto wn. com Thisenormousxpansionf previously ndeveloped e o u newInternetaudiences asgearedonline h marketing strategiesowardmassive, t single-identity portals, with namebranding capture to asmuchmarket hare s as possible. Yahoo!,AOL,Netscape, Mindspring others examples, offeringa one-stop, and are all geteverything-here approach. Thesenational brands forcetheInternetconsumer usea top-down to approach, andnumerouslickc throughs locate product, ervice businesst the locallevel - if a search to a s or a canpinpointhe target. t comparison, WOWtown ffersa o located upapproach Even then,theinformation bottom isfrequently concise packaged a user-friendly expanding not thatfocuses or firstonthe localareabefore in manner.n or I broadening search." a Advertising Bureau (TAB),ntemetadvertising rowthremains i g strongwith$2.1billion revenue the in in "Accordingo the latestedition t ofthe IntemetAd Revenue Reportpublisheduarterlybythe lnternet q second quarterof thisyear.The report,compiled PricewaterhouseCoopers, by alsostatedthatQ2 revenues wereup8.8% overQ1 2000 and127.3%overlastyear's second quarter." revenuesof $4.6 billion." "Totalad revenues for the first half of the year stands at $4.1 billion, approachingtotal 1999 SourceeNarketer I "Asinthe previousuarter,consumer q related advertising asthedominant ategory w c inonlineadvertising." Leadinl onlineAdveitlshl_¢al_orios, Q22000 :30' C U_llt p L]_ ;;! ?. I I I I l; ¢,20_ ,_._._eL Inc. v**,_, elll_ktm'.conl Source"AB,2O00 t reportindicateshattheproportion ad typesremains t of relatively constant. anner dsaccountor B a f 50% of online ads, a very slow 2% decline in share fromthe previousquarter, eNail ads, currentlywidely I market." promotedas a marketing tool,havenot picked upthe slack they havecaptured lowly2% share the -a of i Types OfAdS,Q2;mOO ]t)rt';Uflhll]', 3 _lfltlL'l" _ Sl_ I aieillieds 7_ i Intle_litlal$ 3% B eMail 2% i KoYWai'd aIQld'¢ll 1411, i IL%_0 _l_el. Iric_ _tQTI[eEQif.CCIll "Thereportalsofoundthat similar Q1 2000,95% oftotal revenue to transactionsre cash-based a transactions. remaining represent arter/trade packagedeals.Hybrid The 5% b or d deals account for46% of totalpricing models whileC]_lVls impression-based accountor44%. Theremaining or deals f t0% iscaptured I byperformance-based deals. 2O ! I I CONFID EN TZAL WO Wto w n. c o m eMarketernotes that ad revenuegrowth continuesto be strong. Shouldthe expected run rate of $8 to $10 billionfor the entire year be realized, it will eclipseelVlarketer's estimate of $6.1 billion. Tfrevenues reach$8 billionfor this year, it will represent 74% annual growth. While this growth rate it is considerably lessthan the triple-digitgrowth of severalyears ago, it still showsa very healthy ad market. Growth Rates k)r US Online AdvertlslnZ spending i Year 1996 1997 Millions $175 1650 Q'owth vs_Prevtovs Year 271% i 1999 1998 2000 2001 S3.6QO Sl.667 S6,100 Sg.SQO 116% 156% 69% 56% I 2003 2002 2004 lueI AMUal RMO Sl 7.S00 $13,500 $21.000 30% 42% 20% 95% V_. eIlmI1(a:Lq",c_xn I etV_d e'r, k_L n"i_ So_ce: eA, farke_r, 2000 l 10.0 WOWtown's "Local, Bottom-up" Approach m '@_commerceTM E-commerce is all about GLOBALbuying,credit cards,andsecurityissues,shippingchallengesand choosing i LOCALfoot traffic @ LOCALneighborhoodBricks-and-Mortar businesses where people live, shop, play and whom to trust. WOWtown has of the Internet and introducelocal residentsand touriststo it's all and visit @. We harnessthe power pioneeredthe new conceptcoined'@-commerce"', wheretrusted about recognizedbusinesseswithin eachcity portal we develop. which provides instant and repeatable discountsat the localmerchant'sreal worldestablishments. No We take that relationshipone step further and create incentivesby offering our flee Net Savings CardTM, secure sewers, cookiesor technical hurdles,just good old-fashioned@-commerce TM, where andwhen peoplewant it. WOWtown isstrategicallypositioned alsosupplyonlinee-commerceproductsand services to i i that providethe tools for businessand consumersto embrace the global marketplace. 11.0 I Marketing Plan Targeted Internet marketing (e-marking) plays a vital role in the successof e-onlinecommerce. The Company will provide its products, services, systems and branding to Local Partners in major urban centres and then co-develop sub-partnership agreements, which will further expand WOWtown's Internet presence fast tracking its rollout strategy usinga cookie-cutterapproachthat allowsfor 64 new portals to be into the suburban communities (within a major urban centre's regionalarea of influence). The Company is implementedand integrated into the main databaseat onetime. The initial62 portalnetworkwill be rapidly expanded using this growth formula. The has established site that linksto all Company its core (i.e. (main entry gateway regional www.wowtown.comand regionalsitesportalwww.seattlewow.com,www.lasvegaswow.com, sites) at www.bostonwow.com, etc.), whichform an attractive blend of Flash, HTML and Active Server Pages(ASP) WOWtown community portals and will rollout on a fast tlack basis to advance the corporate network. using leading-edge state-of-the-art technologies. The Companyplans to implement more than 500 Merchandisingand speed of accessare t_e critical elements. Simplicity and ease of navigation will allow the membership, businesses, advertisers and future prospects to use the sites effectively. WOWtown has membership base and marketing strategies based on specific demographic markets within the Company's formulated selling on local, regional, naUonaland international levels. I I i I ! 21 I I CON FID EN TIA L WO Wto wn . COm WOWtown has developed generic advertising formats for TV, Radioand Print media that can be seamlessly modified to reflect the Local Partners"domain name (i.e.: MiamiWOW, SanFranciscoWOW,etc.). The Partner will also be able to develop their own unique advertising and marketing flavor in a region using additional the Company's standards. resources and the community focus to capture the interest in a particular area. All advertising will meet with Cross-promotional opportunities will be sought on a corporate level and within each Parl_ers region of I Savings CardTM with other companies will add additional local content in the area. Co-brandingbases. Net influence to help create awareness and to promot_ the market push through their customer of the l 11.1 Rapid Implementation Our proprietary database designhasallowed us to quicklyandseamlesslyactivatemultiplestand-alone local I aggressiveand geo-targeted domain and uniqueidentity.Thesecurebroad based advertisersand Local portals,each with their own manner enhancesour ability to ability to launchour portals in such an Partners at the same time. i deliver the best localcontent in whichto draw advertisers. Thissignificantlycontributesto our mandate of a The uniqueformat we have developedallows our Local Partnersaccessto our system and enables them to truly global networkof localcommunity portals, but allowsfor a distinctivelocalfeel in each market. Eachestablishedcity portals have a completephase-1 presencewith localizedand relevant searchfacilities I provides the WOWtown Net Savings Card TM for use at local advertising merchants in each community to easilylocate local merchantswithin eachcommunity.These portals also offers free membership to all and and neighbourhood as they participate in WOWtown's local exposure programs. I Development,Mediacommunityor businessthat is alreadyin operation,who then will deliver Web Phase-2of development for all portals encompassessecuringa Local Media Partnerfrom theour marketing programs within that particular market. Local Partnerswill bringwith them the 'street level' marketing expertise and knowledgeto enhance local advertising participation and local content for each market. The Companywill activelysource out MediaPartners to create an instantly accessiblemarket tool for widespread penetration. Many Mediaproperties(i.e. Radioand-rv) have noteffectively developedtheir own corporate presence.Co-marketing with the localWOW portalwill provide a strong synergy. m I 11.2 Brand Recognition & Promotion i and avenues of sales and marketing awareness have been utilized to date, including TV, Radio, local print The WOWtown Brand is being promoted via traditional methods and through online techniques. All means media, contra-adve_sing and cross-membership promotion within each community. Awareness is also being generated through sales campaigns highlighting our unique position in the marketplace; such as "Go Local'; 'qhe Hottest Local Internet Marketing Portals On The PlanetT"" and "where all the fun is @_" Primary Purposes of WebsiWs amonE DI,-_;; Marketers ! PUblic r _i _lt i,or I t_.'i rTl;| _ _.* _dv_._ct I sI rl I Source: DMA. 2000 C_I00 ,s_..I]rl_el, IlK. <,'_R_ERCHAm 'RA_. elN alBet e¢.c,c¢_1 22 ! I I CONFIDENTIAL WOWtown.com WOWtown'sLocal Partners, underan aggressivelocal marketingprogram, will approachbusinesses each in communityand activelytarget new and existingmembersin the locality.The Companyhascompleted extensiveresearchinto how it will developthe awarenesscampaignsand has establishedmechanismsto attract, convert, transact, and retain members and customers. We have implemented62 WOWtown-brandedcommunity portals,duringthe first round of portal expansion and integration.The additionaldomains registered to the Company will be phased in on a timely expansion the PacificNorthwestnew LocalPartnerscomingon stream. WOWtown'scommunityportal rollout began in program in tune with with the EastCoast and MidwesternStates to follow. International portals are being implemented as well to broadenthe exposure. I I Mediapropertiessuch as radio,to draw upon its existing clientele baseavailableWOWtown benefits, to EachLocal Partner will be able TV and print) to promotethe advantage of me in that territory (i.e. ISPs, Bricks-and-Mortarmerchants, online companiesand to potential members. There is no direct cost to the end-user to becomeinvolved. They simply registerto becomea WOWtown Memberand start taking promoted in each community and through the WOWtown brand name on a wide scale. advantage of the program's benefits. The increased incentivesfor individual members to join will be heavily In addition to the conventional and traditional forms of promotion, the Company has obtained the domain I i each portal. This is a Phase III plan. These promotions will be marketed via local and community name '_ommunityAuction.net" and will drive traffic to similar to WOWtown Garage Sales newspapers in t_e classified sections and use a name each site by establishing a local auction site within TM. I 11.3 Attracting Members by Building Web Traffic BuildingWeb traffic is essential to a successfulonline businessendeavour.The five major aspects of traffic I auctionsthat the Companywill undertake are: and e-mail systems. building (local/regional/Network-wide) advertising, referrals, search engine listings, public Hardcosts are focussedtoward print, radio andTV media and t_rough targeted adve_sing. Exposurefor I establishedLocalPar'mersalready operational in the target markets. Combiningmarketing efforts with the Company is also created through low-cost Internet publicitytechniques and by networking with Media properties, such as RadioandTV stations in eachregion will create awareness. I 11.4 Banner Advertising and Keyword Buys Banneradvertisingspace is purchasedat onlinepublicationsandSearchEngines.The Company hasentered I ! I This contracts to purchasebanner spacefor generalthe banner will he presented when and if aadvertising. into technique is a highly targeted approach where rotation and has also purchased keyword customer enters a specific keyword that is referenced with the respective city name. Examples being: "Los Angeles Hotels" or "shopping in Chicago", for example. These _hemed' and geographical search queries are essential in the crowded SearchEngine space where individual searches can result in millions of references on any topic. WOWtown will focus on those local and online marketing agencies that specialize in matching advertising to the demographics required. engage specificbrowsers that providethe highest level of local targeting. The Company will continue to Conventional advertising techniques are also routinely employed in addition to banner advertising, using print and other forms of media to generate awareness of the Company, its products and services. I I 11.5 Referral/Affiliate Based Systems to Build Site Traffic advertising" Public relations and Most successfulonline businessesbuild-inreferral based systems into most traffic have traditionally been highlighted as the their powerful forms of advertising."word-of-mouth 23 ! I CO N FID EN TIA L I WO Wto wn. co m building strategy. Referral programs are more commonly categorized as "affiliate" programs. The modern day referral partner, or affiliat_ is paid bydelivering Internet traffic and sales to a particular website through direct links back to the sponsoring business. Technology allows the originating website, or "sender" to be tracked and commissioned for their efforts. WOWtown has developed an Affiliate Program to create traffic to the sites and has established a working relationship with the leading Affiliate Service Company, Commission3unction.com for marketing our program. Additionally, we have become partners with a number of the top name online corporations to provide revenue streams to the Company by offering our membersand system users access to relevant information numerous other Affiliate programs are beingInterpass.net, into WOWtown to add value to YesMail.com and of interest to them. AskMe.com, eZuz.com, incorporated Mamma.com, MapQuest.com, the membership and to create additional exposure for advertisers. I I ! ! I I I 11.5.1 CommisionJunction.com m Referral/Affiliate Program WOWtown has teamed up with Commisiort]uncion.comand has signed up thousands of "affiliates" to date. Wowtown in return pays a small fee per click through to these referring websites. This is the WOWtown TM. These affiliates place the Company's banners and buttons on their websites driving traffic to most costeffective way to advertise - paying only for results. basis. Affiliate programs allow content sites to partner with the Company to carry banner ads in exchange Affiliate marketing represents an easy and cost-effective way to run ads solely on a pay-for-performance for commissions paid based on clicks, leads, or sales. With affiliate programs, the Company is in control. better known and more Local Partnerships are signed. We anticipate continuing to rapidly increase the number of affiliates as the corporate presence becomes I 11.6 Search Engine Rankings High SearchEngineranking isarguablythe single most important way to build trafficto a site. Search according to which search engine sites are dependent upon many variables that are weighted differently engine placements of WOWtown'sis being utilized. Currently, there are over 1200 Search Engines and directodes on the Internet. It is estimated that 95% of comprehensiveSearch Enginemarketing plan, which has been conceived with the intrinsicdifferencesof all directed traffic is deliveredvia 12 SearchEnginesand Directories.WOWtown hasdeveloped a each in mind. ! i I I CONFZDEN TXAL 11.6.1 Mamma.com 14/'0 Wto wn. co m I WOWtown has signed a strategic alliance agreement with Mamma.corn-- "The mother of all Search Engines" that gives the Company the ability to provide geographically targeted search content from within the Company's network of portals. A localized search provides results for that community only. The Agreement will significantly enhanceWOWtown's online advertising and marketing abilities by providing preciselytargeted Web Searchand MP3 results for WOWtown's network of city-based community portals. Both companies will share equally in revenues derived from banner advertising on the Company's portals i that are linked through a search using the technology gives WOWtown a proven proficiency that can Mamma's proprietary Meta Search Engine Mamma.com search engine. accelerate the Company's expansion into new communities, providing greater reach and further establishing our Brand. Mamma's customizable search parameters will supercharge WOWtown's user base with highly relevant and comprehensivesearch results about local community information of interest to consumers. "lVbmma.com is very pleased to enb_ into a par'meting _ with _.com and is excited that its proprietary t_ctmology canaddsuch tremendous valueto WOAtcown.com's ne_'work" .lohao says DeLeon, PBusiness V Development I itsvisitors with search result_ona locallydefined basisfollov_doselywith Mamma's oalof ernpov_ng In_cn_ users g ofIVlarnma.oom. "Using Mamma's search _lginet_hnology power to WOWl0own's local-first searchprogram provide to withprecise irfonna_onof rdevance tY_m." to WOW_own.com Release--April News 12,2000 I 11.7 Utilizing Community Auctions to Drive Repeat Traffic to the Network: Community Auctionsare sitesis a fundamental attract attention as Internet service.Real World Driving usertraffic to thean effectivemethod to requirementfor anyalmost everyone has something they own that they wish to sell, or converselyare looking for something to purchase.Online Auctionshave provento he very successful ethodsto facilitatethis need. m I The downside to online auctions is that often the items placed for sale are not located in the geographical area where the buyer lives. WOWtown will refashion how online auctions are administered by directing the user toward WOWtown's Network, so that goods may be bought and sold within the regional community on generate "sticky eyeballs" and a reason for people to return to the site. Local auctions are part of our Phase a local level. This form of Community-to-Community (C2C) interaction is consideredan excellent way to III expansion plans. I I % of Total Consumer OnBne Sales) online Auction salos, 1t_8-2004 (in BHIionsand as a YI _ _ Total US 02¢ ecommlcce Sales Au_l_ S_ • % ofTatal as IZC I 1999 1998 2000 2001 $31 S_&5 _ 5 S8 8 $19_4 _0 _37.0 $57.7 l&O_ 8.1% 176% 15 3% I 21003 20,02 2l)9_ _-15.2 $11.8 $16.3 SIOJIL 7 $85.7 $1256 134% 138% 130% I ¢c,oooe I_a'lr_lel,Inc. www.eMll,lll_f.cor_ I m m CON FZDEN TIA L wowtown,s online auctions will drive local community 14/0INto wn • COm traffic The Company has registered the domain name htto://www.communitvauction.net to market WOWtown choice of WOWtown Level. Once a community where they site, he/she will be in the hyperlink to their websites on a macro locations in theviewer has accessed this reside to participate able to auction process. Anyone who is Internet enabled will be able to shop and purchase through the site but those wishing to sell m receive bids and inquiries. to will up for WOWtown membership and member base quickly. their goodswill be requiredThissign help to acreate a wider and expandinguse a WOWtown email address to i IrOns for seNlnl at an Online AUCtion 74' ;1. W+:mt +tt++tri I m _+U_.II l)+,++ol}i;!VJ]Itl Source: Gr _t_ld O_n_ 2000 _,5_81_L,I._, it_ _,###,l+_iw_t._ Localized I aucb'ons are convenien¢ safer and less expensive The benefits of a local online auction are that the buyer can review the items for sale firsthand; it reduces the risk of purchasing online and the costs of having the item shipped since, in the majority of cases the buyer or seller will live in close proximity to one another. It also lessensthe concerns regarding purchasing not unknown entities and the associated gamble for. fromreceiving their purchase once it has been paid of buying defective and/or poor quality merchandise,or By buying and selling locally it automatically minimizes the inherent dangers of purchasing something online when the seller is unknown and or products offered are unverifiable. II_ns for sIN)ppInl at mnOn.AuCtion t,t, k_;lV(+ ft_r_ Source: GreerthMd eMS L_tel, ll_ Or/M_ 20GC +IWW. lJll'll d I1 elr.[.]IM I WOWtown sites will all carry a local auction link on their homepage, both to the local auction and links to the main homepage at http://www.communityauction.net. The auction component will be promoted heavily in each region, which will drive traffic into the local sites. With local auctions accessibleacross the entire and Ubid.com's online auctions are offered on a universal basis. WOWtown Network, a defacto, one-stop auction format is created, in a similar fashionto how eBay.com's As the local flavour of the WOWtown AucUonsattract people from the local community, they can also access purchases and will negotiate a too. Therefore the Company will enableOther service benefits credit cardsfor other WOWtown Auctionsites modest fee for this type of transaction. users to make use of will includethe availability of "escrow" services such as www.eescrow.com. Escrow companies allow the buyer to place their funds in an escrow account subject to receipt, verification and acceptance of items purchased. ! ! 26 I CONFIDENTIAL WOWtown aucb'ons will expand membership WO Wto w n . c o m Asmore viewersare attracted to WOWtownthrough advertisingof the auction site they will learn aboutthe sale but will also be exposedto the other productsand be able to take advantage of the items offered for benefits of membership.Auctioncustomers will not onlyservicesavailableto WOWtown Members. Word-of-mouth, combinedwith conventionaladvertisingwill keep the WOWtown focus in the forefront in each local WOW-community. 11.8 Converting Prospects into Customers - User Friendly Websites Our websites are created in a cookie-cuttermanner that gives the network a regional, nationaland international series of powerfuland dynamic local community marketing venues, created utilizing some of Getting people to the site is important, but it is meaninglessif efforts fail to create customers.WOWtown the best and latest programminglanguages. some of the most talented web designersavailable. Each hasexperienceand workingrelationshipswith portal site is being developedwith the localmembershipand advertiser in mind. EveryWOWtown portal has the same look and feel. This helps to establisha familiarity for the end user. As they travel or accessother Companyportals,they will already be very familiarhew to navigate and locate what they are searchingfor. 12.0 I Creating Lifetime Card Members With little or no "cost of sales" associatedwith a repeat customer, the processof creating a life'dme customer is regardedas the most profitable. Through the WOWtown links,the membership will be able to locate productsand servicesoffered in their own "backyards"or anywhere elsewhere the WOWtown time is measured"3X"; successful ompaniesmust be mindfulof how quicklya customer can becomethe c Network is operational. This fact has not gone unrecognizedby competitorsandin the 'Mrtual world" where competitJon'slifetime customer. driven by their desire to find out what events and activities are occurring in their own neighbourhoods, such Although products and serviceswill form a major component ofWOWtown Net Savings CardTM will provide as discounts and specials offered by local area merchants. The the WOWtown Network, consumerswill be incentive to utilize a WOWtown local portal site for their consumer needs. Asmembers join WOWtownTM all types their own local community portals thiswill cause a demographic target that is ideally suited to through of advertisers -- morn-and-pop, local, regional, national and international. 13.0 Relationship Management: Profiling and Personalizing With the proper customer-servicetools WOWtown will be able to profilea member'sa_ons while visiting members' searching/buying habits. informationabout the clients usingthe sites, and the amassed the websites and provide importantCategoriesand classofpatterns and behavioursof the individual information pertaining to demographicsand psychographics then be utilized in numerousways to help can achievesales or customer support objectives through "kelationshipmanagement". I The informa_on obtained from these relationship management tools can help businessesachievea one-toone marketing environment for the members who are online. solutions for consumers. The WOWtown Network will be highly customer oriented. The process of It also looks at how relationship management can addresscustomer by the use of the WOWtown Net personalizing the benefits of WOWtown membership is underscored service issues and provide self-help Savings CardTM,permission-based email and immediate accessto the WOWtown online and real-world community. 27 I I CO N FID EN TIA L • • I WO Wto wn . CO m eMarketerrepo_ that"a recent Flexo-Hiner report, eCommerce Benefits Monitor, categorizes seven types of online shoppers in an effort to explain e-consumers' motivations. They are: shopping. "e.loiners" - (16%) Shopperswho believe the online community is the best placeto shopand discuss "ePrivateers" - (14%) Shoppers who appreciatethe pdvacy the web allowsthem and buy goodsthey • would not necessarilybuyShopperswho surf the internetfor the lowestprices andconsidercost-saving "eDiscounters" - (15%) in public. the most important aspectof web-shopping. I • • "eCynics" - (14%) Previousweb shopperswho did not enjoy the experience. "eBrowsers" - (12%) Shopperswho browse onlinebut buy offiine. I • • "at-Homers" - (14%) Shopperswho believethe best qualityof intemet shopping isthe convenienceof not leaving home. "eAutomators" - (15%) Shopperswho appreciatethe web for streamliningand automatingthe I shopping process." i Six shoppinl Source e/4arketerre: Rexo-Hiner and Partners, 2000 Types, 2__n__% of TOtal Web-Shotpper_) ( I _ Hooked. Onhne emva_nt mwm= and Sin_.;Ie s_ m Hunter Gatherer-_ CrQu 1T1t, I I i Cltck'_ ;:|It(l Mortar 23_ I...t&rnsI tlt_'a cfbve, 2000 ¢2ooo eMarl_er, Inc.. _.ellll_mef.conl Harris interactive eBwalant ew'oles N HOOke(I, Online a_aStage Shoppll_ Types N_vest to_e intarnet;cloas notspen_ alot LikelyandliKeS males; _as theleast Deyoung t beenonline_e onl_etobanks,i(_lllr_ shoppingom ne _e longest; nvests andshops mostoften wantfastcheck-out andone-stop shpppm8 Mostmteresmatncor_anlance an_sa_tn_ Godirectly the siteofthe merchanthey to t Irma: know; pendthemostolllir_ s compare andprovide analysis ASeS onlinebutprefers Duyoff_ne; once'nea 30 S_pps - 49with 2 o_il_en:u_lizes_tes to c I_at wlt_ onlinepnvacy andsecunty:_stsshopping t mallsthemost _/_.elBa_etel:COrl] 28 I Materialists T=me-San=tiva Brand Loyalists i Hunter.Galher_rs C_lcV.s an0Mortar Group I Had'TIe k_er. f_. ¢'_ooJrntetacfive, eMa, I 20_ ! I I CONFIDENTIAL WOWtown.com "Harris estimates that out of 120 million online shoppers,the smallest percentage(5%) are "newbies," who are notextremely interested in making purchases online.The largestpercentageof shoppers(23%) are "clicks-and-mortar"shoppers,who appreciate the internet but prefer to shop offlineThe Harris shopping-typedefinitions are listed below." 13.1 Push I Pull Interactive Advertising ! 1 I I Aclsator WOWtown has entered into an agreement to begin offering push/pull marketing technology directly to our users/members through a co-branding arrangement with Adgator.com, Inc. (www.adgator.com). WOWtown users can download a city-specific WOWtown branded interactive desktop processusing Adgator's technology, to provide increased exposure "stickiness" and additional advertising inventory with increased revenue poterfdal to WOWtown. Adopting Adgator's technology will provide user-friendly, customized desktop solutions for all WOWtown's technology. portals and offers a information, branding, promotions and advertising normally found on our community All of the Company uniqueautomated updating system for online content using'_)ush" local community portal sites are graphically presented on the PCuser's desktop and can be accessed and activated directly from their PC screen, even if they are not on line. WOWtown will have added ability to placehighlytargeted ads on a users desktop and to pick andchooseto whom and when those messages appear to the users. The Company also gains accessto "real-time" online stafdsticsshowing how advertising messages are working. Some of the basic components of market data are; gender, age group, income level, education level, interests, hobbies, impressions, click rates, etc. I I I I Sample PC desktop uUlizing WOWtown look and feel incorporates push marketing to the end user I I I CON FID EN TIA L 14.0 Website Measurement & Analysis WOWto wn .com experience,whichlinksthey usedto accessthe Network, what searchenginequedes they performedto get Measurementtools willof other valuable information. precisedata on members' activities, their viewing to the site, and a host allow management to collect This informationprovidesan opportunityto quantitativelyanalysea marketing campaign'seffectiveness,test various designsand strategiesand help determine relative advertising effectivenessand ROI. The Company will then utilizeproven Internet and 'franchising-style' arketingformulas to gainawareness m and exposurefor the WOWtown plan. 15.0 WOWtown m A Unique Concept networkof has identified the changing evolutionin Internet usecan harnessthe Bycreating an affiliated WOWtown independentExclusiveResellerPartners, WOWtown and marketing. changingwants of consumerson both a micro and macro basis.Astrends changethe Networkcan quicklyadjust to address the dynamicson a universallevel. Whereas, throughthe positioningof WOWtown's independentportal Network, each unitcan micro-manage content directly to its local user-bases, built on the successesachieved from their own user-base's demographics. WOWtown has been designed to allow maximum flexibility & system content, determined by the unique dynamics at hand in each region. which are i to addresssmaller,easilyidentified markets. WOWtown has iderrdfiedand will target unique niche markets As the Internet unfoldsand "The New Econom_ matures,the need increases advertisersand businesses for not being servicedeffectively, or at all, by the establishedmedia. The Company hasentered these markets through a planned development and expansion program started in fall-2000. According to Jupiter Communications, in 2005, online advertising revenues will hit $16.5 billion -- totalling almost 8% of total US advertising. _Offlinespendingspreesthroughout 1999 by internet businesses,Jupiterbelieves, will be replaced by web will be at a premium. ad campaigns. Efficiencyand accountability for which the quantifiable nature of the internet isbetter suited, "Among executives surveyed by Jupiter, increasesdudng the next 12 months were expected in the following media: 73% of advertisers would increaseonline advertising • • • 43% would increasetheir magazinespending 37% plan to increasetheir cable-TV budget although Between 1999 and 2005 online ad revenueswill show a compoundannual growth rate of 30°, from traditionalonly one-third of increasesto be incremental. Otherincreasesin onlinead budgetswill come Jupiter expects marketing budgetswith direct marketing (20%) and newspaper (14%) budgetstaking the largesthits Forrester Researchdefines these categories as: 'q'raditional companies integrated vertically to build a base of capital and sustain production. To gain real advantage in eBusinessnetworks, firms must master the ability I to build network capital -- value produced through the network." 3O ! I I CONFID EN TIA L WO WtO wn • CO m eCommerce will reset the businessenvironment - replacing rigid chains with eBusiness networks. As supply and demand are built in to these networks, adoption curves and market cycles will tightly compress. Rrms must tune their strategies to build and extract network value more effectively than competitors. Source: Forrester Research Inc. I 16.0 WOWtown's Value-added Strategy WOWtown will focus on building NETWORK CAPITAL and inter-related ExclusiveResellerPartners(ERPs). HYPERMARKETINGthrough the WOWtown community of providing an environment fostering 16.1 NETWORK CAPITAL "To build network capital, corporationswill haveto: "Shape networks for strategic advantage. Companies must bring r_work-ready assets -for example, high-value customers, services, intellectual property, and accessto markets, or aggregated supply -- to the party and initiate a cycle where their network attracts new boats" of all the participants. However, by putting assets in play early, firms will shape the investment servebecomes self-sustaining." The best capitalized networks will "float the network to and their own goals." Source: Forrester ResearchInc. 16.2 I HYPERMARKETING "Extract value from the network. In this new setting, winners will excel not only at creating value in eBusiness, but also at extracting it by mastering a new competency -"hyper-partnering." Hyper-partnering is the practice of quickly and efficiently forming overhead low when partners that can exploit so they can be rapidly disbanded or focused networks of forming these subnetworks,market opportunities. The trick: Keep reconfigured as opportunities dry up or change shape." I Source: Forrester Research Inc. l 16,3 Exclusive Partnerships WOWtown has adopted a courseof action to actively pursue establishedbusinessesto form strategic with strong firms that have a product or service that adds immediate relevant content to WOWtown's alliancesthat highly effective method for developing incentive the people to existing audience. Partnering network is a benefit WOWtown's members and add value to for alliances' reuse our Sites. Creating alliances allows independent product and service providers with a much broader ability to expose their offeringsto a wider market through WOWtown'scommunity portals. I I 31 I I CON FJrD TIA L EN _ _d.com -- Immediate Online Content WO Wto wn. co m ! i se ocomaccessed through a co-brandednetwork of 1600 localradio, televisionand cablestation websites. Sinceits foundingin 1996, BuySellBid.com,nc. has developeda data repositoryof over 4 million classifieds I BuySellBid.com's suite of co-branded content services includesMultimediaClassifieds,Local Shopping Directories,Local Malls,Coupons,and YellowPages. I domesticand internationalmarkets. These features enhanceourlocal contenttoonlinetrafficover 60 BuySellBid.com classified listingsexpand WOWtown'soffering of ability to drive its usersin into our community-focusedsites and further exposesthem to our other services,features and benefits. Promoted locallyin each communityour partnershipwith BuySellBid the ability to increasemerchants,members has community classifieds. and other advertisers acrossthe networkwhile providingour members with one-click accessto local BuySellBid.com's servicesincludethe primary categoriesof automobiles, real estate, and employment, as I I Hajor distributionand equity partners includeNBCand Clear Channel Communications(NYSE: CCU). well as over 2000 subcategories. Users can searchlocally, or can expand their searchto a national level. "In welcomingWOWtown to our growing networkof affiliates we give their usersaccessto one of the brand," said Jay Shepard, CEOof BuySelIBid.com. "We know that classifieds,especially in the auto, largest databases of local classifiedsin the country to beshould keeplocally-focusedback to the WOWtown employment, and real estate categories, continues that a growing them coming business that will be driven to the web by local media alliances." I 16.5 ThinkView.com m Local News, Sports and Entertainment ! I The Companyrecognizesthat local, relevant informationisan important considerationfor our systemusers. Providingcurrent and Umelyinformational content ensuresthat our portals will remain an important destinationfor our members. WOWtown has entered into a syndication partnership with ThJnkView,Inc., a media syndicationcompany that enables content solutions for vertical portals, desl_op applications, online directories, search engines, wireless services, and interac'dve television platforms. Applying ThinkView's Da Vinci patent-pending indexing technology,ThinkView indexeseach a_cle according to its context by extracting keywords, associations, concepts, and other complex linguistic variations. Once headlines are aggregated and indexed, customized content solutions are updated to Wowtown's portals with local subject matter. ThinkView works with leading brands of newspapers, magazines, broadcasters, and cable networks to build powerful content aggregation, indexing, and syndication technologies. It aggregates headlines from over similar crawling methodologies utilized by search engines. 250 leading media brands suchas CNN, New York'limes, Forbes, ScientificAmerican, and the BBCusing 32 ! I i CONFIDENTIAL WOWtown.com ThinkView has formalized relationships with titles suchas RollingStone, Popular Science, Cigar Aficianado, Red Herring, CNET, ZDNet, and Sportsline that expand the scope of ThinkView's ability to use their respectivecontent. 17.0 IMPLEMENTATION ! I I 17.1 Corporate Development Phase I -- Back End Development expansion objectives for development program betaCompany Seattlewow.com) for portability and During the initial 90-day re-tooling the existing the site (i.e. accomplishedthe primaryfront-end functionality, so that this model could be applied toward new portals with ease. We developed WOWtown"Rash" sites for pre-license sales and commenced initial marketing programs, formatted the WOW e-StoreTM andcompleted enhanced searchand online marketing functionality. PublicRelations and Investor Relationsprograms have been implemented. Media Ads (TV, Radio, Print) were completed and activated in a number of localportal markets to test the results.These havebeen very well receivedand are being to reflect into every WOW-city portal. A new membershipcard format was createdintegratedthe universalcorporate brandingas well as presentinga unifiedappearance for the rollout of new portal sites.Complimentarymarketing, sales to simply and efficientlyreplace a localdomainname in one WOW-market with anotherdomain and promotionaltoolsmaterials, to reflect the regionalcommunityflavor in each market. are able name for all our local were completed and instituted. Usingour cookie-cutter format we • I • I • i i . advanced to a level that allowsus to integrate all sales and billinginto the centraldatabase. The The backend billingsystemand the initialenhancementsto the e-commerce merchantcenter were backenddatabasesewer was substantially completed mid-summer 2000 and is fully functionalto support all of our portals during future expansion. I • with relevant trade-marking proceduresintegrated for a numberof the purposeswas established, A comprehensiveASP(Application ServiceProviders)listingfor contact Company'skey slogans: Where all the fun is @T., The Hottest LocalInternet Marketing Portal On The PlanetTM, WOWtownTM, WOW-eStoreTM, WOWtown Net SavingsCardTM and the Net SavingsCardTM. We will augment our marking program with additional trademarks and slogans in due course. We have developed an agreement document usedto sign up Exclusive Reseller, Media and Sales Partners. We purchased all required Domain Namesanticipated in the expansion program to identitiesand growing as new markets are identified. is extensive, with well over S00 secured incorporate Partners in key cities and regions.This list I • I • I We havedeveloped complete LocalPartner Saleskits, Training Kitsand all relevantsupport material to be utilized in each new market. Phase II -- Community Expansion I • Phase II developmentsare to rapidly establisha market presenceby implementing additional "template-style'community portals. These portals will establishthe basic network and develop the foundationto obtain portal partners. During this periodwe completeand implementWOWtown's Merchant Center. 33 I I I I CON FID EN TIA L WO Wto wn. co m I I Phase III B Integration • Phase consists f augmenting Company'srogram indudesuchenhancements III o the p to as online communityauctionsand other LOCAL-lst features that are relevant to the community interestsof people residingin the areas where we have establishedour portals. • I A comprehensive marketingstrategyto create awarenessof the publicaspectsof the Companywill he dovetailed to developa (OTC BB-IWOW) will be stronglymarketed and promotedto Company'strading symbol two-pronged approachthat will generate the widest audience.The stockbrokers, media and investors. ! I I Phase IV B Global Expansion ° establish and The Companyhas primarilyfocusedon the North American markets to a presence gain a foothold towardsdeveloping the WOWtown brand. To rapidly expand Internationally WOWtown has entered into a number of agreements that will accelerateits growth in Europe, LatinAmerica and Brazil.Althoughother countriesoffer tremendouspotential, these geographic locationsare seen as prime areas for early integration. 34 ! I I CONFIDENTIAL • WO Wto wn. com Through a relationship with leffery Freidland, an Advisor to WOWtown, we have entered into Memorandum of Understanding (MOU) agreements that provide strategic relationships in all three regions and provide significant funding for their establishment. Each of the areas is covered by their own independent agreements. Roper Reports Worldwide ... "released a global survey of computer and internet usage which finds there has been substantial growth in personal access to technology in all parts of the world. The survey is based sample represents a total population of 1.39 billion people. on 30,000 face-to-face interviews with 1,000 consumers, 13 to 65 years of age, in each of 30 countries. The • Roper estimates that 30% of global consumers now own a PC, a 6% increase over 1998. I I • • Eighteen percent ofincrease forbase population went online at least once in the last month, Roper also reports, a 7% the same the same period. 51% of North Americans own PCs, an 8% gain over 1998 Latin America PC ownership grew seven percentage points to 29% Western Europe, with 39% PC ownership, and Developing Asia, with 17%, are each up four I , • I percentage points Inlonult us PonoUl_lon ! I m SOUthK,mrea 3% Tahvan 11% AusUraiia 11;% 34% 35% 45% _pm m _lCe 10% 2J% I 1S% ll% • TNS m FiSo_¢_: y_ _t_:_ 2000 _n _A_ 17.2 m Formation ofWOWtown Furope Tile Mou agreement calls for WOWtown.com, Inc., to own 51% of a new entity-- WOWtown Europe Ltd. It was incorporated on September 15 2000. Its primary partner, Euro Tech Worldwide Umited, will raise a minimum of £500,000. Euro Tech will provide strategic advisory services including corporate financing advisory services specifically and primarily to achieve the Company's financial and business objectives. i I I I CONFID ENTIAL WO Wto wn . co m Eump_n Adult Intemet Users, 191;9and 20o3 (in % of TOtal Adult Population) I TotaIW. I lm Eur. pop+ 11_ s 307.2 M 29o3 Total W+ Eur. pop. 11_ s 301LS M Source: a_fa_ete[. 2000 c,2000 _18"1c_e¢. fix. vc/N/.eMIIl[ter.corn I ACtive lntenlmt Users in westQrn Eumpe_ 1_8-2(]03 (In Millions) I _ 15.0 r/.I I source: _,farkete[. 2000 _o0o eMark.elel. InC. _wLelk_llter.c_r_ I US throughwirelesstechnology. Butrecent data point not onlyto a digital divide, but on certain key '_he assumptionisthat Europe,with continueduser growth, will catch up or perhapsleapfrog ahead of the indicators- IT investmentsand host counts - the gap betweenthe continents may be growing, not closing. I the telecommunicationsandinformationtechnologymarket amountto $540 billion,accordingto forecasts The past few years. In 2000, the marketvalue is expectedtoin WesternEurope hasseenrobustgrowth over by the EuropeanInformation TechnologyOffice (EITO). Dueto liberalizationof marketsthroughout Europe, growingcompetition, and expansionof mobiletelephone sales,growth rates were 12.7 and 13% in 1998 and 1999, respectively, with Spainand Italy showingparticularly big jumps in 1999." eNarlceter I I 17.3 Formation of WOWtown Brazil Limited The IOU agreement callsfor WOWtown.com, Inc., to own 51% of a new entity-- WOWtown BrazilLtd. It minimumof £500,000. was incorporated on September 15 2000. Its primary partner, Euro Tech WorldwideLimited,will raise a EuroTech will providestrategicadvisoryservices including corporate financingadvisory servicesspecifically I i and primarilyto achievethe Company'sfinancialand business objectives. 36 I I l I CONFID EN TIA L 17.4 Formation of WOWtown Latin America Limited WO Wto wn, co m Ltd. It was incorporatedon September15 2000. Its primary partner, EuroTech WorldwideUmited, will raise The IvlOUagreement callsfor WOWtown.com, Inc., to own 51% of a new entity-- WOWtown Latin America a minimumof £500,000. EuroTech will providestrategicadvisoryservices includingcorporatefinancingadvisory servicesspecifically primarily Company's objectives. and to achievethe financialand business I i 17.5 Ongoing Marketing and Sales Campaigns As new LocalPartnersjoin the WOWtown Network, additionalservices will be implemented, increasing revenuestreams to its Resellersand to the Companydirectly. WOWtown providesthe technicaland sales I the first twenty or thirtyportal operation. Revenueswill be sharedon a negotiated slidingscale.Initially, for strategies to each local LocalPartners on a 50% - 50% scalethroughoutthe term of the agreement.Once the brandinghas been establishedthe revenuesharemodelwill be primarily on a 75% - 25% profit split, in favour of each Part_er, however, each new market will beevaluated and negotiated individually.Some portals may remainunderthe controlof the Company without the active involvementof a localpartner. The Company's 'cookie-cutter' approachtoward developmentand implementation of portal development into regional marketareas will support a fast ramping-up acrossthe affiliated WOWtown Network. online advertising stressing the brand name, features and benefits of associating with the Company. We WOWtown will create corporate awareness ofthat allows for a local portalsname to be inserted, thus have created "I'V, Radio and Print advertising the Companyand its portal through generic media and replicating the advertising program at much lower cost than producing separately for each market. users, Individual businessesand community presence using a comprehensive advertising and promotion portal region to develop the localadvertisers will be targeted locally through media advertising within each plan. (See www.wowtown.com) Additionally, through developing enhancements such as local community auction sites for each portal, WOWtown will create incentives for new users to access the sites and become members. The Company will also rely on its Exclusive Reseller Partners to expand their clientele basesthrough regional promotion that stress the local flavour. This is accomplished by attending and hosting events in the communities, usinga local sales and opportunities with businesses and services in their region. and by developing cross-promotional markeUng force (under the direction and control of the local Partner), Advertising on company vehicles, billboards, bus stops, transit vehicles and use other promotional items are I to attend in the eventsmix to generate awareness. To date we promote the WOWtown a local marketing TM as included local sales where large groups of people attend to havesuccessfullyused Net Savings Card staff a way to build membership in the regions. I I I I I I brand name and loyalty programs as value-addedservicesthat provides benef'_sabove and WOWtown As the WOWtown Network grows, indMdualsand businesseswill discern the benefits of the beyond basic Internet accessprovidedby the majority of ISPs. I 18.0 WOWtown's Competitive Advantages Through expansionby new Local Partners,the market size of the WOWtown Network and membershipbase I customers. All aspects of the WOWtown Network will be enhanced from the addition of new value-added under theand services, which can be instituted across the Network. New services will be made available to products corporate umbrella will quickly grow to offer many benefits to our Local Partners and their core the Local Partners, which can be up-sold creating additional revenue streams and ensuring their clientele i are provided with the best opportunity to promote and market their services. 37 ! I I I CON FID EN TIA L WO Wto wn . co 111 Ascurrent must-have items are made redundant by the latest and most up-to-date versionsof productsor services,WOWtown Partners will be positionedto providestate-of-the-art features for their consumers. Additionally,the expandedscope of the broader Network will generate highersales potentialto their in their own geographicalareas and elsewhere, and can offer reachand accessto a largercustomer in a corporatecustomers.Online businesses havewider marketincreaseddiscountsand other benefits group will cost-effective manner. I 19.0 Benefits: Exclusive Advertisers • Resellers, Media & Sales Partners, Businesses & I Dynamic and cost-effective affiliations allow independentExclusiveReseller Partners (i.e. media properties, LSPs,local businesses,etc.) to increasemarket impact, both locallyand regionally. I ° • gain wider market exposurefor their productsand services. Affiliationwith a larger Networkallows advertisersto make useof lowered CPH advertising costsand A Partner'sexisting local and regional businessesandadvertisers gainwider market exposure for their i • productsand services, while using the Internet to generate additionalexposure locally. Affiliates are linked directly from their unique WOWtown entry Portals to the WOWtown.com main wet)site providing network access and ease of navigation to millions of Intemet users searching for discounts, product information, local events, and services occurring in regional localized areas. Advertiserscan usedemographicand other measurementsgained from the Company'stracking and monitoring capabilities to target specificmarket sectors. I • • • Businessescan promote their advertising'message'without increasingstaff size. Social andrecreationalGroupActivities involvingWOWtownadvertisers enhancethe participation in the Company's Membership Programs. Affiliation conceptallows for Network-wide savingsandadditionalbenefits to be offered to existing and future businesses,advertisers and other system users. I • I • • presence, at reasonableprices. WOWtown can arrange for businesses not having a currentwebsiteto receivetheir own unique web Businessescan reach consumersin their hometown communities,focusingon the needsof the local members who live within the immediate market area. Businesses and advertiserscan expand their Harket Reach throughefficientand cost-effective techniquesgeared towards increasingtheir profiles-- affordably! can marketing programs through use Businesses and Advertisers better track their of the exclusive "WOWtown Net Savings Card TH-. salesand I • I I 20.0 Benefits: Personal Memberships IndMdual members of WOWtown'sportal partners will haveaccess to a much broader community from I advertisers. Members willof membership discountsand savingsoffered by participating merchants and of whichto take advantage be able to researchand sourcewhat they are looking for from a larger range productsand services, without having to ever leave the WOWtown Network. I website and lookfor the flashingWOW iconslocated throughout the site. Hembers will haveadditional To find out what specials/discountsare offered a member simplyhas to log-onto their local WOWtown privilegesof listing items for sale through the Auctionsites, when implemented. 38 ! I I CONFIDENTIAL WO Wto wn. com Only WOWtown members will havethis ability, although non-members will be able to bid on goods offered via the Auction site. Allowing non-members accesswill encourage them to join as members once they have an opportunity to view the sites and recognize the additional benefits that membership offers. As the Network grows, adding mere locations,separate linksfrom the local WOW affiliate's home page will identify all membership discounts and offers across the system. The members can then take advantage of any promotion no mater whether it is offered, whether in their hometown or across the Network. • Members will be provided with their own credit card-styleWOWtown Net Savings Card TMerrdtling him or her to exclusive offers and discounts at participating Merchants that have embraced the WOWtown program. WOWtown will act as a LocalizedSearch Engine, automatically locatingthe best Merchant values. WOWtown will also provide a generic Search Engine, locating comparison pridng for millions of products, from some of the top online retailers offering products and servicesfor sale over the Internet. One stop access to locate what is happening in their hometown or in other WOW city portals. I I • • I • i • • events anddevelopmentsin the local area, featuringcurrentdiscountsand other member specials. Membership in WOWtown'spermission-hasedWOW Newsletter TM designed to focuson current SocialActivitieswill be highlightedand regularlyupdated. This will helpfoster the senseof community within WOWtown. Online Mapsand directionsto retail shopsand servicesthrough our arrangement with Mal_uest.com. Online shopperswill haveaccessto online maps showingthe retail locationsof Bricksand Hortar establishmentsthat sellonline, In due courseMaps will be incorporatedfor localarea merchants as well. I • I i 21.0 • Revenue Generating will come from a number of divergentsources; sales of exclusiveterritories to Strategies Revenueto WOV_own Partners (eventuallyrenewal fees), salesof advertisingon the Company'sand LocalPartners' websites; merchandise sold over the ]ntemet, and by transaction fees generated by the Company's auction site. revenue streams from affiliate programs linkedthrough our sites; commissionsearned through I • The Company's WOWtown Herchant Center Online TM service will offer additional services and features to the Local Partner Network for resale to their memberships. Fees will be generated between the Local Partner and the Company using a revenue sharing split. As new WOW features and services are added the Company will expand its product and service lines, I • i increasingthe volume and potentialfor e-Commerce-generated sales. onllm) Advertising spendln¢ 19992004 (lllllk)ns) 20C1 _0C3 2004 source: V_off$ 5u_Of, 2000 GAGR = 39.5% _24, _W_ER _,_T I I 39 I I I I I CONFZDENT]'AL WO Wto wn. co m Leadlnz online Adverth;Jng catelorlss. Q2 2000 '_0rrll)lJt in )_ ¢_0_]0_el. II_Z. _,_PoLiMSaJr--Ilmef.£_ll source: _AB, 200,0 I Types of AdL Q2_ B ,ill II *_,r t _p:)rl'_lf',hl|)', _0' I i I I c_,.k_, _ R4_In'als 4% IINerIItltlMs I I I-,, media II lUch ¢30Q0,_. S_urce: 4B, 000 L 2 Ire_ 1"_ I Keyword search 1% v,*l_.eMu'B_elr.corll I I I I CONFID EN TZ4L WO Wto wn .com WOW-e Store TIq__ an exclusive 24/7 online source of consumerproducts. The Company will share in Website with access to millions of products for sale online, provided by top online merchants. revenues provided through a contractual arrangement with eZuz.com -- an Intemet Comparison Pricing Addi_onally, the Company can offer a multitude of other products and services provided from either online merchantsor bricks-and-mortarestablishments. Q4 Worldwide eltetailln_ Sakm, 1999 and 2000 (B|NIons i NarthAmerica and asa % of Quarter TOtal) I Europe S2.74 (26.0_) SS.31; (27.5%) A/ltPadl¢ S0.U (&e_) si.6ottl._) i Japan SOA 4(4,4_) $1,31 (6.7cL) • 1919 112OOO i ReSt f World o .18(1.7%1 I so.521;+7_1 C_O00 _MfV._Iel. Inc. w_w _mRktel'.corfl ! 22.0 i Exclusive Reseller Agreements Exclusive ResellerPartnerswill beable to secureindependentterritories offered bythe Company.These will be priced accordingto populationsize and be granted underconditionalrenewableterms. Asthe Network inducementto purchaselicensesin the eady stages, the establishedbasecostswill increaseby a minimum grows it is anticipated that the valuefor the territories will increasesubstantially.Therefore, as an of 5% per year pro rata. n n 22.1 Local Media Partners The Company recognizesthat in order to developa critical massand to establisha baselinefrom which to i a number of National Media Properties(Radio/TV) to create co-brandedventures in specificmarkets with enhance and promoteour programto other potentialWOW-cityPartners,we are finalizingnegotiationswith the Media Propertiesdirectly. In these instances,WOWtown will exchangefrom 35% - 50% of revenuesto I CONFIDENTIAL I WO Wto wn. com the Media Property/Propertieswhose function will be to saturate the market with on-air and other community awarenesscampaigns. availablemarkets. WOWtown will also hire, train, manage and fund a localresourcelinksfor each of the WOWtown will deliverup a fully functional LocalPortal, complete with localtelemarketing sales force/partner in orderto securelocalmerchantsto participate in the program. I support to promote the localWOWtown site to WOWtown to provide on-air marketing and listening The selected Media Propertieswill conb-dctwith their respectivecommunity/communitiesandpromotional audiencesusingthe Media Property'slocalpresence.Marketing will consiston on-air ads, promotions, contestsand other community-focusedevents, highlightingthe localWOW-city portal throughco-branding efforts. These activitieswill be co-ordinatedwith WOWtown. Co-brandingof the WOWtown Net SavingsCardTM with eachlocal Media Propertywill be a major focusof all marketing and advertising promotions.This will create a strong local membershipbase of Cardholders and developthe local Merchantbasein each region. thisnature it may chooseto foregothe upfrontEntry Fee Where the Companyelectsto enter agreementsof in exchange for developingan exclusiveco-branding relationshipwith the IVleclia Property in eachcity on an exclusive basis.Fees will not be eliminated, rather repatriatedfrom the early salesof productsandservices untilthe Entry Fee obligationhas been realized. WOWtown incurs a hardcost for set-up (approx $20K per dty) but will consider this as an investmenton WOWtown's part. WOWtownwill retain 100% of the aggregaterevenuesgeneratedby the Portalsuntilsuch commence have retired the set-up arrangement. pointthe negotiated revenue-sharingmodel will time as we basedon a city-by-city costs. At this This providesthe Media Property with no up front fees, the media sales force doesnot have to sell the I I I I with a substantialrevenue stream, with a minimalamount of labor involved. internet program, and the Hedia Partner doesnot have to handleany administration. It providesall parties This approachwill quicklyestablishmarket presencefor the local WOWtown portal and moderate the I are establishedin these centerscampaigns in those cities to create brand awareness.Once the programs obligationfor costly advertising and the Company has developedtrack record and history of sales we will focus on rolling out additionalcity sites basedon a fee/revenue-sharingprogram outlined in Section23. I 22.2 Local Sales Partners Under the precedingexamplewhere WOWtown will partner with an exclusiveMedia Property, we will also I contract directly with local sales and marketinggroups in these centers to perform the actual street-level sales resultingfrom the generation of leads. WOWtown acquiresa "local reseller"to sellthe product for a small annual fee. We delivera sales mechanismfor the productto the media Partner and at the same time are establishing marketing a attached to wowtown, other than training and implementation. mechanismto the local re-seller (who is responsiblefor sales and local content). All of this has no cost The local salesforce will be entitled to a percentageof the revenuesgenerated(up to 25%) and will be able coordinateevents, follow up on leads and complete the transactions, under the directionof the Company. to retain residualscreated from these sales. The sales force will work closelywith the Media Properties to This arrangement isa varianceto how other non-Media Property ExclusivePartnershipswill be developed relationshipwill be cultivated undera different revenue-sharinga region, an Exclusive Partnership and nurtured. Where a Media Property is not contracted with in format as outlined in Section23. The company will negotiateall contracts on a case-by-casebasisand will maintain a degree of flexibilitytowards establishinga specificterritorial pricingarrangement. I ! ! 42 I I I I CONFIDENTIAL WO Wto w n. com Section 23 detailsexamplesof revenue-sharingmodels that WOWtown will be offering. WOWtownwill negotiateterritoriesbasedon a numberof factors, with the major considerationof establishingPartnersin a numberof regions, thus creating a fast trackedrollout plan. 23.0 Exclusive Local Partner Agreements and National made available companies, These categorieswill be Web Designand HostingCompanies,CommunityNewspapersand other to Local, Regional Advertising/Harketing as well as existingISPs, independent investors. Media Propertieswill also be approached. Howeverthis model takes into considerationa fully operational Partnershipin whichthe Partner controls all aspects of the Exclusive Partner program. I 23.1 Class 'A' Local Partner Feesfor market areas consistingof the followingpopulationsbasesare (in US dollars): Market Size 1-2 MillionPopulation 2-3 MillionPopulation 4-5 MillionPopulation 3-4 MillionPapulation 5-6 MillionPopulation Over6 MillionPopulation Entry Fee $75,000 $100,000 $150,000 $125,000 $175,000 $200,000 Monthly Fees to Partner 50% - 75% of Sales 50% - 75% of Sales 50% 50% 50% 50% - 75% - 75% -75% - 75% of Sales of Sales of Sales of Sales Note: Local Partners can purchase additionalterritories to extend their market exposure, or selectively purchaseterritories in non-consecutive geographicregions.In order to expedite an accelerated Portal rollPortalswill be negotiated usingthe followingguidelines.Upfront fees may be reducedsubstantiallyin out in the iniUal 12 month period and create a vast presenceof operating Portals, the first 39 Class'A' exchangefor a largerpercentageof the salesrevenues.Thiswill reducea potential Partner'sinitialexposure but reduce their percentage: Portal Rollout Portals 1 thru 15 Portals31 thru 30 39 Portals 16 Entry Fee US $10,000 US $25,000 $50,000 Monthly Fees to WOWtown 25% - 50% of Sales 25% - 50% of Sales I 23.2 Class 'B' Local Partner • • • Marketarea consistingof a population base of 500,000 up to one million Monthly fees: 25% of sales Cost of entry: US $50,000 23.3 Class 'C' Local Partner • • Market area consistingof a population base of 250,000 up to 5OO,OOO Cost of entry: US $25,000 Monthlyfees: 25% of sales • 43 ! I l I CON FID EN TIA I. 24.0 Sales of Banner Advertising l¥0 IiVto wn, COm merchandise,productsor services.Offer-inducementscan be targeted to an individualuser based on Banner advertising has provento be an effective method of informingconsumersabout a company's profilingand intelligencetracking,or to a broadersegment of the Network, as determined by the client's needs. Userscan a particular product or part by usage their fly to which areabe matchedthey are searching in. For service determinedin is lookingto web a citytraits or by of the site to example,if a member within the United States,an Airlinead could be generated providingspecificpricingor other importantconsiderations I i to the member. 25.0 I WOWtown Products WOWtown plansto introduce new value-added features for its Partnersto sell or distribute through the Company.As new productsand services are incorporatedinto the WOWtown Network, it will benefit from salesand distributionusing negotiated remunerationfee structures.An example of exclusiveproduct offeringsis broadbandproducts: I 25.1 I Secure Broadband WOWtown representsan international and emergingglobal brandthat demonstrates the integration of using the Internet to promote merchant productsand services at the community level by incentinglocal products that the Companycan sellor resellthrough its portals to localcustomersis broadband connectivity subscribingconsumers to patronize WOWtown merchants.An example of the types and varieties of services. Accordingto the new report from eMarketerbroadband deploymentwill soonstart to accelerate. By2003, i I broadband accesswill have grown nearlysix-fold, to 32 millionusers. I TOnsil US Blroadband Fiber Users, 1999-2003 '1999 2900 1.76 0.54 1.47 NM 0.06 1.60 5A3 2.46 1.g4 2.94 NM 0.23 1.90 9.37 (Mllflons) 200t _ 332 4,08 _99 0.02 O81 200 15.22 4,31 6.62 727 QI_ 212 1.90 22.26 2003 5.39 10.95 9.78 0.25 3.86 1.80 32.03 I DSL C_Dle Sat I W_r_tess COpper -1 T TOtal Source: _Marketsr,2000 eMarl_er,nc l I www. M_llelm.com e 1 I I 44 I I l CONFIDENTIAL OSL subscrfbem vs. cabb MOdem s_Jscrfbe_ 1999-2o03 (Mqmons of Sub_dbem) 1_9 _ 1_7 WOWtown.com • ¢mle Modemsubsatbers • D_ S_SC_bMS I = 2442 I i $ource: eA4a_et_r. 2 GO0 CC 10 "Business usage is, and will be, driven by the fiber optic rnarkeL In 1999, business broadband users I businesses exploit cheaper broadband access meUx)ds such as DSL and wireless and medium-sized numbered 3.49 million. By 2003, that figure will reach 11.3 million as more small- broadband." I US Business FiDQr Cab_ D_. 5at WIrQIOSS Broadband 1999 _ 200'1 _002 users. 19_RP-21XB (MIHIons) 2003 1.71 2.36 3.15 4.07 5.07 i 0.15 0.04 3.49 1.60 0.42 0.1S 4.83 1.90 0.73 0.02 0.57 6.47 2.00 0.93 0.04 1.59 8.53 1.90 1.10 0.25 3.09 11.30 !.80 i Total C{_oarT.1 SOUrCO: _l_arket_ 2000 C_zO_)O e_ef, If_ _wv. eM_lcaer._orn i "Although business usage of broadband subscribers." will be substantial, it will clearly be dwarfed by residential i (MBI_) O_ Sub_crlbo_ lm _mM = 0`M) m p 0.3t (72%) 2000 {1"oral 1.M) = 1.42(T/_) 0.4= (2S_) RUl_mtk=l V_ lmdnNs, 1999-2003 iRe_lal (% _aro) i =UelMtS _ share) i 200t orotal. 4.M) 0.73 {11%1 _o2 _al = _) &dHi('82%) S.69 (86%) i _03 (l'etal = 10.95) o.t3 154%) 1.10 (1_) C_700_ eMaka_ _m SOurce: Msrk_t_,2000 e w_weMmtm_..com i I CON FZDEN TZAL 2.5.1.1 WO Wto wn. co m SST Digital Broadband Communications, Inc WOWtown hasentered Internet connectivity and related value-added services that will be will be the sole provider of high-speed into a Reseller agreement to distribute its technology. SSTDigital offered under the WOWtown corporate brand through all WOWtown local city portals. SSTDigital BroadbandCommunica'dons access, that enablesorganizations any sizeto securelyandcostis offering stability, reliability,andlast-mile a "next generation" secure broadband communicationsprovider of effectivelyconnectto the Internet andestablisha state-of-the-art protected intemetworking presencein the globaldigital economy. SSTDigitalprovidest_ue business classsecure high-speedInternet connectivity solutionsthat enables small and medium-sizebusinesses and large-scaledist_'ibuted enterprisesto control and improve their communications, nternetworkingande-commercetransactioncapabilitiesto effectivelycompete in Internet i As the number of WOWtown city portalsincrease,SSTDigitalwill meet demandthrough a growing national space. footprint of last-mile accessandvalue-addedservices. SSTC)igital and WOWtown corporate will sharein residualrevenuesfrom all broadbandservices initiated through any of the WOWtown city portals. "SSTDigital's business-classsecure broadband solution will be a great asset to all of WOWtown's local consumers and merchants, no matter which WOWtown portal they have signed up through," said Steve Marzocco,SSTDigital'sCEOand President. I 25.2 Interpass Net Technologies, INC. -- Prepaid Intemet Access Cards "Internet I access without the monthly fees" WOWtown has entered into an agreementwith Interpass to provide FREEco-brandedCards into each new market opened. Distributionof the cards is an effective advertisingand promotionaltool for the Company. WOWtown can also sell 35-hour co-brandedcards acrossthe network. Thiswill provideanother revenue streamto the Company. Interpass' unique and exclusive way for people to access and pay for Internet usage -- Pay As You Go, or prepaid Intemet access, offers a number of distinct user advantages that dovetail with the Company's plans. Home Users: Interpass is perfect for people who feel that they are not using the Internet enough to justify a monthly subscription fee. According to recent statistics, most people use the Internet I I surcharges. less than they think. With Interpass, you pay only for the time you use, no monthly fees, and no New Users: Interpass offers new users thinking of trying the Internet or those who just don"c i know whichTravelers: ifayou traveland easy to connected to the Internet outsideof flexibility. local ISP to use reliable and have use program that provides a lot of your ISP's Business coverage area or you've subscribed to a roaming service, you probably know how costly it can be to use the Internet. At a low rate of only 57 cents an hour, connecting with Interpass will save money. I I CON FZDEN TZAL Vacationers: vacation. WO Wto wn . co Ili Interpass offers easy access to people going away for a few weeks or months on I 26.0 Business-to-Business Product Packs Special pricingof each value-addedserviceor bundleof features will be establishedthat allowsfor I significantmarginsand incentivesto each Licensee. Licensees revenuestream. Initially, for Partners may product packsor sell them _ la carte. The Companyshares in the sell the WOWtown servicesas bundled joiningduring the first year, revenueswill he shared on a 50% - 500/0.Thereafter revenueswill be shared on a 75% - 25% basis,in favour of the Partner. The Company has made allowancesfor independentmarketing groupsto also resell WOWtown products underAffiliatePrograms.The WOWtown.comAffiliatePartner Program(APP) allows the APPIVlember to earn a residualmonthly incomeon goodsand servicessold to others. Additionalproductsand serviceswill be incorporatedto augmentthe basicprograms offered. _- I I 27.0 Independent Agent Commission Sales Potential Due to the communitynature of the WOWtown Program,Affiliate marketing offers tremendousadvantages i WOWtown Program into their normal mix of productsand servicesfor sale. It also opensup a wealth of to the Company. It allows for independentgroupsor individuals100% commission potentialmarketing opportunities for sales agents who sell on a (i.e. HLH, wholesalers,etc.) to includethe structure. Productlinesand servicessold by independentsales peoplecouldquicklybe augmented through inclusion I of WOWtown's productlines into their daily selling activities.would easilyfit into the dailymix phones, Health SPAmemberships,telephonediscountservices,etc., Consumeritems suchas cellular of sales. Independent SalesAgents are in a prime positionto recognizewhen a company is in a positionto expand their marketing programs and are regularlyin direct contact with individualconsumers and groups. 27.1 The Company has no plans to employ sales personneldirectly. Each sales person,group or company is required to agreeto offer the Company'sproducts as an independent, 100%-commisiionagent. Advertisingresidualswill advertising,BannerAds,Websitedesignand a hostof other productsandservices from the sale of monthly flow back to the agent and/or sales groupson a monthly basis.Residualscome that will be addedto the mix over time. An independent person,dedicating a portion sales of income would to WOWtown by a number of factors, revenues over the courseof a year. Althoughrevenuetheir sales timebedetermined couldmake substantial suchas time devotedto the Company'sproductsand marketsize in a region,and acceptance of the mix of products sold (Section9). This forecast representspotential revenue earningsfor the independent Company'sofferingsby consumersand merchants. Income Pro-formashavebeencreated usinganaverage agent and can be extrapolated basedon additional products and servicesoffered over time. Independent Agent Commission Income Potential i 28.0 WOW-U TM _ WOWtown University The Company recognises the needto train its Ucensed Partnerto WOWtown standardsand expectations. A affectingthe operation of the Company'sUcenses. _NOW University'training programhas been developed for its Partnersto deal with all aspectsand issues I ! I i CONFIDENTIAL WO Wto w n. co m Trainees will learn the ins and outs of the WOWtown Organization.They will receiveOperationsManuals, directionsand techniquesdesignedto standardise the process. Each ExclusiveResellerPartner will handle this in-housealter initial training iscompleted. 29.0 WOWtown's Online Magazine TM Business Directory and Membership thus Local This conceptwas developedto reflect the evolvingneedsforConsumers.WOWtown providesthe Business providingtrue Market - ZnternetPortals,for both Business Advertisersand the Internet user, Advertiserwith a vehicle to market their goods and servicesdirectlyto a cal_dvelocal,national and international audience. The Consumer is provided with value-added savings programs, a community-based auction site, as well as daily-use resource guides targeted directly at the local and regional areas for each of the Local Partners. This methodology is totally unique in the marketplace I 29.1 Magazine Content • • Newsand current events, editorials,reviews and commentaries. What's Happeningin and aroundeach Partner'scity and region. Provides a fresh, brisk and the consumers. Encourages repeat traffic by olten controversial overview of the events occurring in the region Provides one-click access from each WOWtown Affiliate's home page to their own specific Magazine Content section. Partner's direct link access from the and regionalized Magazinecontent in the specified WOWtown Provides home pages focusingon local master home page at www.wowtown.com to all region. Magazine content can be geared using a tiered structure that best offers the amount of local, regional and n_onal content. Users will be able to select their individual choice of preferences. Permission-based Newsletters I • • I • • 29.2 WOWtown's based Newsletter, highlighting discountsandsaving as well as new events and goings-onin the region. EachWOWtown Ucenseewill offer their localmembershipand other cities, can make-use of links to each Peopletravelling to the area or localmemberswishing to visit customersa user-requested, permissionWOWtownAffiliate to find out what is happening in the area when they arrive. Newsletterswill help keep eachsite fresh, informationaland active, stimulatingregular repeat websitetraffic, increasingconsumer traffic to the participating businessesproportionately. WOWtown will also provide regular informationabout products,services,sales and advertisingprograms along with other important information to it Merchants throughMerchant Newsletters. These will focuson Local, Regionaland National issuesin eachcountry. 29.3 Business Directories • ComprehensivedirectoriesfeaturingArts, Entertainmentand Hospitality related actMties in eachof the affiliate locations. Highlights Shopping,Retail, Professional ervices,Sports, Recreation, Real Estate, and many other S BusinessCategodes. • • Rather than a drab, text-based and static 'information-onhfpresencecommonwith other online Advertisers will displaytheir wares through their own websites hosted at the LocalWow-city site. providers. 48 ! I I I CONFZDEN 77.4L • WO Wto wn .co m WOWtown'sbusinessclientswill be able to showcasetheir productsand services usingthe power of the Internet, creating a visuallyappealing,enjoyable andentertaining advertisingenvironment. ° discounts', Business showcasing also providetheir WOWtown memberswith value-added features or Advertisers may compan_s products and servicesonline in a similarfashionto how their coupons and discountsare applied in standard printformats. I • at any time, Businesses ensuring a freshonline presencewith current product selectionsthat are visually and Advertiserscan updateor modifytheir feature specialson a regularbasis,promptly appealing, informative, convenientand interactive. I • • No's,Smart Card, swipe card technology). Advertising results are measurable usingthe membershipcard's plannedtrackingfeatures (P.I.N. WOWtown offersan affordable, unique way for businessesto advertise on a local and global basis -- 24 hoursa day, 7 daysa week. Advertisers may participate in their local WOWtown Weekly Email Membership Newsletter, further highlightingseasonalandtimely events, productsand services. Businesses and Consumers will be able to greatly expandtheir informationreachthrough the combinedWOWtown Networkservices. I • I • ,. i • be empowered through the abilityto sourceother WOWtownonlineactivities, servicesand benefits The market cities and locations outsidetheir current geographicarea. instead, Internet users will available in scope won t be limited to merely their own regionalareas, I 30.0 WOWtown Net Savings Card TM I The WOWtown Net Savings Card TM __ a credit card-style MembershipCardfor members' personal use. This hard-plastic,embossedcard identifies the holderas a WOWLownmember, entitling them to access additionalvalue-addedsavings, features and discountprogramsoffered by the participatingWOWtown Businesses and Adver_sers. It entitles members'admissionto WOWtown'sentire Business Network andto take advantage of features and benefits as if they were actual residentmembers in the selectedlocation. The Companyis researching the viabilityof aligning the WOWtown Net Savings Card TXwith establishedPOSsystemsused by major credit card providers. This applicationcouldsee the card becomea combinationcredit/debit card and discountcard prior to posting the balance of the transacldonto the userscreditcard account(i.e.: VISA, MasterCard,etc.). automaticallyapplying WOWtown'smembersuse of Smart Card technology for the Card, the salestotal, to Additionally,the Company is researchingthe with the appropriatebusiness-discounts which would enable the WOWtown system to store and retrieve information basedon the consumer'susage. I I i The implementationof the technology will provide useful statistical information for the retailer and merchants,allowing for registration andtracking of discountand savingsoffered bythe merchants. I I I CONFIDENTIAL 31.0 WO Wto w n. c o m Value Added Features for the WOWtown Net Savings Card TM 31.1 Smart Card Technology Smart Cardsare similarto Credit Cards but contain specificdata about the cardholder.The Smart Card is It has the ability to store vast amounts of informationin electronicform, more than one hundredtimes that the size of a standardplasticcreditcard with an embeddedcomputerchip. This chipis the brainof the card. of a magnetic strip. The data in turn may be protected with sophisticatedsecurityfeature and encrypted algorithms.Magnetic stripe card fraud ($1.3 billion in 1996) created the need for the levelof security smart cards provide. Smart Cardsare very popularin Europeand Asia, presentinga beneficialadvantage for applicationssuchas thoseproposedfor the WOWtown Network. Consumers and businessescan sharein the information containedon the cards but the consumer has the ability to limit accessto important information pertainingto the cardholder.Smart Cardtechnologyoffers worldwide with the largest revenues being generated been usedsuccessfully telecommunicationsand the highest level of securityfor transactionsand has in the areas of banking, countlessapplications in bealthcare. Government,travel and transportation, recreation and gaming are next. The future usesfor smart cards are endless. The Companyhas not budgetedfor smart card implementationat this time. Smart cards are marginally more costlythan credit cards but offer advantagesthat creditcards do not. However, thistechnologyisfast becomingthe choiceof consumers globallyand is being extensively researchedfor use in the WOWtown as thistechnology becomesmore commonplace. program.WOWtown will continueexploring this avenuefor future inclusionacrossthe WOWtown Network i I I I I I 31.2 E-Base Interactive, Magnetic Strip Integration Inc. The Company has researched the possibilitiesof integration of a magnetic strip on the Net SavingsCard" I that will allow merchantsto track a member's card swipe systems) to recognize bhe user,developing bhis technology that will allow for any POS(credit usage. We are in advanced stages toward determine frequency and location of use and t_ack/apply loyalty points offered by the Company or mercharres.E-Base Interactive, Inc. is developing the product for WOWtown. WOWtown is proceedingwith its integraldonplansand expectsto havea working model by early 2001. The additionof thistechnologywill allow the Companyto providegenericWOWtown Net Savings Cardsthrough mass distribution,increasingits membership base rapidlyand dramatically. Potentialmembers would Activation would and WOWtown community portal byallowing theuniquepin number located on at Card. register through register the Card to that individual, entering a Card to be immediately used the participating merchants. I I I Merchants will adopt this model because easily integrates with their in-house accept the Net Savingscard. The card swipe system will allow virtuallyitany merchant with a POSsystem to credit card systems. This will help to firmly establish WOWtowo branding and make the Card user-friendly in terms of merchant acceptance. It encourages enhanced marketing, promotion and elevates WOWtowo as a unique brand. I 32.0 WOWtown Network Benefits I I Accessto No Cost--No Catch! There is no credit card sign-up or contractanyone with a valid e-mail address. the WOWtown network of Businessesand Adve_sers is free to fee requirements for consumers to access and search the WOWtown Network; adding immeasurable benefit to WOWtown's advertisers and businesses. I CONFZD £N TIA L I WO Wto wn . com Accessto WOWtown'sadvertisersis not limitedto WOWtown registeredusers.Once a business has elected to advertise througha localWOWtown portalto promote their website, additionalhits will be generated through the extensive market reachaccessiblethrough the WOWtownfamily of Partner portals. Entry isfree to individuals accessing the Network'ssitesregardlessof whether the personsurfingto the locationis a WOWtown member or not; however, discounts and other membershipadvantages,including listingauctionitems will only be availableto registeredWOWtown members as part of WOWtown'sunique immediately available,encouraginglnternet surfersto sign up auctionsite. Free membershipsare membershipfeature. Non-memberscan purchasethroughthe on the spot. I I l 33.0 WOWtown Membership Services WOWtown individualmembershipswill be providedwith our proprietaryWOWtown Net Savings Card TM. i general public offered by the merchants. These additionalbenefits are in additionto any features,specials,or markdownscurrentlyavailableto the With an internationalnetwork of WOWtown partners, members will be able to take advantage of benefits offered anywhereacrossthe Company'sNetwork, providingaccessto discountsand specialsno matter i where they are geographically located. 34.0 I WOWtown Customer Loyalty Program WOWtown's Net SavingsCardTM provides Businessesand Advertisers with a measurable tracking program while eliminatingthe costsassociatedwith printing, verification and tracing discountcoupons.Membership programsare proventechniquesthat helpdevelopnewcustomers andfacilitate rewardingcustomerloyalty. ! I 35.0 The Development Team WOWtown the Companyto further developthe concept and of leading companieswhose serviceswill be offered by has developedstrategic allianceswith a number ensurethe highestlevel of productfulfilment, customerrelationsand service, marketing, software developmentand productappeal. WOWcownwill offer these service-enhancementsacross the Company's Network as individualapplicationsor as part of an all-in I package. i 36.0 WOWtown's Corporate Alliancesongoing basis.This allowsa tremendousamount of flexibility Alliances will evolve and be developedon an to enhancethe membership advantagesby introducingnew features and benefitsas they becomeavailable applicationsas b_ are developedor when new enhancementsare integratedinto existing ones. The to the marketplace.Thebut a few of the productsthe Companyplansto market, along with its standard following examplesare Company isconstantlyresearchingand reviewing Intemet tools and systems marketing and advertising programs. I I 36.1 eConquest Technologies I hosting,eConcluestdevelops and administers custom scalable e-Commercesites usingleading secure Expertise in backoffice administration,site design, database integration, traffic generation andedge technologyfrom Microsoftand Visual Commerce. ! ! 51 I CO N FZD EIV TZA L WO WtO wn. co m I 36.2 VisualCommerce I Developersof wizard-basedeCommercedevelopmenttools that integrate the following: • Site Server 3.0 CommerceEdition • MicrosoftSQLServer 6.5/7.0 • • • Internet Information Server 4.0 Windows I_" 4.0 MicrosoftTransactionServer 2.0 I I 36.3 NextHost.com NextHost,a divisionof NextStudioCorporation, from Seattle, WA deliverscomplete businesshosting solutionsand offers scalableservicesto accommodatewebsite growth demands. NextHost providesa full complime_ of Website solutions designservices including:sharedhosting, of DC-3 and OC3. Location, E-commerce Hosting andand web development and connectivity dedicatedservers, CoWOWtown utilizes NextHost for it's hosting, domain support, SSL, and web stats requirements. I I 36.4 Hostopia.com with Total Solution Hostopia provides WOWtown a backend, incorporating supedor technology and infrastructure, giving WOWtown the ability to provide a feature-rich and comprehensive web hosting, email and e-commerce solution that works completely behind the scenes, This agreement provides WOWtown with a robust web-hosting solution that is totally redundant, scalable and secure, increasing functionality across WOWtown's multiple city portal sites. Hostopia has a proven record of helping companies develop a market presence and track record be able to offer sophisticated and powerful hosting easy to to and business merchants of producing leading e-commerce solutions that are solutions use small adopt. WOWtown will now through our portal network. i I I I 37.0 WOWtown Strategic Alliances I ! I i WOWtown recognizesthe needto partnerwith establishedfirms in orderto expand itssystem a number of baseof operationsin an expedient and dynamic manner. Contractual arrangements exist with content and companiesthat offer servicesand content supportor materialfor the Company's operations. Additional partners or joint ventureswill sought over time on an as needed basis. 38.0 WOWtown Domain Name Registration over internationally. CurrenUy, Company registered the has domaJnsfor 500 locations These names will be made availableto WOWtown LocalPartners through a contractualarrangement between the Company and the ExclusiveResellerPartner licensee(s)located in the jurisdictionrepresentativeof the WOWtown name. (i.e. SeattleWOW, PortlandWOW,SanFranciscoWOW, plans e The Company has activated over 60 portals to date andtc.). to expand the Network on a IJmely basis that allows the Company to maintain balanced and measured growth. Additional Domain Nameswill be added as i required. 52 ! I I I CON FZOEN TIA L 39.0 Competitive Factors iO Wto w n. co m that offer more in-depthresearchabout specificlocations.Those that do providedetailed searcheslack any Competition on the Intemet is assured.There are numeroussites offering guidesto localareas and some senseof Community and are all text-based sites. i envisionedby the Company. None offer the uniquediscountand savingsofferedthrough the WOWtown Net Noneof cardTM, Savings the similar sites offer much in the way of e-Commerce, enhanced e-mail options or other services i location/destination searchesand information can be found in the attached appendices. None offer the localized and full network auctioncomponer¢. A list of major portals offering competitive I 40.0 Projected Earnings Revenuesare forecast from 7 major areas: I 1. 2. 3. 4. 6. 5. 7. Sales of Master Partner Agreements(ExclusiveResellerAgreements) Salesof Sub Agreements IVlonthly AdvertisingRevenues WOW e-Store Revenuesandadditional NetworkServices WOWtown Merchant Center Affiliate revenues AuctionCommissions(Commissionsare anticipated from percentagesof credit card use and or escrowuse. No revenues havebeen forecast at this time). I I 40.1 Projected profits from all areas of operation: Revenue Projections -- 2001 - 2005 EXPENSES 92,242,377 $3,692w614 95,995,414 $12,387,014 $8,864,614 (US$) REVENUES Year-1 Year-2 Year-3 Year-5 Year-4 $2,976,275 $16,132f385 932,057,980 $81,261,485 $51,426,125 NET 9733,898 INCOME 912,439,771 $26,062,566 $68,874,471 $42,561,511 MARGIN 25 o!_ 77 81 85 83 41.0 WOWtown Advisory Board Marc Strauch: Advisory Board With over 20 years experiencein strategic planning, marketing and business developmentfor technology, media and Internet companies,as well as expertise in physicaland online communitydevelopment, Marc bringsuniqueexperienceand insightto the WOWtown advisory board. Actingin a strategic advisory role to define the business valueof informationtechnologies,Marcis a regular contributorto Microsoft'sbusiness value initiatives on a wide range of productsincludingOffice 2000, Windows 2000, Windows 2000 Datacenter, Exchange2000 and Windows DNA- BizTalkServer. 53 ! I I I CON FZDEN TZAL WO Wto wn. com He regularly consultswith other Internet companiesto define business value strategy and marketing communications in the areas of broadband communications,digital rights management and ePublishing, B2B eCommerce, disruptive technologies, next generation online communities, ASP models for channel as online direct responsemarketing. specificcontent and software, and privateportals/private channelsfor deliveringproprietarycontent, as well Additional expertise in business development and strategic alliances, creating business, marketing I and with WOWtown. Marc has a Masters Degree in capital provide from the City University work strategic plans, along with raising private equity Urban Planning a solid foundation for hisof New York, with additional graduate-level coursework in law, marketing and finance, as well as a BA in Economic Geography and a BS in Environmental Sdence and Public Policy. i 42.0 I Management David B. 3ackson, CEO and a Director Mr. 3ackson has over 25 years experience with private and public corporations in sales, senior management I and corporate finance. He is a co-founder of WOV_cown.com,Inc. Mr. Jackson co-founded Fortune Entertainment Corporation; a US OTC-BBpublicly I_aded Gaming Technology Company where he held the office of President,CEOand Director from 1996 to December 1998. He also served as Vice President and Director, ConsolidatedRamrodGold Corp., a NASDAQ and Toronto Stock Exchange listed base and precious metals Explor_on Company from 1991 through 1995 and as Vice President, Atlanta Gold Corporation during the same period. Prior to his involvement in public companies Mr. 3acksonwas active in the development and marketing of commercial and residential real estate projects both as principle and as a consultant. I I I David E. Packman, President and a Director Mr. Packrnanhas been actively involved in the Internet for three years and has extensive experiencein concept development, sales, marketing, and e-commerceon the Internet. Hisvision led to the creation of model. He will oversee all initially developing VancouverWOW.com,the and promotions. WOWtown.com, Inc. alter WOWtown site development, sales, marking Company'sprototype website Mr. Packman was Executive Vice-President of Ruby Food Services Ltd., and was with the company for 10 I I achieved a 50% growth in for all aspectsof the operation, with an and demonstrated strong fiscal years. He was responsiblesales and revenues over a 5-year period,emphasison sales & marketing. He responsibility, leadership and motivational skills. i with Packrnanhas extensive experience in Sales & Marketing, and has held senior management positions Mr. Sysco/Konings Wholesale. Prior to his involvement in the Foodservice Distribution Industzy, he held several senior management positions with Sirloiner Restaurants and Chi-Chi's MexicanRestaurants, both in Canada and in the US. Davidwas actively involvedin new store openings, management recruiting, and operations, and conceived, planned and implemented several staff training and development programs. I I industry recognition for his services. Mr. Packmanis a past director of the Vancouver Restaurant Assodation and has received awards and I I 54 I I CONF-rDEN TZAl Sl_phen C. 3ackson, WO Wto wn •COm Executive Vice President, Secretary, Treasurer anda D/rector: private and public companies. He was editor and features articles writer for the Vancouver Market Report Mr. Jacksonis a founding to the OTC Stock Journal. He hasand has over 20 years in marketing, public and a contributing writer director of WOWtown.com, Inc. extensive experience experience with both relations, investor relations, corporate development, financing, and stTategic positioning for corporate growth and objectives achievement. He has extensively studied applied marketing techniques for Intemet applications since 1990, gaining considerable knowledge and understanding in this area. Through his private consulting practice, he has provided his services to a wide variety of private corporations and as investor relations officer to publicly listed mining companies, His marketing skillswere utilized by the Prime Ministerof Canada'sOffice (PIO) to promote to indusl_/, inclusionin the 1993 PresidentsClinton (USA) and Yeltsin (Russia)Summit meeting held in Vancouver, Canada. Conservativeestimates placethe value in tourismexposure at $80-million in 1993 dollars. Mr Jackson hasmanaged large staffs and handledthe day-to-day managementof a numberof companies. He is a past director of the BCTaxi Associationand former director with a regionalChamberof Commerce. BritishColumbiaInstitute of technology,where he reviewsbusiness plans for individuals seeking with the He has worked with numerouscommunityorganizations,and is currentlyin an advisorycapacity accessto course studies in the Venture Program(BEST). I I Palzick Helme, Vice President, Development and a D/rector: Mr. Helme is one of the foundingpartners of WOV_own.comInc. and brings with him 5 years Internet developmentexperience. As a co-founderwith all project managers, customersand technicalstaff. functions and acts as the primary liaison of Towncore Intemet Ltd., he overseesall of the technical His main focus was to successfully generate and implement an outsidesalesstrategy throughthe markelJng strategies for of Associate Sales Partnerships.Mr Helme has developedwebsites and Intemet recruitment and training a diverse range of businesses. Mr. Helme has extensive experience in franchising and licensing and has Held principal positions with operations systems with growth of 100 plus franchised units. successfullydeveloped Ucense sales and Sandwich Tree Restaurants Ltd. and Horizon Hotels where he He is a graduate of the British Columbia Institute of Technology and the University of Houston -- Hilton Hotel Hanagement. was chosenasrepresented Canadian franchisinginterests at numerous franchise symposiums of Canadian Trade and Developmentpaneland missionon behalf the US and Hr Helme has a member for a European in franchising interestsabroad. developmentcompany, Mr. Helme sits on the AdvisoryBoardof a British Columbia Publisherand an eCommercesoftware 43.0 Corporate Information 43.1 Legal Counsel Oppenheimer Wolff & Donnelly LLP -- Thomas C. Thomas, Partner 3373 Hillview Avenue, Suite 200 Palo Alto, CA 94304 I I I CONFID ElYTIA L 43.2 Auditor PricewaterhouseCoopers LLP -- Len Boggio WO Wto wn . co m 1111 West Hastings Street, Vancouver, British Columbia V6E 3R2 43.3 I Banking BankWest Mercer, Seattle, Washington 100 of America, 98119 I 43.4 Transfer Transfer Agent Interwest Co. Inc., Salt Lake City, Utah 84117 I I 44.0 Additional Company Information 44.1 Head Omce Seattle, WA 98104 800 - Filth Avenue, Suite 4100 Phone (206) 624-5623 Facsimile: (206) 624-5624 Toll Free: (1-877- 969-8696) 1-877-WOW-TOWN Emaih info@wowtown.com ! 44.2 Development Office 999 West Hastings Street, Suite450 Vancouver,BC, CanadaV6C 2W2 Phone(604) 633-2556 Facsimile(604) 683-0315 44.3 Investor Relations Website: http://www.wowtown.com/investor, Email: investor@wowtown.com hbTd ! I 44.4 Shares Listed CUSIPNUMBER98211T-10-5 OTC BBSymbol: IWOW I l I CONFIDENTIAL 44.5 Capitalization 5,000,000 referred Shares P Authorized: 30,000,000 Common Shares Total Shares Issued: 15,910,067 WOWtown.com I Approximate Float: 4,900,000 Fiscal Year End: April 30 I SEC Filings: http:/hNWw.edqaror_ir__com/brand/oW.nn/search/ddau_asp_c_ery=nNC_W_t=Z_= 1994_x=7_Sgy=4 Stock Quote: I-ICp://cluoCe.yahoo.com/q_=iwow.obSd =v1 i 45.0 Conclusion WOWtown.com has identifieda uniquenichemarket advertisingand marketing vehicle not beingexploited by other Internet properties.WOWtown linksonline userswith bricksand mortar businessesin the same likelyto purchasefrom them. community--creating newaudiencesfor storefront merchantsand other businesses the consumersmost to WOWtown.comisrollingouta network of Local,city-specific gatewaysofferinginformationandgoings-onin I I builds_community"through its Localweb site portalsthat are relevant to the peoplewho live in our city and around the viewer'scommunity.Much more than a textbrowseforlinksin various cities,WOWtown neighborhoods.Our "local-1st"strategywill allow visitorsto listing of restaurants,entertainment, business services,news and many other events happening in each WOWtown city. Membershipis free and we issuecredit card style MembersCards calledthe WOWtown Net shopsand IVlember ards provideinstant and repeatable discountsat LOCALparticipatingmerchants' SavingsCard'". C services.Unliketraditionaland online promotionalcoupons,whichare cumbersome,one-time only andtime wasting, the Net SavingsCardTM allows visitors to quickly locate deals, bargainsand savings in and around their hometownand other cities that will form part of the WOWtown.comNetwork.in each portal I from a Participating LocalMerchantsare offered a numberof ways in which to participate free basic website listing to fully integratede-commerce website designand hosting. I I I developedWOWtown MerchantCenter. Internet related businessservicesavailablein the discountsonline Merchantshave accessto a full array of ParticipaEngMerchantscan manage their member soon to be in real time via our WOWtown Merchant Control Center -- keepingvisitorsinformed of timely savingsand discounts. Merchantspresent their offers onlinevia their MemberOffer Deal in each city-community,where WOWtown visitorscan view exclusivemembershipdeals, savingsanddiscountsoffer. Users can locate the merchant's businesslocationthrougha direct link to their website, find out where their businessis locatedwith an huge element of targeted marketing between potential customers and the real worlddirectly.This adds a online map, listen to a merchant'svoice greeting, emailthe deal to a friend and link shops and services. The Company will market its services to businessesand to a membership base of Internet users. A major I I I element of thehas implementeda strategy to developa Network C2C applications. The Company e-commerce factor will encompassB2B,B2Cand of regionallyAffiliate-licensedExclusive Reseller Partnersthroughout NorthAmerica and internationallyto work directly in our city communitiesto abilitiesof the Partnersto providebusinesssolutionsandmembershipadvantagesthrough expansionof the present value-added servicesacrossthe Company'sNetwork.The Network approach will augment the WOWtown brand name. i I I I CONF.rDEN TIA L WOWto wn. com WOWtown has completed Phase! of our database, with some 62 local portalsoperational.Each portal will be available for partneringwith an establishedlocal businessentity. quickly increaserevenuesthrough market growth of a networkof Partners. WOWtown is forecast to becomeprofitable within seven monthsof the first year of operationand will I I I I I I I ! I I i I I I ! .1: O lid 58