SOFTWARE & SERVICES
11 AUGUST 2009
WEB 2.O WEEKLY
DAVID SHORE, CFA, MBA 416.860.6784
david.shore@researchcapital.com Arun Thomas (Associate) 416.860.7666
DOWN RO UNDS EXCEEDED UP ROUNDS (IN THE VALLEY) FOR THE SECOND QUARTER SINCE Q4/03
DO W N RO UN D S E X C E ED E D UP R O UN D S 46% T O 32%
Down rounds (defined as when a company is valued less than it was during its previous fundraising) exceeded up rounds 46% to 32%, with 22% flat for the second quarter. This is from a survey by Silicon Valley venture capital firm Fenwick & W est LLP. These numbers are slightly better than Q1/09 when down rounds outpaced up rounds 46% to 25%. According to Fenwick & W est, the last two quarters are the first since Q4/03 in which down rounds exceeded up rounds.
As investors (VCs) are busy focusing on portfolio companies, they dedicate less time and money to new investments and in today’s credit markets, where cash is king, there is a great urgency to conserve as much cash as possible. Moreover, venture capitalists are raising less from their investors. W ith stock market valuations improving, as shown in Figure 5, we expect valuations in private investments to improve, albeit gradually. Total capital raised in August (so far) is $94.4 million: Gaming company Turbine, Inc. raised $50 million in August. RichRelevance, a company that offers comment/opinion on ecommerce sites, was a distant second at $12.5 million in August. Total capital raised in July on 31 transactions was $178.7 million, averaging $5.8 million, and June was $196.1 million, averaging $4.9 million. The average for August, month-to-date so far, is $7.4 million.
Financing Activity Last Three Months
250.0 7.4 7.0 200.0 6.0 5.8 8.0
4.9 150.0 (US$m)
5.0
4.0
100.0 3.0
2.0 50.0 1.0
0.0 Jun-09 Jul-09 Total Average Aug-09
0.0
A mixed price performance week: The companies in our universe had mixed stock price performances over the past week (for stocks with prices greater than $1) (Figure 6), with 24 companies showing negative returns on the week. Fluid Music Canada, Inc (TSX:FMN) led the group with a 31.1% return, while NetDragon W ebsoft, Inc. (SEHK:777) had the worst return, dropping 12.0% in the week.
This report has been created b y Anal ysts that are emplo yed b y Research Capital Corporation, a Canadian Investment Dealer. For further disclosures, please see last page of this report.
T o ro n t o 4 1 6 . 8 6 0 . 7 6 0 0 Montreal 514.399.1500 w w w . r e s e a rc h c a p i t a l . c o m Vancouver 604.662.1800 Calgary 403.265.7400 Regina 306.566.7550
(US$m)
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THE WEB 2.0 UNIVERSE Ninety-one public Web 2.0 companies identified: Our W eb 2.0 universe contains 91 companies, with a combined market cap of ~$63 billion (Figure 1). The median market cap for the group is ~$61 million, with average trailing revenue of ~$157.3 million (median $56.2 million). The companies are also generally profitable, with a median EBITDA margin of 13.1%. On a valuation basis, the overall average is 5.0x trailing revenue (median 1.9x) and 11.1x trailing EBITDA (median 9.8x). Twenty-one of the companies have more than 500 employees.
C omparable C ompany Analys is > Web 2.0
C ompany Name
Accelerize New Media , Inc. Actoz S oft C o. , Ltd. AQ Interactive, Inc. As s ociated Media Holdings Inc. B igs tring C orp. B eta wave C orporation B eyond C ommerce, Inc. B right T hings plc B roa dW ebAs ia Inc. C DC C orp. C hangyou. com L imited C hina G a teway C orporation C hines e G amer Interna tiona l C LIC K E R Inc. C ornerW orld C orpora tion C yberplex Inc. DADA S pA DXN Holdings B hd Dibz International, Inc. DigitalP os t Interactive, Inc. DigitalT own, Inc. Dolphin Digital Media , Inc. E olith C o. Ltd. E xtens ions , Inc. F luid Mus ic C a nada , Inc. F rogs ter Interactive P ictures AG G ama nia Digita l E ntertainment C o., Ltd. G ameOn C o Ltd. G eoS entric O yj G iant Interactive G roup, Inc. G iga Media Ltd. G ravity C o., Ltd G ree, Inc. G ungHo O nline E ntertainment, Inc. HanbitS oft, Inc. IAC /InterActiveC orp. IAS E nergy, Inc. is eemedia Inc. J umbuck E nterta inment P ty Ltd. K AB Dis tribution Inc. K ings oft C o. Ltd. Lingo Media C orporation LiveW orld Inc. LookS mart, Ltd. Magnitude Information S ys tems Inc. Mixi, Inc. Modern T imes G roup Mtg AB MO K O .mobi Limited Myriad G roup AG NE O W IZ G ames C orpora tion NetDragon W ebS oft, Inc. Neteas e. com Inc. NeuLion Incorporated NeXplore C orporation Ngi G roup Inc. Northgate T echnologies L imited O pen T ext C orp. O penwave S ys tems Inc. P erfect W orld C o. , Ltd. P NI Digital Media Inc. Q uepa s a C orp. O AO R B C Information S ys tems S handa Interactive E nterta inment Ltd. S hutterfly, Inc. S K C ommunications C o., Ltd. S NAP Interactive, Inc. S NM G loba l Holdings S ocial Media V enures , Inc. S ocialwis e, Inc. S ohu. com Inc. S park Networks , Inc. S pectrumDNA, Inc. T encent Holdings Ltd. T he P arent C ompany T he9 Limited T heS treet. com, Inc. T ota l S port O nline AS T ree.C om, Inc. Unis erve C ommunica tions C orp. United O nline Inc. UOMO Media, Inc V alueC lick Inc. V OIS , Inc. W ebzen Inc. W izzard S oftwa re C orporation W orlds . com Inc. W oozyF ly, Inc. W ynds torm C orpora tion XING AG Y eda ngO nline C orp. Y nk K orea Inc. High Low Average Median
L TM as of Ticker
3/31/2009 3/31/2009 3/31/2009 6/30/2007 3/31/2009 3/31/2009 3/31/2009 9/30/2008 9/30/2008 3/31/2009 6/30/2009 9/30/2008 3/31/2009 5/31/2009 1/31/2009 3/31/2009 3/31/2009 2/28/2009 NA 3/31/2009 5/31/2009 3/31/2009 12/31/2008 3/31/2009 3/31/2009 12/31/2008 3/31/2009 3/31/2009 3/31/2009 3/31/2009 3/31/2009 3/31/2009 6/30/2009 3/31/2009 3/31/2009 6/30/2009 1/31/2009 3/31/2009 12/31/2008 3/31/2009 3/31/2009 3/31/2009 3/31/2009 6/30/2009 3/31/2009 6/30/2009 6/30/2009 12/31/2008 12/31/2008 12/31/2008 3/31/2009 3/31/2009 3/31/2009 6/30/2008 3/31/2009 6/30/2009 3/31/2009 6/30/2009 3/31/2009 3/31/2009 3/31/2009 12/31/2007 3/31/2009 6/30/2009 12/31/2008 3/31/2009 9/30/2008 12/31/2008 3/31/2009 6/30/2009 3/31/2009 3/31/2009 3/31/2009 8/2/2008 12/31/2008 3/31/2009 3/31/2006 6/30/2009 2/28/2009 6/30/2009 1/31/2009 6/30/2009 3/31/2009 3/31/2009 3/31/2009 3/31/2009 3/31/2009 NA 3/31/2009 12/31/2007 3/31/2009 AC LZ A052790 3838 AS MH BS GC B W AV B Y OC AIM: B G T BWBA C HIN. A C Y OU CGWY G T S M: 3083 C LK Z CWR L T S X :C X C M: DA DX N DIB Z DG LP DG T W DP DM A041060 E XT I T S X :F MN FRG 6180 3812 G E O 1V GA G IG M GR VY T S E : 3632 3765 A047080 IAC I IAS C . A IE E AS X :J MB T S X :K AB 3888 T S X V :LM LVW D L OO K MAG Y 2121 MT G B MK B MY R N A095660 777 NT E S T S X :NLN NX P C 2497 590057 OT E X OP W V PWRD T S X V :P N QP S A R BCI S NDA S FLY A066270 S TVI S NMN S MV I S C LW S O HU L OV S P XA 700 K IDS . Q NC T Y TS CM T OS O TR E E T S X V :US S UNT D UO MO V C LK V O IS W ZE N W ZE W DDD W ZY F W Y ND O 1B C A052770 A023770
E xc hange
OT C B B K OS E TS E OT C P K OT C B B OT C B B OT C B B AIM OT C P K Na s daqG S Na s daqG S OT C P K GTS M OT C B B OT C B B TS X CM K LS E OT C P K OT C B B OT C B B OT C B B K OS E OT C P K TS X XT R A GTS M TS E HL S E NY S E Na s daqG S Na s daqG M TS E OS E K OS E Na s daqG S OT C B B T S XV AS X TS X S E HK T S XV OT C P K Na s daqG M OT C B B TS E OM AS X SWX K OS E S E HK Na s daqG S TS X OT C P K TS E BSE Na s daqG S Na s daqG S Na s daqG S T S XV OT C B B R TS Na s daqG S Na s daqG S K OS E OT C B B OT C P K OT C P K OT C B B Na s daqG S AME X OT C B B S E HK OT C P K Na s daqG S Na s daqG M O T C NO Na s daqG M T S XV Na s daqG S OT C B B Na s daqG S OT C B B Na s daqG M AME X OT C B B OT C B B OT C P K XT R A K OS E K OS E
Trading C urrency HQ
US D KR W JPY US D US D US D US D GBP US D US D US D US D TWD US D US D C AD E UR MY R US D US D US D US D KR W US D C AD E UR TWD JPY E UR US D US D US D JPY JPY KR W US D US D C AD AUD C AD HK D C AD US D US D US D JPY SEK AUD C HF KR W HK D US D C AD US D JPY INR US D US D US D C AD US D US D US D US D KR W US D US D US D US D US D US D US D HK D US D US D US D NO K US D C AD US D US D US D US D US D US D US D US D US D E UR KR W KR W United S ta tes S outh K orea J a pan United S ta tes United S ta tes United S ta tes United S ta tes United K ingdom United S ta tes Hong K ong C hina United S ta tes T aiwa n United S ta tes United S ta tes C anada Italy Ma la ys ia United S ta tes United S ta tes United S ta tes United S ta tes S outh K orea United S ta tes United S ta tes G ermany T aiwa n J a pan F inland C hina T aiwa n S outh K orea J a pan J a pan S outh K orea United S ta tes C anada C anada Aus tralia C anada C hina C anada United S ta tes United S ta tes United S ta tes J a pan S weden Aus tralia S witzerland S outh K orea C hina C hina C anada United S ta tes J a pan India C anada United S ta tes C hina C anada United S ta tes R us s ia C hina United S ta tes S outh K orea United S ta tes United S ta tes United S ta tes United S ta tes C hina United S ta tes United S ta tes C hina United S ta tes C hina United S ta tes Norway United S ta tes C anada United S ta tes C anada United S ta tes United S ta tes S outh K orea United S ta tes United S ta tes United S ta tes United S ta tes G ermany S outh K orea S outh K orea
C urrent P rice
0. 57 23,550 53,600 0. 01 0. 03 0. 08 0. 30 0. 02 0. 23 2. 76 39. 35 0. 02 430 0. 01 0. 06 2 6. 10 0. 47 0. 00 0. 06 1. 30 0. 40 820 0. 20 1. 18 14. 50 58. 00 103,700 0. 05 8 4. 94 2. 10 7,740 202,000 4,305 18. 50 0. 18 0. 07 0. 37 1 8 1. 12 0. 06 1. 25 0. 01 618000. 00 293. 00 0. 07 4. 12 31850. 00 6 45. 36 1. 06 1 32200. 00 35. 20 38. 44 2. 62 37. 40 1. 48 1 1. 05 49. 96 15. 89 10100. 00 0 0. 00 0 0. 74 64. 00 3 0 111 0. 02 9. 38 2. 30 0. 03 9. 88 0. 05 7. 55 0 11 0 3. 28 0. 47 0. 09 0. 15 0. 10 26. 70 9,440 4,910
US D Market C ap ($m)
15. 8 165. 3 29. 9 0.6 1.3 2.2 13. 5 4.8 19. 5 292. 3 2,164. 4 0.3 1,101. 7 0.6 3.5 102. 3 139. 8 30. 9 0.0 4.4 35. 6 20. 7 48. 4 8.9 57. 2 51. 8 268. 3 103. 0 63. 5 1,818. 1 269. 3 58. 4 1,779. 8 237. 7 76. 8 2,449. 4 12. 6 3.3 15. 1 82. 7 1,134. 8 12. 9 1.9 21. 4 2.7 976. 1 2,662. 8 4.7 80. 9 545. 9 390. 1 5,870. 8 111. 7 39. 0 41. 0 25. 7 2,022. 8 218. 3 1,819. 0 46. 8 15. 9 145. 7 3,335. 8 404. 5 344. 7 4.3 0.0 0.0 32. 1 2,453. 4 56. 1 10. 7 25, 897.8 0.4 239. 2 70. 4 0.1 106. 7 1.0 633. 0 12. 9 948. 2 4.4 38. 8 22. 5 4.7 2.6 1.8 199. 0 120. 7 21. 4 25, 897.8 0.0 696.6 60. 9
US D L TM Total R ev ($m)
4. 1 94. 0 63. 5 0. 1 0. 1 8. 4 7. 1 0. 3 0. 0 389.9 241.2 6. 7 56. 3 2. 5 1. 3 75. 2 237.6 78. 9 NA 0. 7 NM 0. 8 15. 0 NM 5. 0 3. 2 126.2 75. 6 6. 0 218.9 183.6 46. 6 143.3 105.9 56. 2 1, 392. 3 0. 0 1. 6 15. 0 76. 0 129.0 0. 9 11. 4 56. 8 0. 1 125.7 1, 893. 2 1. 2 40. 0 201.6 86. 9 470.4 18. 1 0. 7 90. 7 83. 2 782.6 191.7 228.0 20. 0 0. 1 148.8 569.9 218.6 187.4 3. 3 2. 0 0. 1 0. 0 485.1 54. 3 0. 1 1, 203. 1 112.0 250.3 67. 0 2. 2 216.6 24. 0 949.8 0. 6 563.6 0. 0 23. 4 5. 6 0. 0 NM NA 53. 5 55. 8 10. 7 1,893. 2 0. 0 157.3 56.2
US D L TM Total E B ITDA ($m)
(4.4) 20. 4 4.0 (2.3) (2.0) (12. 6) (9.5) (1.9) (4.6) 30. 8 147.2 (6.6) 31. 5 (1.2) NM 7.8 34. 8 10. 9 NM (2.6) (2.5) (3.7) (3.5) NM (6.9) (6.2) 21. 0 17. 9 (15. 5) NM NM 12. 8 86. 1 19. 0 (15. 1) 52. 7 (0.8) (5.1) 5.6 9.0 52. 0 (1.6) (0.0) (4.7) (3.1) 42. 4 290.9 (2.5) 0.8 54. 1 34. 4 305.7 (11. 8) (6.2) 10. 9 (41. 6) 199.2 5.3 124.5 0.5 (10. 8) 19. 4 260.8 27. 3 12. 2 0.9 (0.7) (0.1) (4.8) 209.4 11. 8 (2.6) 582.7 (13. 5) 85. 4 1.9 (1.1) (1.0) 0.1 206.2 (0.5) 99. 1 (1.1) (0.6) (5.3) (0.8) NM NM 16. 7 12. 0 (0.8) 582. 7 -41.6 35.6 0. 9
E B ITDA %
NM 21. 7% 6.3% NM NM NM NM NM NM 7.9% 61. 0% -98. 9% 56. 0% -45. 8% NM 10. 3% 14. 6% 13. 8% NM NM NM NM -23. 6% NM NM NM 16. 6% 23. 7% NM NM NM 27. 5% 60. 1% 18. 0% -26. 8% 3.8% NM NM 37. 2% 11. 9% 40. 3% NM -0.4% -8.2% NM 33. 8% 15. 4% NM 1.9% 26. 8% 39. 5% 65. 0% -65. 2% NM 12. 0% -50. 0% 25. 5% 2.8% 54. 6% 2.3% NM 13. 1% 45. 8% 12. 5% 6.5% 28. 0% -34. 8% -60. 6% NM 43. 2% 21. 7% NM 48. 4% -12. 0% 34. 1% 2.9% -50. 6% -0.4% 0.2% 21. 7% -78. 2% 17. 6% NM -2.4% -94. 5% NM NM NM 31. 2% 21. 6% -7.6% 65. 0% -98. 9% 6.9% 13. 1%
TE V/L TM R evenue
5. 1x 1. 4x 0. 0x 15.6x 35.7x 2. 6x 17.6x 0. 8x 7. 8x 0. 0x 18.4x 0. 3x 3. 8x 1. 3x 0. 8x 0. 6x 8. 2x 28.0x 3. 4x 9. 7x 15.4x 1. 9x 0. 6x 9. 9x 1. 1x 11.7x 2. 0x 1. 1x 0. 5x 1. 5x 0. 7x 1. 2x 8. 7x 12.4x 0. 1x 6. 9x 1. 7x 2. 9x 2. 3x 2. 7x 2. 9x 5. 5x 0. 0x 0. 3x 2. 7x 0. 6x 0. 5x 2. 3x 0. 0x 1. 6x 1. 8x 0. 9x 1. 1x 4. 5x 4. 0x 1. 0x 23.6x 0. 2x 0. 1x 4. 6x 0. 5x 0. 2x 0. 9x 20.8x 1. 4x 4. 3x 2. 7x 2. 4x 35.7x 0. 0x 5.0x 1. 9x
TE V/L TM E B ITDA
6. 6x 0. 3x 9. 9x 12. 8x 32. 9x 12. 6x 5. 5x 4. 1x 11. 7x 2. 4x 19. 4x 11. 0x 13. 5x 1. 8x 9. 7x 21. 7x 20. 4x 11. 1x 9. 9x 7. 4x 0. 1x 10. 5x 20. 6x 0. 9x 0. 2x 12. 5x 28. 3x 3. 1x 9. 3x 4. 8x 48. 8x 3. 0x 4. 4x 8. 2x 8. 8x 10. 9x 48. 8x 0. 1x 11.1x 9. 8x
E mployees
11 NA NA 3 4 53 69 9 46 2, 227 628 37 NA 22 NA NA 578 NA NA 7 3 NA NA 2 NA NA NA NA 108 1, 570 751 469 NA NA NA 3, 200 NA NA 72 NA 2, 271 NA NA 90 14 NA 2, 969 NA 405 NA 2, 426 3, 109 237 NA NA NA 3, 400 NA 2, 096 NA 74 NA 3, 124 514 NA 11 33 NA NA 3, 197 183 7 6, 123 347 1, 626 310 16 700 NA 1, 469 NA 1, 189 4 NA 110 1 NA NA 239 NA NA 6, 123 1 905 405
Figure 1. Web 2.0 Universe Summary Source. Capital IQ
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C A P I T A L M A R K E T S A C T I V I T Y (M & A A N D F I N A N C I N G ) Total capital raised in August (so far) is $94.4 million: Online gaming company Turbine, Inc. raised $50 million in August – the largest transaction in August. RichRelevance, a company that offers comment/opinion on ecommerce sites, was a distant second at $12.5 million. Total capital raised in July on 31 transactions was $178.7 million, averaging $5.8 million, and June was $196.1 million (averaging $4.9 million). The average for August, month-to-date so far, is $7.4 million.
Financing Activity Last Three Months
250.0 7.4 7.0 200.0 6.0 5.8 8.0
4.9 150.0 (US$m)
5.0
4.0
100.0 3.0
2.0 50.0 1.0
0.0 Jun-09 Jul-09 Total Average Aug-09
0.0
Figure 2. Financings, Last Three Months Source. Company reports
(US$m)
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Turbine, Inc. raises $50 million: On the capital raise front, Turbine, Inc. raised $50 million, the largest transaction so far in August. RichRelevance was a distant second securing a $12.5 million round. Closely behind was Traffiq (a company that offers display advertising on a digital media platform) raising $10 million. All other transactions (three from a total of eight) were below $10 million each, with the total for August so far at $94.4 million. In addition, Friends Reunited was acquired for $42 million. For additional details on financings, see Figures 23 and 24 (at end of note).
Financing & M/A Summary - Last Three Months
90.0
80.0
70.0
60.0
(US$m)
50.0
Aug-09 Jul-09 Jun-09
40.0
30.0
20.0
10.0
0.0 People Media Super Rewards Turbine Friends Reunited AdLink Internet Media Pandora Media xoopit MediaMath Sugar Inc. Kontera Ltd. Ning Tumri Boku RichRelevance QuickPlay Media Grab Networks Wimba Traffiq AdChina Causes Goojet SAS Bill.com Outspark ConnectEdu Acquia, Inc AdMeld Inc. beeTV SBNation blueKiwi Software SA Nokeena Metaversum Bubble Motion Invodo Zoosk Sense Networks Gather Taomee MojoPages Animoto Quikr India Pvt. Ltd. GameGround OPEN Sports Nexage StyleCaster RingRevenue TweetDeck Crowdcast KODA YuMe eRepublik Busca Akademos Newser LLC ClickFuel ProtonMedia Inigral AdEx Media GROU.PS Yapta iLoop Mobile my6sense OneTXT I Love Rewards Comunitae Lat49 Cliqset Aloqa Tributes.com CoTweet Cellufun LiquidPlanner TodaCell Glubble Clikthrough Picaboo Cognitive Match AdWhirl People Capital MashLogic BookFresh iSyndica Jaxtr
Figure 3. Capital Market Activity, Last Three Months Source. Company reports
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Ad Netw ork remains the most active sector in dollars raised: Following recent trends, Ad Networks as a sector saw the most activity in dollars raised ($126.4 million), followed by the Social Network sector with 12 transactions, raising $99.6 million (Figure 4).
Capital Market Activity by Sector - Last Three Months
140.0
120.0
100.0
(US$m)
80.0
60.0
126.4 99.6
40.0
80.0 69.6 57.8
20.0
47.5 35.0 26.4 24.0 22.3 21.5 13.1 Media 13.0 Mobile Payment 12.5 Comment/Reputation 12.0 Collaboration 10.7 Online Learning 5.2 Vertical Communities 5.0 Search
0.0 Online Dating Gaming Enterprise Mobile Infrastructure Music Blog Social Networks Virtual World Ad Network Video
4.1 Classified
3.2 Microblog
3.0 Mobile Ad
1.0 Publishing
1.0 Analytics
0.5 Online Calendar
0.5 Online Lending
0.0 SMS/Voice 0
# companies
13 12 1 4 4 8 1 4 2 7 4 3 1
1
2
2
2
1
1
1
2
1
1
1
1
Figure 4. Capital Market Activity, by Sector, Last Three Months Source. Company reports
C A P I T A L M A R K E T S A C T I V I T Y (P R I C E P E R F O R M A N C E ) Web 2.0 index far outpaces NASDAQ recovery: Our W eb 2.0 index (market-cap weighted) essentially mirrored the performance of the NASDAQ composite index from mid-2008 until earlier this year. However, the index has recently had a much stronger recovery relative to the NASDAQ index (Figure 5).
Web 2.0 Index Price Performance
130 120 110 100 90 80 70 60 50 40 8/11/2008 8/25/2008 9/22/2008 1/12/2009 1/26/2009 2/23/2009 3/23/2009 4/20/2009 5/18/2009 6/15/2009 6/29/2009 7/13/2009 7/27/2009 10/20/2008 11/17/2008 12/15/2008 12/29/2008 8/10/2009 10/6/2008 11/3/2008 12/1/2008 9/8/2008 2/9/2009 3/9/2009 4/6/2009 5/4/2009 6/1/2009
^COMP - Share Pricing
Index: Web 2.0 X (Market Cap Weights) - Index Value
Figure 5. Web 2.0 Price Performance Source. Capital IQ
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A mixed price performance week: The companies in our universe had mixed stock price performances over the past week (for stocks with prices greater than $1) (Figure 6), with 24 companies showing negative returns on the week. Fluid Music Canada, Inc (TSX:FMN) led the group with a 31.1% return, while NetDragon W ebsoft, Inc. (SEHK:777) had the worst return, dropping 12.0% in the week.
Fluid Mus ic Canada , Inc . NeuLion Incorporated G ravity Co., Ltd Y edangOnline Corp. S park Netw orks , Inc . TheS treet.com, Inc . 8.3% Frogs ter Interactive Pictures A G 6. 4% Changy ou. com Limited 6.2% Modern Times G roup Mtg A B 5.4% Chines e Gamer International 4.8% Openw ave S y s tems Inc . 4.7% S K Communications Co., Ltd. 4. 2% Quepas a Corp. 2.5% Gree, Inc . 2.0% S ohu.com Inc . 1.9% The9 Limited 1. 7% S hutterf ly , Inc . 1.6% LookS mart, Ltd. 1.2% Tencent Holdings Ltd. 0.8% Open Tex t Corp. 0.6% Cy berplex Inc . 0.5% My riad G roup A G 0.3% DA DA S pA 0. 2% G ameOn Co Ltd. 0.1% S handa Interac tive Entertainment Ltd. -0.1% IA C/InterA c tiveCorp. -0. 3% Tree.Com, Inc . -0.7% Perfect World Co., Ltd. -1.0% G igaMedia Ltd. -1.2% Neteas e.com Inc . -1.3% PNI Digita l Media Inc . -1.7% Ga mania Digital Enterta inment Co. , -1.8% Eolith Co. Ltd. -1.9% G iant Interac tive Group, Inc . -2.7% Ngi Group Inc . -2.7% XING A G -3.0% Ha nbitS oft, Inc . -4.7% Y nk K orea Inc . -5. 0% K ings of t Co. Ltd. -5.4% Northgate Technologies Limited -6.7% Webz en Inc . -6.9% CDC Corp. -7.1% Digita lTow n, Inc . -7.4% V a lueClick Inc . -8.0% A ctoz S oft Co., Ltd. -9.4% Mix i, Inc . -9. 6% A Q Interac tive, Inc . -11.2% NEOWIZ Games Corporation NetDra gon WebS oft, Inc . -12.0% -15.0% -10.0% -5.0% 0.0% 5.0%
1 Week P rice P erformance
14.4% 12.8% 11.1% 25.0% 27.7%
31.1%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
Figure 6. 1-Week Price Performance Source. Capital IQ
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INDUSTRY NEWS (PARTNERSHIPS, FINANCIAL RESULTS, NEW PRODUCTS)
K ey Developments
C ompany
Openwave S ys tems Inc. (Nas daqG S : OP WV)
Headline
Notes
T els tra S elects O penwave Mobile Ana lytics of O penwave O penwa ve S ys tems Inc. a nnounced that T els tra has s elected Openwa ve Mobile Analytics , a s olution that provides T els tra a das hboa rd view S ys tems Inc of all as pects of a ggrega ted mobile s ubs criber da ta a ctivity, levera ging a pla tform of intelligent analytics a nd rich reporting ca pabilities acros s its mobile device portfolio, including s ma rtphones a nd fea ture phones , iP hone traffic, netbooks a nd other mobile-ca pable devices . O penwave Mobile Ana lytics empowers T els tra to aggrega te s ubs criber data and behaviora l informa tion a cros s a variety of data s ources , including on porta l and open internet brows ing, mobile email mes s a ging, video and audio s treaming, device type, demogra phics and location to provide a 360-degree view of their mobile s ubs criber bas e. Openwa ve Mobile Analytics a ls o provides T els tra with ins ight into the opera tional as pects of their mobile broa dband network, allowing them to control network operations more efficiently by optimizing pres ent ca pa city a nd managing ongoing ba ndwidth dema nds . Accelerize New Media Inc. Adds T wo New C lients for P erforma nce-B as ed Marketing C a mpa igns Accelerize New Media Inc. a nnounced that it ha s partnered with G uzov O fs ink, L LC and with a multina tional education compa ny to provide performa nce-bas ed ma rketing s ervices to generate new bus ines s via www.S E C F ilings .com. S E C F ilings . com ta rgets a niche a udience within a highly coveted fina ncial demogra phic tha t includes s enior executives , fina ncial profes s ionals , a nd inves tors by providing free rea l-time a cces s to over 7 million S E C filings dating ba ck to 1994.
Acc elerize New Media, Inc. (OTC B B : AC L Z)
L ookS mart, L td. (Nas daqGM: L OOK )
L ookS ma rt L td. a nnounced unaudited cons olidated financia l res ults for the s econd quarter a nd s ix months ended J une 30, 2009. R evenues LookS ma rt Ltd. Announces Unaudited C ons olida ted F ina ncial R es ults for the S econd Quarter a nd S ix Months for the s econd quarter of 2009 were $13.2 million, a 23% decreas e from $17.1 million in the s econd quarter of 2008. Net los s for the s econd qua rter of 2009 wa s $1. 3 million, or $0.08 per bas ic and diluted s ha re. T his is compared to a net los s for the s econd qua rter of 2008 of $0. 2 E nded J une 30, 2009 ; R ecords Impairment C ha rge million or $0. 01 per ba s ic and diluted s ha re. Los s from continuing operations for the s econd quarter of 2009 was $1.4 million or $0. 09 per bas ic and diluted s ha re, which includes a $0.2 million impairment cha rge and $0. 2 million of expens es related to the evalua tion of s tra tegic growth alterna tives . T his compa res to a los s from continuing opera tions in the s econd quarter of 2008 of $0. 04 million. Non-G AAP net los s (net los s before dis continued opera tions and excluding s tock bas ed compens ation a nd impairment cha rges ) for the s econd quarter of 2009 wa s $0. 7 million compared to non-G AAP net income of $0.5 million in the s econd quarter of 2008. C a pital expenditures , including capita lization of internally developed s oftwa re, in the s econd quarter of 2009 were $0. 4 million, compa red to $0.9 million in the s econd qua rter V a lueC lick Inc. reported fina ncial res ults for the s econd qua rter and s ix months ended J une 30, 2009. F or the period, the company reported V a lueC lick Inc. R eports E arnings R es ults for S econd Quarter a nd S ix Months E nded J une 30, 2009 ; P rovides net income of $14. 9 million or $0. 17 per diluted s ha re on revenues of $130. 4 million a ga ins t net income of $16. 5 million or $0. 17 per diluted s ha re on revenues of $158. 5 million for s a me period a year a go. Income from operations for the period wa s $23. 4 million a ga ins t $28.0 E a rnings O utlook for T hird Quarter of 2009 million for s a me period a year a go. Income before income ta xes for the period was $24. 6 million a ga ins t $29.4 million for s ame period a year a go. Net income from continuing opera tions for the period was $14. 9 million or $0.17 per diluted s hare aga ins t net income from continuing opera tions for the period was $16. 5 million or $0.17 per diluted s hare for s ame period a yea r ago. In the s econd quarter of 2009, the company generated approxima tely $23. 5 million in free cas h flow, defined a s net cas h from opera tions les s ca pital expenditures . F or the period, the company reported net income of $28.1 million or $0. 32 per diluted s ha re on revenues of $265. 4 million a ga ins t net income of $35.7 million or $0.37 per diluted s ha re on revenues of $327.7 million for s ame period a year ago. Income from operations for the period wa s $ B eyond C ommerce Inc. Announces L oca lAdLink's E xpa ns ion into India B eyond C ommerce Inc. a nnounced the P re-La unch of L ocalAdLink into the country of India. T he Indian ma rket pres ents a lucrative expa ns ion opportunity for L oca lAdL ink. T he country of India currently has over a million people in the network marketing indus try. Indus try obs ervers , who are highly optimis tic a bout the growth of this indus try in India , es tima te the s ize of the indus try to cros s $1, 000 billion ma rk by the year 2010. United Online Inc. reported un-a udited cons olida ted ea rnings res ults for the s econd quarter a nd s ix months ended J une 30, 2009. F or the qua rter, the compa ny reported net income a pplica ble to common s tockholders of $17.7 million or $0.21 diluted per s ha re on tota l revenues of $260. 8 million a ga ins t $12.8 million or $0.18 diluted per s ha re on tota l revenues of $122. 3 million a yea r ago. Operating income wa s $43. 1 million a gains t $22 million a yea r a go. Income before income ta xes was $34. 7 million a ga ins t $23. 5 million a yea r ago. Net income was $19.3 million agains t $13. 7 million a year ago. Adjus ted opera ting income before depreciation a nd amortization was $68.5 million agains t $37.6 million a yea r a go. Adjus ted net income a pplica ble to common s tockholders was $31.4 million or $0.37 diluted per s hare agains t net income of $20. 4 million or $0.29 diluted per s hare a year a go. Net ca s h provided by opera ting a ctivities wa s $32. 5 million a ga ins t $36.1 million a yea r ago. F or the s ix months , the compa ny reported net income applicable to common s tockholders of $34 million or $0.41 diluted per s hare on tota l revenues of $524. 4 million agains t $25 million or $0.36 diluted per s hare on tota l revenues of $244.1 million a yea r ago. Ope T he compa ny provided ea rnings guidance for the third quarter of 2009. F or the quarter, the company expects revenues in the ra nge of $208. 0
ValueC lick Inc . (Nas daqG S : VC L K )
B eyond C ommerc e, Inc. (OTC B B : B YOC )
United Online Inc. (Nas daqGS : UNTD)
United O nline Inc. R eports Un-Audited C ons olidated E a rnings R es ults for the S econd Q ua rter and S ix Months E nded J une 30, 2009 ; P rovides E a rnings G uida nce for the T hird Q ua rter of 2009
Giant Interactive G roup, Inc . (NYS E : GA) P erfect W orld C o., L td. (Nas daqG S : P WR D)
G ia nt Intera ctive G roup Inc. R eports E arnings R es ults for G iant Interactive G roup Inc. reported ea rnings res ults for the firs t quarter of 2009. F or the qua rter, the compa ny's opera ting revenues the F irs t Q ua rter of 2009 rea ched C NY 1. 595 billion a nd C NY 374 million in 2008 and the firs t qua rter of 2009 res pectively. P erfect W orld Announces New 2D MMO R P G 'Dragon P erfect W orld C o. , L td. a nnounced the introduction of its firs t 2D rea l-time fa nta s y MMOR P G , 'Dragon E xcalibur. ' Developed by P erfect E xca libur' W orld's S hanghai R & D tea m, 'Dragon E xca libur' is a 2D fa ntas y online game tha t runs on R a ider, the C ompany's proprieta ry 2D ga me engine. T he innova tive 2D technology will allow the ga me to feature a dva nced a nd unique vis ual effects . In 'Dragon E xca libur, ' a fantas y world is crea ted where huma n beings , demons and gods meet in a s imulated his torical s cene. It us hers the pla yers into a world of a voluminous his torical novel where they can s huttle between different dyna s ties . T he game players can als o fa miliarize thems elves with the s imulated his torica l s ettings and ca n try to a lter the fa te of his tory with their coura ge in the ga me. T he innovative pla y modes will bring a bra nd new game experience to the pla yers . MOK O .mobi Limited R eports P a rent a nd C ons olida ted E a rnings R es ults for the Y ea r E nded J une 30, 2009 MOK O. mobi L imited reported parent a nd cons olida ted earnings res ults for the year ended J une 30, 2009. F or the year, the company reported cons olida ted los s a fter ta x and los s a ttributa ble to equity holders of AUD 2, 487, 159 or 3. 16 cents per diluted s ha re on revenue from continuing opera tions of AUD 555, 058 compa red to cons olidated los s after ta x a nd los s attributable to equity holders of AUD 3,114,862 or 5.18 cents per diluted s hare on revenue from continuing operations of AUD 1,474,485 for the s ame period a yea r ago. T he company reported cons olida ted los s before income ta x expens e of AUD 2, 808, 925 compared to cons olida ted los s before income ta x expens e of AUD 3,114, 862 for the s ame period a yea r ago. Net cas h us ed in opera ting activities was AUD 2, 100, 797 compared to net ca s h us ed in opera ting a ctivities wa s AUD 2, 162,428 for the s ame period a year ago. F or the yea r, the pa rent compa ny reported los s a fter ta x a nd los s attributable to equity holders of AUD 2,475, 810 on revenue from continuing opera tions of AUD 555, 058 compa red to los s a fter ta x and los s a ttributa ble to equity holders of AUD 3,114, 452 on revenue from continuing opera tions of AUD 1, 474, 485 for the s a me period a year a go. T he company re
MOK O.mobi L imited (AS X: MK B )
Figure 7. Key Developments Source. Capital IQ
Page 8
VALUATION Online Gaming companies lead market-cap charts: Thirteen companies in our W eb 2.0 universe top US$1 billion in market capitalization (Figure 8). Fifty-six of the 91 companies have market caps under US$100 million, with 24 under US$10 million. Online gaming companies dominate the top of the list, led by Tencent Holdings with a market cap over US$20 billion.
Market C ap (US D m)
Tenc ent Holdings Ltd. Neteas e.c om Inc. S ha nda Interactive Entertainment Ltd. Modern Times Group Mtg A B S ohu.c om Inc. IA C/InterA ctiveCorp. Changy ou.com L imited Open Tex t Corp. Perf ec t World Co., Ltd. Giant Interactive G roup, Inc. Gree, Inc. K ings oft Co. Ltd. Chines e G amer International Mix i, Inc. V alueClick Inc. United Online Inc. NEOWIZ G ames Corpora tion S hutterf ly , Inc. NetDragon WebS of t, Inc. S K Communications Co., Ltd. CDC Corp. GigaMedia Ltd. Ga mania Digital Entertainment Co., Ltd. The9 L imited GungHo Online Entertainment, Inc. Openw a ve S y s tems Inc. XING A G A ctoz S of t Co., Ltd. OA O R B C Information S y s tems DA DA S pA Y edangOnline Corp. NeuLion Inc orporated Tree.Com, Inc. G ameOn Co Ltd. Cy berplex Inc. K A B Dis tribution Inc. My riad G roup A G HanbitS of t, Inc. TheS treet.c om, Inc. G eoS entric Oy j G ra vity Co., Ltd Fluid Mus ic Ca nada, Inc. S park Netw orks , Inc. Frogs ter Interactiv e Pic tures A G Eolith Co. Ltd. PNI Digital Media Inc. Ngi G roup Inc. NeXplore Corpora tion Webz en Inc. DigitalTow n, Inc. S oc ialw is e, Inc. DXN Holdings B hd A Q Interactive, Inc. Northgate Technologies L imited Wiz z ard S of tw are Corpora tion LookS mart, Ltd. Y nk K orea Inc. Dolphin Digital Media, Inc. B roa dWebA s ia Inc. Quepas a Corp. A cceleriz e New Media, Inc. J umbuck Enterta inment Pty Ltd. B ey ond Commerce, Inc. L ingo Media Corpora tion UOMO Media, Inc IA S Energy , Inc. S pectrumDNA , Inc. Ex tens ions , Inc. B right Things plc MOK O.mobi L imited Worlds .c om Inc. DigitalPos t Interactive, Inc. V OIS , Inc. S NA P Interactive, Inc. CornerWorld Corpora tion is eemedia Inc. Magnitude Information S y s tems Inc. Wooz y Fly , Inc. B eta w ave Corpora tion Liv eWorld Inc. Wy nds torm Corpora tion B igs tring Corp. Unis erve Communications Corp. CLICK ER Inc. A s s ocia ted Media Holdings Inc. The Pa rent Company China Ga tew ay Corpora tion Total S port Online A S S NM Global Holdings Dibz International, Inc. S ocial Media V enures , Inc. 0 2662.8 2453.4 2449.4 3335.8
2164.4 2022.8 1819.0 1818.1 1779.8 1134.8 1101.7 976.1 948.2
633.0 545.9 404.5 390.1 344.7 292.3 269.3 268.3 239.2 237.7 218.3 199.0 165.3 145.7 139.8 120.7 111.7 106.7 103.0 102.3 82.7 80.9 76.8 70.4 63. 5 58. 4 57.2 56.1 51.8 48.4 46.8 41.0 39.0 38.8 35.6 32.1 30.9 29.9 25.7 22.5 21.4 21.4 20.7 19.5 15.9 15.8 15.1 13.5 12.9 12.9 12.6 10.7 8.9 4.8 4.7 4.7 4.4 4.4 4.3 3.5 3.3 2.7 2.6 2.2 1.9 1.8 1.3 1.0 0.6 0.6 0.4 0.3 0.1 0.0 0.0 0.0 500
1, 000
1,500
2, 000
2,500
3,000
3,500
4,000
Figure 8. Market Cap Ranking Source. Capital IQ
Page 9
TEV/Revenue (LTM) averages 5.0x: The overall average TEV/Revenue (LTM) multiple for our group is 5.0x (versus 4.9x last week) (Figure 9). Two companies trade at more than 25x revenue – Bigstring Corp. (OTCBB:BSGC) at 35.7x, followed by Dolphin Digital Media, Inc. (OTCBB:DPDM) at 28.1x. The median is only 2.0x. Note that we exclude multiples greater than 50x. Twenty-nine companies have multiples under 1.5x.
T E V/L T M R evenue (x)
40. 0
35.7
35. 0 30. 0 25. 0 20. 0
15.4 15.6 18.4 28.0 23.6 20.8 17.6
15. 0
11.7
12.4
10. 0 A v erage, 5. 0 5. 0 0. 0
6.9
8.7 7.8 8.2
9.7 9.9
5.1 5.5 4.3 4.5 4.6 3.4 3.8 4.0 2.4 2.6 2.7 2.7 2.7 2.8 2.9 2.9 1.7 1.8 1.9 2.0 2.3 2.3 0.9 1.0 1.1 1.1 1.1 1.2 1.3 1.4 1.4 1.5 1.6 0.1 0.2 0.2 0.3 0.3 0.5 0.5 0.5 0.6 0.6 0.6 0.7 0.8 0.8 0.9
Figure 9. TEV/Revenue Ranking Source. Capital IQ
TEV/Revenue (LTM) by country/exchange: W e have also calculated multiples based on where the companies are listed or domiciled. Figure 10 shows the average TEV/Revenue multiples by stock exchange. The OTCBB has the largest number of companies (19), trading at an average multiple of 11.7x (versus. 11.1x last week). On a geographic basis, the United States has the most companies (39), trading at an average of 5.3x revenue (versus 5.5x last week) (Figure 11). Ten of the companies are Canadian (average 5.3x revenue).
(x)
OTCNO
OTCBB
OTCPK
NasdaqGM
GTSM
TSE
NasdaqGS OSE
KOSE
SEHK
HLSE
AMEX
XTRA
TSX TSXV
KLSE
SWX
ASX
RTS
OM
CM
BSE
AIM
(x)
Germany
India 1
Canada
Finland
# Companies
1 3 19 2 1 2 1 4 4 5 11 2 1 6 14 1 2 1 1 1 5 1 1
# Companies 1
1
2
10
3
10 39
1
6
Switzerland
1
8
2
1
1
Hong Kong
Australia
1
Malaysia
Taiwan
Norway
Sweden
1
Figures 10 & 11. TEV/Revenue Ranking (Exchange, Country) Source. Capital IQ
Russia 1
China
United
United
Japan
South
Italy
T heS treet.com, Inc . U nis erve C ommunications C orp. T he P a rent C ompany C LIC K E R Inc. N orthgate T echnologies L imited P erfect World C o., Ltd. IAC /InterAc tiveC orp. T ree.C om, Inc. G a meO n C o Ltd. DXN Holdings B hd O penwave S y s tems Inc . J umbuck E nterta inment P ty L td. C DC C orp. DADA S pA S NAP Intera ctive, Inc. United O nline Inc . S pa rk N etwork s , Inc . S N M G loba l Holdings G igaMedia Ltd. H anbitS oft, Inc . K AB Dis tribution Inc . C y berplex Inc . Ac toz S oft C o. , Ltd. V alueC lic k Inc . is eemedia Inc . S hutterfly , Inc . Modern T imes G roup Mtg AB S K C ommunica tions C o., Ltd. G a mania Digital E ntertainment C o., Ltd. G ungH o O nline E ntertainment, Inc. My riad G roup AG P N I Digital Media Inc. Y edangO nline C orp. B ey ond C ommerc e, Inc. N E O WIZ G ames C orporation O pen T ex t C orp. XIN G AG Y nk K orea Inc . MO K O .mobi L imited NetDra gon WebS oft, Inc . E olith C o. Ltd. C ornerWorld C orporation S ohu.com Inc . Wiz z ard S oftware C orporation S ocial Media V enures , Inc . T otal S port O nline AS Acceleriz e New Media , Inc . NeuLion Inc orporated Mix i, Inc . C ha ngy ou.com L imited DigitalP os t Intera ctive, Inc. K ings oft C o. Ltd. F luid Mus ic C a nada , Inc. G eoS entric O y j G ree, Inc . Lingo Media C orporation F rogs ter Intera ctiv e P ic tures AG As s ociated Media Holdings Inc . B right T hings plc C hines e G amer Interna tional UO MO Media, Inc T encent Holdings Ltd. Dolphin Digital Media, Inc. B igs tring C orp.
Average TEV/LTM Revenue - By Exchange
20.0 17.6 18.0 16.0 14.0 11.8 11.7 12.0 10.2 10.0 9.9 9.1 8.0 6.0 4.6 4.4 4.13.8 3.6 2.6 2.3 2.1 2.0 4.0 1.8 1.7 2.0 0.8 0.6 2.0 0.3 0.3 0.0 0.0
Average TEV/LTM Revenue - By Country
20.0 17.6 18.0 16.0 14.0 12.0 9.9 10.0 9.1 7.9 7.1 8.0 5.3 5.3 4.6 6.0 3.5 4.0 2.3 2.1 1.8 1.7 2.0 0.8 0.8 0.6 0.3 0.0 0.0
Page 10
TEV/EBITDA (LTM) averages 11.1x: The average multiple for the 34 companies with positive EBITDA (and multiples under 100x) is 11.1x LTM EBITDA (vs. 10.9x last week), led by Tencent Holdings (SEHK-700) 48.8x multiple (Figure 12). Thirteen of the companies have EBITDA multiples under 7x. The median multiple is 9.8x (vs. 9.5x last week).
T E V/L T M E B IT DA (x)
60.0 48. 8
50.0
40.0 32.9 30.0 21.7 19.4 20.4 20.6 A verage, 11.1 10.0 0.9 0.0 P erfect World C o., Ltd. 1.8 J umbuck E ntertainment P ty Ltd. 2.4 G ameO n C o Ltd. 3.0 T heS treet.com, Inc. 3.1 S NAP Interac tiv e, Inc. 4.1 4.4 4.8 5.5 6. 6 7.4 8.2 8.8 13.5 11. 7 12.5 12.6 12.8 9.9 10.5 10.9 11.0 11.1 28.3
20.0 9.3 9.7 9.9
NE O WIZ G ames C orpora tion
G amania Digital E ntertainment C o., Ltd.
G ungH o O nline E ntertainment, Inc.
S K C ommunications C o., Ltd.
Modern T imes G roup Mtg AB
C hines e G amer International
DX N H oldings B hd
C hangy ou.com Limited
U nited O nline Inc.
C DC C orp.
O pen T ex t C orp.
NetDragon WebS oft, Inc.
S park Network s , Inc.
S ohu.com Inc.
IAC /InterActiveC orp.
Mix i, Inc.
O penwav e S y s tems Inc.
Figure 12. TEV/EBITDA Ranking Source. Capital IQ
TEV/EBITDA (LTM) by country/exchange: Figure 13 shows the average TEV/EBITDA multiples by stock exchange. The OTCBB has the largest number of companies (19), trading at an average multiple of 3.1x (vs. 0.9x last week). On a geographic basis, the United States has the most companies (39), trading at an average of 8.8x EBITDA (Figure 14). Ten of the companies are Canadian (average 11.0x EBITDA).
Average TEV/LTM EBITDA - By Exchange
30.0 26.0 25.0 20.0 (x) 15.0 10.0 5.0 GTSM 0.0 SEHK KOSE NasdaqGS OSE TSE OM XTRA TSX 22.3
(x) 25.0 20.0 15.0 10.0
Average TEV/LTM EBITDA - By Country
22.3 16.8 13.9 11.1 11.0 9.9 8.9 8.8 8.8 5.5 4.1 1.8 Germany Malaysia China Japan United States Hong Kong Canada South Korea Italy Australia Taiwan Sweden 0.2 Russia 1 0.0 Switzerland 1
13.9 11.2 11.1 11.0 10.3 8.8 8.5
5.5 4.8 4.1 3.1 3.0 1.8 OTCBB NasdaqGM CM AMEX KLSE ASX
5.0
0.2 0.0 RTS SWX
0.0
# Companies
3
10
8
1
10
1
6
2
T encent H oldings L td.
V alueC lick Inc.
K AB Dis tribution Inc.
Y eda ngO nline C orp.
C y berplex Inc.
G ree, Inc.
XING AG
Actoz S oft C o., Ltd.
K ings oft C o. Ltd.
S hutterfly , Inc.
DADA S pA
39
1
1
2
# Companies
3
2
6
4
1
1
14
2
5
1
2
1
19
5
2
1
1
Figures 13 & 14. TEV/EBITDA Ranking (Exchange, Country) Source. Capital IQ
Page 11
P/E (LTM) averages 10.0x: The average multiple for the 30 companies with positive earnings (and multiples under 100x) is 10.0x LTM EPS (versus 10.0x last week), led Tencent Holdings Ltd (SEHK-700) 62.1x multiple (Figure 15). Ten of the companies have P/E multiples under 10x. The median is just 14.0x.
P/E L T M (x)
70.0 62.1 60.0 51. 7 50.0 41.1 40.0 30.0 20.0 A verage, 10.0 10.0 1.9 0.0 G iant Interactive G roup, Inc. DXN Holdings B hd T he9 Limited Netea s e.c om Inc. S handa Interactive E ntertainment L td. P erfect World C o., Ltd. 2.7 2.7 3. 1 3.4 5. 4 5.9 6.6 17.2 18.7 28.5 29.3 25.5 23.4 24.3 13.4 14.0 14.3 14.9 11. 6 12.2 12. 6 9. 5 10.6 30.7 31.6 42.5
J umbuck E ntertainment P ty Ltd.
G ama nia Digital E nterta inment C o., Ltd.
NE O WIZ G ames C orporation
Modern T imes G roup Mtg AB
C hines e G amer International
C ha ngy ou.com L imited
S NAP Interac tive, Inc.
G ameO n C o Ltd.
O pen T ex t C orp.
Mix i, Inc .
NetDragon WebS oft, Inc .
Figure 15. P/E Ranking Source. Capital IQ
P/E (LTM) by country/exchange: Figure 16 shows the average P/E multiples by stock exchange. The OTCBB has the largest number of companies (19), trading at an average multiple of 18.7x. On a geographic basis, the United States has the most companies (39), trading at an average of 18.5x earnings (Figure 17). Ten of the companies are Canadian (average 20.5x EPS).
Average P/E - By Country
35.0
Average P/E - By Exchange
40.0 35.0 30.0 25.0 (x) 20.0 15.0 10.0 5.0 OTCBB GTSM 0.0 SEHK KOSE TSE NasdaqGS OM CM XTRA AMEX TSX 35.5 35.0 33.9
(x)
40.0 35.0 30.0 25.0
27.2
23.4
20.0 15.0 10.0
23.4 20.5
22.0
18.7
18.7 18.7
16.5
T encent Holdings Ltd.
C y berplex Inc .
IAC /InterActiveC orp.
S park Network s , Inc .
S ohu.com Inc .
Worlds .com Inc .
G igaMedia Ltd.
Y edangO nline C orp.
Actoz S oft C o. , Ltd.
K ings oft C o. L td.
DADA S pA
G ree, Inc .
XING AG
16.5 14.4
17.2
13.4 5.9 5.4 0.0 Malaysia 1 Switzerland 1
13.4
10.5 9.5
5.9 5.4 1.9 NasdaqGM 0.0 KLSE NYSE ASX
5.0 0.0 Germany Canada United States Japan South Korea China Italy Australia 2 Taiwan Sweden 1
# Companies
6
3
1
10
2
8
39
10
# Companies
2
5
3
1
6
2
19
2
1
14
4
2
1
1
5
Figures 16 & 17. P/E Ranking (Exchange, Country) Source. Capital IQ
Page 12
UPCOMING EVENTS
E arnings C alendar
C ompany
P NI Digital Media Inc. (T S XV : P N) T encent Holdings L td. (S E HK : 700) Neteas e. com Inc. (Nas daqG S : NT E S ) T ucows Inc. (AME X: T C X) C DC C orp. (Nas daqG S : C HIN. A) O pen T ext C orp. (Nas daqG S : O T E X) T he9 L imited (Nas daqG S : NC T Y )
Figure 18. Earnings Calendar Source. Company reports
Date & Time
W ednes day, Augus t 12, 2009 4: 30 P M (E DT ) W ednes day, Augus t 12, 2009 8: 00 AM (E DT ) W ednes day, Augus t 12, 2009 9: 00 P M (E DT ) T hurs day, Augus t 13, 2009 5: 00 P M (E DT ) T ues day, Augus t 18, 2009 9: 00 AM (E DT ) T hurs day, Augus t 20, 2009 5: 00 P M (E DT ) T hurs day, Augus t 27, 2009 9: 00 P M (E DT )
Quarter
Q 3 2009 Q 2 2009 Q 2 2009 Q 2 2009 Q 2 2009 Q 4 2009 Q 2 2009
C onf C all Details
888-300-8196 866. 549. 1292 888-846-5003 800-814-4890 888-603-6873 416-644-3415 800-561-2693
Page 13
C omparable C ompany Analys is > Web 2.0
Pric e P erformanc e
C ompany Name A ccelerize New Media, Inc. A ctoz S oft C o. , L td. A Q Interactive, Inc. A s s ociated Media H oldings Inc. B igs tring C orp. B eta wave C orpora tion B eyond C ommerce, Inc. B right T hings plc B roadW ebA s ia Inc. C DC C orp. C ha ngyou.com Limited C hina G a tewa y C orporation C hines e G a mer International C LIC K E R Inc. C ornerW orld C orpora tion C yberplex Inc. DADA S pA DXN Holdings B hd Dibz Interna tional, Inc. DigitalP os t Intera ctive, Inc. DigitalT own, Inc. Dolphin Digital Media, Inc. E olith C o. L td. E xtens ions , Inc. F luid Mus ic C anada, Inc. F rogs ter Intera ctive P ictures AG G amania Digita l E ntertainment C o., L td. G ameO n C o L td. G eoS entric Oyj G ia nt Interactive G roup, Inc. G igaMedia L td. G ra vity C o., Ltd G ree, Inc. G ungH o Online E ntertainment, Inc. H anbitS oft, Inc. IAC /InterA ctiveC orp. IAS E nergy, Inc. is eemedia Inc. J umbuck E ntertainment P ty Ltd. K AB Dis tribution Inc. K ings oft C o. L td. L ingo Media C orpora tion L iveW orld Inc. L ookS mart, L td. Ma gnitude Information S ys tems Inc. Mixi, Inc. Modern T imes G roup Mtg AB MO K O .mobi L imited Myriad G roup AG NE O W IZ G ames C orporation NetDra gon W ebS oft, Inc. Netea s e. com Inc. NeuLion Incorpora ted NeXplore C orpora tion Ngi G roup Inc. Northgate T echnologies Limited O pen T ext C orp. O penwa ve S ys tems Inc. P erfect W orld C o., Ltd. P NI Digital Media Inc. Q uepa s a C orp. O AO R B C Information S ys tems S ha nda Interactive E nterta inment L td. S hutterfly, Inc. S K C ommunications C o. , L td. S NA P Intera ctive, Inc. S NM G loba l H oldings S ocial Media V enures , Inc. S ocialwis e, Inc. S ohu.com Inc. S pa rk Networks , Inc. S pectrumDNA, Inc. T encent H oldings Ltd. T he P a rent C ompany T he9 L imited T heS treet.com, Inc. T ota l S port Online A S T ree.C om, Inc. U nis erve C ommunica tions C orp. U nited O nline Inc. U OMO Media, Inc V alueC lick Inc. V OIS , Inc. W ebzen Inc. W izzard S oftwa re C orporation W orlds .com Inc. W oozyF ly, Inc. W ynds torm C orpora tion XING A G Y eda ngOnline C orp. Y nk K orea Inc. H igh L ow Average Media n C urrenc y US D KR W JPY US D US D US D US D GB P US D US D US D US D TWD US D US D C AD E UR MY R US D US D US D US D KR W US D C AD E UR TWD JPY E UR US D US D US D JPY JPY KR W US D US D C AD AU D C AD HK D C AD US D US D US D JPY SEK AU D C HF KR W HK D US D C AD US D JPY INR US D US D US D C AD US D US D US D US D KR W US D US D US D US D US D US D US D HK D US D US D US D NO K US D C AD US D US D US D US D US D US D US D US D US D E UR KR W KR W Tic ker AC L Z A052790 3838 AS MH BSGC B W AV B Y OC AIM:B G T BWBA C H IN.A C Y OU CGWY G T S M:3083 CLK Z CW R L T S X: C X C M:DA DXN DIB Z DG LP DG T W DP DM A041060 E XT I T S X: F MN FR G 6180 3812 G E O1V GA G IG M GR VY T S E :3632 3765 A047080 IA C I IA S C . A IE E AS X: J MB T S X: K AB 3888 T S XV :LM LV W D LO OK MAG Y 2121 MT G B MK B MY R N A095660 777 NT E S T S X: NL N NXP C 2497 590057 OT E X OP W V PWRD T S XV :P N QP S A R BCI S NDA S F LY A066270 S TVI S NMN S MV I S CLW S O HU LO V S P XA 700 K IDS . Q NC T Y TS CM T OS O TR E E T S XV :US S UNT D UO MO V CLK V O IS W ZE N W ZE W DDD W ZY F W Y ND O1B C A052770 A023770 E xc hange OT C B B K OS E TS E OT C P K OT C B B OT C B B OT C B B A IM OT C P K Nas da qG S Nas da qG S OT C P K GTS M OT C B B OT C B B TS X CM K LS E OT C P K OT C B B OT C B B OT C B B K OS E OT C P K TS X XT R A GTS M TS E H LS E NY S E Nas da qG S Nas da qG M TS E OS E K OS E Nas da qG S OT C B B T S XV AS X TS X S E HK T S XV OT C P K Nas da qG M OT C B B TS E OM AS X S WX K OS E S E HK Nas da qG S TS X OT C P K TS E BSE Nas da qG S Nas da qG S Nas da qG S T S XV OT C B B R TS Nas da qG S Nas da qG S K OS E OT C B B OT C P K OT C P K OT C B B Nas da qG S A ME X OT C B B S E HK OT C P K Nas da qG S Nas da qG M O T C NO Nas da qG M T S XV Nas da qG S OT C B B Nas da qG S OT C B B Nas da qG M A ME X OT C B B OT C B B OT C P K XT R A K OS E K OS E US D Market C ap ($m) 15.8 165.3 29.9 0.6 1.3 2.2 13.5 4.8 19.5 292.3 2, 164.4 0.3 1, 101.7 0.6 3.5 102.3 139.8 30.9 0.0 4.4 35.6 20.7 48.4 8.9 57.2 51.8 268.3 103.0 63.5 1, 818.1 269.3 58.4 1, 779.8 237.7 76.8 2, 449.4 12.6 3.3 15.1 82.7 1, 134.8 12.9 1.9 21.4 2.7 976.1 2, 662.8 4.7 80.9 545.9 390.1 5, 870.8 111.7 39.0 41.0 25.7 2, 022.8 218.3 1, 819.0 46.8 15.9 145.7 3, 335.8 404.5 344.7 4.3 0.0 0.0 32.1 2, 453.4 56.1 10.7 25,897. 8 0.4 239.2 70.4 0.1 106.7 1.0 633.0 12.9 948.2 4.4 38.8 22.5 4.7 2.6 1.8 199.0 120.7 21.4 C urrent P ric e 0.57 23, 550 53, 600 0.01 0.03 0.08 0.30 0.02 0.23 2.76 39.35 0.02 430.00 0.01 0.06 1.70 6.10 0.47 0.00 0.06 1.30 0.40 820.00 0.20 1.18 14.50 58.00 103, 700 0.05 8.05 4.94 2.10 7, 740 202, 000 4, 305 18.50 0.18 0.07 0.37 1 8 1.12 0.06 1.25 0.01 618,000.00 293.00 0.07 4.12 31,850.00 5.72 45.36 1.06 0.70 32,200.00 35.20 38.44 2.62 37.40 1.48 1.25 1.05 49.96 15.89 10,100.00 0 0.00 0.20 0.74 64.00 3 0 111 0.02 9.38 2.30 0.03 9.88 0.05 7.55 0.15 10.88 0.01 3.28 0.47 0.09 0.15 0.10 26.70 9, 440 4, 910 1 Wk 1. 8% -8.0% -9.6% -30.0% -2.0% 7. 1% -11.8% -14.3% -22.8% -6.9% 6. 4% -25.0% 5. 4% 60.0% 10.0% 0. 6% 0. 3% 17.5% 20.0% 19.8% -7.1% -21.6% -1.8% 150.0% 31.1% 8. 3% -1.7% 0. 2% 25.0% -1.9% -1.0% 25.0% 2. 5% -4.0% -3.0% -0.1% 57.9% -12.5% -2.6% 0. 0% -5.0% -2.6% 100.0% 1. 6% -7.7% -9.4% 6. 2% 0. 0% 0. 5% -11.2% -12.0% -1.2% 27.7% 0. 0% -2.7% -5.4% 0. 8% 4. 8% -0.7% -1.3% 4. 2% 0. 0% 0. 1% 1. 7% 4. 7% 100.0% -60.0% -45.9% 1. 4% 2. 0% 12.8% 57.1% 1. 2% 0. 0% 1. 9% 11.1% 0. 0% -0.3% 0. 0% -17.0% 11.1% -7.4% -11.7% -6.7% -4.1% -25.0% 0. 0% 0. 0% -2.7% 14.4% -4.7% 150.0% -60.0% 4.3% 0. 0% 1 Mth 26.7% -21.1% -8.4% -30.0% -37.5% -6.3% -21.1% -6.3% -22.8% 96.8% 2.3% 650.0% 0.5% 73.9% -8.3% 6.2% -1.5% 34.3% NM 71.1% -35.0% -9.1% 0.0% 0.0% 81.5% 27.2% 1.4% -6.2% 25.0% 7.6% -6.3% 40.0% 12.2% -15.7% -7.8% 16.9% 12.5% -17.6% -2.6% -1.5% 45.7% -5.9% 9.1% 10.6% -33.3% -0.6% 36.6% -7.1% -13.3% -1.4% 0.2% 32.1% 51.4% 16.7% -2.4% 16.0% 8.3% 16.4% 25.4% 2.1% 50.6% 16.7% -3.8% 30.9% 5.0% -11.1% -71.4% -37.5% -7.5% 9.8% 11.4% 10.0% 23.1% -50.0% 6.8% 17.3% 0.0% 2.3% -35.7% 11.2% 36.4% 7.6% -72.1% -9.3% -11.3% 0.0% NM 150.0% -13.9% 12.4% -24.2% 650.0% -72.1% 13.7% 1.7% 3 Mth 14.0% 56.0% 3.5% 833.3% 8.7% -31.8% -68.4% -15.7% -54.9% 107.1% 33.2% 650.0% 78.8% 33.3% -45.0% -8.1% -1.2% 10.6% 20.0% 299.3% -48.0% -40.3% -7.9% 33.3% 96.7% 89.3% 49.7% 12.7% 0.0% -3.5% -20.2% 116.5% 48.8% 41.7% -22.8% 18.2% -35.7% -41.7% -7.5% 6.7% 95.2% 12.0% -7.7% -2.3% -40.0% 46.8% 25.8% -13.3% -17.6% -8.5% 5.1% 45.5% 51.4% 0.0% 12.2% -13.5% 23.4% 116.5% 99.9% -8.6% 26.3% 6.6% -2.8% 24.9% 9.8% -46.7% -33.3% 1900. 0% 25.4% 18.6% 5.0% -45.0% 56.1% 20.0% 0.3% 15.6% 0.0% -14.9% 12.5% 6.6% -48.3% 8.3% 65.6% -7.7% -24.2% -55.0% 0.0% 233.3% -11.1% -0.1% -37.6% 1900. 0% -68.4% 53.1% 6.7% 6 Mth 62.9% 91.5% 60.0% 180.0% 42.9% -54.5% -60.5% -23.9% -77.2% 193.1% NM 650.0% 275.5% -46.7% -86.6% 372.2% -1.9% 30.6% -88.0% 565.6% -13.3% -24.5% 39.0% 0. 0% 110.7% 229.5% 158.9% -9.8% 25.0% 35.1% -32.7% 200.0% 47.7% 96.1% 24.1% 29.1% 620.0% -22.2% -7.5% 75.3% 177.4% 6. 7% 50.0% -9.4% -76.0% 33.2% 103.8% 62.5% -15.1% 118.2% 95.9% 129.7% 140.9% -17.6% 17.2% -19.2% 8. 5% 223.5% 150.0% -12.9% -24.2% 238.7% 65.5% 92.1% 25.5% -59.6% 100.0% -85.6% 54.2% 36.4% 9. 2% 120.0% 131.2% -50.0% -36.2% -14.2% -25.0% 141.6% -43.8% 38.8% 87.5% 67.6% -29.3% 118.4% -34.7% -59.1% 0. 0% -16.7% -11.3% 38.8% 2. 3% 650.0% -88.0% 64.1% 33.2% 1 Yr -9.5% 170. 7% -62. 5% -30. 0% -68. 8% -75. 4% -90. 5% -7.7% -84. 7% -1.3% NM -50. 0% 438. 6% -98. 9% -91. 5% 183. 3% -51. 0% 11.9% -97. 6% -14. 4% -69. 4% NM 0.6% NM -19. 2% 150. 0% 121. 6% -7.4% -28. 6% -23. 2% -61. 1% 13.5% NM 0.5% 11.1% -48. 2% -14. 3% -63. 2% -33. 9% -23. 8% 171. 8% -38. 1% -71. 4% -57. 8% -70. 0% -10. 6% -19. 4% 62.5% -58. 4% 178. 8% -21. 4% 78.3% NM 27.3% -61. 2% -87. 9% 8.9% 80.7% 47.2% -58. 1% -58. 2% -86. 2% 86.3% 59.1% -27. 6% -55. 1% -99. 7% -20. 0% -70. 0% -15. 5% -36. 1% NM 74.6% -99. 3% -50. 1% -66. 7% -40. 0% 0.7% -82. 0% -36. 0% -62. 5% -19. 1% -85. 9% 12.6% -70. 6% -74. 3% NM -83. 3% -14. 7% -0.1% -55. 0% 438. 6% -99. 7% -12.6% -28. 6% 52 Week -13.6% -34.6% -63.8% -72.0% -72.2% -78.0% -90.8% -40.0% -92.1% -29.7% -18.6% -57.1% -17.1% -98.9% -93.0% -14.6% -51.0% -2.1% -97.6% -39.5% -78.7% -64.6% -29.3% -80.2% -34.4% -6.5% -15.7% -32.2% -28.6% -25.3% -61.6% 8.2% -6.3% -27.8% -35.2% -63.4% -35.7% -68.2% -40.3% -29.7% -7.2% -41.7% -76.0% -62.9% -80.0% -32.9% -21.1% -35.0% -58.8% -24.2% -34.3% -2.8% -2.8% -51.7% -74.7% -88.8% -1.7% -16.3% -2.7% -59.1% -63.9% -86.6% -23.1% -3.9% -32.0% -63.0% -99.9% -96.0% -71.5% -19.9% -38.8% -63.3% -2.5% -99.3% -59.5% -68.7% -40.0% -24.4% -82.0% -38.4% -85.8% -22.3% -85.9% -30.0% -72.8% -74.3% -96.3% -83.3% -25.8% -23.9% -60.4% 8.2% -99.9% -47.6% -40.0%
696.6
Figure 19. Price Performance Source. Capital IQ
Page 14
C omparable C ompany Analys is > Web 2.0
Valuation Multiples C ompany Name
Accelerize New Media, Inc. Actoz S oft C o., Ltd. AQ Intera ctive, Inc. As s ocia ted Media Holdings Inc. B igs tring C orp. B etawave C orpora tion B eyond C ommerce, Inc. B right T hings plc B roadW ebAs ia Inc. C DC C orp. C hangyou.com Limited C hina G atewa y C orpora tion C hines e G amer Interna tional C L IC K E R Inc. C ornerW orld C orporation C yberplex Inc. DA DA S pA DXN Holdings B hd Dibz Interna tiona l, Inc. DigitalP os t Interactive, Inc. DigitalT own, Inc. Dolphin Digital Media, Inc. E olith C o. L td. E xtens ions , Inc. F luid Mus ic C a nada, Inc. F rogs ter Interactive P ictures A G G amania Digital E ntertainment C o., Ltd. G ameO n C o Ltd. G eoS entric Oyj G iant Interactive G roup, Inc. G igaMedia Ltd. G ravity C o., Ltd G ree, Inc. G ungH o O nline E nterta inment, Inc. Ha nbitS oft, Inc. IAC /InterActiveC orp. IAS E nergy, Inc. is eemedia Inc. J umbuck E ntertainment P ty L td. K A B Dis tribution Inc. K ings oft C o. Ltd. Lingo Media C orpora tion LiveW orld Inc. LookS ma rt, L td. Magnitude Information S ys tems Inc. Mixi, Inc. Modern T imes G roup Mtg AB MOK O .mobi Limited Myriad G roup AG NE OW IZ G ames C orporation NetDra gon W ebS oft, Inc. Netea s e.com Inc. NeuLion Incorporated NeXplore C orporation Ngi G roup Inc. Northgate T echnologies Limited O pen T ext C orp. O penwave S ys tems Inc. P erfect W orld C o., Ltd. P N I Digital Media Inc. Q uepa s a C orp. O AO R B C Information S ys tems S handa Interactive E nterta inment Ltd. S hutterfly, Inc. S K C ommunications C o., Ltd. S N AP Interactive, Inc. S N M G lobal Holdings S ocial Media V enures , Inc. S ocialwis e, Inc. S ohu.com Inc. S park N etworks , Inc. S pectrumDN A, Inc. T encent Holdings Ltd. T he P a rent C ompany T he9 L imited T heS treet.com, Inc. T otal S port Online AS T ree.C om, Inc. Unis erve C ommunications C orp. United Online Inc. UO MO Media, Inc V a lueC lick Inc. V O IS , Inc. W ebzen Inc. W izzard S oftware C orporation W orlds .com Inc. W oozyF ly, Inc. W ynds torm C orporation XIN G AG Y eda ngO nline C orp. Y nk K orea Inc. High Low Average Median
S ec tor
Direct Marketing G aming G aming Mobile Ins ta nt Mes s aging Media S ocial Networking S ocial Networking S ocial Networking G aming G aming Mobile G aming Direct Marketing C ontent A dvertis ing S ocial Networking S ocial Networking S NS Apps C ontent S ocial Networking S ocial Networking G aming C ontent Media G aming G aming G aming Mobile G aming G aming G aming S ocial Networking Media G aming Media V ideo C ontent S ocial Networking C ontent G aming L earning S ocial Networking Direct Marketing S ocial Networking S ocial Networking Media S ocial Networking Mobile G aming G aming G aming V ideo C ontent Media Direct Marketing C ollabora tion Mobile G aming Digita l Ima ging S ocial Networking Media G aming Digita l Ima ging S earch Dating Media S ocial Networking S ocial Networking G aming S ocial Networking Media P orta l Media G aming Media Media P orta l S ocial Networking Media Media Media S ocial Networking G aming P odca s ting C ontent S ocial Networking C ontent S ocial Networking G aming G aming
C ountry
U nited S ta tes S outh K orea J apan U nited S ta tes U nited S ta tes U nited S ta tes U nited S ta tes U nited K ingdom U nited S ta tes H ong K ong C hina U nited S ta tes T a iwa n U nited S ta tes U nited S ta tes C ana da Italy Mala ys ia U nited S ta tes U nited S ta tes U nited S ta tes U nited S ta tes S outh K orea U nited S ta tes U nited S ta tes G erma ny T a iwa n J apan F inland C hina T a iwa n S outh K orea J apan J apan S outh K orea U nited S ta tes C ana da C ana da Aus tra lia C ana da C hina C ana da U nited S ta tes U nited S ta tes U nited S ta tes J apan S weden Aus tra lia S witzerla nd S outh K orea C hina C hina C ana da U nited S ta tes J apan India C ana da U nited S ta tes C hina C ana da U nited S ta tes R us s ia C hina U nited S ta tes S outh K orea U nited S ta tes U nited S ta tes U nited S ta tes U nited S ta tes C hina U nited S ta tes U nited S ta tes C hina U nited S ta tes C hina U nited S ta tes N orway U nited S ta tes C ana da U nited S ta tes C ana da U nited S ta tes U nited S ta tes S outh K orea U nited S ta tes U nited S ta tes U nited S ta tes U nited S ta tes G erma ny S outh K orea S outh K orea
P rimary E xc hange
OTCB B K OS E TS E OTCP K OTCB B OTCB B OTCB B AIM OTCP K N as da qG S N as da qG S OTCP K GTS M OTCB B OTCB B TS X CM K LS E OTCP K OTCB B OTCB B OTCB B K OS E OTCP K TS X XT R A GTS M TS E H LS E NY S E N as da qG S N as da qG M TS E OS E K OS E N as da qG S OTCB B T S XV AS X TS X S E HK T S XV OTCP K N as da qG M OTCB B TS E OM AS X SWX K OS E S E HK N as da qG S TS X OTCP K TS E BS E N as da qG S N as da qG S N as da qG S T S XV OTCB B R TS N as da qG S N as da qG S K OS E OTCB B OTCP K OTCP K OTCB B N as da qG S AME X OTCB B S E HK OTCP K N as da qG S N as da qG M O T C NO N as da qG M T S XV N as da qG S OTCB B N as da qG S OTCB B N as da qG M AME X OTCB B OTCB B OTCP K XT R A K OS E K OS E
Ticker
AC LZ A052790 3838 AS MH BSGC B W AV B YOC AIM:B G T BWBA C HIN.A C Y OU CGW Y G T S M:3083 C LK Z CW R L T S X: C X C M:DA DXN DIB Z DG L P DG T W DP DM A041060 E XT I T S X:F MN FR G 6180 3812 G E O1V GA G IG M GR VY T S E : 3632 3765 A047080 IAC I IAS C .A IE E AS X:J MB T S X:K AB 3888 T S XV : LM LV W D L OOK MA G Y 2121 MT G B MK B MY R N A095660 777 NT E S T S X:NL N NXP C 2497 590057 OT E X OP W V PWRD T S XV :P N QP S A R BCI S NDA S FLY A066270 S TVI S NMN S MV I S CLW S O HU L OV S P XA 700 K IDS .Q NC T Y TS CM T OS O TREE T S XV :US S U NT D UO MO V CLK V OIS W ZE N W ZE W DDD W ZY F W Y ND O1B C A052770 A023770
US D Market C ap ($m)
15.8 165.3 29.9 0.6 1.3 2.2 13.5 4.8 19.5 292.3 2,164.4 0.3 1,101.7 0.6 3.5 102.3 139.8 30.9 0.0 4.4 35.6 20.7 48.4 8.9 57.2 51.8 268.3 103.0 63.5 1,818.1 269.3 58.4 1,779.8 237.7 76.8 2,449.4 12.6 3.3 15.1 82.7 1,134.8 12.9 1.9 21.4 2.7 976.1 2,662.8 4.7 80.9 545.9 390.1 5,870.8 111.7 39.0 41.0 25.7 2,022.8 218.3 1,819.0 46.8 15.9 145.7 3,335.8 404.5 344.7 4.3 0.0 0.0 32.1 2,453.4 56.1 10.7 25,897.8 0.4 239.2 70.4 0.1 106.7 1.0 633.0 12.9 948.2 4.4 38.8 22.5 4.7 2.6 1.8 199.0 120.7 21.4 25,897.8 0.0 696.6 47.6
TE V/L TM R evenue
5.1x 1.4x 0.0x 15.6x 35.7x 2.6x 17.6x 0.8x 7.8x 0.0x 18.4x 0.3x 3.8x 1.3x 0.8x 0.6x 8.2x 28.0x 3.4x 9.7x 15.4x 1.9x 0.6x 9.9x 1.1x 11.7x 2.0x 1.1x 0.5x 1.5x 0.7x 1.2x 8.7x 12.4x 0.1x 6.9x 1.7x 2.9x 2.3x 2.7x 2.9x 5.5x 0.0x 0.3x 2.7x 0.6x 0.5x 2.3x 0.0x 1.6x 1.8x 0.9x 1.1x 4.5x 4.0x 1.0x 23.6x 0.2x 0.1x 4.6x 0.5x 0.2x 0.9x 20.8x 1.4x 4.3x 2.7x 2.4x 2.8x 35.7x 0.0x 5.0x 2.0x
TE V/ NTM R evenue
0.8x 6.0x 1.4x 6.4x 1.0x 0.5x 1.1x 1.6x 5.6x 2.4x 0.6x 2.4x 1.6x 1.5x 3.5x 0.2x 0.1x 6.4x 0.1x 2.2x 1.5x
TE V/L TM E B ITDA
6. 6x 0. 3x 9. 9x 12.8x 32.9x 12.6x 5. 5x 4. 1x 11.7x 2. 4x 19.4x 11.0x 13.5x 1. 8x 9. 7x 21.7x 20.4x 11.1x 9. 9x 7. 4x 0. 1x 10.5x 20.6x 0. 9x 0. 2x 12.5x 28.3x 3. 1x 9. 3x 4. 8x 48.8x 3. 0x 4. 4x 8. 2x 8. 8x 10.9x 48.8x 0. 1x 11.1x 9. 8x
TE V/NTM E B ITDA
12.5x 10.5x 5.0x 4.2x 6.0x 12.6x 8.1x 5.0x 4.6x 4.6x 7.8x 7.7x 12.9x 8.0x 12.9x 4.2x 7.8x 7.8x
P /L TM E P S
24.3x 14.9x 42.5x 9.5x 23.4x 5.4x 28.5x 12.2x 1.9x 10.6x 0.0x 41.1x 11.6x 5.9x 25.5x 51.7x 13.4x 29.3x 14.0x 3.4x 31.6x 3.1x 2.7x 6.6x 14.3x 17.2x 62.1x 2.7x 30.7x 18.7x 12.6x 62.1x 0.0x 18.4x 14.0x
P /NTM E P S
13.3x 1.6x 13.4x 9.9x 35.7x 14.7x 20.1x 14.6x 32.8x 14.1x 13.9x 17.4x 13.5x 55.7x 55.7x 1.6x 19.3x 14.4x
P /TangB V
2.7x 0.5x 0.3x 14.7x 16.0x 9.4x 0.7x 4.5x 5.4x 7.1x 3.5x 1.4x 10.7x 0.4x 2.3x 0.0x 19.0x 34.3x 2.3x 1.1x 2.7x 1.5x 6.2x 13.1x 0.8x 0.8x 7.1x 3.4x 3.7x 14.8x 2.1x 1.0x 6.3x 0.9x 3.2x 1.2x 18.6x 1.1x 2.4x 2.6x 41.7x 4.8x 28.0x 25.9x 0.1x 0.9x 1.3x 6.2x 15.1x 0.0x 6.2x 4.4x 1.0x 41.7x 0.0x 7.0x 3.3x
Figure 20. Valuation Comparison Source. Capital IQ
Page 15
C omparable C ompany Analys is > Web 2.0
S ummary by C ountry
C ompany Name United S tates C a na da C hina S outh K orea J a pa n T a iwa n Aus tralia G erma ny S witzerla nd Hong K ong F inla nd Ita ly United K ingdom India S weden R us s ia Ma lays ia Norwa y G rand Total 39 10 10 8 6 3 2 2 1 1 1 1 1 1 1 1 1 1 90 US D Market C ap ($m) C hina U nited S ta tes J a pan S weden C anada T a iwa n S outh K orea Hong K ong G ermany R us s ia Ita ly S witzerla nd F inland Malays ia India Aus tralia U nited K ingdom Norway G rand Total 45, 123. 3 5, 235. 3 3, 167. 6 2, 662. 8 2, 409. 0 1, 639. 4 1, 399. 0 292. 3 250. 8 145. 7 139. 8 80. 9 63. 5 30. 9 25. 7 19. 8 4. 8 0. 1 62,690.7 Avg US D Market C ap ($m) C hina S weden T aiwan J apan Hong K ong C anada S outh K orea R us s ia Ita ly U nited S ta tes G ermany S witzerla nd F inland Malays ia India Aus tralia U nited K ingdom Norway G rand Total 4,512. 3 2,662. 8 546. 5 527. 9 292. 3 240. 9 174. 9 145. 7 139. 8 134. 2 125. 4 80. 9 63. 5 30. 9 25. 7 9. 9 4. 8 0. 1 696.6 US D L TM Total R ev ($m) C hina United S tates S weden C a na da S outh K orea J a pa n Hong K ong T a iwa n Ita ly R us s ia India Ma lays ia G erma ny S witzerla nd Aus tralia F inla nd Norwa y United K ingdom G rand Total 3,882. 8 3,882. 8 1,893. 2 999. 1 680. 1 604. 7 389. 9 366. 1 237. 6 148. 8 83. 2 78. 9 56. 8 40. 0 16. 2 6. 0 2. 2 0. 3 13,368.7 US D L TM Total E B ITDA ($m) C hina United S tates S weden C a na da J a pa n S outh K orea T a iwa n Ita ly Hong K ong R us s ia Ma lays ia G erma ny Aus tralia S witzerla nd Norwa y United K ingdom F inla nd India G rand Total 1, 802. 0 291. 6 290. 9 196. 7 180. 4 92. 4 52. 5 34. 8 30. 8 19. 4 10. 9 10. 5 3. 1 0. 8 -1. 1 -1. 9 -15. 5 -41. 6 2,956.7 E B ITDA % C hina A us tralia T aiwan G ermany J apan S weden Italy Mala ys ia R us s ia Hong K ong S outh K orea S witzerla nd C anada U nited S ta tes India Norway U nited K ingdom F inland G rand Total 48. 0% 37. 2% 36. 3% 31. 2% 25. 6% 15. 4% 14. 6% 13. 8% 13. 1% 7. 9% 6. 4% 1. 9% -13. 3% -14. 4% -50. 0% -50. 6% #DIV /0! #DIV /0! 6.9%
Figure 21. Comparison by Country Source. Capital IQ
C omparable C ompany Analys is > Web 2.0
S ummary by E xc hange
C ompany Name OT C B B Nas daqG S OT C P K K OS E TS E Nas daqG M TS X T S XV S E HK AME X AS X XT R A GTS M SWX HLS E CM BSE NY S E OS E AIM OM R TS K LS E O T C NO G rand Total 19 14 11 6 5 5 4 4 3 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 90 US D Market C ap ($m) S E HK Nas daqG S TS E OM NY S E GTS M K OS E TS X Nas daqG M XT R A OS E OT C B B R TS CM SWX AME X OT C P K T S XV HLS E K LS E BSE AS X AIM O T C NO G rand Total 27, 422.7 23, 120.4 2, 929.9 2, 662.8 1, 818.1 1, 370.1 1, 301.8 353.9 295.7 250.8 237.7 200.6 145.7 139.8 80.9 78.6 72.4 64.0 63.5 30.9 25.7 19.8 4.8 0.1 62,690.7 Avg US D Market C ap ($m) S E HK OM NY S E Na s da qG S GTS M TS E OS E K OS E RTS CM XT R A TS X SWX HL S E Na s da qG M AME X K LS E BSE T S XV OT C B B AS X OT C P K AIM O T C NO G rand Total 9, 140.9 2, 662.8 1, 818.1 1, 651.5 685.0 586.0 237.7 217.0 145.7 139.8 125.4 88.5 80.9 63.5 59.1 39.3 30.9 25.7 16.0 10.6 9.9 6.6 4.8 0.1 696.6 US D L TM Total R ev ($m) OM Na s da qG S S E HK CM NY S E RTS OS E K OS E TS E GTS M BSE Na s da qG M K LS E TS X SWX AME X XT R A OT C P K T S XV AS X HL S E O T C NO OT C B B AIM G rand Total 1, 893.2 494.1 473.0 237.6 218.9 148.8 105.9 101.7 99.8 91.3 83.2 82.1 78.9 43.6 40.0 29.9 28.4 16.6 11.6 8.1 6.0 2.2 1.7 0.3 157.3 US D L TM Total E B ITDA ($m) Na s da qG S S E HK OM TS E K OS E GTS M CM RTS OS E K LS E XT R A Na s da qG M AME X AS X SWX NY S E O T C NO AIM TS X T S XV HL S E OT C P K BSE OT C B B G rand Total 1,753.6 669.0 290.9 161.3 80.2 52.5 34.8 19.4 19.0 10.9 10.5 8.5 6.4 3.1 0.8 0.0 -1.1 -1.9 -1.9 -6.2 -15.5 -34.0 -41.6 -62.2 2,956.7 E B ITDA % S E HK AS X GTS M XT R A Nas daqG S TS E OS E OM CM K LS E R TS K OS E Nas daqG M SWX T S XV TS X OT C B B AME X OT C P K BSE O T C NO NY S E AIM HLS E G rand Total 42. 7% 37. 2% 36. 3% 31. 2% 30. 4% 27. 2% 18. 0% 15. 4% 14. 6% 13. 8% 13. 1% 4. 4% 3. 9% 1. 9% 1. 3% -14.3% -32.0% -36.4% -41.3% -50.0% -50.6% #DIV /0! #DIV /0! #DIV /0! 6.9%
Figure 22. Comparison by Exchange Source. Capital IQ
Page 16
Financ ing - L as t Three Months (US $ m)
Month J un-09 C ompany Name S ugar Inc . Tumri B oku W imba G rab Networks AdC hina G oojet S AS AdMeld Inc . beeTV blueK iwi S oftware S A Nokeena B ubble Motion S ens e Networks Zoos k G ather MojoP ages Taomee Animoto G ameG round R ingR evenue C rowdc as t YuMe eR epublik News er L L C C lic kF uel Inigral AdE x Media G R OU.P S my6s ens e OneTXT Yapta I L ove R ewards C liqs et G lubble TodaC ell AdW hirl L iquidP lanner Mas hL ogic J un-09 Total J ul-09 P andora Media K ontera L td. Ning Quic kP lay Media C aus es Outs park C onnectE du Acquia, Inc S B Nation MediaMath Metavers um Invodo Quikr India P vt. L td. OP E N S ports network S tyleC as ter Nexage TweetDec k B us c a P rotonMedia Akademos iL oop Mobile C omunitae L at49 Aloqa Tributes .c om C oTweet C likthrough C ellufun C ognitive Matc h L imited P eople C apital B ookF res h J ul-09 Total US A Is ra el US A C a na da US A US A US A US A US A US A G erma ny US A India US A US A US A UK US A US A US A US A S pa in C a na da G erma ny US A US A US A US A UK US A US A 0. 5 63.5 11.1 25.6 51.5 27.0 1. 0 0. 5 1. 1 1. 0 1. 0 1. 5 1. 2 2. 5 2. 0 1. 7 1. 5 2. 5 4. 0 3. 2 2. 6 4. 1 4. 0 4. 0 8. 0 6. 6 6. 3 6. 0 8. 0 10. 0 8. 3 8. 2 15. 5 15. 0 12. 0 C ountry US A US A US A US A US A C hina F ra nce US A US A F ra nce US A US A US A US A US A US A C hina US A Is ra el US A US A US A S pa in US A US A US A US A US A Is ra el US A US A C a na da US A Netherla nds Is ra el US A US A US A 1. 0 1. 0 0. 5 45.3 15.3 28.5 67.8 34.0 35. 0 5.3 1. 0 1. 5 1. 0 2. 1 2. 0 2. 0 2. 0 1. 8 2. 4 2. 3 3. 0 2. 9 2. 8 2. 5 2. 5 4. 1 3. 5 5. 0 4. 4 5. 0 6. 0 6. 0 6. 0 5. 3 12. 0 10. 0 8. 5 8. 0 8. 0 6. 5 6. 5 13. 0 12. 0 Angel/S eed P IP E S eries A S eries B 15. 0 S eries C 16. 0 S eries D G rand Total 16. 0 15. 0 13. 0 12. 0 12. 0 10. 0 8. 5 8. 0 8. 0 6. 5 6. 5 6. 0 6. 0 6. 0 5. 3 5. 0 5. 0 4. 4 4. 1 3. 5 3. 0 2. 9 2. 8 2. 5 2. 5 2. 4 2. 3 2. 1 2. 0 2. 0 2. 0 1. 8 1. 5 1. 0 1. 0 1. 0 1. 0 0. 5 196.1 35. 0 15. 5 15. 0 12. 0 10. 0 8. 3 8. 2 8. 0 8. 0 6. 6 6. 3 6. 0 4. 1 4. 0 4. 0 4. 0 3. 2 2. 6 2. 5 2. 5 2. 0 1. 7 1. 5 1. 5 1. 2 1. 1 1. 0 1. 0 1. 0 0. 5 0. 5 178.7
Page 17
F inanc ing - L as t T hree Months (US $ m)
F in. Amount (Million)
Month Aug-09 C ompany Name T urbine R ic hR elevanc e T raffiq MediaMath B ill.c om K O DA iS yndic a Aug-09 T otal G rand T otal C ountry US A US A US A US A US A US A US A 3. 0 0. 4 13.4 122.1 15.3 39.6 22.5 115.8 8.5 94.0 50.0 82.3 1 0. 0 8. 5
T ype of financ ing
Angel/S eed P IP E S eries A S eries B 1 2. 5 1 0. 0 S eries C S eries D 50 . 0 G rand T otal 50. 0 12. 5 10. 0 10. 0 8. 5 3. 0 0. 4 94.4 469.1
Figure 23. Financing, Last Three Months Source. Company reports
Page 18
C ompany Des c riptions - C urrent Month C apital Market Ac tivity
C ompany
B ill.com
HQ
United S ta tes
Webs ite
Des cription
B ill. com, Inc. offers an electronic cas h management s ervice. Its s ervice s implifies the way companies ma nage bills , invoices , contracts , and other documents . T he company delivers its s ervice through an on-demand S oftware a s a S ervice (S aaS ) model. C as hV iew is a W eb-bas ed s ys tem that allows companies to s tore all documents , proces s es , mes s ages , and trans a ctions in one place. It gives companies a real-time daily view of anticipated cas h flow while s imultaneous ly proces s ing trans actions . T he compa ny was formerly known as C as hV iew, Inc. a nd changed its name to B ill. com, Inc. in J anuary, 2008. B ill. com, Inc. was founded in 2006 and is bas ed in P alo Alto, C alifornia. F riends R eunited G roup operates as an online community that connects people through a network of friends . It provides an online meeting place for people to s ocializ e, ma ke acqua intances , and find others who s hare their interes ts . T he company a ls o ena bles members to look up friend’s W eb pages , and s hare photos and videos . In addition, it offers online da ting s ervices . T he compa ny is bas ed in the United K ingdom. F riends R eunited G roup operates as a s ubs idia ry of IT V plc. iS yndica, a cloud-ba s ed digital media dis tribution platform, s implifies online s elling by s yndica ting, promoting and tracking us er content on multiple es tablis hed channels . iS yndica’s Upload O nce - S ell E verywhere™ approa ch helps us ers increas e revenue while reducing their work load. B uilt on Amazon W eb S ervices (AW S ), our V irtua l Dis tribution S erver (V DS ) is a groundbreaking, patent pending, multi-category s oftware-as -a-s ervice (S aaS ) dis tribution platform. iS yndica currently s upports photogra phy a nd video. K ODA was founded with a mis s ion to create a pla tform that allows emerging talent and s ma rt companies to go beyond the res ume or traditional job pos ting. More profes s ional than F acebook but more pers onal than L inkedIn, K ODA looks to s howcas e profiles and employer profiles that allow both s ides of the hiring equa tion to get to know each other.
www.bill.com
F riends R eunited
United K ingdom
www.friendsreunited.co.uk
iS yndica
United S ta tes
www.isyndica.com
K oda
United S ta tes
www.koda.us
R ichR elevance
United S ta tes
www.richrelevance.com
Traffiq
United S ta tes
www.traffiq.com
richrelevance, Inc. provides pers ona liza tion and product recommenda tion tools for the eC ommerce s ites . It offers R ichrecs , which offers product recommenda tions to pers onaliz e cus tomer's s hopping experience; myrecs that enga ges loyal s hoppers with a pers onalized pa ge of releva nt product recommendations ; and richmail, which enables cros s -s elling a nd up s elling of relevant products . richreleva nce, Inc. was founded in 2005 and is headquartered in S an F rancis co, C alifornia. It has loca tions in S an Diego, C alifornia; Dallas a nd Hous ton, T exas ; and New Y ork, New Y ork. T R AF F IQ , Inc. , a dis pla y advertis ing mark etplace, operates a digital media management platform that connects buyers and s ellers of online media. Its platform provides a s uite of enterpris e tools that enables negotiations for deal points and centraliz ed advertis ing operations , including trafficking, inventory management, tra cking a nd optimiz ation, and billing. T he company’s pla tform incorporates components of the media planning, buying, and s elling proces s , including s ite s earch, inventory pa ckaging tools , negotiation management, order execution, a utomated R F P dis tribution, campa ign optimiz ation, a nd publis her reconciliation/invoicing. It s erves advertis ers and publis hers . T he company was founded in 2006 and is bas ed in New Y ork, New Y ork with an additional office in V ienna, V irginia. T urbine, Inc. , an interactive media company, engages in developing, launching, and operating online entertainment in North America . It offers online games , including multiplayer online role-pla ying games . T he company operates s ocial gaming communities . It als o s ells its games through reta ilers in North America and E urope. T urbine, Inc. was formerly known a s T urbine E ntertainment S oftware C orp. T he company was founded in 1994 and is headquartered in W es twood, Ma s s achus etts .
Turbine Inc.
United S ta tes
www.turbine.com
Figure 24. Company Descriptions Source. Company reports, Capital IQ, Crunchbase
Page 19
RELEVANT DISCLOSURES APPLICABLE TO: NONE
LIST OF DISCLOSURE TERMS: 1. None applicable.
ANALYST CERTIFICATION
Each analyst of Research Capital Corporation whose name appears in this report hereby certifies that (i) the recommendations and opinions expressed in this research report accurately reflect the analyst’s personal views and (ii) no part of the research analyst’s compensation was or will be directly or indirectly related to the specific conclusions or recommendations expressed in this research report.
I n f o r ma t i o n a b o u t Re s e a r ch C a p i t a l C o r p o r a t i o n ’ s Ra t i n g S y s t e m, t h e d i s t r i b u t i o n o f o u r r e s e a r ch t o cl i e n t s a n d t h e p e r ce n t a g e o f r e c o m me n d a t i o n s wh i c h a r e i n e a c h o f o u r r a t i n g c a t e g o r i e s i s a v a i l a b l e o n o u r we b si t e a t ww w. r e s e a r ch c a p i t a l . c o m. T h e i n f o r ma t i o n c o n t a i n e d i n t h i s r e p o r t h a s b e e n d r a wn f r o m s o u r c e s b e l i e ve d t o b e r e l i a b l e b u t i t s a c cu r a c y o r co mp l e t e n e ss i s n o t g u a r a n t e e d , n o r i n p r o vi d i n g i t d o e s R e s e a r c h Ca p i t a l C o r p o r a t i o n a s s u me a n y r e sp o n si b i l i t y o r l i a b i l i t y . R e s e a r ch C a p i t a l C o r p o r a t i o n , i t s d i r e ct o r s , o f f i c e r s a n d o t h e r e mp l o y e e s ma y , f r o m t i me t o t i me , h a v e p o si t i o n s i n t h e s e cu r i t i e s me n t i o n e d h e r e i n . Co n t e n t s o f t h i s r e p o r t c a n n o t b e r e p r o d u c e d i n wh o l e o r i n p a r t wi t h o u t t h e e xp r e ss e d p e r mi s si o n o f R e se a r ch C a p i t a l C o r p o r a t i o n . ( U . S . I n s t i t u t i o n a l Cl i e n t s — Re s e a r ch C a p i t a l U . S. A . I n c. ( a wh o l l y o wn e d s u b si d i a r y o f R e s e a r c h C a p i t a l Co r p o r a t i o n ) a cc e p t s r e s p o n si b i l i t y f o r t h e c o n t e n t s o f t h i s r e p o r t s u b je c t t o t h e t e r ms & l i mi t a t i o n s s e t o u t a b o v e . F i r ms o r i n s t i t u t i o n s r e ce i vi n g t h i s r e p o r t s h o u l d e f f e ct t r a n s a ct i o n s i n s e c u r i t i e s d i sc u s se d i n t h e r e p o r t t h r o u g h R e s e a r ch C a p i t a l U . S . A . I n c. , a B r o k e r - D e a l e r R e g i s t e r e d wi t h t h e U n i t e d S t a t e s S e cu r i t i e s a n d E xc h a n g e C o m mi s si o n ) .
Tor on to 4 16. 8 60. 76 00
M ontr eal 51 4. 39 9. 150 0
V anco u ver 60 4. 66 2. 180 0
C al gar y 40 3. 26 5. 740 0
R egi na 306. 566. 7550
www.researchcapital.com