09 02 17 web 2.0 weekly

SOFTWARE & SERVICES 17 FEBRUARY 2009

W E B 2 . O W E E K L Y

DAVID SHORE, CFA, MBA 416.860.6784

[email protected]

Arun Thomas (Associate) 416.860.7666

NO REVENUE? NO PROBLEM

TWITTER RAISES $35 MILLION The largest Web 2.0 financing of the last three months was for perhaps the hottest Web 2.0 company on the planet – Twitter. On Friday, the company announced that i t had closed on a new funding round of $35 mill ion that rumour has it valued the company at approximately $230 mill ion. This for a company with no revenue! However, Twitter has undergone tremendous growth over the last year. According to compete.com, Twitter had 6 mill ion unique visitors as of January 2009, up an astounding 800% Y/Y, and moving ahead of social networks l ike Bebo (bought by AOL for $850 mil lion). Overall, there have been 15 financings announced in February, totall ing $89.0 mill ion, or $5.9 mill ion on average. The average value in February is below the $6.9 mill ion average for January, with more early-stage financings announced in February relative to January – 64% of f inancings in February have been Series A rounds versus just 27% in January.

Financing - Last Three Months

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Jan-09

Dec-08

This report has been created by Analysts that are employed by Research Capital Corporation, a Canadian Investment Dealer. www.researchcapi ta l .com

Toronto 416 .860 .7600 Montrea l 514.399 .1500 Vancouver 604 .662 .1800 Calgary 403 .265.7400 Regina 306 .566 .7550

THE WE B 2 . 0 UNI VE RSE

86 public Web 2.0 companies identified: We have identif ied 86 public companies for our Web 2.0 universe, with a combined market cap of $30 bill ion. These include a wide variety of companies, including MMOG (Massive Multi-Player Online Gaming) companies, social networking software companies, media sharing companies, and social lending companies. See below for a summary of the full universe (Figure 1). The average market cap for the group is almost $350 mil lion, with average trail ing revenue of $130 mill ion. The companies are also highly profitable, with an average EBITDA margin of 17.3%. On a valuation basis, the overall average is 4.3x trai ling revenue and 8.7x trai ling EBITDA. Fifteen of the companies have more than 500 employees.

Comparable Company Analys is > Web 2.0

Company Name LTM as of Ticker Exc hange

Trading

Currency HQ

Current

Pr ice

US D Market

C ap ($m)

US D LTM Total

R ev ($m )

USD LTM Total

EB ITDA ($m )

E B ITDA

%

TEV/L TM

R evenue

TEV/L TM

EB ITDA E mployees

Accelerize N ew Media, Inc. 9/30/2008 ACLZ OTCB B US D United S tates 0. 35 9.4 3. 2 ( 4. 7) NM 4.3x - 20

Actoz S oft Co. , Ltd. 9/30/2008 A052790 K OS E KRW S outh Korea 12 ,700 78. 4 51. 2 9. 4 18 .3% 1.0x 5 .7x NA

AQ Inte ractive, Inc. 12/31 /2008 3838 TS E JP Y J a pan 32 ,650 19. 3 65. 7 5. 3 8. 0% - - NA

Ass ociated Media Holdings Inc. 6/30/2007 ASMH OTCP K US D United S tates 0. 01 0.2 0. 1 ( 2. 3) NM 10.2x - 3

B igs tring C orp. 9/30/2008 B SG C OTCB B US D United S tates 0. 02 0.8 0. 1 ( 2. 1) NM 30.7x - 8

BoomJ Inc 9/30/2008 B OMJ OTCB B US D United S tates 0. 70 28. 6 1. 1 ( 7. 7) NM 29.1x - 25

B r ight T hings plc 9/30/2008 A IM:B GT AIM GBP United K ingdom 0.02 3.5 0. 2 ( 1. 6) NM 14.4x - 9 B roadW ebAs ia Inc. 9/30/2008 B W BA OTCP K US D United S tates 1. 50 127 .3 0. 0 ( 4. 6) NM - - 46

CDC Corp. 9/30/2008 CHIN. A Na sdaqG S US D Hong K ong 0.88 94. 9 428 . 1 18 .8 4. 4% 0.4x 8 .1x 3 ,125

China G ateway Corpora tion 9/30/2008 CGWY OTCB B US D United S tates 0. 00 0.0 6. 7 ( 6. 6) -98. 9% 0.0x - 37

Chines e G amer International 9/30/2008 G T S M:3083 G T S M TWD Ta iwan 114.00 282 .5 37. 5 17 .7 47 .1% 6.0x 12.8x NA

CornerWorld Corporation 10/31 /2008 CW R L OTCB B US D United S tates 0. 15 7.0 0. 6 3. 1 506.8% 13.8x 2 .7x NA

DADA SpA 9/30/2008 CM:DA CM E UR Italy 6. 26 129 .7 216 . 7 34 .6 16 .0% 0.8x 5 .0x 574

Digi ta lF X Inte rnational, Inc. 9/30/2008 DXN OTCB B US D United S tates 0. 08 2.0 16. 9 ( 4. 5) -26. 4% 0.3x - 68

Digi ta lP os t Inter active, Inc. 9/30/2008 DG LP OTCB B US D United S tates 0. 01 0.9 0. 4 ( 3. 3) NM 4.4x - 11

Digi ta lT own, Inc. 11/30 /2008 DG TW OTCB B US D United S tates 2. 00 54. 3 NM ( 2. 5) NM - - 3

Dolphin Digita l Media , Inc. NA DP DM OTCB B US D United S tates 0. 53 25. 8 NA NM NM - - 6

E olith Co. Ltd. 12/31 /2007 A041060 K OS E KRW S outh Korea 590 19. 3 17. 5 ( 0. 0) -0 .3% 1.1x - NA E xtensions, Inc. 9/30/2008 E XT I OTCP K US D United S tates 0. 20 18. 9 NM NM NM - - 2

F ina ncia l Media Group, Inc. 11/30 /2008 FNG P OTCB B US D United S tates 0. 02 1.0 6. 8 1. 2 18 .3% 0.0x 0 .1x 22

F luid Mus ic C anada , Inc. 9/30/2008 T S X:FMN TS X CAD United S tates 0. 60 25. 3 4. 2 ( 8. 6) NM 3.2x - 29

F rogs te r Inte ractive P icture s AG 6/30/2008 F R G XT R A E UR G ermany 4.32 13. 0 5. 1 ( 3. 1) -60. 6% 2.4x - NA

Gamania Digital E nterta inment Co. , L td. 9/30/2008 6180 G T S M TWD Ta iwan 23.40 103 .6 108 . 4 18 .3 16 .9% 0.7x 4 .3x NA

GameOn Co L td. 12/31 /2008 3812 TS E JP Y J a pan 114 ,000 120 .1 81. 3 21 .5 26 .4% 0.7x 2 .8x NA

GeoS entric Oyj 9/30/2008 G EO1V HL SE E UR F inland 0.04 45. 8 5. 2 (12 .1 ) NM 7.7x - 92

Giant Inte ractive G roup, Inc. 9/30/2008 G A NY SE US D China 6.22 1, 478 .5 245 . 5 155.8 63 .5% - - 1 ,016

GigaMedia L td. 9/30/2008 G IGM Na sdaqG S US D T a iwan 7.38 398 .7 200 . 5 48 .0 23 .9% 1.7x 6 .9x 975

GoF ish Corporation 9/30/2008 G OFH OTCB B US D United S tates 0. 20 5.1 6. 3 (11 .0 ) NM 2.5x - 41 Gravity Co., Ltd 9/30/2008 G R V Y Na sdaqGM US D S outh Korea 0.71 19. 7 34. 3 6. 6 19 .2% - - 636

Gree, Inc. 6/30/2008 T S E :3632 TS E JP Y J a pan 5 ,360 1, 302 .5 32. 0 11 .5 36 .0% 40.7x - NA

GungHo Online Entertainment, Inc. 9/30/2008 3765 OS E JP Y J a pan 98 ,600 122 .8 111 . 3 16 .3 14 .7% 0.9x 5 .9x NA

HanbitS oft, Inc. 9/30/2008 A047080 K OS E KRW S outh Korea 4 ,060 62. 3 48. 6 (12 .4 ) -25. 6% 0.9x - NA

IAC /InterActiveCorp. 12/31 /2008 IAC I Na sdaqG S US D United S tates 15.05 2, 120 .5 1 , 445 .1 64 .6 4. 5% 0.3x 5 .7x NA

IAS E nergy, Inc. 10/31 /2008 IAS C . A OTCB B US D Canada 0.03 1.8 0. 0 ( 0. 9) NM - - NA

IdeaE dge, Inc. 12/31 /2008 OTCB B: IDAE OTCB B US D United S tates 0. 44 18. 6 0. 0 ( 4. 6) NM - - NA

is eemedia Inc. 9/30/2008 IEE TS XV CAD Canada 0.12 4.9 1. 1 ( 4. 4) NM 2.0x - NA

J umbuck Entertainment P ty Ltd. 6/30/2008 ASX :J MB ASX AUD Aus tra lia 0. 41 13. 2 10. 2 4. 7 46 .0% 0.9x 1 .9x 72

J umpTV Inc. 6/30/2008 T S X: J TV TS X CAD Canada 0.44 40. 2 11. 5 ( 1. 8) -15. 3% 4.3x - NA Kaboos e Inc. 9/30/2008 T S X:KAB TS X CAD Canada 0.38 42. 8 59. 7 4. 5 7. 6% 0.8x 11.0x NA

K ingsoft Co. Ltd. 9/30/2008 3888 S EHK HK D China 2.90 401 .5 106 . 9 36 .1 33 .8% 3.0x 8 .8x 1 ,660

Lingo Media Corpora tion 9/30/2008 T S XV :LM TS XV CAD Canada 0.90 9.3 3. 3 ( 1. 4) -42. 5% 3.1x - NA

LiveWorld Inc. 9/30/2008 L VWD OTCP K US D United S tates 0. 04 1.2 11. 7 ( 1. 2) -10. 1% 0.0x - 73

LookS mart, Ltd. 9/30/2008 LOOK Na sdaqGM US D United S tates 1. 37 23. 3 69. 5 ( 2. 6) -3 .7% - - 93

Magnitude Informa tion S ys tems Inc. 9/30/2008 MAGY OTCB B US D United S tates 0. 03 10. 9 0. 1 ( 3. 2) NM - - 13

Mixi, Inc. 12/31 /2008 2121 TS E JP Y J a pan 413 ,000 688 .7 127 . 8 48 .6 38 .0% 4.5x 11.8x NA

Modern T imes Group Mtg AB 12/31 /2008 MTG B OM SE K S weden 132.00 1, 015 .0 1 , 536 .5 245.7 16 .0% 1.0x 6 .1x NA

Moggle , Inc 12/31 /2008 MMOG OTCB B US D United S tates 2. 00 70. 6 NM ( 1. 1) NM - - 3

MOK O.mobi L imited 6/30/2008 MK B ASX AUD Aus tra lia 0. 04 2.1 1. 3 ( 2. 0) NM 0.7x - NA NEOW IZ G ames Corpora tion 12/31 /2007 A095660 K OS E KRW S outh Korea 33 ,650 226 .2 126 . 3 33 .9 26 .9% 1.7x 6 .4x NA

NetDra gon WebS oft, Inc. 9/30/2008 777 S EHK HK D China 2.95 201 .1 95. 4 46 .3 48 .6% 0.3x 0 .5x 1 ,482

Netea s e. com Inc. 9/30/2008 NTE S Na sdaqG S US D China 19.25 2, 368 .8 423 . 1 274.7 64 .9% - - 2 ,413

NeXplore Corporation 9/30/2007 NX PC OTCP K US D United S tates 0. 79 44. 1 NM ( 4. 9) NM - - 19

Ngi G roup Inc. 12/31 /2008 2497 TS E JP Y J a pan 26 ,170 35. 2 107 . 1 33 .0 30 .8% - - NA

Northgate Technologies L imited 12/31 /2008 590057 B S E INR India 44.30 31. 6 138 . 1 24 .3 17 .6% 0.2x 1 .3x 286

Open T ext Corp. 12/31 /2008 OTE X Na sdaqG S US D Canada 35.55 1, 845 .0 769 . 3 195.0 25 .3% 2.6x 10.1x 3 ,400

Openwave S ys tems Inc. 12/31 /2008 OPWV Na sdaqG S US D United S tates 0. 89 74. 1 199 . 6 (10 .2 ) -5 .1% - - 627

Perfect W orld Co., Ltd. 9/30/2008 P W RD Na sdaqG S US D China 14.30 815 .8 187 . 1 100.0 53 .5% - - 1 ,401

PhotoChannel Networks Inc. 9/30/2008 T S XV :P N TS XV CAD Canada 1.77 47. 6 13. 7 ( 2. 4) -17. 7% 3.4x - NA

Quepasa Corp. 9/30/2008 QPS A Na sdaqCM US D United S tates 1. 43 18. 1 0. 1 (11 .8 ) NM - - 63 OAO R B C Informa tion S ys tems 12/31 /2007 R B C I R T S US D R us s ia 0. 30 41. 6 134 . 8 17 .6 13 .1% 0.0x 0 .1x NA

S handa Intera ctive Ente rtainment L td. 9/30/2008 S NDA Na sdaqG S US D China 30.55 2, 119 .6 478 . 5 228.6 47 .8% - - 2 ,564

S hutterfly, Inc. 12/31 /2008 S FLY Na sdaqG S US D United S tates 8. 49 213 .4 213 . 5 29 .8 13 .9% 0.6x 4 .2x NA

S K Communications Co. , Ltd. 12/31 /2007 A066270 K OS E KRW S outh Korea 8 ,130 234 .2 145 . 2 13 .7 9. 4% 1.6x 17.1x NA

SNAP Interactive, Inc. 9/30/2008 S TVI OTCB B US D United S tates 0. 99 10. 6 2. 3 0. 2 10 .1% 4.1x 40.7x 5

SNM G lobal Holdings 9/30/2008 S NMN OTCP K US D United S tates 0. 00 0.0 2. 0 ( 0. 7) -34. 8% 1.1x - 33

S ocial Media V enures , Inc. 12/31 /2008 S MVI OTCP K US D United S tates 1. 42 0.0 0. 1 ( 0. 1) -60. 5% 0.1x - NA

S park Ne tworks , Inc. 9/30/2008 LOV AMEX US D United S tates 2. 55 54. 7 60. 1 11 .7 19 .5% 0.8x 4 .3x 176

S pectrumDNA, Inc. 9/30/2008 S PXA OTCB B US D United S tates 0. 10 4.9 0. 1 ( 2. 7) NM - - 7

T encent Holdings Ltd. 9/30/2008 700 S EHK HK D China 48.30 11 ,192 .8 904 . 8 448.2 49 .5% 13.4x 27.1x 6 ,039 T he P arent Company 8/2/2008 K IDS .Q OTCP K US D United S tates 0. 03 0.7 112 . 0 (13 .5 ) -12. 0% 0.2x - 347

T he9 Limited 9/30/2008 NCT Y Na sdaqG S US D China 14.49 400 .1 252 . 8 95 .2 37 .7% - - 1 ,361

T heS treet.com, Inc. 9/30/2008 T S CM Na sdaqGM US D United S tates 2. 60 79. 3 75. 2 12 .2 16 .2% 0.0x 0 .1x 349

T ree .Com, Inc. 12/31 /2008 T R E E Na sdaqGM US D United S tates 3. 91 36. 6 228 . 6 (27 .0 ) -11. 8% 0.2x - NA

Unis erve Communications Corp. 11/30 /2008 T S XV :U S S TS XV CAD Canada 0.08 1.6 24. 0 0. 1 0. 4% 0.2x 36.9x NA

United Online Inc. 9/30/2008 UNT D Na sdaqG S US D United S tates 5. 19 425 .4 538 . 7 130.6 24 .2% 1.4x 6 .0x 928

UOMO Media, Inc 10/31 /2008 UOMO OTCB B US D Canada 0.08 6.8 0. 5 ( 0. 4) -91. 6% 15.1x - NA

VOIS , Inc. 9/30/2008 V OIS OTCB B US D United S tates 0. 75 5.4 0. 0 ( 4. 0) NM - - 4

W ebzen Inc. 12/31 /2008 W ZE N Na sdaqGM US D S outh Korea 1.50 17. 8 20. 0 ( 2. 0) -10. 1% - - 330

W izza rd S oftwa re Corporation 9/30/2008 W ZE AMEX US D United S tates 0. 73 33. 0 6. 2 ( 6. 5) NM 5.3x - 110 W oozyF ly, Inc. 9/30/2008 W ZYF OTCB B US D United S tates 0. 15 2.6 0. 0 NM NM - - 14

W orlds .com Inc. 9/30/2008 WDDD OTCB B US D United S tates 0. 20 10. 5 0. 1 NM NM - - 1

W ynds torm Corporation NA W YND OTCB B US D United S tates 0. 12 2.2 NA NM NM - - NA

XING AG 9/30/2008 O1B C XT R A E UR G ermany 29.75 197 .8 40. 1 15 .6 38 .8% 3.6x 9 .2x 161

YedangOnline Corp. 12/31 /2007 A052770 K OS E KRW S outh Korea 7 ,300 80. 0 48. 0 10 .7 22 .4% 1.7x 7 .4x NA

Ynk K orea Inc. 12/31 /2007 A023770 K OS E KRW S outh Korea 4 ,630 8.0 13. 7 ( 1. 0) -7 .6% 0.6x - NA

ZipL ocal Inc. 9/30/2008 T S XV :ZIP TS XV CAD Canada 0.02 1.3 2. 8 ( 3. 9) NM 0.7x - NA

High 11 ,192 .8 1 ,536 .5 448.2 506.8% 40.7x 40.7x 6, 039

Low 0.0 0.0 -27.0 -98.9% 0.0x 0 .1x 1

Average 348.3 131.0 28.3 17.3% 4.3x 8.7x 604

Figure 1. Web 2.0 Universe Summary Source. Capital IQ

CAPIT AL M ARKET S ACT IV I TY (M &A AND F I NANCI NG )

Twitter raises $35 million: The largest Web 2.0 financing of the last three months was for perhaps the hottest Web 2.0 company on the planet – Twitter (Figure 2). On Friday, the company announced that i t had closed on a new funding round of $35 mill ion that rumour has it valued the company at approximately $230 mil lion. This for a company with no revenue! However, Twitter has undergone tremendous growth over the last year. According to compete.com, Twitter had 6 mil lion unique visitors as of January 2009, up an astounding 800% Y/Y, and moving ahead of social networks l ike Bebo (bought by AOL for $850 mill ion) (Figure 3). Overall, there have been 15 financings announced in February, total ling $89.0 mill ion, or $5.9 mill ion on average. The average value in February is below the $6.9 mil lion average for January with more early stage financings announced in February relative to January – 64% of financings in February have been Series A rounds versus just 27% in January. For additional details, see Figure 30 (at end of note).

Financing - Last Three Months

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Dec-08

Figure 2. Financings, Last Three Months Source. Company reports

Figure 3. Twitter vs. Bebo – Unique Visitors Source. www.compete.com

Four aggregation companies raise $22.5 million (total): Activity in February has been busiest among aggregation companies (Figure 4). Four companies, Outbrain, Oodle, OneSpot and fav.or.i t, have raised a total of $22.5 mill ion. There have also been three video-related transactions, although the transactions were much smaller on average, with WhistleBox, Tvinci, and Mixpo raising a total of $7.9 mill ion.

Financing by Sector - February 2009

35.0

22.5

9.07.9

5.34.3

3.02.0

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

Microblog Aggregation Travel Video Social Networks Search Analytics Financial Services

1 4 1 3 2 1 1 1

(US

$m

)

# companies

Figure 4. Financings, by Sector, February 2009 Source. Company reports

Average round size increases slightly: On a trail ing 12-month basis, total f inancing dollars inched up as of February 2009, with average round sizes increasing sl ightly as well (Figure 5).

LTM Financing

0.0

500.0

1,000.0

1,500.0

2,000.0

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14.0

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Total Average

Figure 5. Financings, Last 12 Months Source. Company reports

Cumulative total nears $5.4 billion: Overall, on a cumulative basis, Web 2.0 financings have totalled nearly $5.4 bil lion, with the majority of the financing coming in late 2007 and the first three quarters of 2008 (Figure 6).

Web 2.0 Financing (cumulative)

35.5 28.8 20.1

87.237.5 33.5 18.2

41.9 49.1 29.4

135.6

74.4

145.7133.097.0

301.8

944.7

701.7

1,313.3

524.9

338.5297.5

0.0

200.0

400.0

600.0

800.0

1,000.0

1,200.0

1,400.0

Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1

2003 2004 2005 2006 2007 2008 2009

(US

$m

)

0.0

1,000.0

2,000.0

3,000.0

4,000.0

5,000.0

6,000.0

(US

$m

)

Figure 6. Financing, Cumulative Source. Company reports

U.S. remains dominant: U.S. companies continue to dominate capital market activity – with almost 73% of f inancings/M&A involving U.S. companies (based on dollars) (Figure 7). Canadian companies generated under 1% of capital market activity based on dollar volume (Figure 6). Based on number of transactions, the U.S. leads with 73.6% of deals, while Canada is third in number of f inancings at 5.3% (Figure 8).

Financing/M&A by Country - LTM ($)

China

8.0%

Russia

1.7%

USA

72.9%

ROW

2.0%

France

0.7%

Canada

0.7%

UK

13.1%

Israel

1.0%

Financing/M&A by Country - LTM (#)

Israel4.1%

Canada

5.3%

France

2.8%

UK

5.3%

ROW

8.9%

USA

73.6%

Figures 7 & 8. Financing/M&A, by Country (LTM, $, #) Source. Company reports

Larger volume of early-stage funding (by count): Almost half of financings in the last 12 months are for early-stage companies (Angel/Seed or Series A) (Figure 9). Series B rounds are 28.4% of the total, with later-stage (Series D, E and PIPE) deals accounting for just 7.0%.

Financing by Type - LTM

PIPE

2.2%

Series A

38.9%

Series B

28.4%

Debt financing

2.6%

Series C

14.0%

Series D

4.4%

Angel/Seed

9.6%

Figure 9. Financing, by Type (LTM, #) Source. Company reports

“D” series remain largest equity rounds (by dollar): In the last 12 months, there have been 10 “D” series rounds, averaging $23.8 mil lion per financing (Figure 10). Note that we have excluded the $430 mill ion Series C financing of Oak Pacific Interactive as it skews the results substantial ly.

Average financing round size - LTM

3.5

41.9

8.8

5.8

11.3

18.4

23.8

10.0

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

Angel/Seed Debt financing PIPE Series A Series B Series C Series D Series E

22 6 5 89 65 32 10 1

(US

$m

)

# rounds

Figure 10. Average Size per Round Source. Company reports

CAPIT AL M ARKET S ACT IV I TY (P RI CE PE RFO RM ANCE )

Price Performance: Our Web 2.0 index (market-cap weighted) has closely tracked the performance of the NASDAQ composite index, although it has outperformed the index since mid 2008 (Figure 11).

Web 2.0 Index Price Performance

0

20

40

60

80

100

120

140

2/1

9/2

008

3/4

/2008

3/1

8/2

008

4/1

/2008

4/1

5/2

008

4/2

9/2

008

5/1

3/2

008

5/2

7/2

008

6/1

0/2

008

6/2

4/2

008

7/8

/2008

7/2

2/2

008

8/5

/2008

8/1

9/2

008

9/2

/2008

9/1

6/2

008

9/3

0/2

008

10/1

4/2

008

10/2

8/2

008

11/1

1/2

008

11/2

5/2

008

12/9

/2008

12/2

3/2

008

1/6

/2009

1/2

0/2

009

2/3

/2009

NASDAQ COMP Web 2.0 (Market Cap Weighted)

Figure 11. Web 2.0 Price Performance Source. Capital IQ

DigitalTown leads; NGI falls: DigitalTown Inc. (DGTW-OTCBB) had the best performance in the group (for stocks with prices greater than $1) (Figure 12), increasing 33.3% on the week. Quepasa Corporation (QPSA-NasdaqCM) fel l the most, -19.2%.

1 Week Price Performance

-19.2%-11.6%-11.5%-11.4%

-9.4%-9.3%-8.9%-8.8%-8.6%

-6.3%-5.1%-5.0%-4.3%

-2.3%-1.8%-1.6%-1.3%-1.3%-0.6%

0.0%0.0%0.6%0.7%1.3%1.8%2.6%2.7%2.8%

4.6%4.9%5.2%5.6%6.2%

8.1%8.6%9.4%10.9%

12.5%14.0%

19.0%30.1%

33.3%

-30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0%

Quepas a Corp.TheS treet.com, Inc .

Ngi Group Inc .United Online Inc .

Mix i, Inc .Frogs ter Interactive Pictures AG

GameOn Co Ltd.Modern Times Group Mtg A B

Perfect World Co. , Ltd.Neteas e.com Inc .

S K Communications Co. , Ltd.X ING AG

GungHo Online Enterta inment, Inc .The9 L imitedGree, Inc .

S handa Interactive EntertainmentK ings oft Co. Ltd.S hutterf ly , Inc .

Open Tex t Corp.LookSmart, Ltd.Tree.Com, Inc .

AQ Interactive, Inc .Webzen Inc .

G iant Interactive Group, Inc .IAC/InterActiveCorp.

GigaMedia Ltd.DADA S pA

NetDragon WebS oft, Inc .Y edangOnline Corp.

Chines e Gamer InternationalS ocial Media V enures , Inc .

Gamania Digita l Entertainment Co. ,Tencent Holdings Ltd.A ctoz S oft Co. , Ltd.

PhotoChannel Netw orks Inc .Eolith Co. Ltd.

S park Netw orks , Inc .HanbitS oft, Inc .Y nk K orea Inc .

Northgate Technologies L imitedNEOWIZ Games Corporation

Digita lTow n, Inc .

Figure 12. 1-Week Price Performance Source. Capital IQ

INDUST RY NE WS (P ART NE RS HI PS, F I NANCI AL RES UL TS, NE W P RO DUCT S )

Key DevelopmentsCompany Headline Notes

Tree .Com, Inc. (NasdaqGM:TRE E) T ree .C om, Inc. announced it expects to

receive $3. 65 million in funding.

T ree .C om, Inc. (Nas daqGM: T R E E ) a nnounced a private placement of 93 5,00 0 common s hares a t $3 .91 per s hare for gros s proceeds of

$ 3,65 5,85 0 on F ebrua ry 8, 200 9. Doug L ebda , C ha irman a nd C hief E xecutive O fficer of the compa ny will inves t in the transa ction .

NetDragon WebS oft, Inc. (S EHK :777);

S aigon Tele communica tion &

Technologies C orporation

(HOSE :SGT)

Ne tDragon P artners with S aigonT e l to

L icens e Zero O nline in V ietnam

N etDragon W ebS oft Inc. announced tha t it ha s signed an agreement with S aigon T elecommunication & T e chnologies C orpora tion to licens e

Ze ro Online in V ietnam ma rket. Zero Online is the firs t 2 .5D MMOR PG developed in C hina that is s et in a s cience-fic tion univers e with robot

a vatars . It wa s well receive d by players both in C hina and ove rs ea s market since its launch in April 2007 . NetDra gon has a lready launched

the E nglish and S panish ve rs ion of Zero Online in E uropean and American ma rkets , and the traditional C hines e ve rs ion in Hong K ong,

Macao, and T aiwa n.

B roadWebAs ia Inc. (OTCPK :BWB A) B roadW ebAsia Inc . announced that it has

receive d $0 .15 million in funding.

B roadW ebAs ia Inc . (OT CP K : B W B A) a nnounced a private placement of 1 8% s ecured conve rtible promis so ry note with Able I ncome F und,

L LC for gros s proceeds of $1 50,0 00 on F ebrua ry 9, 200 9. T he no te has a convers ion price of $ 0.50 per s ha re . T he company promis es to pa y

to the holde r $150 ,000 in cas h on May 10 , 20 09. The debenture be ars interes t at the ra te o f 18% per a nnum until the maturity date. T he

compa ny will a ls o is sue a warra nt for the purchas e o f up to 5 0,00 0 s hares of the company ’s common stock at an exercis e price of $0.7 5 pe r

s ha re . T he warra nts are exerc is able , in whole or in part, any time from and afte r the date of is s uance of the warrant for a period of five ye ars .

Open Text C orp. (Nas daqGS:OTEX) Open T ex t C o rp. T eams Up with F us e Digita l

to Deliver the La tes t W eb S olutions to F us e

C lient the G S MA

Open T ex t C orp. announced that it ha s teamed up with F us e Digita l to deliver the la tes t web s olutions to F us e c lient the G SMA . The G S MA

a pproached F us e Digita l , one of the UK 's leading digita l marketing agencies , to improve its public image online a nd move to a more scalable

a nd functional website. P revious ly the G SMA site was hard to mana ge, it wa s re liant on code and exporting content which was ineff ic ie nt a nd

time consuming. T he G S MA wanted F us e to provide the creative input s urrounding the s ite and focus on the brand and online ima ge. F use

s elected the O pen T ext W eb S olution to deliver the functiona lity behind the s ce nes . Due to the nature of the s ite and the e nterprise le ve l

feature s the G S MA requ ired, F us e looked to O pen T ex t, to de live r the h igh le ve l f ra mework required . Open T ext W eb S olutions enabled the

G S MA to take complete control of a ll online output and mes s aging, which in turn s treamlined work flow proces s es , and incre as ed e fficiency ,

productivity and va lue for mone y. F urthermore, the new functionality will ena ble the organis ation to deliver content in a va riety of la ngua ges

to a worldwide a udience. T his wa s critica l to the organis ation as it has over 7 50 G S M mobile phone operato rs a nd over 2 00 manufacturers and s uppliers worldwide.

Attention S pan Media , L LC ; W izzard

S oftware Corporation (AME X:WZE )

W iz zard Media a nd A ttentionS pan Media

S ign Dis tribution Agreement

W iz za rd Media , a div is ion of W izz ard S oftwa re , ha s s igned an agreement with A tte ntion S pa n Me dia , LL C to dis tribute the s tudio's 'S ock

T ube P res ents ' original v ideo content for download to pe rs onal mobile devices , compute rs a nd v ia A pple's iT unes s erv ice a nd M icros oft' s

Zune Marke tplace.

is eemedia Inc. (TS XV: IE E ) Dopod Inte rnational C orp. Ltd. and

is eemedia I nc . Agree to P re -ins ta ll Is eedocs

on S ma rtphones T hroughout C hina

is eemedia I nc . and Dopod I nterna tional C orp. Ltd. have e ntered into a n agre eme nt that will s ee is eemedia 's is ee docs (TM) E mail a ttachment

s olution pre-ins ta lled on hundreds of thous ands of Dopod W indows Mobile devices in S pring 200 9. T he Dopod a greement in unis on with

is eemedia 's recent agreement with Hos t C hina Mobile (Hos tC HN ) is intended to promote the us e of ise edocs , by giv ing S ma rtphone us ers

immedia te and ea sy a cces s to the technology with the click of an icon on the hands et.

XING AG (XTRA:O1B C ) X ING AG Announces E arnings R e su lts for

the Y ear 2 008

X ING AG announced earnings res ults for the year 2 008. T he compa ny re ported reve nues increas ed by 80% to € 35.3 million compared to

€ 19.6 million. T he C ompany a lso increa se d its ope ra tional res ult (E B IT DA ) by more tha n 85% . T he E B IT DA (adjus ted for non recurring

e xpens es res ulting from discontinued M&A proce ss es totaling €0 .77 mill ion) the re fore ros e by 86% to €1 2.82 million in the 2 008 financia l

year compa re d to €6.8 9 million for the s ame pe riod la st ye ar.

P erfec t World Co., L td.

(NasdaqGS :PWR D)

P erfect W orld Announce s C lose Be ta T e st

for 'K ouda ix iyou' in North America

P erfect W orld C o. Ltd. announced on that its multimedia online role-pla ying game, 'K oudaixiyou', o r E therS a ge O nline, has s tarted clos e

beta tes t in North Ame rica .

Acces s China Holding L td.; S handa

Interactive Enterta inment L td.

(NasdaqGS :SNDA)

S handa to C ollaborate with S torm

E nte rta inment on G ame Operation

S ha nda Interactive E nterta inment Ltd. ha s re ached an a greement with Acces s C hina Holding Ltd. on coope ra tion in operating one o f the

latter's online game s. S handa will adopt the s ame mode as is use d in its collaboration with K ings oft C orp. in operating the game, but

dec lined to dis c lose more details on the cooperation .

Modern T imes G roup Mtg AB

(OM:MTG B )

Modern T imes G roup Mtg AB R eports

E arnings R e su lts for the F ull Y ear of 200 8 ;

A nnounces Non-C as h A s se t Impairment

C harge

Modern T imes G roup Mtg AB reporte d ea rn ings re su lts for the full yea r o f 20 08. F or the ye ar, the company posted a n operating profit of S E K

3 ,671 million, as compared to S E K 2, 027 mill ion in 20 07. G roup ne t s a les amounted to S E K 13 ,166 million, up by 1 6% from S E K 1 1,35 1

million in 200 7. E arnings per share ended at S E K 4 3.36 , up from S E K 20. 35. Both s a les and earnings rea ched a n a ll time high. T he

compa ny announced non-cas h a ss et impa irment cha rge of S E K 76 million relating to MTG 's Online busines s area .

Digi ta lFX International, Inc.

(AME X:DXN)

Digita lF X International, Inc . has fi le d a S he lf

R e gistration in the amount of $0.4 2 million.

D igita lF X In ternational, Inc . has file d a S he lf R egis tration in the amount of $0 .42 million.

The P arent Company

(OTCPK :K IDS .Q); The P arent

Company, B abyUniverse. com,

eP regnancy.com and eToys .com;

Toys "R " Us Inc.

T oys "R "Us , I nc . acquired

B abyUniverse .com, eT oys .com and

e P regnancy .com of T he P arent C ompany .

T oys "R "Us , I nc . acquired Ba byUnivers e.com, eT oys .com and eP regna ncy.com of T he P a re nt C ompa ny on February 12, 2009 . T he financia l

terms of the dea l we re not disc los ed. T he P arent C ompany f iled for bankruptcy protection in De cember, 200 8. T oys "R "Us , I nc . completed

the a cquis ition of B a byUnivers e.com, e T oys .com and eP regnancy. com of T he P a re nt C ompany on F ebruary 12, 200 9.

Webzen Inc. (KOSE :A069080) Webzen I nc . R eports E a rnings R es ults for

the F ou rth Quarte r and F ull Y ear 20 08

W ebzen I nc . reporte d ea rnings re su lts for the fourth qua rter and full yea r 2008 . F or the quarter, the company reported net los s of K R W 2,0 19

million on re venue of K R W 7 ,211 mill ion a gains t ne t income of K R W 2,07 3 million on revenue of K R W 6,9 64 mill ion a yea r ago. F or the ye ar,

the compa ny re ported net los s of K R W 14 ,266 million on revenue of K R W 28,4 81 million aga ins t net los s of K R W 9,5 36 million on re venue

of K R W 28 ,216 million a ye ar ago .

Figure 13. Key Developments Source. Capital IQ

VAL UAT IO N

MMOG companies lead market cap charts: Eight companies in our Web 2.0 universe top US$1 bill ion in market capitalization (Figure 14). Sixty-one of the 80 (up from 58 last week) companies have market caps under US$100 mil lion, with 26 (vs. 22 last week) under $10 mil lion. Online gaming companies dominate the top of the l ist with four of the top six by market cap.

Market Cap (USD m)

0.00.00.00.20.70.80.91.01.21.31.61.82.02.12.22.63.54.94.95.15.46.87.08.09.39.410.510.610.913.013.217.818.118.618.919.319.319.723.325.325.828.631.633.035.236.640.241.642.844.145.847.654.354.762.370.674.178.479.380.094.9103.6120.1122.8127.3129.7197.8201.1213.4226.2234.2282.5

398.7400.1401.5425.4

688.7815.8

1015.0

1478.51845.0

2119.62120.5

2368.8

1302.5

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

S NM Global HoldingsS ocia l Media V enures , Inc .China Gatew ay Corporation

A s s oc iated Media Holdings Inc.The Parent Company

B igs tring Corp.Digita lPos t Interactive, Inc .Financ ial Media Group, Inc.

LiveWorld Inc.Z ipLocal Inc.

Unis erve Communications Corp.IAS Energy , Inc.

Digita lFX International, Inc .MOKO.mobi L imited

Wynds torm CorporationWooz yFly , Inc .

B right Things plcS pectrumDNA , Inc.

is eemedia Inc.GoFis h Corporation

V OIS , Inc .UOMO Media , Inc

CornerWorld CorporationY nk Korea Inc.

L ingo Media CorporationA cceleriz e New Media , Inc .

Worlds .com Inc.S NAP Interactive, Inc .

Magnitude Information S ys tems Inc.Frogs ter Interactive Pictures AGJumbuck Enterta inment Pty Ltd.

Webz en Inc.Quepas a Corp.IdeaEdge, Inc.

Extens ions , Inc .Eolith Co. Ltd.

AQ Interactive, Inc .Grav ity Co. , L tdLookSmart, Ltd.

Fluid Mus ic Canada, Inc.Dolphin Digita l Media , Inc .

BoomJ IncNorthgate Technologies L imitedWiz z ard S of tw are Corporation

Ngi Group Inc.Tree.Com, Inc.JumpTV Inc.

OAO RBC Information S ys temsKaboos e Inc.

NeXplore CorporationGeoS entric Oy j

PhotoChannel Netw orks Inc.DigitalTow n, Inc.

S park Netw orks , Inc .HanbitS of t, Inc .

Moggle, IncOpenw ave S ys tems Inc.

Actoz S oft Co. , Ltd.TheS treet. com, Inc.Y edangOnline Corp.

CDC Corp.Gamania Digita l Entertainment Co. ,

GameOn Co Ltd.GungHo Online Enterta inment, Inc .

B roadWebA s ia Inc.DADA S pAXING AG

NetDragon WebS of t, Inc .S hutterf ly , Inc .

NEOWIZ Games CorporationS K Communications Co. , Ltd.Chines e Gamer International

G igaMedia Ltd.The9 L imited

K ings of t Co. Ltd.United Online Inc.

Mix i, Inc .Perfect World Co. , Ltd.

Modern Times Group Mtg A BGree, Inc.

G iant Interactive Group, Inc.Open Tex t Corp.

S handa Interactive Enterta inment Ltd.IA C/InterActiveCorp.

Neteas e.com Inc.Tencent Holdings Ltd.

Figure 14. Market Cap Ranking Source. Capital IQ

TEV/Revenue (LTM) averages 4.1x: The overall average TEV/Revenue (LTM) multiple for our group is 4.3x – up from 4.1x last week (Figure 15). However, this is skewed by Gree (3633-TSE) at 40.7x, Bigstring (BSGC-OTCBB) at 30.7x, and BoomJ at 29.1x (BOMJ-OTCBB). Excluding those companies, the average is 2.8x (2.9x last week). Note that we exclude multiples greater than 50x. Thirty-one of the companies have multiples under 1.5x.

TEV/LTM R evenue (x)

0.0 0.00.1 0.20.2 0.20.2 0.3 0.30.3 0.40.6 0.6 0.70.7 0.70.7 0.80.8 0.8 0.90.9 0.91.0 1.01.1 1.1 1.41.6 1.71.7 1.7

2.02.4 2.52.63.03.1 3.2 3.43.6

4.14.3 4.34.4 4.55.36.0

7.7

10.2

13.413.814.415.1

29.130.7

40.7

A verage, 4.3

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

TheStreet.com, Inc.

LiveWorld Inc.

Social Media Venures, Inc.

Uniserve Communications Corp.

Tree.Com, Inc.

The Parent Company

Northgate Technologies Limited

IAC/InterActiveCorp.

DigitalFX International, Inc.

NetDragon WebSoft, Inc.

CDC Corp.

Ynk Korea Inc.

Shutterfly, Inc.

ZipLocal Inc.

MOKO.mobi Limited

Gamania Digital Entertainment Co.,

GameOn Co Ltd.

DADA SpA

Kaboose Inc.

Spark Networks, Inc.

GungHo Online Entertainment, Inc.

Jumbuck Entertainment Pty Ltd.

HanbitSoft, Inc.

Modern Times Group Mtg AB

Actoz Soft Co., Ltd.

SNM Global Holdings

Eolith Co. Ltd.

United Online Inc.

SK Communications Co., Ltd.

YedangOnline Corp.

GigaMedia Ltd.

NEOWIZ Games Corporation

iseemedia Inc.

Frogster Interactive Pictures AG

GoFish Corporation

Open Text Corp.

Kingsoft Co. Ltd.

Lingo Media Corporation

Fluid Music Canada, Inc.

PhotoChannel Networks Inc.

XING AG

SNAP Interactive, Inc.

Accelerize New Media, Inc.

JumpTV Inc.

DigitalPost Interactive, Inc.

Mixi, Inc.

Wizzard Software Corporation

Chinese Gamer International

GeoSentric Oyj

Associated Media Holdings Inc.

Tencent Holdings Ltd.

CornerWorld Corporation

Bright Things plc

UOMO Media, Inc

BoomJ Inc

Bigstring Corp.

Gree, Inc.

Figure 15. TEV/Revenue Ranking Source. Capital IQ

TEV/Revenue (LTM) by country/exchange: We have also calculated multiples based on where the companies are listed or domiciled. Figure 16 shows the average TEV/Revenue multiples by stock exchange. The OTCBB has the largest number of companies (22), trading at an average multiple of 9.5 (down from 10.6x last week). On a geographic basis, the United States has the most companies (39), trading at an average of 4.9x revenue (unchanged from last week) (Figure 17). Ten of the companies are Canadian (average 3.6x revenue).

Average TEV/LTM Revenue - By Exchange

0.00.10.20.8

0.80.91.01.11.21.92.32.83.03.13.4

5.6

7.7

9.5

14.4

15.3

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

TS

E

AIM

OT

CB

B

HL

SE

SE

HK

GT

SM

AM

EX

XT

RA

TS

X

OT

CP

K

TS

XV

KO

SE

NasdaqG

S

OM

OS

E

CM

AS

X

BS

E

NasdaqG

M

RT

S

5 1 22 1 3 2 2 2 3 8 5 7 11 1 1 1 2 1 5 1

(x)

# Companies

Average TEV/LTM Revenue - By Country

0.2 0.00.40.80.81.0

1.2

2.83.03.64.95.6

7.7

11.7

14.4

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

Unite

d

Kin

gdom

Japan

Fin

land

Chin

a

Unite

d

Sta

tes

Canada

Germ

any

Taiw

an

South

Kore

a

Sw

eden

Italy

Austr

alia

Hong

Kong

India

Russia

1 6 1 8 39 10 2 3 9 1 1 2 1 1 1

(x)

# Companies

Figures 16 & 17. TEV/Revenue Ranking (Exchange, Country) Source. Capital IQ

TEV/EBITDA (LTM) averages 9.4x: The average multiple for the 31 companies with positive EBITDA (and multiples under 100x) is 8.7x LTM EBITDA (9.4x last week), led by SNAP Interactive’s (STVI-OTCBB) 40.7x multiple (Figure 18). Nineteen of the companies have EBITDA multiples under 7x.

TEV/LTM EB ITDA (x)

0.0 0.0 0.0 0.1 0.1 0.1 0.5 1.3 1.9 2.7 2.84.2 4.3 4.3 5.0 5.7 5.7 5.9 6.0 6.1 6.4 6.9 7.4 8.1 8.8 9.2

10.1 11.0 11.812.8

17.1

27.1

36.9

40.7

Average, 8.7

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

#NUM!

#NUM!

#NUM!

OAO RBC Information Systems

Financial Media Group, Inc.

TheStreet.com, Inc.




CornerWorld Corporation

GameOn Co Ltd.

Shutterfly, Inc.

Gamania Digital Entertainment Co., Ltd.


DADA SpA



GungHo Online Entertainment, Inc.

United Online Inc.



GigaMedia Ltd.

YedangOnline Corp.

CDC Corp.

Kingsoft Co. Ltd.

XING AG

Open Text Corp.

Kaboose Inc.

Mixi, Inc.


SK Communications Co., Ltd.


Uniserve Communications Corp.


Figure 18. TEV/EBITDA Ranking Source. Capital IQ

TEV/EBITDA (LTM) by country/exchange: Figure 19 shows the average TEV/EBITDA multiples by stock exchange. The OTCBB has the largest number of companies (22), trading at an average multiple of 14.5x, while companies on the TSXV have the highest multiples (36.9x). On a geographic basis, the United States has the most companies (39), trading at an average of 8.0x EBITDA (Figure 20). Ten of the companies are Canadian (average 19.3x EBITDA).

Average TEV/LTM EBITDA - By Exchange

0.10.11.31.94.35.05.96.16.87.38.69.29.2

11.012.1

14.5

36.9

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

TS

XV

OT

CB

B

SE

HK

TS

X

XT

RA

KO

SE

GT

SM

TS

E

NasdaqG

S

OM

OS

E

CM

AM

EX

AS

X

BS

E

NasdaqG

M

RT

S

5 22 3 3 2 7 2 5 11 1 1 1 2 2 1 5 1

(x)

# Companies

Average TEV/LTM EBITDA - By Country

1.30.1

1.95.0

6.16.88.08.08.19.29.2

12.1

19.3

0.0

5.0

10.0

15.0

20.0

25.0

Canada

Chin

a

Germ

any

South

Kore

a

Hong

Kong

Taiw

an

Unite

d

Sta

tes

Japan

Sw

eden

Italy

Austr

alia

India

Russia

10 8 2 9 1 3 39 6 1 1 2 1 1

(x)

# Companies

Figures 19 & 20. TEV/EBITDA Ranking (Exchange, Country) Source. Capital IQ

P/E (LTM) averages 13.8x: The average multiple for the 31 companies with positive earnings (and multiples under 100x) is 13.8x LTM EPS (down from 14.2x LTM EPS), led again by SNAP Interactive’s (STVI-OTCBB) 58.5x multiple (Figure 21). Sixteen of the companies have P/E multiples under 10x.

P/E LTM (x)

0.0 0.0 0.0 0.0 1.0 1.3 1.4 1.8 1.9 2.0 3.0 3.4 3.85.5 5.7 6.5 7.3 8.0

9.6 9.711.5 11.7 11.8 12.0

13.3 13.415.7 15.8 17.3

19.7

31.9

36.6 37.7

48.0

58.5

Average, 13.8

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

#NUM!

#NUM!

#NUM!

#NUM!

The9 Limited

Perfect World Co., Ltd.

Giant Interactive Group, Inc.

Netease.com Inc.

Shanda Interactive Entertainment Ltd.



LookSmart, Ltd.

Worlds.com Inc.



United Online Inc.


DADA SpA

Ngi Group Inc.

YedangOnline Corp.

GameOn Co Ltd.

GigaMedia Ltd.

Kingsoft Co. Ltd.

Gamania Digital Entertainment Co., Ltd.


TheStreet.com, Inc.




XING AG

Mixi, Inc.


Open Text Corp.

Shutterfly, Inc.


Figure 21. P/E Ranking Source. Capital IQ

P/E (LTM) by country/exchange: Figure 22 shows the average P/E multiples by stock exchange. The OTCBB has the largest number of companies (22), trading at an average multiple of 31.2x. On a geographic basis, the United States has the most companies (39), trading at an average of 19.4x earnings (Figure 23). Ten of the companies are Canadian (average 37.7x EPS).

Average P/E - By Exchange

1.42.0

3.05.57.38.08.4

12.914.014.617.718.119.7

31.2

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

OT

CB

B

XT

RA

SE

HK

TS

E

GT

SM

NasdaqG

S

KO

SE

NasdaqG

M

CM

AS

X

AM

EX

OM

BS

E

NY

SE

22 2 3 5 2 11 7 5 1 2 2 1 1 1

(x)

# Companies

Average P/E - By Country

2.03.0

7.37.78.0

12.913.7

17.719.419.7

37.7

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

Canada

Germ

any

Unite

d

Sta

tes

Japan

Taiw

an

South

Kore

a

Italy

Chin

a

Austr

alia

Sw

eden

India

10 2 39 6 3 9 1 8 2 1 1

(x)

# Companies

Figures 22 & 23. P/E Ranking (Exchange, Country) Source. Capital IQ

UP CO MI NG EVE NTS

Upcoming EventsE vent Date Location Webs ite

Web 2.0 C anadian L eade rs hip S erie s - Ga ming Ma rch 3 T oronto http: //web2le aders hips eries . iglooevents .net/

E ngage! E xpo Ma rch 10-11 New Y ork www. enga geexpo.com

Me sh 200 9 April 7-8 T oronto www. mes hconference. com

Figure 24. Upcoming Events Source. Company reports

Earnings C alendarCompany Date & Time Quarter Conf Call Deta ils

T heS tree t.com, Inc. (N as daqGM: T S CM) T hurs day , F ebruary 1 9, 2 009 4:30 PM (E S T ) Q4 200 8 N /A

United Online Inc . (Na sdaqG S : UNT D) T hurs day , F ebruary 1 9, 2 009 5:00 PM (E S T ) Q4 200 8 888-587 -0 611

T he9 L imited (Nas daqGS :NC T Y ) Monday , F ebrua ry 23 , 20 09 8 :00 PM (E S T ) Q4 200 8 1 -8 66-543 -6 405

P hotoChannel Networks Inc. (T S XV :P N) W ednes day , F ebruary 2 5, 2 009 4:30 PM (E S T ) Q1 200 9 888-300 -0 053

Neteas e.com Inc. (Nas daqGS :NT E S ) W ednes day , F ebruary 2 5, 2 009 8:00 PM (E S T ) Q4 200 8 800-218 -0 713

S handa Interactive E nterta inment L td. (N as daqG S :S NDA) T hurs day , F ebruary 2 6, 2 009 8:00 AM (E S T ) Q4 200 8 1 -8 66-383 -7 989

P erfect W orld C o. , L td. (Na sdaqG S :PW R D) Monday , Ma rch 02, 2 009 8:00 AM (E S T ) Q4 200 8 1 -8 66-519 -4 004

Figure 25. Earnings Calendar Source. Company reports

C omparable C ompany Analys is > Web 2.0

P ric e P erformance

Company Name Currenc y Tic ker E xchange USD Market Cap ($m) Current Price 1 Wk 1 Mth 3 Mth 6 Mth 1 Y r 52 Week

Acce lerize N ew Media, Inc. US D ACLZ OTCBB 9.4 0 .35 -12 . 5% -12. 5% -36.4% -53.3% NM -56 .3%Actoz S oft Co. , Ltd. K RW A052790 K OS E 78. 4 12, 700 4 .5% 23.9% 41 .6% 30 .9% 44.3% -9. 9%

AQ Inte ractive, Inc. J PY 3838 TS E 19. 3 32, 650 -1.4% 15.4% -4 .0% -76.7% -88. 0% -90 .5%As sociated Media Holdings Inc. US D AS MH OTCPK 0.2 0 .01 -50 . 0% -37. 5% -37.5% NM -87. 5% -93 .8%Bigs tring C orp. US D BS GC OTCBB 0.8 0 .02 -8.6% -5.9% -36.0% -80.0% -92. 4% -93 .2%

BoomJ Inc US D BOMJ OTCBB 28. 6 0 .70 -12 . 5% -30. 7% -39.1% -77.8% -44. 9% -78 .8%Br ight Things plc G BP AIM:B G T AIM 3.5 0 .02 -3.6% 27.5% 90 .0% 8. 6% -38. 7% -55 .3%

BroadW ebAs ia Inc. US D BWB A OTCPK 127 .3 1 .50 48.5% 172. 7% 11 .1% 30 .4% NM -50 .0%

CDC Corp. US D CHIN.A Na sdaqGS 94. 9 0 .88 2 .3% -12. 9% -10.2% -68.5% -77. 1% -79 .0%China G ateway Corpora tion US D CGWY OTCBB 0.0 0 .00 -33 . 3% -33. 3% -80.0% -94.4% -99. 7% -99 .7%Chines e G amer International TW D GTS M: 3083 G TSM 282 .5 114 .00 2 .7% 24.6% 59 .0% 36 .9% 21.9% -8. 1%

CornerW orld Corporation US D CWR L OTCBB 7.0 0 .15 -63 . 4% -40. 0% -25.0% -76.9% -89. 3% -89 .7%

DADA SpA E UR CM:DA CM 129 .7 6 .26 1 .1% -8.6% -3 .8% -47.0% -55. 1% -61 .3%Digita lF X Inte rnational, Inc. US D DXN OTCBB 2.0 0 .08 -42 . 9% -34. 7% -68.0% -83.7% -92. 4% -93 .8%

Digita lP os t Interactive, Inc. US D DGLP OTCBB 0.9 0 .01 30.0% -48. 0% -67.5% -81.4% -95. 7% -96 .1%Digita lT own, Inc. US D DGTW OTCBB 54. 3 2 .00 33.3% -33. 3% 0.0% -52.9% -4.8% -67 .2%Dolphin Digita l Media , Inc. US D DPDM OTCBB 25. 8 0 .53 -11 . 7% -18. 5% -41.1% NM NM -53 .1%

Eolith Co. Ltd. K RW A041060 K OS E 19. 3 590 -2.5% 9 .3% 11 .3% -22.4% -68. 7% -71 .5%Extensions, Inc. US D EXT I OTCPK 18. 9 0 .20 33.3% -80. 2% 100.0% NM 33.3% -80 .2%F ina ncia l Media Group, Inc. US D FNGP OTCBB 1.0 0 .02 36.4% -66. 7% -92.5% -98.0% -92. 5% -98 .5%F luid Mus ic C anada , Inc. CAD TSX :FMN TS X 25. 3 0 .60 7 .1% 93.5% 57 .9% -58.9% NM -70 .6%

F rogs te r Inte ractive P icture s AG E UR FR G XTR A 13. 0 4 .32 -7.7% -16. 9% 3.3% -38.3% -16. 8% -43 .5%Gamania Digital E nterta inment Co. , L td. TW D 6180 G TSM 103 .6 23 .40 6 .4% 6 .4% 91 .0% -7.5% -12. 4% -36 .7%

GameOn Co L td. J PY 3812 TS E 120 .1 114, 000 -4.8% 0 .9% -10.2% 1. 8% -11. 6% -30 .3%

GeoS entric Oyj E UR GE O1V HL S E 45. 8 0 .04 0 .0% 0 .0% 0.0% -42.9% -55. 6% -55 .6%Giant Inte ractive G roup, Inc. US D GA NY SE 1,478.5 6 .22 1 .3% 9 .1% 3.0% -40.6% -45. 1% -63 .8%GigaMedia L td. US D GIGM Na sdaqGS 398 .7 7 .38 2 .6% 12.7% 38 .2% -41.9% -62. 2% -64 .8%

GoF ish Corporation US D GOFH OTCBB 5.1 0 .20 33.3% 0 .0% -16.7% -34.4% -39. 4% -66 .1%

Gravity Co., Ltd US D GR V Y Na sdaqGM 19. 7 0 .71 -1.1% 20.3% 6.4% -61.6% -66. 2% -71 .4%Gree, Inc. J PY T S E : 3632 TS E 1,302.5 5, 360 -2.0% -2.9% NM NM NM -14 .9%

GungHo Online E nte rtainment, Inc. J PY 3765 OSE 122 .8 98, 600 -4.3% -5.2% -13.5% -51.3% -46. 7% -77 .3%HanbitS oft, Inc. K RW A047080 K OS E 62. 3 4, 060 21.0% 28.5% 52 .6% 13 .9% -37. 2% -44 .2%IAC /InterActiveCorp. US D IAC I Na sdaqGS 2,120.5 15 .05 1 .8% 1 .3% -5 .5% -57.8% -65. 3% -70 .2%

IAS E nergy, Inc. US D IASC .A OTCBB 1.8 0 .03 0 .0% 19.0% -51.0% -88.1% -92. 9% -93 .4%IdeaE dge, Inc. US D OTCB B :IDAE OTCBB 18. 6 0 .44 -4.3% -47. 0% -76.2% -82.2% -61. 2% -84 .5%iseemedia Inc. CAD IE E TS XV 4.9 0 .12 33.3% -4.0% 71 .4% -25.0% -60. 0% -73 .3%

J umbuck E ntertainment P ty Ltd. AUD AS X: JMB ASX 13. 2 0 .41 2 .5% -14. 6% 2.5% -33.9% -43. 1% -47 .4%J umpTV Inc. CAD TSX :J T V TS X 40. 2 0 .44 -2.2% 46.7% -26.7% -46.3% -64. 5% -68 .6%

Kaboose Inc. CAD TSX :K AB TS X 42. 8 0 .38 -7.3% -3.8% 2.7% -54.8% -82. 3% -84 .1%

Kingsoft Co. Ltd. HK D 3888 S EHK 401 .5 2 .90 -4.9% 7 .4% 46 .5% 0. 0% 20.8% -32 .7%Lingo Media Corpora tion CAD TSXV:LM TS XV 9.3 0 .90 -14 . 3% -10. 0% -18.9% -50.0% -18. 2% -59 .1%LiveWorld Inc. US D LVWD OTCPK 1.2 0 .04 -20 . 0% -46. 7% -20.0% -81.0% -85. 7% -94 .7%LookS mart, Ltd. US D LOOK Na sdaqGM 23. 3 1 .37 0 .0% -2.1% -16.0% -53.7% -62. 5% -71 .5%

Magnitude Informa tion S ys tems Inc. US D MAG Y OTCBB 10. 9 0 .03 -16 . 7% -7.4% 92 .3% 25 .0% 78.6% -28 .6%Mixi, Inc. J PY 2121 TS E 688 .7 413, 000 -9.0% -26. 6% -30.0% -48.4% -66. 1% -69 .2%Modern T imes Group Mtg AB S EK MTG B OM 1,015.0 132 .00 -11 . 9% -6.2% -6 .0% -61.8% -68. 0% -71 .0%

Moggle , Inc US D MMOG OTCBB 70. 6 2 .00 0 .0% 0 .0% NM NM NM 0.0%MOK O.mobi L imited AUD MKB ASX 2.1 0 .04 0 .0% -20. 0% 0.0% -9.1% -18. 4% -43 .7%

NEOW IZ G ames Corpora tion K RW A095660 K OS E 226 .2 33, 650 21.5% 76.2% 165.0% 51 .2% 18.7% -15 .9%

NetDra gon WebS oft, Inc. HK D 777 S EHK 201 .1 2 .95 4 .2% 4 .2% 18 .0% -55.0% -73. 9% -78 .3%Netea s e. com Inc. US D NTES Na sdaqGS 2,368.8 19 .25 -6.3% 12.8% -2 .0% -24.3% 3 .1% -29 .1%NeXplore Corporation US D NXP C OTCPK 44. 1 0 .79 -7.1% -21. 0% -31.3% 36 .2% NM -45 .5%

Ngi G roup Inc. J PY 2497 TS E 35. 2 26, 170 -4.5% -49. 0% -60.0% -70.9% -85. 4% -86 .9%

Northgate T echnologies L imited INR 590057 B S E 31. 6 44 .30 12.0% -2.3% -26.4% -84.6% -91. 0% -91 .9%Open T ext Corp. US D OTE X Na sdaqGS 1,845.0 35 .55 -0.6% 16.1% 23 .7% 0. 7% 7 .3% -9. 1%

Openwave S ys tems Inc. US D OPWV Na sdaqGS 74. 1 0 .89 21.1% 21.9% 36 .9% -38.6% -59. 2% -68 .9%Pe rfect W orld Co., Ltd. US D PWR D Na sdaqGS 815 .8 14 .30 -8.6% -12. 5% -15.4% -43.7% -38. 9% -57 .3%PhotoChannel Ne tworks Inc. CAD TSXV:PN TS XV 47. 6 1 .77 8 .6% 1 .1% 26 .4% -49.9% -53. 4% -57 .3%

Quepasa Corp. US D QP SA Na sdaqCM 18. 1 1 .43 -19 . 2% -23. 5% -34.7% -52.2% -50. 2% -58 .7%OAO R B C Informa tion S ys tems US D R BCI R T S 41. 6 0 .30 3 .4% -50. 0% -80.0% -96.2% -97. 1% -97 .2%Shanda Intera ctive E nte rtainment L td. US D SNDA Na sdaqGS 2,119.6 30 .55 -1.6% 16.6% 26 .1% 14 .0% 7 .1% -20 .1%

Shutterfly, Inc. US D SF LY Na sdaqGS 213 .4 8 .49 -1.3% 25.8% 24 .3% -15.0% -46. 9% -52 .8%SK Communications Co. , Ltd. K RW A066270 K OS E 234 .2 8, 130 1 .2% 40.2% 72 .1% -37.9% -58. 5% -69 .0%SNAP Interactive, Inc. US D STV I OTCBB 10. 6 0 .99 -1.0% 0 .0% 32 .0% 11 .2% 10.0% -10 .0%

SNM G lobal Holdings US D SNMN OTCPK 0.0 0 .00 -66 . 7% 150. 0% -99.3% -99.8% -100 .0% -100 .0%Social Media V enure s , Inc. US D SMV I OTCPK 0.0 1 .42 5 .2% 36.5% -0 .7% 468.0% NM -71 .6%Spark Ne tworks , Inc. US D LOV AMEX 54. 7 2 .55 10.9% 1 .6% -16.4% -40.3% -52. 9% -54 .2%SpectrumDNA, Inc. US D SP XA OTCBB 4.9 0 .10 0 .0% -33. 3% -58.3% NM NM -83 .3%

Tencent Holdings Ltd. HK D 700 S EHK 11,192 .8 48 .30 7 .1% 12.7% 2.3% -23.8% 2 .3% -33 .0%

The P arent Company US D KIDS .Q OTCPK 0.7 0 .03 -25 . 0% -57. 1% -96.8% -98.5% -99. 4% -99 .4%The9 Limited US D NCTY Na sdaqGS 400 .1 14 .49 -2.3% 5 .0% 20 .3% -22.8% -15. 6% -49 .2%

TheS treet.com, Inc. US D TSCM Na sdaqGM 79. 3 2 .60 -11 . 6% -18. 0% -18.0% -62.3% -76. 8% -77 .6%T ree .Com, Inc. US D TR EE Na sdaqGM 36. 6 3 .91 0 .0% -9.7% 78 .5% -60.1% NM -64 .8%Unis erve Communications Corp. CAD TSXV:US S TS XV 1.6 0 .08 -20 . 0% 60.0% -55.6% -68.0% -82. 2% -82 .2%

United Online Inc. US D UNTD Na sdaqGS 425 .4 5 .19 -11 . 4% -16. 2% -21.6% -56.0% -53. 2% -58 .5%UOMO Media, Inc US D UOMO OTCBB 6.8 0 .08 0 .0% 14.3% -48.4% -80.0% -88. 9% -90 .0%VO IS , Inc. US D VO IS OTCBB 5.4 0 .75 87.5% 150. 0% 0.0% -81.3% NM -86 .6%

Webzen Inc. US D WZE N Na sdaqGM 17. 8 1 .50 0 .7% 56.2% 63 .0% -48.5% -48. 3% -66 .3%W izza rd S oftwa re Corporation US D WZE AMEX 33. 0 0 .73 4 .3% -1.2% -12.0% -54.4% -70. 8% -74 .5%

WoozyF ly, Inc. US D WZY F OTCBB 2.6 0 .15 0 .0% 0 .0% NM NM NM -96 .3%

Worlds .com Inc. US D WDDD OTCBB 10. 5 0 .20 -9.1% 33.3% 25 .0% -33.3% -48. 7% -55 .6%W ynds torm Corporation US D WY ND OTCBB 2.2 0 .12 -4.0% 0 .0% -40.0% -80.0% NM -85 .9%XING AG E UR O1BC XTR A 197 .8 29 .75 -4.0% -2.7% 15 .9% -9.8% -25. 8% -36 .2%

YedangOnline Corp. K RW A052770 K OS E 80. 0 7, 300 8 .1% 12.3% 23 .7% -22.3% -13. 0% -41 .8%

Ynk K orea Inc. K RW A023770 K OS E 8.0 4, 630 2 .5% 7 .7% -25.0% -55.5% -74. 3% -76 .7%ZipL ocal Inc. CAD TSXV:ZIP TS XV 1.3 0 .02 0 .0% 100. 0% 100.0% -81.8% -84. 6% -90 .9%

High 87.5% 172. 7% 165.0% 468.0% 78.6% 0.0%

Low -66. 7% -80. 2% -99.3% -99.8% -100 .0% -100 .0%

Average 348.3 -0.7% 4.7% -0.5% -36.7% -48.6% -63.7%

Figure 26. Price Performance Source. Capital IQ

Comparable Company Analys is > Web 2.0Valuation Multiples

Company Name

P rimary

E xchange Ticker

USD Market

Cap ($m)

TE V/L TM

R evenue

TEV / NTM

R evenue

TEV/LTM

EB ITDA

TE V/NTM

EB ITDA P /LTM E P S P /NTM E P S P /TangBV

Acce lerize N ew Media, Inc. OTCBB ACLZ 9 . 4 4 .3x - - - - - -

Actoz S oft Co. , Ltd. K OS E A052790 78 . 4 1 .0x - 5 .7x - 15. 7x - 1. 6xAQ Inte ractive, Inc. T S E 3838 19 . 3 - - - - - - 0. 3x

As sociated Media Holdings Inc. OTCPK ASMH 0 .2 10. 2x - - - - - -B igs tring C orp. OTCBB B SG C 0 . 8 30. 7x - - - - - -

BoomJ Inc OTCBB BOMJ 28 . 6 29. 1x - - - - - -

Br ight Things plc A IM A IM:B GT 3 . 5 14. 4x - - - - - -BroadW ebAs ia Inc. OTCPK B WBA 127 . 3 - - - - - - -

CDC Corp. Na sdaqGS CHIN .A 94 . 9 0 .4x 0. 4x 8 .1x 6 .5x - 12 .4x -China G ateway Corpora tion OTCBB CGW Y 0 . 0 0 .0x - - - - - -

Chinese G amer International G TSM G TSM:3083 282 . 5 6 .0x - 12. 8x - 17. 3x - 5. 6x

CornerW orld Corporation OTCBB CWR L 7 . 0 13. 8x - 2 .7x - - - -DADA SpA CM CM:DA 129 . 7 0 .8x - 5 .0x - 8. 0x - -

Digita lF X Inte rnational, Inc. OTCBB DXN 2 . 0 0 .3x - - - - - -Digita lP os t Interactive, Inc. OTCBB DG LP 0 . 9 4 .4x - - - - - -

Digita lT own, Inc. OTCBB DG TW 54 . 3 - - - - - - -

Dolphin Digita l Media , Inc. OTCBB DP DM 25 . 8 - - - - - - -E olith Co. Ltd. K OS E A041060 19 . 3 1 .1x - - - - - -

E xtensions, Inc. OTCPK E XT I 18 . 9 - - - - - - -F ina ncia l Media Group, Inc. OTCBB FNGP 1 . 0 0 .0x - 0 .1x - - - -

F luid Mus ic Canada , Inc. T S X TS X: FMN 25 . 3 3 .2x 2. 2x - - - - 2. 1x

F rogs te r Inte ractive P ictures AG XTR A FR G 13 . 0 2 .4x - - - - - 1. 3xGamania Digital E nterta inment Co. , L td. G T SM 6180 103 . 6 0 .7x - 4 .3x - 12. 0x - 1. 6x

GameOn Co L td. T S E 3812 120 . 1 0 .7x - 2 .8x - 11. 5x - 1. 5xGeoS entric Oyj HL SE G E O1V 45 . 8 7 .7x - - - - - 7. 0x

Giant Interactive G roup, Inc. NY SE G A 1 , 478 . 5 - - - - 1. 4x 13 .0x 0. 3x

GigaMedia L td. Na sdaqGS G IGM 398 . 7 1 .7x 1. 6x 6 .9x 6 .4x 11. 7x 10 .9x 3. 8xGoF ish Corporation OTCBB GOFH 5 . 1 2 .5x - - - - - -

Gravity Co., Ltd Na sdaqGM G R V Y 19 . 7 - - - - - - -Gree, Inc. T S E T S E :3632 1 , 302 . 5 40. 7x - - - - - -

GungHo Online Ente rtainment, Inc. OSE 3765 122 . 8 0 .9x - 5 .9x - - - 35 . 3x

HanbitS oft, Inc. K OS E A047080 62 . 3 0 .9x - - - - - 2. 2xIAC/Inte rActiveCorp. Na sdaqGS IAC I 2 , 120 . 5 0 .3x 0. 3x 5 .7x 2 .2x 15. 8x 23 .9x 1. 0x

IAS E ne rgy, Inc. OTCBB IAS C .A 1 . 8 - - - - - - -IdeaE dge, Inc. OTCBB OTCB B :IDAE 18 . 6 - - - - - - 13 . 7x

iseemedia Inc. T S XV IEE 4 . 9 2 .0x - - - - - 1. 7xJ umbuck Entertainment P ty Ltd. ASX AS X: JMB 13 . 2 0 .9x - 1 .9x - 7. 3x - 1. 6x

J umpTV Inc. T S X TSX :J T V 40 . 2 4 .3x - - - - - 2. 9x

Kaboose Inc. T S X T SX: K AB 42 . 8 0 .8x 0. 7x 11. 0x 5 .5x - - -K ingsoft Co. Ltd. S EHK 3888 401 . 5 3 .0x - 8 .8x - 11. 8x - 2. 6x

Lingo Media Corpora tion TS XV T SXV : LM 9 . 3 3 .1x - - - - - -LiveWorld Inc. OTCPK LV WD 1 .2 0 .0x - - - - - 0. 6x

LookS mart, Ltd. Na sdaqGM LOOK 23 . 3 - - - - 3. 4x - 0. 8x

Magnitude Informa tion S ys tems Inc. OTCBB MAG Y 10 . 9 - - - - - - -Mixi, Inc. T S E 2121 688 . 7 4 .5x - 11. 8x - 31. 9x - 5. 0x

Modern T imes Group Mtg AB OM MTG B 1 , 015 . 0 1 .0x 0. 9x 6 .1x 6 .5x 3. 0x 6. 6x -Moggle , Inc OTCBB MMOG 70 . 6 - - - - - - -

MOK O.mobi L imited ASX MKB 2 . 1 0 .7x - - - - - 1. 4x

NEOW IZ G ames Corpora tion K OS E A095660 226 . 2 1 .7x - 6 .4x - 13. 3x - 7. 8xNetDra gon WebS oft, Inc. S EHK 777 201 . 1 0 .3x - 0 .5x - 5. 7x - 1. 1x

Netea s e. com Inc. Na sdaqGS NTE S 2 , 368 . 8 - - - - 1. 8x 10 .3x 0. 5xNeXplore Corporation OTCPK NXP C 44 . 1 - - - - - - -

Ngi G roup Inc. T S E 2497 35 . 2 - - - - 9. 6x - 0. 5x

Northgate T echnologies L imited B SE 590057 31 . 6 0 .2x - 1 .3x - 2. 0x - -Open T ext Corp. Na sdaqGS OTEX 1 , 845 . 0 2 .6x 2. 3x 10. 1x 8 .8x 37. 7x 13 .9x -

Openwa ve S ys tems Inc. Na sdaqGS OPW V 74 . 1 - - - - - 29 .7x 1. 0xPerfect W orld Co., Ltd. Na sdaqGS PW R D 815 . 8 - - - - 1. 3x 6. 8x 0. 4x

PhotoChannel Ne tworks Inc. T S XV TS XV : PN 47 . 6 3 .4x 2. 0x - 6 .3x - 28 .1x 16 . 7x

Quepasa Corp. Na sdaqCM QP SA 18 . 1 - - - - - - 7. 4xOAO R B C Informa tion S ys tems R TS R BC I 41 . 6 0 .0x - 0 .1x - - - -

S handa Intera ctive Ente rtainment L td. Na sdaqGS SNDA 2 , 119 . 6 - - - - 1. 9x 11 .0x 1. 0xShutterfly, Inc. Na sdaqGS S F LY 213 . 4 0 .6x 0. 6x 4 .2x 3 .9x 48. 0x - 1. 2x

S K Communications Co. , Ltd. K OS E A066270 234 . 2 1 .6x - 17. 1x - - - -

SNAP Interactive, Inc. OTCBB S TV I 10 . 6 4 .1x - 40. 7x - 58. 5x - 7. 7xSNM G lobal Holdings OTCPK S NMN 0 .0 1 .1x - - - - - -

S ocial Media V enures , Inc. OTCPK S MV I 0 . 0 0 .1x - - - - - -S park Ne tworks , Inc. AMEX LOV 54 . 7 0 .8x - 4 .3x - 5. 5x - -

SpectrumDNA, Inc. OTCBB S PXA 4 . 9 - - - - - - 5. 2x

T encent Holdings Ltd. S EHK 700 11 , 192 . 8 13. 4x - 27. 1x - 36. 6x - 14 . 5xThe P arent Company OTCPK KIDS .Q 0 . 7 0 .2x - - - - - -

T he9 Limited Na sdaqGS NCTY 400 . 1 - - - - 1. 0x 7. 2x 0. 2xTheS treet.com, Inc. Na sdaqGM T SCM 79 . 3 0 .0x 0. 0x 0 .1x 0 .4x 13. 4x - 0. 8x

T ree .Com, Inc. Na sdaqGM TR E E 36 . 6 0 .2x 0. 2x - - - - 0. 6x

Unise rve Communications Corp. T S XV TS XV:US S 1 . 6 0 .2x - 36. 9x - - - -United Online Inc. Na sdaqGS UNTD 425 . 4 1 .4x 0. 8x 6 .0x 3 .3x 6. 5x 8. 1x -

UOMO Media, Inc OTCBB UOMO 6 .8 15. 1x - - - - - -VO IS , Inc. OTCBB VO IS 5 . 4 - - - - - - -

W ebzen Inc. Na sdaqGM WZE N 17 . 8 - - - - - - 0. 0x

W izza rd S oftwa re Corporation AMEX WZE 33 . 0 5 .3x - - - - - -W oozyF ly, Inc. OTCBB WZYF 2 . 6 - - - - - - -

W orlds .com Inc. OTCBB WDDD 10 . 5 - - - - 3. 8x - -W ynds torm Corporation OTCBB W YND 2 . 2 - - - - - - -

XING AG XTR A O1B C 197 . 8 3 .6x - 9 .2x - 19. 7x - 5. 3x

YedangOnline Corp. K OS E A052770 80 . 0 1 .7x - 7 .4x - 9. 7x - 4. 5xYnk K orea Inc. K OS E A023770 8 . 0 0 .6x - - - - - -

ZipL ocal Inc. T S XV TSX V:ZIP 1 . 3 0 .7x - - - - - -

High 11 , 192 . 8 40. 7x 2. 3x 40. 7x 8 .8x 58. 5x 29 .7x 35 . 3xLow 0 . 0 0 .0x 0. 0x 0 .1x 0 .4x 1. 0x 6. 6x 0. 0x

Average 348.3 4.3x 1.0x 8.7x 5.0x 13.8x 14.0x 4.2x

Figure 27. Valuation Comparison Source. Capital IQ

Comparable Company Analys is > Web 2.0S ummary by Country

Company Name US D Market Cap ($m) Avg US D Market Cap ($m ) US D LTM Total R ev ($m ) US D LTM Total EB ITDA ($m) E B ITDA %

United S tates 39 China 18 ,978 .2 C hina 2, 372. 3 United S ta tes 3 ,011 .1 C hina 1,38 5.1 C hina 49.9%

C anada 10 Unite d S tate s 3 ,567 .6 S weden 1, 015. 0 C hina 2 ,694 .1 S weden 24 5.7 Aus tra lia 46.0%

S outh Kore a 9 J apan 2 ,288 .6 J apa n 381. 4 S weden 1 ,536 .5 C anada 18 4.5 T a iwan 29.3%

China 8 Ca nada 2 ,001 .3 T a iwan 261. 6 C ana da 885 .9 J apan 13 6.2 J apan 25.7%

J apa n 6 S wede n 1 ,015 .0 C anada 200. 1 J apan 525 .2 United S tates 10 1.8 Unite d S tate s 20.6%

T aiwan 3 T a iwan 784 .9 Ita ly 129. 7 S outh K orea 504 .7 T aiwan 8 4.0 I ndia 17.6%

Aus tra lia 2 S outh K orea 745 .9 G erma ny 105. 4 Hong K ong 428 .1 S outh K ore a 5 8.8 S wede n 16.0%

G erma ny 2 G ermany 210 .8 Hong K ong 94. 9 T aiwa n 346 .4 Ita ly 3 4.6 I ta ly 16.0%

R us s ia 1 I ta ly 129 .7 United S tates 91. 5 Italy 216 .7 India 2 4.3 R uss ia 13.1%

Hong K ong 1 Hong K ong 94 .9 S outh K ore a 82. 9 India 138 .1 Hong K ong 1 8.8 S outh K orea 5 .8%

F inla nd 1 F inland 45 .8 F inla nd 45. 8 R us s ia 134 .8 R us s ia 1 7.6 Hong K ong 4 .4%

Ita ly 1 R uss ia 41 .6 R us s ia 41. 6 G ermany 45 .2 G erma ny 1 2.4 G ermany -10 .9%

United K ingdom 1 India 31 .6 India 31. 6 Austra lia 11 .5 Aus tra lia 2.7 C a nada -19 .1%

India 1 Aus tralia 15 .3 Aus tralia 7. 6 F in land 5 .2 United K ingdom -1.6 Unite d K ingdom N/M

S weden 1 Unite d K ingdom 3 .5 United K ingdom 3. 5 United K ingdom 0 .2 F in land -1 2.1 F inland N/M

Grand Total 86 G rand Tota l 29,954.7 G rand Total 348.3 G rand Total 10,483.8 G rand Total 2,292.7 G rand Tota l 17.3%

Figure 28. Comparison by Country Source. Capital IQ

Comparable Company Analys is > Web 2.0S ummary by Exc hange

Company Name US D Market Cap ($m) Avg US D Market Cap ($m ) US D LTM Total R ev ($m ) US D LTM Total EB ITDA ($m) E B ITDA %

OT CB B 22 S E HK 11 ,795 .4 S E HK 3, 931. 8 OM 1 ,536 .5 Nas da qG S 1,17 5.1 NY S E 63.5%

Nas da qG S 11 Na sdaqG S 10 ,876 .5 NY S E 1, 478. 5 Nas daqGS 466 .9 S E HK 53 0.7 OT CB B 53.1%

OT CP K 8 T S E 2 ,165 .8 OM 1, 015. 0 S E HK 369 .0 OM 24 5.7 AS X 46.0%

K OS E 7 NY S E 1 ,478 .5 Nas da qG S 988. 8 NY S E 245 .5 NY S E 15 5.8 S E HK 44.0%

T S E 5 OM 1 ,015 .0 T S E 433. 2 CM 216 .7 T S E 11 9.9 G T S M 32.0%

Nas da qGM 5 K O S E 708 .4 G T SM 193. 1 B S E 138 .1 K OS E 5 4.2 T S E 27.8%

T S XV 5 G T S M 386 .2 CM 129. 7 R T S 134 .8 G T SM 36.0 Na sdaqG S 26.8%

S EHK 3 OTC B B 279 .8 O S E 122. 8 OS E 111 .3 CM 34.6 AME X 19.5%

T S X 3 X T R A 210 .8 XT R A 105. 4 Nas daqGM 85 .5 B S E 2 4.3 B S E 17.6%

AME X 2 OTC P K 192 .5 K OS E 101. 2 T S E 82 .8 R T S 1 7.6 OM 16.0%

XT R A 2 Na sdaqGM 176 .8 HLS E 45. 8 G T SM 73 .0 OS E 1 6.3 CM 16.0%

ASX 2 CM 129 .7 AME X 43. 8 KOS E 64 .4 XT R A 1 2.4 OS E 14.7%

G T SM 2 OS E 122 .8 R T S 41. 6 AME X 33 .1 AME X 5.2 R T S 13.1%

R T S 1 T S X 108 .3 T S X 36. 1 T S X 25 .1 A S X 2.7 K OS E 6 .2%

HLS E 1 AME X 87 .6 Nas da qGM 35. 4 XT R A 22 .6 A IM -1.6 Na sdaqGM 2 .0%

OS E 1 T S XV 64 .8 B S E 31. 6 OT C PK 21 .0 T S X -5.8 T S X -3 .9%

CM 1 HL S E 45 .8 O TC P K 24. 1 T S X V 9 .0 Nas da qCM -1 1.8 X T R A -10 .9%

B S E 1 R T S 41 .6 Nas da qCM 18. 1 AS X 5 .7 T S X V -1 2.0 T S XV -19 .9%

Nas da qCM 1 B S E 31 .6 T S XV 13. 0 HLS E 5 .2 HLS E -1 2.1 OT CP K -29 .4%

NY S E 1 Na sdaqCM 18 .1 O TC B B 12. 7 OT C BB 2 .5 Nas da qGM -1 2.8 HL S E N/M

A IM 1 AS X 15 .3 A S X 7. 6 AIM 0 .2 OT C PK -2 7.2 A IM N/M

OM 1 A IM 3 .5 A IM 3. 5 Nas daqCM 0 .1 OT C BB -5 4.6 Na sdaqCM N/M

Grand Total 86 G rand Tota l 29,954.7 G rand Total 348.3 G rand Total 131.0 G rand Total 2,292.7 G rand Tota l 17.3%

Figure 29. Comparison by Exchange Source. Capital IQ

Financing - Last Three Months (US$ m)Month Company Name Country Angel/Seed Debt financing PIPE Series A Series B Series C Series D Series E Grand Total

Dec-08 GoFish USA 22.5 22.5

NetShelter Canada 11.1 11.1

Blue Kai USA 10.5 10.5

Taptu UK 9.9 9.9

FooMojo USA 9.9 9.9

Scribd USA 9.0 9.0

Superfish Israel 5.3 5.3

Tagged USA 5.0 5.0

Snapmylife USA 5.0 5.0

Jackbe USA 5.0 5.0

ChakPak India 5.0 5.0

Tumblr USA 4.5 4.5

Playdo Sweden 4.3 4.3

Overlay.TV Canada 3.8 3.8

DotBlu USA 2.0 2.0

Angie's List USA 1.0 1.0

StockTwits USA 0.8 0.8

Dec-08 Total 5.0 22.5 31.9 49.2 1.0 5.0 114.6

Jan-09 Yodle USA 13.0 13.0

AdMob USA 12.5 12.5

Aster Data Systems USA 12.0 12.0

VirtuOz France 11.4 11.4

Nurien Korea 10.0 10.0

IMVU USA 10.0 10.0

NewsGator USA 10.0 10.0

DECA USA 10.0 10.0

Go Internet Media USA 10.0 10.0

RatePoint USA 10.0 10.0

One True Media USA 9.0 9.0

SundaySky Israel 8.0 8.0

Play Hard Sports USA 8.0 8.0

JibJab USA 7.5 7.5

Xobni USA 7.0 7.0

InsideView USA 6.5 6.5

Kewego France 6.2 6.2

Fliqz USA 6.0 6.0

Motionbox USA 6.0 6.0

SocialMedia USA 6.0 6.0

Sportsblogs USA 5.0 5.0

Geni USA 5.0 5.0

AboutUs USA 5.0 5.0

Gbox USA 5.0 5.0

E-Global Sports Network USA 3.5 3.5

Tripwolf Austria 2.5 2.5

Hubdub UK 1.2 1.2

Snooth USA 1.0 1.0

CoveritLive Canada 1.0 1.0

Identi.ca Canada 0.2 0.2

Meez USA

Jan-09 Total 2.2 45.2 68.9 82.2 10.0 208.5

Feb-09 Twitter USA 35.0 35.0

Outbrain Israel 12.0 12.0

Tvtrip France 9.0 9.0

Oodle USA 5.6 5.6

TextDigger USA 4.3 4.3

OneSpot USA 4.2 4.2

Mixpo Canada 4.0 4.0

FetchDog USA 4.0 4.0

7 Billion People USA 3.0 3.0

WhistleBox USA 2.3 2.3

Outright USA 2.0 2.0

Tvinci Israel 1.6 1.6

Cake Financial USA 1.3 1.3

fav.or.it UK 0.7 0.7

Feb-09 Total 23.4 25.0 40.6 89.0

Grand Total 2.2 5.0 22.5 100.5 143.1 123.8 5.0 10.0 412.0

Figure 30. Financing, Last Three Months Source. Company reports

RELEVANT DISCLOSURES APPLICABLE TO: NONE

L IST OF D IS CLOS URE TE RMS :

1. None applicable.

ANALYST CERTIFICATION

Each analyst of Research Capital Corporation whose name appears in this report hereby certif ies 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.

In format i on about Research Capi ta l Corpora t i on ’s Rat i ng Sys tem, the dis t r i bu t i on o f our research to c l ien ts and the percen tage o f recommendat i ons whi ch are in each o f our rat i ng ca tegor i es i s avai labl e on our web si te a t www. researchcapi ta l . com.

The in format i on con tai ned i n th i s report has been drawn f rom sources bel i eved to be re l i able but i t s accuracy o r comple teness is no t guaranteed , nor i n p rovi d i ng i t does Research Capi ta l Corpora t ion assume any responsib i l i ty o r l iabi l i ty . Research Capi ta l Corpora t ion , i t s d i recto rs , o f f i cers and o ther employees may, f rom t ime to t ime, have posi t ions i n the secur i t ies ment i oned herein . Conten ts o f th i s report cannot be reproduced i n who le or i n par t wi thou t the expressed permissi on o f Research Capi ta l Corporat i on. (U.S. Ins t i tu t ional Cl ien ts — Research Capi ta l U.S.A. Inc. (a whol l y owned subsid i ary o f Research Capi ta l Corpora t ion) accep ts responsib i l i t y fo r the contents o f th i s repor t sub jec t to the terms & l imi tat i ons se t out above . F i rms o r i ns t i tu t i ons recei v i ng th i s repor t should e f fect t ransact i ons in secur i t i es d i scussed i n the repor t through Research Capi ta l U.S.A. Inc. , a Broker-Dealer Regis te red wi th the Uni ted Sta tes Secur i t ies and Exchange Commissi on) .

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