09 06 16 web 2.0 weekly

SOFTWARE & SERVICES 16 JUNE 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

DELL SELLS $3 MILLION IN PCS AND ACCESSORIES USING TWITTER

DELL AND TWITTER – AN EXAMPLE OF CORPORATIONS USING WEB 2 .0 PLATFORMS Although last week was very quiet on the news front, we thought the following was worth highlighting. An article in the Silicon Valley Insider (a division of The Business Insider) t it led “Twitter sells $3 mill ion of Computers for Dell” has caught our attention for various reasons. This is of interest in the context of how companies are looking at leveraging the various Web 2.0 platforms to promote their brand and sell their products.

Since 2007, the Dell Outlet store has experimented using Twitter to sell i ts products through exclusive promotions and coupons that are available only to subscribers to the microblog service. Last week, the company announced that i t has 620,000 fol lowers on the @DellOutlet twitter account. It was able to generate more than $1 mil lion in sales as a result of i ts tweets in the last six months. Although, the sales achieved ($3 mill ion in the last two years) is inconsequential to Dell ’s top l ine (~$61 bil lion in F2009), the company has used Twitter as another channel to quickly move inventory that came about from customer returns. Taking this discussion a li ttle further, we think the other aspect of interest is – will this be a revenue generating opportunity for Twitter (through premium corporate accounts)? With much anticipation in the community to learn about the revenue model for Twitter, this may be an indication of one such revenue stream (i.e. corporate sales).

We would also highlight that throughout our Web 2.0 sessions (attended by various participants in the industry, including management, developers, venture capital ists, and business consultants), the recurring theme has been about exploring innovative ways to use Web 2.0 platforms to share information to increase the overall experience of employees, suppliers, and customers. (We are holding our fi fth Web 2.0 session tit led “VC Financing for Web 2.0 Companies: Necessary? Possible? Lessons Learned” today at 12:00 pm at our office on 199 Bay Street, Suite 4500, Toronto).

On the capital raise front, Sugar Inc. leads: The capital raise from Sugar Inc. for $16 mill ion was the largest deal for the first two weeks of June, closely fol lowed by Wimba and Grab Networks at $12.0 mil lion. All deals, except the three mentioned above, were less than $10 mil lion. The average value for the first week of June is $5.0 mill ion, below the average value for May of $6.4 mil lion (excluding the investment in Facebook) on 16 financings. The Apri l average was $6.2 mill ion on 23 financings.

Financing Activity Last Three Months

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6.2

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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 19 companies showing positive returns on the week. Openwave Systems Inc. (OPWV:NASDAQ) led the group with a 21.7% return, while Tree.com (TREE:NASDAQ) had the worst return, dropping 26.5% in the week.

This report has been created by Analysts that are employed by Research Capital Corporation, a Canadian Investment Dealer.

For further disclosures, please see last page of this report. 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

Ninety-two public Web 2.0 companies = $53 billion market cap: Our Web 2.0 universe contains 92 companies, with a combined market cap of approximately $53.4 bill ion (Figure 1). The average market cap for the group is ~$581 mil lion (but a median of only $46.3 mill ion), with average trail ing revenue of $152 mil lion (median $54.3 mill ion). The companies are also generally profitable, with a median EBITDA margin of 15.3%. On a valuation basis, the overall average is 5.3x trai ling revenue (median 1.9x) and 10.2x trai ling EBITDA (median 9.6x). Fourteen of the companies have more than 500 employees.

Comparable C ompany Analys is > Web 2.0

C ompany Name L TM as of T icker E xchange

Trading

Currency HQ

Current

Price

USD Market

C ap ($m)

USD LTM Total

R ev ($m)

USD L TM Total

E B ITDA ($m)

EBITDA

%

TEV/LTM

R evenue

TEV /L TM

E BITDA Employees

Acce le rize New Media, Inc. 3 /31 /2009 AC LZ OTC BB USD United S ta tes 0 .35 9 .7 4.1 (4 .4) NM 3.5x - 1 1

Actoz S of t C o. , L td. 3 /31 /2009 A052790 KOS E KR W South Korea 27250 184.9 91. 6 1 9.9 21 .7% 1.7x 7. 8x NA

AQ Inte ractive , Inc. 3 /31 /2009 3838 T S E J PY J apan 76800 42.6 63. 1 4 .0 6 .3% 0.2x 3. 6x NA

As socia ted Media Holdings Inc. 6 /30 /2007 AS MH OTC PK USD United S ta tes 0 .02 0 .9 0.1 (2 .3) NM 19.2 x - 3 B igstring Corp. 3 /31 /2009 BS GC OTC BB USD United S ta tes 0 .03 1 .5 0.1 (2 .0) NM 39.0 x - 4

Be tawave Corpora tion 3 /31 /2009 BWAV OTC BB USD United S ta tes 0 .10 2 .9 8.4 (1 2.6) NM - - 5 3

Be yond Commerce, Inc. 3 /31 /2009 BYOC OTC BB USD United S ta tes 0 .91 40.4 7.1 (9 .5) NM 6.3x - 6 9

Br ight Things plc 9 /30 /2008 AIM:BGT AIM GBP United K ingdom 0 .02 4 .8 0.3 (1 .8) NM 17.6 x - 9 Broa dW ebAs ia Inc. 9 /30 /2008 BW BA OTC PK USD United S ta tes 0 .23 19.5 0.0 (4 .6) NM - - 4 6

CDC C orp. 3 /31 /2009 C HIN .A Nasda qGS USD Hong Kong 1 .55 164.4 389 .9 3 0.8 7 .9% 0.5x 5. 8x NA

C ha ngyou. com Limited 3 /31 /2009 C YOU Nasda qGS USD C hina 38 .61 2,1 23.6 222 .5 13 5.1 60 .7% 8.7x 14 .3x 6 28

C hina Gatewa y C orpora tion 9 /30 /2008 C GW Y OTC PK USD United S ta tes 0 .02 0 .4 6.7 (6 .6) -98.9% 0.1x - 3 7 C hine se Gamer International 3 /31 /2009 GT SM:3083 GT SM TWD T aiwan 312 .00 797.0 56. 1 3 1.4 56 .0% 13.0 x 23 .3x NA

C ornerW orld C orporation 1 /31 /2009 CWR L OTC BB USD United S ta tes 0 .07 4 .5 1.3 NM NM 4.6x - NA

C yberplex Inc. 3 /31 /2009 T S X:C X T S X C AD C ana da 1 .80 99.8 71. 7 7 .4 10 .3% 1.3x 12 .9x NA

DADA S pA 3 /31 /2009 CM:DA CM EUR Ita ly 6 .00 134.1 231 .6 4 3.0 18 .6% 0.8x 4. 3x 5 78 DXN Holdings B hd 2 /28 /2009 DXN KL S E MYR Ma la ys ia 0 .40 26.1 78. 4 1 0.8 13 .7% 0.5x 3. 9x NA

Dibz Inte rnational, Inc. NA DIBZ OTC PK USD United S ta tes 0 .00 0 .0 NA NM NM - - NA

DigitalPost Inte ra ctive , Inc. 3 /31 /2009 DGLP OTC BB USD United S ta tes 0 .02 1 .6 0.7 (2 .6) NM 4.5x - 7

DigitalT own, Inc. 2 /28 /2009 DGTW OTC BB USD United S ta tes 2 .50 67.7 NM (3 .0) NM - - 3 Dolphin D igital Media, Inc. 3 /31 /2009 DPDM OTC BB USD United S ta tes 0 .53 27.4 0.8 (3 .7) NM 36.7 x - NA

Eolith C o. L td. 1 2/31 /2008 A041060 KOS E KR W South Korea 760 .00 43.8 14. 6 (3 .5) -23.6% 3.1x - NA

E xtens ions , Inc. 3 /31 /2009 E XT I OT C PK USD United S ta tes 0 .15 14.2 NM NM NM - - 2

F inancia l Media G roup, Inc. 2 /28 /2009 FNGP OTC BB USD United S ta tes 0 .00 0 .3 7.2 2 .4 34 .1% - - 2 2 F luid Mus ic Ca nada, Inc. 3 /31 /2009 T S X:FMN T S X C AD United S ta tes 0 .75 34.7 5.0 (6 .9) NM 5.2x - NA

F rogs te r Interactive P icture s AG 12/31 /2008 F RG XT R A EUR Germany 7 .98 25.9 3.2 (6 .0) NM 7.6x - NA

Gama nia D igital E ntertainment C o. , L td. 3 /31 /2009 6180 GT SM TWD T aiwan 55 .60 256.5 125 .9 2 0.9 16 .6% 1.9x 11 .2x NA

GameOn C o L td. 3 /31 /2009 3812 T S E J PY J apan 114300 112.8 75. 1 1 7.8 23 .7% 0.7x 3. 0x NA GeoS entric O yj 3 /31 /2009 GEO1V HLS E EUR F inland 0 .04 49.5 5.8 (1 5.1) NM 7.8x - 1 08

G iant Intera ctive Group, Inc. 3 /31 /2009 GA NYSE USD C hina 8 .24 1,8 58.9 218 .8 NM NM - - NA

G igaMedia Ltd. 3 /31 /2009 G IGM Nasda qGS USD T aiwan 5 .53 298.8 183 .6 NM NM 1.2x - NA

Gravity C o. , L td 9 /30 /2008 GR VY Nasda qGM USD S outh Korea 1 .10 30.6 38. 8 7 .5 19 .2% - - 6 36

Gree, Inc. 6 /30 /2008 T S E : 3632 T S E J PY J apan 6130 1,3 97.1 30. 0 1 0.8 36 .0% 43.9 x - NA GungHo O nline E ntertainment, Inc. 3 /31 /2009 3765 OS E J PY J apan 225000 263.0 105 .2 1 8.9 18 .0% 2.2x 12 .4x NA

HanbitSof t, Inc. 3 /31 /2009 A047080 KOS E KR W South Korea 4720 82.0 54. 7 (1 4.7) -26.8% 1.2x - NA

IAC /InterActiveC orp. 3 /31 /2009 IAC I Nasda qGS USD United S ta tes 16 .29 2,4 58.4 1 ,40 6.4 4 2.6 3 .0% 0.4x 13 .5x 3, 200

IAS E nergy, Inc. 1 /31 /2009 IAS C.A OT C BB USD C ana da 0 .23 16.1 0.0 (0 .8) NM - - NA is eemedia Inc. 3 /31 /2009 IE E T S XV C AD C ana da 0 .08 3 .4 1.5 (4 .8) NM 1.6x - NA

J umbuck E ntertainment P ty Ltd. 1 2/31 /2008 AS X:JMB AS X AUD Aus tra lia 0 .40 15.7 14. 2 5 .3 37 .2% 0.8x 2. 0x 7 2

J umpT V Inc. 3 /31 /2009 T S X:J T V T S X C AD C ana da 0 .73 73.1 18. 1 (1 2.0) -66.6% 3.4x - 2 37

KA B Dis tribution Inc. 3 /31 /2009 T S X:K AB T S X C AD C ana da 0 .62 76.4 72. 5 8 .6 11 .9% 1.1x 9. 5x NA K ingsoft Co. Ltd. 3 /31 /2009 3888 S E HK HKD C hina 5 .23 732.1 129 .0 5 1.9 40 .3% 5.2x 12 .9x 2, 271

Lingo Media Corporation 3 /31 /2009 T S XV : LM T S XV C AD C ana da 1 .13 12.8 0.9 (1 .6) NM 13.0 x - NA

LiveWorld Inc. 3 /31 /2009 LV WD OTC PK USD United S ta tes 0 .10 3 .1 11. 4 (0 .0) -0 .4% 0.2x - NA

LookSmart, Ltd. 3 /31 /2009 LOOK Nasda qGM USD United S ta tes 1 .35 23.1 60. 7 (3 .8) -6 .3% - - 9 0 Magnitude Information S ys tems Inc. 3 /31 /2009 MAGY OTC BB USD United S ta tes 0 .01 5 .5 0.1 (3 .1) NM - - 1 4

Mixi, Inc. 3 /31 /2009 2121 T S E J PY J apan 460000 721.7 123 .0 4 3.6 35 .4% 4.9x 13 .9x NA

Mode rn Times G roup Mtg AB 3 /31 /2009 MTG B OM S E K Sweden 216 1,8 01.8 1 ,70 4.0 26 1.0 15 .3% 1.4x 9. 0x 2, 969

Moggle , Inc 3 /31 /2009 MMOG OTC BB USD United S ta tes 2 .30 83.5 NM NM NM - - 3 MOKO.mobi L imited 12/31 /2008 MK B AS X AUD Aus tra lia 0 .05 3 .5 1.1 (2 .3) NM 2.1x - NA

Myr iad G roup AG 12/31 /2008 MYR N SWX C HF Switzerla nd 5 .15 100.3 40. 0 0 .8 1 .9% 2.8x - 4 05

NEOW IZ Games C orpora tion 12/31 /2008 A095660 KOS E KR W South Korea 65900 502.9 196 .3 5 2.7 26 .8% 2.5x 9. 4x NA

NetDragon W ebS oft, Inc. 3 /31 /2009 777 S E HK HKD C hina 5 .00 341.0 86. 9 3 4.4 39 .5% 2.3x 5. 8x 2, 426 Nete ase.com I nc. 3 /31 /2009 NT E S Nasda qGS USD C hina 35 .04 4,3 11.8 470 .2 30 5.6 65 .0% - - NA

NeXplore Corpora tion 9 /30 /2007 NXPC OTC PK USD United S ta tes 0 .70 39.0 NM (4 .9) NM - - 1 9

Ngi Group Inc. 1 2/31 /2008 2497 T S E J PY J apan 36100 45.5 100 .3 3 0.9 30 .8% - - NA

Northgate Technologies L imited 3 /31 /2009 590057 BS E INR India 42 .05 30.6 117 .0 (2 7.5) -23.5% 0.3x - NA Open T e xt Corp. 3 /31 /2009 OT E X Nasda qGS USD C ana da 35 .67 1,8 77.1 782 .6 19 9.2 25 .5% 2.5x 9. 8x 3, 400

Openwave S ys tems Inc. 3 /31 /2009 OPWV Nasda qGS USD United S ta tes 2 .30 191.6 197 .2 (2 .1) -1 .0% 0.4x - 6 30

Pe rfect W orld C o. , Ltd. 3 /31 /2009 PW R D Nasda qGS USD C hina 24 .35 1,2 45.2 228 .0 12 4.5 54 .6% 0.1x 0. 2x NA

Quepa sa C orp. 3 /31 /2009 QPS A Nasda qCM USD United S ta tes 0 .62 7 .9 0.1 (1 0.8) NM - - 7 4 OAO RB C Information S ys tems 12/31 /2007 R BC I R T S USD R us s ia 1 .00 138.7 151 .4 1 9.8 13 .1% 0.0x 0. 2x NA

Shanda Interactive E ntertainment L td. 3 /31 /2009 SNDA Nasda qGS USD C hina 54 .40 3,7 74.4 569 .7 26 0.7 45 .8% 0.1x 0. 2x NA

Shutte rf ly, Inc. 3 /31 /2009 S F LY Nasda qGS USD United S ta tes 13 .47 339.1 215 .2 2 8.3 13 .2% 1.3x 9. 7x 5 14

S K C ommunications Co. , Ltd. 1 2/31 /2008 A066270 KOS E KR W South Korea 11000 365.5 182 .5 1 1.9 6 .5% 2.0x 30 .8x NA SNAP Inte ra ctive , Inc. 3 /31 /2009 S T V I OT C BB USD United S ta tes 0 .70 7 .6 3.3 0 .9 28 .0% 1.9x 6. 6x 1 1

SNM G lobal Holdings 9 /30 /2008 SNMN OTC PK USD United S ta tes 0 .00 0 .0 2.0 (0 .7) -34.8% 1.1x - 3 3

Socia l Media Venures , Inc. 1 2/31 /2008 SMV I OT C PK USD United S ta tes 0 .01 0 .0 0.1 (0 .1) -60.5% 0.0x - NA

Socia lwise, Inc. 3 /31 /2009 S C LW OTC BB USD United S ta tes 0 .70 30.3 0.0 (4 .8) NM - - NA Sohu. com Inc. 3 /31 /2009 SOHU Nasda qGS USD C hina 65 .91 2,5 22.0 460 .0 20 0.5 43 .6% 4.7x 10 .7x 3, 197

S ite search C orporation 4 /30 /2009 S T PC OTC BB USD United S ta tes 3 .50 28.2 NM (1 .1) NM - - 1 5

Spark Networks , Inc. 3 /31 /2009 LOV AMEX USD United S ta tes 2 .25 46.3 54. 3 1 1.8 21 .7% 0.9x 4. 0x 1 83

SpectrumDNA, Inc. 3 /31 /2009 S P XA OTC BB USD United S ta tes 0 .20 9 .7 0.1 (2 .6) NM - - 7 T encent Holdings L td. 3 /31 /2009 700 S E HK HKD C hina 89 .20 20,7 58. 8 1 ,20 2.8 57 6.3 47 .9% 18.8 x 39 .2x 6, 194

The Parent C ompany 8/2/2008 K IDS .Q OTC PK USD United S ta tes 0 .03 0 .8 112 .0 (1 3.5) -12.0% 0.2x - 3 47

The9 L imited 12/31 /2008 NCT Y Nasda qGS USD C hina 10 .46 280.5 249 .7 8 4.1 33 .7% - - NA

The S treet.com, Inc. 3 /31 /2009 T S CM Nasda qGM USD United S ta tes 2 .10 64.3 67. 0 1 .9 2 .9% - - 3 10

Total S port Online A S 3 /31 /2006 TOSO OTCNO NOK Norwa y 0 .03 0 .1 2.1 (1 .0) -50.6% 4.6x - 1 6 T ree.C om, Inc. 3 /31 /2009 T R E E Nasda qGM USD United S ta tes 8 .74 94.4 215 .6 (1 3.3) -6 .2% 0.4x - 7 00

Uniserve C ommunications Corp. 2 /28 /2009 T S XV : US S T S XV C AD C ana da 0 .05 1 .1 22. 9 0 .1 0 .2% 0.2x - NA

United Online Inc. 3 /31 /2009 UNTD Nasda qGS USD United S ta tes 6 .54 546.6 811 .2 17 7.3 21 .9% 1.0x 4. 7x 1, 469

UOMO Media , Inc 1 /31 /2009 UOMO OTC BB USD C ana da 0 .17 14.1 0.6 (0 .5) -78.2% 22.8 x - NA Va lueC lick Inc. 3 /31 /2009 VC LK Nasda qGS USD United S ta tes 12 .05 1,0 48.0 591 .7 10 5.5 17 .8% 1.6x 8. 9x 1, 189

VO IS , Inc. 3 /31 /2009 VOIS OT C BB USD United S ta tes 0 .35 2 .9 0.0 (1 .1) NM - - 4

W ebzen Inc. 3 /31 /2009 WZEN Nasda qGM USD S outh Korea 3 .40 40.3 22. 8 (0 .4) -1 .9% - - 3 14

W iz za rd S of twa re Corpora tion 3 /31 /2009 WZE AMEX USD United S ta tes 0 .65 31.1 5.6 (5 .3) -94.5% 5.8x - 1 10 W orlds .com Inc. 3 /31 /2009 WDDD OTC BB USD United S ta tes 0 .09 4 .7 0.0 (0 .8) NM - - 1

W ynds torm C orporation NA WYND OTC BB USD United S ta tes 0 .51 9 .2 NA NM NM - - NA

XING AG 3 /31 /2009 O1B C XT R A EUR Germany 33 .80 245.7 52. 2 1 6.3 31 .2% 3.7x 11 .9x 2 39

YedangOnline Corp. 1 2/31 /2007 A052770 KOS E KR W South Korea 9290 115.6 54. 4 1 2.2 22 .4% 2.3x 10 .4x NA Ynk Korea Inc. 1 2/31 /2008 A023770 KOS E KR W South Korea 6400 27.1 11. 3 1 .2 10 .5% 2.3x 22 .1x NA

ZipLocal Inc. 3 /31 /2009 T S XV : ZIP T S XV C AD C ana da 0 .01 0 .4 2.7 (2 .1) -78.3% 0.6x - NA

High 20,7 58. 8 1 ,704 .0 576.3 65 .0% 43.9 x 39 .2x 6,1 94

Low 0 .0 0.0 -27.5 -98.9% 0.0x 0. 2x 1

Average 581.4 152.1 33.1 7.1% 5.3x 10. 2x 671

Median 46.3 54. 3 0 .8 15 .3% 1.9x 9. 6x 237

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 )

June month-to-date capital raise totals $79.5 million: Total capital raised two weeks into June was $79.5 mil lion on a total of 15 transactions. It was led by Sugar Inc. raising $16.0 mill ion, closely followed by Wimba and Grab Networks raising $12.0 mill ion. All other transactions were less than $10 mil lion. The average value for the month-to-date is $5.0 mil lion, below the average value for May of $6.4 mil lion (excluding the $200 mill ion investment in Facebook) on 16 financings. The April average was $6.2 mil lion on 23 financings.

Financing Activity Last Three Months

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

Sugar Inc. leads capital raise: The capital raise from Sugar Inc. for $16 mil lion was the largest deal for the first two weeks of June. Three of the 15 deals in the month were greater than $10 million. For additional details, see Figures 22 and 23 (at end of note).

Financing & M/A Summary - Last Three Months

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Figure 3. Capital Market Activity, Last Three Months Source. Company reports

Social Network remains the most active sector in dollars raised, while Ad Network remains the most active in number of transactions: Following recent trends, Social Networks as a sector saw the most activity in dollars raised ($234.8 mil lion), largely attributed to the $200 mill ion investment by Digital Sky Technologies in Facebook. However, i t was the Ad Network sector that saw the most transactions (13), raising $103.7 mil lion (Figure 4). The Media sector has the next highest totals, with six companies raising $45.8 mill ion. The following sectors continue to generate the most capital activity over the last few months: Ad Network, Media, Gaming, and Social Networks.

Capital Market Activity by Sector - Last Three Months

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Figure 4. Capital Market Activity, by Sector, Last Three Months Source. Company reports

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

Web 2.0 index outpaces NASDAQ recovery: Our Web 2.0 index (market-cap weighted) essentially mirrored the performance of the NASDAQ composite index from mid-2008 unti l recently. However, the index has recently had a much stronger recovery relative to the NASDAQ index (Figure 5).

46.38

56.38

66.38

76.38

86.38

96.38

Index: Web 2.0 X (Market Cap Weights) ^COMP - Share Pricing

Web 2.0 Index Price Performance

Figure 5. Web 2.0 Price Performance Source. Capital IQ

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 19 companies showing positive returns on the week. Openwave Systems Inc. (OPWV:NASDAQ) led the group with a 21.7% return, while Tree.com (TREE:NASDAQ) had the worst return, dropping 26.5% in the week.

1 Week Price Performance

-26.5%-25.9%

-22.4%-16.2%-15.3%-14.8%

-11.7%-10.2%

-8.7%-8.6%-7.8%

-6.5%-5.9%-5.8%-5.6%-4.7%-4.7%-4.3%-3.9%

-2.6%-2.1%-1.5%-1.5%-0.4%-0.4%-0.2%

0.0%0.1%0.5%1.1%1.5%1.6%2.4%3.0%3.7%3.8%4.0%5.3%

7.6%8.2%8.3%8.6%

12.8%20.0%

21.7%

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

Tree.Com, Inc .OAO RBC Information S ys temsNorthgate Technologies L imited

Actoz S oft Co. , Ltd.Webz en Inc .

Chines e Gamer InternationalS handa Interactive Entertainment Ltd.

GigaMedia Ltd.Giant Interactive Group, Inc .

Y nk Korea Inc .NEOWIZ Games Corporation

Neteas e.com Inc .The9 L imited

NetDragon WebS oft, Inc .United Online Inc .K ings oft Co. Ltd.

Gree, Inc .Grav ity Co. , L td

Y edangOnline Corp.S park Netw orks , Inc .

GameOn Co Ltd.S ohu.com Inc .HanbitS oft, Inc .

Tencent Holdings Ltd.Gamania Digital Enterta inment Co. , Ltd.

Changyou.com LimitedS K Communications Co. , Ltd.

S hutterf ly , Inc .IAC/InterA ctiveCorp.

Mix i, Inc .LookSmart, Ltd.

Modern T imes Group Mtg A BAQ Interactive, Inc .My riad Group AGV alueClick Inc .

Open Tex t Corp.CDC Corp.DADA S pA

Perfect World Co. , Ltd.TheS treet.com, Inc .

XING AGEolith Co. Ltd.Ngi Group Inc .Cyberplex Inc .

Openw ave S ys tems Inc .

Figure 6. 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 )

K ey Developments

Company Headline Notes

K ingsoft Co . Ltd. (S EHK:3888) K ings oft to Launch T-800 Terminator-S haped F lash D isk K ingsoft C o. Ltd. is on the point of rolling out an anti-virus s oftware-embedded 2G flas h dis k in the shape of the c las sic T -800 T erminator in

The Terminator s eries. The B eijing-based s oftware developer will have its spark ling a nti-v irus software preins ta lled in the f lash disk ,

disc losed s ources , noting that us ers will have acces s to the K ings oft software for four years . The flas h disk s will come into the markets in

B eijing and S hangha i when the long-expec ted s cience-fic tion movie T erminator S al vation is put up on show throughout the country on J une

9, 2009, with only 2,018 ava ilable for s a le.

Northgate Technologies Limited

(B SE :590057)

Northgate T echnologies L imited Appo ints B S R and

Company as S tatu tory Auditor R eplac ing P rice

W aterhous e

Northgate Technologies L imited appointed B S R and C ompany, an Indian as soc iate of K PMG , as s tatutory auditors of the company. The

company has appointed B S R and company to fi ll the vacancy caused by the res ignation of P rice W aterhouse, Chartered Accountants.

GigaMedia L td. (NasdaqGS :GIGM) G igaMedia I n T alks G igaMedia L td. reported firs t-quarter revenues of $44. 4 million, net income of $4.8 million, and earnings per s hare of $0.09 basic and $0. 08

fully -diluted. T he company als o announced that it is final round dis cuss ions with two parties concerning a potentia l s tra tegic partnership or

sale involv ing its pok er and casino software bus ines s. No additiona l details a re available at this time.

IB 3 Networks , Inc. (OTCB B: IBNW);

iB eam Solutions L LC

IB 3 N etwork s I nc. and iB eam S olutions LL C S igns Three

Y ear S ervice C ontract with Millennium B usines s

S olutions

IB 3 Network s I nc. and its wholly owned s ubsidiary iB eam S olutions LLC announced that it recently finalized a multi-thous and dolla r three

yea r serv ice contrac t with M illennium B us ines s S olutions .

GigaMedia L td. (NasdaqGS :GIGM) G igaMedia L td. R eports Un-Audi ted Cons olidated

E a rnings R esults for the F irst Quarter E nded March 31,

2009 ; R eports Impa irment Los s

G igaMedia L td. reported un-audited cons olidated ea rnings res ults for the f irst quarter ended March 31, 2009. F or the quarter, the company's

cons olidated revenues decreas ed 13% to $44. 4 million from $51.2 million in the s ame period of 2008, and held s teady compared with the

fourth quarter of 2008. The year-period decrease was primarily due to lower contributions from the company 's gaming software busines s

reflec ting the impac t of the globa l economic downturn on player s pending in the indus try, with depreciation of the euro agains t the U .S . dolla r

increas ing play ing cos ts , res ulting in decreas ed player s pending. C onsolidated income from opera tions for the f irs t quarter was $5. 4 million

compared to $12.7 million in the first quarter of 2008 and $7.9 million in the fourth quarter of 2008. T he year-over-year decreas e in

cons olidated income from opera tions reflected the a forementioned revenue decreas e and lower gros s profit margin on changed revenue mix

during the period, which des pite fla t opera ting expens es, yielded a decrease in the company 's cons olidated opera ting margin to 12.2% . The

quarter-over-quarter decreas e in consolida ted income from operations was primarily the result of lower gros s profit, as well as an increas e in o

TheS treet.com, Inc . (NasdaqGM:TSCM) TheS treet.com Inc. Decl are s Quarterly D ividend, P ayable

on J une 30, 2009

TheS treet. com Inc . announced that its board of directors has decla red the company's quarterly cash dividend on its common stock. T he

cas h div idend of $0.025 per s ha re of common s tock will be payable J une 30, 2009, to a ll s hareholders of record a t the clos e of busines s on

June 15, 2009.

AOL, L LC ; IAC /InterActiveCorp.

(NasdaqGS : IACI)

IAC Might S how I nteres t In AOL It was recently reported that I AC/InterAc tiveCorp might be interested i n buy ing into AO L, LLC. I AC’ s chairman, B a rry D iller s a id the T ime

W arner online serv ice, which is openly for sa le, is a “tremendous ly va luable property’’. H e added, “Not the A OL dialup stuff, of cours e, but it

has done a wonderful job on the media s ide. I t has built up a ton of really good growing s ites . ” “Depending on how much the hang i s, we’d

definitely be i nteres ted in it, ’’ D iller s a id, referring to the cos t of the acquis ition.

S ites earch Corporation (OTCB B:S TPC) S ites ea rch C orp. R eports E arnings R es ults for the

Quarter E nded April 30, 2009

S ites ea rch C orporation reported ea rnings res ults for the quarter ended A pril 30, 2009. The company reported a net los s of $303,451. In

contrast, the company posted a net los s of $221, 450 for the same qua rter in the previous yea r.

Wizzard Software Corporation

(AMEX: WZE )

W izz ard S oftware C orporati on, Annual G eneral Meeting,

Jun 10, 2009

W izza rd S oftware C orporation, A nnual G eneral Meeting, J un 10, 2009, at 14:00 E as tern Day light. Location: Marriott C ourtyard, 5308 L iberty

Ave. , P itts burgh, P A 15224,United S tates . Agenda: T o elec t f ive directors to s erve unti l the nex t annual meeting of s tockholders, or until their

succes s ors a re duly elec ted and qualifi ed; to approve 2009 s tock option plan; to approve the is suance of unregistered and res tricted s tock to

cons ultants ; to ra tify the s elec tion by the B oard of Directors of G regory & As s ocia tes LLC as independent auditors of Wiz za rd for the fisca l

yea r ending December 31, 2009; and to trans act such other busines s as may properly come before the annual meeting and any and all

adjournments or postponements thereof.


(AMEX: WZE )

W izz ard S oftware Introduces New iP hone App and

Launches App Marketing V ia P odcas ts

W izza rd S oftware C orporation announced the acquis ition of a new iP hone App and the marketing launch of its recently acquired Apps via

podcas ts and the Internet. I t acquired the dis tribution rights to S uper Mastermind, a high quality App pois ed for sa les growth through the

company's podcas t mark eting and distribution network ta rgeti ng iP hone and iP od T ouch users . W iz zard has focus ed its recent acquis ition

efforts on Apps that cross a wide range of cons umer interests and match up well with targeted podcast audi ences . The company plans to

mark et the Apps i n targeted podcas ts. T he company believes the new price point for the iP hone wi ll c ause more people to s elect the

pla tform, increas ing audi ences for the podcas ts on the W iz za rd Media Network and adding potentia l cons umers for new Apps.

VOIS , Inc . (OTC BB :VOIS ) VO IS , Inc . has filed a S helf R egistration in the amount of

$1.75 million.

VO IS , Inc . has filed a S helf R egistration in the amount of $1.75 million.

IB 3 Networks , Inc. (OTCB B: IBNW);

iB eam Solutions L LC

iB 3 N etwork s R eceives C ontract F rom Lancaster

Community C hurch

IB 3 Network s I nc. and its wholly owned s ubsidiary iB eam S olutions LLC announced that it has been retained by Lancaster C ommunity

Church. The contrac t inc ludes complete des ign and ins ta lla tion of a new network to s upport the organiz ati on's growth. iB eam S olutions has

been hired by Lancas ter C ommunity Church to insta ll c abling, network s ervers and phones and als o inc ludes a contract for on going monthly

support for the next 12 months covering their I T needs going forward.

TheS treet.com, Inc . (NasdaqGM:TSCM) TheS treet.com, Inc ., $ 0. 025, Cas h Div idend, Jun-12-

2009

TheS treet. com, I nc ., $ 0.025, Cas h D ividend, Jun-12-2009

Gravity Co., L td (NasdaqGM: GRVY) G ravity Co. , Ltd, S pec ial/E x traordinary S hareholders

Meeting, J un 12, 2009

G ravity Co. , Ltd, S pecial/E xtraordinary S hareholders Meeting, Jun 12, 2009, at 01: 00 GMT T ime. Location: Nuritk um S quare B usines s T ower

15F, 1605 S angam-Dong, Mapo-Gu, S eoul 121-270,S outh K orea. Agenda : T o consider appointment of director and to consider approval of

amendment of Artic les of I ncorpora tion.

Figure 7. Key Developments Source. Capital IQ

VAL UAT IO N

Online Gaming companies lead market-cap charts: Eleven companies in our Web 2.0 universe top US$1 bill ion in market capital ization (Figure 8). Fifty-nine of the 92 companies have market caps under US$100 mill ion, with 26 under US$10 mil lion. Online gaming companies dominate the top of the l ist, led by Tencent Holdings with a market cap over US$18 bill ion.

Market C ap (USD m)

0.00.00.00.10.30.40.40.80.91.11.51.62.92.93.13.43.54.54.74.85.57.67.99.29.79.712.814.114.215.716.119.523.125.926.127.127.428.230.330.630.631.134.739.040.340.442.643.845.546.349.564.367.773.176.482.083.594.499.8100.3112.8115.6134.1138.7164.4184.9191.6245.7256.5263.0280.5298.8339.1341.0365.5

502.9546.6

721.7732.1

1048.01245.2

1397.11801.81858.91877.1

2123.62458.42522.0

3774.4

797.0

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

S ocial Media V enures , Inc.Dibz International, Inc .S NM Global HoldingsTota l S port Online A S

Financ ia l Media Group, Inc.Z ipLocal Inc.

China Gatew ay CorporationThe Parent Company

A s s oc iated Media Holdings Inc.Unis erve Communications Corp.

B igs tring Corp.Digita lPos t Interactive, Inc.

V OIS , Inc.B etaw ave Corporation

L iveWorld Inc.is eemedia Inc.

MOKO.mobi L imitedCornerWorld Corporation

Worlds .com Inc.B right Things plc

Magnitude Information S ys tems Inc.S NAP Interactive, Inc.

Quepas a Corp.Wynds torm Corporation

Acceleriz e New Media , Inc.S pectrumDNA , Inc.

L ingo Media CorporationUOMO Media , IncEx tens ions , Inc.

Jumbuck Enterta inment Pty L td.IA S Energy , Inc.

B roadWebAs ia Inc.LookSmart, L td.

Frogs ter Interactive Pic tures AGDXN Holdings Bhd

Y nk Korea Inc.Dolphin Digita l Media , Inc.S ites earch Corporation

S ocia lw is e, Inc.Grav ity Co. , L td

Northgate Technologies L imitedWiz z ard S oftw are Corporation

Fluid Mus ic Canada, Inc.NeXplore Corporation

Webzen Inc.Beyond Commerce, Inc.

AQ Interactive, Inc.Eolith Co. L td.Ngi G roup Inc.

S park Netw orks , Inc .GeoS entric Oy j

TheS treet.com, Inc.Digita lTow n, Inc.

JumpTV Inc.KAB Dis tribution Inc.

HanbitS oft, Inc .Moggle, Inc

Tree.Com, Inc.Cyberplex Inc.

Myriad Group AGGameOn Co Ltd.

Y edangOnline Corp.DADA S pA

OAO RBC Information S ys temsCDC Corp.

A ctoz S of t Co. , L td.Openw ave S ys tems Inc.

XING AGGamania Digital Enterta inment Co. , L td.

GungHo Online Entertainment, Inc.The9 L imited

GigaMedia Ltd.S hutterf ly , Inc .

NetDragon WebS oft, Inc .S K Communications Co. , L td.NEOWIZ Games Corporation

United Online Inc.Mix i, Inc .

K ings oft Co. L td.Chines e Gamer International

V alueClick Inc.Perfect World Co. , L td.

Gree, Inc.Modern Times G roup Mtg ABG iant Interactive Group, Inc.

Open Text Corp.Changyou.com L imitedIAC/InterA ctiveCorp.

S ohu.com Inc.S handa Interactive Enterta inment Ltd.

Neteas e.com Inc.Tencent Holdings Ltd.

Figure 8. Market Cap Ranking Source. Capital IQ

TEV/Revenue (LTM) averages 5.3x: The overall average TEV/Revenue (LTM) multiple for our group is 5.3x (versus 5.4x last week) (Figure 9). One company trades at more than 40x revenue – Gree, Inc. (TSE:3632) at 43.9x – closely followed

by with Dolphin Digital (OTCBB:DPDM) at 39.0x. The median is only 2.0x. Note that we exclude multiples greater than 50x. Twenty-eight companies have multiples under 1.9x.

TEV/LTM R evenue (x)

0.00.10.10.10.20.20.20.20.30.40.40.40.50.50.60.70.80.80.91.01.11.11.21.21.31.31.41.61.61.71.91.92.02.12.22.3

2.32.32.52.52.83.13.43.53.74.54.64.64.7

4.95.25.25.86.37.67.88.7

13.013.0

17.618.819.2

22.8

36.739.0

43.9

A verage, 5.3

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

OAO RBC Information Systems

China Gateway Corporation

Shanda Interactive Entertainment Ltd.

Perfect World Co., Ltd.

Uniserve Communications Corp.

LiveWorld Inc.

AQ Interactive, Inc.

The Parent Company

Northgate Technologies Limited

Tree.Com, Inc.

IAC/InterActiveCorp.

Openwave Systems Inc.

CDC Corp.

DXN Holdings Bhd

ZipLocal Inc.

GameOn Co Ltd.

Jumbuck Entertainment Pty Ltd.

DADA SpA

Spark Networks, Inc.

United Online Inc.

SNM Global Holdings

KAB Distribution Inc.

HanbitSoft, Inc.

GigaMedia Ltd.

Shutterfly, Inc.

Cyberplex Inc.

Modern Times Group Mtg AB

ValueClick Inc.

iseemedia Inc.

Actoz Soft Co., Ltd.

Gamania Digital Entertainment Co., Ltd.

SNAP Interactive, Inc.

SK Communications Co., Ltd.

MOKO.mobi Limited

GungHo Online Entertainment, Inc.

NetDragon WebSoft, Inc.

YedangOnline Corp.

Ynk Korea Inc.

Open Text Corp.

NEOWIZ Games Corporation

Myriad Group AG

Eolith Co. Ltd.

JumpTV Inc.

Accelerize New Media, Inc.

XING AG

DigitalPost Interactive, Inc.

CornerWorld Corporation

Total Sport Online AS

Sohu.com Inc.

Mixi, Inc.

Fluid Music Canada, Inc.

Kingsoft Co. Ltd.


Beyond Commerce, Inc.

Frogster Interactive Pictures AG

GeoSentric Oyj

Changyou.com Limited

Lingo Media Corporation

Chinese Gamer International

Bright Things plc

Tencent Holdings Ltd.

Associated Media Holdings Inc.

UOMO Media, Inc

Dolphin Digital Media, Inc.

Bigstring Corp.

Gree, Inc.

Figure 9. 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 10 shows the average TEV/Revenue multiples by stock exchange. The OTCBB has the largest number of companies (20), trading at an average multiple of 14.9x (below from 15.6x last week). On a geographic basis, the United States has the most companies (40), trading at an average of 6.1x revenue (versus 6.3x last week) (Figure 11). Ten of the companies are Canadian (average 5.2x revenue).

Average TEV/LTM Revenue - By Exchange

0.4 0.30.00.50.8

1.41.41.92.22.22.82.83.33.53.84.65.7

7.47.88.8

12.4

14.9

17.6

0.02.0

4.06.08.0

10.0

12.014.016.0

18.020.0

AIM

OT

CB

B

TS

E

SE

HK

HLS

E

GT

SM

XT

RA

OT

CN

O

TS

XV

OT

CP

K

AM

EX

SW

X

TS

X

OS

E

KO

SE

NasdaqG

S

AS

X

OM

CM

KLS

E

NasdaqG

M

BS

E

RT

S

1 20 5 3 1 2 2 1 4 10 2 1 4 1 7 14 2 1 1 1 5 1 1

(x)

# Companies

Average TEV/LTM Revenue - By Country

0.5 0.3 0.00.8 0.5

1.41.42.22.84.6

5.25.45.75.76.17.8

10.4

17.6

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

Unite

d

Japan

Fin

land

Unite

d

Chin

a

Germ

any

Taiw

an

Canada

Norw

ay

Sw

itzerland

South

Austr

alia

Sw

eden

Italy

Mala

ysia

Hong K

ong

India

Russia

1 6 1 40 10 2 3 10 1 1 9 2 1 1 1 1 1 1

(x)

# Companies

Figures 10 & 11. TEV/Revenue Ranking (Exchange, Country) Source. Capital IQ

TEV/EBITDA (LTM) averages 10.2x: The average multiple for the 34 companies with positive EBITDA (and multiples under 100x) is 10.2x LTM EBITDA (vs. 10.3 last week), led by Tencent Holding’s (700-SEHK) 39.2x multiple (Figure 12). Thirteen of the companies have EBITDA multiples under 7x. The median multiple is 9.6x (vs. 9.4x last week).

TEV/LTM EB ITDA (x)

0.2 0.22.0 3.0 3.6 3.9 4.0 4.3 4.7

5.8 5.8 6.67.8

8.9 9.0 9.4 9.5 9.7 9.8 10.4 10.7 11.2 11.9 12.4 12.9 12.9 13.5 13.9 14.3

22.123.3

30.8

39.2

A verage, 10.2

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

OAO RBC Information Systems



GameOn Co Ltd.

AQ Interactive, Inc.

DXN Holdings Bhd


DADA SpA

United Online Inc.

CDC Corp.




ValueClick Inc.



KAB Distribution Inc.

Shutterfly, Inc.

Open Text Corp.

YedangOnline Corp.

Sohu.com Inc.


XING AG

GungHo Online Entertainment, Inc.

Kingsoft Co. Ltd.

Cyberplex Inc.


Mixi, Inc.


Ynk Korea Inc.


SK Communications Co., Ltd.


Figure 12. TEV/EBITDA Ranking Source. Capital IQ

TEV/EBITDA (LTM) by country/exchange: Figure 13 shows the average TEV/EBITDA multiples by stock exchange. The OTCBB has the largest number of companies (20), trading at an average multiple of 6.6x (vs. 7.2x last week). On a geographic basis, the United States has the most companies (40), trading at an average of 7.9x EBITDA (Figure 14). Ten of the companies are Canadian (average 10.7x EBITDA).

Average TEV/LTM EBITDA - By Exchange

0.00.00.22.03.94.04.3

6.66.87.89.011.211.912.4

16.117.2

19.3

0.0

5.0

10.0

15.0

20.0

25.0

SE

HK

GT

SM

KO

SE

OS

E

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RA

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X

OM

NasdaqG

S

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B

CM

AM

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KLS

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RT

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SW

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NasdaqG

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3 2 7 1 2 4 1 14 5 20 1 2 1 2 1 1 5

(x)

# Companies

Average TEV/LTM EBITDA - By Country

2.00.0

0.2

3.94.3

5.87.98.29.0

10.711.911.9

16.1

17.2

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

Taiw

an

South

Kore

a

Germ

any

Chin

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Canada

Sw

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Japan

Unite

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Sta

tes

Hong K

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Italy

Mala

ysia

Austr

alia

Russia

Sw

itzerland

3 9 2 10 10 1 6 40 1 1 1 2 1 1

(x)

# Companies

Figures 13 & 14. TEV/EBITDA Ranking (Exchange, Country) Source. Capital IQ

P/E (LTM) averages 16.7x: The average multiple for the 30 companies with positive earnings (and multiples under 100x) is 16.7x LTM EPS (vs. 15.3x last week), led Tencent Holding’s (700-SEHK) 49.8x multiple (Figure 15). Eight of the companies have P/E multiples under 10x. The median is just 13.8x.

P/E LTM (x)

2.0 2.0 2.6 2.94.4 5.5 6.4

10.111.6 11.9 12.2 12.4 13.3 13.5 14.2 14.2 14.5

16.5

20.923.0 23.7

27.3 28.1 29.3 30.3 30.7 30.9

36.7

49.8

A verage, 16.7

0.0

10.0

20.0

30.0

40.0

50.0

60.0

Giant Interactive Group, Inc.

Perfect World Co., Ltd.

Netease.com Inc.


DXN Holdings Bhd



Cyberplex Inc.


GigaMedia Ltd.


YedangOnline Corp.

Ngi Group Inc.

GameOn Co Ltd.

Sohu.com Inc.



Kingsoft Co. Ltd.


DADA SpA

XING AG



Open Text Corp.


Worlds.com Inc.


Mixi, 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 (20), trading at an average multiple of 21.2x. On a geographic basis, the United States has the most companies (40), trading at an average of 19.4x earnings (Figure 17). Ten of the companies are Canadian (average 19.7x EPS).

Average P/E - By Exchange

0.02.0

4.45.56.4

10.111.014.2

21.221.223.0

23.623.726.2

29.1

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

GT

SM

SE

HK

XT

RA

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B

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NasdaqG

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KLS

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NY

SE

SW

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2 3 2 7 1 5 20 2 14 4 2 1 1 1 1

(x)

# Companies

Average P/E - By Country

0.0

4.45.5

6.4

11.8

19.419.7

21.223.023.423.6

23.7

0.0

5.0

10.0

15.0

20.0

25.0

Germ

any

South

Kore

a

Taiw

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Italy

Japan

Canada

Unite

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Sta

tes

Chin

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Austr

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Sw

eden

Mala

ysia

Sw

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2 9 3 1 6 10 40 10 2 1 1 1

(x)

# Companies

Figures 16 & 17. P/E Ranking (Exchange, Country) Source. Capital IQ

Comparable Company Analys is > Web 2 .0

P rice Performance

C ompany Name Cur rency Tic ker Exchange USD Market C ap ($m) Current Pric e 1 Wk 1 Mth 3 Mth 6 Mth 1 Yr 52 Week

Acce le rize New Media, Inc. USD ACL Z OTC BB 9 .7 0.3 5 0.0% -30. 0% 59 .1% -12.5% -53 .3% -53. 3%

Actoz S of t C o., L td. KR W A052790 KO S E 184.9 27,250.0 0 -16. 2% 93.3% 150.0% 167.2% 249. 8% -24. 3%

AQ Inte ractive , Inc. J PY 3838 T S E 42.6 76,800.0 0 2.4% 40.1% 126.5% 155.1% -48 .5% -56. 1%As socia ted Media Holdings Inc. USD A SMH OTC PK 0 .9 0.0 2 1233 .3% 1233. 3% 1328.6% 566.7% NM -60. 0%

B igstring Corp. USD B SGC OTC BB 1 .5 0.0 3 7.4% 26.1% 93 .3% 45 .0% -78 .5% -85. 5%

Be tawave Corpora tion USD B W AV OTC BB 2 .9 0.1 0 66.7% -9.1% -44.4% -37.5% -73 .7% -76. 2%

Beyond Commerce, Inc. USD B YOC OTC BB 40.4 0.9 1 -4.2% -26. 6% 78 .4% 30 .0% -71 .1% -72. 4%Bright T hings plc GBP A IM:B GT AI M 4 .8 0.0 2 -6.3% -15. 7% -2 .0% 56 .3% -29 .4% -40. 0%

Broa dWebAs ia Inc. USD B W BA OTC PK 19.5 0.2 3 -22. 8% -22. 8% -54.9% -77.2% -84 .7% -92. 1%

C DC C orp. USD CH IN .A Nasda qGS 164.4 1.5 5 4.0% 21.1% 59 .8% 44 .9% -41 .5% -51. 1%

C ha ngyou. com Limited USD C YOU Nasda qGS 2,1 23. 6 38.6 1 -0.2% 30.0% NM NM NM -13. 9%C hina Gatewa y C orpora tion USD CGWY OTC PK 0 .4 0.0 2 900. 0% 900.0% 1900.0% 900.0% 33.3% -42. 9%

C hine se G amer International TW D G TS M:3083 GT SM 797.0 312.0 0 -14. 8% 13.7% 101.3% 255.8% 205. 9% -20. 6%

C ornerW orld C orporation USD CW R L OTC BB 4 .5 0.0 7 -22. 2% -30. 0% -50.0% -85.1% -76 .7% -91. 1%

C yberplex Inc. C AD T S X:CX T S X 99.8 1.8 0 20.0% 2.9% 260.0% 400.0% 140. 0% -9.5%

DADA S pA EUR CM:DA CM 134.1 6.0 0 5.3% 3.7% 28 .8% -11.7% -55 .2% -56. 2%DXN Holdings B hd MYR DXN KL S E 26.1 0.4 0 2.6% 0.0% 42 .9% 5 .3% 0.0% -14. 9%

Dibz Inte rnational, Inc. USD DIBZ OTC PK 0 .0 0.0 0 -90. 0% -90. 0% -90.0% -98.0% -98 .0% -98. 0%

DigitalPost Inte ra ctive , Inc. USD DGLP OTC BB 1 .6 0.0 2 37.5% 46.7% 450.0% -12.0% -83 .1% -87. 1%

DigitalT own, Inc. USD DGTW OTC BB 67.7 2.5 0 25.0% 0.0% 0 .0% 0 .0% -28 .6% -59. 0%Dolphin Digital Media, Inc. USD DPDM OTC BB 27.4 0.5 3 -11. 7% -24. 3% 8 .2% -32.9% NM -53. 1%

E olith C o. L td. KR W A041060 KO S E 43.8 760.0 0 8.6% -20. 0% 36 .9% 15 .2% -11 .1% -34. 5%

E xtens ions , Inc. USD E XT I OT C PK 14.2 0.1 5 -25. 0% -25. 0% 185.7% 50 .0% 0.0% -85. 1%

F inancia l Media G roup, Inc. USD FNGP OTC BB 0 .3 0.0 0 42.9% 0.0% -71.4% -93.3% -99 .6% -99. 6%F luid Mus ic Ca nada, Inc. C AD T S X:FMN T S X 34.7 0.7 5 7.1% 7.1% 87 .5% 200.0% -60 .5% -63. 2%

F rogste r Interactive P icture s AG EUR F R G XT R A 25.9 7.9 8 1.8% -5.6% 73 .9% 74 .2% 46.4% -19. 4%

Gama nia Digital E ntertainment C o., L td. TW D 6180 GT SM 256.5 55.6 0 -0.4% 42.2% 81 .1% 270.7% 75.9% -11. 3%

GameOn C o L td. J PY 3812 T S E 112.8 114,300.0 0 -2.1% 21.9% 41 .6% -3.8% -11 .4% -30. 1%GeoS entr ic O yj E UR G EO1V HLS E 49.5 0.0 4 -20. 0% -20. 0% 33 .3% 0 .0% -33 .3% -42. 9%

G iant Intera ctive G roup, Inc. USD G A NYS E 1,8 58. 9 8.2 4 -8.7% 0.0% 11 .4% 38 .0% -39 .0% -41. 8%

G igaMedia Ltd. USD G IGM Nasda qGS 298.8 5.5 3 -10. 2% -6.9% -3 .3% -14.7% -62 .4% -65. 0%

G ravity C o., L td USD G RV Y Nasda qGM 30.6 1.1 0 -4.3% 12.2% 74 .6% 115.7% -14 .1% -44. 7%G ree, Inc. J PY T S E :3632 T S E 1,3 97. 1 6,130.0 0 -4.7% 11.9% 23 .6% 27 .7% NM -5.8%

GungHo O nline E ntertainment, Inc. J PY 3765 OS E 263.0 225,000.0 0 -9.9% 26.4% 102.5% 130.3% -16 .7% -19. 9%

HanbitS oft, Inc. KR W A047080 KO S E 82.0 4,720.0 0 -1.5% -15. 0% 42 .2% 31 .8% 33.7% -28. 9%

IAC /InterActiveC orp. USD I ACI Nasda qGS 2,4 58. 4 16.2 9 0.5% 9.0% 8 .8% 0 .1% -60 .4% -67. 7%IAS E nergy, Inc. USD I AS C .A OTC BB 16.1 0.2 3 15.0% -17. 9% 228.6% 666.7% 4.5% -34. 3%

is eemedia Inc. C AD I E E T S XV 3 .4 0.0 8 7.1% -21. 1% -6 .3% 66 .7% -58 .3% -78. 6%

J umbuck E ntertainment P ty Ltd. AUD A S X:JMB AS X 15.7 0.4 0 -4.8% -2.4% -12.1% 2 .6% -34 .4% -35. 5%

J umpT V Inc. C AD T S X:J T V T S X 73.1 0.7 3 -1.4% -6.4% 82 .5% 135.5% 12.3% -43. 0%KA B Dis tribution Inc. C AD T S X:KAB T S X 76.4 0.6 2 1.6% 3.3% 65 .3% 143.1% -31 .1% -37. 4%

K ingsoft Co. Ltd. HKD 3888 S E HK 732.1 5.2 3 -4.7% 11.3% 94 .4% 105.1% 34.1% -12. 4%

Lingo Media Corporation C AD T S XV :LM T S XV 12.8 1.1 3 13.0% 22.8% 25 .6% 7 .6% -42 .6% -42. 6%

LiveWorld Inc. USD L VWD OTC PK 3 .1 0.1 0 -60. 0% 42.9% -50.0% 100.0% -50 .0% -68. 8%LookSmart, Ltd. USD L OOK Nasda qGM 23.1 1.3 5 1.5% 3.8% 31 .1% -11.8% -66 .0% -68. 2%

Magnitude Information S ys tems Inc. USD MAGY OTC BB 5 .5 0.0 1 20.0% 20.0% -33.3% -36.8% -45 .5% -60. 0%

Mixi, Inc. J PY 2121 T S E 721.7 460,000.0 0 1.1% 8.2% 41 .5% -21.0% -38 .9% -50. 1%

Mode rn Times G roup Mtg AB S E K MTG B OM 1,801. 8 216.0 0 1.6% -5.1% 69 .7% 36 .7% -43 .0% -47. 1%Moggle , Inc USD MMOG OTC BB 83.5 2.3 0 15.0% 15.0% 53 .3% NM NM 0.0%

MOKO.mobi L imited AUD MKB AS X 3 .5 0.0 5 -22. 7% -32. 0% -15.0% 2 .0% -7. 3% -49. 0%

Myriad G roup AG CHF MYR N SW X 100.3 5.1 5 3.0% 3.0% 35 .5% -14.2% -49 .8% -49. 8%

NEOW IZ Games C orpora tion KR W A095660 KO S E 502.9 65,900.0 0 -7.8% 5.1% 70 .7% 236.2% 119. 7% -21. 5%NetDragon W ebS oft, Inc. HKD 777 S E HK 341.0 5.0 0 -5.8% -15. 8% 46 .2% 77 .9% -51 .5% -52. 8%

Nete ase.com I nc. USD NT E S Nasda qGS 4,3 11. 8 35.0 4 -6.5% 15.1% 50 .1% 62 .5% 59.7% -9.6%

NeXplore Corpora tion USD NXPC OTC PK 39.0 0.7 0 0.0% 0.0% 0 .0% -33.3% -22 .2% -51. 7%

Ngi G roup Inc. J PY 2497 T S E 45.5 36,100.0 0 12.8% 17.8% 104.0% -28.9% -70 .9% -72. 9%

Northgate Te chnologies L imited INR 590057 BS E 30.6 42.0 5 -22. 4% -13. 9% 24 .0% -28.2% -88 .6% -89. 0%Open T ext Corp. USD O TE X Nasda qGS 1,8 77. 1 35.6 7 3.8% 14.6% 13 .9% 23 .8% 11.0% -8.7%

Openwave S ys tems Inc. USD O PWV Nasda qGS 191.6 2.3 0 21.7% 91.7% 164.4% 265.1% 37.7% -5.3%

Pe rfect W orld C o. , Ltd. USD P W RD Nasda qGS 1,2 45. 2 24.3 5 7.6% 35.1% 91 .7% 51 .7% -1. 7% -13. 3%

Quepa sa C orp. USD Q PSA Nasda qCM 7 .9 0.6 2 -11. 4% -38. 0% -46.1% -65.6% -74 .1% -82. 1%OAO RB C Information S ys tems USD R BC I R T S 138.7 1.0 0 -25. 9% -20. 0% 334.8% 66 .7% -88 .9% -89. 0%

S handa Interactive E ntertainment L td. USD S NDA Nasda qGS 3,7 74. 4 54.4 0 -11. 7% 12.2% 48 .9% 81 .5% 89.5% -16. 3%

S hutte rf ly, Inc. USD S F LY Nasda qGS 339.1 13.4 7 0.1% -2.1% 52 .9% 85 .8% -4. 8% -11. 7%

S K C ommunications Co., Ltd. KR W A066270 KO S E 365.5 11,000.0 0 0.0% 15.3% 42 .5% 91 .0% -34 .5% -44. 2%SNAP Inte ra ctive , Inc. USD S T V I OT C BB 7 .6 0.7 0 -11. 4% -6.7% -33.3% 0 .0% 1.4% -35. 2%

SNM G lobal Holdings USD S NMN OTC PK 0 .0 0.0 0 -25. 0% -50. 0% 50 .0% -95.7% -99 .9% -99. 9%

S ocia l Media Venures , Inc. USD S MVI OT C PK 0 .0 0.0 1 0.0% 0.0% -99.2% -99.1% NM -99. 8%

S ocia lwis e, Inc. USD S CLW OTC BB 30.3 0.7 0 -1.4% -20. 5% 84 .2% -28.6% -51 .7% -75. 3%S ohu. com Inc. USD S OHU Nasda qGS 2,5 22. 0 65.9 1 -1.5% 25.4% 36 .3% 44 .9% -8. 3% -25. 1%

S ite s earch C orporation USD S T PC OTC BB 28.2 3.5 0 -30. 0% NM NM NM NM -30. 0%

S park Networks , Inc. USD L OV AMEX 46.3 2.2 5 -2.6% -10. 7% -4 .3% -13.1% -47 .1% -49. 6%

S pectrumDNA, Inc. USD S PXA OTC BB 9 .7 0.2 0 -46. 0% -41. 2% 11 .1% -4.8% NM -66. 7%T encent Holdings L td. HKD 700 S E HK 20, 758 .8 89.2 0 -0.4% 12.1% 69 .1% 72 .2% 41.8% -3.6%

T he Parent C ompany USD K IDS .Q OTC PK 0 .8 0.0 3 68.4% 156.0% 966.7% -89.3% -98 .4% -98. 8%

T he9 L imited USD NC TY Nasda qGS 280.5 10.4 6 -5.9% 13.0% -18.0% -17.0% -52 .6% -63. 3%

T heS treet.com, Inc. USD T S CM Nasda qGM 64.3 2.1 0 8.2% 13.5% 6 .6% -36.6% -70 .0% -71. 4%T otal S port Online A S NOK TOS O OTC NO 0 .1 0.0 3 0.0% 0.0% -25.0% -40.0% -70 .0% -70. 0%

T ree.C om, Inc. USD T R E E Nasda qGM 94.4 8.7 4 -26. 5% -25. 7% 91 .7% 308.4% NM -33. 1%

Unis erve C ommunications Corp. C AD T S XV :US S T S XV 1 .1 0.0 5 0.0% 25.0% 0 .0% 25 .0% -84 .8% -85. 7%

United Online Inc. USD UNTD Nasda qGS 546.6 6.5 4 -5.6% -1.2% 63 .1% 13 .9% -40 .5% -46. 6%UOMO Media , Inc USD UOMO OTC BB 14.1 0.1 7 -8.3% -52. 9% 135.7% 26 .9% -52 .9% -84. 4%

Va lueC lick Inc. USD V CL K Nasda qGS 1,0 48. 0 12.0 5 3.7% 19.5% 75 .1% 63 .1% -29 .3% -33. 2%

VO IS , Inc. USD V OIS OTC BB 2 .9 0.3 5 0.0% -61. 1% -12.5% 16 .7% -92 .6% -93. 8%

W ebzen Inc. USD W ZEN Nasda qGM 40.3 3.4 0 -15. 3% 9.3% 80 .9% 314.6% -0. 6% -27. 3%W izza rd S of twa re Corpora tion USD W ZE AMEX 31.1 0.6 5 -3.0% 0.0% 71 .1% -34.3% -63 .5% -68. 0%

W orlds .com Inc. USD WDDD OTC BB 4 .7 0.0 9 -10. 0% -47. 1% -50.0% -55.0% -70 .5% -77. 5%

W ynds torm C orporation USD W YND OTC BB 9 .2 0.5 1 1600 .0% 200.0% 325.0% 325.0% -15 .0% -40. 0%

XING AG EUR O 1BC XT R A 245.7 33.8 0 8.3% 10.8% 16 .0% 40 .5% -4. 5% -7.9%YedangOnline Corp. KR W A052770 KO S E 115.6 9,290.0 0 -3.9% 2.1% 34 .4% 30 .8% -16 .3% -25. 1%

Ynk Korea Inc. KR W A023770 KO S E 27.1 6,400.0 0 -8.6% -17. 9% 82 .9% 8 .8% -53 .1% -55. 2%

ZipLocal Inc. C AD T S XV :ZIP T S XV 0 .4 0.0 1 0.0% 0.0% 0 .0% -50.0% -96 .4% -96. 9%

H igh 1600 .0% 1233. 3% 1900.0% 900.0% 249. 8% 0.0%

Low -90. 0% -90. 0% -99.2% -99.1% -99 .9% -99. 9%

Average 581.4 38.2% 27.6% 97.1% 66.3% -24.8% -50.3%

Median -0.4% 2.1% 42 .7% 25 .0% -40 .5% -49. 7%

Figure 18. Price Performance Source. Capital IQ

Comparable C ompany Analys is > Web 2.0V aluation Multiples

C ompany Name Sector Country

Primary

E xchange Ticker

USD Market

Cap ($m)

TEV/LTM

R evenue

TEV/ NTM

R evenue

TEV/LTM

E BITDA

TE V/NTM

E BITDA P/LTM EPS P/NTM EPS P/TangBV

Acce le rize New Media, Inc. D irect Marketing Unite d S tates OT C BB AC LZ 9. 7 3.5 x - - - - - -

Actoz S of t C o., L td. Gaming S outh Kore a KOS E A052790 184. 9 1.7 x - 7.8 x - 28 .1x - 3 .2x

AQ Inte ractive , Inc. Gaming J a pan T S E 3838 42. 6 0.2 x - 3.6 x - - - 0 .7xAs socia ted Media Holdings Inc. Mobile Unite d S tates OT C PK ASMH 0. 9 19.2 x - - - - - -

B igstring Corp. Ins ta nt Mes s aging Unite d S tates OT C BB BSG C 1. 5 39.0 x - - - - - -

Be tawave Corpora tion Media Unite d S tates OT C BB B WAV 2. 9 - - - - - - 0 .4x

Be yond Commerce, Inc. S ocia l Ne tworking Unite d S tates OT C BB BYO C 40. 4 6.3 x - - - - - -B r ight T hings plc S ocia l Ne tworking Unite d K ingdom AIM AIM:BGT 4. 8 17.6 x - - - - - -

B roa dW ebAs ia Inc. S ocia l Ne tworking Unite d S tates OT C PK B WB A 19. 5 - - - - - - -

C DC C orp. Gaming Hong K ong Nasda qGS C HIN .A 164. 4 0.5 x 0.5x 5.8 x 6.2x - 1 1.2 x -

C ha ngyou. com Limited Gaming C hina Nasda qGS CY OU 2,1 23. 6 8.7 x 6.7x 14.3 x - 14 .5x 1 3.9 x 1 3.2xC hina Gatewa y C orpora tion Mobile Unite d S tates OT C PK CGWY 0. 4 0.1 x - - - - - -

C hine se Gamer International Gaming T a iwan GT SM GT SM:3083 797. 0 13.0 x - 23.3 x - 30 .9x - 1 1.6x

C ornerW orld C orporation C ontent Unite d S tates OT C BB CWR L 4. 5 4.6 x - - - - - -

C yberplex Inc. Advertis ing C anada T S X T SX:C X 99. 8 1.3 x 1.0x 12.9 x 8.5x 10 .1x 1 1.8 x 1 0.0x

DADA S pA S ocia l Ne tworking Italy CM CM:DA 134. 1 0.8 x - 4.3 x - 23 .0x - -DXN Holdings B hd S ocia l Ne tworking Malays ia KL S E DXN 26. 1 0.5 x - 3.9 x - 4. 4x - 0 .5x

Dibz Inte rnational, Inc. S NS A pps Unite d S tates OT C PK DIBZ 0. 0 - - - - - - -

D igitalPost Inte ra ctive , Inc. C ontent Unite d S tates OT C BB DGL P 1. 6 4.5 x - - - - - -

D igitalT own, Inc. S ocia l Ne tworking Unite d S tates OT C BB DGTW 67. 7 - - - - - - -Dolphin Digital Media, Inc. S ocia l Ne tworking Unite d S tates OT C BB DP DM 27. 4 36.7 x - - - - - -

E olith C o. L td. Gaming S outh Kore a KOS E A041060 43. 8 3.1 x - - - - - 4 .2x

E xte ns ions , Inc. C ontent Unite d S tates OT C PK E XT I 14. 2 - - - - - - -

F inancia l Media G roup, Inc. D irect Marketing Unite d S tates OT C BB FNGP 0. 3 - - - - - - -F luid Mus ic Ca nada, Inc. Media Unite d S tates T S X T S X:FMN 34. 7 5.2 x 4.3x - - - - 3 .5x

F rogs te r Interactive P icture s AG Gaming G ermany XT RA F RG 25. 9 7.6 x - - - - - 3 .9x

Gama nia D igital E ntertainment C o. , L td. Gaming T a iwan GT SM 6180 256. 5 1.9 x - 11.2 x - 27 .3x - 3 .3x

GameOn C o L td. Gaming J a pan T S E 3812 112. 8 0.7 x - 3.0 x - 13 .5x - 1 .5xGeoS entr ic O yj Mobile F inland HLSE GEO1V 49. 5 7.8 x - - - - - 8 .6x

G iant Intera ctive G roup, Inc. Gaming C hina NYS E G A 1,8 58. 9 - - - - 2. 0x 1 3.7 x 0 .4x

G igaMedia Ltd. Gaming T a iwan Nasda qGS GIGM 298. 8 1.2 x 1.2x - 5.7x 11 .9x 1 1.1 x 2 .6x

G ravity C o. , L td Gaming S outh Kore a Nasda qGM GR VY 30. 6 - - - - - - -G ree, Inc. S ocia l Ne tworking J a pan T S E T S E :3 632 1,3 97. 1 43.9 x - - - - - 1 7.8x

GungHo O nline E ntertainment, Inc. Media J a pan OS E 3765 263. 0 2.2 x - 12.4 x - - - 3 8.2x

HanbitS of t, Inc. Gaming S outh Kore a KOS E A047080 82. 0 1.2 x - - - - - 2 .5x

IAC /InterActiveC orp. Media Unite d S tates Nasda qGS IAC I 2,4 58. 4 0.4 x - 13.5 x 3.7x 20 .9x 3 2.0 x 1 .1xIAS E nergy, Inc. V ideo C anada OT C BB IA S C .A 16. 1 - - - - - - -

iseemedia Inc. C ontent C anada T S XV IE E 3. 4 1.6 x - - - - - 2 .9x

J umbuck E ntertainment P ty Ltd. S ocia l Ne tworking A us tralia AS X AS X:JMB 15. 7 0.8 x - 2.0 x - 6. 4x - 1 .6x

J umpT V Inc. V ideo C anada T S X TS X:J T V 73. 1 3.4 x - - - - - 4 .3xKA B Dis tribution Inc. C ontent C anada T S X TS X:KAB 76. 4 1.1 x 1.1x 9.5 x 5.8x - - -

K ingsoft Co. Ltd. Gaming C hina S EHK 3888 732. 1 5.2 x - 12.9 x - 16 .5x - 4 .0x

Lingo Media Corporation Le arning C anada T S XV TS XV :LM 12. 8 13.0 x - - - - - 1 3.2x

LiveWorld Inc. S ocia l Ne tworking Unite d S tates OT C PK LVWD 3. 1 0.2 x - - - - - 1 .3xLookSmart, Ltd. D irect Marketing Unite d S tates Nasda qGM LOOK 23. 1 - - - - - - 0 .9x

Magnitude Information S ys tems Inc. S ocia l Ne tworking Unite d S tates OT C BB MAGY 5. 5 - - - - - - -

Mixi, Inc. S ocia l Ne tworking J a pan T S E 2121 721. 7 4.9 x - 13.9 x - 36 .7x - 5 .5x

Mode rn Times G roup Mtg AB Media S weden OM MTG B 1,8 01. 8 1.4 x 1.3x 9.0 x 1 0.5 x 5. 5x 1 2.5 x -Moggle , Inc Gaming Unite d S tates OT C BB MMO G 83. 5 - - - - - - -

MOKO.mobi L imited S ocia l Ne tworking A us tralia AS X MKB 3. 5 2.1 x - - - - - 2 .6x

Myriad G roup AG Mobile S witzerland SWX MYR N 100. 3 2.8 x - - - - - 4 .6x

NEOW IZ Games C orpora tion Gaming S outh Kore a KOS E A095660 502. 9 2.5 x - 9.4 x - 30 .3x - 1 5.3xNetDragon W ebS oft , Inc. Gaming C hina S EHK 777 341. 0 2.3 x - 5.8 x - 12 .2x - 1 .8x

Nete ase.com I nc. Gaming C hina Nasda qGS NT E S 4,3 11. 8 - - - - 2. 6x 1 5.9 x 0 .8x

NeXplore Corpora tion C ontent Unite d S tates OT C PK NXPC 39. 0 - - - - - - -

Ngi G roup Inc. Media J a pan T S E 2497 45. 5 - - - - 13 .3x - 0 .7x

Northgate Te chnologies L imited Direct Marketing India BS E 590057 30. 6 0.3 x - - - - - -Open T e xt Corp. C ollaboration C anada Nasda qGS O TE X 1,8 77. 1 2.5 x 2.3x 9.8 x 8.5x 29 .3x 1 3.6 x -

Openwave S ys tems Inc. Mobile Unite d S tates Nasda qGS OPWV 191. 6 0.4 x 0.5x - 5.2x - 3 6.5 x 2 .8x

Pe rf ect W orld C o., Ltd. Gaming C hina Nasda qGS PWR D 1,2 45. 2 0.1 x 0.6x 0.2 x 1.2x 2. 0x 1 0.9 x 0 .8x

Quepa s a C orp. S ocia l Ne tworking Unite d S tates Nasda qCM QP SA 7. 9 - - - - - - -OAO RB C Information S ys tems Media R us s ia R TS R BCI 1 38. 7 0.0 x - 0.2 x - - - -

S handa Interactive E ntertainment L td. Gaming C hina Nasda qGS SNDA 3,7 74. 4 0.1 x 0.5x 0.2 x 1.3x 2. 9x 1 5.2 x 1 .2x

S hutte rf ly, Inc. D igital Imaging Unite d S tates Nasda qGS S FL Y 339. 1 1.3 x - 9.7 x 7.4x - - 2 .0x

S K C ommunications Co., Ltd. S earch S outh Kore a KOS E A066270 365. 5 2.0 x - 30.8 x - - - -S NAP Inte ra ctive , Inc. Dating Unite d S tates OT C BB S TV I 7. 6 1.9 x - 6.6 x - 11 .6x - 4 .5x

S NM Global Holdings Media Unite d S tates OT C PK SNMN 0. 0 1.1 x - - - - - -

S ocia l Media Venures , Inc. S ocia l Ne tworking Unite d S tates OT C PK SMV I 0. 0 0.0 x - - - - - -

S ocia lwis e, Inc. S ocia l Ne tworking Unite d S tates OT C BB S CLW 30. 3 - - - - - - 3 9.5xS ohu. com Inc. Gaming C hina Nasda qGS SOHU 2,5 22. 0 4.7 x 4.1x 10.7 x 9.3x 14 .2x 1 8.2 x 6 .8x

S ite search C orporation S ocia l Ne tworking Unite d S tates OT C BB ST PC 28. 2 - - - - - - 6 0.4x

S park Networks , Inc. S ocia l Ne tworking Unite d S tates AMEX L OV 46. 3 0.9 x - 4.0 x - 14 .2x - -

S pectrumDNA, Inc. Media Unite d S tates OT C BB SPXA 9. 7 - - - - - - 2 5.5xT encent Holdings L td. Porta l C hina S E HK 700 20,7 58. 8 18.8 x - 39.2 x - 49 .8x - 2 0.8x

T he Parent C ompany Media Unite d S tates OT C PK K IDS .Q 0. 8 0.2 x - - - - - -

T he 9 L imited Gaming C hina Nasda qGS NC T Y 280. 5 - - - - 0. 8x 1 1.4 x 0 .1x

T he S treet.com, Inc. Media Unite d S tates Nasda qGM T S CM 64. 3 - - - - - - 0 .8xT otal S port Online A S Media Norway OT C NO TOSO 0. 1 4.6 x - - - - - -

T ree.C om, Inc. Porta l Unite d S tates Nasda qGM TR E E 94. 4 0.4 x 0.4x - 4.5x - - 1 .2x

Unis erve C ommunications Corp. S ocia l Ne tworking C anada T S XV T S XV :US S 1. 1 0.2 x - - - - - -

United Online Inc. Media Unite d S tates Nasda qGS UNTD 546. 6 1.0 x 0.8x 4.7 x 3.4x - 8.1x -UOMO Media , Inc Media C anada OT C BB UOMO 14. 1 22.8 x - - - - - -

Va lueC lick Inc. Media Unite d S tates Nasda qGS VC LK 1,0 48. 0 1.6 x 1.7x 8.9 x 6.9x - 1 9.1 x 8 .5x

VO IS , Inc. S ocia l Ne tworking Unite d S tates OT C BB VOIS 2. 9 - - - - - - 1 0.1x

W ebzen Inc. Gaming S outh Kore a Nasda qGM WZEN 40. 3 - - - - - - 0 .0xW izza rd S of twa re Corpora tion Podcas ting Unite d S tates AMEX WZE 31. 1 5.8 x - - - - - -

W orlds .com Inc. C ontent Unite d S tates OT C BB WDDD 4. 7 - - - - 30 .7x - -

W yndstorm C orporation C ontent Unite d S tates OT C BB WYND 9. 2 - - - - - - -

XING AG S ocia l Ne tworking G ermany XT RA O 1BC 2 45. 7 3.7 x - 11.9 x - 23 .7x - 7 .9xYedangOnline Corp. Gaming S outh Kore a KOS E A052770 115. 6 2.3 x - 10.4 x - 12 .4x - 4 .3x

Ynk Korea Inc. Gaming S outh Kore a KOS E A023770 27. 1 2.3 x - 22.1 x - - - 1 .4x

ZipLocal Inc. D irectory C anada T S XV T S XV :ZIP 0. 4 0.6 x - - - - - -

H igh 20,7 58. 8 43.9 x 6.7x 39.2 x 1 0.5 x 49 .8x 3 6.5 x 6 0.4x

Low 0. 0 0.0 x 0.4x 0.2 x 1.2x 0. 8x 8.1x 0 .0x

Average 581.4 5.3x 1.8x 10.2x 5.9x 16.7x 15.9x 7.4x

Median 41. 5 2.0 x 1.1x 9.4 x 5.8x 13 .8x 1 3.6 x 3 .2x

Figure 19. Valuation Comparison Source. Capital IQ


Summary by Country

C ompany Name USD Market Cap ($m) Avg USD Market C ap ($m) USD LTM Total R ev ($m) USD LTM Total E B ITDA ($m) EB ITDA %

United S tates 40 C hina 37, 948.2 China 3,794. 8 C hina 3, 837. 6 C hina 1,773. 2 C hina 47. 9%

C anada 10 United S tates 5, 300.8 S weden 1,801. 8 United S ta tes 3, 795. 5 S weden 261. 0 Aus tra l ia 37. 2%

C hina 10 J apan 2, 582.7 Ta iwan 450. 8 S weden 1, 704. 0 United S ta tes 244. 5 T aiwan 36. 3%

S outh K orea 9 C anada 2, 174.3 Japan 430. 5 C anada 973. 5 C anada 193. 5 G ermany 31. 2%

J apan 6 S weden 1, 801.8 Canada 217. 4 S outh K orea 667. 0 J apan 125. 9 J apan 25. 0%

T a iwan 3 S outh K orea 1, 392.7 Hong K ong 164. 4 J apan 496. 7 S outh K orea 86. 7 I ta ly 18. 6%

A ustra lia 2 T a iwan 1, 352.3 S outh K orea 154. 7 Hong K ong 389. 9 T a iwan 52. 3 S weden 15. 3%

Germany 2 Germany 271.5 Rus sia 138. 7 T aiwan 365. 6 I ta ly 43. 0 Ma lays ia 13. 7%

S witz erland 1 Hong K ong 164.4 G ermany 135. 8 I ta ly 231. 6 Hong K ong 30. 8 R uss ia 13. 1%

Hong K ong 1 R uss ia 138.7 Ita ly 134. 1 R uss ia 151. 4 R uss ia 19. 8 Hong K ong 7.9%

F inland 1 I ta ly 134.1 United S tates 132. 5 India 117. 0 Malays ia 10. 8 S outh K orea 6.1%

I ta ly 1 S witz erland 100.3 S witzerland 100. 3 Ma lays ia 78. 4 G ermany 10. 3 S witz erland 1.9%

United K ingdom 1 F inland 49.5 Finland 49. 5 G ermany 55. 4 Aus tra lia 2. 9 United S ta tes -10.1%

India 1 India 30.6 India 30. 6 S witz erland 40. 0 S witz erland 0. 8 India -23.5%

S weden 1 Malays ia 26.1 Malay sia 26. 1 Aus tra l ia 15. 4 Norway -1. 0 C anada -25.0%

R us sia 1 Aus tra lia 19.2 Austra lia 9. 6 F inland 5. 8 United K ingdom -1. 8 Norway -50.6%

Malays ia 1 United K ingdom 4.8 United K ingdom 4. 8 Norway 2. 1 F inland -15. 1 United K ingdom #DIV /0!

Norway 1 Norway 0.1 Norway 0. 1 United K ingdom 0. 3 India -27. 5 F inland #DIV /0!

Grand Total 92 Grand Total 53,492.4 Grand Total 581.4 Grand Total 12,927.2 Grand Total 2,810.1 Grand Total 7.1%

Figure 20. Comparison by Country Source. Capital IQ


Summary by Exchange

C ompany Name USD Market Cap ($m) Avg USD Market C ap ($m) USD LTM Total R ev ($m) USD LTM Total E B ITDA ($m) EB ITDA %

OT C BB 20 S E HK 21, 831.9 S E HK 7,277. 3 OM 1, 704. 0 NasdaqGS 1,692. 2 S E HK 42. 6%

Nas daqGS 14 NasdaqGS 21, 181.4 NY S E 1,858. 9 NasdaqGS 484. 1 S E HK 662. 6 AS X 37. 2%

OT C PK 10 T S E 2, 319.7 OM 1,801. 8 S E HK 472. 9 OM 261. 0 G T SM 36. 3%

K OS E 7 NYS E 1, 858.9 Nas daqGS 1,513. 0 C M 231. 6 T S E 107. 0 XT R A 31. 2%

T S E 5 OM 1, 801.8 G TS M 526. 8 NY S E 218. 8 K OS E 79. 7 NasdaqGS 30. 1%

Nas daqGM 5 KOS E 1, 321.8 TS E 463. 9 R TS 151. 4 G T S M 52. 3 T S E 26. 4%

T S X 4 GT S M 1, 053.5 OS E 263. 0 B S E 117. 0 C M 43. 0 C M 18. 6%

T S XV 4 OT CB B 368.0 KOS E 188. 8 OS E 105. 2 R TS 19. 8 OS E 18. 0%

S E HK 3 T S X 284.0 R T S 138. 7 G T S M 91. 0 OS E 18. 9 OM 15. 3%

AME X 2 XT R A 271.5 XT R A 135. 8 K OS E 86. 5 K LS E 10. 8 K LS E 13. 7%

A S X 2 OS E 263.0 CM 134. 1 NasdaqGM 81. 0 XTR A 10. 3 R TS 13. 1%

XT R A 2 NasdaqGM 252.6 SW X 100. 3 K LS E 78. 4 AME X 6. 4 K OS E 5.4%

GT SM 2 R TS 138.7 TS X 71. 0 T S E 78. 3 AS X 2. 9 S WX 1.9%

S WX 1 C M 134.1 Nas daqGM 50. 5 T S X 41. 8 S W X 0. 8 NasdaqGM 1.6%

HLS E 1 SW X 100.3 HLS E 49. 5 S WX 40. 0 NY S E 0. 0 OT CB B -5. 3%

NY S E 1 OT CP K 77.8 AME X 38. 7 AME X 29. 9 OT CNO -1. 0 T S X -14.8%

C M 1 AME X 77.3 B S E 30. 6 XT RA 27. 7 AIM -1. 8 B S E -23.5%

B S E 1 HLS E 49.5 K LS E 26. 1 OT CPK 18. 9 T S X -2. 9 AME X -36.4%

Nas daqCM 1 BS E 30.6 OTC B B 18. 4 AS X 7. 7 NasdaqGM -8. 1 T S XV -39.0%

OS E 1 K LS E 26.1 AS X 9. 6 T S XV 7. 0 T S XV -8. 4 OT CP K -41.3%

A IM 1 AS X 19.2 Nas daqCM 7. 9 HLS E 5. 8 NasdaqC M -10. 8 OT CNO -50.6%

OM 1 T S XV 17.6 OTC P K 7. 8 OT CBB 2. 1 HLS E -15. 1 NasdaqC M #DIV /0!

R TS 1 NasdaqC M 7.9 AIM 4. 8 OT CNO 2. 1 B S E -27. 5 H LS E #DIV /0!

K LS E 1 AIM 4.8 TS XV 4. 4 AIM 0. 3 OT CP K -32. 7 AIM #DIV /0!

OT C NO 1 OT CNO 0.1 OTC NO 0. 1 NasdaqC M 0. 1 OT CB B -49. 4 NY S E #DIV /0!

Grand Total 92 Grand Total 53,492.4 Grand Total 581.4 Grand Total 152.1 Grand Total 2,810.1 Grand Total 7.1%

Figure 21. Comparison by Exchange Source. Capital IQ

Financ ing - Las t Three Months (US$ m)

Month Company Name C ountry Angel/S eed Debt financ ing PIP E Series A S eries B Ser ies C Series D Grand Total

Apr-09 Collective Media U S A 20.0 20. 0

GOOM R adio F rance 16. 0 16. 0

Marin Software U S A 13. 0 13. 0

The R ubicon Project U S A 8. 0 5. 0 13. 0

FreeWheel U S A 12.0 12. 0

Cellufun U S A 10.0 10. 0

Conductor Inc . U S A 10.0 10. 0

S canS cout U S A 8. 1 8. 1

Batanga U S A 7.5 7. 5

Viximo U S A 5. 0 5. 0

DoubleTwis t U S A 5. 0 5. 0

IMShopping U S A 4.7 4. 7

Soc ialtext U S A 4.5 4. 5

Mixercas t U S A 4. 1 4. 1

SoundCloud G ermany 3.3 3. 3

TubeMogul U S A 3.0 3. 0

Tribal Nova C anada 2. 5 2. 5

Tripbase U S A 2.0 2. 0

Soc ialcas t U S A 1.4 1. 4

Brandtology S ingapore 1.4 1. 4

S can & Target F rance 1. 3 1. 3

J odange U S A 1. 2 1. 2

Foodis ta U S A 0.6 0. 6

Apr-09 Total 15.6 8.0 45.3 52.5 16.1 12.0 149.5

May-09 Facebook U S A 200.0 200. 0

One Net E ntertainment C hina 10.0 10. 0 20. 0

Cyberplex C anada 12. 9 12. 9

Peer39 U S A 10.5 10. 5

OpenX UK 10.0 10. 0

Imeem U S A 8. 8 8. 8

EveryZing U S A 8. 3 8. 3

WonderHill U SA 7.0 7. 0

BlogHer Inc . U S A 7. 0 7. 0

Fuhu Inc . U S A 6. 3 6. 3

Azuki S ys tems U S A 6.0 6. 0

I Love R ewards C anada 5. 9 5. 9

TimeBridge U S A 5. 0 5. 0

OLX U S A 5. 0 5. 0

DocuS ign U S A 5.0 5. 0

Medialets U S A 4. 0 4. 0

Resonate Networks U S A 2.0 2. 0

Mo'Minis I srael 1.5 1. 5

VoxPop U S A 1. 5 1. 5

Loop'd Network U S A 0. 8 0. 8

May-09 Total 13.6 10.0 22.9 23.3 18.7 40.8 205.0 334.1

J un-09 Sugar Inc. U S A 16.0 16. 0

Wimba U SA 12.0 12. 0

Grab Networks U S A 12. 0 12. 0

beeTV U S A 8. 0 8. 0

Zoosk U SA 6. 0 6. 0

Gather U SA 5.3 5. 3

GameGround I srael 4. 1 4. 1

RingRevenue U S A 3.5 3. 5

YuMe U SA 2. 9 2. 9

Inigra l U SA 2. 4 2. 4

AdEx Media U SA 2.3 2. 3

my6sense I srael 2.0 2. 0

Cliqs et U S A 1. 5 1. 5

Pic aboo U SA 1.0 1. 0

MashLogic U S A 0. 5 0. 5

J un-09 Total 11.4 15.3 5.5 8.0 34.0 5.3 79.5

Figure 22. Financing, Last Three Months Source. Company reports

Company Des c riptions - C urrent Month C apital Market Ac tivity

Company HQ Webs ite Des cription

AdEx media United S ta tes www.adex.com Adex Media , I nc . operates as an integrated Internet mark eting, advertis ing, and lead generation publisher, a s well as developer, mark eter,

and dis tributor of consumer products in the U nited S tates . I ts marketing platform prov ides va rious services , inc luding search marketing,

display marketing, lead generation, and a ff ilia te marketing; and offers pay-per-performance pricing/cost-per-action/pay-per-action based

services . T he company also provides Overnight G enius , a computer learning cours e for MS W indows , MS Office, eB ay , and others; R is ing

S ta r Learning, a math and language arts educational product for children; Debt S nap, an audio s eminar to help consumers manage their beeTV United S ta tes www.bee.tv beeTV is your v iewer’s own pers ona l channel that antic ipates their viewi ng needs and desi res while tak ing into context their schedule,

behaviors and even their mood. I t uses a revolutionary , proprietary, contex tual matching algorithm incorporating “human unders tanding” to

offer your viewer an entertaining, personalized “channel” acces sible from a ll three sc reens - T V , mobile and P C . beeTV s ervices IP TV , cable,

satellite, mobile, internet and DTT platforms . It is a complement to your exis ting navigation sy stem. It is a find engine rather than a s ea rch

engine.C liqs et United S ta tes www.cliqset.com Cliqs et, Inc . provides an online pla tform that allows developers and us ers to crea te, organiz e, retrieve, s hare, and manipulate s ocia l

information on the W eb, des ktop, and mobile env ironments. It brings together photos, bookmarks , and locations . The company ’s pla tform

cons is ts of AP Is for managing va rious aspec ts of users ’ soc ia l identity giving the ability to build s oc ial applications without recreating the

wheel. C liqs et, I nc. was founded in 2008 and is bas ed i n J ack s onville, F lorida.

GameGround I s rael www.gameground.com GameG round develops an onl ine s ocia l network for gamers . The company is bas ed in I srael.

Gather Inc . United S ta tes www.gather.com Gather, Inc . opera tes a s ocia l network ing s ite for adults . I t enables us ers to s hare thoughts, convers a tions, v ideo, information, pictures ,

ideas, and audio. G ather, Inc. was formerly k nown as S uffic iently Advanced T echnology Corporation and cha nged its name to G ather, Inc. in

July 2005. The company was incorporated in 2004 and is headquartered in B os ton, Mas sachus etts . G ather, Inc. opera tes as a s ubsidia ry of

American P ublic Media G roup.

Grab Networks United S ta tes www.grabnetworks.com G rab Networks , Inc. di stributes and monetiz es video content on the Internet. G rab Network s, Inc . was formerly known as AnyS tream, I nc .

and changed its name to G rab Networks , Inc. in S eptember 2008. T he company was founded i n 2000 and is headquartered in Dulles,

V irginia .Inigral United S ta tes www.inigral.com Inigra l, Inc . engages in the development of s oc ial network ing website for students , their peers and their ins tructors . I nigra l, I nc. is based in

P alo A lto, C alifornia .

MashLogic United S ta tes www.mashlogic.com Mas hLogic Inc. engages in developing cus tomized web brows ers. The company was founded in 2007 and is based in Menlo P ark, California .

my6sense I s rael www.my6sense.com my6s ense Inc . prov ides mobi le technology s olutions. I t offers D igita l Intuition that connec ts us ers with content providing way to experience

information on mobile and desk top. The company was founded in 2007 and is bas ed in Herz liya P ituach, I s ra el.

P icaboo United S ta tes www.picaboo.com P icaboo C orporation provides online photo books and cards . I t offers a software program that turns photos into photo book s. The company

was founded in 2002 and is based in Menlo P a rk , C a lifornia .

R ing R evenue United S ta tes www.ringrevenue.com R ing R evenue, Inc. prov ides online call track ing s ervices . The company was incorporated in 2009 and is based in S an ta B arbara , Ca lifornia .

S ugar Inc. United S ta tes www.sugarinc.com S ugar, Inc. operates as an online media company . It operates lifes ty le and enterta inment W ebsites that cover celebrity, fa s hion, shopping,

beauty , entertainment, food, and hea lth topics . T he company also offers a shopping engine for fas hion and beauty categories . S ugar, I nc. ,

formerly k nown as S ugar P ublishing, Inc ., was founde d in 2006 and is headquartered in S an Francisco, C alifornia .

Wimba Inc United S ta tes www.wimba.com W imba , Inc . provides learning s oftware applica tions and s ervices to the education indus try in the Un ited S ta tes and the United K ingdom. The

company offers D iploma , a question authoring and management tool that a llows ins truc tors to c reate or edit ques tions; C las sroom 5. 2, a

clas s room environment with va rious features that include audio, video, applica tion sharing, and content dis play; and C ollaboration S uite that

a llows ins titutions to bridge the gap between technology and pedagogy by s upplementing cours e management s ys tems . It a ls o provides

Create, a content authoring tool, which converts Micros oft W ord documents into content for online cours es; P ronto, an aca demic mes saging

pla tform, which is designed for educators to advance and promote lea rning; V oice, a W eb-bas ed voice s olution th at fac ilita tes and promotes

vocal in struction, collaboration, coaching, and as s ess ment; and CMS Integra tion. I t s erves universities , community colleges , s chool districts ,

and education ins titutions. T he company was formerly known as H orizon W imba , Inc . and changed its name to W imba , Inc. in April 2007.

W imba , Inc . was founded in 1998 and is based in New York , New Y ork with additiona l offices in Cambridge, U nited K ingdom; and A tlanta , Georgia .YuMe United S ta tes www.yumenetworks.com Y uMe, Inc . operates as a v ideo advertis ing network on W eb. I t offers ad management sy stem that enables advertis ers and publishers to

identify, clas sify , and track content through digita l media pla tforms, s uch as W eb, downloads, mobile, and IP TV . The company a ls o enables

publishers to organize video on their site into content channels, s uch as automotive, fi nancial serv ices , lifesty le, news , music , s ports ,

enterta inment, and family friendly. In addition, it offers rea l-time ta rgeting, meas urement, and optimization; content distribution and vira l

advertis ing opportunities ; a suite of interactive ad placements ; and v ideo monetiza tion s ervices . Further, the company provides a behaviora l

ta rgeting sy stem that enables advertis ers to target their mess ages to v iewers on a national sca le bas ed on v ideo v iewing interes ts and

purchas e intent. Y uMe, Inc . was founded in 2004 and is headquartered in R edwood City, California .

Zoosk United S ta tes www.zoosk.com Zoos k , Inc . opera tes as an online s ocia l dating network . The company was founded in 2007 and is bas ed in S an Franc isco, C a lifornia .

Figure 23. Company Descriptions Source. Company reports, Capital IQ, Crunchbase

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1. None applicable.

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recommendations expressed in this research report.

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