09 12 08 web 2.0 weekly

21
SOFTWARE & SERVICES 8 DECEMBER 2009 WEB 2.O WEEKLY DAVID SHORE, CFA, MBA 416.860.6784 [email protected] Damian Wojcichowsky, CFA (Associate), 416.860.7652 LATTER HALF OF 2009: FORGING FORWARD DEAL VALUE ON PACE TO MEET NOVEMBER LEVEL December starts at strong pace: Total transaction value in the Web 2.0 universe for the first week of December is $68.8 million. The number of financings stands at seven, averaging $9.8 million each. In comparison, total capital raised in November was $203.4 million, averaging $11.3 million (18 deals); October was $171.3 million, averaging $6.3 million (27 deals); and September was $232.8 million, averaging $9.0 million (26 deals). Financing Activity Last Twelve Months 6.5 7.1 6.6 6.2 14.6 4.9 5.6 7.6 9.0 6.3 11.3 9.8 6.7 0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0 400.0 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 (US$m) 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 (US$m) Total Average *May-09 includes $200m FB investment Broad-based sector financing: Video, Gaming, Advertising, Collaboration, and Analytics experienced the most financing activity among our Web 2.0 sector categories in the past three months by number of transactions (six each). Social Networks remain strong with five deals in the past quarter. Infrastructure and Search round out the top three positions at four deals each over the past three months. The $400 million acquisition of Playfish skews the Virtual Worlds segment to the highest total. Market pull-back abates – universe split between risers and decliners: Twenty-five companies in our universe had positive stock price performances over the past week (for stocks with prices greater than $1), while 22 companies showed negative 1-week returns. 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.researchcapital.com Toronto 416.860.7600 Montreal 514.399.1500 Vancouver 604.662.1800 Calgary 403.265.7400 Regina 306.566.7550

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LATTER HALF OF 2009: FORGING FORWARD DEAL VALUE ON PACE TO MEET NOVEMBER LEVEL December starts at strong pace: Total transaction value in the Web 2.0 universe for the first week of December is $68.8 million. The number of financings stands at seven, averaging $9.8 million each. In comparison, total capital raised in November was $203.4 million, averaging $11.3 million (18 deals); October was $171.3 million, averaging $6.3 million (27 deals); and September was $232.8 million, averaging $9.0 million (26 deals). Broad-based sector financing: Video, Gaming, Advertising, Collaboration, and Analytics experienced the most financing activity among our Web 2.0 sector categories in the past three months by number of transactions (six each). Social Networks remain strong with five deals in the past quarter. Infrastructure and Search round out the top three positions at four deals each over the past three months. The $400 million acquisition of Playfish skews the Virtual Worlds segment to the highest total. Market pull-back abates – universe split between risers and decliners: Twenty-five companies in our universe had positive stock price performances over the past week (for stocks with prices greater than $1), while 22 companies showed negative 1-week returns.

TRANSCRIPT

Page 1: 09 12 08 Web 2.0 Weekly

SOFTWARE & SERVICES 8 DECEMBER 2009

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

DAVID SHORE, CFA, MBA 416.860.6784

[email protected]

Damian Wojcichowsky, CFA (Associate), 416.860.7652

LATTER HALF OF 2009: FORGING FORWARD

DEAL VALUE ON PACE TO MEET NOVEMBER LEVEL December starts at strong pace: Total transaction value in the Web 2.0 universe for the first week of December is $68.8 mil lion. The number of financings stands at seven, averaging $9.8 mil lion each. In comparison, total capital raised in November was $203.4 mil lion, averaging $11.3 mill ion (18 deals); October was $171.3 mil lion, averaging $6.3 mil lion (27 deals); and September was $232.8 mil lion, averaging $9.0 mil lion (26 deals).

Financing Activity Last Twelve Months

6.5

7.1

6.66.2

14.6

4.9

5.6

7.6

9.0

6.3

11.3

9.8

6.7

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09

(US

$m

)

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

(US

$m

)

Total Average*May-09 includes $200m FB investment

Broad-based sector financing: Video, Gaming, Advertising, Collaboration, and Analytics experienced the most f inancing activity among our Web 2.0 sector categories in the past three months by number of transactions (six each). Social Networks remain strong with f ive deals in the past quarter. Infrastructure and Search round out the top three positions at four deals each over the past three months. The $400 mill ion acquisit ion of Playfish skews the Virtual Worlds segment to the highest total.

Market pull-back abates – universe split between risers and decliners: Twenty-five companies in our universe had positive stock price performances over the past week (for stocks with prices greater than $1), while 22 companies showed negative 1-week returns.

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

Page 2: 09 12 08 Web 2.0 Weekly

Page 2

THE WE B 2 . 0 UNI VE RSE

Eighty-nine public Web 2.0 companies: Our Web 2.0 universe contains 89 companies, with a combined market cap of approximately $71 bill ion (Figure 1). The median market cap for the group is $41 mill ion, with average trail ing revenue of $164 mil lion (median $52 mill ion). The companies are also generally profitable with a median EBITDA margin of 11.1%. On a valuation basis, the overall average is 5.3x trai ling revenue (median 1.6x) and 11.0x trail ing EBITDA (median 7.8x). Twenty of the companies have more than 500 employees.

Comparable Company Analys is > Web 2.0

Company Name LTM as of Ticker E xchange

Trading

Currency HQ

Current

Price

USD Market

Cap ($m)

USD LTM Total

Rev ($m)

USD LTM Total

E B ITDA ($m)

EB ITDA

%

TEV/LTM

Revenue

TEV/LTM

E B ITDA EmployeesAccelerize New Media , Inc. 9/30/2009 AC LZ OT C B B US D United S ta tes 0.55 15.8 4.1 (1.5) -36.5% 5.0x - 11

Actoz S oft C o. , Ltd. 9/30/2009 A052790 K OS E KR W S outh K orea 20,800 151.1 115.9 25.7 22.2% 1.0x 4.3x NA

AQ Interactive, Inc. 9/30/2009 3838 T S E J P Y J apan 40,550 24.7 74.0 3.8 5.1% 0.0x 0.5x NA

Asknet AG 9/30/2009 XT R A:A5A XT R A E UR Germany 4 26.5 103.6 (2.4) NM - - 3

As sociated Media Holdings Inc. 6/30/2007 AS MH OT C P K US D United S ta tes 0.76 32.9 0.1 (2.3) NM - - 3

B igs tring C orp. 9/30/2009 B S GC OT C B B US D United S ta tes 0.03 1.8 0.1 (1.0) NM 44.4x - 4

B etawave C orporation 9/30/2009 B W AV OT C B B US D United S ta tes 0.09 2.5 8.4 (14.3) NM - - 48

B eyond C ommerce, Inc. 9/30/2009 B YOC OT C B B US D United S ta tes 0.05 2.7 13.5 (12.4) -91.9% 1.1x - 86

B right Things plc 3/31/2009 AIM:B G T AIM GB P United K ingdom 0.01 5.3 0.0 (2.7) NM - - NA

B roadW ebAs ia Inc. 9/30/2008 B W B A OT C P K US D United S ta tes 0.05 4.2 0.0 (4.6) NM - - 46

C DC C orp. 9/30/2009 C HIN.A NasdaqGS US D Hong K ong 2.43 257.5 334.2 20.0 6.0% 0.7x 11.3x 2,227

C hangyou.com L imited 9/30/2009 C YOU NasdaqGS US D C hina 30.99 1,704.5 255.3 157.4 61.7% 5.5x 8.8x 628

C hina Ga teway C orporation 9/30/2008 C GW Y OT C P K US D United S ta tes 0.01 0.2 6.7 (6.6) -98.9% 0.0x - 37

C hinese G amer Interna tiona l 9/30/2009 G T S M:3083 G T S M T W D T aiwan 426 1,103.5 68.3 39.6 58.0% 15.0x 25.8x NA

C LIC K E R Inc. 5/31/2009 C LK Z OT C B B US D United S ta tes 0.01 0.5 2.5 (1.2) -45.8% 0.2x - 22

C ornerW orld C orpora tion 7/31/2009 C W R L OT C B B US D United S ta tes 0.03 2.9 6.8 NM NM 1.9x - 16

C yberplex Inc. 9/30/2009 T S X:C X T S X C AD C anada 1 74.1 105.6 11.7 11.1% 0.5x 4.6x NA

DADA S pA 6/30/2009 C M:DA C M E UR Italy 6.28 149.0 241.9 31.8 13.1% 0.8x 6.2x NA

DXN Holdings B hd 8/31/2009 DXN K LS E MYR Ma lays ia 0.57 36.9 77.3 (84.0) NM 0.6x - NA

Dibz International, Inc. NA DIB Z OT C P K US D United S ta tes 0.00 0.0 NA NM NM - - NA

Digita lP os t Interactive, Inc. 9/30/2009 DGLP OT C B B US D United S ta tes 0.05 4.6 1.2 (0.9) -73.8% 5.7x - 7

Digita lT own, Inc. 8/31/2009 DGT W OT C B B US D United S ta tes 1.40 38.3 0.0 (1.8) NM - - 3

Dolphin Digita l Media , Inc. 9/30/2009 DP DM OT C B B US D United S ta tes 0.27 15.4 0.3 (4.6) NM - - NA

E olith Co. Ltd. 12/31/2008 A041060 K OS E KR W S outh K orea 540 66.8 15.4 (3.6) -23.6% 4.5x - NA

E xtens ions , Inc. 9/30/2009 E XT I OT C P K US D United S ta tes 0.30 13.3 0.0 NM NM - - 2

F luid Mus ic Canada , Inc. 9/30/2009 T S X:F MN T S X C AD United S ta tes 1.80 104.4 5.6 (3.0) -54.0% 18.2x - NA

F rogs ter Interactive P ictures AG 6/30/2009 F R G XT R A E UR Germany 18.75 70.4 9.6 (4.5) -47.0% 7.2x - NA

G amania Digita l E ntertainment C o. , Ltd. 9/30/2009 6180 G T S M T W D T aiwan 47.10 222.9 151.2 24.9 16.5% 1.3x 8.0x NA

G ameOn C o Ltd. 9/30/2009 3812 T S E J P Y J apan 65,500 70.8 79.3 18.6 23.5% - - NA

G eoS entric Oyj 9/30/2009 G E O1V HLS E E UR F inland 0.05 65.8 4.7 (19.0) NM 14.8x - 118

G iant Interactive G roup, Inc. 9/30/2009 GA NY S E US D C hina 7 1,628.3 202.2 137.9 68.2% - - 1,570

G igaMedia Ltd. 3/31/2009 G IGM NasdaqGS US D T aiwan 3.86 210.4 183.6 NM NM 0.7x - 751

G ravity Co. , Ltd 9/30/2009 GR V Y NasdaqGM US D S outh K orea 1.46 40.6 49.9 17.7 35.4% - - 469

G ree, Inc. 9/30/2009 T S E :3632 T S E J P Y J apan 4 ,440 2,222.9 210.3 122.2 58.1% 10.1x 17.4x NA

GungHo Online E ntertainment, Inc. 9/30/2009 3765 OS E J P Y J apan 154,000 197.3 120.7 26.9 22.3% 1.3x 5.9x NA

HanbitS oft, Inc. 9/30/2009 A047080 K OS E KR W S outh K orea 3 ,900 71.6 57.6 (0.3) -0.6% 1.0x - NA

IAC /InterActiveC orp. 9/30/2009 IAC I NasdaqGS US D United S ta tes 19.00 2,507.4 1,359.6 82.4 6.1% 0.6x 10.5x 3,200

IAS E nergy, Inc. 4/30/2009 IAS A.E OT C B B US D C anada 0.11 7.8 0.0 (0.6) NM - - NA

is eemedia Inc. 9/30/2009 IE E T S XV C AD C anada 0.19 9.2 1.8 (4.1) NM 5.3x - NA

J umbuck E nterta inment L imited 6/30/2009 AS X:J MB AS X AUD Aus tralia 0.32 13.6 16.7 7.2 42.8% 0.4x 1.0x 79

K AB Dis tribution Inc. 6/30/2009 T S X:K AB T S X C AD C anada 0 0.6 67.9 4.0 5.8% - - NA

K ingsoft C o. Ltd. 9/30/2009 3888 S E HK HK D C hina 6 796.9 143.4 57.6 40.2% 5.1x 12.8x 2,271

L ingo Media C orporation 9/30/2009 T S XV :LM T S XV C AD C anada 0.96 11.0 1.3 (2.3) NM 8.1x - NA

L iveW orld Inc. 9/30/2009 LVW D OT C P K US D United S ta tes 0.03 1.0 10.4 0.4 4.1% - - NA

LookS mart, Ltd. 9/30/2009 LOOK NasdaqGM US D United S ta tes 1.07 18.3 54.0 (4.5) -8.4% - - 90

Magnitude Information S ys tems Inc. 9/30/2009 MAGY OT C B B US D United S ta tes 0.02 10.2 0.1 (2.3) NM - - 14

Mixi, Inc. 9/30/2009 2121 T S E J P Y J apan 784000.00 1,351.0 139.6 46.1 33.0% 8.7x 26.4x NA

Modern T imes G roup Mtg AB 9/30/2009 MT G B OM S E K S weden 329.60 3,119.2 2,002.6 282.9 14.1% 1.8x 12.9x 2,969

MOK O.mobi L imited 6/30/2009 MK B AS X AUD Aus tralia 0.14 12.5 0.7 (2.4) NM 16.6x - NA

Myriad G roup AG 6/30/2009 MY R N S W X C HF S witzerland 4.84 207.5 63.0 3.4 5.4% 3.2x - 405

NE OW IZ G ames Corpora tion 12/31/2008 A095660 K OS E KR W S outh K orea 44200.00 780.8 207.3 55.7 26.8% 3.7x 13.8x NA

NetDragon W ebS oft, Inc. 9/30/2009 777 S E HK HK D C hina 4 295.3 91.4 27.8 30.4% 1.6x 5.2x 2,426

Netease.com Inc. 9/30/2009 NT E S NasdaqGS US D C hina 37.23 4,818.6 482.9 291.8 60.4% - - 3,109

NeuLion Incorporated 9/30/2009 T S X:NLN T S X C AD C anada 0.70 74.9 24.9 (16.1) -64.5% 2.5x - 237

NeXplore C orporation 6/30/2009 NXP C OT C P K US D United S ta tes 1 37.9 1.7 (13.3) NM 24.6x - NA

Ngi G roup Inc. 9/30/2009 2497 T S E J P Y J apan 24140.00 33.4 81.7 3.2 3.9% - - NA

Northgate T echnologies L imited 9/30/2009 590057 B S E INR India 30.55 22.2 46.4 (49.8) NM 0.5x - NA

Open T ext C orp. 9/30/2009 OT E X NasdaqGS US D C anada 39.22 2,211.3 814.5 211.1 25.9% 2.8x 10.8x 3,900

Openwave S ys tems Inc. 9/30/2009 OP W V NasdaqGS US D United S ta tes 2.24 187.1 190.5 6.2 3.3% 0.4x 13.2x 590

P erfect W orld C o. , Ltd. 9/30/2009 P W R D NasdaqGS US D C hina 43.35 2,157.0 286.1 157.4 55.0% 0.5x 0.8x 2,096

P NI Digita l Media Inc. 6/30/2009 T S XV :P N T S XV C AD C anada 1.71 53.8 21.0 2.3 11.0% 2.5x 22.4x NA

Quepasa C orp. 9/30/2009 QP S A OT C B B US D United S ta tes 2 21.6 0.2 (9.8) NM - - 74

OAO R B C Information S ys tems 12/31/2007 R B C I R T S US D R us s ia 1.60 222.0 157.4 20.6 13.1% 0.0x 0.4x NA

S handa Interactive E nterta inment Ltd. 9/30/2009 S NDA NasdaqGS US D C hina 51.64 3,473.1 694.3 317.2 45.7% - - 3,124

S hutterfly, Inc. 9/30/2009 S FLY NasdaqGS US D United S ta tes 15.76 404.6 223.1 27.0 12.1% 1.3x 10.8x 514

S K C ommunications C o. , Ltd. 12/31/2008 A066270 K OS E KR W S outh K orea 9550.00 335.1 192.7 12.5 6.5% 1.7x 26.7x NA

S NAP Interactive, Inc. 9/30/2009 S T V I OT C B B US D United S ta tes 0 3.3 3.4 0 .5 15.6% 0.5x 3.2x 11

S NM G loba l Holdings 9/30/2008 S NMN OT C P K US D United S ta tes 0.00 0.0 2.0 (0.7) -34.8% 1.1x - 33

S ocial Media V entures Inc. 12/31/2008 S MV I OT C P K US D United S ta tes 0 0.0 0.1 (0.1) -60.6% 4.5x - NA

S ocialwis e, Inc. 6/30/2009 S C LW OT C B B US D United S ta tes 0.50 23.4 0.0 (5.6) NM - - NA

S ohu.com Inc. 9/30/2009 S OHU NasdaqGS US D C hina 52.34 2,012.8 501.0 218.4 43.6% 2.9x 6.7x 3,197

S park Networks , Inc. 9/30/2009 LOV AME X US D United S ta tes 2 48.8 47.5 10.0 21.0% 0.9x 4.5x 183

S pectrumDNA, Inc. 9/30/2009 S P XA OT C B B US D United S ta tes 0 6.8 0.1 (2.5) NM 48.7x - 7

T encent Holdings Ltd. 9/30/2009 700 S E HK HK D C hina 147 34,567.1 1,588.4 811.3 51.1% 23.9x 46.7x 6,194

T he P arent C ompany 8/2/2008 K IDS .Q OT C P K US D United S ta tes 0.01 0.2 112.0 (13.5) -12.0% 0.2x - 347

T he9 L imited 12/31/2008 NC T Y NasdaqGS US D C hina 7.48 187.8 250.6 85.5 34.1% - - 1,626

T heS treet. com, Inc. 3/31/2009 T S C M NasdaqGM US D United S ta tes 2.28 69.8 67.0 1.9 2.9% 0.1x 2.7x 310

T ree.C om, Inc. 9/30/2009 T R E E NasdaqGM US D United S ta tes 7.23 78.8 217.1 9.7 4.5% 0.2x 5.5x 700

Unis erve C ommunica tions C orp. 8/31/2009 T S XV :US S T S XV C AD C anada 0.04 0.9 16.1 0.1 0.9% 0.3x 37.2x NA

United Online Inc. 9/30/2009 UNT D NasdaqGS US D United S ta tes 7.00 592.1 996.8 212.9 21.4% 0.8x 4.0x 1,469

UOMO Media , Inc 7/31/2009 UOMO OT C B B US D C anada 0 5.2 0.8 (0.4) -54.2% 7.1x - NA

V alueC lick Inc. 9/30/2009 V C LK NasdaqGS US D United S ta tes 10 859.2 545.7 130.8 24.0% 1.3x 5.4x 1,189

V OIS , Inc. 6/30/2009 V OIS OT C B B US D United S ta tes 0 9.9 0.0 (1.0) NM - - 4

W ebzen Inc. 9/30/2009 W ZE N NasdaqGM US D S outh K orea 3.00 35.6 23.0 2.5 11.0% - - 328

W izzard S oftware C orporation 9/30/2009 W ZE AME X US D United S ta tes 0.38 20.3 5.2 (3.9) -76.4% 4.2x - 110

W orlds . com Inc. 9/30/2009 W DDD OT C B B US D United S ta tes 0.10 5.4 0.1 (0.6) NM - - 1

W ynds torm Corpora tion NA W YND OT C P K US D United S ta tes 0.04 0.7 NA NM NM - - NA

XING AG 9/30/2009 O1B C XT R A E UR Germany 33.40 257.9 62.5 16.9 27.0% 3.2x 11.9x 266

YD Online C orp. 12/31/2007 A052770 K OS E KR W S outh K orea 7000.00 88.0 57.4 12.4 21.6% 1.6x 7.7x NA

Ynk K orea Inc. 12/31/2008 A023770 K OS E KR W S outh K orea 3695.00 16.5 11.9 1.3 10.5% - - NA

High 34,567.1 2,002.6 811.3 68.2% 48.7x 46.7x 6,194

Low 0.0 0.0 -84.0 -98.9% - - 1

Average 785.8 163.6 40.8 5.6% 5.3x 11.0x 906Median 39.5 51.9 1.9 11.1% 1.6x 7.8x 252

Figure 1. Web 2.0 Universe Summary Source. Capital IQ

Page 3: 09 12 08 Web 2.0 Weekly

Page 3

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

December starts at strong pace: Total transaction value in the Web 2.0 universe for the first week of December is $68.8 mil lion. The number of financings stands at seven averaging $9.8 mill ion each. In comparison, total capital raised in November was $203.4 mill ion, averaging $11.3 mil lion (18 deals); October was $171.3 mill ion, averaging $6.3 mill ion (27 deals); and September was $232.8 mil lion, averaging $9.0 mill ion (26 deals).

Financing Activity Last Twelve Months

6.5

7.1

6.66.2

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7.6

9.0

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11.3

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Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09

(US

$m

)

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2.0

4.0

6.0

8.0

10.0

12.0

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(US

$m

)

Total Average*May-09 includes $200m FB investment

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

Page 4: 09 12 08 Web 2.0 Weekly

Page 4

Deal round-up for December: The large deal highlights for the month include:

• Lala – streaming music site – was acquired by Apple for a rumoured $80 mil lion.

• Zoosk – online social dating web site – raised $30 mil lion in its fourth financing.

• gWallet – developer of virtual currency technology for monetizing brands, publishing, and social media platforms – raised $12.5 mill ion in a first round financing.

All other deals in the month were in the amount of $10 mill ion or less. For additional details on financings, see Figures 23 and 24 (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

Page 5: 09 12 08 Web 2.0 Weekly

Page 5

Broad-based sector financing: Video, Gaming, Advertising, Collaboration, and Analytics experienced the most f inancing activity among our Web 2.0 sector categories in the past three months by number of transactions (six each). Social Networks remain strong with f ive deals in the past quarter. Infrastructure and Search round out the top three positions at four deals each over the past three months (Figure 4). The $400 mil lion acquisition of Playfish skews the Virtual Worlds segment to the highest total.

Capital Market Activity by Sector - Last Three Months

400.0 117.3 98.5 81.0 57.0 50.0 44.1 40.9 39.8 37.5 30.0 22.2 21.1 15.0 12.5 10.0 9.9 8.5 7.0 6.4 4.0 3.9 2.2 1.2 0.8 0.70.0

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orld

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ing

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Media

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get

Soc

ial N

etw

ork

s

Adve

rtis

ing

Infr

astr

uctu

re

Colla

bora

tion

Searc

h

Analy

tics

Mobile

Ad

Tra

vel

Virtu

al G

oods

Do

cum

ents

So

cia

l Com

merc

e

Mo

bile

Cro

wds

ourc

ed

Con

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t

Cla

ssifi

ed

Fin

anc

ial S

erv

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Agg

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1 6 6 2 3 1 5 6 4 6 4 6 3 1 1 1 2 1 1 2 3 2 1 1 1 1

(US

$m

)

# companies

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

Page 6: 09 12 08 Web 2.0 Weekly

Page 6

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

Web 2.0 index continues to outpace NASDAQ recovery: Our Web 2.0 index (market-cap weighted) essentially mirrored the performance of the NASDAQ composite index from mid-2008 until Q1/09. Since then, the index has diverged in a much stronger recovery relative to the NASDAQ index (Figure 5).

Web 2.0 Index Price Performance

0

50

100

150

200

250

12/8

/2008

12/2

2/2

008

1/5

/2009

1/1

9/2

009

2/2

/2009

2/1

6/2

009

3/2

/2009

3/1

6/2

009

3/3

0/2

009

4/1

3/2

009

4/2

7/2

009

5/1

1/2

009

5/2

5/2

009

6/8

/2009

6/2

2/2

009

7/6

/2009

7/2

0/2

009

8/3

/2009

8/1

7/2

009

8/3

1/2

009

9/1

4/2

009

9/2

8/2

009

10/1

2/2

009

10/2

6/2

009

11/9

/2009

11/2

3/2

009

12/7

/2009

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

Figure 5. Web 2.0 Price Performance Source. Capital IQ

Page 7: 09 12 08 Web 2.0 Weekly

Page 7

Market pull-back abates – universe split between risers and decliners: Twenty-five companies in our universe had positive stock price performances over the past week (for stocks with prices greater than $1) (Figure 6), while 22 companies showed negative 1-week returns.

1 Week Price Performance

-10.0%-6.1%

-5.3%-5.1%-4.8%-4.6%

-4.1%-4.0%-3.6%-3.5%-3.3%

-2.7%-2.6%-2.6%-2.3%-2.1%-2.0%-1.8%

-0.9%-0.7%-0.6%-0.2%

0.0%0.0%0.2%

1.4%1.5%

2.1%2.3%

2.9%2.9%2.9%3.0%

3.6%3.6%

4.6%5.0%

5.6%6.3%6.3%6.4%

8.7%9.9%10.3%

12.0%12.1%

14.4%22.3%

26.7%

-0.15 -0.1 -0.05 0 0.05 0.1 0.15 0.2 0.25 0.3

Fluid Mus ic Canada, Inc .S ohu.com Inc .

Northgate Technologies L imitedOpenw ave S ys tems Inc .

A ctoz S of t Co. , Ltd.Changyou.com Limited

Cyberplex Inc .G igaMedia Ltd.Eolith Co. Ltd.

Gree, Inc .Chines e Gamer International

Gravity Co. , LtdNeteas e.com Inc .K ings of t Co. Ltd.

IAC/InterA ctiveCorp.TheS treet.com, Inc .

NetDragon WebS of t, Inc .Perfect World Co. , Ltd.

The9 L imitedS park Netw orks , Inc .

A s knet AGMyriad Group AG

DADA S pAY nk Korea Inc .

AQ Interactive, Inc .Gamania Digita l Entertainment

XING AGCDC Corp.

Giant Interac tive Group, Inc .Tencent Holdings Ltd.

LookS mart, Ltd.United Online Inc .Open Tex t Corp.

S handa InteractivePNI Digita l Media Inc .

NEOWIZ Games CorporationGameOn Co Ltd.

Frogs ter Interactive PicturesHanbitS of t, Inc .

Modern Times Group Mtg A BV alueClick Inc .Ngi Group Inc .S hutterf ly , Inc .

Webz en Inc .Mix i, Inc .

Tree.Com, Inc .Y D Online Corp.Quepas a Corp.

S K Communications Co. , Ltd.

Figure 6. 1-Week Price Performance Source. Capital IQ

Page 8: 09 12 08 Web 2.0 Weekly

Page 8

PUBLI C CO MP ANY I NDUST RY NEWS (P ART NE RS HIPS , F I NANCI AL RE SULT S, NE W P RODUCTS )

Key DevelopmentsCompany Headline Notes

Offerpal Media, Inc .; S ocialwise, Inc .

(OTCBB :S CLW)

S ocia lwise, Inc. E nters into S trategic

P artnership with Offerpal Media

S ocialwise, Inc. announced that it has entered into a s trategic partnership with Offerpal Media , Inc. The two companies will

work together to promote their exis ting payment s olutions , as well as develop new payment programs specifically for the

teen and tween market. Offerpa l will feature B illMyP arents on its proprietary monetization pla tform as an a lternate payment

solution alongs ide V is a , Mas terCard, P ayP al and others , providing teens and tweens with an eas y way to acquire virtual

currency acros s Offerpa l's network of 2,000+ publishers . T he virtual currency will be s pent on items s uch as virtual gifts ,

s ubscriptions , game-play upgrades , and other virtua l goods . B illMyP arents and Offerpal will a ls o collaborate to launch

innovative programs that will expand their reach into the teen and tween online payment solutions market.

Sohu.com Inc . (NasdaqGS :SOHU) S ohu.C om Announces Management

P romotions

S ohu. com Inc. announced the promotion of Ms . B elinda W ang to C o-P res ident and Chief Operating Officer, and Mr.

X iaochuan W ang to C hief T echnology Officer.

iseemedia Inc . (TS XV: IE E ) is eemedia Inc. , Annual G eneral Meeting, Nov

30, 2009

is eemedia Inc. , Annual General Meeting, Nov 30, 2009, a t 16:00 US E as tern T ime. Location: Le Meridien K ing E dward 37

K ing S treet E as t, T oronto, Ontario,Canada. Agenda: To receive and cons ider the audited cons olidated financia l s ta tements

of the corporation for the fis ca l year ended J une 30, 2009, together with the report of the auditors thereon; to elect directors ;

to appoint auditors and to authorize the directors to fix their remuneration; and to trans act such further or other bus ines s as

may properly come before the Meeting or any adjournment or adjournments thereof.

Betawave Corporation (OTCBB :BWAV) B etawave C orporation Amends R es tated Loan

and S ecurity Agreement; Announces C hief

E xecutive C hanges

On November 25, 2009, B etawave C orporation and S ilicon V a lley B ank entered into an Amended and R es tated Loan and

S ecurity Agreement (the 'A&R Loan Agreement'') which amends and res tates the Loan and S ecurity Agreement, dated as of

March 27, 2009 between S ilicon V a lley B ank and the company. T he A&R Loan Agreement amended and res tated the

Origina l Loan Agreement to, among other things : ( i) modify the interes t rate on the financed receivable to be based on the

gros s amount (rather than the financed amount) of the financed receivables and other rela ted fees described below, (ii)

delete the letter of credit, foreign exchange and cash management sub facilities and sub limits , (iii) accelerate the maturity

date from March 27, 2011 to J anuary 31, 2010 (the 'Maturity Date''), (iv) increas e the default rate from 4% to 5% and (v)

remove the financia l covenants in the Origina l Loan Agreement. The ava ilable revolving credit line remains s et a t $1.5

million. T he borrowings under the A&R Loan Agreement remain s ecured and based upon a percentage of certa in eligible

billed accounts receivables of the company, and unbilled accounts

receivables a re no longer included in the borrowing base. Under the A&R Loan Agreement, the C ompany may borrow,

repay and reborrow under the line of credit facility at any time s ubject to certa in terms and conditions , but the advances

a re subject to a lockbox arrangement and are pa id when payment is received on such financed receivable.

Advances under the line of credit facility s ha ll continue to accrue interes t at a per annum rate equa l to the greater of ( i)

3.0% above S ilicon V a lley B ank 's announced prime ra te or ( ii) 7.0% which interes t s ha ll be charged to the coany bas ed

on the gros s amount of the financed receivables . T he A&R Loan Agreement als o requires that the company pay

certain additional monthly fees including a collatera l handling fee equa l to 0.50% of the gros s amount of the financed

receivables . Under the A&R Loan Agreement, the minimum monthly finance charge (including interes t and fees ) to be

paid by the company is $5, 500. The obligations under the A&R Loan Agreement remain colla tera lized by subs tantia lly

a ll of the company's as sets . T he A&R Loan Agreement retains the a ffirmative and negative covenants principally

rela ting to liens , indebtednes s , and inves tments , dis tributions to shareholders and the us e and dispos ition of as sets .

C erta in covenants were amended purs uant to the A&R Loan Agreement and the financia l covenants s et forth in the

Origina l Loan Agreement were removed. In addition, the A&R Loan Agreement contains cus tomary events of default.

On November 23, 2009, the company and Matt F reeman mutua lly agreed to terminate his employment as C hief

E xecutive Officer of the company effective as of November 30, 2009. Mr. F reeman will remain on the company's

board of directors . T he board a lso appointed T abreez V erjee, currently the P res ident of the company, as interim Chief

E xecutive Officer.

iseemedia Inc . (TS XV: IE E ) is eemedia Inc. R eports Unaudited

C ons olidated E arnings R esults for the F irs t

Quarter E nded S eptember 30, 2009

is eemedia Inc. reported unaudited consolidated earnings results for the firs t quarter ended S eptember 30, 2009. The

company reported for the net los s and comprehens ive los s was CAD 1,009,339 or CAD 0.02 los s per bas ic and diluted

share on revenue of CAD 484,718 aga ins t net los s and comprehens ive los s of CAD 1,518,400 or CAD 0. 03 los s per bas ic

and diluted s hare on revenue of CAD 329,640 for the s ame period las t year. Los s before inters t was CAD 1,011,656 aga ins t

CAD 1,535,736 for the s ame period las t year. C as h used in operating activities was CAD 851,683 aga ins t CAD 1,256,749

for the s ame period las t year. P urchase of property and equipment was CAD 1,721 agains t CAD 10,927 for the s ame period

las t year.

Figure 7a. Key Developments Source. Capital IQ

Page 9: 09 12 08 Web 2.0 Weekly

Page 9

Key DevelopmentsCompany Headline Notes

CL ICKER Inc . (OTCBB :CLKZ) CL IC K E R Inc. announced delayed annua l 10-K

filing

On 12/01/2009, C L IC K E R Inc. announced that they will be unable to file their next 10-K by the deadline required by the S E C .

Betawave Corporation (OTCBB :BWAV) B etawave C orporation Appoints Matt F reeman

as V ice C hairman

B etawave C orporation announced that C E O Matt F reeman, who joined the company in J uly 2008, will trans ition into the role

of V ice C ha irman.

Shanda Interactive Entertainment Ltd.

(NasdaqGS :SNDA)

S handa Interactive E nterta inment Ltd.

P rovides E arnings Guidance for the T hird

Quarter E nded S eptember 30, 2009

S handa Interactive E nterta inment Ltd. was es timated to reap a revenue of $197.69 million for the three months ended

S eptember 30, 2009. T he number was $137.3 million a year ago. The company's earnings per share hit $0.88, higher than

$0.68 a year ago.

Open Text Corp. (NasdaqGS :OTEX) Open T ext Corp. R eleas es New V ers ion of

C onnectivity S olutions C ompatible with

W indows 7

Open Text C orporation announced the release of vers ion 14 of its Connectivity S olutions cons is ting of Open Text E xceed,

the leading P C X s erver s olution for W indows , Open T ext Hos tE xplorer, its terminal emulation suite, and its s ecure s hell

clients and network file s ys tem software. Leveraging the new productivity and s ecurity features of W indows 7, this release

offers organizations a smooth trans ition to the new Microsoft pla tform. W orking clos ely with Microsoft, Open Text des igned

its la tes t C onnectivity S olutions to take advantage of W indows 7 technologies . S pecifica lly, users of the new s oftware suite

will be able to take advantage of the following enhancements : S upport for W indows 7 T ouch technology a llows users to

interact with UNIX and Mainframe applications through an intuitive and easy to use touch interface; J ump Lis ts in the T as k

B ar and S tart Menu provide fas ter acces s to frequently acces s ed items and frequently performed tas ks ; Multiple Documents

preview reduces the time s pent switching between applications and open ses s ions ; New F IP S 140-2 va lidated cryptographic

module provides s tronger s ecurity to connections .

VOIS , Inc. (OTCBB :VOIS ) V OIS , Inc. to Launch C loud Application

Development P orta l

V OIS , Inc. announced that the company is launching a new porta l within its exis ting s ite framework to provide tes ting and

development, code and data repos itories for both contract and freelance software developers work ing to build next

generation cloud application software. Ava ilable J anuary 2010, the V OIS C loud Application F os tering E nvironment (CAF E ) is

to provide cloud-based s torage for the development of code, sharing of code and AP I development proces ses . Additiona lly,

the data s torage may be us ed for the tes ting of new and innovative applications being developed by freelance software

des igners , open s ource community members , and others in order to speed adoption of the rapidly maturing technology a rea

now commonly referred to by both pres s and indus try as 'C loud Computing'.

Shanda Interactive Entertainment Ltd.

(NasdaqGS :SNDA)

S handa Interactive E nterta inment Ltd.

Announces Unaudited C ons olidated F inancial

R esults for the Third Quarter and Nine Months

E nded S eptember 30, 2009

S handa Interactive E nterta inment Ltd. announced unaudited cons olidated financia l res ults for the third quarter and nine

months ended S eptember 30, 2009. In the third quarter of 2009, the company reported net revenues of R MB 1,382.9 million

($202.5 million), representing an increas e of 48% from R MB 936.5 million year-over-year. Operating income for the third

quarter of 2009 was R MB 510.7 million ($74.8 million), an increas e of 34% from R MB 381.5 million in the third quarter of

2008. Non-G AAP operating income for the third quarter of 2009 was R MB 595.0 million ($87.1 million), an increase of 51%

from R MB 392. 8 million in the third quarter of 2008. Net income attributable to ordinary s hareholders for the third quarter of

2009 was R MB 435. 3 million ($63.7 million), an increase of 29% from R MB 337.1million in the third quarter of 2008.

E arnings per diluted ADS in the third quarter of 2009 were R MB 6. 18($0. 90), compared with R MB 4.62 in the third quarter of

2008. Non-G AAP net income attributable to ordinary shareholders for the third quarter of 2009 was R MB 519.6 million ($76.0

million), an increase of 49% from R MB 348.4

million in the third quarter of 2008. Non-G AAP earnings per diluted ADS in the third quarter of 2009 were R MB

7.40($1.08), compared with R MB 4.78 in the third quarter of 2008. The company reported income before income tax

expens es , equity in los s of affilia tes of R MB 582.4 million and diluted earnings per s hare of R B M 3. 09 compared to

income before income tax expenses , equity in los s of a ffiliates of R MB 434.4 million and diluted earnings per share of

R BM 2.31 for the s ame period of las t year.

Figure 7b. Key Developments – continued Source. Capital IQ

Page 10: 09 12 08 Web 2.0 Weekly

Page 10

Key DevelopmentsCompany Headline Notes

Shanda Interactive Entertainment Ltd.

(NasdaqGS :SNDA)

S handa Interactive S ecures $1.6 B illion F or

Acquis itions

S handa Interactive E nterta inment Ltd. plans to acquire more digital enterta inment platforms and game content developers to

divers ify its revenue s tream. S handa spun off S handa G ames in S eptember. G race W u, S handa's chief financial officer told

inves tors in a conference call that S handa is keen to use its $1.6 billion cash pile on more acquis itions . He added, “W e will

cons ider acquiring more game content developers and other digita l enterta inment content players . ”

IAC /InterActiveCorp. (NasdaqGS : IAC I) IAC /InterActiveCorp Appoints Nick S toumpas

as V ice P res ident, Inves tor R ela tions and

T reasurer to R eplace E oin R yan

IAC /InterActiveCorp. announced that Nick S toumpas , currently IAC V ice P res ident and T reasurer, has been named V ice

P res ident, Inves tor R ela tions and T reasurer. Mr. S toumpas succeeds E oin R yan, the previous V ice P res ident of Inves tor

R elations who left IAC in November. As V ice P res ident of Inves tor R elations and T reasurer, Mr. S toumpas will ma intain his

exis ting respons ibilities as T reasurer of IAC and will have primary respons ibility for the s tra tegic and tactical elements of

IAC 's Inves tor R ela tions program, the goa l of which is to ensure the marketplace unders tands and fairly values the

company. Mr. S toumpas will continue to report to T om McInerney, CF O of IAC . L is a J a ffa , Manager of IAC Inves tor

R elations , will report to Mr. S toumpas .

Facebook, Inc .; Friends ter, Inc.;

Tencent Holdings L td. (S EHK:700)

F riends ter May R eportedly B e S old T o As ian

B uyer B y December E nd

F riends ter Inc is likely to be acquired an As ian buyer by the end of December for at leas t $100 million, a s ource close to the

s ituation s tated. The company had rejected a $30 million buyout offer from Google Inc s ix years ago, media reports s tated.

A source s tated that F riends ter will be s old to an As ian lis ted company for more than $100 million. T he source added that

the deal will be announced by the end of December. R euters reported that source denied to be identified as the information

was not yet public. In J uly, T echC runch had va lued F riends ter a t $210 million. C hief executive of the company, R ichard

K imber s tated that mos t of the suitors for F riends ter were As ian buyers . He s a id: "W e have a s hortlis t a t this point that we

a re negotiating with. " He added that Morgan S tanley has been engaged to handle the deal. T encent Holdings Ltd is known

to be among the s hort-lis ted bidders . T he sources s ta ted that F acebook Inc had als o expres s ed interes t but was turned

down due to competition and intellectual property is s ues .

Openwave Sys tems Inc.

(NasdaqGS :OPWV)

Openwave S ys tems Inc. has filed a S helf

R egis tra tion in the amount of $2.95 million.

Openwave S ys tems Inc. has filed a S helf R egis tration in the amount of $2.95 million.

Open Text Corp. (NasdaqGS :OTEX) Open T ext Corp. , Annua l G enera l Meeting,

Dec 03, 2009

Open Text C orp. , Annual General Meeting, Dec 03, 2009, a t 10: 00 US E as tern T ime. Location: 275 F rank T ompa Drive,

W aterloo, N2L 0A1, Ontario,C anada . Agenda : T o receive the financia l s tatements of the C ompany for the year ended J une

30, 2009, together with the report of the auditors thereon; to elect directors ; to re-appoint auditors and authorize the directors

to fix their remuneration; and to transact s uch other bus ines s as may properly come before the meeting or any adjournment

thereof.

OAO RBC Information S ys tems

(R TS :RBC I)

OAO R B C Information S ys tems to R es tructure

its Debts

OAO R B C Information S ys tems announced to res tructure its debts . According to the company, as a res ult two tied dea ls

worth R UB 4.87 billion, debts of s ubs idia ries of the holding to R B C Information S ys tems will be owed to R B C -T V Mos cow

J S C (R UB 0. 7 billion) and P intoleza Holdings L td. (R UB 4.17 billion). R B C Information S ys tems will get bonds of R B C -TV

Moscow worth R UB 0. 7 billion and E urobonds of E .M. I . S . F inance B . V . worth R UB 4.17 billion. After an agreement with

creditors is s igned, these bonds and E urobonds will go to creditors , while R B C -TV Moscow will become a new corporative

center of R B C . R B C owes R UB 4.87 billion to banks ; $60 million is the debt of the holding's s ubs idia ries .

Openwave Sys tems Inc.

(NasdaqGS :OPWV)

Openwave S ys tems Inc. , Annual G eneral

Meeting, Dec 03, 2009

Openwave S ys tems Inc. , Annua l G enera l Meeting, Dec 03, 2009, at 11:00 US P acific T ime. Location: 2100 S eaport

B oulevard, R edwood C ity, CA 94063, United S tates . Agenda: To elect G erald D. Held and David C . Nagel as directors ; to

cons ider the amendment to the amended and res tated 1999 Directors E quity C ompensation P lan; to ra tify the s election of

K P MG LLP as independent auditors for the fis ca l year ending J une 30, 2010; and to transact s uch other bus ines s as may

properly come before the meeting or any adjournment thereof.

TheS treet.com, Inc. (NasdaqGM:TSCM) T hes treet. com, Inc. Decla res Quarterly C as h

Dividend, P ayable on December 31, 2009

T heS treet. com, Inc. announced that its board of directors has declared the Company's quarterly cash dividend on its

common s tock. The cash dividend of $0.025 per s hare of common s tock will be payable December 31, 2009, to all

s hareholders of record at the clos e of bus ines s on December 15, 2009.

Figure 7c. Key Developments – continued Source. Capital IQ

Page 11: 09 12 08 Web 2.0 Weekly

Page 11

VAL UAT IO N

Online Gaming companies lead market-cap charts: Twelve companies in our Web 2.0 universe top US$1 bill ion in market capitalization (Figure 8). Fifty-eight of the 89 companies have market caps under US$100 mil lion, with 38 under US$25 mill ion. Online gaming companies dominate the top of the l ist, led by Tencent Holdings (SEHK:700) with a market cap of approximately US$34.6 bill ion.

Market C ap (USD m)

0.00.00.00.20.20.50.60.70.91.01.82.52.72.93.34.24.65.25.35.46.87.89.29.910.211.012.513.313.615.415.816.518.320.321.622.223.424.726.532.933.435.636.937.938.340.648.853.865.866.869.870.470.871.674.174.978.888.0104.4149.0151.1187.1187.8197.3207.5210.4222.0222.9257.5257.9295.3335.1404.6592.1780.8796.9859.21103.51351.0

1704.52012.82157.02211.32222.92507.43119.23473.14818.634567.1

1628.3

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

S ocia l Media V entures Inc .S NM Global Holdings

Dibz International, Inc .China Gatew ay Corporation

The Parent CompanyCLICKER Inc .

K AB Dis tribution Inc .Wynds torm Corporation

Unis erve Communications Corp.L iveWorld Inc .B igs tr ing Corp.

Betaw ave CorporationBeyond Commerce, Inc .

CornerWorld CorporationS NAP Interactive, Inc .

B roadWebA s ia Inc .Digita lPos t Interactive, Inc .

UOMO Media , IncB right Things plcWorlds .com Inc .

S pectrumDNA , Inc .IA S Energy , Inc .

is eemedia Inc .V OIS , Inc .

Magnitude Information S ys tems Inc .L ingo Media Corporation

MOKO.mobi L imitedEx tens ions , Inc .

Jumbuck Enterta inment L imitedDolphin Digita l Media , Inc .

A cceleriz e New Media , Inc .Y nk Korea Inc .

LookS mart, Ltd.Wiz z ard S of tw are Corporation

Quepas a Corp.Northgate Technologies L imited

S ocia lw is e, Inc .AQ Interactive, Inc .

A s knet AGA s s ociated Media Holdings Inc .

Ngi Group Inc .Webzen Inc .

DXN Holdings BhdNeXplore Corporation

Digita lTow n, Inc .Gravity Co. , L td

S park Netw orks , Inc .PNI Digita l Media Inc .

GeoS entric Oy jEolith Co. Ltd.

TheS treet.com, Inc .Frogs ter Interactive Pictures AG

GameOn Co Ltd.HanbitS oft, Inc .Cyberplex Inc .

NeuLion IncorporatedTree.Com, Inc .

Y D Online Corp.Fluid Mus ic Canada, Inc .

DADA S pAActoz S of t Co. , L td.

Openw ave S ys tems Inc .The9 L imited

GungHo Online Enterta inment, Inc .Myriad Group AG

GigaMedia Ltd.OAO RBC Information S ys tems

Gamania Digita l Enterta inment Co. ,CDC Corp.

XING AGNetDragon WebS oft, Inc .

S K Communications Co. , L td.S hutterf ly , Inc .

United Online Inc .NEOWIZ Games Corporation

K ings of t Co. Ltd.V alueClick Inc .

Chines e Gamer InternationalMix i, Inc .

Giant Interactive Group, Inc .Changyou.com L imited

S ohu.com Inc .Perfect World Co. , L td.

Open Tex t Corp.Gree, Inc .

IA C/InterA ctiveCorp.Modern Times Group Mtg A B

S handa Interactive Enterta inmentNeteas e.com Inc .

Tencent Holdings Ltd.

Figure 8. Market Cap Rankin Source. Capital IQ

Page 12: 09 12 08 Web 2.0 Weekly

Page 12

TEV/Revenue (LTM) averages 5.3x: The overall average TEV/Revenue (LTM) multiple for our group is 5.3x (vs. 5.7x last week) (Figure 9). Two companies trade above 25x revenue – SpectrumDNA, Inc. (OTCBB:SPXA) at 48.7x, and Bigstring Corp. (OTCBB:BSGC) at 44.4x. The median of 1.6x compares is f lat vs. last week. Note that we exclude multiples greater than 50x. Thirty-one companies have multiples under 1.5x.

TEV/LTM R evenue (x)

0.0 0.0 0.0 0.10.2 0.2 0.2 0.2 0.3 0.4 0.4 0.5 0.5 0.5 0.5 0.6 0.6 0.7 0.7 0.8 0.8 0.9 1.0 1.0 1.1 1.1 1.3 1.3 1.3 1.3 1.3 1.6 1.6 1.7 1.8 1.9 2.5 2.5 2.8 2.9 3.2 3.2 3.7 4.2 4.5 4.5 5.0 5.1 5.3 5.5 5.77.1 7.2

8.1 8.710.1

14.815.016.6

18.2

23.924.6

44.4

48.7

Average, 5.3

0.0

10.0

20.0

30.0

40.0

50.0

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Openw

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PN

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Inc.

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Sohu.c

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.

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Inc.

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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 (18), trading at an average multiple of 12.7x (vs. 14.7x last week). On a geographic basis, the United States has the most companies (38), trading at an average of 7.2x revenue (vs. 8.5x last week) (Figure 11). Ten of the companies are Canadian (average 3.6x revenue).

Average TEV/LTM Revenue - By Exchange

0.00.20.5

0.60.81.31.61.82.32.63.24.15.26.16.37.18.1

8.5

10.2

12.7

14.8

0.0

2.0

4.0

6.0

8.0

10.0

12.0

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1 18 3 2 2 4 5 11 3 4 1 2 6 1 14 1 1 1 1 5 1

(x)

# Companies

Average TEV/LTM Revenue - By Country

0.00.6 0.5

0.70.81.82.3

3.23.6

5.05.25.76.6

7.2

8.5

14.8

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

Fin

land

Austr

alia

Unite

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Taiw

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Germ

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Japan

Canada

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ong

Mala

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India

Russia

1 2 38 10 3 3 6 10 1 8 1 1 1 1 1 1

(x)

# Companies

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

Page 13: 09 12 08 Web 2.0 Weekly

Page 13

TEV/EBITDA (LTM) averages 10.3x: The average multiple for the 36 companies with positive EBITDA (and multiples under 100x) is 10.3x LTM EBITDA (vs. 11.3x last week), led by Tencent Holdings Ltd. (SEHK:700) at 46.7x (Figure 12). Sixteen companies have EBITDA multiples under 7x. The median multiple is 8.4x (vs. 8.6x last week).

TEV/LTM EB ITDA (x)

0.4 0.5 0.8 1.02.7 3.2 4.0 4.3 4.5 4.6 5.2 5.4 5.5 5.9 6.2 6.7 7.7 8.0 8.8

10.5 10.8 10.8 11.3 11.9 12.5 12.8 12.9 13.2 13.8

17.4

22.4

25.8 26.4 26.7

37.2

46.7

A verage, 10.3

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

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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 (18), trading at an average multiple of 3.2x. On a geographic basis, the United States has the most companies (38), trading at an average of 6.6x EBITDA (Figure 14). Ten of the companies are Canadian (average 13.5x EBITDA).

Average TEV/LTM EBITDA - By Exchange

0.41.03.24.14.54.6

5.96.28.2

11.912.913.114.8

16.921.6

29.8

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

TS

XV

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4 3 2 5 6 1 3 14 1 1 4 2 5 18 2 1

(x)

# Companies

Average TEV/LTM EBITDA - By Country

0.4

1.0

6.2

6.6

11.311.912.512.913.113.5

16.9

18.8

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

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Ge

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Austr

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10 3 10 8 1 6 3 1 38 1 2 1

(x)

# Companies

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

Page 14: 09 12 08 Web 2.0 Weekly

Page 14

P/E (LTM) averages 21.5x: The average multiple for the 33 companies with positive earnings (and multiples under 100x) is 21.5x LTM EPS (vs. 20.8x last week), led by HabitSoft, Inc. (KOSE:A047080) with a 71.3x multiple (Figure 15). Thirteen companies have P/E multiples under 10x. The median is 14.3x.

P/E LTM (x)

0.0 0.01.8 2.1 2.3 2.6 2.7 3.9 5.4 6.7 7.1 8.3 9.3 10.7 11.5 12.3

14.316.2 16.8 17.5 18.0

21.823.5

33.8 34.037.1 37.6

40.6

48.3

60.063.3

67.671.3

A verage, 21.5

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

Gra

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Co., L

td

Webzen Inc.

Gia

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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 (18), trading at an average multiple of 18.0x. On a geographic basis, the United States has the most companies (38), trading at an average of 27.0x earnings (Figure 17). Ten of the companies are Canadian (average 27.5x EPS).

Average P/E - By Exchange

1.8 0.03.9

5.46.711.216.216.818.0

28.730.634.0

35.837.137.4

63.3

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

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CP

K

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KO

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11 5 1 6 3 3 2 18 1 2 14 4 1 2 1 5

(x)

# Companies

Average P/E - By Country

3.95.4

12.716.8

21.923.8

27.027.534.0

37.3

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

Jap

an

Germ

an

y

Cana

da

Unite

d

Sta

tes

South

Kore

a

Taiw

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Sw

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Chin

a

Ma

laysia

Austr

alia

6 3 10 38 8 3 1 10 1 2

(x)

# Companies

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

Page 15: 09 12 08 Web 2.0 Weekly

Page 15

UP CO MI NG EVE NTS

Earnings CalendarCompany Date Time Quarter Conf Call Details

PNI Digital Media Inc. (TSXV:PN) 14-Dec-09 4:30 p.m. EST Q4/09 888-300-8196

Figure 18. Earnings Calendar Source. Company reports

Page 16: 09 12 08 Web 2.0 Weekly

Page 16

Comparable Company Analys is > Web 2.0

Price Performance

Company Name Currency Ticker E xchange USD Market C ap ($m) Current P rice 1 Wk 1 Mth 3 Mth 6 Mth 1 Yr 52 Week

Accelerize New Media, Inc. US D ACLZ OTC B B 15.8 0.55 0.0% -21.4% -3.5% 5.8% 37.5% -31.3%

Actoz S oft C o. , L td. K R W A052790 K OS E 151.1 20,800 -4.8% 35.1% 18.9% -24.6% 109.0% -42.2%

AQ Interactive, Inc. J P Y 3838 T S E 24.7 40,550 0.2% -11.5% -27.6% -41.7% 35.2% -51.1%

Asknet AG E UR XTR A:A5A XTR A 26.5 4 -0.6% 8.8% 10.5% 30.5% -16.5% -21.1%

Associated Media Holdings Inc. US D AS MH OTC P K 32.9 0.76 8344.4% 5328.6% 5328.6% 50566.7% 25233.3% 0.0%

B igs tring Corp. US D B S G C OTC B B 1.8 0.03 -6.7% -17.6% -6.7% -3.4% 64.7% -50.9%

B etawave C orporation US D B W AV OTC B B 2.5 0.09 6.3% 112.5% 21.4% 6.3% -46.9% -66.0%

B eyond Commerce, Inc. US D B Y OC OTC B B 2.7 0.05 4.3% -31.4% -76.0% -94.9% -94.7% -97.4%

B right T hings plc GB P AIM:B G T AIM 5.3 0.01 0.0% -10.9% -10.9% -6.5% 2.1% -50.4%

B roadW ebAs ia Inc. US D B W B A OTC P K 4.2 0.05 -44.4% 66.7% -78.3% -83.2% -95.0% -98.3%

C DC C orp. US D CHIN.A NasdaqG S 257.5 2.43 2.1% -4.0% 4.3% 57.8% 129.2% -38.0%

C hangyou.com Limited US D CY OU NasdaqG S 1,704.5 30.99 -4.6% -0.8% -24.7% -29.4% NM -35.9%

C hina Gateway C orporation US D CG W Y OTC P K 0.2 0.01 350.0% 350.0% -40.0% 350.0% 350.0% -70.0%

C hines e Gamer International TW D GTS M:3083 G T S M 1,103.5 425.50 -3.3% -5.2% -4.4% 34.2% 393.6% -18.0%

C LICK E R Inc. US D CLK Z OTC B B 0.5 0.01 -18.8% -18.8% -13.3% 71.1% -90.7% -95.0%

C ornerW orld Corporation US D CW R L OTC B B 2.9 0.03 0.0% -50.0% -50.0% -57.1% -93.6% -93.6%

C yberplex Inc. CAD TS X:CX T S X 74.1 1.17 -4.1% -14.6% -10.0% -35.4% 239.1% -41.2%

DADA S pA E UR CM:DA C M 149.0 6.28 0.0% -11.0% -0.4% 3.0% -8.7% -23.4%

DXN Holdings B hd MYR DXN K LS E 36.9 0.57 -0.9% -11.0% -0.9% 41.3% 48.7% -18.1%

Dibz International, Inc. US D DIB Z OTC P K 0.0 0.00 20.0% NM 20.0% -88.0% -97.6% -97.6%

DigitalP os t Interactive, Inc. US D DG LP OTC B B 4.6 0.05 0.0% 17.8% -3.6% 231.3% 112.0% -46.5%

DigitalT own, Inc. US D DG TW OTC B B 38.3 1.40 0.0% 38.6% -20.0% -44.0% -53.3% -60.0%

Dolphin Digital Media, Inc. US D DP DM OTC B B 15.4 0.27 -10.0% -32.5% -40.0% -50.9% -66.3% -66.3%

E olith C o. L td. K R W A041060 K OS E 66.8 540.00 -3.6% -5.3% -44.6% -28.9% -6.1% -53.4%

E xtens ions , Inc. US D E XT I OTC P K 13.3 0.30 20.0% -14.3% 275.0% 100.0% 471.4% -70.3%

F luid Mus ic C anada, Inc. CAD TS X:FMN TS X 104.4 1.80 -10.0% -2.7% 47.5% 153.5% 718.2% -16.3%

F rogs ter Interactive P ictures AG E UR FR G XTR A 70.4 18.75 5.6% -0.7% -1.3% 140.4% 309.4% -12.8%

G amania Digita l E ntertainment Co. , L td. TW D 6180 G T S M 222.9 47.10 1.4% 3.5% -3.7% -10.8% 210.9% -31.5%

G ameOn Co L td. J P Y 3812 T S E 70.8 65,500 5.0% -10.2% -34.9% -39.4% -48.0% -56.9%

G eoS entric Oyj E UR GE O1V HLS E 65.8 0.05 25.0% -16.7% 0.0% 0.0% 66.7% -16.7%

G iant Interactive G roup, Inc. US D GA NYS E 1,628.3 7.19 2.3% 0.8% -6.7% -19.7% 20.4% -24.9%

G igaMedia L td. US D G IGM NasdaqG S 210.4 3.86 -4.0% 1.8% -20.1% -31.2% -33.1% -50.1%

G ravity Co. , Ltd US D GR VY NasdaqG M 40.6 1.46 -2.7% -5.2% -18.9% 27.0% 151.7% -44.5%

G ree, Inc. J P Y T S E :3632 T S E 2,222.9 4, 440 -3.5% -19.0% 9.4% 43.2% NM -22.2%

G ungHo Online E ntertainment, Inc. J P Y 3765 OS E 197.3 154,000 8.2% -26.9% -35.8% -38.3% 57.0% -45.0%

HanbitS oft, Inc. K R W A047080 K OS E 71.6 3,900 6.3% 11.1% -2.5% -17.6% 23.4% -41.3%

IAC /InterActiveC orp. US D IAC I NasdaqG S 2,507.4 19.00 -2.3% -1.4% 0.1% 13.5% 14.9% -10.7%

IAS E nergy, Inc. US D IAS A.E OTC B B 7.8 0.11 -7.6% 5.7% -7.5% -57.3% 270.0% -60.4%

is eemedia Inc. CAD IE E T S XV 9.2 0.19 -2.6% 0.0% 216.7% 111.1% 322.2% -29.6%

J umbuck E ntertainment L imited AUD AS X: JMB AS X 13.6 0.32 -3.0% -5.9% -20.0% -23.8% -27.3% -36.0%

K AB Dis tribution Inc. CAD TS X:K AB T S X 0.6 0.01 -50.0% -99.2% -99.2% -98.6% -99.4% -99.4%

K ingsoft C o. L td. HK D 3888 S E HK 796.9 5.65 -2.6% -22.7% -36.7% 2.7% 110.0% -40.3%

L ingo Media Corporation CAD TS XV :LM TS XV 11.0 0.96 -3.0% 1.1% -4.0% -5.0% -4.0% -32.9%

L iveW orld Inc. US D LVW D OTC P K 1.0 0.03 0.0% -3.1% -38.0% -63.5% 106.7% -87.6%

LookS mart, L td. US D LOOK NasdaqG M 18.3 1.07 2.9% -10.1% -10.2% -15.1% -31.8% -40.0%

Magnitude Information S ys tems Inc. US D MAG Y OTC B B 10.2 0.02 -4.2% 155.6% 155.6% 130.0% 0.0% -41.0%

Mixi, Inc. J P Y 2121 T S E 1,351.0 784,000.00 12.0% 11.8% 45.7% 77.0% 33.8% -4.6%

Modern T imes G roup Mtg AB S E K MTG B OM 3,119.2 329.60 6.3% 3.7% 10.2% 51.5% 119.7% -3.1%

MOK O.mobi L imited AUD MK B AS X 12.5 0.14 12.5% 50.0% 80.0% 104.5% 743.8% 0.0%

Myriad G roup AG CHF MYR N S W X 207.5 4.84 -0.2% -0.2% 7.6% -3.2% -22.6% -28.0%

NE OW IZ G ames Corporation K R W A095660 K OS E 780.8 44,200.00 4.6% 15.6% 14.5% 31.0% 355.7% -1.6%

NetDragon W ebS oft, Inc. HK D 777 S E HK 295.3 4.33 -2.0% -14.4% -26.4% -16.4% 47.8% -39.4%

Netease. com Inc. US D NTE S NasdaqG S 4,818.6 37.23 -2.6% -8.5% -15.8% -2.3% 91.0% -23.2%

NeuLion Incorporated CAD TS X:NLN T S X 74.9 0.70 -12.5% -1.4% -36.4% -6.7% 133.3% -46.2%

NeXplore Corporation US D NXP C OTC P K 37.9 0.68 -8.1% -9.3% 23.6% 17.2% -32.7% -46.9%

Ngi G roup Inc. J P Y 2497 T S E 33.4 24,140.00 8.7% -9.1% -13.2% -26.2% -51.2% -59.7%

Northgate T echnologies L imited INR 590057 B S E 22.2 30.55 -5.3% 2.9% -35.7% -37.6% -38.5% -59.0%

Open T ext Corp. US D OTE X NasdaqG S 2,211.3 39.22 3.0% 3.0% 10.2% 8.9% 44.6% -5.4%

Openwave S ys tems Inc. US D OP W V NasdaqG S 187.1 2.24 -5.1% 8.2% -17.6% 12.0% 307.3% -28.4%

P erfect W orld Co. , Ltd. US D P W R D NasdaqG S 2,157.0 43.35 -1.8% -7.2% 3.1% 84.5% 157.7% -14.1%

P NI Digital Media Inc. CAD TS XV :P N T S XV 53.8 1.71 3.6% -5.0% 1.8% 3.0% 15.5% -19.7%

Quepasa C orp. US D QP S A OTC B B 21.6 1.70 22.3% 21.4% 21.4% 126.7% -14.6% -25.1%

OAO R B C Information S ys tems US D R B C I R T S 222.0 1.60 0.0% 6.7% 52.4% 62.4% 6.7% -5.9%

S handa Interactive E nterta inment L td. US D S NDA NasdaqG S 3,473.1 51.64 3.6% 8.4% 7.7% -18.4% 84.3% -20.6%

S hutterfly, Inc. US D S F LY NasdaqG S 404.6 15.76 9.9% 2.4% 21.0% 16.2% 104.4% -13.1%

S K C ommunications C o. , L td. K R W A066270 K OS E 335.1 9,550.00 26.7% 31.5% 7.8% -18.0% 93.5% -25.7%

S NAP Interactive, Inc. US D S TV I OTC B B 3.3 0.30 50.0% 42.9% -40.0% -60.0% -53.8% -72.2%

S NM G loba l Holdings US D S NMN OTC P K 0.0 0.00 -50.0% -33.3% -52.4% -50.0% -97.1% -97.1%

S ocial Media V entures Inc. US D S MV I OTC P K 0.0 0.01 -37.5% -42.3% -93.2% -25.0% -99.3% -99.9%

S ocialwis e, Inc. US D S CLW OTC B B 23.4 0.50 2.0% -10.7% -15.3% -29.6% -63.0% -66.7%

S ohu.com Inc. US D S OHU NasdaqG S 2,012.8 52.34 -6.1% -5.8% -17.6% -24.4% 19.6% -27.6%

S park Networks , Inc. US D LOV AME X 48.8 2.37 -0.7% -8.8% 7.2% 5.8% -13.8% -21.0%

S pectrumDNA, Inc. US D S P XA OTC B B 6.8 0.14 0.0% -6.7% -36.4% -62.2% -33.3% -68.9%

T encent Holdings Ltd. HK D 700 S E HK 34,567.1 147 2.9% 6.3% 14.7% 65.1% 215.3% -3.7%

T he P arent Company US D K IDS .Q OTC P K 0.2 0.01 0.0% 0.0% -36.4% -60.0% -98.9% -99.1%

T he9 L imited US D NC TY NasdaqG S 187.8 7.48 -0.9% -5.8% -4.3% -35.5% -38.6% -55.0%

T heS treet.com, Inc. US D T S C M NasdaqG M 69.8 2.28 -2.1% -8.1% -6.2% 15.2% -32.7% -39.0%

T ree.C om, Inc. US D TR E E NasdaqG M 78.8 7.23 12.1% -11.0% -4.5% -25.8% 338.2% -44.7%

Unis erve Communications Corp. CAD TS XV :US S T S XV 0.9 0.04 0.0% -20.0% -11.1% -20.0% 33.3% -60.0%

United Online Inc. US D UNTD NasdaqG S 592.1 7.00 2.9% -17.8% -5.9% 4.2% 14.0% -26.0%

UOMO Media, Inc US D UOMO OTC B B 5.2 0.06 0.0% -20.0% -57.1% -67.6% -50.0% -94.3%

V alueC lick Inc. US D VCLK NasdaqG S 859.2 10.03 6.4% -2.4% -4.4% -17.5% 40.3% -28.0%

V OIS , Inc. US D VOIS OTC B B 9.9 0.01 -0.8% -15.0% 138.0% 240.0% 296.7% -48.3%

W ebzen Inc. US D W ZE N NasdaqG M 35.6 3.00 10.3% -4.8% 0.3% -21.6% 275.0% -35.9%

W izzard S oftware C orporation US D W ZE AME X 20.3 0.38 -15.6% -17.4% -22.4% -41.5% -59.1% -63.1%

W orlds .com Inc. US D W DDD OTC B B 5.4 0.10 0.0% 11.1% -16.7% 11.1% -54.5% -56.5%

W ynds torm C orporation US D W Y ND OTC P K 0.7 0.04 -60.0% -60.0% -60.0% -92.2% -66.7% -92.2%

XING AG E UR O1B C XT R A 257.9 33.40 1.5% 0.6% 3.6% -0.3% 24.6% -12.1%

Y D Online C orp. K R W A052770 K OS E 88.0 7,000.00 14.4% 0.6% -21.8% -24.7% 11.6% -43.5%

Y nk K orea Inc. K R W A023770 K OS E 16.5 3,695.00 0.0% -7.9% -20.5% -44.6% -26.7% -57.5%

High 8344.4% 5328.6% 5328.6% 50566.7% 25233.3% 0.0%

Low -60.0% -99.2% -99.2% -98.6% -99.4% -99.9%

Average 785.8 95.7% 62.1% 56.8% 569.1% 356.3% -44.0%Median 0.0% -5.0% -6.0% -6.6% 20.0% -41.1%

Figure 19. Price Performance Source. Capital IQ

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Page 17

Comparable Company Analys is > Web 2.0Valuation Multiples

Company Name Sector Country

Primary

E xchange Ticker

USD Market

Cap ($m)

TEV/LTM

R evenue

TEV/ NTM

R evenue

TE V/LTM

EB ITDA

TEV/NTM

E B ITDA P/LTM E PS P/NTM E PS P/TangBV

Accelerize New Media , Inc. Direct Marketing United S ta tes OTCB B AC LZ 15.8 5.0x - - - - - -

Actoz S oft C o. , Ltd. G aming S outh K orea K OS E A052790 151.1 1.0x - 4. 3x - 21.8x - 2.3x

AQ Interactive, Inc. G aming J apan T S E 3838 24.7 0.0x - 0. 5x - - - 0.4x

As knet AG G aming G ermany XT R A XT R A:A5A 26.5 0.2x - - - - - -

As socia ted Media Holdings Inc. Mobile United S ta tes OTCP K AS MH 32.9 - - - - - - -

B igs tring Corp. Ins tant Messaging United S ta tes OTCB B B S G C 1.8 44.4x - - - - - -

B etawave Corpora tion Media United S ta tes OTCB B B W AV 2.5 - - - - - - 1.7x

B eyond Commerce, Inc. S ocial Networking United S ta tes OTCB B B YOC 2.7 1.1x - - - - - -

B right T hings plc S ocial Networking United K ingdom AIM AIM:B GT 5.3 - - - - - - -

B roadW ebAs ia Inc. S ocial Networking United S ta tes OTCP K B W B A 4.2 - - - - - - -

CDC Corp. G aming Hong K ong NasdaqGS CHIN.A 257.5 0.7x 0.7x 11.3x 5.4x - 93.5x 10.9x

Changyou.com Limited G aming C hina NasdaqGS C YOU 1,704.5 5.5x 4.5x 8. 8x 7.0x 11.5x 9.9x 8.9x

China G ateway Corpora tion Mobile United S ta tes OTCP K CGW Y 0.2 0.0x - - - - - -

C hines e G amer Interna tional G aming T a iwan G T S M GT S M:3083 1,103.5 15.0x 15.3x 25.8x 24.8x 33.8x 21.1x 16.2x

C L IC K E R Inc. Direct Marketing United S ta tes OTCB B C LK Z 0.5 0.2x - - - - - -

C ornerW orld C orporation C ontent United S ta tes OTCB B CW R L 2.9 1.9x - - - - - -

C yberplex Inc. Advertis ing C anada T S X T S X:CX 74.1 0.5x 0.4x 4. 6x 3.7x 6.7x 7.0x 2.7x

DADA S pA S ocial Networking Italy C M CM:DA 149.0 0.8x 0.8x 6. 2x 5.8x - 18.4x -

DXN Holdings B hd S ocial Networking Malays ia K LS E DXN 36.9 0.6x - - - 5.4x - 0.8x

Dibz Interna tiona l, Inc. S NS Apps United S ta tes OTCP K DIB Z 0.0 - - - - - - -

DigitalP os t Interactive, Inc. C ontent United S ta tes OTCB B DGLP 4.6 5.7x - - - - - -

DigitalT own, Inc. S ocial Networking United S ta tes OTCB B DGTW 38.3 - - - - - - -

Dolphin Digital Media , Inc. S ocial Networking United S ta tes OTCB B DP DM 15.4 - 1.1x - - - 1.1x -

E olith C o. L td. G aming S outh K orea K OS E A041060 66.8 4.5x - - - - - 3.0x

E xtens ions , Inc. C ontent United S ta tes OTCP K E XT I 13.3 - - - - - - -

F luid Mus ic C anada, Inc. Media United S ta tes T S X T S X:F MN 104.4 18.2x 18.1x - - - - 7.8x

F rogs ter Interactive P ictures AG G aming G ermany XT R A F R G 70.4 7.2x - - - - - 8.6x

G amania Digital E ntertainment Co. , Ltd. G aming T a iwan G T S M 6180 222.9 1.3x - 8. 0x - 23.5x - 2.8x

G ameOn Co Ltd. G aming J apan T S E 3812 70.8 - - - - 7.1x 7.3x 0.8x

G eoS entric Oyj Mobile F inland HLS E GE O1V 65.8 14.8x - - - - - -

G iant Interactive G roup, Inc. G aming C hina NYS E GA 1,628.3 - - - - 1.8x 15.2x 0.3x

G igaMedia Ltd. G aming T a iwan NasdaqGS G IGM 210.4 0.7x 0.7x - 3.6x 8.3x 8.2x 1.8x

G ravity C o. , Ltd G aming S outh K orea NasdaqGM GR V Y 40.6 - - - - 0.0x - 0.0x

G ree, Inc. S ocial Networking J apan T S E T S E : 3632 2,222.9 10.1x 5.9x 17.4x 10.5x 37.6x 21.0x 17.8x

G ungHo Online E nterta inment, Inc. Media J apan OS E 3765 197.3 1.3x 1.2x 5. 9x - 37.1x 13.3x 6.1x

HanbitS oft, Inc. G aming S outh K orea K OS E A047080 71.6 1.0x - - - 71.3x - 2.0x

IAC /InterActiveCorp. Media United S ta tes NasdaqGS IAC I 2,507.4 0.6x 0.6x 10.5x 4.4x 10.7x 27.8x 1.2x

IAS E nergy, Inc. V ideo C anada OTCB B IAS A.E 7.8 - - - - - - -

is eemedia Inc. C ontent C anada T S XV IE E 9.2 5.3x - - - - - -

J umbuck E ntertainment L imited S ocial Networking Aus tra lia AS X AS X:J MB 13.6 0.4x 0.4x 1. 0x 1.1x 3.9x 2.8x 1.3x

K AB Dis tribution Inc. C ontent C anada T S X T S X:K AB 0.6 - - - - - - 0.0x

K ingsoft C o. Ltd. G aming C hina S E HK 3888 796.9 5.1x 4.3x 12.8x 8.9x 17.5x 12.5x 4.2x

Lingo Media C orpora tion Learning C anada T S XV T S XV : LM 11.0 8.1x - - - - - -

L iveW orld Inc. S ocial Networking United S ta tes OTCP K LV W D 1.0 - - - - 63.3x - 0.4x

LookS mart, L td. Direct Marketing United S ta tes NasdaqGM LOOK 18.3 - - - - - - 0.7x

Magnitude Information S ys tems Inc. S ocial Networking United S ta tes OTCB B MAGY 10.2 - - - - - - -

Mixi, Inc. S ocial Networking J apan T S E 2121 1,351.0 8.7x 7.1x 26.4x 21.8x 67.6x 51.2x 8.7x

Modern T imes G roup Mtg AB Media S weden OM MT G B 3,119.2 1.8x 1.8x 12.9x 12.6x 16.8x 15.0x -

MOK O .mobi L imited S ocial Networking Aus tra lia AS X MK B 12.5 16.6x - - - - - 12.8x

Myriad G roup AG Mobile S witzerland S W X MY R N 207.5 3.2x - - - - - -

NE OW IZ G ames Corporation G aming S outh K orea K OS E A095660 780.8 3.7x 2.8x 13.8x 9.7x 40.6x 13.9x 20.6x

NetDragon W ebS oft, Inc. G aming C hina S E HK 777 295.3 1.6x - 5. 2x - 14.3x - 1.6x

Netease.com Inc. G aming C hina NasdaqGS NT E S 4,818.6 - - - - 2.6x 14.0x 0.7x

NeuLion Incorporated V ideo C anada T S X T S X:NLN 74.9 2.5x - - - - - 10.4x

NeXplore Corporation C ontent United S ta tes OTCP K NXP C 37.9 24.6x - - - - - -

Ngi G roup Inc. Media J apan T S E 2497 33.4 - - - - - - 0.6x

Northgate T echnologies L imited Direct Marketing India B S E 590057 22.2 0.5x - - - - 1.2x -

Open T ext C orp. C ollabora tion C anada NasdaqGS OT E X 2,211.3 2.8x 2.5x 10.8x 9.0x 48.3x 13.1x -

Openwave S ys tems Inc. Mobile United S ta tes NasdaqGS OP W V 187.1 0.4x 0.4x 13.2x 4.1x - 31.5x 2.6x

P erfect W orld C o. , Ltd. G aming C hina NasdaqGS P W R D 2,157.0 0.5x 2.4x 0. 8x 4.6x 2.7x 12.6x 1.2x

P NI Digital Media Inc. Digita l Imaging C anada T S XV T S XV :P N 53.8 2.5x 2.1x 22.4x 6.7x - 13.7x 18.8x

Quepasa C orp. S ocial Networking United S ta tes OTCB B QP S A 21.6 - - - - - - -

OAO R B C Information S ys tems Media R uss ia R T S R B C I 222.0 0.0x 1.0x 0. 4x 5.7x - 6.5x -

S handa Interactive E nterta inment Ltd. G aming C hina NasdaqGS S NDA 3,473.1 - - - - 2.3x 14.6x 0.4x

S hutterfly, Inc. Digita l Imaging United S ta tes NasdaqGS S FLY 404.6 1.3x 1.2x 10.8x 6.2x - 93.3x 2.4x

S K Communications Co. , Ltd. S earch S outh K orea K OS E A066270 335.1 1.7x - 26.7x - - - -

S NAP Interactive, Inc. Dating United S ta tes OTCB B S T V I 3.3 0.5x - 3. 2x - 18.0x - 1.7x

S NM G lobal Holdings Media United S ta tes OTCP K S NMN 0.0 1.1x - - - - - -

S ocial Media V entures Inc. S ocial Networking United S ta tes OTCP K S MV I 0.0 4.5x - - - - - -

S ocialwise, Inc. S ocial Networking United S ta tes OTCB B S CLW 23.4 - - - - - - -

S ohu.com Inc. G aming C hina NasdaqGS S OHU 2,012.8 2.9x 2.5x 6. 7x 5.7x 12.3x 14.1x 3.6x

S park Networks , Inc. S ocial Networking United S ta tes AME X LOV 48.8 0.9x - 4. 5x - 16.2x - 22.0x

S pectrumDNA, Inc. Media United S ta tes OTCB B S P XA 6.8 48.7x - - - - - -

T encent Holdings Ltd. P orta l C hina S E HK 700 34,567.1 23.9x 15.8x 46.7x 30.7x 60.0x 40.3x 26.6x

T he P a rent C ompany Media United S ta tes OTCP K K IDS .Q 0.2 0.2x 0.2x - 12.8x - - -

T he9 L imited G aming C hina NasdaqGS NCTY 187.8 - - - - 2.1x - 0.1x

T heS treet.com, Inc. Media United S ta tes NasdaqGM TS CM 69.8 0.1x 0.1x 2. 7x - - - 0.9x

T ree.C om, Inc. P orta l United S ta tes NasdaqGM T R E E 78.8 0.2x 0.2x 5. 5x 6.4x - 90.9x 1.2x

Uniserve C ommunications Corp. S ocial Networking C anada T S XV T S XV :US S 0.9 0.3x - 37.2x - - - -

United Online Inc. Media United S ta tes NasdaqGS UNTD 592.1 0.8x 0.9x 4. 0x 3.5x - 5.3x -

UOMO Media , Inc Media C anada OTCB B UOMO 5.2 7.1x - - - - - -

V a lueC lick Inc. Media United S ta tes NasdaqGS V CLK 859.2 1.3x 1.3x 5. 4x 5.2x - 16.3x 4.6x

V O IS , Inc. S ocial Networking United S ta tes OTCB B V OIS 9.9 - - - - - - 62.6x

W ebzen Inc. G aming S outh K orea NasdaqGM W ZE N 35.6 - - - - 0.0x - 0.0x

W izzard S oftware Corporation P odcas ting United S ta tes AME X W ZE 20.3 4.2x - - - - - -

W orlds .com Inc. C ontent United S ta tes OTCB B W DDD 5.4 - - - - - - -

W ynds torm C orporation C ontent United S ta tes OTCP K W YND 0.7 - - - - - - -

X ING AG S ocial Networking G ermany XT R A O1B C 257.9 3.2x 2.5x 11.9x 6.9x 34.0x 16.6x 7.3x

Y D Online Corp. G aming S outh K orea K OS E A052770 88.0 1.6x 1.4x 7. 7x 6.3x 9.3x 8.9x 2.8x

Y nk K orea Inc. G aming S outh K orea K OS E A023770 16.5 1.3x - 12.5x - - - 0.8x

High 34,567.1 48.7x 18.1x 46.7x 30.7x 71.3x 93.5x 62.6x

Low 0.0 0.0x 0.1x 0. 4x 1.1x 0.0x 1.1x 0.0x

Average 785.8 5.3x 3.2x 11.4x 8.6x 21.5x 22.2x 6.4xMedian 39.5 1.6x 1.3x 8. 4x 6.3x 14.3x 14.0x 2.4x

Figure 20. Valuation Comparison Source. Capital IQ

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Page 18

Comparable Company Analys is > Web 2.0Summary by Country

Company Name USD Market Cap ($m) Avg USD Market Cap ($m) USD LTM Total Rev ($m) USD LTM Total E B ITDA ($m) E B ITDA %

United S tates 38 C hina 49,633.4 C hina 4,963.3 China 4,152.4 China 2,070.2 C hina 48.8%

Canada 10 United S ta tes 5,811.3 S weden 2,974.2 United S tates 3,887.3 S weden 304.6 Aus tralia 42.8%

China 10 J apan 3,871.5 J apan 645.3 S weden 1,982.6 United S tates 290.0 T aiwan 37.1%

S outh K orea 8 S weden 2,974.2 T aiwan 577.9 Canada 1,015.0 Canada 200.0 J apan 24.2%

J apan 6 C anada 2,488.2 Hong K ong 294.6 S outh K orea 707.3 J apan 186.0 S weden 15.4%

Ta iwan 3 Ta iwan 1,733.6 C anada 248.8 J apan 634.4 S outh K orea 121.9 Malays ia 14.4%

Aus tralia 2 S outh K orea 1,527.4 S outh K orea 190.9 T a iwan 385.8 T a iwan 59.8 Italy 13.1%

Germany 2 Germany 317.0 Ita ly 165.4 Hong K ong 361.6 Ita ly 31.9 R us s ia 13.1%

S witzerland 1 Hong K ong 294.6 R us s ia 160.9 Ita ly 242.6 Hong K ong 25.1 S outh K orea 12.7%

Hong K ong 1 Ita ly 165.4 Germany 158.5 R us s ia 156.2 R us s ia 20.4 Hong K ong 6.9%

F inland 1 R us s ia 160.9 United S ta tes 152.9 India 82.8 Germany 12.5 S witzerland 1.9%

Ita ly 1 S witzerland 92.0 S witzerland 92.0 Malays ia 77.1 Malays ia 11.1 C anada -8.5%

United K ingdom 1 F inland 65.9 F inland 65.9 Germany 68.7 Aus tralia 4.5 G ermany -9.1%

India 1 Malays ia 39.8 Malays ia 39.8 S witzerland 40.0 S witzerland 0.8 United S ta tes -21.9%

S weden 1 India 31.0 India 31.0 Aus tralia 17.8 Norway -1.1 India -50.0%

R us s ia 1 Aus tralia 22.1 Aus tralia 11.0 F inland 5.5 United K ingdom -2.7 Norway -50.6%

Malays ia 1 United K ingdom 6.0 United K ingdom 6.0 Norway 2.3 F inland -17.5 United K ingdom NA

Norway 1 Norway 0.1 Norway 0.1 United K ingdom 0.0 India -41.4 F inland NA

Grand Total 89 Grand Total 69,234.6 Grand Total 777.9 Grand Total 13,819.5 Grand Total 3,276.1 Grand Total 5.1%

Figure 21. Comparison by Country Source. Capital IQ

Comparable Company Analys is > Web 2.0Summary by E xchange

Company Name USD Market Cap ($m) Avg USD Market Cap ($m) USD LTM Total Rev ($m) USD LTM Total E B ITDA ($m) E B ITDA %

OT CB B 18 S E HK 31,520.4 S E HK 10,506.8 OM 1,982.6 NasdaqGS 1,796.0 NY S E 62.5%

NasdaqGS 14 NasdaqGS 24,385.7 OM 2,974.2 S E HK 540.0 S E HK 767.5 AS X 42.8%

OT CP K 11 TS E 3,569.2 NY S E 1,750.4 NasdaqGS 498.6 OM 304.6 S E HK 40.6%

K OS E 6 OM 2,974.2 NasdaqGS 1,741.8 CM 242.6 T S E 160.2 G TS M 37.1%

TS E 5 NY S E 1,750.4 GT S M 715.0 NY S E 198.5 NY S E 124.1 Nas daqG S 30.4%

NasdaqGM 5 K OS E 1,437.0 T S E 713.8 R T S 156.2 K OS E 103.2 T S E 24.6%

TS X 4 GT S M 1,430.0 OS E 302.3 OS E 116.1 GT S M 59.8 OS E 22.2%

TS XV 4 XTR A 317.0 K OS E 239.5 K OS E 106.0 CM 31.9 OM 15.4%

S E HK 3 OS E 302.3 C M 165.4 T S E 103.7 OS E 25.8 K LS E 14.4%

AME X 2 NasdaqGM 279.7 R TS 160.9 GT S M 101.1 R T S 20.4 C M 13.1%

AS X 2 TS X 243.6 XTR A 158.5 B S E 82.8 NasdaqGM 15.6 R TS 13.1%

XTR A 2 OT CB B 230.9 S W X 92.0 NasdaqGM 82.4 XTR A 12.5 K OS E 9.6%

GT S M 2 C M 165.4 HLS E 65.9 K LS E 77.1 K LS E 11.1 Nas daqG M 7.7%

S W X 1 R TS 160.9 T S X 60.9 T S X 46.4 AME X 6.2 T S XV 5.6%

HLS E 1 S W X 92.0 NasdaqGM 55.9 S W X 40.0 AS X 4.5 S W X 1.9%

CM 1 TS XV 76.6 K LS E 39.8 XTR A 34.3 S W X 0.8 XT R A -9.1%

B S E 1 AME X 68.5 AME X 34.2 AME X 27.9 OT CNO -1.1 AME X -31.8%

NY S E 1 HLS E 65.9 B S E 31.0 OT CP K 16.5 AIM -2.7 T S X -34.7%

OS E 1 OT CP K 65.8 T S XV 19.1 T S XV 12.0 T S X -4.3 OTCB B -38.8%

AIM 1 K LS E 39.8 OT CB B 12.8 AS X 8.9 T S XV -4.6 OTCP K -41.5%

OM 1 B S E 31.0 AS X 11.0 HLS E 5.5 HLS E -17.5 B S E -50.0%

R T S 1 AS X 22.1 AIM 6.0 OT CB B 2.3 OT CP K -34.1 OTCNO -50.6%

K LS E 1 AIM 6.0 OT CP K 6.0 OT CNO 2.3 B S E -41.4 AIM NA

OT CNO 1 OT CNO 0.1 OT CNO 0.1 AIM 0.0 OT CB B -62.4 HLS E NA

Grand Total 89 Grand Total 69,234.6 Grand Total 777.9 Grand Total 13,819.5 Grand Total 3,276.1 Grand Total 5.1%

Figure 22. Comparison by Exchange Source. Capital IQ

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Page 19

Financ ing - Las t Three Months (US$ m)Fin. Amount (Million) Type of financ ing

Month Company Name Country Angel/S eed Series A Series B Series C Series D Grand Total

Oct-09 DailyMotion F rance 25.3 25.3

PopCap Games US A 22.5 22.5

Engine Yard US A 19.0 19.0

HubSpot US A 16.0 16.0

J ive S oftware US A 12.0 12.0

Spigit US A 10.0 10.0

Ooyala US A 10.0 10.0

S canS cout US A 8.5 8.5

Box.net US A 7.1 7.1

R eality Mobile US A 6.5 6.5

Watercooler US A 5.5 5.5

Vdopia US A 4.7 4.7

Sometrics US A 4.0 4.0

Amie S treet US A 3.9 3.9

ViVu US A 3.0 3.0

F izzback UK 2.6 2.6

Technorati US A 2.0 2.0

Onehub US A 1.3 1.3

DataSync US A 1.2 1.2

DailyBooth US A 1. 0 1.0

Hot Potato US A 1.0 1.0

L inkedex UK 1. 0 1.0

S tatusNet Canada 0. 9 0.9

IngBoo US A 0. 8 0.8

Chango Canada 0.7 0.7

C redit K arma US A 0. 5 0.5

L is tia US A 0. 4 0.4

Oct-09 Total 4.5 40.9 56.5 67.4 2.0 171.3

Nov-09 RockYou US A 50.0 50.0

Playdom US A 43.0 43.0

Sezmi US A 25.0 25.0

Millennial Media US A 16.0 16.0

Zynga US A 15.0 15.0

Evernote US A 10.0 10.0

CubeTree US A 8.0 8.0

Alice.com US A 6.0 6.0

Eventbrite US A 6.0 6.0

Placecas t US A 5.0 5.0

AppNexus US A 5.0 5.0

Altruik US A 4.7 4.7

C redit K arma US A 2.5 2.5

B lekko US A 2.5 2.5

Playfire UK 2.1 2.1

S impleGeo US A 1. 5 1.5

Adfonic UK 0. 6 0.6

S coopler US A 0. 5 0.5

Nov-09 Total 2.6 52.3 29.0 67.0 52.5 203.4

Dec-09 Zoosk US A 30.0 30.0

gWallet US A 12.5 12.5

Movik Networks US A 8.5 8.5

SeekingAlpha I s rael 7.0 7.0

Smaato US A 4.5 4.5

J anRain US A 3.3 3.3

S tockTwits US A 3.0 3.0

Dec-09 Total 15.8 23.0 30.0 68.8

Grand Total 7.1 109.0 108.5 134.4 84.5 443.4

Figure 23. Financing, Last Three Months Source. Company reports

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Company Descriptions - Current Month Capital Market ActivityCompany HQ Webs ite Des cription

gWallet US A www.gwallet. com gWallet provides brands , publis hers and socia l media pla tforms with a virtual currency technology for s ocia l networks . The gW allet

monetization platform conta ins three components including Alternative Online P ayment, V irtual Currency and Aggregation of V irtua l

P roducts . T he platform is a comprehens ive s ys tem tha t has been optimized for F acebook, OpenS ocia l platforms (MyS pace, Hi5, T agged,

etc), virtual worlds or webs ites utiliz ing virtual offer-based currency.

J anRain US A www. janra in.com J anR ain, Inc. provides Internet identity s olutions and s ervices for bus ines ses and consumers . It offers OpenID, an open source software as a

s ervice technology that a llows cons umers to use a s ingle login acros s multiple W ebs ites and regis ter on new s ites with a portable online

identity. Its products include R P X , an enterpris e-clas s hos ted solution that helps in accepting and verifying us ers ' third party accounts , s uch

as Google, Y ahoo, F acebook, and L iveID; OP X that enables to is sue and manage OpenIDs , and build communities with cus tomers in their

own brand; and myOpenID that provides OpenID for individuals in the market. T he company has s trategic partnerships with Microsoft,

Y ahoo! , AOL , MyS pace, P laxo, and Google. J anR ain, Inc. was founded in 2005 and is based in P ortland, Oregon.

Lala US A www. la la . com Lala is a hub for online mus ic dis covery and purchas ing. Users can lis ten for free mus ic, adding tracks to their playlis t as they surf. members

who download a plugin can turn La la into an online mus ic locker that s yncs their des ktop mus ic libra ries to their La la account. Long uploads

a ren’t neces s ary. If La la a lready has the song in their library, they s imply unlock the file to you online.

Movik Networks US A www.movik.net Movik Networks is headquartered near B os ton, MA and has an R &D group in B anga lore, India . T he company is focused on delivering

purpose-built s olutions that bring content and application awarenes s to the edge of the mobile network.

S eekingAlpha Is rael www.seekingalpha .com S eeking Alpha, Ltd. provides s tock market opinion and analys is information from blogs , money managers , and inves tment news letters . T he

company offers daily s ummary of market and s tock related s tories , conference call trans cripts , new IP O filings , and hous ing market roundup.

It a ls o provides articles from contributors for s tock res earch. The company s erves money managers , res earch analys ts , inves tment bankers ,

and individual inves tors . S eeking Alpha, Ltd. was founded in 2004 and is based in New Y ork, New Y ork.

Smaato US A www.smaato.com S maato Inc. , a mobile advertis ing technology company, provides an open mobile advertis ing platform for publis hers , application developers ,

advertis ement networks , and mobile operators . It offers S maato Open Mobile Advertis ing, an advertis ement exchange platform that brings

international campaigns from various advertis ement networks to the publis hers and developers inventory, as well as enables the delivery of

targeted advertis ing to mobile phones on mobile W ebs ites /widgets within applications and in mobile games . T he company’s platform a lso

a llows mobile carriers to advertis ement-enable their s ervices and provides cus tomer relationships . It has a s trategic partnership with

MocoS pace. S maato Inc. was founded in 2005 and is based in R edwood S hores , C alifornia with a loca tion in Hamburg, G ermany.

S tockTwits US A www.s tocktwits . com S tockTwits LLC operates as an online community that provides information about inves tments and s tocks . It provides users to give an

opinion about a specific s tock s ymbol through a tweet. T he company was incorporated in 2008 and is based in Oak land, C alifornia .

Zoosk US A www.zoos k .com Zoosk, Inc. operates as an online socia l dating network. T he company was founded in 2007 and is based in S an F rancis co, C alifornia .

Figure 24. Company Descriptions Source. Company reports, Capital IQ, Crunchbase

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RELEVANT DISCLOSURES APPLICABLE TO: NONE

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