confidential digital services and distribution acquisition strategy

CONFIDENTIAL

Digital Services and DistributionAcquisition Strategy

Executive Summary

• Grouper’s initial focus positioned it for growth during the early development of the UGV market

– Strong, seasoned management team

– Small but compelling base of content; focus on user-generated videos

– Easy-to-navigate interface and technology for sharing content

• Emerging leaders are dictating a new set of minimum success requirements, broadening their audience, functionality, and content through acquisitions and new product introductions

– Google acquires YouTube

– MySpace launches MySpace Videos

– Yahoo acquires JumpCut and partners with CurrentTV

• Sony must acquire to continue to meet the minimum threshold for audience size and breadth of content/functionality

– Near-term focus on increasing audience through syndication plays and acquiring broadly appealing content and functionality

– Once minimum thresholds are met, seek opportunities to build a deeper offering, including expertise in specific content verticals and targeted functionality

The Current State of Market Evolution Rewards Broader Offerings

Deeper OfferingsInception Tipping Point /

Audience GrowthBroader

Offerings

• Multiple market entrants grow at similar rates

Market Dynamic

Minimum Requirements

to Compete

Areas of Differentiation

Examples

(2004 – 2005) (Early 2006) (Late ’06 / Early ‘07) (Late ’07 / Early ‘08)

• Content and features on-par with competitors

• Limited differentiation

• Dozens of pure-play UGV sites struggle to reach a million unique users

• Leaders break-out from the pack

• Single compelling characteristic

• Unique piece of content

• Ease-of-use

• YouTube explodes with “Lazy Sundays”

• MySpace users flock to improved community features

• Leaders expand to adjacent markets

• Larger audience• Breadth of content• Range of functionality

• Broadest range of content

• Network effect of larger audiences

• MySpace launches videos

• Google acquires YouTube

• Market rewards players with deep content catalogs and robust technology

• Ability to supplement broad offering with depth in specific verticals

• Content verticals have not yet gained traction

– Yahoo media group continues to struggle

• Larger audience• Broad offering• Brand known for an

area of expertise

Distinct Service Categories Formed at the Outset of Digital Video

Aggregators Channel Promotional

• On-demand videos programmed in channels or on a show-by-show basis

• Advertising supported, with some upsell to subscription

• Short video clips promoting the site owner’s content, merchandise, and brand

• May include some advertising and limited commerce capabilities

• Aggregate video across providers for purchase

• Includes sell-thru, rental, and ad-support

User Generated Video (UGV)

• Allow audience to watch and share videos created and uploaded by users

• Primarily advertising based revenues

Social Network

• Online communities enabling interactivity between users

• Primarily advertising based revenues

Players with the Largest Audience are Broadening their Offerings, Blurring the Line Between Service Categories

Service Original Focus Areas of Expansion

• Aggregator

• Social Network

• Channel (e.g., Music Videos on Yahoo! Music)

• UGV – Acquired YouTube for $1.65BN

• UGV – Launched MySpace Videos

• Channel – Fox Full Throttle

• Store – Download-to-own Episodes

• UGV Tools – Acquired JumpCut

• UGV Content – CurrentTV Partnership

Digital Service Acquisition Considerations

Considerations

Near-term ApproachSony Skill Set

M&A Landscape

Phase of Market Growth

• Audience and 3rd party distribution currently lagging and difficult to build organically

• SPE has expertise in-house to expand content and functionality

–Repurposing SPE content and licensing from 3rd party partners

–Grouper leading development and licensing as needed

• Focus on narrow universe of significant acquisition targets

• Prioritize audience / syndication• Seek partners that pair audience

with broadly appealing content or functionality

• Limited window for compelling acquisitions

–Competitors acquiring aggressively

–Valuations increasing

• Current market phase demands broader offerings

• As market matures, it will reward depth

Potential Future Expansion

• Point acquisitions to reinforce areas of differentiation

–Targeted content–Features and functionality

Digital Service Acquisition Priorities

Description

Valuations

Speed

Priority

Audience:Syndicators

Breadth DepthAudience:

Destinations

Attractive Moderate Moderate Expensive

• Companies that syndicate video to a network of online partners

• Content and/or functionality with established audience

• Targeted content or functionality

• Sites with audience but no differentiated content

FastGain traction

quickly

FastGain traction

quickly

SlowRequires multiple

acquisitions

SlowRequires content and functionality

deals to supplement

1st 2nd Low

Functionality + Audience

Six Apart (10.4)

Image Shack (9.3)

Xanga (5.5)

Reunion (4.7)

MetaCafe (3.1)

Digg (2.1)

Putfile (1.4)

Friendster (1.0)

Tagged (0.8)

Audience SyndicatorsPhotoBucket (12.0)

Roo Media (5.8)Veoh (N/A)

Brightcove (N/A)FeedRoom (N/A)

Functionality

Meetup (0.7)

Piczo (0.5)

Text America (0.5)

Imeem (0.2)

VideoEgg (0.2)

eyeSpot (0.2)

MotionBox (0.2)

Famster (N/A)

Content

College Humor (0.9)

JibJab (0.6)

SingingFool/VideoDetecitve

Broadband Sports (0.1)

RocketBoom(0.04)

Ruckus (0.02)

Revision3 (0.02)

Channel 101 (0.02)

Content + Functionality

Pure Video (0.9)

Castpost (0.2)

Now Public (0.09)

Bix (0.08)

Blip.tv (0.06)

Dave.tv (N/A)

Acquisition Candidates

Audience Destinations

DailyMotion (0.8)

vidiLife (0.8)

Content + Audience

Break.com (3.3)

eBaum’s World (3.0)

Bolt.com (2.9)

Heavy.com (2.7)

Tier 1 Candidates

Tier 2 Candidates

Low Priority

Tier 1 Acquisition CandidatesCompany M&A Benefits Description Audience(1) Estimated Valuation Range

Break

Los Angeles

Breadth

Content with large audience

• Primarily 15-35 year old male demo • Provides an incentive for content (pays

up to $1,000 for featured videos), and owns a subset of its content

• Focus on humor, sports, games

3.3MM UUs • Approximately $100MM based on early guidance from Montgomery

Roo(2)

New York

Audience / Syndicator

• Video syndication platform• Hosts and streams to third party sites• Also has network of destination sites

5.8MM Unique Video Streamers

(primarily syndicated)

• $33MM (Public RGRP.OB)• $200K debt

Heavy

New York

Breadth


• Skews toward 15-35 year old male demo• Mix of video, animation, and games

created by Heavy and/or its partners• Takes full and exclusive ownership of

content

2.7MM UUs • May want $200MM per paidcontent.org

• Would be <$150MM at $50 / UU• Polaris led $10MM round in (1/06)

Digg

San Francisco

Breadth Functionality with large audience

• Focuses on user ratings• Content is a mix of categorized text

(primary) and video (secondary) postings from blogs, news, and other sites

2.1MM UUs • Approximately $150MM• Passed on Newscorp offer because

it was <$150MM

Bolt

New York

Breadth


• Skews younger (31% 12-16, 32% 18-34)• Content, includes video, photos, music• Some social net features on Bolt2.com• Does not own content, takes non-

exclusive license

2.9MM UUs • Approximately $150-$200MM based on Digg and Heavy comps

• Rumored to be for sale

Metacafe

Palo Alto

Tel Aviv

Breadth Functionality with large audience

• Primarily a UGV destination, does not own content

• Recently tested user rev sharing• Has a robust on-site search tool

3.1MM UUs • Approximately $150-$200MM based on Digg and Heavy comps

(1) Monthly Unique Users per Nielsen Net Ratings except for Roo(2) Roo audience estimate is of unique streamers per ComScore

Tier 2 Acquisition Candidates

Company M&A Benefits Description Audience(1) Valuation Considerations

PutFile

London

Breadth

Functionality with large udience

• Free file hosting and sharing site• Has some UGV destination site features

1.4MM UUs • $4MM asking price

PhotoBucket

Palo Alto

Denver

Audience / Syndicator

• Hosts photos and videos, enables linking to sites like MySpace and Blogger

12.0MM UUs • Approximately $250-$450MM based on rough guidance from Jeffries

• Trinity led $10.5MM round (5/06)

Pure Video

Los Angeles

Depth

Functionality

• Operates a video search engine in partnership with Pixsy

• Runs StupidVideos and Grind (action sports videos)

0.9MM UUs

StupidVideos=596K

Grind = 282K

• Raised $5.6MM from Soft Bank in December 2005

JibJab

Santa Monica

Depth

Content

• Focuses on jokes, humor, and animation• Includes sponsored content (e.g., Bud

Light commercials)

0.6MM UUs • Raised undisclosed amount of funding from Polaris in June 2006

Revision3

San Francisco

Depth

Content

• Positioned as an online TV network• Produces its own original content• Founded by Digg’s founders

0.02MUUs • Raised $1MM in funding from Marc Andreessen and Greylock Partners in September 2006

Bix

Palo Alto

Depth

Content &

Functionality

• User-generated contest site• Users create and enter online talent

competitions

0.08MM UUs • Raised $6.77MM in first round• Investors include Trinity and Sutter

Hill

Blip.tv

New York

Depth

Content &

Functionality

• Hosts high quality “Prosumer” shows• Syndicates and licenses out tech (e.g.,

Oxygen is a licensee)• Lets producers opt-in for post-roll ads

0.06MM UUs • Raised undisclosed amount of funding in a July 2006 Series A round

Imeem

Palo Alto

Depth

Functionality

• Instant messaging with social networking• Integrates with existing IM services• Profiles with photos, music, and videos

0.2MM • Venture backed by Morgenthaler Ventures

(1) Monthly Unique Users per Nielsen Net Ratings

CONFIDENTIAL

APPENDIX A – COMPANY PROFILES

Break.com

Content OfferingContent Offering

• Online entertainment network and community powered by traditional user-generated content

• Content base skews heavily toward 15-35 year old male-oriented humor, sports and racy categories

• Majority of the content is original and created by users specifically for Break.com (Break owns much of its content. Takes an exclusive license to uploaded content it doesn’t own)

• Pays $250/ video for videos it wants to feature, incentivizing users to create high-quality videos (est. to spend ~$250K/ month buying user videos)

PartnershipsPartnerships

Strategic ProfileStrategic Profile

• Established in 1998 as Big-Boys.com, a video-sharing site

• Purchased in May 2004 by Keith Richman, co-founder of Billpoint, and changed name to Break.com

• 100% owned by Richman and a few business partners – has never taken any venture financing

• Generate revenue through custom advertising deals, PPC content plugs, banners and text links

• Based in Beverly Hills, CA with 33 employees

• Leverages AdBrite to sell its banner and text ads

• Established partnerhsip with Amp’d Mobile in Nov. 2005 to distribute videos through mobile, charging $2.99/ month for unlimited access

User MetricsUser Metrics

2.6 2.53.5

2.6 2.9 3.3

Jul-06 Aug-06 Sep-06

MM NR

Web page views (MM)

Time/ person(min.)

141.2 189.2 135.4

16.1 21.5 15.3

Internal Break.com sources estimate uniques of approx 14.7MM.

Unique Users (MM)Note:

estimated to generate ~100MM streams/ month

Source: Nielsen//NetRating used for page view, time data, AdBrite; BambiBlogs.com; Break.com; Multichannel News; Amp’d Mobile; PureVideo; ComScore Video Matrix

Break.com

Advertising:

• Banner ads – no pre-rolls or text

Content

• User-generated

• Share it with friends (viae-mail)

• Embed & blog it

Interactivity:

• Promote to home page

• Rate It

• Recommend

• Comment

ROO Group Business Overview

Content Partners Sites

Advertisers

Entertainment

News

Lifestyle and Family

Partners

Owned and Managed

Ingestion Engine

Ad Network and Insertion

Program Channels

Video Player

Licensing fees, payment-per-stream

and ad revenue share

ROO Group, Inc. (NASDAQ: RGRP)

Roo Group Inc. 5,841 186 31.3

ROO Group, Inc. (NASDAQ: RGRP)Key DevelopmentsKey Developments

• ROO Group is an online broadcast network and a leading global provider of digital media solutions and technology that enable the activation, marketing, and distribution of video content over the Internet and emerging broadcasting platforms such as set top boxes and mobile communication devices

• Core activities include the aggregation of video content, media management, advertising, hosting, and content delivery

• Proprietary technology platform and infrastructure is largely based in the United States and is designed to be accessed and maintained from satellite offices anywhere in the world via a Virtual Private Network (VPN) over the Internet

• Operates a global network of individual destination portals under the brand ROO TV, that enables end users in different regions around the world to view video content over the Internet

• An independent research report which tracks the video streams sent to users per month placed us as the 10th largest broadcaster of video in the world (Source: iBroadcast Stream report released November 21, 2005 prepared by AccuStream iMedia Research. )

• ComScore MediaMetrix ranks ROO Group as #10 among US streamed video sites (5.8 MM streams in July 2006)

• ROO was founded in 2001 and went public in 2003

• Over 100 employees with worldwide operations in New York, Los Angeles, London and Australia

August 1998• Originally incorporated as Virilitec Industries, Inc.; main business

was to license and distribute a line of bioengineered virility nutritional supplements designed to enhance human male sperm count and potency; venture failed

December 2003 • Virilitec Industries, VRLT Acquisition Corp., a Delaware

corporation and wholly-owned subsidiary of Virilitec Industries, ROO Media, Jacob Roth and Bella Roth, merged

April 2004 • Purchased 80% of Reality Group Pty Ltd, a corporation formed

under the laws of Australia

May 2004 • Purchased the business and business assets of Undercover

Media Pty Ltd., operating a music and entertainment site (www.undercover.com.au)

September 2004 • Purchased Bickhams Media, Inc. and the VideoDome property,

an embedded video player integrated in to the ROO offering

October 2005 • Reality Group shareholders agreed to exercise their buyback

option and ROO reduces ownership of Reality Group to 51%

October 2005 • Purchased 51% of Factory 212 Pty Ltd through its subsidiary,

ROO Broadcasting Limited

Company OverviewCompany Overview


Technology and Service OverviewTechnology and Service Overview

Core Services provided include:

• ROO Video Solutions - Customized video solutions for specific customers or industry segments; platform has been designed to be flexible in accommodating various opportunities for activating video for broadcast over the Internet and accommodating emerging technologies such as wireless devices (i.e., mobile phones and PDAs) and set top boxes

• ROO Syndication of Licensed Video Content - Provide a turnkey solution for customers located throughout the world to activate licensed topical video content on their web sites;

• Current customers for this service include Verizon in the United States, Bulldog Broadband in the United Kingdom and News Interactive a subsidiary of News Corp

• ROO’s Online Advertising Network - Through syndication clients, ROO has developed a network of web sites across which the company can sell advertising inventory

• The advertising includes traditional banner ads and television-style 15 second and 30 second commercials, which can be programmed to play before and after topical video clips that are most likely to be viewed by the advertisers' chosen demographic

• Syndication clients can receive a percentage of the advertising revenue generated on their websites

• Recent advertisers utilizing in-stream advertising have included Microsoft, Apple, Honda, Hyundai, Target, Proctor & Gamble and Pfizer

NASDAQ Yearly Performance (as of 11/10/2006)NASDAQ Yearly Performance (as of 11/10/2006)Financial OverviewFinancial Overview


Recent DevelopmentsRecent Developments

• On August 18, 2006, the Company entered into a Common Stock Purchase Agreement pursuant to which the Company sold an aggregate of $5,506,250 of shares of common stock and warrants; each investor will be issued warrants to purchase a number of shares of common stock equal to 50% of the number of shares of common stock purchased

Management TeamManagement Team

• Robert Petty, CEO and Chairman of the Board, ROO Group• Robin Smyth, CFO and Executive Director, ROO Group• Steve Quinn, COO• Tristan Place, VP Sales/Strategic Partnerships• Max Moore, VP Business Development

Ownership DetailOwnership Detail


Common Stock

% of Common

Stock

Series A

Preferred (1)% of Series A Preferred

% of Total Vote

Robert Petty 2,120,000 16.1% 6,000,000 63.2% 57.4%

Robin Smyth 360,000 2.7% 1,500,000 15.8% 14.2%

Avenue Group, Inc. 673,210 5.1% - 0.0% 0.6%

Cobble Creek Consulting, Inc. 40,000 0.3% 1,000,000 10.5% 9.3%

Rubin Irrevocable Family Trust 60,000 0.5% 1,000,000 10.5% 9.3%

Southpoint Capital Advisors LP 866,667 6.6% - 0.0% 0.8%

William D. Witter, Inc. 1,323,333 10.0% - 0.0% 1.2%

Total Outstanding 13,176,436 9,500,000

(1) Holders of Series A Preferred Stock are entitled to vote on all matters submitted to shareholders of the Company and are entitled to ten votes for each share of Series A Preferred Stock owned.

Comparison of Video Syndicators

Roo BrightCove Veoh

Background and Business Model

•Syndicates licensed content; offers customized video platform solutions; operates a network of ROO TV branded sites

•Payment includes licensing fees, payment-per-stream and/or ad revenue share

•Video syndication and publishing syndication

•Partners can syndicate to AOL and through TiVo

•Keeps 50% of ad revenue and 30% of product sales

•Initial focus was on using P2P to distribute free TV quality video over broadband

•Expanding to ad-supported and paid models

Content •Generally topical content (news, sports)

•Organized in 80+ channels and sub-channels

•Initially high quality professional content

•Opened platform to accept content from individuals

•Initially UGV•Expanding to prosumer & professional content

•6/06 started removing adult content

Technology •Content prep / hosting•Ad insertion•Content tracking

•In-video ad placement services•Hosted video stores

•P2P platform focus•Expanding to ad insertion and commerce

Customers •Verizon, NewsCorp, EMI, A&E, FashionTV, Virgin,Reuters, Financial Times, TimesOnline

•National Geographic, Travel Channel, Warner Music, The New York Times, Washington Post

•TNT, Skateboard.com

Traffic 5.8MM Unique Streamers(1)

186MM Monthly Streams(1)

Not Available Unique Streamers N/A

15MM Monthly Streams (2)

Valuation / Funding $30MM (public on NASDAQ) •$28MM in total funding including $16MM in 11/05 from AOL, IAC, and others

•$14.75MM in total funding including $12.5 in 4/06 from Michael Eisner and Spark Capital

(1) Per comScore Video Metric(2) Per Veoh management estimate of roughly 500K streams per day

8.3 7.5 6.8

3.0 3.5 2.7


MM NR

Heavy.com


• Broadband entertainment network focused on providing high-quality content

• Content base skews toward 18-34 year old male-oriented humor and racy categories

• Takes full and exclusive ownership of a range of content (mix of video, animation, and games) created by Heavy and/or its partners, e.g., NBC delivered through distinct channels

• Generates revenue through banner ads, pre-rolls, and branded production, e.g., Burger King videos



• Established in 1999 as a P2P digital content sharing site by Simon Asaad & David Carson

• Polaris venture capital holds a 25% stake in Heavy; Polaris lead a $10MM round in January 2006

• Expected to generate ~$20MM adv. revenues in 2006, a 300% increase over 2005 (recently valued at ~$200MM – source: paidContent.org)

• Ad sales and marketing conducted internally

• Based in New York, NY with 20 employees

• Recently announced partnership with TiVo to provide content for TiVo’s VoD service

• Established partnership with Verizon Wireless in April 2006 and created a channel on V-Cast subscription mobile offering

• Parnter with Sony PSP, video iPod, and Virgin Mobile to distribute non-wireless mobile content


Web page views (MM)

Time/ person(min.)

9.3 10.4 6.6

1.5 1.2 1.0


estimated to

generate 80-90MM streams/ month

Source: Nielsen//NetRating used for page view, time data, Heavy.com; Multichannel News; PureVideo; ComScore Video Matrix; paidContent.org; FT.com; VCMike’s Blog

Heavy.com

Advertising:

• Banner ads

• Pre-rolls

Content sharing:

• Heavy/ partner produced channels

• Share it with friends (via e-mail)

• Blog it

Interactivity:

• Rate It

• Comment

1.2 1.2 1.31.6 1.8

2.1


MM NR

digg.com


• Online user-driven news/ information community providing direct links to stories and video sites

• Target IT professionals, developers, professional “geeks” and news junkies

• Content is a mix of categorized text (primary) and video (secondary) postings from blogs, professional news sites and random Web sites

• Users tag news stories they like (dig) and dislike, driving what content appears on the home page



• Established in Nov. 2004 as an information and news sharing site by Kevin Rose

• Closely held (Rose owns ~30-40%) with minimal venture financing – received $2.8MM round in Oct. 2005 to support initial growth

• Expects ~$3MM in advertising revenues in 2006 (recently valued at $200MM – source: BusinessWeek, 8/2006)

• Generate revenue through banner and text ads only – focused on growing audience with minimally invasive ads

• Based in San Francisco, CA with ~20 employees

• Leverages Federated Media to sell its banner ads

• Digg.com founders started a video production company, Revision3, in Sept. 2006

– Focused on high-end humor and tech content targeted at young, tech-oriented people

– Advertising model is 1950s throwback – based on sponsors named in advance of ‘shows’ by hosts


Web page views (MM)

Time/ person(min.)

6.1 4.9 11.7

2.2 2.1 2.5


estimated to

generate 20-30MM streams/ month

Source: Nielsen//NetRating used for page view, time data, Digg.com; Multichannel News; PureVideo; ComScore Video Matrix; Federated Media; HowStuffWorks.com; BusinessWeek (8/06); Red Herring

digg.com

Advertising:

• Limited banner and text ads

• No pre-rolls (link directly to other video sites, e.g., YouTube)

Content

• User-posted and recommended

• Share it (viae-mail)

• Blog it

Interactivity:

• Edit It

• Rate (Digg) It

• Comment

Bolt Media


• Online entertainment network and community powered by social network aspects where creative users can upload and submit content for competition

• Content base skews toward 18-34 year olds with focus on “prosumer” content

• Encourages interaction/feedback through the user's content – facilitating comments and blogs



• Established in 1996 as a teen community, Bolt has relaunched as an online network and community focused on posting creative content and network

• Focus on 18-34 year old audience

• Bolt Media has also launched Bolt2.com, enabling kids, tweens, and younger teens to create content, meet people, and play games in a safe and age-appropriate environment

• Based in New York, NY

• Currently leveraging creative relationships with the Hip Hop Theater Festival

• Developed significant advertising partnerships with companies such as Toyota, Coke P&G and Nike where users can enter immersive environments


3.54.3

3.4


MM NR

Web page views (MM)

Time/ person(min.)

20.9 25.0 82.4

2.3 1.5 6.2



NA NA NA

Source: Nielsen//NetRating used for page view, time data, Bolt.com; ComScore Video Matrix; BusinessWeek (8/06); TechCrunch.

Advertising:

• Banner ads – no pre-rolls or text

Content

• User-generated

• Embed & blog it

Interactivity:

• Community

• Rate It

• Recommend

• Comment

Bolt Media

Advertising:

• Banner Ads

• Video Ads

Metacafe


• Online entertainment network and community powered by traditional user-generated content and high-end produced content that is licensed in

• Utilizes VideoRank™ technology, allowing the site to mine and filter content

• Filtering system focuses Metacafe on a smaller number of high-quality selected videos to drive a large amount of traffic

• Developing revenue share with posters based on CPMs



• Founded in 2004, Metacafe boasts a global audience of 17 million unique visitors (comScore Media Metrix)

• A desktop client is used to upload and download the videos only about two dozen of which are newly approved each day

• Revenue model based on advertising (banner ads)

• Original round of funding yielded $5 MM from Benchmark Capital; Significant backing from Accel Partners and Benchmark Capital in second round, receiving $15MM in venture funding in July 2006

• Based in Tel Aviv, Israel and Palo Alto, CA

• Currently seeking significant partners for licensing content


3.54.3

3.4


MM NR

Web page views (MM)

Time/ person(min.)

84.6 78.8 101.4

31.4 23.0 25.5



NA NA NA

Source: Nielsen//NetRating used for page view, time data, Metacafe.com; ComScore Video Matrix; BusinessWeek (8/06); TechCrunch.

Content

• User-generated

• Embed & blog it

Interactivity:

• Community

• Rate It

• Recommend

• Comment

Advertising:

• Banner Ads

• Video Ads

Metacafe

0.2

0.5

0.8

1.0

0.03

Aug-06 Sep-06 Oct-06 Nov-06 Dec-06

bix.com

Recent InvestorsRecent Investors • Enables consumers to create their Web-based talent competitions and enter existing competitions

• “Bix is a platform for creating contests online much in the mold of American Idol … The company plans to allow end-users to download their own audio clips and use them as ringtones for a small charge. Eventually the same content could be sold to others, and at that point the company is going to split the proceeds with the creators … Bix is hoping to cash in on the shift of ad-dollars to the online medium … these contests will be ideal vehicles for brand advertising.” (gigaOm)



• Formerly known as 900Seconds.com, bix.com was recently launched and operates a user-generated contest site

• Mike Speiser, Co-Founder and CEO was also the Co-Founder of ePinions

• Currently, the website is ad-free, depending solely on corporate-sponsored contests for revenue

• Bix.com is seeking alternative revenue sources, including advertisements on its site and user-generated ringtones

• Based in Palo Alto, California

• Workforce of 16 employees, mostly engineers from eBay


Unique Users (MM)

* Bix was launched on August 8th, 2006. Forward estimates provided by Citigroup.

Number of Rounds: 1

Total Amount Raised ($ in mm): $6.77

Investors:

Geoff Ralston

Source: Motngomery & Co.

bix.com

Advertising:

• Sponsored Contests

Content

• Contest featuring user-generated content

Photobucket

Ranking Among Photo SitesRanking Among Photo Sites

• Popular sites offers subscriber based services for uploading and sharing photos

• Reliable service that enables efficient sharing and publishing of visual digital content online

• Images and videos can be directly linked form Photobucket to an site, including MySpace, eBay, LiveJournal, Xanga, Friendster, and Neopets



• Founded in 2003 and managed by Alex Welch

• Named fasting growing site of 2005 by Nielsen/Netratings and now has over 25 million users

• The site features free sharing and publishing of online images, graphic art and videos that can be directly linked from Photobucket to any site

• Revenues based on subscription for premiere products and banner advertising

• Based in Palo Alto, California and has workforce of 25


Unique Users (MM)15.9 14.6 15.0

10.4 11.4 11.9


MM NR

Web page views (MM)

Time/ person(min.)

453.8 522.3 375.8

12.1 11.6 8.4

Source: Citigorup Corporate and Investment Bank.1. ComScore MediaMetric. September 2006.

Advertising:

• Banner Ads

Content

• Slideshows and sharing

• Premiere product bundles

Photobucket

CONFIDENTIAL

APPENDIX B(Alternative Strategic Frameworks)

Market Evolution: Observations and Hypothesis

Inception(2004 – 2005)

Rapid Growth(Early 2006)

Breadth(Late ’06 / Early ’07)

Depth(Late ’07 / Early ’08)

• Multiple market entrants grow at a similar rate

• Players refine offerings to “good enough” status and focus on a small base of content and/or functionality

• Leading destination sites emerge based on differentiated feature or piece of content– YouTube explodes as users discover “Lazy Sundays”– MySpace users flock to improved community features

• Successful followers begin to build audience through partners/syndication– Grouper grows through Yahoo links and Friendster partnership– BrightCove, Veoh, and Roo build successful syndicator businesses

• Leaders broaden offerings through acquisition and product extensions– MySpace launches video– Google acquires YouTube

• Succesful followers continue to invest in audience and broaden offerings

• Laggards focus on narrow vertical offerings, hoping to differentiate and find audience

• Leaders build or acquire to create depth in specific verticals

• Targeted offerings that have found an audience are acquired at a premium or survive on a smaller scale

• Targeted offerings with smaller audiences languish or exit

ContentCollege Humor (0.9)

JibJab (0.6)RocketBoom(0.04)Revision3 (0.02)

Channel 101 (0.02)

Audience + Content

Break.com (3.3)

eBaum’s World (3.0)

Bolt.com (2.9)

Heavy.com (2.7)

Audience+Functionality

Six Apart (10.4)

Image Shack (9.3)

Xanga (5.5)

Reunion (4.7)

MetaCafe (3.1)

Digg (2.1)

Friendster (1.0)

Tagged (0.8)

PhotoBucket (12.0)

Roo Media (5.8)

Veoh (N/A)

Brightcove (N/A)

Feedroom (N/A)

Acquisition Candidates

Audience:Syndicators

Breadth DepthAudience:

Destinations

1st 2nd Avoid

AddictingClips (1.9)

Putfile (1.4)

DailyMotion (0.8)

vMix (0.8)

vidiLife (0.8)

ManiaTV (0.6)

Revver (0.5)

Vimeo (0.5)

Content + FunctionalityPure Video (0.9)

Bix (0.08)Blip.tv (0.06)Dave.tv (N/A)

FunctionalityMeetup (0.7)Piczo (0.5)

Text America (0.5)Imeem (0.2)eyeSpot (0.2)

Digital Service Acquisition Priorities

Deep

Content + Functionality

Lower Priority

Potential for small to medium acquisitions

Deep

Lower Priority

Potential for small acquisitions to round-out feature set

Audience - Destination Site

Avoid

Pureplay destination sites generally overvalued

Broad

Audience + Content

High Priority

May require significant investment

Broad

Audience + Functionality

High Priority

May require significant investment

Deep

Lower Priority

Potential for small acquisitions to address specific demographics

Audience - Syndicators

High Priority

High-value opportunities

confidential digital services and distribution acquisition strategy

Documents