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Financial and Stock Market PerformancePublic Software Companies By Product Category

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Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

San Diego, CA 9213012220 El Camino Real, #320

Public SaaS CompaniesPublic Internet Companies By Product Category

Software Equity Group, L.L.C.

p: (858) 509-2800f: (858) 509-2818

November 2010

Software Equity Group Flash Report

Select M&A Transactionsand

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ABOUT OUR FIRM

Software Equity Group is an investment bank and M&A advisory serving the software and technology sectors. Founded in 1992, our firm has represented and guided private companies throughout the United States and Canada, as well as Europe, Asia Pacific, Africa and Israel. We have advised public companies listed on the NASDAQ, NYSE, American, Toronto, London and Euronext exchanges. Software Equity Group also represents several of the world's leading private equity firms. We were recently ranked among the top ten investment banks worldwide for application software mergers and acquisitions.

Our value proposition is unique and compelling. We are skilled and accomplished investment bankers with extraordinary software, internet and technology domainexpertise. Our industry knowledge and experience span virtually every software product category, technology, market and delivery model, including Software-as-a Service (Saas), software on-demand and perpetual license. We have profound understanding of software company finances, operations and valuation. We monitor and analyze every publicly disclosed software M&A transaction, as well as the market, economy and technology trends that impact these deals. We're formidable negotiators and savvy dealmakers who facilitate strategic combinations that enhance shareholder value.

THE SEG SOFTWARE COMPANY MENTORING PROGRAM

As part of our informal mentoring program, we are currently guiding and advising some fifty software companies around the globe that are not yet exit candidates, but aspire to be in the next few years. We meet with them periodically, invite them to call whenever they’d like our opinion on an operational issue that might have exit implications later on, and we keep them apprised of M&A activity and financings in their product category. And the best news – we don’t charge for this mentoring advice. It’s complimentary. It’s our way of building value, and relationships.

We’re looking for a few more such relationships. We begin with an introductory phone call with companies interested in being mentored, followed by a more in-depth telephone conversation. We’ll then invite qualified candidates to meet personally with four or five members of our team at our San Diego office. During this three to four hour sit-down, we’ll discuss the current market, specifically as it relates to valuations, transactions and trends in your product category. We’ll assess the strengths and weakness of your financial performance, how that compares to other software companies your size, and how that relates to buyer expectations. We’ll discuss your market strategy, sales strategy, sales team track record, software and maintenance pricing strategies, equity structure, and a wide array of other factors that can materially impact your salability and valuation down the road. We’re a terrific sounding board. We’ll give you an informed, honest and frank opinion – that’s what we’re known for. And we’ll offer informed and insightful observations, ideas and options based on 17 years of working with countless software companies worldwide.

If you run a profitable software company with revenue in excess of $10 million, and you’re interested in learning more about SEG’s complimentary, no obligation mentoring program, please contact Kris Beible at [email protected] or 858-509-2800.

ADDITIONAL RESEARCH

For our complimentary current and archived Quarterly Reports from 1Q03, please visit: http://www.softwareequity.com/research_quarterly_reports.aspx

For our complimentary current and archived Monthly Flash Reports from July 2008, please visit: http://www.softwareequity.com/research_flash_reports.aspx

For our Annual Reports from 2003 through 2008, please visit: http://www.softwareequity.com/research_annual_reports.aspx


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CAD Computer-aided DesignCAM Computer-aided ManufacturingCRM Customer Relationship ManagementEBITDA Earnings before Interest, Taxes, Depreciation, and AmortizationEV Enterprise ValueFCF Free Cash FlowFORWARD Current EV / Next Four Quarters' Consensus Financial EstimatesHR Human ResourcesNASDAQ National Association of Securities Dealers Automated Quotation SystemOS Operating SystemPLM Product Lifecycle ManagementR&D Research and DevelopmentS&P Standard & Poor'sSaaS Software-as-a-ServiceSEG Software Equity GroupSG&A Selling, General, & AdministrativeSW SoftwareTTM Trailing Twelve MonthYoY Year-over-YearYTD Year-to-date

List of Commonly Used Acronyms


October 2010

Select Software Industry M&A Transactions


Select October 2010 Software Industry M&A Transactions

Date Announced Target EV/ Revenue

10/29/2010 Microsoft Corporation (NasdaqGS:MSFT) Canesta, Inc. - - -10/28/2010 Altair Engineering, Inc. SimLab Corporation - - -10/27/2010 Open Text Corp. (NasdaqGS:OTEX) StreamServe, Inc. - $71.0 -10/25/2010 Zenprise, Inc. Sparus Software SAS - - -10/21/2010 Bond International Software plc (AIM:BDI) VCG, LLC $6.8 $8.4 1.2x10/21/2010 International Business Machines Corp. (NYSE:IBM) Clarity Systems Limited - - -10/20/2010 HomeAway, Inc. Escapia, Inc. - - -10/20/2010 RECAP Management GmbH Data Systems Austria AG $29.3 $4.9 0.2x10/19/2010 Neohapsis, Inc. Texert, Inc. - - -10/18/2010 Software AG (XTRA:SOW) Data Foundations, Inc. - - -10/18/2010 MarkMonitor, Inc. DtecNet Software ApS - - -10/15/2010 VitalHealth Software B.V. SynQuest B.V., QuestManager Activities - - -10/15/2010 Qmastor Ltd. (ASX:QML) Algosys Inc. $1.9 $5.0 2.7x10/14/2010 General Electric Co. (NYSE:GE) Opal Software Pty Ltd. - - -10/13/2010 WideOrbit, Inc. Video Communications, Inc. - - -10/13/2010 International Business Machines Corp. (NYSE:IBM) PSS Systems, Inc. - - -10/13/2010 H&R Block, Inc. (NYSE:HRB) 2nd Story Software, Inc. - $287.5 -10/13/2010 GEOMAP Distribution Software Visiograph-Geomap - - -10/13/2010 Fondaction MEI Group, Inc. - - -10/12/2010 Dena Co. Ltd. (TSE:2432) ngmoco, Inc. - $400.0 -10/12/2010 TMT Ventures Ezwim B.V. - - -10/12/2010 BroadSoft, Inc. (NasdaqGM:BSFT) Casabi, Inc. - $2.0 -10/12/2010 Battery Ventures Data Innovations, Inc. - - -10/12/2010 RedBrick Health Corporation Social Kinetics Corporation - - -10/11/2010 Apex Print Technologies, LLC LaserNet, Inc. - - -10/08/2010 Vodafone Global Enterprise Limited Quickcomm Software Solutions, Inc. - - -10/08/2010 NitroSecurity, Inc. OpenService, Inc. - - -10/07/2010 On Direct Business Services Limited Activator UK Limited - - -10/07/2010 Synopsys Inc. (NasdaqGS:SNPS) Optical Research Associates, Inc. - - -10/06/2010 Zywave, Inc. Specific Software Solutions, LLC - - -10/06/2010 Power-One Inc. (NasdaqGM:PWER) Fat Spaniel Technologies, Inc. - - -10/06/2010 Microsoft Corporation (NasdaqGS:MSFT) AVIcode, Inc. - - -10/06/2010 SWK Holdings Corporation (OTCBB:SWKH) Lagan Technologies Ltd. - - -10/06/2010 Talent Technology Corporation TalentSpring, Inc. - - -10/05/2010 Questback AS Digium Oy - - -10/05/2010 Chess Telecom Limited Shaftesbury Systems Limited - - -10/05/2010 Follett Software Company, Inc. X2 Development Corporation - - -10/05/2010 Thomson Reuters Corporation (TSX:TRI) Legal Systems Holding Company - - -10/05/2010 Interactive Intelligence, Inc. (NasdaqGS:ININ) Global Software Services, Inc. $7.8 $14.0 1.8x10/05/2010 HomeAway, Inc. Instant Software, Inc. - - -10/05/2010 Oracle Corp. (NasdaqGS:ORCL) Passlogix, Inc. - - -10/04/2010 Versata Inc. think3, Inc. - - -10/04/2010 Neutron Interactive, LLC EnticeLabs, Inc. - - -10/04/2010 McGraw Hill Education, Inc. Tegrity, Inc. - - -10/04/2010 Rogue Wave Software, Inc. Acumem AB - - -10/01/2010 Harris Computer Systems, Inc. Cogsdale Corporation - - -10/01/2010 Google Inc. (NasdaqGS:GOOG) BlindType, Inc. - - -10/01/2010 Equifax Inc. (NYSE:EFX) Anakam, Inc. - - -


Target TTM Revenue ($mm)Acquirer

Implied Enterprise Value ($mm)

Category Performance

SEG Software Index


SEG Software Index: All Categories

Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue

EV/ EBITDA

Forward EV/ Revenue

Forward EV/

EBITDA

YoY Stock Market Return

SEG Software Index $658.32 $662.75 $219.79 68.6% 17.7% 7.9% 2.5x 14.0x 2.4x 10.0x 18.8% Billing & Service Management $1,137.74 $1,034.08 $425.68 49.3% 20.3% 6.6% 1.5x 7.2x 1.4x 6.3x 20.4% Business Intelligence $1,004.10 $832.00 $206.97 78.0% 15.1% 11.1% 3.1x 25.5x 3.4x 17.1x 9.8% Content/Document Management $111.19 $115.66 $93.80 72.3% 23.7% -3.0% 2.0x 8.0x 3.7x 10.3x 19.4% CRM, Marketing & Sales Software $153.99 $128.57 $67.17 48.2% 0.3% -6.6% 0.9x 17.5x 1.3x 14.1x 12.2% Database & File Management $2,367.56 $2,072.32 $602.94 83.6% 22.7% 6.1% 2.8x 11.4x 3.3x 9.8x 22.3% Dev Tools, OS & Application Testing Software $881.08 $727.25 $299.38 72.4% 18.9% 17.8% 2.1x 9.6x 3.2x 15.5x 61.6% Education & eLearning $288.85 $240.28 $119.43 73.5% 9.7% 8.8% 1.3x 19.6x 1.5x 12.2x 14.6% Electronic Design Automation $1,182.83 $1,311.80 $794.84 82.6% 8.3% -1.1% 1.9x 19.9x 1.9x 10.2x 38.6% Engineering, PLM & CAD/CAM Software $1,339.62 $1,505.11 $437.76 82.7% 16.0% 7.7% 2.4x 19.3x 2.3x 12.1x 44.0% Enterprise Application Integration $1,630.00 $1,505.44 $390.05 57.4% 14.4% 14.8% 2.4x 18.9x 5.0x 21.3x 28.7% Enterprise Resource Planning $627.02 $701.47 $362.69 57.5% 17.2% 1.3% 1.9x 12.0x 2.0x 11.7x 15.6% Entertainment $1,607.73 $873.84 $1,192.29 61.1% 14.2% -10.5% 0.7x 1.1x 0.9x 8.6x -23.5% Financial Services Software $932.58 $1,103.21 $254.06 60.1% 23.3% 7.7% 2.6x 9.9x 2.8x 11.3x 17.8% Healthcare $478.89 $481.60 $181.86 63.7% 21.0% 14.8% 3.6x 17.7x 3.6x 19.4x 6.7% Messaging, Conferencing & Communications $249.24 $187.63 $75.07 67.7% 15.3% 11.1% 2.5x 20.7x 2.9x 17.7x 67.1% Multimedia, Graphics, Digital Media $443.88 $408.41 $380.46 68.1% 17.6% 8.6% 3.3x 22.9x 3.1x 11.2x 9.6% Networking & Connectivity $2,083.22 $1,160.34 $821.00 79.0% 23.9% 13.8% 3.2x 18.4x 3.1x 22.3x 76.0% Security $892.13 $746.39 $226.99 78.0% 20.2% 10.7% 3.4x 14.4x 3.3x 11.4x 21.1% Storage & Systems Management Software $9,973.32 $8,928.47 $2,296.24 77.0% 20.0% 11.2% 3.0x 12.0x 3.4x 11.3x 34.7% Supply Chain Management & Logistics $535.33 $448.04 $201.64 56.2% 11.1% 3.2% 2.0x 10.7x 2.3x 13.0x 10.7% Wireless $352.17 $368.00 $149.95 54.2% 7.4% 15.1% 1.2x 12.7x 1.2x 11.6x 1.0%

TTM Revenue Growth 7.9%TTM EBITDA Growth 13.6%TTM Earnings Growth 39.7%Gross Profit Margin 68.6%EBITDA Margin 17.7%Net Income Margin 8.1%SG&A Expenses as a % of Total Revenue 37.9%R&D Expenses as a % of Total Revenue 14.1%

Current Ratio 2.0Quick Ratio 1.8Cash as Percent of Market Cap 16.7%Avg Days Outstanding: Accounts Receivable 69Avg Days Outstanding: Accounts Payable 35Working Capital to TTM Operating Expense Ratio 0.4

Levered FCF Margin 5.6%Cash from Operations Growth (YoY) 3.5%Cash from Investing Growth (YoY) -21.4%Cash from Financing Growth (YoY) 57.3%Levered FCF Growth (YoY) 0.0%


Category Name

Income Statement Analysis (Median)

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

November 2010 Monthly Flash Report

SEG SW Index Stock Market Return: Jan-Oct 2010

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DOW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Billing and Service Management

Company Name Ticker Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/ EBITDA


Amdocs Limited DOX $6,122.65 $4,832.72 $2,984.22 36.1% 20.3% 4.2% 1.6x 8.0x 1.4x 6.0x 21.7%AsiaInfo Holdings, Inc. ASIA $1,646.83 $1,381.61 $328.28 53.7% 20.1% 44.8% 4.2x 21.0x 5.3x 29.4x 0.6%CSG Systems International, Inc. CSGS $628.65 $686.56 $523.09 44.9% 20.2% 5.3% 1.3x 6.5x 1.4x 6.3x 19.0%MIND C.T.I. Ltd. MNDO $41.58 $23.58 $19.22 67.8% 28.1% 7.9% 1.2x 4.4x n/a n/a 57.3%

Median: $1,137.74 $1,034.08 $425.68 49.3% 20.3% 6.6% 1.5x 7.2x 1.4x 6.3x 20.4%








Income Statement Analysis (Median) Billing & Service Management Software Stock Market Return: Jan-Oct 2010

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Billing & Service Management SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Business Intelligence


MarginTTM EBITDA

Margin


Forward EV/ Revenue

Forward EV/ EBITDA


Actuate Corporation BIRT $215.06 $192.08 $130.32 84.2% 18.0% 7.4% 1.5x 8.2x 1.7x 7.5x -3.4%Datawatch Corporation DWCH $17.12 $11.05 $17.96 70.4% 8.5% -11.9% 0.6x 7.3x n/a n/a 27.4%Qlik Technologies QLIK $1,926.06 $1,918.98 $206.97 89.3% 16.0% 0.0% 9.3x 58.0x n/a n/a n/aInformatica Corporation INFA $3,765.66 $3,540.68 $602.94 83.6% 23.1% 27.1% 5.9x 25.5x 7.5x 28.6x 91.7%MicroStrategy Incorporated MSTR $1,034.68 $832.00 $421.23 78.0% 15.1% 14.8% 2.0x 13.1x 2.1x 8.1x 3.9%Pegasystems Inc. PEGA $1,004.10 $930.06 $295.10 63.9% 11.3% 23.8% 3.2x 27.9x 3.5x 19.7x -5.7%PROS Holdings PRO $271.72 $210.95 $67.77 71.3% 1.3% -5.4% 3.1x 230.8x 3.4x 17.1x 15.7%

Median: $1,004.10 $832.00 $206.97 78.0% 15.1% 11.1% 3.1x 25.5x 3.4x 17.1x 9.8%

TTM Revenue Growth 11.1%TTM EBITDA Growth -18.1%TTM Earnings Growth -15.3%Gross Profit Margin 78.0%EBITDA Margin 15.1%Net Income Margin 8.7%SG&A Expenses as a % of Total Revenue 50.4%R&D Expenses as a % of Total Revenue 15.7%


Levered FCF Margin 6.8%Cash from Operations Growth (YoY) 10.5%Cash from Investing Growth (YoY) -2.0%Cash from Financing Growth (YoY) 90.4%Levered FCF Growth (YoY) -6.2%






Business Intelligence Software Stock Market Return: Jan-Oct 2010

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Business Intelligence SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Content & Document Management


MarginTTM EBITDA

Margin


Forward EV/ Revenue

Forward EV/ EBITDA


Adobe Systems Incorporated ADBE $14,320.38 $13,266.56 $3,549.34 89.3% 34.0% 14.4% 3.7x 11.0x 4.7x 11.5x -14.5%Datawatch Corporation DWCH $17.12 $11.05 $17.96 70.4% 8.5% -11.9% 0.6x 7.3x n/a n/a 27.4%EasyLink Services International ESIC $111.19 $115.66 $81.44 72.3% 23.7% -4.6% 1.4x 6.0x n/a n/a 151.7%Ninetowns Internet Tech Grp Ltd. NINE $51.27 -$50.33 $93.80 69.1% -70.4% -3.0% n/a n/a n/a n/a -15.1%Open Text Corporation OTEX $2,521.07 $2,436.04 $918.01 74.2% 30.4% 12.7% 2.7x 8.7x 2.6x 9.2x 19.4%

Median: $111.19 $115.66 $93.80 72.3% 23.7% -3.0% 2.0x 8.0x 3.7x 10.3x 19.4%

TTM Revenue Growth -3.0%TTM EBITDA Growth -0.5%TTM Earnings Growth 103.6%Gross Profit Margin 72.3%EBITDA Margin 23.7%Net Income Margin 11.7%SG&A Expenses as a % of Total Revenue 49.6%R&D Expenses as a % of Total Revenue 15.0%


Levered FCF Margin 17.5%Cash from Operations Growth (YoY) 16.0%Cash from Investing Growth (YoY) 70.0%Cash from Financing Growth (YoY) 32.8%Levered FCF Growth (YoY) 3.1%





Income Statement Analysis (Median) Content & Document Management Software Stock Market Return: Jan-Oct 2010

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Content & Document Management SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: CRM, Marketing, and Sales


MarginTTM EBITDA

Margin


Forward EV/ Revenue

Forward EV/ EBITDA


Astea International Inc. ATEA $8.64 $5.14 $19.67 35.5% -8.7% -6.6% 0.3x n/a n/a n/a 12.2%Blackbaud, Inc. BLKB $1,112.26 $1,103.21 $319.11 60.8% 19.8% 2.7% 3.5x 17.5x 3.7x 14.1x 14.4%Callidus Software, Inc. CALD $153.99 $128.57 $67.17 38.9% -15.1% -27.8% 1.9x n/a 1.6x n/a 61.0%CDC Software Corporation CDCS $192.92 $182.73 $206.06 54.9% 16.8% -4.5% 0.9x 5.3x 0.9x 3.8x -29.3%Rainmaker Systems Inc. RMKR $26.46 $14.54 $48.06 48.2% 0.3% -7.2% 0.3x 115.4x 0.3x 14.3x -13.2%

Median: $153.99 $128.57 $67.17 48.2% 0.3% -6.6% 0.9x 17.5x 1.3x 14.1x 12.2%

TTM Revenue Growth -6.6%TTM EBITDA Growth -5.0%TTM Earnings Growth 8.1%Gross Profit Margin 48.2%EBITDA Margin 0.3%Net Income Margin -11.6%SG&A Expenses as a % of Total Revenue 31.3%R&D Expenses as a % of Total Revenue 14.4%








CRM, Marketing, & Sales Software Stock Market Return: Jan-Oct 2010

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CRM, Marketing, & Sales SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Database and File Management


MarginTTM EBITDA

Margin


Forward EV/ Revenue

Forward EV/ EBITDA


BMC Software, Inc. BMC $8,077.06 $6,956.36 $1,962.60 77.8% 32.8% 4.4% 3.5x 10.8x 3.7x 8.5x 22.3%Guidance Software, Inc. GUID $154.18 $127.23 $86.74 74.0% -0.8% 9.4% 1.5x n/a 1.7x n/a 16.0%Informatica Corporation INFA $3,765.66 $3,540.68 $602.94 83.6% 23.1% 27.1% 5.9x 25.5x 7.5x 28.6x 91.7%Oracle Corporation ORCL $147,696.61 $141,503.61 $29,268.00 76.7% 40.3% 27.4% 4.8x 12.0x 5.2x 10.6x 39.2%Pervasive Software Inc. PVSW $81.23 $45.27 $46.00 86.8% 13.0% -3.2% 1.0x 7.6x 0.9x 5.0x 3.7%Quest Software, Inc. QSFT $2,367.56 $2,072.32 $744.85 90.5% 22.7% 6.1% 2.8x 12.3x 2.9x 9.8x 56.4%Versant Corporation VSNT $36.35 $10.89 $15.53 88.2% 17.3% -22.4% 0.7x 4.1x n/a n/a -39.6%

Median: $2,367.56 $2,072.32 $602.94 83.6% 22.7% 6.1% 2.8x 11.4x 3.3x 9.8x 22.3%








Income Statement Analysis (Median) Database & File Management Software Stock Market Return: Jan-Oct 2010

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Database & File Management SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Development Tools, OS, and App Testing


MarginTTM EBITDA

Margin


Forward EV/ Revenue

Forward EV/ EBITDA


BSQUARE Corporation BSQR $38.37 $22.90 $75.44 17.9% -2.0% 14.2% 0.3x n/a n/a n/a 61.6%Google Inc. GOOG $196,245.99 $164,987.99 $27,554.56 64.1% 40.9% 21.5% 6.0x 14.7x 7.2x 15.5x 14.5%Magic Software Enterprises Ltd. MGIC $87.26 $61.52 $78.03 44.2% 16.7% 39.5% 0.8x 4.7x n/a n/a 49.4%Microsoft Corporation MSFT $228,133.02 $195,545.02 $65,759.00 80.7% 45.4% 16.8% 3.0x 6.5x 3.2x 7.6x -3.8%Phoenix Technologies Ltd. PTEC $144.52 $105.33 $62.38 86.0% -13.1% -9.0% 1.7x n/a 1.6x n/a 75.2%Progress Software Corporation PRGS $1,617.64 $1,349.18 $520.74 85.1% 26.9% 4.8% 2.6x 9.6x 2.9x n/a 61.8%Red Hat, Inc. RHT $8,053.95 $7,078.74 $819.12 84.4% 21.0% 18.8% 8.6x 41.2x 9.7x 35.6x 63.7%GeekNet GKNT $126.16 $98.17 $77.34 28.6% -8.4% 26.4% 1.3x n/a 2.1x n/a 79.3%

Median: $881.08 $727.25 $299.38 72.4% 18.9% 17.8% 2.1x 9.6x 3.2x 15.5x 61.6%









Dev Tools and App Testing Software Stock Market Return: Jan-Oct 2010

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Development Tools, OS, and App Testing SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Education and eLearning


MarginTTM EBITDA

Margin


Forward EV/ Revenue

Forward EV/ EBITDA


Archipelago Learning, Inc. ARCL $278.60 $346.77 $53.56 91.9% 24.1% 32.1% 6.5x 26.8x 7.8x 20.4x n/aBlackboard Inc. BBBB $1,431.06 $1,453.01 $429.65 70.9% 24.2% 18.7% 3.4x 14.0x 4.0x 17.4x 17.7%GSE Systems Inc. GVP $68.40 $42.48 $45.95 25.9% 1.2% 23.0% 0.9x 74.1x 1.1x n/a -40.5%Renaissance Learning, Inc. RLRN $409.78 $345.35 $128.30 79.3% 27.4% 8.1% 2.7x 9.8x 2.3x n/a 53.9%Rosetta Stone, Inc. RST $476.73 $377.04 $262.90 85.9% 13.2% 9.4% 1.4x 10.9x 1.5x 8.9x 11.6%Saba Software, Inc. SABA $167.92 $135.20 $110.57 66.0% 6.2% 7.0% 1.2x 19.6x 1.2x 12.2x 38.9%Scientific Learning Corporation SCIL $62.66 $45.49 $49.36 76.1% 2.1% -5.1% 0.9x 42.9x 0.8x 6.3x -33.1%

Median: $288.85 $240.28 $119.43 73.5% 9.7% 8.8% 1.3x 19.6x 1.5x 12.2x 14.6%



Levered FCF Margin 9.5%Cash from Operations Growth (YoY) -26.0%Cash from Investing Growth (YoY) -22.2%Cash from Financing Growth (YoY) 68.7%Levered FCF Growth (YoY) -33.2%





Income Statement Analysis (Median) Education & eLearning Software Stock Market Return: Jan-Oct 2010

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Education & Computer Based Training SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Electronic Design Automation


MarginTTM EBITDA

Margin


Forward EV/ Revenue

Forward EV/ EBITDA


Cadence Design Systems, Inc. CDNS $2,263.28 $2,299.69 $907.22 82.6% 8.4% 5.5% 2.5x 30.1x 2.7x 34.6x 38.6%Magma Design Automation, Inc. LAVA $255.30 $262.50 $126.79 83.9% 5.5% -2.5% 2.1x 37.5x 2.1x 10.0x 99.5%Mentor Graphics Corporation MENT $1,182.83 $1,311.80 $794.84 86.7% 8.3% -1.1% 1.7x 19.9x 1.7x 10.3x 48.2%PDF Solutions, Inc. PDFS $109.93 $75.50 $60.22 59.5% 6.7% 26.9% 1.3x 18.8x 1.6x n/a 14.4%Synopsys, Inc. SNPS $3,800.22 $2,590.39 $1,343.48 82.0% 20.6% -2.3% 1.9x 9.3x 1.9x 6.1x 16.2%

Median: $1,182.83 $1,311.80 $794.84 82.6% 8.3% -1.1% 1.9x 19.9x 1.9x 10.2x 38.6%

TTM Revenue Growth -1.1%TTM EBITDA Growth 126.6%TTM Earnings Growth 98.1%Gross Profit Margin 82.6%EBITDA Margin 8.3%Net Income Margin -1.0%SG&A Expenses as a % of Total Revenue 42.7%R&D Expenses as a % of Total Revenue 32.9%


Levered FCF Margin 13.9%Cash from Operations Growth (YoY) 72.8%Cash from Investing Growth (YoY) -100.0%Cash from Financing Growth (YoY) 118.1%Levered FCF Growth (YoY) n/a






Electronic Design Automation Software Stock Market Return: Jan-Oct 2010

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Electronic Design Automation SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Engineering, PLM, & CAD/CAM


MarginTTM EBITDA

Margin


Forward EV/ Revenue

Forward EV/ EBITDA


ANSYS, Inc. ANSS $4,112.99 $3,866.68 $564.03 88.3% 49.0% 12.4% 6.9x 14.0x 7.9x 13.5x 11.5%Autodesk, Inc. ADSK $8,227.08 $7,140.48 $1,820.40 89.6% 18.5% -6.0% 3.9x 21.2x 4.1x 20.2x 45.2%AutoNavi Holdings AMAP $954.33 $932.24 $62.13 65.6% 30.5% n/a 15.0x 49.2x n/a n/a n/aCadence Design Systems, Inc. CDNS $2,263.28 $2,299.69 $907.22 82.6% 8.4% 5.5% 2.5x 30.1x 2.7x 34.6x 38.6%Cimatron Ltd. CIMT $16.72 $7.65 $34.82 82.9% 8.4% 3.6% 0.2x 2.6x n/a n/a 52.1%Dassault Systèmes DSY $6,584.66 $5,888.46 $1,440.14 85.3% 27.1% 11.2% 4.1x 15.1x n/a n/a 40.2%DigitalGlobe, Inc. DGI $1,496.41 $1,698.41 $311.50 87.1% 53.5% 10.8% 5.5x 10.2x 5.6x 9.3x 46.2%GSE Systems Inc. GVP $68.40 $42.48 $45.95 25.9% 1.2% 23.0% 0.9x 74.1x 1.1x n/a -40.5%Magma Design Automation, Inc. LAVA $255.30 $262.50 $126.79 83.9% 5.5% -2.5% 2.1x 37.5x 2.1x 10.0x 99.5%Mentor Graphics Corporation MENT $1,182.83 $1,311.80 $794.84 86.7% 8.3% -1.1% 1.7x 19.9x 1.7x 10.3x 48.2%Parametric Technology Corporation PMTC $2,476.67 $2,236.42 $1,010.05 69.5% 13.6% 7.7% 2.2x 16.3x 2.3x 12.1x 44.0%PDF Solutions, Inc. PDFS $109.93 $75.50 $60.22 59.5% 6.7% 26.9% 1.3x 18.8x 1.6x n/a 14.4%Stratasys, Inc. SSYS $643.88 $606.72 $114.55 50.0% 21.2% 10.1% 5.3x 25.0x 6.4x 35.2x 98.5%Synopsys, Inc. SNPS $3,800.22 $2,590.39 $1,343.48 82.0% 20.6% -2.3% 1.9x 9.3x 1.9x 6.1x 16.2%

Median: $1,339.62 $1,505.11 $437.76 82.7% 16.0% 7.7% 2.4x 19.3x 2.3x 12.1x 44.0%



Levered FCF Margin 13.4%Cash from Operations Growth (YoY) 65.3%Cash from Investing Growth (YoY) 70.2%Cash from Financing Growth (YoY) -86.9%Levered FCF Growth (YoY) n/a





Income Statement Analysis (Median) Engineering, PLM, & CAD/CAM Software Stock Market Return: Jan-Oct 2010

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Engineering, PLM, & CAD/CAM SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Enterprise Application Integration


MarginTTM EBITDA

Margin


Forward EV/ Revenue

Forward EV/ EBITDA


BluePhoenix Solutions, Ltd. BPHX $50.77 $48.82 $71.74 40.6% 6.6% -14.8% 0.7x 10.3x 0.6x n/a -17.1%Citrix Systems, Inc. CTXS $11,988.46 $11,086.28 $1,796.10 91.0% 23.9% 13.8% 6.2x 25.9x 7.0x 24.4x 74.5%Jacada Ltd. JCDA $17.19 $6.99 $20.20 40.4% -26.2% 19.9% 0.3x n/a n/a n/a -42.8%TIBCO Software Inc. TIBX $3,209.22 $2,962.06 $708.36 74.2% 22.1% 15.9% 4.2x 18.9x 5.0x 18.2x 119.7%

Median: $1,630.00 $1,505.44 $390.05 57.4% 14.4% 14.8% 2.4x 18.9x 5.0x 21.3x 28.7%

TTM Revenue Growth 14.8%TTM EBITDA Growth 26.4%TTM Earnings Growth 37.5%Gross Profit Margin 57.4%EBITDA Margin 14.4%Net Income Margin -5.4%SG&A Expenses as a % of Total Revenue 45.3%R&D Expenses as a % of Total Revenue 17.1%








Enterprise Application Integration Software Stock Market Return: Jan-Oct 2010

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Enterprise Application Integration SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Enterprise Resource Planning


MarginTTM EBITDA

Margin


Forward EV/ Revenue

Forward EV/ EBITDA


American Software, Inc. AMSW.A $155.16 $118.46 $76.54 54.7% 12.9% -0.2% 1.5x 12.0x 1.7x 11.8x -7.1%CDC Software Corporation CDCS $192.92 $182.73 $206.06 54.9% 16.8% -4.5% 0.9x 5.3x 0.9x 3.8x -29.3%Deltek PROJ $532.31 $543.66 $263.85 65.3% 17.7% -1.2% 2.1x 11.6x 2.1x n/a 9.9%Epicor Software Corporation EPIC $595.72 $734.56 $434.98 54.5% 13.2% 3.6% 1.7x 12.8x 1.8x 12.1x 21.9%Intuit Inc. INTU $15,235.38 $14,611.38 $3,455.00 82.5% 32.4% 11.1% 4.2x 13.1x 4.3x 11.7x 65.0%Lawson Software, Inc. LWSN $1,449.55 $1,342.17 $742.08 56.4% 16.3% 0.9% 1.8x 11.1x 1.8x 9.6x 40.9%Oracle Corporation ORCL $147,696.61 $141,503.61 $29,268.00 76.7% 40.3% 27.4% 4.8x 12.0x 5.2x 10.6x 39.2%QAD Inc. QADI $135.89 $96.71 $211.07 58.6% 7.5% -9.3% 0.5x 6.1x 0.5x 4.1x -5.5%SAP SAP $44,341.46 $45,694.46 $11,596.00 68.0% 31.3% 5.6% 3.9x 12.6x 4.3x 14.1x 21.3%Tyler Technologies, Inc. TYL $658.32 $668.38 $290.41 44.4% 17.6% 1.7% 2.3x 13.1x 2.3x 12.0x 7.3%

Median: $627.02 $701.47 $362.69 57.5% 17.2% 1.3% 1.9x 12.0x 2.0x 11.7x 15.6%









Enterprise Resource Planning Software Stock Market Return: Jan-Oct 2010

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Enterprise Resource Planning SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Entertainment


MarginTTM EBITDA

Margin


Forward EV/ Revenue

Forward EV/ EBITDA


Electronic Arts Inc. ERTS $5,228.58 $3,498.58 $3,668.00 58.3% 3.2% -7.0% 1.0x 29.6x 0.9x 11.0x -13.2%Giant Interactive GA $1,607.73 $873.84 $1,192.29 88.0% 67.5% -12.1% 0.7x 1.1x 4.5x 6.8x -2.9%Glu Mobile, Inc. GLUU $76.22 $79.12 $67.76 64.4% -7.3% -17.2% 1.2x n/a 0.9x 17.3x 64.4%Konami Corporation KNM $189,246.97 $188,498.97 $263,993.00 28.2% 14.2% -4.6% 0.7x 5.0x 0.8x 5.8x -99.0%Majesco Entertainment Company COOL $24.49 $15.28 $76.17 24.6% -1.6% -14.0% 0.2x n/a 0.2x n/a -39.2%Perfect World PWRD $1,637.78 $1,389.84 $2,417.11 85.1% 50.3% 38.4% 0.6x 1.1x 4.1x 7.3x -26.4%THQ Inc. THQI $271.03 $155.07 $780.78 61.1% 23.9% -10.5% 0.2x 0.8x 0.3x 9.9x -23.5%

Median: $1,607.73 $873.84 $1,192.29 61.1% 14.2% -10.5% 0.7x 1.1x 0.9x 8.6x -23.5%

TTM Revenue Growth -10.5%TTM EBITDA Growth 11.5%TTM Earnings Growth 68.3%Gross Profit Margin 61.1%EBITDA Margin 14.2%Net Income Margin -4.3%SG&A Expenses as a % of Total Revenue 23.5%R&D Expenses as a % of Total Revenue 11.7%







Income Statement Analysis (Median) Entertainment Software Stock Market Return: Jan-Oct 2010

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Entertainment SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Financial Services


MarginTTM EBITDA

Margin


Forward EV/ Revenue

Forward EV/ EBITDA


ACI Worldwide, Inc. ACIW $809.25 $740.35 $403.09 68.0% 18.6% 3.6% 1.8x 9.9x 2.0x 11.8x 51.5%Advent Software, Inc. ADVS $1,373.51 $1,251.48 $274.28 71.4% 16.8% 5.6% 4.6x 27.2x 4.9x 19.7x 40.6%Blackbaud, Inc. BLKB $1,112.26 $1,103.21 $319.11 60.8% 19.8% 2.7% 3.5x 17.5x 3.7x 14.1x 14.4%Bottomline Technologies EPAY $543.26 $406.89 $163.47 55.9% 15.8% 17.6% 2.5x 15.8x 3.0x 14.1x 22.8%DST Systems, Inc. DST $1,999.07 $2,877.57 $2,299.10 21.3% 20.5% 3.1% 1.3x 6.1x 1.8x 6.8x 3.7%Ebix, Inc. EBIX $862.43 $882.57 $128.40 76.7% 44.7% 48.4% 6.9x 15.4x 9.5x 20.7x 20.0%EPIQ Systems, Inc. EPIQ $430.08 $445.10 $233.84 59.5% 23.3% -5.8% 1.9x 8.2x 2.1x 7.2x -7.1%Fair Isaac Corporation FICO $1,002.73 $1,280.95 $605.64 70.1% 24.1% -4.0% 2.1x 8.8x 2.2x 8.0x 18.2%Fiserv FISV $8,183.67 $11,146.67 $4,117.00 42.1% 31.3% 1.5% 2.7x 8.7x 2.8x 8.6x 18.9%Fundtech Ltd. FNDT $217.95 $163.39 $137.02 53.6% 14.3% 19.4% 1.2x 8.3x 1.5x 11.3x 7.0%Jack Henry & Associates, Inc. JKHY $2,333.89 $2,586.06 $889.08 41.4% 30.5% 19.4% 2.9x 9.5x 3.2x 10.7x 17.7%Longtop Financial Technologies LFT $2,050.85 $1,717.26 $189.45 61.9% 41.7% 64.1% 9.1x 21.7x 12.2x 26.1x 37.1%MSCI, Inc. MSCI $4,258.12 $5,285.60 $871.73 71.0% 33.6% 102.0% 6.1x 18.1x 12.3x 25.5x 17.9%NetSol Technologies Inc. NTWK $72.77 $96.76 $37.56 70.9% 37.4% 51.6% 2.6x 6.9x 2.3x 8.1x 81.0%S1 Corporation SONE $309.02 $272.54 $216.07 49.3% 9.0% -9.2% 1.3x 14.0x 1.1x 5.9x -3.0%SS&C Corporation SSNC $1,243.34 $1,446.77 $313.84 49.7% 37.4% 17.0% 4.6x 12.3x n/a n/a 0.0%Sapiens International SPNS $55.36 $46.26 $49.34 40.1% 13.7% 9.8% 0.9x 6.8x n/a n/a -100.0%TradeStation Group, Inc. TRAD $222.28 n/a $131.23 77.3% n/a -9.4% n/a n/a n/a n/a -28.9%

Median: $932.58 $1,103.21 $254.06 60.1% 23.3% 7.7% 2.6x 9.9x 2.8x 11.3x 17.8%








Income Statement Analysis (Median) Financial Services Software Stock Market Return: Jan-Oct 2010

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Financial Services SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Healthcare


MarginTTM EBITDA

Margin


Forward EV/ Revenue

Forward EV/ EBITDA


Allscripts Healthcare Solutions Inc. MDRX $3,559.78 $3,418.66 $704.50 55.2% 17.8% 28.5% 4.9x 27.3x n/a n/a -2.1%Cerner Corporation CERN $7,276.98 $6,830.87 $1,816.34 83.2% 26.1% 8.7% 3.8x 14.4x 4.1x 14.3x 15.5%Computer Programs and Sys, Inc. CPSI $501.14 $486.05 $143.92 40.6% 18.5% 14.2% 3.4x 18.2x 4.0x 19.4x 8.1%eResearchTechnology, Inc. ERES $372.28 $371.75 $119.23 51.0% 23.5% 18.3% 3.1x 13.3x 3.6x n/a 3.0%MedAssets MDAS $1,079.24 $1,264.14 $380.08 77.4% 28.5% 15.4% 3.3x 11.7x 3.6x 11.2x -15.3%Merge Healthcare MRGE $278.12 $477.15 $113.43 64.7% 17.3% 81.1% 4.2x 24.4x 7.2x 23.3x -6.7%Omnicell, Inc. OMCL $456.65 $278.03 $219.79 51.9% 8.8% -0.5% 1.3x 14.3x 1.3x 13.6x 42.0%Quality Systems, Inc. QSII $1,857.82 $1,750.97 $317.86 62.7% 27.1% 17.9% 5.5x 20.3x 5.9x 19.5x 5.3%Simulations Plus, Inc. SLP $53.56 $44.98 $10.35 75.3% 25.5% 13.2% 4.3x 17.1x 3.5x n/a 133.8%Vital Images, Inc. VTAL $191.00 $73.90 $59.37 73.8% 0.7% -0.9% 1.2x 187.6x 1.2x 26.7x 16.6%

Median: $478.89 $481.60 $181.86 63.7% 21.0% 14.8% 3.6x 17.7x 3.6x 19.4x 6.7%









Healthcare Software Stock Market Return: Jan-Oct 2010

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Healthcare SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Messaging, Conferencing, and Comms


MarginTTM EBITDA

Margin


Forward EV/ Revenue

Forward EV/ EBITDA


8x8 Inc. EGHT $181.34 $163.53 $66.01 67.7% 9.1% 3.9% 2.5x 27.2x 2.8x 31.8x 145.8%BroadSoft, Inc. BSFT $232.23 $187.63 $75.07 77.0% 1.0% n/a 2.5x 243.0x n/a n/a n/aEvolving Systems, Inc. EVOL $78.24 $69.11 $38.51 66.8% 21.3% 0.3% 1.8x 8.4x 1.8x 7.8x 21.9%Interactive Intelligence, Inc. ININ $432.70 $357.15 $151.54 69.8% 15.3% 19.5% 2.4x 15.4x 3.0x 17.7x 47.3%SeaChange International, Inc. SEAC $252.75 $184.96 $212.51 50.2% 7.6% 5.7% 0.9x 11.5x 0.9x 11.8x 18.8%Synchronoss Technologies, Inc. SNCR $668.45 $583.26 $152.34 49.5% 18.5% 22.4% 3.8x 20.7x 6.1x 21.6x 86.8%Zix Corporation ZIXI $249.24 $229.88 $34.56 77.9% 19.6% 16.6% 6.7x 33.9x 7.5x n/a 112.6%

Median: $249.24 $187.63 $75.07 67.7% 15.3% 11.1% 2.5x 20.7x 2.9x 17.7x 67.1%








Income Statement Analysis (Median) Messaging, Conferencing, & Comms Software Stock Market Return: Jan-Oct 2010

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Messaging, Conferencing, & Comms SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Multimedia, Graphics, and Digital Media


MarginTTM EBITDA

Margin


Forward EV/ Revenue

Forward EV/ EBITDA


Adobe Systems Incorporated ADBE $14,320.38 $13,266.56 $3,549.34 89.3% 34.0% 14.4% 3.7x 11.0x 4.7x 11.5x -14.5%Avid Technology, Inc. AVID $480.83 $446.47 $657.85 51.7% 0.8% -0.5% 0.7x 81.4x 0.8x n/a -0.1%Bitstream Inc. BITS $70.24 $66.16 $21.88 55.2% 1.6% 2.4% 3.0x 189.0x n/a n/a 9.6%DigitalGlobe, Inc. DGI $1,496.41 $1,698.41 $311.50 87.1% 53.5% 10.8% 5.5x 10.2x 5.6x 9.3x 46.2%MediaMind Technologies MDMD $254.39 $221.89 $74.89 95.2% 21.0% 24.7% 3.0x 14.1x 0.0x 0.0x n/aMonotype Imaging Holdings TYPE $333.83 $370.35 $102.37 89.4% 38.9% 6.3% 3.6x 9.3x 4.3x 11.0x 26.7%NICE Systems Ltd. NICE $7,441.01 $6,305.14 $662.13 60.1% 14.9% 12.7% 9.5x 63.8x 3.1x 11.7x 2.8%Nuance Communications, Inc. NUAN $4,617.11 $4,989.74 $1,072.52 67.6% 20.3% 14.0% 4.7x 22.9x 5.2x 16.9x 19.8%RealNetworks, Inc. RNWK $406.92 $93.70 $449.42 63.1% -4.6% -21.1% 0.2x n/a 0.2x 6.0x -16.0%Sonic Solutions SNIC $368.52 $313.79 $103.51 68.6% 0.2% -6.2% 3.0x 1515.9x 3.0x 65.8x 146.3%

Median: $443.88 $408.41 $380.46 68.1% 17.6% 8.6% 3.3x 22.9x 3.1x 11.2x 9.6%



Levered FCF Margin 6.0%Cash from Operations Growth (YoY) -7.2%Cash from Investing Growth (YoY) -29.9%Cash from Financing Growth (YoY) -26.3%Levered FCF Growth (YoY) 0.0%






Multimedia, Graphics, & Digital Media Software Stock Market Return: Jan-Oct 2010

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Multimedia, Graphics, & Digital Media SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Networking and Connectivity


MarginTTM EBITDA

Margin


Forward EV/ Revenue

Forward EV/ EBITDA


Allot Communications Ltd. ALLT $165.72 $110.36 $52.30 71.4% 4.8% 31.5% 2.1x 44.2x 2.6x n/a 77.6%CA, Inc. CA $11,869.58 $10,900.58 $4,443.00 86.7% 36.6% 6.1% 2.5x 6.7x 2.5x 6.9x 10.9%Cisco Systems, Inc. CSCO $127,671.57 $103,094.57 $40,040.00 64.0% 28.0% 10.9% 2.6x 9.2x 2.8x 8.5x 0.2%Citrix Systems, Inc. CTXS $11,988.46 $11,086.28 $1,796.10 91.0% 23.9% 13.8% 6.2x 25.9x 7.0x 24.4x 74.5%F5 Networks, Inc. FFIV $9,457.78 $9,029.29 $881.97 80.5% 28.8% 35.0% 10.2x 35.6x 10.5x 31.8x 162.2%NetScout Systems Inc. NTCT $983.63 $890.68 $278.81 78.5% 22.1% 9.0% 3.2x 14.5x 3.5x 13.7x 91.0%Novell, Inc. NOVL $2,083.22 $1,040.31 $821.00 78.5% 15.0% -7.9% 1.3x 8.4x 1.1x n/a 45.0%OPNET Technologies, Inc. OPNT $422.94 $311.38 $135.20 77.5% 14.0% 13.8% 2.3x 16.5x 2.8x 25.2x 80.6%Radware Ltd. RDWR $701.02 $620.55 $137.18 79.0% 15.8% 34.9% 4.5x 28.7x 5.5x 60.6x 205.1%SolarWinds, Inc. SWI $1,268.18 $1,160.34 $143.97 95.2% 39.6% 32.9% 8.1x 20.4x 10.3x 20.2x 2.0%

Median: $2,083.22 $1,160.34 $821.00 79.0% 23.9% 13.8% 3.2x 18.4x 3.1x 22.3x 76.0%









Networking & Connectivity Software Stock Market Return: Jan-Oct 2010

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Networking and Connectivity SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Security


MarginTTM EBITDA

Margin


Forward EV/ Revenue

Forward EV/ EBITDA


ActivCard Corp. ACTI $152.31 $75.23 $57.03 70.3% -9.7% -10.1% 1.3x n/a n/a n/a 42.3%Blue Coat Systems, Inc. BCSI $1,152.27 $968.51 $502.63 75.6% 18.5% 9.7% 1.9x 10.4x 2.0x 12.8x 21.1%Check Point Software Tech Ltd. CHKP $8,875.80 $7,921.56 $1,051.48 88.1% 53.6% 20.9% 7.5x 14.0x 8.8x 15.1x 37.7%Cogent, Inc. COGT $929.86 $657.11 $116.57 56.1% 27.0% -15.4% 5.6x 20.9x 5.0x 14.2x 9.0%Commtouch Software Ltd. CTCH $88.46 $72.43 $16.80 84.2% 23.8% 14.5% 4.3x 18.1x n/a n/a 21.1%McAfee, Inc. MFE $7,284.86 $6,255.86 $2,040.91 77.6% 20.9% 11.8% 3.1x 14.7x 3.3x 10.0x 12.9%Sourcefire, Inc. FIRE $654.29 $579.26 $127.87 79.9% 15.0% 36.2% 4.5x 30.2x 5.9x 45.9x 16.2%Symantec Corporation SYMC $12,779.45 $13,139.45 $5,992.00 85.2% 29.1% 1.8% 2.2x 7.5x 2.3x 6.4x -7.9%VASCO Data Security International VDSI $300.74 $214.31 $106.89 70.2% 10.7% 8.3% 2.0x 18.8x 2.5x n/a 31.4%VeriSign, Inc. VRSN $5,976.58 $4,005.70 $1,073.65 78.0% 44.0% 52.9% 3.7x 8.5x 4.0x 8.8x 52.3%Websense, Inc. WBSN $854.40 $835.66 $326.10 84.0% 19.1% 4.5% 2.6x 13.4x 2.7x 7.6x 25.3%Zix Corporation ZIXI $249.24 $229.88 $34.56 77.9% 19.6% 16.6% 6.7x 33.9x 7.5x n/a 112.6%

Median: $892.13 $746.39 $226.99 78.0% 20.2% 10.7% 3.4x 14.4x 3.3x 11.4x 21.1%



Levered FCF Margin 16.9%Cash from Operations Growth (YoY) 33.6%Cash from Investing Growth (YoY) 7.2%Cash from Financing Growth (YoY) -22.1%Levered FCF Growth (YoY) 65.4%





Income Statement Analysis (Median) Security Software Stock Market Return: Jan-Oct 2010

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Security SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Storage and Systems Management


MarginTTM EBITDA

Margin


Forward EV/ Revenue

Forward EV/ EBITDA


BMC Software, Inc. BMC $8,077.06 $6,956.36 $1,962.60 77.8% 32.8% 4.4% 3.5x 10.8x 3.7x 8.5x 22.3%CA, Inc. CA $11,869.58 $10,900.58 $4,443.00 86.7% 36.6% 6.1% 2.5x 6.7x 2.5x 6.9x 10.9%CommVault Systems, Inc. CVLT $1,249.31 $1,068.88 $285.66 86.9% 12.5% 17.5% 3.7x 29.8x 4.2x 23.1x 46.9%Compuware Corporation CPWR $2,234.74 $2,157.47 $892.22 69.3% 20.6% -6.5% 2.4x 11.8x 2.4x 9.3x 41.8%EMC EMC $43,309.52 $40,544.30 $16,226.63 58.2% 20.4% 16.4% 2.5x 12.2x 3.1x 13.8x 27.6%FalconStor Software, Inc. FALC $125.22 $87.00 $81.36 76.2% -16.5% -8.0% 1.1x n/a 1.0x 11.3x -17.7%Network Appliance, Inc. NTAP $19,014.56 $16,207.06 $4,231.30 64.3% 17.7% 20.7% 3.8x 21.7x 4.5x 24.5x 96.9%SupportSoft, Inc. SPRT $266.23 $193.95 $37.77 34.2% -43.6% 156.0% 5.1x n/a 13.3x n/a 136.7%Symantec Corporation SYMC $12,779.45 $13,139.45 $5,992.00 85.2% 29.1% 1.8% 2.2x 7.5x 2.3x 6.4x -7.9%VMWare VMW $31,684.69 $29,230.50 $2,629.88 82.5% 19.5% 36.2% 11.1x 56.9x 15.8x 52.6x 99.0%

Median: $9,973.32 $8,928.47 $2,296.24 77.0% 20.0% 11.2% 3.0x 12.0x 3.4x 11.3x 34.7%



Levered FCF Margin 13.8%Cash from Operations Growth (YoY) 13.2%Cash from Investing Growth (YoY) -109.5%Cash from Financing Growth (YoY) -13.5%Levered FCF Growth (YoY) 35.2%






Storage & Systems Management Software Stock Market Return: Jan-Oct 2010

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Storage & Systems Management SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Supply Chain Management and Logistics


MarginTTM EBITDA

Margin


Forward EV/ Revenue

Forward EV/ EBITDA


American Software, Inc. AMSW.A $155.16 $118.46 $76.54 54.7% 12.9% -0.2% 1.5x 12.0x 1.7x 11.8x -7.1%Ariba, Inc. ARBA $1,697.71 $1,496.87 $361.15 63.0% 9.0% 6.5% 4.1x 46.0x 4.4x 19.8x 58.9%Aspen Technology, Inc. AZPN $1,042.24 $993.43 $169.65 63.5% -58.7% -36.0% 5.9x n/a 6.5x n/a 6.7%CDC Software Corporation CDCS $192.92 $182.73 $206.06 54.9% 16.8% -4.5% 0.9x 5.3x 0.9x 3.8x -29.3%JDA Software Group JDAS $1,058.38 $1,158.58 $555.57 60.6% 23.0% 44.3% 2.1x 9.1x 4.0x 13.0x 27.6%Manhattan Associates, Inc. MANH $674.45 $560.21 $287.74 57.5% 18.3% 10.6% 1.9x 10.7x 2.3x 14.4x 34.1%ModusLink Global Solutions, Inc. MLNK $294.16 $132.60 $924.00 12.6% 4.5% -8.4% 0.1x 3.2x n/a n/a -19.1%Retalix Ltd. RTLX $1,094.61 $695.42 $197.22 39.5% 6.6% -3.4% 3.5x 53.5x n/a n/a 47.6%The Descartes Systems Group Inc. DSG $396.21 $335.88 $84.27 66.8% 21.0% 22.7% 4.0x 18.9x n/a n/a 14.8%XATA Corporation XATA $23.56 $53.23 $70.65 49.2% 9.3% 8.2% 0.8x 8.1x 0.0x n/a 4.8%

Median: $535.33 $448.04 $201.64 56.2% 11.1% 3.2% 2.0x 10.7x 2.3x 13.0x 10.7%

TTM Revenue Growth 3.2%TTM EBITDA Growth -2.2%TTM Earnings Growth 77.6%Gross Profit Margin 56.2%EBITDA Margin 11.1%Net Income Margin 4.1%SG&A Expenses as a % of Total Revenue 30.5%R&D Expenses as a % of Total Revenue 12.7%


Levered FCF Margin 5.3%Cash from Operations Growth (YoY) -3.9%Cash from Investing Growth (YoY) -52.3%Cash from Financing Growth (YoY) 69.2%Levered FCF Growth (YoY) -32.5%





Income Statement Analysis (Median) Supply Chain Management & Logistics Software Stock Market Return: Jan-Oct 2010

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Supply Chain Management & Logistics SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Wireless


MarginTTM EBITDA

Margin


Forward EV/ Revenue

Forward EV/ EBITDA


Itron, Inc. ITRI $2,453.59 $2,968.42 $2,121.53 31.3% 14.2% 29.1% 1.4x 9.8x 1.8x 14.7x 1.2%Openwave Systems Inc. OPWV $173.65 $67.97 $174.99 64.0% 2.0% -8.1% 0.4x 19.0x 0.4x 7.0x -9.3%PCTEL, Inc. PCTI $109.54 $44.42 $65.48 44.8% 0.7% 10.1% 0.7x 102.6x 1.0x 11.6x 1.0%Smith Micro Software, Inc. SMSI $416.69 $361.84 $124.91 88.0% 22.7% 20.1% 2.9x 12.7x 4.2x 13.8x 33.9%TeleCommunication Systems, Inc. TSYS $287.66 $374.16 $377.37 35.5% 12.8% 30.8% 1.0x 7.7x 1.2x 7.4x -39.4%Motricity MOTR $879.41 $856.67 $122.70 63.6% -2.5% 5.1% 7.0x n/a n/a n/a n/a

Median: $352.17 $368.00 $149.95 54.2% 7.4% 15.1% 1.2x 12.7x 1.2x 11.6x 1.0%



Levered FCF Margin 3.3%Cash from Operations Growth (YoY) 31.6%Cash from Investing Growth (YoY) 52.7%Cash from Financing Growth (YoY) -76.2%Levered FCF Growth (YoY) n/a






Wireless Software Stock Market Return: Jan-Oct 2010

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Wireless SW S&P 500 NASDAQ SEG SW Index

Company Performance

SEG SaaS Index


SEG SaaS Index


MarginTTM EBITDA

Margin


Forward EV/ Revenue

Forward EV/ EBITDA


Athenahealth ATHN $1,369.65 $1,282.86 $230.62 59.6% 12.9% 33.9% 5.6x 43.1x 6.6x 35.6x 6.3%Concur CNQR $2,679.90 $2,353.19 $292.94 72.0% 22.2% 18.3% 8.0x 36.2x 8.4x 29.6x 44.8%Constant Contact CTCT $666.54 $544.48 $163.22 70.7% 5.9% 38.2% 3.3x 57.0x 4.2x 45.9x 38.8%Convio CNVO $156.42 $104.41 $68.55 62.9% 9.7% n/a 1.5x 15.8x n/a n/a n/aDealerTrack TRAK $779.68 $613.43 $235.07 48.7% 13.5% 3.5% 2.6x 19.3x 2.5x 16.6x 17.2%DemandTec DMAN $322.39 $257.31 $78.14 65.5% -8.8% 0.6% 3.3x n/a 3.2x 52.6x 20.4%IntraLinks Holdings IL $1,078.83 $1,536.49 $171.39 73.0% 12.8% n/a 9.0x 69.9x n/a n/a n/aKenexa KNXA $413.92 $350.33 $174.37 65.7% 9.8% 6.5% 2.0x 20.5x 2.3x 14.1x 45.2%LivePerson LPSN $473.03 $420.19 $104.70 73.8% 20.2% 27.2% 4.0x 19.9x 5.0x 20.3x 84.3%Medidata Solutions MDSO $442.97 $360.52 $156.61 67.3% 16.8% 16.8% 2.3x 13.7x 2.7x 18.1x 17.9%Netsuite N $1,304.80 $1,206.61 $184.05 66.8% -7.5% 11.6% 6.6x n/a 8.4x 131.8x 46.6%RealPage RP $1,438.00 $1,497.61 $172.35 58.0% 14.0% n/a 8.7x 62.1x n/a n/a n/aRightNow RNOW $839.05 $730.03 $175.73 69.5% 9.5% 19.4% 4.2x 43.8x 5.1x 46.2x 71.6%Salesforce.com CRM $15,077.49 $14,825.91 $1,455.78 80.6% 11.5% 22.6% 10.2x 88.3x 11.3x 59.0x 104.5%SciQuest SQI $232.81 $248.05 $39.46 79.2% 21.5% n/a 6.3x 29.3x n/a n/a n/aSoundBite Communications SDBT $44.16 $8.97 $39.96 59.8% -4.9% -0.7% 0.2x n/a 0.2x n/a -10.0%SPS Commerce SPSC $153.49 $114.50 $42.66 71.2% 11.4% 19.0% 2.7x 23.5x n/a n/a n/aSuccessFactors SFSF $1,999.69 $1,656.45 $187.98 74.0% -4.0% 30.7% 8.8x n/a 11.5x n/a 77.4%Taleo TLEO $1,148.00 $884.18 $220.56 67.6% 12.7% 12.6% 4.0x 31.6x 5.0x 19.2x 32.0%The Ultimate Software Group, Inc. ULTI $1,038.50 $1,005.24 $219.90 55.8% 6.8% 13.4% 4.6x 67.5x 5.3x 42.3x 62.2%Vocus VOCS $430.26 $337.50 $92.80 80.7% 1.1% 11.6% 3.6x 328.6x 4.4x 20.6x 22.4%

Median: $779.68 $613.43 $172.35 67.6% 11.4% 16.8% 4.0x 36.2x 5.0x 32.6x 41.8%









SEG SaaS Index Stock Market Return: Jan-Oct 2010

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SEG SaaS Index S&P 500 NASDAQ SEG SW Index

Category Performance

SEG Internet Index


SEG Internet Index: All Categories

Category Name Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue

EV/ EBITDA

Forward EV/ Revenue

Forward EV/

EBITDA


SEG Internet Index $393.39 $328.46 $214.88 58.7% 13.9% 10.1% 1.6x 13.0x 1.7x 8.7x 26.0% Ad Tech & Services $367.76 $254.43 $150.87 62.7% 13.7% 19.3% 1.9x 11.7x 2.6x 10.4x 26.4% Online Retail $353.03 $282.75 $478.72 40.5% 9.7% 16.0% 1.2x 13.3x 1.4x 11.3x 34.1% Internet Infrastructure $820.04 $616.07 $406.92 53.4% 18.5% 3.2% 2.1x 9.9x 2.2x 9.0x 51.1% Online Media $465.65 $373.40 $127.65 63.8% 19.6% 7.0% 1.9x 14.0x 1.9x 12.7x 14.5% Search Engine $2,809.61 $1,953.19 $790.04 64.7% 17.1% 18.8% 2.2x 10.4x 4.2x 13.6x 34.0%




Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved November 2010 Monthly Flash Report




SEG Internet Index Stock Market Return: Jan-Oct 2010

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SEG Internet Index S&P 500 NASDAQ SEG SW Index

SEG Internet Index Category: Ad Tech & Services


MarginTTM EBITDA

Margin


Forward EV/ Revenue

Forward EV/ EBITDA


comScore Inc. SCOR $731.91 $652.10 $157.63 70.8% 8.8% 25.6% 4.1x 46.9x 5.2x 23.5x 53.4%DG FastChannel, Inc. DGIT $669.71 $590.09 $228.92 68.0% 43.8% 23.5% 2.6x 5.9x 3.5x 8.8x 12.3%eHealth, Inc. EHTH $318.11 $179.00 $144.11 84.7% 18.2% 10.9% 1.2x 6.8x 1.3x 5.4x -5.1%InfoSpace, Inc. INSP $304.06 $80.70 $253.35 33.9% 9.2% 45.7% 0.3x 3.5x 0.2x 1.9x -1.5%interCLICK, Inc. ICLK $128.51 $122.30 $84.10 44.4% 6.0% 100.6% 1.5x 24.3x 2.6x 32.2x -0.6%Inuvo, Inc. INUV $28.12 $33.23 $56.45 33.6% 1.3% 15.0% 0.6x 45.6x n/a n/a 32.0%LookSmart, Ltd. LOOK $37.09 $14.13 $50.33 37.4% 7.2% -6.7% 0.3x 3.9x 0.3x n/a 64.9%LoopNet, Inc. LOOP $417.40 $329.86 $76.31 84.8% 28.8% -3.7% 4.3x 15.0x 4.8x 12.0x 20.8%SINA Corporation SINA $3,443.25 $2,715.39 $378.96 57.4% 20.0% 2.2% 7.2x 35.8x 8.5x 36.5x 50.6%ValueClick, Inc. VCLK $1,125.66 $953.92 $412.45 72.7% 27.7% 30.1% 2.3x 8.4x 2.1x 7.9x 39.8%

Median: $367.76 $254.43 $150.87 62.7% 13.7% 19.3% 1.9x 11.7x 2.6x 10.4x 26.4%



Levered FCF Margin 10.4%Cash from Operations Growth (YoY) 0.0%Cash from Investing Growth (YoY) 100.0%Cash from Financing Growth (YoY) 98.8%Levered FCF Growth (YoY) -17.5%






SEG Internet: Ad Tech & Services Stock Market Return: Jan-Oct 2010

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S&P 500 NASDAQ SEG SW Index SEG Internet: Advertising

SEG Internet Index Category: Online Retail


MarginTTM EBITDA

Margin


Forward EV/ Revenue

Forward EV/ EBITDA


1-800-FLOWERS.COM, Inc. FLWS $115.03 $193.00 $663.92 40.5% 4.3% -3.3% 0.3x 6.8x 0.3x 7.4x -53.1%Amazon.com, Inc. AMZN $74,161.34 $68,440.34 $30,777.00 22.7% 6.0% 41.9% 2.2x 37.2x 2.9x 39.7x 39.1%Bluefly, Inc. BFLY $60.53 $48.95 $84.34 39.5% 0.1% 0.1% 0.6x 394.8x n/a n/a 8.8%eBay Inc. EBAY $38,929.65 $33,598.30 $9,031.86 72.0% 30.8% 7.6% 3.7x 12.1x 4.0x 11.3x 34.1%Drugstore.com, Inc. DSCM $169.63 $152.15 $478.72 29.0% 1.1% 29.7% 0.3x 28.8x 0.4x 9.8x -42.2%IAC/InterActiveCorp IACI $2,800.66 $1,583.27 $1,577.59 65.2% 9.7% 16.0% 1.0x 10.4x 1.2x 10.1x 47.3%Liquidity Services, Inc. LQDT $429.33 $360.12 $276.77 41.1% 10.3% 13.6% 1.3x 12.6x 1.5x 15.0x 66.3%Mercadolibre, Inc. MELI $2,918.69 $2,876.06 $203.42 78.8% 37.4% 29.3% 14.1x 37.8x 14.6x 41.9x 84.8%Overstock.com, Inc. OSTK $309.22 $282.75 $1,063.36 17.4% 2.0% 31.6% 0.3x 13.3x 0.3x 11.7x -4.2%PetMed Express, Inc. PETS $353.03 $282.44 $234.26 37.8% 16.7% 1.4% 1.2x 7.2x 1.3x 7.6x -1.5%ZAGG, Inc. ZAGG $186.66 $180.26 $58.28 51.8% 21.0% 69.9% 3.1x 14.7x 5.2x n/a 48.2%

Median: $353.03 $282.75 $478.72 40.5% 9.7% 16.0% 1.2x 13.3x 1.4x 11.3x 34.1%








Income Statement Analysis (Median) SEG Internet: Online Retail Stock Market Return: Jan-Oct 2010

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SEG Internet: eCommerce and Portals S&P 500 NASDAQ SEG SW Index

SEG Internet Index Category: Internet Infrastructure


MarginTTM EBITDA

Margin


Forward EV/ Revenue

Forward EV/ EBITDA


8x8, Inc. EGHT $181.34 $163.53 $66.01 67.7% 9.1% 3.9% 2.5x 27.2x 2.8x 31.8x 145.8%Akamai Technologies, Inc. AKAM $9,424.61 $8,876.23 $977.20 73.1% 39.1% 17.2% 9.1x 23.2x 10.4x 22.2x 134.9%Cbeyond, Inc. CBEY $417.56 $365.71 $443.44 68.0% 13.5% 10.9% 0.8x 6.1x 0.8x 5.9x 1.5%Digital River Inc. DRIV $1,476.99 $1,112.62 $370.40 82.1% 13.2% -6.2% 3.0x 22.8x 2.8x 10.5x 63.2%EarthLink Inc. ELNK $972.21 $646.85 $619.97 48.7% 33.2% -20.0% 1.0x 3.1x 0.8x 2.4x 11.0%Equinix, Inc. EQIX $3,874.57 $5,293.99 $1,117.64 45.6% 39.6% 34.6% 4.7x 12.0x 6.0x 13.3x -1.3%Internap Network Services Corp. INAP $259.57 $221.21 $247.75 38.7% 16.2% -3.6% 0.9x 5.5x 0.9x 8.6x 56.3%Keynote Systems Inc. KEYN $182.02 $121.66 $79.08 48.6% 9.4% -2.9% 1.5x 16.4x 1.5x 9.6x 19.3%Level 3 Communications, Inc. LVLT $1,611.00 $7,504.00 $3,654.00 58.9% 21.2% -6.0% 2.1x 9.7x 2.1x 8.6x -18.0%Limelight Networks, Inc. LLNW $667.86 $585.30 $161.71 56.2% 2.1% 20.7% 3.6x 173.5x 5.3x 33.6x 94.6%NaviSite, Inc. NAVI $145.28 $236.45 $126.15 50.6% 20.8% 0.6% 1.9x 9.0x 1.7x 7.6x 109.3%SAVVIS, Inc. SVVS $1,326.24 $2,004.81 $900.06 45.4% 21.9% 2.6% 2.2x 10.2x 2.4x 9.5x 62.3%Tucows Inc. TCX $41.30 $39.50 $82.83 25.9% 8.2% 3.8% 0.5x 5.8x 0.4x 4.5x 30.9%TW Telecom, Inc. TWTC $2,788.96 $3,645.18 $1,256.29 58.3% 33.4% 4.9% 2.9x 8.7x 2.8x 8.1x 46.0%

Median: $820.04 $616.07 $406.92 53.4% 18.5% 3.2% 2.1x 9.9x 2.2x 9.0x 51.1%

TTM Revenue Growth 3.2%TTM EBITDA Growth 7.1%TTM Earnings Growth -23.0%Gross Profit Margin 53.4%EBITDA Margin 18.5%Net Income Margin 3.3%SG&A Expenses as a % of Total Revenue 35.6%R&D Expenses as a % of Total Revenue 0.0%


Levered FCF Margin -1.6%Cash from Operations Growth (YoY) 9.1%Cash from Investing Growth (YoY) -123.6%Cash from Financing Growth (YoY) 30.0%Levered FCF Growth (YoY) -48.0%





Income Statement Analysis (Median) SEG Internet: Internet Infrastructure Stock Market Return: Jan-Oct 2010

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SEG Internet: Networking & Connectivity S&P 500 NASDAQ SEG SW Index

SEG Internet Index Category: Online Media


MarginTTM EBITDA

Margin


Forward EV/ Revenue

Forward EV/ EBITDA


Answers Corp. ANSW $48.97 $33.27 $21.22 74.7% 25.1% 9.5% 1.6x 6.2x 1.5x 4.2x -40.6%AOL, Inc. AOL $2,847.90 $2,525.30 $2,649.50 42.8% 29.7% -21.7% 1.0x 3.2x 0.7x 2.0x n/aeHealth, Inc. EHTH $318.11 $179.00 $144.11 84.7% 18.2% 10.9% 1.2x 6.8x 1.3x 5.4x -5.1%Google, Inc. GOOG $196,245.99 $164,987.99 $27,554.56 64.1% 40.9% 21.5% 6.0x 14.7x 7.2x 15.5x 14.5%Internet Brands, Inc INET $613.18 $554.49 $111.20 81.7% 37.2% 12.3% 5.0x 13.4x 5.4x 13.6x 78.0%Local.com Corp. LOCM $69.51 $57.47 $80.46 79.7% 12.8% 62.6% 0.7x 5.6x 1.2x 31.9x -19.9%Marchex Inc. MCHX $225.22 $192.32 $93.03 42.4% -2.3% -11.1% 2.1x n/a 2.2x 16.6x 41.7%Monster Worldwide, Inc. MWW $2,344.50 $2,312.79 $872.21 45.6% 5.5% -11.2% 2.7x 48.5x 2.8x 22.3x 24.4%The Knot, Inc. KNOT $307.77 $183.43 $110.41 79.4% 10.4% 4.4% 1.7x 16.0x 1.6x 10.2x -15.3%TheStreet.com, Inc. TSCM $96.88 $58.72 $59.01 56.9% 1.5% -3.5% 1.0x 67.3x 0.9x 11.3x 22.9%WebMD Health Corp. WBMD $3,046.20 $2,623.91 $504.12 63.5% 21.0% 20.1% 5.2x 24.8x 6.3x 26.3x 53.5%Yahoo! Inc. YHOO $22,233.10 $19,585.43 $6,531.52 56.8% 21.4% 0.0% 3.0x 14.0x 4.2x 11.8x 3.7%

Median: $465.65 $373.40 $127.65 63.8% 19.6% 7.0% 1.9x 14.0x 1.9x 12.7x 14.5%



Levered FCF Margin 4.8%Cash from Operations Growth (YoY) -3.3%Cash from Investing Growth (YoY) -46.3%Cash from Financing Growth (YoY) 95.9%Levered FCF Growth (YoY) #VALUE!






SEG Internet: Online Media Stock Market Return: Jan-Oct 2010

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SEG Internet: New Media S&P 500 NASDAQ SEG SW Index

SEG Internet Index Category: Search Engine


MarginTTM EBITDA

Margin


Forward EV/ Revenue

Forward EV/ EBITDA


Baidu.com, Inc. BIDU $38,319.72 $37,283.36 $1,004.63 77.0% 51.9% 64.5% 37.1x 71.5x 58.1x 128.7x 191.1%Google Inc. GOOG $196,245.99 $164,987.99 $27,554.56 64.1% 40.9% 21.5% 6.0x 14.7x 7.2x 15.5x 14.5%IAC/InterActiveCorp IACI $2,800.66 $1,583.27 $1,577.59 65.2% 9.7% 16.0% 1.0x 10.4x 1.2x 10.1x 47.3%Local.com Corp. LOCM $69.51 $57.47 $80.46 79.7% 12.8% 62.6% 0.7x 5.6x 1.2x 31.9x -19.9%LookSmart, Ltd. LOOK $37.09 $14.13 $50.33 37.4% 7.2% -6.7% 0.3x 3.9x 0.3x n/a 64.9%ReachLocal, Inc. RLOC $475.54 $397.27 $270.91 45.3% -2.1% 45.8% 1.5x n/a n/a n/a n/aSohu.com Inc. SOHU $2,818.56 $2,323.10 $575.45 74.1% 41.9% 14.9% 4.0x 9.6x 4.6x 10.3x 34.0%Yahoo! Inc. YHOO $22,233.10 $19,585.43 $6,531.52 56.8% 21.4% 0.0% 3.0x 14.0x 4.2x 11.8x 3.7%

Median: $2,809.61 $1,953.19 $790.04 64.7% 17.1% 18.8% 2.2x 10.4x 4.2x 13.6x 34.0%








Income Statement Analysis (Median) SEG Internet: Search Engine Stock Market Return: Jan-Oct 2010

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SEG Internet: Search Engine S&P 500 NASDAQ SEG SW Index


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Software Equity Group, L.L.C.12220 El Camino Real, Suite 320San Diego, CA 92130www.softwareequity.com

p: (858) 509-2800f: (858) 509-2818

The information contained in this Report is obtained from sources we believe to be reliable, but no representation or guarantee is made about the accuracy or completeness of such information, or the opinions expressed herein. Nothing in this Report is intended to be a recommendation of a specific security or company or intended to constitute an offer to buy or sell, or the solicitation of an offer to buy or sell, any security. Software Equity Group LLC may have an interest in one or more of the securities or companies discussed herein. Financial data provided by Capital IQ.This Report may not be reproduced in whole or in part without the expressed prior written authorization of Software Equity Group, L.L.C.Software Equity Group registers each Report with the U.S. Copyright Office and vigorously enforces its intellectual property rights.

Software Equity Group is an investment bank and M&A advisory serving the software and technology sectors. Founded in 1992, our firm has guided and advised companies on five continents, including privately-held software and technology companies in the United States, Canada, Europe, Asia Pacific, Africa and Israel. We have represented public companies listed on the NASDAQ, NYSE, American, Toronto, London and Euronext exchanges. Software Equity Group also advises several of the world's leading private equity firms. We are ranked among the top ten investment banks worldwide for application software mergers and acquisitions.

Our value proposition is unique and compelling. We are skilled and accomplished investment bankers with extraordinary software, internet and technology domain expertise. Our industry knowledge and experience span virtually every software product category, technology, market and delivery model, including Software-as-a-Service (Saas), software on-demand and perpetual license. We have profound understanding of software company finances, operations and valuation. We monitor and analyze every publicly disclosed software M&A transaction, as well as the market, economy and technology trends that impact these deals. We're formidable negotiators and savvy dealmakers who facilitate strategic combinations that enhance shareholder value.

Perhaps most important are the relationships we've built and the industry reputation we enjoy. Software Equity Group is known and respected by publicly traded and privately owned software and technology companies worldwide, and we speak with them often. Our Quarterly and Annual Software Industry Equity Reports are read and relied upon by more than eighteen thousand industry executives, entrepreneurs and equity investors in sixty-one countries, and we have been quoted widely in such leading publications as The Wall Street Journal, Barrons, Information Week, The Daily Deal, The Street.com, U.S. News & World Report, Reuters, Mergers & Acquisitions, USA Today, Arizona Republic, Detroit Free Press, Entrepreneur Magazine, Softletter, Software Success, Software CEO Online and Software Business Magazine. Software Equity Group’s senior bankers have keynoted and spoken at more than one hundred software industry conferences and seminars, including Software Business, SoftExpo, Culpepper, VAR Conference, ACETECH, and the Arizona, Colorado, Chicago, Southern California, Denver, San Diego, Washington State and Boulder Software Associations.

http://www.softwareequity.com/






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