web 2.0 weekly - dec. 22, 2009

SOFTWARE & SERVICES 22 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

DECEMBER 2009 – THE HOTTEST MONTH FOR WEB 2.0 FINANCING IN 2009

2009 ENDS ON A HIGH NOTE Highest value, average deal size in 2009: Total transaction value in the Web 2.0 universe for December-to-date is $383.4 mill ion (compared with $132.4 mill ion at this time last week). The number of financings stands at 22, averaging $17.4 mill ion each (vs. 13 financings at an average $10.2 mill ion per deal at this time last week).

Good month even if Zynga didn’t happen: Excluding the $180 mill ion Zynga round, the total for December would be $203.4 mill ion – sti l l placing December in the top half for 2009 in terms of total value, and representing 56% Y/Y growth for the month. Excluding Zynga results in a $9.7 mill ion average deal size, up 49% Y/Y. In other words, December is a strong month any way you cut it.

In comparison, total capital raised in November was $203.4 mill ion, averaging $11.3 mill ion (18 deals); October was $171.5 mill ion, averaging $6.1 mill ion (28 deals); and September was $232.8 mill ion, averaging $9.0 mill ion (26 deals).

Financing Activity Last Twelve Months

6.5

7.16.6

6.2

14.2

4.8

5.6

7.6

9.0

6.1

11.3

17.4

6.5

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

450.0

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

18.0

20.0

(US

$m)

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

A few sectors emerging as focus areas: Gaming is now clearly the lead sector in terms of financing activity with 11 transactions in the past quarter. Video follows up in second place with eight financings, followed by Social Networks, Advertising, and Analytics with seven each. The $400 mill ion acquisition of Playfish skews the Virtual Worlds segment to the highest total.

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 Montreal 514 .399.1500 Vancouver 604.662.1800 Calgary 403.265 .7400 Regina 306.566.7550

THE WEB 2 .0 UN IVERSE

Eighty-nine public Web 2.0 companies: Our Web 2.0 universe contains 89 companies, with a combined market cap of approximately $73 bil l ion (Figure 1). The median market cap for the group is $41 mill ion, with average trail ing revenue of $166 mill ion (median $54 mill ion). The companies are also generally profitable with a median EBITDA margin of 12.1%. On a valuation basis, the overall average is 5.5x trail ing revenue (median 1.7x) and 11.3x trail ing EBITDA (median 7.9x). Twenty of the companies have more than 500 employees.

C omparable C ompany Analys is > Web 2.0

C ompany Name L TM as of Ticker E xchangeTrading

C urrenc y HQC urrent

P riceUS D Market

C ap ($m)US D L TM Total

R ev ($m)US D L TM Total

E B ITDA ($m)E B ITDA

%TE V/L TM R evenue

TE V/L TM E B ITDA E mployees

Accelerize New Media , Inc. 9/30/2009 AC LZ OT C B B US D United S tates 0. 65 18.7 4.1 (1.5) -36.5% 5. 7x - 11 Actoz S oft C o. , L td. 9/30/2009 A052790 K OS E K R W S outh K orea 20,350 149.9 115.9 25.7 22.2% 1. 0x 4.3x NA AQ Interactive, Inc. 9/30/2009 3838 T S E J P Y J apan 44,650 27.1 74. 0 3.8 5.1% 0. 1x 1.2x NA As knet AG 9/30/2009 XT R A: A5A XT R A E UR G ermany 3 23.6 103.6 (2.4) NM 12.6x - 3 As s ociated Media Holdings Inc. 6/30/2007 AS MH OT C P K US D United S tates 0. 01 0. 4 0.1 (2.3) NM 12.6x - 3 B igs tring C orp. 9/30/2009 B S G C OT C B B US D United S tates 0. 02 1. 5 0.1 (1.0) NM 39.4x - 4 B etawave C orporation 9/30/2009 B W AV OT C B B US D United S tates 0. 11 3. 2 8.4 (14.3) NM 0. 1x - 48 B eyond C ommerce, Inc. 9/30/2009 B Y OC OT C B B US D United S tates 0. 03 1. 5 13. 5 (12.4) -91.9% 1. 0x - 86 B right T hings plc 3/31/2009 AIM:B G T AIM G B P United K ingdom 0. 01 4. 6 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 tates 0. 09 7. 6 0.0 (4.6) NM - - 46 C DC C orp. 9/30/2009 C HIN.A Nas daqG S US D Hong K ong 2. 30 243.8 334.2 20.0 6.0% 0. 6x 10.7x 2,227 C hangyou.com Limited 9/30/2009 C Y OU Nas daqG S US D C hina 32. 72 1,799.6 255.3 157. 4 61.7% 5. 8x 9.4x 628 C hina G ateway C orporation 9/30/2008 C G W Y OT C P K US D United S tates 0. 01 0. 2 6.7 (6.6) -98.9% 0. 0x - 37 C hines e G amer International 9/30/2009 G T S M:3083 G T S M T W D T aiwan 406 1,053.0 68. 3 39.6 58.0% 14.2x 24.5x NA C L IC K E R Inc. 5/31/2009 C LK Z OT C B B US D United S tates 0. 00 0. 2 2.5 (1.2) -45.8% 0. 1x - 22 C ornerW orld C orporation 7/31/2009 C W R L OT C B B US D United S tates 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 76.0 105.6 11.7 11.1% 0. 5x 4.8x NA DADA S pA 6/30/2009 C M:DA C M E UR Ita ly 5. 97 141.7 241.9 31.8 13.1% 0. 8x 6.0x NA DXN Holdings B hd 8/31/2009 DXN K LS E MY R Malays ia 0. 55 35.9 77. 3 (84.0) NM 0. 6x - NA Dibz Internationa l, Inc. NA DIB Z OT C P K US D United S tates 0. 01 0. 0 NA NM NM - - NA Digita lP os t Interactive, Inc. 9/30/2009 DG LP OT C B B US D United S tates 0. 05 4. 6 1.2 (0.9) -73.8% 5. 7x - 7 Digita lT own, Inc. 8/31/2009 DG T W OT C B B US D United S tates 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 tates 0. 25 14.2 0.3 (4.6) NM - - NA E olith C o. L td. 12/31/2008 A041060 K OS E K R W S outh K orea 555 68.6 15. 4 (3.6) -23.6% 4. 6x - NA E xtens ions , Inc. 9/30/2009 E XT I OT C P K US D United S tates 0. 45 20.0 0.0 NM NM - - 2 F luid Mus ic C anada , Inc. 9/30/2009 T S X:F MN T S X C AD United S tates 1. 74 100.9 5.6 (3.0) -54.0% 17.5x - NA F rogs ter Interactive P ictures AG 6/30/2009 F R G XT R A E UR G ermany 17. 49 65.6 9.6 (4.5) -47.0% 6. 7x - NA G amania Digita l E ntertainment C o. , Ltd. 9/30/2009 6180 G T S M T W D T aiwan 48. 50 229.5 151.2 24.9 16.5% 1. 4x 8.3x NA G ameOn C o L td. 9/30/2009 3812 T S E J P Y J apan 65,200 70.5 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 G A NY S E US D C hina 7 1,646.4 202.2 137. 9 68.2% - - 1,570 G igaMedia Ltd. 3/31/2009 G IG M Nas daqG S US D T aiwan 3. 54 193.0 183.6 NM NM 0. 6x - 751 G ravity C o. , L td 9/30/2009 G R V Y Nas daqG M 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 5,510 2,758.6 210.3 122. 2 58.1% 12.6x 21.7x NA G ungHo Online E ntertainment, Inc. 9/30/2009 3765 OS E J P Y J apan 156,200 200.1 120.7 26.9 22.3% 1. 3x 6.0x NA HanbitS oft, Inc. 9/30/2009 A047080 K OS E K R W S outh K orea 4,145 76.1 57. 6 (0.3) -0.6% 1. 1x - NA IAC /InterActiveC orp. 9/30/2009 IAC I Nas daqG S US D United S tates 19. 72 2,602.5 1,359.6 82.4 6.1% 0. 7x 11.6x 3,200 is eemedia Inc. 9/30/2009 IE E T S XV C AD C anada 0. 19 9. 0 1.8 (4.1) NM 5. 1x - NA J umbuck E ntertainment L imited 6/30/2009 AS X:J MB AS X AUD Aus tra lia 0. 32 13.4 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 ings oft C o. L td. 9/30/2009 3888 S E HK HK D C hina 5 770.9 143.4 57.6 40.2% 4. 9x 12.3x 2,271 L ingo Media C orporation 9/30/2009 T S XV : LM T S XV C AD C anada 0. 90 10.3 1.3 (2.3) NM 7. 6x - NA L iveW orld Inc. 9/30/2009 LV W D OT C P K US D United S tates 0. 02 0. 6 10. 4 0.4 4.1% - - NA LookS mart, L td. 9/30/2009 LOOK Nas daqG M US D United S tates 0. 96 16.4 54. 0 (4.5) -8.4% - - 90 Magnitude Information S ys tems Inc. 9/30/2009 MAG Y OT C B B US D United S tates 0. 02 8. 9 0.1 (2.3) NM - - 14 Mixi, Inc. 9/30/2009 2121 T S E J P Y J apan 801000. 00 1,380.3 139.6 46.1 33.0% 8. 9x 27.1x NA Modern T imes G roup Mtg AB 9/30/2009 MT G B OM S E K S weden 334. 90 3,169.4 2,002.6 282. 9 14.1% 1. 9x 13.1x 2,969 MOK O.mobi L imited 6/30/2009 MK B AS X AUD Aus tra lia 0. 18 18.1 0.7 (2.4) NM 24.8x - NA Myriad G roup AG 6/30/2009 MY R N S W X C HF S witzerland 4. 80 205.8 63. 0 3.4 5.4% 3. 2x - 405 NE OW IZ G ames C orporation 12/31/2008 A095660 K OS E K R W S outh K orea 40800. 00 720.8 207.3 55.7 26.8% 3. 4x 12.8x NA NetDragon W ebS oft, Inc. 9/30/2009 777 S E HK HK D C hina 4 271.4 91. 4 27.8 30.4% 1. 3x 4.2x 2,426 Neteas e.com Inc. 9/30/2009 NT E S Nas daqG S US D C hina 37. 27 4,823.7 482.9 291. 8 60.4% - - 3,109 NeuL ion Incorporated 9/30/2009 T S X:NLN T S X C AD C anada 0. 63 67.4 24. 9 (16.1) -64.5% 2. 2x - 237 NeXplore C orporation 6/30/2009 NXP C OT C P K US D United S tates 1 35.1 1.7 (13.3) NM 23.0x - NA Ngi G roup Inc. 9/30/2009 2497 T S E J P Y J apan 25780. 00 35.7 81. 7 3.2 3.9% - - NA Northgate T echnologies L imited 9/30/2009 590057 B S E INR India 27. 70 20.1 46. 4 (49.8) NM 0. 4x - NA Open T ext C orp. 9/30/2009 OT E X Nas daqG S US D C anada 38. 48 2,169.5 814.5 211. 1 25.9% 2. 8x 10.6x 3,900 Openwave S ys tems Inc. 9/30/2009 OP W V Nas daqG S US D United S tates 2. 15 179.6 190.5 6.2 3.3% 0. 4x 12.0x 590 P erfect W orld C o. , Ltd. 9/30/2009 P W R D Nas daqG S US D C hina 40. 39 2,009.7 286.1 157. 4 55.0% 0. 4x 0.7x 2,096 P NI Digita l Media Inc. 9/30/2009 T S XV : P N T S XV C AD C anada 1. 70 52.6 22. 5 3.8 17.0% 2. 2x 13.1x NA Quepas a C orp. 9/30/2009 QP S A OT C B B US D United S tates 2 28.0 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 ntertainment Ltd. 9/30/2009 S NDA Nas daqG S US D C hina 50. 96 3,427.3 694.3 317. 2 45.7% - - 3,124 S hutterfly, Inc. 9/30/2009 S F LY Nas daqG S US D United S tates 17. 51 449.6 223.1 27.0 12.1% 1. 5x 12.5x 514 S K C ommunications C o. , L td. 12/31/2008 A066270 K OS E K R W S outh K orea 12850. 00 450.9 192.7 12.5 6.5% 2. 3x 36.0x NA S NAP Interactive, Inc. 9/30/2009 S T V I OT C B B US D United S tates 0 2. 5 3.4 0.5 15.6% 0. 3x 1.8x 11 S NM G lobal Holdings 9/30/2008 S NMN OT C P K US D United S tates 0. 00 0. 0 2.0 (0.7) -34.8% 1. 1x - 33 S ocia l Media V entures Inc. 12/31/2008 S MV I OT C P K US D United S tates 0 0. 0 0.1 (0.1) -60.6% 4. 5x - NA S ocia lwis e, Inc. 6/30/2009 S C LW OT C B B US D United S tates 0. 45 21.1 0.0 (5.6) NM - - NA S ohu.com Inc. 9/30/2009 S OHU Nas daqG S US D C hina 54. 61 2,100.1 501.0 218. 4 43.6% 3. 1x 7.1x 3,197 S park Networks , Inc. 9/30/2009 LOV AME X US D United S tates 3 59.1 47. 5 10.0 21.0% 1. 2x 5.5x 183 S pectrumDNA, Inc. 9/30/2009 S P XA OT C B B US D United S tates 0 6. 8 0.1 (2.5) NM 48.7x - 7 T encent Holdings L td. 9/30/2009 700 S E HK HK D C hina 153 35,997.2 1,588.4 811. 3 51.1% 24.9x 48.7x 6,194 T he P arent C ompany 8/2/2008 K IDS .Q OT C P K US D United S tates 0. 00 0. 1 112.0 (13.5) -12.0% 0. 2x - 347 T he9 L imited 12/31/2008 NC T Y Nas daqG S US D C hina 6. 41 161.0 250.6 85.5 34.1% - - 1,626 T heS treet.com, Inc. 3/31/2009 T S C M Nas daqG M US D United S tates 2. 39 73.1 67. 0 1.9 2.9% 0. 1x 4.4x 310 T ree. C om, Inc. 9/30/2009 T R E E Nas daqG M US D United S tates 8. 94 97.5 217.1 9.7 4.5% 0. 3x 7.4x 700 Unis erve C ommunications C orp. 8/31/2009 T S XV : US S T S XV C AD C anada 0. 05 1. 1 16. 1 0.1 0.9% 0. 4x 38.7x NA United Online Inc. 9/30/2009 UNT D Nas daqG S US D United S tates 7. 11 601.4 996.8 212. 9 21.4% 0. 9x 4.0x 1,469 UOMO Media , Inc 7/31/2009 UOMO OT C B B US D C anada 0 3. 5 0.8 (0.4) -54.2% 5. 0x - NA V a lueC lick Inc. 9/30/2009 V C LK Nas daqG S US D United S tates 10 819.0 545.7 130. 8 24.0% 1. 2x 5.0x 1,189 V OIS , Inc. 6/30/2009 V OIS OT C B B US D United S tates 0 6. 8 0.0 (1.0) NM - - 4 W ebzen Inc. 9/30/2009 W ZE N Nas daqG M US D S outh K orea 3. 20 37.9 23. 0 2.5 11.0% - - 328 W izzard S oftware C orporation 9/30/2009 W ZE AME X US D United S tates 0. 33 17.6 5.2 (3.9) -76.4% 3. 7x - 110 W orlds . com Inc. 9/30/2009 W DDD OT C B B US D United S tates 0. 09 4. 8 0.1 (0.6) NM - - 1 W ynds torm C orporation NA W Y ND OT C P K US D United S tates 0. 03 0. 5 NA NM NM - - NA XING AG 9/30/2009 O1B C XT R A E UR G ermany 30. 89 238.5 62. 5 16.9 27.0% 2. 9x 10.8x 266 Y D Online C orp. 12/31/2007 A052770 K OS E K R W S outh K orea 6860. 00 86.2 57. 4 12.4 21.6% 1. 6x 7.5x NA Y nk K orea Inc. 12/31/2008 A023770 K OS E K R W S outh K orea 3290. 00 14.7 11. 9 1.3 10.5% - - NA

High 35,997.2 2,002.6 811.3 68.2% 48.7x 48.7x 6,194Low 0. 0 0.0 -84.0 -98.9% - - 1Average 816.9 165.5 41.3 5.7% 5.5x 11.3x 906Median 40.6 54.0 2.2 12.1% 1. 7x 7.9x 252

Figure 1. Web 2.0 Universe Summary Source. Capital IQ

CAPITAL MARKETS ACTIV ITY (M&A AND F INANCING)

December – the year ends on a high note: Total transaction value in the Web 2.0 universe for December-to-date is $383.4 mill ion (compared with $132.4 mill ion at this time last week). The number of financings stands at 22, averaging $17.4 mill ion each (vs. 13 financings at an average $10.2 mill ion per deal at this time last week). In comparison, total capital raised in November was $203.4 mill ion, averaging $11.3 mill ion (18 deals); October was $171.5 mill ion, averaging $6.1 mill ion (28 deals); and September was $232.8 mill ion, averaging $9.0 mill ion (26 deals).

Financing Activity Last Twelve Months

6.5

7.16.6

6.2

14.2

4.8

5.6

7.6

9.0

6.1

11.3

17.4

6.5

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

450.0

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

18.0

20.0

(US

$m)

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

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

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

• Zynga – developer of social games for Facebook – raised $180 mill ion in its third round of financing.

• Shanghai Dacheng Network – 3D MMO gaming developer – was acquired for $80 million by KongZhong.

• Youku – Chinese video site operator – raised $40 mill ion in a fourth round financing.

• Friendster – the third largest social networking site, behind Facebook and MySpace – was acquired by MOL Global for $39.5 million.

• Groupon – a social commerce site that allows members to participate in “one-time only” deep discounted deals – raised $30 mill ion in a second institutional financing.

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

• Lala – streaming music site – was acquired by Apple for $17 mill ion (or $3 mill ion on an enterprise value basis).

• 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 22 and 23 (at end of note).

Financing & M/A Summary - Last Three Months

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

200.0

Pla

yFis

hZ

ynga

Sha

ngh

ai D

ache

ng N

etw

ork

Roc

kYou

Ku6

Pla

ydom

You

kuF

riend

ster

Zoo

skG

roup

onD

aily

Mot

ion

Sez

mi

Pho

enix

New

Me

dia

Mot

ley

Foo

lY

ext

Pop

Cap

Gam

es

Eng

ine

Yar

dLa

laE

cast

Net

wor

kM

illen

nial

Med

iaH

ubS

pot

Qun

ar.c

om

gWal

let

Jive

Sof

twa

reO

oya

laF

eed

Roo

mE

vern

ote

Spi

git

Mov

ik N

etw

orks

Sca

nSco

utG

owal

laG

ogii

Son

icM

ule

Cub

eTre

eka

Chi

ngw

oog

aB

ox.n

etA

viar

yS

eeki

ngA

lpha

Pag

eonc

eG

eniu

s.co

mR

ealit

y M

obile

Biz

oA

lice.

com

Eve

ntbr

iteW

ate

rcoo

ler

Giz

moz

Alik

eLis

tN

ival

Net

wo

rkP

lace

cast

App

Nex

us

Vdo

pia

Altr

uik

Sm

aato

Ton

chid

otS

omet

rics

Sco

ut L

abs

Am

ie S

tre

et5

Min

utes

JanR

ain

Sto

ckT

wits

Art

icle

One

Par

tner

sC

red

it K

arm

aV

iVu

Clo

ud E

ngi

nes

Roc

ket

Fue

lF

izzb

ack

Ove

rton

eB

lekk

oA

ppol

icio

usG

ode

ngo

Pla

yfire

Te

chno

rati

One

For

tyS

onic

oJi

nni

Rek

ooS

impl

eGeo

One

hub

Dat

aSyn

cP

rosp

er.c

om

Ho

t P

otat

oD

aily

Boo

thIm

eem

Lin

kede

xS

tatu

sNet

IngB

ooC

hang

oP

Bw

orks

Adf

onic

Sco

ople

rLi

stia

Joos

tS

ocia

lMed

iaV

EV

OA

uror

a F

eint

(US

$m

) Dec-09

Nov-09

Oct-09

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

A few sectors emerging as focus areas: Gaming is now clearly the lead sector in terms of f inancing activity with 11 transactions in the past quarter. Video follows up in second place with eight financings, followed by Social Networks, Advertising, and Analytics with seven each (Figure 4). The $400 mill ion acquisition of Playfish skews the Virtual Worlds segment to the highest total.

Capital Market Activity by Sector - Last Three Months

405.3 371.9 160.3 85.3 57.0 54.0 44.9 43.8 39.8 37.5 30.0 28.7 24.7 21.1 18.0 15.0 13.1 12.5 11.5 10.0 10.0 6.4 3.9 2.2 1.2 0.7

-25.0

25.0

75.0

125.0

175.0

225.0

275.0

325.0

375.0

425.0

Virt

ual W

orld

Gam

ing

Vid

eo

Soc

ial N

etw

orks

Med

ia

Wid

get

Soc

ial C

omm

erce

Adv

ertis

ing

Infr

astr

uctu

re

Col

labo

ratio

n

Sea

rch

Ana

lytic

s

Mob

ile

Mob

ile A

d

Mus

ic

Tra

vel

Agg

rega

tion

Virt

ual G

oods

Fin

anci

al S

ervi

ces

Doc

umen

ts

Cro

wds

ourc

edC

onte

nt

Cla

ssifi

ed

Mic

robl

og

Pub

lishi

ng

Ent

erpr

ise

Wik

i

2 11 8 7 3 2 4 7 4 6 4 7 3 3 2 1 6 1 4 1 2 2 2 1 1 1

(US

$m)

# companies

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

CAPITAL MARKETS ACTIV ITY (PR ICE PERFORMA NCE)

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

12/2

2/20

08

1/5/

2009

1/19

/200

9

2/2/

2009

2/16

/200

9

3/2/

2009

3/16

/200

9

3/30

/200

9

4/13

/200

9

4/27

/200

9

5/11

/200

9

5/25

/200

9

6/8/

2009

6/22

/200

9

7/6/

2009

7/20

/200

9

8/3/

2009

8/17

/200

9

8/31

/200

9

9/14

/200

9

9/28

/200

9

10/1

2/20

09

10/2

6/20

09

11/9

/200

9

11/2

3/20

09

12/7

/200

9

12/2

1/20

09

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

Figure 5. Web 2.0 Price Performance Source. Capital IQ

More stocks declining, but average gains better average declines: Twenty-eight companies in our universe had positive stock price performances over the past week (for stocks with prices greater than $1) (Figure 6), while 19 companies showed negative 1-week returns.

1 Week P rice P erformance

-10.2%-9.1%

-8.1%-7.8%

-6.4%-6.4%-6.3%

-5.8%-4.9%-4.7%

-3.9%-3.8%-3.5%-3.3%-3.1%-3.1%-2.8%-2.8%-2.7%-2.7%

-2.0%-2.0%-1.8%-1.6%

-1.0%-0.7%-0.7%

-0.2%0.0%0.0%

0.6%0.7%

1.7%1.9%2.0%2.2%2.4%2.6%

2.8%4.0%4.2%

6.0%6.7%

7.7%9.4%

10.2%14.1%

14.8%20.1%

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

The9 L imitedA s knet A G

PNI Digita l Media Inc .Y nk K orea Inc .

NEOWIZ Games CorporationQuepas a Corp.

Perfect World Co. , L td.Chines e Gamer International

Openw ave S ys tems Inc .XING A G

Tencent Holdings L td.CDC Corp.

G igaMedia L td.A ctoz S of t Co. , L td.

Northgate Technologies L imitedS handa Interactive

Frogs ter Interactive Pic tures A GGamania Digita l Enterta inment

V alueClick Inc .Giant Interactive Group, Inc .

NetDragon WebS oft, Inc .GameOn Co Ltd.

Eolith Co. L td.Y D Online Corp.

Myriad Group A GDA DA S pA

Mix i, Inc .S hutterf ly , Inc .

Digita lTow n, Inc .Tree.Com, Inc .

Open Tex t Corp.Neteas e.com Inc .

Cyberplex Inc .Modern Times Group Mtg A B

United Online Inc .IA C/InterA ctiveCorp.

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

Gravity Co. , L tdChangyou.com Limited

K ings oft Co. L td.HanbitS of t, Inc .

Webz en Inc .TheS treet.com, Inc .

Ngi Group Inc .A Q Interactive, Inc .

Gree, Inc .S park Netw orks , Inc .

S K Communications Co. , L td.

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

PUBLIC COMPANY IN DUSTRY NEWS (PARTNERSHIPS , F INANCIAL RESULTS, NEW PRODUCTS)

K ey DevelopmentsC ompany Headline Notes

C hinaren, Inc.; S ohu.com Inc. (Nas daqGS :S OHU)

S ohu. com Inc. and C hinaren, Inc. to Introduce Microblogging S ervice

S ohu. com Inc. and C hinaren, Inc. would introduce microblogging s ervice, a new kind of s ocia l networking s ervice (S NS ). T he S ohu's microblogging webs ite, t. s ohu.com, is till under maintenance and that of C hinaR en opens for regis tration but is under internal tes t, as indicated on its webs ite, t. chinaren. com. Microblogging is a form of multimedia blogging that a llow us ers to s end brief text updates or s hare photos and audio clips with a res tricted group chos en by the us er. Many C hines e internet s ervice providers , including S ina (S INA.NAS DAQ) and T ecent, have launched the microblogging product in the country and NetE as e (NT E S . NAS DAQ) is a ls o mulling on introducing this s ervice. However, the profit pattern of this s ervice is s till uncerta in in C hina . S ome indus try ins iders noted that the operation will face huge policy ris k s ince the approving mechanis m for this product is s till incomplete in the country.

Unis erve C ommunic ations C orp. (TS XV:US S )

Unis erve C ommunications C orp. announced it expects to receive C AD 0.20 million in funding.

Unis erve C ommunications C orp. (T S XV : US S ) announced a non-brokered private placement of 4,000, 000 units a t C AD 0. 05 per unit for gros s proceeds of C AD 200,000 on December 14, 2009. E ach unit cons is ts of one common s hare and one s hare purchas e warrant. E ach warrant entitles the holder to purchas e one common s hare of the company at C AD 0. 10 per s hare for a period of two years . T he company will pay no finder's fees in connection with the trans action.

Tree.C om, Inc . (Nas daqG M: TR E E ) T ree.C om, Inc. P rovides E arnings G uidance for the Y ear 2010; Announces to C ombine its V arious C all C enters into a S ingle C ombined Location

T ree.C om, Inc. provided earnings guidance for the year 2010. T he company expects revenue for 2010 to tota l $227 million to $327 million. T hat would be 3.5% to 7% higher than the revenue it anticipates for this year.

T he company s a id it will combine its various call centers into a s ingle combined location. It declines to s ay where. It intends to eliminate duplication in network and corporate s taff pos itions . In addition to s aving on s a laries , the company expects to generate $3 million per year in facility and overhead s avings .

Myriad Group AG (S WX: MYR N) S ony E rics s on s elects Myriad G roup AG ’s J bed J ava s oftware for XP E R IA X2 hands et

Myriad G roup AG announced that S ony E rics s on has s elected its J bed Advanced J ava virtual machine to power applications on the new XP E R IA? X2 hands et. J bed, which is deployed in over 300 million mobile hands ets , has been s eamles s ly integrated with W indows Mobile on the XP E R IA? X2, enabling J ava applications to run like native apps , ens uring an enriched mobile us er experience. T he integration of J bed gives network operators and the developer community the option to create new applications and s ervices in either native W indows or J ava . W here J ava apps have a lready been developed, operators a re able to port thes e to the XP E R IA? X2 rather than having to create a new W indows Mobile application, delivering advantages of both s peed to market and cos t s avings .

S ohu.com Inc . (Nas daqG S : S OHU) S AR F T ’s F ilm Unit F iles C opyright S uit agains t S ohu. com

C hina's S tate Adminis tration of R adio, F ilm and T elevis ion (S AR F T )'s film production unit has filed a laws uit agains t S ohu. com for the a lleged unauthorized redis tribution of one of S AR F T 's copyrighted films . According to the B eijing Haidian Dis trict C ourt's officia l W eb s ite, S AR F T has demanded that S ohu.com ceas e dis tribution of the film immediately and pay damages worth R MB 50,000 ($7, 319) for both copyright infringement and profiting from related advertis ing. T he court hearing is s cheduled for Dec. 14.

Tree.C om, Inc . (Nas daqG M: TR E E ) T ree.C om, Inc. Launches Lendingtreeautos .C om to Help C ons umers Make S mart Decis ions about B uying T heir Next C ar

T ree.C om, Inc. launched L endingT reeAutos . com, a dedicated online porta l to help cons umers make s mart decis ions about buying their next car. T he new s ite covers the full s cope of car buying information, tools and s ervices , providing one-s top acces s to new and us ed car s earches , vehicle his tory reports , monthly payment calculators , quotes from loca l dea lers , tips and advice, auto ins urance and financing, and more. Already a trus ted provider of auto loans to cons umers through LendingT ree, T ree.com tapped into a proven team of indus try experts to create the mos t comprehens ive channel for car buying online.

P NI Digital Media Inc . (TS XV: P N) P NI Digita l Media Inc. Announces C ons olidated E arnings R es ults for the F ourth Quarter and F ull Y ear E nded S eptember 30, 2009

P NI Digita l Media Inc. announced cons olidated earnings res ults for the fourth quarter and full year ended S eptember 30, 2009. F or the quarter, the company reported net profit of C AD 642,806 aga ins t net los s of C AD 2,714,584 in the s ame period of las t year. Adjus ted E B IT DA was C AD 2,137, 393 agains t adjus ted E B IT DA los s of C AD 206,596 in the s ame period of las t year. R evenue was C AD 6, 811,436. P rofit before other items was C AD 147,228. P rofit before income tax was C AD 793,805. Non-G AAP adjus ted E B IT DA per s hare was C AD 0.06 compared to los s of C AD 0.01 in fourth quarter of 2008. G AAP earnings per s hare was C AD 0. 02 compared to los s of C AD 0. 08 per s hare in fourth quarter of fis cal 2008. R ecorded revenue of C AD 6, 800,000 compared to C AD 5, 300,000 in fourth quarter of fis ca l 2008.

L ookS mart, L td. (Nas daqGM:L OOK ) LookS mart, L td. Announces E xecutive C hanges

T he B oard of Directors of L ookS mart, L td. announced that Mr. W es t has s tepped down from his role as P res ident and C hief E xecutive Officer of the company, as well as res igned his s eat on the company's B oard of Directors , effective immediately. J ean-Y ves Dexmier, the company's E xecutive C hairman, is as s uming the role of C hief E xecutive Officer, until a replacement is named. Dr. Dexmier has s erved on LookS mart's B oard of Directors s ince April of 2007 and as E xecutive C ha irman s ince October of 2009. Dr. Dexmier brings more than thirty years of executive leaders hip experience within the technology indus try including, mos t recently, as C hief F inancia l Officer of Openwave, C hief E xecutive Officer of Agentis S oftware, C hief E xecutive Officer and C hief F inancia l Officer of Informix S oftware, and C hief F inancia l Officer of Octel C orporation.

Figure 7a. Key Developments Source. Capital IQ

K ey DevelopmentsC ompany Headline Notes

The9 L imited (Nas daqG S :NC TY) T he9 L imited to R eleas e F IF A Online 2: 2010 in the C hines e Mainland

T he9 L imited will releas e a new update for its authorized footba ll videogame named E A S ports F IF A Online 2: 2010 in the C hines e mainland. T he new edition is the firs t update s ince T he9 began operating the game on November 14, 2007.

UOMO Media, Inc (OTC B B : UOMO) UOMO Media , Inc announced delayed 10-Q filing

On 12/15/2009, UOMO Media , Inc announced that they will be unable to file their next 10-Q by the deadline required by the S E C .

NetDragon WebS oft, Inc. (S E HK : 777) NetDragon W ebs oft, Inc. Launches Open B eta T es ting for Dis ney F antas y Online

NetDragon W ebs oft Inc. announced that Open B eta T es ting for the firs t Dis ney-themed MMOR P G , Dis ney F antas y Online, created in collaboration with Dis ney Interactive Media G roup, was launched on Dec. 11, 2009. In this 2. 5D turn-bas ed game, players can relive clas s ic Dis ney animated worlds , complete tas ks adapted from Dis ney s tories , and interact with many famous cartoon characters . T he game s hould attract countles s fans due to its fully 3D battle environment, divers ified races and vocations , and inviting s ocia l communities .

Tree.C om, Inc . (Nas daqG M: TR E E ) T ree.C om, Inc. Layoff an Undis clos ed Number of E mployees as P art of a C os t-C utting Initiative

T ree.C om, Inc. la id off an undis clos ed number of employees as part of a cos t-cutting initia tive. T he company s a id that it will reorganize proces s es , eliminate certa in duplicative cos t s tructures , combine call center functions and reduce redundant network and corporate s ta ff roles . In addition, the company is reducing office s pace in C harlotte by moving into one building.

C ornerWorld C orporation (OTC B B :C W R L )

C ornerW orld C orporation announced delayed 10-Q filing

On 12/16/2009, C ornerW orld C orporation announced that they will be unable to file their next 10-Q by the deadline required by the S E C .

E veres t G aming L td.; G igaMedia L td. (Nas daqGS :G IG M); Mangas Gaming S AS

Mangas G aming agreed to acquire 60% s take in E veres t G aming from G igaMedia Ltd. (Nas daqG S : G IG M) for $100 million.

Mangas G aming agreed to acquire 60% s take in E veres t G aming from G igaMedia Ltd. (Nas daqG S : G IG M) for $100 million in cas h on December 16, 2009. As part of the deal, Mangas G aming will make an earnout payment depending on E veres t G aming's market va lue by 2012. G igaMedia will have a put option to s ell a ll the remaining 40% or part to Mangas beginning in 2013. Under the terms of the dea l, All Mangas poker players will move to the E veres t P oker platform. Amelie Negrier, Haris h P arames war, L aurent Azout, G uillaume Izabel, B enjamin C harbit, Artur S ienczews ki of Lazard Ltd. acted as financia l advis or to Mangas G aming. B redin P rat & As s ocies and C ravath, S waine & Moore LL P acted as lega l advis ors to Mangas G aming.

IB 3 Networks , Inc. (OTC B B : IB NW); MG V C ommunications

IB 3 Networks , Inc. (OT C B B : IB NW ) cancelled the acquis ition of MG V C ommunications .

IB 3 Networks , Inc. (OT C B B : IB NW ) s igned a letter of intent to acquire MG V C ommunications in s tock on December 17, 2008. F inancia l terms of the deal were not dis clos ed.

IB 3 Networks , Inc. (OT C B B : IB NW ) cancelled the acquis ition of MG V C ommunications on December 17, 2009.

P erfect World C o., L td. (Nas daqGS :P W R D)

P erfect W orld C o. , L td. Announces the Introduction of New 3D fantas y MMOR P G

P erfect W orld C o. , L td. announced the introduction of a new 3D fantas y MMOR P G , 'F ors aken W orld, ' which was developed under 'P roject E M’. T he game has blended the bes t of the wes tern and eas tern cultures with an a im to bring an entirely new interactive enterta inment experience to players . S ince April 2009, the company's new product developed under P E M has arous ed the interes t in the online game indus try. T he game features exciting elements s uch as 'R ule of T ime, ' 'R ule of S pace, ' 'Magic' and 'Divinity. ' T he players can try to a lter the fa te of 'G rand Mundo' with their res pective actions in the game. F ors aken W orld adopts a s ys tem of anna lis tic his tory, and a llows players to change core contents s uch as the E poch, the orbiting of cons tellations and the birth of deities . T he game is expected to be launched in 2010.

Unis erve C ommunic ations C orp. (TS XV:US S )

Unis erve C ommunications C orp. , Annual G eneral Meeting, Dec 17, 2009

Unis erve C ommunications C orp. , Annual G enera l Meeting, Dec 17, 2009, a t 14: 00 US P acific T ime. Location: S uite 1500, 1050 W es t G eorgia S treet, V ancouver, B ritis h C olumbia , C anada. Agenda : T o receive and cons ider the audited financia l s ta tements of the company for its fis ca l year ended May 31, 2009, the auditor's report thereon and the related management dis cus s ion and analys is ; to elect directors for the ens uing year; to appoint the auditor; to approve amendment and continuation of S hare Option P lan; to approve an ordinary res olution to authorize the board of directors to implement the cons olidation of is s ued and outs tanding common s hares on a bas is of two pre-cons olidation common s hares for one pos t-cons olidation common s hare, and if implemented the contemplated s hare cons olidation mus t be in a form acceptable to the regulatory authorities ; and to cons ider any permitted amendment to or variation of any matter identified in this notice and to trans act s uch other bus ines s as may properly come before the meeting or any adjournment thereof.

OAO R B C Information S ys tems (R TS :R B C I)

OAO R B C Information S ys tems , Annual G eneral Meeting, Dec 18, 2009

OAO R B C Information S ys tems , Annual G eneral Meeting, Dec 18, 2009 Agenda : T o approve the annual report, the annual ba lance s heet, including profit and los s s tatement of the company, and profit and los s dis tribution for 2008; to cons ider R evis ion C ommis s ion election; to approve auditor of the company; and to elect the board of directors .

C DC C orp. (Nas daqGS :C HIN.A); C DC S oftware C orporation (Nas daqGM:C DC S )

C DC C orp. and C DC S oftware C orporation Announce R es ignation of S imon K wong C hi W ong

C DC C orporation announced that S imon K wong C hi W ong was appointed as chief executive officer of the company’s s ubs idiary, C DC G ames C orporation replacing Mr. P eter Y ip, who continues as vice chairman of the board of directors of C DC G ames . Mr. W ong continues to s erve as a non-independent member of the boards of directors of each of C DC C orporation and its s ubs idiary, C DC S oftware C orporation. In connection with the foregoing appointment, Mr. W ong has res igned: from the Audit C ommittee and Nominating C ommittee of the board of directors of C DC C orp. ; and from the Audit C ommittee and C ompens ation C ommittee of the board of directors of C DC S oftware C orporation.

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

V A LU A TI ON

Online Gaming companies lead market-cap charts: Thirteen companies in our Web 2.0 universe top US$1 bil l ion in market capitalization (Figure 8). Fifty-seven of the 89 companies have market caps under US$100 mill ion, with 37 under US$25 mill ion. Online gaming companies dominate the top of the list, led by Tencent Holdings (SEHK:700) with a market cap of approximately US$36.0 bil l ion.

Market C ap (US D m)

0.00.00.00.10.20.20.40.50.60.61.11.51.52.52.93.23.54.64.64.86.86.87.68.99.010.313.414.214.716.417.618.118.720.020.121.123.627.128.035.135.735.937.938.340.652.659.165.665.867.468.670.573.176.076.186.297.5100.9141.7149.9161.0179.6193.0200.1205.8222.0229.5238.5243.8271.4449.6450.9601.4720.8770.9819.01053.01380.31646.4

2009.72100.12169.52602.52758.63169.43427.34823.735997.2

1799.6

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 .The Parent Company

China Gatew ay CorporationCLICK ER Inc .

A s s oc iated Media Holdings Inc .Wynds torm Corporation

LiveWorld Inc .K A B Dis tribution Inc .

Unis erve Communications Corp.B igs tring Corp.

B eyond Commerce, Inc .S NA P Interactive, Inc .

CornerWorld CorporationB etaw ave Corporation

UOMO Media , IncDigita lPos t Interactive, Inc .

B right Things plcWorlds .com Inc .

V OIS , Inc .S pectrumDNA , Inc .B roadWebA s ia Inc .

Magnitude Information S ys tems Inc .is eemedia Inc .

L ingo Media CorporationJ umbuck Enterta inment L imited

Dolphin Digita l Media , Inc .Y nk K orea Inc .

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

MOK O.mobi L imitedA cceleriz e New Media , Inc .

Ex tens ions , Inc .Northgate Technologies L imited

S ocia lw is e, Inc .A s knet A G

A Q Interactive, Inc .Quepas a Corp.

NeXplore CorporationNgi Group Inc .

DXN Holdings B hdWebz en Inc .

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

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

Frogs ter Interactive Pictures A GGeoS entric Oy j

NeuLion IncorporatedEolith Co. Ltd.

GameOn Co Ltd.TheS treet.com, Inc .

Cyberplex Inc .HanbitS of t, Inc .

Y D Online Corp.Tree.Com, Inc .

Fluid Mus ic Canada, Inc .DA DA S pA

A ctoz S oft Co. , L td.The9 L imited

Openw ave S ys tems Inc .G igaMedia Ltd.

GungHo Online Enterta inment, Inc .Myriad Group A G

OA O R B C Information S ys temsGamania Digita l Enterta inment Co. , Ltd.

XING A GCDC Corp.

NetDragon WebS oft, Inc .S hutterf ly , Inc .

S K Communications Co. , Ltd.United Online Inc .

NEOWIZ Games CorporationK ings oft Co. Ltd.

V alueClick Inc .Chines e Gamer International

Mix i, Inc .G iant Interactive Group, Inc .

Changyou.com L imitedPerfect World Co. , Ltd.

S ohu.com Inc .Open Tex t Corp.

IA C/InterA ctiveCorp.Gree, Inc .

Modern Times Group Mtg A BS handa Interactive Enterta inment Ltd.

Neteas e.com Inc .Tencent Holdings Ltd.

Figure 8. Market Cap Rankin Source. Capital IQ

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 39.4x. The median of 1.6x compares to 1.6x last week. Note that we exclude multiples greater than 50x. Thirty-two companies have multiples under 1.5x.

T E V/LT M R evenue (x)

0.0 0.0 0.1 0.1 0.1 0.1 0.1 0.2 0.3 0.3 0.4 0.4 0.4 0.4 0.4 0.5 0.6 0.6 0.6 0.7 0.8 0.9 1.0 1.0 1.1 1.1 1.2 1.2 1.2 1.3 1.3 1.4 1.5 1.6 1.9 1.9 2.2 2.2 2.3 2.8 2.9 3.1 3.2 3.4 3.7 4.54.6 4.9 5.0 5.1 5.7 5.7 5.8 6.7 7.68.9

12.612.614.214.8

17.5

23.024.824.9

39.4

48.7

A verage, 5.3

0.0

10.0

20.0

30.0

40.0

50.0

60.0

Chi

na G

atew

ay C

orpo

ratio

nO

AO

RB

C In

form

atio

n S

yste

ms

AQ

Inte

ract

ive,

Inc.

Bet

awav

e C

orpo

ratio

nC

LIC

KE

R In

c.T

heS

tree

t.com

, Inc

.A

skne

t AG

The

Par

ent C

ompa

nyS

NA

P In

tera

ctiv

e, In

c.T

ree.

Com

, Inc

.U

nise

rve

Com

mun

icat

ions

Cor

p.P

erfe

ct W

orld

Co.

, Ltd

.O

penw

ave

Sys

tem

s In

c.Ju

mbu

ck E

nter

tain

men

t Lim

ited

Nor

thga

te T

echn

olog

ies

Lim

ited

Cyb

erpl

ex In

c.D

XN

Hol

ding

s B

hdC

DC

Cor

p.G

igaM

edia

Ltd

.IA

C/In

terA

ctiv

eCor

p.D

AD

A S

pAU

nite

d O

nlin

e In

c.A

ctoz

Sof

t Co.

, Ltd

.B

eyon

d C

omm

erce

, Inc

.S

NM

Glo

bal H

oldi

ngs

Han

bitS

oft,

Inc.

Ynk

Kor

ea In

c.S

park

Net

wor

ks, I

nc.

Val

ueC

lick

Inc.

Net

Dra

gon

Web

Sof

t, In

c.G

ungH

o O

nlin

e E

nter

tain

men

t, In

c.G

aman

ia D

igita

l Ent

erta

inm

ent C

o.,

Shu

tterf

ly, I

nc.

YD

Onl

ine

Cor

p.M

oder

n T

imes

Gro

up M

tg A

BC

orne

rWor

ld C

orpo

ratio

nN

euLi

on In

corp

orat

edP

NI D

igita

l Med

ia In

c.S

K C

omm

unic

atio

ns C

o., L

td.

Ope

n T

ext C

orp.

XIN

G A

GS

ohu.

com

Inc.

Myr

iad

Gro

up A

GN

EO

WIZ

Gam

es C

orpo

ratio

nW

izza

rd S

oftw

are

Cor

pora

tion

Soc

ial M

edia

Ven

ture

s In

c.E

olith

Co.

Ltd

.K

ings

oft C

o. L

td.

UO

MO

Med

ia, I

ncis

eem

edia

Inc.

Dig

italP

ost I

nter

activ

e, In

c.A

ccel

eriz

e N

ew M

edia

, Inc

.C

hang

you.

com

Lim

ited

Fro

gste

r In

tera

ctiv

e P

ictu

res

AG

Ling

o M

edia

Cor

pora

tion

Mix

i, In

c.A

ssoc

iate

d M

edia

Hol

ding

s In

c.G

ree,

Inc.

Chi

nese

Gam

er In

tern

atio

nal

Geo

Sen

tric

Oyj

Flu

id M

usic

Can

ada,

Inc.

NeX

plor

e C

orpo

ratio

nM

OK

O.m

obi L

imite

dT

ence

nt H

oldi

ngs

Ltd.

Big

strin

g C

orp.

Spe

ctru

mD

NA

, Inc

.

Figure 9. TEV/Revenue Ranking Source. Capital IQ

TEV/Revenue (LTM) by country/exchange: We have also calculated multiples based on where the companies are listed or domiciled. Figure 10 shows the average TEV/Revenue multiples by stock exchange. The OTCBB has the largest number of companies (17), trading at an average multiple of 10.8x (vs. 14.0x last week). On a geographic basis, the United States has the most companies (38), trading at an average of 6.9x revenue (vs. 8.1x last week) (Figure 11). Nine of the companies are Canadian (average 3.2x revenue).

Average TEV/LTM Revenue - By Exchange

0.00.20.4

0.60.81.31.61.92.32.43.23.86.76.97.2

7.47.8

10.410.8

12.6

14.8

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

HLS

E

AS

X

OT

CB

B

SE

HK

GT

SM

XT

RA

TS

E

OT

CP

K

TS

X

TS

XV

SW

X

AM

EX

KO

SE

OM

Nas

daqG

S

OS

E

CM

KLS

E

BS

E

Nas

daqG

M

RT

S

1 2 17 3 2 3 5 11 4 4 1 2 6 1 14 1 1 1 1 5 1

(x)

# Companies

Average TEV/LTM Revenue - By Country

0.00.6 0.4

0.60.81.92.33.23.2

5.45.76.76.9

7.4

12.6

14.8

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

Fin

land

Aus

tral

ia

Ger

man

y

Uni

ted

Sta

tes

Chi

na

Japa

n

Tai

wan

Can

ada

Sw

itzer

land

Sou

thK

orea

Sw

eden Ita

ly

Hon

g K

ong

Mal

aysi

a

Indi

a

Rus

sia

1 2 3 38 10 6 3 9 1 8 1 1 1 1 1 1

(x)

# Companies

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

TEV/EBITDA (LTM) averages 11.6x: The average multiple for the 36 companies with positive EBITDA (and multiples under 100x) is 11.6x LTM EBITDA (vs. 10.5x last week), led by Tencent Holdings Ltd. (SEHK:700) at 48.7x (Figure 12). Fourteen companies have EBITDA multiples under 7x. The median multiple is 8.9x (vs. 8.5x last week).

T E V/L T M E B IT DA (x)

0.4 0.7 1.0 1.2 1.84.0 4.2 4.3 4.4 4.8 5.0 5.5 6.0 6.0 7.1 7.4 7.5 8.3 9.4 10.6 10.7 10.8 11.0 11.6 12.0 12.3 12.5 12.8 13.1 13.1

21.724.5

27.1

36.038.7

48.7

A verage, 11.6

0.0

10.0

20.0

30.0

40.0

50.0

60.0

OA

O R

BC

Info

rmat

ion

Sys

tem

s

Per

fect

Wor

ld C

o., L

td.

Jum

buck

Ent

erta

inm

ent L

imite

d

AQ

Inte

ract

ive,

Inc.

SN

AP

Inte

ract

ive,

Inc.

Uni

ted

Onl

ine

Inc.

Net

Dra

gon

Web

Sof

t, In

c.

Act

oz S

oft C

o., L

td.

The

Str

eet.c

om, I

nc.

Cyb

erpl

ex In

c.

Val

ueC

lick

Inc.

Spa

rk N

etw

orks

, Inc

.

Gun

gHo

Onl

ine

Ent

erta

inm

ent,

Inc.

DA

DA

SpA

Soh

u.co

m In

c.

Tre

e.C

om, I

nc.

YD

Onl

ine

Cor

p.

Gam

ania

Dig

ital E

nter

tain

men

t Co.

, Ltd

.

Cha

ngyo

u.co

m L

imite

d

Ope

n T

ext C

orp.

CD

C C

orp.

XIN

G A

G

Ynk

Kor

ea In

c.

IAC

/Inte

rAct

iveC

orp.

Ope

nwav

e S

yste

ms

Inc.

Kin

gsof

t Co.

Ltd

.

Shu

tterf

ly, I

nc.

NE

OW

IZ G

ames

Cor

pora

tion

Mod

ern

Tim

es G

roup

Mtg

AB

PN

I Dig

ital M

edia

Inc.

Gre

e, In

c.

Chi

nese

Gam

er In

tern

atio

nal

Mix

i, In

c.

SK

Com

mun

icat

ions

Co.

, Ltd

.

Uni

serv

e C

omm

unic

atio

ns C

orp.

Ten

cent

Hol

ding

s Lt

d.

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 (17), trading at an average multiple of 1.8x. On a geographic basis, the United States has the most companies (38), trading at an average of 7.1x EBITDA (Figure 14). Nine of the companies are Canadian (average 16.8x EBITDA).

Average TEV/LTM EBITDA - By Exchange

0.41.01.84.85.55.96.06.0

8.410.813.115.116.416.7

21.7

25.9

0.0

5.0

10.0

15.0

20.0

25.0

30.0

TS

XV

SE

HK

TS

E

GT

SM

KO

SE

OM

XT

RA

Nas

daqG

S

CM

OS

E

Nas

daqG

M

AM

EX

TS

X

OT

CB

B

AS

X

RT

S

4 3 5 2 6 1 3 14 1 1 5 2 4 17 2 1

(x)

# Companies

Average TEV/LTM EBITDA - By Country

0.4

1.0

6.0

7.1

10.710.813.113.814.0

15.1

16.4

16.8

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

Can

ada

Tai

wan

Sou

thK

orea

Japa

n

Chi

na

Sw

eden

Ger

man

y

Hon

gK

ong

Uni

ted

Sta

tes

Italy

Aus

tral

ia

Rus

sia

9 3 8 6 10 1 3 1 38 1 2 1

(x)

# Companies

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

P/E (LTM) averages 21.0x: The average multiple for the 33 companies with positive earnings (and multiples under 100x) is 21.0x LTM EPS (vs. 21.5x last week), led by HabitSoft, Inc. (KOSE:A047080) with a 75.8x multiple (Figure 15). Thirteen companies have P/E multiples under 10x. The median is 13.2x.

P /E L T M (x)

0.0 0.0 1.8 1.8 2.3 2.5 2.6 3.8 5.3 6.9 7.1 7.6 9.2 11.1 12.2 12.8 13.2 13.816.9 17.0

19.6 21.424.2

31.4 32.3

37.5 37.640.8

46.7 47.3

62.5

69.0

75.8

A verage, 21.0

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

Gra

vity

Co.

, Ltd

Web

zen

Inc.

Gia

nt In

tera

ctiv

e G

roup

, Inc

.

The

9 Li

mite

d

Sha

nda

Inte

ract

ive

Ent

erta

inm

ent L

td.

Per

fect

Wor

ld C

o., L

td.

Net

ease

.com

Inc.

Jum

buck

Ent

erta

inm

ent L

imite

d

DX

N H

oldi

ngs

Bhd

Cyb

erpl

ex In

c.

Gam

eOn

Co

Ltd.

Gig

aMed

ia L

td.

YD

Onl

ine

Cor

p.

IAC

/Inte

rAct

iveC

orp.

Cha

ngyo

u.co

m L

imite

d

Soh

u.co

m In

c.

Net

Dra

gon

Web

Sof

t, In

c.

SN

AP

Inte

ract

ive,

Inc.

Kin

gsof

t Co.

Ltd

.

Mod

ern

Tim

es G

roup

Mtg

AB

Spa

rk N

etw

orks

, Inc

.

Act

oz S

oft C

o., L

td.

Gam

ania

Dig

ital E

nter

tain

men

t Co.

, Ltd

.

XIN

G A

G

Chi

nese

Gam

er In

tern

atio

nal

NE

OW

IZ G

ames

Cor

pora

tion

Gun

gHo

Onl

ine

Ent

erta

inm

ent,

Inc.

Live

Wor

ld In

c.

Gre

e, In

c.

Ope

n T

ext C

orp.

Ten

cent

Hol

ding

s Lt

d.

Mix

i, In

c.

Han

bitS

oft,

Inc.

Figure 15. P/E Ranking Source. Capital IQ

P/E (LTM) by country/exchange: Figure 16 shows the average P/E multiples by stock exchange. The OTCBB has the largest number of companies (17), trading at an average multiple of 13.8x. On a geographic basis, the United States has the most companies (38), trading at an average of 21.3x earnings (Figure 17). Nine of the companies are Canadian (average 27.1x EPS).

Average P/E - By Exchange

1.8 0.03.8

5.36.9

11.113.817.019.6

28.330.931.4

35.937.640.8

40.9

0.05.0

10.0

15.020.025.030.0

35.040.045.0

TS

E

OT

CP

K

OS

E

KO

SE

XT

RA

SE

HK

GT

SM

AM

EX

OM

OT

CB

B

Nas

daqG

S

TS

X

KLS

E

AS

X

NY

SE

Nas

daqG

M

5 11 1 6 3 3 2 2 1 17 14 4 1 2 1 5

(x)

# Companies

Average P/E - By Country

3.85.3

12.817.0

21.321.424.027.1

31.4

40.1

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

Japa

n

Ger

man

y

Can

ada

Sou

thK

orea

Tai

wan

Uni

ted

Sta

tes

Sw

eden

Chi

na

Mal

aysi

a

Aus

tral

ia

6 3 9 8 3 38 1 10 1 2

(x)

# Companies

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

UPCO MING EVENTS

There are no upcoming earnings events in our Web 2.0 universe.

C omparable C ompany Analys is > Web 2.0P rice P erformance

C ompany Name C urrency Ticker E xchange US D Market C ap ($m) C urrent P rice 1 Wk 1 Mth 3 Mth 6 Mth 1 Yr 52 Week

Accelerize New Media , Inc. US D AC LZ OT C B B 18.7 0.65 0.0% -11.0% 0.0% 62.5% 85.7% -18.8%Actoz S oft C o. , L td. K R W A052790 K OS E 149.9 20,350 -3.3% 29.2% 2.8% -12.1% 92.0% -43.5%AQ Interactive, Inc. J P Y 3838 T S E 27.1 44,650 10.2% 11.6% -15.0% -38.6% 57.2% -46.2%As knet AG E UR XT R A:A5A XT R A 23.6 3 -9.1% -15.8% -3.0% 31.7% -20.0% -22.3%As s ociated Media Holdings Inc. US D AS MH OT C P K 0.4 0.01 -98.8% 0.0% -35.7% -55.0% 200.0% -98.8%B igs tring C orp. US D B S G C OT C B B 1.5 0.02 9.5% -28.1% 21.1% -23.3% 43.8% -59.6%B etawave C orporation US D B W AV OT C B B 3.2 0.11 74.6% 254.8% 22.2% 37.5% -52.2% -56.0%B eyond C ommerce, Inc. US D B Y OC OT C B B 1.5 0.03 -25.7% -51.9% -84.0% -96.5% -96.8% -98.6%B right T hings plc G B P AIM:B G T AIM 4.6 0.01 -12.2% -8.5% -21.8% -25.9% 13.2% -56.5%B roadW ebAs ia Inc. US D B W B A OT C P K 7.6 0.09 80.0% 0.0% -60.9% -60.9% 50.0% -96.9%C DC C orp. US D C HIN.A Nas daqG S 243.8 2.30 -3.8% -5.0% -17.0% 63.1% 117.0% -41.3%C hangyou.com L imited US D C Y OU Nas daqG S 1,799.6 32.72 4.0% -2.0% -13.7% -16.2% NM -32.4%C hina G ateway C orporation US D C G W Y OT C P K 0.2 0.01 350.0% 350.0% -40.0% 350.0% 350.0% -70.0%C hines e G amer International T W D G T S M:3083 G T S M 1,053.0 406.00 -5.8% -12.1% -12.1% 10.3% 349.1% -21.8%C LIC K E R Inc. US D C LK Z OT C B B 0.2 0.00 -40.0% -64.7% -70.0% 7.1% -92.5% -96.3%C ornerW orld C orporation US D C W R L OT C B B 2.9 0.03 0.0% -50.0% -50.0% -57.1% -93.6% -92.7%C yberplex Inc. C AD T S X:C X T S X 76.0 1.20 1.7% -4.0% -9.8% -31.0% 252.9% -39.7%DADA S pA E UR C M:DA C M 141.7 5.97 -0.7% -13.4% -13.2% 0.7% -14.7% -27.1%DXN Holdings B hd MY R DXN K LS E 35.9 0.55 -3.5% -10.6% -9.1% 44.7% 57.1% -20.3%Dibz International, Inc. US D DIB Z OT C P K 0.0 0.01 316.7% 316.7% 316.7% 400.0% -50.0% 0.0%Digita lP os t Interactive, Inc. US D DG LP OT C B B 4.6 0.05 0.0% 8.2% -11.7% 89.3% 165.0% -46.5%Digita lT own, Inc. US D DG T W OT C B B 38.3 1.40 0.0% 0.0% -47.0% -31.7% -48.1% -60.0%Dolphin Digita l Media , Inc. US D DP DM OT C B B 14.2 0.25 -10.7% -13.8% -43.1% -51.9% -68.8% -68.8%E olith C o. L td. K R W A041060 K OS E 68.6 555.00 -1.8% -1.8% -36.6% -33.1% 0.9% -52.2%E xtens ions , Inc. US D E XT I OT C P K 20.0 0.45 50.0% 80.0% 125.0% NM 350.0% -55.4%F luid Mus ic C anada, Inc. C AD T S X:F MN T S X 100.9 1.74 2.4% -13.0% 20.0% 167.7% 625.0% -19.1%F rogs ter Interactive P ictures AG E UR F R G XT R A 65.6 17.49 -2.8% 1.7% -3.8% 105.8% 216.3% -18.6%G amania Digita l E nterta inment C o. , L td. T W D 6180 G T S M 229.5 48.50 -2.8% 3.0% -4.5% -12.6% 127.7% -29.5%G ameOn C o Ltd. J P Y 3812 T S E 70.5 65,200 -2.0% 0.2% -35.3% -41.4% -44.3% -50.9%G eoS entric O yj E UR G E O 1V HLS E 65.8 0.05 0.0% -16.7% 25.0% 25.0% 25.0% -16.7%G iant Interactive G roup, Inc. US D G A NY S E 1,646.4 7.27 -2.7% 5.8% -4.6% -12.3% 20.4% -24.0%G igaMedia Ltd. US D G IG M Nas daqG S 193.0 3.54 -3.5% -13.4% -36.3% -37.9% -36.8% -54.2%G ravity C o. , L td US D G R V Y Nas daqG M 40.6 1.46 2.8% -5.2% -25.5% 33.9% 175.5% -44.5%G ree, Inc. J P Y T S E :3632 T S E 2,758.6 5,510 14.1% 26.4% 11.9% 55.2% 101.8% -3.5%G ungHo O nline E nterta inment, Inc. J P Y 3765 OS E 200.1 156,200 2.4% 7.7% -35.7% -33.2% 50.8% -44.2%HanbitS oft, Inc. K R W A047080 K OS E 76.1 4,145 6.0% 21.4% 0.4% -1.1% 29.5% -37.6%IAC /InterActiveC orp. US D IAC I Nas daqG S 2,602.5 19.72 2.2% 1.6% -3.8% 23.6% 27.6% -7.3%is eemedia Inc. C AD IE E T S XV 9.0 0.19 12.1% -15.9% 105.6% 85.0% 184.6% -31.5%J umbuck E nterta inment L imited AUD AS X: J MB AS X 13.4 0.32 -1.6% -8.7% -17.1% -19.2% -19.2% -37.0%K AB Dis tribution Inc. C AD T S X:K AB T S X 0.6 0.01 -50.0% -99.2% -99.2% -98.6% -99.4% -99.4%K ings oft C o. L td. HK D 3888 S E HK 770.9 5.46 4.2% -23.8% -29.8% 2.1% 127.5% -42.3%Lingo Media C orporation C AD T S XV :LM T S XV 10.3 0.90 0.0% -9.1% -16.7% -10.0% -10.0% -37.1%LiveW orld Inc. US D LV W D OT C P K 0.6 0.02 -35.5% -37.5% -75.0% -71.4% -55.6% -92.0%LookS mart, L td. US D LO OK Nas daqG M 16.4 0.96 -10.3% -14.3% -23.2% -21.3% -37.6% -46.2%Magnitude Information S ys tems Inc. US D MAG Y OT C B B 8.9 0.02 0.0% -25.9% 100.0% 66.7% 33.3% -48.7%Mixi, Inc. J P Y 2121 T S E 1,380.3 801,000.00 -0.7% 14.6% 33.7% 49.7% 49.7% -7.4%Modern T imes G roup Mtg AB S E K MT G B OM 3,169.4 334.90 1.9% 5.5% 3.5% 56.5% 106.7% -1.5%MOK O.mobi L imited AUD MK B AS X 18.1 0.18 9.4% 45.8% 150.0% 133.3% 169.2% -12.5%Myriad G roup AG C HF MY R N S W X 205.8 4.80 -1.0% -1.0% 6.9% -2.0% -16.5% -25.0%NE O W IZ G ames C orporation K R W A095660 K OS E 720.8 40,800.00 -6.4% 1.5% -3.3% 27.5% 312.1% -9.1%NetDragon W ebS oft, Inc. HK D 777 S E HK 271.4 3.98 -2.0% -19.1% -31.0% -20.9% 39.2% -44.3%Neteas e.com Inc. US D NT E S Nas daqG S 4,823.7 37.27 0.7% -2.6% -17.0% 1.7% 79.9% -23.2%NeuLion Incorporated C AD T S X:NLN T S X 67.4 0.63 -10.0% -18.2% -37.0% -11.3% 57.5% -51.5%NeXplore C orporation US D NXP C OT C P K 35.1 0.63 -3.1% -10.0% 5.0% -10.0% -37.0% -37.0%Ngi G roup Inc. J P Y 2497 T S E 35.7 25,780.00 9.4% 5.3% -3.6% -27.2% -48.6% -57.0%Northgate T echnologies L imited INR 590057 B S E 20.1 27.70 -3.1% -0.2% -37.7% -32.4% -54.6% -62.8%Open T ext C orp. US D O T E X Nas daqG S 2,169.5 38.48 0.6% 5.8% -1.7% 10.7% 27.1% -7.1%Openwave S ys tems Inc. US D O P W V Nas daqG S 179.6 2.15 -4.9% -10.4% -19.8% 3.9% 258.3% -31.3%P erfect W orld C o. , L td. US D P W R D Nas daqG S 2,009.7 40.39 -6.3% -7.6% -10.1% 34.0% 159.7% -20.0%P NI Digita l Media Inc. C AD T S XV :P N T S XV 52.6 1.70 -8.1% 0.0% -6.6% 6.2% 47.8% -20.2%Quepas a C orp. US D Q P S A OT C B B 28.0 2.20 -6.4% 63.0% 33.3% 214.3% 34.1% -12.0%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 Ltd. US D S NDA Nas daqG S 3,427.3 50.96 -3.1% 5.3% -7.9% -10.4% 68.4% -21.6%S hutterfly, Inc. US D S F LY Nas daqG S 449.6 17.51 -0.2% 16.7% -1.1% 35.1% 154.9% -3.4%S K C ommunications C o. , L td. K R W A066270 K OS E 450.9 12,850.00 20.1% 66.9% 39.5% 23.6% 133.6% 0.0%S NAP Interactive, Inc. US D S T V I OT C B B 2.5 0.23 15.0% 15.0% -54.0% -64.6% -67.1% -78.7%S NM G lobal Holdings US D S NMN OT C P K 0.0 0.00 14.3% -20.0% -78.9% -88.6% -84.3% -96.0%S ocia l Media V entures Inc. US D S MV I OT C P K 0.0 0.01 0.0% -27.5% -92.8% -42.0% -99.4% -99.6%S ocia lwis e, Inc. US D S C LW OT C B B 21.1 0.45 -10.0% 0.0% -25.0% -34.8% -45.8% -65.4%S ohu.com Inc. US D S OHU Nas daqG S 2,100.1 54.61 2.6% 1.1% -20.0% -15.2% 25.0% -24.5%S park Networks , Inc. US D LO V AME X 59.1 2.87 14.8% 14.3% 22.6% 24.8% 10.8% -2.4%S pectrumDNA, Inc. US D S P XA OT C B B 6.8 0.14 0.0% 0.0% -36.4% -39.1% -6.7% -68.9%T encent Holdings Ltd. HK D 700 S E HK 35,997.2 153 -3.9% 6.1% 19.8% 70.3% 207.7% -7.3%T he P arent C ompany US D K IDS .Q OT C P K 0.1 0.00 -57.1% -57.1% -85.0% -88.0% -98.7% -99.3%T he9 L imited US D NC T Y Nas daqG S 161.0 6.41 -10.2% -14.4% -24.1% -38.6% -51.0% -61.5%T heS treet.com, Inc. US D T S C M Nas daqG M 73.1 2.39 7.7% -3.2% -16.1% 13.3% -17.6% -32.7%T ree.C om, Inc. US D T R E E Nas daqG M 97.5 8.94 0.0% 27.4% 14.9% -2.6% 315.8% -31.6%Unis erve C ommunications C orp. C AD T S XV :US S T S XV 1.1 0.05 25.0% 0.0% 25.0% -28.6% 66.7% -50.0%United Online Inc. US D UNT D Nas daqG S 601.4 7.11 2.0% -2.2% -16.7% 19.9% 27.6% -24.8%UOMO Media , Inc US D UO MO OT C B B 3.5 0.04 -19.8% -41.9% -67.1% -74.9% -63.5% -96.2%V alueC lick Inc. US D V C LK Nas daqG S 819.0 9.56 -2.7% -4.4% -25.4% -9.2% 43.5% -31.4%V O IS , Inc. US D V OIS OT C B B 6.8 0.01 -25.5% -31.7% 173.3% 10.8% 121.6% -64.3%W ebzen Inc. US D W ZE N Nas daqG M 37.9 3.20 6.7% 16.8% 6.7% 1.6% 259.6% -31.6%W izzard S oftware C orporation US D W ZE AME X 17.6 0.33 -17.5% -21.4% -28.3% -45.0% -62.5% -67.3%W orlds .com Inc. US D W DDD OT C B B 4.8 0.09 100.0% -10.0% -18.2% 12.5% -52.6% -60.9%W ynds torm C orporation US D W Y ND OT C P K 0.5 0.03 -25.0% -70.0% -70.0% -33.3% -75.0% -94.1%XING AG E UR O 1B C XT R A 238.5 30.89 -4.7% -4.3% -14.2% 1.3% 14.4% -18.7%Y D Online C orp. K R W A052770 K OS E 86.2 6,860.00 -1.6% 13.6% -24.4% -14.6% 9.6% -44.7%Y nk K orea Inc. K R W A023770 K OS E 14.7 3,290.00 -7.8% -22.1% -22.2% -47.9% -30.7% -62.2%

High 350.0% 350.0% 316.7% 400.0% 625.0% 0.0%Low -98.8% -99.2% -99.2% -98.6% -99.4% -99.6%Average 816.9 6.8% 5.3% -6.3% 9.1% 56.6% -43.5%Median -0.7% -2.2% -14.2% -5.9% 27.6% -41.3%

Figure 18. Price Performance Source. Capital IQ

C omparable C ompany Analys is > Web 2.0Valuation Multiples

C ompany Name S ector C ountryP rimary E xchange Tic ker

US D Market C ap ($m)

TE V/L TM R evenue

TE V/ NTM R evenue

TE V/L TM E B ITDA

TE V/NTM E B ITDA P /L TM E P S P /NTM E P S P /TangB V

Accelerize New Media , Inc. Direct Marketing United S tates OT C B B AC LZ 18. 7 5.7x - - - - - -Actoz S oft C o. , Ltd. G aming S outh K orea K OS E A052790 149. 9 1.0x - 4.3x - 21. 4x - 2.2xAQ Interactive, Inc. G aming J apan T S E 3838 27. 1 0.1x - 1.2x - - - 0.4xAs knet AG G aming G ermany XT R A XT R A:A5A 23. 6 0.1x - - - - - -As s ociated Media Holdings Inc. Mobile United S tates OT C P K AS MH 0. 4 12. 6x - - - - - -B igs tring C orp. Ins tant Mes s aging United S tates OT C B B B S G C 1. 5 39. 4x - - - - - -B etawave C orporation Media United S tates OT C B B B W AV 3. 2 0.1x - - - - - 2.2xB eyond C ommerce, Inc. S ocia l Network ing United S tates OT C B B B Y OC 1. 5 1.0x - - - - - -B right T hings plc S ocia l Network ing United K ingdom AIM AIM:B G T 4. 6 - - - - - - -B roadW ebAs ia Inc. S ocia l Network ing United S tates OT C P K B W B A 7. 6 - - - - - - -C DC C orp. G aming Hong K ong Nas daqG S C HIN.A 243. 8 0.6x 0.6x 10. 7x 5. 0x - - 10. 3xC hangyou. com L imited G aming C hina Nas daqG S C Y OU 1, 799. 6 5.8x 4.8x 9.4x 7. 5x 12. 2x 10.5x 9.4xC hina G ateway C orporation Mobile United S tates OT C P K C G W Y 0. 2 0.0x - - - - - -C hines e G amer Internationa l G aming T aiwan G T S M G T S M:3083 1, 053. 0 14. 2x 14.6x 24. 5x 17.9x 32. 3x 20.2x 15. 4xC L IC K E R Inc. Direct Marketing United S tates OT C B B C LK Z 0. 2 0.1x - - - - - -C ornerW orld C orporation C ontent United S tates OT C B B C W R L 2. 9 1.9x - - - - - -C yberplex Inc. Advertis ing C anada T S X T S X:C X 76. 0 0.5x 0.5x 4.8x 3. 8x 6.9x 7. 2x 2.7xDADA S pA S ocia l Network ing Italy C M C M:DA 141. 7 0.8x 0.8x 6.0x 5. 6x - 17.5x -DXN Holdings B hd S ocia l Network ing Malays ia K LS E DXN 35. 9 0.6x - - - 5.3x - 0.7xDibz Internationa l, Inc. S NS Apps United S tates OT C P K DIB Z 0. 0 - - - - - - -Digita lP os t Interactive, Inc. C ontent United S tates OT C B B DG LP 4. 6 5.7x - - - - - -Digita lT own, Inc. S ocia l Network ing United S tates OT C B B DG T W 38. 3 - - - - - - -Dolphin Digital Media , Inc. S ocia l Network ing United S tates OT C B B DP DM 14. 2 - 1.0x - - - 1. 0x -E olith C o. Ltd. G aming S outh K orea K OS E A041060 68. 6 4.6x - - - - - 3.1xE xtens ions , Inc. C ontent United S tates OT C P K E XT I 20. 0 - - - - - - -F luid Mus ic C anada, Inc. Media United S tates T S X T S X:F MN 100. 9 17. 5x 17.5x - - - - 7.5xF rogs ter Interactive P ictures AG G aming G ermany XT R A F R G 65. 6 6.7x - - - - - 8.1xG amania Digita l E nterta inment C o. , Ltd. G aming T aiwan G T S M 6180 229. 5 1.4x - 8.3x - 24. 2x - 2.9xG ameOn C o Ltd. G aming J apan T S E 3812 70. 5 - - - - 7.1x 7. 3x 0.8xG eoS entric Oyj Mobile F inland HLS E G E O1V 65. 8 14. 8x - - - - - -G iant Interactive G roup, Inc. G aming C hina NY S E G A 1, 646. 4 - - - - 1.8x 15.3x 0.3xG igaMedia L td. G aming T aiwan Nas daqG S G IG M 193. 0 0.6x 0.6x - 3. 1x 7.6x 7. 1x 1.6xG ravity C o. , L td G aming S outh K orea Nas daqG M G R V Y 40. 6 - - - - 0.0x - 0.0xG ree, Inc. S ocia l Network ing J apan T S E T S E :3632 2, 758. 6 12. 6x 7.2x 21. 7x 13.2x 46. 7x 25.5x 22. 2xG ungHo Online E nterta inment, Inc. Media J apan OS E 3765 200. 1 1.3x 1.2x 6.0x - 37. 6x 12.4x 6.2xHanbitS oft, Inc. G aming S outh K orea K OS E A047080 76. 1 1.1x - - - 75. 8x - 2.1xIAC /InterActiveC orp. Media United S tates Nas daqG S IAC I 2, 602. 5 0.7x 0.7x 11. 6x 4. 9x 11. 1x 28.9x 1.3xis eemedia Inc. C ontent C anada T S XV IE E 9. 0 5.1x - - - - - -J umbuck E nterta inment L imited S ocia l Network ing Aus tralia AS X AS X:J MB 13. 4 0.4x 0.4x 1.0x 1. 1x 3.8x 2. 8x 1.2xK AB Dis tribution Inc. C ontent C anada T S X T S X: K AB 0. 6 - - - - - - 0.0xK ings oft C o. L td. G aming C hina S E HK 3888 770. 9 4.9x 4.2x 12. 3x 8. 8x 16. 9x 12.4x 4.1xL ingo Media C orporation Learning C anada T S XV T S XV :LM 10. 3 7.6x - - - - - -L iveW orld Inc. S ocia l Network ing United S tates OT C P K LV W D 0. 6 - - - - 40. 8x - 0.3xLookS mart, Ltd. Direct Marketing United S tates Nas daqG M LOOK 16. 4 - - - - - - 0.7xMagnitude Information S ys tems Inc. S ocia l Network ing United S tates OT C B B MAG Y 8. 9 - - - - - - -Mixi, Inc. S ocia l Network ing J apan T S E 2121 1, 380. 3 8.9x 7.3x 27. 1x 22.4x 69. 0x 52.3x 8.9xModern T imes G roup Mtg AB Media S weden OM MT G B 3, 169. 4 1.9x 1.8x 13. 1x 12.8x 17. 0x 15.2x -MOK O.mobi L imited S ocia l Network ing Aus tralia AS X MK B 18. 1 24. 8x - - - - - 16. 6xMyriad G roup AG Mobile S witzerland S W X MY R N 205. 8 3.2x - - - - - -NE OW IZ G ames C orporation G aming S outh K orea K OS E A095660 720. 8 3.4x 2.6x 12. 8x 9. 0x 37. 5x 12.8x 19. 0xNetDragon W ebS oft, Inc. G aming C hina S E HK 777 271. 4 1.3x 1.0x 4.2x 3. 9x 13. 2x 13.0x 1.5xNeteas e.com Inc. G aming C hina Nas daqG S NT E S 4, 823. 7 - - - - 2.6x 14.0x 0.7xNeuL ion Incorporated V ideo C anada T S X T S X:NLN 67. 4 2.2x - - - - - 9.4xNeXplore C orporation C ontent United S tates OT C P K NXP C 35. 1 23. 0x - - - - - -Ngi G roup Inc. Media J apan T S E 2497 35. 7 - - - - - - 0.7xNorthgate T echnologies L imited Direct Marketing India B S E 590057 20. 1 0.4x - - - - 1. 1x -Open T ext C orp. C ollaboration C anada Nas daqG S OT E X 2, 169. 5 2.8x 2.4x 10. 6x 8. 8x 47. 3x 12.9x -Openwave S ys tems Inc. Mobile United S tates Nas daqG S OP W V 179. 6 0.4x 0.4x 12. 0x 3. 8x - 30.3x 2.5xP erfect W orld C o. , L td. G aming C hina Nas daqG S P W R D 2, 009. 7 0.4x 2.0x 0.7x 3. 9x 2.5x 11.7x 1.1xP NI Digita l Media Inc. Digita l Imaging C anada T S XV T S XV : P N 52. 6 2.2x 2.0x 13. 1x 6. 7x - 68.0x 11. 8xQuepas a C orp. S ocia l Network ing United S tates OT C B B QP S A 28. 0 - - - - - - -OAO R B C Information S ys tems Media R us s ia R T S R B C I 222. 0 0.0x 1.0x 0.4x 5. 7x - 6. 5x -S handa Interactive E ntertainment L td. G aming C hina Nas daqG S S NDA 3, 427. 3 - - - - 2.3x 14.0x 0.4xS hutterfly, Inc. Digita l Imaging United S tates Nas daqG S S F LY 449. 6 1.5x 1.4x 12. 5x 7. 7x - - 2.7xS K C ommunications C o. , L td. S earch S outh K orea K OS E A066270 450. 9 2.3x - 36. 0x - - - -S NAP Interactive, Inc. Dating United S tates OT C B B S T V I 2. 5 0.3x - 1.8x - 13. 8x - 1.3xS NM G lobal Holdings Media United S tates OT C P K S NMN 0. 0 1.1x - - - - - -S ocia l Media V entures Inc. S ocia l Network ing United S tates OT C P K S MV I 0. 0 4.5x - - - - - -S ocia lwis e, Inc. S ocia l Network ing United S tates OT C B B S C LW 21. 1 - - - - - - -S ohu.com Inc. G aming C hina Nas daqG S S OHU 2, 100. 1 3.1x 2.7x 7.1x 6. 1x 12. 8x 14.7x 3.8xS park Networks , Inc. S ocia l Network ing United S tates AME X LOV 59. 1 1.2x - 5.5x - 19. 6x - 26. 6xS pectrumDNA, Inc. Media United S tates OT C B B S P XA 6. 8 48. 7x - - - - - -T encent Holdings L td. P ortal C hina S E HK 700 35, 997. 2 24. 9x 16.4x 48. 7x 32.0x 62. 5x 41.9x 27. 7xT he P arent C ompany Media United S tates OT C P K K IDS . Q 0. 1 0.2x 0.2x - 12.8x - - -T he9 L imited G aming C hina Nas daqG S NC T Y 161. 0 - - - - 1.8x - 0.1xT heS treet.com, Inc. Media United S tates Nas daqG M T S C M 73. 1 0.1x 0.2x 4.4x - - - 0.9xT ree. C om, Inc. P ortal United S tates Nas daqG M T R E E 97. 5 0.3x 0.3x 7.4x 8. 7x - - 1.4xUnis erve C ommunications C orp. S ocia l Network ing C anada T S XV T S XV : US S 1. 1 0.4x - 38. 7x - - - -United Online Inc. Media United S tates Nas daqG S UNT D 601. 4 0.9x 0.9x 4.0x 3. 6x - 5. 4x -UOMO Media , Inc Media C anada OT C B B UOMO 3. 5 5.0x - - - - - -V alueC lick Inc. Media United S tates Nas daqG S V C LK 819. 0 1.2x 1.3x 5.0x 4. 9x - 15.5x 4.4xV OIS , Inc. S ocia l Network ing United S tates OT C B B V OIS 6.8 - - - - - - 43.2xW ebzen Inc. G aming S outh K orea Nas daqG M W ZE N 37. 9 - - - - 0.0x - 0.0xW izzard S oftware C orporation P odcas ting United S tates AME X W ZE 17. 6 3.7x - - - - - -W orlds .com Inc. C ontent United S tates OT C B B W DDD 4. 8 - - - - - - -W ynds torm C orporation C ontent United S tates OT C P K W Y ND 0. 5 - - - - - - -X ING AG S ocia l Network ing G ermany XT R A O1B C 238. 5 2.9x 2.3x 10. 8x 6. 3x 31. 4x 15.3x 6.7xY D Online C orp. G aming S outh K orea K OS E A052770 86. 2 1.6x 1.4x 7.5x 6. 2x 9.2x 8. 7x 2.7xY nk K orea Inc. G aming S outh K orea K OS E A023770 14. 7 1.2x - 11. 0x - - - 0.7x

High 35, 997. 2 48. 7x 17.5x 48. 7x 32.0x 75. 8x 68.0x 43. 2xLow 0. 0 0.0x 0.2x 0.4x 1. 1x 0.0x 1. 0x 0.0xAverage 816.9 5.3x 3.2x 11.6x 8.4x 21.0x 16.8x 6.0xMedian 40. 6 1.6x 1.3x 8.9x 6. 2x 13. 2x 13.0x 2.4x

Figure 19. Valuation Comparison Source. Capital IQ

C omparable C ompany Analys is > Web 2.0S ummary by C ountry

C ompany Name US D Market C ap ($m) Avg US D Market C ap ($m) US D L TM Total R ev ($m) US D L TM Total E B ITDA ($m) E B ITDA %

United S tates 38 C hina 49, 633.4 C hina 4,963. 3 C hina 4,152.4 C hina 2,070.2 C hina 48. 8%

C anada 10 United S tates 5, 811.3 S weden 2,974. 2 United S tates 3,887.3 S weden 304.6 Aus tra lia 42. 8%

C hina 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 C anada 1,015.0 C anada 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%

T aiwan 3 T aiwan 1, 733.6 C anada 248. 8 J apan 634.4 S outh K orea 121.9 Malays ia 14. 4%

Aus tra lia 2 S outh K orea 1, 527.4 S outh K orea 190. 9 T aiwan 385.8 T aiwan 59.8 Ita ly 13. 1%

G ermany 2 G ermany 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 G ermany 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 tates 152. 9 India 82.8 G ermany 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 G ermany 68.7 Aus tra lia 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 tates -21.9%

S weden 1 India 31.0 India 31. 0 Aus tra lia 17.8 Norway -1.1 India -50.0%

R us s ia 1 Aus tra lia 22.1 Aus tra lia 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 G rand Total 69,234.6 Grand Total 777.9 G rand Total 13,819.5 G rand Total 3,276.1 G rand Total 5.1%

Figure 20. Comparison by Country Source. Capital IQ

C omparable C ompany Analys is > Web 2.0S ummary by E xc hange

C ompany Name US D Market C ap ($m) Avg US D Market C ap ($m) US D L TM Total R ev ($m) US D L TM Total E B ITDA ($m) E B ITDA %

OT C B B 18 S E HK 31, 520.4 S E HK 10,506. 8 OM 1,982.6 Nas daqG S 1,796.0 NY S E 62. 5%

Nas daqG S 14 Nas daqG S 24, 385.7 OM 2,974. 2 S E HK 540.0 S E HK 767.5 AS X 42. 8%

OT C P K 11 T S E 3, 569.2 NY S E 1,750. 4 Nas daqG S 498.6 OM 304.6 S E HK 40. 6%

K OS E 6 OM 2, 974.2 Nas daqG S 1,741. 8 C M 242.6 T S E 160.2 G T S M 37. 1%

T S E 5 NY S E 1, 750.4 G T S M 715. 0 NY S E 198.5 NY S E 124.1 Nas daqG S 30. 4%

Nas daqG M 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%

T S X 4 G T S M 1, 430.0 OS E 302. 3 OS E 116.1 G T S M 59.8 OS E 22. 2%

T S XV 4 XT R A 317.0 K OS E 239. 5 K OS E 106.0 C M 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 Nas daqG M 279.7 R T S 160. 9 G T S M 101.1 R T S 20.4 C M 13. 1%

AS X 2 T S X 243.6 XT R A 158. 5 B S E 82.8 Nas daqG M 15.6 R T S 13. 1%

XT R A 2 OT C B B 230.9 S W X 92. 0 Nas daqG M 82.4 XT R A 12.5 K OS E 9.6%

G T 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 T S 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 Nas daqG M 55. 9 S W X 40.0 AS X 4.5 S W X 1.9%

C M 1 T S XV 76.6 K LS E 39. 8 XT R 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 C NO -1.1 AME X -31.8%

NY S E 1 HLS E 65.9 B S E 31. 0 OT C P K 16.5 AIM -2.7 T S X -34.7%

OS E 1 OT C P K 65.8 T S XV 19. 1 T S XV 12.0 T S X -4.3 OT C B B -38.8%

AIM 1 K LS E 39.8 OT C B B 12. 8 AS X 8.9 T S XV -4.6 OT C P 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 C B B 2.3 OT C P K -34.1 OT C NO -50.6%

K LS E 1 AIM 6.0 OT C P K 6. 0 OT C NO 2.3 B S E -41.4 AIM NA

OT C NO 1 OT C NO 0.1 OT C NO 0. 1 AIM 0.0 OT C B B -62.4 HLS E NA

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

Figure 21. Comparison by Exchange Source. Capital IQ

Financing - L as t Three Months (US $ m)Fin. Amount (Million) Type of financing

Month C ompany Name C ountry Angel/S eed S eries A S eries B S eries C S eries D G rand TotalOc t-09 DailyMotion F rance 25. 3 25. 3

P opC ap G ames US A 22. 5 22. 5

E ngine Yard US A 19. 0 19. 0

HubS pot US A 16. 0 16. 0

J ive S oftware US A 12. 0 12. 0

S pigit US A 10. 0 10. 0

Ooyala US A 10. 0 10. 0

S c anS cout US A 8. 5 8.5

B ox.net US A 7. 1 7.1

R eality Mobile US A 6. 5 6.5

W atercooler US A 5. 5 5.5

Vdopia US A 4. 7 4.7

S ometric s US A 4. 0 4.0

Amie S treet US A 3. 9 3.9

ViVu US A 3. 0 3.0

F izzbac k UK 2. 6 2.6

Technorati US A 2. 0 2.0

Onehub US A 1. 3 1.3

DataS ync US A 1. 2 1.2

DailyB ooth US A 1.0 1.0

Hot P otato US A 1. 0 1.0

L inkedex UK 1.0 1.0

S tatus Net C anada 0.9 0.9

IngB oo US A 0.8 0.8

C hango C anada 0. 7 0.7

C redit K arma US A 0.5 0.5

L is tia US A 0.4 0.4

OneF orty US A 0.2 0.2

Oc t-09 Total 4.7 40.9 56.5 67.4 2.0 171.5

Nov-09 R oc kYou US A 50.0 50. 0

P laydom US A 43. 0 43. 0

S ezmi US A 25. 0 25. 0

Millennial Media US A 16. 0 16. 0

Zynga US A 15. 0 15. 0

E vernote US A 10. 0 10. 0

C ubeTree US A 8. 0 8.0

Alice.com US A 6. 0 6.0

E ventbrite US A 6. 0 6.0

P lacec as 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

P layfire UK 2. 1 2.1

S impleG eo US A 1.5 1.5

Adfonic UK 0.6 0.6

S c oopler US A 0.5 0.5

Nov-09 Total 2.6 52.3 29.0 67.0 52.5 203.4

Dec -09 Zynga US A 180. 0 180. 0

Youku C hina 40.0 40. 0

Zoos k US A 30.0 30. 0

G roupon US A 30. 0 30. 0

gWallet US A 12. 5 12. 5

Movik Networks US A 8. 5 8.5

G owalla US A 8. 4 8.4

G ogii US A 8. 2 8.2

S onicMule US A 8. 0 8.0

kaC hing US A 7. 5 7.5

S eekingAlpha Is rael 7. 0 7.0

G enius .com US A 6. 5 6.5

P ageonc e US A 6. 5 6.5

AlikeL is t US A 5. 0 5.0

S maato US A 4. 5 4.5

Tonc hidot J apan 4. 0 4.0

5 Minutes C hina 3. 5 3.5

J anR ain US A 3. 3 3.3

S tockTwits US A 3. 0 3.0

Artic le One P artners US A 3. 0 3.0

Appolic ious US A 2. 4 2.4

J inni Is rael 1. 6 1.6

Dec -09 Total 49.3 69.6 188.0 76.5 383.4

Grand Total 7.3 142.5 155.1 322.4 131.0 758.2

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

C ompany Des criptions - C urrent Month C apital Market ActivityC ompany HQ Webs ite Des c ription5 Minutes C hina NA 5 Minutes develops cros s -platform s ocia l games , s uch as Happy F arm - available on F acebook, as well as C hines e s ocia l networks , X iaonei,

K a ixin, and QZone.

AlikeL is t US A www. alikelis t. com AlikeL is t, Inc. operates as a s ocia l-local pla tform and directory for lis ting, referring, and dis covering loca l bus ines s es in the United S tates . T he company enables us ers to lis t, dis cover, and s hare local bus ines s es , s uch as the plumbers , doctors , and res taurants ; and to endors e and refer the bus ines s es to help people find local bus ines s es . It offers its s ervices for various bus ines s es , including automotive and trucks , bus ines s and profes s iona l, computers and electronics , cons truction and remodeling, education and employment, enterta inment, family and community, food and beverage, health and medical, home and garden, pets and vets , real es tate, res taurants , s hopping and s pecia lty, s ports and recreation, and travel and lodging, as well as for a rts , crafts , and hobbies ; and finance, legal, and ins urance bus ines s es . AlikeL is t, Inc. was formerly known as G ofavo. T he company was founded in 2008 and is headquartered in S unnyvale, C alifornia .

Appolic ious US A www. appolicious . com Appolicious Inc. operates a W ebs ite for mobile applications . It offers a W eb s ervice to s earch, dis cover, and download iP hone and various mobile applications by combining s ocia l networking, ratings and reviews , original articles , advanced content, aggregation, and s earch. Appolicious Inc. was formerly known as MG P C , Inc. and changed its name in Augus t 2009. T he company was founded in 2009 and is bas ed

C h llArtic le One P artners US A www. articleonepartners .com Article One P artners , LL C , an online res earch community, provides compens ation for s ubmitting prior art evidence for s elected patents . It s erves medica l diagnos tics , pharmaceutical, and s oftware s ectors . T he company was founded in 2008 and is bas ed in New Y ork, New Y ork .

C loud E ngines US A www. cloudengines . com C loud E ngines , Inc. provides P ogoplug devices that connect us er’s external hard drive to the Internet to s hare and acces s media and files from anywhere. T he company was incorporated in 2006 and is bas ed in S an F rancis co, C a lifornia .

Friends ter US A www. friends ter. com F riends ter, Inc. operates an online s ocia l network. It enables people to s tay in touch with friends , family, s chool, s ocia l groups , activities , and interes ts , as well as to dis cover new people and things that a re important to them. Its developer platforms provide AP Is to acces s F riends ter data and integration points within the F riends ter W eb s ite to create applications for us ers . T he company offers OpenS ocia l platform that a llows us ers to write applications and run them on the s ites that s upport OpenS ocia l; and P la tform V 1, which provides AP Is to acces s F riends ter data . It offers its s ervices through www.friends ter. com or m. friends ter. com. T he company was founded in 2002 and is bas ed in S F i C lif i

Genius .c om US A www. genius . com G enius . com Incorporated provides bus ines s -to-bus ines s email marketing s olutions for s a les and marketing profes s ionals . Its products include S ales G enius that enables us ers to s end trackable emails us ing pre-built templates /Micros oft Outlook; G enius T racker that delivers an ins tant a lert that the pros pect is online and demons trating interes t by vis iting the W ebs ite; MarketingG enius that enables marketers and s a les ops managers to create, tes t, s chedule, and s end email campaigns ; and G enius P ro that helps s a les and marketing teams us e a range of capabilities to connect with cus tomers , including pers onalized emails s ent on beha lf of s a les repres entatives , pers ona lized W eb s ite promotions , live chat, and integration with s a les force. com. T he company a ls o provides cus tomer s upport, campaign s ervices , tra ining, and implementation and integration s ervices . G enius . com Incorporated was formerly known as MarketingG enius . com. T he company was founded in 2004 and is bas ed in S an Mateo C alifornia

Gizmoz US A www. gizmoz. com G izmoz, Inc. provides s ocia l expres s ion and us er-generated media s ervices for cons umers , advertis ers , and media partners . It offers B e a S tar, an online application, which enables cons umers to create, cus tomize, animate, and s hare photorealis tic 3D ta lking characters and videos in their movies , televis ion, and video clips that enable to communicate and expres s thems elves . G izmoz, Inc. was formerly known as Zapa Digita l Arts and changed its name to G izmoz, Inc. in March, 2000. T he company was founded in 1996 and is bas ed in New Y ork , New Y ork with additional offices in Menlo P ark, C alifornia ; and R amat G an, Is rael.

Gogii US A www. beta .gogii. com G OG II, Inc. provides free mobile texting application. T he company was founded in 2008 and is bas ed in Marina del R ey, C a lifornia .

Gowalla US A www. gowalla . com G owalla , a ls o known as Alamofire, creates games and game-like experiences for the s ocia l web.

Groupon US A www. groupon.com G roupon, Inc. operates a W ebs ite that offers group dis counts for products and s ervices in various areas . It offers daily dea ls on acupuncture, mea ls , opera tickets , tours , teeth cleanings , res taurants , theatre, s pas , clas s es , s porting events , bars , mus eums , concerts , and gyms . T he company was founded in 2008 and is bas ed in C hicago, I llinois . It has operations in C hicago, New Y ork, Miami, and Atlanta . G roupon, Inc. operates as a s ubs idiary of T he P oint, L LC .

gW allet US A www. gwallet. com gW allet provides brands , publis hers and s ocia l media platforms with a virtual currency technology for s ocia l networks . T he gW allet monetization platform contains three components including Alternative Online P ayment, V irtual C urrency and Aggregation of V irtual P roducts . T he platform is a comprehens ive s ys tem that has been optimized for F acebook, OpenS ocia l pla tforms (MyS pace, Hi5, T agged, etc), virtual worlds or webs ites utiliz ing virtual offer-bas ed currency.

J anR ain US A www. janra in. com J anR ain, Inc. provides Internet identity s olutions and s ervices for bus ines s es and cons umers . It offers OpenID, an open s ource s oftware as a s ervice technology that a llows cons umers to us e 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 s olution that helps in accepting and verifying us ers ' third party accounts , s uch as G oogle, Y ahoo, F acebook, and L iveID; OP X that enables to is s ue and manage OpenIDs , and build communities with cus tomers in their own brand; and myOpenID that provides OpenID for individua ls in the market. T he company has s trategic partners hips with Micros oft, Y ahoo! , AOL, MyS pace, P laxo, and G oogle. J anR ain, Inc. was founded in 2005 and is bas ed in P ortland, Oregon.

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

C ompany Des criptions - C urrent Month C apital Market ActivityC ompany HQ Webs ite Des c riptionJ inni Is rael www. jinni.com J inni, L td. offers online video-on-demand s ervices . T he company a ls o provides content dis covery s olutions , which enable T V operators and

Internet content providers to offer various content as s ets for us ers . J inni, L td. was founded in 2007 and is bas ed in the United K ingdom.

kaC hing US A www. kaching. com kaC hing is an inves ting ta lent marketplace where you can find outs tanding inves tment managers to emulate by automatically mirroring their trades in your private kaC hing brokerage account. kaC hing s creens inves tment managers us ing its Inves ting IQ s core which is modeled after the methodology of the Ivy League E ndowments , widely cons idered the world’s premier evaluators of inves ting ta lent. Only inves tment managers with an Inves ting IQ of 140 or greater can qualify to be “G enius es ” on kaC hing and be mirrored by cus tomers .

L ala US A www. la la . com Lala is a hub for online mus ic dis covery and purchas ing. Us ers can lis ten for free mus ic, adding tracks to their playlis t as they s urf. members who download a plugin can turn Lala into an online mus ic locker that s yncs their des ktop mus ic libra ries to their L a la account. Long uploads aren’t neces s ary. If La la a lready has the s ong in their libra ry, 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 focus ed on delivering purpos e-built s olutions that bring content and application awarenes s to the edge of the mobile network.

OneF orty US A www. oneforty.com Oneforty, Inc. provides online clearing s ervices for applications rela ted to T witter. T he company was founded in 2009 and is bas ed in C ambridge, Mas s achus etts .

P ageonce US A www. pageonce. com P ageOnce has developed an internet “as s is tant” that helps both cons umers manage their online lives and marketers connect with thos e s ame cons umers . T he company unifies information from the divers e internet accounts that mos t regular internet us ers have, and it dis plays that information in a pers onalized homepage. It s upports numerous web s ervices s uch as Digg, delicious , hi5, Helio, S tarbucks , OpenT able, las t. fm, and R eunion. Other more generic s ources of information include bank accounts and cell phone s ubs criptions .

R ekoo C hina NA R ekoo is a B eijing-bas ed s ocia l gaming developer, with titles including Animal P aradis e and S uns hine R anch. T he company's games a re available on F acebook, as well as s everal As ian s ocia l networks .

R ocket F uel US A www. rocketfuelinc.com R ocket F uel Inc. provides an ad s erving technology platform for agencies and advertis ers to manage, run, and evaluate online campaigns . Its automated technology identifies the performing s egments for each individua l campaign and directs impres s ions , as well as provides audience targeting technologies that combine s ocia l, behaviora l, contextual, geographical, s earch, and other data s ources to unders tand cons umer interes t and intent. T he company provides various s olutions , s uch as Audience B oos ter that identifies audiences in media , including s ocia l media and us er-generated content; S earch B oos ter, which a llows to reach people acros s the W eb who s earched for you, went to s ite, and expres s ed interes t in a product or s ervice; and F as hion B oos ter that identifies fas hion cons umers in media . R ocket F uel Inc. was founded in 2008 and is bas ed in R edwood C ity, C a lifornia .

S eekingAlpha Is rael www. s eekingalpha . 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 da ily s ummary of market and s tock rela ted 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. T he company s erves money managers , res earch ana lys ts , inves tment bankers , and individual inves tors . S eeking Alpha , L td. was founded in 2004 and is bas ed in New Y ork, New Y ork.

S hanghai Dacheng Network C hina NA S hanghai Dacheng Network T echnology C o. , L td operates as a three-dimens ional online game developer. It operates as a C hines e Multi-P la tform Digita l E nterta inment and G aming C ompany and develops three-dimens ional multi-player online role-playing games . T he company was founded in 2004 and is bas ed in C hina .

S maato US A www. s maato. 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 ta rgeted advertis ing to mobile phones on mobile W ebs ites /widgets within applications and in mobile games . T he company’s platform als o a llows mobile carriers to advertis ement-enable their s ervices and provides cus tomer rela tions hips . It has a s trategic partners hip with MocoS pace. S maato Inc. was founded in 2005 and is bas ed in R edwood S hores , C alifornia with a location in Hamburg, G ermany.

S onic Mule US A www. s mule.com S onicMule, Inc. develops interactive s onic applications for the iP hone. It creates a mobile audio platform that enables a new generation of applications for the iP hone. T he company offers Ocarina , a mus ical ins trument created for the iP hone; S onic V ox, which a llows us ers to a lter voice with a s wipe of their finger; S onic B oom, which turns phone into a virtua l firecracker; and S onic L ighter, which a llows us ers to let their voices be heard for bes t picture academy awards . S onicMule, Inc. was founded in 2008 and is bas ed in Menlo P ark, C alifornia .

S onic o US A www. s onico.com S onico operates as a s ocia l network in Latin America and B razil. It a llows us ers to connect with friends and s hare information, photos , and videos online. T he company was founded in 2007 and is bas ed in R ecoleta , Argentina .

S toc kTwits US A www. s tocktwits . com S tockT wits LLC operates as an online community that provides information about inves tments and s tocks . It provides us ers to give an opinion about a s pecific s tock s ymbol through a tweet. T he company was incorporated in 2008 and is bas ed in Oakland, C a lifornia .

Tonchidot J apan www. tonchidot. com T onchiDot C orporation develops and provides mobile phone bas ed applications and s ervices . Its des igns and develops S ekai C amera , a camera technology that us es digita l device as a viewfinder to acces s Internet s ervices . T he company is bas ed in T okyo, J apan.

Youku C hina www. youku. com Y ouku. com operates as a C hines e Internet video W ebs ite. It offers us er-generated and profes s iona l video content in C hina and internationally. T he company enables C hines e Internet us ers to watch and s hare videos . Y ouku. com was formerly known as Y oqoo. com and changed its name to Y ouku. com in 2007. T he company was founded in 2006 and is bas ed in B eijing, C hina .

Zoos k US A www. zoos k . com Zoos k, Inc. operates as an online s ocia l dating network. T he company was founded in 2007 and is bas ed in S an F rancis co, C a lifornia .

Zynga US A www. zynga. com Zynga, Inc. operates as an online s ocia l gaming company. It offers cas ino games , word games , board games , role playing games , and party games , as well as cas ual online games . T he company was founded in 2007 and is bas ed in S an F rancis co, C alifornia .

Figure 23b. Company Descriptions – continued Source. Company reports, Capital IQ, Crunchbase

RELEVANT DISCLOSURES APPLICABLE TO: NONE

L IST OF D ISCLOSU RE TERMS:

1. None applicable.

ANALYST CERTIFICATION

Each analyst of Research Capital Corporation whose name appears in this report hereby certif ies that (i) the recommendations and opinions expressed in this research report accurately reflect the analyst’s personal views and (i i) no part of the research analyst’s compensation was or wil l be directly or indirectly related to the specif ic conclusions or recommendations expressed in this research report.

In format ion about Research Cap i ta l Corpora t ion ’s Rat ing Sys tem, the d is t r ibut ion o f our research to c l ients and the percentage o f recommendat ions wh ich a re in each of our ra t ing categor ies is ava i lab le on our web s i te a t www. researchcap i ta l . com.

The in fo rmat ion conta ined in th is repor t has been d rawn f rom sources be l ieved to be re l iab le but i ts accuracy o r comple teness i s not guaranteed , nor in p rov id ing i t does Research Cap i ta l Corpora t ion assume any respons ib i l i t y o r l iab i l i t y . Research Cap i ta l Corpora t ion , i ts d i rec to rs , o f f icers and o ther employees may, f rom t ime to t ime, have pos i t ions in the secur i t ies ment ioned here in . Contents o f th is repor t cannot be reproduced in who le o r in par t wi thout the expressed permiss ion o f Research Cap i ta l Corpora t ion . (U.S. Inst i tu t iona l C l ien ts — Research Cap i ta l U.S.A. Inc. (a who l ly owned subs id ia ry o f Research Cap i ta l Corpora t ion) accepts respons ib i l i ty f o r the con ten ts o f th is repor t sub ject to the te rms & l im i ta t ions se t ou t above . F i rms o r ins t i tu t ions rece iv ing th is repor t shou ld e f fec t t ransac t ions in secur i t ies d iscussed in the repor t th rough Research Cap i ta l U.S.A. Inc . , a Broker-Dea le r Regis te red wi th the Un i ted Sta tes Secur i t ies and Exchange Commiss ion) .

Toronto 416.860.7600 Montreal 514.399.1500 Vancouver 604.662.1800 Calgary 403.265.7400 Regina 306.566.7550

www.researchcapital.com

web 2.0 weekly - dec. 22, 2009

Technology