xact 10-20
TRANSCRIPT
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Blue Chip Client Base
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Email Marketing Solutions
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The OfferingIssuer: Exactis.com
Shares: 3.8 million
Offering Range: $13.00 to $15.00
Ticker/Exchange: XACT / NASDAQ
Underwriters: Thomas Weisel Partners LLC, Perry Boyle
Dain Rauscher Wessels, Mitch Bartlett
Wit Capital Corporation, Jordan Rohan
Expected Pricing: Week of November 15, 1999
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E. Thomas Detmer, Jr.
President and Chief Executive Officer
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What is Exactis.com?
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Investment Highlights
• Tremendous email market opportunity• Superior proprietary technology• Comprehensive suite of solutions • Market share leader in email delivery • Attractive long-term business model• Experienced management team
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Combining Internet and Email Growth…
Source: Jupiter Communications Source: Forrester ResearchSource: Electronic Mail & Messaging Systems
28.8% CAGR
1998 2002
543mm
197mm
142.2% CAGR
1997 2002
250B
3B
14.2% CAGR
1998 2002
131mm
77mm
U.S. Web Users Worldwide Email Boxes U.S. SolicitedCommercial Emails
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…with Internet-based Direct Marketing
1998 2003
Source: Direct Marketing Association
54.6% CAGR
5.3B
0.6B
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Why Email?
Source: Jupiter Communications
Postal MailEmail
Cost Effective $0.01–$0.25 $1.00–$2.00per email per piece
InstantaneousCommunication
Higher Response Rates
2 days 6–8 weeks
5.0%–15.0% 0.5%–5.0%
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CustomerEmail
Internet
Response
User
EmailEngine
Database
Content/SchedulingContent
List
Mechanics of Sending EmailClient
AccountManageme
nt
Program Setup
System Web
Interface
Client
AccountManageme
nt
Program Setup
System Web
InterfaceCustomer
Internet
Response
User
EmailEngine
Database
Content/SchedulingContent
List
Reporting
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Intelligent queuing and flow control
Email sending
production engine
Scalability
Superior Proprietary TechnologyModular
hardware and
software design
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How We Make Money
• Revenue streams based on:– Fees per email message – Hourly engineering fees ($150+)
• Recurring revenue from annual contracts
• Value-added services in development
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TargetcastOne-to-one marketing message to many people
Offers and promotions
Encourage purchasing behavior
$15 - $30
Our Services
Broadcast Same message to many people
News and information
Customer retention and loyalty
$3 - $10
Microcast Personalized message to one person
Event-driven communications
Fast, low-cost communication
$5 - $20
Service Objective PurposeContentPrice/
thousand
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Challenge: Needed same day delivery of electronic newsletter
Solution:Custom Broadcast using graphically designed and delivered rich HTML format
Email Volume:3.7 million/month
Newsletter Case Study
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Challenge: Needed fast electronic transaction notifications
Solution:Designed Microcast using text mail format and custom template
Email Volume:2.5 million/month
Confirmation Case Study
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Promotion Case StudyChallenge: Needed fast execution of targeted direct response campaigns
Solution:Designed Broadcast with custom formatting and targeted lists
Email Volume:2.3 million/month
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The Exactis.com Value Proposition
Scalable
Comprehensive suite of solutions
Custom tailored solutions
Superior account management
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Why We Win
Comprehensive suite of solutions
Custom tailored solutions
Scalable
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Blue Chip Client Base
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Strategic Client Relationship
• InfoBeat online newsletter• Editorial services and targeted ads• New product development• 3-year agreement through 2001• Send 5.0 million messages per weekday
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Ad Servers/Networks
Email Marketing &
Delivery
Email Box
HostingInbound
EmailOpt-in
Email ListsLoyalty
eMarketers
Emarketing Landscape
Critical PathMail.comUSA.Net
BrightwareeGainKana
FlycastLifeMindersNetCreationsYesMail
CybergoldMyPointsNetcentivesWebstakes
AdforceDoubleClickEngageFlycast24/7 Media
Exactis.comDigital ImpactMedia SynergyMessageMediaTumbleweed
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Competitive Landscape - Scalability
10.0
7.4
3.6
1.6
1.2
Experian
Exactis.com
MessageMedia
Digital Impact
Media Synergy
Offline World
Online World
Based on company estimates
Average Daily Message Volume(Millions)
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Exactis.com MessageMedia Digital Impact Media Synergy TumbleweedNews &
information
Email ad serving
Primary service
Event-drivencommunications
Competitive Landscape - Services
Targetedmarketing
Secure delivery Web
In developmentSecondary service
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Growth Strategies• Broaden suite of email services: Targetcast• Extend industry-leading technologies• Increase direct and indirect sales efforts• Develop and leverage strategic relationships• Acquire new businesses and technologies
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Targetcast
• Targeted email marketing solution • Audience targeting, campaign
management and response analysis• Perpetual software license
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Planned Services and Features
SecureEmail
•Encrypted email messages
•Send confidential information
•Lower costs than postal mail
*Service currently provided to InfoBeat
Features BenefitService
Ad Serving* •Banner ads within email messages
•Generate revenue for client
Customcast* •Customized by consumer
•Relevant content likely to be read
Targetcast•Targeted
one-to-one marketing
•Cheaper, faster, better than traditional methods
Price/thousand
$15 - $30
$15 - $30
$1 - $3
$5 - $20
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Management Team
E. Thomas Detmer, Jr. 21 Experian, Metromail, President and Chief Executive Officer NDL/Polk
Kenneth Edwards 17 Experian, Metromail, Chief Financial Officer CT Publications
Cynthia Brown 18 Anova Partners, System One VP Engineering Tandem, Data General
Michael Rosol 16 XVT Software, Datasonix VP Sales
Gregory Schneider 14 Hewlett-Packard VP Marketing & Business Development
Name & Title Experience Years
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Kenneth Edwards
Chief Financial Officer
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Financial Highlights
• Rapid revenue growth• Recurring revenue streams• Sony Music/InfoBeat• Strong balance sheet• Attractive long-term business model
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Email Messages Sent
213256 276
318360
439505
Q1 '98 Q2 '98 Q3 '98 Q4 '98 Q1 '99 Q2 '99 Q3 '99
Includes all InfoBeat messages
(Millions)
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Quarterly Revenue Growth
0.050.10
0.300.37
0.50
0.84
1.00
Q1 '98 Q2 '98 Q3 '98 Q4 '98 Q1 '99 Q2 '99 Q3 '99
1.261.41
1.58
Q1 '99 Q2 '99 Q3 '99
Revenue excluding Sony($ Millions)
Sony/InfoBeat Revenue ($ Millions)
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Pro Forma Balance Sheet
Cash $557 $9,381 $54,692
Working capital (453) 8,371 53,682
Total assets 6,793 15,617 60,928
Deferred revenue 5,890 5,890 5,890
Total debt 979 979 979
Stockholder’s equity(17,791) (17,791) 55,068
June 30, 1999Actuals
After Series EOffering
AfterIPO
Pro-forma Balances($ Thousands)
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Long-term Business Model
Gross Margin 87.6% 88-90%Operating Expenses:
Marketing & Sales 29.5% 25-28%Research, Development and Engineering 96.5% 16-18%General & Administrative 36.0% 10-12%Depreciation/Amortization 16.8% 10-12%
Operating Margin/(Loss) (91.2%) 20-25%
Q2 1999Actuals
Long-termGoals
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Why Exactis.com?
• Tremendous email market opportunity• Superior proprietary technology• Comprehensive suite of solutions • Market share leader in email delivery• Attractive long-term business model• Experienced management team
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Email Marketing Solutions
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Marketing and Technology Process•Strategy•Addresses•Content
•Email Production and Delivery
•Subscription Management
•Reporting — Open Mail, Click Through, Bounced Mail
•Segmenting•Cell Testing —
Offer/Audience