CORRECTION TO COMPANY INFORMATION MATERIALS FOR Business ...

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CORRECTION TO COMPANY INFORMATION MATERIALS FOR Business ...

  1. 1. February 20, 2008 Digital Garage, Inc. (JASDAQ Stock Code: 4819) CORRECTION TO COMPANY INFORMATION MATERIALS FOR Business Strategy Meeting 2008 (JANUARY 23, 2008) The company information materials for Business Strategy Meeting 2008 released on January 23, 2008 contained the following incorrect figure. Page 30: Performance Overview: Finance Segment Performance The following number in the operating income graph for the Finance segment was incorrect. [Incorrect] [Correct] Operating Income for Finance Segment for the year ending June 30, 2008 (Forecast) 1,000 (million yen) 1,100 (million yen) Contact Information Corporate Communication Department Phone: +81-3-5465-7747
  2. 2. JPMorgan’s Japan New Spring Corporate Access Days in London Business Strategy Meeting 2008 Digital Garage, Inc. (JASDAQ: 4819) January 17th - 18th 2008
  3. 3. Contents Mission & Business Model ・・・・・・・ 3 Corporate Information ・・・・・・・ 6 Business Summary ・・・・・・・ 12 Long- & Mid-term Strategies ・・・・・・・ 33 Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  4. 4. Mission & Business Model Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  5. 5. DG’s Mission context company Context Company Digital Garage creates innovative business “contexts” for the new internet age and provides unique business solutions for Japan’s new lifestyles, society and industries by linking: Offline & Online Local & International Marketing & Technology Present & Future -4- Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  6. 6. DG’s Business Model context company Produce and incubate Japan’s Internet businesses with optimal use of our three core strengths: IT, MT and FT ★ Information Technology IT ★ Marketing Technology MT FT ★ Financial Technology -5- Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  7. 7. Corporate Information Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  8. 8. History context company The history of Digital Garage is the history of creating new businesses Always the “first-in-Japan” - DG continues to contribute to society by producing a “half-step-ahead” many “first-in-Japan” business contexts - BLOG/Mobile Web 2.0 Multi Device Finance Multi Platform Platform Broadband ASP EC/CVS AD/Research Portal 10,000 Search Technology 9,000 8,000 7,000 6,000 5,000 「富ケ谷」 Internet World Expo’96 4,000 3,000 2,000 Change in number of Internet users 1,000 Early Stage (Source: Statistics Bureau) 0 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 -7- Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  9. 9. Group Structure context company Through headquarters management of subsidiaries, DG is able to optimize and cross-support human resource, finance and business functions Holding Company ✔ Digital Garage, Inc. Solutions Portal/Weblogs Incubation Finance DG Solutions Co., Ltd. ✔Kakaku.com, Inc. DG Incubation, Inc. ✔ECONTEXT, Inc. (HC) (1st section of TSE) DG&Ibex, Inc. DG&Partners, Inc. Kakaku.com Insurance, Inc. 4Travel, Inc. Sogei, Inc. DG Mobile, Inc. DG New Context Fund Kakaku.com Financial, Inc. Creative Garage, Inc. Technorati Japan, Inc. Joi Ito’s Lab Growth Partners, Inc. DG Media Marketing, Inc. WEB2.0, Inc. CGM Marketing, Inc. ・Advertising, ・Portal site operation ・Domestic investment ・Settlement distribution promotion infrastructure ・Mobile contents ・Overseas investment ・Foreign exchange ・Media consulting transactions ・CGM promotion ・R&D for latest ・Real x Cyber development technologies ・Online/face-to-face insurance brokerage -8- Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  10. 10. Corporate Information context company ■Company Name Digital Garage, Inc. ■Established August 17th, 1995 Yamazaki Bldg., 2-43-15 Tomigaya, Shibuya-ku ■Head Office Tokyo 151-0063, Japan ■Stock Capitalization 27.374 billion Yen (As of December 17th, 2007) ■Consolidated Subsidiaries 22 (As of the end of June, 2007) ■Number of Employees 718 (As of the end of June, 2007) ■Net Sales 17.338 billion yen (As of the end of June, 2007) ■Net Income 588 million yen (As of the end of June, 2007) ■Total Assets 42.407 billion yen (As of the end of June, 2007) ■Net Assets 11.743 billion yen (As of the end of June, 2007) ■Stock Listing (4819) -9- Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  11. 11. Financial Performance Forecast for FYE 2008 context company Consolidated FYE 2006 FYE 2007 FYE 2008 (E) (% chg) Net Sales 12,476 17,338 43,000 +150% Operating Income 1,703 1,613 3,000 +90% Ordinary Income 1,505 2,475 2,700 +9% Net Income 338 588 700 +19% (¥ million) -10- Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  12. 12. Three-year Comparison of Segment Information context company Net Sales (¥ million) EBITDA (¥ million) 20,000 3,000 285 2,500 2,012 1,101 635 15,000 2,718 2,000 2,449 10,000 4,847 1,500 0 666 0 2,167 255 1,348 1,293 2,885 1,000 2,084 704 5,000 788 7,761 500 4,469 4,972 644 458 354 0 0 FYE 2005 FYE 2006 FYE 2007 (yoy) FYE 2005 FYE 2006 FYE 2007 (yoy) ■ Incubation - 2,449 2,012 (-18%) - 1,101 285 (-74%) ■ Finance 1,293 2,167 2,718 (+25%) 255 666 635 (-5%) ■ Portal/Weblog 2,084 2,885 4,847 (+68%) 704 788 1,348 (+71%) ■ Solutions 4,469 4,972 7,761 (+56%) 458 354 644 (+82%) Total 7,846 12,476 17,338 (+39%) 1,416 2,909 2,911 (+0.1%) * Based on figures prior to elimination or Group deduction -11- Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  13. 13. Business Summary Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  14. 14. Solutions Segment context company Ⅰ Solutions Segment IT system design and development, design/plan/implement marketing activities ➤DG Solutions Co., Ltd. Intermediate holding company of Solutions Business segment ➤DG&Ibex, Inc. Sales promotion solution provider ➤ Creative Garage, Inc. Graphics, video and other creative media production services ➤ DG Media Marketing, Inc. Group media operations/total Web advertising sales * ➤ Sogei, Inc. General advertising agency with a focus on real estate * Consolidated since FYE 2008 -13- Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  15. 15. Solutions Segment Overview context company FYE 2007 Net Sales 7.761 billion yen Operating Income 430 million yen EBITDA 644 million yen (56 % increase year-on-year) (247% increase year-on-year) (82% increase year-on-year) Segment Positioning/Strategy ◆ Comprehensively engaged in commissioned businesses ◆ Comprehensively engaged in commissionedas the stable revenue base of DG Group such as IT solutions and marketing solutions businesses revenue base of DG Group such as IT solutions and marketing solutions as the stable ◆ Launch ROI-oriented next-generation marketing solution business by integrating ◆ Launch ROI-oriented next-generation marketingsolicitation gateway operation real media and web media, including advertising solution business byoperation integrating real media andmedia business web media, including advertising solicitation gateway for the Group’s media business for the Group’s ◆ Achieve significant increase in sales due to consolidation of Sogei in FYE 2008. ◆Achieve double-digitincrease in sales due to consolidation of Sogei in FYE 2008. Achieve significant profit increase by absorbing MansionDB’s development costs. Achieve double-digit profit increase by absorbing MansionDB’s development costs. (¥ million) (¥ million) 35,000 600 +28% Solutions + 300% Solutions 30,000 Net Sales Operating Income 500 25,000 400 20,000 300 550 15,000 31,000 200 430 10,000 100 5,000 7,761 124 4,973 0 0 FYE 2006 FYE 2007 FYE 2008 (E) FYE 2006 FYE 2007 FYE 2008 (E) -14- Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  16. 16. Changes in Business Environment context company Background The business environment for IT and MKT solutions drastically changed The business environment for IT and MKT solutions drastically changed due to the widespread use of broadband and 3G mobile technology due to the widespread use of broadband and 3G mobile technology Change in consumer media usage Consumers began sourcing information through customized media rather than traditional mass media Shift in advertising business trends Promotion methods shifted from using four mass media formats (newspapers/magazines/radio/television) to cross-media incorporating IT media. Change in IT solutions business More organizations adopt Web services model instead of legacy systems. Growing needs for cross-media solutions that combine both digital and analog media -15- Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  17. 17. Portal/Weblog Segment context company Ⅱ Portal/Weblog Segment Portal business (e.g., Kakaku.com, CGM and weblog services) ➤Kakaku.com, Inc. Price comparison site “Kakaku.com” operator ➤4travel, Inc. Travel information exchange site “4Travel” operator ➤Technorati Japan, Inc. Blog search engine “Technorati Japan” operator Development and operation of Internet ➤WEB2.0, Inc. information sharing site “pingking” ➤DG Mobile, Inc. Mobile e-book distribution platform and contents provider Blogger-and-advertiser matching service ➤CGM Marketing, Inc. “AD-Butterfly” operator -16- Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  18. 18. Portal/Weblog Segment Overview context company FYE 2007 Net Sales 4.847 billion yen Operating Income 907 million yen EBITDA 1.348 billion yen (68% increase year-on-year) (217% increase year-on-year) (71% increase year-on-year) Segment Positioning/Strategy ◆ Achieve further growth of Kakaku.com, the Group’s core media business and ◆ Achieve further growth of Kakaku.com, the Group’s core media business and promptly establish next-generation CGM business (Consumer Generated Media). promptly establish next-generation CGM business (Consumer Generated Media). ◆ Kakaku.com’s performance improvement and expansion of e-book market to ◆ Kakaku.com’s performance improvement and expansion of e-book market to improve DG Mobile’s results in FYE 2008. improve DG Mobile’s results in FYE 2008. (¥ million) (¥ million) 8,000 2,000 Portal/Weblog +40% Portal/Weblog 7,000 Net Sales +82% Operating Income 1,600 6,000 5,000 1,200 4,000 6,800 1,650 800 3,000 4,847 2,000 907 400 2,885 1,000 286 0 0 FYE 2006 FYE 2007 FYE 2008 (E) FYE 2006 FYE 2007 FYE 2008 (E) -17- Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  19. 19. Portal/Weblog Segment Business Structure and DG Group’s Business Activities context company Expand and Enhance CGM Business in Three Individual Areas Dentsu cci ADK CGM advertising business CGM advertising business DGMM Advertising Revenue Search Traffic CGM search & syndication business CGM search & syndication business Numerous weblog sites in “long tail” market API/Tag Network CGM content/media business CGM content/media business Traffic Shopping portal Shopping portal -18- Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  20. 20. Business Achievement by Fiscal Year context company ¥ thousand 7,000,000 Net Sales Ordinary Income 6,000,000 Net Income 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 FYE 2004 FYE 2005 FYE 2006 FYE 2007 FYE 2008 (Forecast) (Consolidated) (Consolidated) (Consolidated) (Consolidated) Net Sales 1,256,624 2,138,873 2,921,883 4,887,421 6,300,000 Ordinary Income 474,867 790,877 780,864 1,304,610 1,600,000 Net income 274,774 478,045 417,072 856,247 1,140,000 -19- Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  21. 21. Status of Kakaku.com Group Websites context company Increased traffic through Group websites rapidly strengthened our media value Page Views Monthly Access Users (¥ million) (April 2002 - September 2007) (¥ ten thousand) Page Views Monthly users of # of Users 1,400 450 Group websites 15.04M * 1,100 350 Total monthly page views of Group websites 250 800 503.16M * 500 (as of the end of September 2007) 150 *The total of the monthly unique users for every site measured with the IP addresses : kakaku.com, yoyaq.com, e.yoyaq.com, fx- 50 200 rashinban.com, kakakufx.com Apr 2002 Oct Apr 2003 OctApr 2004 Oct Apr 2005 Oct Apr 2006 Oct Apr 2007 Sep measured by the number of browsers : tabelog.com, 4travel.jp, mansion-db.com, eiga.com, tv.eiga.com Acquisition of yoyaQ tabelog released Acquisition of eiga.com mansion-DB released Acquisition of 4travel fx-rashinban released -20- Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  22. 22. Reach Every Scene in the Life of a Consumer context company Expand kakaku.com's market and scope to increase reach Internet Population: about 80M people Net Literacy Net Literacy Light User Light User To all internet users! September 2007 Middle Middle 15.04M UU Total of 7 sites including tabelog and 4travel April 2004 High-end High-end 5.54M UU kakaku.com only Genre Covered Shopping Entertainment -21- Lifestyle© 2007 Digital Garage, Inc. All Rights Reserved Copyright
  23. 23. Medium-term Strategy for Realization context company Three strategies deployed through the kakaku.com Group sites and companies Information All-inclusiveness Integrated Service Platform Provide support for all shopping activities of customers -22- Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  24. 24. Incubation Segment context company <新設> Ⅲ Incubation Segment Investment and incubation of Internet businesses ➤DG Incubation, Inc. Venture business investor ➤DG&Partners, Inc. Investment fund operator -23- Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  25. 25. Incubation Segment Overview context company FYE 2007 Net Sales 2.012 billion yen Operating Income 284 million yen EBITDA 285 million yen (18% decrease year-on-year) (74% decrease year-on-year) (74% decrease year-on-year) Segment Positioning/Strategy ◆ - -Play supportive role for further growth for each DG segment and achieve steady ◆ Play supportive role for further growth for each DG segment and achieve steady profit contribution to Group profit contribution to Group - -Increased seed and early stage investments through Joi's Lab Increased seed and early stage investments through Joi's Lab ◆ Achieve profit mainly through overseas investment in FYE 2008 ◆ Achieve profit mainly through overseas investment in FYE 2008 (¥ million) (¥ million) 3,000 1,200 Incubation Incubation Net Sales Operating Income 2,500 1,000 +180% 2,000 800 -25% 1,500 600 1,098 2,449 1,000 2,012 400 800 1,500 500 200 285 0 0 FYE 2006 FYE 2007 FYE 2008 (E) FYE 2006 FYE 2007 FYE 2008 (E) -24- Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  26. 26. Incubation Segment Overview context company International collaboration on early stage businesses - International business angel scheme - Network for international angel investors and DGI entrepreneurs Leading international network for IT engineers Secure capital gain Highly capable engineers through international IPO Net investment Promising venture Advanced internet companies overseas technology seeding Domestic market cultivation for new Joint ventures international businesses Joi Ito’s Lab Led by Joichi Ito, member of the Board of Directors of Digital Garage, Joi Led by Joichi Ito, member of the Board of Directors of Digital Garage, Joi Ito’s Lab is an R&D open lab for open source software, next-generation Ito’s Lab is an R&D open lab for open source software, next-generation technology using Web 2.0 and 3.0, as well as new business models. technology using Web 2.0 and 3.0, as well as new business models. Service capability Alliances enhancement through Community for engineers & entrepreneurs collaboration with other businesses in DG Group Vision sharing Initial capital New business consulting -25- Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  27. 27. Incubation Segment Overview context company Overseas Portfolio Etology, Inc. FON Wireless Limited Rupture, Inc. Provides ad market place for Provides WiFi services Manages next-generation international web sites where users share SNS services for on-line Position: Investment and bandwidth gamers board seat, localization Position: Investment and Position: Investment and localization Board seat Technorati, Inc. LinkedIn Corporation Twitter, Inc. Manages internet search Manages next-generation Provides microblogging and engine dedicated to blogs SNS services for business social networking services Position: Investment and people Position: Investment and board seat, localization Position: Localization and localization marketing support -26- Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  28. 28. Incubation Segment Overview context company DGI’s Investment Summary - As of the end of June 2007 - Number of Investments Investment Balance Other Solutions Finance Other 1 company 13 companies 470,000,000 yen 0 yen (3.7%) (48.1%) (12.7%) (0.0%) Finance Content 3 companies (11.1%) 310,000,000 yen (8.3%) Total 27 Total companies 3,700,000,000 Content yen 7 companies (25.9%) Web 2.0 792,000,000 yen (21.4%) Solutions Web 2.0 2,123,000,000 yen 3 companies Solutions ソリューション (57.3%) (11.1%) Web 2.0 WEB2.0 Content コンテンツ Finance ファイナンス Other その他 -27- Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  29. 29. Incubation Segment Overview context company DGI’s Investment Cycle IPO - Capital gains re-investment - ALC Group CELSYS ECONTEXT, Inc. Invested in 5 companies Just Planning, Inc. Invested in 9 companies Daiki Sound Co., Ltd. Zion Invested in 6 companies DAC Later Stage Later Stage Secondary Stage Secondary Stage Middle Stage Middle Stage Seed Stage Seed Stage Early Stage Early Stage DGI/Investment Funds Joi Ito’s Lab Domestic Network Overseas Network -28- Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  30. 30. Finance Segment context company <新設> Ⅳ Finance Segment Internet financial services for settlement, currency exchange and insurance, etc. Settlement/distribution service ➤ECONTEXT, Inc. platform for e-commerce sites ➤Kakaku.com Financial, Inc. Foreign exchange transaction business ➤Kakaku.com Insurance, Inc. Insurance brokerage ➤Growth Partners, Inc. IR portal site “STOCKCAFÉ” operation -29- Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  31. 31. Finance Segment Overview context company FYE 2007 Net Sales 2.718 billion yen Operating Income 503 million yen EBITDA 635 million yen (25% increase year-on-year) (17% decrease year-on-year) (5% decrease year-on-year) Segment Positioning/Strategy ◆ With ECONTEXT’s financial settlement business at the core, achieve interim growth of ◆ With ECONTEXT’s financial settlement business at the core, achieve interim growth of insurance/finance/securities businesses by utilizing Kakaku.com’s traffic. insurance/finance/securities businesses by utilizing Kakaku.com’s traffic. ◆ ECONTEXT to grow in FYE 2008 as e-commerce market expands and new businesses ◆ ECONTEXT to grow in FYE 2008 as e-commerce market expands and new businesses are launched. are launched. Kakaku.com Financial to achieve significant profit increase through foreign exchange Kakaku.com Financial to achieve significant profit increase through foreign exchange transaction business (FX). transaction business (FX). (¥ million) (¥ million) 4,000 1,200 Finance +36% Finance +118% Net Sales Operating Income 1,000 3,000 800 2,000 600 3,700 1,100 2,718 400 2,167 1,000 605 503 200 0 FYE 2006 FYE 2007 FYE 2008 (E) FYE 2006 FYE 2007 FYE 2008 (E) -30- Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  32. 32. Highlights and Forecasts of Subsidiaries in Finance Segment context company ECONTEXT, Inc. Settlement Business - Provided e-money sales system to Hanbit Ubiquitous Entertainment Inc., a leading on-line game provider - Strengthened business collaboration by utilizing newly introduced Edy settlement at Microsoft - Provided fee settlement services for Style Walker, mobile fashion SNS. EC Media Operation - Collaborated with IT Boost Co., Ltd., a leading shopping cart business and provided first settlement services in this area - Launched daiko.net, a comprehensive platform for settlement and transportation of used cars, for Yahoo! Auctions Web 2.0 Business - Provided first settlement service for drop shipping operator, OCHANOKO NET - Provided first settlement service for CtoC market for shopping community, ENIGMO Global Development - Participated in establishment of new U.S. settlement service provider, OPA, through Japan-China-Korea alliance Diversify profit base and expand business scope with further focus on enhanced consumer protection capability by using trust account scheme, secure payment ASP through information management, market revitalization by offering complex Web services and settlement and management services for Web communities and drop shipping businesses For more information, please refer to disclosed information on ECONTEXT, Inc. -31- Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  33. 33. Business Direction and Growth Potential for ECONTEXT, Inc. context company With focus on settlement service, expand business EC Business from existing areas (I) to new areas (II to IV) in the EC industry Global Area Corporations Individuals WEB 2.0 EC media operation area area Develop new settlement services and Ⅰ provide multi-functional EC operations Media operation CGM that broaden the EC market Promotional management Product/price management Sales management Develop multi-functional settlement service Ⅱ platform that can respond to industry Ⅱ Distribution management Inventory management challenges Global Companies User support Ⅳ Ⅲ Settlement area Adapt business to new Long Tail market Ⅲ in the era of WEB 2.0 Credit management Customer management Existing business area Blanket contract/factoring services Ⅰ Credit Post Edy/Suica Convenience card companies stores Banks office Distributors settlement ・・・ Form a consortium with major Asian Ⅳ business organizations in order to create global synergy effect *Launch one payment alliance Consumers -32- Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  34. 34. Long- & Mid-term Strategies Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  35. 35. Group Strategy and Mid-term Business Plan context company Group Strategy Evolve businesses that adapt to new Web trends and Evolve businesses that adapt to new Web trends and promptly establish next-generation internet businesses promptly establish next-generation internet businesses Identify challenges and positioning for each segment and promote businesses that are beneficial to society Identify challenges and positioning for each segment and promote businesses that are beneficial to society Mid-term Target Achieve FYE 2009 net sales of 50 billion yen and EBITDA of 5.5 billion yen Achieve FYE 2009 net sales of 50 billion yen and EBITDA of 5.5 billion yen Solutions Portal/Weblog Incubation Finance Current Expand client base and Further enhance Establish new business to Continue to contribute develop new profit model Kakaku.com and establish follow ECONTEXT, Inc. as Term (initiative led by Sogei and Group’s second-generation profit and indirect support contributor of significant Target to all Group businesses DG&Ibex) businesses profit to Group Establish as ROI-oriented Optimize business total marketing partner that Establish CGM businesses Yield results from infrastructure to further Mid-term can bridge ever-changing and develop additional core international projects with improve profitability of new Target media and consumer business units Joi’s Lab as gateway businesses and expand businesses ECONTEXT business -34- Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  36. 36. Medium-term Segment Forecasts context company (¥ million) Net Sales (¥ million) EBITDA 60,000 8,000 70億円 7,000 50,000 7,000 50,000 1,500 6,000 40,000 3,700 5,000 6,800 800 30,000 4,000 1,240 3,000 20,000 285 2,012 635 31,000 2,000 2,250 2,718 10,000 4,847 1,348 1,000 7,761 850 644 0 0 FYE 2007 FYE 2008 (Forecast) FYE 2009 (Forecast) FYE 2007 FYE 2008 (Forecast) FYE 2009 (Forecast) (Consolidated) (Consolidated) (Consolidated) (Consolidated) (Consolidated) (Consolidated) ■ Incubation 2,012 1,500 (-25%) ■ Incubation 285 800 (+280%) ■ Finance 2,718 3,700 (+36%) ■ Finance 635 1,240 (+95%) ■ Portal/Weblog 4,847 6,800 (+40%) ■ Portal/Weblog 1,348 2,250 (+67%) ■ Solutions 7,761 31,000 (+400%) ■ Solutions 644 850 (+32%) Total Net Sales 17,338 43,000 (+250%) 50,000 (+16%) Total EBITDA 2,911 5,140 (+67%) 7,000 (+44%) After elimination or Group deduction 2,406 4,113 (+58%) 5,500 (+34%) Total EBITDA -35- Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  37. 37. Segment Positioning context company Growth Potential Increasing Returns Segment Core Businesses Kakaku.com Kakaku.com Increasing Returns Model -- 4Travel, Inc. 4Travel, Inc. -- Technorati Japan, Inc. Technorati Japan, Inc. -- WEB 2.0, Inc. WEB 2.0, Inc. -- DG Mobile, Inc. DG Mobile, Inc. Portal & Blog -- CGM Marketing, Inc. CGM Marketing, Inc. ECONTEXT, Inc. ECONTEXT, Inc. -- Kakaku.com Insurance, Inc. Kakaku.com Insurance, Inc. -- Kakaku.com Financial, Inc Kakaku.com Financial, Inc Finance -- Growth Partners, Inc. Growth Partners, Inc. DG Incubation, Inc. DG Incubation, Inc. Organic Growth Model -- DG&Partners, Inc. DG&Partners, Inc. (DG new context fund) (DG new context fund) -- Joi Ito’s Lab Joi Ito’s Lab Solution Incubation Sogei/DG&Ibex/ DG Solutions Sogei/DG&Ibex/ DG Solutions -- Creative Garage, Inc. Creative Garage, Inc. -- DG Media Marketing, Inc. DG Media Marketing, Inc. Web 2.0 -36- Copyright © 2007 Digital Garage, Inc. All Rights Reserved
  38. 38. Group Share Prices (listed holdings of Digital Garage’s holding companies) Unrealized Price Cost basis Mkt Cap. Shares Held Gain (Y) (M Yen) (M Yen) (M Yen) Kakaku.com, Inc. 500,000 58,360 1,771 29,180 27,409 ECONTEXT, inc. 118,000 37,757 622 4,455 3,833 Total 33,635 31,242 (Shares Out) Digital Garage, inc. 228,000 159,152 36,287 As of Jan 08, 2008
  39. 39. Please note that the business forecasts and strategies covered in today’s presentation are based on our current evaluation and future results may vary significantly depending on unforeseeable events or circumstances.

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