• Share
  • Email
  • Embed
  • Like
  • Private Content
2013 Review of Key Trends In Internet and Digital Media - Presentation at IAB
 

2013 Review of Key Trends In Internet and Digital Media - Presentation at IAB

on

  • 636 views

 

Statistics

Views

Total Views
636
Views on SlideShare
636
Embed Views
0

Actions

Likes
5
Downloads
21
Comments
0

0 Embeds 0

No embeds

Accessibility

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    2013 Review of Key Trends In Internet and Digital Media - Presentation at IAB 2013 Review of Key Trends In Internet and Digital Media - Presentation at IAB Presentation Transcript

    • Review of Key Trends in Internet/Digital Media November 8, 2013
    • Agenda I. Setting the Stage II. Breakdown of Digital Media Sector Activity III. 2014 Predictions IV. Quick Gridley Commercial © 2013 Gridley & Company LLC 2
    • I. Setting the Stage
    • Broad Market Glance YTD 2013 Market Index Performance 60% Key Themes in Internet/Digital Media Performance of Internet Bellwethers +30.5% YTD YTD Since 2008 44.6% 284.5% 65.2% 41.4% 4.5% 60.5% 84.5% 20% 47.9% 42.0% 40% NA 0% +23.6% YTD (20%) Strong Market Despite Headwinds • High unemployment: 7.2% in September (40%) • Fiscal ceiling uncertainty / government shutdown (60%) • Record amount of cash on corporate balance sheets Jan-08 Sep-08 Jun-09 Feb-10 Nov-10 Jul-11 Apr-12 Jan-13 Sep-13 Source: PriceWaterhouse Coopers; National Venture Capital Association (2013); Capital IQ. © 2013 Gridley & Company LLC 4
    • M&A and VC Volume Appear to Be In Line with Prior Years M&A and Venture Funding Volume Since 1995 ($ in billions) $45.0 $200.0 $40.0 $180.0 VC $35.0 $160.0 M&A $140.0 $30.0 $120.0 $25.0 $100.0 $20.0 $15.0 $60.0 $10.0 $40.0 $5.0 $20.0 $0.0 $0.0 Source: PriceWaterhouse Coopers; National Venture Capital Association (2013); Capital IQ. © 2013 Gridley & Company LLC 5 M&A Volume Venture Funding $80.0
    • Billion Dollar Valuations with Little to No Revenue -Are We in a Bubble? “Big companies are scarcely growing, and interest rates remain near zero, boosting zeal for investment opportunities in companies with high-growth potential.” -WSJ 10/27/13 “The price tag… is determined by the market, which right now is starting to look like the housing bubble of the mid-2000s. -NYT 10/31/13 Billion Dollar Valuations ($ millions) M&A Private Placement IPO $13,600 $4,000 $1,000 Tumblr Waze $0 $13 $0 $3,400 $966 Instagram LTM Revenue $1,100 $3,800 $1,160 Snapchat $0 $0 Source: Capital IQ, TechCrunch, Wall Street Journal article dated 10/27/2013 © 2013 Gridley & Company LLC Pinterest 6 Uber $125 Rocketfuel $107 $1,062 Twitter $82 RetailMeNot $145
    • Performance for Digital Media Related IPOs have been Strong This Year 2013 YTD Internet IPOs ($ in millions, except per share figures) Pricing Date Company Market Cap Performance Current @ IPO Since IPO Market Cap 02/14/13 $509.4 03/04/13 50.4 03/21/13 432.8 05/16/13 465.2 05/16/13 $1,102.1 7.8x NM NM (42.5%) 33.2 3.1x NM NM (5.4%) 366.3 3.3x NM NM 142.6% 1,384.6 12.6x NM NM 1,088.0 131.9% 3,852.6 16.3x NM NM 05/22/13 286.6 153.6% 849.2 10.0x NM NM 06/26/13 494.2 2.4% 502.9 4.7x NM NM 07/18/13 1,054.3 85.5% 1,662.2 9.7x 24.7x 38.7x 08/06/13 286.2 26.2% 255.7 1.9x NM NM 08/08/13 812.0 68.3% 1,317.3 11.5x 111.1x NM 09/17/13 644.3 80.9% 1,182.3 11.1x NM NM 09/19/13 942.3 101.0% 1,538.6 6.8x NM NM 10/30/13 1,714.2 10.9% 1,901.2 NA NA 0.0x 14,162.1 72.7% 66.2% 76.8% 24,456.9 37.9x 10.5x 9.7x NM 67.9x 67.9x NM 19.4x 19.4x 11/07/13 Mean Median © 2013 Gridley & Company LLC 98.1% 2013E Rev. 2013E EBITDA 2013E P/E Multiples Multiples Multiples 7
    • However, The IPO Market Appears To Be Rational Relative to 1999 • Market much more selective vs. 1999 in terms of business model and growth characteristics 1999 2013 YTD # of IPOs 368 32 Mean first-day return 87% 26% 4 years 13 years # that doubled in price on first day 114 1 % with <$50 million LTM Revenue (2005 dollars) 84% 22% % that were unprofitable LTM 86% 66% Median ratio of market value to sales, at IPO 26.5x 5.6x Median age of company Source: Wall Street Journal article dated 10/27/2013 © 2013 Gridley & Company LLC 8
    • Consumer Monetization Models Today Are More Easily Understood… Revenue Jumps When Revenue Models are “Turned On” Valuation tied to User Adoption ($ in Millions) (Consumers in Thousands) 150,000 $317 100,000 Facebook acquisition of Instragram $150 $106 30,000 10,000 $52 © 2013 Gridley & Company LLC 9 Aug-13 Jun-13 Apr-13 Feb-13 Dec-12 Oct-12 Aug-12 Jun-12 Apr-12 Feb-12 Dec-11 2012 Oct-11 2011 Aug-11 2010 Jun-11 2007 Feb-11 2006 Dec-10 2005 5,000 1,000 Apr-11 $28 $6
    • …And Higher Growth Profiles in Digital Marketing are Coming to Market Public Comp Universe at End of 2012 ’12-’13 Revenue Growth Average : 24.5% Millennial Media Inc. 38.5% ValueClick, Inc. Constant Contact, Inc. Bankrate, Inc. 2013E Revenue Multiple Average : 24.2% 21.0% 17.2% 10.6% 3.2x 3.9x 3.9x 2.3x 2.9x 111.1% 6.8x Criteo SA* 0.6x 0.5x Marketo, Inc. 2.8x 2.5x YuMe, Inc. 4.1x 4.1x 1.0x 2013E Revenue Multiple 62.4% Rocket Fuel Inc. 76.1% 4.8x ExactTarget, Inc. ReachLocal, Inc. 2012 Revenue Multiple New Public Comps in 2013 ’13-’14 Revenue Growth 1.0x Twitter, Inc. 102.2% 71.6% 61.5% 33.3% NM 3.0x 12.6x 2.0x Median: -15.0% 21.0% 2.3x 2.0x * Criteo 2013E revenue growth is based on 2013 1H run rate © 2013 Gridley & Company LLC 10 28.9% 3.3x Tremor Video, Inc. QuinStreet, Inc. Marin Software Inc. 28.4% 4.7x Median: 61.5% 3.7x
    • Key Themes in Strategic M&A and Funding Market • Consolidation still quiet in fragmented sectors such as Adtech ‒ Complicated cap structures with multiple layers of institutional capital ‒ Investors with different time horizons and priorities on same deals ‒ Lots of strategics holding on to cash • M&A as a recruiting tool is here to stay – didn’t exist five years ago ‒ Yahoo, Google, Twitter, Facebook all compete with hiring talent ‒ Still primarily a B2C concept, few examples of enterprise software companies employing this tactic ‒ From banker’s perspective, no company is too small • VC/PE investors reluctant to triage their portfolios, believe all will be home runs © 2013 Gridley & Company LLC 11
    • Digital Leaders Are Known to Overpay into Platform Shifts Desktop Chews into Traditional Media Internet Becomes Scalable Transaction Medium Consumers Move to Social Channels Mobile Overtakes Desktop for Consuming Content Sale Price $1,561 $1,433 $745 $966 LTM Rev. Multiple NA 8.25x 18.63x(1) NA Sale Price $850 $3,727 $400 $350 LTM Rev. Multiple NA NA NA NA $5,000 $410 $1,100 $1,000 NA NA 73.33x(2) NA Sale Price LTM Rev. Multiple 1) BuddyMedia rumored LTM revenue is $40MM. 2) Tumblr’s rumored LTM revenue is $15 MM based on 2013 Q1 run rate. 12
    • Internet Leaders Have and Will Continue to Make Transformational Business Moves Through M&A Search solutions provider Online CD and video retailer Online seller-bid auction Pay-per-click advertising Online audio entertainment Digital transactions platform Ad exchange Online shoe and apparel retailer VOIP and IM client Job search engine Online daily deals Online payment system Web hosting Handset manufacturing division Digital commerce services provider Microblog and social network Smartphone navigation app Digital payments processer Internet radio Social media marketing Mobile operating system Online video-sharing website Online baby product retailer Social book cataloguing © 2013 Gridley & Company LLC 13
    • eBay Has Systematically Built A Multi-Channel Commerce Capability Through M&A eBay made a series of acquisitions, most notably of PayPal, GSI Commerce, Red Laser, Zong, and Milo, that enabled eBay to become a front-runner in the race to become the next generation in-store leader Discover Pay Nearby Retailer Store locator and locationbased deals Used, online In-store scanner Card-in-cloud Online retail Virtual goods Better Merchandising At Home Local Retailers / SMB Nearby Used, online Online retail Online social retail © 2013 Gridley & Company LLC 14 Any product
    • Growth and Scale are Primary Factors in Valuations Today 2013E Revenue Growth Rate vs. 2013E Revenue Multiple 140% Legend Adtech 120% Enterprise $225MM 2013E Revenue Growth Consumer Internet 100% $124MM $615MM 80% $345MM $243MM 60% $269MM $204MM $175MM 40% $10.4BN $894MM 20% $532MM $77MM $706MM 0% 0.0x © 2013 Gridley & Company LLC 5.0x $5.2BN 10.0x 15.0x Revenue Multiple 15 20.0x 25.0x
    • II. Sector View of Key Trends and Themes
    • Sector AdTech Mobile Content Social eCommerce © 2013 Gridley & Company LLC 17
    • AdTech – Gridley was First to Write About It: Sept. 2009 • First to develop an industry overview based on the premise that the sector was moving into new phase of growth and innovation ‒ Just beginning to understand data ‒ Inventory was becoming biddable September 2009 ‒ Social was emerging as a new channel © 2013 Gridley & Company LLC 18
    • Key Trends in Adtech • Recent IPOs have brought new life into the Adtech community ‒ Creating urgency to get scale ‒ Establishing clarity around value for high growth advertising stories • Noise level on Privacy/Cookie debate up; although still very exploratory in terms of going forward models • Category leaders getting funding, but otherwise hard market for new capital ‒ Understanding and executing on data is actually very hard! • Convergence of marketing and advertising technologies not leading to considerable strategic activity yet © 2013 Gridley & Company LLC 19
    • The Shift to Digital is Creating a New Architecture for the Advertising Buying Process Traditional Digital Data Data Data Data Data Media Buyer/Marketer Digital Agency Agency Agency Print © 2013 Gridley & Company LLC Radio Video Site Social Agency Agency TV Mobile Online 20 Consumer
    • The CMO’s Dilemma – Multiple, Disconnected Channels Capabilities within Digital Channels Continue to Expand Display Mobile • Advertising • Marketing • LBS • Networks Social • DSPs • Direct Sold • Word of mouth • Various capabilities (e.g. retargeting) • Paid CMO • Campaigns • Owned • Earned Video • Pre vs. post roll • Networks • Direct Sold © 2013 Gridley & Company LLC Email Search • Google vs. others • Bid optimization solutions 21 • Mass branding • One-to-one (rules based)
    • The Buy-side Value Chain – Race to Build Value Through Use of Data • Strategic value is moving to the middle of the value chain as the value of data becomes better understood Value Chain DSP/Network Social Publishing Self Serv. Adserving LBS Email Execution Planning Creative Attribution Analytics Modeling Optimization Scoring Data Mgmt Warehouse Normalize Segment Database CRM Workflow/Mgmt © 2013 Gridley & Company LLC MRM 22 Ops MAM
    • Top 2013 Ad Tech M&A and Private Placements Notable M&A Target Acquirer Aug. 2013 Notable Private Financings Company $405MM $75MM $350MM Sep. 2013 $40MM $261MM Aug. 2013 Oct. 2013 $36MM $119MM $36MM $16 MM Feb. 2013 • Many VCs have moved away from Adtech, Others are very selective • Consolidation has been needed in Adtech for five years, still very fragmented ‒ Clear path to IPO • Chatter around merger discussions up; remains to be seen if there is action © 2013 Gridley & Company LLC ‒ New data models that create unique marketer value 23
    • 2013 AdTech IPOs • Scale and growth clear prerequisites • Recent success of Criteo and Rocket Fuel have bolstered Tremor and YuMe following their weaker post IPOs performance earlier this summer • Overall, mixed public market performance Stock Price Performance 140% 120% 9.6x LTM Revenue 6.8x 2013E Revenue $1.5 billion Market Cap 100% 80% 60% 4.0x LTM Revenue 3.0x 2013E Revenue 40% 2.0x LTM Revenue 1.9x 2013E Revenue $249 million Market Cap 4.7x LTM Revenue 4.4x 2013E Revenue $459 million Market Cap $1.9 billion Market Cap 20% 0% 3.3x LTM Revenue 3.0x 2013ERevenue $336 million Market Cap (20%) (40%) Days Since IPO 7 14 21 © 2013 Gridley & Company LLC 28 35 42 49 56 63 70 77 24 84 91 98 105 112 119 126 133 140 147 154
    • Sector Ad Tech Mobile Content Social eCommerce © 2013 Gridley & Company LLC 25
    • Mobile Is the Most Important Broad Theme in 2013 Driven by A Rapid Shift in Consumer Behavior 3.0 Global Installed Base (Billions) Desktops+Notebooks Smartphones+Tablets 2.5 Q2:13E: Projected Inflection Point Smartphones + Tablet Installed Base > Total PCs Installed Base 2.0 1.5 1.0 0.5 0.0 2009 2010 2011 2012E 2013E 2014E 2015E Note: Notebook PCs include Netbooks. Assumes the following lifecycles: Desktop PCs – 5 years: Notebook PCs – 4 years; Smartphones – 2 years; Tablets – 2.5 years. Source: Morgan Stanley Research, 2012. © 2013 Gridley & Company LLC 26
    • Key Trends in Mobile • 2013 was the year of mobile from many perspectives ‒ Positive mobile consumption trends, quickly overtaking desktop ‒ Internet bellwethers have executed multiple large scale M&A deals ‒ Scaled consumer adoption of vertical specific application such as Uber and Waze • Facebook and Twitter are educating the broader market on value of mobile marketing • Mobile driving much of the innovation in the payments sector today ‒ Exciting opportunity in the convergence between marketing and payments © 2013 Gridley & Company LLC 27
    • POS – A Major Battleground in Mobile Market Research / Data Analytics Account Marketing Digital Commerce Consumer Payments eReceipts © 2013 Gridley & Company LLC 28
    • Massive Strategic Opportunity with Mobile + Local Higher Banner Ad CTR for Local Businesses Rise of Localized Mobile Marketing Local vs. National Mobile Ad Spend ($ in billions) CTR Lift 48% $9.9 CTR Lift 40% $8.1 $5.8 $6.0 CTR Lift 26% $4.5 $4.3 $3.1 $2.7 $1.7 CTR Lift 5% 41% $0.7 $1.0 <1 Mile 2011 1 to 2 Miles 2 to 5 Miles 5 to 10 Miles $2.1 $1.2 $3.6 $2.9 $2.2 $1.5 2012 2013 National Sources: BIA Kelsey, “From National to Local: Mobile Advertising Zeroes In,” Jan. 2013; BI Intelligence; Balihoo, “Micro Study: National Brand Use of Digital in Local Marketing,” Oct. 30, 2012. 29 $4.1 2014 2015 Local 2016 58%
    • Top 2013 Mobile M&A and Private Placements Notable M&A Notable Private Financings Target Acquirer Company $1.1BN $361MM Jun. 2013 Aug. 2013 $350MM $225MM Sep. 2013 Feb. 2013 $261MM $66MM Aug. 2013 Feb. 2013 Jul. 2013 $155MM May 2013 $51MM $100MM Apr. 2013 Sep. 2013 • Continue to see large scale deals as mobile applications, complimented by tech/team and tuck in deals • Aggressive VC market across the spectrum Large mobile team: © 2013 Gridley & Company LLC $60MM 30
    • Sector Ad Tech Mobile Content Social eCommerce © 2013 Gridley & Company LLC 31
    • Historical Gridley Views on Content • Originally presented content sector overview for Business Insider in 2010. Presented with update in 2011. ‒ For content to be successful, businesses need to think about moving beyond the simple browse/consume model ‒ Traditional publishers vs. new digital publishers – who can adopt new tools such as UGC, gaming mechanics, social, mobile? © 2013 Gridley & Company LLC 32
    • Key Trends in Content • Healthy valuations in content enablement (e.g. Wordpress) and big vertical niche properties (e.g. Houzz) • Ongoing pressure from traditional ad models has force some innovation in consumer acquisition/retention, revenue models, integration/coordination across channels ‒ Deeper integration into social channels ‒ New advertising formats such as native advertising ‒ Better mobile consumption experiences ‒ More integrated use of user generated content • Most traditional media companies still on the sidelines from an M&A perspective • Few good public comparable market for digital content businesses © 2013 Gridley & Company LLC 33
    • Change in Content Consumption Behavior Has Been a Driving Factor in Digital Content Landscape Browsing and Consuming Behavior Since the 1950’s… New Content Consumption Model • The Network • Science • Curation • Incentives • Location • Converse • Opine • Review • Rank • Play “Like” • Watch Tag • Read Revenue Acclaim Loyalty Intelligence © 2013 Gridley & Company LLC 34 Tweet Check-in
    • Top 2013 Content M&A and Private Placements Notable M&A Notable Private Financings Target Acquirer Company $1.1BN May 2013 Jul. 2013 $750MM $68MM May 2013 Sep. 2013 Jan. 2013 $51MM $35MM $34MM Oct. 2013 • Content deal market remains quiet overall • Renewed excitement for vertically focused publishers ‒ Few buyers in the market for digital content assets ‒ Multiple $15mm+ capital raises ‒ No material change in behavior in past 3 years © 2013 Gridley & Company LLC • Relatively harder to secure earlier stage funding vs. other digital segments 35
    • Sector Ad Tech Mobile Content Social eCommerce © 2013 Gridley & Company LLC 36
    • Enterprise Social Media Landscape quickly Fragmented – Developed by Gridley in 2009 • Listen • Measure • Analyze • Score Listen/Measure Engage/Acquire • Infrastructure • Community • Commerce • Marketing Agencies Data Driven Solution Providers • Workflow • Media management © 2013 Gridley & Company LLC Execute/Manage 37
    • Key Trends in Social • Platform shift to social has created a lot of success stories and exposed a few vulnerabilities ‒ Positive: Consumer monetization models, value of network effects ‒ Negative: Can a sustainable business be build social media management?, ecommerce on social doesn’t work, long-term ability to create a “platform” around users in question • Fickle users drive consumer businesses, creating new opportunities and risks • Social creating positive impact across the digital ecosystem ‒ Content, commerce and mobile big beneficiaries © 2013 Gridley & Company LLC 38
    • As the Channel Matured, Social Has Started to Have Broad Reaching Implications Social Will Increasingly Play a Role Across the Digital Ecosystem Mobile Commerce • Mobile only social solutions are gaining mass adoption, bypassing desktop entirely • Developing models that tie social connectivity into the path to purchase • Solving consumer discovery challenges via social curation Content Adv/Mkt. • Considerable inventory controlled by social platforms opening up this year • Maturing models around advertising in user generated content • Social remains a key strategic channel for CMOs © 2013 Gridley & Company LLC 39
    • Top 2013 Social M&A and Private Placements Notable M&A Target Acquirer Jun. 2013 Notable Private Financings Company $1.1BN $225MM Oct. 2013 May 2013 $996MM $200MM $300MM Feb. 2013 Jun. 2012 Jul. 2012 $250 MM* $60MM Jun. 2013 $100MM May 2012 $50MM Feb. 2013 Jul. 2013 $80 MM • LOTS of tech & team, smaller deals • $50 million is the new $20 million and $20 million is the new $10 million • Continued premiums paid for perceived market leaders • High valuations paid for experienced teams in uncrowded markets • Social moving deeper into the enterprise, opening up the buyer universe *Google is rumored to have acquired Wildfire for $250 million © 2013 Gridley & Company LLC 40
    • Sector Ad Tech Mobile Content Social eCommerce © 2013 Gridley & Company LLC 41
    • Gridley was One of the First to Write an In-Depth Sector Report -April 2011 • Developed an industry overview based on the premise that innovation was happening at various levels ‒ New business models such as flash sales and subscription commerce ‒ Evolution of back end technologies that support new challenges as ecommerce scaled ‒ Consumer path to purchase became more complex, creating greater new to understand data © 2013 Gridley & Company LLC 42
    • Key Trends in eCommerce • eCommerce is finally strategic as it approaches 10% of all commerce and is influencing 50% of all purchasing ‒ Decisions being made in the C-suite, transitioning from CTO to CMO • Business models still very much in experimental phase ‒ Flash sales, subscription commerce, social commerce, in-store all developing ‒ Started to see scaleable + sustainable models emerge this year • Content + Commerce did not pane out across demographics • Online/Offline convergence still early, but viewed as strategically important © 2013 Gridley & Company LLC 43
    • eCommerce has Very Strong Growth Dynamics Digital is “10 – 50 – 100” Forecast: US Online Retail Sales 2012 to 2017 10% • ~10% total retail sales are eCommerce sales 50% eBusinesses are Shifting Spending to Commerce-Related Technologies • Development of “omnichannel” experiences open opportunities in mobile and marketing • 50% total retail sales are estimated to be influenced by digital ‒ Showrooming, research, planning 100% • Digital has an impact on 100% of the modern shopping experience Source: Kantar Retail “Digital Power 2013” report Source: Forrester Reports dated March 13, 2013 and July 25, 2013 © 2013 Gridley & Company LLC 44
    • Top 2013 eCommerce M&A and Private Placements Notable M&A Target Acquirer Jul. 2013 Notable Private Financings Company $361MM $316MM Aug. 2013 $250MM $180MM Aug. 2013 Feb. 2013 Apr. 2013 $125MM Jun. 2013 Feb. 2013 $50MM Aug. 2013 $170MM Sep. 2013 $94MM Jun. 2013 $206MM $110MM dba: NMD Interactive May 2013 Undisclosed $98MM • Most M&A focused on B2B as software companies like IBM and Netsuite expand retail capabilities into digital © 2013 Gridley & Company LLC • Continued investor interest in new commerce models ‒ Rent the Runway, Birchbox, etc 45
    • Selected 2013 eCommerce IPOs • Healthy IPO market for eCommerce stories • Broadening out of models beyond subscription driven businesses (Netflix, Shutterstock) Stock Price Performance 200% 180% 160% 140% 120% 12.8x LTM Revenue 11.0x 2013 Revenue $818 million Market Cap 100% 80% 60% 40% 9.7x LTM Revenue 7.5x 2013 Revenue $1,593 million Market Cap 20% 0% Days 5 Since IPO 10 15 20 © 2013 Gridley & Company LLC 25 30 35 40 45 50 55 46 60 65 70 75 80 85 90 95 100 105 110 115
    • III. 2014 Predictions
    • Exciting Value Creators for 2014 • Investors get smarter and more exposure in Ad Tech • Differentiated performance across IPOs IPO Market • Quality in Digital Media IPOs will fall • Valuation bubble needs to show signs of popping • Big VC investments are squeezing out PE growth opportunities VC/PE Funding • Everyone can’t be a billion-dollar company • Continuation of Team & Team deals • More M&A courage from the New Guys M&A Market • Traditional strategic buyers continue to fall behind digital leaders © 2013 Gridley & Company LLC 48
    • Key 2014 Sector Themes Mobile • Consumer and innovative “use cases” driving growth eCommerce • Where Adtech was two years ago, a lot of M&A expected AdTech • More IPOs, and new buyers to help fuel M&A • Additional visibility on write offs, • Programmatic and data driven growth remains focus of the sector • Need strategic buyers, watching out for exciting content tools and new content models to emerge Content • First wave of consolidation happened in 2012; next wave of innovative products beginning to emerge Social 49
    • V. Quick Gridley Commercial
    • Gridley Overview Gridley & Company LLC, a New York-based boutique investment bank, provides advisory services to companies in the Information Services industry Gridley & Company LLC Leading Boutique • Sharp focus provides clients with valuable strategic insights and perspectives • Specialize in Internet Services, Digital Media & Marketing Services, Data Services, Financial Technology, and SaaS & Outsourcing Services • Founded in 2001 • Headquartered in New York, NY Strong Reputation • Strong industry reputation on assignments led by senior bankers • Experienced, bulge-bracket trained M&A bankers – The “A” Team Trusted Advisor • Thoughtful ideas – not just logical combinations • Deliver value to buyers, sellers, and investors alike • Broad industry network developed over 25+ years with industry leaders, emerging growth companies, and senior investors © 2013 Gridley & Company LLC 51
    • Gridley’s Differentiated Strategic Approach Our broad network allows us to discern important trends early in their development, advise clients on the best strategies to profit from those trends, and execute successful transactions Well-Known Thought Leadership INDEPENDENT ADVICE StrongINDEPENDENTRelationships Network of ADVICE • Often hired by public company leaders to advise them on major growth initiatives • Approximately 25% of business is retained, strategic buy-side work for industry leaders and selected PE investors • Use industry overviews to effectively guide strategic buyers and PE investors • Split time 1/3, 1/3, 1/3 between strategics, VC/PE firms, and private company CEOs • Built our business by visiting over 400 companies a year annually for 10+ years • Have set up over 1,000 one-on-one “meet and greet” meetings at our annual January conference INTEGRITY Ability to Strategically Position Companies INTEGRITY Impressive Track Record • Spend more time than our competitors on the strategic positioning of our clients • Work together to optimize market positioning • Offer strategic insights based on our understanding and perspective of the industry © 2013 Gridley & Company LLC • Over 25 year history of successfully completing transactions • Clients like us and the job we do • Goal is 100% referencable clients • “No client gets left behind” 52
    • 12+ Years of Strategic Thought Leadership Quarterly Publications Industry Guides Frequent Industry Speaker • Highly respected newsletter about industry trends and corporate finance / M&A activity • January Conference • In-depth review of the digital NY ecosystem, including recent startups and the firms investing in them © 2013 Gridley & Company LLC Annual Gridley Hosted Events • Summer Networking Event & Golf Outing 53
    • Host of Leading Annual Industry Conference for 13 years • Bellwether event focused on our targeted industries • Approximately 500 senior-level executives from over 300 companies • Differentiated audience and participants vs. other conferences • Highly personalized with Gridley arranged “1-on-1”s for clients, presenters, sponsors • Presentations by approximately 40 private companies and industry panels addressing timely topics January 14, 2014 The Westin New York Grand Central (Invitation Only) © 2013 Gridley & Company LLC 54
    • Event History – Track Record of Finding Highly Successful Companies Early • 218 private companies have presented since 2004 • Over 70% have completed liquidity transactions Selected Past Conference Presenters © 2013 Gridley & Company LLC 55
    • Gridley’s Guide to Digital NY • Unique and comprehensive report for investors, buyers and entrepreneurs looking for one place to quickly get up to speed on New York’s exciting, explosive digital ecosystem • We decided to put together this report published originally in Oct. 2011 after people kept asking us about all of the “digital momentum” in NY. There was a feeling that lots was going on, but people didn’t really understand just what “it” was and how extensive “it” was. We aim to answer those questions here • Digital New York report is updated on a quarterly basis and sent to 1,500+ senior executives and investors • For an “easy to use” website that lays out the information in this report (and more) in a fun, creative way, visit www.gridleyco.com or www.gridleydigitalny.com © 2013 Gridley & Company LLC 56
    • Selected Recent Gridley Transactions Gridley clients include industry leaders and premier emerging growth companies © 2013 Gridley & Company LLC 57
    • Selected Recent Gridley Transactions cont. © 2013 Gridley & Company LLC 58
    • QUESTIONS? Linda Gridley President & CEO 212-400-9710 linda.gridley@gridleyco.com Pratik Patel Managing Director 212-400-9712 pratik.patel@gridleyco.com Gridley & Company LLC 10 East 53rd Street, 24th Floor New York, NY 10022 212.400.9720 tel 212.400.9717 fax Twitter: @gridleyco www.gridleyco.com