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SOFTWARE & SERVICES                                                                                                       ...
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THE WEB 2.0 UNIVERSE
 Ninety-tw o public Web 2.0 companies identified: Our W eb 2.0 universe contains 92 compani...
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Figure 1. Web 2.0 Universe Summary
Source. Capital IQ
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C A P I T A L M A R K E T S A C T I V I T Y (M & A A N D F I N A N C I N G )
April run-rate building up: The fir...
(US$m)




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Figure 5. Web 2.0 Price Performance
Source. Capital IQ

 A positive week: Most of the companies in our universe h...
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INDUSTRY NEWS (PARTNERSHIPS, FINANCIAL RESULTS, NEW PRODUCTS)
K ey Developments
C ompany                        ...
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VALUATION
 MMOG companies lead market-cap charts: Nine companies in our Web 2.0 universe top US$1 billion in mar...
09-04-14 Web 2.0 Weekly
09-04-14 Web 2.0 Weekly
09-04-14 Web 2.0 Weekly
09-04-14 Web 2.0 Weekly
09-04-14 Web 2.0 Weekly
09-04-14 Web 2.0 Weekly
09-04-14 Web 2.0 Weekly
09-04-14 Web 2.0 Weekly
09-04-14 Web 2.0 Weekly
09-04-14 Web 2.0 Weekly
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09-04-14 Web 2.0 Weekly

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Web 2.0 financing activity picked up in the 2nd week of April after a slow
start. Price performance for the group was also strong over the past week.

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Transcript of "09-04-14 Web 2.0 Weekly"

  1. 1. SOFTWARE & SERVICES 14 APRIL 2009 DAVID SHORE, CFA, MBA 416.860.6784 WEB 2.O WEEKLY david.shore@researchcapital.com Arun Thomas (Associate) 416.860.7666 COLLECTIVE MEDIA LEADS PICK-UP IN FINANCING ACT I VIT Y P E RK S U P I N S E CO ND WE E K OF A P RIL Month-to-date, April finished with nine financings totalling $66.3 million, a run-rate that could potentially make it a better month for capital market activity than March. A total of three deals greater than $10 million each helped the overall statistics. Although April activity has picked up from a total dollars raised perspective, the number of transactions month-to-date (nine) is well below numbers for March (21) and February (25). Financing Activity Last Three Months 200.0 8.0 180.0 7.0 160.0 6.0 140.0 5.0 120.0 (US$m) (US$m) 100.0 4.0 80.0 3.0 60.0 2.0 40.0 1.0 20.0 0.0 0.0 Feb-09 Mar-09 Apr-09 Total Average Capital Market Activity: The second week of April saw seven companies raising money, with Collective Media raising $20 million (behind Twitter which raised $35 million in February). The month-to-date total of total capital raised stands at $66 million. The Rubicon Project (ad network sector) and Cellufun (gaming sector) followed Collective Media, raising $13 million and $10 million, respectively. Price Performance: Gaming company Hanbitsoft Inc. (A047080-KOSE) was the top price performer for the week, returning 45.6%, closely followed by NEOW IZ Games Corp. (A095660-KOSE). Sitesearch Corp. (STPC-OTCBB) returned the least at -30.0%. Of the 48 companies (with stock price greater than $1), sixteen companies on our list had price performance greater than 10%. Eight companies returned more than 20%. This report has been created b y Anal ysts that are emplo yed b y Research Capital Corporation, a Canadian Investment Dealer. For further disclosures, please see last page of this report. w w w . r e s e a rc h c a p i t a l . c o m T o ro n t o 4 1 6 . 8 6 0 . 7 6 0 0 Montreal 514.399.1500 Vancouver 604.662.1800 Calgary 403.265.7400 Regina 306.566.7550
  2. 2. Page 2 THE WEB 2.0 UNIVERSE Ninety-tw o public Web 2.0 companies identified: Our W eb 2.0 universe contains 92 companies, with a combined market cap of $40 billion (Figure 1). The average market cap for the group is ~$437 million (but a median of only $46 million), with average trailing revenue of $144 million (median $52 million). The companies are also generally profitable, with a median EBITDA margin of 17.6%. On a valuation basis, the overall average is 4.7x trailing revenue (median 1.3x) and 8.9x trailing EBITDA (median 6.7x). Twelve of the companies have more than 500 employees. C omparable C o mpany A nalys is > W eb 2.0 Trading Current U S D Market U S D LT M To tal US D L TM T otal E BITDA TE V/LT M T E V/LT M C om pany Nam e L TM as o f T ic ker E xc h ange Currenc y H Q P ric e C ap ($m) R ev ($m) E B ITDA ($m) % R evenue E B IT DA E mployees Acce le rize N ew Me dia, Inc. 1 2/31 /200 8 AC LZ OT C B B US D U nited S ta tes 0 .38 1 0.4 3.8 (4 .8) NM 3.9 x - 11 Actoz S of t C o., L td. 1 2/31 /200 8 A0 527 90 K OS E KR W S outh K orea 14 800 .00 9 4.7 70. 2 1 4.0 20 .0% 1.0 x 4.8x NA AQ Inte ractive , Inc. 1 2/31 /200 8 38 38 TSE JPY J apan 43 200 .00 2 3.4 60. 1 4 .8 8 .0% - - NA As s ocia ted Media H oldings Inc. 6 /30 /200 7 AS MH OT C P K US D U nited S ta tes 0 .00 0 .1 0.1 (2 .3) NM 8.4 x - 3 B igstring Corp. 1 2/31 /200 8 BS GC OT C B B US D U nited S ta tes 0 .01 0 .7 0.1 (2 .1) NM 23.6 x - 4 B e tawave Co rpora tion 1 2/31 /200 8 B W AV OT C B B US D U nited S ta tes 0 .13 3 .8 7.7 (1 1. 8) NM - - 45 B e yond Commerce, Inc. 1 2/31 /200 8 B Y OC OT C B B US D U nited S ta tes 1 .28 5 2.9 1.8 (8 .6) NM 30.8 x - NA B right T hings plc 9 /30 /200 8 AIM:B G T AIM GBP U nited K ingdom 0 .01 4 .3 0.2 (1 .7) NM 17.2 x - 3 ,12 5 B roa dW ebAs ia Inc. 9 /30 /200 8 BW BA OT C P K US D U nited S ta tes 0 .45 3 8.2 0.0 (4 .6) NM - - 37 C D C C orp. 9 /30 /200 8 C HIN .A N as da qG S US D H ong K ong 1 .26 13 5.9 428 .1 1 8.8 4 .4% 0.4 x 1 0.2 x NA C hina G ate wa y C orpora tion 9 /30 /200 8 C GW Y OT C B B US D U nited S ta tes 0 .00 0 .0 6.7 (6 .6) -9 8.9% 7.0 x - NA C hine s e G amer International 1 2/31 /200 8 G T S M:308 3 GTSM TWD T aiwan 190 . 00 47 9.6 46. 3 2 3.4 50 .5% 1.1 x 1 3.2 x NA C ornerW orld C orporation 1 /31 /200 9 C WR L OT C B B US D U nited S ta tes 0 .12 7 .7 1.3 NM NM 0.6 x 3.8x 574 C yberplex Inc. 1 2/31 /200 8 T S X:C X TSX C AD C ana da 1 .22 5 3.5 46. 8 3 .9 8 .4% 0.5 x 3.8x NA D AD A S pA 9 /30 /200 8 C M:D A CM EUR Ita ly 4 .29 9 2.6 226 .0 3 6.1 16 .0% - - NA D XN Holdings B hd 1 1/30 /200 8 D XN KL SE MY R Ma la ys ia 0 .30 1 8.9 76. 5 1 0.2 13 .3% 5.0 x - 11 D ibz Inte rnational, Inc. NA D IB Z OT C P K US D U nited S ta tes 0 .00 0 .0 NA NM NM - - 3 D igitalP ost Inte ra ctive , Inc. 9 /30 /200 8 D G LP OT C B B US D U nited S ta tes 0 .02 1 .1 0.4 (3 .3) NM - - 6 D igitalT own, Inc. 1 1/30 /200 8 DGT W OT C B B US D U nited S ta tes 2 .50 6 7.9 NM (2 .5) NM 1.3 x - NA D olphin D igital Me dia, Inc. NA DPDM OT C B B US D U nited S ta tes 0 .57 2 7.7 NA NM NM - - 2 E olith C o. L td. 1 2/31 /200 7 A0 410 60 K OS E KR W S outh K orea 700 . 00 2 4.6 18. 8 (0 .1) -0 .3% - - 22 E xte ns ions , Inc. 9 /30 /200 8 E XT I OT C P K US D U nited S ta tes 0 .15 1 4.2 NM NM NM - - 29 F inancia l Med ia G roup, Inc. 1 1/30 /200 8 F NG P OT C B B US D U nited S ta tes 0 .01 0 .5 6.8 1 .2 18 .3% 4.4 x - NA F luid Mus ic Ca nada, Inc. 9 /30 /200 8 T S X:F MN TSX C AD U nited S ta tes 0 .33 1 4.2 4.2 (8 .6) NM 1.2 x 8.4x NA F rogs te r Inter active P icture s AG 6 /30 /200 8 F RG XT R A EUR G ermany 7 .72 2 4.2 5.4 (3 .2) -6 0.6% 0.5 x 1.8x NA G a ma nia D igital E ntertainment C o., L td. 1 2/31 /200 8 61 80 GTSM TWD T aiwan 34 .40 15 5.1 111 .9 1 6.2 14 .5% 4.8 x - NA G a me On C o L td. 1 2/31 /200 8 38 12 TSE JPY J apan 93 000 .00 8 9.6 74. 4 1 9.2 25 .9% - - NA G e oS e ntric O yj 1 2/31 /200 8 G E O1 V H LS E EUR F inland 0 .03 3 5.8 5.8 (1 3. 1) NM 1.4 x 5.6x NA G iant Intera ctive G roup, Inc. 1 2/31 /200 8 GA NYS E US D C hina 7 .57 1,7 10.8 233 .3 14 4.4 61 .9% - - 636 G iga Media Ltd. 1 2/31 /200 8 G IG M N as da qG S US D T aiwan 6 .18 33 3.6 190 .4 4 6.0 24 .2% 41.2 x - NA G ravity C o., L td 9 /30 /200 8 GR VY N as da qG M US D S outh K orea 0 .94 2 6.1 36. 8 7 .1 19 .2% 1.1 x 6.3x NA G ree, Inc. 6 /30 /200 8 T S E : 363 2 TSE JPY J apan 5 700 .00 1,2 67.3 29. 3 1 0.5 36 .0% 1.3 x - NA G ungH o O nline E ntertainment, Inc. 1 2/31 /200 8 37 65 OS E JPY J apan 127 500 . 00 14 5.6 112 .1 2 0.0 17 .8% 0.4 x 9.1x 3 ,20 0 H anbitS of t, Inc. 1 2/31 /200 8 A0 470 80 K OS E KR W S outh K orea 5 030 .00 8 2.9 52. 3 (1 4. 7) -2 8.2% - - NA IAC /InterActiveC orp. 1 2/31 /200 8 IAC I N as da qG S US D U nited S ta tes 16 .60 2,3 39.7 1 ,44 5.1 6 4.6 4 .5% - - NA IAS E nergy, Inc. 1 /31 /200 9 IAS C.A OT C B B US D C ana da 0 .07 4 .9 0.0 (0 .8) NM 2.5 x - NA IdeaE dge, Inc. 1 2/31 /200 8 OT C B B :ID AE OT C B B US D U nited S ta tes 0 .39 1 6.6 0.0 (4 .6) NM 1.0 x 2.6x 72 is ee media Inc. 1 2/31 /200 8 IE E T S XV C AD C ana da 0 .11 4 .6 1.2 (4 .9) NM 2.9 x - NA J umbuck E ntertainment P ty Ltd. 1 2/31 /200 8 AS X:J MB AS X AU D Aus tra lia 0 .48 1 7.3 13. 0 4 .9 37 .2% 1.1 x 1 1.1 x NA J umpT V Inc. 1 2/31 /200 8 T S X:J T V TSX C AD C ana da 0 .58 5 4.0 13. 4 (8 .4) -6 2.6% 3.0 x 7.9x 2 ,27 1 K a boos e Inc. 1 2/31 /200 8 T S X:K AB TSX C AD C ana da 0 .58 6 6.4 67. 0 6 .7 9 .9% 2.7 x - NA K ings oft Co. Ltd. 1 2/31 /200 8 38 88 S E HK HKD C hina 3 .24 44 8.9 120 .1 4 6.3 38 .5% 0.1 x - NA Lingo Media Corporation 9 /30 /200 8 T S XV : LM T S XV C AD C ana da 0 .80 8 .4 3.3 (1 .4) -4 2.5% - - 90 Live World Inc. 1 2/31 /200 8 LV WD OT C P K US D U nited S ta tes 0 .08 2 .5 11. 8 (0 .5) -4 .3% - - 13 LookS mart, Ltd. 1 2/31 /200 8 LOOK N as da qG M US D U nited S ta tes 1 .19 2 0.3 65. 0 (2 .0) -3 .1% 4.2 x 1 0.9 x NA Magnitude Information S ys tems Inc. 9 /30 /200 8 MA G Y OT C B B US D U nited S ta tes 0 .01 4 .4 0.1 (3 .2) NM 1.1 x 6.7x NA Mixi, Inc. 1 2/31 /200 8 21 21 TSE JPY J apan 385 000 . 00 58 9.1 116 .9 4 4.5 38 .0% - - 3 Mode rn Times G roup Mtg AB 1 2/31 /200 8 MT G B OM S EK S weden 155 . 50 1,2 51.5 1 ,60 8.2 25 9.4 16 .1% 4.3 x - NA Moggle , Inc 1 2/31 /200 8 MMOG OT C B B US D U nited S ta tes 2 .30 8 3.5 NM (1 .1) NM 3.7 x 1 3.6 x NA MOK O.mobi L imited 1 2/31 /200 8 MK B AS X AU D Aus tra lia 0 .09 5 .5 1.1 (2 .2) NM 1.6 x 3.4x NA N E OW IZ G ames C orpora tion 1 2/31 /200 7 A0 956 60 K OS E KR W S outh K orea 70 000 .00 50 6.3 135 .6 3 6.4 26 .9% - - NA N etD ragon W ebS oft, Inc. 1 2/31 /200 8 77 7 S E HK HKD C hina 4 .16 28 3.7 87. 2 3 9.9 45 .7% - - 19 N ete as e.com I nc. 1 2/31 /200 8 NT E S N as da qG S US D C hina 29 .37 3,6 14.0 451 .2 29 3.4 65 .0% - - NA N eXplore Co rpora tion 9 /30 /200 7 N XP C OT C P K US D U nited S ta tes 0 .90 5 0.2 NM (4 .9) NM 0.2 x 1.3x 286 N gi G roup Inc. 1 2/31 /200 8 24 97 TSE JPY J apan 27 400 .00 3 3.7 98. 0 3 0.2 30 .8% 2.5 x 1 0.0 x 3 ,40 0 N orthgate Te chnologies L imited 1 2/31 /200 8 59 005 7 BS E INR India 43 .25 3 0.3 135 .4 2 3.8 17 .6% 0.1 x - 627 Open T e xt Co rp. 1 2/31 /200 8 OT E X N as da qG S US D C ana da 35 .11 1,8 22.2 769 .3 19 5.0 25 .3% - - NA Openwave S ys tems Inc. 1 2/31 /200 8 OP W V N as da qG S US D U nited S ta tes 1 .34 11 1.6 199 .6 (1 0. 2) -5 .1% 2.9 x - NA P e rf ect W orld C o., Ltd. 1 2/31 /200 8 PW R D N as da qG S US D C hina 16 .99 89 6.3 210 .2 11 3.8 54 .1% - - 74 P hotoChannel N etwork s Inc. 1 2/31 /200 8 T S XV : P N T S XV C AD C ana da 1 .70 4 7.6 16. 3 (0 .8) -4 .9% 0.0 x 0.1x NA Quepa s a C or p. 1 2/31 /200 8 QP S A N as da qC M US D U nited S ta tes 0 .92 1 1.7 0.1 (1 1. 4) NM 0.2 x 0.5x NA OA O R B C Information S ys tems 1 2/31 /200 7 R BC I R TS US D R us s ia 0 .53 7 2.8 141 .9 1 8.5 13 .1% 0.9 x 6.4x 514 S handa Inter active E ntertainme nt L td. 1 2/31 /200 8 S NDA N as da qG S US D C hina 52 .18 3,6 20.4 522 .1 23 9.9 46 .0% 2.0 x 2 1.5 x NA S hutte rf ly, Inc. 1 2/31 /200 8 S F LY N as da qG S US D U nited S ta tes 10 .75 27 0.5 213 .5 2 8.4 13 .3% 2.0 x 6.4x 11 S K C ommun ications Co., Ltd. 1 2/31 /200 7 A0 662 70 K OS E KR W S outh K orea 10 200 .00 31 5.4 155 .9 1 4.7 9 .4% - - 33 S N AP Inte ra ctive , Inc. 1 2/31 /200 8 S T VI OT C B B US D U nited S ta tes 0 .70 7 .6 3.0 0 .9 31 .4% 0.1 x - NA S N M G lobal H oldings 9 /30 /200 8 S N MN OT C P K US D U nited S ta tes 0 .00 0 .0 2.0 (0 .7) -3 4.8% 3.7 x 8.8x 3 ,19 7 S ocia l Media V e nures , Inc. 1 2/31 /200 8 S MV I OT C P K US D U nited S ta tes 0 .88 0 .0 0.1 (0 .1) -6 0.5% - - 15 S ohu. com Inc. 1 2/31 /200 8 S OH U N as da qG S US D C hina 50 .00 1,9 05.8 429 .1 18 0.5 42 .1% 0.8 x 3.8x 183 S ite s earch C orporation 1 /31 /200 9 S T PC OT C B B US D U nited S ta tes 3 .50 2 8.2 NM (1 .1) NM - - 7 S park N etworks , Inc. 1 2/31 /200 8 LOV AME X US D U nited S ta tes 2 .25 4 6.2 57. 3 1 2.3 21 .5% 14.9 x 3 0.4 x 6 ,19 4 S pectrumDN A, Inc. 1 2/31 /200 8 S P XA OT C B B US D U nited S ta tes 0 .15 7 .3 0.1 (2 .5) NM 0.2 x - 347 T encent Hold ings L td. 1 2/31 /200 8 70 0 S E HK HKD C hina 61 .80 14,3 60. 1 1 ,04 6.6 51 1.9 48 .9% - - NA T he P arent C ompany 8/2/2008 K ID S .Q OT C P K US D U nited S ta tes 0 .02 0 .4 112 .0 (1 3. 5) -1 2.0% - - 310 T he 9 L imited 1 2/31 /200 8 N CT Y N as da qG S US D C hina 13 .25 35 5.3 249 .9 8 4.2 33 .7% 4.6 x - 16 T he S treet.com, Inc. 1 2/31 /200 8 TSCM N as da qG M US D U nited S ta tes 2 .12 6 4.7 71. 9 7 .0 9 .7% 0.3 x - 700 T otal S port O nline A S 3 /31 /200 6 T OS O OT C NO NOK N orwa y 0 .04 0 .2 2.0 (1 .0) -5 0.6% 0.1 x 2 9.5 x NA T ree.C om, In c. 1 2/31 /200 8 TR EE N as da qG M US D U nited S ta tes 5 .50 5 4.9 228 .6 (2 3. 9) -1 0.4% 1.1 x 4.9x 1 ,46 9 U nis erve C ommunications Corp. 1 1/30 /200 8 T S XV : US S T S XV C AD C ana da 0 .04 0 .8 24. 4 0 .1 0 .4% 15.4 x - NA U nited Online Inc. 1 2/31 /200 8 U NT D N as da qG S US D U nited S ta tes 5 .36 44 0.3 669 .4 15 3.9 23 .0% 1.2 x 6.6x 1 ,18 9 U OMO Media , Inc 1 /31 /200 9 U OMO OT C B B US D C ana da 0 .11 9 .4 0.6 (0 .5) -7 8.2% - - 4 V a lueC lick Inc. 1 2/31 /200 8 V C LK N as da qG S US D U nited S ta tes 10 .11 87 7.1 625 .8 11 3.6 18 .2% - - NA V O IS , Inc. 1 2/31 /200 8 V OIS OT C B B US D U nited S ta tes 0 .30 2 .5 0.0 (1 .3) NM 5.4 x - 110 W ebze n Inc. 1 2/31 /200 8 W ZE N N as da qG M US D S outh K orea 2 .89 3 4.3 21. 4 (4 .2) -1 9.8% - - 14 W izza rd S of twa re Corpora tion 1 2/31 /200 8 W ZE AME X US D U nited S ta tes 0 .69 3 2.5 6.1 (6 .0) -9 8.2% - - 1 W oozyF ly, Inc. 9 /30 /200 8 W ZY F OT C B B US D U nited S ta tes 0 .15 2 .6 0.0 NM NM - - NA W orlds .com Inc. 9 /30 /200 8 W DD D OT C B B US D U nited S ta tes 0 .17 8 .9 0.1 NM NM 2.9 x 9.1x 174 W ynds torm C orporation NA W YND OT C B B US D U nited S ta tes 0 .17 3 .1 NA NM NM 2.2 x 9.9x NA XIN G AG 1 2/31 /200 8 O1B C XT R A EUR G ermany 28 .28 19 3.0 46. 5 1 4.9 32 .0% 0.7 x - NA Y e dangOnline Corp. 1 2/31 /200 7 A0 527 70 K OS E KR W S outh K orea 9 810 .00 11 5.4 51. 6 1 1.5 22 .4% 0.6 x - NA Y nk K orea Inc. 1 2/31 /200 7 A0 237 70 K OS E KR W S outh K orea 5 500 .00 1 0.1 14. 7 (1 .1) -7 .6% - - - ZipLocal Inc. 1 2/31 /200 8 T S XV : ZIP T S XV C AD C ana da 0 .01 0 .3 2.7 (2 .8) NM 41.2 x 3 0.4 x 2 0,22 2 H igh 14,3 60. 1 1 ,608 .2 51 1. 9 65 .0% 41.2 x 3 0.4 x 20 ,22 2 Low 0 .0 0.0 -23.9 -9 8.9% - - 0 A vera ge 437.0 144.4 32.0 6.9% 4 .7x 8.9x 1,071 Median 4 6.2 51. 9 1 .2 17 .6% 1.3 x 6.7x 142
  3. 3. Page 3 Figure 1. Web 2.0 Universe Summary Source. Capital IQ
  4. 4. Page 4 C A P I T A L M A R K E T S A C T I V I T Y (M & A A N D F I N A N C I N G ) April run-rate building up: The first two weeks of April has had nine financings, with the month-to-date total capital raise of $66.3 million. The month of April (so far) has registered three deals greater than or equal to $10 million and one deal greater than $15 million. The month of March registered 22 financings (total $130.7 million, average $5.9 million) compared to 25 financings announced in February, totalling $185.5 million, or $7.4 million on average (Figure 2). The average value for February was above the $6.8 million average for January, with four financings over $15 million in February (Twitter, Synthasite, Tremor Media, and Offerpal Media) vs. no deals over $15 million in January. Financing Activity Last Three Months 200.0 8.0 180.0 7.0 160.0 6.0 140.0 5.0 120.0 (US$m) (US$m) 100.0 4.0 80.0 3.0 60.0 2.0 40.0 1.0 20.0 0.0 0.0 Feb-09 Mar-09 Apr-09 Total Average Figure 2. Financings, Last Three Months Source. Company reports Collective Media largest deal in April: Two weeks into April and Collective Media tops the list with a $20 million raise, followed by The Rubicon Project and Cellufun with $13 million and $10 million, respectively (Figure 3). For additional details, see Figures 23 and 24 (at end of note).
  5. 5. (US$m) 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 Twitter Collective Media Synthasite Source. Company reports Tremor Media Vidyo Offerpal Media Imagini The Rubicon Project Buzznet Emergent Game Outbrain LendingClub Figure 3. Capital Market Activity, Last Three Months SendMe Inc. Miva Auditude companies raising $54.4 million. Cellufun Glam Media Visible Measures SuperSecret Tvtrip GoViral ScanScout Tongxue Oodle Greystripe Wamba DoubleTwist OMGPOP Socialtext TextDigger OneSpot Apture Simulmedia Mixpo FetchDog Virtual Fairground Tynt AnySource Media Pixazza TubeMogul Financing Summary - Last Three Months 7 Billion People FamilyLink.com WhistleBox Hunch Outright Mendeley Sports Composite DE Bit.ly Tvinci Socialcast Filtrbox Scan & Target MMO Life AdultSpace Myngle Cake Financial 33Across fav.or.it Three Melons Apr-09 Mar-09 Feb-09 Page 5 eight companies raising over $63.4 million (Figure 4). Social networking companies have the next highest totals, with 11 Video continues to be the most active sector: Activity over the last three months was busiest in the video sector, with
  6. 6. Page 6 Capital Market Activity by Sector - Last Three Months 70.0 60.0 50.0 40.0 (US$m) 63.4 30.0 54.4 20.0 41.9 41.4 37.0 30.6 22.5 10.0 20.0 16.0 15.0 12.0 12.0 9.0 5.5 4.3 4.1 4.0 3.9 3.1 2.0 2.0 1.4 1.3 1.3 0.0 Comment/Reputation Gaming Visual Commerce Wiki Travel Microblog Media Mobile Publishing Online Learning Financial Services Lending Mobile Ad Search Infrastructure Social Networks Virtual Goods SAS Video Aggregation Virtual World Crowdsourced Ad Network Analytics Content # companies 8 11 5 7 2 4 4 1 3 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Figure 4. Capital Market Activity, by Sector, Last Three Months Source. Company reports C A P I T A L M A R K E T S A C T I V I T Y (P R I C E P E R F O R M A N C E ) Price Performance: Our W eb 2.0 index (market-cap weighted) underperformed the NASDAQ composite index from mid 2008 until recently when it has moved higher than the NASDAQ index (Figure 5). Web 2.0 Index Price Performance 140 120 100 80 60 40 20 0 4/14/2008 4/28/2008 5/12/2008 5/26/2008 6/9/2008 6/23/2008 7/7/2008 7/21/2008 8/4/2008 8/18/2008 9/1/2008 9/15/2008 9/29/2008 10/13/2008 10/27/2008 11/10/2008 11/24/2008 12/8/2008 12/22/2008 1/5/2009 1/19/2009 2/2/2009 2/16/2009 3/2/2009 3/16/2009 3/30/2009 4/13/2009 ^COMP - Share Pricing Index: Web 2.0 X (Market Cap)
  7. 7. Page 7 Figure 5. Web 2.0 Price Performance Source. Capital IQ A positive week: Most of the companies in our universe had positive stock price performances over the past week (for stocks with prices greater than $1) (Figure 6), with 34 companies showing positive returns on the week. HanbitSoft Inc. (A047080-KOSE) led the group with a 45.6% return over the past week. Sitesearch Corporation (STPC-OTCBB) had the worst return, dropping 30.0% in the week. 1 Week P rice P erformance HanbitS of t, Inc. 45. 6% NEOWIZ Games Corporation 42.6% Cy berplex Inc. 35.6% Webz en Inc. 28. 4% Eolith Co. Ltd. 26. 1% S handa Interactive Entertainment Ltd. 22. 2% Y nk K orea Inc. 20.6% Ngi Group Inc. 20.1% A ctoz S of t Co., Ltd. 15. 6% Moggle, Inc 15.0% Y edangOnline Corp. 13. 9% S K Communications Co., Ltd. 10.9% CDC Corp. 10. 5% G igaMedia Ltd. 10. 5% Frogs ter Interactive Pictures A G 10.3% S hutterf ly , Inc. 10.3% V alueClick Inc. 9. 9% Northgate Technologies Limited 8. 8% S ohu. com Inc. 8. 2% Openw ave S y s tems Inc. 8. 1% Chines e Gamer International 8. 0% Tree. Com, Inc. 7. 4% TheS treet.com, Inc. 6. 5% PhotoChannel Netw orks Inc. 6. 2% United Online Inc. 5. 7% Perfect World Co., Ltd. 5.2% G ree, Inc. 5.2% Open Tex t Corp. 4.4% Giant Interactive G roup, Inc. 4.3% IA C/InterA ctiveCorp. 2.9% Neteas e. com Inc. 2.7% Tencent Holdings Ltd. 2. 5% GameOn Co Ltd. 2. 3% Gamania Digital Entertainment Co., Ltd. 1.8% S park Netw orks , Inc. 0. 0% A Q Interactive, Inc. 0. 0% B ey ond Commerce, Inc. -0.8% XING A G -0.8% LookS mart, Ltd. -0.8% Modern Times Group Mtg A B -1.0% K ings of t Co. Ltd. -1.5% Mix i, Inc. -1.5% GungHo Online Entertainment, Inc. -1.5% NetDragon WebS of t, Inc. -3.3% The9 Limited -6.4% DA DA S pA -8. 7% DigitalTow n, Inc. -16. 7% S ites earch Corporation -30. 0% -40. 0% -30.0% -20.0% -10. 0% 0.0% 10. 0% 20.0% 30.0% 40. 0% 50. 0% Figure 6. 1-Week Price Performance Source. Capital IQ
  8. 8. Page 8 INDUSTRY NEWS (PARTNERSHIPS, FINANCIAL RESULTS, NEW PRODUCTS) K ey Developments C ompany Headline Notes A T&T , Inc . (NYS E : T); Open Text Corp. O pen T ext C orp. (N asdaqG S : O T E X ) a cquired V izible O pen T ext C orp. (Na s daqG S : O T E X ) ac quired V izible Corporation from AT & T , Inc. (NY S E : T) a nd other sha reholders on April 8, 2009. O pen (Nas daqG S : OT E X); Viz ible C orporation Corpora tion from AT &T , Inc . (N Y S E : T) and other T ext will a dd the V i zible tea m to the company 's Digital M edia G roup. V izible emp loyees will remain in the T oronto area a t O pen T ext's sha reholders . R ic hmond H ill, O nta rio offic e. O pen T ext C orp. (Na s daqG S : O T E X ) completed the a cquisition of V izible Corporation from AT & T , Inc. (N Y S E : T ) a nd other sha reholders on April 8, 2009. B eyond Commerc e, Inc . B eyond Commerce I nc. Appoi nts R ona ld L . Loveles s to B eyond Commerce Inc . a nnounc ed the appointment of R onald L . L oveles s, who owns and manages I ntegrity M a rketing and Cons ulting in (OT CB B: B Y OC) the B oa rd of Direc tors R ogers , AR . , to the B oard of D irectors . He is a retired exec utive of W al-M art S tores Inc. H e s erved four years in the U S A ir F orce Intelligenc e S ervice and bega n his ca reer with W al-M a rt in 1964. G igaMedia L td. (Nas daqG S : G IG M) G igaMedia L td. to L aunch W a rhammer O nline Clos ed G igaMedia L td. ann ounced that it will be la unching W a rhammer O nli ne: Age of R ec koning clos ed beta in T a iwa n. T he ga me wa s originally B eta in Ta iwan launched in N orth Americ a, E urope, a nd A ustra lia in S eptember 2008 a nd R uss ia in F ebrua ry 2009. J u mpTV Inc . (TS X : J TV) University of N ebrask a A thletics Teams Up with J umpTV J umpTV I nc. and U nivers ity of N ebra s ka a nnounced the debut of a grand sla m n ew video service dedicated to Nebras ka H usk ers ba s eba ll. Inc . for E x clus ive Live O nline V ideo S ervic e B eginning immediately this online s ervic e will a ir all home baseball ga mes free to fa ns through the res t of this s ea son. T he onl ine des tination showca s es a sleek look and feel and delive rs the most c omplete a nd comprehensiv e v ideo covera ge of N ebra sk a baseball. H us kers .com is the single des tina tion for Nebras ka baseba l l fans to wa tc h live games with a ll the bes t content a nd features in one centra l l ocation. T he University of Nebras k a is the firs t J umpT V C ollegiate P artner to use NeuL ion technology . Nebra s ka, in conjunction with N euL ion, will offer exc lusiv e free live video strea ms of a ll home ba seba ll ga mes through H usk erV isi on, the athletic depa rtment's televis ion production group. J u mpTV Inc . (TS X : J TV) Indy C ar S eries and JumpT V I nc. Announces New J umpTV I nc. annou nced the launc h of a new online video portal dedicated to the Indy Ca r S eries . T he Indy ca r.c om Media C enter gives auto P a rtners hip racing fa ns a cros s the globe a n opportunity to tune into their favorite multimedi a c ontent and on-demand programs online. P owered by lea ding s ports tec hnology compa ny N euLion, the I ndyc ar.com M edia C enter is an a ll-in-one online media s olution for both the Indy Ca r S eries a nd F irestone Indy L ights. T his is the firs t and only dedicated onli ne network that gives Indy Car S eries fans worldwide one central l ocation to a cc ess all things entertainment. The Media C enter u ses the la tes t NeuL ion technology a nd serv ice to deliver popula r Up to S peed segments, race highlights , vinta ge races , 2008 a rchiv es , podca s ting and all other v ideo ass ets . T he M edia C enter will a ls o provide live online event strea mi ng of I ndyC a r S eries a nd F irestone Indy L ights prac tic e a nd qua lifying ses si ons. T he I ndyC ar. com M edia C enter inc ludes a n integrated s earch feature that allows fans to view archived video by s ea rc hing by driver, tra ck , video title, etc. I t a ls o includes a built-i n option a llowing fa ns to easily s hare a udio and video clips on their pers ona l F ac ebook, M yS p a ce, twitter, d igg, or more than 20 other top soc ial networ L iveWorld Inc . (OT CPK :L VWD ) L iveW orld Inc. R eports P rel imina ry E arnings R es ults for L iveW orld Inc. reported preliminary earnings res ults for the firs t quarter of 2009. F or the quarter, the company wa s cas h flow pos itive by the F irst Q ua rter of 2009 a pproxima tely $65, 000 for the firs t quarter of 2009. This is an improvement of a pprox ima tely $162, 000 compared to the firs t qua rter of 2008 a nd a pprox imately $97, 000 when c ompared to the fourth quarter of 2008. T he revenue for the fi rs t quarter was approximately $2.5 million. T his repres ented a decreas e of 15% compared to $3. 0 million in revenue for the fi rs t qua rter of 2008 and a 16% decrease compared to the $3.0 mi llion in revenue for the fourth quarter of 2008. Modern Times G ro up Mtg AB (OM: MTG Modern Times G roup MT G AB M ulls an E quity B uy back Modern Times G roup MT G AB expec ts to initia te a s ha re repurc ha s e progra m to be approv ed a t its Annua l G eneral Meeting to be held on B) Ma y 11, 2009. U nder the proposal, M odern T imes will repurchase its o wn C las s C sha res . T he repurc hase ma y only be e ffected through a public offer directed to al l holders of C la s s C shares and s hall comprise all outs ta nding C la ss C s hares . T he purcha s e may be effected at a purchas e pric e corres ponding to not less tha n S E K 5 a nd not more than S E K 5. 1. T he total price will not exc eed S E K 1.88 milli on. P ayment for the C la s s C s hares s hall be ma de in ca s h. T he purpos e of the repurchas e is to ens ure the deliv ery of Cla s s B s hares under the P lan. The Company would a ls o s eek approva l to repurc ha se C la s s A and/or Cl a ss B s ha res that the Company's holding does not a t a ny time ex ceed 10% of the tota l number of shares in the C ompany. T he repurchas e of s ha res s hall take pla ce on the N asda q O MX S toc kholm a nd may only occ ur at a price within the s ha re price interva l regis tered at that time, where s hare pric e in terv al means the differenc e between the highes t buying price and l owest selling pric e. The purpose of the authoriza tion is to give the B oard of Di rec tors increas ed flex ibility to continuously dec Modern Times G ro up Mtg AB (OM: MTG Modern Times G roup Mtg A B P ropos es Amendment to Modern Times G roup Mtg AB announced at A nnual G enera l Meeting to be held on M a y 11, 2009, to propos e a mendment of the A rtic les of B) its Artic les of As so ciation; P ropos es Div idend Ass ocia tion. T he company propos ed a dividend of S E K 5. 00 per share. T he record date is propos ed to be M ay 14, 2009. Modern Times G ro up Mtg AB (OM: MTG Upda te to Modern T imes G roup Mtg AB ’ s E quity B uybac k As of D ecember 31, 2008, Modern Times G roup Mtg A B ha s ma de no repurchases under the plan. B) Open T ext C orp. (Nas daqG S : OT E X) L ock heed Ma rtin Aeronautics E xtends Us e of O pen O pen T ext C orp. announced L oc kheed Ma rtin Aeronautic s J oint-S erv ice T echnical D a ta (J T D ) I ntegrated P roduct T ea m (I P T), based in F ort T ex t's D igital As set M a na gement S olution W orth, T exas , extended its us e of O pen T ext's Digital As s et Management (D AM) solution to ma na ge graphic s and rich media content for F - 35 Lightning I I T echnic al Da ta . T he F -35 L ightning I I, or J oint S trike F ighter (J S F ), is a DoD multi -s ervice/mul ti-na tiona l effort to create a next- generation stea lth fighter plane. T he company behind the des ign of the J T D I P T s ys tem, and the J oint-S ervice Technica l D ata IP T team selec ted O pen Tex t to complement a n exis ting X ML -ba s ed content management s ys tem (C M S ). W ith its J av a E nterpris e E dition (JE E ) a rchitecture and open interfac e, the DAM s oftware from O pen T ext is seamles sly integra ted with a complex array of unique F -35 P rogra m T echnical D a ta development a nd support authoring work flows. Open T ext C orp. (Nas daqG S : OT E X) Anthony G allo to J oin O pen T ext C orp. as V ice P res ident O pen T ext C orp. announced tha t it ha s ac quired V izible Corpora tion. Anthony G a llo, former F ounder and C hief T echnology O fficer of V izi ble, of Digi ta l Media E xperiences who will join O pen T ex t a s V ic e P res ident of D igital M edia E x periences . P erfec t World C o. , Ltd. P erfect W orld L aunches Hot D a nce P arty 3.0 - B a by P l a n P erfect W orld Co. L td. announced it launc hed 'H ot Dance P arty 3. 0-B aby P la n' e xpa nsion pac k. 'H ot Da nc e P a rty ' was P erfec t W orld's firs t (Nas daqG S : PW R D) E xpa ns ion P ack 3D online ca s ual ga me. T he game ha s been well-received by online game play ers s ince its la unch beca us e of its excellent graphic des ign, innovative ga me s ys tems a nd continued introduction of new fea tures . I n 'Hot Dance P arty 3. 0-B aby P la n,' a 'B a by R ea ring S y stem' is a dded to the exis ting c la ss ic pla y mode, enhancing the fun of players ' game life. P la y ers who ha ve paired up through the game's 'P a rtnership S ys tem' ca n be bes towed a baby by an angel a nd enjoy the fun of rais ing the baby in game together. T enc en t Ho ldings Ltd. (S E H K: 700) T enc ent H oldings Limited Mulls a s ha re buy back O n April 7, 2009, T encent Holdings L imited a nnounc ed that it’s B oard of Directors would seek a pprov al in the c ompany’s Annua l G eneral Meeting on May 13, 2009 , to commence a share buybac k progra m. Under the program, the C ompany will repurchas e up to 10% of the a ggrega te of th e nominal amount of the iss ued s hare capita l of the Compa ny a s a t the date of pass ing this res olution and the s a id approv al sha ll be limited ac cordingly. T he s hare buyba ck progra m s hall ex pire at the conclusio n of the nex t annual genera l meeting of the C ompany, the expiration of the period within which the next a nnua l general meeting of the C ompa ny is required by the Articles of As s ociation of the Company or any a p plicable la w to be h eld and the date on which the authority set out i n this resolu tion is revok ed or v aried by a n ordina ry resolution of the sha reholders in genera l meeting. Figure 7. Key Developments Source. Capital IQ
  9. 9. Page 9 VALUATION MMOG companies lead market-cap charts: Nine companies in our Web 2.0 universe top US$1 billion in market capitalization (Figure 8). Sixty-five of the 90 companies have market caps under US$100 million, with 28 under $10 million. Online gaming companies dominate the top of the list with four of the top five by market cap. Market C ap (US D m) Tencent Holdings L td. S handa Interac tive Entertainment L td. 3620. 4 Neteas e.c om Inc . 3614.0 IA C/InterA c tiveCorp. 2339.7 S ohu.c om Inc . 1905.8 Open Tex t Corp. 1822.2 Giant Interactiv e Group, Inc . 1710.8 Gree, Inc . 1267.3 Modern Times G roup Mtg A B 1251.5 Perf ec t World Co., L td. 896.3 V alueClick Inc . 877.1 Mix i, Inc . 589.1 NEOWIZ Games Corporation 506.3 Chines e Gamer International 479. 6 K ings of t Co. L td. 448.9 United Online Inc . 440.3 The9 L imited 355. 3 GigaMedia L td. 333.6 S K Communic ations Co., L td. 315.4 NetDragon WebS of t, Inc . 283.7 S hutterf ly, Inc . 270.5 XING A G 193. 0 Gamania Digital Entertainment Co. , 155.1 GungHo Online Entertainment, Inc . 145. 6 CDC Corp. 135.9 Y edangOnline Corp. 115. 4 Openw ave S ys tems Inc . 111. 6 A c toz S of t Co., L td. 94.7 DA DA S pA 92.6 GameOn Co L td. 89.6 Moggle, Inc 83.5 HanbitS of t, Inc . 82.9 OA O R B C Inf ormation S y s tems 72. 8 DigitalTow n, Inc . 67.9 K aboos e Inc . 66.4 TheS treet.com, Inc . 64.7 Tree.Com, Inc. 54.9 J umpTV Inc . 54.0 Cyberplex Inc. 53.5 B eyond Commerc e, Inc . 52.9 NeXplore Corporation 50.2 PhotoChannel Netw orks Inc . 47.6 S park Netw orks , Inc . 46.2 B roadWebA s ia Inc . 38. 2 G eoS entric Oy j 35.8 Webz en Inc . 34.3 Ngi Group Inc . 33.7 Wiz z ard S of tw are Corporation 32.5 Northgate Tec hnologies L imited 30.3 S ites earc h Corporation 28. 2 Dolphin Digital Media, Inc . 27. 7 G ravity Co., L td 26. 1 Eolith Co. L td. 24. 6 Frogs ter Interactiv e Pictures A G 24. 2 A Q Interactiv e, Inc . 23.4 L ookS mart, L td. 20.3 DXN Holdings B hd 18.9 J umbuck Entertainment Pty L td. 17.3 IdeaEdge, Inc . 16.6 Fluid Mus ic Canada, Inc . 14.2 Ex tens ions , Inc . 14.2 Quepas a Corp. 11.7 A c celeriz e New Media, Inc . 10.4 Y nk K orea Inc . 10.1 UOMO Media, Inc 9. 4 Worlds .c om Inc . 8. 9 L ingo Media Corporation 8. 4 CornerW orld Corporation 7. 7 S NA P Interactiv e, Inc . 7. 6 S pectrumDNA , Inc . 7. 3 MOK O. mobi L imited 5. 5 IA S Energy, Inc . 4. 9 is eemedia Inc . 4. 6 Magnitude Inf ormation S ys tems Inc. 4. 4 B right Things plc 4. 3 B etaw av e Corporation 3. 8 Wy nds torm Corporation 3. 1 Wooz yFly, Inc . 2. 6 V OIS , Inc . 2. 5 L iveWorld Inc . 2. 5 DigitalPos t Interactiv e, Inc . 1. 1 Unis erve Communic ations Corp. 0. 8 B igs tring Corp. 0. 7 Financial Media Group, Inc . 0. 5 The Parent Company 0. 4 ZipLocal Inc . 0. 3 Total S port Online A S 0. 2 A s s oc iated Media Holdings Inc . 0. 1 China G atew ay Corporation 0. 0 S ocial Media V enures , Inc . 0. 0 Dibz International, Inc . 0. 0 S NM Global Holdings 0. 0 0 500 1,000 1,500 2,000 2,500 3, 000 3, 500 4,000 Figure 8. Market Cap Ranking Source. Capital IQ

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