0
Web 2.0 Weekly
                                                                    “Strong Week in Web 2.0 M&A”
          ...
Key Developments (past week)
    Deals (M&A, Finance) – Acquisitions the Key Feature in the Landscape
      Google (Nasdaq...
Public Company Data




3                         www.mackieresearch.com
Aggregate Public Data

     Web 2.0 Public Companies   Total      Median    Max           Min
    # Companies             ...
5
                                                                      0
                                                ...
Valuation Dashboard – 1 Week
                         Market Cap                              EV/Revenue

                ...
7
                         Source: CapitalIQ
                                                                             ...
8
                         Source: CapitalIQ
                                                                             ...
9
                         Source: CapitalIQ
                                                                             ...
10
                                                                     -
                                                ...
11
                                                                                         0.0
                          ...
12
                                                                                                           0.0
        ...
10 06-08 web 2.0 weekly
10 06-08 web 2.0 weekly
10 06-08 web 2.0 weekly
10 06-08 web 2.0 weekly
10 06-08 web 2.0 weekly
10 06-08 web 2.0 weekly
10 06-08 web 2.0 weekly
10 06-08 web 2.0 weekly
10 06-08 web 2.0 weekly
10 06-08 web 2.0 weekly
10 06-08 web 2.0 weekly
10 06-08 web 2.0 weekly
10 06-08 web 2.0 weekly
10 06-08 web 2.0 weekly
10 06-08 web 2.0 weekly
10 06-08 web 2.0 weekly
10 06-08 web 2.0 weekly
10 06-08 web 2.0 weekly
10 06-08 web 2.0 weekly
10 06-08 web 2.0 weekly
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Transcript of "10 06-08 web 2.0 weekly"

  1. 1. Web 2.0 Weekly “Strong Week in Web 2.0 M&A” June 8, 2010 David Shore, CFA, MBA 416.860.6784 dshore@mackieresearch.com Damian Wojcichowsky, CFA 416.860.7652 This report has been created by Analysts that are employed by Mackie Research Capital Corporation, a Canadian Investment Dealer. For further disclosures, please see last page of this report. www.mackieresearch.com Copyright © 2000-2010, Mackie Research Capital Corporation, All rights reserved www.mackieresearch.com
  2. 2. Key Developments (past week) Deals (M&A, Finance) – Acquisitions the Key Feature in the Landscape Google (Nasdaq:GOOG) acquired advertising analytics firm, Invite Media, for a rumoured US$70 mm. In the gaming sector, Challenge Games, the virtual goods funded game maker, was acquired by Zynga for US$20.5 mm. FetchBack, a post-customer interaction advertising platform, was acquired for US$40 mm by GSI Commerce. The largest financing in the week outside of acquisitions was US$40 mm raised by HauteLook, a Los Angeles-based luxury Internet retailer. Financial Results/Guidance Shanda Interactive (Nasdaq:SNDA), a Chinese diversified entertainment media company, reported revenue decline of 16% Y/Y to RMB1,107 mm as the company’s gaming revenues registered a decline. 2 www.mackieresearch.com
  3. 3. Public Company Data 3 www.mackieresearch.com
  4. 4. Aggregate Public Data Web 2.0 Public Companies Total Median Max Min # Companies 102 - - - Market Cap (US$ mm) 78,702.4 66.4 34,512.6 1.4 Revenue (US$ mm) 23,227.2 55.2 3,057.7 0.0 1 Year revenue growth 5.0% 8961.6% -100.0% EBITDA as % of revenue - 13.3% 63.1% -63.7% Net cash (US$ mm) 8,902.1 1.8 1,826.4 -670.8 TEV/Revenue - 2.0x 42.8x 0.0x TEV/EBITDA - 8.5x 48.9x 0.0x P/E - 16.7x 81.3x 0.0x Relative to 52 week high -40.7% 0.0% -95.6% Source: CapitalIQ 4 www.mackieresearch.com
  5. 5. 5 0 5 10 15 20 25 30 Gaming 27 Social Networking 16 Media 10 7 Diversified 6 Marketing 5 Mobile Source: CapitalIQ 3 Infrastructure 3 SMS/Voice 3 Enterprise 3 Advertising 2 Internet Retail 2 Virtual World By Sector 2 Dating 2 Music 1 Vertical Communities 1 Collaboration 1 Podcasting 1 Learning 1 Video 1 Search 1 Payment 1 Financial Services Public Company Distribution 0 5 10 15 20 25 30 35 40 45 United States Canada China South Korea Japan Taiwan Germany Australia United Kingdom Hong Kong Poland Russia By Country Finland Sweden Malaysia India Italy Switzerland Israel www.mackieresearch.com
  6. 6. Valuation Dashboard – 1 Week Market Cap EV/Revenue Flat Flat 10% 2% Rising 35% Falling 56% Rising 42% Falling 55% EV/EBITDA P/E Flat Flat 2% 3% Falling Falling 55% 53% Rising Rising 43% 44% 6 www.mackieresearch.com
  7. 7. 7 Source: CapitalIQ Multiple (x) 0.0x 0.5x 1.0x 1.5x 2.0x 2.5x 3.0x 3.5x 4.0x 4.5x 5.0x # companies 4/20/2009 4/27/2009 5/4/2009 5/11/2009 5/18/2009 5/25/2009 6/1/2009 6/8/2009 6/15/2009 6/22/2009 6/29/2009 7/6/2009 7/13/2009 7/20/2009 7/27/2009 8/3/2009 Median EV/Revenue 8/10/2009 8/17/2009 8/24/2009 8/31/2009 9/7/2009 9/14/2009 9/21/2009 9/28/2009 10/5/2009 10/12/2009 10/19/2009 Median 10/26/2009 11/2/2009 11/9/2009 11/16/2009 11/23/2009 11/30/2009 12/7/2009 12/14/2009 12/21/2009 12/28/2009 Long-term average 1/4/2010 1/11/2010 1/18/2010 1/25/2010 2/1/2010 2/8/2010 2/15/2010 2/22/2010 3/1/2010 3/8/2010 3/15/2010 down fourth 3/22/2010 3/29/2010 consecutive week Revenue multiples 4/5/2010 4/12/2010 4/19/2010 4/26/2010 5/3/2010 5/10/2010 5/17/2010 5/24/2010 5/31/2010 6/7/2010 393940414141414143454646474747484951515150545556616161626666666465667070707073727068717371777378777980818180828183858484 www.mackieresearch.com
  8. 8. 8 Source: CapitalIQ Multiple (x) # companies 0.0x 5.0x 10.0x 15.0x 20.0x 25.0x 30.0x 4/20/2009 4/27/2009 5/4/2009 5/11/2009 5/18/2009 5/25/2009 6/1/2009 6/8/2009 6/15/2009 6/22/2009 6/29/2009 7/6/2009 7/13/2009 7/20/2009 Median EV/EBITDA 7/27/2009 8/3/2009 8/10/2009 8/17/2009 8/24/2009 8/31/2009 9/7/2009 9/14/2009 9/21/2009 9/28/2009 10/5/2009 10/12/2009 10/19/2009 Median 10/26/2009 11/2/2009 11/9/2009 11/16/2009 11/23/2009 11/30/2009 12/7/2009 12/14/2009 12/21/2009 12/28/2009 1/4/2010 Long-term average 1/11/2010 1/18/2010 1/25/2010 2/1/2010 2/8/2010 2/15/2010 2/22/2010 3/1/2010 3/8/2010 3/15/2010 below LT average remain depressed 3/22/2010 3/29/2010 EV/EBITDA multiples 4/5/2010 4/12/2010 4/19/2010 4/26/2010 5/3/2010 5/10/2010 5/17/2010 5/24/2010 5/31/2010 6/7/2010 2021 2223 23 2222 2224 2326 2324 2426 27 2726 2525 2628 3030 34 3535 3740 3839 3939 4142 39 3941 4342 4143 4443 44 4444 4545 4850 5053 5353 51 5249 5051 www.mackieresearch.com
  9. 9. 9 Source: CapitalIQ Multiple (x) # companies 0.0x 5.0x 10.0x 15.0x 20.0x 25.0x 30.0x 35.0x 4/20/2009 4/27/2009 5/4/2009 Median P/E 5/11/2009 5/18/2009 5/25/2009 6/1/2009 6/8/2009 6/15/2009 6/22/2009 6/29/2009 7/6/2009 7/13/2009 7/20/2009 7/27/2009 8/3/2009 8/10/2009 8/17/2009 8/24/2009 8/31/2009 9/7/2009 9/14/2009 9/21/2009 9/28/2009 10/5/2009 10/12/2009 10/19/2009 Median 10/26/2009 11/2/2009 11/9/2009 11/16/2009 11/23/2009 11/30/2009 12/7/2009 12/14/2009 12/21/2009 12/28/2009 1/4/2010 Long-term average 1/11/2010 1/18/2010 1/25/2010 2/1/2010 2/8/2010 2/15/2010 2/22/2010 3/1/2010 3/8/2010 3/15/2010 3/22/2010 below LT average 3/29/2010 P/E multiples also 4/5/2010 4/12/2010 4/19/2010 4/26/2010 5/3/2010 5/10/2010 5/17/2010 5/24/2010 5/31/2010 6/7/2010 1919 1818 19 1819 1820 2020 1819 1920 21 2425 2424 2526 2827 31 3232 3234 3435 3638 4040 39 4041 4142 3840 4041 38 3835 3333 3235 3536 3535 37 3432 3635 www.mackieresearch.com
  10. 10. 10 - 5.0 10.0 15.0 20.0 25.0 # Companies 2 Infrastructure 2 Music 7 Social Networking 1 Learning 5 Diversified 1 Vertical Communities 4 Mobile 3 SMS/Voice 6 Marketing Gaming 21 1 Search 1 Collaboration EV/Revenue 9 Media 3 Advertising 1 Podcasting 1 Video 2 Internet Retail 3 Enterprise 2 Dating 1 Financial Services 1 Virtual World - 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 Average Valuation – by Sector # Companies 1 Mobile 2 Enterprise 5 Diversified 2 Internet Retail 6 Media 1 Collaboration 5 Social Networking EV/EBITDA Gaming 14 3 Marketing 1 Dating 1 Advertising www.mackieresearch.com
  11. 11. 11 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 RealNetworks Inc. GameOn Co Ltd. Cyberplex Inc. Actoz Soft Co., Ltd. Source: CapitalIQ Openwave Systems Inc. Jumbuck Entertainment Limited Tree.Com, Inc. GigaMedia Ltd. Glu Mobile, Inc. Northgate Technologies Limited Points International Ltd. DADA SpA Uniserve Communications Corp. AOL, Inc. 0.20.2 0.20.30.30.30.4 0.60.60.60.60.6 0.70.70.7 CDC Corp. United Online, Inc. IAC/InterActiveCorp. The New York Times Company TheStreet.com, Inc. NetDragon WebSoft, Inc. Internet Group SA CornerWorld Corporation OAO RBC Information Systems AQ Interactive, Inc. HanbitSoft, Inc. infoGROUP, Inc. EV/Revenue Ranking Hutchison Telecommunications Hong Kong SNAP Interactive, Inc. Oriented Media Group Berhad NeuLion Incorporated Gamania Digital Entertainment Co., Ltd. 0.80.80.80.80.8 1.0 1.0 1.0 1.1 1.2 1.3 1.3 1.4 1.4 1.4 1.5 1.5 Spark Networks, Inc. Shutterfly, Inc. ValueClick, Inc. GungHo Online Entertainment, Inc. Platforma Mediowa Point Group S.A. Score Media Inc. UOMO Media, Inc PNI Digital Media Inc. Sohu.com Inc. Modern Times Group Mtg AB Velti Plc Webzen Inc. XING AG 1.7 1.7 1.8 1.9 2.02.0 2.12.12.12.22.2 2.22.2 NEOWIZ Games Corporation Open Text Corp. Frogster Interactive Pictures AG Wizzard Software Corporation iseemedia Inc. Unilava Corporation ePro Ltd. Myriad Group AG Kingsoft Corporation Limited 2.62.62.8 2.9 3.03.0 3.13.33.3 Taleo Corp. Mixi, Inc. SK Communications Co., Ltd. revenue multiple at 42.8x SpectrumDNA has highest 3.53.9 4.1 Changyou.com Limited WebMediaBrands Inc Fluid Music Canada, Inc. 4.74.9 5.2 Accelerize New Media, Inc. 5.6 HUGHES Telematics, Inc. DigitalPost Interactive, Inc. 7.5 7.9 TransGaming, Inc. Dena Co. Ltd. Gree, Inc. Lingo Media Corporation 9.79.910.0 Chinese Gamer International 10.4 GeoSentric Oyj Beyond Commerce, Inc. MOKO.mobi Limited 11.811.912.0 Paid Inc. 12.7 Tencent Holdings Ltd. 18.1 Bright Things plc 31.4 SpectrumDNA, Inc. 32.7 Worlds.com Inc. 42.8 www.mackieresearch.com
  12. 12. 12 0.0 10.0 20.0 30.0 40.0 50.0 60.0 AOL, Inc. Cyberplex Inc. 2.1 3.1 Source: CapitalIQ United Online, Inc. NetDragon WebSoft, Inc. The New York Times Company Sohu.com Inc. 3.8 4.4 4.9 4.9 Hutchison Telecommunications Hong Kong Holdings 5.4 Ltd. CDC Corp. ValueClick, Inc. Changyou.com Limited infoGROUP, Inc. Uniserve Communications Corp. GungHo Online Entertainment, Inc. EV/EBITDA Ranking Spark Networks, Inc. 6.1 6.2 6.5 6.7 6.9 7.3 7.5 DADA SpA Kingsoft Corporation Limited NEOWIZ Games Corporation PNI Digital Media Inc. Velti Plc XING AG Gamania Digital Entertainment Co., Ltd. 7.7 7.8 7.9 8.4 8.5 8.7 8.8 Open Text Corp. IAC/InterActiveCorp. Platforma Mediowa Point Group S.A. 9.3 9.5 10.6 Openwave Systems Inc. 11.3 Score Media Inc. at 48.9x Shutterfly, Inc. HanbitSoft, Inc. TheStreet.com, Inc. 12.7 12.8 13.2 13.8 Mixi, Inc. Tree.com leads the group Modern Times Group Mtg AB 14.6 15.0 Frogster Interactive Pictures AG Gree, Inc. 16.2 17.3 Chinese Gamer International 20.4 Dena Co. Ltd. 22.5 Taleo Corp. 24.7 Tencent Holdings Ltd. 34.8 SK Communications Co., Ltd. 41.3 Points International Ltd. 46.3 Tree.Com, Inc. 48.9 www.mackieresearch.com Excluding EV/EBITDA > 100x
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