Web 2.0 Weekly
                “World Cup of Financings as ROW Participates”
                                             ...
Key Developments (past week)
    Deals (M&A, Finance) – Worldwide Financings – World Cup Related?
     Alloy, a provider o...
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
                                                                  -
                                                   ...
Average EV/EBITDA – by Sector

          60.0



                    49.3
          50.0
                                 ...
Average P/E – by Sector

          100.0
                         93.0

           90.0


           80.0


           70....
13
                                                                                 0.0
                                  ...
10 06-29 web 2.0 weekly
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10 06-29 web 2.0 weekly
10 06-29 web 2.0 weekly
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10 06-29 web 2.0 weekly

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June financing well ahead of average: Financing in the Web 2.0 universe in June was the third highest month (over the past 12) with total transaction value (excluding M&A) of $459.6 million from 51 transactions, averaging $9.0 million each - led by the $147 million Zynga financing. In comparison, total capital raised in June 2009 was $226.3 million, averaging $4.5 million over 50 deals. Excluding Dec 09 and Apr 10, the average monthly total is ~$260 million.
Deals (M&A, Finance)
Alloy, a provider of news and commentary concerning New Media, was acquired by ZelnickMedia for $127 mm.
Facebook’s implied valuation rose to $24 bn as Elevation Partners purchased 5 mm shares of the company for $120 mm in the secondary market.
Danish Skype competitor, Vopium, received $16.5 mm in financing from Indian financier, Raghuvinder Kataria.
Social networking software developer based in France, Pearltrees, raised $1.6 mm.
PapayaMobile, mobile application software company based in China, raised $4 mm.
Two Israeli mobile developers received funding this week, including Perfecto Mobile ($4 mm) and Snaptu ($6 mm).

Negative price performance
The Web 2.0 public company universe fell this week, with 68% of companies seeing their market cap fall vs. 25% rising and 7% flat.

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10 06-29 web 2.0 weekly

  1. 1. Web 2.0 Weekly “World Cup of Financings as ROW Participates” June 29, 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) – Worldwide Financings – World Cup Related? Alloy, a provider of news and commentary concerning New Media, was acquired by ZelnickMedia for $127 mm. Facebook’s implied valuation rose to $24 bn as Elevation Partners purchased 5 mm shares of the company for $120 mm in the secondary market. Danish Skype competitor, Vopium, received $16.5 mm in financing from Indian financier, Raghuvinder Kataria. Social networking software developer based in France, Pearltrees, raised $1.6 mm. PapayaMobile, mobile application software company based in China, raised $4 mm. Two Israeli mobile developers received funding this week, including Perfecto Mobile ($4 mm) and Snaptu ($6 mm). Financial Results/Guidance/Partnerships/Product Multiplied Media (TSXV:MMC) announced the availability of local weather functionality for the iPhone version of its Poynt local search mobile application. 2 www.mackieresearch.com
  3. 3. Public Company Data 3 www.mackieresearch.com
  4. 4. Aggregate Public Data Web 2.0 Public Companies Total Median Max Min # Companies 101 - - - Market Cap (US$ mm) 76,167.1 73.3 30,613.7 1.2 Revenue (US$ mm) 23,488.2 56.7 3,057.7 0.0 1 Year revenue growth 5.7% 8961.6% -100.0% EBITDA as % of revenue - 13.3% 63.1% -99.5% Net cash (US$ mm) 9,046.6 2.3 1,836.0 -670.8 TEV/Revenue - 1.9x 47.4x 0.0x TEV/EBITDA - 8.8x 49.3x 0.5x P/E - 16.8x 94.5x 0.0x Relative to 52 week high -40.9% -1.6% -95.6% Source: CapitalIQ 4 www.mackieresearch.com
  5. 5. 5 0 5 10 15 20 25 30 Gaming 28 Social Networking 16 Media 10 8 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 Hong Kong Germany Poland Australia United Kingdom By Country Italy Finland Sweden India Russia Malaysia Switzerland www.mackieresearch.com
  6. 6. Valuation Dashboard – 1 Week Market Cap EV/Revenue Flat 7% Flat 2% Rising 25% Rising 23% Falling 75% Falling 68% EV/EBITDA P/E Flat Flat 4% 0% Rising 28% Rising 32% Falling 68% Falling 68% 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 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 Median EV/Revenue 8/31/2009 9/7/2009 9/14/2009 9/21/2009 9/28/2009 10/5/2009 10/12/2009 10/19/2009 10/26/2009 11/2/2009 11/9/2009 Median 11/16/2009 11/23/2009 11/30/2009 12/7/2009 12/14/2009 12/21/2009 12/28/2009 1/4/2010 1/11/2010 1/18/2010 Long-term average 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 average 3/29/2010 4/5/2010 well below LT 4/12/2010 4/19/2010 down slightly, still Revenue multiples 4/26/2010 5/3/2010 5/10/2010 5/17/2010 5/24/2010 5/31/2010 6/7/2010 6/14/2010 6/21/2010 6/28/2010 383839393940394042424445464646464749515151535456616161616366666666666670717073747069727272747476807880808181808282858384 www.mackieresearch.com
  8. 8. 8 Source: CapitalIQ Multiple (x ) # companies 0. 0x 5. 0x 10. 0x 15. 0x 20. 0x 25. 0x 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 Median EV/EBITDA 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 10/26/2009 11/2/2009 11/9/2009 Median 11/16/2009 11/23/2009 11/30/2009 12/7/2009 12/14/2009 12/21/2009 12/28/2009 1/4/2010 1/11/2010 1/18/2010 1/25/2010 Long-term average 2/1/2010 2/8/2010 2/15/2010 2/22/2010 3/1/2010 3/8/2010 3/15/2010 3/22/2010 3/29/2010 4/5/2010 4/12/2010 4/19/2010 4/26/2010 5/3/2010 EV/EBITDA multiples down, depressed below LT average 5/10/2010 5/17/2010 5/24/2010 5/31/2010 6/7/2010 6/14/2010 6/21/2010 6/28/2010 20 20 22 22 23 23 22 22 24 24 23 23 24 24 26 26 26 26 25 25 26 28 30 30 34 33 36 36 38 38 39 40 39 41 41 39 39 39 43 43 41 42 43 43 42 43 43 45 46 45 50 50 50 53 52 52 51 51 49 51 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 5/11/2009 5/18/2009 5/25/2009 Median P/E 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 10/26/2009 11/2/2009 11/9/2009 Median 11/16/2009 11/23/2009 11/30/2009 12/7/2009 12/14/2009 12/21/2009 12/28/2009 1/4/2010 1/11/2010 1/18/2010 1/25/2010 Long-term average 2/1/2010 2/8/2010 2/15/2010 2/22/2010 3/1/2010 3/8/2010 3/15/2010 3/22/2010 3/29/2010 4/5/2010 4/12/2010 and below LT average 4/19/2010 P/E multiples also down 4/26/2010 5/3/2010 5/10/2010 5/17/2010 5/24/2010 5/31/2010 6/7/2010 6/14/2010 6/21/2010 6/28/2010 19 18 19 18 19 19 19 19 20 20 19 18 19 19 20 20 21 25 24 25 25 27 28 27 30 31 32 32 32 33 33 35 37 39 39 39 40 39 40 41 42 40 40 40 38 37 38 34 33 32 35 35 35 35 35 35 35 34 34 34 www.mackieresearch.com
  10. 10. 10 - 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 # Companies 1 Virtual World 36.3 2 Infrastructure 13.4 7 Diversified 9.9 1 Learning 8.4 8 Social Networking 5.3 2 Music 4.7 1 Vertical Communities 4.3 1 Search 4.2 Gaming 21 3.7 4 Mobile 3.5 3 SMS/Voice 3.3 6 Marketing 3.2 Average EV/Revenue – by Sector 1 Podcasting 2.8 3 Advertising 2.7 1 Collaboration 2.5 9 Media 2.3 2 Internet Retail 2.0 1 Video 1.9 3 Enterprise 1.8 2 Dating 1.4 1 Financial Services 0.4 www.mackieresearch.com
  11. 11. Average EV/EBITDA – by Sector 60.0 49.3 50.0 45.4 40.0 30.0 20.0 18.2 15.6 11.7 11.7 11.7 11.0 9.7 9.3 8.9 10.0 - Diversified Advertising Financial Services Internet Retail Search Enterprise Mobile Gaming Social Networking Media Collaboration # Companies 1 1 2 2 14 2 5 6 1 6 1 11 www.mackieresearch.com
  12. 12. Average P/E – by Sector 100.0 93.0 90.0 80.0 70.0 60.0 56.3 50.0 39.1 40.0 34.9 29.0 30.0 25.5 20.0 15.0 13.6 13.2 10.0 - Internet Retail Enterprise Collaboration Diversified Marketing Social Advertising Media Gaming Networking 2 3 1 8 6 16 3 10 28 # Companies 12 www.mackieresearch.com
  13. 13. 13 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0 NeXplore C orporation 47 Source: CapitalIQ 36 Worlds .com Inc. 33 S oc ialG O P L C 26 S pectrumDNA, Inc. 16 T encent H oldings Ltd. 13 P aid Inc. G eoS entric O yj B ey ond C ommerce, Inc . 11 11 11 G ree, Inc. 10 MO K O .mobi Limited 9 C hines e G amer International 8 Lingo Media C orporation F luid Mus ic C anada, Inc . DigitalP os t Interactive, Inc . 7 7 7 Dena C o. Ltd. T rans G aming, Inc . 7 6 Ac celeriz e New Media, Inc. 5 HU G H E S T elematics , Inc . WebMediaB rands Inc S K C ommunications C o. , L td. C hangy ou.c om Limited 4 4 4 4 T aleo C orp. Mix i, Inc. 4 3 F rogs ter Interactiv e P ic tures AG K ings oft C orporation L imited Wiz z ard S oftware C orporation 3 3 3 is eemedia Inc. O pen T ex t C orp. EV/Revenue Ranking NE O WIZ G ames C orporation eP ro Ltd. Modern T imes G roup Mtg AB XING AG G ungH o O nline E ntertainment, Inc . S hutterfly, Inc. S ohu.com Inc. V elti P lc S core Media Inc. U O MO Media, Inc P NI Digital Media Inc . NeuLion Incorporated 2 2 2 2 2 2 2 2 2 2 2 2 2 V alueC lic k , Inc. Myriad G roup AG H anbitS oft, Inc. Webz en Inc. U nilav a C orporation P latforma Mediowa P oint G roup S . A. S park Network s , Inc. Y D O nline C orp. NeXplore has highest revenue multiple at 47x G amania Digital E ntertainment C o. , L td. 2 2 2 2 2 2 1 1 1 1 H utchis on T elec ommunic ations Hong infoG R O U P , Inc . S NAP Interac tiv e, Inc. NetDragon WebS oft, Inc. Y nk K orea Inc. O riented Media G roup B erhad C ornerWorld C orporation O AO R B C Information S ys tems Internet G roup S A AQ Interac tiv e, Inc. T he New Y ork T imes C ompany C DC C orp. T heS treet. com, Inc. Northgate T echnologies Limited IAC /InterAc tiv eC orp. P oints International L td. C yberplex Inc. United O nline, Inc. 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 U nis erv e C ommunic ations C orp. AO L, Inc. DADA S pA G lu Mobile, Inc. G igaMedia Ltd. Ac toz S oft C o., Ltd. T ree.C om, Inc. O penwav e S y s tems Inc. G ameO n C o L td. R ealNetwork s Inc. J umbuc k E ntertainment Limited 1 1 1 1 0 0 0 0 0 0 0 As k net AG 0 Look S mart, L td. www.mackieresearch.com
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