Web 2.0 Weekly - 09-05-12

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In the first week of May, $38.9 million was raised on seven deals. Over the last three months, four sectors, Media, Ad Network, Video, and Social Network, have seen the most activity, bringing in a …

In the first week of May, $38.9 million was raised on seven deals. Over the last three months, four sectors, Media, Ad Network, Video, and Social Network, have seen the most activity, bringing in a combined $209 million on 25 transactions. Overall, capital market activity has trended downwards on the back of a declining economy and lower valuations. With any sustainable certainty and stability in the public markets, we would expect to see activity pick up as more institutions participate in private placements. Seven companies raised $38.9 million in the first week of May. EveryZing, a company in the video search sector, raised $8.3 million, followed by Gist at $6.8 million. All transactions except one (Resonate Networks) were greater than or equal to $5 million. The companies in our universe had mixed stock price performances over the past week (for stocks with prices greater than $1) (Figure 6), with 22 companies showing positive returns on the week. Tree.com (TREE-NASDAQ) led the group with a 27.5% return, while Beyond Commerce, Inc. (BYOC-OTCBB) had the worst return, dropping 21.8% in the week.

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  • 1. SOFTWARE & SERVICES 12 MAY 2009 DAVID SHORE, CFA, MBA 416.860.6784 WEB 2.O WEEKLY david.shore@researchcapital.com Arun Thomas (Associate) 416.860.7666 SECTORS TO WATCH – MEDIA, AD NETWORK, VIDEO, AND SOCIAL NETWORK E V ER YZ IN G R AI S E S $ 8.3 MIL L I ON In the first week of May, $38.9 million was raised on seven deals. Over the last three months, four sectors, Media, Ad Network, Video, and Social Network, have seen the most activity, bringing in a combined $209 million on 25 transactions. Overall, capital market activity has trended downwards on the back of a declining economy and lower valuations. W ith any sustainable certainty and stability in the public markets, we would expect to see activity pick up as more institutions participate in private placements. Capital Market Activity by Sector - Last Three Months 70.0 60.0 50.0 40.0 (US$m) 63.4 30.0 56.9 49.5 20.0 39.7 30.2 27.6 10.0 18.3 14.4 12.0 12.0 8.9 6.8 5.5 5.0 4.7 4.1 4.1 3.1 2.5 2.0 2.0 2.0 1.3 1.3 0.6 0.0 Comment/Reputation Social Commerce Gaming Visual Commerce Travel Wiki Media Mobile Collaboration Publishing Microblog Online Learning Search Lending Infrastructure Mobile Ad Widget Social Networks SAS Crowdsourced Video Aggregation Virtual World Ad Network Analytics Content # companies 8 7 5 5 2 5 2 3 1 1 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Capital Market Activity: Seven companies raised $38.9 million in the first week of May. EveryZing, a company in the video search sector, raised $8.3 million, followed by Gist at $6.8 million. All transactions except one (Resonate Networks) were greater than or equal to $5 million. Price Performance: The companies in our universe had mixed stock price performances over the past week (for stocks with prices greater than $1) (Figure 6), with 22 companies showing positive returns on the week. Tree.com (TREE-NASDAQ) led the group with a 27.5% return, while Beyond Commerce, Inc. (BYOC-OTCBB) had the worst return, dropping 21.8% in the week. 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. 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 ~ $46 billion (Figure 1). The average market cap for the group is ~$500 million (but a median of only $48.8 million), with average trailing revenue of $149.6 million (median $56.0 million). The companies are also generally profitable, with a median EBITDA margin of 16.0%. On a valuation basis, the overall average is 5.2x trailing revenue (median 1.5x) and 9.4x trailing EBITDA (median 8.7x). Thirteen of the companies have more than 500 employees. C omparable C o mpany A nalys is > W eb 2.0 Trading Current U S D Market U S D LT M Total US D L TM T otal E BITDA TE V/LT M T E V/LT M C om pan y Nam e L TM as of T icker E xc hange Cu rrenc y H Q P ric e C ap ($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 .50 1 3.8 3.8 (4 .8) NM 4.8 x - 11 Actoz S of t C o., L td. 1 2/31 /200 8 A0 527 90 K OS E KR W S o uth K orea 14, 400 9 9.4 75. 7 1 5.1 20 .0% 0.9 x 4.7x NA AQ Inte ractive , Inc. 1 2/31 /200 8 38 38 TSE J PY J apan 48 ,000 .00 2 6.8 61. 8 4 .9 8 .0% - - NA As s o cia ted Media H oldings Inc. 6 /30 /200 7 AS MH OT C P K US D U nited S ta tes 0 0 .1 0.1 (2 .3) NM 8.1 x - 3 B igstring Corp. 1 2/31 /200 8 BS GC OT C B B US D U nited S ta tes 0 .02 1 .2 0.1 (2 .1) NM 30.6 x - 4 B e tawave Corpora tion 1 2/31 /200 8 B W AV OT C B B US D U nited S ta tes 0 3 .2 7.7 (1 1.8) NM - - 45 B e yo nd Commerce, Inc. 1 2/31 /200 8 B Y OC OT C B B US D U nited S ta tes 1 .04 4 3.0 1.8 (8 .6) NM 25.4 x - 43 B right T hings plc 9 /30 /200 8 AIM:B G T AIM GBP U nited K ingdom 0 5 .6 0.2 (1 .7) NM 22.1 x - 9 B roa dW ebAs ia Inc. 9 /30 /200 8 BW BA OT C P K US D U nited S ta tes 0 .30 2 5.3 0.0 (4 .6) NM - - 46 C DC C orp. 1 2/31 /200 8 C HIN .A N as da qG S US D H ong K ong 1 15 7.3 409 .1 2 5.5 6 .2% 0.5 x 7.3x NA C ha ngyou. com Limite d 3 /31 /200 9 C Y OU N as da qG S US D C hina 29 .80 1,5 27.3 222 .5 13 5.1 60 .7% 6.0 x 9.9x 628 C hina G ate wa y C or pora tion 9 /30 /200 8 CGWY OT C P K US D U nited S ta tes 0 0 .0 6.7 (6 .6) -9 8.9% 0.0 x - 37 C hine s e G amer International 3 /31 /200 9 G T S M:308 3 GT S M TWD T aiwan 225 .00 57 5.6 56. 2 3 1.5 56 .0% 9.1 x 1 6.2 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 6 .4 1.3 NM NM 6.0 x - NA C yberplex Inc. 1 2/31 /200 8 T S X:C X TSX C AD C ana da 1 .87 8 6.5 49. 4 4 .1 8 .3% 1.7 x 2 0.6 x NA DADA S pA 9 /30 /200 8 C M:DA CM E UR Ita ly 6 13 9.4 231 .1 3 6.9 16 .0% 0.8 x 5.0x 574 DXN Ho ldings B hd 1 1/30 /200 8 DXN KLSE MY R Ma la ys ia 0 .44 2 9.1 79. 0 1 0.5 13 .3% 0.6 x 4.7x NA Dibz Inte rnational, Inc. NA DIB Z OT C P K US D U nited S ta tes 0 0 .0 NA NM NM - - NA DigitalP o st Inte ra ctive , Inc. 9 /30 /200 8 DG LP OT C B B US D U nited S ta tes 0 .02 1 .1 0.4 (3 .3) NM 5.0 x - 11 DigitalT own, Inc. 2 /28 /200 9 DG T W OT C B B US D U nited S ta tes 3 6 7.7 NM (3 .0) NM - - 3 Dolphin Digital Me dia, Inc. 1 2/31 /200 8 DP DM OT C B B US D U nited S ta tes 0 .68 3 3.5 0.9 (3 .0) NM 37.2 x - NA E o lith C o. L td. 1 2/31 /200 7 A0 410 60 K OS E KR W S o uth K orea 900 5 2.4 20. 2 (0 .1) -0 .3% 2.6 x - NA E xte ns ions , Inc. 1 2/31 /200 8 E XT I OT C P K US D U nited S ta tes 0 .15 1 4.2 NM NM NM - - NA F inancia l Media G roup, Inc. 1 1/30 /200 8 F NG P OT C B B US D U nited S ta tes 0 0 .4 6.8 1 .2 18 .3% - - 22 F luid Mus ic Ca nada, Inc. 1 2/31 /200 8 T S X:F MN TSX C AD U nited S ta tes 0 .45 2 0.4 4.6 (9 .3) NM 1.9 x - NA F rogs te r Interactive P ictu re s AG 6 /30 /200 8 FRG XT R A E UR G ermany 8 2 4.6 5.5 (3 .3) -6 0.6% 4.4 x - NA G a ma nia Digital E ntertainment C o., L td. 3 /31 /200 9 61 80 GT S M TWD T aiwan 38 .60 17 8.2 126 .0 2 0.9 16 .6% 1.2 x 7.4x NA G a me On C o L td. 1 2/31 /200 8 38 12 TSE J PY J apan 91, 800 9 1.0 76. 5 1 9.8 25 .9% 0.4 x 1.7x NA G e oS e ntr ic O yj 1 2/31 /200 8 G E O1 V H LS E E UR F inland 0 .04 4 8.8 6.0 (1 3.4) NM 6.9 x - 94 G iant Intera ctive G r oup, Inc. 1 2/31 /200 8 GA NYS E US D C hina 8 1,8 62.2 233 .6 14 4.6 61 .9% - - NA G iga Media Ltd. 1 2/31 /200 8 G IG M N as da qG S US D T aiwan 6 .38 34 4.7 190 .4 4 6.0 24 .2% 1.4 x 5.8x NA G ravity C o., L td 9 /30 /200 8 G R VY N as da qG M US D S o uth K orea 1 2 7.0 39. 7 7 .6 19 .2% - - 636 G ree, Inc. 6 /30 /200 8 T S E : 363 2 TSE J PY J apan 5 ,260 .00 1,2 03.8 30. 1 1 0.8 36 .0% 37.9 x - NA G u ngH o O nline E ntertainment, Inc. 1 2/31 /200 8 37 65 OS E J PY J apan 1 42, 600 16 7.5 115 .3 2 0.6 17 .8% 1.3 x 7.1x NA H anbitS of t, Inc. 1 2/31 /200 8 A0 470 80 K OS E KR W S o uth K orea 4 ,855 .00 8 6.3 56. 4 (1 5.9) -2 8.2% 1.2 x - NA IAC /InterActiveC orp. 3 /31 /200 9 IAC I N as da qG S US D U nited S ta tes 16 2,3 92.0 1 ,40 6.4 4 2.6 3 .0% 0.4 x 1 1.9 x 3 ,20 0 IAS E nergy, Inc. 1 /31 /200 9 IAS C.A OT C B B US D C ana da 0 .28 1 9.6 0.0 (0 .8) NM - - NA IdeaE dge, Inc. 1 2/31 /200 8 OT C B B :IDAE OT C B B US D U nited S ta tes 1 2 4.3 0.0 (4 .6) NM - - NA is ee media Inc. 1 2/31 /200 8 IE E T S XV C AD C ana da 0 .09 4 .0 1.3 (5 .1) NM 1.8 x - NA J umbuck E nter tainment P ty Ltd. 1 2/31 /200 8 AS X:J MB AS X AU D Au s tra lia 0 1 5.3 13. 7 5 .1 37 .2% 0.8 x 2.1x 72 J umpT V Inc. 1 2/31 /200 8 T S X:J T V TSX C AD C ana da 0 .71 6 9.7 13. 4 (8 .4) -6 2.6% 4.0 x - 237 K a boos e Inc. 1 2/31 /200 8 T S X:K AB TSX C AD C ana da 1 7 2.5 70. 7 7 .0 10 .0% 1.1 x 1 1.2 x NA K ings oft Co . Ltd. 1 2/31 /200 8 38 88 S E HK HKD C hina 4 .14 57 6.9 120 .2 4 6.6 38 .7% 4.2 x 1 0.9 x NA Lingo Media Co rporation 9 /30 /200 8 T S XV: LM T S XV C AD C ana da 1 1 1.1 3.5 (1 .5) -4 2.5% 3.4 x - NA Live World Inc. 1 2/31 /200 8 LV WD OT C P K US D U nited S ta tes 0 .07 2 .2 11. 8 (0 .5) -4 .3% 0.1 x - NA Lo okS mart, Ltd. 3 /31 /200 9 LOOK N as da qG M US D U nited S ta tes 1 2 4.6 60. 7 (3 .8) -6 .3% - - 90 Magnitu de Information S ys tems Inc. 1 2/31 /200 8 MA G Y OT C B B US D U nited S ta tes 0 .01 4 .4 0.1 (3 .0) NM - - 14 Mixi, Inc. 1 2/31 /200 8 21 21 TSE J PY J apan 4 50, 000 70 8.4 120 .3 4 5.8 38 .0% 5.0 x 1 3.2 x NA Mode rn Times G r ou p Mtg AB 3 /31 /200 9 MT G B OM S EK S weden 237 .50 2,0 20.2 1 ,73 7.6 26 6.2 15 .3% 1.5 x 9.7x 2 ,96 9 Moggle , Inc 1 2/31 /200 8 MMOG OT C B B US D U nited S ta tes 2 8 3.5 NM (1 .1) NM - - 3 MOK O.mobi L imited 1 2/31 /200 8 MK B AS X AU D Au s tra lia 0 .08 5 .0 1.1 (2 .3) NM 3.5 x - NA N E OW IZ G ames C orpo ra tion 1 2/31 /200 8 A0 956 60 K OS E KR W S o uth K orea 62, 400 48 7.1 200 .8 5 3.9 26 .8% 2.4 x 8.9x NA N etD rago n W ebS oft, Inc. 1 2/31 /200 8 77 7 S E HK HKD C hina 5 .53 37 7.2 87. 3 3 9.9 45 .7% 2.8 x 6.1x 2 ,42 6 N ete as e.co m I nc. 1 2/31 /200 8 NT E S N as da qG S US D C hina 31 3,8 09.7 451 .8 29 3.7 65 .0% - - NA N eXplo re Co rpora tion 9 /30 /200 7 N XP C OT C P K US D U nited S ta tes 0 .70 3 9.0 NM (4 .9) NM - - 19 N gi G roup Inc. 1 2/31 /200 8 24 97 TSE J PY J apan 31, 700 4 0.2 100 .8 3 1.0 30 .8% - - NA N orthgate Te chno logies L imited 1 2/31 /200 8 59 005 7 BS E INR India 39 .15 2 7.6 136 .2 2 4.0 17 .6% 0.2 x 1.2x 286 Open T e xt Co rp. 3 /31 /200 9 OT E X N as da qG S US D C ana da 32 1,6 69.7 782 .6 19 9.2 25 .5% 2.2 x 8.7x 2 ,91 5 Openwave S ys tems Inc. 3 /31 /200 9 OP W V N as da qG S US D U nited S ta tes 1 .27 10 5.8 197 .2 (2 .9) -1 .5% 0.0 x - 657 P e rf ect W or ld C o., Ltd. 1 2/31 /200 8 PW R D N as da qG S US D C hina 19 99 7.1 210 .5 11 3.9 54 .1% - - NA P hoto Channel N etwork s Inc. 1 2/31 /200 8 T S XV: P N T S XV C AD C ana da 1 .59 4 7.0 17. 2 (0 .8) -4 .9% 2.7 x - NA Qu epa s a C orp. 1 2/31 /200 8 QP S A N as da qC M US D U nited S ta tes 1 1 2.3 0.1 (1 1.4) NM - - 74 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 1 .25 17 3.4 146 .9 1 9.2 13 .1% 0.0 x 0.3x NA S handa Interactive E ntertainme nt L td. 1 2/31 /200 8 S N DA N as da qG S US D C hina 49 3,4 26.1 522 .7 24 0.2 46 .0% 0.2 x 0.4x NA S hutte rf ly, Inc. 3 /31 /200 9 S F LY N as da qG S US D U nited S ta tes 12 .85 32 3.5 215 .2 2 8.3 13 .2% 1.2 x 9.1x 514 S K C ommunications Co., Ltd. 1 2/31 /200 7 A0 662 70 K OS E KR W S o uth K orea 9, 390 31 3.1 168 .1 1 5.8 9 .4% 1.9 x 1 9.8 x NA S N AP Inte ra ctive , Inc. 1 2/31 /200 8 ST VI OT C B B US D U nited S ta tes 0 .75 8 .1 3.0 0 .9 31 .4% 2.2 x 7.0x 11 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 0 .0 2.0 (0 .7) -3 4.8% 1.1 x - 33 S o cia l Media V e nur es , Inc. 1 2/31 /200 8 S M VI OT C P K US D U nited S ta tes 0 .01 0 .0 0.1 (0 .1) -6 0.5% 0.0 x - NA S o hu. com Inc. 3 /31 /200 9 S OH U N as da qG S US D C hina 55 2,1 16.8 460 .0 20 0.4 43 .6% 3.8 x 8.7x 3 ,19 7 S ite s earch C orpo ratio n 1 /31 /200 9 STPC OT C B B US D U nited S ta tes 3 .50 2 8.2 NM (1 .1) NM - - 15 S park N etworks , Inc. 1 2/31 /200 8 LOV AME X US D U nited S ta tes 3 5 6.5 57. 3 1 2.3 NM 1.0 x 4.6x 183 S pectrumDN A, Inc. 1 2/31 /200 8 S P XA OT C B B US D U nited S ta tes 0 .42 2 0.5 0.1 (2 .5) 48 .9% - - 7 T encent Ho ldings L td. 1 2/31 /200 8 70 0 S E HK HKD C hina 71 16,5 68. 2 1 ,04 7.8 51 2.5 -1 2.0% 17.2 x 3 5.3 x 6 ,19 4 T he P arent C ompany 8/2/2008 K IDS .Q OT C P K US D U nited S ta tes 0 .01 0 .3 112 .0 (1 3.5) 33 .7% 0.2 x - 347 T he 9 L imited 1 2/31 /200 8 N CT Y N as da qG S US D C hina 9 25 3.7 250 .2 8 4.3 2 .6% - - NA T he S treet.com, Inc. 3 /31 /200 9 TSC M N as da qG M US D U nited S ta tes 2 .05 6 2.8 67. 0 1 .7 -5 0.6% - - 310 T otal S po rt Online A S 3 /31 /200 6 T OS O OT C NO NOK N orwa y 0 0 .1 2.1 (1 .1) -6 .2% 4.6 x - 16 T ree.C om, Inc. 3 /31 /200 9 TR EE N as da qG M US D U nited S ta tes 12 .09 13 0.5 215 .6 (1 3.3) 0 .4% 0.6 x - 700 U nis erve C ommu nications Corp. 1 1/30 /200 8 T S XV: US S T S XV C AD C ana da 0 0 .8 25. 8 0 .1 21 .9% 0.1 x 2 9.5 x NA U nited Online Inc. 3 /31 /200 9 U NT D N as da qG S US D U nited S ta tes 7 .24 60 5.1 811 .2 17 7.3 -7 8.2% 1.1 x 5.0x 1 ,46 9 U OMO Media , Inc 1 /31 /200 9 U OMO OT C B B US D C ana da 0 2 1.0 0.6 (0 .5) 18 .1% 33.6 x - NA Va lueC lick Inc. 3 /31 /200 9 VC LK N as da qG S US D U nited S ta tes 10 .34 89 7.0 591 .7 10 6.9 NM 1.3 x 7.4x 1 ,18 9 VO IS , Inc. 1 2/31 /200 8 VOIS OT C B B US D U nited S ta tes 0 2 .7 0.0 (1 .3) -1 9.8% - - 4 W ebze n Inc. 1 2/31 /200 8 W ZE N N as da qG M US D S o uth K orea 3 .28 3 8.9 23. 1 (4 .6) -9 8.2% - - NA W izza rd S of twa re Co rpora tion 1 2/31 /200 8 W ZE AME X US D U nited S ta tes 1 2 9.2 6.1 (6 .0) NM 4.8 x - 110 W or lds .com Inc. 1 2/31 /200 8 W DD D OT C B B US D U nited S ta tes 0 .17 8 .9 0.1 (0 .7) NM - - 1 W ynds torm C orporatio n NA W YND OT C B B US D U nited S ta tes 0 0 .5 NA NM 32 .0% - - NA XIN G AG 1 2/31 /200 8 O1B C XT R A E UR G ermany 28 .95 20 8.1 47. 6 1 5.2 22 .4% 3.1 x 9.8x 174 Y e dangOnline Corp. 1 2/31 /200 7 A0 527 70 K OS E KR W S o uth K orea 8, 900 11 3.3 55. 6 1 2.4 -7 .6% 2.0 x 9.0x NA Y nk K orea Inc. 1 2/31 /200 7 A0 237 70 K OS E KR W S o uth K orea 6 ,850 .00 1 3.6 15. 8 (1 .2) NM 0.9 x - NA ZipLocal Inc. 1 2/31 /200 8 T S XV: ZIP T S XV C AD C ana da 0 0 .3 2.8 (3 .0) 0 .0% 0.6 x - NA H igh 16,5 68. 2 1 ,737 .6 51 2.5 65 .0% 37.9 x 3 5.3 x 6 ,194 Lo w 0 .0 0.0 -15.9 -9 8.9% 0.0 x 0.3x 1 A vera ge 500.3 149.6 33.4 7.5% 5.2x 9.4x 644 Median 4 8.8 56. 0 0 .9 16 .0% 1.5 x 8.7x 179 Figure 1. Web 2.0 Universe Summary Source. Capital IQ
  • 3. Page 3 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 ) Will May be better than April? Month-to-date financings in May totalled $38.9 million and has commenced slowly - just like April. The month of May (so far) has registered seven deals, all except one greater than $5 million. No deals were greater than $10 million, with the capital raise by EveryZing being the largest at $8.3 million. The average value for April was $6.5 million on 21 financings. The March average was $6.6 million on 24 financings. Except for two deals (Kaixin001.com and Collective Media) all were below $20 million for the last three months and a total of four deals were greater than or equal to $15 million. Financing Activity Last Three Months 180.0 6.8 160.0 6.6 140.0 6.4 120.0 6.2 100.0 6.0 (US$m) (US$m) 80.0 5.8 60.0 5.6 40.0 5.4 20.0 5.2 0.0 5.0 Mar-09 Apr-09 May-09 Total Average Figure 2. Financings, Last Three Months Source. Company reports Ever yZing largest deal in May: A week into May and EveryZing tops the list with a $8.3 million raise, followed by Gist at $6.8 million. The month so far has seen four deals about the $6 million mark. For additional details, see Figures 23 and 24 (at end of note). Further, the month of May also witnessed the spin-off of StumbleUpon from E-bay on a $29 million valuation. E-bay had bought StumbleUpon for $75 million.
  • 4. (US$m) 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 StumbleUpon Kaixin001.com Source. Company reports Collective Media GOOM Radio Vidyo Marin Software raising $56.9 million. The Rubicon Project Buzznet FreeWheel SendMe Inc. Figure 3. Capital Market Activity, Last Three Months LendingClub Miva Auditude Conductor Inc. Cellufun Glam Media Visible Measures SuperSecret GoViral EveryZing ScanScout Batanga Gist Azuki Systems I Love Rewards Greystripe TimeBridge DocuSign DoubleTwist OMGPOP IMShopping Socialtext Apture Mixercast Simulmedia Tynt SoundCloud AnySource Media Pixazza Financing & M/A Summary - Last Three Months TubeMogul Tribal Nova Sports Composite Tripbase Resonate Networks Hunch Bit.ly Socialcast Brandtology Scan & Target AdultSpace Myngle Jodange 33Across Three Melons Foodista Apr-09 Mar-09 May-09 Page 4 companies raising over $63.4 million (Figure 4). The Ad Network sector has the next highest totals, with seven companies Media is the most active sector: Activity over the last three months was busiest in the Media sector, with eight
  • 5. Page 5 Capital Market Activity by Sector - Last Three Months 70.0 60.0 50.0 40.0 (US$m) 63.4 30.0 56.9 49.5 20.0 39.7 30.2 27.6 10.0 18.3 14.4 12.0 12.0 8.9 6.8 5.5 5.0 4.7 4.1 4.1 3.1 2.5 2.0 2.0 2.0 1.3 1.3 0.6 0.0 Comment/Reputation Social Commerce Gaming Visual Commerce Travel Wiki Media Mobile Collaboration Publishing Microblog Online Learning Mobile Ad Widget Search Lending Infrastructure Social Networks SAS Video Aggregation Virtual World Crowdsourced Ad Network Analytics Content # companies 8 7 5 5 2 5 2 3 1 1 2 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 ) Web 2.0 Index outperforms: Our W eb 2.0 index (market-cap weighted) essentially mirrored the performance of the NASDAQ composite index from mid-2008 until recently when it has moved higher than the NASDAQ index (Figure 5).
  • 6. Page 6 Web 2.0 Index Price Performance 120 100 80 60 40 20 0 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 4/27/2009 5/11/2009 ^COMP - Share Pricing Index: Web 2.0 X (Market Cap) Figure 5. Web 2.0 Price Performance Source. Capital IQ A positive week: The companies in our universe had mixed stock price performances over the past week (for stocks with prices greater than $1) (Figure 6), with 22 companies showing positive returns on the week. Tree.com (TREE-NASDAQ) led the group with a 27.5% return while Beyond Commerce, Inc. (BYOC-OTCBB) had the worst return, dropping 21.8% in the week.
  • 7. Page 7 1 Week P rice P erformance Tree.Com, Inc. 27.5% United Online Inc. 27.5% Y nk K orea Inc. 21.9% Webz en Inc. 14.3% 12.2% LookS mart, Ltd. 11.4% CDC Corp. K ings of t Co. Ltd. 10.4% Gamania Digital Entertainment Co., 9.0% Cy berplex Inc. 8.7% NEOWIZ Games Corporation 8.5% 8.0% Modern Times G roup Mtg A B 7.9% HanbitS of t, Inc. 6.0% PhotoChannel Netw orks Inc. S park Netw orks , Inc. 3.8% G igaMedia Ltd. 3.6% Perfect World Co., Ltd. 2.8% NetDragon WebS of t, Inc. 2.4% 2.2% A Q Interactiv e, Inc. 1.9% Y edangOnline Corp. Openw ave S y s tems Inc. 0.8% A ctoz S of t Co., Ltd. 0.7% Neteas e.com Inc. 0.7% Giant Interactive G roup, Inc. 0.0% 0.0% Chines e Gamer International -0.7% Mix i, Inc. -1.1% Eolith Co. Ltd. IA C/InterA ctiveCorp. -1.1% S hutterf ly , Inc. -2.1% The9 Limited -2.1% -2.5% Open Tex t Corp. -2.7% S K Communications Co., Ltd. -3.2% XING A G S ohu.com Inc. -3.9% Tencent Holdings Ltd. -3.9% TheS treet.com, Inc. -4.2% Northgate Technologies Limited -4.5% -4.7% G ree, Inc. -5.0% G ameOn Co Ltd. -5.8% S handa Interactive Entertainment Ltd. V alueClick Inc. -6.0% DA DA S pA -8.2% Changy ou.com Limited -8.6% -11.7% Frogs ter Interactiv e Pictures A G -13.9% Ngi G roup Inc. -21.8% B ey ond Commerc e, Inc. -30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% Figure 6. 1-Week Price Performance Source. Capital IQ
  • 8. Page 8 INDUSTRY NEWS (PARTNERSHIPS, FINANCIAL RESULTS, NEW PRODUCTS) K ey Developments C ompany Headline Notes L ookS mart L td. Announc es Una u dited Cons olidated L ookS mart L td. a nnounc ed unaudited c ons olidated ea rnings res ults for the firs t qua rter ended March 31, 20 09. F or the qua rter, the L o okS mart, Ltd. (Nas daqG M: LOOK ) E a rnings R esults for the F irst Quarter E nded M arch 31, company's revenues were $13. 3 million, a 24% dec rea s e from $17. 5 million in the firs t qua rter of 2008 and a 11% dec reas e from $14. 9 2009 million in the fourth quarter of 2008. Net loss for the quarter was $2. 0 million, or $0. 12 per sha re compa red to net los s for the first quarter of 2008 of $0. 5 million, or $0. 02 per sha re and net loss for the fourth quarter of 2008 of $12.4 mil lion, or $0. 73 per s ha re. L oss from c ontinuing opera tions for the quarter was $2. 1 million or $0 .13 per s ha re compa red to a los s from continuing opera tions in the first qua rter of 2008 of $0.2 mi llion or $0.01 per s hare a nd los s from co ntinuing opera tions for the fourth quarter of 2008 of $11.4 mil lion. Non-G AAP net los s for the quarter wa s $1. 6 million compared to non-G AAP net income of $0. 8 million in the firs t quarter of 2008 a nd non-G AAP net los s for the fourth quarter of 2008 of $1.1 million. C apita l expenditures for the quarte r were $0. 9 million, c ompared to $1. 0 million in the fourth qua rter of 2008, a nd $0. 6 million in the firs t quarter of 2008. L os s from operations was $2. 2 million compa red with $0. 61 million for the s a me period la st y ear. L S NAP I ntera ctive Inc. B eta -La unches S NAP I ntera ctive I nc. announced the beta la unch of AreY ouInteres ted. com, a sta nd-a lone online dating website incorporating a Fa cebook S NAP Interactive, Inc . (OT CB B: S TVI) AreY ouI nteres ted. com Online D ating W ebs ite Us ing Connec t integra tion. AreY ouI nterested.c om repres ents a n expand ed version of S NA P 's popular F a cebook P latform da ting applica tion 'Are F acebook (R ) C onnect Y ou I nteres ted,' which pres ently ha s more than 13 million us ers. T he website has been built to include a number of unique features for an online dating website. B y utilizing F acebook C onnec t, us ers c an login to AreY ouI nteres ted.com with their Fa cebook identity a nd allow th e site to a cc ess the member's exis ting F a cebook profile informa tion. Additiona lly, us ers are a ble to s ha re content a nd ac tions ta k en on AreY ouInteres ted. com with their friends ba ck on F a cebook for a b etter ov era ll ex perience. W ith Fa cebook C onnect, users benefit from the following fea tures : T rusted Au thentica tion-ea s ily a uthentica te into partner si tes us ing their F ac ebook ac count; R eal I dentity-leverage their rea l identity a cros s the W eb i n a trus ted envi ron ment; Fri end Link ing-tak e their friends with them wherever they go, enabling trus ted s ocia l context any where on the W eb; Dynamic P ri vac y-a s surance that the s ame priva cy s ettings us ers hav e s et up on F acebook will follow them whe Changy ou.com Limited R eports U naudited C onsolidated Changy ou.com Limited reported unaudited c ons olidated ea rnings res ults for the firs t qua rter ended March 31, 2009. F or the qua rter, the C hang yo u. c om L imited E a rnings R esults for the F irst Quarter E nded M arch 31, company's tota l revenues increa s ed 6% qua rter-over-qua rter and 50% yea r-ov er-year to $61.6 million c ompared to total rev enue of $41 (Nas daqG S : C YOU) 2009; P rov ides E arnings G uidance for the S econd million for the s ame quarter a year ago. T he inc reases were mainly a ttributable to a n increa s e in T LB B rev enues as a result of user base Quarter of 2009 expans ion and enha nced us er loy a lty , a s well a s inc reased revenues from B lade Online ('B O'). Opera ting profi t increa s ed 12% qua rter-over- quarter and 79% ye ar-ov er-year to $37. 9 million compared to operating profi t of $21.2 million for the same qua rter a y ea r a go. N et income increa s ed 15% quarter-over-qua rter a nd 120% year-over-y ear to $33.5 mil lion c ompa red to net inc ome of $15. 2 million for the s ame quarter a y ea r a go. N on-G AAP net inc ome increas ed 13% qua rter-over-quarter and 100% yea r-over-yea r to $34.4 million compa red to net income of $17.2 mi llion for the s a me qua rter a y ea r a go. B as ic and fully dil uted ea rnings per A DS were $0.71, c ompared to $0. 32 in the firs t quarter of 2008. Non-G AAP fully diluted ea rnings per ADS were $0. 72, compared to $0.36 in the firs t quarter of 2008. Inc ome before inc ome ta x expens S ohu.com I nc. R eports Una udited Cons olida ted E arnings S ohu.com I nc. repo rted una udited cons olida ted earnings results for the first quarter ended M a rch 31, 2009. G AAP net income of $44. 6 S ohu. c om Inc . (Nas daqG S : S OHU) R es ults for the F irst Quarter E nded M arch 31, 2009 ; million or $1.15 per fully diluted s ha re. G AAP net inc ome was 2. 1 times that of first quarter 2008. G AAP net income included $33.5 million of P rovides E arnings G uida nc e for the S econd Quarter of G AAP net income contributed by online ga me bus iness with a 15% qua rter-on-quarter increas e or a 120% yea r-on-year inc rease. N on-G AAP 2009 net income (i.e. , exc luding sha re-bas ed compensation expense) of $46. 9 million, or $1.20 per fully diluted share, ex ceeding the high end of company guida nc e of $1. 10 by 10 cents . N on-G AAP net income increas ed 87% y ea r-on-year. N on-G AAP n et income included $34.4 million of Non-G AAP net income c ontributed by online ga me busines s with a 13% qua rter-on-quarter increas e or a 100% y ea r-on-year increas e. T otal revenues were $115. 7 million, repres enting a dec reas e of 5% s equentially a nd increa se of 36% yea r-on-y ea r. The company als o reported operating profi t of $50,037, 000, income before inc ome tax expens e of $51, 160, 000 a nd income from continuing operations of $44,574, 000 agains t operating profit of $30, 531,000, income before income tax expens e of $30,740, 000 a nd income from c ontinuing operations of $21 T heS treet.c om, Inc . (Nas daqG M: T S CM) T heS treet.com I nc. R eports E arnings R es ults for Fi rs t T heS treet. com Inc. reported earnings results for first qua rter ende d M arch 31, 2009. F or the qua rter, the c ompany re ported net loss of Quarter E nded Marc h 31, 2009 ; Announc es N on C ash $45,675, 349 and los s attributa ble to c ommon s tockholders of $45,771, 773 or $1. 50 los s per diluted sha re on tota l rev enues of $14, 026,864 Impa irment C harges in F irst Q ua rter of 2009 compared to net income of $2,446 ,649 and inc ome attributable to common s tock holders of $2, 350,225 or $0. 07 per diluted s ha re on total revenues of $18, 947, 985 for the s a me period a year a go. O pera ting los s was $29, 449, 197 compared to operating income of $1, 909, 114 for the sa me period a yea r a go. L os s from continuing operations before in come ta xes of $29,449, 197 compa red to i ncome from continui ng opera tions before incomes taxes of $2, 595, 308 for the s a me period a y ea r a go. L oss from c onti nuing operations of $45, 676,274 compa red to loss from c ontinui ng operations of $2, 449,380 for the s ame period a y ear ago. Adj usted E B I T DA was negative at $620, 400 compa red to a djusted E B IT DA of $3, 871,084 for the s a me period a y ear ago. C apital expenditures were $647, 948 compa red to c apita l ex penditures of $1,390, 341 for the same period a yea r a go. E B I TD A was negative at $28,207, 672 compa red to E B IT DA of $3, 169,987 for the s ame period a y W izz ard S oftwa re C orporati on has filed a S helf W izza rd S oftwa re C orporation has filed a S helf R egistration in the amount of $5.70 million. W izz ard S oftware Co rporation R egis tra tion in the a mount of $5. 70 million . (A ME X: WZE ) China G ateway Deleted From OT C B B China G ateway C orporation’s common stock has been deleted from O T C B ulletin B oa rd effec tiv e Ma y 6, 2009 on a cc ount of its fa ilure to C hin a G ateway Co rporation comply with NAS D 6530. T he compa ny ha s been added to NB B . (OT CPK : C G WY) Mel R ic h to S tep Down a s P resident of S NM G lobal S NM G lobal Holdings announced tha t the company P res ident Mel R ich will be s tepping down immediately a nd the c ompany 's day by day S NM G lobal H olding s (OTCP K:S NMN) Holdings respons ibilities will be ha ndled by newly hired C E O W illia m B rowning. M r. R ich was appointed interim P res ident in 2008 and will remain with the compa ny as a S pecia l Adv isor to B oard Direc tors for E nterta inment S ervices . P erfect W orld Co. , L td. Announces B ra nd N ew 2D P erfect W orld Co. , L td. a nnou nced that it pla ns to releas e a brand new 2D turn-bas ed ca rtoon MM OR P G 'Fa ntasy Zhu Xi a n' in 2009. P erfec t World C o. , Ltd. MM O R P G 'F anta sy Z hu Xia n' F anta sy Z hu Xian' is P erfect W orld's first 2D turn-ba s ed c arto on M MOR P G , which is run on the company 's proprieta ry E P AR CH engine. T he (Nas daqG S : PW R D) game is ba s ed on a popu la r internet fanta s y novel 'Z hu Xian. ' P l ayers will be ushered into the unk nown world of 'Zhu X ia n' to unrav el a series of my s teries . 'F anta sy Z hu Xia n' will a lso fea ture a number of new chara cters which will intera ct with the origina l c ha ra cters of 'Zhu X ian' to generate new stories . G a mania D igita l E ntertainment C o. L td. R eports G a ma nia Di gita l E ntertainment C o. L td. reported cons olidated earnings res ults for the firs t quarter M a rch 31, 2009. F or the quarter, the G am ania Digital E ntertainmen t C o. , Cons olida ted E arnings R es ults for the F irs t Quarter company reported a n opera ting revenues were T W D 1, 363,614, 000, operating income was TW D 217, 031,000, net income was T W D L td. (G TS M: 6180) Ma rc h 31, 2009 165,308, 000 and ea rnings per share wa s T W D 1. 13. United O nline I nc. R eports E a rnings R esults fo r the F irst United Online I nc. reported ea rnings results for the first qua rter ended M a rch 31, 2009. F or the period, the c ompa ny reported cons olida ted U nited Online Inc. (N as daqG S :U NT D) Quarter E nded Marc h 31, 2009; P rovides E a rnings revenues were $263. 6 million, an increa se of 116% against the yea r-ago qua rter. T he inc reas e wa s prima ri ly a ttributable to the company's G uida nce for the S econd Q ua rter of 2009; D eclares a cquis ition of F TD in Augus t 2008. Adjus ted OI B DA was $61. 5 million, an increase of 59% against the year-ago quarter. G A AP diluted net Quarterly C a s h D ividend P a ya ble on Ma y 29, 2009 income per s ha re applica ble to common s tock holders wa s $0 .20, a n increas e of 11% aga inst the y ea r-ago qua rter. Adjus ted diluted net income per s ha re applica ble to common s tock holders wa s $0 .35, a n increas e of 13% aga inst the y ea r-ago qua rter. C a sh flows from opera tions were $43. 6 million, an increa se of 50% a ga inst the year-a go quarter. T he increa s e was primarily attributa bl e to the F TD a cquis ition . Opera ting inc ome was $37. 4 million a ga ins t $20.4 million for the sa me period earlier. I ncome before inc ome ta x es were $29.6 million a ga ins t $22.0 million for the sa me period earlier. N et income a nd net income a pplica ble to c ommon stock holders were $17.0 million or $0. 20 per ba s ic a nd diluted ea rnings per s ha re ag ainst net inc ome and net income applic able to common s toc k holders of $13. 0 million or $0.18 pe
  • 9. Page 9 V a lueClick I nc. R eports F inancia l R es ults for the Firs t V a lueClick I nc. reported financia l res ults for the first quarter e nded M arch 31, 2009. R evenue for the firs t qua rter of 2 009 was $135.0 million V alu eClic k Inc . (Nas daqG S : VC LK ) Q uarter E nded Marc h 31, 2009 ; P rov ides E a rnings a gainst $169 million a year ago. Adjus ted-E B IT DA for the first qua rter of 2009 wa s $34. 7 million against $45. 7 million a yea r ago. Net income G uida nce for the S econd Q ua rter of 2009 from continuing operations and G AAP net income for the first quarter of 2009 wa s $13.2 million or $0.15 per diluted common s hare a ga inst net income from continuing operations a nd G AAP net income for the first quarter of 2008 of $19. 2 million, or $0. 19 per diluted c ommon sha re a y ear ago. Non-G AAP net income for the first qua rter of 2009, whic h excludes discontinued operations, stock -bas ed c ompensation, a nd a morti za tion of intangible ass ets wa s $18. 8 million, or $0.22 per diluted common s ha re a ga inst non-G A AP net inc ome of $ 27.5 milli on or $0.28 per diluted common s ha re a year ago. I ncome from opera tions was $23.7 million a ga ins t $30 mi llion a year a go. I ncome before income taxes was $23. 5 million against $33 million a y ea r a go. T he company provides earnings guidance for the second qua rter of 2009. For the qua rter, the c ompa ny ex pects revenues in the ra nge of $124 O pen T ext R eports E a rnings R es ults for T hird Q uarter O pen T ext C orp. reported earnings res ults for third qua rter and nine months ended M a rch 31, 2009. F or the quarter, the compa ny reported Open T ext C orp. (Nas daqG S : OT E X) a nd N ine Months E nded M a rch 31, 2009 net income of $22,035, 000 or $0. 41 per diluted s hare on total revenues of $192, 035, 000 compa red to net in come of $7,267, 000 or $0.14 per diluted sha re on tota l rev enues of $178, 762,000 for the s ame period a y ea r a go. Inc ome from operations wa s $20, 957,000 compa red to income from operations of $23, 544, 000 for the s a me period a y ear ago. Income before income taxes was $30,181, 000 compared to income before income tax es of $10, 029,000 for the s ame period a y ear ago. N et c ash provided by opera ting ac tiv ities of $72,887, 000 compa red to net ca s h provided by opera ting a ctivities of $49,808, 000 for the same period a year ago. F or nine months period, the c ompa ny reported net income of $37, 457,000 or $0. 71 per diluted s ha re on tota l revenues of $582,309, 000 compared to net income of $25,75 2,000 or $0. 49 per diluted s ha re on tota l revenues of $525,263, 000 for the same p eri od a yea r a go. Inc ome from operations of $63,189, 000 compa red to income from ope rations of $71, 086, 000 for the s a me period a year ago. Income before in L ingo M edia C orporation F orms S trategic Alliance with L ingo M edia C orporation announced tha t it is forming a stra te gic a llia nce with the S ha ngha i Y angpu D istrict P eople's G overnment. T he L ing o Media C orporation (TS XV: L M) the S ha ngha i Y angpu D is trict P eople's G overnment company will provid e E nglis h La ngua ge Learning ('E LL ') services to the Y angpu G overnment. T enc ent H oldings Ltd. , 0. 10 (H K D), C as h D ividend, M a y- T enc ent Holdin gs Ltd. , 0. 10 (H K D), C ash D ividend, M a y-06-2009 T enc en t Ho ldings Ltd. (S E H K: 700) 06-2009 CD C Corp. A nnounces R es igna tion of F ang X in from I ts CD C Corp. a nnounc ed that M r. F ang X in, a member of the boards of direc tors of CD C Corp. a nd the compa ny 's subs idia ry , C hina . com Inc., C DC C orp. (Nas daqG S : CHIN.A) B oard resigned from both suc h boards of direc tors effec tive a s of Ma y 5, 2009. Mr. F a ng has confirmed tha t his res igna tion was not related to any disagreement wi th either of the boa rd of directors of the company or C hina . com. S pec trumDN A to La unch G ame-Changing L oca tion- S pectrumDN A, Inc. ha s a nnounc ed the crea tion of P la netT agger, the first re bra n da ble s ocial media engine tha t marries online a nd mobile S pec trumDNA, Inc . (OTC BB :S PXA) B a se d S oc ia l M edia E ngine C alled P lanetT a gger location-ba sed s ervices with the context of a community to create a highly relev ant and re warding ex perience for community owners , us ers a nd a dv ertis ers. T he product i s a s ca la ble, S aa S (s oftwa re-as-a -s ervice) engine tha t can be white-label ed and cus tomiz ed for a ny brand, webs ite or media property . The purpos e of P lanetT a gger is to combine the best of ge o-po sitioning, loca tion-ba s ed s ervic es and mobile mes s aging a nd offer it to orga nizations tha t a re already s pending the time and money to enga ge a pa rticular niche or mega -niche affinity group from N asca r enthusi a sts, to busines s or adventure travelers , to c ollege c ommunities or sports fans--in order to create a more powerful a nd releva nt community of people and events . Modern Times G ro up Mtg AB (OM: MTG MT G R eportedl y E yes S tak e I n R iks T V Norwegian B roadca sting Corp. (N R K ) a nd T V 2 G ruppen AS A (T V 2) s aid tha t they plan to sell their s tak es in R ik sT V As. I t is believ ed that T elenor AS A is also considering a s a le of its stake in the firm. I t is believed tha t this pa ves wa y for Modern T i mes G roup MT G AB to rai se its B ); Norweg ian B roadcas tin g Co rp. ; ma rk et s hare in Norwa y. T or F uglevik , a n official at M T G s a id that it is interes ted, but not in a mino ri ty pos t. T he news pa per named the firm R iks tv As ; Telenor AS A (OB : TE L ); T V2 a s another pos sible buyer. G ruppen AS A Cy berplex Inc. R eports E arnings R es ults for the F irs t Cy berplex Inc. reported earnings res ults for the firs t quarter ended Ma rc h 31 , 2009. For th e quarter, the compa ny reported rev enues were C yberplex Inc . (TS X: C X) Q uarter E nded Marc h 31, 2009 $32.1 mi llion was an increa s e of 307% over the $7. 9 million genera ted las t yea r. T his growth wa s a chieved prima rily from the W eb Advertising divi sion through the addition of new publis hers , the inc rea se in c ampa ign budgets and the continued momentum of proprietary publishing initia tiv es. I ncome before a mortiz a tion, interes t a nd income taxes increas ed to $4.3 milli on, up from $221, 000 in the first qua rter o f 2008. Net inc ome was $4.1 million or $0. 07 diluted per s ha re compare d to a net inc ome of $0. 5 million or $0. 00 diluted per s hare for the same qua rter a y ear ago. I ncome from opera tions was $4. 2 million against $0. 6 million for the s ame quarter a yea r ago. DAD A S pA R eports E a rnings R es ults for the F irst DAD A S pA reported ea rnings res ults for the first qua rter of 2009. T he c ompa ny regis tered a net profit of E UR 0. 7 million in the firs t qua rter of DADA S pA (C M: DA) Q uarter of 2009 2009, down from E UR 3. 9 million in the year-ago period. The revenue dropped to E UR 38. 4 million from E UR 40. 6 million in the firs t quarter of 2008. T he operating income s tood at E U R 2.4 million, down from E UR 5. 3 million. Upda te to Jumbuck E nterta inment P ty L td. 's E quity As of May 7, 2009, J umbuc k E ntertainment P ty L td. ha s repurchas ed 12, 750 sha res for a tota l cos t of AU D 0. 005 million under the progra m. J u mbuck E ntertainmen t Pty Ltd. B uybac k on Ma y 7, 2009 (A S X:J MB) NetDragon L aunc hes E nglis h E x pa nsion P ack for NetDragon W ebS oft, I nc. a nnounc ed the release of a new E nglish langua ge expa ns ion pac k, 'T he Divi ne P a th', for its fa nta sy online ga me, NetDrago n W ebS oft, Inc. (S E HK :777) E udemons O nline - 'The Divine P a th' E udemons O nline, on M a y 8, 2009. T he E n glish vers ion follows the la unch of the C hinese language expa ns ion pa ck ('Zhong S hen G ui La i') in J anua ry 2009, which features elements of G reek mythology a nd divine eudemons , offering a fresh experienc e to pla yers , while ma intaining the integrity of the origina l title. T he la un ch of the E nglis h ex pansion pa ck is expected to bols ter the influence of E udemons O nline in the ov erseas mark ets . T ree. Com Inc. R eports E arnings R es ults for the F irs t T ree. Com Inc. reported earnings res ults for the firs t quarter ended Ma rc h 31 , 2009. For th e quarter, the compa ny reported net income of T ree. Com, Inc . (Nas daqG M: TR E E ) Q uarter E nded Marc h 31, 2009 $3.16 mi llion. In c ontra s t, the company reported net los s of $9. 8 million for the s a me qua rter in the previous year. Acceleriz e N ew Media , I nc. Announces E a rnings R es ults Accelerize New M edia , I nc. announced ea rnings results for the firs t qua rter ending Ma rch 31, 2009. F or the quarter, the company reported A c celeriz e New Media, In c. for th e F irst Q uarter E nding M arch 31, 2009 net loss of $969,298 c ompa red to net los s of $953, 062 for the sa me quarter in the previous ye a r. (OT CB B: A CL Z) IAC /InterAc tiveC orp. (Nas daqG S : IAC I); IAC In T alk s T o Acquire Y a hoo! P ers onals IAC /I nterA ctiveC orp. reported 10% drop in firs t-quarter revenues of $332 million. I AC sta ted tha t th e company is in talks to acquire Y ahoo! P ersona ls in order to supplement its M a tc h.c om bus iness . C E O of the company , B a rry Diller s a id: “W e are very interested. W e’d love to Yahoo! In c. (Nas daqG S : Y HOO); Yahoo! have Y a hoo! P ers onals a nd I think there is s ome initia l dis c uss ions a bout that, whether th ey’re going awa y or not is of cours e enormous ly P ers onals specula tiv e. B ut I think , Y ahoo! ha s said that it’s not a n a bs olute c ore a s set their future a nd it is core to us. W e’re a leader in the ca tegory . S o, we’re very aggres si ve behind M a tch a nd any pos sibilities for increas ing its fu ture money in the world.” Y ahoo! I nc is look ing at dives ting its non-c ore properties and IA C is likel y to be a buyer of other as sets too. Changy ou.com Limited R eports U naudited C onsolidated Changy ou.com Limited reported unaudited c ons olidated ea rnings res ults for the firs t qua rter ended March 31, 2009. F or the qua rter, the C hang yo u. c om L imited E a rnings R esults for the F irst Q uarter E nded M arch 31, company's tota l revenues increa s ed 6% qua rter-over-qua rter and 50% yea r-ov er-year to $61.6 million c ompared to total rev enue of $41 (Nas daqG S : C YOU) 2009; P rov ides E arnings G uidance for the S econd million for the s ame quarter a year ago. T he inc reases were mainly a ttributable to a n increa s e in T LB B rev enues as a result of user base Q uarter of 2009 expans ion and enha nced us er loy a lty , a s well a s inc reased revenues from B lade O nline ('B O '). O pera ting profi t increa s ed 12% qua rter-over- quarter and 79% ye ar-ov er-year to $37. 9 million compared to operating profi t of $21.2 million for the same qua rter a y ea r a go. N et income increa s ed 15% quarter-over-qua rter a nd 120% year-over-y ear to $33.5 mil lion c ompa red to net inc ome of $15. 2 million for the s ame quarter a y ea r a go. N on-G AAP net inc ome increas ed 13% qua rter-over-quarter and 100% yea r-over-yea r to $34.4 million compa red to net income of $17.2 mi llion for the s a me qua rter a y ea r a go. B as ic and fully dil uted ea rnings per A DS were $0.71, c ompared to $0. 32 in the firs t quarter of 2008. Non-G AAP fully diluted ea rnings per ADS were $0. 72, compared to $0.36 in the firs t quarter of 2008. Inc ome before inc ome ta x expens Figure 7. Key Developments Source. Capital IQ
  • 10. Page 10 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-one of the 92 companies have market caps under US$100 million, with 23 under $10 million. Online gaming companies dominate the top of the list. Market C ap (US D m) Tenc ent Holdings L td. 3809. 7 Netea s e. com Inc . 3426.1 S ha nda Interac tiv e Enterta inment L td. 2392. 0 IA C/InterA ctiveCorp. S ohu. com Inc. 2116. 8 Modern Times Group Mtg A B 2020. 2 Gia nt Intera ctiv e Group, Inc. 1862. 2 Open Tex t Corp. 1669. 7 1527. 3 Cha ngyou. c om L imited 1203.8 G ree, Inc . 997. 1 Perf ec t World Co. , L td. 897. 0 V a lueClic k Inc . Mix i, Inc . 708. 4 United Online Inc . 605. 1 K ings of t Co. L td. 576. 9 Chines e Ga mer Interna tiona l 575. 6 NEOWIZ Ga mes Corporation 487. 1 377. 2 NetDragon WebS of t, Inc. 344.7 G igaMedia L td. 323. 5 S hutterf ly , Inc . S K Communica tions Co. , L td. 313. 1 The9 L imited 253.7 X ING A G 208. 1 Ga ma nia Digital Entertainment Co. , L td. 178.2 OA O R B C Informa tion S y s tems 173.4 167.5 G ungHo Online Enterta inment, Inc . 157. 3 CDC Corp. 139. 4 DA DA S pA 130. 5 Tree. Com, Inc . Y edangOnline Corp. 113. 3 Openw a ve S y s tems Inc. 105. 8 A c toz S oft Co. , L td. 99. 4 Ga meOn Co L td. 91. 0 86. 5 Cyberplex Inc . 86. 3 HanbitS of t, Inc . 83. 5 Moggle, Inc 72. 5 K a boos e Inc. J umpTV Inc . 69. 7 Digita lTow n, Inc . 67. 7 TheS treet. c om, Inc . 62. 8 S pa rk Netw orks , Inc. 56. 5 Eolith Co. L td. 52. 4 48. 8 G eoS entric Oy j 47. 0 PhotoCha nnel Netw orks Inc . 43.0 B ey ond Commerc e, Inc. 40.2 Ngi Group Inc. NeXplore Corporation 39.0 W ebz en Inc . 38.9 Dolphin Digital Media , Inc. 33.5 Wiz z a rd S oftw are Corporation 29.2 29.1 DXN Holdings B hd 28.2 S ites earc h Corporation 27.6 Northgate Tec hnologies L imited 27.0 G rav ity Co., Ltd A Q Interac tiv e, Inc . 26.8 B roadWebA s ia Inc . 25.3 L ookS mart, L td. 24.6 Frogs ter Interac tiv e Pictures A G 24.6 IdeaEdge, Inc. 24.3 21. 0 UOMO Media, Inc 20. 5 S pec trumDNA , Inc. 20. 4 Fluid Mus ic Canada , Inc . IA S Energy , Inc. 19. 6 J umbuck Entertainment Pty L td. 15. 3 Ex tens ions , Inc. 14. 2 A c celeriz e New Media , Inc . 13. 8 Y nk K orea Inc . 13. 6 12. 3 Quepa s a Corp. 11. 1 Lingo Media Corporation 8. 9 Worlds . com Inc. 8. 1 S NA P Interac tiv e, Inc . CornerW orld Corporation 6. 4 B right Things plc 5. 6 MOK O. mobi L imited 5. 0 Ma gnitude Inf orma tion S ys tems Inc . 4. 4 4. 0 is eemedia Inc. 3. 2 B etaw av e Corporation 2. 7 V OIS , Inc. 2. 2 L iv eW orld Inc. B igs tring Corp. 1. 2 DigitalPos t Interac tiv e, Inc . 1. 1 Unis erv e Communica tions Corp. 0. 8 W ynds torm Corporation 0. 5 Financia l Media Group, Inc. 0. 4 0. 3 Z ipL oc al Inc . 0. 3 The Pa rent Compa ny 0. 1 Tota l S port Online A S A s s oc iated Media Holdings Inc . 0. 1 China Ga tew a y Corporation 0. 0 S NM G lobal Holdings 0. 0 Dibz Internationa l, Inc. 0. 0 S ocial Media V enures , Inc. 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 TEV/Revenue (LTM) averages 5.2x: The overall average TEV/Revenue (LTM) multiple for our group is 5.2x (up from 4.7x last week) (Figure 9). However, this is skewed by Gree (3633-TSE) at 37.9x and Dolphin Digital Media Inc. (DPDM- OTCBB) at 37.2x. The median is only 1.9x. Note that we exclude multiples greater than 50x. Twenty-nine companies have multiples under 1.5x.
  • 11. 0. 0 5. 0 10. 0 15. 0 20. 0 25. 0 30. 0 35. 0 40. 0 (x) S ocia l Media V enures , Inc. O penwa ve S y s tems Inc. # Companies A verage, 5.2 0.0 5.0 10.0 15.0 20.0 Source. Capital IQ Source. Capital IQ C hina G ateway C orpora tion AIM O AO R B C Informa tion S y s tems 25.0 22.1 L iveWorld Inc. OTCBB 18.1 Unis erve C ommunications C orp. 1 20 5 TSE Figure 9. TEV/Revenue Ranking 14.4 S ha nda Interactive E ntertainment Ltd. 3 N orthgate T ec hnologies Limited SEHK 8.1 T he P arent C ompany 1 HLSE IAC /InterAc tiveC orp. 2 GTSM 6.9 5.2 G ameO n C o Ltd. 1 C DC C orp. OTCNO T ree.C om, Inc . 2 XTRA ZipL ocal Inc. 2 AMEX DXN Holdings B hd Figures 10 & 11. TEV/Revenue Ranking (Exchange, Country) 4 J umbuck E ntertainment P ty Ltd. 4.6 3.8 2.9 2.2 TSX DADA S pA 2 ASX Y nk K orea Inc. 0.00.00.00.00.10.10.20.20.20.40.40.50.60.60.60.80.80.9 5 TSXV Ac toz S oft C o., Ltd. S pa rk N etwork s , Inc. KOSE S NM G lobal Holdings NasdaqGS U nited O nline Inc . OTCPK K aboos e Inc. 2.1 1.7 1.7 1.6 1.6 S hutterfly , Inc. 7 14 10 1 OM 1.5 Ha nbitS oft, Inc. Average TEV/LTM Revenue - By Exchange 1 OSE G amania Digital E ntertainment C o., 1 CM G ungHo O nline E ntertainment, Inc . 1.3 0.8 V a lueC lick Inc . 1 KLSE G igaMedia Ltd. 5 NasdaqGM 0.6 0.6 Modern T imes G roup Mtg AB 1 C y berplex Inc. BSE 0.2 is eemedia Inc. 0.91.01.11. 11.11.21. 21.21.31. 31.41.51. 71.8 Eleven of the companies are Canadian (average 5.1x revenue). F luid Mus ic C anada , Inc . S K C ommunications C o. , Ltd. Y edangO nline C orp. (x) S NAP Interac tive, Inc . O pen T ex t C orp. T E V/L T M R evenue (x) NE O WIZ G ames C orporation 0.0 5.0 10.0 15.0 20.0 25.0 # Companies E olith C o. Ltd. United 1 P hotoC hannel N etwork s Inc . 1.91. 92.02.22. 22.42.62. 7 Kingdom 22.1 NetDragon WebS oft, Inc. 6 Japan X ING AG 11.1 Lingo Media C orporation 1 Finland 6.9 MO K O .mobi Limited 2.83.13.43.5 United S ohu. com Inc. 40 States J umpT V Inc . China K ings oft C o. Ltd. 10 6.0 5.7 F rogs ter Intera ctive P ic tures AG Canada 11 T ota l S port O nline AS 3.84.04.24.44.6 Ac celeriz e New Media, Inc. 1 Norway Wiz z ard S oftware C orpora tion Mix i, Inc. 3 Taiwan 5.1 4.6 3.9 Digita lP os t Interac tive, Inc . 4.84.85.05.0 2 C ornerWorld C orpora tion Germany 3.8 C hangy ou.com Limited 6.06.0 2 Australia G eoS entric O y j 6.9 As s oc iated Media Holdings Inc . South 8.1 9 C hines e G amer Interna tiona l 9.1 Korea T enc ent Holdings Ltd. 1 17.2 Sweden 2.1 1.7 1.5 B right T hings plc 22.1 Average TEV/LTM Revenue - By Country B ey ond C ommerce, Inc . 1 Italy 25. 4 0.8 B igs tring C orp. 30.6 1 Malaysia UO MO Media, Inc 33.6 Dolphin Digital Media , Inc . Hong 2 1 (Figure 12). Twelve of the companies have EBITDA multiples under 7x. The median multiple is 8.1x (vs. 8.8x last week). 0.6 0.5 G ree, Inc . Kong 37.37.9 Page 11 100x) is 9.4x LTM EBITDA (slightly down from 9.7x last week), led by Tencent Holdings Ltd.’s (700-SEHK) 35.3x multiple TEV/Revenue (LTM) by country/exchange: W e have also calculated multiples based on where the companies are listed or domiciled. Figure 10 shows the average TEV/Revenue multiples by stock exchange. The OTCBB has the largest number of companies (20), trading at an average multiple of 18.1x (up from 12.4x last week). On a geographic basis, the TEV/EBITDA (LTM) averages 9.4x: The average multiple for the 34 companies with positive EBITDA (and multiples under United States has the most companies (40), trading at an average of 6.0x revenue (up from 4.9x last week) (Figure 11). 1 India 0.2
  • 12. Page 12 T E V/L T M E B IT DA (x) 40.0 35. 3 35.0 29. 5 30.0 25.0 19. 8 20. 6 20.0 16. 2 13. 2 15.0 11. 9 10. 9 11. 2 9.8 9.9 A verage, 9. 4 9.7 9.0 9.1 8.9 8.7 8.7 10.0 7. 3 7.4 7. 4 7.1 7. 0 6. 1 5. 8 5. 0 5. 0 4. 7 4. 6 4. 7 5.0 2. 1 1. 7 1. 2 0. 3 0. 4 0.0 NE O WIZ G ames C orporation J umbuck E ntertainment P ty Ltd. G ungHo O nline E ntertainment, Inc. G amania Digital E ntertainment C o., Ltd. C hines e G amer International U nis erve C ommunications C orp. Northgate T echnologies Limited DXN H oldings B hd C hangy ou. com Limited O AO R B C Information S y s tems G ameO n C o Ltd. C DC C orp. S K C ommunications C o., Ltd. Modern T imes G roup Mtg AB S ha nda Interactive E ntertainment Ltd. U nited O nline Inc. S NAP Interactive, Inc. O pen T ex t C orp. S park Network s , Inc. G igaMedia Ltd. NetDragon WebS oft, Inc. V alueC lick Inc. S ohu.c om Inc. XING AG IAC /InterActiveC orp. Mix i, Inc. C y berplex Inc. T encent H oldings Ltd. Y edangO nline C orp. K aboos e Inc. S hutterfly , Inc. K ings oft C o. Ltd. DADA S pA Actoz S oft C o., Ltd. Figure 12. TEV/EBITDA Ranking Source. Capital IQ TEV/EBITDA (LTM) by country/exchange: Figure 13 shows the average TEV/EBITDA multiples by stock exchange. The OTCBB has the largest number of companies (20), trading at an average multiple of 7.0x (up from 6.1x last week). On a geographic basis, the United States has the most companies (40), trading at an average of 7.5x EBITDA (Figure 14). Eleven of the companies are Canadian (average 17.5x EBITDA). Average TEV/LTM EBITDA - By Exchange Average TEV/LTM EBITDA - By Country 20.0 35.0 29.5 17.5 18.0 30.0 16.0 25.0 14.0 11.9 20.0 12.0 17.4 (x) 15.9 10.6 (x) 10.0 15.0 9.8 9.8 9.7 11.8 10.6 7.5 8.0 9.8 9.7 7.4 7.4 7.3 7.3 10.0 7.1 7.0 6.0 5.0 4.7 4.6 2.1 5.0 5.0 4.7 1.2 0.3 4.0 0.0 2.0 1.2 2.1 OTCBB GTSM SEHK KOSE TSE NasdaqGS OSE RTS OM CM TSX XTRA KLSE AMEX BSE TSXV ASX 0.3 0.0 Germany Canada China United Japan Hong Malaysia India Russia Italy South Korea Kong States Taiwan Australia Sweden # Companies 5 3 4 2 7 2 1 5 14 1 20 1 1 2 2 1 1 # Companies 11 10 9 3 2 1 40 6 1 1 1 2 1 1 Figures 13 & 14. TEV/EBITDA Ranking (Exchange, Country) Source. Capital IQ P/E (LTM) averages 17.0x: The average multiple for the 33 companies with positive earnings (and multiples under 100x) is 14.1x LTM EPS (down from 17.0x last week), led by Tencent Holdings Ltd. Inc’s (700-SEHK) 47.1x multiple (Figure 15). Eleven of the companies have P/E multiples under 10x. The median is just 11.9x.
  • 13. Page 13 P /E L T M (x) 50.0 47.1 45.0 40.0 33. 7 35.0 30.9 28. 7 30.0 26.1 25.0 22.3 20.4 20.6 19. 0 20.0 17.1 14.9 15. 3 A verage, 14. 1 13.6 15.0 11. 7 11. 9 11.9 12. 4 10.6 11. 0 11.2 9. 2 8.0 10.0 6. 5 6.0 5. 5 2.9 5.0 2.5 1. 8 1. 7 1.8 0.8 0.0 N E O WIZ G ames C orporation J umbuc k E ntertainment P ty Ltd. G amania Digital E ntertainment C o., Ltd. C hines e G amer International N orthgate T ec hnologies Limited DXN Holdings B hd C hangy ou. com Limited G iant Interac tive G roup, Inc . G ameO n C o L td. Modern T imes G roup Mtg AB T he9 L imited N eteas e.c om Inc . S handa Interac tive E ntertainment L td. S N AP Interac tive, Inc . N gi G roup Inc . O pen T ex t C orp. G igaMedia Ltd. S ohu. com Inc. NetDragon WebS oft, Inc. S park Network s , Inc. C y berplex Inc. IAC /InterAc tiveC orp. Worlds . com Inc. Mix i, Inc. T enc ent Holdings Ltd. XING AG P erfec t World C o., Ltd. Y edangO nline C orp. K ings oft C o. L td. DADA S pA Actoz S oft C o., L td. Figure 15. P/E Ranking Source. Capital IQ P/E (LTM) by country/exchange: Figure 16 shows the average P/E multiples by stock exchange. The OTCBB has the largest number of companies (21), trading at an average multiple of 6.4x. On a geographic basis, the United States has the most companies (40), trading at an average of 31.0x earnings (Figure 17). Eleven of the companies are Canadian (average 25.1x EPS). Average P/E - By Exchange Average P/E - By Country 35.0 80.0 31.0 68.9 70.0 30.0 60.0 25.0 50.0 25.1 21.2 20.1 (x) 20.0 40.0 24.8 23.3 19.1 21.2 (x) 19.1 30.0 16.8 17.3 16.8 15.0 15.8 13.1 20.0 8.7 10.8 7.4 8.7 6.4 10.0 5.1 7.4 10.0 4.9 5.1 4.9 0.0 5.0 OTCBB NasdaqGM GTSM SEHK TSE NasdaqGS KOSE CM OM XTRA TSX AMEX KLSE ASX 0.0 Germany United Canada Japan China Malaysia Italy South Korea States Taiwan Australia Sweden 5 2 3 2 5 14 7 4 2 1 2 21 1 1 # Companies 40 11 2 3 6 9 10 1 2 1 1 # Companies Figures 16 & 17. P/E Ranking (Exchange, Country) Source. Capital IQ
  • 14. Page 14 UPCOMING EVENTS E arnings Calendar C ompany D ate & T ime Qu arter C onf C all D etails C DC C orp. (N a sda qG S : C H IN . A) T uesda y , May 12, 2009 8: 30 AM (E D T ) Q 1 2009 888-603-6873 P hotoC ha nnel N etworks I nc. (TS X V : P N) W ednes da y, M a y 13, 2009 4:30 P M (E DT ) Q 2 2009 888-300-8196 S pa rk Network s, I nc. (AME X : L O V ) T hursda y , Ma y 14, 2009 1: 30 P M (P D T ) Q 1 2009 877-723-9518 P erfec t W orld C o., L td. (N a sda qG S :P W R D) M onda y, M a y 18, 2009 8: 00 AM (E DT ) Q 1 2009 866-519-4004 N etease. com Inc. (Na s da qG S : NT E S ) W ednes da y, M a y 20, 2009 9:00 P M (E DT ) Q 1 2009 877- 941-2068 Figure 18. Earnings Calendar Source. Company reports
  • 15. Page 15 C omparable C ompany Analys is > W eb 2 .0 P ric e P erformanc e C ompa ny Na me C ur rency T ic ker E x change U S D Ma rket C ap ($m) C urrent Pric e 1 Wk 1 Mth 3 Mth 6 Mth 1 Yr 52 We ek Acce le riz e N ew Me dia, Inc. US D A CL Z OT C B B 1 3.8 0.5 0 13.6 % 5 6.3 % 42 .9% 25 .0% -33 .3% -35. 9% Actoz S of t C o., L td. KR W A 052 790 KO SE 9 9.4 1 4,40 0.0 0 0.7 % 0.3% 16 .1% 50 .8% 62.9 % -11. 1% AQ Inte ractive , Inc. JPY 3 838 TSE 2 6.8 4 8,00 0.0 0 2.2 % 8.1% 43 .3% 12 .9% -78 .3% -79. 6% As s ocia ted Media H oldings Inc. US D A S MH OT C P K 0 .1 0.0 0 0.0 % 7.1% -7 0.0% -8 1.3 % 36.4 % -97. 0% B igstring Corp. US D B S GC OT C B B 1 .2 0.0 2 4.8 % 5 7.1 % 25 .7% -4.3% -85 .4% -89. 0% B e tawave Corpora tion US D B W AV OT C B B 3 .2 0.1 1 -0.9 % -18. 5% -4 5.0% -3 8.9 % -60 .7% -73. 8% B e yond Commerce, Inc. US D B Y OC OT C B B 4 3.0 1.0 4 -21. 8% -11. 9% 30 .0% -3 0.7 % -62 .2% -68. 5% B right T hings plc GBP A IM:B G T AI M 5 .6 0.0 2 -16. 7% 2 7.6 % -4 .8% 57 .6% -34 .0% -46. 4% B roa dW ebAs ia Inc. US D B W BA OT C P K 2 5.3 0.3 0 -33. 8% -33. 8% -7 0.5% -7 7.9 % -86 .8% -89. 7% C DC C orp. US D C H IN .A N as da qG S 15 7.3 1.4 7 11.4 % 2 1.5 % 56 .4% 70 .9% -60 .1% -61. 3% C ha ngyou. com Limite d US D C Y OU N as da qG S 1,5 27. 3 2 9.8 0 -8.6 % 1 9.2 % NM NM NM -21. 0% C hina G ate wa y C orpora tion US D CGWY OT C P K 0 .0 0.0 0 1 00. 0% 1 00.0 % 0 .0% -8 6.7 % -96 .7% -95. 6% C hine s e G amer International TWD G TS M:3 083 GT S M 57 5.6 22 5.0 0 0.0 % 1 7.2 % 95 .7% 17 2.1% 1 01. 8% -5.5 % C ornerW orld C orporation US D CWR L OT C B B 6 .4 0.1 0 -16. 7% -28. 6% -7 5.6% -5 0.0 % -80 .4% -87. 5% C yberplex Inc. C AD T S X:CX TSX 8 6.5 1.8 7 8.7 % 6 7.0 % 41 9.4% 39 2.1% 1 33. 8% -6.0 % D ADA S pA E UR C M :DA CM 13 9.4 6.3 1 -8.2 % 4 7.3 % 2 .7% -1 1.9 % -59 .0% -61. 0% D XN Holdings B hd MY R DXN KL SE 2 9.1 0.4 4 12.8 % 3 7.5 % 23 .9% 22 .2% -12 .0% -12. 9% D ibz Inte rnational, Inc. US D DIB Z OT C P K 0 .0 0.0 0 -90. 0% -90. 0% -9 0.0% -9 8.0 % -98 .0% -98. 0% D igitalP ost Inte ra ctive , Inc. US D DG L P OT C B B 1 .1 0.0 2 -11. 8% 0.0% 50 .0% -4 0.0 % -92 .5% -94. 6% D igitalT own, Inc. US D DG T W OT C B B 6 7.7 2.5 0 6.4 % 0.0% 66 .7% 0 .0% -16 .7% -59. 0% D olphin Digital Me dia, Inc. US D DP DM OT C B B 3 3.5 0.6 8 23.6 % 4.6% 15 .3% -2 8.4 % NM -39. 8% E olith C o. L td. KR W A 041 060 KO SE 5 2.4 90 0.0 0 -1.1 % 4 7.5 % 59 .3% 53 .8% -2. 2% -13. 9% E xte ns ions , Inc. US D E XT I OT C P K 1 4.2 0.1 5 -25. 0% -25. 0% 18 5.7% 50 .0% 0.0 % -85. 1% F inancia l Media G roup, Inc. US D F NGP OT C B B 0 .4 0.0 1 51.5 % -28. 6% -6 6.7% -9 8.6 % -99 .1% -99. 5% F luid M us ic Ca nada, Inc. C AD T S X:F MN TSX 2 0.4 0.4 5 -18. 2% 3 6.4 % -1 9.6% 28 .6% NM -77. 9% F rogs te r Interactive P icture s AG E UR FR G XT R A 2 4.6 7.6 8 -11. 7% -0.5 % 72 .6% 65 .5% 60.3 % -22. 4% G a ma nia Digital E ntertainment C o., L td. TWD 6 180 GT S M 17 8.2 3 8.6 0 9.0 % 1 1.6 % 71 .2% 17 7.7% 11.6 % -4.2 % G a me On C o L td. JPY 3 812 TSE 9 1.0 9 1,80 0.0 0 -5.0 % -0.2 % -2 0.2% -2 4.7 % -35 .4% -43. 9% G e oS e ntric O yj E UR G E O1V H LS E 4 8.8 0.0 4 0.0 % 3 3.3 % 33 .3% 0 .0% -33 .3% -42. 9% G iant Intera ctive G roup, Inc. US D GA NYS E 1,8 62. 2 8.2 4 0.0 % 1 1.7 % 35 .1% 37 .8% -47 .2% -49. 4% G iga Media Ltd. US D G IG M N as da qG S 34 4.7 6.3 8 3.6 % 1 0.8 % -1 1.9% 22 .6% -66 .1% -67. 9% G ravity C o., L td US D G RV Y N as da qG M 2 7.0 0.9 7 -1.0 % -1.0 % 38 .6% 43 .1% -29 .7% -51. 3% G ree, Inc. JPY T S E :36 32 TSE 1,2 03. 8 5,26 0.0 0 -4.7 % -8.7 % 0 .4% NM NM -16. 5% G ungH o O nline E ntertainment, Inc. JPY 3 765 OS E 16 7.5 14 2,60 0.0 0 3.6 % 1 7.9 % 38 .4% 38 .6% -64 .2% -67. 2% H anbitS oft, Inc. KR W A 047 080 KO SE 8 6.3 4,85 5.0 0 7.9 % 4.5% 39 .3% 68 .6% -8. 6% -30. 7% IAC /InterActiveC orp. US D I ACI N as da qG S 2,3 92. 0 1 5.8 5 -1.1 % -4.0 % 9 .2% 1 .0% -66 .8% -68. 6% IAS E nergy, Inc. US D I AS C .A OT C B B 1 9.6 0.2 8 3.7 % 3 00.0 % 102 0.0 % 25 0.0% 30.2 % -20. 0% IdeaE dge, Inc. US D O TC B B :ID AE OT C B B 2 4.3 0.5 7 34.1 % 4 6.2 % 23 .9% -7 0.0 % -32 .1% -79. 9% is ee media Inc. C AD IEE T S XV 4 .0 0.0 9 0.0 % -18. 2% -1 8.2% 12 .5% -62 .5% -74. 3% J umbuck E ntertainment P ty Ltd. AU D A S X:J M B AS X 1 5.3 0.4 1 -12. 9% -15. 6% 1 .3% -4.7% -32 .5% -38. 2% J umpT V Inc. C AD T S X:J T V TSX 6 9.7 0.7 1 9.2 % 3 1.5 % 42 .0% 18 .3% 4.4 % -44. 5% K a boos e Inc. C AD T S X:K AB TSX 7 2.5 0.6 0 0.0 % 3.4% 57 .9% 50 .0% -35 .5% -52. 0% K ings oft Co. Ltd. HKD 3 888 S E HK 57 6.9 4.1 4 10.4 % 2 7.8 % 39 .4% 89 .9% 7.5 % -11. 9% Lingo Media Corporation C AD T S XV :LM T S XV 1 1.1 1.0 0 13.6 % -16. 0% -4 .8% -9.9% -47 .4% -50. 7% Live World Inc. US D L VW D OT C P K 2 .2 0.0 7 -46. 2% -46. 2% 75 .0% 16 .7% -80 .0% -82. 9% LookS mart, Ltd. US D L OOK N as da qG M 2 4.6 1.4 4 12.2 % 2 9.7 % 4 .3% -1 3.8 % -65 .9% -69. 4% M agnitude Information S ys tems Inc. US D M AG Y OT C B B 4 .4 0.0 1 -33. 3% -33. 3% -6 6.7% -1 6.7 % -44 .4% -66. 7% M ixi, Inc. JPY 2 121 TSE 70 8.4 45 0,00 0.0 0 -0.7 % 1 1.4 % -3 .0% -3 3.9 % -41 .3% -52. 7% M ode rn Times G roup Mtg AB SE K MT G B OM 2,0 20. 2 23 7.5 0 8.0 % 5 2.7 % 67 .3% 51 .8% -43 .9% -47. 2% M oggle , Inc US D M MOG OT C B B 8 3.5 2.3 0 15.0 % 1 5.0 % 53 .3% NM NM 0.0 % M OK O.mobi L imited AU D MKB AS X 5 .0 0.0 8 1.4 % -16. 7% 87 .5% 87 .5% 50.0 % -25. 0% N E OW IZ G ames C orpora tion KR W A 095 660 KO SE 48 7.1 6 2,40 0.0 0 8.5 % -1.0 % 11 5.2% 35 2.2% 86.3 % -15. 0% N etDragon W ebS oft, Inc. HKD 7 77 S E HK 37 7.2 5.5 3 2.4 % 3 2.9 % 84 .9% 11 6.9% -47 .8% -57. 5% N ete as e.com I nc. US D NT E S N as da qG S 3,8 09. 7 3 0.9 6 0.7 % 8.8% 57 .2% 56 .6% 24.0 % -5.2 % N eXplore Corpora tion US D N XP C OT C P K 3 9.0 0.7 0 55.6 % 7.7% -2 6.3% -2 6.3 % NM -51. 7% N gi G roup Inc. JPY 2 497 TSE 4 0.2 3 1,70 0.0 0 -13. 9% 1 1.8 % 15 .4% -5 9.0 % -78 .6% -81. 0% N orthgate Te chnologies L imited IN R 5 900 57 BS E 2 7.6 3 9.1 5 -4.5 % -5.3 % -5 .7% -3 7.4 % -90 .2% -90. 7% Open T e xt Corp. US D O TE X N as da qG S 1,6 69. 7 3 1.7 3 -2.5 % -9.3 % -1 0.8% 14 .3% -16 .1% -18. 8% Openwave S ys tems Inc. US D O PW V N as da qG S 10 5.8 1.2 7 0.8 % -0.8 % 62 .8% 12 2.8% -36 .2% -41. 2% P e rfect W orld C o., Ltd. US D P W RD N as da qG S 99 7.1 1 8.9 0 2.8 % 1 3.9 % 25 .7% 10 .1% -39 .6% -40. 7% P hotoChannel N etwork s Inc. C AD T S XV :P N T S XV 4 7.0 1.5 9 6.0 % 0.6% -1 .2% -0.6% -55 .6% -61. 7% Quepa s a C orp. US D Q PSA N as da qC M 1 2.3 0.9 7 7.8 % 3.2% -3 9.4% -5 7.1 % -63 .3% -72. 0% OA O R B C Information S ys tems US D R BC I R TS 17 3.4 1.2 5 26.9 % 2 04.9 % 34 6.4% -1 6.7 % -85 .2% -86. 3% S handa Interactive E ntertainme nt L td. US D S NDA N as da qG S 3,4 26. 1 4 9.3 8 -5.8 % 6.4% 64 .1% 11 2.3% 33.6 % -8.3 % S hutte rf ly, Inc. US D S F LY N as da qG S 32 3.5 1 2.8 5 -2.1 % 2 2.0 % 55 .9% 95 .0% -1. 6% -14. 8% S K C ommunications Co., Ltd. KR W A 066 270 KO SE 31 3.1 9,39 0.0 0 -2.7 % -7.5 % 20 .4% 95 .6% -34 .3% -52. 3% S N AP Inte ra ctive , Inc. US D S T VI OT C B B 8 .1 0.7 5 15.4 % 0.0% -2 5.0% 66 .7% -5. 1% -30. 6% S N M G lobal H oldings US D S NM N OT C P K 0 .0 0.0 0 -25. 0% 2 00.0 % 0 .0% -9 8.3 % -99 .9% -99. 9% S ocia l Media V e nures , Inc. US D S MVI OT C P K 0 .0 0.0 1 -93. 3% -99. 2% -9 9.2% -9 9.7 % NM -99. 8% S ohu. com Inc. US D S OH U N as da qG S 2,1 16. 8 5 5.3 2 -3.9 % 1 5.0 % 20 .2% 35 .0% -33 .8% -39. 5% S ite s earch C orporation US D S TPC OT C B B 2 8.2 3.5 0 -30. 0% NM NM NM NM -30. 0% S park N etworks , Inc. US D L OV AM E X 5 6.5 2.7 5 3.8 % 2 5.6 % 12 .2% -2.1% -38 .6% -40. 9% S pectrumDN A, Inc. US D S P XA OT C B B 2 0.5 0.4 2 68.0 % 1 80.0 % 32 0.0% 75 .0% NM -30. 0% T encent Holdings L td. HKD 7 00 S E HK 16, 568 .2 7 1.3 0 -3.9 % 1 5.4 % 51 .7% 39 .8% 6.5 % -4.9 % T he P arent C ompany US D K IDS .Q OT C P K 0 .3 0.0 1 0.0 % -28. 6% -5 8.3% -9 8.6 % -99 .4% -99. 6% T he 9 L imited US D NC TY N as da qG S 25 3.7 9.4 6 -2.1 % -32. 1% -3 6.0% -2 1.4 % -62 .5% -66. 8% T he S treet.com, Inc. US D T S CM N as da qG M 6 2.8 2.0 5 -4.2 % 0.5% -2 5.5% -3 5.1 % -73 .8% -74. 7% T otal S port Online A S N OK T OS O OT C N O 0 .1 0.0 3 0.0 % -25. 0% -2 5.0% -4 0.0 % -70 .0% -70. 0% T ree.C om, Inc. US D TR EE N as da qG M 13 0.5 1 2.0 9 27.5 % 1 19.4 % 20 0.7% 43 7.3% NM 2.4 % U nis erve C ommunications Corp. C AD T S XV :U S S T S XV 0 .8 0.0 4 0.0 % 0.0% -5 0.0% -7 7.8 % -89 .5% -88. 6% U nited Online Inc. US D UNTD N as da qG S 60 5.1 7.2 4 27.5 % 3 5.8 % 24 .2% 7 .7% -39 .7% -42. 1% U OMO Media , Inc US D U OMO OT C B B 2 1.0 0.2 5 75.0 % 1 22.7 % 20 6.3% 58 .1% -44 .3% -69. 4% V a lueC lick Inc. US D V CL K N as da qG S 89 7.0 1 0.3 4 -6.0 % 2.7% 56 .9% 76 .5% -49 .1% -50. 1% V O IS , Inc. US D V OIS OT C B B 2 .7 0.3 2 6.7 % 3 9.1 % -5 7.3% -5 7.3 % NM -94. 3% W ebze n Inc. US D W ZE N N as da qG M 3 8.9 3.2 8 14.3 % 2 6.2 % 12 3.1% 24 8.9% 17.1 % -26. 3% W iz za rd S of twa re Corpora tion US D W ZE AM E X 2 9.2 0.6 2 0.2 % -13. 9% -4 .6% -1 8.4 % -73 .4% -73. 6% W orlds .com Inc. US D W DDD OT C B B 8 .9 0.1 7 0.0 % -15. 0% -2 2.7% 6 .3% -46 .9% -57. 5% W ynds torm C orporation US D W YND OT C B B 0 .5 0.0 3 -66. 7% -66. 7% -7 6.0% -8 5.0 % -92 .5% -96. 5% XIN G AG E UR O 1B C XT R A 20 8.1 2 8.9 5 -3.2 % 2.4% -6 .6% 16 .5% -36 .4% -37. 9% Y e dangOnline Corp. KR W A 052 770 KO SE 11 3.3 8,90 0.0 0 1.9 % -8.2 % 30 .9% 47 .1% -25 .2% -29. 1% Y nk K orea Inc. KR W A 023 770 KO SE 1 3.6 6,85 0.0 0 21.9 % 3 5.4 % 37 .0% 15 .1% -50 .7% -54. 0% ZipLocal Inc. C AD T S XV :ZIP T S XV 0 .3 0.0 1 0.0 % -66. 7% -7 5.0% -7 5.0 % -96 .4% -97. 1% H igh 1 00. 0% 3 00.0 % 102 0.0 % 43 7.3% 1 33. 8% 2.4 % Low -93. 3% -99. 2% -9 9.2% -9 9.7 % -99 .9% -99. 9% A vera ge 500.3 1.1% 16.7% 40.7% 26.7% -35.8% -53.1% M edian 0.0 % 6.4% 22 .1% 12 .7% -43 .9% -52. 2% Figure 19. Price Performance Source. Capital IQ
  • 16. Page 16 C omparable C ompany A nalys is > W eb 2.0 V aluatio n Multiples P rimary US D Market TE V/LT M TE V/ N TM TE V/LT M TE V/NTM C om pany Nam e S ec to r Co untry E xc hange Tic ker Cap ($m) R evenue R evenue E BITDA E BITDA P /LT M E P S P /NT M E P S P /TangBV Acce le rize N ew Me dia, Inc. D irect Marketing U nite d S tates OT C B B AC LZ 13. 8 4.8 x - - - - - - Actoz S of t C o., L td. G aming S outh K ore a K OS E A 052 790 99. 4 0.9 x - 4.7 x - 15 .3x - 1 .7x AQ Inte ractive , Inc. G aming J a pan TSE 3 838 26. 8 - - - - - - 0 .4x As s ocia ted Media Holdings Inc. Mobile U nite d S tates OT C P K AS MH 0. 1 8.1 x - - - - - - B igstring Corp. Ins ta nt Mes s aging U nite d S tates OT C B B BS G C 1. 2 30.6 x - - - - - - B e tawave Corpora tion Me dia U nite d S tates OT C B B B WA V 3. 2 - - - - - - 0 .3x B e yond Commerce, Inc. S ocia l Ne tworking U nite d S tates OT C B B BYO C 43. 0 25.4 x - - - - - - B right T hings plc S ocia l Ne tworking U nite d K ingdom AIM AIM:B G T 5. 6 22.1 x - - - - - - B roa dW ebAs ia Inc. S ocia l Ne tworking U nite d S tates OT C P K B WB A 25. 3 - - - - - - - C D C C orp. G aming H ong K ong N as da qG S C HIN .A 1 57. 3 0.5 x 0.5x 7.3 x 6.6x - 2 4.5 x - C ha ngyou. com Limite d G aming C hina N as da qG S CY OU 1,5 27. 3 6.0 x - 9.9 x - 11 .2x - 1 0.2x C hina G ate wa y C orpora tion Mobile U nite d S tates OT C P K CG W Y 0. 0 0.0 x - - - - - - C hine s e G amer International G aming T a iwan GTS M G T S M:308 3 5 75. 6 9.1 x - 16.2 x - 22 .3x - 8 .4x C ornerW orld C orporation C ontent U nite d S tates OT C B B CWR L 6. 4 6.0 x - - - - - - C yberplex Inc. Advertis ing C anada TSX T S X:C X 86. 5 1.7 x - 20.6 x - 17 .1x - 1 8.3x D AD A S pA S ocia l Ne tworking Italy CM CM:DA 1 39. 4 0.8 x - 5.0 x - 8. 0x - - D XN Holdings B hd S ocia l Ne tworking Malays ia KL SE D XN 29. 1 0.6 x - 4.7 x - 5. 5x - 0 .6x D ibz Inte rnational, Inc. S NS A pps U nite d S tates OT C P K D IB Z 0. 0 - - - - - - - D igitalP ost Inte ra ctive , Inc. C ontent U nite d S tates OT C B B DGL P 1. 1 5.0 x - - - - - - D igitalT own, Inc. S ocia l Ne tworking U nite d S tates OT C B B D G TW 67. 7 - - - - - - - D olphin D igital Me dia, Inc. S ocia l Ne tworking U nite d S tates OT C B B DP DM 33. 5 37.2 x - - - - - - E olith C o. L td. G aming S outh K ore a K OS E A 041 060 52. 4 2.6 x - - - - - - E xte ns ions , Inc. C ontent U nite d S tates OT C P K E XT I 14. 2 - - - - - - - F inancia l Media G roup, Inc. D irect Marketing U nite d S tates OT C B B F NGP 0. 4 - - - - - - - F luid Mus ic Ca nada, Inc. Me dia U nite d S tates TSX T S X:F MN 20. 4 1.9 x 1.4x - - - - 1 .9x F rogs te r Interactive P icture s AG G aming G ermany XT R A F RG 24. 6 4.4 x - - - - - 2 .2x G a ma nia D igital E ntertainment C o., L td. G aming T a iwan GTS M 6 180 1 78. 2 1.2 x - 7.4 x - 19 .0x - 2 .3x G a me On C o L td. G aming J a pan TSE 3 812 91. 0 0.4 x - 1.7 x - 9. 2x - 1 .2x G e oS e ntric O yj Mobile F inland H LS E G E O1V 48. 8 6.9 x - - - - - 4 .9x G iant Intera ctive G roup, Inc. G aming C hina NYS E GA 1,8 62. 2 - - - - 1. 8x 1 3.5 x 0 .4x G iga Media Ltd. G aming T a iwan N as da qG S G IG M 3 44. 7 1.4 x 1.5x 5.8 x 6.4x 11 .0x 1 1.3 x 3 .1x G ravity C o., L td G aming S outh K ore a N as da qG M GR VY 27. 0 - - - - - - - G ree, Inc. S ocia l Ne tworking J a pan TSE T S E :3 632 1,2 03. 8 37.9 x - - - - - 1 8.4x G ungH o O nline E ntertainment, Inc. Me dia J a pan OS E 3 765 1 67. 5 1.3 x - 7.1 x - - - - H anbitS of t, Inc. G aming S outh K ore a K OS E A 047 080 86. 3 1.2 x - - - - - 2 .6x IAC /InterActiveC orp. Me dia U nite d S tates N as da qG S IAC I 2,3 92. 0 0.4 x 0.4x 11.9 x 3.2x 20 .4x 3 1.1 x 1 .1x IAS E nergy, Inc. V ide o C anada OT C B B IA S C .A 19. 6 - - - - - - - IdeaE dge, Inc. S ocia l Ne tworking U nite d S tates OT C B B OT C B B :IDA E 24. 3 - - - - - - 1 7.7x is ee media Inc. C ontent C anada T S XV IE E 4. 0 1.8 x - - - - - 2 .1x J umbuck E ntertainment P ty Ltd. S ocia l Ne tworking A us tralia AS X AS X:J MB 15. 3 0.8 x - 2.1 x - 6. 5x - 1 .6x J umpT V Inc. V ide o C anada TSX T S X:J T V 69. 7 4.0 x - - - - - 3 .6x K a boos e Inc. C ontent C anada TSX TS X:K AB 72. 5 1.1 x 1.0x 11.2 x 6.3x - - - K ings oft Co. Ltd. G aming C hina S E HK 3 888 5 76. 9 4.2 x - 10.9 x - 14 .9x - 3 .5x Lingo Media Corporation Le arning C anada T S XV TS XV :LM 11. 1 3.4 x - - - - - - Live World Inc. S ocia l Ne tworking U nite d S tates OT C P K LV W D 2. 2 0.1 x - - - - - 0 .9x LookS mart, Ltd. D irect Marketing U nite d S tates N as da qG M L OOK 24. 6 - - - - - - 0 .9x Magnitude Information S ys tems Inc. S ocia l Ne tworking U nite d S tates OT C B B MAG Y 4. 4 - - - - - - - Mixi, Inc. S ocia l Ne tworking J a pan TSE 2 121 7 08. 4 5.0 x - 13.2 x - 33 .7x - 5 .5x Mode rn Times G roup Mtg AB Me dia S we den OM MT G B 2,0 20. 2 1.5 x 1.5x 9.7 x 1 1.5 x 6. 0x 1 3.9 x - Moggle , Inc G aming U nite d S tates OT C B B MMO G 83. 5 - - - - - - - MOK O.mobi L imited S ocia l Ne tworking A us tralia AS X MK B 5. 0 3.5 x - - - - - 3 .9x N E OW IZ G ames C orpora tion G aming S outh K ore a K OS E A 095 660 4 87. 1 2.4 x - 8.9 x - 28 .7x - 1 4.5x N etD ragon W ebS oft, Inc. G aming C hina S E HK 777 3 77. 2 2.8 x - 6.1 x - 12 .4x - 2 .0x N ete as e.com I nc. G aming C hina N as da qG S NT E S 3,8 09. 7 - - - - 2. 5x 1 5.4 x 0 .7x N eXplore Corpora tion C ontent U nite d S tates OT C P K N XP C 39. 0 - - - - - - - N gi G roup Inc. Me dia J a pan TSE 2 497 40. 2 - - - - 11 .7x - 0 .6x N orthgate Te chnologies L imited D irect Marketing India BS E 59 005 7 27. 6 0.2 x - 1.2 x - 1. 8x - - Open T e xt Corp. C ollaboration C anada N as da qG S O TE X 1,6 69. 7 2.2 x 2.1x 8.7 x 7.6x 26 .1x 1 2.1 x - Openwave S ys tems Inc. Mobile U nite d S tates N as da qG S OP W V 1 05. 8 0.0 x 0.0x - 0.0x - 2 0.5 x 1 .5x P e rf ect W orld C o., Ltd. G aming C hina N as da qG S PW R D 9 97. 1 - - - - 1. 7x 9.2x 0 .5x P hotoChannel N etwork s Inc. D igital Imaging C anada T S XV T S XV :P N 47. 0 2.7 x 1.8x - 5.8x - 2 4.5 x 9 .8x Quepa s a C orp. S ocia l Ne tworking U nite d S tates N as da qC M QP S A 12. 3 - - - - - - 9 .2x OA O R B C Information S ys tems Me dia R us s ia R TS R B CI 1 73. 4 0.0 x - 0.3 x - - - - S handa Interactive E ntertainme nt L td. G aming C hina N as da qG S S NDA 3,4 26. 1 0.2 x 0.9x 0.4 x 2.0x 2. 9x 1 5.8 x 1 .3x S hutte rf ly, Inc. D igital Imaging U nite d S tates N as da qG S S FL Y 3 23. 5 1.2 x 1.2x 9.1 x 7.0x - 9 1.1 x 1 .9x S K C ommunications Co., Ltd. S e arch S outh K ore a K OS E A 066 270 3 13. 1 1.9 x - 19.8 x - - - - S N AP Inte ra ctive , Inc. D ating U nite d S tates OT C B B S TVI 8. 1 2.2 x - 7.0 x - 10 .6x - 5 .3x S N M G lobal H oldings Me dia U nite d S tates OT C P K S N MN 0. 0 1.1 x - - - - - - S ocia l Media V e nures , Inc. S ocia l Ne tworking U nite d S tates OT C P K S MV I 0. 0 0.0 x - - - - - - S ohu. com Inc. G aming C hina N as da qG S S OH U 2,1 16. 8 3.8 x 3.3x 8.7 x 7.6x 11 .9x 1 4.0 x 5 .7x S ite s earch C orporation S ocia l Ne tworking U nite d S tates OT C B B STPC 28. 2 - - - - - - 4 0.1x S park N etworks , Inc. S ocia l Ne tworking U nite d S tates AME X L OV 56. 5 1.0 x - 4.6 x - 13 .6x - - S pectrumDN A, Inc. Me dia U nite d S tates OT C B B S P XA 20. 5 - - - - - - 3 1.0x T encent Holdings L td. P orta l C hina S E HK 700 16,5 68. 2 17.2 x - 35.3 x - 47 .1x - 1 9.2x T he P arent C ompany Me dia U nite d S tates OT C P K K ID S .Q 0. 3 0.2 x - - - - - - T he 9 L imited G aming C hina N as da qG S NC T Y 2 53. 7 - - - - 0. 8x 1 0.3 x 0 .1x T he S treet.com, Inc. Me dia U nite d S tates N as da qG M TSCM 62. 8 - - - - - - 0 .8x T otal S port Online A S Me dia N orway OT C NO T OS O 0. 1 4.6 x - - - - - - T ree.C om, Inc. P orta l U nite d S tates N as da qG M TR E E 1 30. 5 0.6 x 0.5x - 6.4x - - 1 .7x U nis erve C ommunications Corp. S ocia l Ne tworking C anada T S XV T S XV :U S S 0. 8 0.1 x - 29.5 x - - - - U nited Online Inc. Me dia U nite d S tates N as da qG S U N TD 6 05. 1 1.1 x 0.9x 5.0 x 3.6x - 1 0.0 x - U OMO Media , Inc Me dia C anada OT C B B U OMO 21. 0 33.6 x - - - - - - V a lueC lick Inc. Me dia U nite d S tates N as da qG S VC LK 8 97. 0 1.3 x 1.5x 7.4 x 5.8x - 1 6.6 x 7 .3x V O IS , Inc. S ocia l Ne tworking U nite d S tates OT C B B VOIS 2. 7 - - - - - - 6 .0x W ebze n Inc. G aming S outh K ore a N as da qG M W ZE N 38. 9 - - - - - - 0 .0x W iz za rd S of twa re Corpora tion P odcas ting U nite d S tates AME X W ZE 29. 2 4.8 x - - - - - - W orlds .com Inc. C ontent U nite d S tates OT C B B W DD D 8. 9 - - - - 30 .9x - - W ynds torm C orporation C ontent U nite d S tates OT C B B W YND 0. 5 - - - - - - - XIN G AG S ocia l Ne tworking G ermany XT R A O 1B C 2 08. 1 3.1 x - 9.8 x - 20 .6x - 5 .3x Y e dangOnline Corp. G aming S outh K ore a K OS E A 052 770 1 13. 3 2.0 x - 9.0 x - 11 .9x - 5 .5x Y nk K orea Inc. G aming S outh K ore a K OS E A 023 770 13. 6 0.9 x - - - - - - ZipLocal Inc. D irectory C anada T S XV T S XV :ZIP 0. 3 0.6 x - - - - - - H igh 16,5 68. 2 37.9 x 3.3x 35.3 x 1 1.5 x 47 .1x 9 1.1 x 4 0.1x Low 0. 0 0.0 x 0.0x 0.3 x 0.0x 0. 8x 9.2x 0 .0x A vera ge 500. 3 5.2x 1.2x 9.4x 5.7x 14.1x 20.9x 5.9x Median 39. 6 1.9 x 1.2x 8.1 x 6.4x 11 .9x 1 4.7 x 2 .3x Figure 20. Valuation Comparison Source. Capital IQ
  • 17. Page 17 C omparable C o mpan y A nalys is > W eb 2.0 Su mmary b y C ountry C om pan y Nam e U S D Market Cap ($m) Avg US D Market C ap ($m) U S D LT M T otal R ev ($m) U S D LT M To tal E B IT DA ($m) E B IT DA % 40 31, 515.1 3,151. 5 3, 791. 9 1,811. 2 40. 6% U nited S tates C hina C hina U nited S tates C hina C hina C a na da 11 U nited S tates 5, 092.2 S weden 2,020. 2 C hina 3, 606. 5 S weden 266. 2 Aus tral ia 37. 2% C hina 10 J apa n 2, 237.6 Japan 372. 9 S weden 1, 737. 6 U nited S ta tes 240. 7 T aiwan 32. 3% S outh K orea 9 S weden 2, 020.2 Ta iwan 366. 2 C ana da 967. 3 C a nada 190. 3 J apan 26. 1% J apan 6 C a nada 2, 002.2 C ana da 182. 0 S outh K orea 655. 4 J apan 132. 9 I ndia 17. 6% T a iwan 3 S outh K orea 1, 231.0 R us sia 173. 4 J a pan 504. 9 T aiwan 98. 4 I taly 16. 0% A ustralia 2 T aiwa n 1, 098.5 Hong K ong 157. 3 H ong K ong 409. 1 S outh K orea 83. 2 S weden 15. 3% G ermany 2 G erma ny 232.7 Ita ly 139. 4 T aiwan 372. 6 I taly 36. 9 M alays ia 13. 3% N orwa y 1 R uss ia 173.4 S outh K orea 136. 8 I ta ly 231. 1 H ong K ong 25. 5 R uss ia 13. 1% 1 157.3 127. 3 146. 9 24. 0 6.2% H ong K ong H ong K ong United S tates R uss ia I ndia H ong K ong 1 139.4 116. 3 136. 2 19. 2 -2. 9% F inland I taly G ermany I ndia R uss ia C a nada 1 48.8 48. 8 79. 0 11. 9 -6. 2% I ta ly F inla nd Finland M alays ia G ermany N orway 1 29.1 29. 1 53. 1 10. 5 -7. 4% U nited K ingdom M a la ys ia Malay sia G ermany M alays ia S outh K orea 1 27.6 27. 6 14. 8 2. 8 -10.2% I ndia I ndia India Aus tral ia Aus tralia U nited S tates 1 20.3 10. 2 6. 0 -1. 1 -19.1% S weden Aus tra lia Australia F inland N orway G ermany 1 5.6 5. 6 2. 1 -1. 7 N/A R us sia U nited K ingdom United K ingdom N orway U nited K ingdom U nited K ingdom 1 0.1 0. 1 0. 2 -13. 4 N/A M alays ia N orway Norwa y U nited K ingdom F inland F inland Gr an d To tal 92 G rand T otal 46, 031.1 G ran d To tal 500. 3 G rand T otal 12, 714. 7 G rand T otal 2,937. 5 G rand T otal 7.5% Figure 21. Comparison by Country Source. Capital IQ C omparable C ompany A nalys is > W eb 2.0 Su mmary b y Ex c hange C om pany Nam e U S D Market Cap ($m) Avg US D Mar ket C ap ($m) U S D LT M T otal R ev ($m) U S D LT M Total E B IT DA ($m) E B IT DA % 20 18, 625.8 5,840. 7 1, 737. 6 1,690. 4 61. 9% OT C B B N asdaqG S S E HK OM N a sdaqG S NYS E N as da qG S 14 SE HK 17, 522.2 OM 2,020. 2 N a sda qG S 480. 1 S E HK 599. 0 AS X 37. 2% OT C P K 10 TSE 2, 070.1 NY S E 1,862. 2 S E HK 418. 4 OM 266. 2 GT SM 36. 3% K OS E 7 OM 2, 020.2 Na s daqG S 1,330. 4 NYS E 233. 6 NYS E 144. 6 TSE 27. 7% TSE 5 NYS E 1, 862.2 TS E 414. 0 CM 231. 1 TSE 112. 4 S EHK 24. 1% N as da qG M 5 K OS E 1, 165.2 G TS M 376. 9 R TS 146. 9 K OS E 80. 1 O T CB B 21. 5% T S XV 5 GTS M 753.8 RT S 173. 4 BSE 136. 2 GT S M 52. 4 N asdaqG S 20. 3% TSX 4 OT CB B 392.0 OS E 167. 5 OS E 115. 3 CM 36. 9 OS E 17. 8% S E HK 3 N asdaqG M 283.8 K OS E 166. 5 GT S M 91. 1 BSE 24. 0 BSE 17. 6% 2 249.0 139. 4 84. 7 20. 6 16. 0% A ME X TSX CM K OS E OS E CM 2 232.7 116. 3 81. 2 19. 2 15. 3% XT R A XT R A XT R A N a sda qG M R TS OM 2 173.4 62. 3 79. 0 11. 9 13. 3% ASX R TS TS X K LS E XTR A K LS E 2 167.5 56. 8 77. 9 10. 5 13. 1% GT SM OS E Na s daqG M TSE K LS E R TS 1 139.4 48. 8 34. 5 6. 3 3.3% O T C NO CM HL S E TSX AM E X K OS E 1 85.8 42. 9 31. 7 2. 8 -6. 2% H LS E AM E X AME X AM E X AS X O T CN O 1 81.1 29. 1 26. 5 -1. 1 -6. 4% NYS E OT CP K KLS E XT RA OT CN O T S XV 1 63.2 27. 6 19. 0 -1. 7 -14.8% CM T S XV BS E OT CP K AI M TSX 1 48.8 19. 6 10. 1 -6. 5 -19.1% B SE H LS E O TC B B T S XV TSX XT R A 1 29.1 12. 6 7. 4 -10. 3 -27.1% N as da qC M KLS E TS X V AS X T S XV N asdaqG M 1 27.6 12. 3 6. 0 -11. 4 -33.0% OS E BS E Na s daqC M HLS E N a sdaqC M O T CP K 1 20.3 10. 2 2. 1 -12. 3 N/A A IM AS X AS X OT CN O N a sdaqG M AI M 1 12.3 8. 1 1. 7 -13. 4 N/A OM N asdaqC M O TC P K OT CB B HLS E AM E X 1 5.6 5. 6 0. 2 -33. 1 N/A R TS AI M AIM AI M OT CP K H LS E 1 0.1 0. 1 0. 1 -49. 9 N/A K LS E OT CN O O TC NO N a sda qC M OT CB B N asdaqC M 92 46,031.1 500.3 12,714.7 2,937.5 7.5% G rand To tal G rand T otal G rand Total G rand T otal G r and T otal G rand T otal Figure 22. Comparison by Exchange Source. Capital IQ
  • 18. Page 18 Financing - Last Three Months (US$ m) Month Co mpany N ame C ou ntry Ang el/S eed Debt financ ing P IPE S eries A S eries B S eries C S eries D S eries E G rand Total C hina 20. 0 20. 0 Mar-09 Kaixin 001.com USA 15.0 15. 0 Vidyo USA 12.5 12. 5 Bu zznet USA 12. 0 12. 0 Len dingClub S endMe Inc. USA 12.0 12. 0 Auditude USA 10. 5 10. 5 G lam Media USA 10.0 10. 0 USA 10.0 10. 0 Vis ible Meas u res USA 10. 0 10. 0 S uperS ec ret UK 8.8 8.8 G oViral USA 5. 5 5.5 G reys tripe USA 5.0 5.0 OMG P OP USA 4.1 4.1 Aptu re USA 4.0 4.0 S imu lmedia C ana da 3.9 3.9 Tynt USA 3.2 3.2 AnyS ource Media USA 3.1 3.1 Pixazza Bit.ly USA 2.0 2.0 Hu nc h USA 2.0 2.0 S ports Compos ite DE USA 2.0 2.0 USA 1.3 1.3 AdultS pac e N etherlands 1.3 1.3 Myn gle USA 0.8 0.8 33Acro s s Argentina 0. 6 0.6 Th ree Melo ns Mar-09 T otal 1.3 1.3 0. 6 41. 1 50. 3 43.0 12.0 10.0 159.5 USA 20. 0 20. 0 A pr-09 Co llective Media F ra nce 16. 0 16. 0 G OOM R adio USA 13. 0 13. 0 Marin S oftware USA 8.0 5.0 13. 0 Th e R ubico n P rojec t USA 12.0 12. 0 FreeW heel USA 10. 0 10. 0 Cellu fun USA 10. 0 10. 0 Co nduc to r Inc. S c anS co ut USA 8.1 8.1 Do ubleT wis t USA 5.0 5.0 IMS h opping USA 4.7 4.7 S ocialtext USA 4. 5 4.5 USA 4. 1 4.1 Mixercas t G ermany 3.3 3.3 S oundCloud USA 3.0 3.0 Tu beMogu l C ana da 2.5 2.5 Tribal Nova USA 2.0 2.0 Tripbas e USA 1.4 1.4 S ocialcas t S ingapore 1.4 1.4 Brandtolog y F ra nce 1.3 1.3 S c an & Target USA 1.2 1.2 J odange Fo odis ta USA 0.6 0.6 A pr-09 T otal 10. 6 8.0 45. 3 52. 5 16.1 12.0 144.5 8. 3 8.3 USA May-09 EveryZing Gist 6.8 6.8 USA Azuki Systems 6.0 6.0 USA I Love Rewards 5.9 5.9 Canada 5.0 5.0 USA TimeBridge 5. 0 5.0 USA DocuSign 2.0 2.0 USA Resonate Networks May-09 T otal 14. 8 10. 9 8. 3 5.0 38.9 Figure 23. Financing, Last Three Months Source. Company reports
  • 19. Page 19 C ompany Des c riptio ns - C urrent Mo nth C apital Market A c tivity C ompany HQ W ebs ite Des criptio n U nited S ta tes www. azuk is ys tems .com P eerMeta provides web-e na bled mobile devic es a nd s ervices . The c ompa ny dev elops applic ations around iG oogle, F a c ebook, M yS pac e a nd A zuki s ys tem s Y ahoo. P eerM eta is bas ed in B oston, M a ss a chus etts . U nited S ta tes www. doc usign. com Doc uS ign, I nc. p rov ides s oftwa re services for electronic s igna ture and electronic c ontra c t executi on (E C E ). It offers P rofess ional E d ition, Docu S ign which ena bles individua ls and bus iness es to s end their documents for signa ture; C orpora te E dition, a n elec tronic signature a nd c ontrac t execution s olution tha t a u toma tes the proces s of manua lly s ending, si gning, tra c ki ng, a nd s toring doc uments ; a nd D ocuS i gn C onnect, a suite of integration services to extend D ocuS ign P la tform ca pa bilities into exis ting s ys tems or new a pplica tions . The compa ny a ls o provides C onnec t for S ales forc e, which ena bles us ers to s end doc umen ts ; ca pture contra ct and env elope da ta ; view va rious contra ct s tatus a nd data in the dashboard tab enabling vis ibility into va rious contra ct ac tiv ity a cros s the entire orga niz a tion; a nd extent form data prov ided during the signing proc ess by a utoma tica lly injecting it into S a les force O bjects eliminating the need to rek ey data . I t s erves indus tries, s uc h as a griculture, bio-technology , bus iness s ervices , co nstruction, c onsulting, consumer electronics , debt s ettlement, educa tion, engineering, fina nc ia l services ga ming, gov ernment, hardwa re, healthc are, ins ura nce, lea sing, ma nufa cturing, mining, mortga ge, non-profit pharmac eutica l U nited S ta tes www. every zing. com E very Zing C orp. is a podc as t sea rc h engine tha t lets the user s ea rch a udio of both a udio and video podca sts. The company wa s founded in E veryZing 2006 as P odZinger Corp. a nd changed its na me to E veryZ ing C orp. in 2007. E veryZ ing is bas ed in C a mbridg e, Ma s sa chus etts. E veryZ ing C orp. is a s ubsidia ry of B B NT S olutions , LL C . U nited S ta tes www. gis tworld.c om G ist L td. prov ides s upply cha in s olutions for grocery , retail, elec tronics , ga s , and chemica l indus tries . It offers s trategic sup ply chain G is t trans formation, s upply cha in planning, bus iness modeling, network design, wa rehouse s olutions , and distribution s olutions . T he c ompa ny a lso provide s inbound a nd outbound mana gement; network opera tions , such a s network design a nd optimiza tion, s oluti on deliv ery, s upply cha in opera tions, and prima ry distribution; cus tomer fulfilment, which inc ludes phys ic al replenis hment, rev erse logis tic s, and va lue-add services ; and cha nge management. T he company wa s formerly known a s B OC Dis tribution S ervices Limited and changed its na me to G ist L td. in J une, 2001. T he compa ny wa s inc orpora ted in 1951 and is hea dqua rtered in B a sings toke, U nited K ingdom. I t has opera tions in E urope, As ia, Aus tra la s ia, a nd North America . G ist L td. opera tes as a subs idia ry of T he B O C G roup L td. C a nada www. iloverewards. c om I Love R ewards, Inc ., an inc entiv e mark eting compa ny , engages in the design, development, a nd implementa tion of incentive s olutions for I Love R ewards companies and bus iness es in the United S ta tes a nd C a na da. I t offers online rewards a nd employee recognition, s ales incentiv es, c us tomer loya lty, dea ler inc entiv es, not for profit, a nd cus tom solutions . The c ompany prov ides its solutions through a W eb-ba s ed engine a nd foc uses on employ ee moti va tion, cus tomer loya lty, and va lued beha viors. I L ove R ewa rds, I nc. was founded in 1995 a nd is bas ed in T oronto, C ana da with a n additional offic e in N ew Y ork, the United S ta te s. U nited S ta tes www. res onatenetwork s. com R es ona te N etwo rk s is a n online advertising network tha t wa s crea ted to help public a ffa irs , political and corpora te adv ertis ers a nd a gencies R es on ate Netwo rks mo re prec isely target and reach web users , bas ed on thei r a ttitudes and iss ue pos itions on a wide range of topic s . U nited S ta tes www. timebridge. c om Timebridge, I nc. offers person al s cheduling ma na ger that ena bles profess iona ls to s c hedule their time. The compa ny ’s one-s tep sc heduling T im eBridge a llows s c heduling meetings with la rge groups or individua ls ac ros s time zones , c alenda ring s ys tems , and companies. It allows us ers to schedule meetings a nd share thei r a va ila bility with others , a s well as connec t direc tly with calenda rs , inc luding O utlook a nd G oogle Figure 24. Company Descriptions Source. Company reports, Capital IQ, Crunchbase
  • 20. Page 20 RELEVANT DISCLOSURES APPLICABLE TO: NONE LIST OF DISCLOSURE TERMS: None applicable. 1. ANALYST CERTIFICATION Each analyst of Research Capital Corporation whose name appears in this report hereby certifies that (i) the recommendations and opinions expressed in this research report accurately reflect the analyst’s personal views and (ii) no part of the research analyst’s compensation was or will be directly or indirectly related to the specific conclusions or recommendations expressed in this research report. I n f o r ma t i o n a b o u t Re s e a r ch C a p i t a l C o r p o r a t i o n ’ s Ra t i n g S y s t e m, t h e d i s t r i b u t i o n o f o u r r e s e a r ch t o cl i e n t s a n d t h e p e r ce n t a g e o f r e c o m me n d a t i o n s wh i c h a r e i n e a c h o f o u r r a t i n g c a t e g o r i e s i s a v a i l a b l e o n o u r we b si t e a t ww w. r e s e a r ch c a p i t a l . c o m. T h e i n f o r ma t i o n c o n t a i n e d i n t h i s r e p o r t h a s b e e n d r a wn f r o m s o u r c e s b e l i e ve d t o b e r e l i a b l e b u t i t s a c cu r a c y o r co mp l e t e n e ss i s n o t g u a r a n t e e d , n o r i n p r o vi d i n g i t d o e s R e s e a r c h Ca p i t a l C o r p o r a t i o n a s s u me a n y r e sp o n si b i l i t y o r l i a b i l i t y . R e s e a r ch C a p i t a l C o r p o r a t i o n , i t s d i r e ct o r s , o f f i c e r s a n d o t h e r e mp l o y e e s ma y , f r o m t i me t o t i me , h a v e p o si t i o n s i n t h e s e cu r i t i e s me n t i o n e d h e r e i n . Co n t e n t s o f t h i s r e p o r t c a n n o t b e r e p r o d u c e d i n wh o l e o r i n p a r t wi t h o u t t h e e xp r e ss e d p e r mi s si o n o f R e se a r ch C a p i t a l C o r p o r a t i o n . ( U . S . I n s t i t u t i o n a l Cl i e n t s — Re s e a r ch C a p i t a l U . S. A . I n c. ( a wh o l l y o wn e d s u b si d i a r y o f R e s e a r c h C a p i t a l Co r p o r a t i o n ) a cc e p t s r e s p o n si b i l i t y f o r t h e c o n t e n t s o f t h i s r e p o r t s u b je c t t o t h e t e r ms & l i mi t a t i o n s s e t o u t a b o v e . F i r ms o r i n s t i t u t i o n s r e ce i vi n g t h i s r e p o r t s h o u l d e f f e ct t r a n s a ct i o n s i n s e c u r i t i e s d i sc u s se d i n t h e r e p o r t t h r o u g h R e s e a r ch C a p i t a l U . S . A . I n c. , a B r o k e r - D e a l e r R e g i s t e r e d wi t h t h e U n i t e d S t a t e s S e cu r i t i e s a n d E xc h a n g e C o m mi s si o n ) . Tor on to 4 16. 8 60. 76 00 M ontr eal 51 4. 39 9. 150 0 V anco u ver 60 4. 66 2. 180 0 C al gar y 40 3. 26 5. 740 0 R egi na 306. 566. 7550 www.researchcapital.com