0
Web 2.0 Weekly
                          “DST cashes up and then spends more”
                                            ...
Key Developments
    Tencent (SEHK:700) invests $300mm in Digital Sky Technologies (investor in Facebook, Zynga etc.)


  ...
Public Company Data




3                         www.mackieresearch.com
Aggregate Public Data
     Web 2.0 Public Companies   Total      Median    Max           Min
    # Companies              ...
5
                                                                      0
                                                ...
Valuation Dashboard – 1 Week
                             Market Cap                        EV/Revenue
                   ...
7
                         Source: CapitalIQ
                                                                             ...
8
                         Source: CapitalIQ
                                                                             ...
9
                         Source: CapitalIQ
                                                                             ...
10
                                                                      -
                                               ...
11
                                                                                    0.0
                               ...
12
                                                                                                0.0
                   ...
Web 2.0 Weekly - Apr. 20, 2010
Web 2.0 Weekly - Apr. 20, 2010
Web 2.0 Weekly - Apr. 20, 2010
Web 2.0 Weekly - Apr. 20, 2010
Web 2.0 Weekly - Apr. 20, 2010
Web 2.0 Weekly - Apr. 20, 2010
Web 2.0 Weekly - Apr. 20, 2010
Web 2.0 Weekly - Apr. 20, 2010
Web 2.0 Weekly - Apr. 20, 2010
Web 2.0 Weekly - Apr. 20, 2010
Web 2.0 Weekly - Apr. 20, 2010
Web 2.0 Weekly - Apr. 20, 2010
Web 2.0 Weekly - Apr. 20, 2010
Web 2.0 Weekly - Apr. 20, 2010
Web 2.0 Weekly - Apr. 20, 2010
Web 2.0 Weekly - Apr. 20, 2010
Web 2.0 Weekly - Apr. 20, 2010
Web 2.0 Weekly - Apr. 20, 2010
Web 2.0 Weekly - Apr. 20, 2010
Web 2.0 Weekly - Apr. 20, 2010
Web 2.0 Weekly - Apr. 20, 2010
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Web 2.0 Weekly - Apr. 20, 2010

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Highlighting key transactions in Web 2.0/Social Media. Provides valuation and price performance metrics and trends on ~100 public companies by sector.

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Transcript of "Web 2.0 Weekly - Apr. 20, 2010"

  1. 1. Web 2.0 Weekly “DST cashes up and then spends more” April 20, 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 Tencent (SEHK:700) invests $300mm in Digital Sky Technologies (investor in Facebook, Zynga etc.) DST invests $135mm in Groupon at $1.2b valuation Frogster Interactive Pictures AG (XTRA:FRG) reported revenue for 2009 rose 6x to Euro16.7mm with net profit of Euro2.3mm Webzen Inc. (KOSE: A069080) signed an agreement to acquire NHN Games Co., Ltd. for approximately KRW 240b The9 Limited (NasdaqGS:NCTY) reported consolidated earnings results for the fourth quarter and full year ended December 31, 2009. For the quarter, the company reported loss from operations of RMB 220.2mm on revenue of RMB22.5mm NetDragon WebSoft, Inc. (SEHK:777) announced unaudited consolidated earnings results for the fourth quarter ended December 31, 2009. For the quarter, the company reported operating profit of RMB 1,584,000 on revenues of RMB 134,190,000. 2 www.mackieresearch.com
  3. 3. Public Company Data 3 www.mackieresearch.com
  4. 4. Aggregate Public Data Web 2.0 Public Companies Total Median Max Min # Companies 98 - - - Market Cap (US$ mm) 81,864.6 76.0 37,060.2 1.7 Revenue (US$ mm) 90,908.6 22.7 67,563.7 0.0 1 Year revenue growth 4.3% 1178.9% -91.4% EBITDA as % of revenue - 5.9% 62.7% -91.9% Net cash (US$ mm) 9,008.8 1.5 1,754.9 -732.7 TEV/Revenue - 1.9x 46.6x 0.1x TEV/EBITDA - 8.7x 43.5x 0.1x P/E - 14.1x 92.7x 0.0x Relative to 52 week high -32.1% -1.9% -98.1% Source: CapitalIQ 4 www.mackieresearch.com
  5. 5. 5 0 5 10 15 20 25 30 Gaming 26 Social Networking 16 Media 10 6 Diversified 6 Marketing 5 Mobile Source: CapitalIQ 4 Advertising 3 Infrastructure 3 SMS/Voice 3 Enterprise 2 Internet Retail 2 Virtual World By Sector 2 Dating 2 Music 1 Vertical Communities 1 Collaboration 1 Podcasting 1 Search 1 Video 1 Learning 1 Payment 1 Financial Services Public Company Distribution 0 5 10 15 20 25 30 35 40 45 United States Canada China South Korea Japan Taiwan Germany Australia United Kingdom Poland Malaysia Russia By Country Finland Sweden Hong Kong India Italy Switzerland Israel www.mackieresearch.com
  6. 6. Valuation Dashboard – 1 Week Market Cap EV/Revenue Flat Flat 10% 4% Rising 38% Falling 43% Rising 53% Falling 52% EV/EBITDA P/E Flat Flat 5% 0% Falling Falling 43% 41% Rising Rising 54% 57% 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 3/2/2009 3/9/2009 3/16/2009 3/23/2009 3/30/2009 4/6/2009 4/13/2009 4/20/2009 4/27/2009 5/4/2009 5/11/2009 5/18/2009 5/25/2009 6/1/2009 6/8/2009 6/15/2009 Median EV/Revenue 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 Median 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 Long-term average 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 2/1/2010 recovering but 2/8/2010 below LT Average Revenue multiples 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 373837393939404039414142434444444445474848484750535356585761636364616162666868697168646870716873717475777575747678788280 www.mackieresearch.com
  8. 8. 8 Source: CapitalIQ Multiple (x) # companies 0.0x 5.0x 10.0x 15.0x 20.0x 25.0x 3/2/2009 3/9/2009 3/16/2009 3/23/2009 3/30/2009 4/6/2009 4/13/2009 4/20/2009 4/27/2009 5/4/2009 5/11/2009 5/18/2009 5/25/2009 6/1/2009 Median EV/EBITDA 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 Median 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 11/16/2009 Long-term average 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 below LT average remain depressed 2/1/2010 2/8/2010 EV/EBITDA multiples 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 2120 2022 22 2323 2222 2324 2322 2424 26 2626 2626 2526 2628 30 2830 3334 3640 3738 3638 39 3837 3740 4140 4041 41 4143 4243 4342 4848 4748 49 4947 4745 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 3/2/2009 3/9/2009 3/16/2009 Median P/E 3/23/2009 3/30/2009 4/6/2009 4/13/2009 4/20/2009 4/27/2009 5/4/2009 5/11/2009 5/18/2009 5/25/2009 6/1/2009 6/8/2009 6/15/2009 6/22/2009 6/29/2009 7/6/2009 7/13/2009 7/20/2009 7/27/2009 8/3/2009 8/10/2009 8/17/2009 8/24/2009 8/31/2009 Median 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 11/16/2009 Long-term average 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 2/1/2010 below LT average 2/8/2010 P/E multiples also 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 1719 2019 18 1818 1919 1920 1918 1919 19 2021 2425 2525 2526 26 2629 3030 2932 3132 3235 36 3636 3637 3839 3737 37 3635 3632 3130 3332 3232 32 3232 3130 www.mackieresearch.com
  10. 10. 10 - 5.0 10.0 15.0 20.0 25.0 # Companies 2 Infrastructure 3 SMS/Voice 7 Social Networking 4 Diversified 2 Music 1 Learning 5 Marketing 4 Mobile 1 Vertical Communities Gaming 20 1 Podcasting 1 Collaboration EV/Revenue 1 Search 1 Video 4 Advertising 2 Internet Retail 3 Enterprise 2 Dating 9 Media 1 Financial Services 1 Virtual World - 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 Average Valuation – by Sector # Companies 1 Search 2 Enterprise 4 Diversified 1 Mobile 6 Media 1 Collaboration 2 Internet Retail 5 Social Networking EV/EBITDA 1 Financial Services Gaming 12 3 Marketing 1 Dating 1 Advertising www.mackieresearch.com
  11. 11. 11 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0 0.1 Perfect World Co., Ltd. Ngi Group Inc. Asknet AG Cyberplex Inc. Source: CapitalIQ RealNetworks Inc. Jumbuck Entertainment Limited Betawave Corporation Tree.Com, Inc. Uniserve Communications Corp. Actoz Soft Co., Ltd. Glu Mobile, Inc. GameOn Co Ltd. Points International Ltd. GigaMedia Ltd. Openwave Systems Inc. Northgate Technologies Limited DADA SpA Internet Group SA IAC/InterActiveCorp. TheStreet.com, Inc. AOL, Inc. 0.20.20.20.40.40.40.4 0.40.40.50.50.50.50.6 0.70.70.80.80.80.90.9 CDC Corp. United Online, Inc. CornerWorld Corporation AQ Interactive, Inc. The New York Times Company EV/Revenue Ranking OAO RBC Information Systems Beyond Commerce, Inc. Gamania Digital Entertainment Co., Ltd. infoGROUP, Inc. HanbitSoft, Inc. YD Online Corp. ValueClick, Inc. Spark Networks, Inc. NetDragon WebSoft, Inc. 0.9 1.0 1.0 1.0 1.2 1.2 1.2 1.3 1.3 1.5 1.6 1.6 1.6 1.7 Ynk Korea Inc. Shutterfly, Inc. Score Media Inc. SNAP Interactive, Inc. PNI Digital Media Inc. Velti Plc Modern Times Group Mtg AB NeuLion Incorporated XING AG Oriented Media Group Berhad UOMO Media, Inc 1.8 1.9 1.9 2.1 2.12.22.22.3 2.32.32.4 GungHo Online Entertainment, Inc. SK Communications Co., Ltd. Sohu.com Inc. Myriad Group AG Webzen Inc. Open Text Corp. iseemedia Inc. NEOWIZ Games Corporation revenue multiple 2.6 2.73.0 3.23.23.23.33.3 Wizzard Software Corporation Taleo Corp. Spectrum has highest DigitalPost Interactive, Inc. 4.1 4.5 4.7 WebMediaBrands Inc Kingsoft Corporation Limited Changyou.com Limited 5.4 5.45.5 Lingo Media Corporation Accelerize New Media, Inc. 6.0 6.4 Mixi, Inc. Frogster Interactive Pictures AG 7.8 8.4 Unilava Corporation HUGHES Telematics, Inc. Fluid Music Canada, Inc. 9.39.4 9.9 Gree, Inc. Chinese Gamer International 12.4 15.4 GeoSentric Oyj Paid Inc. 20.0 MOKO.mobi Limited 20.6 Tencent Holdings Ltd. 22.2 Bright Things plc 31.4 SpectrumDNA, Inc. 46.6 www.mackieresearch.com
  12. 12. 12 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0 Perfect World Co., Ltd. Jumbuck Entertainment Limited 0.1 0.9 Source: CapitalIQ GameOn Co Ltd. Actoz Soft Co., Ltd. Cyberplex Inc. AOL, Inc. 2.1 2.2 2.3 2.6 United Online, Inc. 4.5 ValueClick, Inc. Sohu.com Inc. 5.7 6.2 YD Online Corp. Gamania Digital Entertainment Co., Ltd. DADA SpA infoGROUP, Inc. EV/EBITDA Ranking Spark Networks, Inc. The New York Times Company CDC Corp. 6.9 7.1 7.2 7.5 7.5 7.8 Uniserve Communications Corp. XING AG PNI Digital Media Inc. Changyou.com Limited NetDragon WebSoft, Inc. 7.9 8.2 8.4 8.4 8.6 8.7 Tree.Com, Inc. Velti Plc 9.7 10.3 GungHo Online Entertainment, Inc. 10.7 Open Text Corp. NEOWIZ Games Corporation 11.8 12.1 Kingsoft Corporation Limited Score Media Inc. 12.8 13.4 Shutterfly, Inc. Tencent has highest valuation IAC/InterActiveCorp. Openwave Systems Inc. 13.9 14.0 14.0 Ynk Korea Inc. Modern Times Group Mtg AB Gree, Inc. 16.5 16.6 16.8 Mixi, Inc. 21.3 Chinese Gamer International 22.9 TheStreet.com, Inc. 28.9 Taleo Corp. 31.6 SK Communications Co., Ltd. 39.6 Tencent Holdings Ltd. 43.5 www.mackieresearch.com Excluding EV/EBITDA > 100x
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