0
Web 2.0 Weekly
                                                                                       “Consolidation by Go...
Key Developments (past week)
    Deals (M&A, Finance) – Consolidation by Google
     Google confirmed or announced two acq...
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

                  Flat...
7
                         Source: CapitalIQ
                                                                             ...
8
                         Source: CapitalIQ
                                                                             ...
9
                         Source: CapitalIQ
                                                                             ...
10
                                                                  -
                                                   ...
Average EV/EBITDA – by Sector

          45.0


          40.0      38.4


          35.0


          30.0


          25....
Average P/E – by Sector

          100.0
                     92.6

           90.0


           80.0


           70.0


...
13
                                                                                                     0.0
              ...
Web 2.0 Weekly -  Aug. 10, 2010: "Consolidation by Google"
Web 2.0 Weekly -  Aug. 10, 2010: "Consolidation by Google"
Web 2.0 Weekly -  Aug. 10, 2010: "Consolidation by Google"
Web 2.0 Weekly -  Aug. 10, 2010: "Consolidation by Google"
Web 2.0 Weekly -  Aug. 10, 2010: "Consolidation by Google"
Web 2.0 Weekly -  Aug. 10, 2010: "Consolidation by Google"
Web 2.0 Weekly -  Aug. 10, 2010: "Consolidation by Google"
Web 2.0 Weekly -  Aug. 10, 2010: "Consolidation by Google"
Web 2.0 Weekly -  Aug. 10, 2010: "Consolidation by Google"
Web 2.0 Weekly -  Aug. 10, 2010: "Consolidation by Google"
Web 2.0 Weekly -  Aug. 10, 2010: "Consolidation by Google"
Web 2.0 Weekly -  Aug. 10, 2010: "Consolidation by Google"
Web 2.0 Weekly -  Aug. 10, 2010: "Consolidation by Google"
Web 2.0 Weekly -  Aug. 10, 2010: "Consolidation by Google"
Web 2.0 Weekly -  Aug. 10, 2010: "Consolidation by Google"
Web 2.0 Weekly -  Aug. 10, 2010: "Consolidation by Google"
Web 2.0 Weekly -  Aug. 10, 2010: "Consolidation by Google"
Web 2.0 Weekly -  Aug. 10, 2010: "Consolidation by Google"
Web 2.0 Weekly -  Aug. 10, 2010: "Consolidation by Google"
Web 2.0 Weekly -  Aug. 10, 2010: "Consolidation by Google"
Web 2.0 Weekly -  Aug. 10, 2010: "Consolidation by Google"
Web 2.0 Weekly -  Aug. 10, 2010: "Consolidation by Google"
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Web 2.0 Weekly - Aug. 10, 2010: "Consolidation by Google"

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Deals (M&A, Finance) – Consolidation by Google
Google confirmed or announced two acquisitions during the week, including Jambool
($70 mm) involved in virtual goods monetization processes, and widget market, Slide
($182 mm).
In other acquisition-related news, Forbes sold investment media website Investopedia to ValueClick for $42 mm. Zynga acquired Japanese mobile app and game developer,
Unoh, for an estimated $29 mm. Finally, dubbed “the Spanish Facebook,” social
networking site, Tuenti, was acquired by Telefonica in a $99 mm deal.
The largest financing (aside from the aforementioned M&A activity) involved “the
Chinese Youtube,” Tudou, raising $50 mm in Series E funds.

Price Performance
Distinctly negative price momentum, with 49% of stocks falling over the past week (after 48% of stocks declines last week, and 51% declined the week prior).

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Transcript of "Web 2.0 Weekly - Aug. 10, 2010: "Consolidation by Google""

  1. 1. Web 2.0 Weekly “Consolidation by Google” August 10, 2010 David Shore, CFA, MBA 416.860.6784 dshore@mackieresearch.com Damian Wojcichowsky, CFA 416.860.7652 This report has been created by Analysts that are employed by Mackie Research Capital Corporation, a Canadian Investment Dealer. For further disclosures, please see last page of this report. www.mackieresearch.com Copyright © 2000-2010, Mackie Research Capital Corporation, All rights reserved www.mackieresearch.com
  2. 2. Key Developments (past week) Deals (M&A, Finance) – Consolidation by Google Google confirmed or announced two acquisitions during the week, including Jambool ($70 mm) involved in virtual goods monetization processes, and widget market, Slide ($182 mm). In other acquisition-related news, Forbes sold investment media website Investopedia to ValueClick for $42 mm. Zynga acquired Japanese mobile app and game developer, Unoh, for an estimated $29 mm. Finally, dubbed “the Spanish Facebook,” social networking site, Tuenti, was acquired by Telefonica in a $99 mm deal. The largest financing (aside from the aforementioned M&A activity) involved “the Chinese Youtube,” Tudou, raising $50 mm in Series E funds. Financial Results/Guidance/Partnerships/Product Geo-location search app maker, Multiplied Media (TSXV:MMC), made two product and distribution announcements – (1) the gasoline station search function on Poynt (the company’s GPS location-based search app) was extended to the iPhone and iPod Touch versions, and (2) the company (through subsidiary, UnoMobi) extended its email- to-SMS service for legacy phones to over 20 million Globe Telecom subscribers in the Philippines. 2 www.mackieresearch.com
  3. 3. Public Company Data 3 www.mackieresearch.com
  4. 4. Aggregate Public Data Web 2.0 Public Companies Total Median Max Min # Companies 102 - - - Market Cap (US$ mm) 86,452.0 49.4 36,187.5 0.0 Revenue (US$ mm) 28,694.2 43.9 6,877.0 0.0 1 Year revenue growth 1.9% 8961.6% -100.0% EBITDA as % of revenue - 8.8% 63.2% -99.5% Net cash (US$ mm) 17,385.8 2.9 6,672.5 -670.2 TEV/Revenue - 1.7x 37.6x 0.1x TEV/EBITDA - 8.5x 38.4x 0.4x P/E - 16.5x 92.6x 0.0x Relative to 52 week high -41.4% -1.0% -93.5% Source: CapitalIQ 4 www.mackieresearch.com
  5. 5. 5 0 5 10 15 20 25 30 Gaming 28 Social Networking 16 10 Media 9 Diversified 6 Mobile 5 Marketing Source: CapitalIQ 3 Infrastructure 3 SMS/Voice 3 Enterprise 3 Advertising 2 Internet Retail 2 Virtual World By Sector 2 Dating 2 Music 1 Vertical Communities 1 Search 1 Podcasting 1 Learning 1 Video 1 Collaboration 1 Payment 1 Financial Services Public Company Distribution 0 5 10 15 20 25 30 35 40 45 United States Canada China South Korea Japan Taiwan Hong Kong Germany Poland Australia United Kingdom By Country Italy Finland Sweden India Russia Malaysia Switzerland www.mackieresearch.com
  6. 6. Valuation Dashboard – 1 Week Market Cap EV/Revenue Flat Flat 11% 4% Falling 57% Falling Rising 33% 56% Rising 39% EV/EBITDA P/E Flat Flat 0% 0% Falling 48% Rising Falling 48% 52% Rising 52% 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 6/22/2009 6/29/2009 7/6/2009 7/13/2009 7/20/2009 7/27/2009 8/3/2009 8/10/2009 8/17/2009 8/24/2009 8/31/2009 9/7/2009 9/14/2009 9/21/2009 9/28/2009 10/5/2009 Median EV/Revenue 10/12/2009 10/19/2009 10/26/2009 11/2/2009 11/9/2009 11/16/2009 11/23/2009 11/30/2009 12/7/2009 12/14/2009 12/21/2009 Median 12/28/2009 1/4/2010 1/11/2010 1/18/2010 1/25/2010 2/1/2010 2/8/2010 2/15/2010 2/22/2010 3/1/2010 Long-term average 3/8/2010 3/15/2010 3/22/2010 3/29/2010 4/5/2010 4/12/2010 4/19/2010 4/26/2010 5/3/2010 average 5/10/2010 5/17/2010 well below LT 5/24/2010 5/31/2010 down slightly, still Revenue multiples 6/7/2010 6/14/2010 6/21/2010 6/28/2010 7/5/2010 7/12/2010 7/19/2010 7/26/2010 8/2/2010 8/9/2010 383940394040404244454546464647495151515054565661616164666667646566707071707369706672727075747777787980797980798382828484 www.mackieresearch.com
  8. 8. 8 Source: CapitalIQ Multiple (x ) # companies 0. 0x 5. 0x 10. 0x 15. 0x 20. 0x 25. 0x 30. 0x 6/22/2009 6/29/2009 7/6/2009 7/13/2009 7/20/2009 7/27/2009 8/3/2009 8/10/2009 8/17/2009 8/24/2009 8/31/2009 9/7/2009 9/14/2009 9/21/2009 Median EV/EBITDA 9/28/2009 10/5/2009 10/12/2009 10/19/2009 10/26/2009 11/2/2009 11/9/2009 11/16/2009 11/23/2009 11/30/2009 12/7/2009 12/14/2009 12/21/2009 Median 12/28/2009 1/4/2010 1/11/2010 1/18/2010 1/25/2010 2/1/2010 2/8/2010 2/15/2010 2/22/2010 3/1/2010 3/8/2010 L ong-term average 3/15/2010 3/22/2010 3/29/2010 4/5/2010 4/12/2010 4/19/2010 4/26/2010 5/3/2010 5/10/2010 5/17/2010 5/24/2010 5/31/2010 6/7/2010 6/14/2010 week, still below LT average EV/EBITDA multiples up this 6/21/2010 6/28/2010 7/5/2010 7/12/2010 7/19/2010 7/26/2010 8/2/2010 8/9/2010 20 21 22 22 21 21 22 23 22 24 22 23 24 25 26 26 25 24 24 26 27 30 29 32 34 34 37 40 37 38 38 38 40 42 38 38 40 42 41 40 42 41 41 42 43 44 43 44 47 49 48 51 51 50 49 48 47 46 48 49 www.mackieresearch.com
  9. 9. 9 Source: CapitalIQ Multiple (x ) # companies 0. 0x 5. 0x 10. 0x 15. 0x 20. 0x 25. 0x 30. 0x 35. 0x 6/22/2009 6/29/2009 7/6/2009 Median P/E 7/13/2009 7/20/2009 7/27/2009 8/3/2009 8/10/2009 8/17/2009 8/24/2009 8/31/2009 9/7/2009 9/14/2009 9/21/2009 9/28/2009 10/5/2009 10/12/2009 10/19/2009 10/26/2009 11/2/2009 11/9/2009 11/16/2009 11/23/2009 11/30/2009 12/7/2009 12/14/2009 12/21/2009 Median 12/28/2009 1/4/2010 1/11/2010 1/18/2010 1/25/2010 2/1/2010 2/8/2010 2/15/2010 2/22/2010 3/1/2010 3/8/2010 L ong-term average 3/15/2010 3/22/2010 3/29/2010 4/5/2010 4/12/2010 4/19/2010 4/26/2010 LT average 5/3/2010 5/10/2010 5/17/2010 5/24/2010 3rd week) but still below 5/31/2010 P/E multiples tick up (for 6/7/2010 6/14/2010 6/21/2010 6/28/2010 7/5/2010 7/12/2010 7/19/2010 7/26/2010 8/2/2010 8/9/2010 19 18 18 19 18 19 19 20 20 18 18 19 19 19 20 23 24 24 23 25 25 28 26 30 30 31 32 33 33 33 35 37 39 38 38 39 39 40 41 37 39 39 40 37 37 35 33 33 32 35 35 36 35 35 35 36 32 35 34 34 www.mackieresearch.com
  10. 10. 10 - 5.0 10.0 15.0 20.0 25.0 30.0 35.0 # Companies 2 Virtual World 32.4 9 Social Networking 9.4 2 Infrastructure 8.9 1 Learning 7.9 4 Mobile 5.0 2 Music 4.7 6 Diversified 4.2 5 Marketing 3.8 Gaming 21 3.7 1 Search 3.6 1 Vertical Communities 3.0 1 Podcasting 2.8 Average EV/Revenue – by Sector 1 Collaboration 2.5 3 SMS/Voice 2.5 9 Media 2.3 3 Advertising 2.1 2 Internet Retail 1.9 3 Enterprise 1.7 2 Dating 1.5 1 Video 1.4 1 Financial Services 0.5 www.mackieresearch.com
  11. 11. Average EV/EBITDA – by Sector 45.0 40.0 38.4 35.0 30.0 25.0 20.0 16.8 14.8 15.0 13.2 12.3 11.8 11.2 9.9 10.0 9.1 7.0 6.8 4.3 5.0 - Diversified Advertising Internet Retail Search Enterprise Mobile Media Gaming Social Networking Collaboration Marketing Dating # Companies 1 2 3 5 6 13 2 6 1 2 1 1 11 www.mackieresearch.com
  12. 12. Average P/E – by Sector 100.0 92.6 90.0 80.0 70.0 60.0 54.6 50.0 39.9 40.0 37.6 30.0 23.0 20.6 20.0 16.0 15.0 13.3 10.0 7.4 - Internet Enterprise Collaboration Diversified Social Marketing Media Advertising Gaming Virtual World Retail Networking 2 3 1 9 16 5 10 3 28 2 # Companies 12 www.mackieresearch.com
  13. 13. 13 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 38 Acc redited Members H olding C orporation Source: CapitalIQ Worlds . com Inc. 32 32 S oc ialG O P LC 19 T enc ent H oldings L td. MO K O .mobi Limited 17 17 S pec trumDNA, Inc . 15 G eoS entric O yj 14 P aid Inc. B ey ond C ommerc e, Inc . G ree, Inc. 10 10 9 C hines e G amer International DigitalP os t Interac tiv e, Inc . 9 8 T rans G aming, Inc . 8 L ingo Media C orporation 7 Mood Media C orporation Ac celeriz e New Media, Inc. Dena C o. L td. 5 5 5 HU G H E S T elematics , Inc . F rogs ter Interac tiv e P ictures AG C hangy ou.c om L imited 4 4 4 Mix i, Inc. T aleo C orp. S K C ommunic ations C o. , L td. 4 4 3 K ings oft C orporation L imited WebMediaB rands Inc Wiz z ard S oftware C orporation Motricity, Inc. S ohu. com Inc. EV/Revenue Ranking 3 3 3 3 3 O pen T ex t C orp. Modern T imes G roup Mtg AB eP ro Ltd. V elti P lc XING AG NE O WIZ G ames C orporation My riad G roup AG S c ore Media Inc. P NI Digital Media Inc . U O MO Media, Inc S hutterfly, Inc. P latforma Mediowa P oint G roup S . A. H anbitS oft, Inc. V alueC lic k , Inc. H utc his on T elec ommunic ations H ong K ong H oldings L td. 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 G ungH o O nline E ntertainment, Inc . S NAP Interac tiv e, Inc . NeuL ion Inc orporated S park Network s , Inc. Accredited Members is eemedia Inc. revenue multiple at 38x U nilava C orporation Holding Co. has highest G amania Digital E ntertainment C o. , L td. Y D O nline C orp. NetDragon WebS oft, Inc. Y nk K orea Inc. 2 1 1 1 1 1 1 1 1 1 Webz en Inc. O AO R B C Information S y s tems AQ Interac tiv e, Inc. O riented Media G roup B erhad Internet G roup S A T heS treet.c om, Inc. P oints International L td. IAC /InterActiveC orp. Northgate T ec hnologies L imited T he New Y ork T imes C ompany AO L, Inc. DADA S pA U nis erv e C ommunications C orp. U nited O nline, Inc . C DC C orp. G lu Mobile, Inc . T ree.C om, Inc . G igaMedia Ltd. 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 0 0 C y berplex Inc. Actoz S oft C o., Ltd. O penwave S y s tems Inc. J umbuc k E ntertainment Limited R ealNetwork s Inc. As k net AG G ameO n C o L td. L ook S mart, L td. 0 0 0 0 0 0 0 0 T hwapr, Inc. www.mackieresearch.com
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