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

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

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Deals (M&A, Finance) – Consolidation by Google...

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

    • 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
    • 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 $50 mm in Series E funds. Financial Results/Guidance/Partnerships/Product Geo-location search app maker, Multiplied Media (TSXV:MMC), made two product and distribution announcements – (1) the gasoline station search function on Poynt (the company’s GPS location-based search app) was extended to the iPhone and iPod Touch versions, and (2) the company (through subsidiary, UnoMobi) extended its email- to-SMS service for legacy phones to over 20 million Globe Telecom subscribers in the Philippines. 2 www.mackieresearch.com
    • Public Company Data 3 www.mackieresearch.com
    • Aggregate Public Data Web 2.0 Public Companies Total Median Max Min # Companies 102 - - - Market Cap (US$ 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 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
    • 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 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 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 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 - 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
    • 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
    • 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 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
    • 14 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 45.0 Source: CapitalIQ S K C ommunic ations C o., Ltd. HanbitS oft, Inc . 40.0 38.437.5 T enc ent Holdings Ltd. 36. 4 T heS treet. c om, Inc . 32. 0 T aleo C orp. 28.2 F rogs ter Interactive P ic tures AG 26.7 My riad G roup AG 20. 0 C hines e G amer International 18. 4 Mixi, Inc . G ree, Inc . Modern T imes G roup Mtg AB 16. 716.616. 1 S hutterfly, Inc . AQ Interac tive, Inc . 14. 614. 5 S c ore Media Inc . 12. 6 EV/EBITDA Ranking IAC /InterAc tiveC orp. Y D O nline C orp. Dena C o. Ltd. O penwave S ys tems Inc . 10. 0 9.8 9.6 9.6 O pen T ex t C orp. DADA S pA V elti P lc XING AG 9.1 9.0 8.6 8.5 K ings oft C orporation Limited the group at 38.4x P N I Digital Media Inc . G amania Digital E ntertainment C o., Ltd. SK Communications leads NetDragon WebS oft, Inc . NE O WIZ G ames C orporation 8.3 7.8 7.8 7.6 7.5 G ungHo O nline E ntertainment, Inc . Unis erve C ommunic ations C orp. S park Network s , Inc . Hutc his on T elec ommunic ations Hong K ong H oldings Ltd. C hangy ou. c om Limited 7.3 7.3 6.8 6.7 6.7 Look S mart, Ltd. S ohu.c om Inc . V alueC lic k , Inc . 6.5 6.2 6.1 C DC C orp. 5.5 T he New Y ork T imes C ompany C y berplex Inc . United O nline, Inc . 4.4 4.3 3.7 AO L, Inc . 2.4 Ac toz S oft C o., Ltd. 1.6 J umbuc k E ntertainment Limited G ameO n C o Ltd. T hwapr, Inc . 0.6 0.4 0.0 www.mackieresearch.com Excluding EV/EBITDA > 100x
    • 15 Source: CapitalIQ 0.0 20.0 40.0 60.0 80.0 100.0 120.0 eP ro Ltd. S hutterfly , Inc . 97.2 96.3 P oints International Ltd. 62.8 Mix i, Inc . 56.3 P/E Ranking T encent Holdings Ltd. C DC C orp. 47.4 47.0 O pen T ex t C orp. 40.2 G ree, Inc. N etDragon WebS oft, Inc. 33. 5 33.5 G amania Digital E nterta inment C o., L td. F rogs ter Interactive P ictures AG 30.3 30.2 C hines e G amer International V elti P lc 25.9 24. 6 Dena C o. Ltd. Hutc his on T elecommunica tions Hong K ong H oldings L td. 20.7 20.6 NE O WIZ G a mes C orporation P/E at 97.2x DADA S pA ePro has the highest T he N ew Y ork T imes C ompa ny V alueC lic k , Inc. S ohu.com Inc. 17.0 17.0 16.5 15. 1 14.9 C y berplex Inc. K ings oft C orporation L imited 14.3 13.8 AO L, Inc. C hangy ou.c om L imited 10.8 9.9 United O nline, Inc. 9. 1 G ameO n C o Ltd. 8.2 Ngi G roup Inc. 7.7 Unis erv e C ommunica tions C orp. 5.1 J umbuck E ntertainment Limited 3.5 Neteas e.com Inc. 2.7 S ha nda Interactiv e E nterta inment Ltd. 2.0 G ia nt Interac tive G roup, Inc. 1.9 www.mackieresearch.com
    • 16 Source: CapitalIQ (US $m) # companies - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 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 12/28/2009 Total Market Capitalization 1/4/2010 1/11/2010 1/18/2010 1/25/2010 2/1/2010 2/8/2010 2/15/2010 2/22/2010 3/1/2010 3/8/2010 3/15/2010 100 3/22/2010 3/29/2010 96 96 96 96 96 96 96 96 96 96 97 97 97 97 97 97 97 98 98 98 98 98 98 98 98 98 98 98 98 99100100 100100 4/5/2010 4/12/2010 4/19/2010 100 4/26/2010 5/3/2010 5/10/2010 100 5/17/2010 index 5/24/2010 100100 100100 100101 5/31/2010 6/7/2010 in our Web 2.0 103 companies 6/14/2010 at $86.5 bn with 101 Total market cap now represented 6/21/2010 6/28/2010 101101 102102 7/5/2010 7/12/2010 7/19/2010 102 7/26/2010 102101 102 www.mackieresearch.com
    • 17 - # Companies 5,000.0 10,000.0 15,000.0 20,000.0 25,000.0 30,000.0 35,000.0 40,000.0 45,000.0 9 Diversified Gaming 28 Media 10 Social Networking 16 6 Mobile 1 Collaboration 3 Enterprise 5 Marketing 2 Internet Retail 1 Search Total Market Cap – by Sector 3 SMS/Voice 1 Financial Services 2 Dating 2 Music 3 Advertising 2 Virtual World 1 Video $40 bn in market cap 1 Vertical Communities 1 Payment Nine Diversified companies totaling 1 Podcasting 3 Infrastructure 1 Learning www.mackieresearch.com
    • 18 0 1,000 2,000 3,000 4,000 5,000 6,000 Tencent Holdings Ltd. Frogster Interactive Pictures AG Netease.com Inc. Dena Co. Ltd. Source: CapitalIQ IAC/InterActiveCorp. Shanda Interactive Entertainment Ltd. AOL, Inc. Open Text Corp. GeoSentric Oyj Sohu.com Inc. Giant Interactive Group, Inc. Changyou.com Limited Perfect World Co., Ltd. The New York Times Company GungHo Online Entertainment, Inc. Taleo Corp. ValueClick, Inc. Chinese Gamer International NEOWIZ Games Corporation Shutterfly, Inc. SK Communications Co., Ltd. United Online, Inc. RealNetworks Inc. Hutchison Telecommunications Hong Motricity, Inc. Velti Plc NetDragon WebSoft, Inc. Gree, Inc. Myriad Group AG CDC Corp. Gamania Digital Entertainment Co., Ltd. XING AG MOKO.mobi Limited Market Cap Ranking OAO RBC Information Systems Openwave Systems Inc. The9 Limited GigaMedia Ltd. AQ Interactive, Inc. Points International Ltd. Webzen Inc. TheStreet.com, Inc. DADA SpA Thwapr, Inc. Paid Inc. Actoz Soft Co., Ltd. Tree.Com, Inc. Score Media Inc. HUGHES Telematics, Inc. Spark Networks, Inc. Mood Media Corporation Platforma Mediowa Point Group S.A. PNI Digital Media Inc. NeuLion Incorporated YD Online Corp. Cyberplex Inc. Ngi Group Inc. Quepasa Corp. Gravity Co., Ltd TransGaming, Inc. Glu Mobile, Inc. DigitalTown, Inc. ePro Ltd. WebMediaBrands Inc LookSmart, Ltd. Multiplied Media Corporation Socialwise, Inc. dominates group Asknet AG Accredited Members Holding Ynk Korea Inc. Yippy, Inc. NeXplore Corporation Accelerize New Media, Inc. Tencent’s $36.2 bn market cap Northgate Technologies Limited Moggle, Inc Wizzard Software Corporation iseemedia Inc. Dolphin Digital Media, Inc. En2Go International, Inc. VOIS, Inc. DigitalPost Interactive, Inc. SocialGO PLC Kent International Holdings Inc. SNAP Interactive, Inc. Unilava Corporation Jumbuck Entertainment Limited Modern Times Group Mtg AB Worlds.com Inc. Beyond Commerce, Inc. IAS Energy, Inc. SpectrumDNA, Inc. Uniserve Communications Corp. Kiwibox.Com, Inc. Oriented Media Group Berhad Mobile Data Corp. Internet Group SA UOMO Media, Inc LiveWorld Inc. Lingo Media Corporation Kingsoft Corporation Limited GameOn Co Ltd. HanbitSoft, Inc. www.mackieresearch.com
    • Price Performance – 1 Week • Distinctly negative price momentum, with 49% of stocks falling over the past Price Momentum week (after 48% of stocks declines last week, and 51% declined the week Flat prior). 16% • The market has generally seen more decliners than risers over the past two months with an average of two to three down weeks per up week. Falling 49% Rising 35% 19 www.mackieresearch.com
    • Average Price Performance – 1 Week, by Sector 25.0% 22.9% Virtual World sector shows 19.7% highest weekly returns 20.0% 15.3% 15.0% 13.2% 9.2% 10.0% 4.4% 5.0% 0.8% 0.4% 0.0% 0.0% 0.0% -0.4% -0.9% -0.9% -1.1% -1.1% -1.6% -5.0% -2.7% -3.1% -4.4% -10.0% -7.3% -7.8% -9.9% -15.0% Internet Retail Infrastructure Virtual World Networking Collaboration Financial Payment Communities Advertising Learning Music Diversified Marketing Podcasting Search Dating Gaming Mobile Enterprise Services Media Video SMS/Voice Social Vertical Source: CapitalIQ 20 www.mackieresearch.com
    • 21 -50.0% 0.0% 50.0% 100.0% 150.0% 200.0% 250.0% YIPI KIWB WSE:IGR UNLA UNTD Source: CapitalIQ ACLZ IEE OMEDIA OPWV QPSA RNWK TSXV:MMC TSXV:LM TSE:3632 2121 6180 KOSE:A069080 NYT VCLK SEHK:8086 GLUU SFLY TSCM GIGM 3888 TSX:NLN GTSM:3083 MOTR 3765 A023770 777 3812 WEBM TSX:MM CHIN.A CM:DA TREE TSXV:TNG TSX:PTS TSXV:PN A047080 CYOU TSE:2432 MTG B OTEX 2497 O1BC LOOK GA Price Performance – 1 Week LOV DPDM DB:M0C SPXA STVI KNTH TSX:SCR A066270 ASX:JMB TSXV:USS GEO1V UOMO WSE:PGM DGTW ACCM NXPC HUTC TLEO NCTY IASC.A IACI A052770 A052790 700 A095660 NTES 3838 DGLP FRG TSX:CX XTRA:A5A SNDA SCLW GRVY RBCI PWRD SOHU AOL VOIS MYRN WZE BYOC AIM:SGO VEL THWI MKB SEHK:215 590057 WDDD PAYD LVWD MBYL ETGI www.mackieresearch.com
    • 22 0% 20% 40% 60% 80% 100% 120% 0% 50% 100% 150% 200% 250% 300% En2Go ePro Ltd. International, Inc. Beyond Commerce, Mobile Data Corp. Source: CapitalIQ Inc. Hutchison Telecommunications GeoSentric Oyj Hong Kong Holdings Ltd. MOKO.mobi AQ Interactive, Inc. Limited LookSmart, Ltd. The9 Limited 6 Month 1 Month Velti Plc Sohu.com Inc. Hutchison Telecommunication Gree, Inc. s Hong Kong Holdings Ltd. SK Communications Netease.com Inc. Co., Ltd. Frogster Interactive SNAP Interactive, Pictures AG Inc. Points International TransGaming, Inc. Ltd. Price Performance (Top 10) 0% 20% 40% 60% 80% 100% 120% 140% 160% 0% 500% 1000% 1500% 2000% 2500% 3000% 3500% OAO RBC Information Mobile Data Corp. Systems En2Go International, ePro Ltd. Inc. Yippy, Inc. Velti Plc AQ Interactive, Frogster Interactive Inc. Pictures AG Hutchison Telecommunications Velti Plc Hong Kong Holdings 1 Year Ltd. 3 Month Quepasa Corp. Myriad Group AG Uniserve Communications Netease.com Inc. Corp. Dena Co. Ltd. Gree, Inc. TransGaming, HanbitSoft, Inc. Inc. Score Media Inc. IAC/InterActiveCorp. www.mackieresearch.com
    • 23 -40.0% -35.0% -30.0% -25.0% -20.0% -15.0% -10.0% -5.0% 0.0% -80.0% -70.0% -60.0% -50.0% -40.0% -30.0% -20.0% -10.0% 0.0% UOMO Media, Quepasa Inc Corp. Dolphin Digital Openwave Source: CapitalIQ Media, Inc. Systems Inc. En2Go iseemedia International, Inc. Inc. Oriented iseemedia Inc. Media Group Berhad Accelerize Lingo Media New Media, Corporation Inc. 1 Week 6 Month Kiwibox.Com, United Online, Inc. Inc. Unilava VOIS, Inc. Corporation Unilava Internet Corporation Group SA SpectrumDNA, Kiwibox.Com, Inc. Inc. Yippy, Inc. Yippy, Inc. -80.0% -70.0% -60.0% -50.0% -40.0% -30.0% -20.0% -10.0% 0.0% Price Performance (Bottom 10) -100.0% -90.0% -80.0% -70.0% -60.0% -50.0% -40.0% -30.0% -20.0% -10.0% 0.0% Wizzard Kiwibox.Com, Software Inc. Corporation UOMO Media, Internet Group Inc SA HUGHES NeuLion Telematics, Incorporated Inc. LiveWorld Inc. Cyberplex Inc. Unilava Moggle, Inc Corporation 1 Year 1 Month Beyond Dolphin Digital Commerce, Media, Inc. Inc. IAS Energy, SpectrumDNA, Inc. Inc. SpectrumDNA, iseemedia Inc. Inc. Beyond Commerce, VOIS, Inc. Inc. UOMO Media, Yippy, Inc. Inc www.mackieresearch.com
    • Capital Market Activity (Financing, M&A) 24 www.mackieresearch.com
    • Capital Market Activity – Current Month Trans ac tions - C urrent Month (US $ m) Fin. Amount (Million) Type of financing Month C ompany Name C ountry S ec tor Ac quis ition Angel/S eed S eries A S eries B S eries C S eries D S eries E NA G rand Total Aug-10 S lide US A W idget 182. 0 182. 0 Tuenti S pa in S ocia l Networks 99. 0 99. 0 J ambool US A V irtua l G oods 70. 0 70. 0 Tudou C hina V ideo 50. 0 50. 0 Inves topedia US A Media 42. 0 42. 0 Unoh J a pa n G a ming 29. 0 29. 0 AdMeld Inc . US A Advertis ing 15. 0 15. 0 eXelate US A Advertis ing 15. 0 15. 0 YouS endIt US A C olla bora tion 15. 0 15. 0 P ayfone US A Mobile P a yment 11. 0 11. 0 UltiZen C hina G a ming 8. 0 8. 0 R edbeac on US A C la s s ified 7. 4 7. 4 zulily US A S ocia l C ommerce 6. 0 6. 0 My Damn C hannel US A Media 4. 4 4. 4 W eS hop US A S ocia l C ommerce 4. 3 4. 3 P layON! S ports US A V ideo 2. 8 2. 8 S upers onicAds UK Advertis ing 2. 0 2. 0 S tatus Net C ana da Microblog 1. 3 1. 3 R apportive US A S ocia l Networks 1. 0 1. 0 B ringMeTheNews US A Aggrega tion 1. 0 1. 0 E mbed.ly US A W idget 0. 3 0. 3 Aug-10 Total 422.0 1.0 15.2 39.2 23.0 15.0 50.0 1.0 566.4 25 www.mackieresearch.com
    • Capital Market Activity – Current Month, by Sector $ Raised # Deals Virtual Goods 9% Virtual Goods 10% Social Networks 12% Social Networks 20% Other 50% Other 56% Widget 23% Widget 20% 26 www.mackieresearch.com
    • Financing Activity A return to trend level 1000.0 18.0 financing activity after a 16.7 900.0 record July 16.0 800.0 13.4 14.0 700.0 12.1 12.0 600.0 10.1 9.6 10.0 9.0 (US$m) (US$m) 500.0 8.3 8.1 7.2 8.0 400.0 6.3 6.5 5.6 5.5 6.0 300.0 4.0 200.0 100.0 2.0 0.0 0.0 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 *Dec-09 includes $180m Zynga investment Apr-10 includes $300m DST investment Total Average per Deal LTM Total Average Jun-10 includes $147m Zynga investment 27 www.mackieresearch.com
    • 28 (US$m) 0.0 200.0 400.0 600.0 800.0 1,000.0 1,200.0 # companies Gaming Advertising 17 27 4 Search 1 Diversified 9 Media 4 Widget Social Commerce Social Networks 12 12 Analytics 11 5 Enterprise 2 Virtual Goods 5 Internet Retail 5 Video 3 Collaboration 1 Blog 7 Mobile 1 Music 4 Location-based SNS 4 Infrastructure 2 SMS/Voice Advertising as the Gaming overtakes 4 (17 deals, $1,142 mm) Comment/Reputation biggest area of interest in the past three months 2 Mobile Ad 1 Visual Commerce 1 Mobile Payment 2 Financial Services 1 Virtual World 4 Aggregation 3 Vertical Communities 1 Classified 1 Online Auction Capital Market Activity Ranking – by Sector, last three months 2 Travel 1 Publishing 1 Microblog www.mackieresearch.com
    • 29 (US$ mm) 0.0 100.0 200.0 300.0 400.0 500.0 600.0 700.0 800.0 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Social Networks Feb-09 Mar-09 Gaming Apr-09 May-09 $ Raised Jun-09 Advertising Jul-09 Aug-09 Video Sep-09 Oct-09 Nov-09 Diversified Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Top 5 Sectors (2008-present) (# Deals) 0 5 10 15 20 25 30 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 75% of financing comes from Top 5 sectors Aug-08 Sep-08 Oct-08 Nov-08 Advertising Dec-08 Jan-09 Feb-09 Mar-09 Social Networks Apr-09 May-09 Jun-09 Gaming Jul-09 # Deals Aug-09 Sep-09 Virtual World Oct-09 Nov-09 Video Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 Top 5 sectors average $175 mm & 16 deals per month (aggregate) May-10 Jun-10 Jul-10 Aug-10 www.mackieresearch.com
    • Top 10 (2010 YTD) Financing Acquisitions 800.0 900 688.0 800 763.0 700.0 700.0 700 600.0 644.9 600 500.0 500 400.0 400 300.0 250.0 300 200.0 225.0 200 187.5 182.0 135.0 161.5 160.0 142.0 126.5 100.0 60.0 50.0 50.0 50.0 44.0 40.0 38.5 100 0.0 0 Technologies Zynga Tudou LivingSocial Groupon Atlassian Glam Media Tremor Media Squarespace Qiyi Digital Sky Alloy infoGROUP ITA Software Turbine Playdom Exalead ICQ Slide Jigsaw Siri DST soars to top with almost $700 million in financing this year 30 www.mackieresearch.com
    • Upcoming Events/Earnings E arnings C alendar Company Date / Time Quarter Conf Call Details Giant Interactive Group, Inc. (NYSE:GA) Aug-10, 2010 9:00 PM Q2/10 866-356-3093 CDC Corp. (NasdaqGS:CHIN.A) Aug-10, 2010 8:30 PM Q2/10 888-603-6873, passcode: 91985167 Points International Ltd. (TSX:PTS) Aug-10, 2010 5:00 PM Q2/10 877-941-8418 XING AG (XTRA:O1BC) Aug-11, 2010 4:00 AM Q2/10 49-0-6103-485-3002 Tencent Holdings Ltd. (SEHK:700) Aug-11, 2010 8:00 AM Q2/10 866-369-4113 PNI Digital Media Inc. (TSXV:PN) Aug-11, 2010 4:30 PM Q3/10 888-300-8196, passcode: 88463806 WebMediaBrands Inc (NasdaqGS:WEBM) Aug-11, 2010 5:00 PM Q2/10 866-288-9872, passcode: 713481 Spark Netw orks, Inc. (AMEX:LOV) Aug-12, 2010 4:30 PM Q2/10 888-215-6895, passcode: 4394412 Cyberplex Inc. (TSX:CX) Aug-12, 2010 4:30 PM Q2/10 888-892-3255 Perfect World Co., Ltd. (NasdaqGS:PWRD) Aug-17, 2010 7:00 AM Q2/10 866-519-4004, passcode: PWRD Open Text Corp. (NasdaqGS:OTEX) Aug-18-2010 5:00 PM Q4/10 416-644-3414 NetDragon WebSoft, Inc. (SEHK:777) Aug-19-2010 8:00 AM Q2/10 866-831-5605, passcode: 34088977 Netease.com Inc. (NasdaqGS:NTES) Aug-19-2010 9:00 PM Q2/10 877-941-2068 The9 Limited (NasdaqGS:NCTY) Aug-24-2010 9:00 PM Q2/10 866-788-0538, passcode: 37936166 GigaMedia Ltd. (NasdaqGS:GIGM) Aug-26-2010 7:30 AM Q2/10 http://w w w .gigamedia.com Source: CapitalIQ 31 www.mackieresearch.com
    • Public Company Listing T rading C urre nt US $ Mark e t C om pany Nam e T ic k e r Exc hange C urre ncy HQ Pric e C ap (m m ) Em ploye e s A ccelerize New M edia, Inc. A CLZ OTCB B USD United States 0.48 15.0 1 0 A ccredited M embers Holding Co rpo ratio n A CCM OTCB B USD United States 0.65 19.0 8 A cto z So ft Co., Ltd. A 052790 KOSE KRW So uth Ko rea 9,990 76.5 NA A OL, Inc. A OL NYSE USD United States 22.61 2,41 3.5 6,700 A Q Interactive, Inc. 3838 TSE JP Y Japan 163,400 1 03.8 NA A sknet A G XTRA :A 5A XTRA EUR Germany 3.1 7 21 .2 NA B eyo nd Commerce, Inc. B YOC OTCB B USD United States 0.06 4.0 1 6 CDC Co rp. CHIN.A NasdaqGS USD Ho ng Ko ng 1.98 209.1 2,81 0 Changyou.co m Limited CYOU NasdaqGS USD China 29.36 1 4.0 ,51 1,308 Chinese Gamer Internatio nal GTSM :3083 GTSM TWD Taiwan 272.50 739.3 NA Cyberplex Inc. TSX:CX TSX CA D Canada 0.64 45.3 NA DA DA SpA CM :DA CM EUR Italy 4.1 7 89.4 NA Dena Co. Ltd. TSE:2432 TSE JP Y Japan 2,389 3,965.6 NA DigitalP o st Interactive, Inc. DGLP OTCB B USD United States 0.05 8.2 6 DigitalTo wn, Inc. DGTW OTCB B USD United States 15.1 32.1 4 Do lphin Digital M edia, Inc. DP DM OTCB B USD United States 0.1 5 9.3 NA En2Go International, Inc. ETGI OTCB B USD United States 0.38 9.1 NA eP ro Ltd. SEHK:8086 SEHK HKD Ho ng Ko ng 0.68 29.4 707 Fro gster Interactive P ictures A G FRG XTRA EUR Germany 25.50 1 38.4 0,1 NA Gamania Digital Entertainment Co ., Ltd. 6180 GTSM TWD Taiwan 48.25 201 .4 NA GameOn Co Ltd. 381 2 TSE JP Y Japan 66,000 0.3 NA Geo Sentric Oyj GEO1 V HLSE EUR Finland 0.03 2,033.2 130 Giant Interactive Gro up, Inc. GA NYSE USD China 6.76 1,535.8 1,575 GigaM edia Ltd. GIGM NasdaqGS USD Taiwan 2.04 1 2.9 1 NA Glu M o bile, Inc. GLUU NasdaqGM USD United States 19.1 36.7 479 Gravity Co ., Ltd GRVY NasdaqGM USD So uth Ko rea 1.57 43.6 455 Gree, Inc. TSE:3632 TSE JP Y Japan 6,580 237.4 NA GungHo Online Entertainment, Inc. 3765 OSE JP Y Japan 177,500 1 .3 ,231 NA HanbitSo ft, Inc. A 047080 KOSE KRW So uth Ko rea 4,820 0.1 NA HUGHES Telematics, Inc. HUTC OTCB B USD United States 2.00 68.3 276 Hutchiso n Telecommunicatio ns Hong Kong Ho ldings Ltd. SEHK:21 5 SEHK HKD Ho ng Ko ng 2.20 338.4 1,732 IA C/InterA ctiveCo rp. IA CI NasdaqGS USD United States 25.1 1 2,626.4 3,200 IA S Energy, Inc. IA SC.A OTCP K USD Canada 0.05 3.5 NA Internet Gro up SA WSE:IGR WSE P LN P o land 0.72 1.7 NA iseemedia Inc. IEE TSXV CA D Canada 0.07 9.5 NA Jumbuck Entertainment Limited A SX:JM B A SX A UD A ustralia 0.20 6.2 79 Kent International Ho ldings Inc. KNTH OTCP K USD United States 1.90 6.8 NA 32 www.mackieresearch.com
    • Public Company Listing cont. T r ading C urr e nt US $ Mark e t C om pany Nam e T ick e r Exc hange C ur re nc y HQ Price C ap (m m ) Em ploye e s Kingso ft Co rpo ratio n Limited 3888 SEHK HKD China 4.38 0.4 2,735 Kiwibo x.Co m, Inc. KIWB OTCB B USD United States 0.01 3.0 6 Lingo M edia Co rpo ratio n TSXV:LM TSXV CA D Canada 0.42 0.9 NA LiveWo rld Inc. LVWD OTCP K USD United States 0.03 0.9 NA Lo o kSmart, Ltd. LOOK NasdaqGM USD United States 1.53 26.3 65 M ixi, Inc. 2121 TSE JP Y Japan 447,500 0.0 NA M o bile Data Co rp. M B YL OTCB B USD United States 0.10 2.3 NA M o dern Times Gro up M tg A B M TG B OM SEK Sweden 459.50 5.6 2,936 M o ggle, Inc DB :M 0C DB EUR United States 0.85 13.5 2 M OKO.mo bi Limited M KB A SX A UD A ustralia 0.09 170.0 NA M o o d M edia Co rpo ratio n TSX:M M TSX CA D Canada 1.76 63.6 NA M o tricity, Inc. M OTR NasdaqGM USD United States 7.87 31 5.2 353 M ultiplied M edia Co rpo ratio n TSXV:M M C TSXV CA D Canada 0.10 25.9 NA M yriad Gro up A G M YRN SWX CHF Switzerland 4.97 230.6 778 NEOWIZ Games Co rpo ratio n A 095660 KOSE KRW So uth Ko rea 37,600 683.8 NA NetDrago n WebSo ft, Inc. 777 SEHK HKD China 3.66 248.1 2,901 Netease.co m Inc. NTES NasdaqGS USD China 39.60 5,142.2 4,624 NeuLio n Inco rpo rated TSX:NLN TSX CA D Canada 0.43 48.9 224 NeXplo re Co rpo ratio n NXP C OTCP K USD United States 0.30 16.7 NA Ngi Gro up Inc. 2497 TSE JP Y Japan 31,050 45.1 NA No rthgate Techno lo gies Limited 590057 B SE INR India 18.60 14.0 NA OA O RB C Info rmatio n Systems RB CI M ICEX RUB Russia 36.00 162.8 2,523 Open Text Co rp. OTEX NasdaqGS USD Canada 39.36 2,234.9 3,700 Openwave Systems Inc. OP WV NasdaqGS USD United States 1.82 152.6 NA Oriented M edia Gro up B erhad OM EDIA KLSE M YR M alaysia 0.07 3.0 NA P aid Inc. P A YD OTCB B USD United States 0.29 79.0 20 P erfect Wo rld Co ., Ltd. P WRD NasdaqGS USD China 26.01 1 4.8 ,31 2,896 P latfo rma M edio wa P o int Gro up S.A . WSE:P GM WSE P LN P o land 1.44 49.8 NA P NI Digital M edia Inc. TSXV:P N TSXV CA D Canada 1.48 49.4 NA P o ints Internatio nal Ltd. TSX:P TS TSX CA D Canada 0.68 99.2 93 Quepasa Co rp. QP SA OTCB B USD United States 3.45 44.7 71 RealNetwo rks Inc. RNWK NasdaqGS USD United States 2.88 389.5 1,754 Sco re M edia Inc. TSX:SCR TSX CA D Canada 0.91 72.1 230 Shanda Interactive Entertainment Ltd. SNDA NasdaqGS USD China 42.66 2,533.1 5,721 Shutterfly, Inc. SFLY NasdaqGS USD United States 23.97 653.7 519 SK Co mmunicatio ns Co ., Ltd. A 066270 KOSE KRW So uth Ko rea 17,900 636.0 NA 33 www.mackieresearch.com
    • Public Company Listing cont. T r ading C urr e nt US $ Mar k e t C om pany Nam e T ick e r Exc hange C urr e ncy HQ Price C ap (m m ) Em ploye e s SNA P Interactive, Inc. STVI OTCB B USD United States 0.20 6.6 15 So cialGO P LC A IM :SGO A IM GB P United Kingdo m 0.01 7.2 9 So cialwise, Inc. SCLW OTCB B USD United States 0.47 23.5 NA So hu.co m Inc. SOHU NasdaqGS USD China 50.56 1 2.8 ,91 3,997 Spark Netwo rks, Inc. LOV A M EX USD United States 3.25 66.9 155 SpectrumDNA , Inc. SP XA OTCB B USD United States 0.05 3.5 8 Taleo Co rp. TLEO NasdaqGM USD United States 25.62 1 8.7 ,01 91 6 Tencent Ho ldings Ltd. 700 SEHK HKD China 153.70 36,1 87.5 7,845 The New Yo rk Times Co mpany NYT NYSE USD United States 8.71 1,270.7 7,665 The9 Limited NCTY NasdaqGS USD China 5.42 138.3 1 0 ,01 TheStreet.co m, Inc. TSCM NasdaqGM USD United States 2.94 93.0 274 Thwapr, Inc. THWI OTCB B USD United States 5.00 82.9 NA TransGaming, Inc. TSXV:TNG TSXV CA D Canada 0.64 37.1 28 Tree.Co m, Inc. TREE NasdaqGM USD United States 6.81 73.8 700 Unilava Co rpo ratio n UNLA OTCB B USD United States 0.06 6.2 40 Uniserve Co mmunicatio ns Co rp. TSXV:USS TSXV CA D Canada 0.11 3.1 NA United Online, Inc. UNTD NasdaqGS USD United States 5.50 480.0 1,699 UOM O M edia, Inc UOM O OTCB B USD Canada 0.02 1.3 NA ValueClick, Inc. VCLK NasdaqGS USD United States 10.60 862.0 1,086 Velti P lc VEL A IM GB P United Kingdo m 4.70 281 .2 459 VOIS, Inc. VOIS OTCB B USD United States 0.00 8.2 2 WebM ediaB rands Inc WEB M NasdaqGS USD United States 0.71 26.6 83 Webzen Inc. KOSE:A 069080 KOSE KRW So uth Ko rea 9,400.00 96.1 326 Wizzard So ftware Co rpo ratio n WZE A M EX USD United States 0.20 13.2 80 Wo rlds.co m Inc. WDDD OTCB B USD United States 0.09 5.0 1 XING A G O1 C B XTRA EUR Germany 28.80 196.7 293 YD Online Co rp. A 052770 KOSE KRW So uth Ko rea 3,590.00 46.5 NA Yippy, Inc. YIP I OTCB B USD United States 0.80 18.2 NA Ynk Ko rea Inc. A 023770 KOSE KRW So uth Ko rea 2,700.00 18.6 NA Yo uB last Glo bal, Inc. YB LT OTCB B USD United States 0.39 13.4 6 34 www.mackieresearch.com
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