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Web 2.0 Weekly - July 20, 2010: "DST Cashing Up"
 

Web 2.0 Weekly - July 20, 2010: "DST Cashing Up"

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Large deals drive July financing to near record levels: With another huge financing (DST - see below) July financing is near record monthly levels. Total raised month-to-date is $742.6 million over ...

Large deals drive July financing to near record levels: With another huge financing (DST - see below) July financing is near record monthly levels. Total raised month-to-date is $742.6 million over 29 deals - averaging $25.6 million each. Excluding the Zynga ($100 million) and DST ($388 million) deals, the average deal size is $9.4 million. In comparison, total capital raised in July 2009 was $209.0 million, averaging $5.2 million over 40 deals. The monthly median total is ~$280 million with a median deal size of $8.1 million.

Deals (M&A, Finance)
Naspers, a South African media and print conglomerate, invested $388 mm in Digital Sky Technologies, the Russian digital media holding company with significant stakes in Facebook, Groupon, Mail.ru, and Zynga.

The next biggest raise of the week was Australian enterprise software developer, Atlassian, receiving $60 mm in Series A funds from Accel Partners.

Social Commerce continues to garner attention – this week BlueSwarm ($0.8 mm angel round) and Shopkick ($15 mm Series B round) raised money.

Another $31 mm in venture funds found their way to Advertising-related start-ups, including Israel-based Adsmarket ($17 mm), as well as a pair of India-based companies – Komli Media ($6 mm) and InMobi ($8 mm).

Price performance split
The Web 2.0 public company universe was split this week, with 48% of companies seeing their market cap fall vs. 43% rising and 9% flat.

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    Web 2.0 Weekly - July 20, 2010: "DST Cashing Up" Web 2.0 Weekly - July 20, 2010: "DST Cashing Up" Presentation Transcript

    • Web 2.0 Weekly “DST Cashing Up” July 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
    • Key Developments (past week) Deals (M&A, Finance) – Major DST Financing Naspers, a South African media and print conglomerate, invested $388 mm in Digital Sky Technologies, the Russian digital media holding company with significant stakes in Facebook, Groupon, Mail.ru, and Zynga. The next biggest raise of the week was Australian enterprise software developer, Atlassian, receiving $60 mm in Series A funds from Accel Partners. Social Commerce continues to garner attention – this week BlueSwarm ($0.8 mm angel round) and Shopkick ($15 mm Series B round) raised money. Another $31 mm in venture funds found their way to Advertising-related start-ups, including Israel-based Adsmarket ($17 mm), as well as a pair of India-based companies – Komli Media ($6 mm) and InMobi ($8 mm). Financial Results/Guidance/Partnerships/Product Score Media (TSX:SCR, BUY, FTM price target: $1.25), Canadian sports entertainment media concern and developer of the popular Score Mobile application for iPhone, BlackBerry, and Android, reported strong Q3/F10 results, including total revenue of $12.0 million (+10.8% Y/Y, +20.4% Q/Q, MRCC estimate: $11.5 million), EBITDA of $2.0 million (+16.6% Y/Y, +79.1% Q/Q, MRCC: $1.8 million), EBITDA margin of 17.0% (MRCC: 16.0%), and EPS of $0.01 – inline with our $0.01 estimate. 2 www.mackieresearch.com
    • Chart of the Week: DST Continues to Cash Up 800.0 DST has raised almost $700 700.0 688.0 mm this year as it continues to make large investments in Web 2.0 companies 600.0 500.0 400.0 300.0 247.0 200.0 135.0 100.0 60.0 50.0 50.0 44.0 40.0 38.5 35.0 0.0 Technologies Zynga LivingSocial Groupon Atlassian Gilt Groupe Glam Media Tremor Media Squarespace Qiyi Digital Sky 3 www.mackieresearch.com
    • Public Company Data 4 www.mackieresearch.com
    • Aggregate Public Data Web 2.0 Public Companies Total Median Max Min # Companies 102 - - - Market Cap (US$ mm) 81,684.2 56.0 32,832.1 0.0 Revenue (US$ mm) 28,443.7 47.9 6,736.1 0.0 1 Year revenue growth 1.9% 8961.6% -100.0% EBITDA as % of revenue - 8.3% 63.1% -99.5% Net cash (US$ mm) 17,042.9 2.8 6,535.8 -670.8 TEV/Revenue - 1.9x 43.5x 0.1x TEV/EBITDA - 8.3x 48.9x 0.3x P/E - 15.0x 94.5x 0.0x Relative to 52 week high -42.2% -1.6% -93.3% Source: CapitalIQ 5 www.mackieresearch.com
    • 6 0 5 10 15 20 25 30 Gaming 28 Social Networking 17 Media 10 9 Diversified 5 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 9% Flat 2% Falling 51% Rising 43% Falling 48% Rising 47% EV/EBITDA P/E Flat Flat 2% 3% Falling 42% Falling 38% Rising 59% Rising 56% 7 www.mackieresearch.com
    • 8 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 6/1/2009 6/8/2009 6/15/2009 6/22/2009 6/29/2009 7/6/2009 7/13/2009 7/20/2009 7/27/2009 8/3/2009 8/10/2009 8/17/2009 8/24/2009 8/31/2009 9/7/2009 9/14/2009 Median EV/Revenue 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 Median 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 2/8/2010 Long-term average 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 average 4/19/2010 4/26/2010 well below LT 5/3/2010 5/10/2010 down slightly, still Revenue multiples 5/17/2010 5/24/2010 5/31/2010 6/7/2010 6/14/2010 6/21/2010 6/28/2010 7/5/2010 7/12/2010 7/19/2010 373939394040394242444546464646474951515150535656606161646666676464656971717274716770727370767578788179807878808084818484 www.mackieresearch.com
    • 9 Source: CapitalIQ Multiple (x ) # companies 0. 0x 5. 0x 10. 0x 15. 0x 20. 0x 25. 0x 30. 0x 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 EV/EBITDA 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 Median 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 2/8/2010 2/15/2010 Long-term average 2/22/2010 3/1/2010 3/8/2010 3/15/2010 3/22/2010 3/29/2010 4/5/2010 4/12/2010 4/19/2010 4/26/2010 below LT average 5/3/2010 5/10/2010 5/17/2010 slightly, but still depressed 5/24/2010 EV/EBITDA multiples up-tick 5/31/2010 6/7/2010 6/14/2010 6/21/2010 6/28/2010 7/5/2010 7/12/2010 7/19/2010 19 21 21 22 22 21 21 22 23 22 21 23 23 25 25 25 25 25 24 25 26 28 31 29 32 34 35 37 40 38 39 37 39 40 39 38 38 41 42 41 41 41 41 41 43 43 45 44 44 50 49 48 49 50 50 48 49 47 49 49 www.mackieresearch.com
    • 10 Source: CapitalIQ Multiple (x ) # companies 0. 0x 5. 0x 10. 0x 15. 0x 20. 0x 25. 0x 30. 0x 35. 0x 40. 0x 6/1/2009 6/8/2009 6/15/2009 Median P/E 6/22/2009 6/29/2009 7/6/2009 7/13/2009 7/20/2009 7/27/2009 8/3/2009 8/10/2009 8/17/2009 8/24/2009 8/31/2009 9/7/2009 9/14/2009 9/21/2009 9/28/2009 10/5/2009 10/12/2009 10/19/2009 10/26/2009 11/2/2009 11/9/2009 11/16/2009 11/23/2009 11/30/2009 Median 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 2/8/2010 2/15/2010 Long-term average 2/22/2010 3/1/2010 3/8/2010 3/15/2010 3/22/2010 3/29/2010 average 4/5/2010 4/12/2010 4/19/2010 and still below LT 4/26/2010 5/3/2010 5/10/2010 P/E multiples also tick up 5/17/2010 5/24/2010 5/31/2010 6/7/2010 6/14/2010 6/21/2010 6/28/2010 7/5/2010 7/12/2010 7/19/2010 20 19 18 18 18 19 19 19 20 19 18 19 19 18 19 20 23 24 24 24 25 26 26 26 30 31 32 30 33 33 34 34 37 38 38 38 38 39 40 41 39 39 39 37 36 37 34 33 32 35 35 35 35 35 35 36 36 32 33 33 www.mackieresearch.com
    • 11 - 5.0 10.0 15.0 20.0 25.0 30.0 35.0 # Companies 1 Virtual World 33.0 2 Infrastructure 13.4 9 Social Networking 9.2 7 Diversified 9.0 1 Learning 7.6 4 Mobile 4.9 2 Music 4.3 1 Search 4.0 Gaming 21 3.7 5 Marketing 3.4 3 SMS/Voice 3.3 1 Vertical Communities 3.3 Average EV/Revenue – by Sector 1 Podcasting 2.8 1 Collaboration 2.5 9 Media 2.3 3 Advertising 2.3 2 Internet Retail 1.9 3 Enterprise 1.8 1 Video 1.5 2 Dating 1.3 1 Financial Services 0.4 www.mackieresearch.com
    • Average EV/EBITDA – by Sector 45.0 41.3 40.0 35.0 30.0 25.0 20.0 18.3 16.4 15.0 12.7 12.2 10.8 10.1 9.2 9.0 10.0 6.9 6.6 5.0 4.0 - Diversified Advertising Internet Retail Search Mobile Enterprise Gaming Social Networking Collaboration Media Marketing Dating # Companies 1 3 2 13 5 2 6 1 6 2 1 1 12 www.mackieresearch.com
    • Average P/E – by Sector 100.0 90.0 87.6 80.0 70.0 60.0 56.5 50.0 40.3 40.0 35.9 30.0 23.3 19.2 20.0 14.3 13.1 13.0 10.0 7.3 - Internet Enterprise Collaboration Diversified Social Marketing Advertising Gaming Media Virtual World Retail Networking 2 3 1 9 17 5 3 28 10 2 # Companies 13 www.mackieresearch.com
    • 14 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0 43 Ac credited Members H olding C orporation Source: CapitalIQ 36 Worlds .c om Inc . 26 S pec trumDNA, Inc . S ocialG O P LC 25 17 T encent H oldings L td. MO K O . mobi L imited 15 15 G eoS entric O y j 12 P aid Inc . 11 B ey ond C ommerce, Inc . L ingo Media C orporation C hines e G amer International 9 9 9 G ree, Inc . 7 DigitalP os t Interactive, Inc . 7 Mood Media C orporation Dena C o. L td. T rans G aming, Inc . 6 6 5 Ac celeriz e New Media, Inc. 5 HU G H E S T elematic s , Inc . F rogs ter Interac tiv e P ic tures AG C hangyou. com Limited Mix i, Inc. 4 4 4 4 S K C ommunications C o., L td. T aleo C orp. K ings oft C orporation Limited WebMediaB rands Inc 4 3 3 3 Motric ity , Inc . is eemedia Inc . Wiz z ard S oftware C orporation EV/Revenue Ranking 3 3 3 O pen T ex t C orp. eP ro L td. Modern T imes G roup Mtg AB H anbitS oft, Inc. XING AG NE O WIZ G ames C orporation S ohu.c om Inc . S core Media Inc. U O MO Media, Inc V elti P lc S hutterfly, Inc. P NI Digital Media Inc . V alueC lick , Inc . G ungH o O nline E ntertainment, Inc . P latforma Mediowa P oint G roup S . A. 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 Myriad G roup AG NeuL ion Inc orporated Webz en Inc. G amania Digital E ntertainment C o., L td. Accredited Members Hutc his on T elec ommunic ations Hong revenue multiple at 43x Y D O nline C orp. Holding Co. has highest S park Network s , Inc . U nilav a C orporation 2 1 1 1 1 1 1 1 S NAP Interactive, Inc . Y nk K orea Inc. NetDragon WebS oft, Inc. AQ Interactive, Inc . P oints International L td. Internet G roup S A O AO R B C Information S ys tems O riented Media G roup B erhad T he New Y ork T imes C ompany IAC /InterAc tiv eC orp. DADA S pA Northgate T echnologies Limited T heS treet. com, Inc . U nited O nline, Inc . Unis erve C ommunic ations C orp. AO L, Inc. C DC C orp. G lu Mobile, Inc . 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 G igaMedia L td. T ree. C om, Inc . Actoz S oft C o., Ltd. C y berplex Inc. O penwav e S y s tems Inc. R ealNetwork s Inc . J umbuc k E ntertainment L imited G ameO n C o L td. As k net AG Look S mart, L td. 0 0 0 0 0 0 0 0 0 0 DigitalT own, Inc. www.mackieresearch.com
    • 15 0. 0 10. 0 20. 0 30. 0 40. 0 50. 0 60. 0 Source: CapitalIQ HanbitS oft, Inc . 48.9 S K C ommunic ations C o. , Ltd. 41. 3 T enc ent Holdings Ltd. 33. 0 Motric ity , Inc . T aleo C orp. 27.227.0 F rogs ter Interac tive P ic tures AG 25.8 C hines e G amer International 18.0 My riad G roup AG Mix i, Inc . Modern T imes G roup Mtg AB G ree, Inc . 16. 916. 516. 315.9 AQ Interac tive, Inc . S hutterfly , Inc . 14.614.1 T heS treet. c om, Inc . EV/EBITDA Ranking S c ore Media Inc . Dena C o. Ltd. 12. 812. 612. 2 Y D O nline C orp. O penwave S y s tems Inc . 11.110.7 IAC /InterAc tiveC orp. O pen T ex t C orp. DADA S pA 9. 6 9.2 9.1 G amania Digital E ntertainment C o., Ltd. group at 48.9x XING AG HanbitSoft leads the G ungHo O nline E ntertainment, Inc . V elti P lc P NI Digital Media Inc . NE O WIZ G ames C orporation K ings oft C orporation Limited Unis erve C ommunic ations C orp. 8.4 8. 3 7. 7 7. 6 7.5 7.3 7.3 7.3 N etDragon WebS oft, Inc . S park Network s , Inc . C hangy ou. c om Limited V alueC lic k , Inc . 7. 1 6. 6 6.3 6.3 C DC C orp. Hutc his on T elec ommunic ations Hong K ong Holdings Ltd. T he New Y ork T imes C ompany S ohu.c om Inc . 5.8 5.7 5. 1 4. 9 C y berplex Inc . United O nline, Inc . 4.0 3.6 AO L, Inc . Ac toz S oft C o., Ltd. 2.1 1.9 G ameO n C o Ltd. J umbuc k E ntertainment Limited Mood Media C orporation 0. 6 0. 3 0. 0 www.mackieresearch.com Excluding EV/EBITDA > 100x
    • 16 Source: CapitalIQ 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0 eP ro Ltd. S hutterfly , Inc. 94.5 87.6 P oints International Ltd. 64.6 Mix i, Inc . P/E Ranking C DC C orp. 50. 3 48. 4 T enc ent H oldings Ltd. 43. 9 O pen T ex t C orp. NetDragon W ebS oft, Inc . 40. 3 G ree, Inc . G amania Digita l E ntertainment C o., Ltd. 31. 7 31. 2 30.5 F rogs ter Intera ctive P ictures AG 29.2 Dena C o. Ltd. 27.2 C hines e G amer Internationa l V elti P lc 24.4 23.6 Hutc his on T elec ommunications H ong K ong H oldings Ltd. NE O W IZ G ames C orporation P/E at 94.5x 17.8 17.2 DADA S pA ePro has the highest T he New Y ork T imes C ompany V alueC lic k , Inc. C y berplex Inc . S ohu.com Inc . 15.1 14.9 14.8 14.3 13.4 K ings oft C orpora tion L imited AO L , Inc. 12.6 10.8 C hangy ou. com L imited 9.3 G ameO n C o Ltd. 8.5 U nited O nline, Inc . 8.5 Ngi G roup Inc . 7.3 Unis erve C ommunic ations C orp. 5.1 J umbuc k E ntertainment Limited 2.9 N etea s e.com Inc . 2.3 G iant Intera ctive G roup, Inc . 2.0 S ha nda Interac tive E ntertainment Ltd. 1.9 www.mackieresearch.com
    • 17 Source: CapitalIQ (U S $m) # companies - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 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 Total Market Capitalization 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 97 97 97 97 97 97 96 97 97 97 97 98 98 98 98 98 98 98 99 99 99 99 99 99 99 99 99 99 99 99100101 3/8/2010 3/15/2010 101101 3/22/2010 3/29/2010 4/5/2010 101 4/12/2010 4/19/2010 101101 101101 4/26/2010 5/3/2010 5/10/2010 101 index 5/17/2010 5/24/2010 101101 101101 5/31/2010 in our Web 2.0 102 companies 6/7/2010 at $81.7 bn with 101101 Total market cap now represented 6/14/2010 6/21/2010 6/28/2010 102 7/5/2010 7/12/2010 101102 102101 7/19/2010 102 www.mackieresearch.com
    • 18 - # 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 9 Diversified Gaming 28 Media 10 Social Networking 17 5 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 1 Video 2 Virtual World $36 bn in market cap 1 Vertical Communities 1 Payment Nine Diversified companies totaling 1 Podcasting 3 Infrastructure 1 Learning www.mackieresearch.com
    • 19 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. Open Text Corp. AOL, Inc. GeoSentric Oyj Sohu.com Inc. Giant Interactive Group, Inc. GungHo Online Entertainment, Inc. Changyou.com Limited The New York Times Company Perfect World Co., Ltd. Taleo Corp. ValueClick, Inc. Chinese Gamer International SK Communications Co., Ltd. NEOWIZ Games Corporation Shutterfly, Inc. United Online, Inc. RealNetworks Inc. Motricity, Inc. Hutchison Telecommunications Hong Kong Holdings Gree, Inc. NetDragon WebSoft, Inc. Velti Plc CDC Corp. Gamania Digital Entertainment Co., Ltd. Myriad Group AG XING AG Openwave Systems Inc. Market Cap Ranking OAO RBC Information Systems MOKO.mobi Limited GigaMedia Ltd. The9 Limited AQ Interactive, Inc. Webzen Inc. Points International Ltd. DADA SpA TheStreet.com, Inc. HUGHES Telematics, Inc. Tree.Com, Inc. Actoz Soft Co., Ltd. Score Media Inc. Spark Networks, Inc. Paid Inc. Mood Media Corporation NeuLion Incorporated YD Online Corp. Yippy, Inc. Quepasa Corp. Platforma Mediowa Point Group S.A. PNI Digital Media Inc. Ngi Group Inc. Cyberplex Inc. Glu Mobile, Inc. Gravity Co., Ltd DigitalTown, Inc. ePro Ltd. Multiplied Media Corporation TransGaming, Inc. WebMediaBrands Inc LookSmart, Ltd. NeXplore Corporation dominates group Socialwise, Inc. Accredited Members Holding Corporation Asknet AG Ynk Korea Inc. VOIS, Inc. Accelerize New Media, Inc. Tencent’s $32.8 bn market cap YouBlast Global, Inc. Wizzard Software Corporation Moggle, Inc Northgate Technologies Limited Dolphin Digital Media, Inc. iseemedia Inc. DigitalPost Interactive, Inc. Kent International Holdings Inc. Unilava Corporation Jumbuck Entertainment Limited Worlds.com Inc. SocialGO PLC SNAP Interactive, Inc. Modern Times Group Mtg AB Beyond Commerce, Inc. SpectrumDNA, Inc. IAS Energy, Inc. Kiwibox.Com, Inc. Uniserve Communications Corp. Internet Group SA Oriented Media Group Berhad En2Go International, Inc. Mobile Data Corp. UOMO Media, Inc LiveWorld Inc. Lingo Media Corporation Kingsoft Corporation Limited GameOn Co Ltd. HanbitSoft, Inc. www.mackieresearch.com
    • Price Performance – 1 Week • Moderately negative price momentum, with 51% of stocks falling over the past Price Momentum week. • The market is see-sawing – this week Flat down, last week up, and the prior week 11% down. Falling 51% Rising 38% 20 www.mackieresearch.com
    • Average Price Performance – 1 Week, by Sector 25.0% 23.0% 22.5% Music sector shows highest 20.0% 16.2% weekly returns 15.0% 10.0% 6.8% 5.2% 5.2% 5.0% 2.5% 1.7% 1.1% 1.0% 0.0% -0.4% -0.5% -0.7% -1.6% -1.9% -2.2% -2.6% -5.0% -3.2% -3.8% -4.9% -5.3% -10.0% -11.1% -15.0% Internet Retail Infrastructure Virtual World Collaboration Networking Financial Payment Communities Learning Advertising Music Mobile Podcasting Dating Diversified Marketing Enterprise Gaming Search Services Video Media SMS/Voice Social Vertical Source: CapitalIQ 21 www.mackieresearch.com
    • 22 -60.0% -40.0% -20.0% 0.0% 20.0% 40.0% 60.0% 80.0% ACCM ETGI UNLA DPDM AIM:SGO Source: CapitalIQ YIPI YBLT OMEDIA ASX:JMB KIWB XTRA:A5A TSX:CX GTSM:3083 TSXV:USS GRVY PAYD TSXV:TNG 3838 3812 2121 A047080 SEHK:215 NYT WEBM KOSE:A069080 TSCM HUTC A066270 CHIN.A 6180 A095660 SNDA RBCI A023770 SFLY PWRD GA IASC.A TREE DGLP MTG B TSXV:PN 3765 VEL A052770 TLEO 590057 WSE:PGM 2497 Price Performance – 1 Week SCLW FRG NTES IEE STVI MYRN 777 TSX:PTS TSXV:MMC DB:M0C SEHK:8086 BYOC LVWD GEO1V O1BC TSE:3632 700 IACI TSX:MM NCTY GIGM OPWV 3888 WSE:IGR QPSA SOHU OTEX VCLK AOL LOV UNTD WZE KNTH TSE:2432 RNWK CYOU A052790 LOOK DGTW TSX:SCR CM:DA ACLZ TSX:NLN WDDD GLUU MBYL TSXV:LM MOTR SPXA VOIS MKB UOMO NXPC www.mackieresearch.com
    • 23 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 0% 500% 1000% 1500% 2000% 2500% OAO RBC Worlds.com Information Inc. Systems Beyond HanbitSoft, Commerce, Inc. Source: CapitalIQ Inc. Frogster Interactive ePro Ltd. Pictures AG AQ DADA SpA Interactive, Inc. SNAP NeXplore Interactive, Corporation Inc. 6 Month 1 Month Points MOKO.mobi International Limited Ltd. Points HanbitSoft, International Inc. Ltd. Velti Plc The9 Limited YouBlast Netease.com Global, Inc. Inc. LiveWorld Glu Mobile, Inc. Inc. Price Performance (Top 10) 0% 10% 20% 30% 40% 50% 60% 0% 500% 1000% 1500% 2000% 2500% 3000% OAO RBC YouBlast Global, Information Inc. Systems Points Yippy, Inc. International Ltd. ePro Ltd. ePro Ltd. SK Quepasa Corp. Communications Co., Ltd. AQ Interactive, LookSmart, Ltd. Inc. 1 Year 3 Month Velti Plc Glu Mobile, Inc. Uniserve Dena Co. Ltd. Communications Corp. Frogster Interactive Velti Plc Pictures AG SK Communications HanbitSoft, Inc. Co., Ltd. Gree, Inc. Yippy, Inc. www.mackieresearch.com
    • 24 -50.0% -45.0% -40.0% -35.0% -30.0% -25.0% -20.0% -15.0% -10.0% -5.0% 0.0% -100.0% -90.0% -80.0% -70.0% -60.0% -50.0% -40.0% -30.0% -20.0% -10.0% 0.0% Kiwibox.Com, Cyberplex Inc. Inc. Jumbuck TransGaming, Source: CapitalIQ Entertainment Inc. Limited Oriented The9 Limited Media Group Berhad SpectrumDNA, YouBlast Inc. Global, Inc. UOMO Media, Yippy, Inc. Inc 1 Week 6 Month Lingo Media SocialGO PLC Corporation Kiwibox.Com, Dolphin Digital Inc. Media, Inc. Unilava Unilava Corporation Corporation En2Go Mobile Data International, Corp. Inc. Accredited En2Go Members International, Holding Inc. Corporation -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% Dolphin Digital Dena Co. Ltd. Media, Inc. Wizzard SocialGO PLC Software Corporation Dolphin Digital Moggle, Inc Media, Inc. Ngi Group Inc. Cyberplex Inc. IAS Energy, Kiwibox.Com, Inc. Inc. 1 Year 1 Month SpectrumDNA, WebMediaBrands Inc. Inc Beyond Beyond Commerce, Commerce, Inc. Inc. UOMO Media, Unilava Inc Corporation En2Go Accredited International, Members Holding Inc. Corporation YouBlast En2Go Global, Inc. International, Inc. www.mackieresearch.com
    • Capital Market Activity (Financing, M&A) 25 www.mackieresearch.com
    • Capital Market Activity – Current Month C om pany Nam e C ountry S e c tor Ac quis ition Ange l/S e e d S e r ie s A S e rie s B S e r ie s C NA Gr and T otal IT A S oftw ar e US A S earc h 700. 0 700.0 infoGROUP US A A dvertis ing 644. 9 644.9 Digital S k y T e c hnologie s R us s ia Divers ified 388.0 388.0 Zynga US A Gaming 100.0 100.0 Atlas s ian A us tralia Enterpris e 60.0 60. 0 S quare s pac e US A B log 38.5 38. 5 S ys om os Canada A naly tic s 35.0 35. 0 Ads m ar k e t Is rael A dvertis ing 17.0 17. 0 BuyWithMe US A S ocial Commerc e 16.0 16. 0 S hopk ic k US A S ocial Commerc e 15.0 15. 0 hi5 US A S oc ial Netw orks 14.0 14. 0 Pixaz za US A V is ual Commerc e 12.0 12. 0 Be yond The Rac k Canada S ocial Commerc e 12.0 12. 0 OC T ANE360 US A A dvertis ing 10.9 10. 9 7 S tar Ente r tainm e nt US A Media 10.0 10. 0 Flirtom atic UK S oc ial Netw orks 9.0 9.0 My-w ardr obe .com UK Internet R etail 9. 0 9.0 InMobi India A dvertis ing 8.0 8.0 AdS afe Me dia US A A dvertis ing 7.3 7.3 Kom li Me dia India A dvertis ing 6.0 6.0 Aur ora Fe int US A Gaming 5.0 5.0 Xgr aph US A A naly tic s 3.8 3.8 V ivox US A S MS /V oic e 2.0 2.0 T hr e dUP US A S ocial Commerc e 1.7 1.7 Gr oupS pac e s UK V ertical Communities 1.3 1.3 Mave n Re s e ar ch US A Comment/R eputation 1.0 1.0 Ge ndai Gam e s US A Gaming 1. 0 1.0 iGuide rs US A S earc h 1. 0 1.0 Matom y Is rael Widget 1.0 1.0 S oho OS US A Enterpris e 1.0 1.0 Hive 7 US A Gaming 0.9 0.9 Blue S w ar m US A S ocial Commerc e 0.8 0.8 L ive fyr e US A Comment/R eputation 0. 8 0.8 Ze Fr ank Gam e s US A Gaming 0.5 0.5 1391.7 3.3 110.3 58.3 9.0 561.8 2134.3 26 www.mackieresearch.com
    • Capital Market Activity – Current Month, by Sector $ Raised # Deals Other Diversified 9% Diversified 3% 20% Advertising 18% Search 6% Search 36% Other Advertising 73% 35% 27 www.mackieresearch.com
    • Financing Activity Large transactions drive July 1000.0 30.0 financing to near record levels 900.0 25.6 25.0 800.0 700.0 20.0 600.0 (US$m) (US$m) 500.0 13.7 15.0 12.2 400.0 9.6 10.1 8.5 10.0 300.0 8.1 7.4 6.3 6.4 5.2 5.7 5.5 200.0 5.0 100.0 0.0 0.0 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 *Dec-09 includes $180m Zynga investment Apr-10 includes $300m DST investment Total Average per Deal LTM Total Average** **Excludes Dec-09, Apr- Jun-10 includes $147m Zynga investment 10 28 www.mackieresearch.com
    • 29 (US$m) 0.0 100.0 200.0 300.0 400.0 500.0 600.0 700.0 800.0 900.0 1,000.0 # companies 7 Search Advertising 24 Gaming 17 1 Diversified 7 Media Social Commerce 12 Analytics 12 7 Internet Retail 6 Enterprise 3 Collaboration Mobile 10 8 Social Networks 2 Music 5 Virtual World 1 Blog 6 Vertical Communities 3 Location-based SNS 6 Infrastructure 4 Video deals, $851 mm) 2 SMS/Voice area of interest in the past three months (24 Advertising the biggest 4 Comment/Reputation 2 Mobile Ad 2 Virtual Goods 3 Financial Services 1 Visual Commerce 2 Widget 3 Aggregation 2 Publishing 3 Travel 1 Capital Market Activity Ranking – by Sector, last three months Microblog 1 Online Learning Crowdsourced 1 Content www.mackieresearch.com
    • 30 (US$ mm) 0.0 100.0 200.0 300.0 400.0 500.0 600.0 700.0 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Social Networks Jan-09 Feb-09 Mar-09 Gaming Apr-09 $ Raised May-09 Jun-09 Advertising Jul-09 Aug-09 Video Sep-09 Oct-09 Diversified Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-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 Dec-08 Social Networks Jan-09 Feb-09 Mar-09 Advertising Apr-09 May-09 Gaming Jun-09 # Deals Jul-09 Aug-09 Sep-09 Virtual World Oct-09 Nov-09 Video Dec-09 Jan-10 Feb-10 Mar-10 Top 5 sectors average $175 mm & 16 deals per month (aggregate) Apr-10 May-10 Jun-10 Jul-10 www.mackieresearch.com
    • Top 10 (2010 YTD) Financing Acquisitions 800.0 800 700.0 700.0 688.0 700 644.9 600 600.0 500 500.0 400 400.0 300 300.0 225.0 247.0 187.5 200 161.5 160.0 200.0 142.0 126.5 110.0 100.0 135.0 100 100.0 60.0 50.0 50.0 44.0 40.0 38.5 35.0 0 Ankeena Networks Alloy ITA Software Turbine infoGROUP Exalead ICQ Woot Jigsaw Siri 0.0 Technologies Zynga LivingSocial Groupon Atlassian Gilt Groupe Glam Media Tremor Media Squarespace Qiyi Digital Sky DST soars to top with almost $700 million in financing this year 31 www.mackieresearch.com
    • Upcoming Events/Earnings E arnings C alendar Company Date / Time Quarter Conf Call Details Modern Times Group Mtg AB (OM:MTG B) Jul-20-2010 9:00 AM Q2/10 46-0-8-5051-3785 The New York Times Company (NYSE:NYT) Jul-22-2010 11:00 AM Q2/10 888-293-6979 Changyou.com Limited (NasdaqGS:CYOU) Jul-26-2010 7:00 AM Q2/10 1-866-804-6927 Sohu.com Inc. (NasdaqGS:SOHU) Jul-26-2010 8:30 AM Q2/10 1-877-941-6009 IAC/InterActiveCorp. (NasdaqGS:IACI) Jul-28-2010 11:00 AM Q2/10 NA Shutterfly, Inc. (NasdaqGS:SFLY) Jul-28-2010 5:00 PM Q2/10 970-315-0490 Taleo Corp. (NasdaqGM:TLEO) Jul-28-2010 5:30 PM Q2/10 NA Tree.Com, Inc. (NasdaqGM:TREE) Jul-29-2010 11:00 AM Q2/10 877-874-1588 RealNetw orks Inc. (NasdaqGS:RNWK) Jul-29-2010 5:00 PM Q2/10 800-857-5305 LookSmart, Ltd. (NasdaqGM:LOOK) 2-Aug-10 Q2/10 NA Glu Mobile, Inc. (NasdaqGM:GLUU) Aug-03-2010 4:30 PM Q2/10 877-311-0653 Motricity, Inc. (NasdaqGM:MOTR) Aug-03-2010 5:00 PM Q2/10 1-877-941-8416 TheStreet.com, Inc. (NasdaqGM:TSCM) Aug-04-2010 5:00 PM Q2/10 866-730-5767 AOL, Inc. (NYSE:AOL) Aug-04-2010 8:00 AM Q2/10 866-362-4820 ValueClick, Inc. (NasdaqGS:VCLK) Aug-05-2010 4:30 PM Q2/10 818-575-4677 Openw ave Systems Inc. (NasdaqGS:OPWV) Aug-05-2010 5:00 PM Q4/10 877-941-2068 Open Text Corp. (NasdaqGS:OTEX) Aug-18-2010 5:00 PM Q4/10 416-644-3414 The9 Limited (NasdaqGS:NCTY) Aug-24-2010 9:00 PM Q2/10 1-866-788-0538 Source: CapitalIQ 32 www.mackieresearch.com
    • Public Company Listing T rading C urre nt US $ Mark e t C om pany Nam e T ick e r Exchange C ur re ncy HQ Price C ap (m m ) Em ploye e s A ccelerize New M edia, Inc. ACLZ OTCBB USD United States 0.51 15.9 10 A ccredited M embers Holding Co rpo ratio n ACCM OTCBB USD United States 0.75 21 .9 8 A cto z So ft Co ., Ltd. A052790 KOSE KRW So uth Ko rea 10,800 78.8 NA A OL, Inc. AOL NYSE USD United States 21 .09 2,250.7 6,700 A Q Interactive, Inc. 3838 TSE JP Y Japan 164,900 1 03.5 NA A sknet AG XTRA :A 5A XTRA EUR Germany 2.90 19.0 NA B eyo nd Co mmerce, Inc. BYOC OTCBB USD United States 0.08 5.3 16 CDC Co rp. CHIN.A NasdaqGS USD Ho ng Ko ng 2.07 21 8.6 2,81 0 Changyo u.co m Limited CYOU NasdaqGS USD China 26.60 1 .7 ,371 1,308 Chinese Gamer Internatio nal GTSM :3083 GTSM TWD Taiwan 267.00 71 2.8 NA Cyberplex Inc. TSX:CX TSX CA D Canada 0.61 42.0 NA DA DA SpA CM :DA CM EUR Italy 4.56 95.9 597 Dena Co . Ltd. TSE:2432 TSE JP Y Japan 2,1 68 3,565.1 NA DigitalPo st Interactive, Inc. DGLP OTCBB USD United States 0.05 6.8 6 DigitalTown, Inc. DGTW OTCBB USD United States 15.1 32.1 4 Do lphin Digital M edia, Inc. DP DM OTCBB USD United States 0.1 5 9.3 NA En2Go International, Inc. ETGI OTCBB USD United States 0.08 1.9 NA ePro Ltd. SEHK:8086 SEHK HKD Ho ng Ko ng 0.70 30.3 707 Fro gster Interactive P ictures A G FRG XTRA EUR Germany 24.70 10,661 .3 NA Gamania Digital Entertainment Co ., Ltd. 6180 GTSM TWD Taiwan 51 .80 206.3 NA GameOn Co Ltd. 381 2 TSE JP Y Japan 68,700 0.3 NA Geo Sentric Oyj GEO1 V HLSE EUR Finland 0.03 2,059.3 130 Giant Interactive Gro up, Inc. GA NYSE USD China 6.99 1,588.0 1,575 GigaM edia Ltd. GIGM NasdaqGS USD Taiwan 2.20 1 .7 21 NA Glu M o bile, Inc. GLUU NasdaqGM USD United States 1.35 41 .3 479 Gravity Co ., Ltd GRVY NasdaqGM USD So uth Ko rea 1.35 37.5 455 Gree, Inc. TSE:3632 TSE JP Y Japan 6,300 245.2 NA GungHo Online Entertainment, Inc. 3765 OSE JP Y Japan 185,300 1,547.1 NA HanbitSo ft, Inc. A047080 KOSE KRW So uth Ko rea 6,1 20 0.1 NA HUGHES Telematics, Inc. HUTC OTCBB USD United States 2.50 84.3 276 Hutchison Teleco mmunicatio ns Ho ng Kong Ho ldings Ltd. SEHK:21 5 SEHK HKD Ho ng Ko ng 1.73 322.5 1,732 IA C/InterActiveCo rp. IA CI NasdaqGS USD United States 22.61 2,507.1 3,200 IA S Energy, Inc. IA SC.A OTCPK USD Canada 0.05 3.5 NA Internet Gro up SA WSE:IGR WSE P LN P o land 0.76 2.7 NA iseemedia Inc. IEE TSXV CA D Canada 0.1 2 7.6 NA Jumbuck Entertainment Limited ASX:JM B A SX A UD A ustralia 0.1 7 5.9 79 Kent Internatio nal Ho ldings Inc. KNTH OTCPK USD United States 1.90 6.8 NA 33 www.mackieresearch.com
    • Public Company Listing cont. T rading 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 4.07 0.4 2,735 Kiwibo x.Co m, Inc. KIWB OTCB B USD United States 0.01 3.3 6 Lingo M edia Co rpo ratio n TSXV:LM TSXV CA D Canada 0.49 1.2 NA LiveWo rld Inc. LVWD OTCP K USD United States 0.04 1.2 NA Lo o kSmart, Ltd. LOOK NasdaqGM USD United States 1.50 25.7 65 M ixi, Inc. 2121 TSE JP Y Japan 423,500 0.0 NA M o bile Data Co rp. M B YL OTCB B USD United States 0.06 1.4 NA M o dern Times Gro up M tg A B M TG B OM SEK Sweden 442.00 5.4 2,936 M o ggle, Inc DB :M 0C DB EUR United States 0.85 12.3 2 M OKO.mo bi Limited M KB A SX A UD A ustralia 0.08 147.3 NA M o o d M edia Co rpo ratio n TSX:M M TSX CA D Canada 1 .61 60.0 NA M o tricity, Inc. M OTR NasdaqGM USD United States 8.49 337.4 355 M ultiplied M edia Co rpo ratio n TSXV:M M C TSXV CA D Canada 0.1 1 27.7 NA M yriad Gro up A G M YRN SWX CHF Switzerland 4.30 198.6 778 NEOWIZ Games Co rpo ratio n A 095660 KOSE KRW So uth Ko rea 36,900 640.1 NA NetDrago n WebSo ft, Inc. 777 SEHK HKD China 3.58 242.3 2,901 Netease.co m Inc. NTES NasdaqGS USD China 33.53 4,351 .0 4,624 NeuLio n Inco rpo rated TSX:NLN TSX CA D Canada 0.47 52.1 224 NeXplo re Co rpo ratio n NXP C OTCP K USD United States 0.45 25.1 NA Ngi Gro up Inc. 2497 TSE JP Y Japan 30,400 45.1 NA No rthgate Techno lo gies Limited 590057 B SE INR India 16.05 1 .9 1 NA OA O RB C Info rmatio n Systems RB CI M ICEX RUB Russia 33.90 150.1 2,523 Open Text Co rp. OTEX NasdaqGS USD Canada 39.72 2,255.3 3,700 Openwave Systems Inc. OP WV NasdaqGS USD United States 1.96 164.4 590 Oriented M edia Gro up B erhad OM EDIA KLSE M YR M alaysia 0.07 2.7 NA P aid Inc. P A YD OTCB B USD United States 0.24 65.1 20 P erfect Wo rld Co ., Ltd. P WRD NasdaqGS USD China 23.95 1 99.0 ,1 2,896 P latfo rma M edio wa P o int Gro up S.A . WSE:P GM WSE P LN P o land 1.47 47.9 NA P NI Digital M edia Inc. TSXV:P N TSXV CA D Canada 1 .41 45.8 NA P o ints Internatio nal Ltd. TSX:P TS TSX CA D Canada 0.70 99.5 93 Quepasa Co rp. QP SA OTCB B USD United States 3.75 48.6 71 RealNetwo rks Inc. RNWK NasdaqGS USD United States 3.42 462.6 1,754 Sco re M edia Inc. TSX:SCR TSX CA D Canada 0.91 70.1 220 Shanda Interactive Entertainment Ltd. SNDA NasdaqGS USD China 38.98 2,31 4.6 5,721 Shutterfly, Inc. SFLY NasdaqGS USD United States 23.80 639.1 519 SK Co mmunicatio ns Co ., Ltd. A 066270 KOSE KRW So uth Ko rea 19,250 652.3 NA 34 www.mackieresearch.com
    • Public Company Listing cont. T rading C ur re nt US $ Mar k e t C om pany Nam e T ick e r Exc hange C ur re ncy HQ Pr ice C ap (m m ) Em ploye e s SNA P Interactive, Inc. STVI OTCB B USD United States 0.17 5.6 15 So cialGO P LC A IM :SGO A IM GB P United Kingdo m 0.01 5.6 9 So cialwise, Inc. SCLW OTCB B USD United States 0.46 22.9 NA So hu.co m Inc. SOHU NasdaqGS USD China 42.1 3 1,593.3 3,997 Spark Netwo rks, Inc. LOV A M EX USD United States 3.19 65.7 155 SpectrumDNA , Inc. SP XA OTCB B USD United States 0.07 4.8 8 Taleo Co rp. TLEO NasdaqGM USD United States 24.62 978.9 91 6 Tencent Ho ldings Ltd. 700 SEHK HKD China 139.60 32,832.1 7,845 The New Yo rk Times Co mpany NYT NYSE USD United States 8.88 1,292.9 7,665 The9 Limited NCTY NasdaqGS USD China 4.28 109.2 1 0 ,01 TheStreet.co m, Inc. TSCM NasdaqGM USD United States 2.75 86.8 274 TransGaming, Inc. TSXV:TNG TSXV CA D Canada 0.49 27.6 28 Tree.Co m, Inc. TREE NasdaqGM USD United States 7.16 80.2 700 Unilava Co rpo ratio n UNLA OTCB B USD United States 0.06 6.0 40 Uniserve Co mmunicatio ns Co rp. TSXV:USS TSXV CA D Canada 0.1 1 3.0 NA United Online, Inc. UNTD NasdaqGS USD United States 5.94 51 7.6 1,699 UOM O M edia, Inc UOM O OTCB B USD Canada 0.02 1.4 NA ValueClick, Inc. VCLK NasdaqGS USD United States 10.95 890.5 1,086 Velti P lc VEL A IM GB P United Kingdo m 4.09 233.7 459 VOIS, Inc. VOIS OTCB B USD United States 0.01 18.0 2 WebM ediaB rands Inc WEB M NasdaqGS USD United States 0.72 27.0 83 Webzen Inc. KOSE:A 069080 KOSE KRW So uth Ko rea 10,450 1 .9 01 326 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 0.10 5.7 1 XING A G O1 C B XTRA EUR Germany 28.40 190.0 293 YD Online Co rp. A 052770 KOSE KRW So uth Ko rea 4,150 51 .2 NA Yippy, Inc. YIP I OTCB B USD United States 2.23 50.6 NA Ynk Ko rea Inc. A 023770 KOSE KRW So uth Ko rea 2,805 18.4 NA Yo uB last Glo bal, Inc. YB LT OTCB B USD United States 0.39 13.4 6 35 www.mackieresearch.com
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