Web 2.0 Weekly - June 22, 2010: "AOL Sells Bebo for Massive Loss"

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Deals (M&A, Finance) …

Deals (M&A, Finance)
AOL is reported to have sold Bebo, the UK-based social network it bought just two years ago for $850 mm, to private equity firm Criterion Partners for under $10 mm. Based on our calculations, AOL paid the equivalent of $38 per Unique Visitor (UV) for Bebo, and sold it for under $1 per UV.

Positive price performance
The Web 2.0 public company universe rose again this week, with 60% of companies seeing their market cap rise vs. 33% falling and 7% flat.

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  • 1. Web 2.0 Weekly “AOL Sells Bebo For Massive Loss” June 22, 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. Key Developments (past week) Deals (M&A, Finance) – Bebo a Disastrous Investment for AOL AOL is reported to have sold Bebo, the UK-based social network it bought just two years ago for $850 mm, to private equity firm Criterion Partners for under $10 mm. Based on our calculations, AOL paid the equivalent of $38 per Unique Visitor (UV) for Bebo, and sold it for under $1 per UV. Financial Results/Guidance/Partnerships/Product Multiplied Media (TSXV:MMC) announced it would be adding Telus Live Agents to its popular location-based search application, Poynt Mobile Data Corp. (OTCBB:MBYL) reported unaudited earnings results for the third quarter and nine months ended April 30, 2010. For the quarter, the company has reported net loss of $24,096 compared to $20,504 for the same period a year ago. For the nine months, the company has reported net loss of $137,531 compared to $129,675 for the same period a year ago. Net cash used in operations was $84,802 compared to $69,666 for the same period a year ago. 2 www.mackieresearch.com
  • 3. Public Company Data 3 www.mackieresearch.com
  • 4. Aggregate Public Data Web 2.0 Public Companies Total Median Max Min # Companies 101 - - - Market Cap (US$ mm) 77,334.7 73.1 30,367.3 1.2 Revenue (US$ mm) 23,508.7 56.9 3,057.7 0.0 1 Year revenue growth 5.7% 8961.6% -100.0% EBITDA as % of revenue - 13.4% 63.1% -63.7% Net cash (US$ mm) 9,036.9 2.3 1,835.9 -670.8 TEV/Revenue - 2.0x 37.2x 0.0x TEV/EBITDA - 8.8x 45.0x 0.6x P/E - 17.0x 91.3x 0.0x Relative to 52 week high -38.4% -1.8% -95.6% Source: CapitalIQ 4 www.mackieresearch.com
  • 5. 5 0 5 10 15 20 25 30 Gaming 28 Social Networking 16 Media 10 8 Diversified 6 Marketing 5 Mobile 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 Collaboration 1 Podcasting 1 Learning 1 Video 1 Search 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. Valuation Dashboard – 1 Week Market Cap EV/Revenue Flat 7% Falling Flat 44% 1% Falling 33% Rising 60% Rising 55% EV/EBITDA P/E Flat Flat 2% 0% Falling Falling 33% 35% Rising 63% Rising 67% 6 www.mackieresearch.com
  • 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 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 Median EV/Revenue 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 Median 11/9/2009 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 Long-term average 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 3/22/2010 3/29/2010 4/5/2010 but remain well increase slightly 4/12/2010 below LT average Revenue multiples 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 6/21/2010 394040404141404343454647474747485051515050535656606161646666676564667071717274736871737372747679808280818081828286838584 www.mackieresearch.com
  • 8. 8 Source: CapitalIQ Multiple (x) # companies 0.0x 5.0x 10.0x 15.0x 20.0x 25.0x 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 Median EV/EBITDA 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 Median 11/9/2009 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 Long-term average 1/25/2010 2/1/2010 2/8/2010 2/15/2010 2/22/2010 3/1/2010 3/8/2010 3/15/2010 3/22/2010 3/29/2010 4/5/2010 EV/EBITDA multiples 4/12/2010 4/19/2010 4/26/2010 increase slightly but remain depressed below LT average 5/3/2010 5/10/2010 5/17/2010 5/24/2010 5/31/2010 6/7/2010 6/14/2010 6/21/2010 2022 2223 23 2222 2324 2322 2424 2626 26 2626 2526 2728 3129 33 3536 3842 3940 3840 4139 39 3942 4342 4143 4343 45 4347 4545 5151 5052 5253 51 5249 5251 www.mackieresearch.com
  • 9. 9 Source: CapitalIQ Multiple (x) # companies 0.0x 5.0x 10.0x 15.0x 20.0x 25.0x 30.0x 35.0x 5/4/2009 5/11/2009 5/18/2009 Median P/E 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 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 Median 11/9/2009 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 Long-term average 1/25/2010 2/1/2010 2/8/2010 2/15/2010 2/22/2010 3/1/2010 average 3/8/2010 3/15/2010 3/22/2010 3/29/2010 4/5/2010 but also are below LT P/E multiples increase 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 6/21/2010 1919 1818 19 1919 1920 1918 1919 1920 21 2424 2525 2627 2727 31 3233 3133 3335 3538 3939 39 3941 4142 4040 4038 37 3834 3332 3535 3535 3535 35 3531 3433 www.mackieresearch.com
  • 10. 10 - 5.0 10.0 15.0 20.0 25.0 30.0 # Companies 1 Virtual World 26.5 2 Infrastructure 10.1 1 Learning 9.7 8 Social Networking 5.7 2 Music 4.8 1 Vertical Communities 4.7 1 Search 4.2 Gaming 21 4.0 6 Diversified 3.7 4 Mobile 3.6 3 SMS/Voice 3.5 6 Marketing 3.1 Average EV/Revenue – by Sector 1 Podcasting 2.8 9 Media 2.6 1 Collaboration 2.5 3 Advertising 2.3 2 Internet Retail 2.0 3 Enterprise 1.8 1 Video 1.8 2 Dating 1.3 1 Financial Services 0.4 www.mackieresearch.com
  • 11. Average EV/EBITDA – by Sector 50.0 45.0 45.0 40.0 35.0 30.0 25.0 20.0 17.6 15.8 15.0 11.7 11.6 11.5 11.2 9.8 9.5 10.0 9.0 7.4 5.0 - Diversified Advertising Internet Retail Search Enterprise Mobile Gaming Social Networking Media Collaboration Dating # Companies 1 2 2 5 2 14 6 1 6 1 1 11 www.mackieresearch.com
  • 12. Average P/E – by Sector 100.0 91.3 90.0 80.0 70.0 60.0 54.2 50.0 39.3 40.0 29.7 30.0 25.8 19.9 20.0 15.3 14.3 13.3 10.0 - Internet Retail Enterprise Collaboration Marketing Social Diversified Advertising Media Gaming Networking 2 3 1 6 16 8 3 10 28 # Companies 12 www.mackieresearch.com
  • 13. 13 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 37 SocialGO PLC Source: CapitalIQ 27 Worlds.com Inc. 19 SpectrumDNA, Inc. 16 Tencent Holdings Ltd. Beyond Commerce, Inc. MOKO.mobi Limited 13 13 13 Paid Inc. Gree, Inc. 11 11 GeoSentric Oyj Chinese Gamer International 10 10 Lingo Media Corporation 9 TransGaming, Inc. Dena Co. Ltd. Fluid Music Canada, Inc. 8 7 7 DigitalPost Interactive, Inc. 6 HUGHES Telematics, Inc. Accelerize New Media, Inc. 5 5 WebMediaBrands Inc Changyou.com Limited SK Communications Co., Ltd. 4 4 4 Taleo Corp. Mixi, Inc. 4 3 Kingsoft Corporation Limited Frogster Interactive Pictures AG iseemedia Inc. Wizzard Software Corporation 3 3 3 3 ePro Ltd. Open Text Corp. EV/Revenue Ranking NEOWIZ Games Corporation Modern Times Group Mtg AB Sohu.com Inc. UOMO Media, Inc XING AG Velti Plc Unilava Corporation PNI Digital Media Inc. Score Media Inc. Shutterfly, Inc. ValueClick, Inc. Webzen Inc. 2 2 2 2 2 2 2 2 2 2 2 2 2 2 GungHo Online Entertainment, Inc. Myriad Group AG NeuLion Incorporated Platforma Mediowa Point Group S.A. HanbitSoft, Inc. YD Online Corp. Spark Networks, Inc. SocialGo has highest Gamania Digital Entertainment Co., Ltd. revenue multiple at 37x 2 2 2 2 2 2 2 1 Hutchison Telecommunications Hong Kong Holdings Ltd. infoGROUP, Inc. Oriented Media Group Berhad SNAP Interactive, Inc. OAO RBC Information Systems NetDragon WebSoft, Inc. CornerWorld Corporation Internet Group SA The New York Times Company IAC/InterActiveCorp. TheStreet.com, Inc. Ynk Korea Inc. AQ Interactive, Inc. Points International Ltd. Cyberplex Inc. CDC Corp. United Online, Inc. 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 AOL, Inc. Uniserve Communications Corp. DADA SpA Northgate Technologies Limited Glu Mobile, Inc. GigaMedia Ltd. Actoz Soft Co., Ltd. Tree.Com, Inc. Openwave Systems Inc. GameOn Co Ltd. RealNetworks Inc. 1 1 1 1 1 0 0 0 0 0 0 Jumbuck Entertainment Limited Asknet AG LookSmart, Ltd. 0 0 0 Dolphin Digital Media, Inc. www.mackieresearch.com
  • 14. 14 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0 Source: CapitalIQ SK Communications Co., Ltd. 45.0 HanbitSoft, Inc. 35.3 Tencent Holdings Ltd. 30.3 Taleo Corp. 28.4 Frogster Interactive Pictures AG Chinese Gamer International Gree, Inc. 19.819.419.2 Myriad Group AG 17.8 Modern Times Group Mtg AB 16.7 Dena Co. Ltd. 16.1 Mixi, Inc. Shutterfly, Inc. 15.414.9 TheStreet.com, Inc. Openwave Systems Inc. 14.213.7 EV/EBITDA Ranking Score Media Inc. YD Online Corp. 12.812.6 AQ Interactive, Inc. 12.4 IAC/InterActiveCorp. Cyberplex Inc. 10.5 9.8 Platforma Mediowa Point Group S.A. Gamania Digital Entertainment Co., Ltd. Open Text Corp. GungHo Online Entertainment, Inc. 9.3 9.0 9.0 8.7 the group at 45.0x NEOWIZ Games Corporation Velti Plc SK Communications leads XING AG PNI Digital Media Inc. DADA SpA Kingsoft Corporation Limited 8.4 8.3 8.3 8.2 8.1 7.9 Uniserve Communications Corp. Spark Networks, Inc. ValueClick, Inc. Changyou.com Limited CDC Corp. NetDragon WebSoft, Inc. infoGROUP, Inc. 7.4 7.4 7.1 7.0 6.8 6.7 6.7 Hutchison Telecommunications Hong Kong Holdings Ltd. The New York Times Company Sohu.com Inc. 5.6 5.6 5.3 United Online, Inc. 3.8 Actoz Soft Co., Ltd. AOL, Inc. 2.5 2.3 GameOn Co Ltd. Jumbuck Entertainment Limited 1.3 0.6 www.mackieresearch.com Excluding EV/EBITDA > 100x
  • 15. 15 Source: CapitalIQ 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0 Shutterfly, Inc. 91.3 Points International Ltd. 57.2 CDC Corp. 51.2 Mixi, Inc. P/E Ranking infoGROUP, Inc. 47.7 47.0 Tencent Holdings Ltd. Open Text Corp. Gree, Inc. 40.5 39.3 37.4 Dena Co. Ltd. 35.0 Gamania Digital Entertainment Co., Ltd. NetDragon WebSoft, Inc. 32.5 30.9 Chinese Gamer International Velti Plc 26.0 25.9 Frogster Interactive Pictures AG 22.7 NEOWIZ Games Corporation 19.6 Hutchison Telecommunications Hong Kong Holdings Ltd. The New York Times Company Shutterfly has the highest P/E at 91.3x ValueClick, Inc. 17.5 17.0 16.3 Cyberplex Inc. Sohu.com Inc. Kingsoft Corporation Limited 15.3 14.2 13.4 DADA SpA AOL, Inc. 12.5 11.8 Changyou.com Limited GameOn Co Ltd. United Online, Inc. 10.2 9.9 9.1 Uniserve Communications Corp. 5.5 Jumbuck Entertainment Limited 3.5 Netease.com Inc. Giant Interactive Group, Inc. Shanda Interactive Entertainment Ltd. 2.3 2.1 1.9 Perfect World Co., Ltd. 1.2 www.mackieresearch.com
  • 16. 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 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 Total Market Capitalization 11/30/2009 98 98 98 98 98 98 98 98 98 98 97 98 98 98 98 99 99 99 99 99 99 99100 12/7/2009 12/14/2009 100100 12/21/2009 12/28/2009 100100 1/4/2010 1/11/2010 1/18/2010 100 1/25/2010 2/1/2010 100100 100100 2/8/2010 2/15/2010 100100 2/22/2010 3/1/2010 3/8/2010 Total market cap increases to $78 bn 101 3/15/2010 3/22/2010 101101 101101 3/29/2010 4/5/2010 4/12/2010 101 4/19/2010 4/26/2010 101101 101101 5/3/2010 5/10/2010 101101 5/17/2010 5/24/2010 5/31/2010 101 6/7/2010 6/14/2010 101101 101101 6/21/2010 101 www.mackieresearch.com
  • 17. 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 8 Diversified Gaming 28 Media 10 Social Networking 16 1 Collaboration 6 Marketing 3 Enterprise 1 Search 2 Internet Retail 5 Mobile Total Market Cap – by Sector 2 Music 3 SMS/Voice 3 Advertising 2 Dating 1 Financial Services 1 Video 2 Virtual World 1 Vertical Communities Eight Diversified companies totaling $35 bn in market cap 1 Payment 1 Learning 3 Infrastructure 1 Podcasting www.mackieresearch.com
  • 18. 18 0 1,000 2,000 3,000 4,000 5,000 6,000 Tencent Holdings Ltd. Dena Co. Ltd. Netease.com Inc. Modern Times Group Mtg AB Source: CapitalIQ Gree, Inc. IAC/InterActiveCorp. AOL, Inc. Shanda Interactive Entertainment Ltd. Open Text Corp. Sohu.com Inc. Giant Interactive Group, Inc. Changyou.com Limited The New York Times Company Perfect World Co., Ltd. Hutchison Telecommunications Hong Kong Holdings Taleo Corp. ValueClick, Inc. Chinese Gamer International NEOWIZ Games Corporation SK Communications Co., Ltd. Mixi, Inc. Shutterfly, Inc. Kingsoft Corporation Limited United Online, Inc. RealNetworks Inc. infoGROUP, Inc. Gamania Digital Entertainment Co., Ltd. GungHo Online Entertainment, Inc. CDC Corp. Velti Plc NetDragon WebSoft, Inc. Myriad Group AG XING AG Market Cap Ranking Openwave Systems Inc. Fluid Music Canada, Inc. OAO RBC Information Systems GigaMedia Ltd. Webzen Inc. The9 Limited HUGHES Telematics, Inc. Actoz Soft Co., Ltd. TheStreet.com, Inc. Points International Ltd. AQ Interactive, Inc. HanbitSoft, Inc. Cyberplex Inc. GameOn Co Ltd. Tree.Com, Inc. DADA SpA Spark Networks, Inc. Paid Inc. Score Media Inc. YD Online Corp. Frogster Interactive Pictures AG NeuLion Incorporated Ngi Group Inc. PNI Digital Media Inc. Moggle, Inc Quepasa Corp. Platforma Mediowa Point Group S.A. Gravity Co., Ltd TransGaming, Inc. Glu Mobile, Inc. WebMediaBrands Inc DigitalTown, Inc. ePro Ltd. dominates group Multiplied Media Corporation Socialwise, Inc. LookSmart, Ltd. GeoSentric Oyj Asknet AG NeXplore Corporation Tencent’s $31 bn market cap Ynk Korea Inc. VOIS, Inc. Accelerize New Media, Inc. Lingo Media Corporation YouBlast Global, Inc. Wizzard Software Corporation Dolphin Digital Media, Inc. Northgate Technologies Limited Unilava Corporation Jumbuck Entertainment Limited iseemedia Inc. Internet Group SA Beyond Commerce, Inc. SocialGO PLC MOKO.mobi Limited Kent International Holdings Inc. DigitalPost Interactive, Inc. IAS Energy, Inc. Kiwibox.Com, Inc. SNAP Interactive, Inc. En2Go International, Inc. Worlds.com Inc. SpectrumDNA, Inc. Oriented Media Group Berhad Uniserve Communications Corp. CornerWorld Corporation BroadWebAsia Inc. UOMO Media, Inc Mobile Data Corp. www.mackieresearch.com
  • 19. Price Performance – 1 Week • Positive price momentum, with 52% of stocks rising over the past week. Price Momentum Flat 9% Rising Falling 52% 39% 19 www.mackieresearch.com
  • 20. Average Price Performance – 1 Week, by Sector 15.0% 13.3% 11.7% Video sector shows 10.0% 7.7% highest weekly returns 5.9% 4.2% 3.3% 5.0% 1.8% 1.7% 0.9% 0.3% 0.1% 0.0% 0.0% -1.9% -2.7% -5.0% -3.2% -3.6% -4.8% -5.6% -10.0% -7.6% -9.9% -15.0% -15.3%-16.2% -20.0% Internet Retail Infrastructure Collaboration Networking Virtual World Financial Payment Communities Advertising Learning Music Enterprise Search Marketing Gaming Diversified Mobile Podcasting Dating Services Media SMS/Voice Video Social Vertical Source: CapitalIQ 20 www.mackieresearch.com
  • 21. 21 -60.0% -40.0% -20.0% 0.0% 20.0% 40.0% 60.0% BWBA GEO1V MBYL UOMO WDDD Source: CapitalIQ STVI SPXA GLUU DPDM VOIS OMEDIA IEE TSXV:USS TSX:FMN ACLZ TSXV:LM GIGM WSE:PGM WZE WSE:IGR UNTD DGTW OTEX NXPC TSXV:PN TSE:2432 O1BC DGLP TSCM 700 QPSA KOSE:A069 A052770 GRVY SNDA 590057 PWRD A095660 CYOU ASX:JMB MKB NCTY DB:M0C PAYD ETGI WEBM TSXV:TNG CWRL Price Performance – 1 Week 3838 VEL TREE IUSA GTSM:3083 IACI XTRA:A5A YBLT LOV A023770 MTG B GA 2121 SOHU 2497 RBCI SEHK:215 SFLY MYRN A066270 6180 3888 SEHK:8086 OPWV 3812 TLEO SCLW CHIN.A TSX:SCR VCLK 777 HUTC LOOK A047080 3765 NTES CM:DA KNTH TSX:CX AIM:SGO FRG AOL NYT KIWB RNWK TSX:NLN TSE:3632 TSX:PTS TSXV:MMC A052790 UNLA BYOC IASC.A www.mackieresearch.com
  • 22. 22 0% 20% 40% 60% 80% 100% 120% 140% 160% 0% 500% 1000% 1500% 2000% 2500% 3000% OAO RBC YouBlast Global, Information Inc. Systems Beyond ePro Ltd. Source: CapitalIQ Commerce, Inc. Beyond Gree, Inc. Commerce, Inc. AQ Interactive, Actoz Soft Co., Inc. Ltd. Uniserve Communications HanbitSoft, Inc. Corp. 6 Month 1 Month SK Velti Plc Communications Co., Ltd. SNAP AQ Interactive, Interactive, Inc. Inc. Score Media Inc. Cyberplex Inc. SK Points Communications International Ltd. Co., Ltd. Quepasa Corp. DADA SpA Price Performance (Top 10) 0% 50% 100% 150% 200% 250% 0% 500% 1000% 1500% 2000% 2500% 3000% 3500% 4000% OAO RBC Beyond Commerce, Information Inc. Systems Quepasa ePro Ltd. Corp. YouBlast Global, ePro Ltd. Inc. SK Communications Velti Plc Co., Ltd. Dena Co. Ltd. Velti Plc 1 Year 3 Month Fluid Music Points International Canada, Inc. Ltd. Hutchison TransGaming, Telecommunications Inc. Hong Kong Holdings Ltd. Frogster Interactive Gree, Inc. Pictures AG Modern Times LookSmart, Ltd. Group Mtg AB Gree, Inc. Glu Mobile, Inc. www.mackieresearch.com
  • 23. 23 -60.0% -50.0% -40.0% -30.0% -20.0% -10.0% 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, VOIS, Inc. Inc. Dolphin Digital Mobile Data Source: CapitalIQ Media, Inc. Corp. MOKO.mobi Glu Mobile, Inc. Limited SpectrumDNA, GeoSentric Oyj Inc. SpectrumDNA, SNAP Inc. Interactive, Inc. 1 Week 6 Month En2Go Worlds.com International, Inc. Inc. UOMO Media, UOMO Media, Inc Inc Unilava Mobile Data Corporation Corp. CornerWorld GeoSentric Oyj Corporation BroadWebAsia BroadWebAsia Inc. Inc. -70.0% -60.0% -50.0% -40.0% -30.0% -20.0% -10.0% 0.0% Price Performance (Bottom 10) -120.0% -100.0% -80.0% -60.0% -40.0% -20.0% 0.0% Paid Inc. Cyberplex Inc. SNAP Dolphin Digital Interactive, Inc. Media, Inc. Lingo Media Moggle, Inc Corporation SpectrumDNA, VOIS, Inc. Inc. Beyond Commerce, GeoSentric Oyj Inc. 1 Year 1 Month CornerWorld Mobile Data Corporation Corp. YouBlast SpectrumDNA, Global, Inc. Inc. UOMO Media, BroadWebAsia Inc Inc. En2Go CornerWorld International, Corporation Inc. BroadWebAsia Unilava Inc. Corporation www.mackieresearch.com
  • 24. Capital Market Activity (Financing, M&A) 24 www.mackieresearch.com
  • 25. Financing Activity – Current Month Company Name Country Sector Acquisition Angel/Seed Debt financing Series A Series B Series C Series D Series E NA Grand Total Zynga USA Gaming 147.0 147.0 Invite Media USA Analytics 70.0 70.0 FetchBack USA Advertising 40.0 40.0 HauteLook USA Internet Retail 31.0 31.0 Challenge Games USA Gaming 20.5 20.5 Mytopia Israel Gaming 18.0 18.0 Marin Software USA Advertising 11.2 11.2 Apptera USA Mobile Ad 10.0 10.0 BookRenter USA Social Commerce 10.0 10.0 RockYou USA Widget 10.0 10.0 Machinima.com USA Virtual World 9.0 9.0 SafetyWeb USA Social Networks 8.0 8.0 Transpera USA Mobile Ad 7.0 7.0 Kudzu Interactive USA Financial Services 7.0 7.0 Curse USA Social Networks 6.0 6.0 Adisn USA Advertising 5.5 5.5 Connotate USA Analytics 5.3 5.3 Bebo UK Social Networks 5.0 5.0 BigDoor Media USA Media 5.0 5.0 BeachMint USA Social Commerce 5.0 5.0 Metacafe USA Video 5.0 5.0 SponsorPay Germany Virtual Goods 4.6 4.6 LucidMedia USA Advertising 4.5 4.5 Magnetic USA Advertising 4.0 4.0 Gogobot USA Travel 4.0 4.0 Giiv USA Social Commerce 3.4 3.4 Attributor USA Analytics 3.2 3.2 Trefis USA Analytics 3.2 3.2 Metamarkets USA Advertising 2.5 2.5 Snaptic USA Mobile 2.3 2.3 WOWIO USA Internet Retail 1.7 1.7 uCirrus USA Infrastructure 1.7 1.7 Cellixis USA Comment/Reputation 1.5 1.5 Dilithium Networks USA Video 1.5 1.5 Schoology USA Online Learning 1.3 1.3 Thumbtack USA Crowdsourced Content 1.2 1.2 SoGeo Netherlands Location-based SNS 0.8 0.8 Rummble UK Location-based SNS 0.8 0.8 TeamSnap USA Vertical Communities 0.7 0.7 159.0 6.0 1.5 50.1 17.0 47.0 175.9 10.0 11.8 478.3 25 www.mackieresearch.com
  • 26. AOL Takes Huge Loss on Bebo Sale Estimated Value per Unique Visitor Source: Company reports, Compete.com $600 $568 $500 AOL paid $850 mm for Bebo in Mar-08 or $38/unique visitor (UV) – at the “under $10 $400 $370 mm” price it sold Bebo for last week that equates to less than $1/UV ($) $300 $200 $200 $125 $113 $88 $100 $67 $48 $42 $40 $40 $38 $32 $29 $29 $25 $20 $16 $15 $7 $7 $6 $5 $5 $2 $2 $1 $0.79 $- MMC (Poynt) Mint.com FriendFeed Club Penguin People Media PageOnce StumbleUpon Rockyou FriendsReunited Ustream Foursquare (rumoured YHOO offer) Facebook Plaxo Linkedin Foursquare Foursquare Urbanspoon Friendster Booya Bebo Playfish Zynga Bebo Blippy Gowalla Yelp Twitter Twitter Dec- Apr- May- Apr- Sep- Oct- Mar- Aug- Sep- Sep- May- Mar- May- Aug- Feb- Feb- Jul- Dec- May- Feb- Nov- Dec- Feb- May- Nov- Aug- Dec- Jun- 09 10 08 10 09 08 10 09 09 09 10 08 09 07 09 08 09 09 10 09 09 09 10 09 09 09 09 10 26 www.mackieresearch.com
  • 27. Financing Activity – Current Month, by Sector $ Raised # Deals Social Social Networks Networks Internet Retail 4% Other 8% 7% 19% Internet Retail 5% Advertising 14% Advertising 14% Other 52% Analytics Analytics 17% 13% Gaming 39% Gaming 8% 27 www.mackieresearch.com
  • 28. Financing Activity 1000.0 June financing above ~US$265 mm 16.0 monthly total deal value average 14.1 900.0 14.0 800.0 12.2 12.0 700.0 10.3 9.6 9.4 10.0 600.0 8.9 (US$m) (US$m) 7.8 500.0 8.0 6.4 6.4 400.0 5.8 5.6 5.4 6.0 4.6 300.0 4.0 200.0 2.0 100.0 0.0 0.0 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-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 $147m Zynga investment 10 28 www.mackieresearch.com
  • 29. 29 (US$m) 0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0 400.0 450.0 500.0 # companies Gaming 13 1 Diversified 5 Collaboration 9 Mobile 8 Media 9 Social Commerce Crowdsourced 3 Content Advertising 16 Analytics 14 the past quarter area of interest in 8 Video Gaming the biggest 5 Internet Retail Social Networks 10 5 Financial Services 5 Virtual World 2 Widget 4 Enterprise 9 Vertical Communities 3 Mobile Ad 5 Infrastructure 1 Mobile Payment 2 2 Virtual Goods Online Learning 2 Music 1 Aggregation 3 Search 4 Travel 1 Classified 1 Publishing 4 Location-based SNS 1 Microblog Capital Market Activity Ranking – by Sector, last three months 1 Micromedia 1 Blog 1 Comment/Reputation www.mackieresearch.com
  • 30. 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 Social Networks Dec-08 Jan-09 Feb-09 Gaming Mar-09 Apr-09 $ Raised May-09 Advertising Jun-09 Jul-09 Video Aug-09 Sep-09 Oct-09 Virtual World Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-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 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Social Networks Jan-09 Feb-09 Advertising Mar-09 Apr-09 May-09 Gaming # Deals Jun-09 Jul-09 Aug-09 Virtual World Sep-09 Oct-09 Video Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 Top 5 sectors average $170 mm & 15 deals per month (aggregate) May-10 Jun-10 www.mackieresearch.com
  • 31. Upcoming Events/Earnings Company Date Time Quarter Conf Call Details Tree.Com, Inc. (NasdaqGM:TREE) 29-Jul-10 11:00 AM (EST) Q2/10 877-874-1588 Source: CapitalIQ 31 www.mackieresearch.com
  • 32. Public Company Listing Trading Current US$ Market Com pany Nam e Ticker Exchange Currency HQ Price Cap (m m ) Em ployees A ccelerize New M edia, Inc. ACLZ OTCBB USD United States 0 15.0 10 A cto z So ft Co ., Ltd. A052790 KOSE KRW So uth Ko rea 12,350 93.4 NA A OL, Inc. AOL NYSE USD United States 23 2,452.4 6,700 A Q Interactive, Inc. 3838 TSE JP Y Japan 1 00 45,1 86.6 NA A sknet AG XTRA :A 5A XTRA EUR Germany 3 20.2 NA B eyo nd Co mmerce, Inc. BYOC OTCBB USD United States 0 7.9 16 B roadWebA sia Inc. BWB A OTCPK USD United States 0 1.7 46 CDC Co rp. CHIN.A NasdaqGS USD Ho ng Ko ng 2 255.9 NA Changyo u.co m Limited CYOU NasdaqGS USD China 29 1,493.9 1,308 Chinese Gamer Internatio nal GTSM :3083 GTSM TWD Taiwan 285 770.8 NA Co rnerWorld Co rpo ratio n CWRL OTCBB USD United States 0 1.9 16 Cyberplex Inc. TSX:CX TSX CA D Canada 1 85.0 NA DA DA SpA CM :DA CM EUR Italy 4 76.1 597 Dena Co . Ltd. TSE:2432 TSE JP Y Japan 2,794 4,368.7 NA DigitalPo st Interactive, Inc. DGLP OTCBB USD United States 0 6.6 6 DigitalTown, Inc. DGTW OTCBB USD United States 1 35.7 3 Do lphin Digital M edia, Inc. DP DM OTCBB USD United States 0 12.4 NA En2Go International, Inc. ETGI OTCBB USD United States 0 4.8 NA ePro Ltd. SEHK:8086 SEHK HKD Ho ng Ko ng 1 35.1 707 Fluid M usic Canada, Inc. TSX:FM N TSX CA D United States 2 179.9 NA Fro gster Interactive P ictures A G FRG XTRA EUR Germany 19 60.8 NA Gamania Digital Entertainment Co ., Ltd. 6180 GTSM TWD Taiwan 55 275.7 NA GameOn Co Ltd. 381 2 TSE JP Y Japan 80,100 84.9 NA Geo Sentric Oyj GEO1 V HLSE EUR Finland 0 22.3 120 Giant Interactive Gro up, Inc. GA NYSE USD China 7 1,653.9 NA GigaM edia Ltd. GIGM NasdaqGS USD Taiwan 2 122.9 NA Glu M o bile, Inc. GLUU NasdaqGM USD United States 1 38.3 479 Gravity Co ., Ltd GRVY NasdaqGM USD So uth Ko rea 2 46.0 NA Gree, Inc. TSE:3632 TSE JP Y Japan 7,550 3,745.2 NA GungHo Online Entertainment, Inc. 3765 OSE JP Y Japan 203,400 255.9 NA HanbitSo ft, Inc. A047080 KOSE KRW So uth Ko rea 4,570 85.3 NA HUGHES Telematics, Inc. HUTC OTCBB USD United States 3 100.1 276 Hutchison Teleco mmunicatio ns Ho ng Kong Ho ldings Ltd. SEHK:21 5 SEHK HKD Ho ng Ko ng 2 1,053.6 1,732 IA C/InterActiveCo rp. IA CI NasdaqGS USD United States 24 2,606.9 3,200 IA S Energy, Inc. IA SC.A OTCPK USD Canada 0 5.6 NA infoGROUP , Inc. IUSA NasdaqGS USD United States 8 459.7 3,146 Internet Gro up SA WSE:IGR WSE P LN P o land 1 8.4 NA 32 www.mackieresearch.com
  • 33. Public Company Listing cont. Trading Current US$ Market Com pany Nam e Ticker Exchange Currency HQ Price Cap (m m ) Em ployees Jumbuck Entertainment Limited A SX:JM B A SX A UD A ustralia 0.20 8.6 79 Kent Internatio nal Ho ldings Inc. KNTH OTCP K USD United States 1.95 6.9 NA Kingso ft Co rpo ratio n Limited 3888 SEHK HKD China 4.34 609.3 2,735 Kiwibo x.Co m, Inc. KIWB OTCB B USD United States 0.01 5.0 6 Lingo M edia Co rpo ratio n TSXV:LM TSXV CA D Canada 0.51 14.6 NA Lo o kSmart, Ltd. LOOK NasdaqGM USD United States 1.37 23.5 65 M ixi, Inc. 2121 TSE JP Y Japan 402,000.00 681 .6 NA M o bile Data Co rp. M B YL OTCB B USD United States 0.05 1.2 NA M o dern Times Gro up M tg A B M TG B OM SEK Sweden 452.80 3,887.4 2,936 M o ggle, Inc DB :M 0C DB EUR United States 0.85 49.2 2 M OKO.mo bi Limited M KB A SX A UD A ustralia 0.07 7.3 NA M ultiplied M edia Co rpo ratio n TSXV:M M C TSXV CA D Canada 0.14 34.4 NA M yriad Gro up A G M YRN SWX CHF Switzerland 4.49 196.9 NA NEOWIZ Games Co rpo ratio n A 095660 KOSE KRW So uth Ko rea 42,100.00 756.8 NA NetDrago n WebSo ft, Inc. 777 SEHK HKD China 3.49 236.4 2,901 Netease.co m Inc. NTES NasdaqGS USD China 33.33 4,31 6.9 NA NeuLio n Inco rpo rated TSX:NLN TSX CA D Canada 0.51 58.4 224 NeXplo re Co rpo ratio n NXP C OTCP K USD United States 0.36 20.1 NA Ngi Gro up Inc. 2497 TSE JP Y Japan 38,500.00 52.4 NA No rthgate Techno lo gies Limited 590057 B SE INR India 16.00 12.2 160 OA O RB C Info rmatio n Systems RB CI M ICEX RUB Russia 38.69 169.9 2,523 Open Text Co rp. OTEX NasdaqGS USD Canada 38.75 2,200.2 3,700 Openwave Systems Inc. OP WV NasdaqGS USD United States 2.15 180.3 590 Oriented M edia Gro up B erhad OM EDIA KLSE M YR M alaysia 0.09 3.6 NA P aid Inc. P A YD OTCB B USD United States 0.26 70.5 20 P erfect Wo rld Co ., Ltd. P WRD NasdaqGS USD China 25.1 6 1,259.5 NA P latfo rma M edio wa P o int Gro up S.A . WSE:P GM WSE P LN P o land 1.45 46.2 NA P NI Digital M edia Inc. TSXV:P N TSXV CA D Canada 1.56 51 .9 NA P o ints Internatio nal Ltd. TSX:P TS TSX CA D Canada 0.62 91 .1 93 Quepasa Co rp. QP SA OTCB B USD United States 3.68 47.7 71 RealNetwo rks Inc. RNWK NasdaqGS USD United States 3.61 488.3 1,754 Sco re M edia Inc. TSX:SCR TSX CA D Canada 0.87 69.3 230 Shanda Interactive Entertainment Ltd. SNDA NasdaqGS USD China 40.37 2,397.1 5,721 Shutterfly, Inc. SFLY NasdaqGS USD United States 24.78 665.5 51 9 SK Co mmunicatio ns Co ., Ltd. A 066270 KOSE KRW So uth Ko rea 20,500.00 737.8 NA 33 www.mackieresearch.com
  • 34. Public Company Listing cont. Trading Current US$ Market Com pany Nam e Ticker Exchange Currency HQ Price Cap (m m ) Em ployees So cialGO P LC A IM :SGO A IM GB P United Kingdom 0.01 7.6 9 So cialwise, Inc. SCLW OTCB B USD United States 0.50 25.0 NA So hu.co m Inc. SOHU NasdaqGS USD China 44.54 1,684.4 3,997 Spark Networks, Inc. LOV A M EX USD United States 3.55 73.1 155 SpectrumDNA , Inc. SP XA OTCB B USD United States 0.06 3.8 8 Taleo Co rp. TLEO NasdaqGM USD United States 25.60 1 7.9 ,01 91 6 Tencent Holdings Ltd. 700 SEHK HKD China 128.90 30,367.3 7,845 The New Yo rk Times Co mpany NYT NYSE USD United States 1 3 0.1 1,474.9 7,665 The9 Limited NCTY NasdaqGS USD China 4.07 103.8 1 0 ,01 TheStreet.co m, Inc. TSCM NasdaqGM USD United States 2.91 91 .8 274 TransGaming, Inc. TSXV:TNG TSXV CA D Canada 0.67 39.1 28 Tree.Com, Inc. TREE NasdaqGM USD United States 6.88 77.1 700 Unilava Co rpo ratio n UNLA OTCB B USD United States 0.11 10.9 40 Uniserve Communications Co rp. TSXV:USS TSXV CA D Canada 0.12 3.4 NA United Online, Inc. UNTD NasdaqGS USD United States 6.36 554.2 1,699 UOM O M edia, Inc UOM O OTCB B USD Canada 0.02 1.6 NA ValueClick, Inc. VCLK NasdaqGS USD United States 12.05 980.0 1,086 Velti P lc VEL A IM GB P United Kingdom 4.51 250.6 459 VOIS, Inc. VOIS OTCB B USD United States 0.01 18.0 2 WebM ediaB rands Inc WEB M NasdaqGS USD United States 1.00 37.4 83 Webzen Inc. KOSE:A 069080 KOSE KRW So uth Ko rea 1 ,700.00 1 1 8.2 1 326 Wizzard So ftware Corpo 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 0.07 4.0 1 XING A G O1 C B XTRA EUR Germany 28.35 1 .2 81 293 YD Online Co rp. A 052770 KOSE KRW So uth Ko rea 4,790.00 61 .3 NA Ynk Ko rea Inc. A 023770 KOSE KRW So uth Ko rea 2,930.00 19.9 NA Yo uB last Glo bal, Inc. YB LT OTCB B USD United States 0.40 13.8 6 34 www.mackieresearch.com
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