Web 2.0 Weekly - May 26, 2010: "Market Declines Impact Web 2.0 Universe Valuations"
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Web 2.0 Weekly - May 26, 2010: "Market Declines Impact Web 2.0 Universe Valuations"

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May tracking to average monthly levels: After a slow start to the month, financing in the Web 2.0 universe has rebounded and is now on track with prior months. Total transaction value (excluding M&A) ...

May tracking to average monthly levels: After a slow start to the month, financing in the Web 2.0 universe has rebounded and is now on track with prior months. Total transaction value (excluding M&A) in the Web 2.0 universe for May (month-to-date) is $189.9 million from 30 transactions, averaging $6.3 million each. In comparison, total capital raised in May 2009 was $375.0 million, averaging $12.5 million over 30 deals. Excluding May 09, Dec 09 and Apr 10, the average monthly total is $212 million.

Deals (M&A, Finance)
Cyberplex (TSX:CX) announced plans to acquire Tsavo Media for US$75.6 mm, partially funded through a C$30 mm bought deal financing at $0.55.
Online gaming company Gaikai, raised $10.0 mm in Series B financing.
Blip.TV, online TV provider, raised $10.1 mm in Series C financing.

Financial Results/Guidance
Netease.com (NasdaqGS:NTES, online gaming) reported Q1/F10 revenue of RMB 1.2 bn (vs. RMB 781.7 mm in the same period last year).
Snap Interactive (OTCBB:STVI, online dating) reported Q1/F10 revenue growth of 20% to $0.927 mm from $0.768 mm.

Bearish week again: Price performance was largely negative in our Web 2.0 universe. This impacted valuation multiples, which fell for ~80% of the companies in our universe.

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    Web 2.0 Weekly - May 26, 2010: "Market Declines Impact Web 2.0 Universe Valuations" Web 2.0 Weekly - May 26, 2010: "Market Declines Impact Web 2.0 Universe Valuations" Presentation Transcript

    • Web 2.0 Weekly “Market Declines Impact Web 2.0 Universe Valuations” May 26, 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) Cyberplex (TSX:CX) announced plans to acquire Tsavo Media for US$75.6 mm, partially funded through a C$30 mm bought deal financing at $0.55. Online gaming company Gaikai, raised $10.0 mm in Series B financing. Blip.TV, online TV provider, raised $10.1 mm in Series C financing. Financial Results/Guidance Netease.com (NasdaqGS:NTES, online gaming) reported Q1/F10 revenue of RMB 1.2 bn (vs. RMB 781.7 mm in the same period last year). Snap Interactive (OTCBB:STVI, online dating) reported Q1/F10 revenue growth of 20% to $0.927 mm from $0.768 mm. 2 www.mackieresearch.com
    • Public Company Data 3 www.mackieresearch.com
    • Aggregate Public Data Web 2.0 Public Companies Total Median Max Min # Companies 102 - - - Market Cap (US$ mm) 76,398.3 58.8 33,384.2 1.7 Revenue (US$ mm) 23,069.7 58.3 3,057.7 0.0 1 Year revenue growth 5.5% 857.0% -91.4% EBITDA as % of revenue - 13.3% 63.1% -75.0% Net cash (US$ mm) 9,067.7 2.0 1,826.7 -670.8 TEV/Revenue - 1.9x 37.3x 0.0x TEV/EBITDA - 9.2x 45.0x 0.0x P/E - 15.0x 82.6x 0.0x Relative to 52 week high -41.9% -4.7% -96.3% Source: CapitalIQ 4 www.mackieresearch.com
    • 5 0 5 10 15 20 25 30 Gaming 27 Social Networking 16 Media 10 7 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 Germany Australia United Kingdom Hong Kong Poland Russia By Country Finland Sweden Malaysia India Italy Switzerland Israel www.mackieresearch.com
    • Valuation Dashboard – 1 Week Market Cap EV/Revenue Flat Flat 5% 3% Rising 20% Falling 62% Rising 33% Falling 77% EV/EBITDA P/E Flat Flat 2% 0% Rising Rising 17% 20% Falling Falling 80% 81% 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 4/7/2009 4/14/2009 4/21/2009 4/28/2009 5/5/2009 5/12/2009 5/19/2009 5/26/2009 6/2/2009 6/9/2009 6/16/2009 6/23/2009 6/30/2009 7/7/2009 7/14/2009 7/21/2009 Median EV/Revenue 7/28/2009 8/4/2009 8/11/2009 8/18/2009 8/25/2009 9/1/2009 9/8/2009 9/15/2009 9/22/2009 9/29/2009 10/6/2009 Median 10/13/2009 10/20/2009 10/27/2009 11/3/2009 11/10/2009 11/17/2009 11/24/2009 12/1/2009 12/8/2009 12/15/2009 Long-term average 12/22/2009 12/29/2009 1/5/2010 1/12/2010 1/19/2010 1/26/2010 2/2/2010 2/9/2010 2/16/2010 2/23/2010 3/2/2010 down fourth 3/9/2010 3/16/2010 consecutive week Revenue multiples 3/23/2010 3/30/2010 4/6/2010 4/13/2010 4/20/2010 4/27/2010 5/4/2010 5/11/2010 5/18/2010 5/25/2010 393940404041414043434546474746474850515150525354565859596164646463646468696870716965707170707375787780787879788081848281 www.mackieresearch.com
    • 8 Source: CapitalIQ Multiple (x ) # companies 0. 0x 5. 0x 10. 0x 15. 0x 20. 0x 25. 0x 4/7/2009 4/14/2009 4/21/2009 4/28/2009 5/5/2009 5/12/2009 5/19/2009 5/26/2009 6/2/2009 6/9/2009 6/16/2009 6/23/2009 6/30/2009 7/7/2009 Median EV/EBITDA 7/14/2009 7/21/2009 7/28/2009 8/4/2009 8/11/2009 8/18/2009 8/25/2009 9/1/2009 9/8/2009 9/15/2009 9/22/2009 9/29/2009 10/6/2009 Median 10/13/2009 10/20/2009 10/27/2009 11/3/2009 11/10/2009 11/17/2009 11/24/2009 12/1/2009 12/8/2009 12/15/2009 12/22/2009 Long-term average 12/29/2009 1/5/2010 1/12/2010 1/19/2010 1/26/2010 2/2/2010 2/9/2010 2/16/2010 2/23/2010 3/2/2010 below LT average 3/9/2010 remain depressed 3/16/2010 EV/EBITDA multiples 3/23/2010 3/30/2010 4/6/2010 4/13/2010 4/20/2010 4/27/2010 5/4/2010 5/11/2010 5/18/2010 5/25/2010 20 20 22 22 23 23 22 22 24 24 23 23 24 24 26 26 26 26 25 25 26 27 29 30 32 33 35 36 38 41 39 40 39 40 41 39 39 39 42 43 41 41 43 43 42 43 44 47 46 45 51 51 50 53 53 52 53 53 50 50 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 4/7/2009 4/14/2009 4/21/2009 Median P/E 4/28/2009 5/5/2009 5/12/2009 5/19/2009 5/26/2009 6/2/2009 6/9/2009 6/16/2009 6/23/2009 6/30/2009 7/7/2009 7/14/2009 7/21/2009 7/28/2009 8/4/2009 8/11/2009 8/18/2009 8/25/2009 9/1/2009 9/8/2009 9/15/2009 9/22/2009 9/29/2009 10/6/2009 Median 10/13/2009 10/20/2009 10/27/2009 11/3/2009 11/10/2009 11/17/2009 11/24/2009 12/1/2009 12/8/2009 12/15/2009 12/22/2009 Long-term average 12/29/2009 1/5/2010 1/12/2010 1/19/2010 1/26/2010 2/2/2010 2/9/2010 2/16/2010 2/23/2010 3/2/2010 3/9/2010 3/16/2010 below LT average P/E multiples also 3/23/2010 3/30/2010 4/6/2010 4/13/2010 4/20/2010 4/27/2010 5/4/2010 5/11/2010 5/18/2010 5/25/2010 19 19 19 18 18 19 19 19 20 20 19 18 19 19 20 20 21 25 24 25 25 26 27 26 28 30 31 32 31 32 32 34 35 37 38 38 38 38 39 40 41 39 39 39 37 36 37 33 32 31 34 34 34 34 34 34 34 33 31 35 www.mackieresearch.com
    • 10 - 5.0 10.0 15.0 20.0 25.0 # Companies 2 Infrastructure 2 Music 7 Social Networking 1 Learning 5 Diversified 1 Vertical Communities 4 Mobile 3 SMS/Voice 6 Marketing Gaming 21 1 Search 1 Collaboration EV/Revenue 9 Media 3 Advertising 1 Podcasting 1 Video 2 Internet Retail 3 Enterprise 2 Dating 1 Financial Services 1 Virtual World - 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 Average Valuation – by Sector # Companies 1 Mobile 2 Enterprise 5 Diversified 2 Internet Retail 6 Media 1 Collaboration 5 Social Networking EV/EBITDA Gaming 14 3 Marketing 1 Dating 1 Advertising www.mackieresearch.com
    • 11 0. 0 5. 0 10. 0 15. 0 20. 0 25. 0 30. 0 35. 0 40. 0 L ook S mart, L td. As k net AG C y berplex Inc. Actoz S oft C o. , Ltd. Source: CapitalIQ J umbuc k E ntertainment L imited 0.10.10.20.20.20.3 R ealNetwork s Inc. T ree. C om, Inc. O penwav e S y s tems Inc . S NAP Interac tive, Inc . G lu Mobile, Inc . Northgate T echnologies Limited P oints International L td. G igaMedia L td. AO L, Inc . DADA S pA C DC C orp. Unis erv e C ommunications C orp. AQ Interactive, Inc. Internet G roup S A IAC /InterActiv eC orp. United O nline, Inc . T heS treet.c om, Inc . T he New Y ork T imes C ompany NetDragon WebS oft, Inc. O AO R B C Information S ys tems C ornerWorld C orporation EV/Revenue Ranking 0.40.4 0.5 0.50.60.6 0.6 0.70.70.70.70.7 0.70.80.80.80.80.9 0.9 1.0 1.0 H anbitS oft, Inc . H utc his on T elecommunic ations H ong infoG R O U P , Inc . S park Network s , Inc. G amania Digital E ntertainment C o., Ltd. O riented Media G roup B erhad NeuLion Inc orporated 1.2 1.3 1.4 1.4 1.4 1.4 1.5 G ungHo O nline E ntertainment, Inc. V alueC lick , Inc. S hutterfly , Inc . S c ore Media Inc. P latforma Mediowa P oint G roup S . A. Webz en Inc . Modern T imes G roup Mtg AB XING AG S ohu.c om Inc. P NI Digital Media Inc. 1.7 1.7 1.8 1.9 2.02.02.0 2.12.2 2.3 U O MO Media, Inc Wiz z ard S oftware C orporation O pen T ex t C orp. S K C ommunic ations C o. , Ltd. is eemedia Inc. F rogs ter Interac tiv e P ic tures AG eP ro Ltd. My riad G roup AG 2.6 2.72.92.93.0 3.13.1 NE O WIZ G ames C orporation T aleo C orp. Mix i, Inc. 3.4 3.53.63.9 K ings oft C orporation Limited C hangyou. com Limited revenue multiple at 37.3x SpectrumDNA has highest U nilav a C orporation WebMediaB rands Inc 4.14.24.3 4.4 F luid Mus ic C anada, Inc. L ingo Media C orporation HU G H E S T elematic s , Inc . 5.4 5.5 5.8 Ac celeriz e New Media, Inc . V elti P lc 6.26.3 DigitalP os t Interactiv e, Inc. G ree, Inc. 7.9 8.4 Dena C o. L td. 8.8 T rans G aming, Inc. C hines e G amer International G eoS entric O y j 11.211.8 MO K O . mobi Limited 12.8 B ey ond C ommerc e, Inc. 14.5 P aid Inc. T enc ent H oldings L td. 17.417.5 B right T hings plc 25.7 S pectrumDNA, Inc . 37.3 www.mackieresearch.com
    • 12 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0 C y berplex Inc. AO L , Inc . 1. 5 2.1 Source: CapitalIQ United O nline, Inc . NetDragon WebS oft, Inc. H utc his on T elec ommunications H ong K ong H oldings 3. 9 4.6 5. 0 L td. S ohu.c om Inc. T he New Y ork T imes C ompany V alueC lic k , Inc. G ungH o O nline E ntertainment, Inc . C DC C orp. 5.0 5. 1 6. 1 6. 2 6. 2 C hangy ou.c om L imited S park Network s , Inc. infoG R O U P , Inc . 6.5 6. 5 6.7 EV/EBITDA Ranking U nis erve C ommunic ations C orp. XING AG G amania Digital E ntertainment C o., L td. 7. 5 8.1 8. 1 P NI Digital Media Inc. DADA S pA K ings oft C orporation L imited IAC /InterAc tiveC orp. O pen T ex t C orp. 8. 9 8. 9 9. 2 9.6 9. 7 P latforma Mediowa P oint G roup S . A. H anbitS oft, Inc . S c ore Media Inc. 10. 9 11.2 11. 5 NE O WIZ G ames C orporation S hutterfly , Inc. 45.0x G ree, Inc. 12.6 13.1 13. 8 T heS treet.c om, Inc . 13.9 Modern T imes G roup Mtg AB O penwave S y s tems Inc . Points leads the group at G igaMedia L td. Mix i, Inc. 14. 2 14.4 14. 9 15.2 F rogs ter Interactive P ic tures AG Dena C o. L td. 18. 5 19. 3 C hines e G amer International 22. 0 T aleo C orp. 26. 1 V elti P lc 30.4 T enc ent H oldings L td. 33. 7 S K C ommunic ations C o. , L td. P oints International L td. 44.2 45. 0 www.mackieresearch.com Excluding EV/EBITDA > 100x
    • 13 0. 0 10. 0 20. 0 30. 0 40. 0 50. 0 60. 0 70. 0 80. 0 90. 0 C y berplex Inc . Source: CapitalIQ 5.1 U nis erve C ommunic ations C orp. 5. 8 G ameO n C o L td. 8.3 U nited O nline, Inc. 9.4 P/E Ranking C hangy ou.c om L imited 9.6 AO L , Inc. DADA S pA 10. 6 10. 9 S ohu.c om Inc . K ings oft C orporation L imited V alueC lick , Inc . Hutchis on T elec ommunic ations Hong K ong Holdings L td. T he New Y ork T imes C ompany 13.7 14.2 14. 5 14.8 15.0 NetDragon WebS oft, Inc . F rogs ter Interac tive P ic tures AG 20.5 21. 3 G ree, Inc . C hines e G amer International 27.3 29. 2 G amania Digital E ntertainment C o., L td. V elti P lc 30.7 31.8 NE O WIZ G ames C orporation 37.0 Shutterfly has the O pen T ex t C orp. 42. 5 highest P/E at 82.6x Dena C o. L td. T enc ent H oldings L td. 44.7 44.7 infoG R O UP , Inc . C DC C orp. P oints International L td. Mix i, Inc . 46. 8 46. 8 47. 1 47. 2 H anbitS oft, Inc. 61.4 Ac toz S oft C o. , Ltd. 64.9 S hutterfly, Inc . 82. 6 www.mackieresearch.com
    • 14 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 6/2/2009 6/9/2009 6/16/2009 6/23/2009 6/30/2009 7/7/2009 7/14/2009 7/21/2009 7/28/2009 8/4/2009 8/11/2009 8/18/2009 8/25/2009 9/1/2009 9/8/2009 9/15/2009 9/22/2009 9/29/2009 10/6/2009 10/13/2009 10/20/2009 10/27/2009 Total Market Capitalization 11/3/2009 11/10/2009 11/17/2009 98 98 98 98 98 98 98 98 98 98 98 98 98 98 98 98 98 98 99 99 99 99 99 99 100 11/24/2009 12/1/2009 101101 12/8/2009 12/15/2009 12/22/2009 101 12/29/2009 1/5/2010 101101 101101 1/12/2010 1/19/2010 101101 1/26/2010 2/2/2010 2/9/2010 101 Total market cap down over $6 bn 2/16/2010 2/23/2010 101101 101102 3/2/2010 3/9/2010 3/16/2010 102 3/23/2010 3/30/2010 102102 102102 4/6/2010 4/13/2010 102102 4/20/2010 4/27/2010 5/4/2010 102 5/11/2010 5/18/2010 102102 102102 5/25/2010 102 www.mackieresearch.com
    • 15 - # 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 17 1 Collaboration 6 Marketing 3 Enterprise 2 Internet Retail 1 Search 5 Mobile Total Market Cap – by Sector 3 SMS/Voice 2 Music 1 Financial Services 2 Dating 3 Advertising 2 Virtual World 1 Video 1 Vertical Communities over $37.5 bn in market cap 1 Payment 8 Diversified companies totaling 3 Infrastructure 1 Podcasting 1 Learning www.mackieresearch.com
    • 16 0 1,000 2,000 3,000 4,000 5,000 6,000 BroadWebAsia Inc. UOMO Media, Inc CornerWorld Corporation Mobile Data Corp. Source: CapitalIQ SNAP Interactive, Inc. Uniserve Communications Corp. Oriented Media Group Berhad En2Go International, Inc. Beyond Commerce, Inc. Kiwibox.Com, Inc. Bright Things plc SpectrumDNA, Inc. Worlds.com Inc. IAS Energy, Inc. Kent International Holdings Inc. Real Value Estates, Inc. MOKO.mobi Limited DigitalPost Interactive, Inc. iseemedia Inc. Lingo Media Corporation Jumbuck Entertainment Limited Internet Group SA Northgate Technologies Limited Wizzard Software Corporation Sahara Media Holdings, Inc. Dolphin Digital Media, Inc. Accelerize New Media, Inc. VOIS, Inc. Asknet AG NeXplore Corporation Socialwise, Inc. LookSmart, Ltd. Market Cap Ranking Multiplied Media Corporation Unilava Corporation GeoSentric Oyj Glu Mobile, Inc. ePro Ltd. WebMediaBrands Inc Cyberplex Inc. DigitalTown, Inc. TransGaming, Inc. Ngi Group Inc. NeuLion Incorporated Platforma Mediowa Point Group S.A. Gravity Co., Ltd PNI Digital Media Inc. Quepasa Corp. Frogster Interactive Pictures AG Moggle, Inc Score Media Inc. HanbitSoft, Inc. DADA SpA Actoz Soft Co., Ltd. Spark Networks, Inc. Points International Ltd. AQ Interactive, Inc. Tree.Com, Inc. GameOn Co Ltd. Paid Inc. TheStreet.com, Inc. HUGHES Telematics, Inc. Fluid Music Canada, Inc. The9 Limited Webzen Inc. GigaMedia Ltd. OAO RBC Information Systems XING AG Myriad Group AG Openwave Systems Inc. GungHo Online Entertainment, Inc. NetDragon WebSoft, Inc. dominates group CDC Corp. Gamania Digital Entertainment Co., Ltd. infoGROUP, Inc. RealNetworks Inc. Velti Plc SK Communications Co., Ltd. Tencent’s $33 bn market cap United Online, Inc. Shutterfly, Inc. Kingsoft Corporation Limited NEOWIZ Games Corporation Mixi, Inc. Chinese Gamer International ValueClick, Inc. Hutchison Telecommunications Hong Kong Holdings Taleo Corp. Perfect World Co., Ltd. The New York Times Company Changyou.com Limited Giant Interactive Group, Inc. Sohu.com Inc. AOL, Inc. Shanda Interactive Entertainment Ltd. Open Text Corp. IAC/InterActiveCorp. Gree, Inc. Modern Times Group Mtg AB Netease.com Inc. Dena Co. Ltd. Tencent Holdings Ltd. www.mackieresearch.com
    • Price Performance – 1 Week • Negative momentum again, with 74% of stocks falling over the past week Price Momentum (following on last week’s 62% decline). Rising 14% Flat 12% Falling 74% 17 www.mackieresearch.com
    • Average Price Performance – 1 Week, by Sector 20.0% 14.9% 15.0% Only 3 sectors show 8.7% positive returns 10.0% 5.0% 1.4% 0.0% 0.0% -0.4% -0.4% -1.1% -5.0% -2.3% -2.6% -2.9% -3.2% -4.1% -4.3% -5.8% -6.5% -6.9% -10.0% -7.3% -8.0% -10.5% -15.0% -13.9% -20.0% -25.0% -21.4% -24.9% -30.0% Internet Retail Infrastructure Virtual World Networking Collaboration Financial Payment Communities Learning Advertising Music Mobile Diversified Gaming Enterprise Marketing Podcasting Search Dating Services SMS/Voice Media Video Social Vertical Source: CapitalIQ 18 www.mackieresearch.com
    • 19 -100.0% -50.0% 0.0% 50.0% 100.0% 150.0% 200.0% BWBA STVI IASC.A A052770 Source: CapitalIQ ASX:JMB A066270 VOIS GLUU PAYD QPSA RBCI WZE A047080 CHIN.A 3812 DGTW A052790 3888 WSE:IGR 3765 MKB NCTY AOL SEHK:215 SPXA MTG B TSX:FMN 590057 TSCM RNWK 777 LOOK DGLP GTSM:3083 SNDA NXPC 700 HUTC NTES 2497 2121 TSX:SCR VCLK OTEX UNTD KOSE:A069 XTRA:A5A VEL Price Performance – 1 Week PWRD A023770 TREE FRG CYOU SOHU TSE:2432 OMEDIA TLEO WEBM SFLY OPWV TSXV:USS TSX:PTS GIGM TSXV:TNG SCLW NYT LOV AIM:BGT CM:DA UNLA TSX:NLN IUSA GA TSXV:PN KNTH GRVY 6180 KIWB TSXV:LM TSXV:MMC ETGI DPDM DB:M0C GEO1V CWRL RVLU WSE:PGM IEE IACI 3838 TSE:3632 O1BC SEHK:8086 TSX:CX ACLZ MYRN UOMO A095660 BYOC WDDD MBYL SHHD www.mackieresearch.com
    • 20 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 0% 500% 1000% 1500% 2000% 2500% OAO RBC Sahara Media Information Holdings, Inc. Systems ePro Ltd. ePro Ltd. Source: CapitalIQ Uniserve Communications Quepasa Corp. Corp. Mobile Data AQ Interactive, Inc. Corp. Uniserve Communications Velti Plc Corp. 6 Month 1 Month Velti Plc LookSmart, Ltd. SK Gamania Digital Communications Entertainment Co., Ltd. Co., Ltd. Beyond Dena Co. Ltd. Commerce, Inc. Points Lingo Media International Ltd. Corporation Score Media Inc. ValueClick, Inc. Price Performance (Top 10) 0% 20% 40% 60% 80% 100% 120% 140% 160% 0% 500% 1000% 1500% 2000% 2500% 3000% OAO RBC Beyond Information Commerce, Systems Inc. ePro Ltd. ePro Ltd. Sahara Media Quepasa Corp. Holdings, Inc. LookSmart, Velti Plc Ltd. TransGaming, IAS Energy, Inc. Inc. 1 Year 3 Month Uniserve Communications Velti Plc Corp. DigitalPost Worlds.com Interactive, Inc. Inc. Frogster Glu Mobile, Interactive Inc. Pictures AG NEOWIZ VOIS, Inc. Games Corporation Quepasa Dena Co. Ltd. Corp. www.mackieresearch.com
    • 21 -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% Northgate Quepasa Corp. Technologies Limited Source: CapitalIQ Paid Inc. iseemedia Inc. Kiwibox.Com, Glu Mobile, Inc. Inc. Cyberplex Inc. VOIS, Inc. SK Actoz Soft Communications Co., Ltd. Co., Ltd. 1 Week 6 Month Wizzard Jumbuck Software Entertainment Corporation Limited CornerWorld YD Online Corp. Corporation En2Go International, IAS Energy, Inc. Inc. UOMO Media, SNAP Inc Interactive, Inc. 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% Wizzard Mixi, Inc. Software Corporation Actoz Soft IAS Energy, Co., Ltd. Inc. Ngi Group Inc. Cyberplex Inc. Northgate The9 Limited Technologies Limited SpectrumDNA, VOIS, Inc. Inc. 1 Year 1 Month GungHo Online CornerWorld Entertainment, Corporation Inc. En2Go IAS Energy, International, Inc. Inc. UOMO Media, BroadWebAsia Inc Inc. Beyond CornerWorld Commerce, Corporation Inc. BroadWebAsia SNAP Inc. Interactive, Inc. www.mackieresearch.com
    • Capital Market Activity (Financing, M&A) 22 www.mackieresearch.com
    • Financing Activity – Current Month C om pany Nam e C ountr y S e ctor Acquis ition A nge l/S e e d S e r ie s A S e r ie s B S e r ie s C Grand T otal T s avo Me dia US A Media 75.0 75. 0 C ube T r e e US A Collaboration 50.0 50. 0 Gilt Gr oupe US A Internet R etail 35.0 35. 0 S cout L abs US A A naly tic s 20.0 20. 0 Booyah US A V irtual World 20.0 20. 0 Huddle UK Enterpris e 10. 2 10. 2 Blip.tv US A V ideo 10.1 10. 1 Fatfoogoo A us tria V irtual Goods 10.0 10. 0 Gaik ai Netherlands G aming 10. 0 10. 0 Wor ldw ide w ork e r UA E V ertic al Communities 9. 0 9.0 V antr ix Canada Mobile 8. 7 8.7 S im ple Ge o US A Inf ras truc ture 8. 1 8.1 BuzzFe e d US A A ggregation 8.0 8.0 S w ipe ly US A S oc ial Commerc e 7. 5 7.5 Grock it US A V irtual World 7. 0 7.0 C rite o US A A dvertis ing 7. 0 7.0 J e lli US A Mus ic 7. 0 7.0 Wor dS tr e am US A S earc h 6.0 6.0 S tack Ove r flow US A V ertic al Communities 6. 0 6.0 Enquis ite US A A naly tic s 5. 2 5.2 A d.ly US A A dvertis ing 5.0 5.0 He lloWalle t US A Financ ial S ervic es 3. 6 3.6 S w aptre e US A S oc ial Commerc e 3. 3 3.3 T w e e tDe ck UK Microblog 3.0 3.0 Woozw or ld Canada V irtual World 3. 0 3.0 Babble US A V ertic al Communities 3.0 3.0 T ick e tfly US A V ertic al Communities 3. 0 3.0 Groupalia S pain S oc ial Commerc e 2. 5 2.5 Ne w s y US A Media 2.0 2.0 Pok e n S w itz erland S oc ial Netw orks 1. 8 1.8 T he Extr aor dinar ie s US A Mobile 1.1 1.1 T itan Gam ing US A G aming 1.0 1.0 L ocalytics US A A naly tic s 0. 7 0.7 Etacts US A Inf ras truc ture 0.7 0.7 MightyMe e ting US A Collaboration 0.3 0.3 appr upt G ermany Mobile A d 164.0 5.1 43.2 45.2 96.3 353.9 23 www.mackieresearch.com
    • Financing Activity – Current Month, by Sector $ Raised # Deals Search 3% Music 3% Aggregation Media 3% Gaming 5% Collaboration 7% Infrastructure Virtual World 8% 5% 8% Mobile Internet Retail 5% 5% Virtual Goods Other 3% Internet Retail 40% Video 13% 3% Virtual World 10% Enterprise 5% Social Commerce Gaming Collaboration 8% 10% 13% Vertical Analytics Communities 8% Advertising 10% Media 8% 19% 24 www.mackieresearch.com
    • Financing Activity 900.0 18.0 May total nears trailing monthly 16.6 average (excluding outlier months) 800.0 16.0 700.0 14.0 12.1 12.2 600.0 12.0 9.6 500.0 9.1 10.0 (US$m) (US$m) 8.9 8.2 400.0 8.0 6.6 6.3 6.2 300.0 5.4 5.3 6.0 4.6 200.0 4.0 100.0 2.0 0.0 0.0 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 *May-09 includes $200m FB investment Dec-09 includes $180m Zynga investment Total Average Apr-10 includes $300m DST investment 25 www.mackieresearch.com
    • 26 (US$m) 0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0 # companies 1 Diversified 8 Mobile 5 Collaboration Gaming 11 7 Media Crowdsourced 6 Content Social 7 Commerce Video 10 Advertising 16 Social 11 Networks 4 Internet Retail Analytics 10 Financial 7 Services Vertical 10 Communities 6 Virtual World 3 Mobile Ad 2 Widget 4 Enterprise 6 Search Mobile 2 3 Payment Infrastructure Location- 4 based SNS Online 1 Learning Advertising has most deals in last 3 months 2 Music 1 Virtual Goods 4 Travel 1 Aggregation 2 Blog 1 Classified 2 Capital Market Activity Ranking – by Sector, last three months Microblog 1 Micromedia 1 Online Dating www.mackieresearch.com
    • 27 (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 Gaming Feb-09 Mar-09 $ Raised Apr-09 Advertising May-09 Jun-09 Jul-09 Virtual World Aug-09 Sep-09 Video Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-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 Social Networks Dec-08 Jan-09 Feb-09 Advertising Mar-09 Apr-09 Gaming May-09 # Deals Jun-09 Jul-09 Virtual World Aug-09 Sep-09 Video Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Top 5 sectors average $155 mm & 14 deals per month (aggregate) Apr-10 May-10 www.mackieresearch.com
    • Upcoming Events/Earnings Company Date Time Quarter Conf Call Details GigaMedia Ltd. (NasdaqGS:GIGM) 27-May-10 7:30 AM (EST) Q1/10 NA Shanda Interactive Entertainment Ltd. (NasdaqGS:SNDA) 1-Jun-10 10:00 AM (CCT) Q1/10 1-866-730-5763 Source: CapitalIQ 28 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 1 17.2 10 A cto z So ft Co ., Ltd. A052790 KOSE KRW So uth Ko rea 9,250 65.6 NA A OL, Inc. AOL NYSE USD United States 21 2,207.0 6,700 A Q Interactive, Inc. 3838 TSE JP Y Japan 120,800 73.2 NA A sknet AG XTRA :A 5A XTRA EUR Germany 3 21 .0 NA B eyo nd Co mmerce, Inc. BYOC OTCBB USD United States 0 4.9 16 B right Things plc AIM :B GT A IM GB P United Kingdo m 0 5.4 9 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 2 233.7 NA Changyo u.co m Limited CYOU NasdaqGS USD China 27 1,405.7 1,308 Chinese Gamer Internatio nal GTSM :3083 GTSM TWD Taiwan 320 851 .2 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 35.5 NA DA DA SpA CM :DA CM EUR Italy 3 65.4 NA Dena Co . Ltd. TSE:2432 TSE JP Y Japan 745,000 3,940.0 NA DigitalPo st Interactive, Inc. DGLP OTCBB USD United States 0 6.9 6 DigitalTown, Inc. DGTW OTCBB USD United States 1 35.6 3 Do lphin Digital M edia, Inc. DP DM OTCBB USD United States 0 16.1 NA En2Go International, Inc. ETGI OTCBB USD United States 0 4.8 NA ePro Ltd. SEHK:8086 SEHK HKD Ho ng Ko ng 1 34.9 NA Fluid M usic Canada, Inc. TSX:FM N TSX CA D United States 2 94.1 NA Fro gster Interactive P ictures A G FRG XTRA EUR Germany 18 56.5 NA Gamania Digital Entertainment Co ., Ltd. 6180 GTSM TWD Taiwan 52 249.5 NA GameOn Co Ltd. 381 2 TSE JP Y Japan 71,000 78.8 NA Geo Sentric Oyj GEO1 V HLSE EUR Finland 0 33.0 120 Giant Interactive Gro up, Inc. GA NYSE USD China 7 1,609.9 NA GigaM edia Ltd. GIGM NasdaqGS USD Taiwan 2 134.1 NA Glu M o bile, Inc. GLUU NasdaqGM USD United States 1 34.9 479 Gravity Co ., Ltd GRVY NasdaqGM USD So uth Ko rea 2 50.9 469 Gree, Inc. TSE:3632 TSE JP Y Japan 5,510 2,776.2 NA GungHo Online Entertainment, Inc. 3765 OSE JP Y Japan 1 ,500 71 21 9.2 NA HanbitSo ft, Inc. A047080 KOSE KRW So uth Ko rea 3,410 59.7 NA HUGHES Telematics, Inc. HUTC OTCBB USD United States 3 92.4 276 Hutchison Teleco mmunicatio ns Ho ng Kong Ho ldings Ltd. SEHK:21 5 SEHK HKD Ho ng Ko ng 1 888.7 1,732 IA C/InterActiveCo rp. IA CI NasdaqGS USD United States 23 2,507.1 3,200 IA S Energy, Inc. IA SC.A OTCPK USD Canada 0 6.3 NA infoGROUP , Inc. IUSA NasdaqGS USD United States 8 457.9 3,146 29 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 iseemedia Inc. IEE TSXV CA D Canada 0.11 7.1 79 Jumbuck Entertainment Limited A SX:JM B A SX A UD A ustralia 0.19 7.6 NA Kent Internatio nal Ho ldings Inc. KNTH OTCP K USD United States 1.80 6.4 2,735 Kingso ft Co rpo ratio n Limited 3888 SEHK HKD China 4.78 667.4 6 Kiwibo x.Co m, Inc. KIWB OTCB B USD United States 0.01 5.0 NA Lingo M edia Co rpo ratio n TSXV:LM TSXV CA D Canada 0.65 7.5 65 Lo o kSmart, Ltd. LOOK NasdaqGM USD United States 1.57 26.9 NA M ixi, Inc. 2121 TSE JP Y Japan 398,000.00 685.2 NA M o bile Data Co rp. M B YL OTCB B USD United States 0.10 2.4 2,936 M o dern Times Gro up M tg A B M TG B OM SEK Sweden 380.00 3,1 .4 21 2 M o ggle, Inc DB :M 0C DB EUR United States 1.00 57.3 NA M OKO.mo bi Limited M KB A SX A UD A ustralia 0.07 6.8 NA M ultiplied M edia Co rpo ratio n TSXV:M M C TSXV CA D Canada 0.13 29.0 405 M yriad Gro up A G M YRN SWX CHF Switzerland 4.27 178.6 NA NEOWIZ Games Co rpo ratio n A 095660 KOSE KRW So uth Ko rea 40,250.00 678.5 NA NetDrago n WebSo ft, Inc. 777 SEHK HKD China 3.40 230.4 NA Netease.co m Inc. NTES NasdaqGS USD China 28.92 3,745.7 224 NeuLio n Inco rpo rated TSX:NLN TSX CA D Canada 0.45 48.7 NA 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 33,700.00 46.5 160 No rthgate Techno lo gies Limited 590057 B SE INR India 15.25 1 .2 1 2,523 OA O RB C Info rmatio n Systems RB CI M ICEX RUB Russia 34.1 0 145.8 3,700 Open Text Co rp. OTEX NasdaqGS USD Canada 41 .89 2,378.5 590 Openwave Systems Inc. OP WV NasdaqGS USD United States 2.19 183.7 NA Oriented M edia Gro up B erhad OM EDIA KLSE M YR M alaysia 0.10 4.0 20 P aid Inc. P A YD OTCB B USD United States 0.31 82.8 NA P erfect Wo rld Co ., Ltd. P WRD NasdaqGS USD China 25.56 1,279.6 NA P latfo rma M edio wa P o int Gro up S.A . WSE:P GM WSE P LN P o land 1.66 50.7 91 P NI Digital M edia Inc. TSXV:P N TSXV CA D Canada 1.67 52.5 91 P o ints Internatio nal Ltd. TSX:P TS TSX CA D Canada 0.51 70.8 71 Quepasa Co rp. QP SA OTCB B USD United States 4.20 54.4 NA Real Value Estates, Inc. RVLU OTCB B USD United States 1.03 6.6 1,754 RealNetwo rks Inc. RNWK NasdaqGS USD United States 3.51 474.7 6 Sahara M edia Ho ldings, Inc. SHHD OTCB B USD United States 0.45 15.6 230 Sco re M edia Inc. TSX:SCR TSX CA D Canada 0.77 57.9 NA 30 www.mackieresearch.com
    • Public Company Listing cont. T rading C ur re nt US $ Mark e t C om pany Nam e T ic k e r Exchange C urre ncy HQ Pr ice C ap (m m ) Em ploye e s SK Co mmunicatio ns Co ., Ltd. A066270 KOSE KRW So uth Ko rea 15,750.00 528.8 15 SNA P Interactive, Inc. STVI OTCBB USD United States 0.10 3.3 NA So cialwise, Inc. SCLW OTCBB USD United States 0.51 25.5 3,997 So hu.co m Inc. SOHU NasdaqGS USD China 43.09 1,629.6 155 Spark Netwo rks, Inc. LOV A M EX USD United States 3.31 68.1 8 SpectrumDNA , Inc. SPXA OTCBB USD United States 0.08 5.5 91 6 Taleo Co rp. TLEO NasdaqGM USD United States 24.00 954.2 7,845 Tencent Ho ldings Ltd. 700 SEHK HKD China 142.40 33,384.2 7,665 The New Yo rk Times Co mpany NYT NYSE USD United States 8.95 1,303.1 1 0 ,01 The9 Limited NCTY NasdaqGS USD China 4.20 107.2 274 TheStreet.co m, Inc. TSCM NasdaqGM USD United States 2.88 90.9 28 TransGaming, Inc. TSXV:TNG TSXV CA D Canada 0.67 36.9 700 Tree.Co m, Inc. TREE NasdaqGM USD United States 6.69 75.0 39 Unilava Co rpo ratio n UNLA OTCBB USD United States 0.31 31 .0 NA Uniserve Co mmunicatio ns Co rp. TSXV:USS TSXV CA D Canada 0.13 3.3 1,699 United Online, Inc. UNTD NasdaqGS USD United States 6.58 573.3 NA UOM O M edia, Inc UOM O OTCBB USD Canada 0.02 1.7 1,086 ValueClick, Inc. VCLK NasdaqGS USD United States 10.72 871 .8 450 Velti P lc VEL A IM GB P United Kingdo m 4.72 51 2.6 2 VOIS, Inc. VOIS OTCBB USD United States 0.01 20.6 83 WebM ediaB rands Inc WEB M NasdaqGS USD United States 0.94 35.2 NA Webzen Inc. KOSE:A 069080 KOSE KRW So uth Ko rea 1 ,700.00 1 1 0.8 1 80 Wizzard So ftware Co rpo ratio n WZE A M EX USD United States 0.19 12.5 1 Wo rlds.co m Inc. WDDD OTCBB USD United States 0.10 5.7 NA XING AG O1 C B XTRA EUR Germany 27.89 176.4 NA YD Online Co rp. A052770 KOSE KRW So uth Ko rea 4,340.00 52.1 NA Ynk Ko rea Inc. A023770 KOSE KRW So uth Ko rea 2,620.00 16.7 - 31 www.mackieresearch.com
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