The State of the Internet in Brazil 2009

Sao Paulo, Brasil November 2009 The State of the Internet in Brazil Alexander Banks Managing Director, Latin America

The US is No Longer the Center of the Online Universe US Internet Population vs. Rest of the World Distribution of Worldwide Internet Audience Rest of the North World America Europe Latin America Middle East US - Africa Asia Pacific In 1996, 2/3 of the world’s Internet population was in the US, yet today Asia Pacific is the largest region. Many emerging regions are likely to bypass old modes, skipping dial-up to go straight to broadband, making multimedia, video, and collaborative content immediately accessible. Early adoption of mobile web in addition to PC web will likely be popular in many of these high-growth areas. © comScore, Inc. Proprietary and Confidential. 2 Source: comScore World Metrix, July 2009

Latin America Continues Audience Growth Growth is flat in North America, European Worldwide Online Population growth mostly driven by Russia (Millions) Asia continues rapid growth on a very +4% large base 1,165.2 960.2 Growth in LatAm expected to continue on the back of increased residential broadband penetration region-wide August 2008 August 2009 Online Population by Region Aug 2008 +22% (Millions) Aug 2009 477.2 +20% 389.6 325.6 +4% 271.1 183.8 191.0 +28% +79% 70.3 90.2 81.2 45.4 Asia Pacific Europe North America Latin America Middle East - Africa © comScore, Inc. Proprietary and Confidential. 3 Source: comScore Media Metrix, August 2008 to August 2009

China Surges Past the US Internet Users Age 15+ (MM) China 210.2 United States 167.1 Japan 66.9 Germany 42.5 France 38.1 United Kingdom 36.9 India 35.0 Russian Federation 33.2 While US user growth has remained flat over Brazil 31.0 the past year, China, Russia, and Brazil have South Korea 28.8 experienced impressive growth rates of Canada 22.6 31%, 26% and 23%, respectively. Italy 21.2 Spain 19.2 Turkey 18.9 Mexico 13.6 Millions of Internet Users (15+, home & work locations) Source: comScore World Metrix, July 2009 © comScore, Inc. Proprietary and Confidential. 4

The Majority of Top Properties’ Audiences Coming from Outside US Total Worldwide US Audience Non-US Audience Unique Visitors (MM) 84% 854 84% 702 77% 592 77% 370 The top 10 Global Properties attract a 81% 295 majority of Unique Visitors from outside the US; Google Sites and Microsoft Sites 66% 268 attain 84% of their audience from non-US countries. 73% 237 All top sites have experienced a shift in 70% 197 visitor composition to a more international audience: non-US visitors now represent 76% 77% and 66% of Facebook’s and AOL’s 196 visitors, respectively. 64% 192 Source: comScore World Metrix, July 2009 © comScore, Inc. Proprietary and Confidential. 5

How global online behavior has changed over the last year Share of time Spent on Entertainment is growing the fastest Instant Messengers and Conversational Media both boast significant usage time Source: comScore Media Metrix © comScore, Inc. Proprietary and Confidential. 6 Share of Global Minutes on Key Online Categories, May 2008 vs. May 2009

What is social media? Social Media is… – media designed to be disseminated through social interaction – a logical step in the ongoing evolution of the interactive platform – the key driver of the fast-growing Web 2.0 category (including blogs, social networks, UGC sites etc.) – the combination of communication (email, messenger) media-sharing (photos, music, video etc.) and/or UGC (opinion, feedback) – an umbrella term that defines the various activities that integrate technology, social interaction, and the construction of words and pictures. © comScore, Inc. Proprietary and Confidential. 7

Everything from Twitter to Facebook to Digg to Linkedin to Youtube Examples of social media software applications include: Communication Blogs: Blogger, LiveJournal, Open Diary, TypePad, WordPress, Vox, ExpressionEngine, Xanga Micro-blogging / Presence applications: Twitter, Plurk, Jaiku, fmylife Social networking: Bebo, Facebook, LinkedIn, MySpace, Orkut, Skyrock, Hi5, Ning, Elgg Events: Upcoming, Eventful, Meetup.com Collaboration Wikis: Wikipedia, PBwiki, wetpaint Social bookmarking: Delicious, Digg, StumbleUpon, Google Reader, CiteULike Multimedia Photo sharing: Flickr, Zooomr, Photobucket, SmugMug, Picasa Video sharing: YouTube, Vimeo, sevenload Livecasting: Ustream.tv, Justin.tv, Stickam Audio and Music Sharing: imeem, The Hype Machine, Last.fm, ccMixter Reviews and Opinions Product Reviews: Yelp, epinions.com, MouthShut.com Virtual worlds: Second Life, The Sims Online, Forterra © comScore, Inc. Proprietary and Confidential. 8

Profile: Twitter Age Income UVs (000) +2,613% composition index UV composition index UV Many Twitter regulars opt to access the service exclusively from their mobile devices after an initial visit to Twitter.com… Twitter audience in Brazil grew by a factor of almost 10 Who’s over a span of just 5 months following who (from 413k in March to nearly on Twitter? 3.6M in July of 2009) © comScore, Inc. Proprietary and Confidential. 9 Source: comScore Media Metrix United States, July 2009

“Last tweet?” © comScore, Inc. Proprietary and Confidential. 10

November 2009 The Brazilian Online Audience Alexander Banks Managing Director, Latin America

Internet audience in Latin America is to be taken seriously Brazil is the 9th largest Internet audience in the world (15+, H&W), Mexico 15th, Argentina 19th and Colombia 21st Home and work usage growing at significant rate – shared-access very strong In terms of total page views in July (15+ H&W) Brazil was 10th, ahead of Spain, India and Italy In July, Brazil consumed 3.2% of the world’s PVs, Mexico next with just over 1% Argentina (47.6) and Brazil (47.3) are both above the WW average in average visits to the Internet per visitor each month (47.2) The WW average percentage of 15-24 year-olds online is 27.6% (15+, H&W) – Venezuela 50% – Colombia 48% – Mexico 47% – Brazil 31% – Argentina 27% – Chile 27% © comScore, Inc. Proprietary and Confidential. 12

The size and level of engagement of the Brazilian Internet audience Brazil has the largest Internet population in Latin America, with more than 30 million home and work users, 15+ (total online pop. is approx 70M) The average Internet user in Brazil clocks 26.7 hours of usage per month, which is nearly four hours more than the worldwide average Internet User (Millions) in Total Hours Online per Latin America Visitor in Latin America WW Avg: 22.9 Brazil 31.9 Brazil 26.7 Mexico 14.0 Mexico 25.8 Argentina 11.8 Chile 23.6 Colombia 9.0 Venezuela 23.5 Chile 6.5 Colombia 23.0 Venezuela 2.1 Argentina 21.6 Puerto Rico 1.1 Puerto Rico 17.7 © comScore, Inc. Proprietary and Confidential. 13 Source: comScore Media Metrix, September 2009

Comparison to other countries outside region The 15+ Home and Work Internet population in Brazil is similar in size to the Internet populations in the Russian Federation and South Korea Internet users in Brazil spend a similar amount of time online as users in South Korea and the United Kingdom but significantly more time than those in India and the Russian Federation Internet User (Millions) Total Online Hours per Visitor WW Avg: 22.9 United Kingdom 37.3 United Kingdom 28.6 India 35.8 India 11.3 Russian Federation 34.7 Russian Federation 15.8 Brazil 31.9 Brazil 26.7 South Korea 29.2 South Korea 32.4 Canada 22.9 Canada 40.1 © comScore, Inc. Proprietary and Confidential. 14 Source: comScore Media Metrix, September 2009

Less mature Internet audiences are less active online Average time spent online is an indicator of the state of development of internet markets, and Brazil appears very similar to the UK in this regard – Online ad spend in UK recently surpassed that of TV Average Time Spent and Pages Viewed per Unique Visitor per Month 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Turkey United Brazil China Russian India Kingdom Federation Time Spent (mins) Pages Viewed © comScore, Inc. Proprietary and Confidential. 15 Source: comScore World Metrix, September 2009

Age breakdown of the Internet audience in Brazil Internet users in Brazil skew slightly young: 65% of the Internet audience in Brazil is under 35 years old In comparison, only 54% of the global online population is under 35 Brazil 31.4% 33.6% 21.0% 9.1% 4.9% Latin America 35.5% 28.0% 19.0% 10.8% 6.7% Worldwide 27.6% 26.4% 21.6% 14.0% 10.4% Persons: 15-24 Persons: 25-34 Persons: 35-44 Persons: 45-54 Persons: 55+ © comScore, Inc. Proprietary and Confidential. 16 Source: comScore Media Metrix ,September 2009

Demographic profile of the Brazilian Internet audience - Sept 2009 © comScore, Inc. Proprietary and Confidential. 17

Heavy users most visible in markets that are still maturing In all of the largest developing markets, heavy internet users account for a higher volume of total pages Russia has the highest page consumption disparity, with 73% of pages viewed by 20% of the population Share of Page Views by User Segment 100% 80% 57% 57% 59% 60% 69% 73% Heavy Users 60% Medium Users 40% Light Users 34% 31% 30% 30% 20% 24% 23% 9% 11% 11% 10% 7% 0% 4% United Turkey China Brazil India Russian Kingdom Federation © comScore, Inc. Proprietary and Confidential. 18 Source: comScore World Metrix, August 2009

How the world uses the Internet © comScore, Inc. Proprietary and Confidential. 19 Source: comScore World Metrix, July 2009

How the Brazilian audience compares to the rest of the world in terms of reach and time spent in key content categories “On-ramp” Categories Web 2.0 Categories Portals 97 97 157 Reference 66 Search/Navigation 96 112 90 Social Networking 176 Blogs 125 127 Utility & Content Categories e-mail 105 93 Entertainment Categories Instant Messengers 157 135 96 Entertainment 103 101 Retail 69 93 Multimedia 98 News/Information 51 90 Travel 76 58 108 Online Gaming 121 78 Sports 58 © comScore, Inc. Proprietary and Confidential. 20 Source: comScore Media Metrix September 2009

Highest-indexing sub-categories in Brazil Lifestyles and interests of the Brazil: Highest-Indexing Web Categories Brazil internet user are reflected in Index Compared to WW Reach the sub-category visitation 1.1 Gay/Lesbian 2.7 251 – Gay/Lesbian 4.8 e-cards 9.6 200 – Government 19.9 Government 39.0 196 – Consumer Electronics Radio 12.1 23.5 194 – Religion/Spirituality Consumer Electronics 16.1 – Sports/Outdoors 30.8 192 Entertainment - News 17.6 – Beauty/Fashion/Style 32.2 183 Religion/Spirituality 6.7 12.3 183 Sports/Outdoor 5.6 10.3 183 Content preferences also align Beauty/Fashion/Style 9.0 with behavior typically seen by 15.4 172 newer Internet audiences Instant Messengers 44.1 157 69.3 – Instant Messengers Comparison Shopping 24.4 143 34.9 – E-cards Pharmacy 1.5 2.2 142 – Information 12.3 Kids 17.0 139 – Job Search 17.4 Information 24.1 138 Job Search 5.3 138 7.4 WW Reach Brazil Reach © comScore, Inc. Proprietary and Confidential. 21 Source: comScore Media Metrix September 2009

Brazilian’s appetite for social networking is impressive Brazil is 2nd in the world in terms average pages per visitor in the social networking category (1,374), and 4th in the world in page views with over 33.4 billion (15+, H&W) – 9.5B minutes spent in category also amongst the leading countries, sure to pass UK very soon Average visits per visitor per month is only exceeded by Canada, Israel and Turkey – Brazilians Internet users, on average, visit the category 34 times a month – UK and United States considerably less; 26 and 22 average visits a month © comScore, Inc. Proprietary and Confidential. 22

Orkut clearly leads the Social Networking category in Brazil Orkut, one of the top 3 web domains in terms of audience, continues to lead the way – Almost 75% of Orkut’s total global page views comes from Brazil – 33.1 average visits per visitor per month – 33% of entire Orkut audience in Brazil is over the age of 35 – 66% of entire audience is over the age of 25 Social Networking Share of Total Pages 50% 40% Leading Country Social Reach 30% Network Turkey 81.3% 20% 43% 40% United Kingdom 74.1% 10% 20% 19% 18% Brazil 71.4% 12% 0% Russian Federation 46.8% India 44.0% China 24.0% © comScore, Inc. Proprietary and Confidential. 23 Source: comScore World Metrix, September 2009

Is Facebook’s growth in Brazil hurting Orkut? January 2009 September 2009 © comScore, Inc. Proprietary and Confidential. 24

Brazilians also love Instant Messenger Brazil leads the world in Total Visits to the category – almost 15% more than runner-up 12B Total Minutes spent in the category, second only to the US © comScore, Inc. Proprietary and Confidential. 25

The Top 25 most visited web domains in Brazil Google’s dominant presence clearly seen throughout Top 10 Many Brazilian companies appear in Top 20 (UOL, Globo, Baixaki, iG, Abril, BuscaPe) Twitter, Bing, 4shared, MercadoLivre other notable inclusions © comScore, Inc. Proprietary and Confidential. 26

The Top 25 most visited web properties in Brazil Top 7 properties include large multi-nationals and leading portals Very strong performance seen from retail category (BuscaPe included) © comScore, Inc. Proprietary and Confidential. 27

In conclusion Brazilian Internet audience is… – Highly engaged and fast-growing – Relatively young, but maturing – Consuming more and more sophisticated content Relatively strong reach for portals, social media, multimedia, government and retail Social networking and communication (IM) clear “enablers” – stimulating overall Internet audience growth – helping the migration of users from shared-access to H&W Social media should be fundamental part of any digital strategy Balanced audience demographics and diversity offers significant potential for advertising, content development etc. Content consumption, as well as audience profile, will move closer towards the global averages as audience continues to mature © comScore, Inc. Proprietary and Confidential. 28

November 2009 Tracking audience affinity Alexander Banks Managing Director, Latin America

Case study: Targeting the online audience Two sites offering almost identical demographics… © comScore, Inc. Proprietary and Confidential. 30 30

…but their respective audiences show clearly distinct preferences in terms of online content © comScore, Inc. Proprietary and Confidential. 31 31

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The State of the Internet in Brazil 2009

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