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30863072 barclays-internet-data-book-apr-2010

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Barclay' Internet Data Book April 2010

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30863072 barclays-internet-data-book-apr-2010

  1. 1. EQUITY RESEARCH AMERICAS Barclays CapitalINTERNET & MEDIA Internet Data BookInternetSECTOR VIEW Monthly U.S. Internet Research ProductRating: 1 - POSITIVE The Barclays Capital Internet Data Book provides up-to-date statistics on the Internet industry overall, and more specifically on the 13 companies in our coverage universe. The Data Book contains more than 150 figures and charts, Douglas Anmuth 1.212.526.0879 with an emphasis on financial metrics and valuation, Internet usage, online douglas.anmuth@barcap.com advertising, mobile, e-commerce, online travel, and company-specific information BCI, New York and models. Ronald V. Josey 1.202.452.4736 ronald.josey@barcap.com ! Our Internet sector rating is 1-Positive and the ratings within our coverage BCI, New York universe are: Sujay Shah 1.212.526.7827 1-Overweight: Yahoo!, Google, Amazon, Priceline, Netflix, Blue Nile sujay.shah@barcap.com BCI, New York 2-Equal Weight: eBay, IAC/InterActive Corp, Expedia, AOL, Liberty Media Holding–Interactive, Orbitz Worldwide, TechTarget ! We highlight the following charts on pages: 13 Cross-Media and Cross-Retail Valuation Comps 18–19 Historical Average Multiples (P/E, P/FCF, EV/EBITDA) 25 ROIC and ROE Metrics for Internet Coverage Universe 38 Barclays Capital Online Advertising Forecasts 44 U.S. Media Advertising by Category and Medium 49–50 U.S. and Global Search Market Share and Growth 51 Select Internet Advertising & Usage Statistics in the U.S. and U.K. Analyst Certification 54 U.S. Mobile Phone Subs & Mobile Internet Users We, Douglas Anmuth and Ronald V. 58 U.S. E-Commerce by Category, 2009–2014E Josey, hereby certify (1) that the views expressed in this research 63 Priceline, Expedia, & Orbitz Gross Bookings Analysis, 2006–2014E report accurately reflect our personal views about any or all of the subject securities or issuers referred to in this research report and (2) no part of our compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this research report. Barclays Capital does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. April 01, 2010 PLEASE SEE IMPORTANT DISCLOSURES BEGINNING ON PAGE 131
  2. 2. Barclays Capital Internet Data Book Table of Contents Introduction to the Barclays Capital Internet Data Book 6 Introduction.................................................................................................... 9 Broadband and Internet Usage........................................................................ 29 Online Advertising ........................................................................................ 37 Mobile ....................................................................................................... 53 e-Commerce ................................................................................................ 57 Online Travel ............................................................................................... 61 Company Information and Models ................................................................... 67 Table of Figures Figure 1: Seven Key Quality Characteristics for the Internet Sector ............................. 7 Figure 2: Coverage Universe Comparative Valuation – Part I ................................. 10 Figure 3: Coverage Universe Comparative Valuation – Part II................................. 11 Figure 4: Overall Internet Industry Comparative Valuation ...................................... 12 Figure 5: Cross-Media Comparative Valuation .................................................... 13 Figure 6: Retail and Internet Retail Comparative Valuation ..................................... 13 Figure 7: Barclays Capital & Consensus Estimates................................................ 14 Figure 8: Historical Annual Stock Performance,.................................................... 15 Figure 9: Stock Performance Seasonality – Part I .................................................. 16 Figure 10: Stock Performance Seasonality – Part II ............................................... 17 Figure 11: Historical Average Multiples – Forward Year P/E, P/FCF, EV/EBITDA ..... 18 Figure 12: Historical Average Multiples – Forward Year P/E, P/FCF, EV/EBITDA ..... 19 Figure 13: Short Interest by Company................................................................ 20 Figure 14: Annual Revenue and Growth ............................................................ 21 Figure 15: Quarterly Revenue and Sequential Growth .......................................... 21 Figure 16: Annual EBITDA and Growth.............................................................. 22 Figure 17: Annual EBITDA Margins ................................................................... 22 Figure 18: Free Cash Flow and Growth............................................................. 23 Figure 19: Free Cash Flow Conversion of EBITDA................................................ 23 Figure 20: Capital Expenditures and Growth ...................................................... 24 Figure 21: Capital Expenditures as a Percentage of Revenue ................................. 24 Figure 22: Return on Invested Capital (ROIC) ...................................................... 25 Figure 23: Return on Equity (ROE) ..................................................................... 25 Figure 24: Share Repurchases.......................................................................... 26 Figure 25: Select Recent Internet M&A ............................................................... 27 Figure 26: Global Internet Penetration—Top 20 Countries with Most Internet Users .... 30 Figure 27: International Broadband Penetration – Top 20 Countries ........................ 30 Figure 28: U.S. Household Technology Adoption Forecast .................................... 31 Figure 29: Media Consumption Time Breakdown ................................................ 31 Figure 30: Global Internet Browser Share........................................................... 322 April 01, 2010
  3. 3. Barclays Capital Internet Data BookFigure 31: Top 50 U.S. Web Properties by Unique Visitors ................................... 33Figure 32: Top 50 U.S. Web Properties by Page Views ....................................... 34Figure 33: Top 50 Global Properties by Unique Visitors ........................................ 35Figure 34: Top 50 Global Properties by Page Views............................................ 36Figure 35: Barclays Capital U.S. Online Advertising Forecast ............................... 38Figure 36: Barclays Capital Online Video Advertising Forecast .............................. 38Figure 37: Total U.S. Advertising Spending by Medium ........................................ 39Figure 38: Share of Total U.S. Advertising Spending by Medium,........................... 40Figure 39: Total U.S. Advertising Growth by MediumE ......................................... 40Figure 40: U.S. Online Advertising Revenue by Quarter ....................................... 41Figure 41: U.S. Online Advertising Revenue by Format ......................................... 41Figure 42: U.S. Online Advertising Revenue by Pricing Model ............................... 42Figure 43: Internet Advertising Revenue by Major Industry Category ........................ 42Figure 44: Top 50 Ad Focus Properties by Total Internet Reach .............................. 43Figure 45: Total U.S. Measured Media Advertising by Category and Medium.......... 44Figure 46: Total U.S. Measured Media Advertising by Category and % Mix ............ 44Figure 47: Top U.S. Advertisers (1–50) – With Total Spend and Internet Spend ........ 45Figure 48: Top U.S. Advertisers (51–100) – With Total Spend and Internet Spend .... 46Figure 49: Domestic Search Share Comparison by Data Source............................. 46Figure 50: Domestic Search Share, February 2010 ............................................. 47Figure 51: Global Search Share, February 2010 ................................................ 47Figure 52: Domestic Search Share – Google and Yahoo! ..................................... 48Figure 53: Domestic Search Share – Microsoft, Ask.com, and AOL......................... 48Figure 54: U.S. Search Market Share and Growth............................................... 49Figure 55: Global Search Market Share and Growth ........................................... 50Figure 56: China Search Share Comparison....................................................... 50Figure 57: Internet Advertising Statistics in the U.S. and U.K. Markets ...................... 51Figure 58: U.S. Mobile Phone Subscribers & Internet Users.................................... 54Figure 59: U.S. Mobile Subscribers & Market Share of Select National Carriers........ 54Figure 60: U.S. Mobile Advertising Forecast ....................................................... 54Figure 61: U.S. Mobile Advertising Spending Share by Format, 2008–2013E ........ 54Figure 62: Global Smartphone Shipments & as a Percentage of Total Handsets ........ 55Figure 63: Top 20 Domestic Mobile Internet Domains, Traffic, & Page Views............ 55Figure 64: Top 10 Paid Apple iPhone Apps ....................................................... 56Figure 65: Top 10 Free Apple iPhone Apps ....................................................... 56Figure 66: U.S. E-Commerce by Category, 2009–2014E Forecast ........................ 58Figure 67: U.S. E-Commerce Growth Rates by Category ...................................... 58Figure 68: E-Commerce Penetration................................................................... 59Figure 69: U.S. Department of Commerce E-Commerce Data ................................ 59Figure 70: U.S. E-Commerce as a Percentage of Total U.S. Retail........................... 59Figure 71: Top 50 Internet Retailers................................................................... 60Figure 72: Global Travel Market Size................................................................ 62 April 01, 2010 3
  4. 4. Barclays Capital Internet Data Book Figure 73: Online Travel Mix, Suppliers vs. Distributor Share.................................. 62 Figure 74: Total Gross Bookings Across Expedia, Orbitz, & Priceline....................... 63 Figure 75: Domestic Gross Bookings Across Expedia, Orbitz, & Priceline ................. 63 Figure 76: International Gross Bookings Across Expedia, Orbitz, & Priceline............. 63 Figure 77: Share of Global Gross Bookings Across Expedia, Orbitz, & Priceline.com. 64 Figure 78: Domestic Hotel Occupancy & ADR Trends........................................... 64 Figure 79: Top U.S. OTAs by Unique Visitors...................................................... 65 Figure 80: Top Global OTAs by Unique Visitors .................................................. 65 Figure 81: Yahoo! Bull vs. Bear Analysis ............................................................ 68 Figure 82: Yahoo! Income Statement................................................................. 69 Figure 83: Yahoo! Revenue Analysis ................................................................. 70 Figure 84: Yahoo! Cash Flow Statement ............................................................ 71 Figure 85: Yahoo Discounted Cash Flow Analysis ............................................... 72 Figure 86: Yahoo!’s Valuation.......................................................................... 73 Figure 87: Google Bull vs. Bear Analysis ........................................................... 74 Figure 88: Google Income Statement ................................................................ 75 Figure 89: Google Revenue Analysis................................................................. 76 Figure 90: Google Revenue Analysis (Continued)................................................. 77 Figure 91: Google Cash Flow Statement............................................................ 78 Figure 92: eBay Bull vs. Bear Analysis ............................................................... 79 Figure 93: eBay Income Statement.................................................................... 80 Figure 94: eBay Segment Breakdown................................................................ 81 Figure 95: eBay Marketplace Segment .............................................................. 82 Figure 96: eBay Payments Segment .................................................................. 83 Figure 97: eBay Cash Flow Statement ............................................................... 84 Figure 98: eBay Sum-of-the-Parts Analysis ........................................................... 85 Figure 99: eBay 2011 Guidance..................................................................... 85 Figure 100: eBay Fees Update – Auction-Style and Fixed Price, U.S. Only ............... 86 Figure 101: PayPal and Bill Me Later Penetration of Top 50 U.S. Internet Retailers ..... 87 Figure 102: Amazon Bull vs. Bear Analysis......................................................... 88 Figure 103: Amazon Income Statement ............................................................. 89 Figure 104: Amazon Metrics ........................................................................... 90 Figure 105: Amazon Segment Analysis.............................................................. 91 Figure 106: Amazon Cash Flow Statement......................................................... 92 Figure 107: Amazon Discounted Cash Flow Analysis ........................................... 93 Figure 108: Amazon’s Category Launch Dates.................................................... 93 Figure 109: IACI Bull vs. Bear Analysis .............................................................. 94 Figure 110: IAC/InterActiveCorp Income Statement ............................................. 95 Figure 111: IAC Segment Breakdown, Growth Rates and Margins ......................... 96 Figure 112: IAC Drivers .................................................................................. 97 Figure 113: IAC Drivers .................................................................................. 98 Figure 114: IAC Cash Flow Statement............................................................... 994 April 01, 2010
  5. 5. Barclays Capital Internet Data BookFigure 115: IAC Sum-of-the-Parts Analysis ......................................................... 100Figure 116: Liberty Interactive Bull vs. Bear Analysis ........................................... 100Figure 117: Liberty Interactive Income Statement ................................................ 101Figure 118: Liberty Interactive, QVC Summary .................................................. 102Figure 119: Liberty Interactive, QVC Drivers ..................................................... 103Figure 120: Priceline Bull vs. Bear Analysis....................................................... 104Figure 121: Priceline Income Statement............................................................ 105Figure 122: Priceline Segment Breakdown ....................................................... 106Figure 123: Priceline Segment Breakdown, Business Mix: Bookings ...................... 107Figure 124: Priceline Segment Breakdown, Business Mix: Revenue & Other Metrics . 108Figure 125: Priceline Cash Flow..................................................................... 109Figure 126: Expedia Bull vs. Bear Analysis....................................................... 109Figure 127: Expedia Income Statement............................................................ 110Figure 128: Expedia Segment Breakdown ....................................................... 111Figure 129: Expedia Segment Breakdown ....................................................... 112Figure 130: Expedia Cash Flow Statement ....................................................... 113Figure 131: Orbitz Bull vs. Bear Analysis ......................................................... 113Figure 132: Orbitz Income Statement .............................................................. 114Figure 133: Orbitz Segment Breakdown.......................................................... 115Figure 134: Orbitz Base Financials ................................................................. 116Figure 135: AOL Bull .................................................................................. 117Figure 137: AOL Segment Analysis................................................................. 118Figure 138: AOL Cash Flow Statement ............................................................ 119Figure 139: AOL EBITDA Waterfall Scenario Analysis ........................................ 120Figure 140: Netflix Bull vs. Bear Analysis ......................................................... 121Figure 141: Netflix Income Statement .............................................................. 122Figure 142: Netflix Subscriber and Revenue Analysis ......................................... 123Figure 143: Netflix Cash Flow Statement ......................................................... 124Figure 144: Domestic Video Market Share ....................................................... 125Figure 145: Share of Video Rental Turns, 1H09 ................................................ 125Figure 146: Total U.S. Game Console Install Base, as of February 2010 .............. 125Figure 147: Blue Nile Bull vs. Bear Analysis ..................................................... 125Figure 148: Blue Nile Income Statement .......................................................... 126Figure 149: Blue Nile Cash Flow Statement ..................................................... 127Figure 150: TechTarget Bull vs. Bear Analysis ................................................... 127Figure 151: TechTarget Income Statement ........................................................ 128Figure 152: TechTarget Segment Breakdown.................................................... 129Figure 153: TechTarget Cash Flow Statement ................................................... 130 April 01, 2010 5
  6. 6. Barclays Capital Internet Data Book Introduction to the Barclays Capital Internet Data Book The Barclays Capital Internet Data Book provides up-to-date statistics on the Internet industry overall, and more specifically on the 13 companies in our coverage universe. The Data Book contains more than 150 figures and charts that are broken down into seven key areas: 1. Introduction includes Internet and cross-industry comparative valuation charts in addition to key financial metrics for our covered companies, among other things; 2. Internet Usage features U.S. and global data on broadband penetration, and relevant unique visitor and page view information for leading sites; 3. Online Advertising includes our projections for domestic online ad spending through 2012, data on overall U.S. advertising spending, and a closer look at search industry statistics, among other metrics; 4. Mobile features industry data on mobile Internet usage, global smartphone penetration estimates, and the top 20 mobile Internet domains; 5. e-Commerce features overall online retail projections by category; 6. Online Travel includes global industry projections by geography, gross bookings estimates across Priceline, Expedia, and Orbitz, domestic hotel occupancy rates and ADRs, and unique visitors across the major OTAs; 7. Company Information and Models includes key company-specific data for our coverage universe. The Data Book is intended to be a primary resource for investors looking at the Internet space. Each month, we update the Data Book as appropriate and add charts that we believe are increasingly relevant. We highlight the following charts on pages: 13 Cross-Media and Cross-Retail Valuation Comps 18–19 Historical Average Multiples (P/E, P/FCF, EV/EBITDA) 25 ROIC and ROE Metrics for Internet Coverage Universe 38 Barclays Capital Online Advertising Forecasts 44 U.S. Media Advertising by Category and Medium 49–50 U.S. and Global Search Market Share and Growth 51 Select Internet Advertising & Usage Statistics in the U.S. and U.K. 54 U.S. Mobile Phone Subs & Mobile Internet Users 58 U.S. E-Commerce by Category, 2009–2014E 63 Priceline, Expedia, & Orbitz Gross Bookings analysis, 2006–2014E Please let us know if there is particular information you would like us to include in future editions of the Data Book.6 April 01, 2010
  7. 7. Barclays Capital Internet Data Book Our Internet sector rating is 1-Positive and the ratings within our coverage universe are: 1-Overweight: Yahoo!, Google, Amazon, Priceline, Netflix, Blue Nile 2-Equal Weight: eBay, IAC/InterActive Corp, Expedia, AOL, Liberty Media Holding–Interactive, Orbitz Worldwide, TechTargetFigure 1: Seven Key Quality Characteristics for the Internet Sector Barclays Capital Industry / Strong FCF Strong OrganicCoverage Universe Structurally Solid Share Gainer ROIC Execution Rating Franchise Leader Generation GrowthGoogle 1-OW " " " " " " "Priceline 1-OW " " " " " " "Netflix 1-OW " " " " " " "Amazon 1-OW " " " " " " "Blue Nile 1-OW " " " " " " "Yahoo! 1-OW " "Expedia 2-EW " " " "eBay 2-EW " " "Liberty Interactive 2-EW " " " "AOL 2-EW "IAC 2-EW "Tech Target 2-EW "Orbitz 2-EWSource: Barclays Capital estimates April 01, 2010 7
  8. 8. Barclays Capital Internet Data Book This page intentionally left blank8 April 01, 2010
  9. 9. Barclays Capital Internet Data Book Introduction April 01, 2010 9
  10. 10. Barclays Capital Internet Data BookFigure 2: Coverage Universe Comparative Valuation – Part I(US$, millions except per share)Company Google Yahoo! eBay Amazon Large Cap Priceline.com ExpediaSymbol GOOG YHOO EBAY AMZN Average PCLN EXPEBarclays Capital Rating 1-Overweight 1-Overweight 2-Equal Weight 1-Overweight 1-Overweight 2-Equal WeightPrice as of 3/31/2010 $567.12 $16.53 $26.97 $135.77 $255.00 $24.95Shares Outstanding 2009 322 1,416 1,323 442 51.1 301Shares Outstanding 2010E 325 1,429 1,324 465 52.3 303Shares Outstanding 2011E 330 1,441 1,333 468 53.0 306Market Capitalization $182,705 $23,408 $35,670 $60,010 $301,793 $13,024 $7,510Net Debt 2009 (24,485) (4,518) (4,944) (6,257) (604) 193Net Debt 2010E (33,839) (5,627) (7,434) (9,534) (1,152) (400)Net Debt 2011E (44,797) (6,503) (10,264) (13,393) (1,849) (1,035) Less: Non-Consolidated Assets & Investments 145 7,713 1,155 Plus: Minority Interest & Other 288Total Enterprise Value 2009 158,075 11,177 29,571 53,753 12,419 7,990Total Enterprise Value 2010E 150,422 10,408 27,114 53,531 12,178 7,460Total Enterprise Value 2011E 142,445 9,738 24,520 50,079 11,659 6,311EARNINGS PER SHARE (EPS) (1)EPS 2009 $23.22 $0.61 $1.58 $2.36 $8.55 $1.38EPS 2010E $28.06 $0.70 $1.68 $3.07 $11.08 $1.55EPS 2011E $32.51 $0.80 $1.82 $3.77 $14.45 $1.732009 - 2012 EPS CAGR 18% 14% 7% 24% 16% 28% 12%P/E 2009 24.4x 27.0x 17.0x 57.6x 31.5x 29.8x 18.1xP/E 2010E 20.2x 23.6x 16.1x 44.2x 26.0x 23.0x 16.1x P/E-to-Growth 1.2x 1.7x 2.4x 1.8x 0.8x 1.3xP/E 2011E 17.4x 20.7x 14.9x 36.0x 17.6x 14.4xFREE CASH FLOW (FCF)FCF 2009 8,506 1,101 2,341 2,919 495 584FCF 2010E 9,463 1,199 2,499 3,227 548 673FCF 2011E 10,852 1,427 2,838 3,809 698 7152009-2012 FCF CAGR 13% 14% 9% 15% 13% 20% 9%FCF/Share 2009 $26.40 $0.78 $1.77 $6.60 $9.68 $1.94FCF/Share 2010E $29.10 $0.84 $1.89 $6.95 $10.47 $2.22FCF/Share 2011E $32.87 $0.99 $2.13 $8.15 $13.17 $2.34Price/FCF 2009 21.5x 21.3x 15.2x 20.6x 19.6x 26.3x 12.9xPrice/FCF 2010E 19.5x 19.7x 14.3x 19.5x 18.3x 24.3x 11.3x P/FCF-to-Growth 1.5x 1.4x 1.7x 1.3x 1.2x 1.3xPrice/FCF 2011E 17.3x 16.7x 12.7x 16.7x 19.4x 10.7xFCF Yield 2009 4.7% 4.7% 6.6% 4.9% 5.2% 3.8% 7.8%FCF Yield 2010E 5.1% 5.1% 7.0% 5.1% 5.6% 4.1% 8.9%FCF Yield 2011E 5.8% 6.0% 7.9% 6.0% 5.2% 9.4%EBITDAEBITDA 2009 11,001 1,730 3,049 1,952 548 864EBITDA 2010E 13,048 1,778 3,168 2,529 768 938EBITDA 2011E 15,036 2,063 3,343 3,056 976 1,0182009-2012 EBITDA CAGR 17% 10% 5% 22% 14% 31% 9%EV/EBITDA 2009 14.4x 6.5x 9.7x 27.5x 14.5x 22.7x 9.2xEV/EBITDA 2010E 11.5x 5.9x 8.6x 21.2x 11.8x 15.9x 8.0x EV/EBITDA-to-Growth 0.7x 0.6x 1.8x 0.9x 0.9x 0.5x 0.9xEV/EBITDA 2011E 9.5x 4.7x 7.3x 16.4x 11.9x 6.2xREVENUERevenue 2009 17,481 4,682 8,727 24,508 2,338 2,955Revenue 2010E 21,340 4,869 9,136 32,501 2,947 3,358Revenue 2011E 25,533 4,966 9,697 39,525 3,591 3,8022009-2012 Revenue CAGR 20% 3% 6% 24% 13% 23% 13%Market Cap/Revenue 2009 10.5x 5.0x 4.1x 2.4x 5.5x 5.6x 2.5xMarket Cap/Revenue 2010E 8.6x 4.8x 3.9x 1.9x 4.5x 2.3xMarket Cap/Revenue 2011E 7.3x 4.8x 3.7x 1.6x 4.4x 3.8x 2.0xNotes:1) All EPS shown are Pro Forma, to exclude the impact of stock based compensation.2) P/E and P/FCF for Yahoo! does not adjust for Yahoo! JapanSource: Company reports and Barclays Capital estimatesSector rating 1-Positive10 April 01, 2010
  11. 11. Barclays Capital Internet Data BookFigure 3: Coverage Universe Comparative Valuation – Part II(US$, millions except per share) LibertyCompany Orbitz Netflix AOL IAC Interactive (3) Blue Nile TechTargetSymbol OWW NFLX AOL IACI LINTA NILE TTGTBarclays Capital Rating 2-Equal Weight 1-Overweight 2-Equal Weight 2-Equal Weight 2-Equal Weight 1-Overweight 2-Equal WeightPrice as of 3/31/2010 $7.11 $73.74 $25.28 $22.78 $15.30 $55.02 $5.23Shares Outstanding 2009 84 55 106 133 597 15 43Shares Outstanding 2010E 102 53 109 123 600 15 44Shares Outstanding 2011E 103 53 111 123 603 15 46Market Capitalization $600 $4,091 $2,675 $3,023 $9,130 $838 $226Net Debt 2009 472 (82) (73) (1,614) 4,835 (92) (71)Net Debt 2010E 387 (54) (533) (1,588) 4,914 (115) (87)Net Debt 2011E 308 (200) (962) (1,808) 4,259 (159) (105) Less: Non-Consolidated Assets & Investments 178 1,672 Plus: Minority Interest & Other 715Total Enterprise Value 2009 1,072 4,009 2,602 1,230 13,007 745 155Total Enterprise Value 2010E 1,111 3,856 2,220 1,047 13,133 731 143Total Enterprise Value 2011E 1,039 3,738 1,841 1,005 12,572 688 137EARNINGS PER SHARE (EPS) (1)EPS 2009 $0.36 $2.11 $4.58 $0.36 $0.91 $1.15 $0.17EPS 2010E $0.47 $2.65 $3.39 $0.88 $1.22 $1.34 $0.25EPS 2011E $0.61 $3.23 $2.92 $1.10 $1.52 $1.65 $0.302009 - 2012 EPS CAGR 26% 22% -17% 53% 24% 26% 23%P/E 2009 19.7x 34.9x 5.5x 62.4x 16.9x 48.0x 30.0xP/E 2010E 15.2x 27.9x 7.5x 25.8x 12.6x 40.9x 21.2x P/E-to-Growth 0.6x 1.3x NA 0.5x 0.5x 1.6x 0.9xP/E 2011E 11.6x 22.8x 8.7x 20.8x 10.0x 33.3x 17.7xFREE CASH FLOW (FCF)FCF 2009 62 105 741 197 879 37 18FCF 2010E 72 118 451 192 552 38 16FCF 2011E 79 131 421 221 655 44 182009-2012 FCF CAGR NA 11% -21% 7% NM 11% 6%FCF/Share 2009 $0.73 $1.89 $7.01 $1.48 $1.47 $2.41 $0.41FCF/Share 2010E $0.71 $2.22 $4.14 $1.55 $0.92 $2.45 $0.36FCF/Share 2011E $0.77 $2.45 $3.80 $1.79 $1.09 $2.88 $0.39Price/FCF 2009 NA 39.0x 3.6x 15.4x 9.0x 22.8x 12.8xPrice/FCF 2010E 10.1x 33.2x 6.1x 14.7x 14.4x 22.4x 14.7x P/FCF-to-Growth NM 2.9x NA 2.1x NM 2.0x 2.5xPrice/FCF 2011E 9.3x 30.1x 6.7x 12.8x 12.2x 19.1x 13.4xFCF Yield 2009 10.3% 2.6% 27.7% 6.5% 11.1% 4.4% 7.8%FCF Yield 2010E 9.9% 3.0% 16.4% 6.8% 7.0% 4.5% 6.8%FCF Yield 2011E 10.8% 3.3% 15.0% 7.8% 8.2% 5.2% 7.5%EBITDAEBITDA 2009 144 244 1,095 167 1,654 29 14EBITDA 2010E 145 282 844 217 1,785 34 17EBITDA 2011E 162 332 736 246 1,984 41 202009-2012 EBITDA CAGR 7% 16% -16% 17% 10% 21% 19%EV/EBITDA 2009 7.4x 16.4x 2.4x 7.4x 7.9x 25.6x 11.1xEV/EBITDA 2010E 7.7x 13.7x 2.6x 4.8x 7.4x 21.6x 8.4x EV/EBITDA-to-Growth 1.1x 0.8x NA 0.3x 0.8x 1.1x 0.5xEV/EBITDA 2011E 6.4x 11.3x 2.5x 4.1x 6.3x 16.6x 6.7xREVENUERevenue 2009 738 1,670 3,257 1,376 8,305 302 86Revenue 2010E 759 2,099 2,589 1,485 8,986 349 91Revenue 2011E 842 2,562 2,377 1,606 9,778 400 982009-2012 Revenue CAGR 7% 22% -12% 8% 8% 15% 7%Market Cap/Revenue 2009 0.8x 2.4x 0.8x 2.2x 1.1x 2.8x 2.6xMarket Cap/Revenue 2010E 1.0x 1.9x 1.1x 1.9x 1.0x 2.4x 2.5xMarket Cap/Revenue 2011E 0.9x 1.5x 1.2x 1.8x 0.9x 2.1x 2.5xNotes:1) All EPS shown are Pro Forma, to exclude the impact of stock based compensation.2) P/E and P/FCF for Yahoo! does not adjust for Yahoo! Japan3) LINTA Price-to-FCF multiples and FCF Yield are calculated by subtracting the estimated value per share of LINTAs non-consolidated assets from the LINTA price per share.Source: Company reports and Barclays Capital estimatesSector rating 1-Positive April 01, 2010 11
  12. 12. Barclays Capital Internet Data BookFigure 4: Overall Internet Industry Comparative Valuation Barclays Capital Price Market 2010E 2011E 2010E 2011E 2010E 2011ECompany Ticker Rating 3/31/2010 Shares Out Cap ($M) EV/EBITDA EV/EBITDA P/E P/E P/FCF P/FCFOnline Media & SearchYahoo! YHOO 1-OW $16.53 1428.6 23,615 5.9x 4.7x 23.6x 20.7x 19.7x 16.7xGoogle GOOG 1-OW $567.12 325.2 184,406 11.5x 9.5x 20.2x 17.4x 19.5x 17.3xAOL AOL 2-EW $25.28 108.9 2,753 2.6x 2.5x 7.5x 8.7x 6.1x 6.7xTechTarget TTGT 2-EW $5.23 44.1 230 8.4x 6.7x 21.2x 17.7x 14.7x 13.4xDice Holdings DHX -- $7.60 62.4 474 11.2x 8.9x 35.3x 23.2x 21.1x 13.3xBaidu BIDU -- $597.00 26.3 15,701 45.7x 31.0x 60.7x 41.5x 48.7x 33.1xMonster Worldwide MWW -- $16.61 125.6 2,086 19.6x 10.9x -- 45.0x 14.8x 10.0xThe Knot KNOT -- $7.82 33.8 264 10.3x 8.2x 124.7x 76.7x -- --RealNetworks RNWK -- $4.83 135.1 653 10.1x 11.0x -- -- -- --Travelzoo TZOO -- $15.01 16.4 247 -- -- 42.9x 27.3x -- --WebMD WBMD -- $46.38 59.7 2,771 15.2x 12.9x 66.0x 40.4x -- --Marchex MCHX -- $5.11 24.5 125 11.6x 9.7x 37.5x 30.7x -- --Miva MIVA -- $0.43 34.1 15 1.9x 1.3x -- 2.5x -- --TheStreet.com TSCM -- $3.70 31.5 117 -- -- 61.7x 46.3x -- --Looksmart LOOK -- $1.03 17.1 18 -- -- -- -- -- --E-CommerceeBay EBAY 2-EW $26.97 1323.9 35,703 8.6x 7.3x 16.1x 14.9x 14.3x 12.7xAmazon.com AMZN 1-OW $135.77 464.5 63,065 21.2x 16.4x 44.2x 36.0x 19.5x 16.7xIAC/InterActiveCorp IACI 2-EW $22.78 123.5 2,813 4.8x 4.1x 25.8x 20.8x 14.7x 12.8xBlue Nile NILE 1-OW $55.02 15.4 846 21.6x 16.6x 40.9x 33.3x 22.4x 19.1xNetflix NFLX 1-OW $73.74 53.0 3,910 13.7x 11.3x 27.9x 22.8x 33.2x 30.1xMercadoLibre MELI -- $48.21 44.1 2,127 24.1x 17.8x 45.7x 33.8x 35.3x 25.8xOverstock.com OSTK -- $16.23 22.8 371 -- -- 53.7x 22.2x -- 42.7x1-800-FLOWERS.COM FLWS -- $2.51 26.7 67 5.1x 4.7x 18.9x 12.7x -- --GSI Commerce GSIC -- $27.72 60.4 1,674 11.9x 9.9x 1164.7x 79.2x 9.7x 8.6xBluefly BFLY -- $2.73 18.6 51 -- -- -- -- -- --Drugstore.com DSCM -- $3.59 105.8 380 17.2x 12.7x 89.8x -- -- --TravelExpedia EXPE 2-EW $24.95 303.5 7,572 8.0x 6.2x 16.1x 14.4x 24.3x 19.4xOrbitz OWW 2-EW $7.11 101.8 724 7.7x 6.4x 15.2x 11.6x 10.1x 9.3xPriceline PCLN 1-OW $255.00 52.3 13,330 15.9x 11.9x 23.0x 17.6x 24.3x 19.4xAdvertising ServicesValueclick VCLK -- $10.13 81.3 824 6.1x 5.7x 16.6x 15.1x 8.7x 9.0xInternet ServicesHarris Interactive HPOL -- $1.21 54.4 66 -- -- -- -- -- --Alloy ALOY -- $8.20 12.9 106 -- -- -- -- -- --Autobytel ABTL -- $1.05 45.2 47 -- -- -- -- -- --Earthlink ELNK -- $8.54 107.9 921 2.4x 3.1x 7.9x 12.2x -- --United Online UNTD -- $7.48 85.0 636 3.9x 3.9x 6.4x 6.3x -- --Verisign VRSN 2-EW $26.02 183.4 4,773 7.7x 6.8x 20.0x 15.1x 12.1x 10.1xAkamai AKAM -- $31.42 172.1 5,407 11.4x 10.2x 19.2x 21.8x 14.2x 13.5xDigital River DRIV -- $30.30 38.7 1,171 11.4x 8.0x 17.6x 23.2x 17.8x 14.1xInfospace INSP -- $11.05 35.6 393 5.6x 5.3x 36.1x 28.9x -- --Jupiter Media JUPM -- $0.99 36.9 37 -- -- -- -- -- --Market Leader LEDR -- $1.97 24.6 48 -- -- -- -- -- --Vista Print VPRT -- $57.37 43.4 2,491 16.3x 13.0x 34.8x 23.1x -- --Shutterfly SFLY -- $24.09 25.9 624 8.2x 7.1x 6339.5x 42.3x -- --comScore SCOR -- $16.69 30.9 516 11.9x 9.5x 136.6x 43.3x 15.6x 12.8xSources: FactSet, company reports, and Barclays Capital estimates 1-OW: 1-Overweight; 2-EW: 2-Equal Weight; 3-UW: 3-UnderweightNote: Rating for VRSN (2-Equal Weight/1-Positive) is from Barclays Capital software analyst Israel Hernandez.FactSet consensus estimates are used for all companies not in our Internet coverage universe.12 April 01, 2010
  13. 13. Barclays Capital Internet Data BookFigure 5: Cross-Media Comparative Valuation Barclays Capital Barclays Capital Price Market EV/EBITDA Multiple P/E Multiple FCF MultipleInternet Ticker Stock Rating Sector Rating 3/31/10 Cap ($M) 2010E 2011E 2010E 2011E 2010E 2011EYahoo! YHOO 1-OW 1-Postive $16.53 $23,408 5.9x 4.7x 23.6x 20.7x 19.7x 16.7xGoogle GOOG 1-OW 1-Postive $567.12 $182,705 11.5x 9.5x 20.2x 17.4x 19.5x 17.3xInternet Average 8.7x 7.1x 21.9x 19.1x 19.6x 17.0xEntertainment*Time Warner TWX* 2-EW 2-Neutral $31.27 $36,218 7.8x 7.1x 14.7x 13.1x 12.2x 11.1xDisney DIS* 1-OW 2-Neutral $34.91 $65,569 9.1x 8.0x 16.8x 14.8x 18.7x 17.5xNews Corp NWS* 2-EW 2-Neutral $14.41 $37,765 6.8x 6.2x 13.9x 12.0x 15.0x 16.3xViacom VIA* 1-OW 2-Neutral $34.38 $19,027 6.7x 5.7x 13.2x 11.8x 9.8x 8.5xEntertainment Average 7.6x 6.7x 14.6x 12.9x 13.9x 13.4xCable**Comcast CMCSA** 2-EW 2-Neutral $18.83 $52,862 5.0x 4.6x 14.1x 12.2x 9.7x 10.4xCable Average 5.0x 4.6x 14.1x 12.2x 9.7x 10.4xBroadcasting***CBS Corp CBS*** 2-EW 2-Neutral $13.94 $9,623 6.9x 5.9x 14.6x 11.6x 9.8x 8.7xClear Channel CCU 2-EW 3-Negative $10.61 $3,771 8.9x 7.6x NM NM 12.4x 11.7xBroadcasting Average 7.9x 6.7x 14.6x 11.6x 11.1x 10.2x*Covered by Barclays Capital Entertainment analyst Anthony DiClemente.**Covered by Barclays Capital Cable and Satellite Communications analyst James Ratcliff.***Covered by Barclays Capital Broadcasting analyst Anthony DiClemente.Source: Company reports and Barclays Capital estimatesFigure 6: Retail and Internet Retail Comparative Valuation Barclays Capital Barclays Capital Price Market EV/EBITDA Multiple GAAP P/E Multiple FCF MultipleCompany Ticker Stock Rating Sector Rating 3/31/2010 Cap ($M) 2010E 2011E 2010E 2011E 2010E 2011EBed Bath & Beyond BBBY 2-EW 2-Neutral $43.76 $11,465 9.6x 8.6x 20.1x 17.7x 17.3x 14.1xWilliams-Sonoma WSM 3-UW 2-Neutral $26.29 $2,791 6.3x 5.9x -- 17.7x 10.0x 9.6xBest Buy BBY 1-OW 2-Neutral $42.54 $17,783 5.2x 4.7x 12.2x 11.0x 7.7x 7.0xTiffany TIF 1-OW 2-Neutral $47.49 $5,910 8.6x 7.6x 18.7x 16.4x 12.9x 11.9xSpecialty Retailing Average 7.4x 6.7x 12.7x 12.5x 12.0x 10.7xWal-Mart WMT 1-OW 2-Neutral $55.60 $211,846 7.4x 6.9x 13.9x 12.7x 9.1x 8.2xTarget TGT 1-OW 2-Neutral $52.60 $38,888 7.6x 7.1x 14.3x 12.5x 8.6x 9.2xCostco COST 2-EW 2-Neutral $59.71 $26,303 8.5x 7.9x 20.6x 18.7x 13.0x 12.3xBroadlines Average 7.8x 7.3x 16.3x 14.6x 10.2x 9.9xAmazon.com AMZN 1-OW 1-Positive $135.77 $63,065 21.2x 16.4x 46.5x 36.6x 19.5x 16.7xeBay EBAY 2-EW 1-Positive $26.97 $35,703 8.6x 7.3x 20.8x 20.0x 14.3x 12.7xBlue Nile NILE 1-OW 1-Positive $55.02 $846 21.6x 16.6x 53.8x 41.9x 22.4x 19.1xInternet Average 17.1x 13.4x 40.4x 32.8x 18.8x 16.1xNote: All retail estimates are from FactSet. Barclays Capital ratings for Bed Bath & Beyond, Williams-Sonoma, and Best Buy are from Retail Hardlines analyst Michael Lasser.Barclays Capital ratings for Tiffany, Wal-Mart, Target, and Costco are from Department Stores/Broadlines analyst Robert Drbul.Source: FactSet, company reports, and Barclays Capital estimates April 01, 2010 13
  14. 14. Barclays Capital Internet Data BookFigure 7: Barclays Capital & Consensus Estimates for 1Q10, 2Q10, and 2010E($ in millions, except per share data)1Q10 Revenue EPS EBITDA Barclays Barclays Barclays Capital 3/29/2010 Capital 3/29/2010 Capital 3/29/2010 Period Ending Estimate Low Mean High Estimate Low Mean High Estimate Low Mean HighYahoo! Mar-10 $1,153 $1,126 $1,166 $1,224 $0.10 $0.07 $0.09 $0.12 $379 $283 $378 $439eBay Mar-10 $2,257 $2,057 $2,180 $2,257 $0.41 $0.39 $0.41 $0.42 $777 $747 $806 $930Google Mar-10 $5,018 $4,740 $4,926 $5,117 $6.70 $6.05 $6.56 $6.91 $3,121 $2,827 $3,104 $3,320Amazon.com Mar-10 $6,892 $6,459 $6,843 $7,210 $0.63 $0.53 $0.60 $0.68 $559 $449 $551 $614IAC/InterActiveCorp Mar-10 $353 $342 $350 $362 $0.14 $0.00 $0.07 $0.14 $39 $23 $32 $44Liberty Interactive Mar-10 $2,049 $1,930 $2,037 $2,087 $0.34 ($0.00) $0.14 $0.34 $392 $374 $392 $401Priceline Mar-10 $595 $578 $596 $655 $1.72 $1.58 $1.67 $1.79 $108 $105 $108 $113Expedia Mar-10 $701 $665 $723 $813 $0.21 $0.16 $0.23 $0.28 $151 $121 $154 $190AOL Mar-10 $668 $655 $693 $735 $0.88 $0.32 $0.69 $0.93 $216 $32 $177 $224Orbitz Mar-10 $181 $180 $186 $205 ($0.05) ($0.11) ($0.07) ($0.04) $27 $21 $25 $27Blue Nile Mar-10 $74 $72 $73 $74 $0.16 $0.15 $0.16 $0.17 $6 $4 $6 $7Netflix Mar-10 $494 $491 $494 $496 $0.53 $0.48 $0.54 $0.60 $63 $54 $65 $71TechTarget Mar-10 $20 $20 $20 $20 $0.03 $0.01 $0.02 $0.04 $2 $2 $2 $32Q10 Revenue EPS EBITDA Barclays Barclays Barclays Capital 3/29/2010 Capital 3/29/2010 Capital 3/29/2010 Period Ending Estimate Low Mean High Estimate Low Mean High Estimate Low Mean HighYahoo! Jun-10 $1,189 $1,110 $1,183 $1,221 $0.13 $0.08 $0.11 $0.13 $450 $344 $424 $482eBay June-10 $2,246 $2,113 $2,207 $2,299 $0.40 $0.37 $0.40 $0.42 $758 $758 $802 $884Google June-10 $5,015 $4,740 $4,940 $5,242 $6.62 $5.93 $6.46 $6.94 $3,091 $2,805 $3,065 $3,210Amazon.com June-10 $6,488 $6,006 $6,402 $6,691 $0.57 $0.40 $0.54 $0.64 $530 $419 $522 $600IAC/InterActiveCorp June-10 $366 $346 $360 $375 $0.24 $0.09 $0.19 $0.28 $56 $43 $54 $66Liberty Interactive June-10 $2,120 $2,022 $2,077 $2,120 $0.19 $0.15 $0.17 $0.21 $459 $420 $443 $459Priceline June-10 $783 $717 $755 $839 $2.82 $2.45 $2.83 $3.11 $194 $162 $186 $205Expedia June-10 $849 $803 $859 $914 $0.40 $0.36 $0.43 $0.48 $240 $229 $253 $269AOL June-10 $636 $625 $658 $703 $0.84 $0.42 $0.67 $0.87 $208 $172 $195 $234Orbitz June-10 $191 $191 $206 $224 $0.02 $0.02 $0.10 $0.15 $37 $33 $44 $51Blue Nile June-10 $82 $79 $81 $83 $0.25 $0.21 $0.23 $0.25 $8 $6 $8 $8Netflix June-10 $516 $500 $516 $526 $0.66 $0.58 $0.68 $0.75 $74 $70 $78 $86TechTarget June-10 $23 $23 $23 $23 $0.06 $0.03 $0.06 $0.08 $4 $4 $5 $52010 Revenue EPS EBITDA Barclays Barclays Barclays Capital 3/29/2010 Capital 3/29/2010 Capital 3/29/2010 Year Ending Estimate Low Mean High Estimate Low Mean High Estimate Low Mean HighYahoo! 2010 $4,869 $4,651 $4,886 $5,103 $0.52 $0.34 $0.48 $0.68 $1,778 $1,389 $1,746 $1,942eBay 2010 $9,136 $8,919 $9,123 $9,356 $1.68 $1.32 $1.65 $1.71 $3,168 $3,168 $3,329 $3,665Google 2010 $21,340 $19,708 $20,789 $21,820 $28.06 $25.84 $27.42 $28.87 $13,048 $11,544 $12,913 $13,797Amazon.com 2010 $32,501 $29,004 $32,202 $34,893 $2.92 $2.49 $2.89 $3.30 $2,529 $2,037 $2,500 $2,769IAC/InterActiveCorp 2010 $1,485 $1,417 $1,466 $1,527 $0.88 $0.41 $0.76 $1.09 $217 $183 $212 $250Liberty Interactive 2010 $8,986 $8,433 $8,818 $8,994 $0.98 $0.53 $0.69 $0.98 $1,785 $1,613 $1,737 $1,787Priceline 2010 $2,947 $2,754 $2,879 $3,002 $11.08 $10.66 $11.25 $11.96 $768 $671 $732 $794Expedia 2010 $3,358 $3,083 $3,305 $3,460 $1.55 $1.44 $1.58 $1.67 $938 $874 $940 $1,000AOL 2010 $2,589 $2,564 $2,648 $2,773 $3.39 $1.60 $2.56 $3.51 $844 $553 $760 $969Orbitz 2010 $759 $740 $785 $867 $0.08 $0.04 $0.17 $0.29 $145 $129 $149 $165Blue Nile 2010 $349 $346 $349 $353 $1.02 $1.00 $1.04 $1.31 $34 $27 $33 $36Netflix 2010 $2,099 $2,069 $2,104 $2,138 $2.49 $2.31 $2.50 $2.75 $282 $233 $298 $524TechTarget 2010 $91 $91 $92 $93 $0.25 $0.11 $0.22 $0.29 $17 $17 $18 $20Source: Reuters, Thomson One, company reports, and Barclays Capital estimates14 April 01, 2010
  15. 15. Barclays Capital Internet Data BookFigure 8: Historical Annual Stock Performance, 2001–2010 YTD Price as of Marketcap YTD QTDCompany Ticker 3/31/2010 ($ mil.) Returns Returns 2009 2008 2007 2006 2005 2004 2003 2002 2001Yahoo! YHOO $16.53 $21,822 -1% -1% 38% -48% -9% -35% 4% 67% 175% -8% -41%Google GOOG $567.12 $174,387 -9% -9% 102% -56% 50% 11% 115% - - - -eBay EBAY $26.97 $29,787 15% 15% 69% -58% 10% -30% -26% 80% 91% 1% 103%Amazon.com AMZN $135.77 $51,948 1% 1% 162% -45% 135% -16% 6% -16% 179% 75% -30%Large Cap Average 1% 1% 92% -51% 47% -18% 25% 44% 148% 23% 10%InterActiveCorp IACI $22.78 $2,866 11% 11% 30% -33% -28% 31% -8% -19% 48% -16% 41%Liberty Interactive LINTA $15.30 $6,578 41% 41% 247% -84% -12% - - - - - -Expedia EXPE $24.95 $6,676 -3% -3% 212% -74% 51% -12% - - - - -Priceline PCLN $255.00 $10,717 17% 17% 197% -36% 163% 95% -5% 32% 86% -73% 343%AOL AOL $25.36 $2,682 9% 9% -7% - - - - - - - -Netflix NFLX $73.74 $3,598 34% 34% 84% 12% 3% -4% 119% -55% 397% - -Blue Nile NILE $55.02 $748 -13% -13% 159% -64% 84% -8% 46% - - - -Orbitz OWW $7.11 $595 -3% -3% 89% -54% - - - - - - -TechTarget TTGT $5.23 $233 -7% -7% 30% -71% - - - - - - -Total Universe Average 7% 7% 109% -51% 45% 3% 32% 15% 163% -4% 83%Nasdaq COMP $2,397.96 6% 6% 44% -14% 10% 10% 1% 9% 50% -32% -21%S&P 500 SPX $1,169.43 5% 5% 23% -24% 4% 14% 3% 9% 26% -23% -13%Source: FactSet April 01, 2010 15
  16. 16. Barclays Capital Internet Data BookFigure 9: Stock Performance Seasonality – Part IYahoo! AverageYHOO 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 Return1Q -2% 5% 24% 23% -18% -10% 8% 47% 4% -48% -21% 42% 33% 65% N/A 12%2Q NA 22% -29% -13% 2% 2% 50% 36% -20% 27% -28% 2% 70% 26% -36% 8%3Q NA 14% -16% -1% -23% -2% -7% 8% -35% -56% -27% 4% 65% 113% 1% 3%4Q NA -6% -29% -13% 1% 16% 11% 27% 71% 101% -67% 141% 83% 38% -20% 25%Full Year NA 38% -48% -9% -35% 4% 67% 175% -8% -41% -86% 265% 584% 510% -49% 98%Google AverageGOOG 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 Return1Q -9% 13% -36% -1% -6% -6% N/A N/A N/A N/A N/A N/A N/A N/A N/A -7%2Q NA 21% 20% 14% 8% 63% N/A N/A N/A N/A N/A N/A N/A N/A N/A 25%3Q NA 18% -24% 9% -4% 8% 29% N/A N/A N/A N/A N/A N/A N/A N/A 6%4Q NA 25% -23% 22% 15% 31% 49% N/A N/A N/A N/A N/A N/A N/A N/A 20%Full Year NA 102% -56% 50% 11% 115% 92% N/A N/A N/A N/A N/A N/A N/A N/A 52%eBay Averageebay 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 Return1Q 15% -10% -10% 10% -9% -36% 7% 26% -15% 10% 41% 71% N/A N/A N/A 8%2Q NA 36% -8% -3% -25% -11% 33% 22% 9% 89% -38% 10% N/A N/A N/A 10%3Q NA 38% -18% 21% -3% 25% 0% 3% -14% -33% 26% -7% -5% N/A N/A 3%4Q NA 0% -38% -15% 6% 5% 27% 20% 28% 46% -52% -11% 435% N/A N/A 38%Full Year NA 69% -58% 10% -30% -26% 80% 91% 1% 103% -47% 56% 410% N/A N/A 55%Amazon.com AverageAMZN 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 Return1Q 1% 43% -23% 1% -23% -23% -18% 38% 32% -34% -12% 61% 42% N/A N/A 7%2Q NA 14% 3% 72% 6% -3% 26% 40% 14% 38% -46% -27% 133% -11% N/A 20%3Q NA 12% -1% 36% -17% 37% -25% 33% -2% -58% 6% 28% 12% 182% N/A 19%4Q NA 4% -30% -1% 23% 4% 8% 9% 19% 81% -60% -5% 188% 16% N/A 20%Full Year NA 162% -45% 135% -16% 6% -16% 179% 75% -30% -80% 42% 967% 190% N/A 121%IAC/InterActiveCorp AverageIACI 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 Return1Q 11% -3% -23% 1% 4% -34% 12% -32% 8% -19% -19% 25% -27% 7% -11% -8%2Q NA 5% -7% -8% -10% 4% -34% 12% -32% 8% -19% -19% 25% 23% -3% -4%3Q NA 26% -10% -14% 9% -10% 4% -34% 12% -32% 8% -19% -19% 30% -22% -5%4Q NA 1% -9% -9% 29% 9% -10% 4% -34% 12% -32% 8% -19% 27% 1% -2%Full Year NA 30% -42% -28% 31% -34% -19% 48% -16% 40% -30% 67% 29% 117% -32% 12%Liberty Interactive AverageLINTA 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 Return1Q 41% -7% -15% 10% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A -4%2Q NA 73% -9% -6% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 19%3Q NA 119% -13% -14% 18% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 28%4Q NA -1% -76% -1% 6% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A -18%Full Year NA 247% -84% -12% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 51%Large-Cap Average Return (YHOO, GOOG, EBAY, AMZN) Average 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 Return1Q 1% 13% -11% 8% -14% -19% -1% 37% 7% -24% 3% 58% 38% 65% N/A 12%2Q NA 23% -4% 17% -2% 13% 36% 33% 1% 51% -37% -5% 102% 26% N/A 19%3Q NA 20% -15% 16% -12% 17% -11% 15% -17% -49% 2% 8% 38% 147% 1% 12%4Q NA 6% NA -2% 11% 14% 24% 19% 39% 76% -59% 42% 235% 27% -20% 32%Full Year NA 92% -10% 47% -18% 25% 44% 148% 23% 10% -71% 121% 775% 510% N/A 131%S&P 500 AverageSPX 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 Return1Q 5% -12% -10% 0% 4% -3% 1% -4% 0% -12% 2% 5% 14% 2% 5% -1%2Q NA 15% -3% 6% -2% 1% 1% 15% -14% 6% -3% 7% 3% 17% -36% 1%3Q NA 15% -9% 2% 5% 3% -2% 2% -18% -15% -1% -7% -10% 7% 2% -2%4Q NA 6% -23% -4% 6% 2% 9% 12% 8% 10% -8% 15% 21% 2% 8% 4%Full Year NA 24% -38% 4% 14% 3% 9% 26% -23% -13% -10% 20% 27% 31% -49% 2%NASDAQ AverageCOMP 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 Return1Q 6% -3% -14% 0% 6% -8% 0% 0% -5% -26% 12% 12% 17% -5% 5% -1%2Q NA 20% 1% 7% -7% 3% 3% 21% -21% 17% -13% 9% 3% 18% -36% 2%3Q NA 16% -9% 4% 4% 5% -7% 10% -20% -31% -7% 2% -11% 17% 4% -2%4Q NA 7% -25% -2% 7% 2% 15% 12% 14% 30% -33% 48% 29% -7% 5% 7%Full Year NA 44% -41% 10% 10% 1% 9% 50% -32% -21% -39% 86% 40% 22% -49% 6%Source: FactSet16 April 01, 2010
  17. 17. Barclays Capital Internet Data BookFigure 10: Stock Performance Seasonality – Part IIExpedia Average 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 Return1Q -3% 10% -31% 10% -15% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A -6%2Q NA 66% -16% 26% -26% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 13%3Q NA 59% -18% 9% 5% -18% N/A N/A N/A N/A N/A N/A N/A N/A N/A 7%4Q NA 7% -45% -1% 34% 21% N/A N/A N/A N/A N/A N/A N/A N/A N/A 3%Full Year NA 212% -74% 51% -12% 0% N/A N/A N/A N/A N/A N/A N/A N/A N/A -9%Priceline AveragePCLN 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 Return1Q 17% 7% 5% 22% 11% 7% 51% 3% -10% 93% 69% N/A N/A N/A N/A 26%2Q NA 42% -5% 29% 20% -7% 0% 126% -47% 258% -53% 39% N/A N/A N/A 36%3Q NA 49% -41% 29% 23% -17% -18% 30% -48% -58% -69% -44% N/A N/A N/A -15%4Q NA 32% 8% 29% 19% 16% 6% -38% 10% 54% -89% -27% N/A N/A N/A 2%Full Year NA 197% -36% 163% 95% -5% 32% 87% -73% 343% -97% N/A N/A N/A N/A 57%Orbitz AverageOWW 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 Return1Q -3% -67% -19% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A -43%2Q NA 47% -27% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 10%3Q NA 225% 17% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 121%4Q NA 19% -34% -25% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A -13%Full Year NA 89% -54% NA N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/ANetflix AverageNFLX 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 Return1Q 34% 44% 30% -10% 7% -12% 25% 85% N/A N/A N/A N/A N/A N/A N/A 24%2Q NA -4% -23% -16% -6% 51% 6% 25% -9% N/A N/A N/A N/A N/A N/A 3%3Q NA 12% 16% 7% -16% 58% -57% 31% -31% N/A N/A N/A N/A N/A N/A 3%4Q NA 19% -3% 28% 14% 4% -20% 63% 14% N/A N/A N/A N/A N/A N/A 15%Full Year NA 84% 12% 3% -4% 119% -55% 396% -29% N/A N/A N/A N/A N/A N/A 63%AOL AverageAOL 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 Return1Q 9% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A2Q NA N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A3Q NA N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A4Q NA -7% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A -7%Full Year NA -7% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/ABlue Nile AverageNILE 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 Return1Q -13% 23% -20% 10% -13% 0% N/A N/A N/A N/A N/A N/A N/A N/A N/A 0%2Q NA 43% -21% 49% -9% 18% 32% N/A N/A N/A N/A N/A N/A N/A N/A 19%3Q NA -12% 1% 56% 13% -3% -10% N/A N/A N/A N/A N/A N/A N/A N/A 7%4Q NA 2% -43% -28% 1% 27% -18% N/A N/A N/A N/A N/A N/A N/A N/A -10%Full Year NA 159% -64% 84% -8% 46% -3% N/A N/A N/A N/A N/A N/A N/A N/A 11%TechTarget AverageTTGT 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 Return1Q -7% -44% -4% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A -24%2Q NA 67% -25% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 21%3Q NA 43% -34% 32% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 13%4Q NA -1% -38% -13% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A -17%Full Year NA 30% -71% NA N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/AS&P 500 AverageSPX 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 Return1Q 5% -12% -10% 0% 4% -3% 1% -4% 0% -12% 2% 5% 14% 2% 5% -1%2Q NA 15% -3% 6% -2% 1% 1% 15% -14% 6% -3% 7% 3% 17% -36% 1%3Q NA 15% -9% 2% 5% 3% -2% 2% -18% -15% -1% -7% -10% 7% 2% -2%4Q NA 6% -23% -4% 6% 2% 9% 12% 8% 10% -8% 15% 21% 2% 8% 4%Full Year NA 24% -38% 4% 14% 3% 9% 26% -23% -13% -10% 20% 27% 31% -49% 2%NASDAQ AverageCOMP 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 Return1Q 6% -3% -14% 0% 6% -8% 0% 0% -5% -26% 12% 12% 17% -5% 5% -1%2Q NA 20% 1% 7% -7% 3% 3% 21% -21% 17% -13% 9% 3% 18% -36% 2%3Q NA 16% -9% 4% 4% 5% -7% 10% -20% -31% -7% 2% -11% 17% 4% -2%4Q NA 7% -25% -2% 7% 2% 15% 12% 14% 30% -33% 48% 29% -7% 5% 7%Full Year NA 44% -41% 10% 10% 1% 9% 50% -32% -21% -39% 86% 40% 22% -49% 6%Source: FactSet April 01, 2010 17

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