Challenge

Business Plan

2009. March
by Semantics. Co., Ltd.

Confidential : This proposal and all contents herein are the sole property of Semantics. Co., Ltd.
Any reproduction or distribution of this document without the written consent of Semantics. Co., Ltd. is prohibited.
Table of Contents

1. Company Overview
2. Product , Service
3. Market & Marketing Strategy
4. Operations
5. Key People & Management
6. Finance
7. Risk Assessment
8. Viability
Appendix. Press Release Data

2
1. Company Overview

1. Vision
2. Key Information
3. Summary

3
1. Company Overview
• Vision

Our vision is

to make wonderful world

that shares and enjoys

fruitful information & knowledge on the web

without a obstacle of language & country

By using the next generation search platform

* Semantic Web ?
 It derives from W3C director Sir Tim Berners-Lee's vision of the Web as a universal medium for data,
information, and knowledge exchange. World IT industry has been trying to develop the core technology of
the next generation search engine that understands meaning of words.

 SemanticWeb is the next generation intelligent Web: a computer can understands words and sentences and
carry out logical reasoning. The intelligent Web analyses analogies and interrelations of words to search a
result that a user wishes to locate. It is the Stem Cell technology of IT industry.

4
1. Company Overview
• Key Information

Company SEMANTICS, Inc. / SEMANTICS, Lab.

CEO Arthur Cho

Head of Research CI Chung

Establishment April 2006

Business Internet search service, podcating servicing

Main Business www.qrobo.com / www.podics.com

Employee 47

Company URL www.semantics.co.kr

TEL 02) 6000-6002

FAX 0505-690-6000

5
1. Company Overview
• Summary

Intelligent Internet Company; Semantics

Established SEMANTICS, Inc. in 2006 after it has invested 10 years to develop semantic based search engine

In 2008 the company has launched ‘Qrobo’; It is the world first commercialization of a semantic based
search engine

Built the world largest ‘Ontology’, Holding unique technology of building up ‘Ontology’ automatically

99.9% Automated/Computerized Search Engine:

 Qrobo’s search robot can analyses meaning of web information and automatically sort them under
prefixed categories

 Ranks web information by exposure order by the prefixed categories. It is called ‘Semantic Rank’ and
it helps to carry out accurate/relevant search

Intelligent Robotic Semantic Search Engine : Qrobo (www.qrobo.com)

Multimedia Listing Service Podcast – Podics (www.podics.com)

6
2. Product , Service

1. Technology
2. Compare Competitors

7
2. Product, Service
• Technology

I. Numerical Vector Language

 Technology that numerates meaning of words. Despite of a language

type whether it is English of French, the technology understands the
structure of the language, the meaning, numerically.

(This is the world unique commercialized technology)

 The core technology can be applied to any language. A language

adaptation period is circa 1 month and then the technology can build
any adapted language search engine.

(2 months after the language adaptation period an Alpha site can be

launched. Within 1 year after the language adaptation period an official
site can be launched.)

8
2. Product, Service
• Technology

II. Application of the Numerical Vector Language has no limit

All Languages -‘One Standard Process’

English Japanese Chinese French German

Vector Vector Vector Vector Vector

Qrobo Vector Language No, Linguists

No, Dictionary
Autom ated Transposition
No, Morpheme Analyzer

English Japanese Chinese French German

Assem bly Language

M achine Language
10001010110011010001100010101100110100010001010110011010001000101011001101000

9
2. Product, Service
• Technology

III. Intelligent Search Agent equipped with Semantic Web technology

 The world largest ‘Ontology’

 Real time ontology update : automatically abstracting ontology form

the web builds up its own ‘Ontology’ (the world unique technology)

 At present 35 billion ontology has been built up (this is the world

largest)

 More accurate/relevant search result through ‘Semantic Rank’ system

 Searched information through the ‘Ontology(Knowledge Foundation)’

is analyzed by number of algorithms, such as semantic relation, birth
of the information and etc., then expose the most relevant
information on top rank. This allows Qrobo to provide more
accurate/relevant search result.

10
2. Product, Service
• Technology

III. Intelligent Search Agent equipped with Semantic Web technology

W3C Standard Technology

Study Input
Data
Humans

Qrobo Original Technology

Crawling Automated Make

Web

Robots

11
2. Product, Service
• Technology

III. Intelligent Search Agent equipped with Semantic Web technology

W3C Standard Technology Qrobo Original Technology

Another Site Qrobo.com

10,000 ~ 100,000 Ontologies 35,000,000,000 Ontologies
about for many years about 3 months,
(2~5 years), many humans no humans only robot

12
2. Product, Service
• Technology

IV. 99.9% Automation/Computerization (robot does it all)

 Full automation from a planning to managing

 Once a web site developer let the robot knows definition of a planned
service then the robot abstracts all relevant web information, ranks
them, monitors, and update information automatically

 Reduces huge amount of manual work, such as sorting and editing

operation, therefore it requires the minimum manpower who can cover
the creative work that the robot can not do.

 Automated/computerized management will let you have a huge

budget saving

13
2. Product, Service
• Technology

IV. 99.9% Automation/Computerization (robot does it all)

Original
Semantic Search Technology

Automated Ontology Builder

Super Fast Development Time

Time & Real Cost Saving
for All language Service
Profit Margin Increase
Focus on Service Planning Robot Management System
Innovative Trials for New Services
with Technology Barrier
Highly Efficient System

14
2. Product, Service
• Technology
- Qrobo’s 5 core ‘Serve Robot’

 Automatically builds up Qrobo Ontology Dictionary with abstracting web

ONTOrobo
information. (Ontology Builder)

 Analyses document/information within 0.03 seconds and then sort it out

DOCUrobo
under 1250 categories, such as culture, politics, finance and etc.

 Analyses a keyword in real-time by year, month, date, season. Manages

ISSUErobo lifecycle, popularity and preference of a keyword and then monitors
transition of issues that are relevant to the keyword.

 Locate core words from a document/information and locate words that

TAGrobo they have high relevancy, and then automatically tags them to
document/information.

 By the users various circumstantial information and previous search

PERSONALrobo
preference, the robot recommends the most relevant search results.

15
2. Product, Service
• Technology

None Semantic Technology Semantic Technology

1(Human) : n(Info) 1(Human) : 1(Robot) : n(Info)

INFO
INFO

INFO Knowledge
INFO Knowledge

ROBOT

INFO People

INFO
People

Intelligence
Intelligence

16
2. Product, Service
• Technology

W 3C Qrobo
Sem antic W eb Sem antic Technology

Search Solution Search Solution

Sem antic w eb Solution vs Autom ated Sem antic

W 3C Standard Technology Qrobo Original Technology

M anual
W 3C Standard Technology Autom ated Ontology
vs
Qrobo Original Technology
OW L XM L RDF

17
2. Product, Service
• Technology

Ow n Technology

Server Unit M aking Server For Qrobo

Operating System Linux Based ‘Qrobo Sem anN UX ’

Clustering Qrobo Logical Clustering System

Database System M ysql Based ‘Qrobo Sem anSQL’

Storage System Qrobo Enterprise Storage System

18
2. Product, Service
• Compare Competitors

Transition of Search Engine and Technology Comparison

Hakia
SEMANTIC
Ask
Powerset

Altavista Google
Quintura

Excite
Yahoo
Lycos

19
2. Product, Service
• Compare Competitors

Transition of Search Engine and Technology Comparison

None Nex t Google.com

HAK I A.com P OW ER SET.com QUI NTUR A.com

Supports -
Hakia Supports -
Hakia Wikipedia, Powerset Quintura
Manual Yahoo
Automated Freebase

Semantic Technology Base

20
3. Market & Marketing Strategy

1. Forecast of IT
2. Status & Forecast of Web Environment
3. Status & Forecast of Search Engine
4. Comparison Search Engine
5. Search Ads (Korea)

21
3. Market & Marketing Strategy
• Forecast of IT

IT Road Map Toward 2010, Semantic & Autonomic

1990s 2000s 2010s

Robots and Agents will Autonomically make Decisions by gathering and Accumulating expert knowledge.

IT with  Semantic Web

Intelligence  Autonomic Computing
 Agent-embedded Automobile Navigation Systems

Source: http://www.nri.co.jp/english/opinion/papers/2006/pdf/np2006102.pdf
IT Road Map Toward 2010 / Nomura Research Institute, Ltd.

22
3. Market & Marketing Strategy
• Status & Forecast of Web Environment
- The Intelligence is in the Connections
The Global
Artificial Intelligence Intelligent Agents Brain
Enterprise
Personal Semantic Minds

Web 3.0 Web 4.0

Degree of Information Connectivity

Assistants Webs Smart

Marketplaces
Group
Semantic Web The Metaweb
Minds
Connects Knowledge Connects Intelligence
Ontologies Lifelogs The
Knowledge “Relationship”
Management Decentralised
Knowledge Web
Semantic Communities
Taxonomies Bases Weblogs

Search Engines Enterprise Marketplaces Wikis

Portals Community
Auctions
Content Portals RSS Portals
Weblogs

Web 1.0 Web 2.0

Web Sites
Groupware

PIMs
The Web Social Software
Connects Information Connects People Social
eMail USENET Networks
Databases “Push”
Conferencing
Pub-Sub
File Servers P2P File-sharing IM

Degree of Social Connectivity

23
3. Market & Marketing Strategy
• Status & Forecast of Web Environment
- The Intelligence is in the Connections
Intelligent Web
Connections between Information

Web OS
Web 4.0
2020 - 2030
Intelligent personal agents
Semantic Web Web 3.0
Semantic Technology OWL
SWRL
2010 - 2020
AJAX SPARQL Semantic Databases
OpenID
Semantic Search
Social Web RSS
ATOM Widgets
P2P RDF Mashups
Office 2.0
Javascript
SOAP XML
Flash Web 2.0
The Web Java 2000 - 2010 Weblogs Social Media Sharing
HTML
HTTP SaaS Social Networking
Directory Portals Wikis
VR
Keyword Search Lightweight Collaboration
The PC BBS Gopher Web 1.0 Websites
1990 - 2000
MMO’s MacOS SQL
Groupware
SGML Databases
Windows
File Servers
The Internet
PC Era
FTP IRC Email 1980 - 1990
USENET
PC’s File Systems

Connections between people

24
3. Market & Marketing Strategy
• Status & Forecast of Search Engine
- Intelligent Search Services, Evolutionary trends of Web Search Technology, Semantic Search
Productivity of Search

The Intelligent Web

Web 4.0
2020 - 2030 Reasoning

The Semantic Web

Semantic Search
Web 3.0
2010 - 2020

The Social Web

Natural language search
Web 2.0
The World Wide Web 2000 - 2010
Tagging Semantic Search
Web 1.0
1990 - 2000
Keyword search 2010-2020
The Desktop
Directories
PC Era
1980 - 1990
Files & Folders

Databases Keyword Search

Directory Search
Database Search 2000-2010

Amount of data
25
3. Market & Marketing Strategy
• Comparison Search Engine

1st Generation 1.5th Generation 2nd Generation 3rd Generation

Name Yahoo AltaVista Google Qrobo

Keyword Keyword
Method Directory Search Keyword Search
+Ranking Search +Semantic Search

Search robot locates

Search robot
and evaluates The next generation
locates web
Directory sorting reliance of web technology to protect
Technology information but
by manually information but user from a flood of
manually sort
semi automatically irrelevant information
them out
list them

Profit Display Banner SemanticWeb Ontology

Proactive
Making Banner Ads Premature Keyword Search Ads.
Keyword Ads
Model Keyword Ads Multi Linguistic Service

26
3. Market & Marketing Strategy
• Search Ads (Korea)

Advertising Sales Request Advertising Sales

Naver
Overture Internet Advertisers
Korea 35,000
Yahoo Korea

Daum
Internet Advertisers
AdWords User
1,000,000
Google Korea

Internet Advertisers
Qrobo(Korea) Overture Korea
35,000
Internet Advertisers
Qrobo(Japan) Overture Japan
50,000
Internet Advertisers
Qrobo(Global) AdWords
1,000,000

Revenue Sharing Pay per click advertising Click search ads

27
3. Market & Marketing Strategy
• Search Ads (Korea)

Analyzing Rankey & I.R Datas

Dec. 2008 Rankey Data 2008 I.R Data
Reasoning Data
Search ad revenues in Average search Unit Ads cost Annual Unit
1Day Average 1Day Average
Annual Total Hit 2008 total times by a per a search cost per a
U/V U/V
(100 million Won) person per day (Won) person (Won)

Naver Portal 12,361,491 Naver Search 9,734,170 63,304,541,500 6,084 18 9 62,501

Daum Portal 9,138,910 Daum Search 4,201,555 14,293,622,285 1,230 9 8 29,275

Empas Portal 2,307,106 Empas Search 968,188 2,447,831,255 223 7 7 17,765

Google Korea
Search
800,623 3,517,678,740 247 12 7 17,765

Empas
2.23billion Won (12.4million pounds) / 2008 / 960K person
Search Ads Turnover

Google Korea
2.47billion Won (13.7million pounds) / 2008 / 800K person
Search Ads Turnover

Profit making model for Qrobo

1 st Year Goal: Levels with Empass and Google Korea
Search Ads

28
3. Market & Marketing Strategy
• Roadmap
2012
Entering into the big 4 global search engine

2011
Qrobo services in 199 countries with
135 different languages

2009
Qrobo launch its service in 50 countries,
UK, US, China, Germany and etc, with 22 languages

November 2008
Launch Qrobo Japan Beta Version

June 2008
Launch Qrobo Korea Beta Version

29
3. Market & Marketing Strategy
• Goal of Business
- 2008.2Q Efficient Frontier 2008.11 -

Google | Yahoo | MS Live

World 3 major
search engine
•Google.com

World Market Share

•Yahoo.com
•Msn.com(Live.com)

8 popular search
engines 4.8 4.0
•Ask.com
•Aol.com 17.6 10.5 4.2 7.0 43.3
•Altavista.com
•Netscape.com
•Alltheweb.com
•Go.com
•Alexa.com
•Dogplie.com
74.6 81.1 91.4 89.2 51.5

US UK Europe Australia Japan

Google | Yahoo | Live | Qrobo

By 2012 Qrobo enters in world 4 major search engine group
30
4. Operations

1. Operational Plan

31
4. Operations
• Operational Plan

Plan
 1st half : Inviting Government grant and overseas investment move IDC facility and increa
se sever up to 20,000 units
2009
 April launch Qrobo Korea, Aug launch Qrobo Japan
 2nd half: Beta service in 22 countries increase server up to 30,000 units

 Meets(levels with) Yahoo Global Service

2010  Increase server up to 50,000 units at the IDC
 Market Qrobo Search Engine to the major portal sites

 Levels with Googles Global Service

2011  Qrobo builds up world largest documents
(Secure over 10% of Korean and Japanese search engine market.)

2012  Entering in world 4 major search engine group (Google, Yahoo, MS Live, Qrobo)

2013  World top 2 search engine (Google, Qrobo)

32
5. Key People / Management

1. Executive profiles
2. Organization

33
5. People / Management
• Executive profiles

CEO / CTO Arthur Cho Experience:

NewTech Information and Communication Lab Senior Researcher
Webbizline Inc. CEO
Street Journal CEO & Publisher
Mysearch Korea Inc. CEO
Semantics Korea Inc. CEO

COO KY Kim Education:

Korea University
Graduate School of International Studies
Experience:
National Intelligence Service IT & Venture
ORG STUDIO Inc. Auditor

Research CI Chung Education:

Institute Kyungpook National University
(Doctorate, Physical Science)
Experience:
NewTech ZigZag Lab Head of R&D Lab
Mondex Telecom Inc. CEO
Mondex Network Inc. CEO
Semantics Korea Head of R&D Lab

34
5. People / Management
• Organization Chart

Oversea Executive Auditor

Administration R&D

Platform Development Division Service Division

Intelligence Platform Business Service

Service Operation Service Planning
Development Platform Development

35
6. Finance

1. Investment Plan

36
6. Finance
• Investment Plan

2009 2010 2011 2012

Levels with Google
Secure 10% of
Korean Korea 22.3 bil won
April Grand Open Korean search
Service turn over with 5.8
engine market
bil won profit

Levels with Secure 10% of

Japanese
Aug Grand Open Goo.ne.jp and Japanese search
Service Google Japan engine market Global Service

Entering World
By Semantics 4 major search
engine group

Levels up with Levels up with

Beta Service in 22
Global Service countries
Yahoo Regional Google Regional
service service
By Semantics

Inviting Investment Inviting Investment

37
7. Risk Assessment

1. Profit Projection by US Keyword Ads Market Share

2. Investment Highlight

38
7. Risk Assessment
• Profit Projection by US Keyword Ads Market Share

2009 2010 2011

12,935,000,000 14,906,000,000 16,590,000,000

US $ 38,805,000 $ 447,180,000 $ 2,488,500,000
0.3% 3% 15%
Market About About About
40 millon dollor 450 million dollor 2.5 billion dollor

Only
Search Keywords Advertisement

39
 7. Risk Assessment
• Investment Highlight

Advanced High Performance Search Engine by SemanticWeb Technology

Increase Profit

User can locate accurate/relevant web information faster searching by

Maximize User Satisfaction
Qrobo

Maximize Ads Effect Sponsor can expose theirs Ads to the targeted audience located by Qrobo.

Save Running Cost

▶Operated by automatic robotic search agent, operation efficiency gets

Semantic Search Engine better but running cost reduces
▶Semantic Agent automatically collects data for new linguistic service

Unique Server Management Technology helps to reduce number of

Unique Server Management
computer processors and bands width to assist search engine. Low grade
Technology
(low cost) server meets the requirements.

40
 8. Viability

1. Advanced and Unique Technology promises rapid growth

41
8. Viability
• Advanced and Unique Technology promises rapid growth

Advanced High Performance Search Engine by SemanticWeb Technology

 99.9% automatic/computerization provides low running cost business model

 Intelligent Robotic operation requires at the very least manpower

 Secure bigger growth engine with locating floating manpower from operation
to R&D

 The advanced technology allows operating with low grade (low cost) server.
Floating budget can be invested for further growth.

 Due to automatic development system and advanced numerical computer language,

it is possible to build up Global Service in a short period

 With less than 10 manpower it takes 2 month to launch Alpha service, 6month to
launch Beta service and less than a year to launch official service.
(ex: Qrobo Japan only took 2 month to launch the current Alpha service with only 5 staff)

42
Appendix. Company Press Release

2007~2008 December

43
Appendix. Press Release Data

2007.3.8 The Electronic Times, Page 1 Top News

'Semantic Web Search engine, the First Commercial'
2007.03.08

2007.10.17

2008.01.22

2008.03.05

2008.06.17

2008.07.10

2008.07.11

2008.08.12

2008.09.09

2008.12.12

2008.12.19

2008.12.26

2008.12.29

44
Appendix. Press Release Data
2007.10.17 The Electronic Times
Qrobo.com, 1st Patent Registration
2007.11.30 The Electronic Times
Qrobo.com, 2nd Patent Registration

2007.03.08

2007.10.17

2008.01.22

2008.03.05

2008.06.17

2008.07.10

2008.07.11

2008.08.12

2008.09.09

2008.12.12

2008.12.19

2008.12.26

2008.12.29

45
Appendix. Press Release Data

2008.1.22 The Electronic Times

Qrobo.com, Released next week
2007.03.08

2007.10.17

2008.01.22

2008.03.05

2008.06.17

2008.07.10

2008.07.11

2008.08.12

2008.09.09

2008.12.12

2008.12.19

2008.12.26

2008.12.29

46
Appendix. Press Release Data

2008.3.5 Global news network AVING | USA

The world's first semantic search engine ‘Qrobo’ at CeBIT 2008
2007.03.08

2007.10.17
Semantics unveiled the world's first semantic search engine 'Qrobo' at CeBIT 2008

2008.01.22

2008.03.05

2008.06.17

2008.07.10

2008.07.11

2008.08.12

2008.09.09

2008.12.12

2008.12.19

2008.12.26

2008.12.29

47
Appendix. Press Release Data

2008.6.17 The Electronic Times,

The world's first semantic search engine ‘Qrobo’ at World IT Show
2007.03.08

2007.10.17

2008.01.22

2008.03.05

2008.06.17

2008.07.10

2008.07.11

2008.08.12

2008.09.09

2008.12.12

2008.12.19

2008.12.26

2008.12.29

48
Appendix. Press Release Data

2008.7.10 JoongAng Ilbo

Prevent distortion of public opinion Search Engine, Qrobo
2007.03.08

2007.10.17

2008.01.22

2008.03.05

2008.06.17

2008.07.10

2008.07.11

2008.08.12

2008.09.09

2008.12.12

2008.12.19

2008.12.26

2008.12.29

49
Appendix. Press Release Data

2008.7.11 CHOSUN Ilbo

Meaning the search engine ‘Qrobo’, Over Google
2007.03.08

2007.10.17

2008.01.22

2008.03.05

2008.06.17

2008.07.10

2008.07.11

2008.08.12

2008.09.09

2008.12.12

2008.12.19

2008.12.26

2008.12.29

50
Appendix. Press Release Data
2008.8.12 The Electronic Times
1 Qrobo Plan in Japan Open for 2 months
2008.11.5 The Electronic Times
2 Japanese trial Qrobo
2007.03.08 1 2

2007.10.17

2008.01.22

2008.03.05

2008.06.17

2008.07.10

2008.07.11

2008.08.12

2008.09.09

2008.12.12

2008.12.19

2008.12.26

2008.12.29

51
Appendix. Press Release Data

2008.9.9 Money Today

Qrobo, IPone visual search releases
2007.03.08

2007.10.17

2008.01.22

2008.03.05

2008.06.17

2008.07.10

2008.07.11

2008.08.12

2008.09.09

2008.12.12

2008.12.19

2008.12.26

2008.12.29

52
Appendix. Press Release Data

2009.12.12 KOREA Ministry, MKE Announcement No. 2008-198

Qrobo, Selected ‘World Class Product’

2007.03.08

2007.10.17
World Class Product
2008.01.22

2008.03.05 Qrobo
2008.06.17
Next-generation first-class product
2008.07.10 Ontology automatically build an artificial intelligent robot, and to
2008.07.11 give meaning to all the live Web Search Engine
2008.08.12

2008.09.09
2008y, Score Semantics SAMSUNG DOOSAN
Comparison Qrobo CDMA Station Medicine
2008.12.12
Price 50 80 120
2008.12.19

2008.12.26
Quality 200 180 100
2008.12.29 Technology 200 180 100
Source: KOREA Ministry, MKE Announcement No. 2008-198

53
Appendix. Press Release Data

2009.12.19 Computer Times / KIPO / MKE / Korea Ministry

‘Qrobo’ Korea 100 patents for Excellence

2007.03.08

2007.10.17

2008.01.22

2008.03.05

2008.06.17

2008.07.10

2008.07.11

2008.08.12

2008.09.09

2008.12.12

2008.12.19

2008.12.26

2008.12.29

54
Appendix. Press Release Data

2008.12.26 DongA Ilbo

The New Search Engine Google Surpasses

2007.03.08

2007.10.17

2008.01.22

2008.03.05
TIMAX vs MS
2008.06.17 QROBO vs GOOGLE
2008.07.10 (TIMAX: Korea No.1 SW Company)
2008.07.11

2008.08.12

2008.09.09

2008.12.12

2008.12.19

2008.12.26

2008.12.29

55
Appendix. Press Release Data

2008.12.29 Electronic Times

Qrobo, Asia's Largest Green IDC building

2007.03.08
Government Techno Valley
2007.10.17 Support for free

2008.01.22
Electric Facilities
2008.03.05 1,500kw ~ 5,000kw
Internet Backbone
2008.06.17 5GB ~ 20GB
2008.07.10 Server Facility
50,000 EA
2008.07.11

2008.08.12

2008.09.09

2008.12.12

2008.12.19

2008.12.26

2008.12.29

56
㈜시맨틱스
www.sematics.co.kr
www.qrobo.com
podics.qrobo.com

57