‘Youruee MONETIZATION “ASSUMPTIONS, YouTube Model Buildup Below, we offer our tke on seveate build-out and projections far YouTube to serve 15a rwadanp for investors who want co ideatiy the Bkely revenue divers of online ideo sts. YouTube — Domestic + YouTube PVs Expected to Amount to 3% of Domestic Internet PVs. We stom with total domestic Iteret ses, which we expect to aro in mer fon 174 alioa in 2008 o 242 aulion ia 2012, by ssrusing steady declining yeor- coveryear growth over the next five yeas. We then do the same analysis for ‘YouTube in which we assuine the aunber of domestic uique visitors wil grow fou 30 million in 2006 to ~83 alin in 2012. We alo project the number of| YouTube ser 9 4 peoent of total Inert user will grow fom 17% in 2006 19 34% in 2012, In reed wo YouTube pages viewed, we expest am increase from 23 billion in 2008 to 172 bilion in 2012. As page views incweas, we also expect the YouTube percentage of total Tatemet pageviews to gow steal. from 0.4% in 2006 wo 2.5% in 2012, + 2008 Estimates. We expect the anuber of YouTube visitors in 2008 reach $9 nll by yearend 2008, or 14% yenrovenyear growth. We then project YouTube's pages viewed for 2007, which we expect to be ~83 billion, of yea oversyenr growth of 76% + Banner Ad Monetization Expected to Grow to 23% of PVs by 2012. We sanipled a numberof pages on YouTube and found that a sigiicant proportion ofthe eategory pages ore being monetized even as only a handful ofthe pages with the astal slips have banner advertisements. For conservatism, we use @ 15% monetization rate and expect this percentage to intease fo aronnd 23% in 2012, As sich, ot monetized page views on YouTube are exited at around Seven billion in 2007 and are projected 10 grow to 40 billion by 2012, ‘+ Prime Ad Revenues Estimated at S105 Million by 2012, We extate pene page views asa percentage of total monetized page views at 100% in 2007 and project they will decline to 72% iu 2012. We expect prtne CPM to amuoustto S485 based on conversations with indasty coumats, sine to our estate for Facebook hit wve detailed in our report Yahoo!'s 100-Day Review: What Should Yahoo! Do Regarding Social Nenvoria? dated Avguet 1, 2007. We puojet prise (CPM will gro to $5.70 in 2012, which ie ofa sigatisantdieconat to ovr $18 estimate for Facebook. aot only tbe coasevative but als to sciowledge that A numberof prea conten provides, ke Viacom, ae building thei ona sites to offer video. Mulplying prin page views by prime CPM leads us to prise sevenising revenues, which ar estimated at ~$168 milion by 2012 + Remnant Ad Revenues Estimated at 6 Million by 2012. In rez to rennaat page views a5 a percentage of total page views, we estimate 0% in 2007 and ‘tesily increasing to somprise 28% in 2012 as prime inventory declines #6 9 perceatage ofthe foal We estimate remnant CPM st 10% of the prime CPM, BEAR, STEARNS & CONE Page 27sud pooject this CPM will insrease steadily o $0.57 ia 2012. Muliplyiag remnant page views ith enmant CPM leds us to remant advertising reves wih are estimated a ~86 aalionby 2012. Streaming Ad Net Revennes Estimated at S2E Mion by 2012. YouTube is just sted offing steaming ads on is sit, aod the business i vater rdimestury. We estimate the nuser of video teem saved to incense Som 16K in 2007 to 45 milion in 2012, essentially serving steaming video ads 0 5% ofthe weer by 2012, Video CPM te surentiy evicted at ~$20 fv 2009 (as UGC CPM sould come ata discount to CPMs fr professional cote), We asrvatively projet video wl to snctease to $24 by 2012. uliplying video Sten served by video CPM lends ts #9 gross video srenming advertising evens, which ae exited at $106 nilion by 2012; farther assy a TAC sate of 8s, We get at ideo a senming evens of $2 lon i 2012 Revenues Estinated t Increase t0 S277 Milion by 2012 foot S34 Mion in 2007. As sch, add up the various reverse rst to etnate S31 aalion a reverts 2007 nod $50 milion in 2008: we expetretemies 19 gro fo S277 ‘nllicn by 2012, wie peimary diver of the grows being the baer adsxn 25. YouTube Domest Projet a ae Uso ees Pan Vine Dame tn Inet r= 0°00) ane 19191 amie ase zag zaneer Ts "EYot Gow toe ED’ 50% Ah aK 20H naet ag ews nbn) S252 BBLS) SONNE WEA gama wseasse TRIN "stor Gown 506 0K AK AD Dh "sabe vs 0° (09) sn asec tas Ta “Etat Ga a Ce a ‘ePaoern tren es ie 08 SK Pag los nto) nam 48080 OMG ROE TST "et0t Gow moet 762) Nh TOK TDR TZ Pages te) ess wy Tse Mosse ssa65TISTT Pages than 60s EPH 3300 wz onsen Pag wm Mon) nos nym 21560 Gene to PremirnPage sr (ae) roe nesta ma "eo Tol Med Page ns roe SHI TA TaD Premmci un fe Se BN ee STD Fabio Aa Ronan (ie) sera sis watt sas Sica Ramnat age ew (es) me i asm DTH "Eo Tl Met Page ews = sm tite time ee emt Pt soa mise sas) fost sas SST “Ripe esos SH Mo] a ts a Sten seed (05) ts tom aes ta amo cat ‘below om tm bbe wa wero sao ems gz ATS "Yat Goh ee ee el “ie Revers Si oa taee oar ags ss see “eV Reon few) as ee EO eeeeeeeeeih$7)5s- YouTube — international For the interantooal YouTube sites, we applied the same methodology fiom the domestic sites to arrive at our intemtional YouTube estinintes. Our estimates are noted belo Exhibit 2, YouTube nernaina Projection ae Tonal You Vo