You are on page 1of 23

SOFTWARE & SERVICES

31 MARCH 2009

WEB 2.O WEEKLY
FINANCING REBO UND IN Q1
F IR ST Q UA RT E R CL O S E S B ET T E R T HA N P R E VI OU S QU A RT ER

DAVID SHORE, CFA, MBA 416.860.6784
david.shore@researchcapital.com Arun Thomas (Associate) 416.860.7666

The first quarter of 2009 finished with 77 financings totalling $521 million, up 54% Q/Q (Q4/08 at $338.5 million) and down 44% Y/Y (Q1/08 at $748.2 million). March was the weakest month in the first quarter at $118.7 million, with January and February closing at $216.8 million and $185.5 million, respectively. Does this rise in quarterly rise over Q4/F08 portend what 2009 will look like? W e will be keeping track and discussing trends in our upcoming reports. Sectors that attracted the most amount of capital in the first quarter are Video ($121 million) and social networking ($60 million), with gaming not far behind at $43 million. W e wonder if the interest in the video sector is a leading indicator of where the next big innovation is located or companies’ looking to capitalize on the massive traffic online video is driving? Among individual companies, Twitter leads the pack in the quarter, raising $35 million, with Synthasite taking the runners-up at $20 million.

Financing by Month
800.0 720.8 700.0 649.9 30 35

600.0 25

500.0 461.7 20 (US$mm) 400.0 360.5 318.7 300.0 244.0 216.8 200.0 192.6 142.0 132.3 111.0 100.0 24.4 21.4 21.2 15.4 12.5 12.2 8.0 0.0
M ay -0 6 M ay -0 7 M ay -0 8 Ju l-0 6 Se p06 N ov -0 6 Ju l-0 7 Se p07 N ov -0 7 N ov -0 8 N ov -0 5 ar -0 6 ar -0 7 ar -0 8 Ju l-0 5 Se p05 Ju l-0 8 Se p08 Ja n09 Ja n06 Ja n08 Ja n07 ar -0 9

15 304.3

10

185.5

68.8 56.3 42.0 38.0 40.9 40.5 48.7 38.8 38.8 18.8 16.5

82.5

99.0 69.0 38.6 69.5 69.0

122.8 114.6 101.1

118.7 5

82.6

38.6 22.0

0

M

M

M

This report has been created b y Anal ysts that are emplo yed b y Research Capital Corporation, a Canadian Investment Dealer. For further disclosures, please see last page of this report.
T o ro n t o 4 1 6 . 8 6 0 . 7 6 0 0 Montreal 514.399.1500 w w w . r e s e a rc h c a p i t a l . c o m Vancouver 604.662.1800 Calgary 403.265.7400 Regina 306.566.7550

M

(#)

Page 2

THE WEB 2.0 UNIVERSE Ninety public Web 2.0 companies identified: Our W eb 2.0 universe contains 90 companies, with a combined market cap of $34.8 billion. These include a wide variety of companies, including MMOG (Massive Multi-Player Online Gaming) companies, social networking software companies, media sharing companies, and social lending companies. See below for a summary of the full universe (Figure 1). The average market cap for the group is ~$386 million (but a median of only $31 million), with average trailing revenue of $138.6 million (median $48 million). The companies are also generally profitable, with a median EBITDA margin of 16.4%. On a valuation basis, the overall average is 4.7x trailing revenue (median 1.3x) and 8.9x trailing EBITDA (median 6.6x). Twelve of the companies have more than 500 employees.
C omparable C o mpany A nalys is > W eb 2.0
C om pany Nam e
Acce le rize New Me dia, Inc. Actoz S oft C o., L td. AQ Inte ractive , Inc. As s ocia ted Media H oldings Inc. B igstring Corp. B e tawave Corpora tion B e yond Commerce, Inc. B right T hings plc B roa dW ebAs ia Inc. C DC C orp. C hina G ate wa y C orpora tion C hine s e G amer International C ornerW orld C orporation D ADA S pA D XN Holdings B hd D ibz Inte rnational, Inc. D igitalP ost Inte ra ctive , Inc. D igitalT own, Inc. D olphin Digital Me dia, Inc. E olith C o. L td. E xte ns ions , Inc. F inancia l Media G roup, Inc. F luid Mus ic Ca nada, Inc. F rogs te r Interactive P icture s AG G a ma nia D igital E ntertainment C o., L td. G a me On C o L td. G e oS e ntric O yj G iant Intera ctive G roup, Inc. G iga Media Ltd. G ravity C o., L td G ree, Inc. G ungH o O nline E ntertainment, Inc. H anbitS of t, Inc. IAC /InterActiveC orp. IAS E nergy, Inc. IdeaE dge, Inc. is ee media Inc. J umbuck E ntertainment P ty Ltd. J umpT V Inc. K a boos e Inc. K ings oft Co. Ltd. Lingo Media Corporation Live World Inc. LookS mart, Ltd. Magnitude Information S ys tems Inc. Mixi, Inc. Mode rn Times G roup Mtg AB Moggle , Inc MOK O.mobi L imited N E OW IZ G ames C orpora tion N etD ragon W ebS oft, Inc. N ete as e.com I nc. N eXplore Corpora tion N gi G roup Inc. N orthgate Te chnologies L imited Open T e xt Corp. Openwave S ys tems Inc. P e rf ect W orld C o., Ltd. P hotoChannel N etwork s Inc. Quepa s a C orp. OA O R B C Information S ys tems S handa Interactive E ntertainme nt L td. S hutte rf ly, Inc. S K C ommunications Co., Ltd. S N AP Inte ra ctive , Inc. S N M G lobal H oldings S ocia l Media V e nures , Inc. S ohu. com Inc. S ite s earch C orporation S park N etworks , Inc. S pectrumDN A, Inc. T encent Holdings L td. T he P arent C ompany T he 9 L imited T he S treet.com, Inc. T otal S port Online A S T ree.C om, Inc. U nis erve C ommunications Corp. U nited Online Inc. U OMO Media , Inc V O IS , Inc. W ebze n Inc. W iz za rd S of twa re Corpora tion W oozyF ly, Inc. W orlds .com Inc. W ynds torm C orporation XIN G AG Y e dangOnline Corp. Y nk K orea Inc. ZipLocal Inc. H igh Low A vera ge Median

L TM as of T ic ker
9 /30 /200 8 9 /30 /200 8 1 2/31 /200 8 6 /30 /200 7 9 /30 /200 8 9 /30 /200 8 9 /30 /200 8 9 /30 /200 8 9 /30 /200 8 9 /30 /200 8 9 /30 /200 8 9 /30 /200 8 1 /31 /200 9 9 /30 /200 8 1 1/30 /200 8 NA 9 /30 /200 8 1 1/30 /200 8 NA 1 2/31 /200 7 9 /30 /200 8 1 1/30 /200 8 9 /30 /200 8 6 /30 /200 8 9 /30 /200 8 1 2/31 /200 8 9 /30 /200 8 1 2/31 /200 8 9 /30 /200 8 9 /30 /200 8 6 /30 /200 8 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 8 1 /31 /200 9 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 8 6 /30 /200 8 9 /30 /200 8 9 /30 /200 8 9 /30 /200 8 9 /30 /200 8 1 2/31 /200 8 9 /30 /200 8 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 7 1 2/31 /200 8 1 2/31 /200 8 9 /30 /200 7 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 8 9 /30 /200 8 1 2/31 /200 7 1 2/31 /200 8 1 2/31 /200 8 1 2/31 /200 7 9 /30 /200 8 9 /30 /200 8 1 2/31 /200 8 1 2/31 /200 8 1 /31 /200 9 1 2/31 /200 8 9 /30 /200 8 1 2/31 /200 8 8/2/2008 1 2/31 /200 8 1 2/31 /200 8 3 /31 /200 6 1 2/31 /200 8 1 1/30 /200 8 1 2/31 /200 8 1 /31 /200 9 1 2/31 /200 8 1 2/31 /200 8 9 /30 /200 8 9 /30 /200 8 9 /30 /200 8 NA 1 2/31 /200 8 1 2/31 /200 7 1 2/31 /200 7 1 2/31 /200 8 AC LZ A0 527 90 38 38 AS MH BS GC B W AV B Y OC AIM:B G T BW BA C HIN.A C GW Y G T S M:308 3 C WR L C M:D A D XN D IB Z D G LP DGT W D P DM A0 410 60 E XT I F NG P T S X:F MN F RG 61 80 38 12 G E O1 V GA G IG M GR VY T S E : 363 2 37 65 A0 470 80 IAC I IAS C.A OT C B B :IDAE IE E AS X:J MB T S X:J T V T S X:K AB 38 88 T S XV : LM LV WD LOOK MA G Y 21 21 MT G B MMOG MK B A0 956 60 77 7 NT ES N XP C 24 97 59 005 7 OT E X OP W V PW R D T S XV : P N QP S A R BC I S N DA S F LY A0 662 70 S T VI S N MN S MV I S OH U S T PC LOV S P XA 70 0 K ID S .Q N CT Y TSCM T OS O TR EE T S XV : US S U NT D U OMO V OIS W ZE N W ZE W ZY F W DDD W Y ND O1B C A0 527 70 A0 237 70 T S XV : ZIP

E xc hang e
OT C B B K OS E TSE OT C P K OT C B B OT C B B OT C B B AIM OT C P K N as da qG S OT C B B GTSM OT C B B CM KL SE OT C P K OT C B B OT C B B OT C B B K OS E OT C P K OT C B B TSX XT R A GTSM TSE H LS E NYS E N as da qG S N as da qG M TSE OS E K OS E N as da qG S OT C B B OT C B B T S XV AS X TSX TSX S E HK T S XV OT C P K N as da qG M OT C B B TSE OM OT C B B AS X K OS E S E HK N as da qG S OT C P K TSE BS E N as da qG S N as da qG S N as da qG S T S XV N as da qC M R TS N as da qG S N as da qG S K OS E OT C B B OT C P K OT C P K N as da qG S OT C B B AME X OT C B B S E HK OT C P K N as da qG S N as da qG M OT C NO N as da qG M T S XV N as da qG S OT C B B OT C B B N as da qG M AME X OT C B B OT C B B OT C B B XT R A K OS E K OS E T S XV

Trading Curr enc y H Q
US D KR W J PY US D US D US D US D GBP US D US D US D TWD US D E UR MY R US D US D US D US D KR W US D US D C AD E UR TWD J PY E UR US D US D US D J PY J PY KR W US D US D US D C AD AU D C AD C AD HKD C AD US D US D US D J PY S EK US D AU D KR W HKD US D US D J PY INR US D US D US D C AD US D US D US D US D KR W US D US D US D US D US D US D US D HKD US D US D US D NOK US D C AD US D US D US D US D US D US D US D US D E UR KR W KR W C AD U nited S ta tes S outh K orea J apan U nited S ta tes U nited S ta tes U nited S ta tes U nited S ta tes U nited K ingdom U nited S ta tes H ong K ong U nited S ta tes T aiwan U nited S ta tes Ita ly Ma la ys ia U nited S ta tes U nited S ta tes U nited S ta tes U nited S ta tes S outh K orea U nited S ta tes U nited S ta tes U nited S ta tes G ermany T aiwan J apan F inland C hina T aiwan S outh K orea J apan J apan S outh K orea U nited S ta tes C ana da U nited S ta tes C ana da Aus tra lia C ana da C ana da C hina C ana da U nited S ta tes U nited S ta tes U nited S ta tes J apan S weden U nited S ta tes Aus tra lia S outh K orea C hina C hina U nited S ta tes J apan India C ana da U nited S ta tes C hina C ana da U nited S ta tes R us s ia C hina U nited S ta tes S outh K orea U nited S ta tes U nited S ta tes U nited S ta tes C hina U nited S ta tes U nited S ta tes U nited S ta tes C hina U nited S ta tes C hina U nited S ta tes N orwa y U nited S ta tes C ana da U nited S ta tes C ana da U nited S ta tes S outh K orea U nited S ta tes U nited S ta tes U nited S ta tes U nited S ta tes G ermany S outh K orea S outh K orea C ana da

Current P ric e
0 .35 11, 150 40 ,000 .00 0 0 .02 0 0 .51 0 0 .51 1 0 .00 171 0 .14 5 0 .30 0 0 .01 3 0 .59 515 0 .15 0 0 .40 7 32 .60 93, 600 0 .03 7 5 .91 1 5 ,600 .00 1 35, 300 3 ,210 .00 15 0 .05 0 0 .09 1 0 .54 0 3 .25 1 0 .13 1 0 .02 3 78, 000 135 .25 2 0 .09 45, 400 4 .09 25 0 .60 24, 300 31 .30 34 0 .90 14 1 .60 1 0 .38 37 9 .34 7, 300 0 .80 0 1 .20 40 3 .50 2 0 .19 58 0 .05 12 1 .99 0 4 .47 0 4 .35 0 0 .12 2 0 .43 0 0 .18 0 28 .80 8, 400 3 ,780 .00 0

U S D Market C ap ($m)
9 .4 7 1.1 2 2.4 0 .1 0 .8 4 .4 2 0.9 2 .5 4 3.3 11 6.5 0 .0 42 5.9 6 .6 10 1.2 1 8.8 0 .0 0 .7 6 7.9 2 8.7 1 7.4 1 4.2 0 .5 1 6.7 2 0.4 14 5.5 9 3.2 2 4.6 1,5 43.6 31 9.3 1 9.2 1,2 86.4 15 9.6 5 0.9 2,1 48.0 3 .2 1 4.8 3 .7 1 6.9 4 8.9 4 4.6 45 0.3 7 .2 4 .0 1 7.2 8 .3 59 7.5 1,0 68.9 8 3.5 5 .4 31 5.9 27 8.9 3,1 12.0 3 3.5 3 0.9 2 1.3 1,7 71.3 7 5.0 71 6.4 4 2.7 1 2.2 5 2.7 2,5 54.0 23 4.9 21 7.2 8 .6 0 .0 0 .0 1,5 28.4 2 8.2 4 7.3 9 .2 13,3 41. 9 1 .3 33 1.7 6 0.7 0 .2 4 4.6 0 .8 35 7.3 1 1.1 1 .0 2 0.7 1 9.4 2 .6 9 .4 2 .2 19 7.1 9 5.1 6 .7 1 .0 13,3 41. 9 0 .0 386.3 3 0.9

U S D LT M To tal R ev ($m)
3.2 52. 9 62. 1 0.1 0.1 6.3 1.1 0.2 0.0 428 .1 6.7 37. 8 1.3 223 .0 76. 0 NA 0.4 NM NA 18. 1 NM 6.8 4.2 5.3 109 .3 76. 8 5.4 233 .2 200 .5 35. 4 30. 3 115 .8 50. 3 1 ,44 5.1 0.0 0.0 1.2 12. 2 11. 5 59. 1 106 .8 3.2 11. 7 65. 0 0.1 120 .8 1 ,57 9.2 NM 1.0 130 .4 87. 2 451 .1 NM 101 .3 131 .8 769 .3 199 .6 210 .2 15. 9 0.1 139 .3 522 .0 213 .5 150 .0 2.3 2.0 0.1 429 .1 NM 57. 3 0.1 1 ,04 6.4 112 .0 249 .8 71. 9 2.0 228 .6 23. 8 669 .4 0.6 0.0 20. 6 6.2 0.0 0.1 NA 45. 9 49. 6 14. 1 2.6 1 ,579 .2 0.0 138.6 47. 8

US D L TM T otal E B ITDA ($m)
(4 .7) 9 .7 5 .0 (2 .3) (2 .1) (1 1.0) (7 .7) (1 .6) (4 .6) 1 8.8 (6 .6) 1 7.8 NM 3 5.6 1 0.1 NM (3 .3) (2 .5) NM (0 .0) NM 1 .2 (8 .6) (3 .2) 1 8.5 1 9.9 (1 2.4) 14 4.4 4 8.0 6 .8 1 0.9 2 0.7 (1 4.2) 6 4.6 (0 .8) (4 .6) (4 .7) 4 .5 (1 .8) 4 .5 3 6.1 (1 .4) (1 .2) (2 .0) (3 .2) 4 5.9 25 2.5 (1 .1) (2 .0) 3 5.1 3 9.9 29 3.3 (4 .9) 3 1.2 2 3.2 19 5.0 (1 0.2) 11 3.7 (0 .8) (1 1.8) 1 8.2 23 9.9 2 8.4 1 4.1 0 .2 (0 .7) (0 .1) 18 0.5 (1 .1) 1 2.3 (2 .7) 51 7.5 (1 3.5) 8 4.1 7 .0 (1 .0) (2 3.9) 0 .1 15 3.9 (0 .5) (1 .3) (2 .1) (6 .5) NM NM NM 1 4.7 1 1.1 (1 .1) (2 .8) 51 7.5 -23.9 31.3 0 .2

E B ITDA %
NM 18 .3% 8 .0% NM NM NM NM NM NM 4 .4% -9 8.9% 47 .1% NM 16 .0% 13 .3% NM NM NM NM -0 .3% NM 18 .3% NM -6 0.6% 16 .9% 25 .9% NM 61 .9% 23 .9% 19 .2% 36 .0% 17 .8% -2 8.2% 4 .5% NM NM NM 37 .2% -1 5.3% 7 .6% 33 .8% -4 2.5% -1 0.1% -3 .1% NM 38 .0% 16 .0% NM NM 26 .9% 45 .7% 65 .0% NM 30 .8% 17 .6% 25 .3% -5 .1% 54 .1% -4 .9% NM 13 .1% 46 .0% 13 .3% 9 .4% 10 .1% -3 4.8% -6 0.5% 42 .1% NM 21 .5% NM 49 .5% -1 2.0% 33 .7% 9 .7% -5 0.6% -1 0.4% 0 .4% 23 .0% -7 8.2% NM -1 0.1% NM NM NM NM 32 .0% 22 .4% -7 .6% NM 65 .0% -9 8.9% 8.9% 16 .4%

TE V/LT M R evenu e
4.3 x 0.9 x 8.0 x 29.8 x 2.4 x 21.8 x 10.5 x 0.4 x 0.0 x 9.8 x 6.1 x 0.6 x 0.5 x 3.9 x 1.0 x 0.7 x 3.8 x 1.1 x 0.5 x 3.6 x 1.3 x 40.4 x 1.2 x 0.7 x 0.3 x 1.8 x 1.0 x 5.3 x 0.9 x 3.5 x 2.4 x 0.3 x 4.1 x 1.0 x 4.5 x 2.4 x 1.5 x 0.2 x 2.5 x 2.6 x 0.0 x 0.7 x 1.4 x 3.3 x 1.1 x 0.1 x 2.8 x 0.8 x 13.7 x 0.2 x 4.6 x 0.2 x 0.1 x 1.0 x 18.1 x 44.0 x 3.1 x 3.1 x 1.9 x 0.5 x 0.8 x 44.0 x 4.7x 1.3 x

T E V/LT M E B IT DA
4.7x 9.2x 2 0.8 x 4.1x 3.8x 6.5x 1.8x 5.3x 6.7x 6.1x 2.8x 1 1.5 x 1 0.3 x 1 0.7 x 6.2x 8.8x 3.3x 0.9x 9.8x 0.1x 5.2x 1 5.4 x 3 2.5 x 6.8x 3.9x 2 7.8 x 2 9.5 x 4.3x 9.6x 8.5x 3 2.5 x 8.9x 6.6x

E mployees
20 NA NA 3 8 41 25 9 46 3 ,12 5 37 NA NA 574 NA NA 11 3 6 NA 2 22 29 NA NA NA 92 NA 975 636 NA NA NA 3 ,20 0 NA NA NA 72 NA NA 1 ,66 0 NA 73 NA 13 NA NA 3 NA NA NA NA 19 NA 286 3 ,40 0 627 NA NA 63 NA NA 514 NA 5 33 NA 3 ,19 7 15 NA 7 6 ,19 4 347 NA 310 16 700 NA 1 ,46 9 NA 4 330 110 14 1 NA NA NA NA NA 6 ,194 1 603 83

Figure 1. Web 2.0 Universe Summary Source. Capital IQ

C A P I T A L M A R K E T S A C T I V I T Y (M & A A N D F I N A N C I N G ) March activity slows below busy February: In the month of March there were 19 financings announced (total $118.7 million, average $6.1 million) compared to 25 financings announced in February, totalling $185.5 million, or $7.4 million on

Page 3

average (Figure 2). The average value for February was above the $6.8 million average for January, with four financings over $15 million in February (Twitter, Synthasite, Tremor Media, and Offerpal Media) vs. no deals over $15 million in January. There was only one $15 million deal in March – Vidyo.

Financing Activity Last Three Months
250.0 25.0

200.0

20.0

150.0 (US$m)

15.0 (US$m)

100.0

10.0

50.0

5.0

0.0 Jan-09 Feb-09 Total Average Mar-09

0.0

Figure 2. Financings, Last Three Months Source. Company reports

Vidyo largest deal in March: The largest deal in March was the $15 million Series D round for Vidyo (Figure 3). For additional details, see Figures 30 and 31 (at end of note).

(US$m) 10.0 15.0 20.0 25.0 30.0 35.0 40.0 0.0 5.0

Figure 3. Capital Market Activity, Last Three Months Source. Company reports

Financing Summary - Last Three Months

Twitter Synthasite Tremor Media Aster Data Systems Vidyo Offerpal Media Imagini Yodle Buzznet Emergent Game AdMob LendingClub SendMe Inc. Outbrain Miva VirtuOz Auditude Visible Measures SuperSecret RatePoint Nurien DECA Go Internet Media IMVU NewsGator One True Media Tvtrip GoViral Play Hard Sports SundaySky JibJab Xobni InsideView Kewego Tongxue Motionbox SocialMedia Fliqz Oodle Greystripe Wamba OMGPOP Geni Gbox Sportsblogs AboutUs TextDigger OneSpot Apture FetchDog Simulmedia Virtual Fairground Mixpo Tynt E-Global Sports Network AnySource Media Pixazza 7 Billion People FamilyLink.com Tripwolf mEgo WhistleBox Mendeley Sports Composite DE Outright Hunch Tvinci Filtrbox MMO Life AdultSpace Cake Financial Myngle Hubdub Snooth CoveritLive 33Across fav.or.it Three Melons TweetDeck BackType Identi.ca Meez Pulse Entertainment Jan-09 Mar-09 Feb-09

Page 4

Video continues to be the most active sector: Activity over the last three months was busiest in the video sector, with 16 companies raising over $120 million (Figure 4). Social networking companies have the next highest totals, with 11 companies raising $60.5 million.

Page 5

Capital Market Activity by Sector - Last Three Months
140.0

120.0

100.0

(US$m)

80.0

60.0

121.1

40.0 60.5 20.0 42.9 42.3 35.8 26.5 0.0 Gaming Wiki Microblog Media Infrastructure Social Networks Virtual Goods Virtual World Aggregation Video Ad Network Analytics 25.0 22.5 20.9 19.5 15.6 15.0 12.4 Comment/Reputation 12.0 Lending 12.0 Mobile 11.5 Travel 11.4 Micromedia 10.0 RSS 6.2 Blog

5.5 Mobile Ad

4.3 Search

4.1 Publishing

3.2 Crowdsourced Content

3.1 Visual Commerce

2.0 Financial Services 1

1.3 Online Learning 1

# companies
16

11

8

5

3

4

2

4

2

3

2

1

3

1

1

2

1

1

3

1

1

1

2

1

Figure 4. Capital Market Activity, by Sector, Last Three Months Source. Company reports

Average round size decreases: On a trailing 12-month basis, total financing dollars fell as of March 2009, with average round sizes decreasing slightly. (Figure 5).
LTM Financing
4,000.0 18.0

3,500.0

16.0

14.0 3,000.0

12.0 2,500.0 10.0 (US$m) 2,000.0 8.0 1,500.0 6.0 (US$m) 4.0 2.0 0.0 May-06 May-07 May-08 Mar-06 Mar-07 Mar-08 Nov-05 Nov-06 Nov-07 Nov-08 Sep-05 Sep-06 Sep-07 Sep-08 Mar-09 Jul-05 Jul-06 Jul-07 Jan-06 Jan-07 Jan-08 Jul-08 Jan-09 Total Average

1,000.0

500.0

0.0

Figure 5. Financings, Last 12 Months Source. Company reports

Page 6

Cumulative total nears $5.8 billion: Overall, on a cumulative basis, W eb 2.0 financings have totalled nearly $5.8 billion, with the majority of the financing coming in late 2007 and the first three quarters of 2008 (Figure 6).Financing for the first quarter of 2009 passed that raised in the fourth quarter of 2008 – reversing the downtrend since the second quarter last year. However, for the period ended Q1-C2009, total capital raised was below Q1-C2008 level (at $748.2 million).
Web 2.0 Financing (cumulative)
1,400.0 1,314.8 7,000.0

1,200.0

6,000.0

1,000.0

963.4

5,000.0

800.0 (US$m)

600.0

528.9

521.0

3,000.0

400.0

330.1

338.5

2,000.0

200.0 87.2 38.8 20.1 0.0 37.5 33.5 18.2 41.9 57.8

126.4 135.6 84.0

151.7 159.3

129.5

1,000.0

0.0 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 2004 2005 2006 2007 2008 2009

Figure 6. Financing, Cumulative Source. Company reports

U.S. remains dominant: U.S. companies continue to dominate capital market activity – with almost 67.5% of financings/M&A involving U.S. companies (based on dollars) (Figure 7). Based on number of transactions, the U.S. leads with 73.1% of deals, while Canada is third in number of financings at 4.7% (Figure 8).
Financing/M&A by Country - LTM ($)
China 16.0% Russia 4.1% UK 2.4% Israel 1.9%

Financing/M&A by Country - LTM (#) UK 5.6% Canada 4.7% Israel 3.4%

(US$m)
France 2.6%

748.2

4,000.0

France 1.6% Denmark 1.6%

ROW 10.7%

ROW 5.0%

USA 73.1%
USA 67.5%

Page 7

Figures 7 & 8. Financing/M&A, by Country (LTM, $, #) Source. Company reports

Larger volume of early-stage funding (by count): Almost half of financings in the last 12 months are for early-stage companies (Angel/Seed or Series A) (Figure 9). Series B rounds are 29.2% of the total, with later-stage (Series D, E and PIPE) deals accounting for just 9.2%.
Financing by Type - LTM

Series B 29.2%

Series C 15.2%

Series D 4.4%

Angel/Seed 11.2%

Series A 35.2%

Debt financing 2.8% PIPE 2.0%

Figure 9 Financing, by Type (LTM, #) Source. Company reports

Equity financings smaller over last 12 months: In the last 12 months, the average size of Series A, B, C and D rounds have all been lower than the overall average (Figure 10).

Page 8

Average financing round size
40.0 36.1 35.0 33.5 31.6 30.0 27.4

25.0 22.7 (US$m)

20.0 17.5

15.0 11.4 11.7 10.0 7.9 6.3 5.0 3.3 2.4 5.4 7.3 11.3 11.3

0.0 Angel/Seed Debt financing PIPE Series A LTM Average Size Series B Overall Average Series C Series D Series E

Figure 10. Average Size per Round Source. Company reports

C A P I T A L M A R K E T S A C T I V I T Y (P R I C E P E R F O R M A N C E ) Price Performance: Our W eb 2.0 index (market-cap weighted) underperformed the NASDAQ composite index from mid 2008 until recently when it has moved sharply higher than the NASDAQ index (Figure 11).

Page 9

Web 2.0 Index Price Performance
140

120

100

80

60

40

20

0 6/9/2008 7/7/2008 8/4/2008 9/1/2008 1/5/2009 2/2/2009 10/13/2008 10/27/2008 11/10/2008 11/24/2008 12/22/2008 3/31/2008 4/14/2008 4/28/2008 5/12/2008 5/26/2008 6/23/2008 7/21/2008 8/18/2008 9/15/2008 9/29/2008 12/8/2008 1/19/2009 2/16/2009 3/2/2009 3/16/2009 3/30/2009

^COMP - Share Pricing

Index: Web 2.0 X (Market Cap)

Figure 11. Web 2.0 Price Performance Source. Capital IQ

Ngi Group leads; Sitesearch falls: Many of the companies in our universe had negative stock price performances over the past week (for stocks with prices greater than $1) (Figure 12), with 22 companies showing negative returns on the week. Ngi Group Inc. (2497-TSE) led the group with a 28.6% return over the past week. Sitesearch Corp. (STPC-OTCBB) had the worst return, dropping 30.0% in the week.

Page 10

Ngi G roup Inc. G ree, Inc. A Q Interactiv e, Inc. Mix i, Inc. G ameOn Co Ltd. Moggle, Inc GungHo Online Entertainment, Inc. NEOWIZ Games Corporation S hutterfly , Inc. PhotoChannel Netw orks Inc. Neteas e.com Inc. Perfect World Co., Ltd. K ings of t Co. Ltd. Tencent Holdings Ltd. IA C/InterA ctiveCorp. CDC Corp. XING A G Y nk K orea Inc. S handa Interactive Entertainment Ltd. S park Netw orks , Inc. Y edangOnline Corp. United Online Inc. LookS mart, Ltd. S ohu.com Inc. Open Tex t Corp. Frogs ter Interactiv e Pictures A G G amania Digital Entertainment Co., Ltd. NetDragon WebS of t, Inc. A ctoz S of t Co., Ltd. G igaMedia Ltd. Modern Times G roup Mtg A B DA DA S pA S ocial Media V enures , Inc. Giant Interactive G roup, Inc. Eolith Co. Ltd. Webz en Inc. Chines e Gamer International TheS treet.com, Inc. S K Communications Co., Ltd. HanbitS of t, Inc. Northgate Technologies Limited The9 Limited Tree.Com, Inc. DigitalTow n, Inc. S ites earch Corporation -40.0%
Figure 12. 1-Week Price Performance Source. Capital IQ

1 Week P rice P erformance
22.5% 19.8% 18.1% 17.0% 15.0% 12.6% 9.5% 7.7% 7.4% 4.9% 4.6% 4.5% 3.2% 2.3% 1.9% 1.4% 1.3% 1.2% 0.9% 0.8% 0.5% 0.0% -0.1% -0.1% -0.2% -0.6% -0.7% -1.3% -2.6% -2.9% -3.2% -4.0% -4.5% -4.6% -5.9% -6.1% -6.1% -6.6% -8.3% -9.3% -9.4% -10.6% -16.7% -30.0% -30.0% -20.0% -10.0% 0.0% 10.0% 20.0%

28.6%

30.0%

40.0%

Page 11

INDUSTRY NEWS (PARTNERSHIPS, FINANCIAL RESULTS, NEW PRODUCTS)
K ey Developments
Company
OA O R BC Inform ation S ys tem s (R TS : RB CI); T he ONE XIM Group P erfect World C o., Ltd. (Nas daqGS :PW R D)

H eadline

N otes

T he O NE X I M G roup made an offer to acquire 65% stak e T he ON E X IM G roup made an offer to acquire 65% stake in OAO R B C I nformation S y stems (R T S : R B C I ) for $35 million on March 23, 2009. in OAO R B C Information S y s tems (R T S : R B CI ) for $35 T he plan envis ages R B C is suing new shares to Onexim, with the proceeds to be us ed to partially repay R B C's debt and to finance ongoing activities and developme nt. Onex im offered to acquire 65% of the enlarged share capital of R B C . million. P erfect W orld Launches Open B eta T esting for 'B attle of P erfect Wo rl d C o. Ltd. announ ced that the company will launch open beta testing for i ts first my sterious adventure MMOR P G , 'B attle of the the Immortals ' on April 2, 20 09 I mmortals' on April 2, 2009. T he famous Chines e magician Lu C hen is the spok espers on of the game. 'B attle of the Immortals ' is on e of P erfect Wo rl d's major titles for 2009. I t runs on the company 's proprietary 'C ube' engine, which depicts s cenes in rich texture. T ogether with its abundant s kill effect s ys tems, it gives the game a strong visual impress ion. I t is repres ented by the famous C hines e magician Lu Chen. B oth parties will s hare res ources and ideas with an aim of bringing a new s ens ation to players . C DC C orp. Announces B uy B ack of $168 Million Debt D ue in 2011 C DC C orp. announced that with the clos ing of its mos t recent agre ements with debt holders, it has bought back more than half of its $168 million debt due in 2011. T he company announced deal s truck between a debt holder and one of its affiliates will bring the total to $85 million in 3.75% s enior convertible notes . The deal is spli t into two ins tallments , with one purchas e made and a nother scheduled withi n 30 days . The compa ny said it has repurchased debt from eight of 11 creditors . T he9 Limited announced on March 23, 2009 it would launch its firs t s elf-developed webgame J iu Z hou Z han J i (9zwar) on March 31, 2009. Operations and services of the new game will k eep the s tandards that us ed for W orld of W arcraft, enabling players to have firs t-clas s ex peri ences , which was formed in J uly 2008. T he company posted a net profit of U S D 6.5 million for the fourth quarter ended D ecember 31, 2008, dropping 55% from US D 14.4 mil lion in the third qu arter of 2008 and 48% from US D 12. 6 million in the fourth quarter of 2 007. Net revenues inched down 1% quarter on quarter and 4% year on year to US D 59. 4 million. F ully diluted earnings per American depos itary s hare stood at U S D 0. 24, compared with U S D 0. 52 in the previous quarter and US D 0. 43 a y ear ago.

C DC C orp. (Nas daqGS : CHIN.A)

T he9 L imited (Nas daqG S :NC TY)

T he9 Limited to Launch S elf-D evelope d W ebgame ; Announces E arnings R es ults for the Fourth Quarter E nded D ecember 31, 2008

MOK O.mobi Limited (AS X:MKB ); T ris creen Media Group

MOK O. mobi Limited announced it will receive AUD 0.25 million of funding from T riscreen Media G roup.

MOK O.mobi Limited (AS X : MK B ) announced a private placement of 2, 777,778 shares at AUD 0. 09 per s hare for gros s proceeds of AU D 250, 000 with new inves tor T riscreen Media G rou p on March 24, 2009. The company wi ll als o is s ue 1, 388,889 options exercisable at AU D 0.2 per share ti ll J uly 25, 2013. T he investor has the right to s ubscribe for further s hares for gros s proceeds of AU D 250,000 in nex t s ix months. Open Tex t Corp. has announced that Touris m Aus tralia has gone live with its W eb Content Management s oluti on from Open Text. T he Open T ext W eb S olution will power two major webs ites : aus tralia. com and media. australia. com. T he new s ites will enable T ourism Australia to eventually s tandardize on the Open T ext W eb S olutions platform with one k nowledge base acros s the organiz ation. This will create efficiencies, reduce cos ts and facilitate the rapid update of informa tion and maintenance. S N AP Interactive, I nc. recently provi ded analy sis of its financial condition. The company s aid, “As the C ompany grows and expands its operations, the need for working capital will increas e. T he C ompany expects to finance its internal growth with cas h provided from operations, borrowings , debt or equity offerings , or some combination thereof. ” T he9 Limited and E lectronic Arts I nc. annou nced in a press conference held at S hanghai P u D ong E x po C enter that the highly anticipated game E A S P OR TS (TM) F IF A ON LI NE 2 will begin its open beta tes t in mainland China on 22 April, 2009. FI FA ONLI NE 2 is the latest online version of E A S P OR T S ' officially licens ed F IF A football video games . B uilding upon over a decade of s ucces s from the E A S P OR T S FI FA video game franchise, E A S P OR T S F IF A ONLI NE 2 features 30 licens ed leagues , over 10, 000 real players , 31 stadiums, and authentic team k its . T he game has enhanced player controls s o that gamers can direct each of their in-game team's play ers to perform real footba ll moves . E A S P OR TS FI FA ON LIN E 2 als o highly focus es on player interactivity. G amers can s et up matches, track each others' scores, chat in the game and enjoy other community functions. E A S P OR TS F IF A ON LIN E 2 brings the ultimate online football ga ming experience that mirrors the s ophistication, fines se and beauty of the real-world s port. P erfect Wo rl d C o. Ltd. announ ced the launch of the new ex pansion pack, 'B attle S ong of the E lves , ' for 'P erfect W orld II ' a 3D fantas y MMOR P G . 'P erfect W orld II ,' which was launched by the C ompany in 2006, contains elements of traditional C hinese culture. B as ed on a C hinese cl ass ic, 'S han Hai J ing,' a fabled geographical and cultural account of pre-Qin C hina as well as a collection of mythology, the game vividly reflects a magnificent fantas y world. T he game has been well-received by many online game play ers because of its excellent graphic des ign and innovative game s y stems . T he game has been s ucces sfully licensed to many overs eas countries and regions . In the ex pansion pack 'B attle S ong of the E lves ,' players will be us hered into the 'W orld of Five E lements ,' where they will encounter the mys terious 'F ive E lements E lves . ' The elves are gifted with the power to harness the five elements and have different sk ill sets that can help players of different clas ses with their battles .

Open T ext C orp. (Nas daqGS :OT E X)

T ouris m Aus tralia S elects W eb Content Management S olution from Open T ext

S NAP Interactive, Inc. (OT CB B:S TVI) E lectronic Arts Inc. (Nas daqGS :E R TS ); The9 Limited (Nas daqGS :NCT Y)

S N AP Interactive May S eek Funds

T he9 Limited and E lectronic Arts I nc. Announce Open B eta Tes t for E A S ports FI FA Online 2 to B egin on 22 April 2009 in C hina

P erfect World C o., Ltd. (Nas daqGS :PW R D)

P erfect W orld C o. Ltd. Launches 'B attl e S ong of the E lves '

L ightworks P rogram Dis tribution; W iz zard Media E nters into International S yndication Deal W iz zard Media announced tha t they have entered into an international s yndication deal with Lightwork s P rogram D istribution. Lightworks has acquired the worldwide dis tribution rights for W iz zardX T V , an action sports lifestyle program. with Lightworks P rogram Di stribution W izzard S oftware Corporation (A ME X: WZE ) Linekong Online (B eijing) E ntertainment T ech Co. , Ltd. L inekong Online (B eijing) and S handa Interactive E ntertainment Ltd. to J ointly E ntertainment Tech C o., L td.; S handa Interactive E ntertainment Operate The Legend of K ung-Fu L td. (Nas daqGS :S NDA) P hotoC hannel Networks Inc. (T S XV:PN) P hotoC hannel N etworks I nc. Announces B oard and E x ecutive C hanges Linek ong Onli ne (B eijing) E nte rtainment T ech Co. , Ltd. will jointly operate online game The Legend of K ung-Fu with S handa Interactive E ntertainment Ltd. Linek ong will become the third online game partner of S handa through revenue sharing from game operation.

P hotoChannel Networks I nc. a nnounced that the annual general meeting held on March 25, 2009, the s hareholders elected management nominees P eter F itz gerald, P eter S carth, Cory K ent, T homas Niels en, S cott B rownstein, K y le H all and Aaron R allo to the company 's B oard of Directors . Additionally, the B oard of D irectors has approved management's decision to promote S imon B odymore, the C ompany 's V P F inance, to the position of Chief F inancial Officer and C hris T ivel, the company's V P of S oftware D evelopment, to the pos ition of Chief T echnology Officer. R obert Ch isholm has resigned as C FO effective immediately . Mr. C his holm has been retained by the C ompany to as s ist in the trans ition of hi s CF O duties and to continue to provide s trategic and bus ines s development input on a going forward basis . Mr. C hisholm is also considering other long-term opportu nities with the C ompany . Accele ri ze New Media, Inc. (OT CB B : AC LZ) announced a private pl acement of convertible promis sory note for gross proceeds of $617, 000 on March 26, 2009. The notes accrue interes t at the rate of 12% per annum and mature in March 2012. Interest will be paid, at the inves tor’s option, in cas h or in shares of common s tock of the company. I f the interest i s paid in s hares of common s tock , the number of shares is suable to s atis fy the interes t is bas ed on the closing price of the company’s shares , as quoted on the Over-The-C ounter B ulletin B oard, on the trading day immediately prior to the interes t payment date. T he compan y may prepay the n otes in whole or in parts, if pri or to J une 30, 2009, at a premium amounting to the product of 0. 5% for each full month remaining between the prepayment date an d the maturity date times the applicable prepay ment amount, and after J une 30, 2009, without premium. T he inves tors may convert, at their option, into compa ny's common stock the outs tanding principal of the notes , after June 30, 2009 and prior to maturity date, at the les ser of $0.50 per s hare of common s tock or the average clos ing price of the common stock on the last five tradi ng day s prior to the relevant convers ion date, bu

A ccelerize New Media, Inc. (OT CB B:A CL Z)

Accelerize New Media, Inc. announced that it has received $0. 62 million in funding.

Page 12

G o o gle Inc . (Nas daqG S :G OOG ); K ings oft Co . Ltd. (S E H K:3888) X IN G AG (XTR A:O1B C)

K ings oft Co. L td. a nd G oogle I nc . to L a unc h J a pa nese e- K ings oft Co. L td. a nd G oogle ha v e dec ided to come up with the dua l-bra nd e-di ctiona ry in other la ngua ges. F irst, it will be J a pa nese. D ictiona ry K ings oft ha s by now pushed out J a pa nese vers ions of a nti-virus softwa re a nd W P S in J a pa n. Unl ike the Chines e vers ion, the J a pa nese G oogle-K ings oft dictiona ry will only be a cc ess ible to pa id users . X I NG AG R eports Cons olida ted E a rnings R es ults for the X I NG AG reported c ons olida ted ea rnings res ults for the yea r 2008. T he c ompa ny reported a 62. 2% yea r-on-yea r jump in its cons olida ted net Y ea r 2008 profit for 2008 to E UR 7. 3 million (US D 9.9 million) benefiting from the ris ing membership figures . T he res ult for 2007 incl uded a E UR 1. 1 million loss from dis continued opera tions . T he a djus ted ea rnings before interes t, ta x, deprec ia tion a nd a mortis a tion ca me in a t E UR 12. 9 million for 2008, up from E U R 6. 9 million a y ea r ea rlier. T he rev enues jumped 80% to E U R 35. 27 million. W orlds .c om I nc . a nnounced dela yed a nnua l 10-K filing U pda te to C DC C orp.’s E quity B uy ba ck on M a rch 27, 2009 O n 03/27/2009, W orlds .c om I nc. a nnou nced tha t they will be una ble to file their next 10-K by the dea dline required by the S E C. O n Ma rc h 27, 2009, CD C Corp. a nnounc ed tha t it ha s repurcha s ed a pproxima tely 1, 100,000 s ha res sinc e the beginning of 2009 a t a n a v era ge pric e of a pproxima tely $0. 83 per s ha re for a tota l cos t of a pprox ima tely $0.91 million. O v er the la s t 12 months , CD C ha s purc ha sed a pprox ima tely 1,700 ,000 sha res a t a n a v era ge pric e of a pproxima tely $1. 38 per s ha re for a tota l cos t of a pprox ima tely $2. 34 million.

W o rlds .c o m Inc . (O TCB B: WDDD) C DC C o rp. (Nas daqG S : CH IN .A)

IB 3 N etworks , Inc . (OT CB B:IBN W ) I B 3 Network s, I nc . a nnounced dela yed a nnua l 10-K filing O n 03/27/2009, I B 3 N etworks , I nc. a nnounc ed tha t they will be una ble to file their next 10-K by the dea dline required by the S E C. J umpTV Inc . (TS X :J TV) J umpTV Inc . R eports E a rnings R es ults for the Fourth Q ua rter a nd F ull Y ea r E nded Dec ember 31, 2008 J umpT V Inc . reported ea rnings res ults for the fourth qua rter a nd full yea r ended D ecember 31, 2008. F or the qua rter, the c ompa ny reported rev enue wa s $5.8 million c ompa red to $5. 3 million in the sa me period in 2007. T he net los s wa s $7.2 million (inc luding $3.8 mill ion of nonc a sh c ha rges) or $0. 13 per s ha re, ba sic a nd diluted a s compa red to $0.2 million (inc luding $0. 6 million of non-c a sh c ha rges) or $0. 00 pe r s ha re, ba s ic a nd diluted in the s a me period a y ea r a go. F or the full yea r, the c ompa ny reported revenue wa s $13.4 milli on c ompa red to $7. 8 million in the p ri or y ea r. The net los s wa s $11. 6 million (inc luding $5. 5 million of non-c a sh c ha rges) or $0. 21 per s ha re, ba sic a nd diluted a s compa red to $4.5 million (inc luding $ 2.6 million of nonc a sh c ha rges) or $0. 11 per s ha re, ba sic a nd diluted in the prior yea r.

Figure 13. Key Developments Source. Capital IQ

VALUATION MMOG companies lead market-cap charts: Nine companies in our Web 2.0 universe top US$1 billion in market capitalization (Figure 14). Sixty-five of the 90 companies have market caps under US$100 million, with 29 under $10 million. Online gaming companies dominate the top of the list with four of the top six by market cap.

Page 13

Market C ap (US D m)
Tencent Holdings Ltd. Neteas e.com Inc. S handa Interactive Entertainment IA C/InterA c tiveCorp. Open Tex t Corp. G iant Interactiv e Group, Inc. S ohu.com Inc. Gree, Inc. Modern Times G roup Mtg A B Perf ec t World Co. , Ltd. Mix i, Inc. K ings of t Co. Ltd. Chines e G amer International United Online Inc. The9 Limited GigaMedia Ltd. NEOWIZ G ames Corporation NetDragon WebS of t, Inc. S hutterf ly , Inc. S K Communic ations Co. , Ltd. XING A G G ungHo Online Entertainment, Inc. G ama nia Digita l Enterta inment Co. , CDC Corp. DA DA S pA Y edangOnline Corp. G ameOn Co Ltd. Moggle, Inc Openw a ve S y s tems Inc. A ctoz S of t Co. , Ltd. Digita lTow n, Inc. TheS treet. com, Inc. OA O R B C Inf orma tion S y s tems HanbitS of t, Inc. J umpTV Inc. S pa rk Netw orks , Inc. K aboos e Inc. Tree.Com, Inc. B roadWebA s ia Inc. PhotoChannel Netw orks Inc. NeXplore Corporation Ngi G roup Inc. Dolphin Digital Media , Inc. S ites earch Corporation G eoS entric Oy j A Q Interactive, Inc. Northgate Tec hnologies Limited B ey ond Commerc e, Inc. Webz en Inc. Frogs ter Interactiv e Pictures A G Wiz z ard S oftw are Corporation G ra vity Co., L td DXN Holdings B hd Eolith Co. Ltd. LookS mart, Ltd. J umbuck Entertainment Pty Ltd. Fluid Mus ic Canada , Inc. IdeaEdge, Inc. Ex tens ions , Inc. Quepas a Corp. UOMO Media, Inc Worlds .com Inc. A cceleriz e New Media, Inc. S pectrumDNA , Inc. S NA P Interactiv e, Inc. Magnitude Inf orma tion S y s tems Inc. Lingo Media Corporation Y nk K orea Inc. CornerWorld Corporation MOK O. mobi Limited B eta w ave Corporation L iveWorld Inc. is eemedia Inc. IA S Energy , Inc. Wooz y Fly , Inc. B right Things plc Wy nds torm Corporation The Pa rent Company V OIS , Inc. ZipLoc al Inc. Unis erv e Communic ations Corp. B igs tring Corp. DigitalPos t Interactiv e, Inc. Financ ial Media Group, Inc. Tota l S port Online A S A s s ociated Media Holdings Inc. China G atew ay Corporation S ocia l Media V enures , Inc. Dibz Interna tional, Inc. S NM G lobal Holdings 0 2148.0 2554.0 3112. 0

716. 4 450.3 597. 5 425. 9 357.3 331. 7 319. 3 315. 9 278. 9 234. 9 217. 2 197.1 159.6 145. 5 116. 5 101.2 95. 1 93. 2 83. 5 75.0 71.1 67. 9 60. 7 52. 7 50. 9 48.9 47.3 44.6 44.6 43.3 42.7 33. 5 30. 9 28. 7 28. 2 24. 6 22. 4 21. 3 20. 9 20. 7 20. 4 19. 4 19. 2 18. 8 17. 4 17. 2 16. 9 16. 7 14.8 14.2 12.2 11.1 9. 4 9. 4 9. 2 8. 6 8. 3 7. 2 6. 7 6. 6 5. 4 4. 4 4. 0 3. 7 3. 2 2. 6 2. 5 2. 2 1. 3 1. 0 1. 0 0. 8 0. 8 0. 7 0. 5 0. 2 0. 1 0. 0 0. 0 0. 0 0. 0 500 1, 000

1068. 9

1286. 4

1543. 6 1528.4

1771. 3

1,500

2, 000

2,500

3, 000

3,500

4, 000

Figure 14. Market Cap Ranking Source. Capital IQ

TEV/Revenue (LTM) averages 4.7x: The overall average TEV/Revenue (LTM) multiple for our group is 4.7x – slightly up from 4.6x last week (Figure 15). However, this is skewed by VOIS (VOIS-OTCBB) at 44.0x, Gree (3633-TSE) at 40.4x and Bigstring (BSGC-OTCBB) at 29.8x. The median is only 1.5x. Note that we exclude multiples greater than 50x. Thirty-one companies have multiples under 1.5x.

Page 14

T E V/L T M R evenue (x)
50. 0 45. 0 40. 0 35. 0 29.8 30. 0 25. 0 20. 0 15. 0 10. 0 A vera ge, 4.7 5. 0 0. 0 1.01.11.11.2 1.31.41. 5 1.81.9 0.00.1 0.10.20. 20.20.30.30.4 0.50.50. 50.60.70.70.70.80.80. 90.91.01.01. 0 2.42.42.42.5 3. 8 3.9 4.1 4.3 4.54.6 2. 6 2.83.13.1 3.3 3.53.6 5.3 6. 1 8.0 10.5 9.8 21.8 18.1 13. 7 44.0 40.4

Figure 15. TEV/Revenue Ranking Source. Capital IQ

TEV/Revenue (LTM) by country/exchange: W e have also calculated multiples based on where the companies are listed or domiciled. Figure 16 shows the average TEV/Revenue multiples by stock exchange. The OTCBB has the largest number of companies (22), trading at an average multiple of 8.4x (unchanged from last week). On a geographic basis, the United States has the most companies (40), trading at an average of 5.5x revenue (up from 5.3x last week) (Figure 17). Ten of the companies are Canadian (average 7.2x revenue).
Average TEV/LTM Revenue - By Exchange
14.0 12.0 10.0 (x) 8.0 6.0 4.0 2.0 OTCBB OTCPK NasdaqGM GTSM 0.0 NasdaqGS TSX AIM ASX 10.5 8.4
(x)

OTCNO

NasdaqCM

SEHK

KOSE

OSE

TSE

BSE

CM

XTRA

NYSE

TSXV

KLSE

Germany

United Kingdom

Canada

South Korea United States

Malaysia

India

Japan

China

Taiwan

Australia

Hong Kong

Italy

Norway 1

# Companies

5

1 22 2 12

2

9

3

1

2

5

3

1

7

1

1

5

1

1

1
# Companies

1

10

9

40

3

2

1

2

9

6

1

1

1

Figures 16 & 17. TEV/Revenue Ranking (Exchange, Country) Source. Capital IQ

TEV/EBITDA (LTM) averages 9.2x: The average multiple for the 30 companies with positive EBITDA (and multiples under 100x) is 9.2x LTM EBITDA (slightly down from 9.4x last week), led by SNAP Interactive’s (STVI-OTCBB) 32.5x multiple (Figure 18). Seventeen of the companies have EBITDA multiples under 7x. The median multiple is 6.6x (vs. 6.4x last week).

Sweden 1

O AO R B C Information S y s tems S ocial Media V enures , Inc . U nis erve C ommunications C orp. N orthgate T echnologies L imited T ree.C om, Inc. T he P a rent C ompany L iveWorld Inc . IAC /InterAc tiveC orp. C DC C orp. G a meO n C o Ltd. Y nk K orea Inc . DXN Holdings B hd DADA S pA F luid Mus ic C a nada , Inc. S hutterfly , Inc . H anbitS oft, Inc . ZipLoca l Inc . S pa rk N etwork s , Inc . Ac toz S oft C o. , Ltd. K aboos e Inc . E olith C o. Ltd. Modern T imes G roup Mtg AB United O nline Inc . J umbuck E nterta inment P ty Ltd. S N M G loba l Holdings G a mania Digital E ntertainment C o., G ungHo O nline E ntertainment, Inc. G igaMedia Ltd. S K C ommunica tions C o., Ltd. NetDra gon WebS oft, Inc . is eemedia Inc . Y edangO nline C orp. NE O WIZ G ames C orporation B eta wav e C orporation Lingo Media C orporation O pen T ex t C orp. P hotoC hannel Network s Inc . S ohu.com Inc . XIN G AG Wiz z ard S oftware C orporation S NAP Intera ctive, Inc . K ings oft C o. Ltd. G eoS entric O y j F rogs ter Intera ctiv e P ic tures AG DigitalP os t Intera ctive, Inc. Mix i, Inc . Acceleriz e New Media , Inc . MO K O .mobi L imited T otal S port O nline AS J umpT V Inc . C ornerWorld C orporation As s ociated Media Holdings Inc . C hines e G amer Interna tional B right T hings plc T encent Holdings Ltd. UO MO Media, Inc B ey ond C ommerc e, Inc. B igs tring C orp. G ree, Inc . V O IS , Inc .

Average TEV/LTM Revenue - By Country
12.0 10.0 8.0 7.2 6.3 5.5 5.1 3.8 2.5 1.5 1.4 10.5

12.1

5.1

4.6 3.8

6.0 4.0 2.0 0.0

3.6 2.7

2.5 1.5 1.5 1.3 1.3 1.2 0.7 0.6 0.5 0.6 0.2 0.0

1.3 0.6 0.5

0.4

0.2 0.0

Page 15

T E V/L T M E B IT DA (x)
35.0 30.0 25.0 20. 8 20.0 15.4 15.0 10.0 5.0 0.1 O AO R B C Information S y s tems 0.0 0. 9 Northgate T echnologies Limited 1.8 G ameO n C o Ltd. A verage, 9.2 4. 3 4.7 5. 2 5.3 6. 1 6.2 6. 5 6.7 6. 8 8. 5 3. 8 3.9 4. 1 8. 8 9. 2 9.6 9. 8 10. 3 10.7 11. 5 29.5 27. 8 32. 5

2. 8

3.3

J umbuck E ntertainment P ty Ltd.

G amania Digital E ntertainment C o., Ltd.

G ungHo O nline E ntertainment, Inc.

NE O WIZ G ames C orporation

C hines e G amer International

U nis erve C ommunications C orp.
4.1

DXN H oldings B hd

S K C ommunications C o., Ltd.

Modern T imes G roup Mtg AB

C DC C orp.

NetDragon WebS oft, Inc.

Figure 18. TEV/EBITDA Ranking Source. Capital IQ

TEV/EBITDA (LTM) by country/exchange: Figure 19 shows the average TEV/EBITDA multiples by stock exchange. The OTCBB has the largest number of companies (22), trading at an average multiple of 13x, while companies on the Nasdaq have the highest multiples (29.5x). On a geographic basis, the United States has the most companies (40), trading at an average of 12.9x EBITDA (Figure 20). Ten of the companies are Canadian (average 5.8x EBITDA).

Average TEV/LTM EBITDA - By Exchange
35.0 29.5 30.0 25.0 (x) 20.0 15.0 10.0 5.0 OTCBB OTCPK NasdaqGM GTSM 0.0 NasdaqGS KOSE XTRA NYSE TSX BSE ASX 13.011.7 11.3 10.9 9.9 9.8 8.8 7.5 6.8 5.3
(x) 14.0 12.0 10.0 8.0 6.0 4.0

Average TEV/LTM EBITDA - By Country
12.9 11.7 11.3 9.8 9.2 8.8 7.5 5.8 5.2 4.6

4.6 4.1 3.8 2.4 TSE CM KLSE TSXV

0.1 0.0 NasdaqCM OTCNO

2.0 0.0 Germany Canada India Australia Hong Kong United States South Korea China Japan Taiwan Italy

3.8 0.0 Malaysia 1 Norway 1

# Companies

5

22

7

2

3

12

1

2

2

9

1

5

1

1

5

1

1

# Companies

40

9

3

1

1

2

2

10

9

6

1

Figures 19 & 20. TEV/EBITDA Ranking (Exchange, Country) Source. Capital IQ

P/E (LTM) averages 15.9x: The average multiple for the 31 companies with positive earnings (and multiples under 100x) is 15.9x LTM EPS (unchanged from 16x last week), led by TheStreet.com’s (TSCM-NASDAQ) 64.1x multiple (Figure 21). Sixteen of the companies have P/E multiples under 10x. The median is just 9.9x.

S NAP Interactive, Inc.

U nited O nline Inc.

O pen T ex t C orp.

XING AG

T encent H oldings Ltd.

S park Network s , Inc.

G igaMedia Ltd.

IAC /InterActiveC orp.

S ohu.c om Inc.

Mix i, Inc.

Y edangO nline C orp.

Actoz S oft C o., Ltd.

K ings oft C o. Ltd.

S hutterfly , Inc.

K aboos e Inc.

DADA S pA

Page 16

P /E L T M (x)
70.0 60.0 52. 8 50.0 40.0 30.0 20.0 17. 9 16.0 16. 7 20. 5 28. 3 36. 2 38. 0 47.3

64. 1

25.8

A verage, 15.9 6. 0 8.0 9. 0 9. 2 9. 4 9.4 9. 9 11.2 11. 4

13. 2 13. 8

10.0 1. 0 0.0 T he9 L imited P erfect World C o., Ltd. 1.2 1.4 Northgate T echnologies L imited 1. 5 G iant Interactive G roup, Inc. 2. 0 Neteas e.c om Inc . 2.1 S handa Interactive E nterta inment L td. 3.1 Modern T imes G roup Mtg AB 3. 4

3. 7 DXN Holdings B hd

G amania Digital E ntertainment C o. , Ltd.

J umbuck E nterta inment P ty Ltd.

NE O WIZ G a mes C orporation

C hines e G amer International

G ameO n C o L td.

O pen T ex t C orp.

NetDragon WebS oft, Inc .

S NAP Interactive, Inc .

T encent Holdings Ltd.

S pa rk Network s , Inc .

IAC /InterAc tiveC orp.

Y edangO nline C orp.

Figure 21. P/E Ranking Source. Capital IQ

P/E (LTM) by country/exchange: Figure 22 shows the average P/E multiples by stock exchange. The OTCBB has the largest number of companies (22), trading at an average multiple of 20.3x. On a geographic basis, the United States has the most companies (40), trading at an average of 13.6x earnings (Figure 23). Ten of the companies are Canadian (average 7.1x EPS).

Average P/E - By Exchange
45.0 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0
40.0

Ac toz S oft C o. , Ltd.

Average P/E - By Country
36.2

39.4 36.2
(x)

35.0 30.0 25.0 32.1 21.6 17.9 17.6 14.0 13.6 7.1 6.0 3.7 2.3 Germany China United States Canada Australia Malaysia 1 Taiwan Japan 6 India South Korea Italy 1

(x)

21.6 20.3

17.9 17.6

20.0 15.0

14.0

13.2

9.4

6.6

6.0

4.0 TSXV

3.7 KLSE

10.0

2.3 TSE

5.0 0.0

OTCBB

NasdaqGS

OTCPK

GTSM

KOSE

BSE

XTRA

TSX

NYSE

ASX

CM

# Companies

12

1

7

22

2

2

2

3

1

9

1

5

1

5

# Companies

1

9

9

2

3

2

40

10

Figures 22 & 23. P/E Ranking (Exchange, Country) Source. Capital IQ

T heS treet. com, Inc .

Ngi G roup Inc .

Worlds .c om Inc .

G igaMedia Ltd.

S ohu.c om Inc .

K ings oft C o. Ltd.

XING AG

Mix i, Inc .

S hutterfly , Inc.

DADA S pA

Page 17

UPCOMING EVENTS
Upc oming E vents
Event
W eb 2. 0 E x po M esh 2009

Date
Marc h 31-A pril 3 April 7-8

L oca tio n
S an Franc is co T oronto

Webs ite
http://www.web2expo.c om/s f% 20rel= www.mes hconference. c om

Figure 24. Upcoming Events Source. Company reports

E arnings Calendar
C ompany
G i gaMedia L td. (N asdaqG S :G I G M) W iz zard S oftwa re C orporation (AME X : W ZE )
Figure 25. Earnings Calendar Source. Company reports

D ate & T ime
T uesday , Marc h 31, 2009 8: 00 A M (E DT ) W ednes day, April 01, 2009 11:00 AM (E D T)

Qu arter
Q 4 2008 Q 4 2008

Conf Call D etails
N/A 877-407-0782

Page 18

C omparable C ompany Analys is > W eb 2 .0
P ric e P erformanc e
C ompa ny Na me Acce le riz e N ew Me dia, Inc. Actoz S of t C o., L td. AQ Inte ractive , Inc. As s ocia ted Media H oldings Inc. B igstring Corp. B e tawave Corpora tion B e yond Commerce, Inc. B right T hings plc B roa dW ebAs ia Inc. C DC C orp. C hina G ate wa y C orpora tion C hine s e G amer International C ornerW orld C orporation D ADA S pA D XN Holdings B hd D ibz Inte rnational, Inc. D igitalP ost Inte ra ctive , Inc. D igitalT own, Inc. D olphin Digital Me dia, Inc. E olith C o. L td. E xte ns ions , Inc. F inancia l Media G roup, Inc. F luid M us ic Ca nada, Inc. F rogs te r Interactive P icture s AG G a ma nia Digital E ntertainment C o., L td. G a me On C o L td. G e oS e ntric O yj G iant Intera ctive G roup, Inc. G iga Media Ltd. G ravity C o., L td G ree, Inc. G ungH o O nline E ntertainment, Inc. H anbitS oft, Inc. IAC /InterActiveC orp. IAS E nergy, Inc. IdeaE dge, Inc. is ee media Inc. J umbuck E ntertainment P ty Ltd. J umpT V Inc. K a boos e Inc. K ings oft Co. Ltd. Lingo Media Corporation Live World Inc. LookS mart, Ltd. M agnitude Information S ys tems Inc. M ixi, Inc. M ode rn Times G roup Mtg AB M oggle , Inc M OK O.mobi L imited N E OW IZ G ames C orpora tion N etDragon W ebS oft, Inc. N ete as e.com I nc. N eXplore Corpora tion N gi G roup Inc. N orthgate Te chnologies L imited Open T e xt Corp. Openwave S ys tems Inc. P e rfect W orld C o., Ltd. P hotoChannel N etwork s Inc. Quepa s a C orp. OA O R B C Information S ys tems S handa Interactive E ntertainme nt L td. S hutte rf ly, Inc. S K C ommunications Co., Ltd. S N AP Inte ra ctive , Inc. S N M G lobal H oldings S ocia l Media V e nures , Inc. S ohu. com Inc. S ite s earch C orporation S park N etworks , Inc. S pectrumDN A, Inc. T encent Holdings L td. T he P arent C ompany T he 9 L imited T he S treet.com, Inc. T otal S port Online A S T ree.C om, Inc. U nis erve C ommunications Corp. U nited Online Inc. U OMO Media , Inc V O IS , Inc. W ebze n Inc. W iz za rd S of twa re Corpora tion W oozyF ly, Inc. W orlds .com Inc. W ynds torm C orporation XIN G AG Y e dangOnline Corp. Y nk K orea Inc. ZipLocal Inc. H igh Low A vera ge M edian C ur rency US D KR W JPY US D US D US D US D GBP US D US D US D TWD US D E UR MY R US D US D US D US D KR W US D US D C AD E UR TWD JPY E UR US D US D US D JPY JPY KR W US D US D US D C AD AU D C AD C AD HKD C AD US D US D US D JPY SE K US D AU D KR W HKD US D US D JPY IN R US D US D US D C AD US D US D US D US D KR W US D US D US D US D US D US D US D HKD US D US D US D N OK US D C AD US D US D US D US D US D US D US D US D E UR KR W KR W C AD T ic ker A CL Z A 052 790 3 838 A S MH B S GC B W AV B Y OC A IM:B G T B W BA C H IN .A CGWY G TS M:3 083 CWR L C M :DA DXN DIB Z DG L P DG T W DP DM A 041 060 E XT I F NGP T S X:F MN FR G 6 180 3 812 G E O1V GA G IG M G RV Y T S E :36 32 3 765 A 047 080 I ACI I AS C .A O TC B B :ID AE IEE A S X:J M B T S X:J T V T S X:K AB 3 888 T S XV :LM L VW D L OOK M AG Y 2 121 MT G B M MOG MKB A 095 660 7 77 NT E S N XP C 2 497 5 900 57 O TE X O PW V P W RD T S XV :P N Q PSA R BC I S NDA S F LY A 066 270 S T VI S NM N S MVI S OH U S TPC L OV S P XA 7 00 K IDS .Q NC TY T S CM T OS O TR EE T S XV :U S S UNTD U OMO V OIS W ZE N W ZE W ZY F W DDD W YND O 1B C A 052 770 A 023 770 T S XV :ZIP E x change OT C B B KO SE TSE OT C P K OT C B B OT C B B OT C B B AI M OT C P K N as da qG S OT C B B GT S M OT C B B CM KL SE OT C P K OT C B B OT C B B OT C B B KO SE OT C P K OT C B B TSX XT R A GT S M TSE H LS E NYS E N as da qG S N as da qG M TSE OS E KO SE N as da qG S OT C B B OT C B B T S XV AS X TSX TSX S E HK T S XV OT C P K N as da qG M OT C B B TSE OM OT C B B AS X KO SE S E HK N as da qG S OT C P K TSE BS E N as da qG S N as da qG S N as da qG S T S XV N as da qC M R TS N as da qG S N as da qG S KO SE OT C B B OT C P K OT C P K N as da qG S OT C B B AM E X OT C B B S E HK OT C P K N as da qG S N as da qG M OT C N O N as da qG M T S XV N as da qG S OT C B B OT C B B N as da qG M AM E X OT C B B OT C B B OT C B B XT R A KO SE KO SE T S XV U S D Ma rket C ap ($m) 9 .4 7 1.1 2 2.4 0 .1 0 .8 4 .4 2 0.9 2 .5 4 3.3 11 6.5 0 .0 42 5.9 6 .6 10 1.2 1 8.8 0 .0 0 .7 6 7.9 2 8.7 1 7.4 1 4.2 0 .5 1 6.7 2 0.4 14 5.5 9 3.2 2 4.6 1,5 43. 6 31 9.3 1 9.2 1,2 86. 4 15 9.6 5 0.9 2,1 48. 0 3 .2 1 4.8 3 .7 1 6.9 4 8.9 4 4.6 45 0.3 7 .2 4 .0 1 7.2 8 .3 59 7.5 1,0 68. 9 8 3.5 5 .4 31 5.9 27 8.9 3,1 12. 0 3 3.5 3 0.9 2 1.3 1,7 71. 3 7 5.0 71 6.4 4 2.7 1 2.2 5 2.7 2,5 54. 0 23 4.9 21 7.2 8 .6 0 .0 0 .0 1,5 28. 4 2 8.2 4 7.3 9 .2 13, 341 .9 1 .3 33 1.7 6 0.7 0 .2 4 4.6 0 .8 35 7.3 1 1.1 1 .0 2 0.7 1 9.4 2 .6 9 .4 2 .2 19 7.1 9 5.1 6 .7 1 .0 C urrent Pric e 0.3 5 1 1,15 0.0 0 4 0,00 0.0 0 0.0 0 0.0 2 0.1 5 0.5 1 0.0 1 0.5 1 1.0 8 0.0 0 17 0.5 0 0.1 4 4.7 5 0.3 0 0.0 0 0.0 1 2.5 0 0.5 9 51 5.0 0 0.1 5 0.0 1 0.4 0 6.5 9 3 2.6 0 9 3,60 0.0 0 0.0 3 6.8 3 5.9 1 0.6 9 5,60 0.0 0 13 5,30 0.0 0 3,21 0.0 0 1 5.2 4 0.0 5 0.3 5 0.0 9 0.5 0 0.5 4 0.4 0 3.2 5 0.7 0 0.1 3 1.0 1 0.0 2 37 8,00 0.0 0 13 5.2 5 2.3 0 0.0 9 4 5,40 0.0 0 4.0 9 2 5.2 9 0.6 0 2 4,30 0.0 0 3 1.3 0 3 4.1 3 0.9 0 1 3.5 8 1.6 0 0.9 6 0.3 8 3 6.8 1 9.3 4 7,30 0.0 0 0.8 0 0.0 0 1.2 0 4 0.1 0 3.5 0 2.3 0 0.1 9 5 7.5 0 0.0 5 1 2.3 7 1.9 9 0.0 4 4.4 7 0.0 4 4.3 5 0.1 3 0.1 2 1.7 5 0.4 3 0.1 5 0.1 8 0.1 2 2 8.8 0 8,40 0.0 0 3,78 0.0 0 0.0 2 1 Wk 75.0 % -1.3 % 19.8 % 0.0 % -6.3 % 0.0 % 21.4 % 5.6 % -32. 0% 1.9 % 1 00. 0% -6.1 % -6.7 % -3.2 % 5.4 % -90. 0% 0.0 % -16. 7% -4.8 % -4.6 % -25. 0% 0.0 % 14.3 % -0.2 % -0.6 % 17.0 % 0.0 % -4.5 % -2.6 % 7.8 % 22.5 % 12.6 % -8.3 % 2.3 % 0.0 % -11. 4% -10. 0% 0.0 % 35.0 % 8.1 % 4.5 % -4.1 % -13. 3% 0.0 % 11.8 % 18.1 % -2.9 % 15.0 % 56.7 % 9.5 % -0.7 % 4.9 % 0.0 % 28.6 % -9.3 % -0.1 % 1.1 % 4.6 % 7.4 % -15. 7% -20. 0% 1.2 % 7.7 % -6.6 % -15. 8% 0.0 % -4.0 % -0.1 % -30. 0% 0.9 % 0.0 % 3.2 % 6.0 % -9.4 % -6.1 % 0.0 % -10. 6% -20. 0% 0.5 % 44.4 % -70. 0% -5.9 % 4.9 % 0.0 % -2.7 % 0.0 % 1.4 % 0.8 % 1.3 % 2 00. 0% 2 00. 0% -90. 0% 3.4% 0.0 % 1 Mth 1 2.9 % 6.2% 2 3.6 % -72. 0% -9.1 % NM -33. 8% 1 7.3 % -66. 0% 3 7.6 % 1 00.0 % 3 4.3 % -65. 9% -7.3 % -4.8 % -90. 0% 6 6.7 % 2 5.0 % 1 8.0 % -7.2 % -25. 0% -80. 0% -8.0 % 6 0.7 % 4 5.9 % 0.6% -25. 0% 6.7% 1.0% 0.0% 2 3.6 % 1 5.6 % -1.1 % 2.1% 1 14.3 % -16. 7% -5.3 % 1 1.1 % 4 2.1 % -1.2 % 2 4.0 % -26. 3% 2 25.0 % -19. 2% 5.6% -3.8 % 6.5% 1 5.0 % 1 08.9 % 4 6.5 % 4 8.7 % 2 3.5 % -7.7 % 1 3.6 % -12. 8% 8.0% 9.8% 1 8.1 % -11. 6% -25. 0% 2 6.7 % 1 2.2 % 1 6.3 % 1 0.9 % -15. 8% 0.0% -7.0 % -18. 8% NM -9.8 % 9 0.0 % 2 7.9 % -91. 7% 6.0% 1.0% 0.0% -1.3 % -20. 0% -6.7 % 8 5.7 % -84. 0% 6 8.3 % -28. 3% 0.0% 0.0% 0.0% -4.0 % 2 8.6 % 3.4% -25. 0% 2 25.0 % -91. 7% 7.5% 1.0% 3 Mth 0 .0% 9 .3% 36 .1% -5 3.3% -6 .3% -3 1.8% -3 6.3% 32 .0% -4 9.5% -2 .7% 0 .0% 80 .4% -6 8.9% -2 9.9% -1 5.7% -9 0.0% -4 4.4% -2 3.1% -2 6.3% -8 .0% 18 5.7% -8 0.0% 66 .7% 11 .7% 44 .9% -2 3.7% 0 .0% 12 .0% 11 .3% 38 .0% 4 .1% 37 .4% -5 .6% -3 .4% 50 .0% -5 8.8% 38 .5% 28 .2% 33 .3% 19 .4% 30 .0% -3 6.4% 22 5.0% -3 6.5% 0 .0% -3 0.9% -1 9.7% 53 .3% 44 .6% 12 8.7% 36 .8% 14 .4% -3 6.8% -5 2.4% -4 8.5% 11 .5% 50 .0% -1 8.6% 18 .5% -4 4.2% -2 4.0% 19 .7% 38 .4% 33 .9% 14 .3% -8 0.4% 11 .1% -1 3.2% NM -9 .8% 26 .7% 16 .2% -9 2.9% -9 .6% -2 8.2% -2 0.0% 90 .2% 0 .0% -2 3.0% 16 0.0% -6 0.0% 17 3.4% -4 1.9% NM -5 .3% 0 .0% 6 .7% 36 .4% -1 6.0% 50 .0% 22 5.0% -9 2.9% 7.1% 0 .0% 6 Mth -2 5.5 % 30 .6% -2 3.2 % -9 3.6 % -6 2.5 % -5 3.1 % -7 9.6 % 10 .0% -6 0.8 % -4 2.2 % -8 6.7 % 16 2.3% -7 7.0 % -4 7.3 % -2 2.4 % -9 8.0 % -8 4.6 % -4 1.2 % -4 4.3 % -1 1.2 % 50 .0% -9 8.0 % -6 3.0 % 24 .3% 97 .6% -1 7.9 % -2 5.0 % -1.3% -1 6.4 % -3 7.3 % NM -1 9.5 % -4.7% -1 2.5 % -7 2.7 % -8 4.8 % -1 0.0 % -1 8.0 % -1.8% -4 9.4 % 56 .3% -5 8.8 % -1 3.3 % -6 1.7 % -2 4.0 % -4 4.2 % -4 3.4 % NM 70 .9% 12 6.4% -1 4.8 % 16 .3% -3 6.8 % -7 6.7 % -8 2.3 % -4.5% -2 4.4 % -4 0.0 % -2 3.8 % -6 9.6 % -9 1.7 % 43 .4% 2 .3% -3 4.2 % -1 0.1 % -9 9.7 % 38 0.0% -2 8.7 % NM -3 9.8 % -3 6.7 % 3 .6% -9 7.0 % -2 3.5 % -6 5.0 % -2 0.0 % -2 0.5 % -5 0.0 % -5 3.5 % -4 3.5 % -8 7.4 % 37 .8% -6 2.6 % NM -4 0.0 % -4 5.5 % -4.7% 17 .0% -6 6.4 % -8 1.3 % 38 0.0% -9 9.7 % -24.1% -3 5.5 % 1 Yr -51 .4% 35.3 % -81 .5% 27.3 % -91 .7% -60 .5% -73 .2% -47 .2% -80 .4% -73 .1% -96 .7% 56.4 % -88 .8% -63 .2% -42 .2% -98 .0% -95 .0% 13.6 % NM -53 .8% 0.0 % -94 .7% NM 43.6 % 11.1 % -14 .9% -57 .1% -45 .5% -64 .4% -45 .2% NM -45 .4% -35 .6% -64 .4% -85 .0% -62 .4% -77 .5% -19 .4% -15 .6% -73 .5% 30.0 % -60 .9% -31 .6% -69 .6% -13 .6% -62 .2% -68 .1% NM 2 13. 3% 31.0 % -60 .4% 30.6 % NM -83 .5% -92 .3% 0.4 % -66 .2% -49 .2% -55 .6% -64 .7% -95 .9% 25.8 % -35 .6% -53 .8% 23.1 % -100 .0% NM -22 .0% NM -48 .2% NM 19.8 % -99 .1% -37 .8% -78 .2% -33 .3% NM -88 .6% -61 .2% -62 .9% NM -43 .5% -81 .5% NM -48 .6% NM -19 .1% -24 .3% -75 .6% -92 .3% 2 13. 3% -100 .0% -42.5% -54 .7% 52 We ek -55. 1% -20. 9% -83. 1% -97. 2% -93. 3% -65. 9% -84. 5% -68. 9% -83. 0% -74. 3% -95. 6% -11. 0% -88. 8% -70. 7% -47. 3% -98. 0% -97. 0% -59. 0% -47. 8% -59. 4% -85. 1% -99. 2% -80. 4% -13. 9% -11. 8% -42. 8% -57. 1% -60. 3% -70. 2% -65. 5% -11. 1% -68. 9% -54. 2% -69. 8% -87. 1% -87. 6% -79. 5% -23. 7% -57. 8% -74. 8% -24. 6% -68. 2% -82. 7% -79. 0% -36. 7% -65. 6% -70. 2% 0.0 % -1.1 % -4.4 % -69. 9% -6.9 % -58. 6% -85. 5% -93. 3% -12. 7% -68. 5% -59. 5% -61. 4% -72. 3% -96. 0% -8.2 % -48. 0% -62. 9% -25. 9% -100 .0% -76. 0% -56. 2% -30. 0% -50. 6% -68. 3% -20. 2% -99. 2% -56. 6% -79. 0% -60. 0% -59. 7% -91. 1% -65. 2% -83. 8% -97. 9% -60. 7% -82. 2% -96. 3% -60. 0% -85. 9% -38. 3% -33. 1% -81. 0% -92. 9% 0.0 % -100 .0% -62.1% -67. 0%

386.3

Figure 26. Price Performance Source. Capital IQ

Page 19

C omparable C ompany A nalys is > W eb 2.0
V aluatio n Multiples C om pany Nam e
Acce le rize N ew Me dia, Inc. Actoz S of t C o., L td. AQ Inte ractive , Inc. As s ocia ted Media Holdings Inc. B igstring Corp. B e tawave Corpora tion B e yond Commerce, Inc. B right T hings plc B roa dW ebAs ia Inc. C D C C orp. C hina G ate wa y C orpora tion C hine s e G amer International C ornerW orld C orporation D AD A S pA D XN Holdings B hd D ibz Inte rnational, Inc. D igitalP ost Inte ra ctive , Inc. D igitalT own, Inc. D olphin D igital Me dia, Inc. E olith C o. L td. E xte ns ions , Inc. F inancia l Media G roup, Inc. F luid Mus ic Ca nada, Inc. F rogs te r Interactive P icture s AG G a ma nia D igital E ntertainment C o., L td. G a me On C o L td. G e oS e ntric O yj G iant Intera ctive G roup, Inc. G iga Media Ltd. G ravity C o., L td G ree, Inc. G ungH o O nline E ntertainment, Inc. H anbitS of t, Inc. IAC /InterActiveC orp. IAS E nergy, Inc. IdeaE dge, Inc. is ee media Inc. J umbuck E ntertainment P ty Ltd. J umpT V Inc. K a boos e Inc. K ings oft Co. Ltd. Lingo Media Corporation Live World Inc. LookS mart, Ltd. Magnitude Information S ys tems Inc. Mixi, Inc. Mode rn Times G roup Mtg AB Moggle , Inc MOK O.mobi L imited N E OW IZ G ames C orpora tion N etD ragon W ebS oft, Inc. N ete as e.com I nc. N eXplore Corpora tion N gi G roup Inc. N orthgate Te chnologies L imited Open T e xt Corp. Openwave S ys tems Inc. P e rf ect W orld C o., Ltd. P hotoChannel N etwork s Inc. Quepa s a C orp. OA O R B C Information S ys tems S handa Interactive E ntertainme nt L td. S hutte rf ly, Inc. S K C ommunications Co., Ltd. S N AP Inte ra ctive , Inc. S N M G lobal H oldings S ocia l Media V e nures , Inc. S ohu. com Inc. S ite s earch C orporation S park N etworks , Inc. S pectrumDN A, Inc. T encent Holdings L td. T he P arent C ompany T he 9 L imited T he S treet.com, Inc. T otal S port Online A S T ree.C om, Inc. U nis erve C ommunications Corp. U nited Online Inc. U OMO Media , Inc V O IS , Inc. W ebze n Inc. W iz za rd S of twa re Corpora tion W oozyF ly, Inc. W orlds .com Inc. W ynds torm C orporation XIN G AG Y e dangOnline Corp. Y nk K orea Inc. ZipLocal Inc. H igh Low A vera ge Median

S ec to r
D irect Marketing G aming G aming Mobile Ins ta nt Mes s aging Me dia S ocia l Ne tworking S ocia l Ne tworking S ocia l Ne tworking G aming Mobile G aming C ontent S ocia l Ne tworking S ocia l Ne tworking S NS A pps C ontent S ocia l Ne tworking S ocia l Ne tworking G aming C ontent D irect Marketing Me dia G aming G aming G aming Mobile G aming G aming G aming S ocia l Ne tworking Me dia G aming Me dia V ide o S ocia l Ne tworking C ontent S ocia l Ne tworking V ide o C ontent G aming Le arning S ocia l Ne tworking D irect Marketing S ocia l Ne tworking S ocia l Ne tworking Me dia G aming S ocia l Ne tworking G aming G aming G aming C ontent Me dia D irect Marketing C ollaboration Mobile G aming D igital Imaging S ocia l Ne tworking Me dia G aming D igital Imaging S e arch D ating Me dia S ocia l Ne tworking G aming S ocia l Ne tworking S ocia l Ne tworking Me dia P orta l Me dia G aming Me dia Me dia P orta l S ocia l Ne tworking Me dia Me dia S ocia l Ne tworking G aming P odcas ting S ocia l Ne tworking C ontent C ontent S ocia l Ne tworking G aming G aming D ire ctory

Co untry
U nite d S tates S outh K ore a J a pan U nite d S tates U nite d S tates U nite d S tates U nite d S tates U nite d K ingdom U nite d S tates H ong K ong U nite d S tates T a iwan U nite d S tates Italy Malays ia U nite d S tates U nite d S tates U nite d S tates U nite d S tates S outh K ore a U nite d S tates U nite d S tates U nite d S tates G ermany T a iwan J a pan F inland C hina T a iwan S outh K ore a J a pan J a pan S outh K ore a U nite d S tates C anada U nite d S tates C anada A us tralia C anada C anada C hina C anada U nite d S tates U nite d S tates U nite d S tates J a pan S we den U nite d S tates A us tralia S outh K ore a C hina C hina U nite d S tates J a pan India C anada U nite d S tates C hina C anada U nite d S tates R us s ia C hina U nite d S tates S outh K ore a U nite d S tates U nite d S tates U nite d S tates C hina U nite d S tates U nite d S tates U nite d S tates C hina U nite d S tates C hina U nite d S tates N orway U nite d S tates C anada U nite d S tates C anada U nite d S tates S outh K ore a U nite d S tates U nite d S tates U nite d S tates U nite d S tates G ermany S outh K ore a S outh K ore a C anada

P rimary E xc hange
OT C B B K OS E TSE OT C P K OT C B B OT C B B OT C B B AIM OT C P K N as da qG S OT C B B GTS M OT C B B CM KL SE OT C P K OT C B B OT C B B OT C B B K OS E OT C P K OT C B B TSX XT R A GTS M TSE H LS E NYS E N as da qG S N as da qG M TSE OS E K OS E N as da qG S OT C B B OT C B B T S XV AS X TSX TSX S E HK T S XV OT C P K N as da qG M OT C B B TSE OM OT C B B AS X K OS E S E HK N as da qG S OT C P K TSE BS E N as da qG S N as da qG S N as da qG S T S XV N as da qC M R TS N as da qG S N as da qG S K OS E OT C B B OT C P K OT C P K N as da qG S OT C B B AME X OT C B B S E HK OT C P K N as da qG S N as da qG M OT C NO N as da qG M T S XV N as da qG S OT C B B OT C B B N as da qG M AME X OT C B B OT C B B OT C B B XT R A K OS E K OS E T S XV

Tic ker
AC LZ A 052 790 3 838 AS MH BS G C B WA V BYO C AIM:B G T B WB A C HIN .A CG W Y G T S M:308 3 CWR L CM:DA D XN D IB Z DGL P D G TW DP DM A 041 060 E XT I F NGP T S X:F MN F RG 6 180 3 812 G E O1V GA G IG M GR VY T S E :3 632 3 765 A 047 080 IAC I IA S C .A OT C B B :IDA E IE E AS X:J MB T S X:J T V TS X:K AB 3 888 TS XV :LM LV W D L OOK MAG Y 2 121 MT G B MMO G MK B A 095 660 777 NT E S N XP C 2 497 59 005 7 O TE X OP W V PW R D T S XV :P N QP S A R B CI S NDA S FL Y A 066 270 S TVI S N MN S MV I S OH U STPC L OV S P XA 700 K ID S .Q NC T Y TSCM T OS O TR E E T S XV :U S S U N TD U OMO VOIS W ZE N W ZE W ZY F W DD D W YND O 1B C A 052 770 A 023 770 T S XV :ZIP

US D Market Cap ($m)
9. 4 71. 1 22. 4 0. 1 0. 8 4. 4 20. 9 2. 5 43. 3 1 16. 5 0. 0 4 25. 9 6. 6 1 01. 2 18. 8 0. 0 0. 7 67. 9 28. 7 17. 4 14. 2 0. 5 16. 7 20. 4 1 45. 5 93. 2 24. 6 1,5 43. 6 3 19. 3 19. 2 1,2 86. 4 1 59. 6 50. 9 2,1 48. 0 3. 2 14. 8 3. 7 16. 9 48. 9 44. 6 4 50. 3 7. 2 4. 0 17. 2 8. 3 5 97. 5 1,0 68. 9 83. 5 5. 4 3 15. 9 2 78. 9 3,1 12. 0 33. 5 30. 9 21. 3 1,7 71. 3 75. 0 7 16. 4 42. 7 12. 2 52. 7 2,5 54. 0 2 34. 9 2 17. 2 8. 6 0. 0 0. 0 1,5 28. 4 28. 2 47. 3 9. 2 13,3 41. 9 1. 3 3 31. 7 60. 7 0. 2 44. 6 0. 8 3 57. 3 11. 1 1. 0 20. 7 19. 4 2. 6 9. 4 2. 2 1 97. 1 95. 1 6. 7 1. 0 13,3 41. 9 0. 0 386. 3 23. 5

TE V/LT M R evenue
4.3 x 0.9 x 8.0 x 29.8 x 2.4 x 21.8 x 10.5 x 0.4 x 0.0 x 9.8 x 6.1 x 0.6 x 0.5 x 3.9 x 1.0 x 0.7 x 3.8 x 1.1 x 0.5 x 3.6 x 1.3 x 40.4 x 1.2 x 0.7 x 0.3 x 1.8 x 1.0 x 5.3 x 0.9 x 3.5 x 2.4 x 0.3 x 4.1 x 1.0 x 4.5 x 2.4 x 1.5 x 0.2 x 2.5 x 2.6 x 0.0 x 0.7 x 1.4 x 3.3 x 1.1 x 0.1 x 2.8 x 0.8 x 13.7 x 0.2 x 4.6 x 0.2 x 0.1 x 1.0 x 18.1 x 44.0 x 3.1 x 3.1 x 1.9 x 0.5 x 0.8 x 44.0 x 0.0 x 4.7x 1.5 x

TE V/ N TM R evenue
0.4x 0.5x 1.3x 0.3x 0.8x 1.0x 2.2x 1.8x 0.7x 2.4x 0.2x 0.7x 2.4x 0.2x 1.0x 0.7x

TE V/LT M E BITDA
4.7 x 9.2 x 20.8 x 4.1 x 3.8 x 6.5 x 1.8 x 5.3 x 6.7 x 6.1 x 2.8 x 11.5 x 10.3 x 10.7 x 6.2 x 8.8 x 3.3 x 0.9 x 9.8 x 0.1 x 5.2 x 15.4 x 32.5 x 6.8 x 3.9 x 27.8 x 29.5 x 4.3 x 9.6 x 8.5 x 32.5 x 0.1 x 9.2x 6.6 x

TE V/NTM E BITDA
7.5x 5.0x 2.4x 5.8x 7.3x 8.5x 5.5x 4.6x 5.6x 2.8x 8.5x 2.4x 5.5x 5.5x

P /LT M E P S
13 .8x 25 .8x 6. 0x 3. 7x 16 .7x 9. 4x 1. 5x 9. 4x 16 .0x 8. 0x 13 .2x 28 .3x 3. 1x 17 .9x 9. 2x 2. 0x 9. 0x 1. 4x 36 .2x 1. 2x 2. 1x 52 .8x 47 .3x 9. 9x 11 .4x 38 .0x 1. 0x 64 .1x 3. 4x 20 .5x 11 .2x 64 .1x 1. 0x 15.9x 9. 9x

P /NT M E P S
1 6.6 x 1 1.4 x 8.9x 2 5.2 x 7.1x 1 3.1 x 1 4.0 x 3 0.0 x 6.6x 2 0.7 x 1 2.5 x 9.6x 8.3x 6.0x 3 0.0 x 6.0x 13.6x 1 1.9 x

P /TangBV
1 .4x 0 .4x 8 .4x 0 .4x 1 .4x 1 .9x 2 .2x 1 .3x 5 .3x 0 .3x 3 .1x 1 9.6x 1 .7x 1 .0x 1 0.9x 2 .1x 2 .0x 3 .5x 2 .9x 1 .9x 0 .6x 4 .6x 4 .9x 1 0.6x 1 .5x 0 .6x 0 .5x 1 .0x 0 .4x 9 .8x 5 .0x 1 .0x 1 .4x 6 .3x 4 .7x 4 0.1x 9 .9x 1 5.5x 0 .1x 0 .6x 0 .7x 2 .3x 0 .0x 5 .3x 5 .2x 4 0.1x 0 .0x 4.5x 2 .0x

Figure 27. Valuation Comparison Source. Capital IQ

Page 20

C o mparable Co mpany A nalys is > W eb 2.0
S umma ry by C ou ntry
Co mpan y N ame United S tates Ca nada China S outh K orea J apa n Taiwan Australia G ermany Norway Hong K ong Finla nd Italy United K i ngdom India S weden R us sia Mala y sia G rand To tal 40 10 9 9 6 3 2 2 1 1 1 1 1 1 1 1 1 90 US D Market Cap ($m) China United S ta tes Ja pan Cana da S weden Taiwan S outh K orea G ermany Hong K ong Italy R us sia Finland Australia India Malays ia United K ingdom Norwa y Gran d Total 23, 857.3 3, 437.4 2, 190.1 1, 934.5 1, 068.9 890.7 814.2 217.5 116.5 101.2 52.7 24.6 22.2 21.3 18.8 2.5 0.2 34, 770.6 Avg U S D Market Cap ($m) C hina S weden J apan T ai wan C ana da Hong K ong G ermany Italy S outh K orea United S ta tes R us s ia F i nland In dia Malay si a Aus tralia United K ingdom Norway G ran d T otal 2,650. 8 1,068. 9 365. 0 296. 9 193. 4 116. 5 108. 7 101. 2 90. 5 85. 9 52. 7 24. 6 21. 3 18. 8 11. 1 2. 5 0. 2 386. 3 US D L TM T otal R ev ($m) C hina United S ta tes S weden C ana da S outh K orea J a pan Hong K ong T aiwan Italy R us sia India Malays ia G ermany Australia F inland Norwa y United K ingdom G ran d Total 3,335. 6 3,115. 0 1,579. 2 887. 3 521. 5 507. 1 428. 1 347. 6 223. 0 139. 3 131. 8 76. 0 51. 2 13. 2 5. 4 2. 0 0. 2 11,363. 4 U S D L TM T otal E B ITDA ($m) C hina S weden C anada J a pan U nited S tates T aiwan S ou th K orea I taly I ndia H ong K ong R us sia G ermany M alays ia Aus tra lia N orway U nited K ingdom F inland G rand Total 1,649. 3 252. 5 186. 9 133. 5 125. 8 84. 3 59. 4 35. 6 23. 2 18. 8 18. 2 11. 5 10. 1 2. 5 -1. 0 -1. 6 -12. 4 2,596.6 E B ITDA % China Australia Taiwa n J apa n India S weden Italy Mala ys ia R us sia S outh K orea Hong K ong United S tates G ermany Ca nada Norway United K ingdom Finla nd G rand To tal 48.0% 37.2% 29.3% 26.1% 17.6% 16.0% 16.0% 13.3% 13.1% 5. 5% 4. 4% -9.0% -14. 3% -15. 4% -50. 6% #D IV /0! #D IV /0! 8. 9%

Figure 28. Comparison by Country Source. Capital IQ

C omparable C ompany A nalys is > W eb 2.0
Su mmary b y Ex c hange
C om pany Nam e OT C B B N as da qG S OT C P K K OS E TSE N as da qG M T S XV S E HK TSX A ME X XT R A ASX GT SM O T C NO H LS E OS E CM B SE N as da qC M NYS E A IM OM R TS K LS E G rand To tal 22 12 9 7 5 5 5 3 3 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 90 U S D Market Cap ($m) SE HK N asdaqG S TSE NYS E OM K OS E GTS M OT CB B XT R A N asdaqG M OS E TSX CM OT CP K AM E X T S XV R TS H LS E AS X BS E KLS E N asdaqC M AI M OT CN O G rand T otal 14, 071.2 13, 265.0 2, 030.4 1, 543.6 1, 068.9 774.3 571.4 322.0 217.5 162.5 159.6 110.3 101.2 96.3 66.7 55.3 52.7 24.6 22.2 21.3 18.8 12.2 2.5 0.2 34,770.6 Avg US D Mar ket C ap ($m) S E HK NY S E Na s daqG S OM TS E G TS M OS E K OS E XT R A CM RT S TS X AME X Na s daqG M HL S E BS E KLS E O TC B B Na s daqC M AS X TS X V O TC P K AIM O TC NO G rand Total 4,690. 4 1,543. 6 1,105. 4 1,068. 9 406. 1 285. 7 159. 6 110. 6 108. 7 101. 2 52. 7 36. 8 33. 3 32. 5 24. 6 21. 3 18. 8 14. 6 12. 2 11. 1 11. 1 10. 7 2. 5 0. 2 386.3 U S D LT M T otal R ev ($m) OM N a sda qG S S E HK NYS E CM R TS BSE OS E N a sda qG M TSE K LS E GT S M K OS E AM E X XT RA TSX OT CP K T S XV AS X HLS E OT CN O OT CB B AI M N a sda qC M G rand T otal 1, 579. 2 482. 3 413. 4 233. 2 223. 0 139. 3 131. 8 115. 8 84. 3 78. 3 76. 0 73. 5 66. 5 31. 7 25. 6 24. 9 21. 0 9. 3 6. 6 5. 4 2. 0 1. 7 0. 2 0. 1 138.6 U S D LT M Total E B IT DA ($m) N a sdaqG S S E HK OM NYS E TSE K OS E GT S M CM BSE OS E R TS XTR A K LS E AM E X AS X OT CN O AI M TSX T S XV N a sdaqC M HLS E N a sdaqG M OT CP K OT CB B G r and T otal 1,410. 1 593. 4 252. 5 144. 4 112. 8 54. 6 36. 3 35. 6 23. 2 20. 7 18. 2 11. 5 10. 1 5. 8 2. 5 -1. 0 -1. 6 -5. 8 -9. 5 -11. 8 -12. 4 -14. 2 -27. 2 -51. 7 2,596.6 E B IT DA % NYS E S EHK AS X GT SM TSE N asdaqG S AM E X OS E BSE OM CM K LS E R TS K OS E N asdaqG M TSX XT R A T S XV O T CP K O T CB B O T CN O AI M H LS E N asdaqC M G rand T otal 61. 9% 43. 0% 37. 2% 32. 0% 27. 7% 27. 5% 21. 5% 17. 8% 17. 6% 16. 0% 16. 0% 13. 3% 13. 1% 5.8% 1.1% -3. 9% -14.3% -15.6% -29.4% -37.2% -50.6% #DI V /0! #DI V /0! #DI V /0! 8.9%

Figure 29. Comparison by Exchange Source. Capital IQ

Page 21

Financing - Last Three Months (US$ m)
Month Jan-09 Company Name Aster Data Systems Yodle AdMob VirtuOz IMVU NewsGator Go Internet Media DECA Nurien RatePoint One True Media SundaySk y Play Hard Sports JibJab Xobni InsideView Kewego Fl iqz Motionbox SocialMedia Sportsblogs AboutUs Geni Gbox E-Global Sports Network mEgo Tripwolf Hubdub Snooth CoveritLive TweetDec k BackType Identi.ca Meez Country USA USA USA France USA USA USA USA Korea USA USA Israel USA USA USA USA France USA USA USA USA USA USA USA USA USA Austria UK USA Canada UK USA Canada USA Angel/Seed Debt financing PIPE Series A Series B 17.0 Series C 13.0 12.5 11.4 10.0 10.0 10. 0 10.0 10. 0 10.0 9.0 8.0 8.0 7.5 7.0 6.5 6.2 6.0 6.0 6.0 5.0 5.0 5.0 5.0 3.5 2.5 2.5 1.2 1.0 1.0 0.5 0.3 0.2 5.5 Twitter Synthasi te Tremor Media Offerpal Media Imagini Emergent Game Technologies Outbrain Tvtrip Tongxue Oodle Te xtDigger OneSpot Mixpo Fe tchDog Virtual Fairground 7 Billion People Fa milyLink.com WhistleBox Mendel ey Outright Tvi nci Fi ltrbox MMO Life Cake Financi al fa v.or.it USA South Africa USA USA UK USA Israel France China USA USA USA Canada USA Netherla nds USA USA USA UK USA Israel USA Netherla nds USA UK 45. 2 73.9 82.2 35.0 20.0 18.0 15.0 13.5 12.5 12.0 9.0 6.0 5.6 4.3 4.2 4.0 4.0 4.0 3.0 2.9 2.3 2.0 2.0 1.6 1.4 1.3 1.3 0.7 24. 8 10.0 Series D Series E Grand Total 17. 0 13. 0 12. 5 11. 4 10. 0 10. 0 10. 0 10. 0 10. 0 10. 0 9.0 8.0 8.0 7.5 7.0 6.5 6.2 6.0 6.0 6.0 5.0 5.0 5.0 5.0 3.5 2.5 2.5 1.2 1.0 1.0 0.5 0.3 0.2 216.8 35. 0 20. 0 18. 0 15. 0 13. 5 12. 5 12. 0 9.0 6.0 5.6 4.3 4.2 4.0 4.0 4.0 3.0 2.9 2.3 2.0 2.0 1.6 1.4 1.3 1.3 0.7 185.5 15. 0 12. 5 12. 0 12. 0 10. 5 10. 0 10. 0 5.5 5.0 4.1 4.0 3.9 3.2 2.0 2.0 1.3 1.3 0.8 0.6 118.7 22.5 521.0

Jan-09 Total Feb-09

Feb-09 Total Mar-09 Vidyo Buzznet Le ndingClub SendMe Inc. Auditude Visible Measures SuperSecret Greystripe OMGPOP Apture Simulmedia Tynt AnySource Media Hunch Sports Composite DE AdultSpace Myngle 33Across Three Melons USA USA USA USA USA USA USA USA USA USA USA Canada USA USA USA USA Netherla nds USA Argentina

13. 3

76.4

58.6 15.0 12.5

12.5

12.0 12. 0 10.5 10.0 10. 0 5.5 5.0 4.1 4.0 3.9 3.2 2.0 2.0 1.3 1.3 0.8 1.3 20. 1 1.3 1.3 0.6 0.6 0.6 30. 3 100.3 30.3 180.5 43.0 183.8 12. 0 12. 0

Mar-09 Total Grand Total

Figure 30. Financing, Last Three Months Source. Company reports

Page 22

C ompany Des c riptio ns - C u rrent Mo nth C apital Market A c tivity
C ompany
33A c ro s s Inc .

HQ
U nited S ta tes

W ebs ite
www. 33ac ross .c om

Des criptio n
33Acros s , named after the 33% of internet users at whic h its ma rketing is directed, propos es to use s ocial networks to mak e online a dvertising more effe ctive. I n a departure from wides pread direct res pons e adv ertis ing, this compa ny is developing tec hnology to identify and target mes sages to thes e mos t influential web users , in order to us e their sway to the c lient’s advantage. AdultS pa ce is a n a dult targeted s oc ial network . F ounded in 2006, AnyS ourc e Media is a rapidly -growing, innov ative tec hnology c ompany enabling c onsumer elec tronics manufacturers ’ to bring a wide range of Internet-delivered video directly into their devices . Any S ource Media provides an I nternet-ena bled T V (iTV ) platform, called the I nternet V ideo N aviga tor™ (I V N ) to s ilic on c ompa nie s a nd c onsumer electronic s man ufa c turers ’ of HD TV worldwide. The IV N platform inc ludes embedded s oftware ins ide the HD T V , a full -s pec trum of both bra nded and us er-generated video con tent delivered over a direct Internet connec tion, as well as a targeted a dvertising and us er management s ys tem managed at the I V N data c enter. S imilar to a video R S S reader for televis ion, the IV N da ta center c ommunicates with a wide-range of c ontent pro viders to c ollec t the informa tion neces s ary to populate the friendly IV N user interface on the HD TV s creen. T he c ontent desc ription da ta is enha nced and norma liz ed s o the navigation e xperience is s imple and cons is tent. T he nav igation da ta is then delivered to the TV along with adv ertis ing, preferences and other trans ac tion information. Apture allows publishers and bloggers to link a nd inc orporate s everal media items into a dy na mic layer above their pages . P ublis hers have to embed a single line of J avasc ript c ode into their site a nd then s ign i nto their Aptu re ac count. B y highlighting words or phrases Apture allows publishers to link, providing appropriate content to c hoos e between. W hen the reader clic ks a s mall wind ow opens with related items selec ted by the publis her. T he reader ca n v iew the content be it tex t, video o r photos. R eaders ac ces s these items without leaving the original page. Auditud e, Inc . operates as a b usines s-to-bus iness c ompany. T he c ompa ny’s produc t is a n a d platform for s yndic ated media ma nagement a nd targeting bas ed on automated c ontent identific ation. T he c ompany helps c ontent owners, publishers , and a dvertisers to cha nge the way me dia is c ons umed online. T he c ompany was founded in 1999 and is ba s ed in P alo Alto, California. B uzz net, Inc . operates as a s oc ia l network ing W ebs ite. The company provides an integrated media and c ommunity platform tha t enables users to network with bands , trendsetters , and peers throu gh s elf-c reated c ontent, videos , photos, and journals . I t also offers mus ic and pop culture topic s. The company was founded in 2002 and is ba sed in Holly wood, C alifornia. G oV iral opera tes as a online distributor of v ideo c onte nt. T he c ompany wa s founded in 2005 and is ba s ed in L ondon, U nited K ingdom. G reys tripe, Inc . operates an ad-s upported mobile games and a pplic ations dis tribution pla tform. The c ompa ny provides online gaming and ingame a dvertis ing s olutions through publis her s ites . I ts A dW R AP product suite ena bles bra nd advertis ers to c ommunic ate their brand me ss ages to mobile audienc e; publis hers to s erve ads through their ga mes ; and c ons umers to download ga mes , a s well as delivers images , videos , and sc rolling ba nners to mobile games and a pplications . T he co mpany ’s s olutions als o include AdW R AP C a mpaign Manager, a n a dvertising W eb interface that a llows advertis ing agencies and a d resellers to crea te and monitor mobi le in-ga me a d c ampaigns ; AdW R AP Ca talog P rogram, which enables partners to dis tribute a mobile ga me ca talog; and AdW R AP for P ublis hers platform that provides mobile game publis hers an automated proc ess , whic h ad-enables mobi le games and applica tions . It s evers developers , carriers and dis tributors , game pla y ers, and c onsumer W eb s ites . The c ompany is based in S an F rancis co, Ca lifornia. N/A I'm in lik e with you provides online interaction with friends. I t facilitates to c re ate a game, brows e games and profiles, find friends , a nd dra w pictures . The compa ny is bas ed in the U nited S tates . L ending C lub Corporation develops and ma rk ets network ing solutions for the financ ial indus try . T he c ompany’s s uite enables s oci a l lending networking s ervic es. Addi tiona lly , it provides risk as s ess ment and inv estment a dvis ory s olutions . L ending Club mark ets its products under the L endingMatc h brand name. The compa ny is headquartered in S unny vale, C alifornia. MI V A, I nc. , along with its s ubsidia ries , operates as an online media a nd adv ertis ing network company primarily in N orth A merica and E urope. It o pera tes in two div is ions, M IV A D irect a nd MI V A Media. T he MIV A D irect di vis ion operates a portfolio of c ons umer des tina tion W eb s ites , a s well as various cons umer-oriented intera c tive products , including toolbars, home pages, and downloada ble des ktop wallpapers and sc reens a vers . Its AL O T toolba rs produc ts offer c onsumers direc t link s to va rious releva nt affinity c ontent, and provide searc h func tionality, utiliz ing searc h res ults and ad lis tings primarily from a third-party provider. I ts portfolio of cons umer des tina tion W eb s ites inc ludes vertic a l content s ites and entertainment-oriented sites . The MI V A Media divis ion is an auc tion ba s ed pa y -per-clic k advertis ing and publis hing network. I t c onnects buy ers and s ellers online by dis playing releva nt and ti mely text ads in res ponse to c onsumer searc h or brows ing ac tivity on s elec t Internet properties. M IV A M edia publis her network includes various third party and M IV A owned properties, including, porta ls , vertical and category spec ific content W eb sites , commerce W eb s ites, c ommunity W eb sites, sea rc h engines , direc tories , toolba rs, and des k My ngle B . V . prov ides an onl ine la ngua ge e-lea rning platform. T he company brings together la ngua ge tea c hers and s tudents enabli ng live less ons or conv ersational practice over the I nternet. M yngle B .V . was founded in 2007 and is bas ed in Amsterdam, The N etherlands . P ixa z za , I nc . provides v isual c ommerc e enabling s olutions . It offers a platform that enables s hoppers to buy produc ts from photos s een on W ebsites of W eb publishers . P ix azz a, Inc . was incorporated in 2007 and is bas ed in M ounta in V iew, C alifornia. S endMe, I nc ., a mobile media company, provides direc t to c onsumer mobile enterta inment s ervic es in the United S tates. I t prov ides interac tive mobile trivia, ringtones, wallpaper, and mobi le s weeps tak es. The company als o prov ides horos copes , jok es, gos s ips, romanc e tips , s ports trivia, pick -up lines, diet tips , da ily ins pirations , and fan clubs . S endM e, Inc . wa s founded in 2 006 and is ba s ed in S a n F ranc isc o, Ca lifornia. S imulmedia is a New Y ork C ity-bas ed media mark eting c ompa ny dedic a ted to improv ing the effectivenes s of program promotion on televisi on. The company is pioneering the development of predictive technology to hel p televis ion c ompanies deliver the right on-air promotions to the right viewers at th e right time. S ports Composite DE , I nc ., doing busi ness a s R otoHog, opera tes a s a fantas y sports ga me on the W eb. T he c ompan y’s s ervic es inc lude a thlete price updates ; bas eball s c ores, s tats , a nd c hats; ma rk et analys is ; and c ompetitive roster views . S ports Co mpos ite D E , Inc . was founded in 2006 and is bas ed in Inglewood, California. S uperS ec ret is a s uper-fun, sec ret world full of a dventures and s urprises . C hoose a c harac ter a nd do all your fa vorite stuff: c hat with friends , play games all da y , explore s ecret plac es , get clu es, and shop for tasty trea ts a nd exc ellent c lothes . T he more y ou pla y, the older your charac ter gets, until you're a teenager with a pet, an apa rtment, and ac ces s to really c ool ha ngouts . T hat means lots of S uperS ecret birthday s—far more tha n jus t the us ua l one a y ear. E very time you vis it, there'll be fri ends waiting to play and new things to be disc overed. Y ou c an even pla y pranks on people, if you're that s ort of pers on. And we think maybe you are. S uperS ec ret. L ike life. B ut way more fun. W e c reate games for enterta inment and mark eting. W e work with video games publis hers , med ia c ompanies and F ortune 500 advertisers (and their ad agenc ies) to c reate addicting, s hort-s es sion video ga mes for W eb, P C , Mac and Cons oles . T y nt Multimedia I nc . develops hos ted s olutions for online publis hers , soc ial networks , a nd online c ommunities to inc rease us er engagement. It o ffers Trac er, a tec hnology that records the user action and automa tic ally adds a link back to the original content when it is pa s ted when a user highlights or c opies text or images from W eb s ites . T he c ompany was founded in 2007 a nd is bas ed in C algary, C anada. V idyo, Inc . provides disruptive video tec hnology for traditio nal video c ommunic ati ons. I t des igns software development tool kit that a llows its tec hnology to be easily integra ted into s oft switc h or gatewa y , video networking and c onferencing sy s tems, personal communic ation devic es, presenc e ba sed IM produc ts or s ervic es , W eb c onferenc ing products or services , audio and v ideo c onferenc ing serv ices , a nd back bone and V O IP network s. T he company wa s formerly known as L ayered Media , I nc. and c hanged its name to V idyo, I nc . in O c tober 2007. T he company was founded in 2005 and is hea dqua rte red in Hac kens ac k, N ew J ers ey. V is ible M easures C orporation operates as an independent third-party mea surement c ompa ny for Internet video publis hers, a dvertisers , and viral marketers. I t s peciali zes in meas uring the cons umption and distribution of I nternet v ideos . Its s olutions inc lude V isible S uite, which shows video publis hers how their audienc es interac t with their content; V is ibleCa mpaign, whic h shows advertisers and agenc ies the true vira l reach a nd audience enga gement of Internet video c a mpaigns; and T rue R each, which measures total a udienc e that has been expos ed to a viral video c ampa ign. T he company als o offers analytic, data, and profes si onal s ervic es. Its products and serv ic es help I nternet video publishers and adv ertis ers to unders tand audienc es’ beha vior, as well as predict a nd ana ly ze the s ucc ess of Internet video programs. The company was founded in 2005 and is bas ed in B oston, M ass achus etts .

A dults pac e A nyS ourc e Media

N /A U nited S ta tes

www. adultspac e.c om www. anys ourc emedia. c om

A pture In c

U nited S ta tes

www. apture.c om

A uditude, In c .

U nited S ta tes

www. auditude.c om

B uz z net, Inc .

U nited S ta tes

www. buzz net.c om

G o Viral G reys tripe, Inc .

U nited K ingdom U nited S ta tes

www. govi ral .c om www. greys tripe.c om

H unc h I'm in like with you L ending C lu b C or po ration

U nited S ta tes U nited S ta tes U nited S ta tes

www. hunc h.c om iminlik ewithyou. com www. lendingc lub.c om

MIVA Inc .

U nited S ta tes

www. miva . com

Myngle B .V. P ixaz za, Inc . S endMe, Inc .

N etherlands U nited S ta tes U nited S ta tes

www. myngle. com www. bemuz. com www. s endmemobile. com

S imulmedia, Inc .

U nited S ta tes

http ://www. si mulmedia. com/

S po rts Co mpo s ite DE Inc .

U nited S ta tes

www. rotohog.c om

S uperS ec r et, Inc .

U nited S ta tes

www. s upersec ret. c om

T hree Melons T ynt Multimedia Inc .

Argentina C anada

www. threemelons . com www. tynt.c om

V idyo , Inc .

U nited S ta tes

www. vid yo. com

V is ible Meas ures Co rporatio n

U nited S ta tes

www. vis iblemeasu res . com

Figure 31. Company Descriptions Source. Company reports, Capital IQ, Crunchbase

Page 23

RELEVANT DISCLOSURES APPLICABLE TO: NONE
LIST OF DISCLOSURE TERMS: 1. None applicable.

ANALYST CERTIFICATION
Each analyst of Research Capital Corporation whose name appears in this report hereby certifies that (i) the recommendations and opinions expressed in this research report accurately reflect the analyst’s personal views and (ii) no part of the research analyst’s compensation was or will be directly or indirectly related to the specific conclusions or recommendations expressed in this research report.

I n f o r ma t i o n a b o u t Re s e a r ch C a p i t a l C o r p o r a t i o n ’ s Ra t i n g S y s t e m, t h e d i s t r i b u t i o n o f o u r r e s e a r ch t o cl i e n t s a n d t h e p e r ce n t a g e o f r e c o m me n d a t i o n s wh i c h a r e i n e a c h o f o u r r a t i n g c a t e g o r i e s i s a v a i l a b l e o n o u r we b si t e a t ww w. r e s e a r ch c a p i t a l . c o m. T h e i n f o r ma t i o n c o n t a i n e d i n t h i s r e p o r t h a s b e e n d r a wn f r o m s o u r c e s b e l i e ve d t o b e r e l i a b l e b u t i t s a c cu r a c y o r co mp l e t e n e ss i s n o t g u a r a n t e e d , n o r i n p r o vi d i n g i t d o e s R e s e a r c h Ca p i t a l C o r p o r a t i o n a s s u me a n y r e sp o n si b i l i t y o r l i a b i l i t y . R e s e a r ch C a p i t a l C o r p o r a t i o n , i t s d i r e ct o r s , o f f i c e r s a n d o t h e r e mp l o y e e s ma y , f r o m t i me t o t i me , h a v e p o si t i o n s i n t h e s e cu r i t i e s me n t i o n e d h e r e i n . Co n t e n t s o f t h i s r e p o r t c a n n o t b e r e p r o d u c e d i n wh o l e o r i n p a r t wi t h o u t t h e e xp r e ss e d p e r mi s si o n o f R e se a r ch C a p i t a l C o r p o r a t i o n . ( U . S . I n s t i t u t i o n a l Cl i e n t s — Re s e a r ch C a p i t a l U . S. A . I n c. ( a wh o l l y o wn e d s u b si d i a r y o f R e s e a r c h C a p i t a l Co r p o r a t i o n ) a cc e p t s r e s p o n si b i l i t y f o r t h e c o n t e n t s o f t h i s r e p o r t s u b je c t t o t h e t e r ms & l i mi t a t i o n s s e t o u t a b o v e . F i r ms o r i n s t i t u t i o n s r e ce i vi n g t h i s r e p o r t s h o u l d e f f e ct t r a n s a ct i o n s i n s e c u r i t i e s d i sc u s se d i n t h e r e p o r t t h r o u g h R e s e a r ch C a p i t a l U . S . A . I n c. , a B r o k e r - D e a l e r R e g i s t e r e d wi t h t h e U n i t e d S t a t e s S e cu r i t i e s a n d E xc h a n g e C o m mi s si o n ) .

Tor on to 4 16. 8 60. 76 00

M ontr eal 51 4. 39 9. 150 0

V anco u ver 60 4. 66 2. 180 0

C al gar y 40 3. 26 5. 740 0

R egi na 306. 566. 7550

www.researchcapital.com