HeyAnita Korea Business Plan 2000

Business Plan for
HeyAnita Korea, Inc.
Teaching old phones new tricks…
October 2000
Confidential 1 Do Not Copy or Distribute

Table of Contents
HeyAnita Korea, Inc...........................................................................................1

Our Company.......................................................................................................................................3
Our Market Opportunity ......................................................................................................................3
Our Advantage .....................................................................................................................................4
Our Technology....................................................................................................................................4
Our Value Proposition..........................................................................................................................5
Our Strategy.........................................................................................................................................6
Our Business Model.............................................................................................................................7
Milestones............................................................................................................................................7
Management Team...............................................................................................................................8
A. Compelling Technical Advantage..................................................................................................10
B. Opportunity for Revenue Sharing with Wireless and Telco Companies........................................10
C. Lack of Viable Competition in Our Market...................................................................................11
D. Large Segment of Early Adopters in Technology..........................................................................11
E. Untapped and Undeveloped Market...............................................................................................11
A. Definition of the Voice Portal Concept and Business...................................................................12
B. HeyAnita’s Value Proposition........................................................................................................13
C. Anticipated Services and Partners.................................................................................................13
D. Similar Services in Korea..............................................................................................................14
E. Revenue Streams............................................................................................................................15
F. Distribution.....................................................................................................................................15
G. Likely Responses from Stakeholders.............................................................................................16
H. Competition and HeyAnita’s Competitive Advantage...................................................................16
R&D.......................................................................................................................18
Team Members...................................................................................................................................18
A. Operating Results...........................................................................................................................21
Projected Revenues..................................................................................................................21
Projected Expenses.................................................................................................................24
Personnel..........................................................................................................24
General & Administrative.................................................................................24
Infrastructure....................................................................................................24
Cash flows...............................................................................................................................25
KeumChan Whang.................................................................................................................28
Dean, Graduate School of Engineering at Yonsei University.....................28

1. Executive Summary
Our Company
HeyAnita Korea, Inc. is a joint venture formed by Softbank, HeyAnita Inc., and local partners
in South Korea. Our venture empowers people to surf the Internet and access information
from any phone, anywhere, anytime simply by using their voice. HeyAnita’s patent-pending
AnitaServer technology provides a compelling advantage over our competition in numerous
factors, such as our voice-activated web agent and natural language processor. HeyAnita
Korea seeks to establish the first comprehensive Voice Internet Portal (“VIP”) in Korea and
allow everyone with a telephone to access information (e.g. news, weather, stock quotes, and
travel information) and services (e.g. banking, shopping, stock trades, and games).
Additionally, our company will build a base of corporate clients by enabling e-commerce
providers to add voice-applications services to their existing platform and allow traditional
corporations to efficiently compete in the age of convergence.
Our Market Opportunity

Our market lies in the convergence of the plain old telephone, Internet, and wireless services.
Our venture stands at the crossroads to capture market share and revenue from the
telecommunications, Internet, and wireless arenas. South Korea is an ideal target market for
HeyAnita due to four key market conditions:
• One of the fastest growing Internet markets in the world

From 1998 to 1999, Internet users grew from 3.1 million to 10.9 million users. Over the
course of six years, the CAGR (compound annual growth rate) was 239%. E-commerce
grew from 672 billion won (US$605 million) in 1999 to 1.5 trillion won (US$1.4 billion) in
2000. This places Korea among the top 5 Internet markets in the world.
• Over 50% wireless telephone penetration
As of April 2000, South Korea has over 27 million wireless phone users. From 1997 to
2000, the CAGR for wireless phone use was 400%. This large wireless market adds
significant additional value to the near 100% of landline telephony.
• Significant demand for information “over-the-phone”
As illustrated by the growth in the 700 ARS industry and Wireless Application Protocol
(WAP) services, Koreans are embracing mobile information. In 1999 alone, the 700 ARS
providers generated some 100 billion won from a user base of 3 million people by offering
over-the-telephone services related to stocks, weather, traffic, and entertainment related
information (NOT including pornography). During the past 3 years, growth in this market
has accelerated to a rate of about 30% per annum.1
In addition, with Korea’s 5 wireless carriers having recently launched WAP services to
provide information similar to the 700 ARS players, more than 3 million people profess to
having tried WAP services (about 10% of all wireless users). Despite user complaints
about difficult and clumsy interface, market research indicates a continuing desire to
access the types of information offered.
• Large segment of early adopters in technology
As with other Asian countries, Korean consumers are fast adopters of technology and
general trends within its society. The rapid growth in the wireless and Internet markets
support this premise, but a better example is the incredible growth of online stock trading
in Korea. Within four months of its availability, over 40% of total trading volume was done
online. We assume our technology and service will have a similar impact.
1
Based on interviews with managers of multiple currently operating 700 ARS services. The information
was crosschecked through discussions with managers at Korea Telecom who confirmed the magnitude
of these numbers.

HeyAnita Korea will satisfy people’s ever-growing desire to obtain information in a timely and
convenient manner. We will bring the abundance of information the Internet provides through
the simplicity of the telephone and voice. Through our technology, we will “Internet-ize” not
only the 30% of Korea that currently has access to PC-Internet connections but also the
approximately 30 million Koreans who are without Internet access. In our march toward our
objectives, HeyAnita will leverage not only the 27 million mobile handsets in operation but
also the more than 50 million landline telephones as viable channels to our services.
Our Advantage
HeyAnita Korea is the first significant mover in the Korean VIP market. By leveraging the
technical platform developed by HeyAnita Inc., we have gained a tremendous lead over other
start-ups that have announced entry. The basis of our advantage is as follows:
• Compelling technical advantage

Validated by prospective and current investors such as Softbank, we have third-party
confirmation that our technology stands apart from our competitors, both those in the U.S.
as well as in Korea. Our strength lies in our patent-pending natural language processor
and web agent. The technology we possess ensures fast and low-cost development as
well as easy inter-connections with content providers. We will leverage these technical
advantages to ensure short and economically efficient time-to-market for HeyAnita’s
services.
• Deep venture experience of global investors

With the global reach and support of Softbank Ventures, our lead investor, HeyAnita
Korea has access to an amazing array of resources. The support available to HeyAnita
Korea ranges from the venture expertise of Softbank Venture Capital’s Gary Rieschel,
Chairman of HeyAnita Inc. to the rich network of Softbank’s portfolio companies in Korea,
Asia, and the world. In the world of ventures, a world in which “smart” money can mean
the difference between success and failure, HeyAnita is proud to be supported by some
of the smartest money available.
• Experienced team of technologists and managers

HeyAnita Korea has assembled an impressive team of technologists and managers to
execute against the objectives outlined in the earlier portions of this document. Our
roster of team members includes managers and senior members of companies which are
leaders in their respective fields. Former employers of HeyAnita’s technical team include:
Locus, Andersen Consulting, US Web, Samsung SDS, LG-EDS, Korea Telecom, and LG
Telecom. Our managers come to us from leading organizations such as McKinsey, Arthur
Andersen, TriGem Computers, and Morrison & Foerster.
• Lack of viable competition in our market

While our U.S. counterpart faces competitors such as Tellme and BeVocal, we currently
do not have such threats. To date, no significant player has surfaced in the domestic
market to endanger our position. Those who do exist possess neither the telephony-
focused technical capabilities nor the financial support of value-added investors that
HeyAnita has already secured.
Our Technology
HeyAnita Korea’s voice technology and voice portal infrastructure were developed by the
founders of HeyAnita, a U.S. based company. The four technical founders departed from
Microsoft to develop a solution that solved many of the difficulties in voice browsing
technology.

HeyAnita’s solution allows people to access the Internet by using their voice and any wireless
or landline telephone. Our technology enables a high rate of voice recognition as well as
flexible and efficient Internet surfing. The user’s voice commands will go through the
following steps (please refer to diagram):
• The user’s naturally spoken words are routed through a Dialogic board and digitalized
in preparation for the speech recognition process.
• The utterances contained in the user’s voice is broken down, identified, and sent to
the HeyAnita’s Natural Language Processor.
• All commands and relevant words are identified and sent to HeyAnita’s Manager and
Agent to begin the web search process and ad generation.
• Information is obtained or transaction is completed.
• A voice response or answer is provided to the user.
Telephone Interface Utterance Recognition

(Dialogic/Intel) (Speechworks)
Server
HeyAnita User (HeyAnita)
Natural
Language
Interpretation
Ad Repository
(HeyAnita)
(HeyAnita)
Call Forwarding CP Interface Internet

(HeyAnita & KT) (HeyAnita) or
Intranet
Our Value Proposition

HeyAnita Korea provides numerous benefits for our customers and partners:
• Increases call volume for our wireless and telco partners

Because HeyAnita “creates” a new and convenient medium for dynamic interchange of
information, our services will dramatically increase call volume for telcos. In recognition of
this large potential, Korea Telecom has already signed an agreement with HeyAnita
Korea to jointly build and share in this business opportunity.
• Increases brand awareness and distribution for content producers

HeyAnita will allow media companies to expand their distribution and brand equity. By
distributing their content through HeyAnita, large as well as small content providers (CP’s)
can significantly improve their reach and recognition. This will appeal especially to
Korean Internet companies because public recognition of their brand is extremely low. In
fact, brand awareness of Korean Internet CP’s is so low that more than 72% of Internet
users name specific portals such as Yahoo! and Daum as their content provider of choice
rather than the actual CP’s, even in highly name-conscious categories such as movie
information and entertainment.2
2
Based on focus groups and quantitative market research of more than 1000 Koreans between 15 and
50. Research conducted by Asian Market Intelligence (AMI) agency.

• Provides a new media channel and cultivates an immature Internet market for
advertisers
Korea’s Internet advertising market is relatively undeveloped and allows for a tremendous
amount of growth. Goldman Sachs recently projected Internet advertising in Korea to
grow from US$32 million in 1999 to $0.9 billion by 2004. HeyAnita Korea will be in the
forefront of this development and act as a catalyst by providing an exciting new Internet
channel for advertisers. HeyAnita will extend the reach of the Internet and thereby
increase the value of the Internet as an effective and wide-reaching medium for
advertisers.
• Presents cost-effective solutions for corporations

Our B2B and ASP services will dramatically lower corporate expenditures as we voice-
enable call centers, online businesses, intranet services, and bricks-and-mortar
operations. The convenient and easily accessible telephone interface will not only add
value to the users of our B2B ASP solutions but also significantly lower costs for
backroom operations.
• Expands global presence for our partners

HeyAnita’s global network allows our content providers, advertisers, and other partners to
expand their brand and services into global markets. For example, there are nearly 2
million Korean Americans and Korean immigrants in the U.S. Efficiently tapping into this
market can serve as a significant builder of any partner’s customer base. By providing
services to these Koreans in their native language, HeyAnita Korea will immediately
appeal to a significant number of users outside of Korea.
• Empowers people to easily and effectively access the Internet

The simplicity of the phone allows everyone in Korea to surf the Internet with their voices.
Children, college students, young professionals, and elderly alike can access the wealth
of information in the Internet.
Our Strategy
HeyAnita Korea’s strategy includes a 3-phased growth plan.
Phase 1: Branding the Voice Internet Portal concept: In this initial phase, HeyAnita aims
to build wide-reaching acceptance and familiarity for our voice technology through quality,
consumer-focused service. Our decision to initially pursue the B2C market is driven not only
by a need to brand the VIP concept but also due to the opportunity to immediately generate
revenues from user traffic (see “Our Business Model” section below for details).
Although our competitive advantage lies with our technology, we are well aware that
customers rarely realize or see the technology behind the services they experience.
Therefore, we will present our targeted consumers with services that provide a better method
of accessing information with unique and compelling applications, all within an entertaining
and enjoyable environment. Some of these services might be: news, weather, personal
information management (PIM), stock quotes, movie information, restaurant reviews, e-
commerce.
Phase 2: Enabling B2B market leaders and back-office systems: Within 6 months of
service launch, once the B2C market and consumers become familiar with voice recognition
services and functionality, we can effectively present our voice solutions to the corporate
market. With public acceptance already built, HeyAnita Korea will be able to quickly charge
fees for voice-enabling corporate clients. Our B2B strategy targets corporations and Internet
companies who want us to voice enable their products and websites and provide voice
capabilities for their customers.

Phase 3: Enabling appliances and facilities: In the longer term, HeyAnita will partner with
large makers of appliances and facilities to provide voice-enabling applications for things such
as home appliances, buildings, and automobiles.
Our Business Model

Our business model will be developed in three primary stages: B2C, B2B, and ASP. We
believe all three areas to have room for tremendous growth and high profitability for our
company. Our revenue will come from four primary sources:
• Revenue sharing with telecommunications companies

Share in the call volume with our telecommunications partners.
• V-Portal advertising
Sponsorship and jingle ads sold on our Voice Internet Portal.
• V-Commerce
Portion of each v-commerce transaction completed by us.
• V-Applications
Fees for voice enabling other properties.
Based on these revenue streams, our projections for the first 5 years of operation are:
Summary of Projections (million won)
Million Won 2000 2001 2002 2003 2004

Total users (EOY basis) 100 1,023,108 2,327,062 3,053,334 3,536,860
Revenues 1 5,972 35,788 63,745 89,906
Operating Expenses 2,771 12,012 25,742 36,519 44,899
Depreciation 329 1,601 2,198 3,016 3,385
EBIT (3,099) (7,641) 7,848 24,210 41,622
EBIT Margin - - 22% 38% 46%
Net Income (3,099) (7,641) 7,848 18,429 30,035
Return on Sales - - 22% 29% 33%
Free Cash Flows (12,767) (7,064) 7,998 19,421 32,396
Milestones
 Mar 2000 Joint Venture agreement signed among Softbank, HeyAnita Inc., ThruNet,
Naray, and TriGem Ventures.
 May 2000 Signed strategic alliance with Korea Telecom.
 Jul 2000 Signed strategic alliances with 6 major content providers, including exclusive
deals with a major television/radio network, major newspaper/cable group, and leading
airline.
 Oct 2000 Conducted controlled field tests and focus group interviews with version 2 of
applications
 Nov 2000 Currently conducting general field tests with version 3 of applications.
 Dec 2000 Full launch of services planned for December 5, 2000

Management Team
Joong Sam Lee, CEO & President
Joong Sam Lee brings over 25 years of management experience to HeyAnita Korea. Prior to
joining HeyAnita Korea, Joong Sam was appointed by the Korean government in 1998 as
CEO and Chief Shareholder Executor of the Daesun Group to oversee their restructuring.
Joong Sam reengineered Daesun Monitors, a computer monitor manufacturing company, and
Daesun Data, one of the leading POS (point of sale) system retailers and integrators in
Korea.
Preceding his work with Daesun, he spent the majority of his professional career was with the
SK Group, the fourth largest conglomerate in Korea, composed of 33 operating companies
with US$6 billion in revenues. He was the Senior Strategic Advisor and Senior Managing
Director of SK’s steel, petroleum, mineral resources and chemical businesses. In 1985, he
was admitted to SK’s board of directors. During the same year, Joong Sam became
president of SK’s Hong Kong operations. As President, he paved the way for Korean firms to
enter the Chinese market by establishing the first Korean branch office in Beijing at a time
when there were no diplomatic relationships between the two countries. During his tenure in
Hong Kong and China, SK became the first Korean corporation to reach the export mark of
US$1 billion with China. In 1992, South Korea and China established diplomatic ties, and for
his economic and political contributions leading to this major event, Joong Sam was awarded
the Presidential Industrial Service Medal. He received his B.A. in Economics from
Sungkyunkwan University and completed the Advanced Management Program at the Seoul
National University.
Peter T. Chang, Chief Technology Officer

Peter brings to HeyAnita Korea his wide technical knowledge, skills, and prior startup
experience. As co-founder and CTO of ViewPlus, Inc., an interactive TV/video-on-demand
venture, he developed the core technology that utilizes cable and satellite networks in a
bandwidth efficient and flexible manner. ViewPlus's platform was optimized for video-on-
demand, game-on-demand, music-on-demand, and other services. Prior to founding
ViewPlus, at Andersen Consulting, LLP in Seoul, he worked on developing the market entry
strategy for Dacom Satellite Multimedia, a new DBS startup in Korea. He also worked on a
project to create LG Mart’s e-commerce market entry strategy by analyzing the Korean e-
commerce market and developing business cases. For Iridium Korea Co., a partner in the
global satellite communication consortium, he developed and analyzed business
requirements especially for customer care systems. In addition, Peter has acquired material
management knowledge from various automotive industry projects. He received his B.S. in
Electrical Engineering from Brown University and M.S. in Computer Engineering from
POSTECH (Korea).
Jae Choi, Executive Vice President, Corporate Alliances

Prior to joining HeyAnita Korea, Jae was a management consultant with McKinsey &
Company. During his tenure at McKinsey, he served numerous clients on efforts including the
design of an overall alliance strategy for a large financial services institution, development of
business-to-business marketing capabilities for a major chaebol, management of multiple
M&A efforts for a leading consumer goods player, and improvement of channel operations for
a leading wireless telecommunications service provider.
Prior to joining McKinsey, Jae was a Principal Consultant for Oracle Corporation where he
served on business process reengineering and change management projects for both internal
and external customers. He also served on Oracle Consulting’s Worldwide Operations team
which developed and monitored market service strategies for the consulting divisions of key
international subsidiaries. Jae holds a B.A. in Human Biology and a M.A. in Organization
Development from Stanford University. He also holds a M.B.A. from the Kellogg Graduate
School of Management of Northwestern University.
James Kim, Executive Vice President, Operations

Prior to joining HeyAnita Korea, James was co-founder of ViewPlus, Inc., an interactive
TV/video-on-demand venture with planned service launches in the U.S. and Korea. As Vice

President of Operations, his primary responsibility was overseeing the day-to-day functions
for ViewPlus Korea, which included budget planning, business development, and human
resources. At TriGem Computers, Inc., he was part of the product planning team where he
was responsible for product development, creating company policy and strategic planning.
He was a core member of the team that created eMachines, a leading low-cost PC company
in the U.S. James was also responsible for handling affairs with TriGem’s OEM partners such
as Microsoft Corp., Intel Corp., IBM Corp., and Softbank Korea. In addition, he was deeply
involved in the restructuring and reengineering of the TriGem Group. During his tenure at
TriGem, he reengineered a procurement process that realized a 50% savings to increase the
profit margin to 15% from 2%. He received his B.S. in Biomedical Engineering from
Northwestern University and M.S. in Genetic Engineering from the Korea Advanced Institute
of Science and Technology (KAIST).
Sue-Lynn Koo, General Counsel, Executive Vice President

Sue-Lynn brings over seven years of legal experience to HeyAnita Korea. As an attorney in
the New York office of Morrison & Foerster LLP, Sue-Lynn's practice focused on corporate
finance transactions including mergers and acquisitions, joint ventures, securities offerings,
investment transactions, restructurings, exchange offerings, and venture capital transactions.
In addition, Sue-Lynn has advised privately held and start-up companies in a wide variety of
corporate and related matters, including organizational structure and early stage financings.
Sue-Lynn is admitted to practice in the State of California, the District of Columbia, the State
of New York, and before the U.S. Court of International Trade and the U.S. Court of Appeals
for the Federal Circuit. She received her B.A., M.B.A., and J.D. degrees from The George
Washington University.
Bernard B. Moon, Executive Vice President, Product Development & Marketing

Prior to joining HeyAnita Korea, Bernard was co-founder and Vice President of Strategic
Development of ViewPlus, Inc., an interactive TV/video-on-demand venture. At ViewPlus, he
was responsible for planning, identifying and developing strategic relationships with Oracle,
Scientific-Atlanta, Liberate, and other partners that assisted in its technical development and
entry into its targeted markets. In the strategic planning unit of Digital City Chicago, a
partnership with the Tribune Co. and AOL, he was involved in the rollout of new virtual
communities, their community development project, and other new initiatives. Additionally, he
has various experiences from consulting Koplar Communications on their InTOUCH TV
venture, an interactive television service, to the development of the City of St. Louis’s
Community Information Network, a web-based information system for its citizens. Prior to his
graduate studies, he completed the Coro Fellowship, an experiential leadership development
program in public affairs and government. He also served as a legislative liaison for Governor
Jim Edgar of Illinois. He received his B.A. in English and Psychology from the University of
Wisconsin-Madison and M.P.A from Columbia University in Telecommunications and New
Media Policy.

2. Overview of Business Opportunity
HeyAnita Korea is the first joint venture established by HeyAnita Inc. and Softbank. Various
factors drove HeyAnita to rapidly build a presence in Korea. The following are points that will
be discussed within this section:
A. Compelling Technical Advantage

B. Opportunity for Revenue Sharing with Wireless and Telco Companies
C. Lack of Viable Competition in Our Market
D. Large Segment of Early Adopters in Technology
E. Untapped and Undeveloped Market
A. Compelling Technical Advantage
HeyAnita’s proprietary technology is based on four pending international patents. Our

competitors, such as Tellme in the U.S., license the complete speech recognition and voice
browser package from various voice solution companies, and do not have their own
proprietary solutions. HeyAnita only licenses the utterance aspect of the speech recognition
technology from Speechworks. This allows HeyAnita to be less dependent on companies for
their technical development and support. Furthermore, it lessens the royalty and licensing
fees that can drain precious cash. Companies such as Tellme could pay upwards of $20
million in licensing fees to companies such as Nuance or Speechworks.
Our strength lies in our proprietary natural language interpretation and web agent technology.
HeyAnita’s Natural Language Interpreter allows the user to interface with our server in a
natural conversant manner.
Another great differentiator is our web agent. While our competitors’ data retrieval agent is
primarily limited to data repositories or mirror images of websites, HeyAnita’s agent can
access any information on the Internet. Our web agent can retrieve information from HTML,
XML, WML, or VoiceXML sites, while the majority of our competitors can only read VoiceXML
websites on the Internet. This provides an additional advantage since we do not have to
allocate resources and personnel to code information from our content partners into a
separate HeyAnita database. Furthermore, our technology ensures that once we voice-
enable a website, a constant XML feed is established so we do not have to manually recode
the connection to reflect each and every change made by our content partners on their
websites.
Our global network creates an open system environment where every HeyAnita entity shares
technical resources and applications with each other. If HeyAnita Japan creates a music
application that is applicable to HeyAnita Spain, then HeyAnita Spain could use that
application and cater it for the Spanish market. This forms a compelling intellectual and
technical network that provides us with an incredible advantage over our competitors.
B. Opportunity for Revenue Sharing with Wireless and Telco Companies
A unique characteristic of Korea is that the environment in the telecommunications market

allows us to obtain revenue-sharing agreements with the network providers. Because
Koreans have shifted so dramatically from landlines to wireless, Korea Telecom is
experiencing a significant drop in utilization of its network capacity. In addition, because
Korea has allowed growth of 5 wireless carriers, significant overcapacity exists in the wireless
industry as well. HeyAnita Korea will create a win-win situation for our carrier partners by
driving call traffic to them. In return, HeyAnita Korea will benefit by receiving a percentage of
the call revenues generated from the additional traffic. This will be a significant source of
revenue and growth for our company.

C. Lack of Viable Competition in Our Market
Currently, there are a handful of competitors in Korea: Nettus, Voceweb, and Voiceware.com.
Each has its own strengths. However, headcount and capitalization for each one of these
entities is significantly less than HeyAnita Korea. Our technical advantages have been
confirmed by our current global partner, Softbank, and other top venture capital firms who
state we have a lead-time of 6 to 12 months.
As for speech recognition efforts that may remain latent in large chaebols, most are not
geared toward the telephone and were not intended to interface with the Internet or any other
large bodies of information. As such, even if these efforts were rekindled or accelerated, we
do not believe viable competition will emerge in the short term. With this lead-time intact,
HeyAnita should be able to develop a large and loyal user base with which to grow into future
phases of our strategy.
D. Large Segment of Early Adopters in Technology
Korea’s culture encourages the rapid adoption of consumer and societal trends. This is
supported by patterns in industries that range from fashion to the extremely fast-growing
Internet market. The fact that Internet penetration in Korea could easily surpass that of the
U.S. and that broadband penetration could also grow faster than in the U.S.3 is attractive to
HeyAnita. Goldman Sachs projects 46% of Korean Internet users could have broadband
access by 2004, which is more than the 44% expected in the U.S. In another example,
Korean’s propensity to embrace useful technology is also evidenced by the dramatic growth
in online stock trading and wireless phone penetration. In view of these patterns, we believe
that Korea is a market that is ripe for our voice applications. We believe that Korea will
accept our efforts to change people’s lives by providing a more convenient and efficient way
to do daily tasks.
E. Untapped and Undeveloped Market
Korea is an undeveloped market in numerous areas, such as e-commerce, online advertising,

and telecommunications services. We will be a leader in these areas by initiating change and
creating new markets. For example, many telecommunication services such as call
forwarding do not exist. These services present a golden opportunity for HeyAnita to
introduce. Through our technology and the help of our partners, we will introduce these types
of services to consumers and corporations. We will explore a variety of future business
opportunities as we continue to grow.
3
Goldman Sachs Global Equity Research, “Internet Korea”, May 19, 2000

3. Overview of Business Concept
This section provides a detailed view of how HeyAnita will transform the telephone into a
powerful new medium for information and interaction thereby creating value for our investors
and shareholders. Our proprietary technology will allow HeyAnita to capitalize on the
changes in telecommunications and information exchange that are currently affecting Korea.
Furthermore, the launch of our services in the year 2000 will enable HeyAnita to clearly
establish an early leadership position as the voice portal concept matures globally.
This section provides details on the following:
A. Definition of the Voice Portal Concept and Business

B. HeyAnita’s Value Proposition
C. Anticipated Services and Partners
D. Similar Services in Korea
E. Revenue Streams
F. Distribution
G. Likely Responses from Stakeholders
H. Competition and HeyAnita’s Competitive Advantage
A. Definition of the Voice Portal Concept and Business
As an early mover in the voice portal space, HeyAnita aims to create and nurture a new
medium for interactive communication, a medium that combines the power of the Internet, the
richness of broadcast and web content, and the convenience and penetration of basic
telephones. Through this new channel, compelling information will be pulled (i.e., requested)
by users as well as be pushed to them as necessary or desired. Development of this new
medium will provide users with a convenient means to access valued information and content
providers with a new channel through which they can reach their target audiences.
As this new channel is developed, HeyAnita will leverage this medium to provide valuable
services for (1) individual users who seek timely information as well as for (2) corporate
clients that desire effective deployment of their resources. With this new medium, individuals
who seek dynamic information will no longer need to be in front of a television set, radio, PC,
or newspaper. A simple phone call will allow them to access time-sensitive and convenience-
oriented information immediately, wherever and whenever they wish. Likewise, providers of
such information will find HeyAnita’s new integrated services as the single place through
which their rich content can be disseminated to a wide body of mobile and/or non-PC
accessing information seekers. Simply put, HeyAnita will create and provide a new
distribution channel for content providers such as television and radio networks, Internet
websites, and proprietary information providers (e.g., 700 ARS services).
Users of HeyAnita’s services will receive the basic services without charge from HeyAnita.
Unlike 700 ARS services currently in the market, HeyAnita’s services will be available to users
at the cost of a within-city phone call by accessing a single nationwide number. Availability of
services at no extra charge will drive widespread and rapid adoption of the voice portal
concept and HeyAnita’s services.
HeyAnita’s revenues will come from sponsors, content providers, and advertisers who desire
to leverage this voice portal medium as an additional channel to their current distribution
system. In addition, usage based revenues will be generated from the telephone network
carriers through revenue-sharing agreements that reward HeyAnita for building call traffic
through any one network.

B. HeyAnita’s Value Proposition
HeyAnita’s enabling value proposition is its voice-driven interface technology. Through our
patent pending technology, HeyAnita will allow users to access information stored throughout
the Internet and/or intranet via the simplicity of an everyday telephone. By asking questions
in everyday spoken language, users will connect to a wide array of information and
immediately hear the requested information conveyed to them by voice. With this technology
platform, HeyAnita will seek to reach end consumers and soon migrate to providing voice-
enabling services to businesses.
Value to End Users: Leveraging this revolutionary voice interface technology, HeyAnita aims
to build a variety of services designed to provide our users with time-sensitive and
convenience-oriented information whenever and wherever they want it. Delivering on this
value proposition will enable individuals to access information they want and currently already
use without being tethered to the confines of an Internet connection or specialized receivers
such as a television or WAP-enabled handset. Our services will appeal to those individuals
who are “on the go”, to those who for whatever reason can not or do not wish to connect to
the internet via the PC, and to those who find the WAP’s keypad/screen interface
cumbersome to use.
Value to Content Providers: HeyAnita will provide a means to better leverage their current
investments in content development. For example, broadcast networks can leverage
HeyAnita to reach current viewers at times when they are not or can not be near a television
set or if they are not near one at the appropriate air time. Through HeyAnita, networks can
reach their viewers, at the viewers’ discretion, with the simplicity and ubiquity of the
telephone.
Value to Advertisers: The forging of content and users in a new medium will naturally create
additional opportunities for advertising. As such, HeyAnita will provide advertisers to use the
proven concepts of sponsorship promotions and jingle ads in our newly created medium to
promote their products and services. This not only benefits advertisers but also the content
providers who can leverage relationships they currently hold with advertisers in traditional
media such as television, radio, print press, and the Internet.
Value to Business Partners: In addition, HeyAnita will quickly transform into an Application
Services Provider working to enable B2B solutions to client organizations. Voice-enabling
Internet or ARS services of leading players will provide competitive differentiation while doing
so for players who have fallen behind with a crucial platform to “leap frog” ahead of the
competition. Such voice-enabling efforts will be targeted to businesses whose user base are
large and/or demand high frequency of contact with the business organization.
Value to Telecommunication Carriers: As HeyAnita builds its user base on the merits of its
convenient and easy-to-use interface and the richness of its content, carriers such as Korea
Telecom may find significant value in us as builders of network traffic. Such traffic will be
important for carriers as serve as meaningful assistance in their ever-present fight against
poor capacity utilization.
C. Anticipated Services and Partners
To deliver this value proposition, HeyAnita is designed as a one-stop shop for those in need of
time-sensitive or convenience-oriented information while “on the go.” HeyAnita is also
designed to become the information provider of choice for those who cannot or choose not to
turn to PCs for their information needs. We, along with our content partners, will drive this
business by offering voice-enabled services that allow users to easily and quickly:
• Obtain time-sensitive information such as latest news, weather, and stock quotes
• Conduct everyday transactions such as stock trading and on-line banking

• Find often sought information such as movie reviews, airline schedules and then
transition to reservations and ticketing
• Communicate with friends, family, and colleagues through phone-based email,

chatting, polling, and bulletin board like capabilities
• Enjoy entertaining and educational programming specifically tailored for the

telephone
In order to provide compelling content through our technology, HeyAnita will partner with the
best-in-class content providers in each category of services we provide. By leveraging
content that has already been branded and thus widely recognized by the user base,
HeyAnita will be able to quickly establish itself as the voice portal of choice.
D. Similar Services in Korea
At present, no comprehensive voice portal service exists in Korea. However, telephone

interface to information does operate in two basic forms: (1) 700 ARS services which deliver
limited information for a fee and (2) character based WAP services for fee. Although each
service type has developed a user base, even regular users profess significant drawbacks
with the services.
700 ARS services: Although official accounts are not recorded, interviews with industry
operators indicate that Korea currently has more than 4 million users of 700 ARS services
seeking a wide variety of information ranging from the daily horoscope to traffic information to
weather (note: these figures do not include users of pornographic services).4 These services
offer pre-recorded information that can be retrieved through a multi-layer telephone keypad
interface. In total, these users generate some 500 million won in revenues per year by paying
fees ranging from 50 won per 30 seconds up to more than 100 won per 30 seconds. These
fees are in addition to the telephone connection fees charged by the network carriers.
However, market research reveals that nearly 40% of users are not satisfied with the current
services offered. In fact, less than 20% of users find the services satisfactory. The primary
reasons for these negative responses are that the services are expensive (55%), require too
much time to retrieve (34%), and complicated to use (14%).5
HeyAnita resolves all three main complaints. Our services do not charge any extra fees
beyond the normal toll required for connection. Second, with HeyAnita’s proprietary server
technology, response to information requests requires less than 1 second. Finally, with
HeyAnita’s easy-to-use natural language interface, users will be able to access information by
simply asking for it.
WAP services: Our market research indicates that only about 1% of respondents currently
view WAP services (such as SK Telecom’s n-top or LG Telecom’s EZ Web) as good sources
of information. Focus group interviews show that the major reasons for negative views of
WAP services range from the lack of content to the cumbersome keypad interface to the lack
of ease in viewing retrieved information on a handset’s tiny LCD screen.
HeyAnita will be able to secure and provide a wide variety of content not only because of the
merits of the new voice portal medium but also because content providers will not re required
to reformat their existing content. Without the additional labor required to transfer traditional
4
Base on interviews with managers of multiple currently operating 700 ARS services. The information
was crosschecked through discussions with managers at Korea Telecom who confirmed the magnitude
of these numbers.
5
Quantitative research with individual respondents recorded unprompted responses to the question
“What makes you view these services as unsatisfactory?”

HTML format to WML, content partners can leverage the HeyAnita platform immediately. This
ability to quickly ensure a robust selection of content along with HeyAnita’s easy-to-use voice
interface should set our services apart from WAP-based services.
E. Revenue Streams
HeyAnita’s revenues will come from the following sources:
Revenue sharing with telcos: During the first few years of operation, this stream comprises
more than 50% of HeyAnita’s total revenues. While we will not charge usage fees to end
users, HeyAnita will directly gain revenues from the user traffic we generate. This is
accomplished through revenue-sharing agreements with major telcos; with these agreements,
HeyAnita will command a significant percentage of connection fees earned by carriers from
the network traffic produced by HeyAnita’s services.
Sponsorship and advertising fees: HeyAnita will find exclusive sponsors for each of its
major and minor service nodes. These sponsors will pay for priority listing on the HeyAnita
property. In addition, HeyAnita will compile demographic information of our users (based on
information sought by the user and/or on information provided when the user registers for a
free account). This information will be used to sell advertising on each of our service nodes.
(Note: to reflect the current market sentiments about advertising revenues, our business model shows zero
inflow during 2000 and 2001 from this source.)
Commissions on v-commerce transactions: As HeyAnita begins to enable telephone-

based commerce transactions, we will charge a commission for each transaction made
through our service. While early transactions are likely to remain small (e.g., movie tickets,
restaurant reservations), we predict quick movement into larger purchase amounts (such as
airplane tickets and stock trading) as users become accustomed to the interface and gain
confidence in the security of the new medium.
Fees for provision of solutions: As voice-enabled access to information becomes accepted

in the public and proven in view of business operators, HeyAnita will shift into developing
solutions for corporate clients. As such, we will collect fees for voice-enabling websites as
well as proprietary applications such as call centers. In addition to consulting services fees,
for those clients who wish to take advantage of our hosting services, HeyAnita will charge a
volume-based hosting fee for providing solutions via our own hardware. This revenue stream
will steadily increase to become a significant source of revenue.
F. Distribution
HeyAnita’s strategy is to quickly secure wide adoption of our technology and services. As
such, our plans for distribution are comprised of several key components.
Co-market with content partners: By leveraging the marketing power of our key content
partners (e.g., broadcast networks, news organizations, and leading Internet websites),
HeyAnita will quickly reach a wide range of users. Furthermore, co-branding with these
familiar content providers will ensure build-up of much needed validation of the information
made available through HeyAnita’s services.
Product placements with media/entertainment partners: HeyAnita will work with its
domestic and international media/entertainment partners to include its services in current
popular television and radio programming as well as upcoming movie productions. Because
a major portion of HeyAnita’s initial target population is young (teens and twenties), such
placements will help drive mass acceptance of the new voice portal medium as well as to
brand HeyAnita the service provider of choice.
Traditional and non-traditional marketing: HeyAnita will pursue a variety of low-cost, high-
impact marketing efforts to build our user base. Efforts such as workplace marketing (to

reach the massive employee base of our strategic partners) and community group/affiliation
marketing (e.g., churches) are among some of these opportunities. In addition, HeyAnita has
secured the services of a professional advertising and promotion agency to assist in
developing acceptance of the voice portal concept in general as well as to help brand us as
the provider of choice.
In-kind trades of advertising with other Internet businesses: HeyAnita will seek and
secure advertising deals with Internet businesses that serve our target audiences. By
carefully selecting leaders in Korea’s quickly growing Internet industry, these agreements will
generate traffic to our voice portal.
G. Likely Responses from Stakeholders
End Users: Focus groups and quantitative market surveys conducted with more than a
nation-wide sample of respondents (n=1000) strongly suggest that HeyAnita will be well
received by end users. Nearly 70% of respondents indicated that they would use the services
of HeyAnita.6 When probed to explain the basis for their intent to use, the following
information surfaced:
• 63% of respondents viewed HeyAnita’s services as a very quick and simple means to
access information
• 68% of respondents cite the fact that they will need to remember only one telephone
number as an attractive feature of HeyAnita’s services
• 66% of respondents viewed HeyAnita’s plan to not charge additional fees for its
services as a strong benefit
• 56% of respondents indicate that they would be willing to pay more than 5,000 won
per month for these types of services. (31% would pay more than 10,000 won per
month and 12% would pay more than 15,000 won per month)
Content Providers: Based on our contact experiences thus far, we believe that most content
providers will be very positive about HeyAnita. All established businesses, including
television networks and newspapers, view HeyAnita as a new distribution medium of
enormous potential. All established Internet businesses contacted to date have generated
positive responses with desire to establish long-term contracts.
Telcos: HeyAnita has already secured a strategic relationship with Korea Telecom to share
usage revenues resulting from call traffic generated by HeyAnita. As a carrier with large
amounts of excess capacity, HeyAnita represents a significant opportunity to improve capacity
utilization.
In addition, discussions are underway to strike similar deals with several of the wireless
carriers in Korea. Due to the various competitive situations of each carrier, immediate
relationships with certain organizations make sense while others do not.
H. Competition and HeyAnita’s Competitive Advantage
HeyAnita will face competition from a number of sources, with each reacting to our launch in
different ways. We view immediate competition to come from:
6
Our market research measured intent to use via a 5-point scale (standard market research approach).
The percentage of respondents indicating 4 or 5 is interpreted as being interested in using the service
(also standard market research technique).

• Other voice portal entrants
• Internet portals extending into this space
• WAP service providers
Other voice portal entrants: Over recent months, several newly created organizations have
announced their intent to enter into the voice portal space. Most of these entities are smaller
in size (teams ranging from 2 to 7 members) and poorly capitalized (investment base ranging
from 10 million to 100 million won).
On the technology front, while some of these ventures possess some proprietary technology,
most are based on TTS (text-to-speech) programs. As such, their appeal to end users are
likely to be severely limited since most people indicate “machine-like” voice as a major cause
for dissatisfaction with this new type of service. HeyAnita’s natural language capabilities
surpass most if not all competitors we have researched.
Furthermore, HeyAnita’s drag-and-drop development tools enable our organization to quickly

scale our services for new users and new services. These advantages will be compelling
controllers of development costs and time-to-market when HeyAnita migrates to providing
B2B solutions to its ASP clients.
Internet portals extending into this space: Similar to our assessment of other voice portal
entrants, we view Internet portals such as Daum as a longer-term issue. The leading Internet
portals have partnered with voice-enabling partners who are smaller and much further behind
in technology development than HeyAnita. Although the entry of Internet portals into this
space may grow into a significant threat in 2 years, their voice-enabling partners must make
much progress before they can launch viable services that can compete directly with
HeyAnita. Until then, HeyAnita plans to push aggressively to build its own user base.
Furthermore, with our global strategic alliance agreement with Softbank, HeyAnita is confident
that long-term strategic directions between the Internet powerhouse and us will be
complementary.
WAP service providers: At present, adoption of WAP services has been slow, in part due to
the low adoption of expensive WAP-capable handsets, lack of diverse content, as well as the
cumbersome keyboard interface. However, all wireless carriers are pushing aggressively to
develop these services. Based on consumer research, individual users are likely to side with
voice-driven technology rather than with WAP. The same holds true for content providers who
must drastically alter their HTML-based content into special WML format in order to work with
WAP services.
HeyAnita will continue to monitor the pace of adoption of WAP services and, if warranted,
seek near-term ways to collaborate/cooperate with providers. Until then, HeyAnita will pursue
building its user base of wireless and wireline users with our value propositions of “simple to
use” and “no special handsets required.”

4. Organization Structure
HeyAnita Korea is a joint venture formed by Softbank, HeyAnita Inc., and local partners in
Korea. In each international joint venture HeyAnita creates, Softbank will invest along with
local investors from each country. Almost every joint venture will be autonomous in its
application development, operations, and its corporate development.
HeyAnita Korea is divided into three primary areas: technology, business development &
marketing, and operations.
BUSINESS
DEVELOPMEN
TECHNOLOGY T& OPERATIONS
MARKETING
• R&D • Alliances • Financial

• Creative & Audio • Marketing • Legal
• Speech Recognition • Ad Sales • Human Resources
• Maintenance & Support
Team Members
The successful execution of HeyAnita Korea does not solely rest upon our technical
advantages or the executive management team, but on the quality of our overall team. We
believe we have assembled an outstanding team with relevant experience from top firms
within Korea and worldwide. Here are only a few of our 53 current team members:
Sharon J. Kim, Controller

Sharon joins HeyAnita Korea from Arthur Andersen’s Privatization and Emerging Markets
Group based in London and Washington D.C. For the past two years, Sharon has focused
her efforts in the banking sector of transitional economies affected by the Asian banking crisis.
Primarily, she has advised several emergency government vehicles on problem bank and
credit restructurings. Her list of clients includes the Indonesian Bank Restructuring Authority,
the Financial Sector Restructuring Authority and the Financial Supervisory Commission and
Service in Indonesia, Thailand, and Korea, respectively. Previous to her international
position, Sharon worked on financial turnarounds and strategic insolvency filings in the United
States in the healthcare and retail industries. She received her B.S. in Accountancy from the
University of Illinois at Urbana-Champaign. She was invited to join the AICPA in November
1996.
Hyuek Joon Lee, Business Development Manager

Prior to joining HeyAnita Korea, Joon was a manager in the Management Innovation Team at
LG Chemicals Ltd., Korea. While at LG Chemical, Joon was involved in a number of strategy
and new product development projects as well as supporting the overall innovation initiatives.
He has recently worked on a project to formulate a strategy for the battery business, where he
conducted a study to identify the key drivers and future trends in the notebook PC market,
and devised mid- to long-term R&D and product plans. He also was involved in developing a
new product introduction process for a business unit, which recorded $7.5 million in the first
two months of sales, and increased ROS by more than 3-fold. Additionally, Joon has
conducted a number of lectures on new product development at LG Chemical. After receiving
his B.S. in Chemistry from Seoul National University, he earned his M.S.E. and Ph.D. in
Chemical Engineering from the University of Michigan at Ann Arbor.

Leonard J. Moon, Business Development Manager
Prior to joining HeyAnita Korea, Leonard was a strategy consultant with Arthur D. Little, Inc. in
Chicago. While at ADL, Leonard worked with clients to develop electronic business,
information technological, and operational strategies. Some of his experience with ADL
included advising a client on the development strategy of a logistics datawarehouse that
supported the organization’s national air operations, working with a major commercial airline
to develop new flight dispatch processes for the U.S. Airforce, and assessing the possible
Internet revenue streams for an Asian telecommunications company. Leonard also co-
developed some of ADL’s electronic business product/service offerings and methodologies as
part of the firm’s spearhead initiative to strengthen its consulting e-business presence in the
marketplace. He received his B.S. in Business Administration and Management Information
Systems from the University of Illinois at Urbana-Champaign.
Joanne Jeong, Marketing Manager

Prior to joining HeyAnita Korea, Joanne was an account director at Lee & DDB, Inc., which is
part of the third largest communications group in the world. She was involved in the
managing and launching of several products and brands in Korea. Her clients included
Johnson & Johnson, Moulinex, Remy Martin, and Unilever. Joanne successfully led
launching campaigns for OXO, Ciba Vision, and Johnson pH5.5. At DDB, her initial entry as a
marketing planner served as a foundation for her research and analytic skills. During that
time, her clients included Reebok, Pepsi Cola, Fuji Film, and Korean Air. She holds a B.A. in
Economics from Ewha Womans University and a M.A. in Advertising from The University of
Texas at Austin.
Ji-Young Lee, Technology Product Manager

Ji-Young was a consultant at Andersen Consulting in Seoul before joining HeyAnita Korea.
For several years, Ji-Young was in the Process Competency Group with various experiences
in Business Process Reengineering (BPR), Knowledge Management, SAP Implementation,
and Hyperion Implementation. For a major semiconductor company, she was involved in a
Supply Chain BPR project that produced a plan for the client’s customer-fronting processes.
As a team member for a SAP implementation project, she was involved in conducting
functional feasibility analysis and prototyping, focused on billing and pricing. Prior to
Andersen, she served a short stint at Daum Communications. She holds a B.S. in Computer
Science form Yonsei University.
Brian Hyun Suhp Shin, Technology Product Manager

Prior to joining HeyAnita Korea, Brian was a research and field engineer at Locus
Corporation’s R&D Center. During his time at Locus, he focused on designing and
implementing systems for large telecommunication service providers. For SK Telecom, he
developed a signaling and scenario-processing engine of an IPU (Intelligent Peripheral Unit)
for an advanced paging system. After the project, he was part of the maintenance team and
supported SK Telecom as a trouble-shooter. Brian designed and developed an IVR
(Interactive Voice Response) server for Korea Telecom. This was for various scenarios such
as collect call service and signaling for a local PBX. Additionally for Korea Telecom, he
participated in the design and development of a next generation information service (114)
system, specially devising an algorithm for parsing voice prompts. Brian received his B.S. in
Computer Science and Statistics from Seoul National University.
Dan D. Son, Technology Product Manager

Dan joins us from US Web/CKS, a leading Internet professional services firm, where he was a
Senior Application Developer in its San Francisco office. As a team and technical leader, his
responsibilities included system planning, technical design, and application development. He
led development teams on projects that brought in over $10 million to the firm. Some of his
major projects included Talkcity.com, Christianity.com, Style365.com and Sega.com. Before
joining US Web/CKS, Dan was a researcher with the xDSL Group, an independent think tank
run by the Research Program for Communications Policy of Massachusetts Institute of
Technology. At the xDSL Group, Dan led such studies as one that determined the feasibility
and profitability of different xDSL deployment scenarios. Dan holds a B.A from
Massachusetts Institute of Technology in Management Science.

5. Managing Growth
HeyAnita has the potential to create and benefit from explosive growth. We will leverage a
pre-planned, 3-tier growth model to ensure sustainable growth. The overall plan includes:
Phase 1: During October of 2000, HeyAnita will launch with a limited set of services that carry
wide appeal to individual users from throughout Korea. With these initial services and
additional service lines that we plan to launch on a monthly basis, we anticipate a user base
of 300,000 growing rapidly to more than a million.
Phase 2: This focus on consumer services will serve to brand the voice portal concept as
well as the voice-recognition technology. However, once this initial branding is underway, we
will quickly move to voice-enable business partners. With consumers educated to use and
accept this new method of interaction, HeyAnita will assist business entities to identify
opportunities to fully leverage this new technology. Some potential areas on Phase 2
opportunities are voice-enabling large Internet and/or intranet websites and call centers.
Timing for our move into phase 2 is within 6 months of service launch. By year 2 of
operations, ASP will be a significant stream of revenues.
Phase 3: Providing English services in Korea as well to provide Korean services in other
countries will be a phase 3 objective. By leveraging HeyAnita’s global network of services,
the Korean operations will be able to quickly serve the English-speaking communities in
Korea as well as the Korean speaking communities outside of Korea. These satellite
populations offer significant opportunities for revenues and global branding. Provision of this
aspect of our services will likely begin within 6 to 9 months of launch.
In the longer term, HeyAnita aspires to work with leading R&D facilities to provide voice-
recognition technology for applications for things such as appliances, buildings, and
automobiles.

6. Financials
As described in the section on HeyAnita’s business concept, we have already shown that our
business model consists of four separate revenue streams. The largest revenue source
comes for usage revenues to be shared with the telco operators whereby HeyAnita earns
revenues for generating caller traffic for the carriers. Additional revenues such as
sponsorship and advertising are integrally linked to the number of users HeyAnita can secure.
The remaining revenue stream of ASP services represent a second platform from which
HeyAnita can launch continued growth.
Our business model shows strong operating results and market valuations. To discuss
HeyAnita Korea’s financial prospects, this section covers the following:
A. Operating results
B. Required capital
C. Market valuation (multiple methods)
A. Operating Results
The management team at HeyAnita Korea has taken a very conservative approach to
estimating our financial performance. We have erred on the side of overestimating costs and
underestimating revenues.
An overview of HeyAnita Korea’s anticipated performance is presented below:
Summary of Projections (million won)
Million Won 2000 2001 2002 2003 2004

Total users (EOY basis) 100 1,023,108 2,327,062 3,053,334 3,536,860
Revenues 1 5,972 35,788 63,745 89,906
Operating Expenses 2,771 12,012 25,742 36,519 44,899
Depreciation 329 1,601 2,198 3,016 3,385
EBIT (3,099) (7,641) 7,848 24,210 41,622
EBIT Margin - - 22% 38% 46%
Net Income (3,099) (7,641) 7,848 18,429 30,035
Free Cash Flows (12,767) (7,064) 7,998 19,421 32,396
Projected Revenues
Summary of Projected Revenues (million won)
Million Won 2000 2001 2002 2003 2004

Usage Revenue Sharing 1 3,096 19,740 32,211 39,096
Ad Revenue - 0 3,648 7,576 11,494
Sponsorship Revenue - 0 4,740 10,080 13,440
V-Commerce Revenue sharing - 9 798 5,061 14,675
Corporate Client Revenues - 2,867 6,863 8,817 11,202
Total Revenues 1 5,972 35,788 63,745 89,906
Usage Revenue

• Users: We assumed that our user base would build quickly through 2001 and
eventually reach 2% of the total Korean population at 14 operating months. We
believe 2% of the total Korean population is a conservative estimate given that
Japan’s NTT Docomo’s i-mode mobile Internet function’s surpassed a 6 million user
base within 14 months from their product launch. Additionally, in Korea, short
messaging service providers forecast a market size of 10 million users in 2002 from
their product launch. More significantly, Korea already boasts a user base of 5 million
who regularly pay a premium fee to use 700 ARS services. Therefore, we believe
that a user base of 3.5 million users in year 5 is a conservative estimate considering
the breadth of services we provide in comparison to short messaging and 700 ARS.
• Average Call Length: We assume that average call length at a conservative

estimate of 2 minutes progressing to 4 minutes then stabilizing at 5 minutes from
January 2002. Increases will result from value added services that will be launched
over time as well as user familiarity with HeyAnita.
• Average Calls per User: Each user is estimated to call the service once per
workday (i.e., about 20 calls per month decreasing to 15 by July 2003).
• Usage Revenue Sharing %: Our signed agreement with Korea Telecom entitles
HeyAnita Korea to a significant percentage of airtime revenues generated by
HeyAnita callers for both inbound and outbound calls. Specifics of our agreement
can be disclosed by HeyAnita Korea to potential investors when appropriate.
Ad Revenue (this stream comes on-line beginning January 2002)
• Ad Frequency per Minute: The number of ads per minute was conservatively
estimated at 1 per minute. Considering that the maximum length per jingle ad is 4
seconds, we believe that users will not be deterred from using our service when less
than 7% of their time on HeyAnita is spent listening to jingle ads.
• Usage Minutes: This is a calculation based on Users, Average Call Length, and
Average Calls per User per month.
• Impression Capacity (1000): An impression is an individual user being exposed to

one ad. Total impressions are calculated by multiplying the Ad Frequency per Minute
times the Usage Minutes. Impression Capacity is the resulting calculation from
dividing total impressions into units of 1000 to correspond to the way impressions are
priced.
• CPM (Cost per 1000 Impressions): An unconfirmed benchmark that we used for
CPM is Yahoo! in the United States. The CPM for a mid-sized banner is US$50. In
the beginning stages, we plan to give advertisers free advertising for the first 4
operational months. Once we establish a strong user base, we plan to start charging
our advertisers. Charging only 7,000 KRW (approx. US$6.25) for monthly CPM is a
conservative estimate. We have shown two different CPM for smart advertising and
blind advertising. An example of smart advertising would be beef jerky and beer ads
on our sports node. An example of dumb advertising is selling diapers on our sports
node or making diaper ads a general ad that is heard throughout our portal.
• Ad revenue is capped at the amount companies are willing to pay and the
number of companies that are willing to advertise. We assumed that we would
be able to sign up 30 advertisers initially and charge an initial advertising price of
5,000,000 KRW to each advertiser. We were conservative on the initial advertising
price because Korean advertisers are reluctant to pay so much to try a new, unproven
advertising method. Additionally, we need to consider how many advertisers can
convey their brand or their message in less than 5 seconds. Therefore, this is the
amount that ad revenue is capped at.

Sponsorship Revenue (this stream comes on-line beginning January 2002)
• Nodes: This is the number of nodes/services that HeyAnita Korea will be offering.
• Node price: This is the average price that we think we can charge per node. We
believe that our node sponsorship will vary greatly depending on user traffic and the
demographic profile of the node users. Once we determine the timing of when
specific nodes will be rolled out and the demand for such specific nodes, we will be
better able to price the individual nodes.
• Special node: This is the top node that all users will hear as an introduction to
HeyAnita when they call.
• Special node price: We believe that we will be able to charge a premium for this
special node because every time a user calls in, they will be exposed to this special
node.
V-Commerce Revenue
• V-Commerce Call (%): We need to get a figure here. We are in process of firming
up this number by comparing click-throughs from Internet portals into e-commerce
sites. As an initial base, we begin with 0.025% initially slowly ramping up to 1%
toward the end of 2004.
• V-Commerce Calls: This is the product of V-Commerce Call % and the total number
of calls per month.
• Average Transaction Value: This is the average value of the transactions that we
expect to be completed on the HeyAnita system. We believe that the average
transaction value can be higher because we plan to enable higher priced ticket items
related to travel reservations and stock trades. The current calculations are based on
an average transaction value of 30,000 won until July 2002 increasing to 50,000 won
thereafter.
• V-Commerce Revenue Sharing (%): This is the % of each transaction we are in the
process of negotiating as commission from vendors that will sell their goods and
services through HeyAnita.
• Share Revenue per Call (KRW): This is the product of Average Transaction Value
and V-Commerce Revenue Sharing (%).
V-ASP (Application Service Provider)
• This revenue stream is a product of service fees and the number of clients we
acquire. We are still in the process of tuning the projections of this revenue stream.
As with other current ASPs, we believe that we can charge an installation fee and a
monthly service fee. At present, we estimate an initial service fee of 100 million won
and an average hosting fee of 3.7 million won per month per client with a client base
beginning from 1 ramping up to 42 aggregate clients by 2004. As the potential for this
market gains recognition, a wider pool of corporate clients will emerge.

Projected Expenses
Summary of Projected Expenses (million won)
Million Won 2000 2001 2002 2003 2004

Leasing Payments - 2,598 12,463 21,214 28,400
Data Center 57 751 3,140 5,054 6,135
Personnel 1,301 3,412 3,686 3,797 3,911
G&A 334 248 233 233 233
Marketing 1,078 5,004 6,220 6,220 6,220
Total Expenses 2,771 12,012 25,742 36,519 44,899
Leasing Payments
• In conjunction with Compaq, HeyAnita Korea will lease a large portion of its hardware
needs. As such, capital equipment will be covered through lease expenses rather
than cash-based capital outlays.
Marketing
• As mentioned in the earlier description of our distribution strategy (please see section
on “Overview of Business Concept”), HeyAnita Korea will seek to brand both the VIP
concept in Korea as well as to brand our unique services.
• Also included in the marketing component of our expenses is a flexible budget that
will allow us to leverage a variety of marketing resources including effective television
advertising. A large portion of our marketing expenditure will be used for promotional
efforts such as contests.
Personnel
• Our personnel costs are projected on two assumptions:

o Labor costs for technical staff in Korea are 15-20% lower than in the U.S.
o However, in order to secure valuable talent, HeyAnita must offer attractive
packages that include a competitive salary.
• Based on these assumptions, we estimate that HeyAnita Korea will incur the above-
listed personnel costs in order to build the desired team.
General & Administrative
• G&A covers a variety of expense categories including: insurance for fire, casualty,
and loss; utilities; professional services fees for legal and accounting assistance; as
well as fees for building security services.
Infrastructure
• This component covers expenses for the IT infrastructure required for our staff and
offices, including E1 lines and digital telephone lines.

Cash flows
We project that HeyAnita will achieve cash break-even by January 2002. Cash drains during
the first year are primarily due to investments in hardware required to service a growing user
base, marketing, and personnel.
Cash Flow Projections (million won)
Million Won 2000 2001 2002 2003 2004

Net Income (3,099) (7,641) 7,848 18,429 30,035
Add: Depreciation 329 1,601 2,198 3,016 3,385
Less: CapEx 9,997 1,024 2,048 2,024 1,024
Free Cash Flow (12,767) (7,064) 7,998 19,421 32,396

7. Required Capital
HeyAnita Korea requires about 20 billion won in additional capital to support operations
through year end 2001 at which time cash flow from operations is projected to sustain the
entity. As a means to place this capital requirement in context of the value of our business,
we include 2 estimates of HeyAnita Korea’s long-term value using 2 different approaches:
• Discounted Cash Flows (DCF)
Although DCF may not be appropriate for valuing “New Economy” startups, for
comparison purposes, we have calculated a DCF valuation based on the
assumptions used to forecast our cashflows. Furthermore, we assumed a relative
high discount rate of 25% in order to account for the increased risk associated with
this venture. Based on a 10-year projection of free cash flows7, we estimate a value
of 108 billion won.
• Revenue Multiple for Internet Companies
Based on our revenue projections and a valuation approach of 5X to 10X sales

multiple, HeyAnita Korea should provide highly attractive returns for our investors.
Using sales multiples, the value for HeyAnita Korea at year-end 2002 is projected to
be 180 billion won at 5X and 360 billion won at 10X. This value could grow to 450 to
900 billion won by the end of 2004.
7
We based our DCF analysis on 5 years of explicit forecast (shown in the Cash Flow table above)
PLUS 5 additional years projected via revenue increases of 8% per annum to reflect a 6% inflation rate
and a 2% growth rate. All costs increased in proportion to revenues.

A. Board of Advisors
JoAnn Patrick-Ezzell
Chairman & CEO of iAsiaworks
JoAnn Patrick-Ezzell is chairman and chief executive officer of iAsiaWorks, a privately owned,
venture-backed Internet company focused on Asia/Pacific. iAsiaWorks, which is
headquartered in the Silicon Valley, launched commercial service in 1997, as AUNET, to
deliver innovative Internet services and solutions to companies doing business throughout the
region, dot.coms and multinational corporations.
JoAnn was recruited by AUNET in August 1999 to broaden the scope and reach of its
Internet-centric offerings and make AUNET a leading Pan-Asian Internet solutions company.
JoAnn has 24 years of experience in telecommunications, broad management expertise, and
a track record of growing global businesses and championing innovation. Before being
recruited by AUNET, she was president and CEO, AT&T Asia/Pacific, responsible for AT&T's
multi-billion dollar business throughout the region. Before that, she was president of AT&T
Online Services, Asia/Pacific. In Asia/Pacific, she drove the development of AT&T's regional
Internet business, including groundbreaking Internet telephony, electronic commerce and
global clearinghouse services. She also served as chairman of AT&T Jens, a joint venture
between AT&T and 25 Japanese corporations. In the early 1990s, she led the acquisition and
establishment of AT&T's global messaging service.
JoAnn graduated from Bucknell University in 1975 with a B.A. in Economics. A Sloan Fellow,
she received her M.B.A. from Stanford University Graduate School of Business in 1988 and
serves on the Graduate School of Business Advisory Council. She has been a frequent
presenter at conferences and industry events, including Internet World, the Asia Pacific
Economic Council (APEC) and the Pacific Basin Economic Council (PBEC).
Eliot Kang
CEO & Founder of Kang & Lee Advertising
Eliot Kang, CEO and founder of Kang & Lee Advertising, is considered one of the leading
authorities and innovators in the Asian American market. Kang & Lee Advertising was
established in 1985 and has grown to be the largest full-service marketing communications
company linking corporate America to the Asian-American marketplace, as well as the
Russian and Polish community. With 1999 capitalized billing of $80 million, Kang & Lee
Advertising is a member of the Young & Rubicam, Inc. family of companies. Kang & Lee
Advertising provides unique solutions for its blue chip clients including, among others, AT&T,
Bank of America, Prudential, Sears, Roebuck & Co, Seagram Americas, Shiseido Cosmetics,
The New York Times, The United States Postal Service, U.S. Census 2000, and others.
In the past 15 years, as one of the pioneers in multicultural marketing, Eliot was the recipient
of numerous awards, including, Asian Business League’s Entrepreneur of the Year for his
achievements and contribution to the Asian American business community, Crain's New
York's "40 Under 40”, Asian Businessman's Award by the Mayor of New York City. He was
also selected as one of the most influential Asian-Americans of the decade by A-magazine.
He holds a B.A. in Social Psychology from Cornell University.
Gyeun K.B. Kim

President & CEO of Mondex Korea
K.B. Kim is President & CEO of Mondex Korea, a subsidiary of MasterCard International and
a leading electronic cash smart card system. He previously was President & CEO of
MasterCard International Korea, Ltd. where he is responsible for the growth and development
of its branded products in Korea, Philippines and Pakistan. While at MasterCard, he has
increased the volume from 2 million cardholders and $2 billion to 32 million cardholders and
$30 billion in five years in Korea, making Korea the largest assessed volume market in Asia
for MasterCard. In the Philippines, MasterCard was a distant second to Visa and gained a
lead position, with 400,000 cardholders and $350 million in volume in 1996, within 18 months
under his leadership. In Pakistan, he launched the first international credit card. Being an
innovator, K.B. initiated and implemented an online debit program for Korea, and manages

Mondex Asia Ltd.; a Singapore based electronic cash licensor that is developing and
implementing a payment solution for real and virtual markets.
Prior to MasterCard, K.B. was Senior Executive Managing Director of Dongbu Group, a major
industrial conglomerate in Korea. His responsibilities included the formulation and execution
of business strategies for the finance subsidiaries of the Dongbu Group including life
insurance, securities, mutual savings bank and venture capital. He began at Dongbu as
President & CEO of Dongbu America Inc. Prior to Dongbu, he was Executive Director of
Amex Asia Ltd. H.K., a merchant bank subsidiary of Shearson Lehman and American Express
Bank. Prior to Amex Asia, he was a Vice President at Bankers Trust. He holds a B.A. from
Seoul National University, a M.B.A. from New York University, and a Ph.D. in Business
Administration from Inha University.
Si-Bok Kim
Professor, Graduate School of Pan-Pacific International at KyungHee University
Si-Bok Kim is currently a professor at the Graduate School of Pan-Pacific International
Studies at KyungHee University. Prior to KyungHee University, he was the 2nd Special
Assistant to the Director at the Agency of National Security Planning where he was
responsible for domestic media policy and international public relations. In addition to his
experience at the Agency of National Security Planning, he served in numerous key positions
in government throughout his career. He was Vice Minister at the Ministry of Patriots &
Veterans Affairs, Secretary to the President for Political Affairs, Senior Public Officer at the
Ministry of Public Information in Japan, and was the Spokesman at the Ministry of Education.
Si-Bok began his career at the HanKook Ilbo, one of Korea’s top daily newspapers, where he
worked for 15 years as a reporter. Si-Bok received his B.S. from Korea University’s College
of Law, M.A from Seoul National University in Journalism, and completed post-graduate
studies at the College of Newspaper at Keio University in Japan.
Keum-Chan Whang
Dean, Graduate School of Engineering at Yonsei University
Keum-Chan Whang is Dean of The Graduate School of Engineering and a Professor of
Electrical and Computer Engineering at Yonsei University. He has had an illustrious and
active career in academia, telecommunications, and technology. Prior to becoming Dean,
Keum-Chan served as R&D Director of Yonsei’s Radio Communication Research Center. He
also served as the Vice-Chair of the Acoustic Society of Korea. Beyond his duties as Dean,
he is currently the Managing Director of the Qualcomm-Yonsei Research Lab. For the
government, he has numerous responsibilities such as being a member of the Radio Wave
Application Committee, a member of the Korea Information & Communication Standardization
Committee, an advisor for the Ministry of Information and Communication’s technology fund,
and a director of ABEEK (Accreditation Board for Engineering of Korea). Keum-Chan is
President of the Korean Institute of Communication Sciences, an organization committed to
the progress and development of wireless and network technology and communication
theory. He received a B.S. from Yonsei University in Electrical Engineering and his M.S. and
Ph.D. in Electrical Engineering from the Polytechnic Institute of New York.

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HeyAnita Korea Business Plan 2000

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Business Plan for

HeyAnita Korea, Inc.

Teaching old phones new tricks…

Confidential 1 Do Not Copy or Distribute

HeyAnita Korea, Inc...........................................................................................1

Confidential 2 Do Not Copy or Distribute

Our Market Opportunity

• One of the fastest growing Internet markets in the world

Confidential 3 Do Not Copy or Distribute

• Compelling technical advantage

• Deep venture experience of global investors

• Experienced team of technologists and managers

• Lack of viable competition in our market

Confidential 4 Do Not Copy or Distribute

Telephone Interface Utterance Recognition

Call Forwarding CP Interface Internet

Our Value Proposition

• Increases call volume for our wireless and telco partners

• Increases brand awareness and distribution for content producers

Confidential 5 Do Not Copy or Distribute

• Presents cost-effective solutions for corporations

• Expands global presence for our partners

• Empowers people to easily and effectively access the Internet

Confidential 6 Do Not Copy or Distribute

Our Business Model

• Revenue sharing with telecommunications companies

Summary of Projections (million won)

Million Won 2000 2001 2002 2003 2004

 May 2000 Signed strategic alliance with Korea Telecom.

 Dec 2000 Full launch of services planned for December 5, 2000

Confidential 7 Do Not Copy or Distribute

Peter T. Chang, Chief Technology Officer

Jae Choi, Executive Vice President, Corporate Alliances

James Kim, Executive Vice President, Operations

Confidential 8 Do Not Copy or Distribute

Sue-Lynn Koo, General Counsel, Executive Vice President

Bernard B. Moon, Executive Vice President, Product Development & Marketing

Confidential 9 Do Not Copy or Distribute

A. Compelling Technical Advantage

A. Compelling Technical Advantage

HeyAnita’s proprietary technology is based on four pending international patents. Our

B. Opportunity for Revenue Sharing with Wireless and Telco Companies

A unique characteristic of Korea is that the environment in the telecommunications market

Confidential 10 Do Not Copy or Distribute

D. Large Segment of Early Adopters in Technology

E. Untapped and Undeveloped Market

Korea is an undeveloped market in numerous areas, such as e-commerce, online advertising,

Confidential 11 Do Not Copy or Distribute

This section provides details on the following:

A. Definition of the Voice Portal Concept and Business

A. Definition of the Voice Portal Concept and Business

Confidential 12 Do Not Copy or Distribute

C. Anticipated Services and Partners

• Conduct everyday transactions such as stock trading and on-line banking

Confidential 13 Do Not Copy or Distribute

• Communicate with friends, family, and colleagues through phone-based email,

• Enjoy entertaining and educational programming specifically tailored for the

D. Similar Services in Korea

At present, no comprehensive voice portal service exists in Korea. However, telephone

Confidential 14 Do Not Copy or Distribute

HeyAnita’s revenues will come from the following sources:

Commissions on v-commerce transactions: As HeyAnita begins to enable telephone-

Fees for provision of solutions: As voice-enabled access to information becomes accepted

Confidential 15 Do Not Copy or Distribute