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Overview of Business, Technology, and Value 

December 2000

This report is solely for the use of discussion only.  No part of it may be circulated, quoted, or reproduced for distribution outside the client 
organization without prior written approval from HeyAnita Korea. This material was used by HeyAnita during an oral presentation; it is not 
a complete record of the discussion.
CONTENTS

1. Overview of HeyAnita: vision, goal, approach, and value


2. Details of HeyAnita: structure, technology, business model, and advantages
3. Progress to date
4. Projected revenues

5. Appendix

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1. Overview of HeyAnita

HeyAnita is a global startup built on the belief that voice is the most natural method of interfacing 
with the vast amounts of information available today.

HEYANITA’S VISION

Available Information Current Method of Access HeyAnita’s Vision…

WAP-enabled
Internet wireless handsets
…to provide
users with easy,
PC real-time access
to valuable
information by
leveraging ANY
telephone
Intranet

Specialized
Hand-held
terminals

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HeyAnita is striving to leverage the potential of this concept in order to generate a successful and 
sustainable business.

HEYANITA’S GOAL, APPROACH, AND VALUE

Goal Approach Value (main drivers)*

Phase 1: Direct User


Create a solid voice portal in Revenues
order to build end-user and
corporate confidence in the
To transfer the value of the
technology AND secure
internet and intranet to the
immediate revenues
ordinary telephone by Phase 2:
providing voice-driven • Private label
access to valuable content Phase 2: Corporate Clients • V-ASP

Leverage success and Phase 1:


reputation from voice portal • Rev sharing
to draw corporate clients for with KT
“solutions” business Time

* Detailed forecast included in Appendix E

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HeyAnita was founded by Microsoft veterans in the hopes of leveraging the wireless revolution.  These 
founders teamed with Softbank’s money and global reach to create an international presence.

WHO IS HEYANITA?
JV: EU
JV: South America
JV: India
US Founders Investor JV: China
JV: Japan
• Softbank JV: Korea
• 4 Microsoft veterans
• Currently invested in
• Headquartered in Los • Incorporated: March 22, 2000
HeyAnita’s US and Korea
Angeles entities; committed to • Investors:
• Experts in creating invest in ANY international • HeyAnita US 30%
entity created by HeyAnita • Softbank Korea 30%
operating systems and + • Thrunet 20%
related technologies • Decision to invest in • Naray 10%
• Experts at building HeyAnita over Tellme • TG Ventures 10%
applications and based on perceived • PIC: 7.8 billion won
implementing for Fortune technical superiority
• Management Team:
500 clients • JS Lee (CEO)
• James Kim (COO)
• Peter Chang (CTO)
• Bernard Moon (EVP)
• Sue-Lynn Koo (EVP)
• Jae Choi (EVP)

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Our belief in HeyAnita’s value is supported by the robustness of our technology.

SUMMARY OF TECHNOLOGY AND SERVICE

Telephone Interface Utterance Recognition


(Dialogic/Intel) (Speechworks)

Server
HeyAnita User (HeyAnita)
Natural
Language
Interpretation
Ad Repository
(HeyAnita)
(HeyAnita)

CP Interface
Call Forwarding (HeyAnita) Internet
(HeyAnita & KT) or
Intranet

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The value of HeyAnita’s business is driven by (1) our ability to create and share value with Korea Telecom and 
(2) our ability to leverage expertise in delivering voice solutions to corporate clients.

SOURCE OF VALUE
HeyAnita
Phase 2: Corporate Clients is building
Phase 1: Direct User
multiple revenue
streams
Revenue
Sharing
with KT
• Development
• Hosting
HeyAnita User • V-commerce
ASP clients

Data Center
Call Transfer
•Sponsorship
•Advertising
•V-commerce

Users’ friends,
family,
colleagues
Private Label Clients
“Powered by HeyAnita”
• Development
• Maintenance
• License

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HeyAnita can capture and protect this business value through its technical advantages and 
its strategic alliances.

SUMMARY OF ADVANTAGES

1. Open system architecture


Utterance + high robustness in O/S
Telephone Interface Recognition + high ability to provide
best-of-breed solutions
HeyAnita User

2. Proprietary technology
Server + low licensing fees
+ low dependence on 3rd
Natural party (ie. fast time-to-market)
Language
Interpretation
Ad Repository

4. Detailed profiling of users 3. Easy interface with CP’s & Clients


+ high ability to track caller + no reformatting by CP’s/Clients
and call patterns + no hard coding for HeyAnita
CP Interface
Call Forwarding

Internet
or
Intranet
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In order to execute on this plan, HeyAnita’s management has been driving for and has achieved key outputs 
during the past 9 months.

PROGRESS TO DATE
Description Partners

• Secured unprecedented revenue-sharing and • Korea Telecom


strategic partnership with dominant telco
Backbone

• Secured top-tier content for all service areas • MBC/iMBC


• Maeil Economic Daily & MBN
Content • Rotis
• Ticketlink, MaxMovie, Cineseoul
• CityNet, Cookand, Unitel
• Weathernews
• KSE
• Korean Air

• Completed commercial launch of 6 services • Speechworks


• HeyAnita US
Services • Second set of 5-8 services currently under
development

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HeyAnita Korea plans to follow up with 10 additional service on its second phase launch, and plans to 
introduce continuous stream of new services every one to two months.

PROGRESS TO DATE: SERVICE LAUNCH PLAN


First Phase Second Phase

December 5th, 2000 February 5th, 2001


Launch Date

News Taxi reservation

Traffic information Airline schedule & ticketing

Services Movie information World Clock

Restaurant guides Directory service

Weather information Horoscope

Stock quotes Fan Clubs

My Service Music-on-demand

Quiz

Email & Voicemail

Voice chatting service

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HeyAnita forecasts the creation and protection of multiple revenue streams.  Usage revenues from direct 
users serve as the main driver until end of 2002.  Beginning in 2003, corporate client users serve as the major 
revenue stream.

OVERVIEW OF PROJECTED P&L Expenses


Million won

80000
72,712
70000 8,726 V-commerce
60000 8,400 Sponsorship
50,604
6,841 Advertising
50000 3,129
5,880
40000 4,706
28,008 Corp Client User
30000 25,076
19,132
2,370
20000 2,545
8,182
10000 6,185 20,736 Direct User
17,756
3,036 11,444
0.01 3,142
0
2000 2001 2002 2003 2004

Total Expenses 2,770 10,802 19,812 27,112 34,301

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APPENDIX

A. Basic foundation
B. Comparison of possible business approaches
C. Differences in Direct User Models models
D. Current state of competition
E. HeyAnita’s financial projections

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A. Basic foundation

HeyAnita’s business is built on a belief that wireless access to the internet (as well as similar value­added 
information sources) will be a widespread reality.

BASE CONCEPT

Worldwide Wireless Internet Users


Key Drivers of Use

484 million • Widespread penetration of


terminals
• Affordable rates for wireless
connections
• Availability and usefulness of
content
• Ease and comfort of user interface

• Speed of access

6 million
Current trends
support all
2000 2005
drivers

Source: Ovum Research

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The bet that HeyAnita has placed is on the medium for this wireless internet access.

X = Advantage

BET ON MEDIUM al n ss ss
in tio le nt r ce ce d
e r m tra i r e
s nte U se rf a c
A pee
Current Thinking T ene W ate Co In
te
S
P R

“[Customers] try this WAP, and it is so hard! You go


down, down, down all these menus, and you wait, wait,
wait…pretty soon you give up…” (Head of Internet
Operations, SEB Bank)
WAP “Share prices of major European [players] have taken
sharp hits recently, despite booming sales, because of
concerns about WAP” (Nomura Securities)
“We need better hardware and a new generation of
mobile transmission to make it work” (Apps Mgr,
Ericsson)

• Speech recognition technology is a boon with


successful IPO’s of Nuance, Speechworks, and L&H
• Major players are moving to voice interface (eg. Oracle,
Voice Motorola, Lucent, Palm)
• Speech portal business alone is forecasted to reach
X X X X X
$12 billion by 2005
• Regarding the telephone as the wireless internet
appliance of choice: It is already in the market and no
one has made one that is easier to use or cheaper to
buy (summary of WSJ article)

Source: Kelsey Group, Washington Post, Industry Standard, Wall Street Journal
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B. Business Approach and Model

HeyAnita’s approach to this new voice­interface market is designed to (1) build user acceptance of the new 
medium via our voice portal, (2) secure solid revenues from the portal operations, and (3) leverage assets 
from the portal business to transition to serve corporate clients.

BUSINESS APPROACH

HeyAnita Most Competitors

Approach Direct Users  Corporate Clients Corporate Client s  Direct Users


• Immediately generate large-scale revenues via • Generate attractive margins (>50%) on revenues
sharing agreement with Korea Telecom for development services (where services typically
comprise 25% of total voice enabling project;
Explanation • Build wide-spread acceptance of voice enabled
remainder of value will flow to technology provider
technology to seed Corporate Client market
such as L&H or Voiceware)
• Create strong brand with decision makers of
• Tap into a limited pool of clients willing and able to
corporate clients and direct end users (ie. portal)
VS install CTI systems (estimates for total market is
• Selectively build corporate client base via less than 500 such clients*)
relationships with initial content providers
• Build market acceptance for voice solutions “one-
• Fully leverage experience built during launch client-at-a-time”
direct user services and shift resources to
• Enter direct user market when sector has matured
corporate client users
• Hope that corporate client experience can easily
• Leverage HeyAnita US’s corporate client success
and quickly scale to serve large direct user market
stories and expertise in order to service Korean
clients • Likely to make large capital investments for direct
user services when market is already crowded
• Possess option to shift server assets to corporate
with competitors
client business; thereby capture hardware margins
as well as services

*Current CTI install base is about 250 sites with a projected growth rate of 10-20% per annum for 3-5 years
Source: industry interviews 15
C. Differences in Direct User models

Despite the fact that a few competitors are pursuing direct users, HeyAnita’s model is far superior in value.

DIFFERENCES IN DIRECT USER BUSINESSES

HeyAnita Dacom-L&H-Chollian (now defunct)*

Korea Telecom Dacom


Telco
• Owns the so-called “last mile” of infrastructure • Relies on KT for use of the incumbent’s
Partner to which is critical to reach end users “last mile” to end users
• Owns and operates core of Korea’s • Owns and operates a small network of
telecommunications backbone trunk lines
• Able and willing to provide full, integrated, and • Billing services plagued with inability to
reliable billing services collect on ~30% of gross revenues
User must pay
VS extra for the
service

45 30 48 + α 40 Voceweb does
Revenue not receive call
Sharing revenues
(per 3 minutes of
land-line call)
15
8+α
0
User KT HeyAnita User KT Dacom VoceWeb
Pays Keeps Collects Pays collects keeps collects
To KT From KT To Dacom from from Dacom
Dacom

* L&H’s recently exposed financial troubles have halted all efforts with Dacom and Chollian. Chollian (a leading ISP and portal) is currently 16
seeking bids for voice-enabling solutions.
D. Current state of competition

Competitors have chosen varying approaches to the business.  Although source of initial concerns, the 
actions­to­date of these players have given HeyAnita reprieve from concern.

COMPETITION Description Comments

• Launched no-fee portal services without • Using R2 lines (60 ports)


Vocian revenue sharing agreement • Linked to Voiceware technology
(portal) • Quickly “burning” initial $1 million in • Is seeking funds with poorly defined focus
funding; seeking additional $10 million to • Informally contacted HeyAnita about
continue operations potential merger

• Defunct due to demise of L&H • DACOM has requested a proposals from HeyAnita
Dacom-L&H-Chollian
(portal services for fee)

• Defunct due to demise of L&H • SK is currently seeking competitive


SK Corp-L&H-Voceweb
(PC based portal) proposals for voice solutions

• Posturing to enter corporate client space • Activities are currently at a standstill due to
Voceweb
(corporate focus) as solutions provider reliance on now troubled L&H.

Samsung Spinoffs • Zenaway being reabsorbed due to glitch • Closing down shortly.
(PC based UI solutions) in technology
• 2nd spinoff likely

• After 6 months of analysis, decided to drop • Focusing on solutions rather than direct user
Nettus
(portal) portal and pursue for solutions business services

* L&H, Speechworks, Voiceware, SL2 are technology providers with whom HeyAnita has had reseller/solutions provider discussions. 17
** Off-shore voice-portals such as TellMe and BeVocal are focused on the US and do not have multi-language capabilities or international
plans
F. Financial projections

With the help of these partners, HeyAnita is poised to generate its forecasted revenues and stay within the 
bounds of our forecasted expenses.

SUMMARY OF P&L
Korean Won
(KRW) 2000 2001 2002 2003 2004
Usage Revenue Sharing 10,535 3,141,674,212 11,443,816,911 17,756,317,661 20,736,245,180
Ad Revenue 0 0 2,545,140,212 4,706,192,124 6,841,485,504
Sponsorship Revenue 0 0 2,370,000,000 5,880,000,000 8,400,000,000
V-Commerce Revenue sharing 0 7,818,844 535,578,107 3,128,898,215 8,726,287,607
Corporate Business Revenue 0 3,035,907,032 8,181,770,852 19,132,490,788 28,007,545,269
Revenues 10,535 6,185,400,087 25,076,306,081 50,603,898,788 72,711,563,559

Leasing Payments 0 2,358,206,833 9,038,702,165 15,122,599,758 21,429,049,965


Data Center 57,406,296 681,200,000 2,120,800,000 3,004,800,000 3,495,200,000
Personnel 1,301,342,011 3,411,892,000 3,686,323,135 3,796,912,829 3,910,820,214
G&A 334,150,204 248,020,800 233,020,800 233,020,800 233,020,800
Marketing 987,140,860 2,040,000,000 2,472,000,000 3,204,000,000 3,936,000,000
Research & Content 90,500,000 262,000,000 460,000,000 460,000,000 460,000,000
Operating contingency 0 1,800,263,927 1,801,084,610 1,291,066,669 1,122,484,027
Operating contingency as % of monthly expense 20% 10% 5% 2.5%
Operating Expenses 2,770,539,371 10,801,583,560 19,811,930,710 27,112,400,056 34,300,693,253

Gross Margin (2,770,528,836) (6,416,447,399) 3,463,290,762 22,200,432,062 37,288,386,279

Depreciation 328,702,517 1,572,355,317 1,913,622,617 2,475,789,812 2,531,345,367

EBIT (3,099,231,353) (6,188,538,790) 3,350,752,754 21,015,708,920 35,879,524,939

INTEREST 60,000,000 240,000,000 240,000,000 240,000,000 240,000,000

Taxes 0 0 0 4,231,863,472 9,979,066,983

Net Income (3,159,231,353) (6,428,538,790) 3,110,752,754 16,543,845,448 25,660,457,956

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Gut check calculations reveal that HeyAnita’s calculations fall well­within the range of acceptability on 
many fronts.

GUT CHECKS ON P&L


Users, Korean Won

Gut Check 2000 2001 2002 2003 2004

Direct user base


Average monthly add 2,220 76,750 100,000 100,000 100,000
Annual churn 30% 30% 40% 50% 50%
Net new users (EOY basis) 100 830,384 663,030 362,535 217,545
Total users (EOY basis) 100 830,484 1,493,514 1,856,048 2,073,593
Avg monthly cost to avg direct user 967 7,000 8,000 8,917 9,000

Corporate client user base


Average monthly add 0 7,500 42,500 75,833 70,000
Total users (EOY basis) 0 90,000 600,000 1,510,000 2,350,000
Avg monthly cost to V-ASP client 0 9,000,000 15,375,000 21,000,000 21,000,000

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SUMMARY OF CASHFLOW
Korean Won

(KRW) 2000 2001 2002 2003 2004

Revenues 10,535 6,185,400,087 25,076,306,081 50,603,898,788 72,711,563,559


Operating Expenses 2,770,539,371 10,801,583,560 19,811,930,710 27,112,400,056 34,300,693,253
Depreciation 328,702,517 1,572,355,317 1,913,622,617 2,475,789,812 2,531,345,367
EBIT -3,099,231,353 -6,188,538,790 3,350,752,754 21,015,708,920 35,879,524,939
EBIT Margin -29418428% -100% 13% 42% 49%
Tax 0 0 0 4,231,863,472 9,979,066,983
Net Income (3,099,231,353) (6,188,538,790) 3,350,752,754 16,783,845,448 25,900,457,956
Return on Sales -29418428% -100% 13% 33% 36%
Depreciation 328,702,517 1,572,355,317 1,913,622,617 2,475,789,812 2,531,345,367
CapEx 9,996,822,181 1,023,801,900 1,023,801,900 1,000,000,000 0
Free Cash Flow (12,767,351,017) (5,639,985,372) 4,240,573,472 18,259,635,260 28,431,803,323

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ESTIMATED VALUE*
Korean Won

Discounted Cash Flow


25% discount rate NPV (5 year; g=6% inflation) NPV (10 year, inflation growth from yr6-10, no g thereafter)
76,211,250,947 93,573,834,289

Sales Multiple (based on total annual sales) 2000 2001 2002 2003 2004
89 Daum Multiple 938,573 551,062,916,876 2,234,070,905,426 4,508,347,346,573 6,477,939,298,932
10 times 105,350 61,854,000,874 250,763,060,813 506,038,987,881 727,115,635,594
5 times 52,675 30,927,000,437 125,381,530,407 253,019,493,940 363,557,817,797

Users Multiple (based on direct users only)** 2000 2001 2002 2003 2004
HA users (at EOY) 100 830,484 1,493,514 1,856,048 2,073,593
3,089,330 SKT multiple 308,933,043 2,565,638,228,862 4,613,957,189,190 5,733,946,270,617 6,406,013,811,333
1,968,740 KTF multiple 196,874,000 1,635,006,262,140 2,940,340,073,167 3,654,076,382,933 4,082,365,385,369
298,261 Daum 29,826,087 247,700,757,586 445,456,681,451 553,586,557,611 618,471,636,541
200,000 Estimate 20,000,000 166,096,717,915 298,702,731,002 371,209,645,045 414,718,590,100

* All valuations derived from market capitalization of respective organizations as of June 2000. Current values will
cause variations in calculated numbers
** Calculated valuation based on User Multiple accounts for user base of Direct Users only. Users of corporate
clients have not been included in current calculations for simplicity.
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