SOFTWARE & SERVICES 10 NOVEMBER 2009

DAVID SHORE, CFA, MBA 416.860.6784

WEB 2.O WEEKLY david.shore@researchcapital.com
Damian Wojcichowsky, CFA (Associate), 416.860.7652

ANOTHER TECH BUBBLE? NOT Q UITE

GO OGL E A CQ UI R E S AD M OB N ET W OR K
Google announced the acquisition of AdMob, the mobile ad platform that serves online ads for a network of 15,000
mobile W eb sites. AdMob’s platform has made considerable in-roads into the iPhone ecosystem, and fits nicely with
the burgeoning Google Android platform. Google bid $750 million for the company, which generates a revenue run
rate of approximately $100 million currently, implying a Price/Sales valuation on the deal of 7.5x. Before we begin
proclaiming the onset of a new tech bubble, we note that Google and Microsoft both acquired companies in the same
digital marketing space in 2007 for double digit P/S multiples (see Digital Marketing M&A Valuations).

Digital Marketing M&A Valuations

WPP Group acquires 24/7 Real Media

Google acquires AdMob (November 2009)

Google acquires DoubleClick (April 2007)

Microsoft acquires aQuantive (May 2007)

- 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0

Price/Sales (trailing 12 months)

EL E CT R ON IC A RT S A CQ UI R ES PL A YF I SH
The long-anticipated acquisition of Playfish by Electronic Arts has come to fruition in a deal involving consideration of
$275 million upfront in cash, $25 million in retention payments via shares, and $100 million in earn-out – a total
consideration of $400 million potentially. The Price/Sales valuation on this transaction (based on estimates of $75
million in Playfish revenue run rate) ranges between 4.0x and 5.3x (depending on the value when EA closes the deal).

Playfish operates social games on Facebook, MySpace, Hi5, and other social networks which have been installed
more than 150 million times, and claims 60 million monthly active users. Its top games include Pet Society,
Restaurant City, Country Story, and Who Has The Biggest Brain?

S UMM AR Y – C A PIT AL M A RK ET S A CT I V IT Y
Slow down continues since late October: Total transaction value in the Web 2.0 universe for November is $24.2
million – a decidedly slow start to the month. November has begun with six financings in the sector averaging $4.0
million each (vs. an average of $6.3 million last month). In comparison, total capital raised in October was $171.3
million, averaging $6.3 million (27 deals); September was $232.8 million, averaging $9.0 million (26 deals); and
August was $221.6 million, averaging $7.6 million (29 deals).

This report has been created b y Anal ysts that are emplo yed b y Research Capital Corporation, a Canadian Investment Dealer.
For further disclosures, please see last page of this report.
w w w . r e s e a rc h c a p i t a l . c o m
T o ro n t o 4 1 6 . 8 6 0 . 7 6 0 0 Montreal 514.399.1500 Vancouver 604.662.1800 Calgary 403.265.7400 Regina 306.566.7550
 Page 2

THE WEB 2.0 UNIVERSE

Eighty-nine public Web 2.0 companies: Our W eb 2.0 universe contains 89 companies, with a combined market cap of
approximately $71 billion (Figure 1). The median market cap for the group is $41.8 million, with average trailing revenue
of $163 million (median $56 million). The companies are also generally profitable with a median EBITDA margin of 11.6%.
On a valuation basis, the overall average is 5.3x trailing revenue (median 1.8x) and 11.1x trailing EBITDA (median 8.3x).
Twenty of the companies have more than 500 employees.
C omparable C ompany Analys is > Web 2.0
Trading C urrent US D Market US D L TM Total US D L TM Total E B ITDA TE V/L TM TE V/L TM
C ompany Name L TM as of Ticker E xc hange C urrency HQ P rice C ap ($m) R ev ($m) E B ITDA ($m) % R evenue E B ITDA E mployees
Accelerize New Media , Inc. 6/30/2009 AC LZ OT C B B US D United S ta tes 0. 75 21. 0 4. 4 (3.7) -83. 3% 5. 8x - 11
Actoz S oft C o. , Ltd. 6/30/2009 A052790 K OS E KR W S outh K orea 15,450 112. 1 108.7 25. 9 23. 8% 0. 7x 3. 1x NA
AQ Interactive, Inc. 6/30/2009 3838 TS E JPY J a pan 47,400 28. 8 66. 1 (2.0) -2.9% 0. 1x - NA
As s ociated Media Holdings Inc. 6/30/2007 AS MH OT C P K US D United S ta tes 0. 01 0.4 0. 1 (2.3) NM 13.2x - 3
B igs tring C orp. 6/30/2009 BS GC OT C B B US D United S ta tes 0. 03 2.0 0. 1 (1.5) NM 48.2x - 4
B eta wave C orporation 6/30/2009 B W AV OT C B B US D United S ta tes 0. 03 0.9 9. 4 (12. 6) NM - - 51
B eyond C ommerce, Inc. 6/30/2009 B Y OC OT C B B US D United S ta tes 0. 07 3.5 11. 7 (12. 8) NM 0. 8x - 101
B right T hings plc 3/31/2009 AIM: B G T AIM GBP United K ingdom 0. 01 5.4 0. 0 (2.7) NM - - NA
B roa dW ebAs ia Inc. 9/30/2008 BWBA OT C P K US D United S ta tes 0. 03 2.5 0. 0 (4.6) NM - - 46
C DC C orp. 6/30/2009 C HIN. A Na s daqG S US D Hong K ong 2. 52 267. 1 361.6 25. 1 6.9% 0. 7x 10. 5x 2, 227
C hangyou. com L imited 9/30/2009 C Y OU Na s daqG S US D C hina 33. 14 1,822. 7 255.3 157.4 61. 7% 5. 9x 9. 6x 628
C hina G a teway C orporation 9/30/2008 CGWY OT C P K US D United S ta tes 0. 00 0.0 6. 7 (6.6) -98. 9% 0. 0x - 37
C hines e G amer Interna tiona l 9/30/2009 G T S M: 3083 GTS M TWD T aiwa n 444 1,151. 5 68. 3 39. 6 58. 0% 15.7x 27. 0x NA
C LIC K E R Inc. 5/31/2009 C LK Z OT C B B US D United S ta tes 0. 01 0.5 2. 5 (1.2) -45. 8% 0. 2x - 22
C ornerW orld C orpora tion 7/31/2009 CWR L OT C B B US D United S ta tes 0. 06 5.7 6. 8 NM NM 2. 4x - 16
C yberplex Inc. 6/30/2009 T S X :C X TS X C AD C anada 1 84. 2 89. 8 9.7 10. 8% 0. 7x 6. 6x NA
DADA S pA 6/30/2009 C M: DA CM E UR Italy 7. 35 174. 5 241.9 31. 8 13. 1% 0. 9x 7. 0x NA
DXN Holdings B hd 8/31/2009 DX N K LS E MY R Ma la ys ia 0. 63 41. 1 77. 3 (84. 0) NM 0. 7x - NA
Dibz International, Inc. NA DIB Z OT C P K US D United S ta tes 0. 00 0.0 NA NM NM - - NA
DigitalP os t Interactive, Inc. 6/30/2009 DG LP OT C B B US D United S ta tes 0. 05 3.5 1. 0 (1.4) NM 5. 5x - 7
DigitalT own, Inc. 8/31/2009 DG T W OT C B B US D United S ta tes 0. 50 13. 7 0. 0 (1.8) NM - - 3
Dolphin Digital Media , Inc. 6/30/2009 DP DM OT C B B US D United S ta tes 0. 40 21. 5 0. 6 (3.4) NM 38.6x - NA
E olith C o. Ltd. 12/31/2008 A041060 K OS E KR W S outh K orea 570 34. 6 15. 4 (3.6) -23. 6% 2. 4x - NA
E xtens ions , Inc. 6/30/2009 E XT I OT C P K US D United S ta tes 0. 25 11. 1 NM NM NM - - 2
F luid Mus ic C a nada , Inc. 6/30/2009 T S X :F MN TS X C AD United S ta tes 1. 80 86. 8 5. 3 (5.1) -95. 2% 15.4x - NA
F rogs ter Interactive P ictures AG 6/30/2009 FRG XT R A E UR G ermany 18. 66 70. 0 9. 6 (4.5) -47. 0% 7. 1x - NA
G ama nia Digita l E ntertainment C o., Ltd. 9/30/2009 6180 GTS M TWD T aiwa n 45. 05 211. 0 151.2 24. 9 16. 5% 1. 2x 7. 5x NA
G ameOn C o Ltd. 6/30/2009 3812 TS E JPY J a pan 72,200 78. 1 81. 9 20. 1 24. 5% 0. 0x 0. 2x NA
G eoS entric O yj 6/30/2009 G E O 1V HL S E E UR F inland 0. 06 78. 9 5. 4 (17. 4) NM 14.5x - 115
G iant Interactive G roup, Inc. 6/30/2009 GA NY S E US D C hina 7 1,648. 5 198.5 124.1 62. 5% - - 1, 570
G iga Media Ltd. 3/31/2009 G IG M Na s daqG S US D T aiwa n 3. 82 208. 3 183.6 NM NM 0. 7x - 751
G ravity C o., Ltd 6/30/2009 GR VY Na s daqG M US D S outh K orea 1. 57 43. 6 49. 1 16. 6 33. 9% - - 469
G ree, Inc. 9/30/2009 T S E : 3632 TS E JPY J a pan 5,410 2,708. 5 210.3 122.2 58. 1% 12.4x 21. 3x NA
G ungHo O nline E ntertainment, Inc. 6/30/2009 3765 OS E JPY J a pan 205,400 263. 2 119.5 26. 6 22. 2% 1. 9x 8. 6x NA
HanbitS oft, Inc. 6/30/2009 A047080 K OS E KR W S outh K orea 3,580 65. 7 60. 7 1.4 2.3% 0. 9x 36. 9x NA
IAC /InterActiveC orp. 9/30/2009 IAC I Na s daqG S US D United S ta tes 19. 61 2,587. 9 1, 359. 6 82. 4 6.1% 0. 7x 11. 5x 3, 200
IAS E nergy, Inc. 4/30/2009 IAS A. E OT C B B US D C anada 0. 12 8.5 0. 0 (0.6) NM - - NA
is eemedia Inc. 6/30/2009 IE E T S XV C AD C anada 0. 19 9.2 1. 7 (4.5) NM 5. 2x - NA
J umbuck E nterta inment Limited 6/30/2009 AS X :J MB AS X AUD Aus tralia 0. 34 14. 5 16. 7 7.2 42. 8% 0. 5x 1. 1x 79
K AB Dis tribution Inc. 6/30/2009 T S X :K AB TS X C AD C anada 0 0.6 67. 9 4.0 5.8% - - NA
K ings oft C o. Ltd. 6/30/2009 3888 S E HK HK D C hina 8 1,074. 8 139.1 61. 4 44. 2% 7. 7x 17. 5x 2, 463
Lingo Media C orporation 6/30/2009 T S X V :LM T S XV C AD C anada 0. 98 11. 2 1. 2 (1.9) NM 8. 6x - NA
LiveW orld Inc. 6/30/2009 LVW D OT C P K US D United S ta tes 0. 04 1.1 10. 6 (0.1) -1.2% - - NA
LookS mart, Ltd. 9/30/2009 L OO K Na s daqG M US D United S ta tes 1. 17 20. 0 54. 0 (4.9) -9.0% - - 90
Magnitude Information S ys tems Inc. 6/30/2009 MAG Y OT C B B US D United S ta tes 0. 01 4.1 0. 1 (2.5) NM - - 14
Mixi, Inc. 6/30/2009 2121 TS E JPY J a pan 740000. 00 1,275. 1 136.8 46. 2 33. 8% 8. 4x 25. 0x NA
Modern T imes G roup Mtg AB 9/30/2009 MT G B OM SEK S weden 323. 00 3,056. 7 2, 002. 6 282.9 14. 1% 1. 8x 12. 7x 2, 969
MO K O .mobi Limited 6/30/2009 MK B AS X AUD Aus tralia 0. 09 7.9 0. 7 (2.4) NM 10.0x - NA
Myriad G roup AG 6/30/2009 MY R N SWX C HF S witzerland 4. 79 205. 4 63. 0 3.4 5.4% 3. 2x - 405
NE O W IZ G ames C orpora tion 12/31/2008 A095660 K OS E KR W S outh K orea 39250. 00 693. 4 207.3 55. 7 26. 8% 3. 3x 12. 3x NA
NetDragon W ebS oft, Inc. 6/30/2009 777 S E HK HK D C hina 5 351. 2 89. 3 25. 7 28. 7% 2. 3x 8. 0x 3, 109
Neteas e. com Inc. 6/30/2009 NT E S Na s daqG S US D C hina 42. 00 5,435. 9 472.4 297.4 63. 0% - - 3, 109
NeuLion Incorporated 6/30/2009 T S X :NLN TS X C AD C anada 0. 68 72. 8 21. 5 (13. 0) -60. 3% 2. 9x - 237
NeXplore C orporation 6/30/2009 NX P C OT C P K US D United S ta tes 1 41. 8 1. 7 (13. 3) NM 27.0x - NA
Ngi G roup Inc. 6/30/2009 2497 TS E JPY J a pan 26600. 00 36. 8 93. 0 6.9 7.4% - - NA
Northgate T echnologies L imited 6/30/2009 590057 BSE INR India 30. 85 22. 4 82. 9 (41. 5) -50. 0% 0. 3x - NA
O pen T ext C orp. 9/30/2009 OT E X Na s daqG S US D C anada 39. 04 2,201. 1 814.5 211.1 25. 9% 2. 8x 10. 8x 3, 900
O penwave S ys tems Inc. 9/30/2009 OP W V Na s daqG S US D United S ta tes 2. 15 179. 6 190.5 5.6 3.0% 0. 4x 13. 3x 590
P erfect W orld C o. , Ltd. 6/30/2009 PWRD Na s daqG S US D C hina 49. 08 2,473. 2 255.6 142.2 55. 6% 0. 9x 1. 5x 2, 096
P NI Digital Media Inc. 6/30/2009 T S X V :P N T S XV C AD C anada 1. 76 55. 4 21. 0 2.3 11. 0% 2. 5x 23. 1x NA
Q uepa s a C orp. 6/30/2009 QP S A OT C B B US D United S ta tes 1 17. 8 0. 2 (10. 6) NM - - 74
O AO R B C Information S ys tems 12/31/2007 R BCI R TS US D R us s ia 1. 60 222. 0 157.4 20. 6 13. 1% 0. 0x 0. 4x NA
S handa Interactive E nterta inment Ltd. 6/30/2009 S NDA Na s daqG S US D C hina 50. 41 3,390. 3 629.0 296.7 47. 2% - - 3, 124
S hutterfly, Inc. 9/30/2009 S FLY Na s daqG S US D United S ta tes 15. 55 399. 2 223.1 27. 0 12. 1% 1. 3x 10. 6x 514
S K C ommunications C o., Ltd. 12/31/2008 A066270 K OS E KR W S outh K orea 7150. 00 250. 9 192.7 12. 5 6.5% 1. 3x 20. 0x NA
S NAP Interactive, Inc. 6/30/2009 S TVI OT C B B US D United S ta tes 0 4.3 3. 5 0.9 27. 0% 0. 8x 2. 9x 11
S NM G loba l Holdings 9/30/2008 S NMN OT C P K US D United S ta tes 0. 00 0.0 2. 0 (0.7) -34. 8% 1. 1x - 33
S ocial Media V entures Inc. 12/31/2008 S MV I OT C P K US D United S ta tes 0 0.0 0. 1 (0.1) -60. 6% 4. 5x - NA
S ocialwis e, Inc. 6/30/2009 S C LW OT C B B US D United S ta tes 0. 55 24. 3 0. 0 (5.6) NM - - NA
S ohu. com Inc. 9/30/2009 S O HU Na s daqG S US D C hina 57. 86 2,225. 1 501.0 218.5 43. 6% 3. 4x 7. 7x 3, 197
S park Networks , Inc. 6/30/2009 L OV AME X US D United S ta tes 3 55. 0 50. 5 10. 8 21. 3% 1. 0x 4. 9x 183
S pectrumDNA, Inc. 6/30/2009 S P XA OT C B B US D United S ta tes 0 7.3 0. 1 (2.5) NM - - 7
T encent Holdings Ltd. 6/30/2009 700 S E HK HK D C hina 139 32, 555.5 1, 391. 6 680.3 48. 9% 25.8x - 6, 421
T he P arent C ompany 8/2/2008 K IDS . Q OT C P K US D United S ta tes 0. 01 0.2 112.0 (13. 5) -12. 0% 0. 2x - 347
T he9 Limited 12/31/2008 NC T Y Na s daqG S US D C hina 7. 88 197. 7 250.6 85. 5 34. 1% - - 1, 626
T heS treet. com, Inc. 3/31/2009 TS CM Na s daqG M US D United S ta tes 2. 45 75. 0 67. 0 1.9 2.9% 0. 2x 5. 4x 310
T ree.C om, Inc. 9/30/2009 TR E E Na s daqG M US D United S ta tes 7. 78 84. 8 217.1 10. 5 4.8% 0. 3x 6. 2x 700
Unis erve C ommunica tions C orp. 8/31/2009 T S X V :US S T S XV C AD C anada 0. 04 0.8 16. 1 0.1 0.9% 0. 3x 36. 4x NA
United O nline Inc. 9/30/2009 UNT D Na s daqG S US D United S ta tes 8. 33 704. 6 996.8 214.9 21. 6% 1. 0x 4. 5x 1, 469
UOMO Media, Inc 7/31/2009 UO MO OT C B B US D C anada 0 6.9 0. 8 (0.4) -54. 2% 9. 3x - NA
V alueC lick Inc. 9/30/2009 V C LK Na s daqG S US D United S ta tes 10 906. 4 545.7 130.8 24. 0% 1. 4x 5. 7x 1, 189
V OIS , Inc. 6/30/2009 V O IS OT C B B US D United S ta tes 0 6.2 0. 0 (1.0) NM - - 4
W ebzen Inc. 6/30/2009 W ZE N Na s daqG M US D S outh K orea 3. 09 36. 6 23. 2 2.3 9.9% - - 328
W izzard S oftwa re C orporation 6/30/2009 W ZE AME X US D United S ta tes 0. 47 23. 7 5. 3 (4.5) -84. 9% 4. 7x - 110
W orlds . com Inc. 6/30/2009 W DDD OT C B B US D United S ta tes 0. 10 5.2 0. 1 (0.7) NM - - 1
W ynds torm C orpora tion NA W Y ND OT C P K US D United S ta tes 0. 10 1.8 NA NM NM - - NA
XING AG 6/30/2009 O 1B C XT R A E UR G ermany 32. 30 249. 4 58. 9 17. 0 28. 8% 3. 3x 11. 6x 246
Y D O nline C orp. 12/31/2007 A052770 K OS E KR W S outh K orea 7120. 00 89. 5 57. 4 12. 4 21. 6% 1. 7x 8. 0x NA
Y nk K orea Inc. 12/31/2008 A023770 K OS E KR W S outh K orea 4020. 00 18. 0 11. 9 1.3 10. 5% - - NA
High 32, 555.5 2,002. 6 680. 3 63. 0% 48.2x 36. 9x 6, 421
Low 0.0 0. 0 -84.0 -98. 9% - - 1
Average 794.1 163.0 39.4 6.2% 5.3x 11.1x 945
Median 41. 8 55.7 1. 7 11. 6% 1. 8x 8. 3x 246

Figure 1. Web 2.0 Universe Summary

Source. Capital IQ
 Page 3

C A P I T A L M A R K E T S A C T I V I T Y (M & A A N D F I N A N C I N G )
Slow down continues since late October: Total transaction value in the Web 2.0 universe for November is $24.2 million
– a decidedly slow start to the month. November has begun with six financings in the sector averaging $4.0 million each
(vs. an average of $6.3 million last month). In comparison, total capital raised in October was $171.3 million, averaging
$6.3 million (27 deals); September was $232.8 million, averaging $9.0 million (26 deals); and August was $221.6 million,
averaging $7.6 million (29 deals).

Financing Activity Last Twelve Months

400.0 16.0

14.6

350.0 14.0

300.0 12.0

250.0 10.0
9.0
(US$m)

(US$m)
200.0 7.6 8.0
7.1
6.7 6.6
6.5 6.3
6.2
150.0 5.6 6.0
4.9

4.0
100.0 4.0

50.0 2.0

0.0 0.0
Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09

*May-09 includes $200m FB investment Total Average

Figure 2. Financings, Last Twelve Months

Source. Company reports
 Page 4

Deal round-up for November start: The large deal highlights for the month include:

• Playfish – the UK-based social gaming company – was acquired by Electronic Arts in a deal potentially valued up
to $400 million.

• Motley Fool – the financial information site – raised $25 million in an unattributed financing.

• Phoenix New Media – the subsidiary of Phoenix Television, a popular Chinese news portal and media site – raised
$25 million from Intel Capital and Bertelsmann Asia Investment Fund.

All other deals in the month were in the amount of $10 million or less. For additional details on financings, see Figures 23
and 24 (at end of note).

Financing & M/A Summary - Last Three Months

200.0

180.0

160.0

140.0

120.0

Nov-09
(US$m)

100.0 Oct-09
Sep-09

80.0

60.0

40.0

20.0

0.0
Phoenix New
DailyMotion

Jive Software

Mzinga
InXpo

NextBio

Reality Mobile
HiveLive

Fwix
Yext

Box.net
Motley Fool
Skype
PlayFish

Ooyala

Jobvite

Eventbrite

Booyah
YuMe

Overtone
Greystripe

DailyBooth

OnLive
Aviary

Mocapay

Vantrix
Fizzback

Linkedex
Twitter

Dopplr

Unisfair

Fluther
Scoopler
Mint

Ensequence
Engine Yard

CubeTree

Vuclip

Vdopia
NeoEdge

Alliance Health

ViVu

Blekko

Godengo

FourSquare
Onehub
EduFire

Hot Potato

IngBoo
Chango

Listia
NowPublic

Ecast Network
Livebookings

Altruik

Scout Labs

Conduit Labs

MashLogic

Tiny Pictures

DataSync

VEVO
HubSpot

Spigit

ScanScout

StatusNet

Aurora Feint
Technorati
Credit Karma

Loomia
PopCap Games

Riot Games

Sometrics
FeedRoom

Amie Street

TransGaming Inc.
Imeem

Gamelab.com
Watercooler

Figure 3. Capital Market Activity, Last Three Months

Source. Company reports
 Page 5

Social Networks the most active sector: Social Networks experienced the most financing activity among our W eb 2.0
sector categories in the past three months by number of transactions (8). Collaboration-related companies have been hot
recently, garnering the second highest number of deals (7). Advertising continues to be among the highest activity sectors
in the past quarter (6 deals) (Figure 4). The $2.0 billion acquisition of Skype skews the dollars transacted to the
SMS/Voice segment, while the $400 million acquisition of Playfish brings the Virtual W orlds segment to the second highest
total. Finally, the $170 million acquisition of Mint brings the Vertical Communities segment into third place.

Capital Market Activity by Sector - Last Three Months

200.0

180.0

160.0

140.0

120.0
(US$m)

100.0

80.0

60.0

40.0

20.0

2,025.0 417.1 178.3 100.9 68.3 57.0 49.3 45.5 39.9 37.5 36.5 30.0 25.6 17.2 16.2 13.0 6.4 6.0 3.9 3.6 3.0 2.2 2.0 1.5
0.0

Comment/Reputation
Social Commerce
Communities

Gaming
Microblog

Media

Collaboration

Enterprise

Mobile

Publishing
Music

Financial Services
SMS/Voice

Infrastructure

Search

Classified

Mobile Ad
Social Networks
Virtual World

Video

Advertising

Crowdsourced

Aggregation
Analytics
Vertical

Content

# companies
1 4 2 2 5 3 8 7 6 3 4 4 2 2 5 4 2 1 1 2 2 1 1 1

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

Source. Company reports
 Page 6

C A P I T A L M A R K E T S A C T I V I T Y (P R I C E P E R F O R M A N C E )
Web 2.0 index continues to outpace NASDAQ recovery: Our W eb 2.0 index (market-cap weighted) essentially mirrored
the performance of the NASDAQ composite index from mid-2008 until Q1/09. Since then, the index has diverged in a much
stronger recovery relative to the NASDAQ index (Figure 5).

Web 2.0 Index Price Performance

250

200

150

100

50

0
11/10/2008

11/24/2008

12/8/2008

12/22/2008

1/5/2009

1/19/2009

2/2/2009

2/16/2009

3/2/2009

3/16/2009

3/30/2009

4/13/2009

4/27/2009

5/11/2009

5/25/2009

6/8/2009

6/22/2009

7/6/2009

7/20/2009

8/3/2009

8/17/2009

8/31/2009

9/14/2009

9/28/2009

10/12/2009

10/26/2009

11/9/2009
Index: Web 2.0 (Market Cap) ^COMP - Share Pricing

Figure 5. Web 2.0 Price Performance

Source. Capital IQ
 Page 7

Broad-based price improvement: Thirty-five companies in our universe had positive stock price performances over the
past week (for stocks with prices greater than $1) (Figure 6), while 12 companies showed negative 1-week returns.

1 Week P rice P erformance

Quepas a Corp. 16.7%
Perf ect World Co., Ltd. 13.5%
V alueClick Inc. 12.9%
S handa Interactive Entertainment Ltd. 11.5%
Neteas e.com Inc. 11.4%
S hutterf ly , Inc. 9.2%
Changy ou.com Limited 9.2%
Eolith Co. Ltd. 7.5%
NetDragon WebS oft, Inc. 7.5%
CDC Corp. 7.2%
S ohu.com Inc. 7.0%
A ctoz S oft Co., Ltd. 6.6%
G ree, Inc. 6.3%
United Online Inc. 6.0%
Open Tex t Corp. 5.7%
Northgate Technologies Limited 5.3%
Modern Times G roup Mtg A B 5.2%
HanbitS oft, Inc. 4.7%
Y D Online Corp. 4.6%
Openw ave S y s tems Inc. 4.4%
Chines e G amer International 4.2%
DA DA S pA 4.0%
IA C/InterA ctiveCorp. 3.1%
Y nk K orea Inc. 3.1%
Webz en Inc. 2.0%
NEOWIZ G ames Corporation 1.7%
TheS treet.c om, Inc. 1.7%
K ings oft Co. Ltd. 1.5%
S K Communica tions Co., Ltd. 1.4%
A Q Interactive, Inc. 1.3%
The9 Limited 0.8%
Cy berplex Inc. 0.7%
Fluid Mus ic Canada, Inc. 0.6%
G amania Digital Entertainment Co., Ltd. 0.6%
G iant Interactive G roup, Inc. 0.3%
G ravity Co., Ltd 0.0%
My riad G roup A G -2.0%
Frogs ter Interactive Pictures A G -2.0%
PNI Digital Media Inc. -2.2%
Tencent Holdings Ltd. -2.9%
Tree.Com, Inc. -3.4%
Ngi G roup Inc. -3.4%
G igaMedia Ltd. -4.0%
Mix i, Inc. -5.2%
S park Netw orks , Inc. -7.3%
X ING A G -7.4%
L ookS ma rt, Ltd. -9.3%
G ameOn Co Ltd. -15.3%
-0.2 -0.15 -0.1 -0.05 0 0.05 0.1 0.15 0.2

Figure 6. 1-Week Price Performance

Source. Capital IQ

P U B L I C C O M P A N Y I N D U S T R Y N E W S (P A R T N E R S H I P S , F I N A N C I A L R E S U L T S , N E W P R O D U C T S )
K ey Developments
C ompany Headline
P erfect World C o., L td. P erfect W orld C o., Ltd. P ropos es Amendments to
(Nas daqG S :P WR D) Memorandum and Articles of As s ociation
Neteas e.com Inc. (Nas daqG S : NTE S ) Neteas e.com Inc. La unches New G ame C hannel
G ame.163. com
Northgate Technologies L imited Northgate T echnologies L imited R eports Una udited
(B S E :590057) C ons olidated and S tandalone E arnings R es ults for the
S econd Q uarter and S ix Months E nded S eptember 30,
2009
Openwave S ys tems Inc . B ouygues T elecom S elects O penwave S ys tems to
(Nas daqG S :OP WV) Manage and O ptimiz e Network T ra ffic
L ookS mart, L td. (Nas daqG M: L OOK ) LookS ma rt L td. R eports U n-Audited C ons olida ted
E arnings R es ults for the T hird Q ua rter a nd Nine Months
E nded S eptember 30, 2009 ; Announces Appointment of
J ea n-Y ves Dexmier as the E xecutive C hairman of the
B oard of Directors
Tencent Holdings L td. (S E HK : 700) T encent H oldings Ltd. P rovides E a rnings G uidance for
the T hird Q ua rter of 2009
Ic eWE B Inc. (OTC B B : IWE B ); VOIS , Inc . IceW E B Inc. (O T C B B : IW E B ) acquired 19. 31% s take in
(OTC B B : VOIS ) V O IS , Inc. (O T C B B : V O IS ) for $0.64 million.
Ic eWE B Inc. (OTC B B : IWE B ); VOIS , Inc . V O IS , Inc. a nnounced tha t it has received $0. 05 million in V O IS , Inc. (O T C B B : V O IS ) announced a private placement of 160,000, 000 s hares of common s tock at $0.0003 per s hare to
(OTC B B : VOIS ) funding from IceW E B , Inc.
Figure 7a. Key Developments
Source. Capital IQ
Page 8
Notes
P erfect W orld C o. , Ltd. announced that an annual genera l meeting of company will be held on November 14, 2009 for the
purpos es of cons idering amendment of Article 1 of the a mended a nd res ta ted Memora ndum and Articles of As s ociation of
the company by adding the following definition: 'Des igna ted S tock E xcha nge' means T he Nas daq S tock Market. And for the
purpos es of cons idering amendment of Article 111 of the amended and res tated Memorandum a nd Articles of As s ocia tion of
the company by repla cing it with the following new article: 111. S ubject to a pplicable la w and rules of the Des ignated S tock
E xchange: (1) T he B oard s hall a ppoint an Auditor to a udit the accounts of the company a nd s uch a uditor s ha ll hold office
until the board appoints another a uditor. S uch auditor may be a member but no director or officer or employee of the
company s hall, during his continuance in office, be eligible to act as an a uditor of the compa ny. (2) A pers on, other tha n a
retiring a uditor, s hall not be capable of
being appointed auditor at a boa rd meeting unles s notice in writing of an intention to nominate tha t pers on to the office of
Auditor ha s been given not les s than fourteen (14) days before the boa rd meeting a nd furthermore, the
company s hall s end a copy of any s uch notice to the retiring a uditor. (3) T he B oard ma y, a t any board meeting
convened and held in accordance with thes e articles , remove the auditor at any time before the expira tion of his term
of office and s hall at tha t meeting appoint a nother Auditor in his s tead for the rema inder of his term.
Neteas e.com Inc. la unched its ga me cha nnel, game.163. com, to extend its bus ines s . T he new channel will initially provide
news on games , including product news , player oriented news , and indus try information. T he compa ny ha s es ta blis hed a
tea m to collect and report the s elect content.
Northgate T echnologies Limited reported una udited cons olidated and s tandalone ea rnings res ults for the s econd qua rter a nd
s ix months ended S eptember 30, 2009. F or the quarter, the company reported on cons olidated ba s is , net los s of INR
169.999 million or INR 4.85 per diluted s ha re on revenue of INR 140. 411 million compared to net income of INR 224. 050
million or INR 6. 29 per diluted s hare on revenue of INR 1,893. 738 million for the s a me quarter a year ago. Net los s from
ordinary activities after tax and before minority interes t was INR 169. 999 million, operating los s a fter interes t of INR 166.229
million compa red to net profit from ordinary activities after tax a nd before minority interes t of INR 225. 468 million, opera ting
profit after interes t of INR 283. 971 million for the s ame quarter a yea r ago. Los s from ordinary activities before ta x wa s INR
157.143 million, operating los s before interes t of INR 165.203 million a nd opera ting los s before interes t, depreciation a nd
amortization of INR 70. 719 million compared to profit from ordina ry
activities before tax of INR 285. 564 million, operating profit before interes t of INR 286. 325 million a nd opera ting profit
before interes t, depreciation a nd amortiza tion of INR 463.570 million for the s ame quarter a yea r ago.
O penwave S ys tems Inc. has announced that B ouygues T elecom has s elected O penwave's traffic management s olution to
ma nage a nd optimize its network tra ffic. O penwave's traffic ma nagement s olution monitors and dyna mically controls a
divers e range of IP (T C P -a nd UDP -bas ed) data flows within the B ouygues mobile network. O penwave's monitoring features
will ena ble B ouygues T elecom to obtain better ins ights into network us age patterns and help them to define and anticipate
new s ubs criber beha viours . O penwave's traffic management s olution will als o allow B ouygues T elecom to offer a variety of
tiered s ubs criber plans tha t reflect a ctual us age. W ith O penwave's traffic ma nagement s olution, B ouygues T elecom will be
able to apply a policy for each s ubs criber initia ted IP s es s ion including: Acces s control bas ed on des tination IP and port of
content or application being reques t. Acces s control bas ed on s ubs criber plan/level of s ervice. S ource/des tina tion network
addres s trans lation (NAT ). Monitoring of predefined time a nd volume s es s ion limits . T he O penwa ve tra ffic ma nagement
s olution will a ls o a llow informa tion to
be logged on each IP s es s ion to enable 'hot-billing' bas ed on duration a nd volume cons umed, giving B ouygues
T elecom the ca pability to control network res ources that bind s ervice tiers to rea l-time parameters , and provides a
framework for even more s ophis ticated and proa ctive a ll IP policy management going forward.
LookS ma rt L td. reported un-audited cons olidated earnings res ults for the third quarter and nine months ended S eptember
30, 2009. R evenues for the third quarter of 2009 were $12.5 million, a 19% decrea s e from $15. 4 million in the third quarter
of 2008 and a 5% decrea s e from $13. 2 million in the s econd quarter of 2009. Net los s for the third quarter of 2009 was $1.9
million, or $0.11 los s per s ha re. T his is compa red to a net los s for the third quarter of 2008 of $1. 7 million, or $0. 10 los s per
s hare. Net los s for the s econd quarter of 2009 was $1. 3 million, or $0.08 per s ha re. Los s from continuing operations for the
third qua rter of 2009 was $2. 1 million, which includes $0. 3 million of s everance expens e and $0.2 million of expens es
rela ted to the evalua tion of s trategic growth a lterna tives or $0. 12 ba s ic and diluted los s from continuing opera tions compared
to a los s from continuing operations in the third quarter of 2008 of $1.7 million, which included $0.2 million of s evera nce
expens e or $0.10 bas ic and diluted los s from continuing operations of previous year period. Non-G AAP net los s for the third
qua rter of 2009 was $1. 7 million compa red to a
los s of $1. 0 million in the third quarter of 2008. Non-G AAP net los s for the s econd quarter of 2009 was $0. 7 million.
C apital expenditures , including ca pita liza tion of internally developed s oftware, in the third quarter of 2009 were $0. 6
million, compared to $1.2 million in the third qua rter of 2008, and $0.4 million in the s econd qua rter of 2009. Net cas h
us ed in opera ting activities for the three months ended S eptember 30, 2009 was $2. 2 million.
T he compa ny announced the appointment of J ea n-Y ves Dexmier as the E xecutive C ha irma n of the B oard of
Directors . Dr. Dexmier ha s s erved on the company's B oa rd of Directors s ince 2007 and ha s s erved as the C ha ir of
both the Audit and S tra tegic Direction committees .
T encent Holdings Ltd. provided earnings guidance for the third quarter of 2009. T he company is predicted to a chieve a n
online game revenue of C NY 1. 43 billion in the third quarter of 2009, up 15% quarter on quarter. T he company is expected
to ga in a tota l revenue of C NY 3. 28 billion and a net profit of C NY 1.34 billion in the qua rter.
IceW E B Inc. (O T C B B : IW E B ) acquired 19.31% s take in V O IS , Inc. (O T C B B : V O IS ) for $0. 64 million in cas h on November
3, 2009. In addition to the cas h cons ideration, V O IS will ha ve acces s to IceW E B ’s cloud s tora ge network and will be able to
dis tribute IceMAIL , IceP O R T AL, and IceS E C UR E to exis ting and pros pective new us er bas e. Mark B . Lucky, C hief F inancia l
O fficer of IceW E B , has tak en a B oard pos ition on V O IS and will cha ir the Audit C ommittee.
IceW E B Inc. (O T C B B : IW E B ) completed the a cquis ition of 19. 31% s ta ke in V O IS , Inc. (O T C B B : V OIS ) on November 3,
2009.
IceW E B , Inc. for gros s proceeds of $48, 000 on November 3, 2009. T he purcha s er is an accredited inves tor and an affiliate
of Mark B . Lucky, a member of the B oard of Directors . T he s hares were is s ued purs ua nt to R egulation D under the
S ecurities Act. T he compa ny did not pay any commis s ions or finder’s fees . IceW E B will a ppoint new directors to the
company.
 Page 9

K ey Developments - c ontinued
C ompany
Quepas a C orp. (OTC B B : QP S A)
Headline Notes
Q uepas a and Mexico's T ouris m B oa rd Announce S ocial Q uepas a C orp. a nnounced tha t it will be colla borating with Mexico's T ouris m B oard, officially known as the C ons ejo de
Media Marketing Initiative P romocion T uris tica de Mexico, S A de C A, with regards to an online initiative aimed a t promoting touris m to Mexico. As part
of this progra m, Q uepa s a will promote Mexico's beautiful touris t des tinations via online communities , which will index
content rela ted to s pecific des tina tion and facilitate us er interaction via blogs and vira l tools . At the s ame time, Q uepa s a and
Mexico's T ouris m B oard will be a pproa ching online travel a gencies , hotels and a irlines with rega rds to s pons oring a broader
vira l campa ign us ing the Q uepa s a Dis tributed S ocial Media pla tform.

G iant Interac tive G roup, Inc. G ia nt Intera ctive L aunches B D-C onnect(T M) for B lu-ra y G ia nt Intera ctive G roup, Inc. announced the North America n ava ilability of B D-C onnect(T M), the world's mos t widely us ed
(NYS E :G A) B D-L ive s olution. T he flexible, eas y to us e ga teway to content a nd cus tomers is the eas ies t B D-L ive technology to
implement, is pre-configured with more features than competing s olutions and ready to go. Alrea dy featured on more than
400 titles in E urope a s dyna micHD, a nd availa ble in North America exclus ively through G iant, B D-C onnect s oftwa re for
adding robus t web-connected interactive fea tures to B lu-ray Dis cs is a ctive a nd in us e on more B lu-ra y titles worldwide tha n
any other B D-Live platform. T he technology is already a hit with E uropea n cons umers and content producers , and it arrives
in North America as a compelling a nd thoroughly proven gatewa y to cus tomers and content. B D-C onnect works s eamles s ly
with community-driven web s ites s uch a s C B S -B DLive.com, T witter a nd F acebook. O ther noteworthy fea tures include a
highly s ca la ble a rchitecture with Aka ma i edge s erver content delivery, a llowing for ra pid loa ding of geo-targeted B D-Live
components with full s creen progres s ive s treaming video, HD downloa ds , s ynched movie viewing experiences , us er genera ted quizz e
tracks , photo ga lleries , marketing banners , R S S feeds and menu widgets .

IAC /InterActiveC orp. (Nas daqG S : IAC I)
IB 3 Networks , Inc. (OTC B B :IB NW)
Webzen Inc . (K OS E : A069080)
IAC /InterActiveC orp. Announces C es s a tion of G regory R . O n November 2, 2009, G regory R . B latt ceas ed to be an executive officer of IAC /InterActiveC orp. as a res ult of his reduced
B la tt a s E xecutive O fficer
IB 3 Network s Inc. Announces R es ignation of T renton
Argobright a s C hief T echnology O fficer
W ebz en Inc. Announces E arnings R es ults for the T hird
Q uarter and Nine Months E nded S eptember 30, 2009
role at the IAC corporate level. Mr. B la tt will continue in his role as C hief E xecutive Officer of Ma tch.com, a s ubs idiary of
IAC .
IB 3 Network s Inc. a nnounced tha t T renton Argobright res igned his pos ition of chief technology officer. H e will remain as
chief technology officer and s enior network E ngineer of wholly owned s ubs idiary iB ea m S olutions LLC .
W ebz en Inc. announced ea rnings res ults for the third quarter and nine months ended S eptember 30, 2009. F or the quarter,
the company reported s a les of K R W 6,716 million compared to K R W 6, 879 million for the s ame period las t yea r. O perating
income was K R W 355 million compared to operating los s of K R W 603 million for the s ame period las t yea r. P rofit from
continuing operation before corporate income tax was K R W 367 million compa red to K R W 1,988 million for the s ame period
la s t year. Net income wa s K R W 138 million compared to K R W 1, 843 million for the s a me period las t year.

L iveWorld Inc. (OTC P K :L VWD)
LiveW orld Inc. R eports Una udited E arnings R es ults for LiveW orld Inc. reported $2. 5 million in total revenues and net income of $7,000 for the third quarter of 2009 as compared to
the T hird Q ua rter a nd Nine Months E nded S eptember 30, $2. 7 million in total revenues and net los s of $602, 000 for the third qua rter of 2008. T he company s a w lower revenues as a
2009 res ult of fewer new client acquis itions , which was pa rtia lly offs et by new projects from exis ting clients . T he $609,000
increas e in the net income was attributable to efficiencies the company has been a ble to obtain in the delivery of s ervices to
clients . On a non-G AAP bas is , the company reported net income of $189, 000 for third quarter of 2009, which wa s a n
improvement of $541,000 from the $352, 000 net los s for the third quarter of 2008. Income from operations wa s $3,000
aga ins t los s from operations of $622, 000 a year ago. Los s before tax was $5,000 aga ins t $618, 000 a year ago. Net cas h
provided by opera ting activities wa s $100,000 aga ins t net cas h us ed in operating a ctivities of $294,000 a yea r ago. Adjus ted
E B IT DA wa s $189,000 aga ins t adjus ted LB IT DA of $352, 000 a year a go.

Figure 7b. Key Developments – continued

Source. Capital IQ

K ey Developments - c ontinued
C ompany
United Online Inc. (Nas daqG S : UNTD)
The9 L imited (Nas daqG S :NC TY)
C hines e G amer International
(G TS M: 3083)
Wizzard S oftware C orporation
(AME X:W ZE )
S park Networks , Inc . (AME X:L OV)
DigitalP os t Interactive, Inc .
(OTC B B : DG L P )
S pec trumDNA, Inc. (OTC B B : S P XA)
Quepas a C orp. (OTC B B : QP S A)
Figure 7c. Key Developments – continued
Source. Capital IQ
Headline
United O nline Inc. R eports C ons olidated Unaudited
E arnings R es ults for the T hird Q ua rter a nd Nine Months
E nded S eptember 30, 2009; P rovides E arnings G uidance
for the F ourth Q ua rter a nd F ull Y ea r of 2009; Declares
Q uarterly C a s h Dividend P a yable on November 30, 2009;
Net Debt as at S eptember 30, 2009
G la ncy B inkow & G oldberg L LP F iles a C las s Action
Laws uit on B ehalf of a C las s C ons is ting of All P ers ons or New Y ork on behalf of a clas s cons is ting of a ll pers ons or entities who purchas ed American Depos itary S hares , a s
E ntities W ho P urchas ed American Depos itary S hares , of evidenced by American Depos itary R eceipts , of T he9 Limited between November 15, 2006 and J uly 15, 2009, inclus ive (the
T he9 L imited
C hines e G amer Interna tional S igns G ame Licens ing
Agreement with C ha ngyou. com
W iz za rd Media L aunches 24 New iP hone Apps
S park Networks Inc. R eports F inancial R es ults for the
T hird Q uarter E nded S eptember 30, 2009
DigitalP os t Interactive Launches Digital Media-S haring
P la tform for F amilyDrive.com
S pectrumDNA Inc. Appoints J eff Nolan to its B oa rd of
Directors
Q uepas a C orp. Appoints T ony P a tti as Director of
Deliverabilty
Page 10
Notes
United O nline Inc. reported cons olidated unaudited earnings res ults for the third quarter and nine months ended S eptember
30, 2009. F or the qua rter, the company reported revenues were $216. 2 million, a n increas e of 28% vers us the year-ago
qua rter. T he increas e was attributable to the company's acquis ition of F T D on Augus t 26, 2008. Net income applica ble to
common s tockholders wa s $14. 9 million or $0. 18 diluted net income per common s hare aga ins t net income applicable to
common s tockholders of $15. 2 million or $0. 20 diluted net income per common s hare for the s a me quarter a year ago
period. Income before income taxes was $26.2 million a gains t $26. 6 million for the s ame quarter a year ago period.
O perating income was $32.6 million a gains t $28. 8 million for the s ame qua rter a year a go period. C a s h flows from
opera tions and free cas h flow were $28.2 million and $23.5 million, a decreas e of 20% and 25% , res pectively vers us the
yea r-ago quarter. T he decreas e in cas h flows was primarily a ttributable to changes in working capital. P urcha s es of property
and equipment were $4. 8 million aga ins t $4. 2 million for the s ame qua rter a year a go period. Adjus ted net income applica ble to comm
income per common s ha re a gains t $25. 4 million or $0. 34 diluted net income per common s hare for the s a me quarter
a yea r ago period.
T he compa ny provided earnings guidance for the fourth quarter and full year of 2009. F or the quarter, the company
expects adjus ted O IB DA to be in the range of $56.0--$61.0, revenues in the range of $235. 0--$243. 0 and G AAP
opera ting income in the ra nge of $29.1--$34.1.
F or the year, the company expects a djus ted O IB DA to be in the range of $243.5--$248.5, revenues in the range of
$975.6--$983. 6 and G AAP operating income in the ra nge of $142.3--$147. 3.
T he compa ny's B oard of Directors recently decla red a quarterly cas h dividend of $0. 10 per s hare that is paya ble on
November 30, 2009 to s tockholders of record on November 13, 2009.
Net debt at S eptember 30, 2009 was $252. 6 million, a decreas e of $12.5 million vers us $265. 1 million at J une 30, 2009.
G la ncy B inkow & G oldberg L LP has filed a cla s s action laws uit in the United S ta tes Dis trict C ourt for the S outhern Dis trict of
'C las s P eriod'). T he C ompla int charges T he9 and certain of the C ompany's current and former executive officers with
violations of federal s ecurities laws . T he9 operates as an online game opera tor and developer in ma inla nd C hina and directly
or through a ffiliates operates licens ed multiplayer online role-playing games and adva nced ca s ual games , including S oul of
T he Ultima te Na tion, G ranado E s pada and Atlantica, among others . T he C omplaint alleges tha t throughout the C la s s P eriod
defendants knew or reckles s ly dis rega rded that their public s tatements concerning T he9's bus ines s , opera tions and
pros pects were materia lly fa ls e a nd mis lea ding. S pecifically, the defendants ma de fals e and/or mis lea ding s tatements
and/or failed to dis clos e tha t: (i) it was becoming increa s ingly les s likely that the C ompa ny would be renewing the W orld of W arcra ft c
E ntertainment Inc. ('B lizz ard'); (ii) T he9 had not even begun formal negotiations with B liz zard regarding the W orld of
W arcra ft contract renewal; (iii) T he9 and B lizz ard had been at odds regarding T he9's operation of W orld of W a rcraft in
C hina; a nd (iv) the equity inves tment in T he9 by E lectronic Arts Inc.--a developer and publis her of interactive
enterta inment--had made it les s likely that B liz za rd would renew the W orld of W arcra ft contract beca us e B liz za rd
would es s entially be doing bus ines s with one of its greates t competitors .
C hines e G a mer Interna tiona l announced an over R MB 100 million (approx. $14. 7 million) licens ing agreement with
C hangyou. com Limited, whereby C ha ngyou. com will receive the exclus ive right from the company to operate Zhong Hua
Y ing X iong, a new 3D martial-a rts game, in mainland C hina. C hines e G amer a ls o plans to grab more s hares in the va s t
C hines e online game market in the future through work ing clos ely with C hangyou.com on the res earch and development of
new games .
W iz za rd Media a nnounced the launch of 24 new iP hone(R ) Apps availa ble for s ale in the App s tore including Inves tors
B us ines s Da ily E ditoria ls and Alas k a H DT V . T he newly launched Apps a re iP hone companion Apps for popular podca s ts on
the W izz ard Media Network, offering a udiences one-click acces s to the podcas t directly on their iP hone or iP od T ouch(R ),
bonus content and new s ocial communica tion features creating a n unprecedented level of audience engagement. W iz zard
recently announced 2009 third quarter network numbers of 12, 281 podca s ts downloa ded 332 million times in the qua rter by
over 18 million unique monthly audience members . Approxima tely 70% of the audience for podca s ts s ubs cribe through
iT unes (R ) from which us ers download podca s ts for their iP hone a nd iP od(R ). U ntil recently, W iz za rd's only means to derive
R evenue was through podcas t publis hing s ervices as well a s a dvertis ing s ales . W ith the la unch of the iP hone App s tore in
iT unes , W iz zard created a unique iP hone App that can be quickly cus tomized for each podcas t and allows podca s t
publis hers to genera te a new revenue s tream by ma rketing their own iP hone App directly to their audience.
S park Networks Inc. reported fina ncial res ults for the third quarter ended S eptember 30, 2009. F or the qua rter, the company
reported revenue of $11. 1 million, a decreas e of 21% compared to $14.0 million in the third qua rter of 2008. C ontribution for
the third quarter of 2009 wa s $8.0 million, a decreas e of 25% compared to $10.6 million for the third quarter of 2008. Net
income was $1 million, or $0. 05 per s hare, compared to $1.7 million, or $0.08 per s hare, for the third qua rter of 2008.
Adjus ted E B IT DA was $2. 6 million, a decreas e of 36% compared to $4.1 million for the third quarter of 2008.
DigitalP os t Interactive Inc. announced its rebranded and cus tomized interactive platform was la unched for F amilyDrive.com,
a new pa rtner providing pers ona l, priva te and a d-free s ha ring a nd pres ervation of family pictures , videos , and other digital
memories . Digita lP os t's interactive platform and s oftware development provided F amilyDrive. com with new technology
capa bilities to not only s erve their exis ting cus tomers but a ls o rea ch out to new family cus tomers . T he F amilyDrive. com web
s ite wa s cus tom-des igned to provide a place where fa milies ca n depend on pers onal s ervice and cutting-edge technology for
s haring and s toring their precious family memories .
S pectrumDNA Inc. a nnounced tha t J eff Nolan ha s been appointed to its board of directors . Nolan is a n entrepreneur,
venture ca pitalis t and s ocial media s trategis t. He wa s venture partner for S AP V entures , founded the E nterpris e Irregulars
B logging C ommunity, s erved as director of the Apollo S trategy G roup for S AP G lobal Mark eting, and mos t recently was vice
pres ident of corpora te development at News G a tor T echnologies .
Q uepas a C orp. a nnounced the formation of a cros s -functiona l team dedicated to e-ma il management and deliverability. As
part of this initia tive, the company hired T ony P atti a s Director of Deliverabilty. T ony is a recogniz ed leader in the field of e-
ma il deliverability. W ith a record of s ucces s s panning over a decade, T ony has developed focus ed, cus tomiz ed delivera bility
s olutions for s uch brands as T ra velocity. com a nd T rue. com, helping them a chieve unprecedented delivery-to-inbox rates . As
an expert in e-mail marketing, IS P relations , and the lates t in indus try trends a nd s tanda rds , T ony's delivera bility s tewards hip
ens ures tha t Q uepa s a's vital marketing inves tment pays - ins tea d of being los t in s pa m filters .
 Page 11

VALUATION
Online Gaming companies lead market-cap charts: Fourteen companies in our W eb 2.0 universe top US$1 billion in
market capitalization (Figure 8). Fifty-eight of the 89 companies have market caps under US$100 million, with 39 under
US$25 million. Online gaming companies dominate the top of the list, led by Tencent Holdings (SEHK:700) with a market
cap of approximately US$32.6 billion.

Market C ap (US D m)
Tenc ent Holdings Ltd. 32555. 5
Neteas e.c om Inc . 5435. 9
S handa Interac tive Entertainment Ltd. 3390. 3
Modern Times G roup Mtg A B 3056. 7
G ree, Inc . 2708. 5
IA C/InterA c tiveCorp. 2587. 9
Perf ec t World Co. , Ltd. 2473. 2
S ohu.c om Inc . 2225. 1
Open Tex t Corp. 2201. 1
Changy ou. c om Limited 1822. 7
G iant Interac tive G roup, Inc . 1648. 5
Mix i, Inc . 1275. 1
Chines e G amer International 1151. 5
K ings of t Co. Ltd. 1074. 8
V alueClick Inc . 906. 4
United Online Inc . 704. 6
NEOWIZ G ames Corporation 693. 4
S hutterf ly, Inc . 399. 2
NetDragon WebS of t, Inc . 351. 2
CDC Corp. 267. 1
G ungHo Online Entertainment, Inc . 263. 2
S K Communic ations Co. , Ltd. 250. 9
XING A G 249. 4
OA O R B C Information S ys tems 222. 0
G amania Digital Entertainment Co. , Ltd. 211. 0
GigaMedia Ltd. 208. 3
My riad G roup A G 205. 4
The9 Limited 197. 7
Openw ave S y s tems Inc . 179. 6
DA DA S pA 174. 5
A c toz S oft Co. , Ltd. 112. 1
Y D Online Corp. 89.5
Fluid Mus ic Canada, Inc . 86.8
Tree.Com, Inc . 84.8
Cy berplex Inc . 84.2
GeoS entric Oy j 78.9
G ameOn Co Ltd. 78.1
TheS treet. c om, Inc . 75.0
NeuLion Inc orporated 72.8
Frogs ter Interac tive Pictures A G 70.0
HanbitS of t, Inc . 65.7
PNI Digital Media Inc . 55.4
S park Netw orks , Inc . 55.0
G ravity Co., Ltd 43.6
NeXplore Corporation 41.8
DX N Holdings B hd 41.1
Ngi Group Inc . 36.8
Webz en Inc . 36.6
Eolith Co. Ltd. 34.6
A Q Interac tive, Inc . 28.8
S oc ialw is e, Inc . 24.3
Wiz z ard S of tw are Corporation 23.7
Northgate Technologies Limited 22.4
Dolphin Digital Media, Inc . 21.5
A cc eleriz e New Media, Inc . 21.0
LookS mart, Ltd. 20.0
Y nk K orea Inc . 18.0
Quepas a Corp. 17.8
J umbuc k Entertainment Limited 14.5
DigitalTow n, Inc . 13.7
Lingo Media Corporation 11.2
Ex tens ions , Inc . 11.1
is eemedia Inc . 9.2
IA S Energy, Inc . 8.5
MOK O. mobi Limited 7.9
S pec trumDNA , Inc . 7.3
UOMO Media, Inc 6.9
V OIS , Inc . 6.2
CornerWorld Corporation 5.7
B right Things plc 5.4
Worlds .c om Inc . 5.2
S NA P Interac tive, Inc . 4.3
Magnitude Inf ormation S y s tems Inc . 4.1
B ey ond Commerce, Inc . 3.5
DigitalPos t Interac tive, Inc . 3.5
B roadWebA s ia Inc . 2.5
B igs tring Corp. 2.0
Wy nds torm Corporation 1.8
LiveWorld Inc . 1.1
B etaw ave Corporation 0.9
Unis erve Communic ations Corp. 0.8
K A B Dis tribution Inc . 0.6
CLICK ER Inc . 0.5
A s s oc iated Media Holdings Inc . 0.4
The Parent Company 0.2
China G atew ay Corporation 0.0
S NM G lobal Holdings 0.0
Dibz International, Inc . 0.0
S oc ial Media V entures Inc . 0.0
0 500 1,000 1,500 2, 000 2, 500 3, 000 3, 500 4, 000

Figure 8. Market Cap Ranking

Source. Capital IQ
 Page 12

TEV/Revenue (LTM) averages 5.4x: The overall average TEV/Revenue (LTM) multiple for our group is 5.4x (vs. 5.3x last
week) (Figure 9). W e continue to see four companies trading above 25x revenue – Bigstring Corp. (OTCBB:BSGC) at
48.2x, Dolphin Digital Media, Inc. (OTCBB:DPDM) at 38.6x, NexPlore Corporation (OTCPK:NXPC) at 27.0x, and Tencent
Holdings Ltd. (SEHK:700) at 25.8x. The median of 1.8x compares with 1.7x last week. Note that we exclude multiples
greater than 50x. Thirty-one companies have multiples under 1.5x.

T E V/L T M R evenue (x)

60. 0

50. 0 48.2

38.6
40. 0

30. 0 27.0
25.8

20. 0
15.7
14.515.4
13.2
12.4
9.3 10.0
8.4 8.6
A10. 0
verage, 5.4 5.8 5.9
7.1 7.7
4.5 4.7 5.2 5.5
3.3 3.3 3.4
2.3 2.4 2.4 2.5 2.8 2.9 3.2
1.2 1.3 1.3 1.4 1.4 1.7 1.8 1.9
0.0 0.0 0.0 0.1 0.2 0.2 0.2 0.3 0.3 0.3 0.4 0.5 0.7 0.7 0.7 0.7 0.7 0.7 0.8 0.8 0.9 0.9 0.9 1.0 1.0 1.1
0. 0

N E O WIZ G ames C orporation

J umbuc k E nterta inment L imited

MO K O .mobi L imited
UO MO Media, Inc
C LIC K E R Inc.

G a mania Digital E ntertainment C o., Ltd.

G ungHo O nline E ntertainment, Inc.

P N I Digital Media Inc.

C hines e G amer Interna tional

U nis erve C ommunications C orp.
O AO R B C Information S y s tems

N orthgate T echnologies L imited

DXN Holdings B hd

C hangy ou.com L imited

G a meO n C o Ltd.

T ree.C om, Inc.

C DC C orp.

B ey ond C ommerc e, Inc.

S K C ommunica tions C o., Ltd.

DigitalP os t Intera ctive, Inc.

F luid Mus ic C a nada , Inc.

Dolphin Digital Media, Inc.

T he P a rent C ompany

Modern T imes G roup Mtg AB

G eoS entric O y j
S N M G loba l Holdings

NeuLion Inc orporated

C ornerWorld C orporation

Lingo Media C orporation

NeX plore C orporation

T heS treet.com, Inc .

S NAP Intera ctive, Inc.

United O nline Inc .

O pen T ex t C orp.
C hina G atewa y C orporation

AQ Intera ctive, Inc .

IAC /InterAc tiveC orp.

C y berplex Inc .

G igaMedia Ltd.

S pa rk N etwork s , Inc .

V alueC lic k Inc .

Y D O nline C orp.

NetDra gon WebS oft, Inc .

E olith C o. Ltd.

S ohu.com Inc .

is eemedia Inc .

F rogs ter Intera ctiv e P ictures AG

Mix i, Inc .

G ree, Inc .
As s ociated Media Holdings Inc .

T encent Holdings Ltd.

XIN G AG
O penwave S y s tems Inc .

H anbitS oft, Inc .

P erfect World C o., Ltd.

Y nk K orea Inc .

S ocial Media V entures Inc .

B igs tring C orp.

My riad G roup AG
S hutterfly , Inc .

Acceleriz e New Media , Inc .

K ings oft C o. Ltd.

DADA S pA
Ac toz S oft C o. , Ltd.

Wiz z ard S oftware C orporation

Figure 9. TEV/Revenue Ranking

Source. Capital IQ

TEV/Revenue (LTM) by country/exchange: W e have also calculated multiples based on where the companies are listed
or domiciled. Figure 10 shows the average TEV/Revenue multiples by stock exchange. The OTCBB has the largest
number of companies (18), trading at an average multiple of 12.4x (vs. 12.6x last week). On a geographic basis, the
United States has the most companies (38), trading at an average of 7.3x revenue (vs. 6.9x last week) (Figure 11). Ten of
the companies are Canadian (average 4.0x revenue).

Average TEV/LTM Revenue - By Exchange Average TEV/LTM Revenue - By Country

16.0 14.5 16.0 14.5
14.0 14.0
12.0 12.4
11.9 12.0
10.0 10.0
(x)

8.0 8.5 7.7

(x)

7.7 6.3 8.0 7.3

6.0 5.9 5.3
5.3 5.2 5.2 4.2 6.0 5.2 4.6
4.0 3.2 2.8 1.9 4.0
1.8 1.7 1.7 0.9 0.7 4.0 3.2
2.0 0.3 0.2
2.0 1.8 1.7 0.9 0.7
0.0 0.0 0.7 0.3
OTCPK
OTCBB

GTSM

NasdaqGM
HLSE

SEHK

TSE

OSE

NasdaqGS
KOSE
CM

RTS
OM

0.0 0.0
TSX

XTRA

AMEX

KLSE
BSE
SWX
TSXV
ASX

Germany
Finland

China
United

Japan

Canada

Hong Kong

Malaysia

India

Russia
Italy
South
Korea
States
Taiwan

Australia

Switzerland

Sweden

# Companies 1 18 3 2 11 4 2 5 2 4 1 2 1 1 14 6 1 1 1 5 1
# Companies 1 10 38 3 2 2 6 10 1 1 8 1 1 1 1 1

Figures 10 & 11. TEV/Revenue Ranking (Exchange, Country)

Source. Capital IQ
 Page 13

TEV/EBITDA (LTM) averages 11.8x: The average multiple for the 35 companies with positive EBITDA (and multiples
under 100x) is 11.8x LTM EBITDA (vs. 10.6x last week), led by HanbitSoft, Inc. (KOSE:A047080) 36.9x multiple (Figure
12). Twelve companies have EBITDA multiples under 7x. The median multiple is 9.6x (vs. 8.6x last week).

T E V/L T M E B IT DA (x)

40. 0
36. 4 36. 9

35. 0

30. 0
27. 0
25. 0
25. 0 23. 1
21.3
20.0
20. 0 17.5

13. 6
15. 0 A verage, 11. 8 12. 7 13. 3
11. 5 11. 6 12. 3
10. 5 10. 6 10. 8
9. 6
10. 0 8. 6
7.5 7. 7 8. 0 8. 0
6.6 7.0
4. 9 5. 4 5. 7 6. 2
4. 5
5. 0 2. 9 3. 1
1. 1 1. 5
0. 2 0. 4
0. 0

NE O WIZ G ames C orporation

J umbuck E ntertainment L imited

G amania Digital E ntertainment C o. , Ltd.

G ungH o O nline E ntertainment, Inc .

P NI Digital Media Inc .

C hines e G amer International

U nis erve C ommunications C orp.

O AO R B C Information S y s tems

C hangy ou. c om L imited

G ameO n C o L td.

T ree. C om, Inc .

C DC C orp.

S K C ommunic ations C o. , Ltd.

Modern T imes G roup Mtg AB
S NAP Interac tive, Inc .

U nited O nline Inc .

T heS treet. c om, Inc .

O pen T ex t C orp.
S park Network s , Inc .

V alueC lic k Inc .

C yberplex Inc.

S ohu. c om Inc .

Y D O nline C orp.

NetDragon WebS oft, Inc.

IAC /InterAc tiveC orp.

G ree, Inc .

Mix i, Inc .
XING AG
P erfec t World C o. , L td.

O penwave S y s tems Inc.

Y nk K orea Inc.

H anbitS oft, Inc.

S hutterfly , Inc.

K ings oft C o. L td.

DADA S pA
Actoz S oft C o. , L td.

Figure 12. TEV/EBITDA Ranking

Source. Capital IQ

TEV/EBITDA (LTM) by country/exchange: Figure 13 shows the average TEV/EBITDA multiples by stock exchange. The
OTCBB has the largest number of companies (18), trading at an average multiple of 2.9x. On a geographic basis, the
United States has the most companies (38), trading at an average of 7.2x EBITDA (Figure 14). Ten of the companies are
Canadian (average 19.2x EBITDA).

Average TEV/LTM EBITDA - By Exchange Average TEV/LTM EBITDA - By Country

35.0 29.8 25.0
30.0
19.2
25.0 20.0

20.0 17.3
17.3
(x)

16.0 15.5 15.0 16.0

15.0 13.8
(x)

12.8 12.7 11.6 12.7 11.6

10.0 8.6 8.6 10.5
7.0 6.6 10.0 8.9
5.8 4.9 2.9 1.1 7.2
5.0 0.4 7.0
0.0 5.0
1.1
OTCBB
GTSM

NasdaqGM
KOSE

TSE

SEHK

OSE

NasdaqGS

RTS
OM

CM
XTRA

TSX

AMEX
TSXV

ASX

0.0 0.4
Germany
Canada

Japan

Hong

China

United

Russia
Italy
South
Korea

Kong

States
Taiwan

Australia
Sweden

# Companies 4 2 6 5 3 1 2 1 14 1 4 5 2 18 2 1

# Companies 10 3 8 6 1 2 1 10 38 1 2 1

Figures 13 & 14. TEV/EBITDA Ranking (Exchange, Country)

Source. Capital IQ
 Page 14

P/E (LTM) averages 18.6x: The average multiple for the 33 companies with positive earnings (and multiples under 100x)
is 18.6x LTM EPS (vs. 18.8x last week), led by Tencent Holdings Ltd. (SEHK:700) with a 66.5x multiple (Figure 15).
Fourteen companies have P/E multiples under 10x. The median is 12.3x.

P /E L T M (x)

70.0 66.5
61.9
60.0 56.9

48.0
50.0 45.8

40.0 35.3 36.1

30.0 25.6
21.4 22.5
20.0
A verage, 18.6
20.0
15.0 15.9 16.4
13.1 14.3
11.0 11.7 12.3
7.5 7.7 7.8 8.2 9.5
10.0 6.0
4.1
2.0 2.3 2.4 3.1 3.5
0.0 0.0
0.0

NE O W IZ G ames C orporation
J umbuck E ntertainment Limited

G amania Digital E ntertainment C o., Ltd.

G ungH o O nline E ntertainment, Inc.

C hines e G amer International
DXN H oldings B hd

C hangy ou.com Limited

G iant Interactive G roup, Inc.

G ameO n C o Ltd.

Modern T imes G roup Mtg AB

G ravity C o., Ltd

T he9 Limited

S handa Interactive E ntertainment Ltd.

Neteas e.com Inc.

S NAP Interactive, Inc.

O pen T ex t C orp.
C y berplex Inc.

G igaMedia Ltd.

Y D O nline C orp.

IAC /InterActiveC orp.

S ohu.com Inc.

NetDragon W ebS oft, Inc.

S park Network s , Inc.

Worlds .com Inc.

G ree, Inc.

Mix i, Inc.

T encent H oldings Ltd.

XING AG
W ebz en Inc.

P erfect World C o., Ltd.

H anbitS oft, Inc.

K ings oft C o. Ltd.

Actoz S oft C o., Ltd.

Figure 15. P/E Ranking

Source. Capital IQ

P/E (LTM) by country/exchange: Figure 16 shows the average P/E multiples by stock exchange. The OTCBB has the
largest number of companies (18), trading at an average multiple of 13.8x. On a geographic basis, the United States has
the most companies (38), trading at an average of 13.4x earnings (Figure 17). Ten of the companies are Canadian
(average 27.8x EPS).

Average P/E - By Country

Average P/E - By Exchange 50.0
45.0 43.1
60.0 56.9
40.0
50.0 35.0
40.0 30.0 27.8 25.6
38.5
34.1
(x)

25.0 22.0
28.9
(x)

30.0 25.6 20.0 16.4

14.1
18.3 16.4 15.0 13.4 12.2
20.0
15.0 13.8 11.5 6.0
7.5 10.0 4.1
10.0 6.0
4.1 5.0 0.0
2.0
0.0 0.0 0.0 0.0
Germany
Japan

Canada

China

United

Malaysia

Italy
South
Korea
OTCBB
GTSM

NasdaqGM

States
Taiwan

Australia
OSE

TSE

SEHK

KOSE

NasdaqGS
OM

Sweden

Switzerland
XTRA

AMEX

TSX

KLSE

NYSE
ASX

# Companies 1 5 3 2 2 6 1 2 18 14 4 1 2 1 5 # Companies 6 10 2 3 1 10 38 8 1 2 1 1

Figures 16 & 17. P/E Ranking (Exchange, Country)

Source. Capital IQ
 Page 15

UPCOMING EVENTS

E arnings C alendar
C ompany Date Time Quarter C onf C all Details
Cyberplex Inc. (TSX:CX) 10-Nov-09 4:30 p.m. EST Q3/09 888-892-3255
Perfect World Co., Ltd. (NasdaqGS:PWRD) 16-Nov-09 7:00 a.m. EST Q3/09 800-819-0121
Netease.com Inc. (NasdaqGS:NTES) 18-Nov-09 8:00 p.m. EST Q3/09 877-941-1427
The9 Limited (NasdaqGS:NCTY) 23-Nov-09 8:00 p.m. EST Q3/09 800-884-5695
Figure 18. Earnings Calendar
Source. Company reports
 Page 16

C omparable C ompany Analys is > Web 2.0

Pric e P erformanc e
C ompany Name C urrenc y Tic ker E xc hange US D Market C ap ($m) C urrent P ric e 1 Wk 1 Mth 3 Mth 6 Mth 1 Yr 52 Week

A ccelerize New Media, Inc. US D AC L Z OT C B B 21.0 0.75 36.4% 25.0% 31.6% 50.0% 87.5% -6.3%
A ctoz S oft C o. , L td. KR W A052790 K OS E 112.1 15, 450 6. 6% -6.9% -33.3% 1. 3% 67.0% -57.1%
A Q Interactive, Inc. JPY 3838 TS E 28.8 47, 400 1. 3% -5.0% -8.7% -15.1% 24.7% -42.9%
A s s ociated Media H oldings Inc. US D AS MH OT C P K 0.4 0.01 11.1% -28.6% -28.6% 566.7% 233. 3% -50.0%
B igs tring C orp. US D BSGC OT C B B 2.0 0.03 -2.9% -21.4% 31.5% 43.5% 32.0% -42.1%
B eta wave C orpora tion US D B W AV OT C B B 0.9 0.03 -1.6% -55.0% -58.0% -71.4% -86. 9% -89.1%
B eyond C ommerce, Inc. US D B Y OC OT C B B 3.5 0.07 -14.6% -56.3% -75.9% -92.4% -93. 9% -96.3%
B right T hings plc GB P AIM:B G T A IM 5.4 0.01 -9.1% -9.1% -16.7% -28.6% 38.9% -49.4%
B roadW ebA s ia Inc. US D BWBA OT C P K 2.5 0.03 0. 0% -87.0% -87.0% -91.4% -97. 8% -99.0%
C DC C orp. US D C H IN.A Nas da qG S 267.1 2.52 7. 2% -1.9% -4.5% 110.0% 157. 1% -35.7%
C ha ngyou.com Limited US D C Y OU Nas da qG S 1, 822.7 33.14 9. 2% 6.0% -13.0% 21.6% NM -31.5%
C hina G a tewa y C orporation US D CGWY OT C P K 0.0 0.00 -86.7% -86.7% -86.7% 0. 0% -80. 0% -93.3%
C hines e G a mer International TWD G T S M:3083 GTS M 1, 151.5 444.00 4. 2% -2.8% -2.2% 72.8% 458. 5% -14.5%
C LIC K E R Inc. US D CLK Z OT C B B 0.5 0.01 -23.5% -35.0% -18.8% 8. 3% -96. 8% -98.1%
C ornerW orld C orpora tion US D CW R L OT C B B 5.7 0.06 0. 0% 0.0% 20.0% -57.1% -70. 0% -87.2%
C yberplex Inc. C AD T S X: C X TS X 84.2 1.40 0. 7% 12.0% -17.2% -17.6% 250. 0% -29.6%
DADA S pA E UR C M:DA CM 174.5 7.35 4. 0% 7.9% 21.5% 22.9% 9.9% -10.3%
DXN Holdings B hd MY R DXN K LS E 41.1 0.63 -0.8% 2.4% 18.9% 46.5% 75.0% -8.7%
Dibz Interna tional, Inc. US D DIB Z OT C P K 0.0 0.00 20.0% NM 20.0% -88.0% -97. 6% -97.6%
DigitalP os t Intera ctive, Inc. US D DG LP OT C B B 3.5 0.05 -10.0% -25.0% -35.7% 200.0% 12.5% -54.5%
DigitalT own, Inc. US D DG T W OT C B B 13.7 0.50 -50.5% -75.0% -61.5% -75.0% -75. 0% -85.7%
Dolphin Digital Media, Inc. US D DP DM OT C B B 21.5 0.40 0. 0% 14.3% -11.1% -43.7% -55. 6% -57.9%
E olith C o. L td. KR W A041060 K OS E 34.6 570.00 7. 5% -18.6% -29.2% -44.1% 5.6% -50.9%
E xtens ions , Inc. US D E XT I OT C P K 11.1 0.25 -37.5% -44.4% 25.0% 66.7% 150. 0% -75.2%
F luid Mus ic C anada, Inc. C AD T S X: F MN TS X 86.8 1.80 0. 6% 33.3% 44.0% 200.0% 373. 7% -16.3%
F rogs ter Intera ctive P ictures AG E UR FR G XT R A 70.0 18.66 -2.0% 3.7% 33.4% 120.8% 334. 0% -13.2%
G amania Digita l E ntertainment C o., L td. TWD 6180 GTS M 211.0 45.05 0. 6% -8.1% -23.1% 12.6% 241. 3% -34.5%
G ameO n C o L td. JPY 3812 TS E 78.1 72, 200 -15.3% -18.4% -30.8% -22.7% -39. 3% -52.5%
G eoS entric Oyj E UR G E O1V H LS E 78.9 0.06 20.0% 20.0% 20.0% 20.0% 50.0% 0.0%
G ia nt Interactive G roup, Inc. US D GA NY S E 1, 648.5 7.28 0. 3% 4.6% -8.4% -11.0% 20.5% -23.9%
G igaMedia L td. US D G IG M Nas da qG S 208.3 3.82 -4.0% -21.1% -19.9% -35.7% -28. 5% -50.6%
G ra vity C o., Ltd US D GR VY Nas da qG M 43.6 1.57 0. 0% -19.1% -26.3% 61.9% 135. 4% -40.3%
G ree, Inc. JPY T S E :3632 TS E 2, 708.5 5, 410 6. 3% 10.4% 37.5% 103.4% NM -5.3%
G ungH o Online E ntertainment, Inc. JPY 3765 OS E 263.2 205, 400 -2.9% -7.3% 1.7% 44.0% 67.0% -26.6%
H anbitS oft, Inc. KR W A047080 K OS E 65.7 3, 580 4. 7% -17.4% -17.5% -37.0% 32.3% -46.1%
IAC /InterA ctiveC orp. US D IA C I Nas da qG S 2, 587.9 19.61 3. 1% 2.8% 7.1% 29.4% 23.2% -7.8%
IAS E nergy, Inc. US D IA S A. E OT C B B 8.5 0.12 9. 1% 100.0% 3.4% -57.1% 50.0% -57.1%
is eemedia Inc. C AD IE E T S XV 9.2 0.19 31.0% 58.3% 171.4% 100.0% 171. 4% 0.0%
J umbuck E ntertainment Limited AU D AS X: J MB AS X 14.5 0.34 0. 0% -15.0% -8.1% -17.1% -15. 0% -32.0%
K AB Dis tribution Inc. C AD T S X: K AB TS X 0.6 0.01 -50.0% -99.2% -99.2% -98.6% -99. 4% -99.4%
K ings oft C o. L td. HK D 3888 S E HK 1, 074.8 7.62 1. 5% 1.5% -10.2% 79.3% 264. 6% -19.5%
L ingo Media C orpora tion C AD T S XV :LM T S XV 11.2 0.98 3. 2% 0.0% -12.5% -2.0% -11. 7% -32.9%
L iveW orld Inc. US D LV W D OT C P K 1.1 0.04 -12.5% -30.0% -36.4% -53.3% -56. 3% -86.0%
L ookS mart, L td. US D LO OK Nas da qG M 20.0 1.17 -9.3% 0.9% -14.0% -6.4% -28. 2% -36.1%
Ma gnitude Information S ys tems Inc. US D MAG Y OT C B B 4.1 0.01 -18.2% 0.0% 28.6% -10.0% -52. 6% -70.0%
Mixi, Inc. JPY 2121 TS E 1, 275.1 740,000.00 -5.2% 13.7% 14.9% 76.2% 18.4% -6.4%
Modern T imes G roup Mtg AB SEK MT G B OM 3, 056.7 323.00 5. 2% 4.5% 12.9% 43.9% 113. 2% -5.0%
MO K O .mobi L imited AU D MK B AS X 7.9 0.09 -4.4% 13.2% 32.3% 14.7% 115. 0% -14.0%
Myriad G roup AG C HF MY R N S WX 205.4 4.79 -2.0% 7.6% 14.6% -5.9% -31. 6% -34.4%
NE O W IZ G ames C orporation KR W A095660 K OS E 693.4 39,250.00 1. 7% -3.8% 21.3% 18.0% 479. 3% -12.6%
NetDra gon W ebS oft, Inc. HK D 777 S E HK 351.2 5.15 7. 5% 0.2% -20.8% -2.8% 99.6% -28.0%
Netea s e. com Inc. US D NT E S Nas da qG S 5, 435.9 42.00 11.4% 3.7% -6.7% 36.1% 113. 7% -13.4%
NeuLion Incorpora ted C AD T S X: NL N TS X 72.8 0.68 -2.9% -29.2% -25.3% -2.9% 13.3% -47.7%
NeXplore C orpora tion US D NXP C OT C P K 41.8 0.75 0. 0% 36.4% 7.1% 36.4% -34. 8% -48.3%
Ngi G roup Inc. JPY 2497 TS E 36.8 26,600.00 -3.4% -3.1% -19.9% -16.1% -63. 1% -68.1%
Northgate T echnologies Limited INR 590057 BSE 22.4 30.85 5. 3% -18.0% -12.2% -28.1% -49. 9% -58.6%
O pen T ext C orp. US D OT E X Nas da qG S 2, 201.1 39.04 5. 7% 1.3% 2.8% 29.1% 35.8% -5.8%
O penwa ve S ys tems Inc. US D OP W V Nas da qG S 179.6 2.15 4. 4% -19.5% -19.8% 77.7% 230. 8% -31.3%
P erfect W orld C o., Ltd. US D PWRD Nas da qG S 2, 473.2 49.08 13.5% 12.0% 22.9% 175.3% 190. 2% -2.8%
P NI Digital Media Inc. C AD T S XV :P N T S XV 55.4 1.76 -2.2% -5.4% 23.9% 6. 7% 25.7% -18.1%
Q uepa s a C orp. US D QP S A OT C B B 17.8 1.40 16.7% 2.9% 0.0% 37.3% -36. 1% -40.4%
O AO R B C Information S ys tems US D R BCI R TS 222.0 1.60 0. 0% 6.7% 52.4% 62.4% 6.7% -5.9%
S ha nda Interactive E nterta inment L td. US D S NDA Nas da qG S 3, 390.3 50.41 11.5% 5.3% 2.1% 4. 1% 108. 1% -22.4%
S hutterfly, Inc. US D S F LY Nas da qG S 399.2 15.55 9. 2% -7.1% -0.5% 28.3% 127. 7% -14.2%
S K C ommunications C o. , L td. KR W A066270 K OS E 250.9 7,150.00 1. 4% -16.3% -29.6% -20.1% 56.1% -44.4%
S NA P Intera ctive, Inc. US D S TVI OT C B B 4.3 0.40 90.5% 14.3% 0.0% -50.0% -46. 7% -63.0%
S NM G loba l H oldings US D S NMN OT C P K 0.0 0.00 0. 0% 0.0% -70.0% -50.0% -99. 2% -99.3%
S ocial Media V entures Inc. US D S MV I OT C P K 0.0 0.01 6. 8% -86.1% -93.4% 25.0% -99. 1% -99.8%
S ocialwis e, Inc. US D S CLW OT C B B 24.3 0.55 10.0% -5.2% -15.4% -16.7% -70. 3% -72.5%
S ohu.com Inc. US D S O HU Nas da qG S 2, 225.1 57.86 7. 0% -10.3% -8.0% 10.2% 33.6% -20.0%
S pa rk Networks , Inc. US D LO V A ME X 55.0 2.67 -7.3% 14.6% -4.0% 4. 7% -12. 5% -15.2%
S pectrumDNA, Inc. US D S P XA OT C B B 7.3 0.15 0. 0% -25.0% -34.8% -61.5% -37. 5% -66.7%
T encent H oldings Ltd. HK D 700 S E HK 32,555. 5 139 -2.9% 7.9% 18.2% 90.8% 177. 0% -8.6%
T he P a rent C ompany US D K IDS . Q OT C P K 0.2 0.01 0. 0% 0.0% -53.3% -53.3% -99. 3% -99.3%
T he9 L imited US D NC T Y Nas da qG S 197.7 7.88 0. 8% 2.5% -15.4% -13.2% -34. 6% -52.6%
T heS treet.com, Inc. US D TS CM Nas da qG M 75.0 2.45 1. 7% -18.1% 7.5% 29.6% -22. 7% -34.5%
T ree.C om, Inc. US D TR E E Nas da qG M 84.8 7.78 -3.4% -1.5% -19.5% -32.9% 255. 3% -40.5%
U nis erve C ommunica tions C orp. C AD T S XV :US S T S XV 0.8 0.04 -30.0% -12.5% -22.2% -12.5% -80. 6% -65.0%
U nited O nline Inc. US D UNT D Nas da qG S 704.6 8.33 6. 0% 2.2% 11.8% 23.4% 25.8% -11.9%
U OMO Media, Inc US D UO MO OT C B B 6.9 0.08 5. 3% -30.4% -42.9% -75.8% -48. 4% -92.5%
V alueC lick Inc. US D V CLK Nas da qG S 906.4 10.40 12.9% -22.7% -3.2% 7. 4% 82.1% -25.4%
V OIS , Inc. US D V O IS OT C B B 6.2 0.01 87.5% 50.0% 36.4% 134.4% 0.0% -67.4%
W ebzen Inc. US D W ZE N Nas da qG M 36.6 3.09 2. 0% 10.0% -4.0% -3.4% 235. 9% -34.0%
W izzard S oftwa re C orporation US D W ZE A ME X 23.7 0.47 9. 3% 0.0% -2.1% -24.2% -43. 4% -72.8%
W orlds .com Inc. US D W DDD OT C B B 5.2 0.10 0. 0% 0.0% 11.1% -41.2% -37. 5% -56.5%
W ynds torm C orpora tion US D W Y ND OT C P K 1.8 0.10 0. 0% 0.0% 0.0% 11.1% -50. 0% -80.4%
XING A G E UR O1B C XT R A 249.4 32.30 -7.4% -11.3% 15.4% 7. 7% 12.2% -15.0%
Y D Online C orp. KR W A052770 K OS E 89.5 7,120.00 4. 6% -15.7% -22.6% -25.7% 24.3% -42.6%
Y nk K orea Inc. KR W A023770 K OS E 18.0 4,020.00 3. 1% 2.3% -25.0% -48.6% -32. 4% -53.8%
H igh 90.5% 100.0% 171.4% 566.7% 479. 3% 0.0%
L ow -86.7% -99.2% -99.2% -98.6% -99. 4% -99.8%
Average 794.1 1.2% -7.1% -7.2% 15.9% 44.0% -44.1%
Media n 0. 7% -0.8% -8.0% 4. 1% 13.3% -40.5%

Figure 19. Price Performance

Source. Capital IQ
 Page 17

C omparable C ompany Analys is > Web 2.0

Valuation Multiples
P rimary US D Market TE V/L TM TE V/ NTM TE V/L TM TE V/NTM
C ompany Name S ec tor C ountry E xc hange Ticker C ap ($m) R evenue R evenue E B ITDA E B ITDA P /L TM E P S P /NTM E P S P /TangB V
Accelerize New Media, Inc. Direct Marketing U nited S ta tes OTCB B AC LZ 21.0 5.8x - - - - - -
Actoz S oft C o., Ltd. G aming S outh K orea K OS E A052790 112.1 0.7x - 3. 1x - 15.9x - 1.8x
AQ Intera ctive, Inc. G aming J apan TS E 3838 28.8 0.1x 0.1x - - - 8.5x 0.5x
As s ocia ted Media Holdings Inc. Mobile U nited S ta tes OTCP K AS MH 0.4 13.2x - - - - - -
B igs tring C orp. Ins ta nt Mes s aging U nited S ta tes OTCB B BSGC 2.0 48.2x - - - - - -
B etawave C orpora tion Media U nited S ta tes OTCB B B W AV 0.9 - - - - - - 0.2x
B eyond C ommerce, Inc. S ocial Networking U nited S ta tes OTCB B B YOC 3.5 0.8x - - - - - -
B right T hings plc S ocial Networking U nited K ingdom AIM AIM:B G T 5.4 - - - - - - -
B roadW ebAs ia Inc. S ocial Networking U nited S ta tes OTCP K BWBA 2.5 - - - - - - -
C DC C orp. G aming H ong K ong N as da qG S C HIN.A 267.1 0.7x 0.8x 10.5x 7.3x - - -
C hangyou.com Limited G aming C hina N as da qG S C Y OU 1,822.7 5.9x 4.9x 9. 6x 7.6x 12.3x 10.6x 9.5x
C hina G atewa y C orpora tion Mobile U nited S ta tes OTCP K CGW Y 0.0 0.0x - - - - - -
C hines e G amer Interna tional G aming T a iwa n GTS M G T S M:3083 1,151.5 15.7x 16.0x 27.0x 25.9x 35.3x 22.0x 16.9x
C L IC K E R Inc. Direct Marketing U nited S ta tes OTCB B C LK Z 0.5 0.2x - - - - - -
C ornerW orld C orporation C ontent U nited S ta tes OTCB B CW R L 5.7 2.4x - - - - - -
C yberplex Inc. A dvertis ing C ana da TS X T S X: C X 84.2 0.7x 0.6x 6. 6x 5.2x 7.5x 8.4x 3.3x
DA DA S pA S ocial Networking Italy CM C M:DA 174.5 0.9x 0.9x 7. 0x 6.0x - 16.5x -
DXN Holdings B hd S ocial Networking Mala ys ia K LS E DXN 41.1 0.7x - - - 6.0x - 0.8x
Dibz Interna tiona l, Inc. S NS Apps U nited S ta tes OTCP K DIB Z 0.0 - - - - - - -
DigitalP os t Interactive, Inc. C ontent U nited S ta tes OTCB B DG L P 3.5 5.5x - - - - - -
DigitalT own, Inc. S ocial Networking U nited S ta tes OTCB B DG T W 13.7 - - - - - - -
Dolphin Digital Media, Inc. S ocial Networking U nited S ta tes OTCB B DP DM 21.5 38.6x 1.4x - - - 1.6x -
E olith C o. L td. G aming S outh K orea K OS E A041060 34.6 2.4x - - - - - 3.1x
E xtens ions , Inc. C ontent U nited S ta tes OTCP K E XT I 11.1 - - - - - - -
F luid Mus ic C a nada, Inc. Media U nited S ta tes TS X T S X:F MN 86.8 15.4x 14.7x - - - - 8.2x
F rogs ter Interactive P ictures A G G aming G erma ny XT R A FR G 70.0 7.1x - - - - - 8.6x
G amania Digital E ntertainment C o., Ltd. G aming T a iwa n GTS M 6180 211.0 1.2x 1.5x 7. 5x - 22.5x - 2.7x
G ameO n C o Ltd. G aming J apan TS E 3812 78.1 0.0x - 0. 2x - 7.8x - 0.9x
G eoS entric Oyj Mobile F inland H LS E G E O1V 78.9 14.5x - - - - - 65.2x
G iant Interactive G roup, Inc. G aming C hina NY S E GA 1,648.5 - - - - 2.0x 15.2x 0.3x
G igaMedia Ltd. G aming T a iwa n N as da qG S G IG M 208.3 0.7x 0.7x - 3.4x 8.2x 7.7x 1.8x
G ravity C o., Ltd G aming S outh K orea N as da qG M GR VY 43.6 - - - - 0.0x - 0.0x
G ree, Inc. S ocial Networking J apan TS E T S E : 3632 2,708.5 12.4x 7.3x 21.3x 13.3x 45.8x 26.1x 21.7x
G ungH o O nline E nterta inment, Inc. Media J apan OS E 3765 263.2 1.9x - 8. 6x - 56.9x - 19.6x
Ha nbitS oft, Inc. G aming S outh K orea K OS E A047080 65.7 0.9x - 36.9x - 11.7x - 1.8x
IAC /InterActiveC orp. Media U nited S ta tes N as da qG S IAC I 2,587.9 0.7x 0.7x 11.5x 4.9x 11.0x 28.7x 1.3x
IAS E nergy, Inc. V ideo C ana da OTCB B IAS A.E 8.5 - - - - - - -
is eemedia Inc. C ontent C ana da T S XV IE E 9.2 5.2x - - - - - 18.2x
J umbuck E ntertainment Limited S ocial Networking Aus tra lia AS X AS X:J MB 14.5 0.5x 0.5x 1. 1x 1.2x 4.1x 3.0x 1.3x
K A B Dis tribution Inc. C ontent C ana da TS X T S X:K AB 0.6 - - - - - - 0.0x
K ings oft C o. Ltd. G aming C hina S E HK 3888 1,074.8 7.7x 6.3x 17.5x 12.1x 21.4x 16.1x 6.0x
Lingo Media C orpora tion L earning C ana da T S XV T S XV : LM 11.2 8.6x - - - - - 20.1x
LiveW orld Inc. S ocial Networking U nited S ta tes OTCP K LV W D 1.1 - - - - - - 0.5x
LookS ma rt, L td. Direct Marketing U nited S ta tes N as da qG M L OOK 20.0 - - - - - - 0.8x
Magnitude Information S ys tems Inc. S ocial Networking U nited S ta tes OTCB B MA G Y 4.1 - - - - - - -
Mixi, Inc. S ocial Networking J apan TS E 2121 1,275.1 8.4x - 25.0x - 61.9x 49.5x 8.5x
Modern T imes G roup Mtg AB Media S weden OM MT G B 3,056.7 1.8x - 12.7x - 16.4x - -
MOK O .mobi Limited S ocial Networking Aus tra lia AS X MK B 7.9 10.0x - - - - - 8.2x
Myriad G roup AG Mobile S witzerla nd SWX MY R N 205.4 3.2x - - - - - -
NE OW IZ G ames C orporation G aming S outh K orea K OS E A095660 693.4 3.3x 2.5x 12.3x 8.6x 36.1x 12.4x 18.2x
NetDra gon W ebS oft, Inc. G aming C hina S E HK 777 351.2 2.3x 1.6x 8. 0x 4.4x 14.3x 11.4x 1.9x
Netea s e.com Inc. G aming C hina N as da qG S NT E S 5,435.9 - - - - 3.1x - 0.9x
NeuLion Incorporated V ideo C ana da TS X T S X:NL N 72.8 2.9x - - - - - 5.2x
NeXplore C orporation C ontent U nited S ta tes OTCP K NXP C 41.8 27.0x - - - - - -
Ngi G roup Inc. Media J apan TS E 2497 36.8 - - - - - - 0.7x
Northgate T echnologies Limited Direct Marketing India BS E 590057 22.4 0.3x - - - - 1.2x -
O pen T ext C orp. C ollabora tion C ana da N as da qG S OT E X 2,201.1 2.8x 2.4x 10.8x 9.0x 48.0x 13.1x -
O penwave S ys tems Inc. Mobile U nited S ta tes N as da qG S OP W V 179.6 0.4x 0.4x 13.3x 3.8x - 30.3x 2.5x
P erfect W orld C o., Ltd. G aming C hina N as da qG S PWRD 2,473.2 0.9x - 1. 5x - 3.5x - 1.6x
P N I Digital Media Inc. Digita l Ima ging C ana da T S XV T S XV :P N 55.4 2.5x 2.1x 23.1x 6.9x - 14.1x 19.3x
Q uepa s a C orp. S ocial Networking U nited S ta tes OTCB B QP S A 17.8 - - - - - - -
O AO R B C Information S ys tems Media R us s ia R TS R BCI 222.0 0.0x 1.0x 0. 4x 5.7x - 6.5x -
S handa Interactive E nterta inment Ltd. G aming C hina N as da qG S S NDA 3,390.3 - - - - 2.4x - 0.9x
S hutterfly, Inc. Digita l Ima ging U nited S ta tes N as da qG S S FLY 399.2 1.3x 1.2x 10.6x 6.1x - 92.0x 2.4x
S K C ommunications C o., Ltd. S earch S outh K orea K OS E A066270 250.9 1.3x - 20.0x - - - -
S N AP Interactive, Inc. Dating U nited S ta tes OTCB B S TVI 4.3 0.8x - 2. 9x - 7.7x - 2.4x
S N M G lobal Holdings Media U nited S ta tes OTCP K S NMN 0.0 1.1x - - - - - -
S ocial Media V entures Inc. S ocial Networking U nited S ta tes OTCP K S MV I 0.0 4.5x - - - - - -
S ocialwis e, Inc. S ocial Networking U nited S ta tes OTCB B S CLW 24.3 - - - - - - -
S ohu.com Inc. G aming C hina N as da qG S S O HU 2,225.1 3.4x 2.9x 7. 7x 6.5x 13.1x 14.9x 4.0x
S park N etworks , Inc. S ocial Networking U nited S ta tes AME X L OV 55.0 1.0x - 4. 9x - 15.0x - 56.2x
S pectrumDN A, Inc. Media U nited S ta tes OTCB B S P XA 7.3 - - - - - - 72.8x
T encent Holdings Ltd. P orta l C hina S E HK 700 32,555.5 25.8x 19.6x - 46.8x 66.5x 54.9x 29.6x
T he P a rent C ompany Media U nited S ta tes OTCP K K IDS .Q 0.2 0.2x 0.2x - 12.8x - - -
T he9 L imited G aming C hina N as da qG S NC T Y 197.7 - - - - 2.3x - 0.1x
T heS treet.com, Inc. Media U nited S ta tes N as da qG M TS CM 75.0 0.2x 0.2x 5. 4x - - - 1.0x
T ree.C om, Inc. P orta l U nited S ta tes N as da qG M TREE 84.8 0.3x 0.3x 6. 2x 7.9x - 97.9x 1.3x
Unis erve C ommunications C orp. S ocial Networking C ana da T S XV T S XV :US S 0.8 0.3x - 36.4x - - - -
United Online Inc. Media U nited S ta tes N as da qG S U NT D 704.6 1.0x 1.0x 4. 5x 3.9x - 6.7x -
UO MO Media, Inc Media C ana da OTCB B UO MO 6.9 9.3x - - - - - -
V a lueC lick Inc. Media U nited S ta tes N as da qG S V CLK 906.4 1.4x 1.4x 5. 7x 5.6x - 16.9x 4.8x
V O IS , Inc. S ocial Networking U nited S ta tes OTCB B V OIS 6.2 - - - - - - 39.5x
W ebzen Inc. G aming S outh K orea N as da qG M W ZE N 36.6 - - - - 0.0x - 0.0x
W izzard S oftware C orporation P odca s ting U nited S ta tes AME X W ZE 23.7 4.7x - - - - - -
W orlds .com Inc. C ontent U nited S ta tes OTCB B W DDD 5.2 - - - - 20.0x - -
W ynds torm C orporation C ontent U nited S ta tes OTCP K W Y ND 1.8 - - - - - - -
XIN G AG S ocial Networking G erma ny XT R A O1B C 249.4 3.3x 2.6x 11.6x 7.3x 25.6x 15.3x 8.0x
Y D Online C orp. G aming S outh K orea K OS E A052770 89.5 1.7x 1.4x 8. 0x 4.8x 9.5x 7.2x 3.0x
Y nk K orea Inc. G aming S outh K orea K OS E A023770 18.0 1.4x - 13.6x - - - 0.9x
High 32,555.5 48.2x 19.6x 36.9x 46.8x 66.5x 97.9x 72.8x
Low 0.0 0.0x 0.1x 0. 2x 1.2x 0.0x 1.2x 0.0x
Average 794.1 5.4x 3.2x 11.5x 9.1x 18.6x 21.7x 9.6x
Median 41.8 1.8x 1.4x 9. 1x 6.5x 12.3x 14.5x 2.5x

Figure 20. Valuation Comparison

Source. Capital IQ
 Page 18

C omparable C ompany Analys is > Web 2.0

S ummary by C ountry
C ompany Name US D Market C ap ($m) Avg US D Market C ap ($m) US D L TM Total R ev ($m) US D L TM Total E B ITDA ($m) E B ITDA %

United S tates 38 C hina 49, 633. 4 C hina 4,963. 3 C hina 4,152. 4 C hina 2, 070. 2 C hina 48. 8%
C a na da 10 U nited S ta tes 5, 811. 3 S weden 2,974. 2 United S tates 3,887. 3 S weden 304. 6 A us tralia 42. 8%
C hina 10 J a pan 3, 871. 5 J apan 645. 3 S weden 1,982. 6 United S tates 290. 0 T aiwan 37. 1%
S outh K orea 8 S weden 2, 974. 2 T aiwan 577. 9 C a na da 1,015. 0 C a na da 200. 0 J apan 24. 2%
J a pa n 6 C anada 2, 488. 2 Hong K ong 294. 6 S outh K orea 707. 3 J a pa n 186. 0 S weden 15. 4%
T a iwa n 3 T a iwa n 1, 733. 6 C anada 248. 8 J a pa n 634. 4 S outh K orea 121. 9 Mala ys ia 14. 4%
Aus tralia 2 S outh K orea 1, 527. 4 S outh K orea 190. 9 T a iwa n 385. 8 T a iwa n 59. 8 Italy 13. 1%
G erma ny 2 G ermany 317. 0 Ita ly 165. 4 Hong K ong 361. 6 Ita ly 31. 9 R us s ia 13. 1%
S witzerla nd 1 Hong K ong 294. 6 R us s ia 160. 9 Ita ly 242. 6 Hong K ong 25. 1 S outh K orea 12. 7%
Hong K ong 1 Ita ly 165. 4 G ermany 158. 5 R us s ia 156. 2 R us s ia 20. 4 Hong K ong 6. 9%
F inla nd 1 R us s ia 160. 9 U nited S ta tes 152. 9 India 82. 8 G erma ny 12. 5 S witzerla nd 1. 9%
Ita ly 1 S witzerla nd 92. 0 S witzerla nd 92. 0 Ma lays ia 77. 1 Ma lays ia 11. 1 C anada -8. 5%
United K ingdom 1 F inland 65. 9 F inland 65. 9 G erma ny 68. 7 Aus tralia 4. 5 G ermany -9. 1%
India 1 Malays ia 39. 8 Malays ia 39. 8 S witzerla nd 40. 0 S witzerla nd 0. 8 U nited S ta tes -21. 9%
S weden 1 India 31. 0 India 31. 0 Aus tralia 17. 8 Norwa y -1. 1 India -50. 0%
R us s ia 1 Aus tralia 22. 1 Aus tralia 11. 0 F inla nd 5. 5 United K ingdom -2. 7 Norway -50. 6%
Ma lays ia 1 U nited K ingdom 6. 0 U nited K ingdom 6. 0 Norwa y 2. 3 F inla nd -17. 5 U nited K ingdom NA
Norwa y 1 Norway 0. 1 Norway 0. 1 United K ingdom 0. 0 India -41. 4 F inland NA

G rand Total 89 G rand Total 69,234.6 G rand Total 777.9 G rand Total 13,819.5 G rand Total 3,276.1 G rand Total 5.1%

Figure 21. Comparison by Country

Source. Capital IQ

C omparable C ompany Analys is > Web 2.0

S ummary by E xc hange
C ompany Name US D Market C ap ($m) Avg US D Market C ap ($m) US D L TM Total R ev ($m) US D L TM Total E B ITDA ($m) E B ITDA %

OT C B B 18 S E HK 31, 520. 4 S E HK 10,506. 8 OM 1,982. 6 Na s daqG S 1, 796. 0 NY S E 62. 5%

Na s daqG S 14 Nas da qG S 24, 385. 7 OM 2,974. 2 S E HK 540. 0 S E HK 767. 5 AS X 42. 8%
OT C P K 11 TS E 3, 569. 2 NY S E 1,750. 4 Na s daqG S 498. 6 OM 304. 6 S E HK 40. 6%
K OS E 6 OM 2, 974. 2 Nas da qG S 1,741. 8 CM 242. 6 TS E 160. 2 GTS M 37. 1%
TS E 5 NY S E 1, 750. 4 GTS M 715. 0 NY S E 198. 5 NY S E 124. 1 Nas da qG S 30. 4%
Na s daqG M 5 K OS E 1, 437. 0 TSE 713. 8 RTS 156. 2 K OS E 103. 2 TSE 24. 6%
TS X 4 GTS M 1, 430. 0 OS E 302. 3 OS E 116. 1 GTS M 59. 8 OS E 22. 2%
T S XV 4 XT R A 317. 0 K OS E 239. 5 K OS E 106. 0 CM 31. 9 OM 15. 4%
S E HK 3 OS E 302. 3 CM 165. 4 TS E 103. 7 OS E 25. 8 K LS E 14. 4%
AME X 2 Nas da qG M 279. 7 R TS 160. 9 GTS M 101. 1 RTS 20. 4 CM 13. 1%
AS X 2 TS X 243. 6 XT R A 158. 5 BSE 82. 8 Na s daqG M 15. 6 R TS 13. 1%
XT R A 2 OT C B B 230. 9 SWX 92. 0 Na s daqG M 82. 4 XT R A 12. 5 K OS E 9. 6%
GTS M 2 CM 165. 4 HLS E 65. 9 K LS E 77. 1 K LS E 11. 1 Nas da qG M 7. 7%
SWX 1 R TS 160. 9 TSX 60. 9 TS X 46. 4 AME X 6. 2 T S XV 5. 6%
HL S E 1 SWX 92. 0 Nas da qG M 55. 9 SWX 40. 0 AS X 4. 5 S WX 1. 9%
CM 1 T S XV 76. 6 K LS E 39. 8 XT R A 34. 3 SWX 0. 8 XT R A -9. 1%
BS E 1 AME X 68. 5 AME X 34. 2 AME X 27. 9 OT C NO -1. 1 A ME X -31. 8%
NY S E 1 HLS E 65. 9 BS E 31. 0 OT C P K 16. 5 AIM -2. 7 TSX -34. 7%
OS E 1 OT C P K 65. 8 T S XV 19. 1 T S XV 12. 0 TS X -4. 3 OTCB B -38. 8%
AIM 1 K LS E 39. 8 OT C B B 12. 8 AS X 8. 9 T S XV -4. 6 OTCP K -41. 5%
OM 1 BS E 31. 0 AS X 11. 0 HL S E 5. 5 HL S E -17. 5 BSE -50. 0%
RTS 1 AS X 22. 1 AIM 6. 0 OT C B B 2. 3 OT C P K -34. 1 O T C NO -50. 6%
K LS E 1 AIM 6. 0 OT C P K 6. 0 OT C NO 2. 3 BSE -41. 4 A IM NA
OT C NO 1 OT C NO 0. 1 OT C NO 0. 1 AIM 0. 0 OT C B B -62. 4 HLS E NA

G rand Total 89 G rand Total 69,234.6 G rand Total 777.9 G rand Total 13,819.5 G rand Total 3,276.1 G rand Total 5.1%

Figure 22. Comparison by Exchange

Source. Capital IQ
 Page 19

F inanc ing - L as t Three Months (US $ m)

F in. Amount (Million) Type of financing
Month C ompany Name C ountry Angel/S eed Debt financing S eries A S eries B S eries C S eries D S eries E G rand Total
S ep-09 Twitter US A 100.0 100.0
E ns equence US A 20.0 20.0
L ivebookings UK 16. 0 16.0
Mzinga US A 10. 0 10.0
InXpo US A 9.0 9. 0
J obvite US A 8.3 8. 3
R iot Games US A 8.0 8. 0
NextB io US A 8. 0 8. 0
Imeem US A 6.0 6. 0
Vuclip US A 6.0 6. 0
Y uMe US A 5. 0 5. 0
B ooyah US A 5.0 5. 0
NeoE dge US A 4. 0 4. 0
Alliance Health Networks US A 3. 3 3. 3
Unis fair US A 3.1 3. 1
C onduit L abs US A 3.0 3. 0
Moc apay US A 3. 0 3. 0
F wix US A 2.8 2. 8
Vantrix C ana da 2. 6 2. 6
Mas hL ogic US A 2.5 2. 5
G reys tripe US A 2. 0 2. 0
L oomia US A 1. 5 1. 5
F ourS quare US A 1.4 1. 4
E duF ire US A 1.3 1. 3
F luther US A 0.6 0. 6
Trans G aming Inc. C ana da 0. 5 0. 5
OnL ive US A
S ep-09 Total 0.6 2.0 16.9 52.3 27.9 23.1 110.0 232.8

Oct-09 DailyMotion F rance 25. 3 25.3

P opC ap Games US A 22.5 22.5
E ngine Yard US A 19. 0 19.0
HubS pot US A 16. 0 16.0
J ive S oftware US A 12. 0 12.0
S pigit US A 10. 0 10.0
Ooyala US A 10. 0 10.0
S c anS cout US A 8.5 8. 5
B ox.net US A 7. 1 7. 1
R eality Mobile US A 6.5 6. 5
W atercooler US A 5.5 5. 5
Vdopia US A 4.7 4. 7
S ometric s US A 4.0 4. 0
Amie S treet US A 3.9 3. 9
ViVu US A 3.0 3. 0
F izzbac k UK 2.6 2. 6
Technorati US A 2.0 2. 0
Onehub US A 1.3 1. 3
DataS ync US A 1.2 1. 2
DailyB ooth US A 1.0 1. 0
Hot P otato US A 1.0 1. 0
L inkedex UK 1.0 1. 0
S tatus Net C a na da 0.9 0. 9
IngB oo US A 0.8 0. 8
C hango C a na da 0.7 0. 7
C redit K arma US A 0.5 0. 5
L is tia US A 0.4 0. 4
Oct-09 Total 4.5 40.9 56.5 67.4 2.0 171.3

Nov-09 C ubeTree US A 8.0 8. 0

E ventbrite US A 6. 0 6. 0
Altruik US A 4.7 4. 7
C redit K arma US A 2.5 2. 5
B lekko US A 2.5 2. 5
S c oopler US A 0.5 0. 5
Nov-09 Total 0.5 7.2 8.0 6.0 2.5 24.2

Figure 23. Financing, Last Three Months

Source. Company reports
 Page 20

C ompany Des c riptions - C urrent Month C apital Market Ac tivity

C ompany HQ Webs ite Des cription
Altruik United S ta tes www. altuik. com Altruik , Inc. provides s earch engine optimization s olutions for optimiz ing the W ebs ite content to ens ure vis ibility and page rank ing. T he
company was founded in 2006 and is bas ed in New Y ork, New Y ork.
B lekko United S ta tes www. blekko.com B lek ko, Inc. provides internet s earch s olutions . B lekk o, Inc. was founded in 2007 a nd is bas ed in United S tates .
C redit K arma United S ta tes www. creditkarma. com C redit K arma is the cons umer’s advoca te for demys tifying credit and has a ra nge of tools a nd information res ources to help them monitor
a nd manage the credit as pect of their financial hea lth. C redit K a rma’s goal is to help cons umers eas ily diges t the contents of their credit
report and unders tand what makes up their credit s core. C redit K arma works with a range of partners , including mortgage lenders , credit
card providers , bank s , and wireles s providers .
C ubeTree United S ta tes www. cubetree. com C ubeT ree, Inc. provides s ocial networking s oftware. It offers C ubeT ree AP I, a R E S T W eb s ervices AP I, which allows applications to query
a nd manipulate the res ources provided by the C ubeT ree W eb application. C ubeT ree provides its s oftware as s ervice. T he compa ny was
founded in 2008 and is bas ed in R edwood C ity, C alifornia.
E ventbrite United S ta tes www. eventbrite. com Mollyguard C orpora tion, doing bus ines s as E ventbrite, provides online regis tra tion s olutions to event organizers . It offers online event
management and ticketing s ervices . T he company a ls o engages in publis hing branded event pages ; promoting events online; and s elling
event tick ets through the pers onalized event regis tration W eb page. In addition, it offers an online events marketplace that enables
individuals , bus ines s es , and organiza tions of various s izes mana ge, promote, and s ell their events . T he compa ny s erves event organizers ,
a s well as various non-profits , univers ities , libra ries , and organiz ations . Mollyguard C orporation was founded in 2006 and is ba s ed in S an
F rancis co, C alifornia.
P hoenix New Media C hina P hoenix New Media is a s ubs idiary compa ny of P hoenix T elevis ion G roup, an integra ted multi-media platform that offers web, online V OD,
a nd mobile internet/ wireles s s ervices . Its web portal, www. ifeng. com, is one of the top news s ites in C hina, es pecially popular among
C hina's growing middle clas s .
P layF is h UK www. playfis h. com P layfis h Limited, a s ocial games company, develops and publis hes video games for s ocial networks . It creates games for people to play
together us ing s ocial networks , s uch as F acebook, MyS pace, B ebo, Y ahoo! , iP hone, and iP od touch. T he company als o offers a dvertis ing
opportunities , including in-game video ads and s pons ors hips packages . P layfis h Limited wa s founded in 2007 and is headquartered in
L ondon, the United K ingdom with additional offices in B eijing, C hina; S an F rancis co, C alifornia; and T roms o, Norway. As of November 9,
2009, P layfis h Limited operates as a s ubs idia ry of E A Interactive.
S coopler United S ta tes www. s coopler. com S coopler, Inc. , a real-time s earch engine, aggregates and organiz es content being s ha red on the internet as it happens . It offers s earch
options on entertainment, technology, s ports , world a nd bus ines s , s cience, gaming, politics , and lifes tyle topics . T he company wa s
incorporated in 2008 and is ba s ed in S an F rancis co, C a lifornia .
Motley F ool United S ta tes www. fool. com T he Motley F ool, Inc. operates as a multimedia financial-s ervices company. T he compa ny provides financia l s olutions for various inves tors . It
reaches people each month through its W ebs ite, books , news paper column, televis ion appea rances , and s ubs cription news letter s ervices .
T he company’s s ervices include s ubs cription inves tment news letter that provides information on blue-chips , mutual funds , undis covered
s mall caps , and growth s tocks , as well as delivers s tock and fund recommendations ; and F ool.com that publis hes articles to offer news ,
a nalys is , and commentary through a range of dis tribution partners hips primarily with Y a hoo! , MS N, and AO L. Its s ervices als o compris e
C AP S , a Motley F ool community members ’ s tock-rating s ervice; a weekly news paper column; books in print on inves ting and pers onal-
finance; independent analys is and engaging commentary for bus ines s reporters , as well as radio a nd T V producers ; F ool UK , a financial
W ebs ite in the United S tates ; a nd cons umer finance advices that range from buying a home to dealing with taxes , and from managing credit-
card debt to s aving for retirement. Its products and s ervices further include credit cards ; online news letter as an inves tment guide; and reports on s ma
res earch, value s tock res earch, million dollar portfolio s ervice, different portfolios , and s tock advis ory. T he company a ls o provides informa tion on
bonds , broker comparis on, E T F s , index funds , mutua l funds , and s tock idea s ; and s aving and s pending, credit and debt, home and real es tate,
death and T axes , and IR As . T he Motley F ool wa s founded in 1994 a nd is bas ed in Alexandria , V irginia.

Figure 24a. Company Descriptions

Source. Company reports, Capital IQ, Crunchbase
 Page 21

RELEVANT DISCLOSURES APPLICABLE TO: NONE

LIST OF DISCLOSURE TERMS:

1. None applicable.

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

I n f o r ma t i o n a b o u t Re s e a r ch C a p i t a l C o r p o r a t i o n ’ s Ra t i n g S y s t e m, t h e d i s t r i b u t i o n o f o u r r e s e a r ch t o cl i e n t s a n d t h e p e r ce n t a g e o f r e c o m me n d a t i o n s wh i c h a r e i n e a c h
o f o u r r a t i n g c a t e g o r i e s i s a v a i l a b l e o n o u r we b si t e a t ww w. r e s e a r ch c a p i t a l . c o m.

T h e i n f o r ma t i o n c o n t a i n e d i n t h i s r e p o r t h a s b e e n d r a wn f r o m s o u r c e s b e l i e ve d t o b e r e l i a b l e b u t i t s a c cu r a c y o r co mp l e t e n e ss i s n o t g u a r a n t e e d , n o r i n p r o vi d i n g i t
d o e s R e s e a r c h Ca p i t a l C o r p o r a t i o n a s s u me a n y r e sp o n si b i l i t y o r l i a b i l i t y . R e s e a r ch C a p i t a l C o r p o r a t i o n , i t s d i r e ct o r s , o f f i c e r s a n d o t h e r e mp l o y e e s ma y , f r o m t i me t o
t i me , h a v e p o si t i o n s i n t h e s e cu r i t i e s me n t i o n e d h e r e i n . Co n t e n t s o f t h i s r e p o r t c a n n o t b e r e p r o d u c e d i n wh o l e o r i n p a r t wi t h o u t t h e e xp r e ss e d p e r mi s si o n o f R e se a r ch
C a p i t a l C o r p o r a t i o n . ( U . S . I n s t i t u t i o n a l Cl i e n t s — Re s e a r ch C a p i t a l U . S. A . I n c. ( a wh o l l y o wn e d s u b si d i a r y o f R e s e a r c h C a p i t a l Co r p o r a t i o n ) a cc e p t s r e s p o n si b i l i t y f o r
t h e c o n t e n t s o f t h i s r e p o r t s u b je c t t o t h e t e r ms & l i mi t a t i o n s s e t o u t a b o v e . F i r ms o r i n s t i t u t i o n s r e ce i vi n g t h i s r e p o r t s h o u l d e f f e ct t r a n s a ct i o n s i n s e c u r i t i e s d i sc u s se d
i n t h e r e p o r t t h r o u g h R e s e a r ch C a p i t a l U . S . A . I n c. , a B r o k e r - D e a l e r R e g i s t e r e d wi t h t h e U n i t e d S t a t e s S e cu r i t i e s a n d E xc h a n g e C o m mi s si o n ) .

Tor on to 4 16. 8 60. 76 00 M ontr eal 51 4. 39 9. 150 0 V anco u ver 60 4. 66 2. 180 0 C al gar y 40 3. 26 5. 740 0 R egi na 306. 566. 7550

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