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LATTER HALF OF 2009: FORGING FORWARD DEAL VALUE ON PACE TO MEET NOVEMBER LEVEL December starts at strong pace: Total transaction value in the Web 2.0 universe for the first week of December is $68.8 million. The number of financings stands at seven, averaging $9.8 million each. In comparison, total capital raised in November was $203.4 million, averaging $11.3 million (18 deals); October was $171.3 million, averaging $6.3 million (27 deals); and September was $232.8 million, averaging $9.0 million (26 deals). Broad-based sector financing: Video, Gaming, Advertising, Collaboration, and Analytics experienced the most financing activity among our Web 2.0 sector categories in the past three months by number of transactions (six each). Social Networks remain strong with five deals in the past quarter. Infrastructure and Search round out the top three positions at four deals each over the past three months. The $400 million acquisition of Playfish skews the Virtual Worlds segment to the highest total. Market pull-back abates – universe split between risers and decliners: Twenty-five companies in our universe had positive stock price performances over the past week (for stocks with prices greater than $1), while 22 companies showed negative 1-week returns.
Citation preview
SOFTWARE & SERVICES 8 DECEMBER 2009
W E B 2 . O W E E K L Y
DAVID SHORE, CFA, MBA 416.860.6784
Damian Wojcichowsky, CFA (Associate), 416.860.7652
LATTER HALF OF 2009: FORGING FORWARD
DEAL VALUE ON PACE TO MEET NOVEMBER LEVEL December starts at strong pace: Total transaction value in the Web 2.0 universe for the first week of December is $68.8 mil lion. The number of financings stands at seven, averaging $9.8 mil lion each. In comparison, total capital raised in November was $203.4 mil lion, averaging $11.3 mill ion (18 deals); October was $171.3 mil lion, averaging $6.3 mil lion (27 deals); and September was $232.8 mil lion, averaging $9.0 mil lion (26 deals).
Financing Activity Last Twelve Months
6.5
7.1
6.66.2
14.6
4.9
5.6
7.6
9.0
6.3
11.3
9.8
6.7
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09
(US
$m
)
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
(US
$m
)
Total Average*May-09 includes $200m FB investment
Broad-based sector financing: Video, Gaming, Advertising, Collaboration, and Analytics experienced the most f inancing activity among our Web 2.0 sector categories in the past three months by number of transactions (six each). Social Networks remain strong with f ive deals in the past quarter. Infrastructure and Search round out the top three positions at four deals each over the past three months. The $400 mill ion acquisit ion of Playfish skews the Virtual Worlds segment to the highest total.
Market pull-back abates – universe split between risers and decliners: Twenty-five companies in our universe had positive stock price performances over the past week (for stocks with prices greater than $1), while 22 companies showed negative 1-week returns.
This report has been created by Analysts that are employed by Research Capital Corporation, a Canadian Investment Dealer. For further disclosures, please see last page of this report.
www.researchcapi ta l .com
Toronto 416 .860 .7600 Montrea l 514.399 .1500 Vancouver 604 .662 .1800 Calgary 403 .265.7400 Regina 306 .566 .7550
Page 2
THE WE B 2 . 0 UNI VE RSE
Eighty-nine public Web 2.0 companies: Our Web 2.0 universe contains 89 companies, with a combined market cap of approximately $71 bill ion (Figure 1). The median market cap for the group is $41 mill ion, with average trail ing revenue of $164 mil lion (median $52 mill ion). The companies are also generally profitable with a median EBITDA margin of 11.1%. On a valuation basis, the overall average is 5.3x trai ling revenue (median 1.6x) and 11.0x trail ing EBITDA (median 7.8x). Twenty of the companies have more than 500 employees.
Comparable Company Analys is > Web 2.0
Company Name LTM as of Ticker E xchange
Trading
Currency HQ
Current
Price
USD Market
Cap ($m)
USD LTM Total
Rev ($m)
USD LTM Total
E B ITDA ($m)
EB ITDA
%
TEV/LTM
Revenue
TEV/LTM
E B ITDA EmployeesAccelerize New Media , Inc. 9/30/2009 AC LZ OT C B B US D United S ta tes 0.55 15.8 4.1 (1.5) -36.5% 5.0x - 11
Actoz S oft C o. , Ltd. 9/30/2009 A052790 K OS E KR W S outh K orea 20,800 151.1 115.9 25.7 22.2% 1.0x 4.3x NA
AQ Interactive, Inc. 9/30/2009 3838 T S E J P Y J apan 40,550 24.7 74.0 3.8 5.1% 0.0x 0.5x NA
Asknet AG 9/30/2009 XT R A:A5A XT R A E UR Germany 4 26.5 103.6 (2.4) NM - - 3
As sociated Media Holdings Inc. 6/30/2007 AS MH OT C P K US D United S ta tes 0.76 32.9 0.1 (2.3) NM - - 3
B igs tring C orp. 9/30/2009 B S GC OT C B B US D United S ta tes 0.03 1.8 0.1 (1.0) NM 44.4x - 4
B etawave C orporation 9/30/2009 B W AV OT C B B US D United S ta tes 0.09 2.5 8.4 (14.3) NM - - 48
B eyond C ommerce, Inc. 9/30/2009 B YOC OT C B B US D United S ta tes 0.05 2.7 13.5 (12.4) -91.9% 1.1x - 86
B right Things plc 3/31/2009 AIM:B G T AIM GB P United K ingdom 0.01 5.3 0.0 (2.7) NM - - NA
B roadW ebAs ia Inc. 9/30/2008 B W B A OT C P K US D United S ta tes 0.05 4.2 0.0 (4.6) NM - - 46
C DC C orp. 9/30/2009 C HIN.A NasdaqGS US D Hong K ong 2.43 257.5 334.2 20.0 6.0% 0.7x 11.3x 2,227
C hangyou.com L imited 9/30/2009 C YOU NasdaqGS US D C hina 30.99 1,704.5 255.3 157.4 61.7% 5.5x 8.8x 628
C hina Ga teway C orporation 9/30/2008 C GW Y OT C P K US D United S ta tes 0.01 0.2 6.7 (6.6) -98.9% 0.0x - 37
C hinese G amer Interna tiona l 9/30/2009 G T S M:3083 G T S M T W D T aiwan 426 1,103.5 68.3 39.6 58.0% 15.0x 25.8x 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 C W R L OT C B B US D United S ta tes 0.03 2.9 6.8 NM NM 1.9x - 16
C yberplex Inc. 9/30/2009 T S X:C X T S X C AD C anada 1 74.1 105.6 11.7 11.1% 0.5x 4.6x NA
DADA S pA 6/30/2009 C M:DA C M E UR Italy 6.28 149.0 241.9 31.8 13.1% 0.8x 6.2x NA
DXN Holdings B hd 8/31/2009 DXN K LS E MYR Ma lays ia 0.57 36.9 77.3 (84.0) NM 0.6x - 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
Digita lP os t Interactive, Inc. 9/30/2009 DGLP OT C B B US D United S ta tes 0.05 4.6 1.2 (0.9) -73.8% 5.7x - 7
Digita lT own, Inc. 8/31/2009 DGT W OT C B B US D United S ta tes 1.40 38.3 0.0 (1.8) NM - - 3
Dolphin Digita l Media , Inc. 9/30/2009 DP DM OT C B B US D United S ta tes 0.27 15.4 0.3 (4.6) NM - - NA
E olith Co. Ltd. 12/31/2008 A041060 K OS E KR W S outh K orea 540 66.8 15.4 (3.6) -23.6% 4.5x - NA
E xtens ions , Inc. 9/30/2009 E XT I OT C P K US D United S ta tes 0.30 13.3 0.0 NM NM - - 2
F luid Mus ic Canada , Inc. 9/30/2009 T S X:F MN T S X C AD United S ta tes 1.80 104.4 5.6 (3.0) -54.0% 18.2x - NA
F rogs ter Interactive P ictures AG 6/30/2009 F R G XT R A E UR Germany 18.75 70.4 9.6 (4.5) -47.0% 7.2x - NA
G amania Digita l E ntertainment C o. , Ltd. 9/30/2009 6180 G T S M T W D T aiwan 47.10 222.9 151.2 24.9 16.5% 1.3x 8.0x NA
G ameOn C o Ltd. 9/30/2009 3812 T S E J P Y J apan 65,500 70.8 79.3 18.6 23.5% - - NA
G eoS entric Oyj 9/30/2009 G E O1V HLS E E UR F inland 0.05 65.8 4.7 (19.0) NM 14.8x - 118
G iant Interactive G roup, Inc. 9/30/2009 GA NY S E US D C hina 7 1,628.3 202.2 137.9 68.2% - - 1,570
G igaMedia Ltd. 3/31/2009 G IGM NasdaqGS US D T aiwan 3.86 210.4 183.6 NM NM 0.7x - 751
G ravity Co. , Ltd 9/30/2009 GR V Y NasdaqGM US D S outh K orea 1.46 40.6 49.9 17.7 35.4% - - 469
G ree, Inc. 9/30/2009 T S E :3632 T S E J P Y J apan 4 ,440 2,222.9 210.3 122.2 58.1% 10.1x 17.4x NA
GungHo Online E ntertainment, Inc. 9/30/2009 3765 OS E J P Y J apan 154,000 197.3 120.7 26.9 22.3% 1.3x 5.9x NA
HanbitS oft, Inc. 9/30/2009 A047080 K OS E KR W S outh K orea 3 ,900 71.6 57.6 (0.3) -0.6% 1.0x - NA
IAC /InterActiveC orp. 9/30/2009 IAC I NasdaqGS US D United S ta tes 19.00 2,507.4 1,359.6 82.4 6.1% 0.6x 10.5x 3,200
IAS E nergy, Inc. 4/30/2009 IAS A.E OT C B B US D C anada 0.11 7.8 0.0 (0.6) NM - - NA
is eemedia Inc. 9/30/2009 IE E T S XV C AD C anada 0.19 9.2 1.8 (4.1) NM 5.3x - NA
J umbuck E nterta inment L imited 6/30/2009 AS X:J MB AS X AUD Aus tralia 0.32 13.6 16.7 7.2 42.8% 0.4x 1.0x 79
K AB Dis tribution Inc. 6/30/2009 T S X:K AB T S X C AD C anada 0 0.6 67.9 4.0 5.8% - - NA
K ingsoft C o. Ltd. 9/30/2009 3888 S E HK HK D C hina 6 796.9 143.4 57.6 40.2% 5.1x 12.8x 2,271
L ingo Media C orporation 9/30/2009 T S XV :LM T S XV C AD C anada 0.96 11.0 1.3 (2.3) NM 8.1x - NA
L iveW orld Inc. 9/30/2009 LVW D OT C P K US D United S ta tes 0.03 1.0 10.4 0.4 4.1% - - NA
LookS mart, Ltd. 9/30/2009 LOOK NasdaqGM US D United S ta tes 1.07 18.3 54.0 (4.5) -8.4% - - 90
Magnitude Information S ys tems Inc. 9/30/2009 MAGY OT C B B US D United S ta tes 0.02 10.2 0.1 (2.3) NM - - 14
Mixi, Inc. 9/30/2009 2121 T S E J P Y J apan 784000.00 1,351.0 139.6 46.1 33.0% 8.7x 26.4x NA
Modern T imes G roup Mtg AB 9/30/2009 MT G B OM S E K S weden 329.60 3,119.2 2,002.6 282.9 14.1% 1.8x 12.9x 2,969
MOK O.mobi L imited 6/30/2009 MK B AS X AUD Aus tralia 0.14 12.5 0.7 (2.4) NM 16.6x - NA
Myriad G roup AG 6/30/2009 MY R N S W X C HF S witzerland 4.84 207.5 63.0 3.4 5.4% 3.2x - 405
NE OW IZ G ames Corpora tion 12/31/2008 A095660 K OS E KR W S outh K orea 44200.00 780.8 207.3 55.7 26.8% 3.7x 13.8x NA
NetDragon W ebS oft, Inc. 9/30/2009 777 S E HK HK D C hina 4 295.3 91.4 27.8 30.4% 1.6x 5.2x 2,426
Netease.com Inc. 9/30/2009 NT E S NasdaqGS US D C hina 37.23 4,818.6 482.9 291.8 60.4% - - 3,109
NeuLion Incorporated 9/30/2009 T S X:NLN T S X C AD C anada 0.70 74.9 24.9 (16.1) -64.5% 2.5x - 237
NeXplore C orporation 6/30/2009 NXP C OT C P K US D United S ta tes 1 37.9 1.7 (13.3) NM 24.6x - NA
Ngi G roup Inc. 9/30/2009 2497 T S E J P Y J apan 24140.00 33.4 81.7 3.2 3.9% - - NA
Northgate T echnologies L imited 9/30/2009 590057 B S E INR India 30.55 22.2 46.4 (49.8) NM 0.5x - NA
Open T ext C orp. 9/30/2009 OT E X NasdaqGS US D C anada 39.22 2,211.3 814.5 211.1 25.9% 2.8x 10.8x 3,900
Openwave S ys tems Inc. 9/30/2009 OP W V NasdaqGS US D United S ta tes 2.24 187.1 190.5 6.2 3.3% 0.4x 13.2x 590
P erfect W orld C o. , Ltd. 9/30/2009 P W R D NasdaqGS US D C hina 43.35 2,157.0 286.1 157.4 55.0% 0.5x 0.8x 2,096
P NI Digita l Media Inc. 6/30/2009 T S XV :P N T S XV C AD C anada 1.71 53.8 21.0 2.3 11.0% 2.5x 22.4x NA
Quepasa C orp. 9/30/2009 QP S A OT C B B US D United S ta tes 2 21.6 0.2 (9.8) NM - - 74
OAO R B C Information S ys tems 12/31/2007 R B C I R T S 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. 9/30/2009 S NDA NasdaqGS US D C hina 51.64 3,473.1 694.3 317.2 45.7% - - 3,124
S hutterfly, Inc. 9/30/2009 S FLY NasdaqGS US D United S ta tes 15.76 404.6 223.1 27.0 12.1% 1.3x 10.8x 514
S K C ommunications C o. , Ltd. 12/31/2008 A066270 K OS E KR W S outh K orea 9550.00 335.1 192.7 12.5 6.5% 1.7x 26.7x NA
S NAP Interactive, Inc. 9/30/2009 S T V I OT C B B US D United S ta tes 0 3.3 3.4 0 .5 15.6% 0.5x 3.2x 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 0.50 23.4 0.0 (5.6) NM - - NA
S ohu.com Inc. 9/30/2009 S OHU NasdaqGS US D C hina 52.34 2,012.8 501.0 218.4 43.6% 2.9x 6.7x 3,197
S park Networks , Inc. 9/30/2009 LOV AME X US D United S ta tes 2 48.8 47.5 10.0 21.0% 0.9x 4.5x 183
S pectrumDNA, Inc. 9/30/2009 S P XA OT C B B US D United S ta tes 0 6.8 0.1 (2.5) NM 48.7x - 7
T encent Holdings Ltd. 9/30/2009 700 S E HK HK D C hina 147 34,567.1 1,588.4 811.3 51.1% 23.9x 46.7x 6,194
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 L imited 12/31/2008 NC T Y NasdaqGS US D C hina 7.48 187.8 250.6 85.5 34.1% - - 1,626
T heS treet. com, Inc. 3/31/2009 T S C M NasdaqGM US D United S ta tes 2.28 69.8 67.0 1.9 2.9% 0.1x 2.7x 310
T ree.C om, Inc. 9/30/2009 T R E E NasdaqGM US D United S ta tes 7.23 78.8 217.1 9.7 4.5% 0.2x 5.5x 700
Unis erve C ommunica tions C orp. 8/31/2009 T S XV :US S T S XV C AD C anada 0.04 0.9 16.1 0.1 0.9% 0.3x 37.2x NA
United Online Inc. 9/30/2009 UNT D NasdaqGS US D United S ta tes 7.00 592.1 996.8 212.9 21.4% 0.8x 4.0x 1,469
UOMO Media , Inc 7/31/2009 UOMO OT C B B US D C anada 0 5.2 0.8 (0.4) -54.2% 7.1x - NA
V alueC lick Inc. 9/30/2009 V C LK NasdaqGS US D United S ta tes 10 859.2 545.7 130.8 24.0% 1.3x 5.4x 1,189
V OIS , Inc. 6/30/2009 V OIS OT C B B US D United S ta tes 0 9.9 0.0 (1.0) NM - - 4
W ebzen Inc. 9/30/2009 W ZE N NasdaqGM US D S outh K orea 3.00 35.6 23.0 2.5 11.0% - - 328
W izzard S oftware C orporation 9/30/2009 W ZE AME X US D United S ta tes 0.38 20.3 5.2 (3.9) -76.4% 4.2x - 110
W orlds . com Inc. 9/30/2009 W DDD OT C B B US D United S ta tes 0.10 5.4 0.1 (0.6) NM - - 1
W ynds torm Corpora tion NA W YND OT C P K US D United S ta tes 0.04 0.7 NA NM NM - - NA
XING AG 9/30/2009 O1B C XT R A E UR Germany 33.40 257.9 62.5 16.9 27.0% 3.2x 11.9x 266
YD Online C orp. 12/31/2007 A052770 K OS E KR W S outh K orea 7000.00 88.0 57.4 12.4 21.6% 1.6x 7.7x NA
Ynk K orea Inc. 12/31/2008 A023770 K OS E KR W S outh K orea 3695.00 16.5 11.9 1.3 10.5% - - NA
High 34,567.1 2,002.6 811.3 68.2% 48.7x 46.7x 6,194
Low 0.0 0.0 -84.0 -98.9% - - 1
Average 785.8 163.6 40.8 5.6% 5.3x 11.0x 906Median 39.5 51.9 1.9 11.1% 1.6x 7.8x 252
Figure 1. Web 2.0 Universe Summary Source. Capital IQ
Page 3
CAPIT AL M ARKET S ACT IV I TY (M &A AND F I NANCI NG )
December starts at strong pace: Total transaction value in the Web 2.0 universe for the first week of December is $68.8 mil lion. The number of financings stands at seven averaging $9.8 mill ion each. In comparison, total capital raised in November was $203.4 mill ion, averaging $11.3 mil lion (18 deals); October was $171.3 mill ion, averaging $6.3 mill ion (27 deals); and September was $232.8 mil lion, averaging $9.0 mill ion (26 deals).
Financing Activity Last Twelve Months
6.5
7.1
6.66.2
14.6
4.9
5.6
7.6
9.0
6.3
11.3
9.8
6.7
0.0
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Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09
(US
$m
)
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
(US
$m
)
Total Average*May-09 includes $200m FB investment
Figure 2. Financings, Last Twelve Months Source. Company reports
Page 4
Deal round-up for December: The large deal highlights for the month include:
• Lala – streaming music site – was acquired by Apple for a rumoured $80 mil lion.
• Zoosk – online social dating web site – raised $30 mil lion in its fourth financing.
• gWallet – developer of virtual currency technology for monetizing brands, publishing, and social media platforms – raised $12.5 mill ion in a first round financing.
All other deals in the month were in the amount of $10 mill ion or less. For additional details on financings, see Figures 23 and 24 (at end of note).
Financing & M/A Summary - Last Three Months
0.0
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(US
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) Dec-09
Nov-09
Oct-09
Figure 3. Capital Market Activity, Last Three Months Source. Company reports
Page 5
Broad-based sector financing: Video, Gaming, Advertising, Collaboration, and Analytics experienced the most f inancing activity among our Web 2.0 sector categories in the past three months by number of transactions (six each). Social Networks remain strong with f ive deals in the past quarter. Infrastructure and Search round out the top three positions at four deals each over the past three months (Figure 4). The $400 mil lion acquisition of Playfish skews the Virtual Worlds segment to the highest total.
Capital Market Activity by Sector - Last Three Months
400.0 117.3 98.5 81.0 57.0 50.0 44.1 40.9 39.8 37.5 30.0 22.2 21.1 15.0 12.5 10.0 9.9 8.5 7.0 6.4 4.0 3.9 2.2 1.2 0.8 0.70.0
20.0
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Virtu
al W
orld
Vid
eo
Gam
ing
Music
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Wid
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Soc
ial N
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1 6 6 2 3 1 5 6 4 6 4 6 3 1 1 1 2 1 1 2 3 2 1 1 1 1
(US
$m
)
# companies
Figure 4. Capital Market Activity, by Sector, Last Three Months Source. Company reports
Page 6
CAPIT AL M ARKET S ACT IV I TY (P RI CE PE RFO RM ANCE )
Web 2.0 index continues to outpace NASDAQ recovery: Our Web 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
0
50
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12/8
/2008
12/2
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008
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/2009
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/2009
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/2009
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/2009
8/1
7/2
009
8/3
1/2
009
9/1
4/2
009
9/2
8/2
009
10/1
2/2
009
10/2
6/2
009
11/9
/2009
11/2
3/2
009
12/7
/2009
Index: Web 2.0 (Market Cap) ^COMP - Share Pricing
Figure 5. Web 2.0 Price Performance Source. Capital IQ
Page 7
Market pull-back abates – universe split between risers and decliners: Twenty-five companies in our universe had positive stock price performances over the past week (for stocks with prices greater than $1) (Figure 6), while 22 companies showed negative 1-week returns.
1 Week Price Performance
-10.0%-6.1%
-5.3%-5.1%-4.8%-4.6%
-4.1%-4.0%-3.6%-3.5%-3.3%
-2.7%-2.6%-2.6%-2.3%-2.1%-2.0%-1.8%
-0.9%-0.7%-0.6%-0.2%
0.0%0.0%0.2%
1.4%1.5%
2.1%2.3%
2.9%2.9%2.9%3.0%
3.6%3.6%
4.6%5.0%
5.6%6.3%6.3%6.4%
8.7%9.9%10.3%
12.0%12.1%
14.4%22.3%
26.7%
-0.15 -0.1 -0.05 0 0.05 0.1 0.15 0.2 0.25 0.3
Fluid Mus ic Canada, Inc .S ohu.com Inc .
Northgate Technologies L imitedOpenw ave S ys tems Inc .
A ctoz S of t Co. , Ltd.Changyou.com Limited
Cyberplex Inc .G igaMedia Ltd.Eolith Co. Ltd.
Gree, Inc .Chines e Gamer International
Gravity Co. , LtdNeteas e.com Inc .K ings of t Co. Ltd.
IAC/InterA ctiveCorp.TheS treet.com, Inc .
NetDragon WebS of t, Inc .Perfect World Co. , Ltd.
The9 L imitedS park Netw orks , Inc .
A s knet AGMyriad Group AG
DADA S pAY nk Korea Inc .
AQ Interactive, Inc .Gamania Digita l Entertainment
XING AGCDC Corp.
Giant Interac tive Group, Inc .Tencent Holdings Ltd.
LookS mart, Ltd.United Online Inc .Open Tex t Corp.
S handa InteractivePNI Digita l Media Inc .
NEOWIZ Games CorporationGameOn Co Ltd.
Frogs ter Interactive PicturesHanbitS of t, Inc .
Modern Times Group Mtg A BV alueClick Inc .Ngi Group Inc .S hutterf ly , Inc .
Webz en Inc .Mix i, Inc .
Tree.Com, Inc .Y D Online Corp.Quepas a Corp.
S K Communications Co. , Ltd.
Figure 6. 1-Week Price Performance Source. Capital IQ
Page 8
PUBLI C CO MP ANY I NDUST RY NEWS (P ART NE RS HIPS , F I NANCI AL RE SULT S, NE W P RODUCTS )
Key DevelopmentsCompany Headline Notes
Offerpal Media, Inc .; S ocialwise, Inc .
(OTCBB :S CLW)
S ocia lwise, Inc. E nters into S trategic
P artnership with Offerpal Media
S ocialwise, Inc. announced that it has entered into a s trategic partnership with Offerpal Media , Inc. The two companies will
work together to promote their exis ting payment s olutions , as well as develop new payment programs specifically for the
teen and tween market. Offerpa l will feature B illMyP arents on its proprietary monetization pla tform as an a lternate payment
solution alongs ide V is a , Mas terCard, P ayP al and others , providing teens and tweens with an eas y way to acquire virtual
currency acros s Offerpa l's network of 2,000+ publishers . T he virtual currency will be s pent on items s uch as virtual gifts ,
s ubscriptions , game-play upgrades , and other virtua l goods . B illMyP arents and Offerpal will a ls o collaborate to launch
innovative programs that will expand their reach into the teen and tween online payment solutions market.
Sohu.com Inc . (NasdaqGS :SOHU) S ohu.C om Announces Management
P romotions
S ohu. com Inc. announced the promotion of Ms . B elinda W ang to C o-P res ident and Chief Operating Officer, and Mr.
X iaochuan W ang to C hief T echnology Officer.
iseemedia Inc . (TS XV: IE E ) is eemedia Inc. , Annual G eneral Meeting, Nov
30, 2009
is eemedia Inc. , Annual General Meeting, Nov 30, 2009, a t 16:00 US E as tern T ime. Location: Le Meridien K ing E dward 37
K ing S treet E as t, T oronto, Ontario,Canada. Agenda: To receive and cons ider the audited cons olidated financia l s ta tements
of the corporation for the fis ca l year ended J une 30, 2009, together with the report of the auditors thereon; to elect directors ;
to appoint auditors and to authorize the directors to fix their remuneration; and to trans act such further or other bus ines s as
may properly come before the Meeting or any adjournment or adjournments thereof.
Betawave Corporation (OTCBB :BWAV) B etawave C orporation Amends R es tated Loan
and S ecurity Agreement; Announces C hief
E xecutive C hanges
On November 25, 2009, B etawave C orporation and S ilicon V a lley B ank entered into an Amended and R es tated Loan and
S ecurity Agreement (the 'A&R Loan Agreement'') which amends and res tates the Loan and S ecurity Agreement, dated as of
March 27, 2009 between S ilicon V a lley B ank and the company. T he A&R Loan Agreement amended and res tated the
Origina l Loan Agreement to, among other things : ( i) modify the interes t rate on the financed receivable to be based on the
gros s amount (rather than the financed amount) of the financed receivables and other rela ted fees described below, (ii)
delete the letter of credit, foreign exchange and cash management sub facilities and sub limits , (iii) accelerate the maturity
date from March 27, 2011 to J anuary 31, 2010 (the 'Maturity Date''), (iv) increas e the default rate from 4% to 5% and (v)
remove the financia l covenants in the Origina l Loan Agreement. The ava ilable revolving credit line remains s et a t $1.5
million. T he borrowings under the A&R Loan Agreement remain s ecured and based upon a percentage of certa in eligible
billed accounts receivables of the company, and unbilled accounts
receivables a re no longer included in the borrowing base. Under the A&R Loan Agreement, the C ompany may borrow,
repay and reborrow under the line of credit facility at any time s ubject to certa in terms and conditions , but the advances
a re subject to a lockbox arrangement and are pa id when payment is received on such financed receivable.
Advances under the line of credit facility s ha ll continue to accrue interes t at a per annum rate equa l to the greater of ( i)
3.0% above S ilicon V a lley B ank 's announced prime ra te or ( ii) 7.0% which interes t s ha ll be charged to the coany bas ed
on the gros s amount of the financed receivables . T he A&R Loan Agreement als o requires that the company pay
certain additional monthly fees including a collatera l handling fee equa l to 0.50% of the gros s amount of the financed
receivables . Under the A&R Loan Agreement, the minimum monthly finance charge (including interes t and fees ) to be
paid by the company is $5, 500. The obligations under the A&R Loan Agreement remain colla tera lized by subs tantia lly
a ll of the company's as sets . T he A&R Loan Agreement retains the a ffirmative and negative covenants principally
rela ting to liens , indebtednes s , and inves tments , dis tributions to shareholders and the us e and dispos ition of as sets .
C erta in covenants were amended purs uant to the A&R Loan Agreement and the financia l covenants s et forth in the
Origina l Loan Agreement were removed. In addition, the A&R Loan Agreement contains cus tomary events of default.
On November 23, 2009, the company and Matt F reeman mutua lly agreed to terminate his employment as C hief
E xecutive Officer of the company effective as of November 30, 2009. Mr. F reeman will remain on the company's
board of directors . T he board a lso appointed T abreez V erjee, currently the P res ident of the company, as interim Chief
E xecutive Officer.
iseemedia Inc . (TS XV: IE E ) is eemedia Inc. R eports Unaudited
C ons olidated E arnings R esults for the F irs t
Quarter E nded S eptember 30, 2009
is eemedia Inc. reported unaudited consolidated earnings results for the firs t quarter ended S eptember 30, 2009. The
company reported for the net los s and comprehens ive los s was CAD 1,009,339 or CAD 0.02 los s per bas ic and diluted
share on revenue of CAD 484,718 aga ins t net los s and comprehens ive los s of CAD 1,518,400 or CAD 0. 03 los s per bas ic
and diluted s hare on revenue of CAD 329,640 for the s ame period las t year. Los s before inters t was CAD 1,011,656 aga ins t
CAD 1,535,736 for the s ame period las t year. C as h used in operating activities was CAD 851,683 aga ins t CAD 1,256,749
for the s ame period las t year. P urchase of property and equipment was CAD 1,721 agains t CAD 10,927 for the s ame period
las t year.
Figure 7a. Key Developments Source. Capital IQ
Page 9
Key DevelopmentsCompany Headline Notes
CL ICKER Inc . (OTCBB :CLKZ) CL IC K E R Inc. announced delayed annua l 10-K
filing
On 12/01/2009, C L IC K E R Inc. announced that they will be unable to file their next 10-K by the deadline required by the S E C .
Betawave Corporation (OTCBB :BWAV) B etawave C orporation Appoints Matt F reeman
as V ice C hairman
B etawave C orporation announced that C E O Matt F reeman, who joined the company in J uly 2008, will trans ition into the role
of V ice C ha irman.
Shanda Interactive Entertainment Ltd.
(NasdaqGS :SNDA)
S handa Interactive E nterta inment Ltd.
P rovides E arnings Guidance for the T hird
Quarter E nded S eptember 30, 2009
S handa Interactive E nterta inment Ltd. was es timated to reap a revenue of $197.69 million for the three months ended
S eptember 30, 2009. T he number was $137.3 million a year ago. The company's earnings per share hit $0.88, higher than
$0.68 a year ago.
Open Text Corp. (NasdaqGS :OTEX) Open T ext Corp. R eleas es New V ers ion of
C onnectivity S olutions C ompatible with
W indows 7
Open Text C orporation announced the release of vers ion 14 of its Connectivity S olutions cons is ting of Open Text E xceed,
the leading P C X s erver s olution for W indows , Open T ext Hos tE xplorer, its terminal emulation suite, and its s ecure s hell
clients and network file s ys tem software. Leveraging the new productivity and s ecurity features of W indows 7, this release
offers organizations a smooth trans ition to the new Microsoft pla tform. W orking clos ely with Microsoft, Open Text des igned
its la tes t C onnectivity S olutions to take advantage of W indows 7 technologies . S pecifica lly, users of the new s oftware suite
will be able to take advantage of the following enhancements : S upport for W indows 7 T ouch technology a llows users to
interact with UNIX and Mainframe applications through an intuitive and easy to use touch interface; J ump Lis ts in the T as k
B ar and S tart Menu provide fas ter acces s to frequently acces s ed items and frequently performed tas ks ; Multiple Documents
preview reduces the time s pent switching between applications and open ses s ions ; New F IP S 140-2 va lidated cryptographic
module provides s tronger s ecurity to connections .
VOIS , Inc. (OTCBB :VOIS ) V OIS , Inc. to Launch C loud Application
Development P orta l
V OIS , Inc. announced that the company is launching a new porta l within its exis ting s ite framework to provide tes ting and
development, code and data repos itories for both contract and freelance software developers work ing to build next
generation cloud application software. Ava ilable J anuary 2010, the V OIS C loud Application F os tering E nvironment (CAF E ) is
to provide cloud-based s torage for the development of code, sharing of code and AP I development proces ses . Additiona lly,
the data s torage may be us ed for the tes ting of new and innovative applications being developed by freelance software
des igners , open s ource community members , and others in order to speed adoption of the rapidly maturing technology a rea
now commonly referred to by both pres s and indus try as 'C loud Computing'.
Shanda Interactive Entertainment Ltd.
(NasdaqGS :SNDA)
S handa Interactive E nterta inment Ltd.
Announces Unaudited C ons olidated F inancial
R esults for the Third Quarter and Nine Months
E nded S eptember 30, 2009
S handa Interactive E nterta inment Ltd. announced unaudited cons olidated financia l res ults for the third quarter and nine
months ended S eptember 30, 2009. In the third quarter of 2009, the company reported net revenues of R MB 1,382.9 million
($202.5 million), representing an increas e of 48% from R MB 936.5 million year-over-year. Operating income for the third
quarter of 2009 was R MB 510.7 million ($74.8 million), an increas e of 34% from R MB 381.5 million in the third quarter of
2008. Non-G AAP operating income for the third quarter of 2009 was R MB 595.0 million ($87.1 million), an increase of 51%
from R MB 392. 8 million in the third quarter of 2008. Net income attributable to ordinary s hareholders for the third quarter of
2009 was R MB 435. 3 million ($63.7 million), an increase of 29% from R MB 337.1million in the third quarter of 2008.
E arnings per diluted ADS in the third quarter of 2009 were R MB 6. 18($0. 90), compared with R MB 4.62 in the third quarter of
2008. Non-G AAP net income attributable to ordinary shareholders for the third quarter of 2009 was R MB 519.6 million ($76.0
million), an increase of 49% from R MB 348.4
million in the third quarter of 2008. Non-G AAP earnings per diluted ADS in the third quarter of 2009 were R MB
7.40($1.08), compared with R MB 4.78 in the third quarter of 2008. The company reported income before income tax
expens es , equity in los s of affilia tes of R MB 582.4 million and diluted earnings per s hare of R B M 3. 09 compared to
income before income tax expenses , equity in los s of a ffiliates of R MB 434.4 million and diluted earnings per share of
R BM 2.31 for the s ame period of las t year.
Figure 7b. Key Developments – continued Source. Capital IQ
Page 10
Key DevelopmentsCompany Headline Notes
Shanda Interactive Entertainment Ltd.
(NasdaqGS :SNDA)
S handa Interactive S ecures $1.6 B illion F or
Acquis itions
S handa Interactive E nterta inment Ltd. plans to acquire more digital enterta inment platforms and game content developers to
divers ify its revenue s tream. S handa spun off S handa G ames in S eptember. G race W u, S handa's chief financial officer told
inves tors in a conference call that S handa is keen to use its $1.6 billion cash pile on more acquis itions . He added, “W e will
cons ider acquiring more game content developers and other digita l enterta inment content players . ”
IAC /InterActiveCorp. (NasdaqGS : IAC I) IAC /InterActiveCorp Appoints Nick S toumpas
as V ice P res ident, Inves tor R ela tions and
T reasurer to R eplace E oin R yan
IAC /InterActiveCorp. announced that Nick S toumpas , currently IAC V ice P res ident and T reasurer, has been named V ice
P res ident, Inves tor R ela tions and T reasurer. Mr. S toumpas succeeds E oin R yan, the previous V ice P res ident of Inves tor
R elations who left IAC in November. As V ice P res ident of Inves tor R elations and T reasurer, Mr. S toumpas will ma intain his
exis ting respons ibilities as T reasurer of IAC and will have primary respons ibility for the s tra tegic and tactical elements of
IAC 's Inves tor R ela tions program, the goa l of which is to ensure the marketplace unders tands and fairly values the
company. Mr. S toumpas will continue to report to T om McInerney, CF O of IAC . L is a J a ffa , Manager of IAC Inves tor
R elations , will report to Mr. S toumpas .
Facebook, Inc .; Friends ter, Inc.;
Tencent Holdings L td. (S EHK:700)
F riends ter May R eportedly B e S old T o As ian
B uyer B y December E nd
F riends ter Inc is likely to be acquired an As ian buyer by the end of December for at leas t $100 million, a s ource close to the
s ituation s tated. The company had rejected a $30 million buyout offer from Google Inc s ix years ago, media reports s tated.
A source s tated that F riends ter will be s old to an As ian lis ted company for more than $100 million. T he source added that
the deal will be announced by the end of December. R euters reported that source denied to be identified as the information
was not yet public. In J uly, T echC runch had va lued F riends ter a t $210 million. C hief executive of the company, R ichard
K imber s tated that mos t of the suitors for F riends ter were As ian buyers . He s a id: "W e have a s hortlis t a t this point that we
a re negotiating with. " He added that Morgan S tanley has been engaged to handle the deal. T encent Holdings Ltd is known
to be among the s hort-lis ted bidders . T he sources s ta ted that F acebook Inc had als o expres s ed interes t but was turned
down due to competition and intellectual property is s ues .
Openwave Sys tems Inc.
(NasdaqGS :OPWV)
Openwave S ys tems Inc. has filed a S helf
R egis tra tion in the amount of $2.95 million.
Openwave S ys tems Inc. has filed a S helf R egis tration in the amount of $2.95 million.
Open Text Corp. (NasdaqGS :OTEX) Open T ext Corp. , Annua l G enera l Meeting,
Dec 03, 2009
Open Text C orp. , Annual General Meeting, Dec 03, 2009, a t 10: 00 US E as tern T ime. Location: 275 F rank T ompa Drive,
W aterloo, N2L 0A1, Ontario,C anada . Agenda : T o receive the financia l s tatements of the C ompany for the year ended J une
30, 2009, together with the report of the auditors thereon; to elect directors ; to re-appoint auditors and authorize the directors
to fix their remuneration; and to transact s uch other bus ines s as may properly come before the meeting or any adjournment
thereof.
OAO RBC Information S ys tems
(R TS :RBC I)
OAO R B C Information S ys tems to R es tructure
its Debts
OAO R B C Information S ys tems announced to res tructure its debts . According to the company, as a res ult two tied dea ls
worth R UB 4.87 billion, debts of s ubs idia ries of the holding to R B C Information S ys tems will be owed to R B C -T V Mos cow
J S C (R UB 0. 7 billion) and P intoleza Holdings L td. (R UB 4.17 billion). R B C Information S ys tems will get bonds of R B C -TV
Moscow worth R UB 0. 7 billion and E urobonds of E .M. I . S . F inance B . V . worth R UB 4.17 billion. After an agreement with
creditors is s igned, these bonds and E urobonds will go to creditors , while R B C -TV Moscow will become a new corporative
center of R B C . R B C owes R UB 4.87 billion to banks ; $60 million is the debt of the holding's s ubs idia ries .
Openwave Sys tems Inc.
(NasdaqGS :OPWV)
Openwave S ys tems Inc. , Annual G eneral
Meeting, Dec 03, 2009
Openwave S ys tems Inc. , Annua l G enera l Meeting, Dec 03, 2009, at 11:00 US P acific T ime. Location: 2100 S eaport
B oulevard, R edwood C ity, CA 94063, United S tates . Agenda: To elect G erald D. Held and David C . Nagel as directors ; to
cons ider the amendment to the amended and res tated 1999 Directors E quity C ompensation P lan; to ra tify the s election of
K P MG LLP as independent auditors for the fis ca l year ending J une 30, 2010; and to transact s uch other bus ines s as may
properly come before the meeting or any adjournment thereof.
TheS treet.com, Inc. (NasdaqGM:TSCM) T hes treet. com, Inc. Decla res Quarterly C as h
Dividend, P ayable on December 31, 2009
T heS treet. com, Inc. announced that its board of directors has declared the Company's quarterly cash dividend on its
common s tock. The cash dividend of $0.025 per s hare of common s tock will be payable December 31, 2009, to all
s hareholders of record at the clos e of bus ines s on December 15, 2009.
Figure 7c. Key Developments – continued Source. Capital IQ
Page 11
VAL UAT IO N
Online Gaming companies lead market-cap charts: Twelve companies in our Web 2.0 universe top US$1 bill ion in market capitalization (Figure 8). Fifty-eight of the 89 companies have market caps under US$100 mil lion, with 38 under US$25 mill ion. Online gaming companies dominate the top of the l ist, led by Tencent Holdings (SEHK:700) with a market cap of approximately US$34.6 bill ion.
Market C ap (USD m)
0.00.00.00.20.20.50.60.70.91.01.82.52.72.93.34.24.65.25.35.46.87.89.29.910.211.012.513.313.615.415.816.518.320.321.622.223.424.726.532.933.435.636.937.938.340.648.853.865.866.869.870.470.871.674.174.978.888.0104.4149.0151.1187.1187.8197.3207.5210.4222.0222.9257.5257.9295.3335.1404.6592.1780.8796.9859.21103.51351.0
1704.52012.82157.02211.32222.92507.43119.23473.14818.634567.1
1628.3
0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000
S ocia l Media V entures Inc .S NM Global Holdings
Dibz International, Inc .China Gatew ay Corporation
The Parent CompanyCLICKER Inc .
K AB Dis tribution Inc .Wynds torm Corporation
Unis erve Communications Corp.L iveWorld Inc .B igs tr ing Corp.
Betaw ave CorporationBeyond Commerce, Inc .
CornerWorld CorporationS NAP Interactive, Inc .
B roadWebA s ia Inc .Digita lPos t Interactive, Inc .
UOMO Media , IncB right Things plcWorlds .com Inc .
S pectrumDNA , Inc .IA S Energy , Inc .
is eemedia Inc .V OIS , Inc .
Magnitude Information S ys tems Inc .L ingo Media Corporation
MOKO.mobi L imitedEx tens ions , Inc .
Jumbuck Enterta inment L imitedDolphin Digita l Media , Inc .
A cceleriz e New Media , Inc .Y nk Korea Inc .
LookS mart, Ltd.Wiz z ard S of tw are Corporation
Quepas a Corp.Northgate Technologies L imited
S ocia lw is e, Inc .AQ Interactive, Inc .
A s knet AGA s s ociated Media Holdings Inc .
Ngi Group Inc .Webzen Inc .
DXN Holdings BhdNeXplore Corporation
Digita lTow n, Inc .Gravity Co. , L td
S park Netw orks , Inc .PNI Digita l Media Inc .
GeoS entric Oy jEolith Co. Ltd.
TheS treet.com, Inc .Frogs ter Interactive Pictures AG
GameOn Co Ltd.HanbitS oft, Inc .Cyberplex Inc .
NeuLion IncorporatedTree.Com, Inc .
Y D Online Corp.Fluid Mus ic Canada, Inc .
DADA S pAActoz S of t Co. , L td.
Openw ave S ys tems Inc .The9 L imited
GungHo Online Enterta inment, Inc .Myriad Group AG
GigaMedia Ltd.OAO RBC Information S ys tems
Gamania Digita l Enterta inment Co. ,CDC Corp.
XING AGNetDragon WebS oft, Inc .
S K Communications Co. , L td.S hutterf ly , Inc .
United Online Inc .NEOWIZ Games Corporation
K ings of t Co. Ltd.V alueClick Inc .
Chines e Gamer InternationalMix i, Inc .
Giant Interactive Group, Inc .Changyou.com L imited
S ohu.com Inc .Perfect World Co. , L td.
Open Tex t Corp.Gree, Inc .
IA C/InterA ctiveCorp.Modern Times Group Mtg A B
S handa Interactive Enterta inmentNeteas e.com Inc .
Tencent Holdings Ltd.
Figure 8. Market Cap Rankin Source. Capital IQ
Page 12
TEV/Revenue (LTM) averages 5.3x: The overall average TEV/Revenue (LTM) multiple for our group is 5.3x (vs. 5.7x last week) (Figure 9). Two companies trade above 25x revenue – SpectrumDNA, Inc. (OTCBB:SPXA) at 48.7x, and Bigstring Corp. (OTCBB:BSGC) at 44.4x. The median of 1.6x compares is f lat vs. last week. Note that we exclude multiples greater than 50x. Thirty-one companies have multiples under 1.5x.
TEV/LTM R evenue (x)
0.0 0.0 0.0 0.10.2 0.2 0.2 0.2 0.3 0.4 0.4 0.5 0.5 0.5 0.5 0.6 0.6 0.7 0.7 0.8 0.8 0.9 1.0 1.0 1.1 1.1 1.3 1.3 1.3 1.3 1.3 1.6 1.6 1.7 1.8 1.9 2.5 2.5 2.8 2.9 3.2 3.2 3.7 4.2 4.5 4.5 5.0 5.1 5.3 5.5 5.77.1 7.2
8.1 8.710.1
14.815.016.6
18.2
23.924.6
44.4
48.7
Average, 5.3
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orp
.
Sohu.c
om
Inc.
Myriad G
roup A
G
XIN
G A
G
NE
OW
IZ G
am
es C
orp
ora
tion
Wiz
zard
Softw
are
Corp
ora
tion
Eolit
h C
o. Ltd
.
Socia
l Media
Ventu
res Inc.
Accele
rize N
ew
Media
, In
c.
Kin
gsoft C
o. Ltd
.
iseem
edia
Inc.
Changyou.c
om
Lim
ited
Dig
italP
ost In
tera
ctiv
e, In
c.
UO
MO
Media
, In
cF
rogste
r In
tera
ctiv
e P
ictu
res A
G
Lin
go M
edia
Corp
ora
tion
Mix
i, In
c.
Gre
e, In
c.
GeoS
entr
ic O
yj
Chin
ese G
am
er
Inte
rnatio
nal
MO
KO
.mobi L
imite
d
Flu
id M
usic
Canada, In
c.
Tencent H
old
ings L
td.
NeX
plo
re C
orp
ora
tion
Big
str
ing C
orp
.
Spectr
um
DN
A, In
c.
Figure 9. TEV/Revenue Ranking Source. Capital IQ
TEV/Revenue (LTM) by country/exchange: We 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 12.7x (vs. 14.7x last week). On a geographic basis, the United States has the most companies (38), trading at an average of 7.2x revenue (vs. 8.5x last week) (Figure 11). Ten of the companies are Canadian (average 3.6x revenue).
Average TEV/LTM Revenue - By Exchange
0.00.20.5
0.60.81.31.61.82.32.63.24.15.26.16.37.18.1
8.5
10.2
12.7
14.8
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
HLS
E
OT
CB
B
SE
HK
AS
X
GT
SM
TS
X
TS
E
OT
CP
K
XT
RA
TS
XV
SW
X
AM
EX
KO
SE
OM
NasdaqG
S
OS
E
CM
KLS
E
BS
E
NasdaqG
M
RT
S
1 18 3 2 2 4 5 11 3 4 1 2 6 1 14 1 1 1 1 5 1
(x)
# Companies
Average TEV/LTM Revenue - By Country
0.00.6 0.5
0.70.81.82.3
3.23.6
5.05.25.76.6
7.2
8.5
14.8
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
Fin
land
Austr
alia
Unite
d
Sta
tes
Chin
a
Taiw
an
Germ
any
Japan
Canada
Sw
itzerland
South
Kore
a
Sw
eden
Italy
Hong K
ong
Mala
ysia
India
Russia
1 2 38 10 3 3 6 10 1 8 1 1 1 1 1 1
(x)
# Companies
Figures 10 & 11. TEV/Revenue Ranking (Exchange, Country) Source. Capital IQ
Page 13
TEV/EBITDA (LTM) averages 10.3x: The average multiple for the 36 companies with positive EBITDA (and multiples under 100x) is 10.3x LTM EBITDA (vs. 11.3x last week), led by Tencent Holdings Ltd. (SEHK:700) at 46.7x (Figure 12). Sixteen companies have EBITDA multiples under 7x. The median multiple is 8.4x (vs. 8.6x last week).
TEV/LTM EB ITDA (x)
0.4 0.5 0.8 1.02.7 3.2 4.0 4.3 4.5 4.6 5.2 5.4 5.5 5.9 6.2 6.7 7.7 8.0 8.8
10.5 10.8 10.8 11.3 11.9 12.5 12.8 12.9 13.2 13.8
17.4
22.4
25.8 26.4 26.7
37.2
46.7
A verage, 10.3
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
50.0
OA
O R
BC
Info
rmatio
n S
yste
ms
AQ
Inte
ractiv
e, In
c.
Perf
ect W
orld C
o., L
td.
Jum
buck E
nte
rtain
ment Lim
ited
TheS
treet.com
, In
c.
SN
AP
Inte
ractiv
e, In
c.
Unite
d O
nlin
e Inc.
Acto
z S
oft C
o., L
td.
Spark
Netw
ork
s, In
c.
Cyberp
lex Inc.
NetD
ragon W
ebS
oft, In
c.
Valu
eC
lick Inc.
Tre
e.C
om
, In
c.
GungH
o O
nlin
e E
nte
rtain
ment, Inc.
DA
DA
SpA
Sohu.c
om
Inc.
YD
Onlin
e C
orp
.
Gam
ania
Dig
ital E
nte
rtain
ment C
o., L
td.
Changyou.c
om
Lim
ited
IAC
/Inte
rActiv
eC
orp
.
Open T
ext C
orp
.
Shutterf
ly, In
c.
CD
C C
orp
.
XIN
G A
G
Ynk K
ore
a Inc.
Kin
gsoft C
o. Ltd
.
Modern
Tim
es G
roup M
tg A
B
Openw
ave S
yste
ms Inc.
NE
OW
IZ G
am
es C
orp
ora
tion
Gre
e, In
c.
PN
I D
igita
l Media
Inc.
Chin
ese G
am
er
Inte
rnatio
nal
Mix
i, In
c.
SK
Com
munic
atio
ns C
o., L
td.
Unis
erv
e C
om
munic
atio
ns C
orp
.
Tencent H
old
ings 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 3.2x. On a geographic basis, the United States has the most companies (38), trading at an average of 6.6x EBITDA (Figure 14). Ten of the companies are Canadian (average 13.5x EBITDA).
Average TEV/LTM EBITDA - By Exchange
0.41.03.24.14.54.6
5.96.28.2
11.912.913.114.8
16.921.6
29.8
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
TS
XV
SE
HK
GT
SM
TS
E
KO
SE
OM
XT
RA
NasdaqG
S
CM
OS
E
TS
X
AM
EX
NasdaqG
M
OT
CB
B
AS
X
RT
S
4 3 2 5 6 1 3 14 1 1 4 2 5 18 2 1
(x)
# Companies
Average TEV/LTM EBITDA - By Country
0.4
1.0
6.2
6.6
11.311.912.512.913.113.5
16.9
18.8
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
Canad
a
Taiw
an
Ch
ina
South
Kore
a
Sw
ed
en
Japa
n
Ge
rmany
Hong
Kon
g
Unite
d
Sta
tes
Italy
Austr
alia
Rus
sia
10 3 10 8 1 6 3 1 38 1 2 1
(x)
# Companies
Figures 13 & 14. TEV/EBITDA Ranking (Exchange, Country) Source. Capital IQ
Page 14
P/E (LTM) averages 21.5x: The average multiple for the 33 companies with positive earnings (and multiples under 100x) is 21.5x LTM EPS (vs. 20.8x last week), led by HabitSoft, Inc. (KOSE:A047080) with a 71.3x multiple (Figure 15). Thirteen companies have P/E multiples under 10x. The median is 14.3x.
P/E LTM (x)
0.0 0.01.8 2.1 2.3 2.6 2.7 3.9 5.4 6.7 7.1 8.3 9.3 10.7 11.5 12.3
14.316.2 16.8 17.5 18.0
21.823.5
33.8 34.037.1 37.6
40.6
48.3
60.063.3
67.671.3
A verage, 21.5
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
Gra
vity
Co., L
td
Webzen Inc.
Gia
nt In
tera
ctiv
e G
roup, In
c.
The9 L
imite
d
Shanda Inte
ractiv
e E
nte
rtain
ment Ltd
.
Nete
ase.c
om
Inc.
Perf
ect W
orld C
o., L
td.
Jum
buck E
nte
rtain
ment Lim
ited
DX
N H
old
ings B
hd
Cyberp
lex Inc.
Gam
eO
n C
o L
td.
Gig
aM
edia
Ltd
.
YD
Onlin
e C
orp
.
IAC
/Inte
rActiv
eC
orp
.
Changyou.c
om
Lim
ited
Sohu.c
om
Inc.
NetD
ragon W
ebS
oft, In
c.
Spark
Netw
ork
s, In
c.
Modern
Tim
es G
roup M
tg A
B
Kin
gsoft C
o. Ltd
.
SN
AP
Inte
ractiv
e, In
c.
Acto
z S
oft C
o., L
td.
Gam
ania
Dig
ital E
nte
rtain
ment C
o., L
td.
Chin
ese G
am
er
Inte
rnatio
nal
XIN
G A
G
GungH
o O
nlin
e E
nte
rtain
ment, Inc.
Gre
e, In
c.
NE
OW
IZ G
am
es C
orp
ora
tion
Open T
ext C
orp
.
Tencent H
old
ings L
td.
Liv
eW
orld Inc.
Mix
i, In
c.
HanbitS
oft, In
c.
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 18.0x. On a geographic basis, the United States has the most companies (38), trading at an average of 27.0x earnings (Figure 17). Ten of the companies are Canadian (average 27.5x EPS).
Average P/E - By Exchange
1.8 0.03.9
5.46.711.216.216.818.0
28.730.634.0
35.837.137.4
63.3
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
OT
CP
K
TS
E
OS
E
KO
SE
XT
RA
SE
HK
GT
SM
OT
CB
B
OM
AM
EX
NasdaqG
S
TS
X
KLS
E
AS
X
NY
SE
NasdaqG
M
11 5 1 6 3 3 2 18 1 2 14 4 1 2 1 5
(x)
# Companies
Average P/E - By Country
3.95.4
12.716.8
21.923.8
27.027.534.0
37.3
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
Jap
an
Germ
an
y
Cana
da
Unite
d
Sta
tes
South
Kore
a
Taiw
an
Sw
eden
Chin
a
Ma
laysia
Austr
alia
6 3 10 38 8 3 1 10 1 2
(x)
# Companies
Figures 16 & 17. P/E Ranking (Exchange, Country) Source. Capital IQ
Page 15
UP CO MI NG EVE NTS
Earnings CalendarCompany Date Time Quarter Conf Call Details
PNI Digital Media Inc. (TSXV:PN) 14-Dec-09 4:30 p.m. EST Q4/09 888-300-8196
Figure 18. Earnings Calendar Source. Company reports
Page 16
Comparable Company Analys is > Web 2.0
Price Performance
Company Name Currency Ticker E xchange USD Market C ap ($m) Current P rice 1 Wk 1 Mth 3 Mth 6 Mth 1 Yr 52 Week
Accelerize New Media, Inc. US D ACLZ OTC B B 15.8 0.55 0.0% -21.4% -3.5% 5.8% 37.5% -31.3%
Actoz S oft C o. , L td. K R W A052790 K OS E 151.1 20,800 -4.8% 35.1% 18.9% -24.6% 109.0% -42.2%
AQ Interactive, Inc. J P Y 3838 T S E 24.7 40,550 0.2% -11.5% -27.6% -41.7% 35.2% -51.1%
Asknet AG E UR XTR A:A5A XTR A 26.5 4 -0.6% 8.8% 10.5% 30.5% -16.5% -21.1%
Associated Media Holdings Inc. US D AS MH OTC P K 32.9 0.76 8344.4% 5328.6% 5328.6% 50566.7% 25233.3% 0.0%
B igs tring Corp. US D B S G C OTC B B 1.8 0.03 -6.7% -17.6% -6.7% -3.4% 64.7% -50.9%
B etawave C orporation US D B W AV OTC B B 2.5 0.09 6.3% 112.5% 21.4% 6.3% -46.9% -66.0%
B eyond Commerce, Inc. US D B Y OC OTC B B 2.7 0.05 4.3% -31.4% -76.0% -94.9% -94.7% -97.4%
B right T hings plc GB P AIM:B G T AIM 5.3 0.01 0.0% -10.9% -10.9% -6.5% 2.1% -50.4%
B roadW ebAs ia Inc. US D B W B A OTC P K 4.2 0.05 -44.4% 66.7% -78.3% -83.2% -95.0% -98.3%
C DC C orp. US D CHIN.A NasdaqG S 257.5 2.43 2.1% -4.0% 4.3% 57.8% 129.2% -38.0%
C hangyou.com Limited US D CY OU NasdaqG S 1,704.5 30.99 -4.6% -0.8% -24.7% -29.4% NM -35.9%
C hina Gateway C orporation US D CG W Y OTC P K 0.2 0.01 350.0% 350.0% -40.0% 350.0% 350.0% -70.0%
C hines e Gamer International TW D GTS M:3083 G T S M 1,103.5 425.50 -3.3% -5.2% -4.4% 34.2% 393.6% -18.0%
C LICK E R Inc. US D CLK Z OTC B B 0.5 0.01 -18.8% -18.8% -13.3% 71.1% -90.7% -95.0%
C ornerW orld Corporation US D CW R L OTC B B 2.9 0.03 0.0% -50.0% -50.0% -57.1% -93.6% -93.6%
C yberplex Inc. CAD TS X:CX T S X 74.1 1.17 -4.1% -14.6% -10.0% -35.4% 239.1% -41.2%
DADA S pA E UR CM:DA C M 149.0 6.28 0.0% -11.0% -0.4% 3.0% -8.7% -23.4%
DXN Holdings B hd MYR DXN K LS E 36.9 0.57 -0.9% -11.0% -0.9% 41.3% 48.7% -18.1%
Dibz International, Inc. US D DIB Z OTC P K 0.0 0.00 20.0% NM 20.0% -88.0% -97.6% -97.6%
DigitalP os t Interactive, Inc. US D DG LP OTC B B 4.6 0.05 0.0% 17.8% -3.6% 231.3% 112.0% -46.5%
DigitalT own, Inc. US D DG TW OTC B B 38.3 1.40 0.0% 38.6% -20.0% -44.0% -53.3% -60.0%
Dolphin Digital Media, Inc. US D DP DM OTC B B 15.4 0.27 -10.0% -32.5% -40.0% -50.9% -66.3% -66.3%
E olith C o. L td. K R W A041060 K OS E 66.8 540.00 -3.6% -5.3% -44.6% -28.9% -6.1% -53.4%
E xtens ions , Inc. US D E XT I OTC P K 13.3 0.30 20.0% -14.3% 275.0% 100.0% 471.4% -70.3%
F luid Mus ic C anada, Inc. CAD TS X:FMN TS X 104.4 1.80 -10.0% -2.7% 47.5% 153.5% 718.2% -16.3%
F rogs ter Interactive P ictures AG E UR FR G XTR A 70.4 18.75 5.6% -0.7% -1.3% 140.4% 309.4% -12.8%
G amania Digita l E ntertainment Co. , L td. TW D 6180 G T S M 222.9 47.10 1.4% 3.5% -3.7% -10.8% 210.9% -31.5%
G ameOn Co L td. J P Y 3812 T S E 70.8 65,500 5.0% -10.2% -34.9% -39.4% -48.0% -56.9%
G eoS entric Oyj E UR GE O1V HLS E 65.8 0.05 25.0% -16.7% 0.0% 0.0% 66.7% -16.7%
G iant Interactive G roup, Inc. US D GA NYS E 1,628.3 7.19 2.3% 0.8% -6.7% -19.7% 20.4% -24.9%
G igaMedia L td. US D G IGM NasdaqG S 210.4 3.86 -4.0% 1.8% -20.1% -31.2% -33.1% -50.1%
G ravity Co. , Ltd US D GR VY NasdaqG M 40.6 1.46 -2.7% -5.2% -18.9% 27.0% 151.7% -44.5%
G ree, Inc. J P Y T S E :3632 T S E 2,222.9 4, 440 -3.5% -19.0% 9.4% 43.2% NM -22.2%
G ungHo Online E ntertainment, Inc. J P Y 3765 OS E 197.3 154,000 8.2% -26.9% -35.8% -38.3% 57.0% -45.0%
HanbitS oft, Inc. K R W A047080 K OS E 71.6 3,900 6.3% 11.1% -2.5% -17.6% 23.4% -41.3%
IAC /InterActiveC orp. US D IAC I NasdaqG S 2,507.4 19.00 -2.3% -1.4% 0.1% 13.5% 14.9% -10.7%
IAS E nergy, Inc. US D IAS A.E OTC B B 7.8 0.11 -7.6% 5.7% -7.5% -57.3% 270.0% -60.4%
is eemedia Inc. CAD IE E T S XV 9.2 0.19 -2.6% 0.0% 216.7% 111.1% 322.2% -29.6%
J umbuck E ntertainment L imited AUD AS X: JMB AS X 13.6 0.32 -3.0% -5.9% -20.0% -23.8% -27.3% -36.0%
K AB Dis tribution Inc. CAD TS X:K AB T S X 0.6 0.01 -50.0% -99.2% -99.2% -98.6% -99.4% -99.4%
K ingsoft C o. L td. HK D 3888 S E HK 796.9 5.65 -2.6% -22.7% -36.7% 2.7% 110.0% -40.3%
L ingo Media Corporation CAD TS XV :LM TS XV 11.0 0.96 -3.0% 1.1% -4.0% -5.0% -4.0% -32.9%
L iveW orld Inc. US D LVW D OTC P K 1.0 0.03 0.0% -3.1% -38.0% -63.5% 106.7% -87.6%
LookS mart, L td. US D LOOK NasdaqG M 18.3 1.07 2.9% -10.1% -10.2% -15.1% -31.8% -40.0%
Magnitude Information S ys tems Inc. US D MAG Y OTC B B 10.2 0.02 -4.2% 155.6% 155.6% 130.0% 0.0% -41.0%
Mixi, Inc. J P Y 2121 T S E 1,351.0 784,000.00 12.0% 11.8% 45.7% 77.0% 33.8% -4.6%
Modern T imes G roup Mtg AB S E K MTG B OM 3,119.2 329.60 6.3% 3.7% 10.2% 51.5% 119.7% -3.1%
MOK O.mobi L imited AUD MK B AS X 12.5 0.14 12.5% 50.0% 80.0% 104.5% 743.8% 0.0%
Myriad G roup AG CHF MYR N S W X 207.5 4.84 -0.2% -0.2% 7.6% -3.2% -22.6% -28.0%
NE OW IZ G ames Corporation K R W A095660 K OS E 780.8 44,200.00 4.6% 15.6% 14.5% 31.0% 355.7% -1.6%
NetDragon W ebS oft, Inc. HK D 777 S E HK 295.3 4.33 -2.0% -14.4% -26.4% -16.4% 47.8% -39.4%
Netease. com Inc. US D NTE S NasdaqG S 4,818.6 37.23 -2.6% -8.5% -15.8% -2.3% 91.0% -23.2%
NeuLion Incorporated CAD TS X:NLN T S X 74.9 0.70 -12.5% -1.4% -36.4% -6.7% 133.3% -46.2%
NeXplore Corporation US D NXP C OTC P K 37.9 0.68 -8.1% -9.3% 23.6% 17.2% -32.7% -46.9%
Ngi G roup Inc. J P Y 2497 T S E 33.4 24,140.00 8.7% -9.1% -13.2% -26.2% -51.2% -59.7%
Northgate T echnologies L imited INR 590057 B S E 22.2 30.55 -5.3% 2.9% -35.7% -37.6% -38.5% -59.0%
Open T ext Corp. US D OTE X NasdaqG S 2,211.3 39.22 3.0% 3.0% 10.2% 8.9% 44.6% -5.4%
Openwave S ys tems Inc. US D OP W V NasdaqG S 187.1 2.24 -5.1% 8.2% -17.6% 12.0% 307.3% -28.4%
P erfect W orld Co. , Ltd. US D P W R D NasdaqG S 2,157.0 43.35 -1.8% -7.2% 3.1% 84.5% 157.7% -14.1%
P NI Digital Media Inc. CAD TS XV :P N T S XV 53.8 1.71 3.6% -5.0% 1.8% 3.0% 15.5% -19.7%
Quepasa C orp. US D QP S A OTC B B 21.6 1.70 22.3% 21.4% 21.4% 126.7% -14.6% -25.1%
OAO R B C Information S ys tems US D R B C I R T S 222.0 1.60 0.0% 6.7% 52.4% 62.4% 6.7% -5.9%
S handa Interactive E nterta inment L td. US D S NDA NasdaqG S 3,473.1 51.64 3.6% 8.4% 7.7% -18.4% 84.3% -20.6%
S hutterfly, Inc. US D S F LY NasdaqG S 404.6 15.76 9.9% 2.4% 21.0% 16.2% 104.4% -13.1%
S K C ommunications C o. , L td. K R W A066270 K OS E 335.1 9,550.00 26.7% 31.5% 7.8% -18.0% 93.5% -25.7%
S NAP Interactive, Inc. US D S TV I OTC B B 3.3 0.30 50.0% 42.9% -40.0% -60.0% -53.8% -72.2%
S NM G loba l Holdings US D S NMN OTC P K 0.0 0.00 -50.0% -33.3% -52.4% -50.0% -97.1% -97.1%
S ocial Media V entures Inc. US D S MV I OTC P K 0.0 0.01 -37.5% -42.3% -93.2% -25.0% -99.3% -99.9%
S ocialwis e, Inc. US D S CLW OTC B B 23.4 0.50 2.0% -10.7% -15.3% -29.6% -63.0% -66.7%
S ohu.com Inc. US D S OHU NasdaqG S 2,012.8 52.34 -6.1% -5.8% -17.6% -24.4% 19.6% -27.6%
S park Networks , Inc. US D LOV AME X 48.8 2.37 -0.7% -8.8% 7.2% 5.8% -13.8% -21.0%
S pectrumDNA, Inc. US D S P XA OTC B B 6.8 0.14 0.0% -6.7% -36.4% -62.2% -33.3% -68.9%
T encent Holdings Ltd. HK D 700 S E HK 34,567.1 147 2.9% 6.3% 14.7% 65.1% 215.3% -3.7%
T he P arent Company US D K IDS .Q OTC P K 0.2 0.01 0.0% 0.0% -36.4% -60.0% -98.9% -99.1%
T he9 L imited US D NC TY NasdaqG S 187.8 7.48 -0.9% -5.8% -4.3% -35.5% -38.6% -55.0%
T heS treet.com, Inc. US D T S C M NasdaqG M 69.8 2.28 -2.1% -8.1% -6.2% 15.2% -32.7% -39.0%
T ree.C om, Inc. US D TR E E NasdaqG M 78.8 7.23 12.1% -11.0% -4.5% -25.8% 338.2% -44.7%
Unis erve Communications Corp. CAD TS XV :US S T S XV 0.9 0.04 0.0% -20.0% -11.1% -20.0% 33.3% -60.0%
United Online Inc. US D UNTD NasdaqG S 592.1 7.00 2.9% -17.8% -5.9% 4.2% 14.0% -26.0%
UOMO Media, Inc US D UOMO OTC B B 5.2 0.06 0.0% -20.0% -57.1% -67.6% -50.0% -94.3%
V alueC lick Inc. US D VCLK NasdaqG S 859.2 10.03 6.4% -2.4% -4.4% -17.5% 40.3% -28.0%
V OIS , Inc. US D VOIS OTC B B 9.9 0.01 -0.8% -15.0% 138.0% 240.0% 296.7% -48.3%
W ebzen Inc. US D W ZE N NasdaqG M 35.6 3.00 10.3% -4.8% 0.3% -21.6% 275.0% -35.9%
W izzard S oftware C orporation US D W ZE AME X 20.3 0.38 -15.6% -17.4% -22.4% -41.5% -59.1% -63.1%
W orlds .com Inc. US D W DDD OTC B B 5.4 0.10 0.0% 11.1% -16.7% 11.1% -54.5% -56.5%
W ynds torm C orporation US D W Y ND OTC P K 0.7 0.04 -60.0% -60.0% -60.0% -92.2% -66.7% -92.2%
XING AG E UR O1B C XT R A 257.9 33.40 1.5% 0.6% 3.6% -0.3% 24.6% -12.1%
Y D Online C orp. K R W A052770 K OS E 88.0 7,000.00 14.4% 0.6% -21.8% -24.7% 11.6% -43.5%
Y nk K orea Inc. K R W A023770 K OS E 16.5 3,695.00 0.0% -7.9% -20.5% -44.6% -26.7% -57.5%
High 8344.4% 5328.6% 5328.6% 50566.7% 25233.3% 0.0%
Low -60.0% -99.2% -99.2% -98.6% -99.4% -99.9%
Average 785.8 95.7% 62.1% 56.8% 569.1% 356.3% -44.0%Median 0.0% -5.0% -6.0% -6.6% 20.0% -41.1%
Figure 19. Price Performance Source. Capital IQ
Page 17
Comparable Company Analys is > Web 2.0Valuation Multiples
Company Name Sector Country
Primary
E xchange Ticker
USD Market
Cap ($m)
TEV/LTM
R evenue
TEV/ NTM
R evenue
TE V/LTM
EB ITDA
TEV/NTM
E B ITDA P/LTM E PS P/NTM E PS P/TangBV
Accelerize New Media , Inc. Direct Marketing United S ta tes OTCB B AC LZ 15.8 5.0x - - - - - -
Actoz S oft C o. , Ltd. G aming S outh K orea K OS E A052790 151.1 1.0x - 4. 3x - 21.8x - 2.3x
AQ Interactive, Inc. G aming J apan T S E 3838 24.7 0.0x - 0. 5x - - - 0.4x
As knet AG G aming G ermany XT R A XT R A:A5A 26.5 0.2x - - - - - -
As socia ted Media Holdings Inc. Mobile United S ta tes OTCP K AS MH 32.9 - - - - - - -
B igs tring Corp. Ins tant Messaging United S ta tes OTCB B B S G C 1.8 44.4x - - - - - -
B etawave Corpora tion Media United S ta tes OTCB B B W AV 2.5 - - - - - - 1.7x
B eyond Commerce, Inc. S ocial Networking United S ta tes OTCB B B YOC 2.7 1.1x - - - - - -
B right T hings plc S ocial Networking United K ingdom AIM AIM:B GT 5.3 - - - - - - -
B roadW ebAs ia Inc. S ocial Networking United S ta tes OTCP K B W B A 4.2 - - - - - - -
CDC Corp. G aming Hong K ong NasdaqGS CHIN.A 257.5 0.7x 0.7x 11.3x 5.4x - 93.5x 10.9x
Changyou.com Limited G aming C hina NasdaqGS C YOU 1,704.5 5.5x 4.5x 8. 8x 7.0x 11.5x 9.9x 8.9x
China G ateway Corpora tion Mobile United S ta tes OTCP K CGW Y 0.2 0.0x - - - - - -
C hines e G amer Interna tional G aming T a iwan G T S M GT S M:3083 1,103.5 15.0x 15.3x 25.8x 24.8x 33.8x 21.1x 16.2x
C L IC K E R Inc. Direct Marketing United S ta tes OTCB B C LK Z 0.5 0.2x - - - - - -
C ornerW orld C orporation C ontent United S ta tes OTCB B CW R L 2.9 1.9x - - - - - -
C yberplex Inc. Advertis ing C anada T S X T S X:CX 74.1 0.5x 0.4x 4. 6x 3.7x 6.7x 7.0x 2.7x
DADA S pA S ocial Networking Italy C M CM:DA 149.0 0.8x 0.8x 6. 2x 5.8x - 18.4x -
DXN Holdings B hd S ocial Networking Malays ia K LS E DXN 36.9 0.6x - - - 5.4x - 0.8x
Dibz Interna tiona l, Inc. S NS Apps United S ta tes OTCP K DIB Z 0.0 - - - - - - -
DigitalP os t Interactive, Inc. C ontent United S ta tes OTCB B DGLP 4.6 5.7x - - - - - -
DigitalT own, Inc. S ocial Networking United S ta tes OTCB B DGTW 38.3 - - - - - - -
Dolphin Digital Media , Inc. S ocial Networking United S ta tes OTCB B DP DM 15.4 - 1.1x - - - 1.1x -
E olith C o. L td. G aming S outh K orea K OS E A041060 66.8 4.5x - - - - - 3.0x
E xtens ions , Inc. C ontent United S ta tes OTCP K E XT I 13.3 - - - - - - -
F luid Mus ic C anada, Inc. Media United S ta tes T S X T S X:F MN 104.4 18.2x 18.1x - - - - 7.8x
F rogs ter Interactive P ictures AG G aming G ermany XT R A F R G 70.4 7.2x - - - - - 8.6x
G amania Digital E ntertainment Co. , Ltd. G aming T a iwan G T S M 6180 222.9 1.3x - 8. 0x - 23.5x - 2.8x
G ameOn Co Ltd. G aming J apan T S E 3812 70.8 - - - - 7.1x 7.3x 0.8x
G eoS entric Oyj Mobile F inland HLS E GE O1V 65.8 14.8x - - - - - -
G iant Interactive G roup, Inc. G aming C hina NYS E GA 1,628.3 - - - - 1.8x 15.2x 0.3x
G igaMedia Ltd. G aming T a iwan NasdaqGS G IGM 210.4 0.7x 0.7x - 3.6x 8.3x 8.2x 1.8x
G ravity C o. , Ltd G aming S outh K orea NasdaqGM GR V Y 40.6 - - - - 0.0x - 0.0x
G ree, Inc. S ocial Networking J apan T S E T S E : 3632 2,222.9 10.1x 5.9x 17.4x 10.5x 37.6x 21.0x 17.8x
G ungHo Online E nterta inment, Inc. Media J apan OS E 3765 197.3 1.3x 1.2x 5. 9x - 37.1x 13.3x 6.1x
HanbitS oft, Inc. G aming S outh K orea K OS E A047080 71.6 1.0x - - - 71.3x - 2.0x
IAC /InterActiveCorp. Media United S ta tes NasdaqGS IAC I 2,507.4 0.6x 0.6x 10.5x 4.4x 10.7x 27.8x 1.2x
IAS E nergy, Inc. V ideo C anada OTCB B IAS A.E 7.8 - - - - - - -
is eemedia Inc. C ontent C anada T S XV IE E 9.2 5.3x - - - - - -
J umbuck E ntertainment L imited S ocial Networking Aus tra lia AS X AS X:J MB 13.6 0.4x 0.4x 1. 0x 1.1x 3.9x 2.8x 1.3x
K AB Dis tribution Inc. C ontent C anada T S X T S X:K AB 0.6 - - - - - - 0.0x
K ingsoft C o. Ltd. G aming C hina S E HK 3888 796.9 5.1x 4.3x 12.8x 8.9x 17.5x 12.5x 4.2x
Lingo Media C orpora tion Learning C anada T S XV T S XV : LM 11.0 8.1x - - - - - -
L iveW orld Inc. S ocial Networking United S ta tes OTCP K LV W D 1.0 - - - - 63.3x - 0.4x
LookS mart, L td. Direct Marketing United S ta tes NasdaqGM LOOK 18.3 - - - - - - 0.7x
Magnitude Information S ys tems Inc. S ocial Networking United S ta tes OTCB B MAGY 10.2 - - - - - - -
Mixi, Inc. S ocial Networking J apan T S E 2121 1,351.0 8.7x 7.1x 26.4x 21.8x 67.6x 51.2x 8.7x
Modern T imes G roup Mtg AB Media S weden OM MT G B 3,119.2 1.8x 1.8x 12.9x 12.6x 16.8x 15.0x -
MOK O .mobi L imited S ocial Networking Aus tra lia AS X MK B 12.5 16.6x - - - - - 12.8x
Myriad G roup AG Mobile S witzerland S W X MY R N 207.5 3.2x - - - - - -
NE OW IZ G ames Corporation G aming S outh K orea K OS E A095660 780.8 3.7x 2.8x 13.8x 9.7x 40.6x 13.9x 20.6x
NetDragon W ebS oft, Inc. G aming C hina S E HK 777 295.3 1.6x - 5. 2x - 14.3x - 1.6x
Netease.com Inc. G aming C hina NasdaqGS NT E S 4,818.6 - - - - 2.6x 14.0x 0.7x
NeuLion Incorporated V ideo C anada T S X T S X:NLN 74.9 2.5x - - - - - 10.4x
NeXplore Corporation C ontent United S ta tes OTCP K NXP C 37.9 24.6x - - - - - -
Ngi G roup Inc. Media J apan T S E 2497 33.4 - - - - - - 0.6x
Northgate T echnologies L imited Direct Marketing India B S E 590057 22.2 0.5x - - - - 1.2x -
Open T ext C orp. C ollabora tion C anada NasdaqGS OT E X 2,211.3 2.8x 2.5x 10.8x 9.0x 48.3x 13.1x -
Openwave S ys tems Inc. Mobile United S ta tes NasdaqGS OP W V 187.1 0.4x 0.4x 13.2x 4.1x - 31.5x 2.6x
P erfect W orld C o. , Ltd. G aming C hina NasdaqGS P W R D 2,157.0 0.5x 2.4x 0. 8x 4.6x 2.7x 12.6x 1.2x
P NI Digital Media Inc. Digita l Imaging C anada T S XV T S XV :P N 53.8 2.5x 2.1x 22.4x 6.7x - 13.7x 18.8x
Quepasa C orp. S ocial Networking United S ta tes OTCB B QP S A 21.6 - - - - - - -
OAO R B C Information S ys tems Media R uss ia R T S R B C I 222.0 0.0x 1.0x 0. 4x 5.7x - 6.5x -
S handa Interactive E nterta inment Ltd. G aming C hina NasdaqGS S NDA 3,473.1 - - - - 2.3x 14.6x 0.4x
S hutterfly, Inc. Digita l Imaging United S ta tes NasdaqGS S FLY 404.6 1.3x 1.2x 10.8x 6.2x - 93.3x 2.4x
S K Communications Co. , Ltd. S earch S outh K orea K OS E A066270 335.1 1.7x - 26.7x - - - -
S NAP Interactive, Inc. Dating United S ta tes OTCB B S T V I 3.3 0.5x - 3. 2x - 18.0x - 1.7x
S NM G lobal Holdings Media United S ta tes OTCP K S NMN 0.0 1.1x - - - - - -
S ocial Media V entures Inc. S ocial Networking United S ta tes OTCP K S MV I 0.0 4.5x - - - - - -
S ocialwise, Inc. S ocial Networking United S ta tes OTCB B S CLW 23.4 - - - - - - -
S ohu.com Inc. G aming C hina NasdaqGS S OHU 2,012.8 2.9x 2.5x 6. 7x 5.7x 12.3x 14.1x 3.6x
S park Networks , Inc. S ocial Networking United S ta tes AME X LOV 48.8 0.9x - 4. 5x - 16.2x - 22.0x
S pectrumDNA, Inc. Media United S ta tes OTCB B S P XA 6.8 48.7x - - - - - -
T encent Holdings Ltd. P orta l C hina S E HK 700 34,567.1 23.9x 15.8x 46.7x 30.7x 60.0x 40.3x 26.6x
T he P a rent C ompany Media United S ta tes OTCP K K IDS .Q 0.2 0.2x 0.2x - 12.8x - - -
T he9 L imited G aming C hina NasdaqGS NCTY 187.8 - - - - 2.1x - 0.1x
T heS treet.com, Inc. Media United S ta tes NasdaqGM TS CM 69.8 0.1x 0.1x 2. 7x - - - 0.9x
T ree.C om, Inc. P orta l United S ta tes NasdaqGM T R E E 78.8 0.2x 0.2x 5. 5x 6.4x - 90.9x 1.2x
Uniserve C ommunications Corp. S ocial Networking C anada T S XV T S XV :US S 0.9 0.3x - 37.2x - - - -
United Online Inc. Media United S ta tes NasdaqGS UNTD 592.1 0.8x 0.9x 4. 0x 3.5x - 5.3x -
UOMO Media , Inc Media C anada OTCB B UOMO 5.2 7.1x - - - - - -
V a lueC lick Inc. Media United S ta tes NasdaqGS V CLK 859.2 1.3x 1.3x 5. 4x 5.2x - 16.3x 4.6x
V O IS , Inc. S ocial Networking United S ta tes OTCB B V OIS 9.9 - - - - - - 62.6x
W ebzen Inc. G aming S outh K orea NasdaqGM W ZE N 35.6 - - - - 0.0x - 0.0x
W izzard S oftware Corporation P odcas ting United S ta tes AME X W ZE 20.3 4.2x - - - - - -
W orlds .com Inc. C ontent United S ta tes OTCB B W DDD 5.4 - - - - - - -
W ynds torm C orporation C ontent United S ta tes OTCP K W YND 0.7 - - - - - - -
X ING AG S ocial Networking G ermany XT R A O1B C 257.9 3.2x 2.5x 11.9x 6.9x 34.0x 16.6x 7.3x
Y D Online Corp. G aming S outh K orea K OS E A052770 88.0 1.6x 1.4x 7. 7x 6.3x 9.3x 8.9x 2.8x
Y nk K orea Inc. G aming S outh K orea K OS E A023770 16.5 1.3x - 12.5x - - - 0.8x
High 34,567.1 48.7x 18.1x 46.7x 30.7x 71.3x 93.5x 62.6x
Low 0.0 0.0x 0.1x 0. 4x 1.1x 0.0x 1.1x 0.0x
Average 785.8 5.3x 3.2x 11.4x 8.6x 21.5x 22.2x 6.4xMedian 39.5 1.6x 1.3x 8. 4x 6.3x 14.3x 14.0x 2.4x
Figure 20. Valuation Comparison Source. Capital IQ
Page 18
Comparable Company Analys is > Web 2.0Summary by Country
Company Name USD Market Cap ($m) Avg USD Market Cap ($m) USD LTM Total Rev ($m) USD LTM Total E B ITDA ($m) E B ITDA %
United S tates 38 C hina 49,633.4 C hina 4,963.3 China 4,152.4 China 2,070.2 C hina 48.8%
Canada 10 United S ta tes 5,811.3 S weden 2,974.2 United S tates 3,887.3 S weden 304.6 Aus tralia 42.8%
China 10 J apan 3,871.5 J apan 645.3 S weden 1,982.6 United S tates 290.0 T aiwan 37.1%
S outh K orea 8 S weden 2,974.2 T aiwan 577.9 Canada 1,015.0 Canada 200.0 J apan 24.2%
J apan 6 C anada 2,488.2 Hong K ong 294.6 S outh K orea 707.3 J apan 186.0 S weden 15.4%
Ta iwan 3 Ta iwan 1,733.6 C anada 248.8 J apan 634.4 S outh K orea 121.9 Malays ia 14.4%
Aus tralia 2 S outh K orea 1,527.4 S outh K orea 190.9 T a iwan 385.8 T a iwan 59.8 Italy 13.1%
Germany 2 Germany 317.0 Ita ly 165.4 Hong K ong 361.6 Ita ly 31.9 R us s ia 13.1%
S witzerland 1 Hong K ong 294.6 R us s ia 160.9 Ita ly 242.6 Hong K ong 25.1 S outh K orea 12.7%
Hong K ong 1 Ita ly 165.4 Germany 158.5 R us s ia 156.2 R us s ia 20.4 Hong K ong 6.9%
F inland 1 R us s ia 160.9 United S ta tes 152.9 India 82.8 Germany 12.5 S witzerland 1.9%
Ita ly 1 S witzerland 92.0 S witzerland 92.0 Malays ia 77.1 Malays ia 11.1 C anada -8.5%
United K ingdom 1 F inland 65.9 F inland 65.9 Germany 68.7 Aus tralia 4.5 G ermany -9.1%
India 1 Malays ia 39.8 Malays ia 39.8 S witzerland 40.0 S witzerland 0.8 United S ta tes -21.9%
S weden 1 India 31.0 India 31.0 Aus tralia 17.8 Norway -1.1 India -50.0%
R us s ia 1 Aus tralia 22.1 Aus tralia 11.0 F inland 5.5 United K ingdom -2.7 Norway -50.6%
Malays ia 1 United K ingdom 6.0 United K ingdom 6.0 Norway 2.3 F inland -17.5 United K ingdom NA
Norway 1 Norway 0.1 Norway 0.1 United K ingdom 0.0 India -41.4 F inland NA
Grand Total 89 Grand Total 69,234.6 Grand Total 777.9 Grand Total 13,819.5 Grand Total 3,276.1 Grand Total 5.1%
Figure 21. Comparison by Country Source. Capital IQ
Comparable Company Analys is > Web 2.0Summary by E xchange
Company Name USD Market Cap ($m) Avg USD Market Cap ($m) USD LTM Total Rev ($m) USD LTM Total E B ITDA ($m) E B ITDA %
OT CB B 18 S E HK 31,520.4 S E HK 10,506.8 OM 1,982.6 NasdaqGS 1,796.0 NY S E 62.5%
NasdaqGS 14 NasdaqGS 24,385.7 OM 2,974.2 S E HK 540.0 S E HK 767.5 AS X 42.8%
OT CP K 11 TS E 3,569.2 NY S E 1,750.4 NasdaqGS 498.6 OM 304.6 S E HK 40.6%
K OS E 6 OM 2,974.2 NasdaqGS 1,741.8 CM 242.6 T S E 160.2 G TS M 37.1%
TS E 5 NY S E 1,750.4 GT S M 715.0 NY S E 198.5 NY S E 124.1 Nas daqG S 30.4%
NasdaqGM 5 K OS E 1,437.0 T S E 713.8 R T S 156.2 K OS E 103.2 T S E 24.6%
TS X 4 GT S M 1,430.0 OS E 302.3 OS E 116.1 GT S M 59.8 OS E 22.2%
TS XV 4 XTR A 317.0 K OS E 239.5 K OS E 106.0 CM 31.9 OM 15.4%
S E HK 3 OS E 302.3 C M 165.4 T S E 103.7 OS E 25.8 K LS E 14.4%
AME X 2 NasdaqGM 279.7 R TS 160.9 GT S M 101.1 R T S 20.4 C M 13.1%
AS X 2 TS X 243.6 XTR A 158.5 B S E 82.8 NasdaqGM 15.6 R TS 13.1%
XTR A 2 OT CB B 230.9 S W X 92.0 NasdaqGM 82.4 XTR A 12.5 K OS E 9.6%
GT S M 2 C M 165.4 HLS E 65.9 K LS E 77.1 K LS E 11.1 Nas daqG M 7.7%
S W X 1 R TS 160.9 T S X 60.9 T S X 46.4 AME X 6.2 T S XV 5.6%
HLS E 1 S W X 92.0 NasdaqGM 55.9 S W X 40.0 AS X 4.5 S W X 1.9%
CM 1 TS XV 76.6 K LS E 39.8 XTR A 34.3 S W X 0.8 XT R A -9.1%
B S E 1 AME X 68.5 AME X 34.2 AME X 27.9 OT CNO -1.1 AME X -31.8%
NY S E 1 HLS E 65.9 B S E 31.0 OT CP K 16.5 AIM -2.7 T S X -34.7%
OS E 1 OT CP K 65.8 T S XV 19.1 T S XV 12.0 T S X -4.3 OTCB B -38.8%
AIM 1 K LS E 39.8 OT CB B 12.8 AS X 8.9 T S XV -4.6 OTCP K -41.5%
OM 1 B S E 31.0 AS X 11.0 HLS E 5.5 HLS E -17.5 B S E -50.0%
R T S 1 AS X 22.1 AIM 6.0 OT CB B 2.3 OT CP K -34.1 OTCNO -50.6%
K LS E 1 AIM 6.0 OT CP K 6.0 OT CNO 2.3 B S E -41.4 AIM NA
OT CNO 1 OT CNO 0.1 OT CNO 0.1 AIM 0.0 OT CB B -62.4 HLS E NA
Grand Total 89 Grand Total 69,234.6 Grand Total 777.9 Grand Total 13,819.5 Grand Total 3,276.1 Grand Total 5.1%
Figure 22. Comparison by Exchange Source. Capital IQ
Page 19
Financ ing - Las t Three Months (US$ m)Fin. Amount (Million) Type of financ ing
Month Company Name Country Angel/S eed Series A Series B Series C Series D Grand Total
Oct-09 DailyMotion F rance 25.3 25.3
PopCap Games US A 22.5 22.5
Engine Yard US A 19.0 19.0
HubSpot US A 16.0 16.0
J ive S oftware US A 12.0 12.0
Spigit US A 10.0 10.0
Ooyala US A 10.0 10.0
S canS cout US A 8.5 8.5
Box.net US A 7.1 7.1
R eality Mobile US A 6.5 6.5
Watercooler US A 5.5 5.5
Vdopia US A 4.7 4.7
Sometrics US A 4.0 4.0
Amie S treet US A 3.9 3.9
ViVu US A 3.0 3.0
F izzback UK 2.6 2.6
Technorati US A 2.0 2.0
Onehub US A 1.3 1.3
DataSync US A 1.2 1.2
DailyBooth US A 1. 0 1.0
Hot Potato US A 1.0 1.0
L inkedex UK 1. 0 1.0
S tatusNet Canada 0. 9 0.9
IngBoo US A 0. 8 0.8
Chango Canada 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 RockYou US A 50.0 50.0
Playdom US A 43.0 43.0
Sezmi US A 25.0 25.0
Millennial Media US A 16.0 16.0
Zynga US A 15.0 15.0
Evernote US A 10.0 10.0
CubeTree US A 8.0 8.0
Alice.com US A 6.0 6.0
Eventbrite US A 6.0 6.0
Placecas t US A 5.0 5.0
AppNexus US A 5.0 5.0
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
Playfire UK 2.1 2.1
S impleGeo US A 1. 5 1.5
Adfonic UK 0. 6 0.6
S coopler US A 0. 5 0.5
Nov-09 Total 2.6 52.3 29.0 67.0 52.5 203.4
Dec-09 Zoosk US A 30.0 30.0
gWallet US A 12.5 12.5
Movik Networks US A 8.5 8.5
SeekingAlpha I s rael 7.0 7.0
Smaato US A 4.5 4.5
J anRain US A 3.3 3.3
S tockTwits US A 3.0 3.0
Dec-09 Total 15.8 23.0 30.0 68.8
Grand Total 7.1 109.0 108.5 134.4 84.5 443.4
Figure 23. Financing, Last Three Months Source. Company reports
Page 20
Company Descriptions - Current Month Capital Market ActivityCompany HQ Webs ite Des cription
gWallet US A www.gwallet. com gWallet provides brands , publis hers and socia l media pla tforms with a virtual currency technology for s ocia l networks . The gW allet
monetization platform conta ins three components including Alternative Online P ayment, V irtual Currency and Aggregation of V irtua l
P roducts . T he platform is a comprehens ive s ys tem tha t has been optimized for F acebook, OpenS ocia l platforms (MyS pace, Hi5, T agged,
etc), virtual worlds or webs ites utiliz ing virtual offer-based currency.
J anRain US A www. janra in.com J anR ain, Inc. provides Internet identity s olutions and s ervices for bus ines ses and consumers . It offers OpenID, an open source software as a
s ervice technology that a llows cons umers to use a s ingle login acros s multiple W ebs ites and regis ter on new s ites with a portable online
identity. Its products include R P X , an enterpris e-clas s hos ted solution that helps in accepting and verifying us ers ' third party accounts , s uch
as Google, Y ahoo, F acebook, and L iveID; OP X that enables to is sue and manage OpenIDs , and build communities with cus tomers in their
own brand; and myOpenID that provides OpenID for individuals in the market. T he company has s trategic partnerships with Microsoft,
Y ahoo! , AOL , MyS pace, P laxo, and Google. J anR ain, Inc. was founded in 2005 and is based in P ortland, Oregon.
Lala US A www. la la . com Lala is a hub for online mus ic dis covery and purchas ing. Users can lis ten for free mus ic, adding tracks to their playlis t as they surf. members
who download a plugin can turn La la into an online mus ic locker that s yncs their des ktop mus ic libra ries to their La la account. Long uploads
a ren’t neces s ary. If La la a lready has the song in their library, they s imply unlock the file to you online.
Movik Networks US A www.movik.net Movik Networks is headquartered near B os ton, MA and has an R &D group in B anga lore, India . T he company is focused on delivering
purpose-built s olutions that bring content and application awarenes s to the edge of the mobile network.
S eekingAlpha Is rael www.seekingalpha .com S eeking Alpha, Ltd. provides s tock market opinion and analys is information from blogs , money managers , and inves tment news letters . T he
company offers daily s ummary of market and s tock related s tories , conference call trans cripts , new IP O filings , and hous ing market roundup.
It a ls o provides articles from contributors for s tock res earch. The company s erves money managers , res earch analys ts , inves tment bankers ,
and individual inves tors . S eeking Alpha, Ltd. was founded in 2004 and is based in New Y ork, New Y ork.
Smaato US A www.smaato.com S maato Inc. , a mobile advertis ing technology company, provides an open mobile advertis ing platform for publis hers , application developers ,
advertis ement networks , and mobile operators . It offers S maato Open Mobile Advertis ing, an advertis ement exchange platform that brings
international campaigns from various advertis ement networks to the publis hers and developers inventory, as well as enables the delivery of
targeted advertis ing to mobile phones on mobile W ebs ites /widgets within applications and in mobile games . T he company’s platform a lso
a llows mobile carriers to advertis ement-enable their s ervices and provides cus tomer relationships . It has a s trategic partnership with
MocoS pace. S maato Inc. was founded in 2005 and is based in R edwood S hores , C alifornia with a loca tion in Hamburg, G ermany.
S tockTwits US A www.s tocktwits . com S tockTwits LLC operates as an online community that provides information about inves tments and s tocks . It provides users to give an
opinion about a specific s tock s ymbol through a tweet. T he company was incorporated in 2008 and is based in Oak land, C alifornia .
Zoosk US A www.zoos k .com Zoosk, Inc. operates as an online socia l dating network. T he company was founded in 2007 and is based in S an F rancis co, C alifornia .
Figure 24. Company Descriptions Source. Company reports, Capital IQ, Crunchbase
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