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SOFTWARE & SERVICES 15 OCTOBER 2

W E B 2 . O W E E K L YDAVID SHORE, CFA, MBA 416.860.6

david.shore@researchcapital.

Damian Wojcichowsky, CFA (Associate), 416.860.7

VIRTUAL GOODS THAT GENERATE REAL DOLLARS

SOCIAL GAMING POTENTIALLY A $1.6 BILLION MARKET BY 2010Based on data from Inside Virtual Goods, the market for virtual goods that is, the non-physical objects associatedwith social networks and online gaming, which are purchased and exchanged on the internet will soon exceed $1bill ion, up 50% year-over-year. Zynga, maker of Farmville, is rumoured to be generating $200 mill ion in revenue,while Playdom, maker of Caf World, reportedly has generated $50 mill ion in sales, and Playfish is rumoured to havereached the $75 mill ion revenue level.

Not coincidentally, in the past three months, gaming has become the top financing draw in our universe. Given thegains in monthly users that social networking sites that run many of these games are reporting (see Top 20 Games ofthe Week), and noting the signif icant posit ive valuation impact of a rapidly growing unique user base that we havediscussed frequently in this periodical, we speculate that funds will continue to f low in the direction of these

developers. Indeed, rumours abound that Electronic Arts is poised to announce the acquisit ion of one or more of thetop social gaming developers.

TOP 20 GAMES OF THE WEEK

Monthly

Average Weekly

Game Us ers Gain C hange %

Caf World 10,098,584 8,598,277 573.1

Farmville 56,122,407 2,422,800 4.5

Pet Society 19,512,235 623,927 3.3

(Lil) Farm Life 4,737,693 419,702 9.7

YoVille 18,917,129 381,688 2.1

My Fishbowl 5,143,462 374,545 7.9Country Story 7,425,779 373,398 5.3

Restaurant City 16,200,404 321,128 2.0

_ _ _ 3,761,044 264,965 7.6

Bejeweled Blitz 7,688,337 229,411 3.1

Friend Facts 3,467,673 217,380 6.7

Texas HoldEm Poker 18,092,599 201,301 1.1

Brain Buddies 5,378,231 193,344 3.7

Jungle Jewels 900,423 179,730 24.9

Animal Paradise 3,310,592 167,284 5.3

Sunshine Ranch 2,030,705 149,484 8.0

Mobsters 2: Vendetta 2,966,508 135,239 4.8

Friends For Sale! 6,558,440 107,961 1.7

Hug Me 3,409,953 107,455 3.3

Quiztastic! 833,167 104,032 14.3

Source. Inside Social Games

This report has been created by Analysts that are employed by Research Capital Corporation, a Canadian Investment DealFor further disclosures, please see last page of this report.

www.researchcapita l .com

Toronto 416.860.7600 Montreal 514.399.1500 Vancouver 604.662.1800 Calgary 403.265.7400 Regina 306.566.75

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HE WEB 2 .0 UNIVERSE

Eighty-nine public Web 2.0 companies: Our Web 2.0 universe contains 89 companies, with a combined market caapproximately $70 bil l ion (Figure 1). The median market cap for the group is $50 mill ion, with average trail ing revenu$163 mill ion (median $57 mill ion). The companies are also generally profitable, with a median EBITDA margin of 12.On a valuation basis, the overall average is 4.6x trail ing revenue (median 1.9x) and 11.8x trail ing EBITDA (median 10

Twenty of the companies have more than 500 employees.Comparable Company Analysis > Web 2.0

ompany Name L TM as of Ticker E xchange

Trading

C ur re nc y H Q

Current

Price

USD Market

Cap ($m)

USD LTM Total

Rev ($m)

USD LTM Total

EBITDA ($m)

EBITDA

%

TEV/LTM

Revenue

TEV/LTM

E BITDA E mploccelerize New Media, Inc. 6/30/2009 AC LZ OT C B B U S D United S tates 0. 60 16.8 4. 4 (3.7) -83.3% 4. 9x - 11

ctoz S oft C o. , L td. 6/30/2009 A052790 K OS E K R W S outh K orea 16, 000 115.6 108. 7 25. 9 23. 8% 0. 8x 3.2x NA

Q Interactive, Inc. 6/30/2009 3838 T S E J P Y J apan 49, 000 29.8 66.1 (2.0) -2. 9% 0. 1x - NA

s sociated Media Holdings Inc. 6/30/2007 AS MH OT C P K U S D United S tates 0. 01 0. 6 0. 1 (2.3) NM 15.6x - 3

gstring C orp. 6/30/2009 B S G C OT C B B U S D United S tates 0. 04 2. 3 0. 1 (1.5) NM - - 4

etawave C orporation 6/30/2009 B W AV OT C B B U S D United S tates 0. 08 2. 3 9. 4 (12. 6) NM - - 51

eyond C ommerce, Inc. 6/30/2009 B Y OC OT C B B U S D United S tates 0. 14 6. 5 11.7 (12. 8) NM 1. 0x - 10

right T hings plc 3/31/2009 AIM:B G T AIM G B P United K ingdom 0. 01 5. 9 0. 0 (2.7) NM - - NA

roadW ebAs ia Inc. 9/30/2008 B W B A OT C P K U S D United S tates 0. 03 2. 5 0. 0 (4.6) NM - - 46

DC C orp. 6/30/2009 C HIN. A Nas daqG S U S D Hong K ong 2. 53 268.1 361. 6 25. 1 6. 9% 0. 7x 10. 5x 2, 22

hangyou. com L imited 6/30/2009 C Y OU Nas daqG S U S D C hina 31. 90 1, 754. 5 241. 2 147.2 61. 0% 6. 1x 10. 0x 62

hina G ateway C orporation 9/30/2008 C G W Y OT C P K U S D United S tates 0. 00 0. 0 6. 7 (6.6) -98.9% 0. 0x - 37

hines e G amer Internationa l 6/30/2009 G T S M: 3083 G T S M T W D T aiwan 445 1, 154. 1 61.6 34. 7 56. 3% 17.6x 31. 2x NA

L IC K E R Inc. 5/31/2009 C L K Z OT C B B U S D United S tates 0. 01 0. 7 2. 5 (1.2) -45.8% 0. 3x - 22

ornerW orld C orporation 7/31/2009 C W R L OT C B B U S D United S tates 0. 06 5. 7 6. 8 NM NM 2. 4x - 16

yberplex Inc. 6/30/2009 T S X :C X T S X C AD C anada 1 74.9 89.8 9.7 10. 8% 0. 6x 5.7x NA

ADA S pA 6/30/2009 C M:DA C M E U R Ita ly 7. 89 187.3 241. 9 31. 8 13. 1% 1. 0x 7.4x NA

XN Holdings B hd 5/31/2009 DXN K LS E MY R Malays ia 0. 67 43.9 77.1 11. 1 14. 4% 0. 8x 5.3x NA

bz Internationa l, Inc. NA DIB Z OT C P K U S D United S tates 0. 00 0. 0 NA NM NM - - NA

gita lP os t Interactive, Inc. 6/30/2009 DG L P OT C B B U S D United S tates 0. 06 4. 6 1. 0 (1.4) NM 6. 6x - 7

gita lT own, Inc. 5/31/2009 DG T W OT C B B U S D United S tates 2. 50 68.4 NM (2.5) NM - - 3

olphin Digita l Media, Inc. 6/30/2009 DP DM OT C B B U S D United S tates 0. 40 21.5 0. 6 (3.4) NM 38.6x - NA

olith C o. Ltd. 12/31/2008 A041060 K OS E K R W S outh K orea 700 42.5 15.4 (3.6) -23.6% 2. 9x - NA

xtens ions , Inc. 6/30/2009 E XT I OT C P K U S D United S tates 0. 35 15.6 NM NM NM - - 2

uid Mus ic C a nada , Inc. 6/30/2009 T S X :F MN T S X C AD United S tates 1. 35 65.1 5. 3 (5.1) -95.2% 10.9x - NA

ogs ter Interactive P ictures AG 6/30/2009 F R G XT R A E U R G ermany 18. 09 67.9 9. 6 (4.5) -47.0% 6. 9x - NA

amania Digital E nterta inment C o. , L td. 6/30/2009 6180 G T S M T W D T aiwan 49. 15 230.2 140. 6 25. 1 17. 9% 1. 5x 8.3x NA

ameOn C o Ltd. 6/30/2009 3812 T S E J P Y J apan 89, 800 97.1 81.9 20. 1 24. 5% 0. 3x 1.1x NA

eoS entric Oyj 6/30/2009 G E O 1V HL S E E U R F inland 0. 05 65.8 5. 4 (17. 4) NM 12.1x - 11

iant Interactive G roup, Inc. 6/30/2009 G A NY S E U S D C hina 7 1, 548. 9 198. 5 124.1 62. 5% - - 1, 5

igaMedia L td. 3/31/2009 G IG M Nas daqG S U S D T aiwan 4. 82 262.8 183. 6 NM NM 1. 0x - 75

ravity C o. , L td 6/30/2009 G R V Y Nas daqG M U S D S outh K orea 1. 85 51.4 49.1 16. 6 33. 9% - - 46

ree, Inc. 6/30/2009 T S E : 3632 T S E J P Y J apan 4, 790 2, 398. 1 156. 0 93. 7 60. 1% 14.6x 24. 3x NA

ungHo O nline E nterta inment, Inc. 6/30/2009 3765 OS E J P Y J apan 227, 900 2 92.0 119. 5 26. 6 22. 2% 2. 2x 9.7x NA

anbitS oft, Inc. 6/30/2009 A047080 K OS E K R W S outh K orea 4, 150 76.1 60.7 1.4 2. 3% 1. 0x 44. 3x NA

C /InterActiveC orp. 6/30/2009 IAC I Nas daqG S U S D United S tates 19. 04 2, 520. 9 1, 392.3 52. 7 3. 8% 0. 6x 14. 8x 3, 20

S E nergy, Inc. 4/30/2009 I AS A.E OT C B B U S D C anada 0. 11 7. 7 0. 0 (0.6) NM - - NA

eemedia Inc. 3/31/2009 I E E T S XV C AD C anada 0. 15 7. 1 1. 6 (5.0) NM 3. 9x - NA

umbuck E nterta inment L imited 6/30/2009 AS X:J MB AS X AU D Aus tra lia 0. 38 16.2 16.7 7.2 42. 8% 0. 6x 1.4x 79

AB Distribution 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

ngs oft C o. L td. 6/30/2009 3888 S E HK HK D C hina 8 1, 070. 8 139. 1 61. 4 44. 2% 7. 7x 17. 4x 2, 46

ngo Media C orpora tion 6/30/2009 T S XV :L M T S XV C AD C anada 0. 81 9. 3 1. 2 (1.9) NM 7. 0x - NA

veW orld Inc. 6/30/2009 LV W D OT C P K U S D United S tates 0. 04 1. 3 10.6 (0.1) -1. 2% 0. 0x - NA

ookS mart, L td. 6/30/2009 LO OK Nas daqG M U S D United S tates 1. 16 19.9 56.8 (4.4) -7. 8% - - 90

agnitude Information S ys tems Inc. 6/30/2009 MAG Y OT C B B U S D United S tates 0. 01 5. 0 0. 1 (2.5) NM - - 14

ixi, Inc. 6/30/2009 2121 T S E J P Y J apan 658000. 00 1, 133. 8 136. 8 46. 2 33. 8% 7. 4x 21. 9x NA

odern T imes G roup Mtg AB 6/30/2009 MT G B OM S E K S weden 326. 50 3, 089. 9 1, 971.4 302.9 15. 4% 1. 9x 12. 1x 2, 96

OK O. mobi L imited 6/30/2009 MK B AS X AU D Aus tra lia 0. 08 5. 8 0. 7 (2.4) NM 6. 9x - NAyriad G roup AG 6/30/2009 MY R N S W X C HF S witzerland 4. 54 194.6 63.0 3.4 5. 4% 3. 0x - 40

E OW IZ G ames C orporation 12/31/2008 A095660 K OS E K R W S outh K orea 38900. 00 687.2 207. 3 55. 7 26. 8% 3. 3x 12. 2x NA

etDra gon W ebS oft, Inc. 6/30/2009 777 S E HK HK D C hina 5 341.0 89.3 25. 7 28. 7% 2. 2x 7.6x 3, 10

eteas e.com Inc. 6/30/2009 NT E S Nas daqG S U S D C hina 39. 99 5, 175. 8 472. 4 297.4 63. 0% - - 3, 10

euLion Incorporated 6/30/2009 T S X :NLN T S X C AD C anada 0. 90 94.4 21.5 (13. 0) -60.3% 3. 9x - 23

eXplore C orporation 6/30/2009 NXP C OT C P K U S D United S tates 1 39.0 1. 7 (13. 3) NM 25.3x - NA

gi G roup Inc. 6/30/2009 2497 T S E J P Y J apan 27510. 00 38.1 93.0 6.9 7. 4% - - NA

orthgate T echnologies L imited 6/30/2009 590057 B S E INR India 36. 90 26.8 82.9 (41. 5) -50.0% 0. 3x - NA

pen T ext C orp. 6/30/2009 OT E X Nas daqG S U S D C anada 40. 55 2, 276. 8 785. 7 205.1 26. 1% 2. 9x 11. 2x 3, 4

penwave S ystems Inc. 6/30/2009 OP W V Nas daqG S U S D United S tates 2. 67 222.9 191. 7 4.9 2. 6% 0. 6x 23. 3x 59

erfect W orld C o. , L td. 6/30/2009 P W R D Nas daqG S U S D C hina 44. 10 2, 168. 9 255. 6 142.2 55. 6% 0. 7x 1.2x 2, 09

NI Digita l Media Inc. 6/30/2009 T S XV :P N T S XV C AD C anada 1. 80 56.6 21.0 2.3 11. 0% 2. 6x 23. 6x NA

uepasa C orp. 6/30/2009 QP S A OT C B B U S D United S tates 1 17.6 0. 2 (10. 6) NM - - 74

AO R B C Information S ys tems 12/31/2007 R B C I R T S U S D R us s ia 1. 60 222.0 157. 4 20. 6 13. 1% 0. 0x 0.4x NA

handa Interactive E nterta inment L td. 6/30/2009 S NDA Nas daqG S U S D C hina 49. 16 3, 306. 3 629. 0 296.7 47. 2% - - 3, 12

hutterfly, Inc. 6/30/2009 S F L Y Nas daqG S U S D United S tates 16. 14 410.9 218. 6 27. 3 12. 5% 1. 6x 12. 7x 51

K C ommunications C o. , L td. 12/31/2008 A066270 K OS E K R W S outh K orea 8460. 00 296.9 192. 7 12. 5 6. 5% 1. 5x 23. 7x NA

NAP Interactive, Inc. 6/30/2009 S T V I OT C B B U S D United S tates 0 3. 8 3. 5 0.9 27. 0% 0. 6x 2.3x 11

NM G loba l Holdings 9/30/2008 S NMN OT C P K U S D United S tates 0. 00 0. 0 2. 0 (0.7) -34.8% 1. 1x - 33

ocia l Media V entures Inc. 12/31/2008 S MV I OT C P K U S D United S tates 0 0. 0 0. 1 (0.1) -60.6% 4. 5x - NA

ocia lwise, Inc. 6/30/2009 S C LW OT C B B U S D United S tates 0. 61 27.0 0. 0 (5.6) NM - - NA

ohu.com Inc. 6/30/2009 S OHU Nas daqG S U S D C hina 65. 38 2, 506. 3 485. 1 209.6 43. 2% 4. 1x 9.5x 3, 19

park Networks , Inc. 6/30/2009 LO V AME X U S D United S tates 2 49.8 50.5 10. 8 21. 3% 0. 9x 4.5x 18

pectrumDNA, Inc. 6/30/2009 S P XA OT C B B U S D United S tates 0 6. 8 0. 1 (2.5) NM - - 7

T encent Holdings L td. 6/30/2009 700 S E HK HK D C hina 138 32,300.4 1, 391.6 680.3 48. 9% 25.6x - 6

he P arent C ompany 8/2/2008 K IDS . Q OT C P K U S D United S tates 0. 01 0. 2 112. 0 (13. 5) -12.0% 0. 2x - 34

T he9 L imited 12/31/2008 N C T Y Nas daqG S U S D C hina 7. 40 185.7 250. 6 85. 5 34. 1% - - 1T heS treet.com, Inc. 3/31/2009 T S C M Nas daqG M U S D United S tates 3. 08 94.3 67.0 1.9 2. 9% 0. 4x 15. 3x

ree. C om, Inc. 6/30/2009 T R E E Nas daqG M U S D United S tates 8. 10 87.5 216. 6 (0.7) -0. 3% 0. 4x - 70

nis erve C ommunications C orp. 5/31/2009 T S XV :U S S T S XV C AD C anada 0. 04 0. 9 17.1 (0.2) -1. 0% 0. 2x - NA

nited Online Inc. 6/30/2009 UNT D Nas daqG S U S D United S tates 8. 99 753.7 949. 8 203.2 21. 4% 1. 1x 5.0x 1, 46

OMO Media , Inc 7/31/2009 UOMO OT C B B U S D C anada 0 9. 5 0. 8 (0.4) -54.2% 12.6x - NA

a lueC lick Inc. 6/30/2009 V C LK Nas daqG S U S D United S tates 14 1, 193. 1 563. 6 99. 0 17. 6% 1. 9x 10. 7x 1, 18

O IS , Inc. 6/30/2009 V OIS OT C B B U S D United S tates 0 3. 7 0. 0 (1.0) NM - - 4

ebzen Inc. 6/30/2009 W ZE N Nas daqG M U S D S outh K orea 2. 63 31.2 23.2 2.3 9. 9% - - 32

izzard S oftware C orporation 6/30/2009 W ZE AME X U S D United S tates 0. 43 21.7 5. 3 (4.5) -84.9% 4. 3x - 11

orlds .com Inc. 6/30/2009 W DDD OT C B B U S D United S tates 0. 10 5. 2 0. 1 (0.7) NM - - 1

yndstorm C orporation NA W Y ND OT C P K U S D United S tates 0. 10 1. 8 NA NM NM - - NA

NG AG 6/30/2009 O1B C XT R A E U R G ermany 36. 90 284.9 58.9 17. 0 28. 8% 3. 9x 13. 7x 24

D Online C orp. 12/31/2007 A052770 K OS E K R W S outh K orea 8130. 00 102.1 57.4 12. 4 21. 6% 1. 9x 9.0x NA

nk K orea Inc. 12/31/2008 A023770 K OS E K R W S outh K orea 3750. 00 16.8 11.9 1.3 10. 5% - - NA

gh 32,300.4 1,971.4 680 .3 63. 0% 38.6x 44. 3x 6, 42

ow 0. 0 0.0 -41.5 -98.9% - - 1

verage 788.0 163.1 39.0 6.1% 4.6x 11.8x 936edian 49.8 57. 4 1. 7 12. 5% 1. 9x 10. 0x 246

gure 1. Web 2.0 Universe Summaryource. Capital IQ

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APITAL MARKETS ACTIV ITY (M&A AND F I NANCING)

October off to a decent start: Total transaction value in the Web 2.0 universe for October is $89.5 mill ion. This weekrought 10 financings to the sector, bringing the total for October to 12 transactions averaging $9.0 mill ion each in

with the September average. The largest transaction in the week was a $22.5 mill ion financing of PopCap Gamesnline gaming developer. The biggest deal in the month is Yext at $25 mill ion. In comparison, total capital raise

September was $232.8 mill ion, averaging $9.0 mill ion (26 deals); August was $208.5 mill ion, averaging $7.7 mill ioneals); and July (35 deals) $ 191.4 mill ion, averaging $5.5 mill ion.

Financing Activity Last Twelve Months

9.7

7.0

6.5

7.1

6.66.2

14.6

4.9

5.5

7.9

9.0 9.0

7.0

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

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

(US$m)

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

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

gure 2. Financings, Last Twelve Monthsource. Company reports

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Deal round-up for October (to date): The large deal highlights for the month include:

Yext an online directory provider raised $25 mill ion.

PopCap Games a developer of casual games played o n multiple types of devices raised $22 .5 mill ion in its round of funding.

DailyMotion a French online video content provider raised $22.1 mill ion through a Series C financing.

Engine Yard provider of managed hosting and deployment solutions for Ruby and Rails applications raised mill ion in a Series C financing.

FeedRoom provider of Web video solutions was acquired for $10 mill ion by KIT Digital.

Ooyala an online video management and analytics company raised $10 mill ion in a Series B financing.

All other deals in the month involved less than $10 mill ion in funding. For additional details on financings, see Figuresnd 24 (at end of note).

Financing & M/A Summary - Last Three Months

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

200.0

Skype

Mint

Twitter

Turbine

FriendsReunited

Smith&Tinker

Yext

NowPublic

PopCapGames

DailyMotion

Ensequence

iLike

EngineYard

Livebookings

Dopplr

Zoove

RichRelevance

Ooyala

FeedRoom

Mzinga

MediaMath

Traffiq

InXpo

Bill.com

EdoInteractive

Jobvite

NextBio

RiotGames

InnoCentive

OneRiot

Balihoo

RealityMobile

Imeem

Vuclip

Boxee

HiveLive

Polyvore

Booyah

MOG

YuMe

Fanbase

NeoEdge

AmieStreet

AllianceHealth

Unisfair

ViVu

Z2Live

ConduitLabs

KODA

OurStage

Mocapay

Scoreloop

Fwix

Vantrix

MashLogic

Roblox

iSocket

Greystripe

TremorMedia

RightsFlow

Loomia

Plista

FourSquare

EduFire

TinyPictures

ChessCube

DataSync

Linkedex

Fluther

Linksify

TransGamingInc.

Listia

iSyndica

Gigpark

Gamelab.com

OnLive

(US$m) Oct-

Sep

Aug

gure 3. Capital Market Activity, Last Three Monthsource. Company reports

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Gaming, Social Networks most active sectors: Gaming companies, along with Social Networks, experienced the mfinancing activity among our Web 2.0 sector categories in the past three months by number of transactions Advertising was the next most active (7), followed by Video (6) (Figure 4). The $2.0 bil l ion acquisit ion of Skype skewsdollars transacted to the SMS/Voice segment, while the $170 mill ion acquisit ion of Mint brings the Vertical Communsegment to the second highest total.

Capital Market Activity by Sector - Last Three Months

2,025.0 192.3 116.5 100.0 85.4 67.1 39.4 37.9 35.5 32.0 30.0 26.1 17.1 15.8 14.5 14.0 13.2 6.0 3.9 2.8 2.0 1.3 1.0 00.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

200.0

SMS/Voice

Vertical

Communities

Gaming

Microblog

SocialNetworks

Video

Advertising

Crowdsourced

Content

Music

Search

Infrastructure

Enterprise

VirtualWorld

Mobile

Collaboration

Comment/Reputation

Advertising/Mobile

Media

SocialCommerce

Aggregation

MobileAd

OnlineLearning

Analytics

C l a s s i f i e d

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

(US$m)

# companies

gure 4. Capital Market Activity, by Sector, Last Three Monthsource. Company reports

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APITAL MARKETS ACTIV ITY (PRICE PERFORMANCE)

Web 2.0 index continues to outpace NASDAQ recovery: Our Web 2.0 index (market-cap weighted) essentially mirrothe performance of the NASDAQ composite index from mid-2008 until earlier this year. However, the index has recehad a much stronger recovery relative to the NASDAQ index (Figure 5).

Web 2.0 Index Price Performance

0

20

40

60

80

100

120

140

160

180

200

10/1

4/2008

10/2

8/2008

11/1

1/2008

11/2

5/2008

12/

9/2008

12/2

3/2008

1/

6/2009

1/2

0/2009

2/

3/2009

2/1

7/2009

3/

3/2009

3/1

7/2009

3/3

1/2009

4/1

4/2009

4/2

8/2009

5/1

2/2009

5/2

6/2009

6/

9/2009

6/2

3/2009

7/

7/2009

7/2

1/2009

8/

4/2009

8/1

8/2009

9/

1/2009

9/1

5/2009

9/2

9/2009

1 0 / 1

3 / 2 0 0 9

Index: Web 2.0 (Market Cap) ^COMP - Share Pricing

gure 5. Web 2.0 Price Performanceource. Capital IQ

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Broad-based price improvement: Twenty-seven companies in our universe had positive stock price performances the past week (for stocks with prices greater than $1) (Figure 6), while 23 companies showed negative 1-week retuVolatile price swings continue for DigitalTown (OTCBB:DGTW), up 24%, having fallen 24% the prior week, risen 76%week before that, and declined 14% the week before that.

1 Week Price Performance

-10.0%

-7.7%-5.6%-5.5%-5.5%

-4.1%-3.8%-3.6%-3.5%-3.5%

-2.8%-2.8%-2.8%

-2.4%-2.2%-2.1%

-1.6%-1.4%-1.3%

-0.8%-0.6%-0.5%

-0.1%0.3%0.4%0.6%0.6%0.7%0.8%

1.2%2.3%

2.5%2.7%

2.9%3.1%3.1%3.5%

4.1%4.3%4.4%

5.5%5.5%

5.9%6.2%

7.4%8.4%

8.8%12.9%

15.0% 24.4%

-0. 15 -0.1 -0.05 0 0.05 0.1 0.15 0. 2 0.25

Neteas e.c om Inc.

PNI Digital Media Inc.Northgate Tec hnologies Limited

Changyou.com LimitedChines e Gamer International

The9 LimitedNetDragon WebSoft, Inc.Fluid Mus ic Canada , Inc.

S ohu.com Inc.HanbitSoft, Inc.

Giant Interactive G roup, Inc.Eolith Co. Ltd.

NEOWIZ G ames CorporationPerfect World Co., Ltd.

Frogster Interactive Pictures AGGravity Co., Ltd

IAC/InterActiveCorp.Quepas a Corp.S hutterfly, Inc.Y nk Korea Inc.

Actoz Soft Co., Ltd.S K Communica tions C o., L td.

XING AGGamania Digital Entertainment Co.,

S handa Interac tive Entertainment L td.Y D Online Corp.

GigaMedia Ltd.V alueClick Inc.Cyberplex Inc.

CDC Corp.Myriad Group AG

Spark Netw orks, Inc.LookS mart, L td.

AQ Interactive, Inc.Mixi, Inc.

Webzen Inc.Ga meOn Co L td.

Gree, Inc.Kingsof t Co. L td.

TheS treet.com, Inc.Tree.Com, Inc.

Openwa ve S ys tems Inc.Open Text Corp.

Ngi Group Inc.Modern T imes Gr oup Mtg AB

GungHo Online Entertainment, Inc. Tenc ent Holdings L td.

United O nline Inc.DADA S pADigitalTow n, Inc.

gure 6. 1-Week Price Performanceource. Capital IQ

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UBLIC COMPANY INDUSTRY NEWS (PARTNERSHIPS, F INANCIAL RESULTS, NEW PRODUCTS)

Key Developmentsompany Headline Notes

ocial Media Ventures Inc.

OTCPK:SMVI)

Social Media Venures Inc. Joins Ma rketing Affiliate

Program with www.OfficialPetHotels.com

S ocial Media V entures Inc. a nnounced that it has entered into a marketing affiliate agreement with www.OfficialP etHotels. com. Acc or

the terms of the marketing affiliate agreement, S MVI will advertise www.OfficialP etHotels.c om on its networking site for pets,

www.P etsP laces .com in exchange for a commission for each member of Petspla ces. com that books a hotel using the serv ice provide

OfficalPetHotels.com.

erfect World Co., Ltd.

NasdaqGS:PWRD)

Perfect World Co., L td. Releas es New E dition for its In-

House Game

P erfect World Co. , Ltd. a nnounced that its in-house 3D web game has offered a new edition named Mermaid Legend. The vers ion is

third extension package of the game, following Perfect W orld, launched in November 25 in 2005, a nd Perfect W orld International E dit

pen Text Corp. (NasdaqGS:OTEX);

AP AG (DB:SAP)

SA P AG and Open Text Corp. E xpand Global Reseller

Agreement

S AP AG and Open Text Corp. announced another expansion of their successful strategic relationship. S AP has s elected Open Text

E xtended EC M for SAP for resale under the name the SAP Extended Enterprise Content Management (S AP Extended ECM) applic

Open Text.

euLion Incorporated (TS X:NLN) NeuLion Incorporated and HorseR acing TV, Inc.

Announce Debut of a New S ervice

Hors eR acing TV , Inc. a nd NeuLion announced the debut of a new service dedicated to the sport and lifestyle of horse racing. W ith ac

over 70 track s from acr oss the country and around the world, H R TV brings the thrill of live racing to viewers online through a uniquely

branded video portal where fans can access all the best horse racing action. Powered by NeuLion technology, a leading service provid

live and on demand sports a nd international programming, HR TV 's broadband servic e gives rac ing fans the ability to watch live race

coverage, the HRT V channel and unparalleled access to racing's greatest circuits, on a 24 hours per day, seven days a week basis. T

of-a-kind service features live races, video-on-demand, audience polling and more. Additionally, subscribers have access to various c

and a full complement of the network's award-winning original programming including: 'Ins ide Information,' 'P ursuit of the C up,' 'Again

Odds,' 'Across The B oard' and more.

etease.com Inc. (NasdaqGS:NTES) Ne te ase .com I nc . - Confe re nce Pre se ntation Cal l Ne te ase .com I nc . - Conf e re nce Pre sentat ion Call s

eemedia Inc. (TSXV:IEE) iseemedia Inc. Delivers B lackberry-Like Service to Mass -

Market Mobile Phones

isee media Inc. announced the ava ilability of iseema il(TM), a new Blackberry-like s ervice that eliminates the need for expensive data p

high-end phones to receive ema ils a nd rich attachments on the go. T he solution will be specifica lly attractive to wireless serv ice provid

and OE Ms who support almost two billion mobile phone subscribers in emerging markets where the penetration of smartphones is vir

non-existent. The C ompany also announced that a soon-to-be-disclosed car rier is now implementing the iseemedia s ervice in India. I

predicts there will be 4.81 billion mobile phone subscribers by 2012, with the majority of the next billion subscribers coming from emergmarkets . P ortio Re sea rch further states that nine of the top ten highest growth markets over this period have one ke y defining factor i

common - they are all low income per-capita ma rkets. Therefore hands ets s old into these emerging markets will continue to be mainl

priced devices.

gure 7. Key Developmentsource. Capital IQ

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ALUATION

Online Gaming companies lead market-cap charts: Fifteen companies in our Web 2.0 universe top US$1 bil l iomarket capitalization (Figure 8). Fifty-seven of the 89 companies have market caps under US$100 mill ion, with 28 unUS$10 mill ion. Online gaming companies dominate the top of the list, led by Tencent Holdings with a market cap nUS$30 bil l ion.

Market Cap (US D m)

0. 00. 00. 00. 00. 30. 60. 60. 60. 91. 82. 02. 12. 53. 33. 84. 14. 24. 5

4. 95. 25. 75. 95. 98. 99. 710.411.312.116.816.817.019.119.519.519.923.527.029.429.632.133.436.339.4

45.247.152.055.059.865.868.473.374.976.783.187.593.098.6105.5124.6159.7189.7192.5208.1208.7225.2261.7264.9277.4

284.5308.1341.0399.7659.8676.6968.2970.11,127.81,255.21,512.6

2,097.22,142.82,250.12,509.02,548.72,716.13,337.95,565.328,711.6

1,818.9

0 500 1,000 1,500 2,000 2,500 3, 000 3, 500 4,000

Social Media V enures, Inc.Dibz International, Inc.

S NM Global HoldingsChina Gatewa y Corporation

The Parent CompanyCLICKER Inc.

As s ociated Media Holdings Inc.KA B Distribution Inc.

Unis erve Communications Corp.Wy ndstorm Corporation

Betaw ave CorporationBigstring Corp.LiveWorld Inc.

V OIS, Inc.SNAP Interactive, Inc.

Magnitude Infor mation Sy s tems Inc .IAS E nergy, Inc.DigitalPost Intera ctive, Inc .

MOKO .mobi LimitedWorlds. com Inc.

CornerWorld Corporationiseemedia Inc.

Br ight Things plcExtensions, Inc.

S pectrumDNA, Inc.UOMO Media, Inc

Bey ond Commerce, Inc.Lingo Media Corporation

Y nk Korea Inc.Ac celerize New Media, Inc.

Jumbuck Entertainment LimitedQuepasa C orp.LookS mart, L td.

BroadWebAs ia Inc.Dolphin Digital Media, Inc.

Wizz ard S oftware CorporationSocialwise, Inc.

Northgate Tec hnologies LimitedAQ Interactive, Inc.

Webzen Inc.Ngi Group Inc.

NeXplore CorporationDXN Holdings B hd

Eolith Co. Ltd.Spark Netw orks, Inc.

Grav ity Co., LtdDigitalTow n, Inc.

PNI Digital Media Inc.GeoSentric Oy j

Frogs ter Interactive Pictures A GFluid Mus ic Canada, Inc.

Cyberplex Inc.HanbitSoft, Inc.Tree.Com, Inc.

TheStreet.c om, Inc.GameOn Co L td.

NeuLion IncorporatedY edangOnline Corp.Actoz S oft Co., L td.

DADA SpAThe9 Limited

Myriad Group AGOAO RBC Information Systems

Openw ave Sy s tems Inc.Gamania Digital Entertainment Co., Ltd.

GigaMedia Ltd.CDC Corp.GungHo Online Entertainment, Inc.

XING A GS K Communica tions C o., Ltd.

NetDragon WebS oft, Inc.Shutterfly, Inc.

United O nline Inc .NEOWIZ Ga mes Corporation

Kingsoft Co. Ltd.Mixi, Inc.

V alueClick Inc.Chinese Ga mer InternationalGiant Interac tive Group, Inc.

Changyou.com LimitedOpen Text Corp.

Gree, Inc.Perfect World Co., Ltd.

S ohu.com Inc.IAC/InterActiveCorp.

Modern Times G roup Mtg ABS handa Interac tive Entertainment Ltd.

Netease. com Inc.Tenc ent Holdings Ltd.

gure 8. Market Cap Rankingource. Capital IQ

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TEV/Revenue (LTM) averages 4.6x: The overall average TEV/Revenue (LTM) multiple for our group is 4.6x (vs. 4.2xweek) (Figure 9). Having recovered from a negative end of month in September, we now see three companies tradabove 25x revenue Dolphin Digital Media, Inc. (OTCBB:DPDM) at 38.6x, Tencent Holdings Ltd. (SEHK:700) at 25and NexPlore Corporation (OTCPK:NXPC) at 25.3x. The median o f 1.9x is down from 1.7x at las t publication. Note thaexclude multiples greater than 50x. Twenty-nine companies have multiples under 1.5x.

TE V/LT M Re venue (x)

0.10.2 0.2 0.3 0.3 0.3 0.4 0.4 0.6 0.6 0.6 0.6 0.6 0.70.70 .8 0.8 0.9 1.0 1.0 1.0 1.0 1.1 1.1 1.3

1.5 1.5 1.6 1.9 1.9 1.92.2 2.2 2.4 2.6

2.9 2.9 3.0 3.33.9 3.9 3.9 4.1 4.3

4.5 4.96.1 6.6

6.9 6.9 7.0 7.47.7

10.912.112.6

14.615.6

17.6

25.325.6

Average, 4.6

0. 0

5. 0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

AQ

Interactive,

Inc.

TheParentCompany

UniserveCommunicationsCorp.

GameOnCoLtd.

CLICKERInc.

NorthgateTechnologiesLimited

TheStreet.com,

Inc.

Tree.C

om,

Inc.

IAC/InterActiveCorp.

JumbuckEntertainmentLimited

OpenwaveSystemsInc.

CyberplexInc.

SNAPInteractive,

Inc.

PerfectWorldCo.,

Ltd.

CDCCorp.

DXNHoldingsBhd

ActozSoftCo.,

Ltd.

SparkNetworks,

Inc.

DADASpA

GigaMediaLtd.

HanbitSoft

,Inc.

BeyondCommerce,

Inc.

SNM

GlobalHoldings

UnitedOnlineInc.

YnkKoreaInc.

GamaniaDigitalEntertainment

SKCommunicationsCo.,

Ltd.

Shutterfly

,Inc.

ModernTimesGroupMtgAB

ValueClickInc.

YDOnlineCorp.

GungHoOnlineEntertainment,

NetDragonWebSoft

,Inc.

CornerWorldCorporation

PNIDigitalMediaInc.

EolithCo.

Ltd.

OpenTextCorp.

MyriadGroupAG

NEOWIZGamesCorporation

iseemediaInc.

NeuLionIncorporated

XING

AG

Sohu.c

om

Inc.

WizzardSoftwareCorporation

SocialMediaVenturesInc.

AccelerizeNewMedia

,Inc.

Changyou.c

om

Limited

DigitalPostInteractive,

Inc.

MOKO

.mobiLimited

FrogsterInteractivePictures

LingoMediaCorporation

Mixi,Inc.

KingsoftCo.

Ltd.

FluidMusicCanada,

Inc.

GeoSentricOyj

UOMOMedia

,Inc

Gree,

Inc.

AssociatedMediaHoldingsInc.

ChineseGamerInternational

NeXploreCorporation

TencentHoldingsLtd.

gure 9. TEV/Revenue Rankingource. Capital IQ

TEV/Revenue (LTM) by country/exchange: We have also calculated multiples based on where the companies are lior domiciled. Figure 10 shows the average TEV/Revenue multiples by stock exchange. The OTCBB has the largnumber of companies (18), trading at an average multiple of 8.4x (vs. 8.2x last week). On a geographic basis, the UnStates has the most companies (38), trading at an average of 5.2x revenue (vs. 4.3x last week) (Figure 11). Ten ofcompanies are Canadian (average 4.2x revenue).

Average TEV/LTM Revenue - By Exchange

0.00.00.0

12.1

11.8

9.5

8.46.7 5.6

5.45.23.73.4 3.02.62.21.9 1.91.9 1.00.8

0.40.30.0

2.0

4.0

6.08.0

10.0

12.0

14.0

HLSE

SEHK

GTSM

OTCBB

OTCPK

TSE

XTRA

TSX

ASX

TSXV

SWX

AMEX

OSE

NasdaqGS

KOSE

OM

CM

KLSE

NasdaqGM

BSE

RTS

AIM

NYSE

1 3 2 18 11 5 2 4 2 4 1 2 1 14 6 1 1 1 5 1 1 1 1

(x)

# Companies

Average TEV/LTM Revenue - By Country

0.0

12.1

7.76.7

5.4 5.2 4.9 4.2 3.73.0

1.9 1.9 1.0 0.80.30.7

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

Finland

China

Taiwan

Germany

United

States

Japan

Canada

Australia

Switzerland

South

Korea

Sweden

Italy

Malaysia

HongKong

India

Russia

1 10 3 2 38 6 10 2 1 8 1 1 1 1 1 1

(x)

# Companies

gures 10 & 11. TEV/Revenue Ranking (Exchange, Country)ource. Capital IQ

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TEV/EBITDA (LTM) averages 12.2x: The average multiple for the 35 companies with posit ive EBITDA (and multiunder 100x) is 12.2x LTM EBITDA (vs. 12.1x last week), led by Tencent Holdings (SEHK:700) 44.3x multiple (Figure Nine companies have EBITDA multiples under 7x. The median multiple is 10.0x (vs. 10.4x last week).

TEV/LTM EBITDA (x)

1.1 1. 2 1. 4 2. 33. 2

4. 5 5. 0 5. 35. 7

7. 4 7. 6 8. 39. 0 9. 5 9. 7 10.0

10.5 10.7 11.21 2. 1 12 .2 12 .7 1 2. 7

13.714.8 15.3

17.4

21.923.3 2 3. 6 2 3. 7 24.3

31.2

4

Average, 12.2

0. 0

5. 0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

GameOnCoLtd.

PerfectWorldCo.,

Ltd.


SNAPInteractive,

Inc.

ActozSoftCo.,

Ltd.

SparkNetworks,

Inc.

UnitedOnlineInc.

DXNHoldingsBhd

CyberplexInc.

DADASpA

NetDragonWebSoft,

Inc.

GamaniaDigitalEntertainmentCo.,

Ltd.

YDOnlineCorp.

Sohu.comI

nc.

GungHoOnlineEntertainment,Inc.

Changyou.comL

imited

CDCCorp.

ValueClickInc.

OpenTextCorp.



YnkKoreaInc.

Shutterfly,

Inc.

XINGA

G


TheStreet.com,

Inc.

KingsoftCo.

Ltd.

Mixi,Inc.

OpenwaveSystemsInc.

PNIDigitalMediaInc.

SKCommunicationsCo.,

Ltd.

Gree,

Inc.


b

f

gure 12. TEV/EBITDA Rankingource. Capital IQ

TEV/EBITDA (LTM) by country/exchange: Figure 13 shows the average TEV/EBITDA multiples by stock exchange. OTCBB has the largest number of companies (18), trading at an average multiple of 2.3x. On a geographic basis, United States has the most companies (38), trading a t an average of 11.1x EBITDA (Figure 14). Ten of the companiesCanadian (average 9.2x EBITDA).

Average TEV/LTM EBITDA - By Exchange

0.41.42.34.55.35.7

7.49.710.9

12.112.513.715.315.8

18.519.7

23.6

0.0

5.0

10.0

15.0

20.0

25.0

TSXV

GTSM

KOSE

TSE

NasdaqGM

XTRA

SEHK

OM

NasdaqGS

OSE

CM

TSX

KLSE

AMEX

OTCBB

ASX

RTS

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

(x)

# Companies

Average TEV/LTM EBITDA - By Country

1.4

5.37.4

9.210.511.112.1

13.513.714.3

18.5

19.7

0.0

5.0

10.0

15.0

20.0

25.0

Taiwan

South

Korea

Japan

Germany

Canada

Sweden

United

States

Hong

Kong

China

Italy

Malaysia

Australia

3 8 6 2 10 1 38 1 10 1 1 2

(x)

# Companies

gures 13 & 14. TEV/EBITDA Ranking (Exchange, Country)ource. Capital IQ

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P/E (LTM) averages 18.8x: The average multiple for the 33 companies with posit ive earnings (and multiples under 1s 18.8x LTM EPS (vs. 18.0x last week), led by Tencent Holdings Ltd. (SEHK:700) with a 65.9x multiple (Figure

Twelve companies have P/E multiples under 10x. The median is 13.6x.

P/E LT M (x)

0.0 0.01. 8 2. 1 2. 3 2. 9 3. 1

4. 66.7 6.7 7. 3 9. 7

10.4 10.8 11.912.0

1 3. 6 1 3. 6 13.9 1 4. 8 1 4. 816.4

19. 8 20 .021.4

29.3

35.737.9

41.0

50.9

55.1

63.16

Average, 18.8

0. 0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

GravityCo.,

Ltd

WebzenInc.

GiantInteractiveGroup,

Inc.

The9Limited

ShandaInteractiveEntertainmentLtd.

Netease.comI

nc.

PerfectWorldCo.,

Ltd.


SNAPInteractive,

Inc.

CyberplexInc.

DXNHoldingsBhd

GameOnCoLtd.

GigaMediaLtd.

YDOnlineCorp.


Changyou.comL

imited

HanbitSoft,

Inc.

SparkNetworks,

Inc.

NetDragonWebSoft,

Inc.


Sohu.comI

nc.

ActozSoftCo.,

Ltd.

GamaniaDigitalEntertainmentCo.,

Ltd.

Worlds.comI

nc.

KingsoftCo.

Ltd.

XINGA

G


OpenTextCorp.


Gree,

Inc.

Mixi,Inc.

GungHoOnlineEntertainment,Inc.

T t H l d i L t d

gure 15. P/E Rankingource. Capital IQ

P/E (LTM) by country/exchange: Figure 16 shows the average P/E multiples by stock exchange. The OTCBB hasargest number of companies (18), trading at an average multiple of 13.3x. On a geographic basis, the United States

the most companies (38), trading at an average of 13.1x earnings (Figure 17). Ten of the companies are Canad(average 22.3x EPS).

Average P/E - By Exchange

0.01.8

4.66.77.3

10.813.313.614.8

19.1

29.330.433.7

38.5

63.1

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

OSE

TSE

SEHK

GTSM

XTRA

KOSE

OM

AMEX

OTCBB

NasdaqGS

KLSE

TSX

ASX

NYSE

NasdaqGM

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

(x)

# Companies

Average P/E - By Country

7.3

12.813.114.0

14.8

22.323.729.3

44.7

0.0

5.0

10.0

15.0

20.0

25.030.0

35.0

40.0

45.0

50.0

Japan

Germany

Taiwan

Canada

Sweden

China

United

States

South

Korea

Malaysia

6 2 3 10 1 10 38 8 1

(x)

# Companies

gures 16 & 17. P/E Ranking (Exchange, Country)ource. Capital IQ

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PCOMING EVENTS

Earnings CalendarC ompany Date & Time Quarter C onf C all Details

Changyou.com Limited (NasdaqGS:CYOU) Monday, October 26, 2009, 7:00 a.m. EDT Q 3 2009 1-866-314-5050

Sohu.com Inc. (NasdaqGS:SOHU) Monday, October 26, 2009, 8:00 a.m. EDT Q 3 2009 1-800-901-5248

AC/InterActiveCorp. (NasdaqGS:IACI) Tuesday, October 27, 2009, 11:00 a.m. EDT Q 3 2 00 9 www. ia c . com/inv es to

Open Text Corp. (NasdaqGS:OTEX) Tuesday, October 27, 2009, 5:00 p.m. EDT Q 1 2010 1-800-814-4861

Shutterfly, Inc. (NasdaqGS:SFLY) Wednesday, October 28, 2009, 5:00 p.m. EDT Q 3 2009 719-325-4880

Tree.Com, Inc. (NasdaqGM:TREE) Friday, October 30, 2009, 11:00 a.m. EDT Q 3 2009 1-888-428-9470

gure 18. Earnings Calendarource. Company reports

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Comparable Company Analysis > Web 2.0

rice Performance

ompany Name C urrency Tic ker E xchange US D Market C ap ($m) C urrent P rice 1 Wk 1 Mth 3 Mth 6 Mth 1 Yr 52 W

ccelerize New Media, Inc. US D AC LZ OT C B B 16.8 0.60 0. 0% 0.0% 9.1% 57.9% 20.0% -13.0

ctoz S oft C o. , L td. K R W A052790 K OS E 115.6 16, 000 -0.6% -11.1% -39.4% 8. 8% 92.8% -55.6

Q Interactive, Inc. J P Y 3838 T S E 29.8 49, 000 2. 9% -5.0% -14.0% 4. 3% 41.6% -41.0

ss ociated Media Holdings Inc. US D AS MH OT C P K 0.6 0.01 -30.0% -30.0% 833.3% 180.0% -30. 0% -72.0

igs tring C orp. US D B S G C OT C B B 2.3 0.04 2. 6% 100.0% -9.3% 182.6% 59.2% -31.6

etawave C orporation US D B W AV OT C B B 2.3 0.08 12.9% 12.9% -1.3% -43.6% -56. 1% -72.8

eyond Commerce, Inc. US D B Y OC OT C B B 6.5 0.14 -30.0% -30.0% -58.8% -90.3% -93. 2% -93.5

right T hings plc G B P AIM:B G T AIM 5.9 0.01 0. 0% -0.4% -14.1% -8.3% 44.7% -44.3

roadW ebAs ia Inc. US D B W B A OT C P K 2.5 0.03 -87.0% -87.0% -87.0% -93.3% -95. 0% -99.0

DC C orp. US D CHIN.A Nas daqG S 268.1 2.53 1. 2% -8.7% 30.4% 75.7% 65.4% -35.5

hangyou.com Limited US D CY OU Nas daqG S 1,754.5 31.90 -5.5% -21.3% -25.6% 18.5% NM -34.1

hina G ateway C orporation US D CG W Y OT C P K 0.0 0.00 -86.7% -86.7% -86.7% 0. 0% -80. 0% -93.3

hines e G amer International T W D GT S M:3083 G T S M 1,154.1 445.00 -5.5% 7.5% -5.8% 137.3% 556.3% -14.3

LICK E R Inc. US D CL K Z OT C B B 0.7 0.01 28.6% 63.6% 23.3% 80.0% -95. 5% -97.8

ornerW orld Corpora 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

yberplex Inc. C AD T S X:C X T S X 74.9 1.25 0. 8% -1.6% -19.9% 0. 8% 150.0% -37.2

ADA S pA E UR CM:DA C M 187.3 7.89 15.0% 11.0% 31.5% 56.1% 3.3% -3.7

XN Holdings B hd MY R DXN K LS E 43.9 0.67 11.7% 18.6% 71.8% 116.1% 91.4% -1.5

ibz 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

igitalP os t Interactive, Inc. US D DG LP OT C B B 4.6 0.06 -6.3% 7.3% 96.7% 293.3% -1.7% -40.4

igitalT own, Inc. US D DG T W OT C B B 68.4 2.50 24.4% 42.9% 25.0% -9.1% -16. 7% -28.6

olphin Digital Media, Inc. US D DP DM OT C B B 21.5 0.40 5. 3% 6.4% -11.1% -11.1% -57. 9% -63.6

olith C o. Ltd. K R W A041060 K OS E 42.5 700.00 -2.8% -18.1% -9.1% 12.0% 29.6% -39.7

xtens ions , Inc. US D E XT I OT C P K 15.6 0.35 40.0% 94.4% 337.5% 133.3% 250.0% -65.3

uid Mus ic C anada, Inc. C AD T S X:FMN T S X 65.1 1.35 -3.6% -4.9% 50.0% 285.7% 237.5% -15.6

rogs ter Interactive P ictures AG E UR FR G XT R A 67.9 18.09 -2.2% -3.7% 54.6% 112.8% 302.0% -9.0

amania Digital E ntertainment C o. , Ltd. T W D 6180 G T S M 230.2 49.15 0. 3% 7.0% -16.4% 54.1% 239.0% -28.6

ameOn C o Ltd. J P Y 3812 T S E 97.1 89, 800 3. 5% -11.4% -15.3% -2.6% 25.8% -40.9

eoS entric Oyj E UR GE O1V HLS E 65.8 0.05 0. 0% 0.0% 25.0% 25.0% 25.0% -16.7

iant Interactive G roup, Inc. US D GA NY S E 1,548.9 6.84 -2.8% -9.2% -6.3% -9.0% 4.9% -28.5

igaMedia Ltd. US D GIGM Nas daqG S 262.8 4.82 0. 6% -0.2% -9.9% -28.7% -26. 0% -38.8ravity Co. , Ltd US D GR V Y Nas daqG M 51.4 1.85 -2.1% 8.2% 15.6% 86.9% 131.3% -29.7

ree, Inc. J P Y T S E :3632 T S E 2,398.1 4, 790 4. 1% 10.1% 51.6% 75.8% NM -10.1

ungHo Online E ntertainment, Inc. J P Y 3765 OS E 292.0 227, 900 8. 4% -12.0% 14.0% 87.1% 125.6% -18.6

anbitS oft, Inc. K R W A047080 K OS E 76.1 4, 150 -3.5% -1.2% -7.9% -0.2% 32.2% -37.5

AC /InterActiveC orp. US D IAC I Nas daqG S 2,520.9 19.04 -1.6% -1.9% 12.5% 14.1% 24.6% -10.5

AS E nergy, Inc. US D IAS A. E OT C B B 7.7 0.11 83.3% -26.7% -38.9% -54.2% -44. 7% -60.7

eemedia Inc. C AD IE E T S XV 7.1 0.15 25.0% 150.0% 66.7% 50.0% 114.3% -6.3

umbuck E ntertainment Limited AUD AS X: J MB AS X 16.2 0.38 -5.0% 2.7% 0.0% -24.0% -35. 0% -37.7

AB Dis tribution Inc. C AD T S X:K AB T S X 0.6 0.01 -50.0% -99.2% -99.2% -98.6% -99. 4% -99.2

ings oft C o. Ltd. HK D 3888 S E HK 1,070.8 7.60 4. 3% -8.1% 25.4% 113.5% 289.7% -19.7

ngo Media C orporation C AD T S XV :LM T S XV 9.3 0.81 -17.3% -19.0% -26.4% -19.0% -50. 9% -52.6

veW orld Inc. US D LV W D OT C P K 1.3 0.04 -48.8% 2.5% 17.1% -59.0% -68. 5% -83.6

ookS mart, L td. US D LOOK Nas daqG M 19.9 1.16 2. 7% -0.9% 5.5% -1.7% -37. 6% -41.7

agnitude Information S ys tems Inc. US D MAG Y OT C B B 5.0 0.01 22.2% 19.6% 22.2% 10.0% -45. 0% -63.3

ixi, Inc. J P Y 2121 T S E 1,133.8 658,000.00 3. 1% 18.3% 3.8% 74.5% 2.5% -11.9

odern T imes G roup Mtg AB S E K MT G B OM 3,089.9 326.50 7. 4% 12.8% 41.6% 90.4% 85.0% -0.5

OK O .mobi L imited AUD MK B AS X 5.8 0.08 15.2% 8.6% 26.7% 1. 3% 58.3% -24.0

yriad G roup AG C HF MY R N S W X 194.6 4.54 2. 3% 0.9% -5.4% 12.1% -26. 8% -42.9

E O W IZ G ames C orporation K R W A095660 K OS E 687.2 38,900.00 -2.8% -0.5% 28.8% 39.9% 422.1% -13.4

etDragon W ebS oft, Inc. HK D 777 S E HK 341.0 5.00 -3.8% -14.7% -10.2% 9. 4% 66.1% -30.1

eteas e. com Inc. US D NT E S Nas daqG S 5,175.8 39.99 -10.0% -6.1% 4.2% 32.8% 83.1% -17.5

euLion Incorporated C AD T S X:NLN T S X 94.4 0.90 -5.3% -12.6% 5.9% 50.0% NM -30.8

eXplore C orporation US D NXP C OT C P K 39.0 0.70 7. 7% 16.7% 55.6% 0. 0% 32.1% -51.7

gi G roup Inc. J P Y 2497 T S E 38.1 27,510.00 6. 2% -5.9% -10.1% 0. 1% -63. 7% -69.1

orthgate T echnologies Limited INR 590057 B S E 26.8 36.90 -5.6% -18.5% 12.8% -14.2% -46. 1% -60.3pen T ext Corp. US D OT E X Nas daqG S 2,276.8 40.55 5. 9% 13.6% 10.3% 12.8% 54.6% 0.9%

penwave S ys tems Inc. US D OP W V Nas daqG S 222.9 2.67 5. 5% -7.0% -3.3% 115.3% 233.8% -14.7

erfect W orld Co. , Ltd. US D P W R D Nas daqG S 2,168.9 44.10 -2.4% 1.6% 40.0% 166.0% 109.6% -12.7

NI Digital Media Inc. C AD T S XV :P N T S XV 56.6 1.80 -7.7% -4.3% 12.5% 12.5% -5.3% -22.4

uepa sa C orp. US D QP S A OT C B B 17.6 1.38 -1.4% -21.1% 38.0% 75.1% -42. 5% -50.7

AO R B C Information S ys tems US D R B C I R T S 222.0 1.60 6. 7% 52.4% 113.3% 220.0% -60. 0% -79.6

handa Interactive E ntertainment Ltd. US D S NDA Nas daqG S 3,306.3 49.16 0. 4% -4.4% -12.7% 2. 9% 76.1% -24.4

hutterfly, Inc. US D S F LY Nas daqG S 410.9 16.14 -1.3% 8.6% 17.0% 45.3% 130.6% -11.0

K C ommunications C o. , Ltd. K R W A066270 K OS E 296.9 8,460.00 -0.5% -6.1% -7.5% -6.9% 17.2% -34.2

NAP Intera ctive, Inc. US D S T V I OT C B B 3.8 0.35 -30.0% -12.5% -22.2% -53.3% 75.0% -67.6

NM Globa l Holdings US D S NMN OT C P K 0.0 0.00 58.3% -9.5% 18.8% 850.0% -99. 3% -99.3

ocial Media V entures Inc. US D S MV I OT C P K 0.0 0.05 -52.6% -43.8% -85.9% -70.0% -95. 5% -99.1

ocialwis e, Inc. US D S C LW OT C B B 27.0 0.61 0. 0% 24.5% -18.7% 64.9% -72. 1% -72.8

ohu.com Inc. US D S O HU Nas daqG S 2,506.3 65.38 -3.5% -0.7% 3.2% 36.6% 20.0% -9.6

park Networks , Inc. US D LOV AME X 49.8 2.42 2. 5% 11.0% -1.2% 9. 5% -19. 3% -27.8

pectrumDNA, Inc. US D S P XA OT C B B 6.8 0.14 -30.0% -36.4% -6.7% -6.7% -12. 5% -68.9

ncent Holdings Ltd. HK D 700 S E HK 32,300. 4 138 8. 8% 8.6% 49.8% 109.4% 177.0% -0.1%

P a rent C ompany US D K IDS .Q OT C P K 0.2 0.01 -50.0% -53.3% -75.9% -65.0% -99. 1% -99.4%

Limited US D NC T Y Nas daqG S 185.7 7.40 -4.1% -9.4% -14.7% -30.8% -46. 4% -58.3%

S treet.com, Inc. US D T S C M Nas daqG M 94.3 3.08 4. 4% 16.2% 54.8% 25.2% -16. 1% -31.1%

e.C om, Inc. US D T R E E Nas daqG M 87.5 8.10 5. 5% 3.4% -15.4% 43.9% 243.2% -38.0%

nis erve C ommunica tions Corp. C AD T S XV :US S T S XV 0.9 0.04 0. 0% -11.1% -50.0% 0. 0% -77. 8% -77.8

nited Online Inc. US D UNT D Nas daqG S 753.7 8.99 12.9% 15.3% 9.1% 86.5% 14.1% -5.0

OMO Media, Inc US D UOMO OT C B B 9.5 0.11 -13.4% -19.7% 0.0% 37.5% -38. 9% -89.6

alueC lick Inc. US D V C LK Nas daqG S 1,193.1 13.69 0. 7% 22.3% 21.5% 36.6% 82.5% -1.8OIS , Inc. US D V O IS OT C B B 3.7 0.00 12.5% 7.1% -27.4% 50.0% -40. 0% -80.4

W ebzen Inc. US D W ZE N Nas daqG M 31.2 2.63 3. 1% -10.5% -20.3% -1.1% 195.5% -43.8

W izzard S oftware C orporation US D W ZE AME X 21.7 0.43 -14.0% -21.8% -14.0% -29.5% -46. 9% -75.1

W orlds .com Inc. US D W DDD OT C B B 5.2 0.10 11.1% -9.1% -28.6% -41.2% -54. 5% -58.3

W yndstorm C orpora tion US D W Y ND OT C P K 1.8 0.10 0. 0% 0.0% 0.0% -41.2% -50. 0% -80.4

NG AG E UR O1B C XT R A 284.9 36.90 -0.1% 12.3% 32.3% 27.8% 23.0% -2.8

D Online C orp. K R W A052770 K OS E 102.1 8,130.00 0. 6% -11.6% 2.4% -14.5% 29.0% -34.4

nk K orea Inc. K R W A023770 K OS E 16.8 3,750.00 -0.8% -7.6% -37.2% -15.5% -53. 6% -57.6

igh 83.3% 150.0% 833.3% 850.0% 556.3% 0.9%

ow -87.0% -99.2% -99.2% -98.6% -99. 4% -99.4

verage 788.0 -1.5% -0.4% 15.6% 39.6% 35.1% -43.7edian 0. 0% -1.0% 2.4% 12.1% 9.5% -38.0

gure 19. Price Performanceource. Capital IQ

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Comparable Company Analysis > Web 2.0aluation Multiples

ompany Name S ector Country

Primary

E xchange Ticker

USD Market

Cap ($m)

TEV/LTM

Revenue

TEV/ NTM

Revenue

TEV/LTM

EBITDA

TEV/NTM

E B ITDA P /LTM E PS P /NTM E P S P/Ta

ccelerize New Media , Inc. Direct Marketing U nited S tates OT C B B AC LZ 16.8 4.9x - - - - -

ctoz S oft C o. , L td. G aming S outh K orea K OS E A052790 115.6 0.8x - 3. 2x - 16.4x - 1

Q Interactive , Inc. G aming J apan T S E 3838 29.8 0.1x 0.1x - - - 8.8x 0

s s ociated Media Holdings Inc. Mobile U nited S tates OT C P K AS MH 0.6 15.6x - - - - -

gs tring C orp. Ins tant Mes s aging U nited S tates OT C B B B S G C 2.3 - - - - - -

etawave C orporation Media U nited S tates OT C B B B W AV 2.3 - - - - - - 0

eyond C ommerce , Inc. S ocial Networking U nited S tates OT C B B B Y OC 6.5 1.0x - - - - -

right T hings plc S ocial Networking U nited K ingdom AIM AIM:B G T 5.9 - - - - - -

roadW ebAs ia Inc. S ocial Networking U nited S tates OT C P K B W B A 2.5 - - - - - -

DC C orp. G aming H ong K ong NasdaqG S C HIN.A 268.1 0.7x 0.8x 10.5x 7.4x - -

hangyou.com L imited G aming C hina NasdaqG S C Y OU 1,754.5 6.1x 4.7x 10.0x 8.2x 12.0x 10.8x 11

hina G ateway C orporation Mobile U nited S tates OT C P K C G W Y 0.0 0.0x - - - - -

hines e G amer Interna tional G aming T a iwa n G T S M G T S M:3083 1,154.1 17.6x 16.5x 31.2x 26.9x 41.0x 24.5x 19

L IC K E R Inc. Direct Marketing U nited S tates OT C B B C LK Z 0.7 0.3x - - - - -

ornerW orld C orporation C ontent U nited S tates OT C B B C W R L 5.7 2.4x - - - - -

yberplex Inc. Advertis ing C anada T S X T S X:C X 74.9 0.6x 0.5x 5. 7x 4.3x 6.7x 7.6x 3

ADA S pA S ocial Networking Italy C M C M:DA 187.3 1.0x 0.9x 7. 4x 6.3x - 17.7x

XN Holdings B hd S ocial Networking Malays ia K LS E DXN 43.9 0.8x - 5. 3x - 7.3x - 0

ibz Inte rnationa l, Inc. S NS Apps U nited S tates OT C P K DIB Z 0.0 - - - - - -

igitalP os t Inte ractive , Inc. C ontent U nited S tates OT C B B DG LP 4.6 6.6x - - - - -

igitalT own, Inc. S ocial Networking U nited S tates OT C B B DG T W 68.4 - - - - - -

olphin Digita l Media , Inc. S ocial Networking U nited S tates OT C B B DP DM 21.5 38.6x 1.4x - - - 1.6x

olith C o. L td. G aming S outh K orea K OS E A041060 42.5 2.9x - - - - - 3

xtens ions , Inc. C ontent U nited S tates OT C P K E XT I 15.6 - - - - - -

uid Mus ic C anada , Inc. Media U nited S tates T S X T S X:F MN 65.1 10.9x 9.7x - - - - 6

rogs ter Inte ractive P ictures AG G aming G ermany XT R A F R G 67.9 6.9x - - - - - 8

amania Digita l E nte rtainment C o. , L td. G aming T a iwa n G T S M 6180 230.2 1.5x - 8. 3x - 19.8x - 3

ameOn C o Ltd. G aming J apan T S E 3812 97.1 0.3x - 1. 1x - 9.7x - 1

eoS entric Oyj Mobile F inland HLS E G E O1V 65.8 12.1x - - - - - 54

iant Inte ractive G roup, Inc. G aming C hina NY S E G A 1,548.9 - - - - 1.8x 14.3x 0

igaMedia L td. G aming T a iwa n NasdaqG S G IG M 262.8 1.0x 1.0x - 4.8x 10.4x 9.7x 2ravity C o. , L td G aming S outh K orea NasdaqG M G R V Y 51.4 - - - - 0.0x - 0

ree , Inc. S ocial Networking J apan T S E T S E : 3632 2,398.1 14.6x 8.0x 24.3x 13.2x 50.9x 33.7x 23

ungHo O nline E nterta inment, Inc. Media J apan OS E 3765 292.0 2.2x - 9. 7x - 63.1x - 21

anbitS oft, Inc. G aming S outh K orea K OS E A047080 76.1 1.0x - 44 .3x - 13.6x - 2

AC /InterActiveC orp. Media U nited S tates NasdaqG S IAC I 2,520.9 0.6x 0.6x 14.8x 4.5x 11.9x 33.3x 1

AS E nergy, Inc. V ideo C anada OT C B B IAS A.E 7.7 - - - - - -

eeme dia Inc. C ontent C anada T S XV IE E 7.1 3.9x - - - - - 5

umbuck E nterta inment L imited S ocial Networking Austra lia AS X AS X: J MB 16.2 0.6x 0.6x 1. 4x 1.7x 4.6x 4.5x 1

AB Distribution Inc. C ontent C anada T S X T S X:K AB 0.6 - - - - - - 0

ngsoft C o. L td. G aming C hina S E HK 3888 1,070.8 7.7x 6.3x 17.4x 12.0x 21.4x 15.4x 5

ngo Me dia C orporation Learning C anada T S XV T S XV : LM 9.3 7.0x - - - - - 16

veW orld Inc. S ocial Networking U nited S tates OT C P K LV W D 1.3 0.0x - - - - - 0

ookS mart, L td. Direct Marketing U nited S tates NasdaqG M LOOK 19.9 - - - - - - 0

agnitude Information S ys tems Inc. S ocial Networking U nited S tates OT C B B MAG Y 5.0 - - - - - -

ixi, Inc. S ocial Networking J apan T S E 2121 1,133.8 7.4x 6.4x 21.9x 20.3x 55.1x 48.0x 7

odern T imes G roup Mtg AB Media S weden OM MT G B 3,089.9 1.9x 1.8x 12.1x 13.3x 14.8x 15.9x

OK O .mobi Limited S ocial Networking Austra lia AS X MK B 5.8 6.9x - - - - - 7

yriad G roup AG Mobile S witzerland S W X MY R N 194.6 3.0x - - - - -

E OW IZ G ames C orporation G aming S outh K orea K OS E A095660 687.2 3.3x 2.9x 12.2x 10.1x 35.7x 9.3x 18

etDragon W e bS oft, Inc. G aming C hina S E HK 777 341.0 2.2x - 7. 6x - 13.9x - 1

eteas e .com Inc. G aming C hina NasdaqG S N T E S 5,175.8 - - - - 2.9x 16.1x 0

euL ion Incorporated V ideo C anada T S X T S X:NL N 94.4 3.9x - - - - - 6

eXplore C orporation C ontent U nited S tates OT C P K NXP C 39.0 25.3x - - - - -

gi G roup Inc. Media J apan T S E 2497 38.1 - - - - - - 0

orthgate T echnologies L imite d Direct Marketing India B S E 590057 26.8 0.3x - - - - 1.5xpen T ext C orp. C ollaboration C anada NasdaqG S OT E X 2,276.8 2.9x 2.5x 11.2x 9.4x 37.9x 14.4x

penwave S ys te ms Inc. Mobile U nited S tates NasdaqG S OP W V 222.9 0.6x 0.6x 23.3x 5.2x - 33.4x 3

erfect W orld C o. , L td. G aming C hina NasdaqG S P W R D 2,168.9 0.7x 3.4x 1. 2x 6.3x 3.1x 14.0x 1

NI Digita l Media Inc. Digita l Ima ging C anada T S XV T S XV :P N 56.6 2.6x 2.2x 23.6x 7.1x - 14.4x 19

uepas a C orp. S ocial Networking U nited S tates OT C B B QP S A 17.6 - - - - - -

AO R B C Information S ys tems Media R us s ia R T S R B C I 222.0 0.0x 1.0x 0. 4x 5.7x - 5.1x

handa Interactive E nterta inme nt Ltd. G aming C hina NasdaqG S S NDA 3,306.3 - - - - 2.3x 13.5x 0

hutterfly, Inc. Digita l Ima ging U nited S tates NasdaqG S S F LY 410.9 1.6x 1.5x 12.7x 8.2x - - 2

K C ommunications C o. , L td. S earch S outh K orea K OS E A066270 296.9 1.5x - 23 .7x - - -

NAP Interactive, Inc. Dating U nited S tates OT C B B S T V I 3.8 0.6x - 2. 3x - 6.7x - 2

NM G lobal Holdings Media U nited S tates OT C P K S NMN 0.0 1.1x - - - - -

ocial Media V entures Inc. S ocial Networking U nited S tates OT C P K S MV I 0.0 4.5x - - - - -

ocialwise , Inc. S ocial Networking U nited S tates OT C B B S C LW 27.0 - - - - - -

ohu.com Inc. G aming C hina NasdaqG S S OHU 2,506.3 4.1x 3.5x 9. 5x 7.9x 14.8x 17.9x 4

park N etworks , Inc. S ocial Networking U nited S tates AME X LOV 49.8 0.9x - 4. 5x - 13.6x - 50

pectrumDNA, Inc. Media U nited S tates OT C B B S P XA 6.8 - - - - - - 68

cent Holdings L td. P orta l C hina S E HK 700 32,300.4 25.6x 19.5x - 46.4x 65.9x 55.1x 29.3x

P a rent C ompany Media U nited S tates OT C P K K IDS .Q 0.2 0.2x 0.2x - 12.8x - - -

L imited G aming C hina NasdaqG S NC T Y 185.7 - - - - 2.1x - 0.1x

S treet.com, Inc. Media U nited S tates NasdaqG M T S C M 94.3 0.4x 0.5x 15.3x - - - 1.2

e.C om, Inc. P orta l U nited S tates NasdaqG M T R E E 87.5 0.4x 0.4x - 8.4x - 52.1x 1.1

nis erve C ommunications C orp. S ocial Networking C anada T S XV T S XV :US S 0.9 0.2x - - - - -

nited Online Inc. Media U nited S tates NasdaqG S UNT D 753.7 1.1x 1.0x 5. 0x 4.3x - 6.8x

OMO Media , Inc Media C anada OT C B B UOMO 9.5 12.6x - - - - -

a lueC lick Inc. Media U nited S tates NasdaqG S V C LK 1,193.1 1.9x 2.0x 10.7x 7.5x - 21.4x 7

OIS , Inc. S ocial Networking U nited S tates OT C B B V OIS 3.7 - - - - - - 23

ebzen Inc. G aming S outh K orea NasdaqG M W ZE N 31.2 - - - - 0.0x - 0

izzard S oftware C orporation P odca sting U nited S tates AME X W ZE 21.7 4.3x - - - - -

orlds .com Inc. C ontent U nited S tates OT C B B W DDD 5.2 - - - - 20.0x -

ynds torm C orporation C ontent U nited S tates OT C P K W Y ND 1.8 - - - - - -

NG AG S ocial Networking G ermany XT R A O1B C 284.9 3.9x 3.0x 13.7x 8.2x 29.3x 16.8x 9

D Online C orp. G aming S outh K orea K OS E A052770 102.1 1.9x 1.5x 9. 0x 5.0x 10.8x - 3

nk K orea Inc. G aming S outh K orea K OS E A023770 16.8 1.3x - 12 .7x - - - 0

igh 32,300.4 38.6x 19.5x 44.3x 46.4x 65.9x 55.1x 68

ow 0.0 0.0x 0.1x 0. 4x 1.7x 0.0x 1.5x 0

verage 788.0 4.6x 3.4x 12.2x 10.2x 18.8x 18.5x 8edian 49.8 1.9x 1.5x 10.5x 7.9x 13.6x 14.4x 3

gure 20. Valuation Comparisonource. Capital IQ

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Comparable C ompany Analysis > Web 2.0ummary by C ountry

ompany Name US D Market C ap ($m) Avg US D Market C ap ($m) US D LTM Total R ev ($m) US D LTM Total E B ITDA ($m) E B ITDA %

nited States 38 China 49,633.4 China 4,963.3 China 4,152.4 China 2,070.2 China 4

anada 10 United States 5,811.3 S weden 2,974.2 United States 3,887.3 S weden 304.6 Australia 4

hina 10 Japan 3,871.5 Japan 645.3 S weden 1,982.6 United States 290.0 Taiwan 3

outh Korea 8 S weden 2,974.2 Taiwan 577.9 Canada 1,015.0 Canada 200.0 Japan 24apan 6 Canada 2,488.2 Hong Kong 294.6 S outh Korea 707.3 Japan 186.0 S weden 1

aiwan 3 Taiwan 1,733.6 Canada 248.8 Japan 634.4 S outh Korea 121.9 Malaysia 14

ustralia 2 S outh Korea 1,527.4 S outh Korea 190.9 Taiwan 385.8 Taiwan 59.8 Italy 1

ermany 2 Germany 317.0 Italy 165.4 Hong Kong 361.6 Italy 31.9 Russ ia 1

witzerland 1 Hong Kong 294.6 Russ ia 160.9 Italy 242.6 Hong Kong 25.1 S outh Korea 1

ong Kong 1 Italy 165.4 Germany 158.5 Russ ia 156.2 Russ ia 20.4 Hong Kong 6

inland 1 Russ ia 160.9 United States 152.9 India 82.8 Germany 12.5 S witzerland 1

aly 1 S witzerland 92.0 S witzerland 92.0 Malaysia 77.1 Malaysia 11.1 Canada -8

nited Kingdom 1 Finland 65.9 Finland 65.9 Germany 68.7 Australia 4. 5 Germany -9

ndia 1 Malaysia 39.8 Malaysia 39.8 S witzerland 40.0 S witzerland 0. 8 United States -2

weden 1 India 31.0 India 31.0 Australia 17.8 Norway -1.1 India -5

uss ia 1 Australia 22.1 Australia 11.0 Finland 5. 5 United Kingdom -2.7 Norway -5

Malaysia 1 United Kingdom 6. 0 United Kingdom 6. 0 Norway 2. 3 Finland -17.5 United Kingdom

orway 1 Norway 0. 1 Norway 0. 1 United Kingdom 0. 0 India -41.4 Finland

rand Total 89 Grand Total 69,234.6 Grand Total 777.9 Grand Total 13,819.5 Grand Total 3,276.1 Grand Total 5

gure 21. Comparison by Countryource. Capital IQ

Comparable C ompany Analysis > Web 2.0ummary by Exchange

ompany Name US D Market C ap ($m) Avg US D Market C ap ($m) US D LTM Total R ev ($m) US D LTM Total E B ITDA ($m) E B ITDA %

T C B B 18 S E H K 31,520.4 S E H K 10,506.8 OM 1,982.6 NasdaqGS 1,796.0 N Y S E 6

asdaqGS 14 NasdaqGS 24,385.7 OM 2,974.2 S E H K 540.0 S E H K 767.5 AS X 4

T C P K 11 T S E 3,569.2 N Y S E 1,750.4 NasdaqGS 498.6 OM 304.6 S E H K 4

O S E 6 OM 2,974.2 NasdaqGS 1,741.8 C M 242.6 T S E 160.2 G T S M 3

S E 5 N Y S E 1,750.4 G T S M 715.0 N Y S E 198.5 N Y S E 124.1 NasdaqGS 3

asdaqGM 5 K O S E 1,437.0 T S E 713.8 R T S 156.2 K O S E 103.2 T S E 24

S X 4 G T S M 1,430.0 OS E 302.3 OS E 116.1 G T S M 59.8 OS E 2

S X V 4 X T R A 317.0 K O S E 239.5 K O S E 106.0 C M 31.9 OM 1

E H K 3 OS E 302.3 C M 165.4 T S E 103.7 OS E 25.8 K L S E 14

MEX 2 NasdaqGM 279.7 R T S 160.9 G T S M 101.1 R T S 20.4 C M 1

S X 2 T S X 243.6 X T R A 158.5 B S E 82.8 NasdaqGM 15.6 R T S 1

T R A 2 O T C B B 230.9 S W X 92.0 NasdaqGM 82.4 X T R A 12.5 K O S E 9

T S M 2 C M 165.4 H L S E 65.9 K L S E 77.1 K L S E 11.1 NasdaqGM 7

W X 1 R T S 160.9 T S X 60.9 T S X 46.4 A M E X 6. 2 T S X V 5

L S E 1 S W X 92.0 NasdaqGM 55.9 S W X 40.0 AS X 4. 5 S W X 1

M 1 T S X V 76.6 K L S E 39.8 X T R A 34.3 S W X 0. 8 X T R A -9

S E 1 AMEX 68.5 AMEX 34.2 A M E X 27.9 OT C N O -1.1 AMEX -3

Y S E 1 H L S E 65.9 B S E 31.0 O T C P K 16.5 AI M -2.7 T S X -3

S E 1 O T C P K 65.8 T S X V 19.1 T S X V 12.0 T S X -4.3 O T C B B -3

IM 1 K L S E 39.8 O T C B B 12.8 AS X 8. 9 T S X V -4.6 O T C P K -4

M 1 B S E 31.0 AS X 11.0 H L S E 5. 5 H L S E -17.5 B S E -5

TS 1 AS X 22.1 AI M 6. 0 O T C B B 2. 3 O T C P K -34.1 OT C N O -5

L S E 1 AI M 6. 0 O T C P K 6. 0 OT C N O 2. 3 B S E -41.4 AI M

T C N O 1 OT C N O 0. 1 OT C N O 0. 1 AI M 0. 0 O T C B B -62.4 H L S E

rand Total 89 Grand Total 69,234.6 Grand Total 777.9 Grand Total 13,819.5 Grand Total 3,276.1 Grand Total 5

gure 22. Comparison by Exchange

ource. Capital IQ

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inancing - Last Three Months (US$ m)

n. Amount (Million) Type of financ ing

onth Company Name Country Angel/S eed Debt financ ing S eries A S eries B S eries C S eries D S eries E Gran

ug-09 Turbine US A 50.0

Smith & Tinker US A 29.0

Mint US A 14.1

Zoove US A 13.2

RichRelevance US A 12.5

Traffiq US A 10.0

MediaMathUS A 10.0

Bill.com US A 8.5

Edo Interactive US A 8. 5

InnoCentive US A 7.3

OneRiot US A 7.0

Balihoo US A 7.0

Boxee US A 6.0

Polyvore US A 5.6

Fanbase US A 5.0

MOG US A 5.0

OurStage US A 3.0

Z2Live US A 3.0

KODA US A 3. 0

Scoreloop G erma ny 2.8

Roblox US A 2. 2

Tremor Media US A 2.0

iSocket US A 2.0

RightsFlow US A 1.5

Plista G erma ny 1.4

ChessCube S outh Africa 1. 3

Linksify US A 0. 5

iSyndica US A 0. 4

ug-09 Total 25.8 11.5 77.6 43.6 63.2 2

ep-09 Twitter US A 100.0 1

Ensequence US A 20.0

Livebookings UK 16.0

Mzinga US A 10. 0

InXpo US A 9.0

Jobvite US A 8.3

Riot Games US A 8.0

NextBio US A 8.0

Imeem US A 6.0

Vuclip US A 6.0

YuMe US A 5.0

Booyah US A 5.0

NeoEdge US A 4.0

Alliance Health Networks US A 3.3

Unisfair US A 3. 1

Conduit Labs US A 3.0

Mocapay US A 3.0

Fwix US A 2.8

Vantrix C anada 2.6

MashLogic US A 2.5

Greystripe US A 2.0

Loomia US A 1.5FourSquare US A 1.4

EduFire US A 1.3

Fluther US A 0. 6

TransGaming Inc. C anada 0.5

OnLive US A

ep-09 Total 0.6 2.0 16.9 52.3 27.9 23.1 110.0 2

ct-09 PopCap G ames US A 22.5

DailyMotion F ra nce 22.1

Engine Yard US A 19.0

Ooyala US A 10.0

Reality Mobile US A 6.5

Amie Street US A 3.9

ViVu US A 3.0

DataSync US A 1.2

Linkedex UK 1. 0

Listia US A 0. 4

ct-09 Total 1.4 33.2 13.9 41.1

rand Total 27.8 2.0 61.6 143.7 112.6 86.3 110.0 5

gure 23. Financing, Last Three Monthsource. Company reports

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Company Descriptions - Current Month Capital Market Activityompany HQ W ebs ite Des c ription

mie Street U ni te d S t a te s w ww. a m ie s tr ee t. c om A m ie S t re e t, I nc . , a W e b b as e d s o ci a l m us i c s t or e, e na b le s me mb er s to di s c ov er , do wn lo a d, a n d s h a re mu s ic . T he c om pa ny wa s f ou

2006 and is based in Long Island City, New York.

ailyMotion F r a nc e w ww. d ai ly mo ti on . co m D a il ym oti on S A R L p ro vi de s on -l in e v id eo c on te nt i n F r a nc e a nd E u r op e. It o pe r ate s a v id eo e nt er ta i nm en t W e bs i te t ha t p ro vi de s vi de o

sharing services . T he company also enables sha ring of official and profess ional contents. Dailymotion SAR L was founded in 2005 and

based in Paris, France.

ataSync United States www.datasyncsuite.com DataSync Corporation deve lops ope n source consol idation sof tware . The company de ve lops DataSync Suite , a sof tware pl atf orm that

integrates core applications into an open source software-as-a-s ervice web portal. DataS ync Corporation was founded in 2005 and is

in Sioux Fa l ls, South Dakota.

ngine Yard U ni te d S ta t es w ww. e ng in ey a rd .c o m E n gi ne Y a r d, I n c. p ro vi de s m a na ge d ho s ti ng a nd de pl oy me nt s ol uti on s fo r R u by a nd R a i ls a p pl ic a ti on s . T he c om pa n y o ff er s a c lu s te r

computing platform, deployment support, and da ta center se rvices. It helps its clients in building sites and applications on-demand. En

Ya rd, Inc. was founded in 2006 and is based in S an Fra ncisco, C alifornia with additional locations in the United S tates, C anada, Europ

Isra el, the Philippines, Australia, a nd New Zealand.

eedRoom U ni te d S ta t es w ww. f ee dr oo m. c om T h e F ee dR o o m, I n c. p ro vi de s W e b vi de o s ol uti on s a nd te c hn ol og y f or c or po ra ti on s , me di a /p ub li s hi ng or ga ni z at io ns , a n d go ve r nm en t

agencies. It offers broadband video distribution for Web, sea rch engines, and podcasting; broadband video encoding, ma nagement, a

delivery; performance reporting; broadband video a pplication design and development; media advertising services; subsc ription and

registration tools; email video alert delivery and tracking; and original content development and production. The company was founded

1999 and is based in New York, New York. As of September 30, 2009, T he FeedR oom, Inc. operates as a s ubsidiary of KI T digital, In

inkedex UK NA B as ed in London and S an F rancis co, Linkedex a ims to help compa nies analys e the proces s by which s earch engines deliver their res

and achieve higher rankings in natural (non-paid-for) search for their brands a nd services.

istia U ni te d S t a te s w ww. l is t ia . c om L i s ti a , wh ic h l au nc he d i n A u gu s t 2 0 09 , is e B a y f or f re e s t uff . U s e rs ge t a c er ta i n n um be r o f c re di ts wh ic h th ey bi d fo r th e i te m, s o wh oe

wins the auction is the person who wanted it the most. Us ers get credits in three ways: e very user gets a certain number automatically

you can get more by a uctioning items, by referring friends, and by buying them. T he company is based in S unnyvale, Ca lifornia.

oyala U ni te d S ta t es w ww. o oy a la . c om O o ya l a is a v i de o te ch no lo gy c om pa ny t ha t pr ov id es i nd us t ry -le a di ng s ol ut io ns f or m an a gi ng , di s tr ib ut in g a nd mo ne ti z in g h ig h- qu a li ty

online. F ounded by former Google engineers in April 2007, Ooyala takes a novel approach a t delivering video, targeting ads a nd colle

video analytics. S ince launching its flagship product, B acklot, in December of 2007, O oyala has signed up over 1000 paying customer

including Warner B rothers, AOL/B ebo, National Geographic, TV Guide and the Glam network. T he company is based in Mountain Vie

l ropCap Games U ni te d S t ate s www. po pc ap .c om P o pC a p G a m es , I nc . de ve lo ps a nd pu bli s he s ca s ua l ga me s . Its g am es a re pla y ed on the W eb , de s kto p c om pu te rs , c ell pho ne s ,

smartphones, P DAs, pocket PCs , iP ods, iP hones, game consoles, a nd in-flight entertainment systems. T he company offers its producWeb portals, retail stores, mobile operators and developers, and game device manufacturers. PopC ap G ames, Inc. was founded in 2

and is based in Sea ttle, W as hington. It has operations in Chicago, Illinois; S an Francis co, Ca lifornia; S hanghai, China; Dublin, Ireland

reality Mobile United States www.re ali tymobil e.com Re al i ty Mobi le LLC provide s mobil e v ide o and data sharing technol ogy. The company was founde d in 2003 and is base d in He rndon ,

riVu U ni te d S t ate s www. vi vu .tv V i V u, I nc . de ve lo ps p a rti ci pa ti ve e ve nt pla tfo rm tha t e na ble s li ve vi de o pa rti ci pa ti on fr om a pe rs o na l co mpu te r, M a c, a nd L inu x wi tho ut

proprietary downloads. It offers a solution for event organizers to create, publish, a nd manage quality video events. The c ompany prov

its products for on-site deployment, online meetings and events, s ales presentations, live interactive training, online events, IT helpdes

support, and customer s upport, as well as for face-to-face meetings, c alendar invitations, outlook integration, e-learning, a nd video

collaboration services. In addition, it offers its solutions that are used in remote training courses, sales training on new products, a nd r

live video caller participation during Webcasts. The company was incorporated in 2008 and is bas ed in Sunnyvale, C alifornia.

ext U ni te d S t ate s www. ye xt. c om Y e xt, I nc . pr ov ide s onl ine di re cto ri es . I t fo cu se s on re pr es e nti ng va r io us b us ine s s es a c ro s s the U ni te d S t ate s . T he c om pa ny wa s fo un

2006 and is based in New York, New York.

gure 24. Company Descriptionsource. Company reports, Capital IQ, Crunchbase

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RELEVANT DISCLOSURES APPLICABLE TO: NONE

LIST OF D ISCLOSURE TERMS:

1. None applicable.

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Each analyst of Research Capital Corporation whose name appears in this report hereby certif ies that (i)

recommendations and opinions expressed in this research report accurately reflect the analysts personal views and

no part of the research analysts compensation was or wil l be directly or indirectly related to the specific conclusion

recommendations expressed in this research report.

In fo rmat ion about Research Cap i ta l Corpora t ion s Rat ing System, the d is t r ibu t ion o f our research to c l ien ts and the percentage o f recommendat ions wh ich are in eo f our ra t ing ca tegor ies is ava i lab le on our web s i te a t www.researchcap i ta l .com.

The in format ion conta ined in th is repor t has been drawn f rom sources be l ieved to be re l iab le but i ts accuracy or comple teness is no t guaranteed, nor in p rov id indoes Research Cap i ta l Corpora t ion assume any responsib i l i ty o r l iab i l i ty . Research Cap i ta l Corpora t ion , i ts d i rectors, o f f icers and o ther employees may, f rom t imet ime, have posi t ions in the secur i t ies ment ioned here in . Contents o f th is repor t cannot be reproduced in who le or in par t wi thout the expressed permiss ion o f ReseaCapi ta l Corpora t ion . (U.S. Inst i tu t iona l Cl ien ts Research Cap i ta l U.S.A. Inc. (a who l ly owned subsid ia ry o f Research Cap i ta l Corpora t ion) accepts responsib i l i tythe contents o f th is repor t sub ject to the te rms & l imi ta t ions se t ou t above. F i rms or inst i tu t ions rece iv ing th is repor t shou ld e f fect t ransact ions in secur i t ies d iscusin the repor t th rough Research Cap i ta l U.S.A. Inc. , a Broker -Dea ler Reg istered wi th the Un i ted Sta tes Secur i t ies and Exchange Commission) .

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