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Financial and Stock Market Performance Public Software Companies By Product Category [email protected] Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved San Diego, CA 92130 12220 El Camino Real, #320 Public SaaS Companies Public Internet Companies By Product Category Software Equity Group, L.L.C. p: (858) 509-2800 f: (858) 509-2818 August 2010 Software Equity Group Flash Report Select M&A Transactions and

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Page 1: Software Equity Group Flash Reportsoftwareequity.com/Reports/Monthly/2010/Monthly_Report_August_2… · CAD Computer-aided Design CAM Computer-aided Manufacturing CRM Customer Relationship

Financial and Stock Market PerformancePublic Software Companies By Product Category

[email protected]

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

San Diego, CA 9213012220 El Camino Real, #320

Public SaaS CompaniesPublic Internet Companies By Product Category

Software Equity Group, L.L.C.

p: (858) 509-2800f: (858) 509-2818

August 2010

Software Equity Group Flash Report

Select M&A Transactionsand

Page 2: Software Equity Group Flash Reportsoftwareequity.com/Reports/Monthly/2010/Monthly_Report_August_2… · CAD Computer-aided Design CAM Computer-aided Manufacturing CRM Customer Relationship

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Page 3: Software Equity Group Flash Reportsoftwareequity.com/Reports/Monthly/2010/Monthly_Report_August_2… · CAD Computer-aided Design CAM Computer-aided Manufacturing CRM Customer Relationship

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

ABOUT OUR FIRM

Software Equity Group is an investment bank and M&A advisory serving the software and technology sectors. Founded in 1992, our firm has represented and guided private companies throughout the United States and Canada, as well as Europe, Asia Pacific, Africa and Israel. We have advised public companies listed on the NASDAQ, NYSE, American, Toronto, London and Euronext exchanges. Software Equity Group also represents several of the world's leading private equity firms. We were recently ranked among the top ten investment banks worldwide for application software mergers and acquisitions.

Our value proposition is unique and compelling. We are skilled and accomplished investment bankers with extraordinary software, internet and technology domainexpertise. Our industry knowledge and experience span virtually every software product category, technology, market and delivery model, including Software-as-a Service (Saas), software on-demand and perpetual license. We have profound understanding of software company finances, operations and valuation. We monitor and analyze every publicly disclosed software M&A transaction, as well as the market, economy and technology trends that impact these deals. We're formidable negotiators and savvy dealmakers who facilitate strategic combinations that enhance shareholder value.

THE SEG SOFTWARE COMPANY MENTORING PROGRAM

As part of our informal mentoring program, we are currently guiding and advising some fifty software companies around the globe that are not yet exit candidates, but aspire to be in the next few years. We meet with them periodically, invite them to call whenever they’d like our opinion on an operational issue that might have exit implications later on, and we keep them apprised of M&A activity and financings in their product category. And the best news – we don’t charge for this mentoring advice. It’s complimentary. It’s our way of building value, and relationships.

We’re looking for a few more such relationships. We begin with an introductory phone call with companies interested in being mentored, followed by a more in-depth telephone conversation. We’ll then invite qualified candidates to meet personally with four or five members of our team at our San Diego office. During this three to four hour sit-down, we’ll discuss the current market, specifically as it relates to valuations, transactions and trends in your product category. We’ll assess the strengths and weakness of your financial performance, how that compares to other software companies your size, and how that relates to buyer expectations. We’ll discuss your market strategy, sales strategy, sales team track record, software and maintenance pricing strategies, equity structure, and a wide array of other factors that can materially impact your salability and valuation down the road. We’re a terrific sounding board. We’ll give you an informed, honest and frank opinion – that’s what we’re known for. And we’ll offer informed and insightful observations, ideas and options based on 17 years of working with countless software companies worldwide.

If you run a profitable software company with revenue in excess of $10 million, and you’re interested in learning more about SEG’s complimentary, no obligation mentoring program, please contact Kris Beible at [email protected] or 858-509-2800.

ADDITIONAL RESEARCH

For our complimentary current and archived Quarterly Reports from 1Q03, please visit: http://www.softwareequity.com/research_quarterly_reports.aspx

For our complimentary current and archived Monthly Flash Reports from July 2008, please visit: http://www.softwareequity.com/research_flash_reports.aspx

For our Annual Reports from 2003 through 2008, please visit: http://www.softwareequity.com/research_annual_reports.aspx

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CAD Computer-aided DesignCAM Computer-aided ManufacturingCRM Customer Relationship ManagementEBITDA Earnings before Interest, Taxes, Depreciation, and AmortizationEV Enterprise ValueFCF Free Cash FlowFORWARD Current EV / Next Four Quarters' Consensus Financial EstimatesHR Human ResourcesNASDAQ National Association of Securities Dealers Automated Quotation SystemOS Operating SystemPLM Product Lifecycle ManagementR&D Research and DevelopmentS&P Standard & Poor'sSaaS Software-as-a-ServiceSEG Software Equity GroupSG&A Selling, General, & AdministrativeSW SoftwareTTM Trailing Twelve MonthYoY Year-over-YearYTD Year-to-date

List of Commonly Used Acronyms

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Page 5: Software Equity Group Flash Reportsoftwareequity.com/Reports/Monthly/2010/Monthly_Report_August_2… · CAD Computer-aided Design CAM Computer-aided Manufacturing CRM Customer Relationship

July 2010

Select Software Industry M&A Transactions

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Page 6: Software Equity Group Flash Reportsoftwareequity.com/Reports/Monthly/2010/Monthly_Report_August_2… · CAD Computer-aided Design CAM Computer-aided Manufacturing CRM Customer Relationship

Select July 2010 Software Industry M&A Transactions

Date Announced Target EV/ Revenue

07/31/2010 FleetMatics Limited SageQuest, LLC - - -07/30/2010 The Newton Group, Inc. Consultedge, Inc. - - -07/30/2010 Redknee Solutions, Inc. (TSX:RKN) Nimbus Systems SL - - -07/29/2010 Quest Software Inc. (NasdaqGS:QSFT) Surgient, Inc. - - -07/29/2010 McAfee, Inc. (NYSE:MFE) tenCube Pte Ltd. - - -07/29/2010 Administaff Inc. (NYSE:ASF) Galaxy Technologies, Inc. - $10.2 -07/27/2010 Walt Disney Co. (NYSE:DIS) Playdom, Inc. - $763.2 -07/27/2010 Parallax Capital Partners, LLC Daptiv, Inc. - - -07/27/2010 Juniper Networks, Inc. (NYSE:JNPR) SMobile Systems, Inc. - $70.0 -07/27/2010 Cegedim SA (ENXTPA:CGM) Pulse Systems, Inc. - $58.0 -07/26/2010 Open Solutions Inc. The Weiland Financial Group, Inc. - - -07/26/2010 Commtouch, Inc. Command Software Systems, Inc. - $8.0 -07/22/2010 Scantron Corporation Spectrum K12 School Solutions, Inc. - - -07/22/2010 Roper Industries Inc. (NYSE:ROP) iTradeNetwork, Inc. - $525.0 -07/22/2010 Ingenix, Inc. Picis, Inc. - - -07/22/2010 Harbinger Capital Partners LLC Ubisoft Entertainment SA (ENXTPA:UBI) - - -07/22/2010 Camstar Systems, Inc. SigmaQuest, Inc. - - -07/21/2010 The Core Company Enigma Data Solutions Limited - - -07/21/2010 Autodesk, Inc. (NasdaqGS:ADSK) Illuminate Labs AB - - -07/20/2010 Synchronica PLC (AIM:SYNC) iseemedia Inc. (TSXV:IEE) $2.2 $5.8 2.6x07/20/2010 Motio, Inc. BIPT, Inc. - - -07/19/2010 SunGard Data Systems Inc. Fox River Execution Technology, LLC - - -07/15/2010 SDL plc (LSE:SDL) Language Weaver, Inc. $12.2 $42.5 3.5x07/15/2010 MSCI Inc. (NYSE:MSCI) Bear Measurisk, LLC - - -07/14/2010 Rally Software Development Corp. Blue Hole Software Inc., ScrumAway - - -07/14/2010 Primestream Corporation B4M(TM) - - -07/13/2010 GFI Software Ltd. Sunbelt Software, Inc. - - -07/13/2010 AirClic, Inc. Airversent, Inc. - - -07/08/2010 Qbase Holdings, LLC MetaCarta, Inc. - - -07/07/2010 Webroot Software, Inc. BrightCloud, Inc. - - -07/07/2010 Sverica International Syscon Justice Systems Ltd. - - -07/07/2010 SANBlaze Technology Inc. Emtech LLC - - -07/07/2010 Logitech International SA (SWX:LOGN) Paradial AS - - -07/07/2010 Fortress Financial Services Inc. BISNet, Inc. - - -07/07/2010 Bentley Systems, Incorporated BLUERIDGE Analytics, Inc. - - -07/06/2010 Synchronoss Technologies, Inc. (NasdaqGS:SNCR) FusionOne, Inc. - $75.0 -07/06/2010 Manatron, Inc. Beyond Appraisal, Inc. - - -07/06/2010 Hexagon AB (OM:HEXA B) Intergraph Corporation $769.9 $2,125.0 2.8x07/06/2010 EMC Corporation (NYSE:EMC) Greenplum, Inc. - - -07/06/2010 Access Formatta Corporation - - -07/02/2010 Blackboard Inc. (NasdaqGS:BBBB) Wimba, Inc. - $53.2 -07/01/2010 Tier 1 Performance Solutions, LLC Motionplan, Inc. - - -07/01/2010 International Business Machines Corp. (NYSE:IBM) BigFix, Inc. - - -07/01/2010 Infor Global Solutions, Inc. Qurius N.V., ERP LN Business - $5.0 -07/01/2010 Google Inc. (NasdaqGS:GOOG) ITA Software, Inc. - $700.0 -07/01/2010 Dell Inc. (NasdaqGS:DELL) Scalent Systems, Inc. - $35.0 -07/01/2010 Datalogic Scanning Holdings, Inc. Evolution Robotics Retail, Inc. $5.1 $25.5 5.0x07/01/2010 Automatic Data Processing, Inc. (NasdaqGS:ADP) Workscape, Inc. - - -

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Target TTM Revenue ($mm)Acquirer

Implied Enterprise Value ($mm)

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Category Performance

SEG Software Index

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Page 8: Software Equity Group Flash Reportsoftwareequity.com/Reports/Monthly/2010/Monthly_Report_August_2… · CAD Computer-aided Design CAM Computer-aided Manufacturing CRM Customer Relationship

SEG Software Index: All Categories

Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue

EV/ EBITDA

Forward EV/ Revenue

Forward EV/

EBITDA

YoY Stock Market Return

SEG Software Index $506.26 $492.68 $222.73 69.3% 16.1% 2.0% 2.0x 11.6x 1.9x 8.9x 17.6% Billing & Service Management $803.63 $636.61 $392.03 51.0% 21.2% 3.2% 1.3x 6.5x 1.5x 6.3x 13.7% Business Intelligence $596.84 $467.12 $198.32 76.4% 14.2% 5.8% 1.8x 15.1x 1.7x 7.8x 22.5% Content/Document Management $68.45 $72.70 $93.75 71.0% 23.2% -7.3% 1.7x 7.5x 3.5x 10.3x 34.5% CRM, Marketing & Sales Software $150.82 $117.15 $87.64 52.1% 6.6% -6.0% 1.1x 10.9x 1.3x 7.6x 26.7% Database & File Management $1,803.61 $1,466.77 $565.08 83.8% 22.8% 0.5% 2.0x 8.7x 2.3x 6.2x 6.8% Dev Tools, OS & Application Testing Software $1,294.61 $1,034.89 $511.43 80.2% 21.1% 6.9% 2.0x 8.5x 2.9x 10.6x 20.1% eCommerce Enablement Software $565.25 $420.11 $186.93 68.8% 13.6% 6.0% 2.2x 13.0x 3.0x 9.5x -5.0% Education & eLearning $272.48 $221.43 $118.51 75.0% 12.5% 18.4% 1.3x 12.4x 1.5x 13.2x 20.3% Electronic Design Automation $1,027.69 $1,143.64 $789.53 82.3% 8.4% 1.1% 1.6x 25.7x 1.5x 7.4x 39.0% Engineering, PLM & CAD/CAM Software $1,244.77 $1,446.57 $552.37 82.3% 13.2% 0.5% 1.9x 17.2x 1.7x 10.4x 42.1% Enterprise Application Integration $1,130.28 $1,011.49 $374.38 57.7% 13.9% -3.6% 1.7x 13.5x 2.9x 13.2x 3.5% Enterprise Resource Planning $537.91 $608.52 $354.95 57.4% 17.2% -3.1% 1.8x 9.9x 1.6x 8.9x 10.9% Entertainment $1,180.82 $793.57 $1,234.72 63.5% 6.1% -5.6% 0.6x 0.7x 0.7x 5.9x -32.0% Financial Services Software $647.13 $608.52 $233.36 58.5% 23.1% 4.4% 2.3x 9.0x 2.3x 9.0x 19.7% Healthcare $446.87 $396.36 $176.74 68.0% 25.1% 11.7% 3.4x 14.3x 3.4x 12.9x 12.8% Messaging, Conferencing & Communications $213.81 $172.05 $73.03 67.6% 11.8% 4.1% 1.6x 13.8x 1.7x 10.9x 37.9% Multimedia, Graphics, Digital Media $470.41 $386.17 $397.53 68.4% 9.7% -3.8% 3.0x 37.9x 2.2x 10.2x 24.7% Networking & Connectivity $1,530.72 $991.05 $535.96 78.8% 23.2% 3.4% 2.5x 15.8x 2.4x 15.0x 43.2% Security $805.55 $712.20 $181.38 78.0% 17.2% 11.6% 3.8x 12.8x 2.9x 9.3x 19.1% Storage & Systems Management Software $8,224.12 $7,245.17 $2,163.74 77.2% 18.8% 7.0% 2.3x 10.9x 2.6x 10.5x 9.0% Supply Chain Management & Logistics $484.02 $396.91 $202.71 57.4% 11.5% -1.5% 2.0x 9.8x 2.1x 10.8x 25.4% Wireless $253.96 $282.07 $153.56 52.9% 12.2% 6.8% 1.2x 11.8x 1.1x 8.1x -14.0%

TTM Revenue Growth 2.0%TTM EBITDA Growth 15.4%TTM Earnings Growth 34.0%Gross Profit Margin 69.3%EBITDA Margin 16.1%Net Income Margin 7.3%SG&A Expenses as a % of Total Revenue 37.4%R&D Expenses as a % of Total Revenue 14.4%

Current Ratio 2.0Quick Ratio 1.7Cash as Percent of Market Cap 20.8%Avg Days Outstanding: Accounts Receivable 70Avg Days Outstanding: Accounts Payable 39Working Capital to TTM Operating Expense Ratio 0.4

Levered FCF Margin 8.0%Cash from Operations Growth (YoY) 9.0%Cash from Investing Growth (YoY) -14.4%Cash from Financing Growth (YoY) 61.3%Levered FCF Growth (YoY) 1.3%

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Category Name

Income Statement Analysis (Median)

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

August 2010 Monthly Flash Report

SEG SW Index Stock Market Return: Jan-Jul 2010

-10%

-5%

0%

5%

10%

15%

DOW S&P 500 NASDAQ SEG SW Index

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SEG Software Index Category: Billing and Service Management

Company Name Ticker Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/ EBITDA

YoY Stock Market Return

Amdocs Limited DOX $5,641.43 $4,351.49 $2,929.45 36.2% 20.5% -1.7% 1.5x 7.2x 1.5x 6.3x 14.3%AsiaInfo Holdings, Inc. ASIA $965.49 $700.27 $270.12 58.3% 21.8% 29.9% 2.6x 11.9x 3.2x 18.0x 5.9%CSG Systems International, Inc. CSGS $641.77 $572.95 $513.94 43.8% 19.4% 4.9% 1.1x 5.7x 1.1x 5.1x 13.1%MIND C.T.I. Ltd. MNDO $35.66 $15.19 $18.74 64.5% 21.9% 1.5% 0.8x 3.7x n/a n/a 91.1%

Median: $803.63 $636.61 $392.03 51.0% 21.2% 3.2% 1.3x 6.5x 1.5x 6.3x 13.7%

TTM Revenue Growth 3.2%TTM EBITDA Growth 42.2%TTM Earnings Growth 62.4%Gross Profit Margin 51.0%EBITDA Margin 21.2%Net Income Margin 14.4%SG&A Expenses as a % of Total Revenue 17.5%R&D Expenses as a % of Total Revenue 14.9%

Current Ratio 2.5Quick Ratio 2.4Cash as Percent of Market Cap 31.8%Avg Days Outstanding: Accounts Receivable 78Avg Days Outstanding: Accounts Payable 87Working Capital to TTM Operating Expense Ratio 0.7

Levered FCF Margin 16.0%Cash from Operations Growth (YoY) 40.7%Cash from Investing Growth (YoY) 33.4%Cash from Financing Growth (YoY) -92.5%Levered FCF Growth (YoY) 161.1%

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

August 2010 Monthly Flash Report

Income Statement Analysis (Median) Billing & Service Management Software Stock Market Return: Jan-Jul 2010

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Billing & Service Management SW S&P 500 NASDAQ SEG SW Index

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SEG Software Index Category: Business Intelligence

Company Name Ticker Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/ EBITDA

YoY Stock Market Return

Actuate Corporation ACTU $215.85 $188.28 $119.90 83.8% 13.1% -4.6% 1.6x 12.0x 1.5x 6.5x -9.0%Datawatch Corporation DWCH $15.45 $9.11 $18.13 70.5% 8.6% -15.2% 0.5x 5.8x n/a n/a 36.8%Informatica Corporation INFA $2,766.96 $2,604.79 $565.08 83.8% 23.1% 21.6% 4.6x 20.0x 4.2x 16.0x 63.8%MicroStrategy Incorporated MSTR $977.82 $745.96 $410.72 80.0% 20.4% 16.1% 1.8x 8.9x 1.7x 6.6x 36.2%Pegasystems Inc. PEGA $1,138.83 $936.76 $276.73 65.0% 15.4% 22.7% 3.4x 22.0x 3.8x 21.5x 8.7%PROS Holdings PRO $183.95 $122.62 $68.08 72.8% 9.9% -10.1% 1.8x 18.1x 1.6x 7.8x -10.1%

Median: $596.84 $467.12 $198.32 76.4% 14.2% 5.8% 1.8x 15.1x 1.7x 7.8x 22.5%

TTM Revenue Growth 5.8%TTM EBITDA Growth -4.8%TTM Earnings Growth 6.5%Gross Profit Margin 76.4%EBITDA Margin 14.2%Net Income Margin 8.1%SG&A Expenses as a % of Total Revenue 47.8%R&D Expenses as a % of Total Revenue 15.6%

Current Ratio 1.7Quick Ratio 1.6Cash as Percent of Market Cap 25.1%Avg Days Outstanding: Accounts Receivable 67Avg Days Outstanding: Accounts Payable 40Working Capital to TTM Operating Expense Ratio 0.3

Levered FCF Margin 9.7%Cash from Operations Growth (YoY) -3.8%Cash from Investing Growth (YoY) -6.2%Cash from Financing Growth (YoY) 96.9%Levered FCF Growth (YoY) 4.1%

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Income Statement Analysis (Median)

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

August 2010 Monthly Flash Report

Business Intelligence Software Stock Market Return: Jan-Jul 2010

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15%

Business Intelligence SW S&P 500 NASDAQ SEG SW Index

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SEG Software Index Category: Content & Document Management

Company Name Ticker Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/ EBITDA

YoY Stock Market Return

Adobe Systems Incorporated ADBE $15,084.43 $13,933.36 $3,256.53 89.4% 32.7% -1.1% 4.3x 13.1x 4.3x 10.5x -11.4%Datawatch Corporation DWCH $15.45 $9.11 $18.13 70.5% 8.6% -15.2% 0.5x 5.8x n/a n/a 36.8%EasyLink Services International ESIC $68.45 $72.70 $82.15 71.0% 23.2% -7.3% 0.9x 3.8x n/a n/a 34.5%Ninetowns Internet Tech Grp Ltd. NINE $54.43 -$43.66 $93.75 69.5% -38.5% -10.3% n/a n/a n/a n/a 52.0%Open Text Corporation OTEX $2,242.81 $2,223.04 $875.35 74.1% 27.7% 11.9% 2.5x 9.2x 2.7x 10.1x 4.7%

Median: $68.45 $72.70 $93.75 71.0% 23.2% -7.3% 1.7x 7.5x 3.5x 10.3x 34.5%

TTM Revenue Growth -7.3%TTM EBITDA Growth -9.2%TTM Earnings Growth 101.0%Gross Profit Margin 71.0%EBITDA Margin 23.2%Net Income Margin 1.7%SG&A Expenses as a % of Total Revenue 49.1%R&D Expenses as a % of Total Revenue 14.4%

Current Ratio 1.5Quick Ratio 1.4Cash as Percent of Market Cap 22.9%Avg Days Outstanding: Accounts Receivable 58Avg Days Outstanding: Accounts Payable 48Working Capital to TTM Operating Expense Ratio 0.2

Levered FCF Margin 20.4%Cash from Operations Growth (YoY) -15.3%Cash from Investing Growth (YoY) 59.4%Cash from Financing Growth (YoY) -3.2%Levered FCF Growth (YoY) -0.2%

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

August 2010 Monthly Flash Report

Income Statement Analysis (Median) Content & Document Management Software Stock Market Return: Jan-Jul 2010

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Content & Document Management SW S&P 500 NASDAQ SEG SW Index

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SEG Software Index Category: CRM, Marketing, and Sales

Company Name Ticker Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/ EBITDA

YoY Stock Market Return

Astea International Inc. ATEA $9.24 $5.23 $20.01 38.2% -3.8% -7.4% 0.3x n/a n/a n/a 12.2%Blackbaud, Inc. BLKB $1,061.57 $1,052.53 $315.09 61.1% 20.2% 1.1% 3.3x 16.5x 3.1x 11.6x 26.7%Callidus Software, Inc. CALD $110.67 $82.55 $66.09 36.5% -20.5% -36.4% 1.2x n/a 0.9x n/a 39.2%CDC Software Corporation CDCS $197.86 $187.67 $206.06 54.9% 16.8% -4.5% 0.9x 5.4x 0.9x 3.7x n/aRainmaker Systems Inc. RMKR $26.70 $13.39 $50.24 49.3% 4.0% -13.5% 0.3x 6.7x n/a 13.6x -24.7%Unica Corporation UNCA $190.97 $151.75 $109.19 73.5% 9.2% 4.2% 1.4x 15.1x 1.6x 0.0x 42.5%

Median: $150.82 $117.15 $87.64 52.1% 6.6% -6.0% 1.1x 10.9x 1.3x 7.6x 26.7%

TTM Revenue Growth -6.0%TTM EBITDA Growth 32.6%TTM Earnings Growth 54.9%Gross Profit Margin 52.1%EBITDA Margin 6.6%Net Income Margin -2.2%SG&A Expenses as a % of Total Revenue 31.5%R&D Expenses as a % of Total Revenue 15.7%

Current Ratio 1.1Quick Ratio 1.0Cash as Percent of Market Cap 24.2%Avg Days Outstanding: Accounts Receivable 75Avg Days Outstanding: Accounts Payable 33Working Capital to TTM Operating Expense Ratio 0.1

Levered FCF Margin 5.0%Cash from Operations Growth (YoY) 4.9%Cash from Investing Growth (YoY) -249.1%Cash from Financing Growth (YoY) 3.4%Levered FCF Growth (YoY) -10.6%

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Income Statement Analysis (Median)

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

August 2010 Monthly Flash Report

CRM, Marketing, & Sales Software Stock Market Return: Jan-Jul 2010

-20%

-15%

-10%

-5%

0%

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20%

CRM, Marketing, & Sales SW S&P 500 NASDAQ SEG SW Index

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SEG Software Index Category: Database and File Management

Company Name Ticker Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/ EBITDA

YoY Stock Market Return

BMC Software, Inc. BMC $6,355.51 $5,313.61 $1,922.10 78.1% 32.5% 2.0% 2.8x 8.5x 2.7x 6.2x 4.6%Guidance Software, Inc. GUID $115.77 $77.19 $81.90 74.3% -2.8% -1.8% 0.9x n/a 1.2x n/a 19.5%Informatica Corporation INFA $2,766.96 $2,604.79 $565.08 83.8% 23.1% 21.6% 4.6x 20.0x 4.2x 16.0x 63.8%Oracle Corporation ORCL $118,820.48 $115,407.48 $26,820.00 78.5% 45.1% 15.3% 4.3x 9.5x 3.9x 8.0x 6.8%Pervasive Software Inc. PVSW $82.56 $42.21 $47.21 87.4% 14.7% 0.0% 0.9x 6.1x 0.9x 4.9x -9.8%Quest Software, Inc. QSFT $1,803.61 $1,466.77 $722.66 90.5% 22.8% 0.5% 2.0x 8.9x 1.8x 6.1x 36.8%Versant Corporation VSNT $36.32 $8.42 $16.54 88.6% 21.3% -24.4% 0.5x 2.4x n/a n/a -26.2%

Median: $1,803.61 $1,466.77 $565.08 83.8% 22.8% 0.5% 2.0x 8.7x 2.3x 6.2x 6.8%

TTM Revenue Growth 0.5%TTM EBITDA Growth 2.8%TTM Earnings Growth 9.7%Gross Profit Margin 83.8%EBITDA Margin 22.8%Net Income Margin 12.5%SG&A Expenses as a % of Total Revenue 45.6%R&D Expenses as a % of Total Revenue 18.5%

Current Ratio 1.4Quick Ratio 1.3Cash as Percent of Market Cap 22.3%Avg Days Outstanding: Accounts Receivable 68Avg Days Outstanding: Accounts Payable 45Working Capital to TTM Operating Expense Ratio 0.4

Levered FCF Margin 17.2%Cash from Operations Growth (YoY) 13.5%Cash from Investing Growth (YoY) -37.7%Cash from Financing Growth (YoY) 56.6%Levered FCF Growth (YoY) 8.0%

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

August 2010 Monthly Flash Report

Income Statement Analysis (Median) Database & File Management Software Stock Market Return: Jan-Jul 2010

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Database & File Management SW S&P 500 NASDAQ SEG SW Index

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SEG Software Index Category: Development Tools, OS, and App Testing

Company Name Ticker Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/ EBITDA

YoY Stock Market Return

BSQUARE Corporation BSQR $32.29 $20.83 $64.65 15.7% -7.9% -1.1% 0.3x n/a n/a n/a 20.1%Google Inc. GOOG $154,524.66 $124,465.66 $26,213.56 63.6% 41.3% 17.7% 4.7x 11.5x 4.9x 10.6x 9.4%Magic Software Enterprises Ltd. MGIC $80.19 $55.60 $69.16 46.5% 16.1% 18.7% 0.8x 5.0x n/a n/a 41.8%Microsoft Corporation MSFT $223,348.56 $192,594.56 $62,484.00 80.2% 43.5% 6.9% 3.1x 7.1x 2.9x 7.3x 9.7%Phoenix Technologies Ltd. PTEC $108.37 $83.86 $62.38 86.0% -13.6% -10.1% 1.3x n/a 1.1x n/a -7.2%Progress Software Corporation PRGS $1,294.61 $1,034.89 $511.43 85.3% 23.8% 1.5% 2.0x 8.5x 2.0x n/a 32.1%Red Hat, Inc. RHT $6,074.29 $5,250.49 $782.99 84.6% 21.1% 16.8% 6.7x 31.8x 6.2x 22.9x 40.8%

Median: $1,294.61 $1,034.89 $511.43 80.2% 21.1% 6.9% 2.0x 8.5x 2.9x 10.6x 20.1%

TTM Revenue Growth 6.9%TTM EBITDA Growth 27.3%TTM Earnings Growth 36.2%Gross Profit Margin 80.2%EBITDA Margin 21.1%Net Income Margin 11.8%SG&A Expenses as a % of Total Revenue 34.7%R&D Expenses as a % of Total Revenue 13.9%

Current Ratio 2.0Quick Ratio 1.9Cash as Percent of Market Cap 20.1%Avg Days Outstanding: Accounts Receivable 65Avg Days Outstanding: Accounts Payable 36Working Capital to TTM Operating Expense Ratio 0.4

Levered FCF Margin 17.0%Cash from Operations Growth (YoY) 24.0%Cash from Investing Growth (YoY) 30.8%Cash from Financing Growth (YoY) 6.2%Levered FCF Growth (YoY) 40.9%

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Income Statement Analysis (Median)

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

August 2010 Monthly Flash Report

Dev Tools and App Testing Software Stock Market Return: Jan-Jul 2010

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SEG Software Index Category: eCommerce Enablement Software

Company Name Ticker Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/ EBITDA

YoY Stock Market Return

Art Technology Group, Inc. ARTG $565.25 $420.11 $186.93 66.7% 13.6% 8.3% 2.2x 16.5x 2.3x 10.5x -5.0%Imergent, Inc. IIG $42.30 $23.85 $70.26 68.8% -1.5% -26.3% 0.3x n/a n/a n/a -46.9%VeriSign, Inc. VRSN $5,137.29 $4,211.37 $1,057.81 77.5% 42.3% 6.0% 4.0x 9.4x 3.8x 8.5x 37.7%

Median: $565.25 $420.11 $186.93 68.8% 13.6% 6.0% 2.2x 13.0x 3.0x 9.5x -5.0%

TTM Revenue Growth 6.0%TTM EBITDA Growth 15.4%TTM Earnings Growth 120.0%Gross Profit Margin 68.8%EBITDA Margin 13.6%Net Income Margin 8.3%SG&A Expenses as a % of Total Revenue 41.4%R&D Expenses as a % of Total Revenue 7.8%

Current Ratio 2.2Quick Ratio 1.5Cash as Percent of Market Cap 26.0%Avg Days Outstanding: Accounts Receivable 35Avg Days Outstanding: Accounts Payable 29Working Capital to TTM Operating Expense Ratio 0.8

Levered FCF Margin -4.6%Cash from Operations Growth (YoY) 26.2%Cash from Investing Growth (YoY) -201.4%Cash from Financing Growth (YoY) 29.9%Levered FCF Growth (YoY) -49.3%

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Income Statement Analysis (Median)

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

August 2010 Monthly Flash Report

eCommerce Enablement Software Stock Market Return: Jan-Jul 2010

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eCommerce Enablement SW S&P 500 NASDAQ SEG SW Index

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SEG Software Index Category: Education and eLearning

Company Name Ticker Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/ EBITDA

YoY Stock Market Return

Archipelago Learning, Inc. ARCL $274.65 $278.28 $45.37 92.9% 35.3% 32.3% 6.1x 17.4x 6.7x 17.5x n/aBlackboard Inc. BBBB $1,296.26 $1,307.69 $391.62 70.9% 24.0% 18.6% 3.3x 13.9x 3.4x 15.0x 11.8%GSE Systems Inc. GVP $76.32 $52.09 $43.14 25.6% 2.8% 43.6% 1.2x 42.7x 1.3x n/a -48.7%Renaissance Learning, Inc. RLRN $407.46 $361.35 $127.45 79.0% 26.7% 10.7% 2.8x 10.6x 3.1x n/a 42.9%Rosetta Stone, Inc. RST $435.63 $336.91 $265.00 86.6% 10.2% 18.3% 1.3x 12.4x 1.5x 8.7x -30.2%Saba Software, Inc. SABA $137.49 $105.94 $109.57 66.4% 8.7% 6.6% 1.0x 11.2x 1.2x 13.2x 28.9%Scientific Learning Corporation SCIL $96.04 $79.76 $57.73 79.3% 14.7% 22.1% 1.4x 9.4x 1.5x 11.4x 139.4%

Median: $272.48 $221.43 $118.51 75.0% 12.5% 18.4% 1.3x 12.4x 1.5x 13.2x 20.3%

TTM Revenue Growth 18.4%TTM EBITDA Growth 34.8%TTM Earnings Growth 195.4%Gross Profit Margin 75.0%EBITDA Margin 12.5%Net Income Margin 4.5%SG&A Expenses as a % of Total Revenue 42.4%R&D Expenses as a % of Total Revenue 12.1%

Current Ratio 1.2Quick Ratio 1.1Cash as Percent of Market Cap 19.8%Avg Days Outstanding: Accounts Receivable 59Avg Days Outstanding: Accounts Payable 26Working Capital to TTM Operating Expense Ratio 0.1

Levered FCF Margin 6.4%Cash from Operations Growth (YoY) 7.7%Cash from Investing Growth (YoY) -7.4%Cash from Financing Growth (YoY) 56.9%Levered FCF Growth (YoY) 14.0%

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

August 2010 Monthly Flash Report

Income Statement Analysis (Median) Education & eLearning Software Stock Market Return: Jan-Jul 2010

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Education & Computer Based Training SW S&P 500 NASDAQ SEG SW Index

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SEG Software Index Category: Electronic Design Automation

Company Name Ticker Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/ EBITDA

YoY Stock Market Return

Cadence Design Systems, Inc. CDNS $1,881.20 $1,944.50 $885.40 82.3% 8.5% 1.1% 2.2x 25.7x 1.6x 21.0x 18.0%Magma Design Automation, Inc. LAVA $171.22 $191.34 $123.08 83.3% 5.0% 5.8% 1.6x 31.1x 1.4x 6.5x 120.4%Mentor Graphics Corporation MENT $1,027.69 $1,143.64 $789.53 86.3% 8.4% -1.8% 1.4x 17.2x 1.3x 8.3x 39.0%PDF Solutions, Inc. PDFS $111.05 $79.11 $59.27 59.7% 3.8% 13.2% 1.3x 35.2x 2.0x n/a 78.3%Synopsys, Inc. SNPS $3,231.64 $2,153.19 $1,351.73 81.9% 21.5% -1.6% 1.6x 7.4x 1.5x 4.7x 9.3%

Median: $1,027.69 $1,143.64 $789.53 82.3% 8.4% 1.1% 1.6x 25.7x 1.5x 7.4x 39.0%

TTM Revenue Growth 1.1%TTM EBITDA Growth 113.8%TTM Earnings Growth 96.7%Gross Profit Margin 82.3%EBITDA Margin 8.4%Net Income Margin -2.7%SG&A Expenses as a % of Total Revenue 42.6%R&D Expenses as a % of Total Revenue 32.6%

Current Ratio 1.7Quick Ratio 1.5Cash as Percent of Market Cap 28.9%Avg Days Outstanding: Accounts Receivable 107Avg Days Outstanding: Accounts Payable 26Working Capital to TTM Operating Expense Ratio 0.3

Levered FCF Margin 4.6%Cash from Operations Growth (YoY) 146.0%Cash from Investing Growth (YoY) -109.4%Cash from Financing Growth (YoY) 116.1%Levered FCF Growth (YoY) -7.2%

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Income Statement Analysis (Median)

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

August 2010 Monthly Flash Report

Electronic Design Automation Software Stock Market Return: Jan-Jul 2010

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Electronic Design Automation SW S&P 500 NASDAQ SEG SW Index

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SEG Software Index Category: Engineering, PLM, & CAD/CAM

Company Name Ticker Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/ EBITDA

YoY Stock Market Return

ANSYS, Inc. ANSS $4,068.38 $3,883.70 $552.37 88.5% 49.8% 11.4% 7.0x 14.1x 6.8x 11.6x 43.8%Autodesk, Inc. ADSK $6,778.34 $5,718.54 $1,762.50 89.2% 16.2% -17.7% 3.2x 20.0x 2.7x 13.2x 35.4%Cadence Design Systems, Inc. CDNS $1,881.20 $1,944.50 $885.40 82.3% 8.5% 1.1% 2.2x 25.7x 1.6x 21.0x 18.0%Cimatron Ltd. CIMT $12.72 $6.38 $33.03 82.1% 3.0% -14.9% 0.2x 6.5x n/a n/a 75.0%Dassault Systèmes DSY $5,902.06 $5,188.96 $1,328.24 84.9% 27.0% 0.5% 3.9x 14.4x n/a n/a 42.1%DigitalGlobe, Inc. DGI $1,244.77 $1,446.57 $291.80 88.1% 56.4% 6.7% 5.0x 8.8x 5.0x 8.3x 49.8%GSE Systems Inc. GVP $76.32 $52.09 $43.14 25.6% 2.8% 43.6% 1.2x 42.7x 1.3x n/a -48.7%Magma Design Automation, Inc. LAVA $171.22 $191.34 $123.08 83.3% 5.0% 5.8% 1.6x 31.1x 1.4x 6.5x 120.4%Mentor Graphics Corporation MENT $1,027.69 $1,143.64 $789.53 86.3% 8.4% -1.8% 1.4x 17.2x 1.3x 8.3x 39.0%Parametric Technology Corporation PMTC $2,082.55 $1,863.53 $988.33 69.3% 13.2% -0.3% 1.9x 14.2x 1.7x 10.4x 39.0%PDF Solutions, Inc. PDFS $111.05 $79.11 $59.27 59.7% 3.8% 13.2% 1.3x 35.2x 2.0x n/a 78.3%Stratasys, Inc. SSYS $465.80 $433.85 $108.62 50.1% 20.6% -1.5% 4.0x 19.4x 4.4x 24.4x 43.9%Synopsys, Inc. SNPS $3,231.64 $2,153.19 $1,351.73 81.9% 21.5% -1.6% 1.6x 7.4x 1.5x 4.7x 9.3%

Median: $1,244.77 $1,446.57 $552.37 82.3% 13.2% 0.5% 1.9x 17.2x 1.7x 10.4x 42.1%

TTM Revenue Growth 0.5%TTM EBITDA Growth 13.2%TTM Earnings Growth 30.5%Gross Profit Margin 82.3%EBITDA Margin 13.2%Net Income Margin 5.4%SG&A Expenses as a % of Total Revenue 37.1%R&D Expenses as a % of Total Revenue 26.3%

Current Ratio 1.9Quick Ratio 1.8Cash as Percent of Market Cap 17.3%Avg Days Outstanding: Accounts Receivable 96Avg Days Outstanding: Accounts Payable 30Working Capital to TTM Operating Expense Ratio 0.6

Levered FCF Margin 1.5%Cash from Operations Growth (YoY) 17.7%Cash from Investing Growth (YoY) -37.6%Cash from Financing Growth (YoY) 100.0%Levered FCF Growth (YoY) n/a

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

August 2010 Monthly Flash Report

Income Statement Analysis (Median) Engineering, PLM, & CAD/CAM Software Stock Market Return: Jan-Jul 2010

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SEG Software Index Category: Enterprise Application Integration

Company Name Ticker Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/ EBITDA

YoY Stock Market Return

BluePhoenix Solutions, Ltd. BPHX $37.64 $35.01 $74.63 40.9% 6.0% -15.4% 0.5x 7.8x 0.3x n/a -47.6%Citrix Systems, Inc. CTXS $10,219.85 $9,396.83 $1,724.91 91.2% 23.4% 9.4% 5.4x 23.3x 4.5x 15.6x 54.6%Jacada Ltd. JCDA $15.75 $7.85 $17.10 36.2% -45.6% -20.0% 0.5x n/a n/a n/a -51.2%TIBCO Software Inc. TIBX $2,222.92 $1,987.97 $674.14 74.6% 21.9% 8.1% 2.9x 13.5x 2.9x 10.7x 55.3%

Median: $1,130.28 $1,011.49 $374.38 57.7% 13.9% -3.6% 1.7x 13.5x 2.9x 13.2x 3.5%

TTM Revenue Growth -3.6%TTM EBITDA Growth 15.9%TTM Earnings Growth 31.9%Gross Profit Margin 57.7%EBITDA Margin 13.9%Net Income Margin -5.5%SG&A Expenses as a % of Total Revenue 47.4%R&D Expenses as a % of Total Revenue 17.1%

Current Ratio 1.8Quick Ratio 1.7Cash as Percent of Market Cap 29.7%Avg Days Outstanding: Accounts Receivable 95Avg Days Outstanding: Accounts Payable 36Working Capital to TTM Operating Expense Ratio 0.3

Levered FCF Margin 6.1%Cash from Operations Growth (YoY) 10.2%Cash from Investing Growth (YoY) -93.0%Cash from Financing Growth (YoY) -29.8%Levered FCF Growth (YoY) 23.4%

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Income Statement Analysis (Median)

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

August 2010 Monthly Flash Report

Enterprise Application Integration Software Stock Market Return: Jan-Jul 2010

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SEG Software Index Category: Enterprise Resource Planning

Company Name Ticker Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/ EBITDA

YoY Stock Market Return

American Software, Inc. AMSW.A $128.06 $90.03 $75.28 56.2% 12.2% -3.5% 1.2x 9.8x 1.0x 7.0x -21.7%CDC Software Corporation CDCS $197.86 $187.67 $206.06 54.9% 16.8% -4.5% 0.9x 5.4x 0.9x 3.7x n/aDeltek PROJ $506.26 $517.61 $262.73 65.2% 19.6% -4.1% 2.0x 10.1x 2.3x 8.9x 20.8%Epicor Software Corporation EPIC $488.59 $634.04 $418.93 55.4% 13.6% -8.3% 1.5x 11.2x 1.6x 10.8x 27.3%Intuit Inc. INTU $12,486.15 $11,555.15 $3,448.54 81.5% 31.7% 10.2% 3.4x 10.6x n/a 9.0x 33.8%Lawson Software, Inc. LWSN $1,291.79 $1,142.66 $736.41 56.4% 16.1% -2.8% 1.6x 9.7x 1.6x 12.1x 34.2%Oracle Corporation ORCL $118,820.48 $115,407.48 $26,820.00 78.5% 45.1% 15.3% 4.3x 9.5x 3.9x 8.0x 6.8%QAD Inc. QADI $130.94 $90.73 $211.07 58.4% 7.0% -15.9% 0.4x 6.1x 0.4x 3.3x 10.9%SAP SAP $41,745.88 $39,564.88 $11,101.00 67.8% 30.9% -1.1% 3.6x 11.5x 3.9x 12.9x 6.3%Tyler Technologies, Inc. TYL $569.56 $583.00 $290.97 44.3% 17.7% 3.9% 2.0x 11.3x 1.8x 9.6x 6.7%

Median: $537.91 $608.52 $354.95 57.4% 17.2% -3.1% 1.8x 9.9x 1.6x 8.9x 10.9%

TTM Revenue Growth -3.1%TTM EBITDA Growth 2.5%TTM Earnings Growth 16.8%Gross Profit Margin 57.4%EBITDA Margin 17.2%Net Income Margin 8.2%SG&A Expenses as a % of Total Revenue 31.6%R&D Expenses as a % of Total Revenue 12.3%

Current Ratio 1.5Quick Ratio 1.3Cash as Percent of Market Cap 29.7%Avg Days Outstanding: Accounts Receivable 74Avg Days Outstanding: Accounts Payable 30Working Capital to TTM Operating Expense Ratio 0.2

Levered FCF Margin 21.9%Cash from Operations Growth (YoY) 13.9%Cash from Investing Growth (YoY) -15.9%Cash from Financing Growth (YoY) 28.8%Levered FCF Growth (YoY) 34.0%

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Income Statement Analysis (Median)

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

August 2010 Monthly Flash Report

Enterprise Resource Planning Software Stock Market Return: Jan-Jul 2010

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SEG Software Index Category: Entertainment

Company Name Ticker Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/ EBITDA

YoY Stock Market Return

Electronic Arts Inc. ERTS $5,251.85 $3,255.85 $3,825.00 53.8% -0.7% -5.6% 0.9x n/a 0.7x 8.1x -25.8%Giant Interactive GA $1,528.97 $793.57 $1,234.72 84.6% n/a -17.5% 0.6x n/a 4.3x 6.5x -17.2%Glu Mobile, Inc. GLUU $39.79 $44.35 $71.94 63.9% -6.5% -16.5% 0.6x n/a 0.6x 11.1x 20.4%Konami Corporation KNM $177,769.60 $174,113.60 $262,144.00 29.1% 12.9% -15.4% 0.7x 5.1x 0.7x 5.2x -99.2%Majesco Entertainment Company COOL $26.13 $15.84 $81.20 24.0% -4.7% -5.4% 0.2x n/a 0.2x n/a -68.9%Perfect World PWRD $1,180.82 $908.69 $2,344.26 85.9% 53.3% 50.4% 0.4x 0.7x 2.7x 4.7x -34.7%THQ Inc. THQI $308.98 $151.17 $899.14 63.5% 30.6% 8.3% 0.2x 0.5x 0.2x 4.9x -32.0%

Median: $1,180.82 $793.57 $1,234.72 63.5% 6.1% -5.6% 0.6x 0.7x 0.7x 5.9x -32.0%

TTM Revenue Growth -5.6%TTM EBITDA Growth 24.9%TTM Earnings Growth 71.7%Gross Profit Margin 63.5%EBITDA Margin 6.1%Net Income Margin -1.0%SG&A Expenses as a % of Total Revenue 23.3%R&D Expenses as a % of Total Revenue 11.1%

Current Ratio 2.7Quick Ratio 1.6Cash as Percent of Market Cap 44.0%Avg Days Outstanding: Accounts Receivable 16Avg Days Outstanding: Accounts Payable 33Working Capital to TTM Operating Expense Ratio 0.3

Levered FCF Margin 3.9%Cash from Operations Growth (YoY) -2.7%Cash from Investing Growth (YoY) 5.8%Cash from Financing Growth (YoY) 61.3%Levered FCF Growth (YoY) 14.7%

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

August 2010 Monthly Flash Report

Income Statement Analysis (Median) Entertainment Software Stock Market Return: Jan-Jul 2010

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SEG Software Index Category: Financial Services

Company Name Ticker Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/ EBITDA

YoY Stock Market Return

ACI Worldwide, Inc. ACIW $647.13 $606.73 $410.54 68.6% 19.2% 4.4% 1.5x 7.7x 1.5x 9.0x 28.7%Advent Software, Inc. ADVS $1,321.12 $1,218.59 $266.08 71.2% 15.8% 2.1% 4.6x 29.0x 4.2x 17.0x 40.6%Blackbaud, Inc. BLKB $1,061.57 $1,052.53 $315.09 61.1% 20.2% 1.1% 3.3x 16.5x 3.1x 11.6x 26.7%Bottomline Technologies EPAY $446.30 $388.17 $151.38 57.0% 14.3% 8.8% 2.6x 18.0x 2.6x 22.0x 38.5%DST Systems, Inc. DST $1,918.44 $2,874.54 $2,283.60 21.6% 21.4% 2.0% 1.3x 5.9x 1.7x 6.3x -7.3%Ebix, Inc. EBIX $582.01 $608.52 $108.62 77.7% 45.2% 37.9% 5.6x 12.4x 6.0x 13.2x 20.1%EPIQ Systems, Inc. EPIQ $496.90 $473.82 $233.36 58.5% 23.1% -6.4% 2.0x 8.8x 2.2x 7.4x -18.9%Fair Isaac Corporation FICO $1,088.99 $1,367.21 $602.47 70.4% 25.1% -8.3% 2.3x 9.0x 1.9x 7.7x 24.3%Fiserv FISV $7,645.76 $10,746.76 $4,084.00 41.9% 31.0% 0.1% 2.6x 8.5x 2.5x 7.7x 5.7%Fundtech Ltd. FNDT $188.29 $128.76 $131.58 54.1% 13.7% 13.7% 1.0x 7.2x 0.9x 6.9x 22.4%Jack Henry & Associates, Inc. JKHY $2,167.36 $2,206.04 $800.62 41.1% 30.5% 7.8% 2.8x 9.0x 2.8x 9.6x 18.3%Longtop Financial Technologies LFT $1,874.19 $1,542.47 $169.06 63.5% 43.2% 59.0% 9.1x 21.1x 9.0x 19.6x 19.3%NetSol Technologies Inc. NTWK $30.78 $53.37 $32.93 62.0% 26.6% 9.4% 1.6x 6.1x 1.9x n/a -16.0%S1 Corporation SONE $303.95 $270.15 $222.73 51.9% 12.5% -5.8% 1.2x 9.7x 1.1x 6.0x -17.2%SS&C Corporation SSNC $1,212.82 $1,591.09 $299.73 49.9% 38.2% 10.9% 5.3x 13.9x n/a n/a n/aSapiens International SPNS $64.59 $51.55 $46.87 41.2% n/a 7.1% 1.1x n/a n/a n/a 161.5%TradeStation Group, Inc. TRAD $261.03 $171.30 $131.72 77.2% n/a -14.6% 1.3x n/a n/a n/a -14.7%

Median: $647.13 $608.52 $233.36 58.5% 23.1% 4.4% 2.3x 9.0x 2.3x 9.0x 19.7%

TTM Revenue Growth 4.4%TTM EBITDA Growth 15.4%TTM Earnings Growth 29.1%Gross Profit Margin 58.5%EBITDA Margin 23.1%Net Income Margin 9.7%SG&A Expenses as a % of Total Revenue 28.9%R&D Expenses as a % of Total Revenue 12.1%

Current Ratio 1.4Quick Ratio 1.2Cash as Percent of Market Cap 13.9%Avg Days Outstanding: Accounts Receivable 69Avg Days Outstanding: Accounts Payable 32Working Capital to TTM Operating Expense Ratio 0.3

Levered FCF Margin 13.5%Cash from Operations Growth (YoY) 16.0%Cash from Investing Growth (YoY) -75.8%Cash from Financing Growth (YoY) 30.1%Levered FCF Growth (YoY) -8.5%

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

August 2010 Monthly Flash Report

Income Statement Analysis (Median) Financial Services Software Stock Market Return: Jan-Jul 2010

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SEG Software Index Category: Healthcare

Company Name Ticker Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/ EBITDA

YoY Stock Market Return

Allscripts Healthcare Solutions Inc. MDRX $2,445.40 $2,304.28 $704.50 55.2% 17.8% 28.5% 3.3x 18.4x 3.5x 19.2x -3.1%Cerner Corporation CERN $6,388.23 $5,872.15 $1,763.07 83.3% 25.6% 4.7% 3.3x 13.0x 3.5x 12.0x 19.0%Computer Programs and Sys, Inc. CPSI $493.01 $478.00 $136.01 40.4% 18.2% 10.2% 3.5x 19.3x 3.4x 16.4x 15.5%eResearchTechnology, Inc. ERES $395.29 $314.73 $91.91 53.6% 29.2% -25.4% 3.4x 11.7x 3.2x 0.0x 48.6%MedAssets MDAS $1,338.07 $1,548.62 $366.62 76.9% 27.2% 13.6% 4.2x 15.5x 4.5x 13.8x 25.7%Merge Healthcare MRGE $268.14 $252.97 $71.50 75.0% 24.7% 22.6% 3.5x 14.3x 3.4x 11.1x -14.1%Omnicell, Inc. OMCL $400.73 $215.58 $217.46 51.0% 7.3% -6.0% 1.0x 13.6x 0.9x 10.0x -0.8%Quality Systems, Inc. QSII $1,587.79 $1,486.88 $308.10 62.1% 27.3% 19.9% 4.8x 17.7x 5.4x 18.0x -0.1%Simulations Plus, Inc. SLP $37.92 $29.34 $10.35 75.3% 25.5% 13.2% 2.8x 11.1x 3.1x 9.9x 55.8%Vital Images, Inc. VTAL $212.23 $76.62 $58.80 73.9% -1.1% -7.1% 1.3x n/a 0.9x 18.9x 10.1%

Median: $446.87 $396.36 $176.74 68.0% 25.1% 11.7% 3.4x 14.3x 3.4x 12.9x 12.8%

TTM Revenue Growth 11.7%TTM EBITDA Growth 3.6%TTM Earnings Growth 8.6%Gross Profit Margin 68.0%EBITDA Margin 25.1%Net Income Margin 9.9%SG&A Expenses as a % of Total Revenue 36.2%R&D Expenses as a % of Total Revenue 8.5%

Current Ratio 3.5Quick Ratio 3.2Cash as Percent of Market Cap 9.9%Avg Days Outstanding: Accounts Receivable 88Avg Days Outstanding: Accounts Payable 35Working Capital to TTM Operating Expense Ratio 0.6

Levered FCF Margin 8.9%Cash from Operations Growth (YoY) 27.5%Cash from Investing Growth (YoY) -81.4%Cash from Financing Growth (YoY) 79.6%Levered FCF Growth (YoY) 18.7%

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Income Statement Analysis (Median)

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

August 2010 Monthly Flash Report

Healthcare Software Stock Market Return: Jan-Jul 2010

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SEG Software Index Category: Messaging, Conferencing, and Comms

Company Name Ticker Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/ EBITDA

YoY Stock Market Return

8x8 Inc. EGHT $90.88 $72.79 $64.67 67.6% 8.3% 1.1% 1.1x 13.6x 1.0x 10.9x 95.6%BroadSoft, Inc. BSFT $213.81 $172.05 $73.03 76.5% 0.3% 0.0% 2.4x 729.0x n/a n/a n/aEvolving Systems, Inc. EVOL $68.94 $60.63 $39.06 65.8% 20.9% 4.1% 1.6x 7.4x 1.7x 7.1x 37.6%Interactive Intelligence, Inc. ININ $282.26 $206.72 $142.88 70.4% 15.3% 15.5% 1.4x 9.4x 1.6x 9.7x 0.1%SeaChange International, Inc. SEAC $281.11 $205.03 $206.86 50.8% 7.2% 0.7% 1.0x 13.8x 0.9x 11.6x -2.1%Synchronoss Technologies, Inc. SNCR $609.82 $524.05 $140.98 49.8% 20.9% 19.8% 3.7x 17.8x 4.0x 14.1x 64.1%Zix Corporation ZIXI $145.87 $128.65 $33.36 76.2% 11.8% 17.0% 3.9x 32.7x 4.3x n/a 38.2%

Median: $213.81 $172.05 $73.03 67.6% 11.8% 4.1% 1.6x 13.8x 1.7x 10.9x 37.9%

TTM Revenue Growth 4.1%TTM EBITDA Growth 58.7%TTM Earnings Growth 69.3%Gross Profit Margin 67.6%EBITDA Margin 11.8%Net Income Margin 6.9%SG&A Expenses as a % of Total Revenue 39.8%R&D Expenses as a % of Total Revenue 18.1%

Current Ratio 2.0Quick Ratio 1.7Cash as Percent of Market Cap 19.9%Avg Days Outstanding: Accounts Receivable 83Avg Days Outstanding: Accounts Payable 95Working Capital to TTM Operating Expense Ratio 0.4

Levered FCF Margin 7.7%Cash from Operations Growth (YoY) n/aCash from Investing Growth (YoY) 20.0%Cash from Financing Growth (YoY) 50.6%Levered FCF Growth (YoY) 28.0%

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

August 2010 Monthly Flash Report

Income Statement Analysis (Median) Messaging, Conferencing, & Comms Software Stock Market Return: Jan-Jul 2010

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SEG Software Index Category: Multimedia, Graphics, and Digital Media

Company Name Ticker Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/ EBITDA

YoY Stock Market Return

Adobe Systems Incorporated ADBE $15,084.43 $13,933.36 $3,256.53 89.4% 32.7% -1.1% 4.3x 13.1x 4.3x 10.5x -11.4%Avid Technology, Inc. AVID $491.78 $444.99 $644.91 52.0% 0.1% -11.2% 0.7x 699.7x 0.7x n/a 5.6%Bitstream Inc. BITS $70.52 $56.45 $21.70 56.8% 5.0% -4.2% 2.6x 52.6x n/a n/a 24.3%DigitalGlobe, Inc. DGI $1,244.77 $1,446.57 $291.80 88.1% 56.4% 6.7% 5.0x 8.8x 5.0x 8.3x 49.8%DivX, Inc. DIVX $251.35 $115.78 $75.18 87.4% -0.4% -14.1% 1.5x n/a 1.7x 28.4x 30.5%Monotype Imaging Holdings TYPE $290.84 $327.36 $97.04 88.9% 37.8% -3.5% 3.4x 8.9x 3.9x 10.0x 14.3%NICE Systems Ltd. NICE $6,808.36 $5,741.18 $631.96 59.4% 14.4% 4.4% 9.1x 63.0x 2.2x 8.5x 43.3%Nuance Communications, Inc. NUAN $4,808.08 $5,212.01 $1,040.36 67.1% 21.5% 13.6% 5.0x 23.3x 4.7x 15.3x 25.1%RealNetworks, Inc. RNWK $449.03 $135.81 $503.25 62.5% -3.7% -13.4% 0.3x n/a 0.2x 4.9x 14.5%Sonic Solutions SNIC $241.11 $186.73 $104.22 69.6% 3.2% -9.7% 1.8x 55.2x 1.9x 41.7x 116.8%

Median: $470.41 $386.17 $397.53 68.4% 9.7% -3.8% 3.0x 37.9x 2.2x 10.2x 24.7%

TTM Revenue Growth -3.8%TTM EBITDA Growth -1.4%TTM Earnings Growth -14.3%Gross Profit Margin 68.4%EBITDA Margin 9.7%Net Income Margin 3.3%SG&A Expenses as a % of Total Revenue 38.5%R&D Expenses as a % of Total Revenue 19.0%

Current Ratio 2.5Quick Ratio 2.3Cash as Percent of Market Cap 16.4%Avg Days Outstanding: Accounts Receivable 49Avg Days Outstanding: Accounts Payable 50Working Capital to TTM Operating Expense Ratio 0.4

Levered FCF Margin 4.3%Cash from Operations Growth (YoY) -10.4%Cash from Investing Growth (YoY) -13.2%Cash from Financing Growth (YoY) 111.3%Levered FCF Growth (YoY) 6.6%

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Income Statement Analysis (Median)

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

August 2010 Monthly Flash Report

Multimedia, Graphics, & Digital Media Software Stock Market Return: Jan-Jul 2010

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SEG Software Index Category: Networking and Connectivity

Company Name Ticker Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/ EBITDA

YoY Stock Market Return

Allot Communications Ltd. ALLT $109.15 $67.41 $44.85 71.8% -2.0% 17.4% 1.5x n/a 1.4x n/a 21.0%CA, Inc. CA $10,092.73 $9,176.73 $4,400.00 86.9% 36.9% 4.1% 2.1x 5.7x 1.9x 5.3x -7.5%Cisco Systems, Inc. CSCO $131,756.25 $107,918.25 $37,739.00 64.4% 27.2% -0.5% 2.9x 10.5x 2.7x 9.5x 4.8%Citrix Systems, Inc. CTXS $10,219.85 $9,396.83 $1,724.91 91.2% 23.4% 9.4% 5.4x 23.3x 4.5x 15.6x 54.6%F5 Networks, Inc. FFIV $7,024.38 $6,626.02 $802.83 79.9% 27.1% 23.7% 8.3x 30.5x 8.0x 28.5x 136.6%NetScout Systems Inc. NTCT $663.54 $578.82 $269.09 78.3% 23.0% 1.5% 2.2x 9.3x 2.1x 8.1x 59.3%Novell, Inc. NOVL $2,113.20 $1,133.62 $838.10 78.6% 15.1% -8.9% 1.4x 8.9x 1.2x 0.0x 31.9%OPNET Technologies, Inc. OPNT $326.00 $221.32 $126.35 76.1% 10.6% 2.8% 1.8x 16.5x 1.6x 15.0x 60.4%Radware Ltd. RDWR $436.51 $366.89 $129.63 78.9% 13.7% 35.1% 2.8x 20.7x 3.0x 32.9x 152.0%SolarWinds, Inc. SWI $948.25 $848.48 $135.16 95.4% 39.6% 32.3% 6.3x 15.8x 8.7x 16.9x -30.9%

Median: $1,530.72 $991.05 $535.96 78.8% 23.2% 3.4% 2.5x 15.8x 2.4x 15.0x 43.2%

TTM Revenue Growth 3.4%TTM EBITDA Growth 22.3%TTM Earnings Growth 40.5%Gross Profit Margin 78.8%EBITDA Margin 23.2%Net Income Margin 12.4%SG&A Expenses as a % of Total Revenue 44.3%R&D Expenses as a % of Total Revenue 15.1%

Current Ratio 2.1Quick Ratio 1.9Cash as Percent of Market Cap 24.4%Avg Days Outstanding: Accounts Receivable 67Avg Days Outstanding: Accounts Payable 47Working Capital to TTM Operating Expense Ratio 0.6

Levered FCF Margin 15.9%Cash from Operations Growth (YoY) 6.8%Cash from Investing Growth (YoY) -61.9%Cash from Financing Growth (YoY) 70.5%Levered FCF Growth (YoY) 0.3%

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Income Statement Analysis (Median)

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

August 2010 Monthly Flash Report

Networking & Connectivity Software Stock Market Return: Jan-Jul 2010

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SEG Software Index Category: Security

Company Name Ticker Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/ EBITDA

YoY Stock Market Return

ActivCard Corp. ACTI $94.24 $16.09 $58.79 70.0% -9.7% -5.8% 0.3x n/a n/a n/a -22.2%ArcSight, Inc. ARST $861.57 $712.20 $181.38 80.3% 12.2% 33.2% 3.9x 32.2x 3.5x 19.9x 31.8%Blue Coat Systems, Inc. BCSI $933.49 $775.16 $496.14 74.7% 16.1% 11.6% 1.6x 9.7x 1.4x 9.3x 17.2%Check Point Software Tech Ltd. CHKP $7,063.27 $6,080.02 $1,011.93 88.1% 53.0% 21.1% 6.0x 11.3x 5.6x 9.6x 27.5%Cogent, Inc. COGT $805.55 $507.36 $122.95 60.5% 32.3% -6.9% 4.1x 12.8x 3.9x 11.0x -21.1%Commtouch Software Ltd. CTCH $76.79 $60.76 $16.10 84.5% 23.5% 11.8% 3.8x 16.1x n/a n/a 24.1%McAfee, Inc. MFE $5,164.20 $4,359.87 $2,002.92 78.0% 20.9% 14.4% 2.2x 10.4x 2.1x 6.3x -25.8%Sourcefire, Inc. FIRE $586.30 $514.64 $119.13 79.6% 14.0% 37.3% 4.3x 30.8x 4.1x 31.6x 21.0%Symantec Corporation SYMC $10,361.59 $9,519.59 $5,986.00 85.3% 29.8% 0.9% 1.6x 5.3x 1.7x 4.5x -13.1%VASCO Data Security International VDSI $239.68 $163.68 $102.72 70.0% 11.3% -11.7% 1.6x 14.1x 1.6x n/a -15.1%VeriSign, Inc. VRSN $5,137.29 $4,211.37 $1,057.81 77.5% 42.3% 6.0% 4.0x 9.4x 3.8x 8.5x 37.7%Websense, Inc. WBSN $801.83 $789.61 $319.95 83.2% 17.2% 3.8% 2.5x 14.4x 2.4x 6.8x 25.4%Zix Corporation ZIXI $145.87 $128.65 $33.36 76.2% 11.8% 17.0% 3.9x 32.7x 4.3x n/a 38.2%

Median: $805.55 $712.20 $181.38 78.0% 17.2% 11.6% 3.8x 12.8x 2.9x 9.3x 19.1%

TTM Revenue Growth 11.6%TTM EBITDA Growth 15.4%TTM Earnings Growth 111.7%Gross Profit Margin 78.0%EBITDA Margin 17.2%Net Income Margin 13.4%SG&A Expenses as a % of Total Revenue 46.8%R&D Expenses as a % of Total Revenue 14.8%

Current Ratio 2.6Quick Ratio 2.4Cash as Percent of Market Cap 20.9%Avg Days Outstanding: Accounts Receivable 68Avg Days Outstanding: Accounts Payable 54Working Capital to TTM Operating Expense Ratio 0.9

Levered FCF Margin 8.6%Cash from Operations Growth (YoY) 65.0%Cash from Investing Growth (YoY) 4.2%Cash from Financing Growth (YoY) -10.4%Levered FCF Growth (YoY) 30.3%

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

August 2010 Monthly Flash Report

Income Statement Analysis (Median) Security Software Stock Market Return: Jan-Jul 2010

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SEG Software Index Category: Storage and Systems Management

Company Name Ticker Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/ EBITDA

YoY Stock Market Return

BMC Software, Inc. BMC $6,355.51 $5,313.61 $1,922.10 78.1% 32.5% 2.0% 2.8x 8.5x 2.7x 6.2x 4.6%CA, Inc. CA $10,092.73 $9,176.73 $4,400.00 86.9% 36.9% 4.1% 2.1x 5.7x 1.9x 5.3x -7.5%CommVault Systems, Inc. CVLT $799.23 $624.67 $277.08 86.7% 11.9% 15.6% 2.3x 18.9x 2.9x 16.2x 6.4%Compuware Corporation CPWR $1,828.35 $1,689.68 $884.28 69.4% 20.8% -12.1% 1.9x 9.2x 1.9x 7.1x 11.6%EMC EMC $40,680.48 $37,675.81 $15,531.99 57.3% 19.2% 9.8% 2.4x 12.7x 2.5x 11.4x 31.4%FalconStor Software, Inc. FALC $139.63 $101.42 $81.36 76.2% -16.4% -8.0% 1.2x n/a 0.9x 10.5x -42.6%Network Appliance, Inc. NTAP $15,037.95 $12,415.45 $3,931.40 64.1% 15.7% 11.2% 3.2x 20.1x 2.7x 14.8x 88.3%SupportSoft, Inc. SPRT $192.74 $116.73 $30.19 28.9% -63.1% 146.2% 3.9x n/a 7.1x n/a 67.9%Symantec Corporation SYMC $10,361.59 $9,519.59 $5,986.00 85.3% 29.8% 0.9% 1.6x 5.3x 1.7x 4.5x -13.1%VMWare VMW $31,807.92 $29,478.10 $2,405.39 82.1% 18.3% 25.8% 12.3x 66.8x 11.8x 39.4x 140.6%

Median: $8,224.12 $7,245.17 $2,163.74 77.2% 18.8% 7.0% 2.3x 10.9x 2.6x 10.5x 9.0%

TTM Revenue Growth 7.0%TTM EBITDA Growth 4.8%TTM Earnings Growth 24.4%Gross Profit Margin 77.2%EBITDA Margin 18.8%Net Income Margin 10.2%SG&A Expenses as a % of Total Revenue 44.7%R&D Expenses as a % of Total Revenue 13.0%

Current Ratio 2.1Quick Ratio 1.9Cash as Percent of Market Cap 23.6%Avg Days Outstanding: Accounts Receivable 65Avg Days Outstanding: Accounts Payable 40Working Capital to TTM Operating Expense Ratio 0.4

Levered FCF Margin 16.4%Cash from Operations Growth (YoY) 6.6%Cash from Investing Growth (YoY) -153.1%Cash from Financing Growth (YoY) 65.6%Levered FCF Growth (YoY) 19.0%

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Income Statement Analysis (Median)

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

August 2010 Monthly Flash Report

Storage & Systems Management Software Stock Market Return: Jan-Jul 2010

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SEG Software Index Category: Supply Chain Management and Logistics

Company Name Ticker Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/ EBITDA

YoY Stock Market Return

American Software, Inc. AMSW.A $128.06 $90.03 $75.28 56.2% 12.2% -3.5% 1.2x 9.8x 1.0x 7.0x -21.7%Ariba, Inc. ARBA $1,435.46 $1,248.81 $350.37 62.8% 10.7% 3.0% 3.6x 33.2x 3.7x 17.4x 52.0%Aspen Technology, Inc. AZPN $1,007.37 $975.71 $199.36 65.5% -33.8% -41.1% 4.9x n/a 2.7x n/a 10.4%CDC Software Corporation CDCS $197.86 $187.67 $206.06 54.9% 16.8% -4.5% 0.9x 5.4x 0.9x 3.7x 86.4%JDA Software Group JDAS $979.46 $1,105.73 $492.99 62.3% 22.6% 27.2% 2.2x 9.9x 3.3x 10.8x 14.0%Manhattan Associates, Inc. MANH $595.43 $477.77 $279.02 58.6% 19.5% 0.5% 1.7x 8.8x 2.1x 12.9x 45.2%ModusLink Global Solutions, Inc. MLNK $288.99 $128.85 $921.08 13.2% 5.6% -13.1% 0.1x 2.5x n/a n/a -8.0%Retalix Ltd. RTLX $1,166.43 $797.02 $194.13 39.9% 7.4% -9.5% 4.1x 55.7x n/a n/a 47.6%The Descartes Systems Group Inc. DSG $372.61 $316.06 $77.64 67.3% 21.3% 15.6% 4.1x 19.1x n/a n/a 36.8%XATA Corporation XATA $25.81 $57.37 $69.78 47.2% 9.3% 4.4% 0.8x 8.9x 0.9x n/a -20.0%

Median: $484.02 $396.91 $202.71 57.4% 11.5% -1.5% 2.0x 9.8x 2.1x 10.8x 25.4%

TTM Revenue Growth -1.5%TTM EBITDA Growth 13.1%TTM Earnings Growth 93.5%Gross Profit Margin 57.4%EBITDA Margin 11.5%Net Income Margin 4.4%SG&A Expenses as a % of Total Revenue 30.3%R&D Expenses as a % of Total Revenue 13.0%

Current Ratio 2.1Quick Ratio 1.7Cash as Percent of Market Cap 15.1%Avg Days Outstanding: Accounts Receivable 71Avg Days Outstanding: Accounts Payable 27Working Capital to TTM Operating Expense Ratio 0.4

Levered FCF Margin 5.5%Cash from Operations Growth (YoY) -27.2%Cash from Investing Growth (YoY) 20.4%Cash from Financing Growth (YoY) 40.2%Levered FCF Growth (YoY) -9.3%

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

August 2010 Monthly Flash Report

Income Statement Analysis (Median) Supply Chain Management & Logistics Software Stock Market Return: Jan-Jul 2010

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SEG Software Index Category: Wireless

Company Name Ticker Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/ EBITDA

YoY Stock Market Return

Itron, Inc. ITRI $2,622.45 $3,158.42 $1,953.92 31.2% 13.1% 13.6% 1.6x 12.3x 1.9x 15.3x 24.7%Openwave Systems Inc. OPWV $170.25 $61.25 $187.62 59.3% 2.8% -4.9% 0.3x 11.8x 0.3x n/a -22.8%PCTEL, Inc. PCTI $119.74 $50.56 $61.88 46.4% 1.3% -6.1% 0.8x 61.6x 0.6x 7.9x -5.4%Smith Micro Software, Inc. SMSI $336.96 $287.64 $118.72 87.6% 22.0% 15.4% 2.4x 11.0x 2.6x 8.4x -14.0%TeleCommunication Systems, Inc. TSYS $189.99 $276.49 $346.03 36.2% 14.7% 26.5% 0.8x 5.5x 1.1x 6.7x -56.6%Motricity MOTR $317.93 $343.55 $119.50 65.9% 11.2% 0.0% 2.9x 25.7x n/a n/a n/a

Median: $253.96 $282.07 $153.56 52.9% 12.2% 6.8% 1.2x 11.8x 1.1x 8.1x -14.0%

TTM Revenue Growth 6.8%TTM EBITDA Growth 27.1%TTM Earnings Growth 89.3%Gross Profit Margin 52.9%EBITDA Margin 12.2%Net Income Margin -0.3%SG&A Expenses as a % of Total Revenue 29.0%R&D Expenses as a % of Total Revenue 20.3%

Current Ratio 2.0Quick Ratio 1.8Cash as Percent of Market Cap 33.7%Avg Days Outstanding: Accounts Receivable 84Avg Days Outstanding: Accounts Payable 41Working Capital to TTM Operating Expense Ratio 0.3

Levered FCF Margin 5.5%Cash from Operations Growth (YoY) 18.0%Cash from Investing Growth (YoY) 19.3%Cash from Financing Growth (YoY) -100.0%Levered FCF Growth (YoY) 10.8%

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Income Statement Analysis (Median)

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

August 2010 Monthly Flash Report

Wireless Software Stock Market Return: Jan-Jul 2010

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Company Performance

SEG SaaS Index

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SEG SaaS Index

Company Name Ticker Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/ EBITDA

YoY Stock Market Return

Athenahealth ATHN $948.18 $870.40 $214.88 58.7% 11.2% 34.1% 4.1x 36.1x 4.1x 22.1x -24.8%Concur CNQR $2,339.27 $2,012.56 $280.26 70.4% 23.2% 16.6% 7.2x 31.0x 8.5x 28.1x 34.2%Constant Contact CTCT $555.70 $439.71 $151.92 70.3% 4.7% 41.5% 2.9x 61.7x 3.8x 41.5x -13.8%Convio CNVO $139.31 $158.93 $66.93 62.5% 9.0% 0.0% 2.4x 26.2x n/a n/a n/aDealerTrack TRAK $629.15 $446.74 $226.71 49.1% 10.1% -3.2% 2.0x 19.4x 2.1x 14.0x -21.3%DemandTec DMAN $202.26 $146.77 $77.55 66.3% -9.1% 1.4% 1.9x n/a 1.8x 31.5x -24.5%Kenexa KNXA $271.81 $211.07 $163.90 66.5% 10.2% -7.6% 1.3x 12.6x 1.3x 8.0x -1.4%LivePerson LPSN $358.21 $307.37 $98.74 74.3% 20.1% 24.3% 3.1x 15.5x 3.5x 14.1x 75.6%Medidata Solutions MDSO $349.19 $271.92 $144.44 65.2% 13.9% 22.0% 1.9x 13.6x 2.0x 13.9x -18.3%Netsuite N $939.70 $843.22 $168.91 65.5% -7.6% 5.6% 5.0x n/a 4.2x 66.1x 22.0%RightNow RNOW $506.03 $406.59 $165.87 69.3% 8.6% 14.6% 2.5x 28.3x 2.7x 24.1x 31.4%Salary.com SLRY $51.27 $45.02 $45.75 68.4% -26.9% 7.8% 1.0x n/a 0.8x 0.0x 5.0%Salesforce.com CRM $12,734.87 $12,264.42 $1,377.47 80.6% 11.8% 21.5% 8.9x 75.2x 8.2x 42.6x 128.3%SoundBite Communications SDBT $46.50 $10.39 $40.69 59.9% -3.2% 0.8% 0.3x n/a 0.3x n/a -10.9%SPS Commerce SPSC $123.51 $85.88 $40.80 70.4% 10.7% 0.0% 2.1x 19.6x n/a n/a n/aSuccessFactors SFSF $1,470.48 $1,127.24 $171.51 76.0% -4.6% 27.1% 6.6x n/a 7.8x n/a 92.5%Taleo TLEO $978.10 $733.39 $212.56 67.2% 12.9% 10.8% 3.5x 26.7x 3.7x 14.1x 40.6%The Ultimate Software Group, Inc. ULTI $804.07 $776.98 $210.99 55.3% 5.7% 11.2% 3.7x 65.1x 4.0x 32.3x 26.0%Vocus VOCS $315.68 $220.48 $89.14 81.1% 2.0% 8.6% 2.5x 122.8x 2.3x 10.7x -3.2%

Median: $506.03 $406.59 $163.90 67.2% 9.0% 10.8% 2.5x 27.5x 3.5x 22.1x 5.0%

TTM Revenue Growth 10.8%TTM EBITDA Growth 61.0%TTM Earnings Growth 60.0%Gross Profit Margin 67.2%EBITDA Margin 9.0%Net Income Margin 1.2%SG&A Expenses as a % of Total Revenue 49.4%R&D Expenses as a % of Total Revenue 14.0%

Current Ratio 2.2Quick Ratio 2.1Cash as Percent of Market Cap 23.3%Avg Days Outstanding: Accounts Receivable 58Avg Days Outstanding: Accounts Payable 20Working Capital to TTM Operating Expense Ratio 0.5

Levered FCF Margin 8.2%Cash from Operations Growth (YoY) 11.0%Cash from Investing Growth (YoY) -29.2%Cash from Financing Growth (YoY) 103.2%Levered FCF Growth (YoY) 27.7%

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Income Statement Analysis (Median)

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

August 2010 Monthly Flash Report

SEG SaaS Index Stock Market Return: Jan-Jul 2010

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Category Performance

SEG Internet Index

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SEG Internet Index: All Categories

Category Name Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue

EV/ EBITDA

Forward EV/ Revenue

Forward EV/

EBITDA

YoY Stock Market Return

SEG Internet Index $316.52 $239.85 $156.21 60.7% 12.3% 6.7% 1.4x 11.1x 1.3x 7.4x 11.8% Advertising $751.91 $632.17 $312.47 56.8% 16.4% 4.4% 2.0x 10.6x 2.7x 9.0x 19.2% eCommerce & Portals $492.77 $428.25 $241.28 71.6% 12.9% 11.5% 1.7x 16.5x 1.9x 11.8x 18.3% Networking & Connectivity $349.76 $356.04 $209.48 43.5% 12.9% -2.4% 0.7x 7.9x 0.9x 6.3x 4.5% New Media $277.87 $145.42 $111.30 62.3% 2.9% -4.8% 1.3x 29.6x 1.2x 9.7x 3.4% Search Engine $19,224.67 $16,635.39 $5,747.91 63.6% 41.0% 13.0% 2.6x 10.6x 4.2x 10.2x 9.4%

TTM Revenue Growth 6.7%TTM EBITDA Growth 11.6%TTM Earnings Growth 74.9%Gross Profit Margin 60.7%EBITDA Margin 12.3%Net Income Margin 2.9%SG&A Expenses as a % of Total Revenue 40.7%R&D Expenses as a % of Total Revenue 6.9%

Current Ratio 2.6Quick Ratio 2.3Cash as Percent of Market Cap 24.0%Avg Days Outstanding: Accounts Receivable 33Avg Days Outstanding: Accounts Payable 33Working Capital to TTM Operating Expense Ratio 0.4

Levered FCF Margin 5.3%Cash from Operations Growth (YoY) 11.5%Cash from Investing Growth (YoY) -19.4%Cash from Financing Growth (YoY) 36.4%Levered FCF Growth (YoY) 0.0%

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved August 2010 Monthly Flash Report

Income Statement Analysis (Median)

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

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SEG Internet Index Category: Advertising

Company Name Ticker Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/ EBITDA

YoY Stock Market Return

Autobytel Inc. ABTL $47.42 $21.36 $50.86 36.8% -11.0% -20.9% 0.4x n/a n/a n/a 113.4%Baidu.com, Inc. BIDU $28,330.80 $27,459.23 $5,747.91 74.3% 49.1% 54.1% 4.8x 9.7x 36.1x 79.9x 133.8%comScore Inc. SCOR $613.32 $533.50 $143.84 71.0% 12.8% 15.8% 3.7x 29.0x 3.4x 15.3x 30.2%Google Inc. GOOG $154,524.66 $124,465.66 $26,213.56 63.6% 41.3% 17.7% 4.7x 11.5x 4.9x 10.6x 9.4%InfoSpace, Inc. INSP $280.62 $49.20 $245.99 32.8% 8.9% 54.7% 0.2x 2.3x 0.2x 1.5x 7.0%LookSmart, Ltd. LOOK $25.74 $3.94 $51.60 34.5% 1.0% -9.2% 0.1x n/a n/a n/a 32.7%Marchex Inc. MCHX $164.55 $130.71 $90.69 46.6% 4.4% -33.3% 1.4x 32.9x 1.1x 8.2x 6.2%SINA Corporation SINA $2,616.38 $1,888.72 $378.96 57.4% 20.0% 2.2% 5.0x 24.9x 4.0x 17.1x 28.9%Sohu.com Inc. SOHU $1,778.20 $1,276.60 $547.97 74.7% 41.0% 13.0% 2.3x 5.7x 2.0x 4.5x -23.1%Tucows Inc. TCX $35.88 $33.44 $81.29 27.3% 8.4% 1.8% 0.4x 4.9x 0.4x 4.1x 39.5%ValueClick, Inc. VCLK $890.51 $730.84 $415.33 73.3% 28.0% 6.7% 1.8x 6.3x 1.3x 5.2x -4.8%Yahoo! Inc. YHOO $19,224.67 $16,635.39 $6,505.72 56.2% 20.4% -3.6% 2.6x 12.5x 3.5x 9.7x -3.1%

Median: $751.91 $632.17 $312.47 56.8% 16.4% 4.4% 2.0x 10.6x 2.7x 9.0x 19.2%

TTM Revenue Growth 4.4%TTM EBITDA Growth 29.1%TTM Earnings Growth 90.3%Gross Profit Margin 56.8%EBITDA Margin 16.4%Net Income Margin 13.9%SG&A Expenses as a % of Total Revenue 27.0%R&D Expenses as a % of Total Revenue 10.7%

Current Ratio 3.8Quick Ratio 3.6Cash as Percent of Market Cap 20.7%Avg Days Outstanding: Accounts Receivable 52Avg Days Outstanding: Accounts Payable 15Working Capital to TTM Operating Expense Ratio 0.5

Levered FCF Margin 6.1%Cash from Operations Growth (YoY) 24.0%Cash from Investing Growth (YoY) -0.7%Cash from Financing Growth (YoY) -93.2%Levered FCF Growth (YoY) -37.6%

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Income Statement Analysis (Median)

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

August 2010 Monthly Flash Report

SEG Internet: Advertising Stock Market Return: Jan-Jul 2010

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SEG Internet Index Category: eCommerce and Portals

Company Name Ticker Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/ EBITDA

YoY Stock Market Return

1-800-FLOWERS.COM, Inc. FLWS $142.15 $180.63 $674.75 40.0% 4.1% 16.1% 0.3x 6.6x 0.2x 5.0x -7.1%Amazon.com, Inc. AMZN $52,794.09 $47,818.09 $28,665.00 22.6% 6.0% 39.8% 1.7x 27.8x 1.8x 24.6x 37.5%Bluefly, Inc. BFLY $57.82 $43.57 $81.56 40.6% 1.8% -9.8% 0.5x 29.0x n/a n/a n/aDigital River Inc. DRIV $1,041.66 $701.94 $384.83 82.6% 15.5% -1.8% 1.8x 11.8x 1.4x 5.4x -25.6%eBay Inc. EBAY $27,437.16 $22,539.28 $9,020.22 71.9% 30.6% 9.0% 2.5x 8.2x 2.4x 6.9x -1.6%Expedia, Inc. EXPE $6,452.33 $6,281.18 $3,101.83 79.3% 24.7% 8.5% 2.0x 8.2x 1.8x 6.2x 9.5%GSI Commerce, Inc. GSIC $1,493.68 $1,584.79 $1,157.38 59.1% 6.8% 20.3% 1.4x 20.1x 1.9x 18.6x 23.5%InsWeb Corp. INSW $24.54 $14.63 $36.31 100.0% 2.2% 9.5% 0.4x 18.6x n/a n/a n/aInternet Brands, Inc INET $506.66 $447.96 $107.45 81.7% 37.7% 6.8% 4.2x 11.1x 4.0x 10.1x 46.2%Liquidity Services, Inc. LQDT $366.74 $298.39 $276.77 41.1% 10.3% 13.6% 1.1x 10.5x 1.2x 11.8x 18.3%LiveDeal, Inc. LIVE $2.61 -$3.01 $9.52 45.7% -87.9% -51.2% n/a n/a n/a n/a n/aLoopNet, Inc. LOOP $478.88 $378.39 $75.32 85.1% 29.7% -9.0% 5.0x 16.9x 4.7x 11.6x 43.0%Market Leader, Inc. LEDR $49.19 $0.21 $23.07 100.0% -45.1% -21.8% 0.0x n/a n/a n/a 2.6%Mercadolibre, Inc. MELI $2,669.68 $2,627.97 $198.07 78.8% 38.0% 34.8% 13.3x 34.9x 12.5x 36.0x 110.0%Move, Inc. MOVE $352.43 $311.58 $205.78 77.3% 2.3% -12.4% 1.5x 66.6x 1.3x 11.9x -15.4%NetEase.com, Inc. NTES $4,973.39 $3,849.31 $4,145.51 71.0% 54.7% 28.9% 0.9x 1.7x 5.5x 9.4x -13.1%OpenTable, Inc. OPEN $1,016.75 $940.88 $79.92 71.3% 24.8% 30.8% 11.8x 47.5x 12.9x 60.5x 50.5%Overstock.com, Inc. OSTK $453.94 $408.54 $955.37 18.4% 2.3% 17.5% 0.4x 18.7x 0.4x 15.0x 50.1%priceline.com Incorporated PCLN $10,646.21 $9,968.99 $2,624.25 57.6% 23.6% 29.1% 3.8x 16.1x 3.3x 14.8x 73.1%Travelzoo, Inc. TZOO $255.87 $223.80 $103.98 94.0% 18.0% 21.8% 2.2x 12.0x 1.9x n/a 14.0%

Median: $492.77 $428.25 $241.28 71.6% 12.9% 11.5% 1.7x 16.5x 1.9x 11.8x 18.3%

TTM Revenue Growth 11.5%TTM EBITDA Growth 16.0%TTM Earnings Growth 63.5%Gross Profit Margin 71.6%EBITDA Margin 12.9%Net Income Margin 5.7%SG&A Expenses as a % of Total Revenue 40.1%R&D Expenses as a % of Total Revenue 10.2%

Current Ratio 2.5Quick Ratio 2.2Cash as Percent of Market Cap 19.9%Avg Days Outstanding: Accounts Receivable 19Avg Days Outstanding: Accounts Payable 43Working Capital to TTM Operating Expense Ratio 0.4

Levered FCF Margin 6.5%Cash from Operations Growth (YoY) 37.1%Cash from Investing Growth (YoY) 6.4%Cash from Financing Growth (YoY) 59.7%Levered FCF Growth (YoY) 36.5%

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

August 2010 Monthly Flash Report

Income Statement Analysis (Median) SEG Internet: eCommerce & Portals Stock Market Return: Jan-Jul 2010

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SEG Internet Index Category: Networking and Connectivity

Company Name Ticker Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/ EBITDA

YoY Stock Market Return

EarthLink Inc. ELNK $954.91 $629.55 $649.33 48.7% 33.2% -21.9% 1.0x 2.9x 0.5x 1.5x 4.5%Internap Network Services Corp. INAP $242.49 $194.38 $251.85 37.6% 12.9% -2.3% 0.8x 6.0x 0.7x 6.3x 53.9%Internet Gold Golden Lines Ltd. IGLD $457.02 $625.84 $3,237.81 107.7% n/a 166.1% 0.2x n/a 1.9x n/a 173.3%Internet Initiative Japan Inc. IIJI $546.06 $568.71 $68,006.38 20.5% 13.8% -2.5% 0.0x 0.1x 0.8x 6.9x 22.3%iPass Inc. IPAS $75.77 $38.98 $167.11 38.5% -1.2% -11.1% 0.2x n/a n/a n/a -28.1%Keynote Systems Inc. KEYN $149.15 $88.79 $79.08 48.6% 11.4% -2.9% 1.1x 9.9x 1.0x 5.6x -0.5%LogMeIn, Inc. LOGM $664.25 $517.70 $84.02 90.0% 17.7% 28.1% 6.2x 34.9x 6.3x 29.4x n/aSify Technologies Limited SIFY $56.09 $99.92 $160.17 36.1% 1.2% 17.9% 0.6x 52.1x n/a n/a -27.6%

Median: $349.76 $356.04 $209.48 43.5% 12.9% -2.4% 0.7x 7.9x 0.9x 6.3x 4.5%

TTM Revenue Growth -2.4%TTM EBITDA Growth 5.8%TTM Earnings Growth 97.9%Gross Profit Margin 43.5%EBITDA Margin 12.9%Net Income Margin 2.3%SG&A Expenses as a % of Total Revenue 33.4%R&D Expenses as a % of Total Revenue 8.4%

Current Ratio 2.0Quick Ratio 1.8Cash as Percent of Market Cap 40.5%Avg Days Outstanding: Accounts Receivable 32Avg Days Outstanding: Accounts Payable 27Working Capital to TTM Operating Expense Ratio 0.5

Levered FCF Margin 6.1%Cash from Operations Growth (YoY) 69.9%Cash from Investing Growth (YoY) -18.7%Cash from Financing Growth (YoY) -38.9%Levered FCF Growth (YoY) -19.5%

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

August 2010 Monthly Flash Report

Income Statement Analysis (Median) SEG Internet: Networking & Connectivity Stock Market Return: Jan-Jul 2010

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SEG Internet Index Category: New Media

Company Name Ticker Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/ EBITDA

YoY Stock Market Return

Inuvo, Inc. INUV $13.95 $18.18 $51.38 32.4% 0.1% -8.3% 0.4x 271.8x n/a n/a -44.8%RealNetworks, Inc. RNWK $449.03 $135.81 $503.25 62.5% -3.7% -13.4% 0.3x n/a 0.2x 4.9x 14.5%TechTarget, Inc. TTGT $245.88 $172.10 $89.07 72.6% 2.2% -10.7% 1.9x 86.9x 1.8x 9.9x 3.4%The Knot, Inc. KNOT $277.87 $145.42 $111.30 78.9% 11.8% 6.4% 1.3x 11.1x 1.2x 8.0x -5.8%TheStreet.com, Inc. TSCM $96.55 $53.90 $59.91 56.4% 2.9% -4.8% 0.9x 31.4x 0.8x 9.8x 47.1%WebMD Health Corp. WBMD $2,477.25 $2,069.19 $456.30 62.3% 16.3% 19.1% 4.5x 27.7x n/a n/a 82.0%Yahoo! Inc. YHOO $19,224.67 $16,635.39 $6,505.72 56.2% 20.4% -3.6% 2.6x 12.5x 3.5x 9.7x -3.1%

Median: $277.87 $145.42 $111.30 62.3% 2.9% -4.8% 1.3x 29.6x 1.2x 9.7x 3.4%

TTM Revenue Growth -4.8%TTM EBITDA Growth -4.8%TTM Earnings Growth 87.5%Gross Profit Margin 62.3%EBITDA Margin 2.9%Net Income Margin -5.8%SG&A Expenses as a % of Total Revenue 46.0%R&D Expenses as a % of Total Revenue 18.5%

Current Ratio 2.8Quick Ratio 2.6Cash as Percent of Market Cap 32.6%Avg Days Outstanding: Accounts Receivable 52Avg Days Outstanding: Accounts Payable 50Working Capital to TTM Operating Expense Ratio 0.5

Levered FCF Margin 4.3%Cash from Operations Growth (YoY) 25.6%Cash from Investing Growth (YoY) 17.6%Cash from Financing Growth (YoY) 27.7%Levered FCF Growth (YoY) -10.0%

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Income Statement Analysis (Median)

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

August 2010 Monthly Flash Report

SEG Internet: New Media Stock Market Return: Jan-Jul 2010

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SEG Internet: New Media S&P 500 NASDAQ SEG SW Index

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SEG Internet Index Category: Search Engine

Company Name Ticker Market Cap EV TTM RevenueTTM Gross

MarginTTM EBITDA

Margin

TTM Revenue Growth EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/ EBITDA

YoY Stock Market Return

Baidu.com, Inc. BIDU $28,330.80 $27,459.23 $5,747.91 74.3% 49.1% 54.1% 4.8x 9.7x 36.1x 79.9x 133.8%Google Inc. GOOG $154,524.66 $124,465.66 $26,213.56 63.6% 41.3% 17.7% 4.7x 11.5x 4.9x 10.6x 9.4%LookSmart, Ltd. LOOK $25.74 $3.94 $51.60 34.5% 1.0% -9.2% 0.1x n/a n/a n/a 32.7%Sohu.com Inc. SOHU $1,778.20 $1,276.60 $547.97 74.7% 41.0% 13.0% 2.3x 5.7x 2.0x 4.5x -23.1%Yahoo! Inc. YHOO $19,224.67 $16,635.39 $6,505.72 56.2% 20.4% -3.6% 2.6x 12.5x 3.5x 9.7x -3.1%

Median: $19,224.67 $16,635.39 $5,747.91 63.6% 41.0% 13.0% 2.6x 10.6x 4.2x 10.2x 9.4%

TTM Revenue Growth 13.0%TTM EBITDA Growth 22.8%TTM Earnings Growth 84.3%Gross Profit Margin 63.6%EBITDA Margin 41.0%Net Income Margin 24.3%SG&A Expenses as a % of Total Revenue 18.7%R&D Expenses as a % of Total Revenue 12.2%

Current Ratio 3.8Quick Ratio 3.7Cash as Percent of Market Cap 20.9%Avg Days Outstanding: Accounts Receivable 39Avg Days Outstanding: Accounts Payable 14Working Capital to TTM Operating Expense Ratio 1.4

Levered FCF Margin 5.1%Cash from Operations Growth (YoY) 9.0%Cash from Investing Growth (YoY) -100.0%Cash from Financing Growth (YoY) -424.7%Levered FCF Growth (YoY) 64.2%

Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

August 2010 Monthly Flash Report

Income Statement Analysis (Median) SEG Internet: Search Engine Stock Market Return: Jan-Jul 2010

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SEG Internet: Search Engine S&P 500 NASDAQ SEG SW Index

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Copyright © 2010 by Software Equity Group, L.L.C., All Rights Reserved

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Software Equity Group is an investment bank and M&A advisory serving the software and technology sectors. For a confidential consultation without obligation, please contact Kris Beible, Director, Business Development (858 509-2800, [email protected]).

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