SOFTWARE & SERVICES 12 JANUARY 2010

DAVID SHORE, CFA, MBA 416.860.6784

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

SMARTPHONES THE BIG DRAW AT CES 2010

Google’s Nexus One phone the most visible among many smartphone launches: If there were any doubts that
smartphones will dominate the leading edge of the W eb 2.0 universe in 2010, the CES helped assuage them. The
highest profile phone announcement was the release of the Google Nexus One smartphone (actually launched just
before the start of CES). But several others were featured, including the Palm Pre Plus, Lenovo’s Lephone,
Motorola’s Backflip, along with launches from Nokia, Hitachi, and Samsung.

Smartphones to drive app development in 2010: W e have commented on the smartphone market within our
coverage of Multiplied Media Corp. (TSXV:MMC, RCC target: $0.40/share, RCC rating: BUY). The key drivers of
increasing smartphone adoption (and, indeed, transition from the legacy mobile market to the smartphone) and
greater focus on mobile advertising have resulted in an explosion of software applications specifically for the
increasingly capable crop of smartphones being released. Expect to see more attention in 2010 paid to mobile gaming
(we note that gaming companies have been attracting the greatest number of financings and the highest total value of
funds, as well as in equity market price appreciation within our W eb 2.0 universe), location-based applications that
harness the GPS-capabilities of smartphones, as well as novel applications in this nascent tech space.

JA NU A R Y 2 010 F U N DI NG L E V EL S OF F T O A SL U G GI SH ST A RT
January – will 2010 turn out the way it has started? Total transaction value in the W eb 2.0 universe for January-to-
date is $60.7 million. The number of financings stands at six, averaging $10.1 million each. In comparison, total
capital raised in December was $449.4 million, averaging $13.2 million over 34 deals. November was $204.4 million,
averaging $10.8 million (19 deals); and October was $176.1 million, averaging $5.9 million (30 deals).

Financing Activity Last Twelve Months

500.0 16.0

14.2
450.0
14.0
13.2

400.0

12.0

350.0 10.8
10.1
10.0
300.0 9.0
(US$m)

(US$m)

250.0 8.0
7.0 7.2
6.9
6.5
6.2
200.0 5.9
5.6 6.0

4.7
150.0

4.0

100.0

2.0
50.0

0.0 0.0
Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10

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

Dec-09 includes $180m Zynga investment

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

THE WEB 2.0 UNIVERSE

Eighty-seven public Web 2.0 companies: Our Web 2.0 universe contains 87 companies, with a combined market cap of
approximately $79 billion (Figure 1). The median market cap for the group is $65 million, with average trailing revenue of
$446 million (median $24 million). The companies are also generally profitable with a median EBITDA margin of 15.6%.
On a valuation basis, the overall average is 5.1x trailing revenue (median 2.0x) and 11.8x trailing EBITDA (median 10.1x).
Twenty-one of the companies have more than 500 employees.
C omparable C ompany Analys is > Web 2.0
Trading C urrent US D Market US D L TM Total US D L TM Total E B ITDA TE V/L TM TE V/L TM
C ompany Name L TM as of Ticker E xc hange C urrency HQ P rice C ap ($m) R ev ($m) E B ITDA ($m) % R evenue E B ITDA E mployees
Accelerize New Media , Inc. 9/30/2009 AC LZ OT C B B US D United S ta tes 0. 65 18. 7 4. 1 (1.5) -36. 5% 5. 7x - 11
Actoz S oft C o. , Ltd. 9/30/2009 A052790 K OS E KR W S outh K orea 18,250 141. 1 121.7 27. 0 22. 2% 0. 8x 3. 7x NA
AQ Interactive, Inc. 9/30/2009 3838 TS E JPY J a pan 65,400. 00 38. 8 NM NM NM 0. 2x 4. 5x NA
As knet AG 9/30/2009 X T R A:A5A XT R A E UR G ermany 3. 28 23. 8 9, 526. 3 483.6 5.1% 0. 1x - NA
As s ociated Media Holdings Inc. 6/30/2007 AS MH OT C P K US D United S ta tes 0. 05 2.1 0. 1 (2.3) NM 36.0x - 3
B eta wave C orporation 9/30/2009 B W AV OT C B B US D United S ta tes 0. 19 5.6 8. 4 (14. 3) NM 0. 4x - 48
B eyond C ommerce, Inc. 9/30/2009 B Y OC OT C B B US D United S ta tes 0. 03 1.5 13. 5 (12. 4) -91. 9% 1. 0x - 86
B igs tring C orp. 9/30/2009 BS GC OT C B B US D United S ta tes 0. 02 1.5 0. 1 (1.0) NM 39.9x - 4
B right T hings plc 9/30/2009 AIM: B G T AIM GBP United K ingdom 0. 01 5.4 0. 1 (3.6) NM - - 46
B roa dW ebAs ia Inc. 9/30/2008 BWBA OT C P K US D United S ta tes 0. 06 5.1 0. 0 (4.6) NM - - 46
C DC C orp. 9/30/2009 C HIN. A Na s daqG S US D Hong K ong 2. 95 312. 7 334.2 20. 0 61. 7% 6. 2x 10. 1x 628
C hangyou. com L imited 9/30/2009 C Y OU Na s daqG S US D C hina 34. 63 1,904. 7 255.3 157.4 61. 7% 6. 2x 10. 1x 628
C hines e G amer Interna tiona l 9/30/2009 G T S M: 3083 GTS M TWD T aiwa n 412. 00 1,088. 5 0. 0 (0.1) NM 14.5x 24. 9x NA
C ornerW orld C orpora tion 10/31/2009 CWR L OT C B B US D United S ta tes 0. 03 2.9 9. 2 NM NM 1. 3x - 16
C yberplex Inc. 9/30/2009 T S X :C X TS X C AD C anada 1. 15 76. 4 2, 135. 5 1, 239.2 58. 0% 0. 5x 4. 5x NA
DADA S pA 6/30/2009 C M: DA CM E UR Italy 5. 83 135. 9 13. 2 NM NM 0. 8x 5. 9x NA
DigitalP os t Interactive, Inc. 9/30/2009 DG LP OT C B B US D United S ta tes 0. 04 3.5 1. 2 (0.9) -73. 8% 4. 8x - 7
DigitalT own, Inc. 8/31/2009 DG T W OT C B B US D United S ta tes 1. 25 34. 2 0. 0 (1.8) NM - - 3
Dolphin Digital Media , Inc. 9/30/2009 DP DM OT C B B US D United S ta tes 0. 30 17. 1 0. 3 (4.6) 11. 1% 0. 7x - NA
DXN Holdings B hd 8/31/2009 DX N K LS E MY R Ma la ys ia 0. 60 40. 2 33. 9 3.8 11. 1% 0. 7x - NA
E n2G o International, Inc. 8/31/2009 E TGI OT C B B US D United S ta tes 0. 90 21. 4 NM (2.4) NM - - NA
E olith C o. Ltd. 9/30/2009 A041060 K OS E KR W S outh K orea 650. 00 87. 1 0. 2 (0.3) NM 14.4x 30. 3x NA
F luid Mus ic C a nada , Inc. 9/30/2009 T S X :F MN TS X C AD United S ta tes 1. 74 105. 8 5. 6 (3.0) -54. 0% 17.5x - NA
F rogs ter Interactive P ictures AG 6/30/2009 FRG XT R A E UR G ermany 18. 70 69. 0 8. 0 (4.3) -54. 0% 7. 1x - NA
G ama nia Digita l E ntertainment C o., Ltd. 9/30/2009 6180 GTS M TWD T aiwa n 55 264. 6 0. 2 (0.1) -47. 0% 1. 6x 9. 5x NA
G ameOn C o Ltd. 9/30/2009 3812 TS E JPY J a pan 75400. 00 79. 6 53. 6 8.8 16. 5% 0. 1x 0. 3x NA
G eoS entric O yj 9/30/2009 G E O 1V HL S E E UR F inland 0. 05 64. 6 10,207. 7 2, 398.7 23. 5% 14.8x - 118
G iant Interactive G roup, Inc. 9/30/2009 GA NY S E US D C hina 7. 26 1,644. 1 0. 5 (1.9) NM - - 1, 570
G iga Media Ltd. 3/31/2009 G IG M Na s daqG S US D T aiwa n 3. 24 176. 6 183.6 NM NM 0. 6x - 751
G ravity C o., Ltd 9/30/2009 GR VY Na s daqG M US D S outh K orea 2 51. 7 0. 2 NM NM - - 469
G ree, Inc. 9/30/2009 T S E : 3632 TS E JPY J a pan 5,340 2,611. 6 651.5 230.7 35. 4% 12.2x 21. 0x NA
G ungHo O nline E ntertainment, Inc. 9/30/2009 3765 OS E JPY J a pan 226,000 282. 8 205.5 119.4 58. 1% 2. 1x 9. 3x NA
HanbitS oft, Inc. 9/30/2009 A047080 K OS E KR W S outh K orea 3800. 00 73. 2 9. 5 2.1 22. 3% 1. 0x - NA
IAC /InterActiveC orp. 9/30/2009 IAC I Na s daqG S US D United S ta tes 21. 19 2,796. 4 1, 359. 6 82. 4 42. 8% 0. 4x 0. 9x 79
InternetArray, Inc. 12/31/2006 INAR OT C P K US D United S ta tes 0. 00 0.0 5. 9 (4.0) 40. 2% 6. 4x 16. 0x 2, 271
is eemedia Inc. 9/30/2009 IE E T S XV C AD C anada 0. 20 10. 2 1. 9 (4.3) NM 5. 5x - NA
J umbuck E nterta inment Limited 6/30/2009 AS X :J MB AS X AUD Aus tralia 0. 31 13. 6 17. 5 7.5 42. 8% 0. 4x 0. 9x 79
K ings oft C o. Ltd. 9/30/2009 3888 S E HK HK D C hina 6. 80 959. 4 143.4 57. 7 40. 2% 6. 4x 16. 0x 2, 271
Lingo Media C orporation 9/30/2009 T S X V :LM T S XV C AD C anada 1. 39 16. 7 1. 4 (2.4) NM 11.9x - NA
LookS mart, Ltd. 9/30/2009 L OO K Na s daqG M US D United S ta tes 1. 12 19. 2 54. 0 (4.5) -8.4% - - 90
Magnitude Information S ys tems Inc. 9/30/2009 MAG Y OT C B B US D United S ta tes 0. 02 8.9 0. 1 (2.3) NM - - 14
Mixi, Inc. 9/30/2009 2121 TS E JPY J a pan 653,000 1,099. 2 136.3 45. 0 33. 0% 7. 1x 21. 5x NA
Modern T imes G roup Mtg AB 9/30/2009 MT G B OM SEK S weden 366 3,396. 3 1, 963. 6 277.4 14. 1% 2. 0x 14. 1x 2, 969
MO K O .mobi Limited 6/30/2009 MK B AS X AUD Aus tralia 0. 16 16. 8 0. 7 (2.5) NM 21.8x - NA
Multiplied Media C orporation 9/30/2009 T S X V :MMC T S XV C AD C anada 0. 24 30. 3 0. 2 (4.8) NM - - NA
Myriad G roup AG 6/30/2009 MY R N SWX C HF S witzerland 5. 00 214. 1 63. 0 3.4 5.4% 3. 3x - 405
NE O W IZ G ames C orpora tion 12/31/2008 A095660 K OS E KR W S outh K orea 39,450 731. 8 217.7 58. 5 26. 8% 3. 3x 12. 3x NA
NetDragon W ebS oft, Inc. 9/30/2009 777 S E HK HK D C hina 4. 55 310. 0 91. 4 27. 8 30. 4% 1. 8x 5. 8x 2, 426
Neteas e. com Inc. 9/30/2009 NT E S Na s daqG S US D C hina 39. 01 5,048. 9 483.0 291.9 60. 4% - - 3, 109
NeuLion Incorporated 9/30/2009 T S X :NLN TS X C AD C anada 0. 70 78. 6 24. 9 (16. 1) -64. 5% 2. 5x - 237
NeXplore C orporation 9/30/2009 NX P C OT C P K US D United S ta tes 0. 61 34. 0 0. 5 NM NM - - NA
Ngi G roup Inc. 9/30/2009 2497 TS E JPY J a pan 23,230 31. 4 79. 8 3.1 3.9% - - NA
Northgate T echnologies L imited 9/30/2009 590057 BSE INR India 30. 65 23. 2 48. 2 (51. 7) NM 0. 5x - NA
O AO R B C Information S ys tems 12/31/2007 R BCI R TS US D R us s ia 1. 40 193. 9 0. 0 (0.3) NM 0. 0x 0. 3x NA
O pen T ext C orp. 9/30/2009 OT E X Na s daqG S US D C anada 40. 60 2,289. 1 814.5 211.1 25. 9% 2. 9x 11. 2x 3, 900
O penwave S ys tems Inc. 9/30/2009 OP W V Na s daqG S US D United S ta tes 2. 48 207. 1 190.5 6.2 3.3% 0. 5x 16. 4x 590
P erfect W orld C o. , Ltd. 9/30/2009 PWRD Na s daqG S US D C hina 43. 75 2,176. 9 27. 9 0.9 3.3% 0. 5x 0. 9x 2, 096
P NI Digital Media Inc. 9/30/2009 T S X V :P N T S XV C AD C anada 1. 62 52. 6 1, 882. 7 1, 035.6 55. 0% 2. 1x 11. 9x NA
Q uepa s a C orp. 9/30/2009 QP S A OT C B B US D United S ta tes 2. 55 32. 5 0. 2 (9.8) NM - - 74
R eal V alue E s tates , Inc. 11/30/2009 R V LU OT C B B US D Is rael 1. 25 8.0 NM NM 45. 7% - - 3, 124
S ahara Media Holdings , Inc. 9/30/2009 S HHD OT C B B US D United S ta tes 0. 50 15. 5 0. 0 (4.7) 12. 1% 1. 6x 12. 8x 514
S handa Interactive E nterta inment Ltd. 9/30/2009 S NDA Na s daqG S US D C hina 59. 00 3,968. 1 694.5 317.3 45. 7% - - 3, 124
S hutterfly, Inc. 9/30/2009 S FLY Na s daqG S US D United S ta tes 17. 82 457. 5 223.1 27. 0 12. 1% 1. 6x 12. 8x 514
S K C ommunications C o., Ltd. 12/31/2008 A066270 K OS E KR W S outh K orea 15,750 580. 4 202.4 13. 2 6.5% 2. 9x 44. 1x NA
S NAP Interactive, Inc. 9/30/2009 S TVI OT C B B US D United S ta tes 0. 30 3.3 3. 4 0.5 15. 6% 0. 5x 3. 2x 11
S ocial Media V entures Inc. 12/31/2008 S MV I OT C P K US D United S ta tes 0. 00 0.0 0. 1 (0.1) NM - - NA
S ocialwis e, Inc. 9/30/2009 S C LW OT C B B US D United S ta tes 0. 50 23. 8 NM (5.5) NM - - NA
S ohu. com Inc. 9/30/2009 S O HU Na s daqG S US D C hina 58. 95 2,267. 0 501.0 218.4 43. 6% 3. 4x 7. 9x 3, 197
S park Networks , Inc. 9/30/2009 L OV AME X US D United S ta tes 2. 96 60. 9 47. 5 10. 0 21. 0% 1. 2x 5. 7x 183
S pectrumDNA, Inc. 9/30/2009 S P XA OT C B B US D United S ta tes 0. 19 9.0 0. 1 (2.5) NM - - 7
T encent Holdings Ltd. 9/30/2009 700 S E HK HK D C hina 171 40, 142.3 1, 588. 8 811.5 51. 1% 27.9x - 6, 194
T he9 Limited 12/31/2008 NC T Y Na s daqG S US D C hina 8. 17 205. 2 250.6 85. 5 34. 1% - - 1, 626
T heS treet. com, Inc. 3/31/2009 TS CM Na s daqG M US D United S ta tes 2. 32 71. 0 67. 0 1.9 2.9% 0. 1x 3. 3x 310
T ree.C om, Inc. 9/30/2009 TR E E Na s daqG M US D United S ta tes 9. 15 99. 8 217.1 9.7 4.5% 0. 3x 7. 6x 700
Unilava C orpora tion 12/31/2008 UNLA OT C B B US D United S ta tes 0. 32 0.0 5. 3 (1.0) -18. 1% 0. 0x - 39
Unis erve C ommunica tions C orp. 8/31/2009 T S X V :US S T S XV C AD C anada 0. 09 2.1 5. 1 (0.9) -18. 1% 0. 4x 44. 7x NA
United O nline Inc. 9/30/2009 UNT D Na s daqG S US D United S ta tes 7. 29 616. 7 996.8 212.9 -42. 2% 4. 5x - NA
UOMO Media, Inc 10/31/2009 UO MO OT C B B US D C anada 0. 05 3.9 1. 0 (0.4) -42. 2% 4. 5x - NA
V alueC lick Inc. 9/30/2009 V C LK Na s daqG S US D United S ta tes 10. 30 882. 4 545.7 130.8 24. 0% 1. 3x 5. 5x 1, 189
V elti P lc 6/30/2009 VEL AIM GBP United K ingdom 2. 61 156. 9 83. 8 17. 2 NM - - NA
V OIS , Inc. 9/30/2009 V O IS OT C B B US D United S ta tes 0. 01 8.2 0. 0 (1.0) NM - - NA
W ebzen Inc. 9/30/2009 K O S E : A069080 K OS E KR W S outh K orea 11,000 114. 7 24. 2 2.7 11. 0% 2. 2x 20. 2x 328
W izzard S oftwa re C orporation 9/30/2009 W ZE AME X US D United S ta tes 0. 36 19. 0 5. 2 (3.9) -76. 4% 3. 9x - 110
W orlds . com Inc. 9/30/2009 W DDD OT C B B US D United S ta tes 0. 09 4.8 0. 1 (0.6) NM - - 1
XING AG 9/30/2009 O 1B C XT R A E UR G ermany 31. 72 240. 7 61. 4 16. 6 27. 0% 3. 0x 11. 2x 266
Y D O nline C orp. 12/31/2007 A052770 K OS E KR W S outh K orea 7,630 100. 7 60. 3 13. 0 21. 6% 1. 8x 8. 3x NA
Y nk K orea Inc. 12/31/2008 A023770 K OS E KR W S outh K orea 3,125 14. 7 12. 5 1.3 10. 5% 1. 1x 10. 4x NA
High 40, 142.3 10, 207.7 2, 398. 7 61. 7% 39.9x 44. 7x 6, 194
Low 0.0 0. 0 -51.7 -91. 9% 0. 0x 0. 3x 1
Average 911.0 445.7 106.3 10.1% 5.1x 11.8x 949
Median 64. 6 24.2 1. 1 15. 6% 2. 0x 10. 1x 310

Figure 1. Web 2.0 Universe Summary

Source. Capital IQ
 Page 3

C A P I T A L M A R K E T S A C T I V I T Y (M & A A N D F I N A N C I N G )
January – w ill 2010 turn out the way it has started? Total transaction value in the W eb 2.0 universe for January-to-date
is $60.7 million. The number of financings stands at six, averaging $10.1 million each. In comparison, total capital raised in
December was $449.4 million, averaging $13.2 million over 34 deals. November was $204.4 million, averaging $10.8
million (19 deals); and October was $176.1 million, averaging $5.9 million (30 deals).

Financing Activity Last Twelve Months

500.0 16.0

14.2
450.0
14.0
13.2

400.0

12.0

350.0 10.8
10.1
10.0
300.0 9.0
(US$m)

(US$m)
250.0 8.0
7.0 7.2
6.9
6.5
6.2
200.0 5.9
5.6 6.0

4.7
150.0

4.0

100.0

2.0
50.0

0.0 0.0
Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10

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

Dec-09 includes $180m Zynga investment

Figure 2. Financings, Last Twelve Months

Source. Company reports
 (US$m)

•
•

0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
450.0
PlayFish
Jajah
Zynga

Source. Company reports

ReachLocal
Shanghai Dacheng Network
RockYou

financing.
Ku6
Playdom
Youku
Friendster
Zoosk

and 24 (at end of note).

Groupon
Quantcast
Sezmi
Phoenix New Media

Figure 3. Capital Market Activity, Last Three Months

Motley Fool
Lithium
Lala
Spiceworks
Millennial Media
Qunar.com
gWallet
MobGold
Evernote
Aggregate Knowledge
Movik Networks
Gowalla
Gogii
LiveMocha
SonicMule
CubeTree
kaChing
wooga
ChaCha
SeekingAlpha
Pageonce
Genius.com
Curse
Bizo
Alice.com
Eventbrite
Gizmoz
Mixer Labs
Gaikai
AppNexus
Living Social
Placecast
Nival Network
AlikeList
PowerReviews
Altruik
Smaato
SCVNGR
Tonchidot
Twilio
5 Minutes
Deal round-up for Januar y: The large deal highlights for the month include:

JanRain
Cloud Engines
StockTwits
Article One Partners
Rocket Fuel
Credit Karma
Financing & M/A Summary - Last Three Months

Blekko
Whiskey Media
Appolicious
Grapeshot
Reframe It
Playfire
Jelli
HootSuite
Center'd
Sonico
Quantcast – a web analytics service – raised $27.5 million in its third round of financing.

WePay
OneForty
Jinni
SimpleGeo
Rekoo
Echo Nest
Graphic.ly
Prosper.com
GlobalMotion Media
Imeem
PBworks
Adfonic
Scoopler
SocialMedia
Joost
Jan-10

Nov-09
Dec-09
Page 4

All other deals in the month were in the amount of $10 million or less. For additional details on financings, see Figures 23
Spiceworks – an ad-supported IT management software developer – raised $16 million in its third round of
 Page 5

A few sectors emerging as focus areas: Gaming is now clearly the lead sector in terms of financing activity with 10
transactions in the past quarter. Social Networks remain strong in second place with nine financings, followed by
Advertising with six transactions (Figure 4). The $400 million acquisition of Playfish skews the Gaming segment to the
highest total financing figure.

Capital Market Activity by Sector - Last Three Months

800.0

700.0

600.0

500.0
(US$m)

400.0

300.0

200.0

100.0

740.5 210.7 124.3 112.0 106.1 54.0 51.2 45.9 44.7 33.1 31.7 21.3 16.0 15.0 13.4 12.7 12.5 12.5 12.1 10.0 10.0 8.0 8.0 6.0 5.3 5.3
0.0
Social Commerce
Gaming

Documents
Travel
Media

Mobile

Enterprise

Collaboration

Online Learning

Microblog
Music

Financial Services
Widget
SMS/Voice

Mobile Ad

Location-based

Infrastructure

Classified
Social Networks

Virtual Goods
Advertising

Video

Crowdsourced

Aggregation

Virtual World
Analytics

Content
SNS

# companies
10 2 6 4 9 2 3 4 4 4 4 4 1 1 3 4 3 1 4 1 3 1 1 1 1 2

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

Source. Company reports
 Page 6

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

Web 2.0 Index Price Performance

250

200

150

100

50

0
1/5/09

1/19/09

2/2/09

2/16/09

3/2/09

3/16/09

3/30/09

4/13/09

4/27/09

5/11/09

5/25/09

6/8/09

6/22/09

7/6/09

7/20/09

8/3/09

8/17/09

8/31/09

9/14/09

9/28/09

10/12/09

10/26/09

11/9/09

11/23/09

12/7/09

12/21/09
Index: Web 2.0 (Market Cap) ^COMP - Share Pricing

Figure 5. Web 2.0 Price Performance

Source. Capital IQ
 Page 7

Strong uptick to start the year: Twenty-seven companies in our universe had positive stock price performances
(averaging 7.9$) over the past week (for stocks with prices greater than $1) (Figure 6), while 18 companies showed
negative 1-week returns (averaging -2.7%).

1 Week P rice P erformance

Lingo Media Corporation 47.9%
V elti Plc 30.5%
CDC Corp. 26.6%
Northgate Technologies Limited 14.2%
Quepas a Corp. 13.3%
G ravity Co., Ltd 12.7%
Eolith Co. Ltd. 11.1%
NetDragon WebS of t, Inc. 8.9%
The9 Limited 8.2%
A ctoz S of t Co., Ltd. 4.3%
DigitalTow n, Inc. 4.2%
XING A G 4.0%
Openw ave S y s tems Inc. 3.8%
Perfect World Co., Ltd. 3.6%
S handa Interactive Entertainment Ltd. 3.5%
IA C/InterA ctiveCorp. 3.3%
Modern Times G roup Mtg A B 2.7%
A s knet A G 2.5%
My riad Group A G 2.0%
Tencent Holdings Ltd. 1.7%
Frogs ter Interactiv e Pictures A G 1.4%
Giant Interactive G roup, Inc. 1.0%
LookS mart, Ltd. 0.9%
Cy berplex Inc. 0.9%
Y D Online Corp. 0.5%
Open Tex t Corp. 0.0%
S park Netw orks , Inc. 0.0%
Tree.Com, Inc. 0.0%
DA DA S pA 0.0%
G igaMedia Ltd. -0.3%
K ings of t Co. Ltd. -0.4%
S ohu.com Inc. -0.5%
Fluid Mus ic Canada , Inc. -0.6%
PNI Digital Media Inc. -0.6%
S hutterf ly , Inc. -1.2%
HanbitS of t, Inc. -1.6%
Changy ou.com Limited -1.9%
V alueClick Inc. -2.4%
United Online Inc. -2.7%
Y nk K orea Inc. -3.3%
Chines e Gamer International -3.4%
Gamania Digital Entertainment Co., -3.5%
TheS treet.com, Inc. -3.7%
Webz en Inc. -4.8%
NEOWIZ Games Corporation -4.9%
Neteas e.com Inc. -6.4%
S K Communications Co., Ltd. -6.8%
-0.1 0 0.1 0.2 0.3 0.4 0.5 0.6

Figure 6. 1-Week Price Performance

Source. Capital IQ
 Page 8

P U B L I C C O M P A N Y I N D U S T R Y N E W S (P A R T N E R S H I P S , F I N A N C I A L R E S U L T S , N E W P R O D U C T S )

K ey Developments
C ompany Headline Notes
Neteas e.c om Inc. (Nas daqG S : NTE S ) Netea s e. C om Inc. La unches O nline V ideo Netea s e. com Inc. announced that it ha d la unched an online video webs ite, v. 163. com, and tea med up with the J oy. cn C orp.
P roduct to introduce another cha nnel for providing high-qua lity online movies a nd T V s hows . Netea s e s a id that it would a dd more
fea tures to its online video webs ite, s uch as online mus ic a nd cartoons . It would a ls o coopera te with certa in T V s ta tions a nd
video producers to jointly crea te cha nnels a nd s ha re video a dvertis ements .

W ebzen Inc . (K OS E : A069080)
MOK O.mobi L imited (AS X: MK B )
is eemedia Inc . (TS XV: IE E )
W ebzen Inc. Announces R eloca tion of
C orporate Hea dqua rters
MO K O . mobi L imited S igns Agreement with
Y oigo S pa in
is eemedia Inc. Deploys its Is eedocs on the T - is eemedia Inc. a nnounced tha t it ha s begun commercia l deployment of is eedocs (T M) on the T -Mobile Network in the U. S .
Mobile Network
W ebzen Inc. a nnounced tha t it has relocated its corporate Hea dquarters from 135-971, Da elim Acrotel B uilding C . , 467-6
Dogok-dong K a ngnam-K u, S eoul, S outh K orea to 152-790, 14th F loor, Da erung P os t T ower 2nd, 182-13, G uro Dong, G uro-
G u, S eoul, S outh K orea. T he effective da te is on December 19, 2009.
MO K O . mobi Ltd. has s igned a n a greement with Y oigo S pain. MO K O . mobi will be launched with s ubs cription a nd other
premium activity billing, and will be featured on the ca rrier's mobile content porta l. MO K O. mobi will mana ge the billing a nd
MMS functionality. T his is MO K O . mobi's s econd E uropea n dea l a nd the company hopes it will es ta blis h a s olid bas e for
further E uropea n ca rrier contracts . T echnical and product integra tion is s cheduled to begin during the firs t qua rter 2010 and
revenue is expected to flow by the firs t ha lf of 2010.
with R emoba. is eedocs enables ins ta nt a tta chment viewing and naviga tion without ha ving to downloa d content. Ha nds ets
provide a cces s to enterpris e ema il, ca lenda r a nd contacts . T he combined offering is now being rolled out to T -Mobile
cus tomers a s a choice downloa d with a fforda ble ema il da ta plans . Unlike mos t email a tta chment ha ndlers , is eedocs
delivers a document index which is a ls o the document ma na gement s ys tem. All pa ges , ima ges a nd gra phs a re a cces s ible
on dema nd. Unlike other a tta chment viewers , is eedocs does not downloa d the document to the mobile device, but s trea ms
pa ges a s they are reques ted. T he us er can a ls o zoom a nd pa n the
document, providing a higher degree of information tha n is norma lly a va ilable on mobile devices .

W ebzen Inc . (K OS E : A069080)
NeXplore C orporation (OTC PK : NXP C )
W ebzen Inc. R eports Un-Audited Non W ebzen Inc. reported un-a udited earnings res ults for the s econd quarter a nd s ix months ended J une 30, 2009. F or the
C ons olida ted E arnings R es ults for the S econd qua rter, net los s was K R W 313 million or K R W 26 ba s ic a nd diluted los s per s ha re on revenue of K R W 6, 172 million
Q ua rter a nd S ix Months E nded J une 30, 2009 compa red to net los s of K R W 11, 981 million or K R W 1, 010 ba s ic a nd diluted los s per s ha re on revenue of K R W 7, 245
million for the s a me period las t yea r. O perating income wa s K R W 69 million a gains t operating los s of K R W 4, 024 million of
previous year period. L os s before income taxes wa s K R W 73. 362 compared to K R W 11, 795 for the s a me period a yea r
ago.
NeX plore C orpora tion Appoints G eorge NeXplore C orpora tion announced tha t former NB A great G eorge 'Iceman' G ervin has joined company's board of advis ors
'Iceman' G ervin to B oa rd of Advis ors and will a s s is t with public rela tions and bus ines s development initiatives in s upport of the NeXplore S ea rch (S qua red).

The9 L imited (Nas daqG S : NC TY)
Dis h Network C orp. (Nas daqG S : DIS H); Dis h Network C orp. P a rtners with NeuLion
NeuL ion Inc orporated (TS X: NL N)
T he9 L imited’s F irs t W orld of F ighter
E xpa ns ion P a ck to B e O ffered in April
Incorpora ted to Dis tribute Live Interna tional T V interna tiona l cha nnels us ing NeuL ion's IP T V s ervice. T he pa rtners hip with NeuL ion enhances DIS H Network's internationa l
C ha nnels
T he9 L imited a nnounced tha t it would launch a new expa ns ion pa ck for W orld of F ighter (W oF ) every qua rter, with the firs t
pos s ibly debuting in April. W oF , a ma s s ively multipla yer online role-playing game (MMOR P G ), is one of the compa ny's in-
hous e products . T he compa ny will kick off open beta tes ting on a nd tha t the firs t expa ns ion pa ck's R & D has been
completed.
Dis h Network C orp. a nd NeuL ion Incorpora ted announced a multi-year partners hip to dis tribute certain DIS H Network
progra mming offering by providing cons umers without acces s to s a tellite T V the a bility to enjoy s elect DIS H Network
interna tiona l cha nnels through IP T V . As a lea der in the IP T V s pa ce, NeuLion provides an end-to-end, multi-pla tform
s ervice, allowing the delivery of live a nd on-dema nd content to the T V , P C a nd Mobile devices -- offering a univers al
pla tform tha t connects viewers globa lly. C omponents of the s ervice include: encoding, pers ona liza tion, delivery, regis tra tion,
monetiza tion, s upport a nd reporting tools . DIS H Network offers the mos t internationa l progra mming in the nation, with more
tha n 180 interna tional cha nnels in more tha n 28 langua ges . T he compa ny pla ns to la unch the new IP T V s ervice in ea rly
2010.

B eyond C ommerc e, Inc . B eyond C ommerce, Inc. R eports E a rnings B eyond C ommerce, Inc. reported earnings res ults for the fourth qua rter of 2009. F or the qua rter, the compa ny reported
(OTC B B : B YOC ) R es ults for the F ourth Q ua rter of 2009 profit of a pproxima tely $1 million that includes a one-time ga in from the s a le of its L oca lAdL ink proprietary technology
pla tform along with its tra demarks for $4 million, the proceeds of which were us ed to reduce corpora te debt.

F liptrac k, Inc.; Quepas a C orp.
(OTC B B : QPS A)
Q uepa s a C orp. P artners with F liptrack, Inc. to Quepa s a C orpora tion has s igned a s ocia l a pplica tion dis tribution agreement with F liptra ck, Inc. (Moblyng). Under the terms
B ring the La tes t S ocial G ames to of the a greement, Moblyng will provide their titles to us ers on Q uepa s a . com, levera ging Q uepa s a 's O penS ocia l fra mework.
Q uepa s a . C om Us ers Quepa s a us ers will now be able to pla y a portfolio of Moblyng's s ocia l ga ming titles with their friends on Q uepa s a . com a nd
on their mobile phones . T he objective of the a greement is to provide exclus ive web a nd mobile ga me experiences to
Quepa s a's us er ba s e a nd to jointly monetize a nd s ha re revenues . Moblyng has a greed to provide eight ga mes for
Quepa s a's us e: m: P oker L ive, m: V a mpire, m: Ma fia , m: R a cing, m: Zombies , Dungeon Q ues t, W ordR a cer and
Na rcotra fica nte. T hes e games will be offered to Q uepa s a us ers in S pa nis h a nd P ortugues e as well a s E nglis h. Moblyng
ga mes ca n be pla yed cros s pla tform either on the web a t Q uepa s a . com or on Nokia S 60 S eries , iP hone, Android and P alm
W ebO S s ma rtphones . B lackB erry (R IM) and O MS vers ions of thes e s a me titles a re s cheduled to be releas ed during 2010.

AR C S olutions , Inc .; E xtens ions , Inc .
(OTC PK : E XTI)
Arc S olutions a nd E xtens ions , Inc. Announce
New C olla bora tion S oftwa re S olutions ,
S pecifica lly Des igned for the Healthca re
S ector
AR C S olutions , Inc. has forged a new pa rtners hip with E xtens ions , Inc. to provide a n integrated communica tions s olution for
the healthca re s ector. T his unique relations hip will deliver a powerful range of s olutions tha t s olve workflow a nd
colla boration cha llenges a cros s healthca re organiza tions . Us ing the indus try s ta nda rd HL -7 protocol, rea l time patient and
s ta ff contact a nd pres ence s ta tus informa tion ca n now be s ha red a cros s Arc, E XT E NS IO N, and a hos t of other s oftware
applica tions . O ne key a dva nta ge is tha t hea lthcare receptionis ts a nd telephone attenda nts can have rich, a ccura te
informa tion rela ting to pa tients a nd medica l s ta ff a t their fingertips , via the Arc a ttenda nt operator cons ole.

The9 L imited (Nas daqG S : NC TY)
S hutterfly, Inc . (Nas daqG S : S F L Y)
T he9 O pens B eta T es ting of F irs t P os t- W oW T he9 L td. launched open beta tes ting for W orld of F ighter, coming a s its firs t in-hous e operating product s ince los ing
MMO R P G authoriza tion for W orld of W a rcra ft (W oW ). T he9 promis ed cyber money to online ga mers in a n effort to ma rket the ga me, a
ma s s ively multipla yer online role-pla ying game (MMO R P G ).
S hutterfly, Inc. has filed a S helf R egis tra tion in S hutterfly, Inc. ha s filed a S helf R egis tra tion in the amount of $23. 90 million.
the amount of $23. 90 million.

Neteas e.c om Inc. (Nas daqG S : NTE S ) Netea s e. com Inc. ha s filed a S helf R egis tration Netea s e. com Inc. ha s filed a S helf R egis tra tion in the a mount of $525. 16 million.
in the a mount of $525. 16 million.

C DC C orp. (Nas daqG S : C HIN.A) C DC C orp. - S pecia l/M&A C a ll T o a cquire a ll the outs tanding s ha res of C hordiant S oftwa re, Inc.

Figure 7. Key Developments

Source. Capital IQ
 Page 9

VALUATION
Gaming companies lead market-cap charts: Thirteen companies in our Web 2.0 universe top US$1 billion in market
capitalization (Figure 8). Fifty-one of the 87 companies have market caps under US$100 million, with 32 under US$25
million. Online gaming companies dominate the top of the list, led by Tencent Holdings (SEHK:700) with a market cap of
approximately US$40.1 billion.

Market C ap ($US mm)

Tencent Holdings L td. 40142.3
Neteas e. com Inc . 5048. 9
S handa Intera ctiv e Entertainment 3968. 1
Modern Times Group Mtg A B 3396. 3
IA C/InterA ctiv eCorp. 2796. 4
Gree, Inc . 2611. 6
Open Tex t Corp. 2289. 1
S ohu. com Inc . 2267. 0
Perf ec t World Co., L td. 2176. 9
Cha ngyou.c om L imited 1904. 7
G iant Intera ctiv e G roup, Inc . 1644. 1
Mix i, Inc . 1099. 2
Chines e Ga mer Interna tional 1088. 5
K ings oft Co. L td. 959.4
V alueClic k Inc . 882.4
NEOWIZ Ga mes Corpora tion 731.8
United Online Inc . 616.7
S K Communic ations Co., Ltd. 580.4
S hutterfly, Inc . 457.5
CDC Corp. 312.7
NetDragon W ebS oft, Inc . 310.0
GungHo Online Entertainment, Inc . 282.8
Gamania Digita l Entertainment Co. , 264.6
XING A G 240.7
Myriad Group A G 214.1
Openw a ve S ys tems Inc . 207.1
The9 L imited 205.2
OA O R B C Inf orma tion S ys tems 193.9
GigaMedia L td. 176.6
V elti Plc 156.9
A ctoz S oft Co., L td. 141.1
DA DA S pA 135.9
W ebz en Inc . 114.7
Fluid Mus ic Ca na da, Inc . 105.8
Y D Online Corp. 100.7
Tree.Com, Inc . 99.8
Eolith Co. Ltd. 87.1
GameOn Co L td. 79.6
NeuLion Inc orpora ted 78.6
Cyberplex Inc . 76.4
HanbitS oft, Inc . 73.2
TheS treet.c om, Inc . 71.0
Frogs ter Intera ctiv e Pic tures A G 69.0
GeoS entric Oyj 64.6
S pa rk Netw orks , Inc . 60.9
PNI Digital Media Inc . 52.6
G ra vity Co., Ltd 51.7
DXN Holdings B hd 40.2
A Q Interac tive, Inc . 38.8
DigitalTow n, Inc . 34.2
NeXplore Corpora tion 34.0
Quepas a Corp. 32.5
Ngi Group Inc . 31.4
Multiplied Media Corpora tion 30.3
S oc ia lw is e, Inc . 23.8
A s knet A G 23.8
Northgate Tec hnologies L imited 23.2
En2Go Internationa l, Inc . 21.4
L ookS mart, L td. 19.2
Wiz z ard S oftw a re Corpora tion 19.0
A cceleriz e New Media, Inc . 18.7
Dolphin Digital Media, Inc . 17.1
MOK O.mobi L imited 16.8
Lingo Media Corpora tion 16.7
S ahara Media Holdings , Inc . 15.5
Y nk K orea Inc . 14.7
J umbuc k Enterta inment L imited 13.6
is eemedia Inc . 10.2
S pectrumDNA , Inc . 9.0
Ma gnitude Inf orma tion S y s tems Inc . 8.9
V OIS , Inc . 8.2
R eal V alue Es tates , Inc . 8.0
B eta w ave Corpora tion 5.6
B right Things plc 5.4
B roadWebA s ia Inc . 5.1
Worlds . com Inc . 4.8
UOMO Media , Inc 3.9
Digita lPos t Interac tive, Inc . 3.5
S NA P Interac tive, Inc . 3.3
CornerWorld Corpora tion 2.9
Unis erv e Communica tions Corp. 2.1
A s s ociated Media Holdings Inc . 2.1
B eyond Commerce, Inc . 1.5
B igs tring Corp. 1.5
Unilava Corpora tion 0.0
S oc ia l Media V entures Inc . 0.0
0 1,000 2,000 3, 000 4,000 5,000 6,000

Figure 8. Market Cap Ranking

Source. Capital IQ
 0. 0
5. 0
10. 0
15. 0
20. 0
25. 0
30. 0
35. 0
40. 0
45. 0
(x)
U nilav a C orporation

# Companies
O AO R B C Information S y s tems

0.0
5.0
10.0
15.0
20.0
25.0

Source. Capital IQ
Source. Capital IQ

revenue).
G a meO n C o Ltd.

5
OTCPK T heS treet.com, Inc .

21.2

1
HLSE As k net AG

14.8
AQ Intera ctive, Inc .

3
SEHK

12.0
Figure 9. TEV/Revenue Ranking
T ree.C om, Inc.

2
ASX B eta wav e C orporation

11.1

2
GTSM J umbuc k E nterta inment L imited
U nis erve C ommunications C orp.
TSX

8.0 6.8
P erfect World C o., Ltd.
OTCBB N orthgate T echnologies L imited
C y berplex Inc .

3 20 5
TSXV
S NAP Intera ctive, Inc.

5
TSE
O penwave S y s tems Inc .

8
5.5 5.0 4.9 3.4

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

KOSE G igaMedia Ltd.
DXN Holdings B hd

3
XTRA
DADA S pA

0.0 0.0 0.1 0.1 0.1 0.2 0.3 0.4 0.4 0.4 0.5 0.5 0.5 0.5 0.50.6 0.70.8
SWX
Ac toz S oft C o. , Ltd.
NasdaqGS C DC C orp.
IAC /InterAc tiveC orp.

1 14 2
AMEX
United O nline Inc .

1
OSE

3.4 3.3 2.6 2.6 2.1

B ey ond C ommerc e, Inc.

1
OM H anbitS oft, Inc .

Average TEV/LTM Revenue - By Exchange

Y nk K orea Inc .

1
CM
InternetArray , Inc .

1
KLSE

2.0 0.8 0.7

S pa rk N etwork s , Inc .

1
BSE C ornerWorld C orporation
V alueC lic k Inc .

4
NasdaqGM

0.5 0.2
S hutterfly , Inc .

1
RTS

0.0
0.8 0.8 0.8 0.9 1.0 1.0 1.1 1.1 1.2 1.3 1.3 1.6 1.6
G a mania Digital E ntertainment C o., Ltd.
NetDra gon WebS oft, Inc .
Y D O nline C orp.
V elti P lc
Modern T imes G roup Mtg AB
(x)
G ungHo O nline E ntertainment, Inc.
P N I Digital Media Inc.

0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
T E V/L T M R evenue (x)

# Companies
1.8 1.8 1.8 2.0 2.1 2.12.2

Webz en Inc .
NeuLion Inc orporated

1
Finland
S K C ommunica tions C o., Ltd.

14.8
O pen T ex t C orp.

2
Australia
multiples greater than 50x. Twenty-four companies have multiples under 1.5x.

11.1
XIN G AG
China N E O WIZ G ames C orporation

10
7.7
My riad G roup AG
2.5 2.9 2.9 3.0 3.3 3.3

1
Hong Kong S ohu.com Inc .
Wiz z ard S oftware C orporation
3.4 3.9

United

34
6.2 5.9
States UO MO Media, Inc
S ocial Media V entures Inc .

3
5.5
Taiwan
4.5 4.6 4.8

DigitalP os t Intera ctive, Inc.

6
Japan is eemedia Inc .
Acceleriz e New Media , Inc .
5.5 5.7

9
Canada C hangy ou.com L imited

4.3 3.8
South K ings oft C o. Ltd.

9
3.4
Mix i, Inc .
6.2 6.4 7.1

Korea
F rogs ter Intera ctiv e P ictures AG
7.1

3
Germany
Lingo Media C orporation
G ree, Inc .
11.9 12.2

1
Switzerland

3.4 3.3
E olith C o. Ltd.

1
Sweden C hines e G amer Interna tional

2.0
G eoS entric O y j
14.414.514.8

Average TEV/LTM Revenue - By Country

1
Italy F luid Mus ic C a nada , Inc.

0.8
17.5

MO K O .mobi L imited

1
Malaysia B right T hings plc
21.822.2

T encent Holdings Ltd.

27.9

1
India

0.7 0.5
As s ociated Media Holdings Inc .
36.0

B igs tring C orp.

1
39.9

Russia

0.0
Page 10

TEV/Revenue (LTM) by country/exchange: W e have also calculated multiples based on where the companies are listed
or domiciled. Figure 10 shows the average TEV/Revenue multiples by stock exchange. The OTCBB has the largest

companies (34), trading at an average of 5.9x revenue (Figure 11). Nine of the companies are Canadian (average 3.4x
(OTCPK:ASMH) at 36.0x, and Tencent Holdings Ltd. (SEHK:700) at 27.9x. The median is 1.8x. Note that we exclude

number of companies (20), trading at an average multiple of 5.5x. On a geographic basis, the United States has the most
Three companies trade above 25x revenue – Bigstring Corp. (OTCBB:BSGC) at 39.9x, Associated Media Holdings Inc.
TEV/Revenue (LTM) averages 5.2x: The overall average TEV/Revenue (LTM) multiple for our group is 5.2x (Figure 9).
 Page 11

TEV/EBITDA (LTM) averages 11.8x: The average multiple for the 39 companies with positive EBITDA (and multiples
under 100x) is 11.8x LTM EBITDA, led by Uniserve Communications Corp. (TSXV:USS) at 44.7x (Figure 12). Fourteen
companies have EBITDA multiples under 7x. The median multiple is 9.5x.

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

50. 0
44.1 44. 7
45. 0

40. 0

35. 0
30. 3
30. 0
24. 9
25. 0 21. 5
20. 2 21.0
20. 0
16. 0 16. 4
14. 0 14. 1 14. 1
15. 0 11. 9 12. 3 12. 8
10. 4 11. 2 11. 2
9. 3 9. 5 10. 1
10. 0 7. 6 7. 9 8. 3 8.7
5. 7 5. 8 5.9
4. 5 4.5 5. 5
5. 0 3. 2 3. 3 3. 7 4. 1
0. 3 0. 3 0. 9 0. 9
0. 0

NE O WIZ G ames C orporation

J umbuc k E ntertainment L imited

G ungH o O nline E ntertainment, Inc .

G amania Digital E ntertainment C o. , Ltd.

P NI Digital Media Inc .

C hines e G amer International

U nis erve C ommunic ations C orp.

O AO R B C Information S y s tems

C hangy ou. c om L imited

G ameO n C o L td.

T ree. C om, Inc .

C DC C orp.

S K C ommunic ations C o. , L td.

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

T heS treet. c om, Inc.

U nited O nline Inc.

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

AQ Interac tive, Inc.

V alueC lic k Inc.

S park Network s , Inc.

NetDragon WebS oft, Inc.

S ohu. com Inc.

Y D O nline C orp.

IAC /InterAc tiveC orp.

G ree, Inc.

Mix i, Inc.

E olith C o. L td.
XING AG
P erfec t World C o. , L td.

Y nk K orea Inc.

O penwave S y s tems Inc.

Webz en Inc.
V elti P lc

S hutterfly , Inc.

K ings oft C o. L td.

DADA S pA
Ac toz S oft C o. , L td.

Figure 12. TEV/EBITDA Ranking

Source. Capital IQ

TEV/EBITDA (LTM) by country/exchange: Figure 13 shows the average TEV/EBITDA multiples by stock exchange. The
OTCBB has the largest number of companies (20), trading at an average multiple of 8.0x. On a geographic basis, the
United States has the most companies (34), trading at an average of 8.4x EBITDA (Figure 14). Nine of the companies are
Canadian (average 18.1x EBITDA).

Average TEV/LTM EBITDA - By Country

Average TEV/LTM EBITDA - By Exchange
20.0
30.0 28.3 18.5
18.0
25.0 16.0 18.1
20.0 14.0 17.2
18.5 12.0 14.1
17.2
(x)

15.0 16.0 11.3 11.2

(x)

14.1 10.0 10.1

11.9 11.2 10.9 8.4
10.0 9.3 8.4 8.0 8.1
8.0
5.9 5.7 5.5 4.5 6.0 5.9
5.0
0.9 0.3 4.0
0.0 0.9
2.0
OTCPK

OTCBB
GTSM

NasdaqGM
KOSE

TSE

SEHK

OSE

NasdaqGS

RTS
OM

CM
XTRA

AMEX

TSX
TSXV

ASX

0.0 0.3
Germany
Canada

Japan

Hong

United

China

Russia
Italy
South
Korea

Kong

States
Taiwan

Australia
Sweden

# Companies 5 8 2 5 1 5 3 3 1 14 20 1 2 4 3 2 1
# Companies 9 9 3 1 6 3 1 34 10 1 2 1

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

Source. Capital IQ
 Page 12

P/E (LTM) averages 22.9x: The average multiple for the 33 companies with positive earnings (and multiples under 100x)
is 22.9x LTM EPS, led by Tencent Holdings Ltd. (SEHK:700) with a 69.5x multiple (Figure 15). Eleven companies have
P/E multiples under 10x. The median is 17.5x.

P /E L T M (x)

80.0
69.5 69.5
70.0
60.3
60.0 56.3
54.4
49.9
50.0 45.2

40.0 36.2
32.3 32.8
30.0 27.4

20.2 21.1
20.0 17.5 18.0 18.4 19.2
13.8 15.1
11.9 12.9
10.2
10.0 5.7 6.6 7.0 8.2
1.8 2.3 2.6 2.7 2.7 3.7
0.0
0.0

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

G amania Digital E ntertainment C o., Ltd.

G ungH o O nline E ntertainment, Inc.

C hines e G amer International
DXN H oldings B hd

C hangy ou.com Limited

G iant Interactive G roup, Inc.

G ameO n C o Ltd.

Modern T imes G roup Mtg AB

G ravity C o., Ltd

T he9 Limited

S handa Interactive E ntertainment Ltd.

Neteas e.com Inc.

S NAP Interactive, Inc.

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

G igaMedia Ltd.

Y D O nline C orp.

IAC /InterActiveC orp.

S ohu.com Inc.

NetDragon W ebS oft, Inc.

S park Network s , Inc.

G ree, Inc.

Mix i, Inc.

T encent H oldings Ltd.

XING AG
P erfect World C o., Ltd.

W ebz en Inc.

H anbitS oft, Inc.

V elti P lc

K ings oft C o. Ltd.

Actoz S oft C o., Ltd.

Figure 15. P/E Ranking

Source. Capital IQ

P/E (LTM) by country/exchange: Figure 16 shows the average P/E multiples by stock exchange. The OTCBB has the
largest number of companies (20), trading at an average multiple of 8.8x. On a geographic basis, the United States has
the most companies (34), trading at an average of 13.7x earnings (Figure 17). Nine of the companies are Canadian
(average 32.6x EPS).

Average P/E - By Exchange Average P/E - By Country

45.0
60.0 41.0
54.4 40.0
50.0 35.0
40.0 39.1 36.6 30.0 32.6 32.3
35.2 28.3
32.3 25.0
(x)

30.0 30.1
(x)

22.4
21.1 20.0 18.4
20.0 20.2 18.4
11.1 8.8 15.0 14.5 13.7
6.6 5.7 12.9
10.0 10.0
3.7 5.7
0.0 1.8 0.0 5.0 3.7
OTCPK

OTCBB
GTSM

NasdaqGM
OSE

KOSE

TSE

SEHK

NasdaqGS
OM
XTRA

AMEX

TSX

KLSE

NYSE
ASX

0.0 2.6
Germany

Israel
Japan

Canada

China

United

Hong

Malaysia
South
Korea

Kong
States
Taiwan

Australia
Sweden

# Companies 1 8 5 3 3 2 5 2 1 14 20 3 1 2 1 4
# Companies 6 9 3 9 3 1 10 34 1 1 2 1

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

Source. Capital IQ
 Page 13

UPCOMING EVENTS

E arnings C alendar
C ompany Date Time Quarter C onf C all Details
Open Text Corp. (NasdaqGS:OTEX) 3-Feb-10 5:00 p.m. EDT Q2/10 800-814-4859
Tree.Com, Inc. (NasdaqGM:TREE) 5-Feb-10 11:00 a.m. EDT Q4/09 800-967-7184

Figure 18. Earnings Calendar

Source. Capital IQ
 Page 14

C omparable C ompany Analys is > Web 2.0

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

A ccelerize New Media, Inc. US D AC L Z OT C B B 18.7 0.65 0. 0% -11.0% 0.0% 62.5% 85.7% -18.8%
A ctoz S oft C o. , L td. KR W A052790 K OS E 141.1 18, 250 4. 3% -16.3% 15.5% -33.3% 78.0% -49.3%
A Q Interactive, Inc. JPY 3838 TS E 38.8 65,400.00 -4.2% 59.5% 31.1% 11.8% 127. 1% -21.2%
A s knet AG E UR XT R A :A5A XT R A 23.8 3.28 2. 5% -6.8% 7.5% 4. 1% -14. 8% -20.4%
A s s ociated Media H oldings Inc. US D AS MH OT C P K 2.1 0.05 -2.0% 433.3% 242.9% 140.0% 860. 0% -93.7%
B eta wave C orpora tion US D B W AV OT C B B 5.6 0.19 35.7% 201.6% 171.4% 65.2% -13. 6% -17.4%
B eyond C ommerce, Inc. US D B Y OC OT C B B 1.5 0.03 -23.3% -25.7% -78.5% -92.7% -97. 4% -98.6%
B igs tring C orp. US D BSGC OT C B B 1.5 0.02 0. 0% -6.0% -44.0% -41.3% 38.2% -58.8%
B right T hings plc GB P AIM:B G T A IM 5.4 0.01 6. 4% 25.0% -9.1% -16.7% -16. 1% -49.4%
B roadW ebA s ia Inc. US D BWBA OT C P K 5.1 0.06 50.0% 20.0% 100.0% -73.9% -94. 1% -96.0%
C DC C orp. US D C H IN.A Nas da qG S 312.7 2.95 26.6% 25.0% 19.4% 96.7% 192. 1% -24.7%
C ha ngyou.com Limited US D C Y OU Nas da qG S 1, 904.7 34.63 -1.9% 12.6% 12.0% -18.8% NM -28.4%
C hines e G a mer International TWD G T S M:3083 GTS M 1, 088.5 412.00 -3.4% -5.3% -6.4% -12.9% 350. 3% -20.6%
C ornerW orld C orpora tion US D CW R L OT C B B 2.9 0.03 0. 0% 0.0% -50.0% -50.0% -88. 0% -92.7%
C yberplex Inc. C AD T S X: C X TS X 76.4 1.15 0. 9% -3.4% -8.7% -25.8% 228. 6% -42.2%
DADA S pA E UR C M:DA CM 135.9 5.83 0. 0% -4.0% -26.1% -2.6% -15. 0% -28.9%
DigitalP os t Intera ctive, Inc. US D DG LP OT C B B 3.5 0.04 -18.4% -24.5% -27.3% 14.3% 81.8% -59.6%
DigitalT own, Inc. US D DG T W OT C B B 34.2 1.25 4. 2% -10.7% -50.0% -37.5% -58. 3% -64.3%
Dolphin Digital Media, Inc. US D DP DM OT C B B 17.1 0.30 50.0% 3.4% -21.1% -33.3% -60. 0% -62.5%
DXN Holdings B hd MY R DXN K LS E 40.2 0.60 9. 1% 5.3% -6.3% 50.0% 62.2% -13.0%
E n2G o International, Inc. US D E TGI OT C B B 21.4 0.90 76.5% 38.5% 50.0% -40.0% -47. 1% -82.0%
E olith C o. L td. KR W A041060 K OS E 87.1 650.00 11.1% 16.1% -5.8% -17.7% 20.4% -44.0%
F luid Mus ic C anada, Inc. C AD T S X: F MN TS X 105.8 1.74 -0.6% -3.3% 28.9% 128.9% 346. 2% -19.1%
F rogs ter Intera ctive P ictures AG E UR FR G XT R A 69.0 18.70 1. 4% 2.7% 3.4% 64.5% 259. 6% -13.0%
G amania Digita l E ntertainment C o., L td. TWD 6180 GTS M 264.6 55 -3.5% 12.6% 13.0% -5.7% 149. 5% -20.2%
G ameO n C o L td. JPY 3812 TS E 79.6 75400.00 2. 6% 6.2% -14.8% -31.8% -38. 6% -43.3%
G eoS entric Oyj E UR G E O1V H LS E 64.6 0.05 0. 0% 0.0% 0.0% 66.7% 25.0% -16.7%
G ia nt Interactive G roup, Inc. US D GA NY S E 1, 644.1 7.26 1. 0% -2.6% 6.9% -2.2% 29.4% -24.1%
G igaMedia L td. US D G IG M Nas da qG S 176.6 3.24 -0.3% -8.2% -33.3% -40.3% -52. 5% -58.1%
G ra vity C o., Ltd US D GR VY Nas da qG M 51.7 2 12.7% 37.8% -8.8% 24.0% 220. 7% -29.3%
G ree, Inc. JPY T S E :3632 TS E 2, 611.6 5, 340 -6.6% 18.1% 9.0% 54.8% 115. 3% -11.3%
G ungH o Online E ntertainment, Inc. JPY 3765 OS E 282.8 226, 000 -10.3% 42.4% -1.6% 4. 4% 119. 6% -19.3%
H anbitS oft, Inc. KR W A047080 K OS E 73.2 3800.00 -1.6% -2.8% -7.3% -16.0% 20.3% -42.8%
IAC /InterA ctiveC orp. US D IA C I Nas da qG S 2, 796.4 21.19 3. 3% 11.6% 10.7% 26.8% 40.0% -0.4%
InternetArray, Inc. US D INAR OT C P K 0.0 0.00 25.0% -16.7% -81.5% -58.3% -99. 8% -100.0%
is eemedia Inc. C AD IE E T S XV 10.2 0.20 -4.8% 21.2% 66.7% 100.0% 122. 2% -25.9%
J umbuck E ntertainment Limited AU D AS X: J MB AS X 13.6 0.31 -1.6% -4.7% -20.8% -19.7% -36. 5% -39.0%
K ings oft C o. L td. HK D 3888 S E HK 959.4 6.80 -0.4% 23.6% -9.2% 15.3% 151. 9% -28.2%
L ingo Media C orpora tion C AD T S XV :LM T S XV 16.7 1.39 47.9% 54.4% 43.3% 37.6% 40.4% -3.5%
L ookS mart, L td. US D LO OK Nas da qG M 19.2 1.12 0. 9% 7.7% -1.8% 3. 7% -13. 2% -34.1%
Ma gnitude Information S ys tems Inc. US D MAG Y OT C B B 8.9 0.02 -4.8% -4.8% 110.5% 122.2% -33. 3% -48.7%
Mixi, Inc. JPY 2121 TS E 1, 099.2 653, 000 -10.8% -23.5% 0.3% 5. 0% 17.9% -24.5%
Modern T imes G roup Mtg AB SEK MT G B OM 3, 396.3 366 2. 7% 11.5% 15.1% 58.4% 160. 0% -1.0%
MO K O .mobi L imited AU D MK B AS X 16.8 0.16 3. 3% 6.9% 103.9% 121.4% 210. 0% -22.5%
Multiplied Media C orpora tion C AD T S XV :MMC T S XV 30.3 0.24 41.2% 45.5% 29.7% 300.0% 433. 3% 0.0%
Myriad G roup AG C HF MY R N S WX 214.1 5.00 2. 0% 4.4% 14.9% 4. 2% -16. 7% -19.4%
NE O W IZ G ames C orporation KR W A095660 K OS E 731.8 39, 450 -4.9% -11.9% 3.5% 27.9% 313. 1% -12.1%
NetDra gon W ebS oft, Inc. HK D 777 S E HK 310.0 4.55 8. 9% 12.3% -7.0% -17.6% 60.8% -36.4%
Netea s e. com Inc. US D NT E S Nas da qG S 5, 048.9 39.01 -6.4% 6.5% -3.9% 7. 9% 122. 4% -19.6%
NeuLion Incorpora ted C AD T S X: NL N TS X 78.6 0.70 2. 9% 0.0% -27.1% -12.5% 150. 0% -46.2%
NeXplore C orpora tion US D NXP C OT C P K 34.0 0.61 -3.2% -6.2% 1.7% 22.0% -39. 0% -39.0%
Ngi G roup Inc. JPY 2497 TS E 31.4 23, 230 -4.8% -1.6% -15.4% -29.6% -54. 2% -59.6%
Northgate T echnologies Limited INR 590057 BSE 23.2 30.65 14.2% 3.9% -17.8% -1.6% -32. 4% -48.8%
O AO R B C Information S ys tems US D R BCI R TS 193.9 1.40 -12.7% -12.7% 20.5% 55.3% 179. 5% -17.8%
O pen T ext C orp. US D OT E X Nas da qG S 2, 289.1 40.60 0. 0% 5.3% 2.8% 10.8% 29.8% -2.0%
O penwa ve S ys tems Inc. US D OP W V Nas da qG S 207.1 2.48 3. 8% 10.2% -3.5% -4.6% 281. 5% -20.8%
P erfect W orld C o., Ltd. US D PWRD Nas da qG S 2, 176.9 43.75 3. 6% 1.5% 6.1% 41.6% 179. 2% -13.3%
P NI Digital Media Inc. C AD T S XV :P N T S XV 52.6 1.62 -0.6% -15.6% -11.0% 11.7% 1.3% -23.9%
Q uepa s a C orp. US D QP S A OT C B B 32.5 2.55 13.3% 6.7% 82.1% 157.6% 32.1% -3.8%
R ea l V alue E s tates , Inc. US D R V LU OT C B B 8.0 1.25 13.6% 13.6% NM NM NM 0.0%
S ahara Media H oldings , Inc. US D S HH D OT C B B 15.5 0.50 42.9% -10.7% -52.4% -83.3% -83. 3% -84.6%
S ha nda Interactive E nterta inment L td. US D S NDA Nas da qG S 3, 968.1 59.00 3. 5% 11.4% 23.9% 9. 6% 106. 6% -9.2%
S hutterfly, Inc. US D S F LY Nas da qG S 457.5 17.82 -1.2% 3.8% 8.2% 36.3% 151. 0% -5.3%
S K C ommunications C o. , L td. KR W A066270 K OS E 580.4 15, 750 -6.8% 49.3% 87.1% 67.9% 171. 6% -11.0%
S NA P Intera ctive, Inc. US D S TVI OT C B B 3.3 0.30 -33.3% 42.9% -14.3% -33.3% -71. 4% -72.2%
S ocial Media V entures Inc. US D S MV I OT C P K 0.0 0.00 -2.5% -29.1% -93.5% -98.8% -99. 6% -99.7%
S ocialwis e, Inc. US D S CLW OT C B B 23.8 0.50 8. 7% -2.0% -10.7% -37.5% -39. 8% -51.0%
S ohu.com Inc. US D S O HU Nas da qG S 2, 267.0 58.95 -0.5% 10.4% -7.0% -5.3% 44.4% -18.5%
S pa rk Networks , Inc. US D LO V A ME X 60.9 2.96 0. 0% 21.3% 24.4% 20.8% 18.4% -12.1%
S pectrumDNA, Inc. US D S P XA OT C B B 9.0 0.19 8. 8% 32.1% 15.6% 23.3% -2.6% -58.9%
T encent H oldings Ltd. HK D 700 S E HK 40,142. 3 171 1. 7% 8.6% 31.6% 85.7% 298. 6% -2.4%
T he9 L imited US D NC T Y Nas da qG S 205.2 8.17 8. 2% 13.8% 9.8% -7.7% -45. 4% -50.9%
T heS treet.com, Inc. US D TS CM Nas da qG M 71.0 2.32 -3.7% 2.2% -23.2% 13.7% -23. 2% -31.8%
T ree.C om, Inc. US D TR E E Nas da qG M 99.8 9.15 0. 0% 9.7% 14.4% -5.8% 98.9% -30.0%
U nilava C orporation US D UNLA OT C B B 0.0 0.32 33.3% -3.0% NM NM NM -41.8%
U nis erve C ommunica tions C orp. C AD T S XV :US S T S XV 2.1 0.09 50.0% 157.1% 125.0% 28.6% 80.0% -10.0%
U nited O nline Inc. US D UNT D Nas da qG S 616.7 7.29 -2.7% 4.6% -14.1% -10.9% 17.8% -22.9%
U OMO Media, Inc US D UO MO OT C B B 3.9 0.05 0. 0% -4.3% -60.9% -60.9% -62. 5% -95.8%
V alueC lick Inc. US D V CLK Nas da qG S 882.4 10.30 -2.4% 6.4% -22.7% -5.2% 78.2% -26.1%
V elti P lc GB P VEL A IM 156.9 2.61 30.5% 34.5% 61.0% 51.0% 101. 5% -1.5%
V OIS , Inc. US D V O IS OT C B B 8.2 0.01 -30.8% -30.8% 84.4% 33.9% 107. 5% -63.9%
W ebzen Inc. KR W K O S E : A069080 K OS E 114.7 11, 000 -4.8% -8.3% 7.8% -24.1% 111. 1% -46.9%
W izzard S oftwa re C orporation US D W ZE A ME X 19.0 0.36 -11.3% -9.0% -21.1% -29.0% -52. 7% -57.3%
W orlds .com Inc. US D W DDD OT C B B 4.8 0.09 0. 0% -5.3% -10.0% -40.0% -40. 0% -59.1%
XING A G E UR O1B C XT R A 240.7 31.72 4. 0% -2.4% -12.6% 10.9% 3.7% -16.5%
Y D Online C orp. KR W A052770 K OS E 100.7 7, 630 0. 5% 11.1% -7.4% -5.0% 17.4% -38.5%
Y nk K orea Inc. KR W A023770 K OS E 14.7 3, 125 -3.3% -13.7% -17.8% -47.5% -27. 3% -64.1%
H igh 76.5% 433.3% 242.9% 300.0% 860. 0% 0.0%
L ow -33.3% -30.8% -93.5% -98.8% -99. 8% -100.0%
Average 911.0 5.1% 14.7% 8.8% 12.6% 69.9% -36.3%
Media n 0. 0% 4.4% 0.0% 4. 1% 31.0% -28.4%

Figure 19. Price Performance

Source. Capital IQ
 Page 15

C omparable C ompany Analys is > Web 2.0

Valuation Multiples
P rimary US D Market TE V/L TM TE V/ NTM TE V/L TM TE V/NTM
C ompany Name S ec tor C ountry E xc hange Ticker C ap ($m) R evenue R evenue E B ITDA E B ITDA P /L TM E P S P /NTM E P S P /TangB V
Accelerize New Media, Inc. Direct Marketing U nited S ta tes OTCB B AC LZ 18.7 5.7x - - - - - -
Actoz S oft C o., Ltd. G aming S outh K orea K OS E A052790 141.1 0.8x - 3. 7x - 19.2x - 2.0x
AQ Intera ctive, Inc. G aming J apan TS E 3838 38.8 0.2x - 4. 5x - - - 0.6x
As knet A G G aming G erma ny XT R A XT R A :A5A 23.8 0.1x - - - - - -
As s ocia ted Media Holdings Inc. G aming U nited S ta tes OTCP K AS MH 2.1 36.0x - - - - - -
B etawave C orpora tion Media U nited S ta tes OTCB B B W AV 5.6 0.4x - - - - - 3.9x
B eyond C ommerce, Inc. S ocial Networking U nited S ta tes OTCB B B YOC 1.5 1.0x - - - - - -
B igs tring C orp. Ins ta nt Mes s aging U nited S ta tes OTCB B BSGC 1.5 39.9x - - - - - -
B right T hings plc S ocial Networking U nited K ingdom AIM AIM:B G T 5.4 22.2x - - - - - 7.6x
B roadW ebAs ia Inc. S ocial Networking U nited S ta tes OTCP K BWBA 5.1 - - - - - - -
C DC C orp. G aming H ong K ong N as da qG S C HIN.A 312.7 0.8x 0.8x 14.1x 6.8x - 51.8x 13.3x
C hangyou.com Limited G aming C hina N as da qG S C Y OU 1,904.7 6.2x 5.2x 10.1x 8.0x 12.9x 11.3x 9.9x
C hines e G amer Interna tional G aming T a iwa n GTS M G T S M:3083 1,088.5 14.5x - 24.9x - 32.8x - 15.7x
C ornerW orld C orporation C ontent U nited S ta tes OTCB B CW R L 2.9 1.3x - - - - - -
C yberplex Inc. A dvertis ing C ana da TS X T S X: C X 76.4 0.5x 0.4x 4. 5x 3.6x 6.6x 6.9x 2.6x
DA DA S pA S ocial Networking Italy CM C M:DA 135.9 0.8x - 5. 9x - - - -
DigitalP os t Interactive, Inc. C ontent U nited S ta tes OTCB B DG L P 3.5 4.8x - - - - - -
DigitalT own, Inc. S ocial Networking U nited S ta tes OTCB B DG T W 34.2 - - - - - - -
Dolphin Digital Media, Inc. S ocial Networking U nited S ta tes OTCB B DP DM 17.1 - 1.2x - - - 1.2x -
DXN Holdings B hd S ocial Networking Mala ys ia K LS E DXN 40.2 0.7x - - - 5.7x - 0.8x
E n2G o International, Inc. S ocial Networking U nited S ta tes OTCB B E TGI 21.4 - - - - - - -
E olith C o. L td. G aming S outh K orea K OS E A041060 87.1 14.4x - 30.3x - - - 1.0x
F luid Mus ic C a nada, Inc. Media U nited S ta tes TS X T S X:F MN 105.8 17.5x 17.5x - - - - 7.5x
F rogs ter Interactive P ictures A G G aming G erma ny XT R A FR G 69.0 7.1x - - - - - 8.6x
G amania Digital E ntertainment C o., Ltd. G aming T a iwa n GTS M 6180 264.6 1.6x - 9. 5x - 27.4x - 3.3x
G ameO n C o Ltd. G aming J apan TS E 3812 79.6 0.1x - 0. 3x - 8.2x - 1.0x
G eoS entric Oyj Mobile F inland H LS E G E O1V 64.6 14.8x - - - - - -
G iant Interactive G roup, Inc. G aming C hina NY S E GA 1,644.1 - - - - 1.8x 15.3x 0.3x
G igaMedia Ltd. G aming T a iwa n N as da qG S G IG M 176.6 0.6x 1.1x - 23.8x 7.0x - 1.6x
G ravity C o., Ltd G aming S outh K orea N as da qG M GR VY 51.7 - - - - 0.0x - 0.0x
G ree, Inc. S ocial Networking J apan TS E T S E : 3632 2,611.6 12.2x - 21.0x - 45.2x - 21.5x
G ungH o O nline E nterta inment, Inc. Media J apan OS E 3765 282.8 2.1x - 9. 3x - 54.4x - 8.9x
Ha nbitS oft, Inc. G aming S outh K orea K OS E A047080 73.2 1.0x - - - 69.5x - 2.0x
IAC /InterActiveC orp. Media U nited S ta tes N as da qG S IAC I 2,796.4 0.8x 0.8x 14.0x 5.9x 11.9x 31.1x 1.4x
InternetA rray, Inc. Media U nited S ta tes OTCP K INA R 0.0 1.1x - - - - - -
is eemedia Inc. C ontent C ana da T S XV IE E 10.2 5.5x - - - - - -
J umbuck E ntertainment Limited S ocial Networking Aus tra lia AS X AS X:J MB 13.6 0.4x - 0. 9x - 3.7x - 1.2x
K ings oft C o. Ltd. G aming C hina S E HK 3888 959.4 6.4x - 16.0x - 21.1x - 5.1x
Lingo Media C orpora tion L earning C ana da T S XV T S XV : LM 16.7 11.9x - - - - - -
LookS ma rt, L td. Direct Marketing U nited S ta tes N as da qG M L OOK 19.2 - - - - - - 0.8x
Magnitude Information S ys tems Inc. S ocial Networking U nited S ta tes OTCB B MA G Y 8.9 - - - - - - -
Mixi, Inc. S ocial Networking J apan TS E 2121 1,099.2 7.1x - 21.5x - 56.3x - 7.2x
Modern T imes G roup Mtg AB Media S weden OM MT G B 3,396.3 2.0x - 14.1x - 18.4x - -
MOK O .mobi Limited S ocial Networking Aus tra lia AS X MK B 16.8 21.8x - - - - - 14.7x
Multiplied Media C orpora tion Mobile C ana da T S XV T S XV :MMC 30.3 - 7.4x - - - - 21.6x
Myriad G roup AG Mobile S witzerla nd SWX MY R N 214.1 3.3x - - - - - -
NE OW IZ G ames C orporation G aming S outh K orea K OS E A095660 731.8 3.3x - 12.3x - 36.2x - 18.3x
NetDra gon W ebS oft, Inc. G aming C hina S E HK 777 310.0 1.8x - 5. 8x - 15.1x - 1.7x
Netea s e.com Inc. G aming C hina N as da qG S NT E S 5,048.9 - - - - 2.7x 14.7x 0.8x
NeuLion Incorporated V ideo C ana da TS X T S X:NL N 78.6 2.5x - - - - - 10.4x
NeXplore C orporation C ontent U nited S ta tes OTCP K NXP C 34.0 - - - - - - -
Ngi G roup Inc. Media J apan TS E 2497 31.4 - - - - - - 0.6x
Northgate T echnologies Limited Direct Marketing India BS E 590057 23.2 0.5x - - - - - -
O AO R B C Information S ys tems Media R us s ia R TS R BCI 193.9 0.0x - 0. 3x - - - -
O pen T ext C orp. C ollabora tion C ana da N as da qG S OT E X 2,289.1 2.9x 2.5x 11.2x 9.3x 49.9x 13.6x -
O penwave S ys tems Inc. Mobile U nited S ta tes N as da qG S OP W V 207.1 0.5x 0.5x 16.4x 5.1x - 34.9x 2.9x
P erfect W orld C o., Ltd. G aming C hina N as da qG S PWRD 2,176.9 0.5x 2.5x 0. 9x 4.7x 2.7x 12.7x 1.2x
P N I Digital Media Inc. Digita l Ima ging C ana da T S XV T S XV :P N 52.6 2.1x 1.8x 11.9x 5.7x - 10.1x 11.8x
Q uepa s a C orp. S ocial Networking U nited S ta tes OTCB B QP S A 32.5 - - - - - - -
R eal V a lue E s ta tes , Inc. Media Is ra el OTCB B R V LU 8.0 - - - - - - -
S a hara Media Holdings , Inc. Media U nited S ta tes OTCB B S HH D 15.5 - - - - - - 19.0x
S handa Interactive E nterta inment Ltd. G aming C hina N as da qG S S NDA 3,968.1 - - - - 2.6x 16.4x 0.4x
S hutterfly, Inc. Digita l Ima ging U nited S ta tes N as da qG S S FLY 457.5 1.6x 1.4x 12.8x 8.0x - - 2.7x
S K C ommunications C o., Ltd. S earch S outh K orea K OS E A066270 580.4 2.9x - 44.1x - - - -
S N AP Interactive, Inc. Dating U nited S ta tes OTCB B S TVI 3.3 0.5x - 3. 2x - 18.0x - 1.7x
S ocial Media V entures Inc. Dating U nited S ta tes OTCP K S MV I 0.0 4.6x - - - - - -
S ocialwis e, Inc. S ocial Networking U nited S ta tes OTCB B S CLW 23.8 - - - - - - -
S ohu.com Inc. G aming C hina N as da qG S S O HU 2,267.0 3.4x 2.9x 7. 9x 6.8x 13.8x 15.9x 4.1x
S park N etworks , Inc. S ocial Networking U nited S ta tes AME X L OV 60.9 1.2x - 5. 7x - 20.2x - 27.5x
S pectrumDN A, Inc. Media U nited S ta tes OTCB B S P XA 9.0 - - - - - - -
T encent Holdings Ltd. P orta l C hina S E HK 700 40,142.3 27.9x - - - 69.5x - 30.9x
T he9 L imited G aming C hina N as da qG S NC T Y 205.2 - - - - 2.3x - 0.1x
T heS treet.com, Inc. Media U nited S ta tes N as da qG M TS CM 71.0 0.1x 0.1x 3. 3x - - - 0.9x
T ree.C om, Inc. P orta l U nited S ta tes N as da qG M TREE 99.8 0.3x 0.3x 7. 6x 8.9x - - 1.5x
Unilava C orporation Media U nited S ta tes OTCB B U NLA 0.0 0.0x - - - - - 1.4x
Unis erve C ommunications C orp. S ocial Networking C ana da T S XV T S XV :US S 2.1 0.4x - 44.7x - - - -
United Online Inc. Media U nited S ta tes N as da qG S U NT D 616.7 0.9x 0.9x 4. 1x 3.6x - 5.5x -
UO MO Media, Inc Media C ana da OTCB B UO MO 3.9 4.5x - - - - - -
V a lueC lick Inc. Media U nited S ta tes N as da qG S V CLK 882.4 1.3x 1.4x 5. 5x 5.4x - 16.6x 4.8x
V elti P lc Media U nited K ingdom AIM VEL 156.9 1.8x - 8. 7x - 17.5x - 5.0x
V O IS , Inc. S ocial Networking U nited S ta tes OTCB B V OIS 8.2 - - - - - - -
W ebzen Inc. G aming S outh K orea K OS E K OS E :A069080 114.7 2.2x - 20.2x - 60.3x - 1.1x
W izzard S oftware C orporation P odca s ting U nited S ta tes AME X W ZE 19.0 3.9x - - - - - -
W orlds .com Inc. C ontent U nited S ta tes OTCB B W DDD 4.8 - - - - - - -
XIN G AG S ocial Networking G erma ny XT R A O1B C 240.7 3.0x - 11.2x - 32.3x - 6.9x
Y D Online C orp. G aming S outh K orea K OS E A052770 100.7 1.8x - 8. 3x - 10.2x - 3.0x
Y nk K orea Inc. G aming S outh K orea K OS E A023770 14.7 1.1x - 10.4x - - - 0.7x
High 40,142.3 39.9x 17.5x 44.7x 23.8x 69.5x 51.8x 30.9x
Low 0.0 0.0x 0.1x 0. 3x 3.6x 0.0x 1.2x 0.0x
Average 911.0 5.2x 2.7x 11.8x 7.6x 22.9x 17.2x 6.2x
Median 64.6 1.8x 1.3x 9. 5x 6.3x 17.5x 14.7x 2.8x

Figure 20. Valuation Comparison

Source. Capital IQ
 Page 16

C omparable C ompany Analys is > Web 2.0

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

United S tates 29 C hina 56, 945. 8 C hina 5,694. 6 C hina 4,496. 8 C hina 2, 262. 8 C hina 49. 0%
C hina 10 U nited S ta tes 5, 465. 2 S weden 3,266. 2 United S tates 3,752. 1 United S tates 393. 7 A us tralia 42. 8%
C a na da 9 J a pan 4, 440. 9 J apan 740. 1 S weden 1,942. 0 S weden 274. 4 T aiwan 37. 3%
S outh K orea 9 S weden 3, 266. 2 T aiwan 515. 6 C a na da 992. 4 J a pa n 213. 0 J apan 24. 3%
J a pa n 6 C anada 2, 538. 6 C anada 282. 1 S outh K orea 740. 1 C a na da 199. 5 S outh K orea 20. 1%
T a iwa n 3 S outh K orea 1, 845. 8 Hong K ong 237. 5 J a pa n 680. 8 S outh K orea 133. 5 S weden 14. 1%
G erma ny 3 T a iwa n 1, 546. 9 S witzerla nd 205. 8 T a iwa n 404. 6 T a iwa n 65. 0 Italy 13. 1%
Aus tralia 2 G ermany 318. 0 S outh K orea 205. 1 Hong K ong 334. 2 Ita ly 31. 0 R us s ia 13. 1%
S witzerla nd 1 Hong K ong 237. 5 R us s ia 193. 9 Ita ly 236. 1 R us s ia 20. 4 Hong K ong 6. 0%
India 1 S witzerla nd 205. 8 U nited S ta tes 188. 5 G erma ny 171. 4 Hong K ong 20. 0 S witzerla nd 5. 4%
F inla nd 1 R us s ia 193. 9 Ita ly 136. 8 R us s ia 156. 3 G erma ny 9. 7 G ermany -7. 4%
United K ingdom 1 Ita ly 136. 8 G ermany 106. 0 Ma lays ia 78. 5 Aus tralia 4. 9 C anada -10. 6%
Ita ly 1 F inland 51. 3 F inland 51. 3 S witzerla nd 63. 0 S witzerla nd 3. 4 U nited S ta tes -15. 4%
Hong K ong 1 Malays ia 36. 4 Malays ia 36. 4 India 47. 7 United K ingdom -2. 7 F inland NA
S weden 1 Aus tralia 29. 4 India 20. 2 Aus tralia 17. 8 F inla nd -18. 5 India NA
R us s ia 1 India 20. 2 Aus tralia 14. 7 F inla nd 4. 5 India -51. 2 U nited K ingdom NA
Ma lays ia 1 U nited K ingdom 5. 6 U nited K ingdom 5. 6 United K ingdom 0. 0 Ma lays ia -85. 2 Mala ys ia NA

G rand Total 80 G rand Total 77,284.4 G rand Total 966.1 G rand Total 14,118.5 G rand Total 3,473.8 G rand Total 11.8%

Figure 21. Comparison by Country

Source. Capital IQ

C omparable C ompany Analys is > Web 2.0

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

OT C B B 16 S E HK 40, 705. 3 S E HK 13,568. 4 OM 1,942. 0 Na s daqG S 1, 918. 2 NY S E 68. 2%

Na s daqG S 14 Nas da qG S 22, 230. 0 OM 3,266. 2 S E HK 607. 9 S E HK 897. 1 AS X 42. 8%
K OS E 8 TS E 4, 129. 4 NY S E 1,594. 3 Na s daqG S 508. 5 OM 274. 4 S E HK 40. 6%
T S XV 5 OM 3, 266. 2 Nas da qG S 1,587. 9 CM 236. 1 TS E 187. 1 GTS M 37. 3%
TS E 5 K OS E 1, 799. 1 TSE 825. 9 NY S E 202. 3 NY S E 137. 9 Nas da qG S 30. 7%
Na s daqG M 4 NY S E 1, 594. 3 GTS M 684. 0 RTS 156. 3 K OS E 115. 4 TSE 24. 7%
TS X 3 GTS M 1, 368. 0 OS E 311. 5 OS E 116. 4 GTS M 65. 0 OS E 22. 3%
XT R A 3 XT R A 318. 0 K OS E 224. 9 TS E 112. 9 CM 31. 0 K OS E 18. 2%
OT C P K 3 OS E 311. 5 SWX 205. 8 GTS M 110. 5 OS E 25. 9 OM 14. 1%
S E HK 3 TS X 253. 3 R TS 193. 9 Na s daqG M 97. 3 Na s daqG M 25. 2 CM 13. 1%
AME X 2 Nas da qG M 237. 6 CM 136. 8 K OS E 86. 1 RTS 20. 4 R TS 13. 1%
AS X 2 SWX 205. 8 XT R A 106. 0 K LS E 78. 5 XT R A 9. 7 T S XV 9. 0%
GTS M 2 R TS 193. 9 TSX 84. 4 SWX 63. 0 AME X 6. 0 Nas da qG M 8. 6%
SWX 1 OT C B B 166. 1 Nas da qG M 59. 4 XT R A 57. 1 AS X 4. 9 S WX 5. 4%
HL S E 1 CM 136. 8 HLS E 51. 3 BSE 47. 7 SWX 3. 4 XT R A -7. 4%
CM 1 T S XV 97. 3 AME X 40. 0 TS X 46. 5 AIM -2. 7 A ME X -27. 7%
BS E 1 AME X 79. 9 K LS E 36. 4 AME X 26. 4 TS X -7. 0 TSX -35. 8%
OS E 1 HLS E 51. 3 BS E 20. 2 AS X 8. 9 T S XV -7. 2 OTCB B -48. 2%
NY S E 1 OT C P K 48. 8 T S XV 19. 5 T S XV 8. 6 OT C P K -17. 9 OTCP K NA
AIM 1 K LS E 36. 4 OT C P K 16. 3 HL S E 4. 5 HL S E -18. 5 A IM NA
OM 1 AS X 29. 4 AS X 14. 7 OT C B B 2. 4 BSE -51. 2 BSE NA
RTS 1 BS E 20. 2 OT C B B 10. 4 OT C P K 0. 6 OT C B B -58. 3 HLS E NA
K LS E 1 AIM 5. 6 AIM 5. 6 AIM 0. 0 K LS E -85. 2 K LS E NA

G rand Total 80 G rand Total 77,284.4 G rand Total 966.1 G rand Total 14,118.5 G rand Total 3,473.8 G rand Total 11.8%

Figure 22. Comparison by Exchange

Source. Capital IQ
 Page 17

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

Fin. Amount (Million) Type of financ ing
Month C ompany Name C ountry Angel/S eed Debt financ ing S eries A S eries B S eries C S eries D G rand Total
Nov-09 R ockYou US A 50. 0 50. 0
P laydom US A 43. 0 43. 0
S ezmi US A 25.0 25. 0
Millennial Media US A 16.0 16. 0
Zynga US A 15.0 15. 0
E vernote US A 10.0 10. 0
C ubeTree US A 8.0 8.0
Alic e.c om US A 6.0 6.0
E ventbrite US A 6.0 6.0
P lac ec as t US A 5.0 5.0
AppNexus US A 5.0 5.0
Altruik US A 4. 7 4.7
C redit K arma US A 2. 5 2.5
B lekko US A 2. 5 2.5
P layfire UK 2. 1 2.1
S impleG eo US A 1. 5 1.5
P ros per.c om US A 1. 0 1.0
Adfonic UK 0. 6 0.6
S coopler US A 0. 5 0.5
Nov-09 Total 2.6 1.0 52.3 44.0 52.0 52.5 204.4

Dec -09 Zynga US A 180. 0 180. 0

Youku C hina 40. 0 40. 0
Zoos k US A 30. 0 30. 0
G roupon US A 30.0 30. 0
L ithium US A 18.0 18. 0
gW allet US A 12. 5 12. 5
MobG old C hina 12.0 12. 0
Movik Networks US A 8.5 8.5
G owalla US A 8.4 8.4
G ogii US A 8.2 8.2
L iveMoc ha US A 8.0 8.0
S onicMule US A 8.0 8.0
kaC hing US A 7. 5 7.5
S eekingAlpha Is rael 7.0 7.0
P ageonce US A 6. 5 6.5
G enius .c om US A 6. 5 6.5
C urs e US A 6.0 6.0
AlikeL is t US A 5. 0 5.0
P owerR eviews US A 4.9 4.9
S maato US A 4.5 4.5
S C VNG R US A 4.0 4.0
Tonc hidot J a pan 4. 0 4.0
Twilio US A 3. 7 3.7
5 Minutes C hina 3. 5 3.5
J anR ain US A 3. 3 3.3
S toc kTwits US A 3.0 3.0
Article One P artners US A 3. 0 3.0
W his key Media US A 2. 5 2.5
Appolic ious US A 2. 4 2.4
G rapes hot UK 2. 4 2.4
C enter'd US A 1.9 1.9
W ePay US A 1. 7 1.7
J inni Is rael 1. 6 1.6
G lobalMotion Media US A 1. 0 1.0
Dec -09 Total 2.5 58.0 101.5 210.9 76.5 449.4

J an-10 Quantc as t US A 27.5 27. 5

S pic eworks US A 16.0 16. 0
Aggregate K nowledge US A 9.0 9.0
G aikai Netherla nds 5. 0 5.0
J elli US A 2. 0 2.0
G raphic.ly US A 1. 2 1.2
J an-10 Total 2.0 6.2 52.5 60.7

G rand Total 7.1 1.0 116.5 145.5 315.4 129.0 714.6

Figure 23. Financing, Last Three Months

Source. Company reports
 Page 18

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

C ompany HQ Webs ite Des cription
Aggregate K nowledge US A www. aggrega teknowledge. com Aggregate K nowledge, Inc. provides s olutions that ena ble cus tomers to levera ge real-time cons umer interes t into their advertis ing and
marketing campaigns . It offers P ique Dis covery Network that connects cons umers to the products , content, and items from various reta ilers
a nd media compa nies . Aggregate K nowledge s erves retailers and media companies . T he company was founded in 2005 a nd is bas ed in
S an Mateo, C alifornia.
E cho Nes t US A www. the. echones t. com T he E cho Nes t C orpora tion is a mus ic intelligence company. T he company develops mus ic s earch, and pers onaliz ation and interactive
a pplica tions on a platform that reads about and lis tens to online mus ic. It offers mus ic information s ervices to developers and partners
through its da ta mining and machine lis tening platform. T he E cho Nes t C orporation was incorporated in 2005 a nd is bas ed in S omerville,
G aikai Netherlands www. gaikai. com Mas
G s achus
aikai B . V . etts . online games . T he company was founded in 2008 and is headquartered in Alis o V iejo, C alifornia.
offers
G raphic.ly US A www. graphic.ly G raphicly is a digital content delivery s ys tem and community platform for the publis hing world. G raphic.ly’s firs t product focus es on comic
publis hers , creators and enthus ias ts , and provides a n immers ive s ocial experience and ma rketplace around digital comics and as s ociated
merchandis e. T he company is looking to expand its community and content pla tform and become the de facto s olution for print media .
J elli US A www. jelli.net J elli, Inc. operates online radio s tation. T he compa ny was incorporated in 2007 a nd is bas ed in S an Mateo, C alifornia.
L iving S oc ial US A www. livings ocial. com L ivingS ocial offers a collection of us er-review apps acros s the mos t popular s ocial networks (F a cebook, MyS pace, Hi5, B ebo, and O rkut).
T he apps are des igned to let people organize and dis cover their favorite book s , movies , mus ic, res taurants , games , a nd beer.
Quantcas t US A www. quantcas t.com Q uantcas t is a media meas urement, web analytics s ervice tha t a llows us ers to view audience tra ffic for millions of s ites . P articipa nts in
Q uantcas t’s direct meas urement program include F ox, C B S , B elo C orporation, AccuW eather, S lide, a nd IDG .
R eframe It US A www. reframeit. com R eframe It allows web us ers to comment on the text of a ny web page without the permis s ion of the s ite. R eframe It’s mis s ion is to offer the
public a s pace right next to the web where news papers , bloggers , companies , governments , non-profits and individuals a re able to hold one
a nother accountable for the information they convey a nd withhold from the public. T his lets people with relevant expertis e confirm good
information and it lets them challenge informa tion which is inaccurate, mis leading and deceptive s o that the broader community of us ers can
US A www. s picework s . com benefit
Aus tin, from
T exasit.-bas ed S piceworks provides ad-s upported IT management s oftware for s mall-to-medium s ized bus ines s es . T he des k top
S piceworks
s oftware allows IT managers to keep track of their network as s ets , run a helpdes k, monitor a ctivity, receive reports and troubles hoot network
problems . T he network monitoring is very a ctive providing managers with information on low dis k s pace, una pproved s oftware and s tatus of
a nti-virus updates .

Figure 24. Company Descriptions

Source. Company reports, Capital IQ, Crunchbase
 Page 19

RELEVANT DISCLOSURES APPLICABLE TO: NONE

LIST OF DISCLOSURE TERMS:

1. None applicable.

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

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

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

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

www.researchcapital.com