Netdragon Reports Fourth Quarter 2008 73.2 Million

SOFTWARE & SERVICES

10 FEBRUARY 2009

DAVID SHORE, CFA, MBA 416.860.6784

WEB 2.O WEEKLY

[email protected] Arun Thomas (Associate) 416.860.7666

$25 MILLION IN FINANCING MONTH-TO-DATE S U MMA R Y We have identified 80 public companies for our Web 2.0 universe with a combined market cap of almost $25 billion. These include a wide variety of companies, including MMOG (Massive Multi-Player Online Gaming) companies, social networking software companies, media sharing companies, and social lending companies. The average market cap for the group is over $300 million, with average trailing revenue of $100 million. The companies are also highly profitable with an average EBITDA margin of 16.6%. On a valuation basis, the overall average is 4.1x trailing revenue and 9.4x trailing EBITDA. Seventeen of the companies have more than 500 employees.

CAPITAL MARKET ACTIVITY January was the busiest month since April 2008, with 29 financings totalling $199.5 million (average $6.9 million). February has started well, with $25 million in financings so far. The largest financing in the last three months was of GoFish for $22.5 million in December. Ten companies raised more than $10 million each in January – with AdMob the largest at $12.5 million.

Financing Transactions by Month 35

30

25

(#)

20

15

29

28

27

26

10

19 17

10 7

9 6

5

Jan-09

Dec-08

Oct-08

Nov-08

Sep-08

Jul-08

Aug-08

Jun-08

Apr-08

May-08

Mar-08

Jan-08

Feb-08

Dec-07

Oct-07

Nov-07

Sep-07

4

Jul-07

4

Aug-07

Apr-07

Mar-07

Jan-07

Feb-07

11

6

Jun-07

6

3 Dec-06

Jul-06

Aug-06

Jun-06

Apr-06

Jan-06

7

2 Oct-06

3

Nov-06

4

7

5

1 Feb-06

Dec-05

Oct-05

Nov-05

7 5

Sep-06

4 1

May-06

4

Mar-06

3 Sep-05

Jul-05

2 Aug-05

0

1

5

May-07

7

6

10

17 15

Feb-09

12 5

18

17 17

16

I ND US T R Y NEW S This section discusses corporate activity such as partnerships, new product launches, and financial results.

VAL UAT ION This section provides an overview of valuation metrics for the 80 public Web 2.0 companies we have identified thus far. We calculate TEV/Revenue, TEV/EBITDA, and P/E multiples for the companies in our universe. We also compare multiples by country and exchange. This report has been created by Anal ysts that are employed by Research Capital Corporation, a Canadian Investment Dealer. Toronto 416.860.7600

Montreal 514.399.1500

www.researchcapital.com Vancouver 604.662.1800

Calgary 403.265.7400

Regina 306.566.7550

Page 2

THE WEB 2.0 UNIVERSE 80 public Web 2.0 companies identified: We have identified 80 public companies for our Web 2.0 universe with a combined market cap of almost $25 billion. These include a wide variety of companies, including MMOG (Massive MultiPlayer Online Gaming) companies, social networking software companies, media sharing companies, and social lending companies. See below for a summary of the full universe (Figure 1). Note that we have not included the large technology and media companies such as Google, Yahoo, Disney, and Sony in our universe as they would skew the results due to their immense size relative to the rest of the group. The average market cap for the group is over $300 million, with average trailing revenue of $100 million. The companies are also highly profitable with an average EBITDA margin of 16.6%. On a valuation basis, the overall average is 4.1x trailing revenue and 9.4x trailing EBITDA. Seventeen of the companies have more than 500 employees. Comparable Company Analys is > W eb 2.0 S u mmary

C omp any Name A cc elerize New Media, Inc. A ctoz S oft C o. , L td. A Q Inter a ctiv e, Inc . A ss oc ia ted Media Holdings Inc . B oomJ Inc B right Things plc B roa dW ebA sia Inc . C DC C orp. C hina Ga tewa y C orpora tion C hines e G a mer Interna tiona l C ornerW orld C or por a tion DA DA S pA Digita lF X Inter na tiona l, Inc . Digita lP ost Intera ctive, Inc. Digita lT own, Inc. Dolphin Digita l Media, Inc. E olith C o. L td. E xtensions , Inc . F inanc ia l Media G roup, Inc . F luid Mus ic C a nada , Inc. F rogs ter Intera c tiv e P ictures A G Ga ma nia Digita l E nterta inment C o., L td. Ga meOn C o L td. GeoS entr ic Oyj Gia nt Intera c tive G roup, Inc. Giga Media L td. GoF ish C orpora tion Gr av ity C o., L td Gr ee, Inc. GungHo Online Enterta inment, Inc. Ha nbitS oft, Inc. IAS E ner gy, Inc . Idea E dge, Inc . Jumbuck E nterta inment P ty L td. JumpT V Inc. K aboos e Inc. K ingsoft C o. L td. L ingo Media C or por a tion L iv eW orld Inc. L ook S ma rt, Ltd. Magnitude Informa tion Sy stems Inc. Mix i, Inc. Moggle, Inc NE OW IZ Ga mes C or por ation NetDra gon W ebS oft, Inc. Neteas e. com Inc. NeXplore C orpor a tion Ngi G roup Inc . Northga te T ec hnologies Limited Open T ext C orp. Openwa ve S ystems Inc . P er fect W orld C o. , L td. P hotoC ha nnel Networ ks Inc . Quepa sa C orp. S ha nda Inter ac tiv e E nterta inment L td. S hutterfly, Inc. S K C ommunic a tions C o. , L td. S NAP Inter a ctive, Inc . S NM G loba l Holdings S oc ial Media Venures, Inc. S pa r k Network s, Inc. S pec trumDNA , Inc . Tencent Holdings L td. The P ar ent C ompa ny The9 L imited TheS treet. c om, Inc . Tr ee. C om, Inc . Unis erv e C ommunic a tions C orp. United Online Inc. UOMO Media , Inc V OIS , Inc . W ebzen Inc . W iz za rd S oftwa r e C or por ation W oozyF ly, Inc. W orlds . com Inc. W yndstorm C orpora tion XING AG Yeda ngOnline C orp. Ynk K or ea Inc. ZipLoc a l Inc.

LTM as of 9/30/2008 9/30/2008 9/30/2008 6/30/2007 9/30/2008 9/30/2008 9/30/2008 9/30/2008 9/30/2008 9/30/2008 10/31/2008 9/30/2008 9/30/2008 9/30/2008 11/30/2008 NA 12/31/2007 9/30/2008 11/30/2008 9/30/2008 6/30/2008 9/30/2008 9/30/2008 9/30/2008 9/30/2008 9/30/2008 9/30/2008 9/30/2008 NA 9/30/2008 9/30/2008 10/31/2008 9/30/2008 6/30/2008 6/30/2008 9/30/2008 9/30/2008 9/30/2008 9/30/2008 9/30/2008 9/30/2008 9/30/2008 12/31/2008 12/31/2007 9/30/2008 9/30/2008 9/30/2007 12/31/2008 9/30/2008 12/31/2008 12/31/2008 9/30/2008 9/30/2008 9/30/2008 9/30/2008 12/31/2008 12/31/2007 9/30/2008 9/30/2008 12/31/2008 9/30/2008 9/30/2008 9/30/2008 8/2/2008 9/30/2008 9/30/2008 12/31/2008 11/30/2008 9/30/2008 10/31/2008 9/30/2008 9/30/2008 9/30/2008 9/30/2008 9/30/2008 NA 9/30/2008 12/31/2007 12/31/2007 9/30/2008

High L ow Average

Figure 1. Web 2.0 Universe Summary Source. Capital IQ

Tic ker ACLZ A 052790 3838 A SMH B O MJ AIM: BG T BWBA C HIN. A C GW Y G T S M: 3083 CWR L C M:D A DXN DGL P DG T W DP DM A 041060 E XT I F NGP TS X: F MN FR G 6180 3812 GE O 1V GA GIG M GO F H G R VY TS E: 3632 3765 A 047080 IA S C . A OT C BB : IDA E A S X: JMB TS X :J TV T S X : KA B 3888 T S X V: L M L VW D L O OK MA G Y 2121 MMO G A 095660 777 NTE S NX P C 2497 590057 OTE X O PW V PWRD TS X V: P N Q PS A S NDA S FL Y A 066270 S TV I S NMN S MV I L OV SP X A 700 K IDS . Q NC T Y T SC M TR E E T S XV : US S UNT D UO MO VO IS W ZE N W ZE W ZY F W DDD W Y ND O1BC A 052770 A 023770 TS XV : ZIP

E xc h an ge O TCB B KO S E T SE O TCP K O TCB B A IM O TCP K Na s da qG S O TCB B G TS M O TCB B CM AME X O TCB B O TCB B O TCB B KO S E O TCP K O TCB B TS X XT R A G TS M T SE HL S E NYS E Na s da qG S O TCB B Na sda qGM T SE OS E KO S E O TCB B O TCB B AS X TS X TS X S E HK TS X V O TCP K Na sda qGM O TCB B T SE O TCB B KO S E S E HK Na s da qG S O TCP K T SE BSE Na s da qG S Na s da qG S Na s da qG S TS X V Na sda qC M Na s da qG S Na s da qG S KO S E O TCB B O TCP K O TCP K AME X O TCB B S E HK O TCP K Na s da qG S Na sda qGM Na sda qGM TS X V Na s da qG S O TCB B O TCB B Na sda qGM AME X O TCB B O TCB B O TCB B XT R A KO S E KO S E TS X V

Trad ing C urrenc y US D KR W JP Y US D US D GB P US D US D US D TW D US D EUR US D US D US D US D KR W US D US D C AD EUR TW D JP Y EUR US D US D US D US D JP Y JP Y KR W US D US D AUD C AD C AD HKD C AD US D US D US D JP Y US D KR W HKD US D US D JP Y INR US D US D US D C AD US D US D US D KR W US D US D US D US D US D HKD US D US D US D US D C AD US D US D US D US D US D US D US D US D EUR KR W KR W C AD

HQ United S ta tes S outh Kor ea J a pa n United S ta tes United S ta tes United K ingdom United S ta tes Hong K ong United S ta tes T a iwa n United S ta tes Ita ly United S ta tes United S ta tes United S ta tes United S ta tes S outh Kor ea United S ta tes United S ta tes United S ta tes Germa ny T a iwa n J a pa n F inla nd C hina T a iwa n United S ta tes S outh Kor ea J a pa n J a pa n S outh Kor ea C a nada United S ta tes A ustr alia C a nada C a nada C hina C a nada United S ta tes United S ta tes United S ta tes J a pa n United S ta tes S outh Kor ea C hina C hina United S ta tes J a pa n India C a nada United S ta tes C hina C a nada United S ta tes C hina United S ta tes S outh Kor ea United S ta tes United S ta tes United S ta tes United S ta tes United S ta tes C hina United S ta tes C hina United S ta tes United S ta tes C a nada United S ta tes C a nada United S ta tes S outh Kor ea United S ta tes United S ta tes United S ta tes United S ta tes Germa ny S outh Kor ea S outh Kor ea C a nada

C urrent P ric e 0. 35 12, 150. 00 33, 100. 00 0. 01 0. 75 0. 02 1. 50 0. 94 0. 00 111. 00 0. 41 6. 19 0. 11 0. 02 1. 50 0. 59 605. 00 0. 20 0. 02 0. 56 4. 68 22. 00 119, 700. 00 0. 04 6. 18 7. 44 0. 20 0. 70 5, 470. 00 103, 000. 00 3, 355. 00 0. 03 0. 50 0. 40 0. 49 0. 40 3. 05 0. 95 0. 04 1. 39 0. 03 454, 000. 00 2. 00 27, 700. 00 2. 83 20. 23 0. 84 27, 410. 00 39. 55 36. 17 0. 74 15. 74 1. 61 1. 82 31. 30 8. 84 8, 030. 00 1. 00 0. 00 1. 39 2. 40 0. 10 45. 10 0. 05 14. 92 2. 81 4. 17 0. 08 5. 88 0. 08 0. 75 1. 46 0. 64 0. 15 0. 22 0. 12 31. 00 6, 750. 00 4, 515. 00 0. 02

USD Market C ap ($m) 9. 4 77. 7 19. 7 0. 2 30. 7 3. 8 127. 3 101. 4 0. 0 280. 0 19. 3 131. 1 2. 7 1. 0 40. 7 28. 7 20. 5 18. 9 1. 0 24. 1 14. 4 99. 1 130. 2 46. 8 1, 469. 0 402. 0 5. 1 19. 5 0. 0 128. 7 53. 4 1. 8 21. 1 13. 5 45. 7 46. 0 422. 3 10. 0 1. 2 23. 7 12. 7 759. 2 70. 6 192. 9 192. 9 2, 489. 3 46. 9 37. 0 28. 4 1, 877. 2 61. 6 897. 9 44. 3 23. 1 2, 171. 7 222. 2 239. 6 10. 7 0. 0 0. 0 51. 5 4. 9 10,448. 0 1. 3 411. 9 85. 7 39. 1 1. 6 482. 0 6. 8 5. 4 17. 3 28. 9 2. 6 11. 5 2. 2 210. 7 76. 6 8. 0 1. 3

US D LTM T otal R ev ($m) 3. 2 53.0 60.3 0. 1 1. 1 0. 2 0. 0 428. 1 6. 7 38.2 0. 6 221. 4 16.9 0. 4 NM NA 18.1 NM 6. 8 4. 2 5. 3 110. 3 81.4 5. 4 245. 1 200. 5 6. 3 35.5 NA 111. 6 50.3 0. 0 0. 0 10.8 11.5 60.9 106. 7 3. 3 11.7 69.5 0. 1 123. 0 NM 130. 8 95.2 422. 4 NM 107. 4 137. 2 769. 3 199. 6 186. 8 14.0 0. 1 477. 7 213. 5 150. 4 2. 3 2. 0 0. 1 60.1 0. 1 903. 3 112. 0 252. 4 75.2 228. 6 24.5 538. 7 0. 5 0. 0 20.5 6. 2 0. 0 0. 1 NA 40.9 49.7 14.1 2. 9

US D LTM Total E B ITDA ($m ) ( 4.7) 9.7 4.8 ( 2.3) ( 7.7) ( 1.7) ( 4.6) 18. 8 ( 6.6) 18. 0 3.1 35. 4 ( 4.5) ( 3.3) ( 2.5) NM ( 0.0) NM 1.2 ( 8.6) ( 3.2) 18. 7 20. 7 ( 12. 3) 155. 6 48. 0 ( 11. 0) 6.8 NM 16. 4 ( 12. 9) ( 0.9) ( 3.5) 4.9 ( 1.8) 4.6 36. 0 ( 1.4) ( 1.2) ( 2.6) ( 3.2) 48. 5 ( 1.1) 35. 2 46. 3 274. 2 ( 4.9) 33. 1 24. 5 195. 4 ( 10. 4) 99. 9 ( 2.5) ( 11. 8) 228. 2 29. 8 14. 2 0.2 ( 0.7) ( 0.1) 11. 7 ( 2.7) 447. 5 ( 13. 5) 95. 1 12. 2 ( 27. 0) 0.1 130. 6 ( 0.4) ( 4.0) ( 6.0) ( 6.5) NM NM NM 15. 9 11. 1 ( 1.1) ( 3.9)

E B ITDA % NM 18. 3% 8. 0% NM NM NM NM 4. 4% -98. 9% 47. 1% 506. 8% 16. 0% -26. 4% NM NM -0. 3% NM 18. 3% NM -60. 6% 16. 9% 25. 4% NM 63. 5% 23. 9% NM 19. 2% NM 14. 7% -25. 6% NM NM 46. 0% -15. 3% 7. 6% 33. 8% -42. 5% -10. 1% -3. 7% NM 39. 4% NM 26. 9% 48. 6% 64. 9% NM 30. 8% 17. 8% 25. 4% -5. 2% 53. 5% -17. 7% NM 47. 8% 13. 9% 9. 4% 10. 1% -34. 8% -60. 5% 19. 5% NM 49. 5% -12. 0% 37. 7% 16. 2% -11. 8% 0. 4% 24. 2% -91. 6% NM -29. 5% NM NM NM NM 38. 8% 22. 4% -7. 6% NM 0. 0%

TEV /LT M R evenue 4. 3x 1. 0x 10. 2x 31. 1x 15. 0x 0. 4x 5. 9x 33. 7x 0. 8x 0. 3x 4. 8x 1. 1x 2. 7x 2. 6x 0. 7x 0. 8x 7. 7x 1. 7x 2. 5x 0. 9x 0. 7x 0. 8x 4. 8x 0. 9x 3. 2x 3. 2x 5. 3x 1. 4x 0. 2x 0. 2x 2. 6x 3. 1x 0. 6x 1. 6x 4. 2x 1. 1x 0. 1x 0. 8x 12. 5x 0. 2x 0. 1x 0. 2x 0. 2x 1. 6x 15. 1x 4. 7x 3. 8x 1. 5x 0. 6x 0. 7x

T EV /LTM E B ITDA 5. 4x 8. 4x 12.4x 6. 7x 4. 9x 0. 1x 4. 0x 3. 2x 7. 0x 6. 2x 1. 8x 11.5x 9. 5x 13.4x 5. 2x 0. 3x 1. 2x 10.3x 4. 5x 16.9x 41.2x 4. 0x 25.2x 0. 7x 36.9x 6. 4x 9. 8x 6. 8x -

E mployees 20 NA NA 3 25 9 46 3,125 37 NA NA 574 68 11 3 6 NA 2 22 29 NA NA NA 92 1,016 975 41 636 NA NA NA NA NA 72 NA NA 1,660 NA 73 93 13 NA 3 NA 1,482 2,413 19 NA 286 2,915 657 1,401 NA 63 2,564 NA NA 5 33 NA 176 7 6,039 347 1,361 349 NA NA 928 NA 4 338 110 14 1 NA 161 NA NA NA

10,448. 0 0. 0 314.6

903.3 0. 0 100.6

447. 5 -27. 0 26.5

506. 8% -98. 9% 16.6%

33. 7x 0. 1x 4.1x

41.2x 0. 1x 9.4x

6, 039 1 607

Webs ite www. a c celer iz enewmedia . c om www. ac toz. com www.a qi. co. jp www. mac gregorener gy. com www. boomj. c om www. brightthings . com www. broa dwebas ia . c om www. cdc corpora tion. net www. chines egamer. net www. cornerworld. com da da . da da . net www. digita lfx .c om www. digita lpos tintera ctive. c om www. enetpc. c om www. dolphindigita lmedia . com www.eolith. c o. k r www. ext. c om www. wa llst. net www. fluidmedia network s . com www. frogs ter -ip. de/en/index. php www.ga ma nia . c o. k r www. ga meon. co. jp www. benefon. c om www. ga -me. com www. gigamedia. c om. tw www.gofish. com www. gra vity. co. k r www. gree. co. jp www. gungho. co. jp/english/ www. hanbitsoft. co. k r www. ia s ener gy . com www. idea edge. com www. jumbuck . com www. jumptv. c om www. ka boose. com www. kingsoft. com www. lingomedia . com www. liv eworld. c om www. looks ma rt. com www. ma gnitude. com www. mix i. c o.jp www. pla y moggle. c om www. neowiz . com/kor / www. nd. com. c n cor p. 163. com www. nex plore. com www. netage. c o. jp/en/index . html www. nor thga tetech. com www. opentext. com www. openwa v e.c om www. wa nmei. com/en/index. htm www. photoc hannel.c om www.quepa sa . c om www. s nda . c om www. shutterfly . com www. s na p- intera ctive. c om www. snmgloba lholdings . com www. s pa rk . net www. tencent. c om. hk /index_e. shtml www. thepar entc ompa ny. c om www. the9. c om www. thestr eet. c om www. lendingtree. com www. uniser ve. com www. unitedonline. net www. uomolife. com www. vois. com www. webzen. co. k r www. wizza rds oftwa r e. c om www. wooz yfly. com www. worlds . com www. wynds tor m. c om www. xing. c om www. yeda ngonline. com/indexhome. a sp www. y nk . net www. z iploc a l. c om

Page 3

CAPITAL MARKETS ACTIVITY (M&A AND FINANCING) $25 Million in financing month-to-date: After 18 financings in December totalling $122.1 million (average $6.8 million), January was the busiest month since April 2008, with 29 financings totalling $199.5 million (average $6.9 million). As of yesterday, February recorded transactions totalling a little below $25 million. The largest financing in the last three months was of GoFish for $22.5 million in December (Figure 2). Ten companies raised more than $10 million each in January – with AdMob the largest at $12.5 million. For additional details, see Figure 27 (at end of note). Financing - Last Three Months 25.0

20.0

15.0 (US$m)

Feb-09 Jan-09 Dec-08 10.0

5.0

GoFish AdMob Aster Data Systems VirtuOz NetShelter Blue Kai IMVU NewsGator Go Internet Media Nurien Yodle RatePoint DECA Taptu FooMojo Tvtrip Scribd One True Media SundaySky Play Hard Sports Social Median JibJab Xobni InsideView Kewego SocialMedia Motionbox Superfish Jackbe Gbox Geni ChakPak Tagged Sportsblogs Snapmylife AboutUs Tumblr TextDigger Playdo OneSpot Mixpo Overlay.TV E-Global Sports Network 7 Billion People Tripwolf DotBlu Hubdub Snooth Angie's List CoveritLive StockTwits Identi.ca Meez Pulse Entertainment Clickpass

0.0

Figure 2. Financings, Last Three Months Source. Company reports

Travel site Tvtrip raises $9 million: Activity in February so far was led by Tvtrip, a travel-related site, raising about $9 million (Figure 3). Further, single transactions in Search, Aggregation, and Video sectors raised about $4 million each in the first 10 days of the month.

Page 4

Financing by Sector - February 2009 10.0

9.0

8.0

7.0

(US$m)

6.0

5.0 9.0 4.0

3.0

4.3

2.0

4.2

4.0 3.0

1.0

0.0 Travel

Search

Aggregation

Video

Analytics

1

1

1

1

1

# companies

Figure 3. Financings, by Sector, January 2009 Source. Company reports

Average round size increases slightly: On a trailing 12-month basis, total financing dollars are down for the third month in the last four. However; average round sizes increased slightly as of February (Figure 4). LTM Financing 4,000.0

20.0

18.0

3,500.0

16.0 3,000.0 14.0

12.0

2,000.0

10.0

(US$m)

(US$m)

2,500.0

8.0

1,500.0

6.0 1,000.0 4.0 500.0

2.0

Total

Jan-09

Nov-08

Jul-08

Sep-08

May-08

Mar-08

Jan-08

Nov-07

Sep-07

Jul-07

May-07

Mar-07

Jan-07

Nov-06

Sep-06

Jul-06

Mar-06

May-06

Jan-06

Nov-05

Sep-05

0.0 Jul-05

0.0

Average

Figure 4. Financings, Last 12 Months Source. Company reports

Cumulative total nears $5.3 billion: Overall, on a cumulative basis, Web 2.0 financings have totalled nearly $5.3 billion, with the majority of the financing coming in late 2007 and the first three quarters of 2008 (Figure 5).

Page 5

Web 2.0 Financing (cumulative) 1,400.0

6,000.0

1,313.3

1,200.0

5,000.0

1,000.0

944.7 4,000.0

701.7 600.0

3,000.0

(US$m)

(US$m)

800.0

524.9 2,000.0

400.0

338.5

301.8

224.0 200.0 87.2 35.5 28.8 20.1

130.6 37.5 33.5 18.2 41.9 49.1 29.4

73.4

145.7 116.3 97.0

1,000.0

0.0

0.0 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 2003

2004

2005

2006

2007

2008

2009

Figure 5. Financing, Cumulative Source. Company reports

U.S. remains dominant: U.S. companies continue to dominate capital market activity – with almost 73% of financings/M&A involving U.S. companies (based on dollars) (Figure 6). Canadian companies generated under 1% of capital market activity based on dollar volume (Figure 6). Based on number of transactions, the U.S. leads with 73.6% of deals, while Canada is third in number of financings at 5.5% (Figure 7). Financing/M&A by Country - LTM (#)

Financing/M&A by Country - LTM ($)

Canada 5.5%

UK 13.2%

UK 5.1%

Israel 3.4% France 3.0%

China 8.1%

Russia 1.7%

ROW 9.4%

Israel 0.8% Canada 0.7% France 0.7%

ROW 2.0%

USA 72.8%

USA 73.6%

Figures 6 & 7. Financing/M&A, by Country (LTM, $, #) Source. Company reports

Larger volume of early-stage funding (by count): Almost half of financings in the last 12 months are for early-stage companies (Angel/Seed or Series A) (Figure 8). Series B rounds are 28.8% of the total, with later-stage (Series D, E and PIPE) deals accounting for just 7.3%.

Page 6

Financing by Type - LTM

Series B 28.8%

Series C 13.7%

Series D 4.6%

Angel/Seed 10.0%

Debt financing 2.7% Series A 37.9%

PIPE 2.3%

Figure 8. Financing, by Type (LTM, $) Source. Company reports

“D” series remain largest equity rounds (by dollar): In the last 12 months, there have been 10 “D” series rounds, averaging $23.8 million per financing (Figure 9). Note that we have excluded the $430 million Series C financing of Oak Pacific Interactive as it skews the results substantially. Average financing round size - LTM 45.0

40.0

35.0

30.0

(US$m)

25.0

41.9

20.0

15.0 23.8 10.0

18.5

11.2

5.0

10.0

8.8 6.1 3.5

0.0 # rounds

Angel/Seed

Debt financing

PIPE

Series A

Series B

Series C

Series D

Series E

22

6

5

83

63

30

10

1

Figure 9. Average Size per Round Source. Company reports

Page 7 CAPITAL MARKETS ACTIVITY (PRICE PERFORMANCE) Price Performance: Our Web 2.0 index (market-cap weighted) has closely tracked the performance of the NASDAQ composite index, although it has outperformed the index since late October 2008 (Figure 10). Web 2.0 Index Price Performance 140

120

100

80

60

40

20

NASDAQ COMP

2/9/2009

1/26/2009

1/12/2009

12/29/2008

12/15/2008

12/1/2008

11/17/2008

11/3/2008

10/20/2008

10/6/2008

9/22/2008

9/8/2008

8/25/2008

8/11/2008

7/28/2008

7/14/2008

6/30/2008

6/16/2008

6/2/2008

5/19/2008

5/5/2008

4/21/2008

4/7/2008

3/24/2008

3/10/2008

2/25/2008

2/11/2008

0

Web 2.0 (Market Cap Weighted)

Figure 10. Web 2.0 Price Performance Source. Capital IQ

Chinese Gamer leads; NGI falls: NGI Group Inc. (2497-TSE) had the worst performance in the group (for stocks with prices greater than $1) (Figure 11), falling 20.1% on the week. Chinese Gamer International (3083-GTSM) increased the most, +22.9 %.

Page 8

1 Week Pric e P erformanc e C hines e G a mer Interna tional Y nk K orea Inc. NE O W IZ G ames C orporation K ings oft C o. L td. E olith C o. L td. G iga Media L td. P erfect W orld C o. , L td. HanbitS oft, Inc. DADA S pA XING AG Netea s e. com Inc. S ocia l Media V enures , Inc. S ha nda Intera ctive E ntertainment L td. G iant Interactive G roup, Inc. G a mania Digita l E nterta inment C o. , L td. Actoz S oft C o. , L td. T ree. C om, Inc. O pen T ext C orp. S K C ommunications C o. , L td. LookS mart, L td. NetDra gon W ebS oft, Inc. Northgate T echnologies Limited F rogs ter Intera ctive P ictures AG W ebzen Inc. G a meO n C o L td. T he9 Limited S park Networks , Inc. Y edangO nline C orp. United Online Inc. T heS treet. com, Inc. Q uepa s a C orp. T encent Holdings L td. P hotoC ha nnel Networks Inc. G ree, Inc. Mixi, Inc. AQ Intera ctive, Inc. Ngi G roup Inc. -25. 0%

22. 9% 18. 7% 17. 4% 14. 7% 14. 2% 14. 1% 13. 2% 10. 4% 9. 9% 9. 9% 8.0% 7.8% 7. 1% 6. 6% 5. 8% 5. 2% 4. 3% 4. 1% 3. 2% 3. 0% 2. 9% 1. 7% 1. 1% 0. 7% 0. 2% 0. 1% -0. 4% -1. 2% -2. 0% -2. 1% -2. 7% -4. 1% -6. 4% -7. 8% -15. 0% -15. 1% -20. 1% -20. 0%

-15. 0%

-10. 0%

-5. 0%

0. 0%

5. 0%

10. 0%

15. 0%

20. 0%

25. 0%

30. 0%

Figure 11. 1-Week Price Performance Source. Capital IQ

INDUSTRY NEWS (PARTNERSHIPS, FINANCIAL RESULTS, NEW PRODUCTS) Open Text Corp. Announces Availability of Latest Release of Open Text Web Solutions: Open Text Corp. announced availability of the latest release of Open Text Web Solutions. Available to customers now, this new release offers a number of additional enhancements to what is already a core strength of Open Text Web Solutions: Helping customers translate, manage and synchronize multiple websites worldwide. Web Solutions is an integral component of the Open Text ECM Suite, the industry's most comprehensive suite of content services used by tens of thousands of organizations worldwide. The enhanced functionality is part of a complete solution called Open Text Web Solutions for Multi-Sites that gives customers everything they need to develop a global Web presence. It helps large enterprises to more efficiently share corporate information, leverage existing translation memory tools such as Across Systems(R) or SDL TRADOS(R), and to personalize the user experience. For small and mid-size businesses, it provides a simple and cost-effective tool for expanding globally. For organizations with a global presence, Web Solutions for Multi-Sites adds new content distribution services that make it easy for Web localization teams to share and update content via a centralized content pool. Team members are automatically notified when content changes or updates become available. Once localized content is added to this pool all countries that use the same language can use this content for their local websites. A new Content Translation Management module offers translation workflow integration, expanded support for computer-aided translation tools, and export to standardized XLIFF formats. XLIFF, which stands for XML Localization Interchange File Format, streamlines the exchange of localization data among companies, vendors and across software tools. Openw ave Systems Announces Executive Appointments: Openwave Systems Inc. announced the appointment of Martin McKendry as senior vice president, engineering, effective immediately. Mr. McKendry most recently held this role with Openwave on an interim basis. He brings more than 22 years of executive leadership experience in leading global engineering organizations. He will report to Openwave's chief executive officer, Kenneth Denman. Openwave also announced the appointment of Bruce K. Posey as senior vice president, general counsel and corporate secretary responsible for leading Openwave's legal team and overseeing the company's vital regulatory and governmental relations efforts. Mr. Posey brings over 28 years of senior legal, public policy and regulatory experience to Openwave. Mr. Posey will also report to Mr. Denman. Most recently, Mr. Posey was senior vice president, general counsel and corporate secretary at iPass Inc. Bright Things plc Announces Launch of SocialGO: Bright Things plc announced the launch of the first of its subscription based products going live with effect from 2nd February 2009. SocialGO is a subscription based revenue

Page 9 earning product with many additional features being released over the next few months. The product has been in full beta test for the last four months offering customers a free trial period. During that period over 22,000 networks have been registered. United Online Declares Quarterly Dividend Payable on February 27, 2009: United Online Inc. announced that its Board of Directors has declared a regular quarterly cash dividend of $0.10 per share. The dividend is payable on February 27, 2009 to shareholders of record on February 13, 2009. Open Text Corp. Extends eDiscovery Offering: Open Text Corp. announced that it has extended its new eDiscovery solution to its Open Text eDOCS customers. Now organizations, particularly corporate legal departments, will be able to significantly minimize the need for third-party processing and control the high costs of legal reviews by culling irrelevant information. Open Text eDiscovery Early Case Assessment is being offered through a strategic relationship with Recommind, the leader in search-powered information risk management (IRM). The solution combines Recommind's Insite Legal Hold application with the Open Text ECM Suite. The combination not only addresses the critical need for eDiscovery in an age of growing regulatory and legal challenges, it also lets customers tightly integrate eDiscovery within their broader ECM initiatives. Open Text eDOCS customers will gain expanded eDiscovery capabilities woven into their overall content, records and email management practices. Wizzard Media to Provide Catalog of Branded and Independent Streaming Video Content to Sevenload: Wizzard Media announced that it will provide a catalog of branded and independent streaming video content to sevenload. The sevenload network reaches 15 million users monthly with independent, intelligent and creative content through twelve international country portals including the USA, Germany, Spain, France, Italy, Turkey, Russia, the UK, India, Australia, Singapore and Poland. The delivery of video content through sevenload or on sevenload properties/portals/platforms is an ideal distribution channel for the Wizzard Media Network catalog. Through this partnership, Wizzard will reach a large audience of fans across Europe and the United States and offer more opportunities for monetization to its network of video producers. Shutterfly Inc. Reports Unaudited Consolidated Earnings Results for the Fourth Quarter and Full Year Ended December 31, 2008; Provides Earnings Guidance for the First Quarter Ending March 31, 2009 and Full Year Ending December 31, 2009: "Shutterfly Inc. reported unaudited consolidated earnings results for the fourth quarter and full year ended December 31, 2008. For the fourth quarter, the company reported net income of $14.92 million or $0.59 diluted net income per share on sales of $107.74 million compared to net income of $16.9 million or $0.63 diluted net income per share on sales of $97.54 million for the same period last year. For the year, the company reported net income of $4.56 million or $0.18 diluted net income per share on sales of $213.48 million compared to net income of $10.09 million or $0.38 diluted net income per share on sales of $186.72 million for the same period last year. The company also provided earnings guidance for the first quarter ending March 31, 2009 and full year ending December 31, 2009. For the first quarter, the company expects operating loss from $15 million to $13 million. GAAP diluted net loss per share to range from $0.35 to $0.14. Non-GAAP operating loss to range from $12 million to $10 million. Non-GAAP diluted net loss per share to range from $0.69 to $0.26. Adjusted EBITDA was from $5.6 million to $3.2 million. Net revenues to range from $28 million to $32 million, a year-over-year decrease of 7% to 19%. For the full year, the company expects operating loss from $14 million to $2 million. GAAP diluted net loss per share to range from $0.30 to $0.01. Non-GAAP operating loss to range from $1 million to $13 million. Non-GAAP diluted net income per share to range from $0.08 to $0.35. Adjusted EBITDA was from $26 million to $38 million. Net revenues to range from $190 million to $210 million, a year-over-year decrease of 11% to 2%." CDC Corp. Reaffirms Earnings Guidance for the Second Half of 2008: CDC Corp. reaffirmed earnings guidance for the second half of 2008. The company reaffirmed its previously provided guidance for adjusted EBITDA for the second half of 2008, despite announced preliminary plans by China.com Inc., to record an approximately $2.7 million investment impairment loss in the fourth quarter of 2008, subject to final year-end audit. Based upon preliminary financial results and estimates, the company expects its Adjusted EBITDA from continuing operations to be in the range of approximately $17.0 million to $19.0 million for the second half of 2008. The Company does not expect that China.com's preliminary planned fourth quarter 2008 net impairment loss charges of approximately $2.2 million (after the impact of minority interest) announced by China.com in a filing made to the Growth Enterprise Market of the Stock Exchange of Hong Kong Limited, or GEM Market, will impact the Company's previously announced second half guidance. The company currently has significant cash on hand and expect to report strong Adjusted EBITDA from continuing operations for the fourth quarter 2008. Tree.Com, Inc. (NasdaqGM: TREE) Acquired JustThrive.com.: Tree.Com, Inc. (NasdaqGM: JustThrive.com on February 4, 2009. The financial terms of the transaction were not disclosed.

TREE)

acquired

Best of Malayalam TV Chooses NeuLion as End-to-End Service Provider: Best of Malayalam TV (BoMTV) announces the launch of a new broadcast service throughout the United States and Canada. BoMTV offers a full range of high quality South Indian entertainment made possible through JumpTV Inc., an iPTV service provider and NeuLion's proprietary set top box solution. Viewers will be able to watch live Malayalam content directly on the television. Tree.Com Inc. Reports Earnings Results for the Fourth Quarter and Year of 2008: "Tree.Com Inc. reported earnings results for the fourth quarter and year of 2008. The company reported a net loss of $7 million, or 75 cents per share, on revenue of $48.1 million. That was considerably better than the loss of $22.6 million, or $2.41 per share, it reported in the third quarter. Revenue in the third quarter was $50.3 million. A year ago, the businesses making up Tree.com lost $531.5 million on $50.8 million in revenue, largely because of the write-down and impairment charges. For the full year, Tree.com

Page 10 reports a net loss of $202.3 million, or $21.59 per share. That compares with a net loss of $550.42 million, or $59 per share in 2007. Again, the year ago figures are skewed by the special charges. Revenue last year dropped to $228.6 million from $346.4 million in 2007." GeoSentric Oyj Announces Availability of its Mobile Social Networking Application on Nokia and BlackBerry Devices: GeoSentric Oyj's GyPSii announced that its market leading mobile social networking application is now available on over 25 more Nokia devices, as well as the BlackBerry Bold, Curve and Pearl devices from Research in Motion - a move that extends the reach of GyPSii to millions of potential new customers. GyPSii users can uniquely experience a broad range of location-specific functions and mobile lifestyle services - including sharing user generated content, mobile geo-location content search, and social networking, as well the ability to view it all on a map - all within a single user experience. The latest version of the GyPSii software extends these features to even more devices and markets in particular, China. Supported Nokia phones include: N96, N95-8GB, N95, N93/N931, N92, N85, N82, N81, N80, N79, N78, N77, N76, N75, N73, N72, N71, E90, E71, E70, E66, E65, E62, E61/E61i, E60, E51, E50, Touch Xpress 5800, 6220 Classic, 6210 Navigator, 6120 Classic, 6110 Navigator, 5700, 5500, 5320XM. Supported Blackberry Smartphones include: Bold; Pearl series 8110, 8120, 8130; Curve series 8310, 8320, 8330 and 8800, 8820, 8830. Perfect World Co., Ltd. Partners with HI-WIN Co., Ltd. to License 'Pocketpet Journey West' in Korea: Perfect World Co., Ltd. signed an agreement with HI-WIN Co., Ltd. to license 'Pocketpet Journey West' in Korea. This is the company's fifth game licensed in the country. VALUATION MMOG companies lead market cap charts: Just five (same as last week) companies in our Web 2.0 universe top US$1 billion in market capitalization (Figure 12). Fifty-eight of the 80 (down from 60 last week) companies have market caps under US$100 million, with 22 (same as last week) under $10 million. Online gaming companies dominate the top of the list with five of the top six by market cap.

Market C ap (US D m) T encent Holdings L td. Netea s e. com Inc. S ha nda Intera ctive E nterta inment O pen T ext C orp. G ia nt Intera ctive G roup, Inc. P erfect W orld C o. , L td. Mixi, Inc. United O nline Inc. K ings oft C o. L td. T he9 L imited G iga Media L td. C hines e G a mer Interna tiona l S K C ommunica tions C o. , L td. S hutterfly, Inc. X ING AG NetDra gon W ebS oft, Inc. NE O W IZ G a mes C orpora tion DADA S pA G a meO n C o L td. G ungHo O nline E nterta inment, Inc. B roa dW ebAs ia Inc. C DC C orp. G a mania Digita l E nterta inment T heS treet. com, Inc. Actoz S oft C o. , L td. Y edangO nline C orp. Moggle, Inc O penwa ve S ys tems Inc. Ha nbitS oft, Inc. S park Networks , Inc. NeX plore C orpora tion G eoS entric O yj K aboos e Inc. J umpT V Inc. P hotoC ha nnel Networks Inc. DigitalT own, Inc. T ree. C om, Inc. Ngi G roup Inc. B oomJ Inc W izza rd S oftwa re C orpora tion Dolphin Digita l Media , Inc. Northga te T echnologies L imited F luid Mus ic C ana da , Inc. L ookS ma rt, L td. Q uepa s a C orp. Idea E dge, Inc. E olith C o. L td. AQ Intera ctive, Inc. G ra vity C o. , L td C ornerW orld C orpora tion E xtens ions , Inc. W ebzen Inc. F rogs ter Intera ctive P ictures AG J umbuck E nterta inment P ty L td. Ma gnitude Informa tion S ys tems W orlds . com Inc. S NAP Intera ctive, Inc. L ingo Media C orpora tion Accelerize New Media , Inc. Y nk K orea Inc. UOMO Media , Inc V O IS , Inc. G oF is h C orpora tion S pectrumDNA, Inc. B right T hings plc DigitalF X Interna tiona l, Inc. W oozyF ly, Inc. W ynds torm C orpora tion IAS E nergy, Inc. Unis erve C ommunica tions C orp. ZipL oca l Inc. T he P a rent C ompa ny L iveW orld Inc. Digita lP os t Intera ctive, Inc. F ina ncia l Media G roup, Inc. As s ocia ted Media Holdings Inc. C hina G a tewa y C orpora tion S ocia l Media V enures , Inc. S NM G loba l Holdings G ree, Inc.

280. 0 239. 6 222. 2 210. 7 192. 9 192. 9 131. 1 130. 2 128. 7 127. 3 101. 4 99. 1 85. 7 77. 7 76. 6 70. 6 61.6 53. 4 51.5 46. 9 46. 8 46. 0 45. 7 44. 3 40. 7 39. 1 37. 0 30. 7 28. 9 28. 7 28. 4 24. 1 23. 7 23. 1 21. 1 20.5 19. 7 19. 5 19. 3 18. 9 17. 3 14. 4 13. 5 12. 7 11. 5 10.7 10. 0 9. 4 8. 0 6. 8 5. 4 5. 1 4. 9 3.8 2. 7 2. 6 2. 2 1. 8 1. 6 1. 3 1. 3 1. 2 1. 0 1. 0 0. 2 0. 0 0. 0 0. 0 0. 0

0

Figure 12. Market Cap Ranking Source. Capital IQ

482. 0 422. 3 411. 9 402. 0

500

759. 2

897. 9

1, 000

1469.0

1, 500

1877. 2

2, 000

2171. 7

2489. 3

2, 500

3, 000

3, 500

4, 000

Page 11 TEV/Revenue (LTM) averages 4.1x: The overall average TEV/Revenue (LTM) multiple for our group is 4.1x (Figure 13). However, this is skewed by CornerWorld (CWRL-OTCBB) at 33.7x and BoomJ at 31.1x (BOMJ-OTCBB). Excluding those companies, the average is 2.9x. Note that we exclude multiples greater than 50x. Twenty-four of the companies have multiples under 1.5x. TE V/L TM R evenue (x) 40. 0

33. 7

35. 0

31. 1 30. 0

25. 0

20. 0 15. 015. 1

15. 0

12. 5 10. 2

10. 0

B oomJ Inc

C ornerW orld C orporation

B right T hings plc

UO MO Media, Inc

T encent Holdings L td.

G eoS entric O yj

As s ociated Media Holdings Inc.

C hines e G amer International

Mixi, Inc.

5. 9

J umpT V Inc.

4. 7 4. 8 4. 8 5. 3

DigitalP os t Interactive, Inc.

Acceleriz e New Media, Inc.

3. 8 4. 2 4. 3

X ING AG

K ings oft C o. L td.

L ingo Media C orporation

F luid Mus ic C anada, Inc.

P hotoC hannel Networks Inc.

O pen T ext C orp.

F rogs ter Interactive P ictures AG

G igaMedia L td.

G oF is h C orporation

United O nline Inc.

S K C ommunications C o. , L td.

Y edangO nline C orp.

E olith C o. L td.

1. 4 1. 5 1. 6 1. 6 1. 7 NE O W IZ G ames C orporation

Actoz S oft C o. , L td.

S NM G lobal Holdings

K aboos e Inc.

G ungHo O nline E ntertainment, Inc.

G ameO n C o L td.

J umbuck E ntertainment P ty L td.

DADA S pA

S park Networks , Inc.

ZipL ocal Inc.

HanbitS oft, Inc.

S hutterfly, Inc.

0. 7 0. 7 0. 7 0. 8 0. 8 0. 8 0. 8 0. 9 0. 9 1. 0 1. 1 1. 1 G amania Digital E ntertainment C o. , L td.

C DC C orp.

Y nk K orea Inc.

T he P arent C ompa ny

DigitalF X International, Inc.

T ree. C om, Inc.

Northgate T echnologies L imited

NetDragon W ebS oft, Inc.

T heS treet. com, Inc.

Unis erve C ommunications C orp.

#NUM!

S ocial Media V enures , Inc.

0. 0

0. 0 0. 1 0. 1 0. 2 0. 2 0. 2 0. 2 0. 2 0. 3 0. 4 0. 6 0. 6

3. 2 3. 2 2. 5 2. 6 2. 6 2. 7 3. 1

S NAP Interactive, Inc.

Avera ge, 4. 1 5. 0

W iz z ard S oftware C orporation

7. 7

Figure 13. TEV/Revenue Ranking Source. Capital IQ

TEV/Revenue (LTM) by country/exchange: We have also calculated multiples based on where the companies are listed or domiciled. Figure 14 shows the average TEV/Revenue multiples by stock exchange. The OTCBB has the largest number of companies (20), trading at an average multiple of 10.6x (down from 11.3x last week). On a geographic basis, the United States has the most companies (37), trading at an average of 4.9x revenue (down from 5.7x revenue last week) (Figure 15). Nine of the companies are Canadian (average 3.8x revenue).

Page 12

Average TEV/LTM Revenue - By Country

16.0

16.0

14.0

14.0

12.0

12.0

10.0

10.0

8.0

(x)

(x)

Average TEV/LTM Revenue - By Exchange

8.0

15.0

15.0

6.0

6.0

10.6 4.0

4.0

7.7

7.7

5.3

5.3

2.0

3.3

3.2

2.8

2.3

1.9

1.8

1.4

1.1

0.9

CM

BSE

NasdaqGM

3

ASX

8

0.1

OSE

3

0.2

KOSE

5

0.8

TSXV

2

0.8

NasdaqGS

2

AMEX

TSE

3

TSX

XTRA

1

OTCPK

GTSM

20

HLSE

OTCBB

1

SEHK

AIM

0.0

# Companies

4.9

2.0

3.0

4

10

7

1

1

1

1

5

3.8

3.2

2.7

2.3 1.1

0.8

0.8

0.4

0.2

United Kingdom

Finland

China

United States

Canada

Germany

Taiwan

Japan

South Korea

Australia

Italy

Hong Kong

India

1

1

8

37

9

2

3

6

9

1

1

1

1

0.0

# Companies

Figures 14 & 15. TEV/Revenue Ranking (Exchange, Country) Source. Capital IQ

TEV/EBITDA (LTM) averages 9.4x: The average multiple for the 28 companies with positive EBITDA (and multiples under 100x) is 9.4x LTM EBITDA (9.4x last week), led by SNAP Interactive’s (STVI-OTCBB) 41.2x multiple (Figure 16). Sixteen of the companies have EBITDA multiples under 7x. TE V/L TM E B ITDA (x) 45. 0 41. 2 40. 0

36. 9

35. 0 30. 0 25. 2 25. 0 20. 0

16. 9

6. 7

6. 8

7. 0

C ornerW orld C orporation

Y edangOnline C orp.

G igaMedia L td.

8. 4

9. 8

10. 3

Open T ext C orp.

6. 4

9. 5

X ING AG

6. 2

United Online Inc.

4. 9

Actoz S oft C o. , L td.

Northgate T echnologies L imited

4. 5

5. 4

G ungHo O nline E ntertainment, Inc.

T heS treet. com, Inc.

4. 0

NE OW IZ G ames C orpora tion

NetDragon W ebS oft, Inc.

4. 0

DADA S pA

0. 7

3. 2

S hutterfly, Inc.

0. 3

1. 8

S park Networks , Inc.

0. 1

1. 2

F ina ncial Media G roup, Inc.

5. 0

5. 2

G a mania Digital E nterta inment C o. , L td.

10. 0

J umbuck E ntertainment P ty L td.

Average, 9. 4

K ings oft C o. L td.

15. 0 11. 5

12. 4

13. 4

S NAP Interactive, Inc.

T encent Holdings L td.

Unis erve C ommunications C orp.

S K C ommunica tions C o. , L td.

Mixi, Inc.

C hines e G amer International

K aboos e Inc.

C DC C orp.

G ameO n C o L td.

0. 0

Figure 16. TEV/EBITDA Ranking Source. Capital IQ

TEV/EBITDA (LTM) by country/exchange: Figure 17 shows the average TEV/EBITDA multiples by stock exchange. The OTCBB has the largest number of companies (20), trading at an average multiple of 16.0x, while companies on the TSXV have the highest multiples (36.9x). On a geographic basis, the United States has the most companies (37), trading at an average of 9.1x EBITDA (Figure 18). Nine of the companies are Canadian (average 19.6x EBITDA).

Page 13

Average TEV/LTM EBITDA - By Country

Average TEV/LTM EBITDA - By Exchange 25.0

40.0

35.0

20.0

30.0

25.0

(x)

15.0

20.0 (x)

36.9 15.0

10.0

19.6

10.0 16.0 11.7 5.0

8.6

8.3

8.2

7.3

6.2

4.9

3

2

7

5

2

1

1

AMEX

10

CM

GTSM

TSE

KOSE

XTRA

TSX 3

OSE

20

NasdaqGS

4

SEHK

OTCBB

TSXV

0.0

# Companies

9.8

9.1

8.6

8.4

7.8

7.6

4.0

3

1.8

1.2

0.7 NasdaqGM

9.8

BSE

11.5

ASX

11.7

5.0

1

1

4.9 1.8 0.0

5

# Companies

1.2

Canada

China

Germany

United States

South Korea

Hong Kong

Taiwan

Japan

Italy

Australia

India

9

8

2

37

9

1

3

6

1

1

1

Figures 17 & 18. TEV/EBITDA Ranking (Exchange, Country) Source. Capital IQ

P/E (LTM) averages 13.4x: The average multiple for the 29 companies with positive earnings (and multiples under 100x) is 14.2x LTM EPS (up from 13.1x LTM EPS), led again by SNAP Interactive’s (STVI-OTCBB) 59.1x multiple (Figure 19). Fourteen of the companies have P/E multiples under 10x. P /E L TM (x) 70. 0

59. 1

60. 0 50. 0

50. 0

38. 4

40. 0 33. 4 34. 2 30. 0 20. 5

G ia nt Intera ctive G roup, Inc.

P erfect W orld C o. , Ltd.

Northga te T echnologies Limited

Netea s e. com Inc.

S ha nda Intera ctive E ntertainment L td.

7. 3

7. 9

9. 0

Y eda ngO nline C orp.

1. 9

7. 1

DADA S pA

1. 9

5. 5

NetDra gon W ebS oft, Inc.

1. 8

5. 2

S pa rk Networks , Inc.

1. 4

4. 2

W orlds . com Inc.

1. 3

3. 4

LookS ma rt, Ltd.

1. 1 T he9 Limited

10. 0

United O nline Inc.

Avera ge, 14. 2

J umbuck E nterta inment P ty Ltd.

20. 0

12. 4 12. 8 11. 3 11. 8 10. 1 10. 9

14. 5 15. 1

16. 8

S NAP Intera ctive, Inc.

S hutterfly, Inc.

O pen T ext C orp.

T encent Holdings L td.

Mixi, Inc.

X ING AG

C hines e G a mer Interna tiona l

Actoz S oft C o. , Ltd.

T heS treet. com, Inc.

G a meO n C o Ltd.

K ings oft C o. L td.

G iga Media Ltd.

G a ma nia Digita l E nterta inment C o. , L td.

NE O W IZ G a mes C orpora tion

Ngi G roup Inc.

0. 0

Figure 19. P/E Ranking Source. Capital IQ

P/E (LTM) by country/exchange: Figure 20 shows the average P/E multiples by stock exchange. The OTCBB has the largest number of companies (20), trading at an average multiple of 31.7x. On a geographic basis, the United States has the most companies (37), trading at an average of 20.5x earnings (Figure 21). Nine of the companies are Canadian (average 38.4x EPS).

Page 14

Average P/E - By Country

Average P/E - By Exchange 45.0

35.0

40.0

30.0 35.0

25.0 30.0

20.0 (x)

(x)

25.0

15.0

20.0

31.7

38.4

15.0

20.5

10.0

18.8

17.4

20.5

10.0

14.2

20.5

14.1

18.8

11.7

5.0

13.3

9.0

7.9

5.0

11.7

7.1

7.9

7.5

7.1

5.2 1.8

1.3

0.0

# Companies

OTCBB

XTRA

TSE

SEHK

NasdaqGS

GTSM

KOSE

NasdaqGM

CM

ASX

AMEX

BSE

NYSE

20

2

5

3

10

2

7

5

1

1

3

1

1

Figures 20 & 21. P/E Ranking (Exchange, Country) Source. Capital IQ

1.8

0.0

# Companies

Canada

United States

Germany

Japan

Taiwan

South Korea

Italy

China

Australia

India

9

37

2

6

3

9

1

8

1

1

Page 15

UPCOMING EVENTS

Upc oming E vents E vent

Date

L oca tion

Webs ite

U s er G ene ra ted C onte nt

F ebrua ry 9-10

S an J os e

www. ugc xeven t. c om/

W eb 2. 0 C anadian L eade rs hip S erie s - G a ming

Ma rc h 3

T oronto

http: //web2le aders hips eries .iglooeven ts . net/

E ngage! E xpo

Ma rc h 10-11

New Y ork

www. enga geex po. c o m

Me sh 200 9

A pril 7-8

T oronto

www. mes hc on ferenc e. co m

Figure 22. Upcoming Events Source. Company reports

E arnings C alendar C ompany

Date & Time

Qua rter

C onf C all Details

T heS tree t. c om, In c. (N as daqG M: T S C M )

T hurs day , F ebru ary 1 9, 2 009 4: 30 P M (E S T )

Q4 200 8

N/A

U nited O nline Inc . (Na sdaqG S : U NT D)

T hurs day , F ebru ary 1 9, 2 009 5: 00 P M (E S T )

Q4 200 8

888-58 7-0611

T he9 L imited (Nas daq G S : NC T Y )

Monday , F ebrua ry 2 3, 20 09 8 : 00 P M ( E S T )

Q4 200 8

1-866-54 3-6 405

Figure 23. Earnings Calendar Source. Company reports

Page 16 C omparable C ompa ny Analysis > W eb 2.0 P rice P erforma nc e C omp any Name

A cceleriz e Ne w Me dia , Inc. A ctoz S oft C o., L td. A Q Inte ra ctive, Inc. A s s ocia ted M edia H oldings Inc. B oomJ Inc B right Things plc B roadW ebA s ia I nc. C D C C orp. C hina G ate wa y C orporation C hines e G a me r Interna tional C orne rW orld C orporation D AD A S pA D igita lFX International, Inc. D igita lP os t Inte ra ctive, Inc. D igita lTown, Inc. D olphin Digital M edia, Inc. E olith Co. L td. E xtens ions , Inc. F ina ncia l Me dia G roup, Inc. F luid M us ic C anada, Inc. F rogs ter I nte ractive P ictures A G G a mania D igita l E nterta inment C o., L td. G a meOn C o Ltd. G e oS entric Oyj G ia nt Interactive G roup, Inc. G igaM edia L td. G oF is h C orporation G ra vity C o., Ltd G re e, Inc. G ungH o O nline E nterta inment, Inc. H anbitS of t, I nc. IA S E ne rgy, Inc. Idea E dge , Inc. J u mbuc k E nte rta inment P ty L td. J u mpT V Inc. K aboos e Inc. K ings o ft Co. L td. L ingo M edia C orporation L ive W orld I nc. L ookS mart, Ltd. M agnitude Information S ys te ms Inc. M ixi, Inc. M oggle, Inc N E O W IZ G a mes C orporation N etDra gon W e bS oft, Inc. N etea s e.co m Inc. N eX plore Corpora tion N gi G ro up Inc. N orthga te T echnologies Limite d Open T ext C orp. Openwa ve S ys te ms Inc. P erfec t W orld Co ., Ltd. P hotoC ha nnel N e tworks Inc. Quepas a C orp. S handa Inte ra ctive E nterta inment L td. S hutte rfly, Inc. S K C o mmunications C o., Ltd. S NA P I nte ractive , Inc. S NM G loba l H oldings S ocial M e dia V enures , Inc. S park Ne tworks , Inc. S pec trumD NA , I nc. T e nce nt Holdings L td. T he P arent C ompany T he9 Limited T heS tre et.com, Inc. T ree .C om, Inc. U nis e rve C ommunications Corp. U nite d Online Inc. U OMO M edia, Inc V OIS , Inc. W e bz en Inc. W iz zard S oftware Corporation W ooz yF ly, I nc. W orlds .com Inc. W ynds torm Corporation XI NG AG Y eda ngOnline C orp. Y nk K orea Inc. ZipL oca l Inc. A ver age

Figure 24. Price Performance Source. Capital IQ

C urrenc y

Tic ker

E xch ange

US D Market C ap ( $m)

US D KR W J PY US D US D GBP US D US D US D TWD US D E UR US D US D US D US D KR W US D US D C AD E UR TWD J PY E UR US D US D US D US D J PY J PY KR W US D US D AU D C AD C AD HKD C AD US D US D US D J PY US D KR W HKD US D US D J PY I NR US D US D US D C AD US D US D US D KR W US D US D US D US D US D HKD US D US D US D US D C AD US D US D US D US D US D US D US D US D E UR KR W KR W C AD

AC L Z A 05 279 0 3 83 8 AS MH B OMJ AIM:B G T B W BA CH I N. A CG W Y G T S M:3 08 3 CWR L C M:D A D XN DG L P DGT W DP D M A 04 106 0 E XT I F NGP T S X: F MN FR G 6 18 0 3 81 2 G E O1 V GA G IG M G OF H GR VY T S E : 363 2 3 76 5 A 04 708 0 IA S C .A OT C B B :ID AE A S X:J MB T S X:J T V T S X:K AB 3 88 8 T S XV :L M LV W D L OOK MA G Y 2 12 1 MMOG A 09 566 0 77 7 NT E S N XP C 2 49 7 59 00 57 O TEX OP WV PW R D T S XV :P N QP S A S ND A S F LY A 06 627 0 S TVI S N MN S MV I L OV S P XA 70 0 K ID S .Q NC T Y TSCM TRE E T S XV : US S UNTD U OMO V OI S W ZE N W ZE W ZY F W DD D W YND O 1B C A 05 277 0 A 02 377 0 T S XV : ZIP

OT C B B K OS E TSE OT C P K OT C B B A IM OT C P K N as daqG S OT C B B GTS M OT C B B CM A ME X OT C B B OT C B B OT C B B K OS E OT C P K OT C B B TSX XT R A GTS M TSE H LS E NY S E N as daqG S OT C B B N as daqG M TSE OS E K OS E OT C B B OT C B B AS X TSX TSX S E HK TSXV OT C P K N as daqG M OT C B B TSE OT C B B K OS E S E HK N as daqG S OT C P K TSE B SE N as daqG S N as daqG S N as daqG S TSXV N a s da qC M N as daqG S N as daqG S K OS E OT C B B OT C P K OT C P K A ME X OT C B B S E HK OT C P K N as daqG S N as daqG M N as daqG M TSXV N as daqG S OT C B B OT C B B N as daqG M A ME X OT C B B OT C B B OT C B B XT R A K OS E K OS E TSXV

9 .4 77 .7 19 .7 0 .2 30 .7 3 .8 12 7.3 10 1.4 0 .0 28 0.0 19 .3 13 1.1 2 .7 1 .0 40 .7 28 .7 20 .5 18 .9 1 .0 24 .1 14 .4 99 .1 13 0.2 46 .8 1 ,46 9. 0 40 2.0 5 .1 19 .5 0 .0 12 8.7 53 .4 1 .8 21 .1 13 .5 45 .7 46 .0 42 2.3 10 .0 1 .2 23 .7 12 .7 75 9.2 70 .6 19 2.9 19 2.9 2 ,48 9. 3 46 .9 37 .0 28 .4 1 ,87 7. 2 61 .6 89 7.9 44 .3 23 .1 2 ,17 1. 7 22 2.2 23 9.6 10 .7 0 .0 0 .0 51 .5 4 .9 1 0,4 48 .0 1 .3 41 1.9 85 .7 39 .1 1 .6 48 2.0 6 .8 5 .4 17 .3 28 .9 2 .6 11 .5 2 .2 21 0.7 76 .6 8 .0 1 .3 314.6

C urrent Pric e

0.3 5 12, 15 0.0 0 33, 10 0.0 0 0.0 1 0.7 5 0.0 2 1.5 0 0.9 4 0.0 0 11 1.0 0 0.4 1 6.1 9 0.1 1 0.0 2 1.5 0 0.5 9 60 5.0 0 0.2 0 0.0 2 0.5 6 4.6 8 2 2.0 0 1 19, 70 0.0 0 0.0 4 6.1 8 7.4 4 0.2 0 0.7 0 5, 47 0.0 0 1 03, 00 0.0 0 3, 35 5.0 0 0.0 3 0.5 0 0.4 0 0.4 9 0.4 0 3.0 5 0.9 5 0.0 4 1.3 9 0.0 3 4 54, 00 0.0 0 2.0 0 27, 70 0.0 0 2.8 3 2 0.2 3 0.8 4 27, 41 0.0 0 3 9.5 5 3 6.1 7 0.7 4 1 5.7 4 1.6 1 1.8 2 3 1.3 0 8.8 4 8, 03 0.0 0 1.0 0 0.0 0 1.3 9 2.4 0 0.1 0 4 5.1 0 0.0 5 1 4.9 2 2.8 1 4.1 7 0.0 8 5.8 8 0.0 8 0.7 5 1.4 6 0.6 4 0.1 5 0.2 2 0.1 2 3 1.0 0 6, 75 0.0 0 4, 51 5.0 0 0.0 2

1 Wk

1 Mth

3 Mth

6 Mth

1 Yr

52 Week

-1 2. 5% 5 .2% -1 5. 1% -5 0. 0% -1 6. 7% 1 4.5 % 4 8.5 % 2 5.3 % -2 5. 0% 2 2.9 % 6 4.0 % 9 .9% -8.3 % -1 6. 7% -3 4. 8% -1 5. 7% 1 4.2 % 3 3.3 % -2 5. 0% 8 0.6 % 1 .1% 5 .8% 0 .2% 3 3.3 % 6 .6% 1 4.1 % 0 .0% -2.5 % -7.8 % -3.4 % 1 0.4 % 1 9.0 % 1 9.0 % -1 6. 7% 1 1.4 % -7.0 % 1 4.7 % -9.5 % -2 0. 0% 3 .0% 1 1.5 % -1 5. 0% 3 3.3 % 1 7.4 % 2 .9% 8 .0% 5 2.7 % -2 0. 1% 1 .7% 4 .1% -8.0 % 1 3.2 % -6.4 % -2.7 % 7 .1% 2 9.6 % 3 .2% 0 .0% 20 0.0 % 7 .8% -0.4 % 0 .0% -4.1 % 6 .0% 0 .1% -2.1 % 4 .3% 0 .0% -2.0 % 0 .0% 8 7.5 % 0 .7% -8.6 % 0 .0% 1 0.0 % -4.0 % 9 .9% -1.2 % 1 8.7 % 10 0.0 % 9.1%

-12 .5 % 21. 5% 14. 1% -37 .5 % -28 .6 % 57. 6% 1 72 .7 % -21 .0 % -25 .0 % 23. 2% -12 .8 % -11 .9 % -13 .9 % -31 .8 % -44 .4 % -26 .3 % 6. 1% -80 .2 % -70 .0 % 60. 0% -22 .0 % 5. 3% -5 .7% 0. 0% 0. 7% 10. 1% 0. 0% 29. 6% 5. 2% -3 .8% 0. 1% -16 .7 % -37 .5 % 2. 6% 58. 1% -4 .8% 10. 9% -5 .0% -11 .1 % -16 .8 % 7. 4% -19 .9 % 33. 3% 29. 7% -3 .1% 8. 9% 4 60 .0 % -48 .9 % -32 .3 % 19. 8% 0. 5% -12 .6 % 0. 6% -9 .0% 11. 2% 15. 4% 20. 6% 44. 9% 6 50 .0 % 33. 7% -5 .5% -33 .3 % 4. 9% -91 .7 % -0 .4% -8 .2% -9 .3% 1 00 .0 % -5 .3% -33 .3 % 1 50 .0 % 41. 8% -21 .5 % 0. 0% 10. 0% 0. 0% 2. 4% 6. 6% 3. 8% 3 00 .0 % 19.5%

-3 6. 4% 29 .0 % -2 1. 2% -3 7. 5% -6 0. 5% 11 8.9 % 11 .1 % -9.6 % -7 5. 0% 29 .1 % 10 5.0 % -1 6. 1% -5 7. 7% -6 2. 5% -4 0. 0% -3 7. 9% 4 .3% 10 0.0 % -9 2. 5% 60 .0 % 2 .0% 56 .0 % -1.9 % 0 .0% -0.3 % 31 .7 % -4.8 % 29 .6 % NM 0 .1% 20 .9 % -7 0. 6% -7 4. 0% -5.9 % -9.3 % 0 .0% 51 .7 % -1 4. 4% -5 0. 0% -1 6. 8% 52 .6 % -3 4. 4% NM 93 .7 % 9 .7% -3.5 % -6.7 % -6 5. 8% -3 8. 7% 24 .3 % 17 .6 % -1 3. 7% -6.9 % -1 9. 8% 29 .7 % 26 .5 % 62 .2 % 12 2.2 % -9 7. 0% -4.1 % -1 8. 4% -5 8. 3% -1 1. 7% -9 2. 9% 17 .1 % -1 3. 8% 98 .6 % -5 5. 6% -1 7. 4% -5 7. 9% 0 .0% 57 .0 % -1 6. 9% NM 10 .0 % -4 0. 0% 25 .5 % 8 .9% -2 3. 1% 10 0.0 % -1.1%

-53 .3 % 39 .8% -77 .0 % NM -76 .3 % 31 .3% 30 .4% -67 .2 % -95 .0 % 27 .9% -32 .8 % -47 .0 % -77 .1 % -76 .5 % -57 .1 % NM -24 .8 % NM -98 .0 % -65 .0 % -14 .1 % -16 .0 % -0 .7% -42 .9 % -37 .9 % -40 .0 % -34 .4 % -54 .2 % NM -46 .9 % -14 .0 % -90 .0 % -79 .8 % -28 .6 % -40 .2 % -54 .0 % 5. 5% -47 .2 % -81 .8 % -53 .4 % 45 .0% -33 .2 % NM 22 .8% -61 .1 % -15 .9 % 52 .7% -66 .2 % -86 .7 % 6. 2% -52 .5 % -36 .5 % -52 .6 % -38 .7 % 24 .4% -13 .8 % -40 .5 % 12 .4% -99 .8 % 4 56 .0% -43 .4 % NM -31 .7 % -97 .0 % -17 .8 % -59 .2 % -51 .8 % -60 .0 % -47 .5 % -82 .2 % -81 .3 % -49 .5 % -59 .2 % NM -29 .0 % -80 .0 % 9. 4% -28 .3 % -56 .4 % -81 .8 % -33.1%

NM 3 7. 3% -88 .0% -87 .5% -40 .0% -34 .3% NM -76 .6% -99 .6% 3 1. 8% -72 .7% -55 .1% -90 .7% -94 .7% -31 .8% NM -67 .6% 3 3. 3% -92 .5% NM -30 .8% -14 .7% -2. 7% -20 .0% -41 .1% -62 .8% -39 .4% -70 .0% NM -34 .4% -51 .9% -93 .6% -56 .5% -46 .7% -60 .5% -81 .6% 1 8. 2% -13 .6% -85 .2% -61 .9% 1 07 .1% -59 .8% NM -6. 1% -76 .8% 1 4. 9% NM -82 .2% -91 .9% 6.6 % -66 .9% -32 .0% -57 .3% -42 .2% 1 0. 8% -46 .8% -69 .3% 1 1. 1% -1 00 .0 % NM -56 .4% NM -9. 6% -99 .1% -16 .3% -74 .8% NM -81 .4% -48 .8% -88 .9% NM -49 .7% -73 .9% NM -43 .6% NM -25 .4% -19 .0% -76 .2% -84 .0% -46.4%

-5 6.3 % -4 .7% -9 0.3 % -9 3.8 % -7 7.3 % -5 3.6 % -5 0.0 % -7 7.6 % -9 9.8 % -1 0.5 % -7 3.5 % -6 1.7 % -9 1.5 % -9 6.8 % -7 5.4 % -4 7.8 % -7 1.5 % -8 0.2 % -9 8.5 % -7 2.5 % -4 2.9 % -4 0.5 % -2 6.8 % -5 5.6 % -6 4.1 % -6 4.5 % -6 6.1 % -7 3.6 % -1 3.2 % -7 6.3 % -5 3.9 % -9 3.6 % -8 2.3 % -4 9.4 % -6 5.0 % -8 3.3 % -2 9.2 % -5 6.8 % -9 4.7 % -7 1.0 % -1 7.1 % -6 6.1 % 0. 0% -3 0.8 % -7 9.2 % -2 5.5 % -4 2.1 % -8 6.3 % -9 2.8 % -7 .5% -7 4.1 % -5 3.0 % -6 1.2 % -4 7.4 % -1 8.1 % -5 0.8 % -7 1.0 % -9 .1% -10 0.0 % -7 2.2 % -5 8.0 % -8 3.3 % -3 7.4 % -9 9.2 % -4 7.6 % -7 6.0 % -6 2.4 % -8 2.2 % -5 3.0 % -9 0.0 % -8 6.6 % -6 7.2 % -7 8.3 % -9 6.3 % -5 1.1 % -8 5.9 % -3 3.5 % -4 6.2 % -7 7.3 % -9 0.9 % -62.4%

Page 17

Comparable Company Analys is > W eb 2.0 Valuatio n Multiples

C ompany Name

P rima ry E xc ha nge

Ti ck er

A cc elerize New Media, Inc. A ctoz S oft C o. , L td. A Q Inter a ctiv e, Inc . A ss oc ia ted Media Holdings Inc . B oomJ Inc B right T hings plc B roa dW ebA sia Inc . C DC C orp. C hina Ga tewa y C orpora tion C hines e G a mer Interna tiona l C ornerW orld C or por a tion DA DA S pA Digita lF X Inter na tiona l, Inc . Digita lP ost Intera ctive, Inc. Digita lT own, Inc. Dolphin Digita l Media, Inc. E olith C o. L td. E xtensions , Inc . F inanc ia l Media G roup, Inc . F luid Mus ic C a nada , Inc. F rogs ter Intera c tiv e P ictures A G Ga ma nia Digita l E nterta inment C o., L td. Ga meOn C o L td. GeoS entr ic Oyj Gia nt Intera c tive G roup, Inc. Giga Media L td. GoF ish C orpora tion Gr av ity C o., L td Gr ee, Inc. GungHo Online E nterta inment, Inc. Ha nbitS oft, Inc. IAS E ner gy, Inc . Idea E dge, Inc . Jumbuck E nterta inment P ty L td. JumpT V Inc. K aboos e Inc. K ingsoft C o. L td. L ingo Media C or por a tion L iv eW orld Inc. L ook S ma rt, Ltd. Magnitude Informa tion S y stems Inc. Mix i, Inc. Moggle, Inc NE OW IZ Ga mes C or por ation NetDra gon W ebS oft, Inc. Neteas e. com Inc. NeXplore C orpor a tion Ngi G roup Inc . Northga te T ec hnologies Limited Open T ext C orp. Openwa ve S ystems Inc . P er fect W orld C o. , L td. P hotoC ha nnel Networ ks Inc . Quepa sa C orp. S ha nda Inter ac tiv e E nterta inment L td. S hutterfly, Inc. S K C ommunic a tions C o. , L td. S NAP Inter a ctive, Inc . S NM G loba l Holdings S oc ial Media Venures, Inc. S pa r k Network s, Inc. S pec trumDNA , Inc . T encent Holdings L td. T he P ar ent C ompa ny T he9 L imited T heS treet. c om, Inc . T r ee. C om, Inc . Unis erv e C ommunic a tions C orp. United Online Inc. UOMO Media , Inc V OIS , Inc . W ebzen Inc . W iz za rd S oftwa r e C or por ation W oozyF ly, Inc. W orlds . com Inc. W yndstorm C orpora tion XING AG Yeda ngOnline C orp. Ynk K or ea Inc. ZipLoc a l Inc.

OT C BB K OS E TS E OT C PK OT C BB A IM OT C PK Na sda qGS OT C BB GT S M OT C BB CM A ME X OT C BB OT C BB OT C BB K OS E OT C PK OT C BB TS X XT R A GT S M TS E HL S E NY S E Na sda qGS OT C BB Na sda qGM TS E OS E K OS E OT C BB OT C BB ASX TS X TS X S E HK T S XV OT C PK Na sda qGM OT C BB TS E OT C BB K OS E S E HK Na sda qGS OT C PK TS E B SE Na sda qGS Na sda qGS Na sda qGS T S XV Na sda qC M Na sda qGS Na sda qGS K OS E OT C BB OT C PK OT C PK A ME X OT C BB S E HK OT C PK Na sda qGS Na sda qGM Na sda qGM T S XV Na sda qGS OT C BB OT C BB Na sda qGM A ME X OT C BB OT C BB OT C BB XT R A K OS E K OS E T S XV

AC L Z A 052790 3838 A S MH BO MJ A IM: B GT B W BA C HIN. A CG WY GT S M: 3083 CW R L C M: DA DX N DGL P D GT W DP DM A 041060 EX TI F NGP T S X : F MN FR G 6180 3812 G E O1V GA G IGM G OF H GR V Y T S E : 3632 3765 A 047080 IAS C . A O T C B B: IDA E AS X: J MB T S X : JT V T S X: K AB 3888 T S XV : L M LV W D L OOK MA GY 2121 MMOG A 095660 777 NT E S NXP C 2497 590057 OT E X OPWV PWRD T S XV : PN QP S A S NDA SF LY A 066270 S T VI S NMN S MV I LO V S P XA 700 KIDS . Q NC T Y TS C M TR E E T S X V: US S UNT D UOMO V OIS W ZE N WZE W Z YF W DDD W YND O1B C A 052770 A 023770 T S X V: ZIP

High L ow Average

Figure 25. Valuation Comparison Source. Capital IQ

US D Mark et C ap ($m )

TE V/L TM R e venue

T E V / NT M R ev enue

TE V /L T M E B IT DA

T E V /NT M E BI TDA

P/L TM E PS

P/NT M E PS

P/T a ngBV

9. 4 77. 7 19. 7 0. 2 30. 7 3. 8 127. 3 101. 4 0. 0 280. 0 19. 3 131. 1 2. 7 1. 0 40. 7 28. 7 20. 5 18. 9 1. 0 24. 1 14. 4 99. 1 130. 2 46. 8 1, 469. 0 402. 0 5. 1 19. 5 0. 0 128. 7 53. 4 1. 8 21. 1 13. 5 45. 7 46. 0 422. 3 10. 0 1. 2 23. 7 12. 7 759. 2 70. 6 192. 9 192. 9 2, 489. 3 46. 9 37. 0 28. 4 1, 877. 2 61. 6 897. 9 44. 3 23. 1 2, 171. 7 222. 2 239. 6 10. 7 0. 0 0. 0 51. 5 4. 9 10, 448. 0 1. 3 411. 9 85. 7 39. 1 1. 6 482. 0 6. 8 5. 4 17. 3 28. 9 2. 6 11. 5 2. 2 210. 7 76. 6 8. 0 1. 3

4. 3x 1. 0x 10. 2x 31. 1x 15. 0x 0. 4x 5. 9x 33. 7x 0. 8x 0. 3x 4. 8x 1. 1x 2. 7x 2. 6x 0. 7x 0. 8x 7. 7x 1. 7x 2. 5x 0. 9x 0. 7x 0. 8x 4. 8x 0. 9x 3. 2x 3. 2x 5. 3x 1. 4x 0. 2x 0. 2x 2. 6x 3. 1x 0. 6x 1. 6x 4. 2x 1. 1x 0. 1x 0. 8x 12. 5x 0. 2x 0. 1x 0. 2x 0. 2x 1. 6x 15. 1x 4. 7x 3. 8x 1. 5x 0. 6x 0. 7x

0. 4x 1. 9x 1. 6x 0. 8x 2. 3x 1. 9x 0. 7x 0. 1x 0. 2x 0. 8x -

5. 4x 8. 4x 12. 4x 6. 7x 4. 9x 0. 1x 4. 0x 3. 2x 7. 0x 6. 2x 1. 8x 11. 5x 9. 5x 13. 4x 5. 2x 0. 3x 1. 2x 10. 3x 4. 5x 16. 9x 41. 2x 4. 0x 25. 2x 0. 7x 36. 9x 6. 4x 9. 8x 6. 8x -

6. 4x 6. 2x 5. 8x 8. 9x 5. 7x 4. 2x 2. 1x 3. 3x -

15. 1x 16. 8x 7. 9x 11. 3x 12. 8x 1. 3x 11. 8x 7. 1x 12. 4x 3. 4x 33. 4x 10. 9x 5. 5x 1. 9x 10. 1x 1. 8x 38. 4x 1. 4x 1. 9x 50. 0x 59. 1x 5. 2x 34. 2x 1. 1x 14. 5x 7. 3x 4. 2x 20. 5x 9. 0x -

14. 0x 12. 9x 10. 2x 10. 8x 14. 1x 24. 7x 7. 5x 25. 6x 11. 3x 7. 3x 7. 7x -

1. 5x 0. 3x 5. 5x 1. 9x 1. 4x 1. 5x 1. 6x 7. 0x 0. 3x 3. 9x 36. 9x 1. 8x 18. 2x 1. 6x 3. 2x 2. 7x 0. 6x 0. 8x 5. 7x 6. 4x 1. 1x 0. 5x 0. 5x 0. 8x 0. 5x 15. 2x 9. 4x 1. 0x 1. 3x 7. 8x 5. 2x 13. 6x 0. 2x 0. 9x 0. 6x 5. 6x 4. 2x -

10, 448. 0 0. 0 314.6

33. 7x 0. 1x 4.1x

2. 3x 0. 1x 1.1x

41. 2x 0. 1x 9.4x

8. 9x 2. 1x 5.3x

59. 1x 1. 1x 14.2x

25. 6x 7. 3x 13.3x

36. 9x 0. 2x 4.6x

Page 18

Comparable Company Analys is > W eb 2.0 S u mmary by C ountry C ompany Name U nite d S ta te s

US D Ma rke t Ca p ($m) 37

C hina

Av g US D Ma rke t Ca p ($m) 18 ,50 3. 2

C hina

US D LT M T otal R ev ($m) 2 ,3 12. 9

2,6 89 .7

C hina

1,5 65 .9

C anada

9

C anada

2 ,03 4. 7

T aiwan

2 60. 4

U nited S ta te s

S outh K orea

9

U nite d S ta te s

1 ,51 7. 9

C anada

2 26. 1

C anada

1 ,07 4. 7

C hina

8

J a pa n

J a pa n T a iwan

6

78 1. 1

3

T a iwan S outh K orea

G e rma ny

2

G e rma ny

US D L TM Total E B IT DA ($m)

C hina

8 87 .0

E B I TDA % 1 ,38 2. 8

F inland

C a na da

18 9. 2

T aiwan

6 3.5 % 3 6.2 %

J a pa n

12 3. 4

India

2 5.4 %

J a pa n

1 79. 1

S outh K ore a

5 22 .6

T a iwa n

8 4. 6

U nite d S ta tes

2 1.0 %

1 31. 1

4 0. 1

G e rma ny S outh K orea

1 9.6 %

4 28 .1

S outh K ore a U nited S tate s

5 6. 9

1 12. 5

J a pa n H ong K ong

4 83 .7

70 5. 4

Italy G e rma ny

22 5. 0

H ong K ong

1 01. 4

T a iwa n

3 49 .0

I taly

3 5. 4

Italy

1 6.0 % 8 .4 %

1 7.3 %

A us tra lia

1

Italy

13 1. 1

S outh K orea

78. 4

I taly

2 21 .4

I ndia

2 4. 5

C anada

H ong K ong

1

H ong K ong

10 1. 4

F inla nd

46. 8

I ndia

1 37 .2

H ong K ong

1 8. 8

C hina

6 .7 %

India

1

F inla nd

U nite d S ta tes

41. 0

G erma ny

46 .2

G ermany

1 2. 7

H ong K ong

4 .4 %

4 6. 8

F inla nd

1

India

2 8. 4

India

28. 4

A us tra lia

10 .8

Italy

1

A us tra lia

1 3. 5

Aus tralia

13. 5

F inla nd

5 .4

U nited K ingdom

1

U nite d K ingdom

0 .2

F inla nd

U nite d K ingdom Gr and T otal

80

Gr and T otal

3. 8 25,167. 1

U nite d K ingdom Gra nd Tota l

3. 8 314. 6

U nited K ingdom G rand T otal

7,347.2

A us tra lia

G rand Total

4. 9 -1. 7 -1 2. 3

J a pan Aus tralia U nite d K ingdom

3 .7 % -1 5. 3% NA

1,959. 3

Gra nd Tota l

16.6%

1 ,10 9. 5

H LS E

6 3.5 %

Figure 26. Comparison by Country Source. Capital IQ

Comparable Company Analys is > W eb 2.0 S u mmary by E xc h ange C ompany Name

US D Ma rke t Ca p ($m)

OT C B B

20

S EHK

N as daqG S

10

OT C P K K OS E

8 7

Av g US D Ma rke t Ca p ($m)

US D LT M T otal R ev ($m)

US D L TM Total E B IT DA ($m)

E B I TDA %

11 ,06 3. 3

S E HK

3 ,6 87. 8

N as daqG S

3 68 .9

N a s da qG S

N as daqG S

9 ,11 7. 3

NYS E

1 ,4 69. 0

S EHK

3 68 .4

S E HK

52 9. 8

OT C B B

5 1.2 %

NYS E TS E

1 ,46 9. 0

N as daqG S GT S M

9 11. 7

NYS E CM

2 45 .1

NY S E TS E

15 5. 6

2 21 .4

10 7. 0

N as daqCM GT S M

3 6.2 %

94 6. 1

1 89. 5

4 7.8 %

TS E

5

K OS E

66 8. 6

TSE

1 89. 2

B SE

1 37 .2

K OS E

5 6. 1

BS E

2 5.4 %

N as daqG M

5

GTS M

37 9. 1

CM

1 31. 1

OSE

1 11 .6

G TSM

3 6. 6

NYS E

2 3.9 %

T S XV

4 3

OT C B B

28 6. 1 22 5. 0

OS E

1 28. 7 1 12. 5

TS E

93 .0 85 .9

CM

3 5. 4 2 4. 5

XT R A

A ME X

1 9.6 % 1 7.3 %

S E HK

3

OT C P K

19 5. 8

KO SE

95. 5

G TS M

74 .3

OSE

1 6. 4

CM

1 6.0 %

TS X GT S M

3

18 5. 2

4. 9

TSE OT C P K

1 3.5 %

27 .7

X TR A ASX

1 2. 7

38. 6

K OS E A ME X

66 .7

13 1. 1

H LS E TSX

46. 8

2

N as daqG M CM

XT R A

2

OS E

12 8. 7

N as daqG M

37. 0

TS X

25 .5

A ME X

0. 8

TSXV

4 .7 %

A IM

1

TS X

11 5. 8

BS E

28. 4

XT R A

23 .1

A IM

-1. 7

S E HK

3 .5 %

NYS E

1 1

T S XV

-5. 7 -7. 7

N as daqG S

T S XV

21 .0 11 .2

TS X

OT C P K

27. 7 24. 5

O TC P K

T S XV

8 3. 1 5 7. 2

AM E X

H LS E

N as daqG M

-2.1 % -5.7 %

N as daqC M

1

H LS E

4 6. 8

N as daqC M

23. 1

ASX

10 .8

N a s da qC M

-1 1. 8

TSX

-6.4 %

CM B SE

1

2 8. 4

-1 6. 6

AS X OS E

-1 5. 3%

1 .7

HL S E N a s da qG M

-1 2. 3

14. 3

H LS E O TC B B

5 .4

2 3. 1

TSXV OT C B B

14. 3

1

B SE N as daqC M

ASX

1

ASX

1 3. 5

AS X

13. 5

A IM

0 .2

O T CP K

-2 7. 2

AM E X

-2 6. 4%

OS E

1

A IM

3. 8

AI M

3. 8

N as daqC M

0 .1

O T CB B

-4 7. 0

AI M

Gr and T otal

80

XT R A

A ME X

Gr and T otal

Figure 27. Comparison by Exchange Source. Capital IQ

25,167. 1

XT R A

Gra nd Tota l

314. 6

N as daqG M

G rand T otal

100.6

B SE

G rand Total

1,959. 3

KO SE

Gra nd Tota l

7 .0 %

-2 5. 6% NA 16.6%

Page 19

Financing - Last Three Months (US$ m) Month

Company Name

Country

Dec-08

GoFish NetShelter Blue Kai Taptu FooMojo Scribd Superfish Tagged Snapmylife Jackbe ChakPak Tumblr Playdo Overlay.TV DotBlu Angie's List StockTwits

USA Canada USA UK USA USA I srael USA USA USA I ndia USA Sweden Canada USA USA USA

Angel/Seed

USA USA France USA USA USA Korea USA USA USA USA I srael USA USA USA USA France USA USA USA USA USA USA USA Austria UK USA Canada Canada USA

Jan-09 Total Feb-09

Figure 28. Financing, Last Three Months Source. Company reports

Series C

Series D

Series E

9.0 5.3 5.0 5.0 5.0 5.0 4.5 4. 3 3. 8 2. 0 1.0 22.5

0. 8 31.9

49.2

1.0

5.0

12.5 12.0 11.4 10.0 10.0 10.0 10.0 10.0 10.0 10.0 9.0 8. 0 8.0 7.5 7.0 6.5 6.2 6.0 6.0 5. 0 5.0 5. 0 5.0 3. 5 2. 5 1. 2 1.0 1.0 0.2 45.2

France USA USA Canada USA

68.9

73.2

10.0

9.0

4.0 3. 0

2.2

5.0

22.5

13.0

88.6

131.1

12.5 12.0 11.4 10.0 10.0 10.0 10.0 10.0 10.0 10.0 9.0 8.0 8.0 7.5 7.0 6.5 6.2 6.0 6.0 5.0 5.0 5.0 5.0 3.5 2.5 1.2 1.0 1.0 0.2 199.5 9.0 4.3 4.2 4.0 3.0

4. 3 4. 2

11.5

Grand Total 22.5 11.1 10.5 9.9 9.9 9.0 5.3 5.0 5.0 5.0 5.0 4.5 4.3 3.8 2.0 1.0 0.8 114.6

9. 9

Feb-09 Total Gr and Total

Series B

10.5 9.9

2.2 Tvtrip TextDigger OneSpot Mixpo 7 Billion People

Se ries A 11.1

5.0 AdMob Aster Data System s VirtuOz IMVU NewsGator Go Internet Media Nurien DECA Yodle RatePoint One True Media SundaySky Play Hard Sports JibJab Xobni InsideView Kewego Motionbox SocialMedia AboutUs Geni Gbox Sportsblogs E-Global Sports Network Tripwolf Hubdub Snooth CoveritLive Identi.ca Meez

PIPE 22.5

Dec-08 Total Jan-09

Debt financing

24.5 74.2

5.0

10.0

338.5

Page 20

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.

Information about Research Capital Corporation’s Rating System, the distribution of our research to clients and the percentage of recommendations which are in each of our rating categories is available on our web site at www.researchcapital.com. The information contained in this report has been drawn from sources believed to be reliable but its accuracy or completeness is not guaranteed, nor in providing it does Research Capital Corporation assume any responsibility or liability. Research Capital Corporation, its directors, officers and other employees may, from time to time, have positions in the securities mentioned herein. Contents of this report cannot be reproduced in whole or in part witho ut the expressed permission of Research Capital Corporation. (U.S. Institutional Clients — Research Capital U.S.A. Inc. (a wholly owned subsidiary of Research Capital Corporation) accepts responsibility for the contents of this report subject to the terms & limitations set out above. Firms or institutions receiving this report should effect transactions in securities discussed in the report through Research Capital U.S.A. Inc., a Broker-Dealer Registered with the United States Securities and Exchange Commission).

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