Web 2.0 Weekly - June 22, 2010: "AOL Sells Bebo at Massive Loss"

Web 2.
0 Weekly
“AOL Sells Bebo For Massive Loss”
June 22, 2010
David Shore, CFA, MBA 416.860.6784

dshore@mackieresearch.com
Damian Wojcichowsky, CFA 416.860.7652
This report has been created by Analysts that are employed by Mackie Research Capital Corporation, a Canadian Investment Dealer.
For further disclosures, please see last page of this report.
www.mackieresearch.com
Copyright © 2000-2010, Mackie Research Capital Corporation, All rights reserved www.mackieresearch.com
Key Developments (past week)
Deals (M&A, Finance) – Bebo a Disastrous Investment for AOL
AOL is reported to have sold Bebo, the UK-based social network it bought just two
years ago for $850 mm, to private equity firm Criterion Partners for under $10 mm.
Based on our calculations, AOL paid the equivalent of $38 per Unique Visitor (UV) for
Bebo, and sold it for under $1 per UV.
Financial Results/Guidance/Partnerships/Product
Multiplied Media (TSXV:MMC) announced it would be adding Telus Live Agents to its
popular location-based search application, Poynt
Mobile Data Corp. (OTCBB:MBYL) reported unaudited earnings results for the third
quarter and nine months ended April 30, 2010. For the quarter, the company has
reported net loss of $24,096 compared to $20,504 for the same period a year ago. For
the nine months, the company has reported net loss of $137,531 compared to $129,675
for the same period a year ago. Net cash used in operations was $84,802 compared to
$69,666 for the same period a year ago.
2 www.mackieresearch.com
Public Company Data
Aggregate Public Data
Web 2.0 Public Companies Total Median Max Min

# Companies 101 - - -
Market Cap (US$ mm) 77,334.7 73.1 30,367.3 1.2
Revenue (US$ mm) 23,508.7 56.9 3,057.7 0.0
1 Year revenue growth 5.7% 8961.6% -100.0%
EBITDA as % of revenue - 13.4% 63.1% -63.7%
Net cash (US$ mm) 9,036.9 2.3 1,835.9 -670.8
TEV/Revenue - 2.0x 37.2x 0.0x
TEV/EBITDA - 8.8x 45.0x 0.6x
P/E - 17.0x 91.3x 0.0x
Relative to 52 week high -38.4% -1.8% -95.6%
Source: CapitalIQ
5
0
5
10
15
20
25
30
Gaming
28
Social Networking
16
Media
10
8
Diversified
6
Marketing
5
Mobile
Source: CapitalIQ
3
Infrastructure
3
SMS/Voice
3
Enterprise
3
Advertising
2
Internet Retail
2
Virtual World
By Sector
2
Dating
2
Music
1
Vertical Communities
1
Collaboration
1
Podcasting
1
Learning
1
Video
1
Search
1
Payment
1
Financial Services
Public Company Distribution
0
5
10
15
20
25
30
35
40
45
United States
Canada
China
South Korea
Japan
Taiwan
Hong Kong
Germany
Poland
Australia
United Kingdom
By Country
Italy
Finland
Sweden
India
Russia
Malaysia
Switzerland
Valuation Dashboard – 1 Week
Market Cap EV/Revenue
Flat
7% Falling Flat
44% 1%
Falling
33%
Rising
60%
Rising
55%
EV/EBITDA P/E
Flat Flat
2% 0%
Falling
Falling 33%
35%
Rising
63% Rising
67%
7
Source: CapitalIQ
Multiple (x)
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
3.0x
3.5x
4.0x
4.5x
5.0x
# companies
5/4/2009
5/11/2009
5/18/2009
5/25/2009
6/1/2009
6/8/2009
6/15/2009
6/22/2009
6/29/2009
7/6/2009
7/13/2009
7/20/2009
7/27/2009
8/3/2009
8/10/2009
8/17/2009
Median EV/Revenue
8/24/2009
8/31/2009
9/7/2009
9/14/2009
9/21/2009
9/28/2009
10/5/2009
10/12/2009
10/19/2009
10/26/2009
11/2/2009
Median
11/9/2009
11/16/2009
11/23/2009
11/30/2009
12/7/2009
12/14/2009
12/21/2009
12/28/2009
1/4/2010
1/11/2010
Long-term average
1/18/2010
1/25/2010
2/1/2010
2/8/2010
2/15/2010
2/22/2010
3/1/2010
3/8/2010
3/15/2010
3/22/2010
3/29/2010
4/5/2010
but remain well
increase slightly
4/12/2010
below LT average
Revenue multiples
4/19/2010
4/26/2010
5/3/2010
5/10/2010
5/17/2010
5/24/2010
5/31/2010
6/7/2010
6/14/2010
6/21/2010
394040404141404343454647474747485051515050535656606161646666676564667071717274736871737372747679808280818081828286838584
8
Source: CapitalIQ
Multiple (x)
# companies
0.0x
5.0x
10.0x
15.0x
20.0x
25.0x
5/4/2009
5/11/2009
5/18/2009
5/25/2009
6/1/2009
6/8/2009
6/15/2009
6/22/2009
6/29/2009
7/6/2009
7/13/2009
7/20/2009
7/27/2009
8/3/2009
Median EV/EBITDA
8/10/2009
8/17/2009
8/24/2009
8/31/2009
9/7/2009
9/14/2009
9/21/2009
9/28/2009
10/5/2009
10/12/2009
10/19/2009
10/26/2009
11/2/2009
Median
11/9/2009
11/16/2009
11/23/2009
11/30/2009
12/7/2009
12/14/2009
12/21/2009
12/28/2009
1/4/2010
1/11/2010
1/18/2010
Long-term average
1/25/2010
2/1/2010
2/8/2010
2/15/2010
2/22/2010
3/1/2010
3/8/2010
3/15/2010
3/22/2010
3/29/2010
4/5/2010
EV/EBITDA multiples
4/12/2010
4/19/2010
4/26/2010
increase slightly but remain
depressed below LT average
5/3/2010
5/10/2010
5/17/2010
5/24/2010
5/31/2010
6/7/2010
6/14/2010
6/21/2010
2022 2223 23 2222 2324 2322 2424 2626 26 2626 2526 2728 3129 33 3536 3842 3940 3840 4139 39 3942 4342 4143 4343 45 4347 4545 5151 5052 5253 51 5249 5251
9
Source: CapitalIQ
Multiple (x)
# companies
0.0x
5.0x
10.0x
15.0x
20.0x
25.0x
30.0x
35.0x
5/4/2009
5/11/2009
5/18/2009
Median P/E
5/25/2009
6/1/2009
6/8/2009
6/15/2009
6/22/2009
6/29/2009
7/6/2009
7/13/2009
7/20/2009
7/27/2009
8/3/2009
8/10/2009
8/17/2009
8/24/2009
8/31/2009
9/7/2009
9/14/2009
9/21/2009
9/28/2009
10/5/2009
10/12/2009
10/19/2009
10/26/2009
11/2/2009
Median
11/9/2009
11/16/2009
11/23/2009
11/30/2009
12/7/2009
12/14/2009
12/21/2009
12/28/2009
1/4/2010
1/11/2010
1/18/2010
Long-term average
1/25/2010
2/1/2010
2/8/2010
2/15/2010
2/22/2010
3/1/2010
average
3/8/2010
3/15/2010
3/22/2010
3/29/2010
4/5/2010
but also are below LT
P/E multiples increase
4/12/2010
4/19/2010
4/26/2010
5/3/2010
5/10/2010
5/17/2010
5/24/2010
5/31/2010
6/7/2010
6/14/2010
6/21/2010
1919 1818 19 1919 1920 1918 1919 1920 21 2424 2525 2627 2727 31 3233 3133 3335 3538 3939 39 3941 4142 4040 4038 37 3834 3332 3535 3535 3535 35 3531 3433
10
-
5.0
10.0
15.0
20.0
25.0
30.0
# Companies 1
Virtual World
26.5
2
Infrastructure
10.1
1
Learning
9.7
8
Social Networking
5.7
2
Music
4.8
1
4.7
1
Search
4.2
Gaming
21
4.0
6
Diversified
3.7
4
Mobile
3.6
3
SMS/Voice
3.5
6
Marketing
3.1
Average EV/Revenue – by Sector
1
Podcasting
2.8
9
Media
2.6
1
Collaboration
2.5
Advertising
2.3
Internet Retail
2.0
Enterprise
1.8
Video
1.8
Dating
1.3
Financial Services
0.4
Average EV/EBITDA – by Sector
50.0
45.0
45.0
40.0
35.0
30.0
25.0
20.0 17.6
15.8
15.0
11.7 11.6 11.5 11.2
9.8 9.5
10.0 9.0
7.4
5.0
-
Diversified
Advertising
Internet Retail
Search
Enterprise
Mobile
Gaming
Social Networking
Media
Collaboration
Dating
# Companies 1 2 2 5 2 14 6 1 6 1 1
Average P/E – by Sector
100.0
91.3
90.0
80.0
70.0
60.0
54.2
50.0
39.3
40.0
29.7
30.0 25.8
19.9
20.0
15.3 14.3 13.3
10.0
-
Internet Retail Enterprise Collaboration Marketing Social Diversified Advertising Media Gaming
Networking
2 3 1 6 16 8 3 10 28
# Companies
13
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
37
SocialGO PLC
Source: CapitalIQ
27
Worlds.com Inc.
19
SpectrumDNA, Inc.
16
Tencent Holdings Ltd.
Beyond Commerce, Inc.
MOKO.mobi Limited
13 13 13
Paid Inc.
Gree, Inc.
11 11
GeoSentric Oyj
Chinese Gamer International
10 10
Lingo Media Corporation
9
TransGaming, Inc.
Dena Co. Ltd.
Fluid Music Canada, Inc.
8 7 7
DigitalPost Interactive, Inc.
6
HUGHES Telematics, Inc.
Accelerize New Media, Inc.
5 5
WebMediaBrands Inc
Changyou.com Limited
SK Communications Co., Ltd.
4 4 4
Taleo Corp.
Mixi, Inc.
4 3
Kingsoft Corporation Limited
Frogster Interactive Pictures AG
iseemedia Inc.
Wizzard Software Corporation
3 3 3 3
ePro Ltd.
Open Text Corp.
EV/Revenue Ranking
NEOWIZ Games Corporation

Modern Times Group Mtg AB
Sohu.com Inc.
UOMO Media, Inc
XING AG
Velti Plc
Unilava Corporation
PNI Digital Media Inc.
Score Media Inc.
Shutterfly, Inc.
ValueClick, Inc.
Webzen Inc.
2 2 2 2 2 2 2 2 2 2 2 2 2 2
GungHo Online Entertainment, Inc.

Myriad Group AG
NeuLion Incorporated
Platforma Mediowa Point Group S.A.
HanbitSoft, Inc.
YD Online Corp.
Spark Networks, Inc.
SocialGo has highest
Gamania Digital Entertainment Co., Ltd.

revenue multiple at 37x
2 2 2 2 2 2 2 1
Hutchison Telecommunications Hong Kong Holdings Ltd.

infoGROUP, Inc.
Oriented Media Group Berhad
SNAP Interactive, Inc.
OAO RBC Information Systems
NetDragon WebSoft, Inc.
CornerWorld Corporation
Internet Group SA
The New York Times Company
IAC/InterActiveCorp.
TheStreet.com, Inc.
Ynk Korea Inc.
AQ Interactive, Inc.
Points International Ltd.
Cyberplex Inc.
CDC Corp.
United Online, Inc.
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
AOL, Inc.
Uniserve Communications Corp.
DADA SpA
Northgate Technologies Limited
Glu Mobile, Inc.
GigaMedia Ltd.
Actoz Soft Co., Ltd.
Tree.Com, Inc.
Openwave Systems Inc.
GameOn Co Ltd.
RealNetworks Inc.
1 1 1 1 1 0 0 0 0 0 0
Jumbuck Entertainment Limited

Asknet AG
LookSmart, Ltd.
0 0 0
Dolphin Digital Media, Inc.

14
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
50.0
Source: CapitalIQ
45.0
HanbitSoft, Inc.
35.3
30.3
Taleo Corp.
28.4
Gree, Inc.
19.819.419.2
Myriad Group AG
17.8
Dena Co. Ltd.
16.716.1
Mixi, Inc.
Shutterfly, Inc.
15.414.9
TheStreet.com, Inc.
Openwave Systems Inc. 14.213.7
EV/EBITDA Ranking
Score Media Inc.

YD Online Corp.
12.812.612.4
Cyberplex Inc.
10.5 9.8

Open Text Corp.
9.3 9.0 9.0 8.7
the group at 45.0x

Velti Plc
SK Communications leads
XING AG
DADA SpA
8.4 8.3 8.3 8.2 8.1 7.9

ValueClick, Inc.
CDC Corp.
infoGROUP, Inc.
7.4 7.4 7.1 7.0 6.8 6.7 6.7

Sohu.com Inc.
5.6 5.6 5.3
United Online, Inc.

3.8

AOL, Inc.
2.5 2.3
GameOn Co Ltd.
1.3 0.6
Excluding EV/EBITDA > 100x
15
Source: CapitalIQ
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
Shutterfly, Inc.
91.3
57.2
CDC Corp.
51.2
Mixi, Inc.
P/E Ranking
infoGROUP, Inc.
47.7 47.0
Open Text Corp.
Gree, Inc. 40.5 39.3

37.4
Dena Co. Ltd. 35.0

32.5 30.9
Velti Plc
26.0 25.9

22.7

19.6

Shutterfly has the
highest P/E at 91.3x
ValueClick, Inc.
17.5 17.0 16.3
Cyberplex Inc.
Sohu.com Inc.

15.3 14.2 13.4
DADA SpA
AOL, Inc.
12.5 11.8
GameOn Co Ltd.
United Online, Inc.

10.2 9.9 9.1

5.5

3.5
Netease.com Inc.
Giant Interactive Group, Inc.
Shanda Interactive Entertainment Ltd.

2.3 2.1 1.9
Perfect World Co., Ltd.

1.2
16
Source: CapitalIQ
(US$m)
# companies
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
6/29/2009
7/6/2009
7/13/2009
7/20/2009
7/27/2009
8/3/2009
8/10/2009
8/17/2009
8/24/2009
8/31/2009
9/7/2009
9/14/2009
9/21/2009
9/28/2009
10/5/2009
10/12/2009
10/19/2009
10/26/2009
11/2/2009
11/9/2009
11/16/2009
11/23/2009
Total Market Capitalization
11/30/2009
12/7/2009
12/14/2009
12/21/2009
12/28/2009
1/4/2010
1/11/2010
1/18/2010
1/25/2010
2/1/2010
2/8/2010
2/15/2010
2/22/2010
3/1/2010
3/8/2010
Total market cap increases to $78 bn
3/15/2010
3/22/2010
3/29/2010
4/5/2010
4/12/2010
4/19/2010
4/26/2010
5/3/2010
5/10/2010
5/17/2010
5/24/2010
5/31/2010
6/7/2010
6/14/2010
6/21/2010
98 98 98 98 98 98 98 98 98 98 97 98 98 98 98 99 99 99 99 99 99 99100100100100100100100100100100100100101101101101101101101101101101101101101101101101101101
17
-
# Companies
5,000.0
10,000.0
15,000.0
20,000.0
25,000.0
30,000.0
35,000.0
40,000.0
8
Diversified
Gaming
28
Media
10
Social Networking
16
1
Collaboration
6
Marketing
3
Enterprise
1
Search
2
Internet Retail
5
Mobile
Total Market Cap – by Sector
2
Music
3
SMS/Voice
3
Advertising
2
Dating
1
Financial Services
1
Video
2
Virtual World
1
Eight Diversified companies
totaling $35 bn in market cap
Payment
1
Learning
3
Infrastructure
1
Podcasting
18
0
1,000
2,000
3,000
4,000
5,000
6,000
Dena Co. Ltd.
Netease.com Inc.
Source: CapitalIQ
Gree, Inc.
AOL, Inc.
Shanda Interactive Entertainment Ltd.
Open Text Corp.
Sohu.com Inc.
Giant Interactive Group, Inc.
Perfect World Co., Ltd.
Hutchison Telecommunications Hong Kong Holdings
Taleo Corp.
ValueClick, Inc.
Mixi, Inc.
Shutterfly, Inc.
United Online, Inc.
RealNetworks Inc.
infoGROUP, Inc.
CDC Corp.
Velti Plc
Myriad Group AG
XING AG
Market Cap Ranking
Openwave Systems Inc.

Fluid Music Canada, Inc.
OAO RBC Information Systems
GigaMedia Ltd.
Webzen Inc.
The9 Limited
HUGHES Telematics, Inc.
TheStreet.com, Inc.
HanbitSoft, Inc.
Cyberplex Inc.
GameOn Co Ltd.
Tree.Com, Inc.
DADA SpA
Paid Inc.
Score Media Inc.
YD Online Corp.
NeuLion Incorporated
Ngi Group Inc.
Moggle, Inc
Quepasa Corp.
Gravity Co., Ltd
TransGaming, Inc.
Glu Mobile, Inc.
WebMediaBrands Inc
DigitalTown, Inc.
ePro Ltd.
dominates group
Multiplied Media Corporation

Socialwise, Inc.
LookSmart, Ltd.
GeoSentric Oyj
Asknet AG
NeXplore Corporation
Tencent’s $31 bn market cap
Ynk Korea Inc.

VOIS, Inc.
Accelerize New Media, Inc.
Lingo Media Corporation
YouBlast Global, Inc.
Wizzard Software Corporation
Dolphin Digital Media, Inc.
Northgate Technologies Limited
Unilava Corporation
iseemedia Inc.
Internet Group SA
Beyond Commerce, Inc.
SocialGO PLC
MOKO.mobi Limited
Kent International Holdings Inc.
DigitalPost Interactive, Inc.
IAS Energy, Inc.
Kiwibox.Com, Inc.
SNAP Interactive, Inc.
En2Go International, Inc.
Worlds.com Inc.
SpectrumDNA, Inc.
Oriented Media Group Berhad
CornerWorld Corporation
BroadWebAsia Inc.
UOMO Media, Inc
Mobile Data Corp.
Price Performance – 1 Week
• Positive price momentum, with 52% of
stocks rising over the past week. Price Momentum
Flat
9%
Rising
Falling
52%
39%
Average Price Performance – 1 Week, by Sector
15.0% 13.3%
11.7%
Video sector shows
10.0% 7.7% highest weekly returns
5.9%
4.2% 3.3%
5.0%
1.8% 1.7% 0.9%
0.3% 0.1% 0.0%
0.0%
-1.9% -2.7%
-5.0% -3.2% -3.6%
-4.8% -5.6%
-10.0% -7.6%
-9.9%
-15.0%
-15.3%-16.2%
-20.0% Internet Retail
Infrastructure
Collaboration
Networking
Virtual World
Financial
Payment
Communities
Advertising
Learning
Music
Enterprise
Search
Marketing
Gaming
Diversified
Mobile
Podcasting
Dating
Services
Media
SMS/Voice
Video
Social
Vertical
Source: CapitalIQ
21
-60.0%
-40.0%
-20.0%
0.0%
20.0%
40.0%
60.0%
BWBA
GEO1V
MBYL
UOMO
WDDD
Source: CapitalIQ
STVI
SPXA
GLUU
DPDM
VOIS
OMEDIA
IEE
TSXV:USS
TSX:FMN
ACLZ
TSXV:LM
GIGM
WSE:PGM
WZE
WSE:IGR
UNTD
DGTW
OTEX
NXPC
TSXV:PN
TSE:2432
O1BC
DGLP
TSCM
700
QPSA
KOSE:A069
A052770
GRVY
SNDA
590057
PWRD
A095660
CYOU
ASX:JMB
MKB
NCTY
DB:M0C
PAYD
ETGI
WEBM
TSXV:TNG
CWRL
Price Performance – 1 Week
3838
VEL
TREE
IUSA
GTSM:3083
IACI
XTRA:A5A
YBLT
LOV
A023770
MTG B
GA
2121
SOHU
2497
RBCI
SEHK:215
SFLY
MYRN
A066270
6180
3888
SEHK:8086
OPWV
3812
TLEO
SCLW
CHIN.A
TSX:SCR
VCLK
777
HUTC
LOOK
A047080
3765
NTES
CM:DA
KNTH
TSX:CX
AIM:SGO
FRG
AOL
NYT
KIWB
RNWK
TSX:NLN
TSE:3632
TSX:PTS
TSXV:MMC
A052790
UNLA
BYOC
IASC.A
22
0%
20%
40%
60%
80%
100%
120%
140%
160%
0%
500%
1000%
1500%
2000%
2500%
3000%
OAO RBC YouBlast Global,
Information Inc.
Systems
Beyond
ePro Ltd.
Source: CapitalIQ
Commerce, Inc.
Beyond Gree, Inc.

Commerce, Inc.
AQ Interactive, Actoz Soft Co.,

Inc. Ltd.
Uniserve
Communications HanbitSoft, Inc.
Corp.
6 Month
1 Month
SK
Velti Plc Communications
Co., Ltd.
SNAP AQ Interactive,
Interactive, Inc. Inc.
Score Media Inc. Cyberplex Inc.
SK
Points
Communications
International Ltd.
Co., Ltd.
Quepasa Corp. DADA SpA

Price Performance (Top 10)
0%
50%
100%
150%
200%
250%
0%
500%
1000%
1500%
2000%
2500%
3000%
3500%
4000%
OAO RBC
Beyond Commerce,
Information
Inc.
Systems
Quepasa
ePro Ltd.
Corp.
YouBlast Global,
ePro Ltd.
Inc.
SK Communications
Velti Plc
Co., Ltd.
Dena Co. Ltd. Velti Plc

1 Year
3 Month
Fluid Music Points International

Canada, Inc. Ltd.
Hutchison
TransGaming, Telecommunications
Inc. Hong Kong Holdings
Ltd.
Frogster
Interactive Gree, Inc.
Pictures AG
Modern Times
LookSmart, Ltd.
Group Mtg AB
Gree, Inc. Glu Mobile, Inc.

23
-60.0%
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
-100.0%
-90.0%
-80.0%
-70.0%
-60.0%
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
Kiwibox.Com, VOIS, Inc.
Inc.
Dolphin Digital
Mobile Data
Source: CapitalIQ
Media, Inc.
Corp.
MOKO.mobi Glu Mobile, Inc.

Limited
SpectrumDNA,
GeoSentric Oyj Inc.
SpectrumDNA, SNAP
Inc. Interactive, Inc.
1 Week
6 Month
En2Go Worlds.com
International, Inc.
Inc.
UOMO Media, UOMO Media,

Inc Inc
Unilava Mobile Data

Corporation Corp.
CornerWorld
GeoSentric Oyj
Corporation
BroadWebAsia BroadWebAsia
Inc. Inc.
-70.0%
-60.0%
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
Price Performance (Bottom 10)
-120.0%
-100.0%
-80.0%
-60.0%
-40.0%
-20.0%
0.0%
Paid Inc.
Cyberplex Inc.
SNAP
Dolphin Digital
Interactive, Inc.
Media, Inc.
Lingo Media
Moggle, Inc Corporation
SpectrumDNA, VOIS, Inc.

Inc.
Beyond
Commerce, GeoSentric Oyj
Inc.
1 Year
1 Month
CornerWorld Mobile Data

Corporation Corp.
YouBlast SpectrumDNA,
Global, Inc. Inc.
UOMO Media, BroadWebAsia

Inc Inc.
En2Go
CornerWorld
International,
Corporation
Inc.
BroadWebAsia Unilava
Inc. Corporation
Capital Market Activity (Financing, M&A)
Financing Activity – Current Month
Company Name Country Sector Acquisition Angel/Seed Debt financing Series A Series B Series C Series D Series E NA Grand Total
Zynga USA Gaming 147.0 147.0
Invite Media USA Analytics 70.0 70.0
FetchBack USA Advertising 40.0 40.0
HauteLook USA Internet Retail 31.0 31.0
Challenge Games USA Gaming 20.5 20.5
Mytopia Israel Gaming 18.0 18.0
Marin Software USA Advertising 11.2 11.2
Apptera USA Mobile Ad 10.0 10.0
BookRenter USA Social Commerce 10.0 10.0
RockYou USA Widget 10.0 10.0
Machinima.com USA Virtual World 9.0 9.0
SafetyWeb USA Social Networks 8.0 8.0
Transpera USA Mobile Ad 7.0 7.0
Kudzu Interactive USA Financial Services 7.0 7.0
Curse USA Social Networks 6.0 6.0
Adisn USA Advertising 5.5 5.5
Connotate USA Analytics 5.3 5.3
Bebo UK Social Networks 5.0 5.0
BigDoor Media USA Media 5.0 5.0
BeachMint USA Social Commerce 5.0 5.0
Metacafe USA Video 5.0 5.0
SponsorPay Germany Virtual Goods 4.6 4.6
LucidMedia USA Advertising 4.5 4.5
Magnetic USA Advertising 4.0 4.0
Gogobot USA Travel 4.0 4.0
Giiv USA Social Commerce 3.4 3.4
Attributor USA Analytics 3.2 3.2
Trefis USA Analytics 3.2 3.2
Metamarkets USA Advertising 2.5 2.5
Snaptic USA Mobile 2.3 2.3
WOWIO USA Internet Retail 1.7 1.7
uCirrus USA Infrastructure 1.7 1.7
Cellixis USA Comment/Reputation 1.5 1.5
Dilithium Networks USA Video 1.5 1.5
Schoology USA Online Learning 1.3 1.3
Thumbtack USA Crowdsourced Content 1.2 1.2
SoGeo Netherlands Location-based SNS 0.8 0.8
Rummble UK Location-based SNS 0.8 0.8
TeamSnap USA Vertical Communities 0.7 0.7
159.0 6.0 1.5 50.1 17.0 47.0 175.9 10.0 11.8 478.3
AOL Takes Huge Loss on Bebo Sale
Estimated Value per Unique Visitor
Source: Company reports, Compete.com
$600 $568
$500 AOL paid $850 mm for Bebo in Mar-08 or

$38/unique visitor (UV) – at the “under $10
$400 $370
mm” price it sold Bebo for last week that
equates to less than $1/UV
($)
$300
$200
$200
$125
$113
$88
$100 $67
$48 $42 $40 $40 $38 $32
$29 $29 $25 $20
$16 $15 $7 $7 $6 $5 $5 $2 $2 $1 $0.79
$-
MMC (Poynt)
Mint.com
FriendFeed
Club Penguin
People Media
PageOnce
StumbleUpon
Rockyou
FriendsReunited
Ustream
Foursquare (rumoured YHOO offer)
Facebook
Plaxo
Linkedin
Foursquare
Foursquare
Urbanspoon
Friendster
Booya
Bebo
Playfish
Zynga
Bebo
Blippy
Gowalla
Yelp
Twitter
Twitter
Dec- Apr- May- Apr- Sep- Oct- Mar- Aug- Sep- Sep- May- Mar- May- Aug- Feb- Feb- Jul- Dec- May- Feb- Nov- Dec- Feb- May- Nov- Aug- Dec- Jun-
09 10 08 10 09 08 10 09 09 09 10 08 09 07 09 08 09 09 10 09 09 09 10 09 09 09 09 10
Financing Activity – Current Month, by Sector
$ Raised # Deals
Social Social
Networks Networks
Internet Retail 4% Other 8%
7% 19% Internet Retail
5%
Advertising
14%
Advertising
14%
Other
52%
Analytics Analytics
17% 13%
Gaming
39%
Gaming
8%
Financing Activity
1000.0
June financing above ~US$265 mm 16.0
monthly total deal value average
14.1
900.0
14.0
800.0 12.2
12.0
700.0 10.3
9.6 9.4 10.0
600.0 8.9
(US$m)
(US$m)
7.8
500.0 8.0
6.4 6.4
400.0 5.8 5.6
5.4 6.0
4.6
300.0
4.0
200.0
2.0
100.0
0.0 0.0
Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10
*Dec-09 includes $180m Zynga investment

Apr-10 includes $300m DST investment
Total Average per Deal LTM Total Average**
**Excludes Dec-09, Apr-
Jun-10 includes $147m Zynga investment 10
29
(US$m)
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
450.0
500.0
# companies
Gaming
13
1
Diversified
5
Collaboration
9
Mobile
8
Media
9
Social Commerce
Crowdsourced
3
Content
Advertising
16
Analytics
14
the past quarter
area of interest in
8
Video
Gaming the biggest
5
Internet Retail
Social Networks
10
5
Financial Services
5
Virtual World
2
Widget
4
Enterprise
9
3
Mobile Ad
5
Infrastructure
1
Mobile Payment
2
2 Virtual Goods
Online Learning
2
Music
1
Aggregation
3
Search
4
Travel
1
Classified
1
Publishing
4
Location-based SNS
1
Microblog
Capital Market Activity Ranking – by Sector, last three months
Micromedia
1
Blog
1
Comment/Reputation
30
(US$ mm)
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
Jan-08
Feb-08
Mar-08
Apr-08
May-08
Jun-08
Jul-08
Aug-08
Sep-08
Oct-08
Nov-08
Social Networks
Dec-08
Jan-09
Feb-09
Gaming
Mar-09
Apr-09
$ Raised
May-09
Advertising
Jun-09
Jul-09
Video
Aug-09
Sep-09
Oct-09
Virtual World
Nov-09
Dec-09
Jan-10
Feb-10
Mar-10
Apr-10
May-10
Jun-10
Top 5 Sectors (2008-present)
(# Deals)
0
5
10
15
20
25
30
Jan-08
Feb-08
Mar-08
Apr-08
May-08
Jun-08
Jul-08
Aug-08
Sep-08
Oct-08
Nov-08
Dec-08
Social Networks
Jan-09
Feb-09
Advertising
Mar-09
Apr-09
May-09
Gaming
# Deals
Jun-09
Jul-09
Aug-09
Virtual World
Sep-09
Oct-09
Video
Nov-09
Dec-09
Jan-10
Feb-10
Mar-10
Apr-10
Top 5 sectors average $170 mm & 15 deals per month (aggregate)
May-10
Jun-10
Upcoming Events/Earnings
Company Date Time Quarter Conf Call Details
Tree.Com, Inc. (NasdaqGM:TREE) 29-Jul-10 11:00 AM (EST) Q2/10 877-874-1588
Source: CapitalIQ
Public Company Listing Trading Current US$ Market
Com pany Nam e Ticker Exchange Currency HQ Price Cap (m m ) Em ployees
A ccelerize New M edia, Inc. ACLZ OTCBB USD United States 0 15.0 10
A cto z So ft Co ., Ltd. A052790 KOSE KRW So uth Ko rea 12,350 93.4 NA
A OL, Inc. AOL NYSE USD United States 23 2,452.4 6,700
A Q Interactive, Inc. 3838 TSE JP Y Japan 145,100 86.6 NA
A sknet AG XTRA :A 5A XTRA EUR Germany 3 20.2 NA
B eyo nd Co mmerce, Inc. BYOC OTCBB USD United States 0 7.9 16
B roadWebA sia Inc. BWB A OTCPK USD United States 0 1.7 46
CDC Co rp. CHIN.A NasdaqGS USD Ho ng Ko ng 2 255.9 NA
Changyo u.co m Limited CYOU NasdaqGS USD China 29 1,493.9 1,308
Chinese Gamer Internatio nal GTSM :3083 GTSM TWD Taiwan 285 770.8 NA
Co rnerWorld Co rpo ratio n CWRL OTCBB USD United States 0 1.9 16
Cyberplex Inc. TSX:CX TSX CA D Canada 1 85.0 NA
DA DA SpA CM :DA CM EUR Italy 4 76.1 597
Dena Co . Ltd. TSE:2432 TSE JP Y Japan 2,794 4,368.7 NA
DigitalPo st Interactive, Inc. DGLP OTCBB USD United States 0 6.6 6
DigitalTown, Inc. DGTW OTCBB USD United States 1 35.7 3
Do lphin Digital M edia, Inc. DP DM OTCBB USD United States 0 12.4 NA
En2Go International, Inc. ETGI OTCBB USD United States 0 4.8 NA
ePro Ltd. SEHK:8086 SEHK HKD Ho ng Ko ng 1 35.1 707
Fluid M usic Canada, Inc. TSX:FM N TSX CA D United States 2 179.9 NA
Fro gster Interactive P ictures A G FRG XTRA EUR Germany 19 60.8 NA
Gamania Digital Entertainment Co ., Ltd. 6180 GTSM TWD Taiwan 55 275.7 NA
GameOn Co Ltd. 3812 TSE JP Y Japan 80,100 84.9 NA
Geo Sentric Oyj GEO1V HLSE EUR Finland 0 22.3 120
Giant Interactive Gro up, Inc. GA NYSE USD China 7 1,653.9 NA
GigaM edia Ltd. GIGM NasdaqGS USD Taiwan 2 122.9 NA
Glu M o bile, Inc. GLUU NasdaqGM USD United States 1 38.3 479
Gravity Co ., Ltd GRVY NasdaqGM USD So uth Ko rea 2 46.0 NA
Gree, Inc. TSE:3632 TSE JP Y Japan 7,550 3,745.2 NA
GungHo Online Entertainment, Inc. 3765 OSE JP Y Japan 203,400 255.9 NA
HanbitSo ft, Inc. A047080 KOSE KRW So uth Ko rea 4,570 85.3 NA
HUGHES Telematics, Inc. HUTC OTCBB USD United States 3 100.1 276
Hutchison Teleco mmunicatio ns Ho ng KongSEHK:21
Ho ldings
5 Ltd. SEHK HKD Ho ng Ko ng 2 1,053.6 1,732
IA C/InterActiveCo rp. IA CI NasdaqGS USD United States 24 2,606.9 3,200
IA S Energy, Inc. IA SC.A OTCPK USD Canada 0 5.6 NA
infoGROUP , Inc. IUSA NasdaqGS USD United States 8 459.7 3,146
Internet Gro up SA WSE:IGR WSE P LN P o land 1 8.4 NA
Public Company Listing cont.
Trading Current US$ Market
Jumbuck Entertainment Limited A SX:JM B A SX A UD A ustralia 0.20 8.6 79
Kent Internatio nal Ho ldings Inc. KNTH OTCP K USD United States 1.95 6.9 NA
Kingso ft Co rpo ratio n Limited 3888 SEHK HKD China 4.34 609.3 2,735
Kiwibo x.Co m, Inc. KIWB OTCB B USD United States 0.01 5.0 6
Lingo M edia Co rpo ratio n TSXV:LM TSXV CA D Canada 0.51 14.6 NA
Lo o kSmart, Ltd. LOOK NasdaqGM USD United States 1.37 23.5 65
M ixi, Inc. 2121 TSE JP Y Japan 402,000.00 681.6 NA
M o bile Data Co rp. M B YL OTCB B USD United States 0.05 1.2 NA
M o dern Times Gro up M tg A B M TG B OM SEK Sweden 452.80 3,887.4 2,936
M o ggle, Inc DB :M 0C DB EUR United States 0.85 49.2 2
M OKO.mo bi Limited M KB A SX A UD A ustralia 0.07 7.3 NA
M ultiplied M edia Co rpo ratio n TSXV:M M C TSXV CA D Canada 0.14 34.4 NA
M yriad Gro up A G M YRN SWX CHF Switzerland 4.49 196.9 NA
NEOWIZ Games Co rpo ratio n A 095660 KOSE KRW So uth Ko rea 42,100.00 756.8 NA
NetDrago n WebSo ft, Inc. 777 SEHK HKD China 3.49 236.4 2,901
Netease.co m Inc. NTES NasdaqGS USD China 33.33 4,316.9 NA
NeuLio n Inco rpo rated TSX:NLN TSX CA D Canada 0.51 58.4 224
NeXplo re Co rpo ratio n NXP C OTCP K USD United States 0.36 20.1 NA
Ngi Gro up Inc. 2497 TSE JP Y Japan 38,500.00 52.4 NA
No rthgate Techno lo gies Limited 590057 B SE INR India 16.00 12.2 160
OA O RB C Info rmatio n Systems RB CI M ICEX RUB Russia 38.69 169.9 2,523
Open Text Co rp. OTEX NasdaqGS USD Canada 38.75 2,200.2 3,700
Openwave Systems Inc. OP WV NasdaqGS USD United States 2.15 180.3 590
Oriented M edia Gro up B erhad OM EDIA KLSE M YR M alaysia 0.09 3.6 NA
P aid Inc. P A YD OTCB B USD United States 0.26 70.5 20
P erfect Wo rld Co ., Ltd. P WRD NasdaqGS USD China 25.16 1,259.5 NA
P latfo rma M edio wa P o int Gro up S.A . WSE:P GM WSE P LN P o land 1.45 46.2 NA
P NI Digital M edia Inc. TSXV:P N TSXV CA D Canada 1.56 51.9 NA
P o ints Internatio nal Ltd. TSX:P TS TSX CA D Canada 0.62 91.1 93
Quepasa Co rp. QP SA OTCB B USD United States 3.68 47.7 71
RealNetwo rks Inc. RNWK NasdaqGS USD United States 3.61 488.3 1,754
Sco re M edia Inc. TSX:SCR TSX CA D Canada 0.87 69.3 230
Shanda Interactive Entertainment Ltd. SNDA NasdaqGS USD China 40.37 2,397.1 5,721
Shutterfly, Inc. SFLY NasdaqGS USD United States 24.78 665.5 519
SK Co mmunicatio ns Co ., Ltd. A 066270 KOSE KRW So uth Ko rea 20,500.00 737.8 NA
Public Company Listing cont.
Trading Current US$ Market
So cialGO P LC A IM :SGO A IM GB P United Kingdom 0.01 7.6 9
So cialwise, Inc. SCLW OTCB B USD United States 0.50 25.0 NA
So hu.co m Inc. SOHU NasdaqGS USD China 44.54 1,684.4 3,997
Spark Networks, Inc. LOV A M EX USD United States 3.55 73.1 155
SpectrumDNA , Inc. SP XA OTCB B USD United States 0.06 3.8 8
Taleo Co rp. TLEO NasdaqGM USD United States 25.60 1,017.9 916
Tencent Holdings Ltd. 700 SEHK HKD China 128.90 30,367.3 7,845
The New Yo rk Times Co mpany NYT NYSE USD United States 10.13 1,474.9 7,665
The9 Limited NCTY NasdaqGS USD China 4.07 103.8 1,010
TheStreet.co m, Inc. TSCM NasdaqGM USD United States 2.91 91.8 274
TransGaming, Inc. TSXV:TNG TSXV CA D Canada 0.67 39.1 28
Tree.Com, Inc. TREE NasdaqGM USD United States 6.88 77.1 700
Unilava Co rpo ratio n UNLA OTCB B USD United States 0.11 10.9 40
Uniserve Communications Co rp. TSXV:USS TSXV CA D Canada 0.12 3.4 NA
United Online, Inc. UNTD NasdaqGS USD United States 6.36 554.2 1,699
UOM O M edia, Inc UOM O OTCB B USD Canada 0.02 1.6 NA
ValueClick, Inc. VCLK NasdaqGS USD United States 12.05 980.0 1,086
Velti P lc VEL A IM GB P United Kingdom 4.51 250.6 459
VOIS, Inc. VOIS OTCB B USD United States 0.01 18.0 2
WebM ediaB rands Inc WEB M NasdaqGS USD United States 1.00 37.4 83
Webzen Inc. KOSE:A 069080 KOSE KRW So uth Ko rea 11,700.00 118.2 326
Wizzard So ftware Corpo ratio n WZE A M EX USD United States 0.20 13.2 80
Wo rlds.co m Inc. WDDD OTCB B USD United States 0.07 4.0 1
XING A G O1B C XTRA EUR Germany 28.35 181.2 293
YD Online Co rp. A 052770 KOSE KRW So uth Ko rea 4,790.00 61.3 NA
Ynk Ko rea Inc. A 023770 KOSE KRW So uth Ko rea 2,930.00 19.9 NA
Yo uB last Glo bal, Inc. YB LT OTCB B USD United States 0.40 13.8 6
Disclaimer
RELEVANT DISCLOSURES APPLICABLE TO: NONE
1. None applicable.
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Web 2.0 Weekly - June 22, 2010: &quot;AOL Sells Bebo at Massive Loss&quot;

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Web 2.0 Weekly - June 22, 2010: &quot;AOL Sells Bebo at Massive Loss&quot;

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Web 2.

David Shore, CFA, MBA 416.860.6784

Web 2.0 Public Companies Total Median Max Min

NEOWIZ Games Corporation

GungHo Online Entertainment, Inc.

Gamania Digital Entertainment Co., Ltd.

Hutchison Telecommunications Hong Kong Holdings Ltd.

Jumbuck Entertainment Limited

Dolphin Digital Media, Inc.

Score Media Inc.

Platforma Mediowa Point Group S.A.

NEOWIZ Games Corporation

Uniserve Communications Corp.

Hutchison Telecommunications Hong Kong Holdings Ltd.

United Online, Inc.

Actoz Soft Co., Ltd.

Open Text Corp.

Gree, Inc. 40.5 39.3

Gamania Digital Entertainment Co., Ltd.

NetDragon WebSoft, Inc.

Chinese Gamer International

Frogster Interactive Pictures AG

NEOWIZ Games Corporation

Hutchison Telecommunications Hong Kong Holdings Ltd.

The New York Times Company

Kingsoft Corporation Limited

United Online, Inc.

Uniserve Communications Corp.

Jumbuck Entertainment Limited

Giant Interactive Group, Inc.

Shanda Interactive Entertainment Ltd.

Perfect World Co., Ltd.

Openwave Systems Inc.

Multiplied Media Corporation

Ynk Korea Inc.

Beyond Gree, Inc.

AQ Interactive, Actoz Soft Co.,

Score Media Inc. Cyberplex Inc.

Quepasa Corp. DADA SpA

Dena Co. Ltd. Velti Plc

Fluid Music Points International

Gree, Inc. Glu Mobile, Inc.

MOKO.mobi Glu Mobile, Inc.

UOMO Media, UOMO Media,

Unilava Mobile Data

SpectrumDNA, VOIS, Inc.

CornerWorld Mobile Data

UOMO Media, BroadWebAsia

$500 AOL paid $850 mm for Bebo in Mar-08 or

*Dec-09 includes $180m Zynga investment

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Web 2.0 Weekly - June 22, 2010: "AOL Sells Bebo at Massive Loss"

Web 2.0 Weekly - June 22, 2010: "AOL Sells Bebo at Massive Loss"