1. SOFTWARE & SERVICES 16 JUNE 2009
DAVID SHORE, CFA, MBA 416.860.6784
WEB 2.O WEEKLY david.shore@researchcapital.com
Arun Thomas (Associate) 416.860.7666
DELL SELLS $3 MILLIO N IN PCS AND ACCESSORIES USING TWITTER
D EL L AN D T W IT T ER – A N E X AM PL E OF CO R P OR A T IO N S U S IN G W E B 2 .0 P L AT F O RM S
Although last week was very quiet on the news front, we thought the following was worth highlighting. An article in the
Silicon Valley Insider (a division of The Business Insider) titled “Twitter sells $3 million of Computers for Dell” has
caught our attention for various reasons. This is of interest in the context of how companies are looking at leveraging
the various W eb 2.0 platforms to promote their brand and sell their products.
Since 2007, the Dell Outlet store has experimented using Twitter to sell its products through exclusive promotions
and coupons that are available only to subscribers to the microblog service. Last week, the company announced that
it has 620,000 followers on the @DellOutlet twitter account. It was able to generate more than $1 million in sales as a
result of its tweets in the last six months. Although, the sales achieved ($3 million in the last two years) is
inconsequential to Dell’s top line (~$61 billion in F2009), the company has used Twitter as another channel to quickly
move inventory that came about from customer returns. Taking this discussion a little further, we think the other
aspect of interest is – will this be a revenue generating opportunity for Twitter (through premium corporate accounts)?
W ith much anticipation in the community to learn about the revenue model for Twitter, this may be an indication of
one such revenue stream (i.e. corporate sales).
W e would also highlight that throughout our W eb 2.0 sessions (attended by various participants in the industry,
including management, developers, venture capitalists, and business consultants), the recurring theme has been
about exploring innovative ways to use W eb 2.0 platforms to share information to increase the overall experience of
employees, suppliers, and customers. (We are holding our fifth Web 2.0 session titled “VC Financing for Web 2.0
Companies: Necessary? Possible? Lessons Learned” today at 12:00 pm at our office on 199 Bay Street, Suite 4500,
Toronto).
On the capital raise front, Sugar Inc. leads: The capital raise from Sugar Inc. for $16 million was the largest deal
for the first two weeks of June, closely followed by W imba and Grab Networks at $12.0 million. All deals, except the
three mentioned above, were less than $10 million. The average value for the first week of June is $5.0 million, below
the average value for May of $6.4 million (excluding the investment in Facebook) on 16 financings. The April average
was $6.2 million on 23 financings.
Financing Activity Last Three Months
160.0 7.0
6.2 6.4
140.0
6.0
120.0
5.0 5.0
100.0
4.0
(US$m)
(US$m)
80.0
3.0
60.0
2.0
40.0
1.0
20.0
0.0 0.0
Apr-09 May-09 (excl FB) Jun-09
Total Average
A mixed price performance week: The companies in our universe had mixed stock price performances over the past
week (for stocks with prices greater than $1) (Figure 6), with 19 companies showing positive returns on the week.
Openwave Systems Inc. (OPW V:NASDAQ) led the group with a 21.7% return, while Tree.com (TREE:NASDAQ) had
the worst return, dropping 26.5% in the week.
This report has been created b y Anal ysts that are emplo yed b y Research Capital Corporation, a Canadian Investment Dealer.
For further disclosures, please see last page of this report.
w w w . r e s e a rc h c a p i t a l . c o m
T o ro n t o 4 1 6 . 8 6 0 . 7 6 0 0 Montreal 514.399.1500 Vancouver 604.662.1800 Calgary 403.265.7400 Regina 306.566.7550

2. Page 2
THE WEB 2.0 UNIVERSE
Ninety-tw o public Web 2.0 companies = $53 billion market cap: Our W eb 2.0 universe contains 92 companies, with a
combined market cap of approximately $53.4 billion (Figure 1). The average market cap for the group is ~$581 million (but
a median of only $46.3 million), with average trailing revenue of $152 million (median $54.3 million). The companies are
also generally profitable, with a median EBITDA margin of 15.3%. On a valuation basis, the overall average is 5.3x trailing
revenue (median 1.9x) and 10.2x trailing EBITDA (median 9.6x). Fourteen of the companies have more than 500
employees.
C omparable C ompany A nalys is > W eb 2.0
Trading Current U S D Market U S D LT M To tal US D L TM T otal E BITDA T E V/LT M TE V /L TM
C om pany Nam e L TM as of T ic ker E xch ang e Cu rrenc y HQ P ric e C ap ($m) R ev ($m) E B ITDA ($m) % R evenu e E BITD A E mplo yees
Acce le riz e N ew Me dia, Inc. 3 /31 /200 9 AC LZ OT C B B USD U nited S ta tes 0 .35 9 .7 4.1 (4 .4) NM 3.5x - 11
Actoz S of t C o., L td. 3 /31 /200 9 A0 527 90 K OS E KR W S outh K orea 27 250 18 4.9 91. 6 1 9.9 21 .7% 1.7x 7. 8x NA
AQ Inte ractive , Inc. 3 /31 /200 9 38 38 TSE JPY J apan 76 800 4 2.6 63. 1 4 .0 6 .3% 0.2x 3. 6x NA
As s ocia ted Media H oldings Inc. 6 /30 /200 7 AS MH OT C P K USD U nited S ta tes 0 .02 0 .9 0.1 (2 .3) NM 1 9.2 x - 3
Bigstring Corp. 3 /31 /200 9 BS GC OT C B B USD U nited S ta tes 0 .03 1 .5 0.1 (2 .0) NM 3 9.0 x - 4
Be tawave Corpora tion 3 /31 /200 9 B W AV OT C B B USD U nited S ta tes 0 .10 2 .9 8.4 (1 2.6) NM - - 53
Be yond Commerce, Inc. 3 /31 /200 9 B Y OC OT C B B USD U nited S ta tes 0 .91 4 0.4 7.1 (9 .5) NM 6.3x - 69
Bright T hings plc 9 /30 /200 8 AIM :BG T AIM GBP U nited K ingdom 0 .02 4 .8 0.3 (1 .8) NM 1 7.6 x - 9
Broa dW ebAs ia Inc. 9 /30 /200 8 BW BA OT C P K USD U nited S ta tes 0 .23 1 9.5 0.0 (4 .6) NM - - 46
C D C C orp. 3 /31 /200 9 C HIN .A N as da qG S USD H ong K ong 1 .55 16 4.4 389 .9 3 0.8 7 .9% 0.5x 5. 8x NA
C ha ngyou. com Limite d 3 /31 /200 9 C Y OU N as da qG S USD C hina 38 .61 2,1 23.6 222 .5 13 5.1 60 .7% 8.7x 14 .3x 6 28
C hina G ate wa y C orpora tion 9 /30 /200 8 C GW Y OT C P K USD U nited S ta tes 0 .02 0 .4 6.7 (6 .6) -9 8.9% 0.1x - 37
C hine s e G amer International 3 /31 /200 9 G T S M:308 3 GTSM TWD T aiwan 312 .00 79 7.0 56. 1 3 1.4 56 .0% 1 3.0 x 23 .3x NA
C ornerW orld C orporation 1 /31 /200 9 C WR L OT C B B USD U nited S ta tes 0 .07 4 .5 1.3 NM NM 4.6x - NA
C yberplex Inc. 3 /31 /200 9 T S X:C X TSX C AD C ana da 1 .80 9 9.8 71. 7 7 .4 10 .3% 1.3x 12 .9x NA
DAD A S pA 3 /31 /200 9 C M:D A CM EUR Ita ly 6 .00 13 4.1 231 .6 4 3.0 18 .6% 0.8x 4. 3x 5 78
DXN Holdings B hd 2 /28 /200 9 D XN KL SE MY R Ma la ys ia 0 .40 2 6.1 78. 4 1 0.8 13 .7% 0.5x 3. 9x NA
Dibz Inte rnational, Inc. NA D IB Z OT C P K USD U nited S ta tes 0 .00 0 .0 NA NM NM - - NA
DigitalP ost Inte ra ctive , Inc. 3 /31 /200 9 D G LP OT C B B USD U nited S ta tes 0 .02 1 .6 0.7 (2 .6) NM 4.5x - 7
DigitalT own, Inc. 2 /28 /200 9 DGT W OT C B B USD U nited S ta tes 2 .50 6 7.7 NM (3 .0) NM - - 3
Dolphin D igital Me dia, Inc. 3 /31 /200 9 D P DM OT C B B USD U nited S ta tes 0 .53 2 7.4 0.8 (3 .7) NM 3 6.7 x - NA
E olith C o. L td. 1 2/31 /200 8 A0 410 60 K OS E KR W S outh K orea 760 .00 4 3.8 14. 6 (3 .5) -2 3.6% 3.1x - NA
E xte ns ions , Inc. 3 /31 /200 9 E XT I OT C P K USD U nited S ta tes 0 .15 1 4.2 NM NM NM - - 2
F inancia l Media G roup, Inc. 2 /28 /200 9 F NG P OT C B B USD U nited S ta tes 0 .00 0 .3 7.2 2 .4 34 .1% - - 22
F luid M us ic Ca nada, Inc. 3 /31 /200 9 T S X:F MN TSX C AD U nited S ta tes 0 .75 3 4.7 5.0 (6 .9) NM 5.2x - NA
F rogs te r Interactive P icture s AG 1 2/31 /200 8 F RG XT R A EUR G ermany 7 .98 2 5.9 3.2 (6 .0) NM 7.6x - NA
G a ma nia D igital E ntertainment C o., L td. 3 /31 /200 9 61 80 GTSM TWD T aiwan 55 .60 25 6.5 125 .9 2 0.9 16 .6% 1.9x 11 .2x NA
G a me On C o L td. 3 /31 /200 9 38 12 TSE JPY J apan 114 300 11 2.8 75. 1 1 7.8 23 .7% 0.7x 3. 0x NA
G e oS e ntric O yj 3 /31 /200 9 G E O1 V H LS E EUR F inland 0 .04 4 9.5 5.8 (1 5.1) NM 7.8x - 1 08
G iant Intera ctive G roup, Inc. 3 /31 /200 9 GA NYSE USD C hina 8 .24 1,8 58.9 218 .8 NM NM - - NA
G iga Media Ltd. 3 /31 /200 9 G IG M N as da qG S USD T aiwan 5 .53 29 8.8 183 .6 NM NM 1.2x - NA
G ravity C o., L td 9 /30 /200 8 GR VY N as da qG M USD S outh K orea 1 .10 3 0.6 38. 8 7 .5 19 .2% - - 6 36
G ree, Inc. 6 /30 /200 8 T S E : 363 2 TSE JPY J apan 6 130 1,3 97.1 30. 0 1 0.8 36 .0% 4 3.9 x - NA
G ungH o O nline E ntertainment, Inc. 3 /31 /200 9 37 65 OS E JPY J apan 225 000 26 3.0 105 .2 1 8.9 18 .0% 2.2x 12 .4x NA
H anbitS of t, Inc. 3 /31 /200 9 A0 470 80 K OS E KR W S outh K orea 4 720 8 2.0 54. 7 (1 4.7) -2 6.8% 1.2x - NA
IAC /InterActiveC orp. 3 /31 /200 9 IAC I N as da qG S USD U nited S ta tes 16 .29 2,4 58.4 1 ,40 6.4 4 2.6 3 .0% 0.4x 13 .5x 3, 200
IAS E nergy, Inc. 1 /31 /200 9 IAS C.A OT C B B USD C ana da 0 .23 1 6.1 0.0 (0 .8) NM - - NA
is ee media Inc. 3 /31 /200 9 IE E T S XV C AD C ana da 0 .08 3 .4 1.5 (4 .8) NM 1.6x - NA
J umbuck E ntertainment P ty Ltd. 1 2/31 /200 8 AS X:J MB AS X AU D Aus tra lia 0 .40 1 5.7 14. 2 5 .3 37 .2% 0.8x 2. 0x 72
J umpT V Inc. 3 /31 /200 9 T S X:J T V TSX C AD C ana da 0 .73 7 3.1 18. 1 (1 2.0) -6 6.6% 3.4x - 2 37
K A B Dis tribution Inc. 3 /31 /200 9 T S X:K AB TSX C AD C ana da 0 .62 7 6.4 72. 5 8 .6 11 .9% 1.1x 9. 5x NA
K ings oft Co. Ltd. 3 /31 /200 9 38 88 S E HK HKD C hina 5 .23 73 2.1 129 .0 5 1.9 40 .3% 5.2x 12 .9x 2, 271
Lingo Media Corporation 3 /31 /200 9 T S XV : LM T S XV C AD C ana da 1 .13 1 2.8 0.9 (1 .6) NM 1 3.0 x - NA
Live World Inc. 3 /31 /200 9 LV WD OT C P K USD U nited S ta tes 0 .10 3 .1 11. 4 (0 .0) -0 .4% 0.2x - NA
LookS mart, Ltd. 3 /31 /200 9 LOOK N as da qG M USD U nited S ta tes 1 .35 2 3.1 60. 7 (3 .8) -6 .3% - - 90
Magnitude Information S ys tems Inc. 3 /31 /200 9 MA G Y OT C B B USD U nited S ta tes 0 .01 5 .5 0.1 (3 .1) NM - - 14
Mixi, Inc. 3 /31 /200 9 21 21 TSE JPY J apan 460 000 72 1.7 123 .0 4 3.6 35 .4% 4.9x 13 .9x NA
Mode rn Times G roup Mtg AB 3 /31 /200 9 MT G B OM S EK S weden 216 1,8 01.8 1 ,70 4.0 26 1.0 15 .3% 1.4x 9. 0x 2, 969
Moggle , Inc 3 /31 /200 9 MMOG OT C B B USD U nited S ta tes 2 .30 8 3.5 NM NM NM - - 3
MOK O.mobi L imited 1 2/31 /200 8 MK B AS X AU D Aus tra lia 0 .05 3 .5 1.1 (2 .3) NM 2.1x - NA
Myriad G roup AG 1 2/31 /200 8 MY R N SWX C HF S witzerla nd 5 .15 10 0.3 40. 0 0 .8 1 .9% 2.8x - 4 05
NE OW IZ G ames C orpora tion 1 2/31 /200 8 A0 956 60 K OS E KR W S outh K orea 65 900 50 2.9 196 .3 5 2.7 26 .8% 2.5x 9. 4x NA
NetD ragon W ebS oft, Inc. 3 /31 /200 9 77 7 S E HK HKD C hina 5 .00 34 1.0 86. 9 3 4.4 39 .5% 2.3x 5. 8x 2, 426
Nete as e.com I nc. 3 /31 /200 9 NT E S N as da qG S USD C hina 35 .04 4,3 11.8 470 .2 30 5.6 65 .0% - - NA
NeXplore Corpora tion 9 /30 /200 7 N XP C OT C P K USD U nited S ta tes 0 .70 3 9.0 NM (4 .9) NM - - 19
Ngi G roup Inc. 1 2/31 /200 8 24 97 TSE JPY J apan 36 100 4 5.5 100 .3 3 0.9 30 .8% - - NA
Northgate Te chnologies L imited 3 /31 /200 9 59 005 7 BS E INR India 42 .05 3 0.6 117 .0 (2 7.5) -2 3.5% 0.3x - NA
Open T e xt Corp. 3 /31 /200 9 OT E X N as da qG S USD C ana da 35 .67 1,8 77.1 782 .6 19 9.2 25 .5% 2.5x 9. 8x 3, 400
Openwave S ys tems Inc. 3 /31 /200 9 OP W V N as da qG S USD U nited S ta tes 2 .30 19 1.6 197 .2 (2 .1) -1 .0% 0.4x - 6 30
P e rf ect W orld C o., Ltd. 3 /31 /200 9 PW R D N as da qG S USD C hina 24 .35 1,2 45.2 228 .0 12 4.5 54 .6% 0.1x 0. 2x NA
Quepa s a C orp. 3 /31 /200 9 QP S A N as da qC M USD U nited S ta tes 0 .62 7 .9 0.1 (1 0.8) NM - - 74
OA O R B C Information S ys tems 1 2/31 /200 7 R BC I R TS USD R us s ia 1 .00 13 8.7 151 .4 1 9.8 13 .1% 0.0x 0. 2x NA
S handa Interactive E ntertainme nt L td. 3 /31 /200 9 S N DA N as da qG S USD C hina 54 .40 3,7 74.4 569 .7 26 0.7 45 .8% 0.1x 0. 2x NA
S hutte rf ly, Inc. 3 /31 /200 9 S F LY N as da qG S USD U nited S ta tes 13 .47 33 9.1 215 .2 2 8.3 13 .2% 1.3x 9. 7x 5 14
S K C ommunications Co., Ltd. 1 2/31 /200 8 A0 662 70 K OS E KR W S outh K orea 11 000 36 5.5 182 .5 1 1.9 6 .5% 2.0x 30 .8x NA
S N AP Inte ra ctive , Inc. 3 /31 /200 9 S T VI OT C B B USD U nited S ta tes 0 .70 7 .6 3.3 0 .9 28 .0% 1.9x 6. 6x 11
S N M G lobal H oldings 9 /30 /200 8 S N MN OT C P K USD U nited S ta tes 0 .00 0 .0 2.0 (0 .7) -3 4.8% 1.1x - 33
S ocia l Media V e nures , Inc. 1 2/31 /200 8 S MV I OT C P K USD U nited S ta tes 0 .01 0 .0 0.1 (0 .1) -6 0.5% 0.0x - NA
S ocia lwis e, Inc. 3 /31 /200 9 S C LW OT C B B USD U nited S ta tes 0 .70 3 0.3 0.0 (4 .8) NM - - NA
S ohu. com Inc. 3 /31 /200 9 S OH U N as da qG S USD C hina 65 .91 2,5 22.0 460 .0 20 0.5 43 .6% 4.7x 10 .7x 3, 197
S ite s earch C orporation 4 /30 /200 9 S TPC OT C B B USD U nited S ta tes 3 .50 2 8.2 NM (1 .1) NM - - 15
S park Networks , Inc. 3 /31 /200 9 LOV AME X USD U nited S ta tes 2 .25 4 6.3 54. 3 1 1.8 21 .7% 0.9x 4. 0x 1 83
S pectrumDN A, Inc. 3 /31 /200 9 S P XA OT C B B USD U nited S ta tes 0 .20 9 .7 0.1 (2 .6) NM - - 7
T encent Holdings L td. 3 /31 /200 9 70 0 S E HK HKD C hina 89 .20 20,7 58. 8 1 ,20 2.8 57 6.3 47 .9% 1 8.8 x 39 .2x 6, 194
T he P arent C ompany 8/2/2008 K ID S .Q OT C P K USD U nited S ta tes 0 .03 0 .8 112 .0 (1 3.5) -1 2.0% 0.2x - 3 47
T he 9 L imited 1 2/31 /200 8 N CT Y N as da qG S USD C hina 10 .46 28 0.5 249 .7 8 4.1 33 .7% - - NA
T he S treet.com, Inc. 3 /31 /200 9 TSCM N as da qG M USD U nited S ta tes 2 .10 6 4.3 67. 0 1 .9 2 .9% - - 3 10
T otal S port Online A S 3 /31 /200 6 T OS O OT C NO NOK N orwa y 0 .03 0 .1 2.1 (1 .0) -5 0.6% 4.6x - 16
T ree.C om, Inc. 3 /31 /200 9 TR EE N as da qG M USD U nited S ta tes 8 .74 9 4.4 215 .6 (1 3.3) -6 .2% 0.4x - 7 00
U nis erve C ommunications Corp. 2 /28 /200 9 T S XV : US S T S XV C AD C ana da 0 .05 1 .1 22. 9 0 .1 0 .2% 0.2x - NA
U nited Online Inc. 3 /31 /200 9 U NT D N as da qG S USD U nited S ta tes 6 .54 54 6.6 811 .2 17 7.3 21 .9% 1.0x 4. 7x 1, 469
U OMO Media , Inc 1 /31 /200 9 U OMO OT C B B USD C ana da 0 .17 1 4.1 0.6 (0 .5) -7 8.2% 2 2.8 x - NA
Va lueC lick Inc. 3 /31 /200 9 V C LK N as da qG S USD U nited S ta tes 12 .05 1,0 48.0 591 .7 10 5.5 17 .8% 1.6x 8. 9x 1, 189
VO IS , Inc. 3 /31 /200 9 V OIS OT C B B USD U nited S ta tes 0 .35 2 .9 0.0 (1 .1) NM - - 4
W ebze n Inc. 3 /31 /200 9 W ZE N N as da qG M USD S outh K orea 3 .40 4 0.3 22. 8 (0 .4) -1 .9% - - 3 14
W iz za rd S of twa re Corpora tion 3 /31 /200 9 W ZE AME X USD U nited S ta tes 0 .65 3 1.1 5.6 (5 .3) -9 4.5% 5.8x - 1 10
W orlds .com Inc. 3 /31 /200 9 W DD D OT C B B USD U nited S ta tes 0 .09 4 .7 0.0 (0 .8) NM - - 1
W ynds torm C orporation NA W YND OT C B B USD U nited S ta tes 0 .51 9 .2 NA NM NM - - NA
XIN G AG 3 /31 /200 9 O1B C XT R A EUR G ermany 33 .80 24 5.7 52. 2 1 6.3 31 .2% 3.7x 11 .9x 2 39
Ye dangOnline Corp. 1 2/31 /200 7 A0 527 70 K OS E KR W S outh K orea 9 290 11 5.6 54. 4 1 2.2 22 .4% 2.3x 10 .4x NA
Ynk K orea Inc. 1 2/31 /200 8 A0 237 70 K OS E KR W S outh K orea 6 400 2 7.1 11. 3 1 .2 10 .5% 2.3x 22 .1x NA
ZipLocal Inc. 3 /31 /200 9 T S XV : ZIP T S XV C AD C ana da 0 .01 0 .4 2.7 (2 .1) -7 8.3% 0.6x - NA
H igh 20,7 58. 8 1 ,704 .0 57 6.3 65 .0% 4 3.9 x 39 .2x 6,1 94
Low 0 .0 0.0 -27.5 -9 8.9% 0.0x 0. 2x 1
Avera ge 581.4 152.1 33.1 7.1% 5.3x 10. 2x 671
Median 4 6.3 54. 3 0 .8 15 .3% 1.9x 9. 6x 2 37
Figure 1. Web 2.0 Universe Summary
Source. Capital IQ

3. Page 3
C A P I T A L M A R K E T S A C T I V I T Y (M & A A N D F I N A N C I N G )
June month-to-date capital raise totals $79.5 million: Total capital raised two weeks into June was $79.5 million on a
total of 15 transactions. It was led by Sugar Inc. raising $16.0 million, closely followed by W imba and Grab Networks
raising $12.0 million. All other transactions were less than $10 million. The average value for the month-to-date is $5.0
million, below the average value for May of $6.4 million (excluding the $200 million investment in Facebook) on 16
financings. The April average was $6.2 million on 23 financings.
Financing Activity Last Three Months
160.0 7.0
6.2 6.4
140.0
6.0
120.0
5.0 5.0
100.0
4.0
(US$m)
(US$m)
80.0
3.0
60.0
2.0
40.0
1.0
20.0
0.0 0.0
Apr-09 May-09 (excl FB) Jun-09
Total Average
Figure 2. Financings, Last Three Months
Source. Company reports
Sugar Inc. leads capital raise: The capital raise from Sugar Inc. for $16 million was the largest deal for the first two
weeks of June. Three of the 15 deals in the month were greater than $10 million. For additional details, see Figures 22 and
23 (at end of note).

4. Page 4
Financing & M/A Summary - Last Three Months
250.0
200.0
150.0
Jun-09
(US$m)
May-09
Apr-09
100.0
50.0
0.0
AdEx Media
Mixercast
Collective Media
Marin Software
EveryZing
VoxPop
Cyberplex
Jaxtr
OpenX
OLX
Socialtext
TubeMogul
GOOM Radio
Viximo
IMShopping
RingRevenue
YuMe
Tribal Nova
Grab Networks
I Love Rewards
Medialets
Resonate Networks
Mo'Minis
Brandtology
Gather
DoubleTwist
Inigral
Peer39
Cellufun
Batanga
DocuSign
SoundCloud
my6sense
Tripbase
Jodange
Picaboo
Foodista
Facebook
Zoosk
Azuki Systems
Loop'd Network
MashLogic
Sugar Inc.
The Rubicon Project
Conductor Inc.
ScanScout
beeTV
BlogHer Inc.
Gist
Fuhu Inc.
Cliqset
Socialcast
Scan & Target
StumbleUpon
TimeBridge
GameGround
One Net Entertainment
Imeem
FreeWheel
WonderHill
Wimba
Figure 3. Capital Market Activity, Last Three Months
Source. Company reports
Social Network remains the most active sector in dollars raised, while Ad Network remains the most active in
number of transactions: Following recent trends, Social Networks as a sector saw the most activity in dollars raised
($234.8 million), largely attributed to the $200 million investment by Digital Sky Technologies in Facebook. However, it
was the Ad Network sector that saw the most transactions (13), raising $103.7 million (Figure 4). The Media sector has
the next highest totals, with six companies raising $45.8 million. The following sectors continue to generate the most
capital activity over the last few months: Ad Network, Media, Gaming, and Social Networks.

5. Page 5
Capital Market Activity by Sector - Last Three Months
250.0
200.0
150.0
(US$m)
234.8
100.0
50.0 103.7
45.8
33.0 30.2 24.0 23.0 18.3 17.0 14.5 10.4 9.0
0.0 6.8 5.9 4.7 4.4 2.0 2.0 1.3 1.0
Comment/Reputation
Social Commerce
Gaming
Travel
Media
Collaboration
Enterprise
Mobile
Publishing
Widget
Blog
Search
Infrastructure
Social Networks
SAS
Video
Virtual World
Aggregation
Ad Network
Analytics
# companies
10 13 6 5 2 2 2 2 3 3 2 3 1 1 1 2 1 1 1 1
Figure 4. Capital Market Activity, by Sector, Last Three Months
Source. Company reports
C A P I T A L M A R K E T S A C T I V I T Y (P R I C E P E R F O R M A N C E )
Web 2.0 index outpaces NASDAQ recovery: Our W eb 2.0 index (market-cap weighted) essentially mirrored the
performance of the NASDAQ composite index from mid-2008 until recently. However, the index has recently had a much
stronger recovery relative to the NASDAQ index (Figure 5).
Web 2.0 Index Price Performance
96.38
86.38
76.38
66.38
56.38
46.38
Index: Web 2.0 X (Market Cap Weights) ^COMP - Share Pricing
Figure 5. Web 2.0 Price Performance
Source. Capital IQ
A mixed price performance week: The companies in our universe had mixed stock price performances over the past
week (for stocks with prices greater than $1) (Figure 6), with 19 companies showing positive returns on the week.
Openwave Systems Inc. (OPW V:NASDAQ) led the group with a 21.7% return, while Tree.com (TREE:NASDAQ) had the
worst return, dropping 26.5% in the week.

6. Page 6
1 Week Price Performance
Openw ave S ys tems Inc. 21.7%
Cyberplex Inc. 20.0%
Ngi Group Inc. 12.8%
Eolith Co. Ltd. 8.6%
XING A G 8.3%
TheS treet.com, Inc. 8.2%
Perfect World Co., Ltd. 7.6%
DA DA S pA 5.3%
CDC Corp. 4.0%
Open Tex t Corp. 3.8%
V alueClick Inc. 3.7%
My riad Group A G 3.0%
A Q Interactive, Inc. 2.4%
Modern Times Group Mtg A B 1.6%
LookS mart, Ltd. 1.5%
Mix i, Inc. 1.1%
IA C/InterA ctiveCorp. 0.5%
S hutterfly, Inc. 0.1%
S K Communic ations Co., Ltd. 0.0%
Changyou.com Limited -0.2%
Gamania Digital Entertainment Co., Ltd. -0.4%
Tencent Holdings Ltd. -0.4%
HanbitS oft, Inc. -1.5%
S ohu.com Inc. -1.5%
GameOn Co Ltd. -2.1%
S park Netw orks , Inc. -2.6%
Y edangOnline Corp. -3.9%
Gravity Co., L td -4.3%
Gree, Inc. -4.7%
K ings oft Co. Ltd. -4.7%
United Online Inc. -5.6%
NetDragon WebS oft, Inc. -5.8%
The9 Limited -5.9%
Neteas e.c om Inc. -6.5%
NEOWIZ Games Corporation -7.8%
Y nk K orea Inc. -8.6%
Giant Interactive Group, Inc. -8.7%
GigaMedia Ltd. -10.2%
S handa Interactive Entertainment Ltd. -11.7%
Chines e Gamer International -14.8%
Webz en Inc. -15.3%
A ctoz S oft Co., Ltd. -16.2%
Northgate Technologies Limited -22.4%
OA O R B C Information S ys tems -25.9%
Tree.Com, Inc. -26.5%
-30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0%
Figure 6. 1-Week Price Performance
Source. Capital IQ

7. Page 7
INDUSTRY NEWS (PARTNERSHIPS, FINANCIAL RESULTS, NEW PRODUCTS)
K ey Developments
C ompany Headline Notes
K ing s oft Co . Ltd. (S E HK: 3888) K ings oft to L aunc h T -800 T erminator-S ha ped F la sh D isk K ingsoft C o. Ltd. is on the point of rolling out an a nti-virus s oftwa re-embedded 2G flas h dis k in the shape of the c las sic T -800 T erminator in
T he T ermina tor s eries. T he B eijing-based s oftware developer will have its spark ling a nti-virus software preins ta lled in the flash disk ,
disclosed s ources , noting that us ers will have a cc es s to the K ings oft software for four y ears . T he flas h disk s will c ome into the ma rk ets in
B eijing a nd S ha ngha i when the long-expec ted s cience-fic tion movie T ermina tor S al vation is put up on show throughout the country on J une
9, 2009, with onl y 2,018 ava ila ble for s a le.
Northgate Tec hno logies Limited Northga te T echnologies Limited Appo ints B S R a nd Northga te Technologies Limited appointed B S R and C ompa ny, a n Indian a s soc iate of K P M G , as s tatutory auditors of the compa ny. T he
(B S E :590057) Company as S tatu tory Auditor R eplacing P rice company has a ppointed B S R a nd compa ny to fi ll the va ca nc y c aused by the res igna tion of P ric e W aterhouse, C ha rtered Ac countants.
W a terhous e
G igaMedia L td. (Nas daqG S : G IG M) G igaMedia I n T alks G igaMedia L td. reported firs t-qua rter rev enues of $44. 4 million, net income of $4.8 million, and earnings per s hare of $0.09 basic a nd $0. 08
fully -diluted. T he company als o a nnounced tha t it is final round dis cuss ions with two parties concerning a potentia l s tra tegic partnership or
sale involv ing its pok er and ca sino software bus ines s. N o a dditiona l details a re av ailable at this time.
IB 3 Networks , Inc. (OT CB B: IB NW ); IB 3 N etwork s I nc. a nd iB ea m S olutions LL C S igns T hree IB 3 Network s I nc. and its wholly owned s ubsidiary iB eam S olutions L LC a nnounc ed that it rec ently finalized a multi-thous and dolla r three
iB eam S o lu tions L LC Y ear S ervice C ontra ct with Millennium B usines s yea r service co ntrac t with M illennium B us ines s S olutions .
S olutions
G igaMedia L td. (Nas daqG S : G IG M) G igaMedia L td. R eports Un-Audi ted Cons olidated G igaMedia L td. reported un-a udited cons olidated ea rnings res ults for the first qua rter ended M a rch 31, 2009. F or the qua rter, the c ompany's
E a rnings R esults for the F irst Q uarter E nded M arch 31, cons olidated revenues decrea s ed 13% to $44. 4 million from $51.2 million in the s ame period of 2008, a nd held s tea dy c ompa red with the
2009 ; R eports Impa irment Los s fourth qua rter of 2008. The year-period decrease wa s prima rily due to lower contributions from the compa ny 's ga ming software busines s
reflec ting the impac t of the globa l economic downturn on play er s pending in the indus try, with depreciation of the euro agains t the U .S . dolla r
increa s ing play ing cos ts , res ulting in decreas ed play er s pending. C onsolidated income from opera tions for the firs t quarter wa s $5. 4 million
compared to $12.7 million in the first quarter of 2008 a nd $7.9 million in the fourth qua rter of 2008. T he y ear-over-y ear decrea s e in
cons olidated income from opera tions reflected the a forementioned revenue decreas e and lower gros s profit ma rgin on c ha nged revenue mix
during the period, whic h des pite fl a t opera ting expens es, yielded a decrea se in the company 's cons olidated opera ting ma rgin to 12.2% . The
quarter-ov er-quarter decrea s e i n consolida ted income from operations wa s prima rily the result of lower gros s profit, as well as a n increa s e in o
T heS treet.c om, Inc . (Nas daqG M: T S CM) T heS treet.com I nc. D ecl are s Q uarterly D ividend, P a ya ble T heS treet. com Inc. announced tha t its boa rd of directors ha s decla red the compa ny's quarterly ca sh dividend on its common stoc k. T he
on J une 30, 2009 cas h div idend of $0.025 per s ha re of common s tock will be pa ya ble J une 30, 2009, to all s hareholders of rec ord a t the clos e of busines s on
J une 15, 2009.
A OL, L LC ; IAC /InterActiveCorp. IAC Might S how I nteres t I n AO L It was recently reported tha t I AC /InterAc tiv eC orp might be interested i n buy ing into AO L, LL C. I AC’ s chairma n, B a rry D iller s a id the T ime
(Nas daqG S : IACI) W a rner online service, whic h is openly for sa le, is a “tremendous ly va luable property’’. H e a dded, “Not the A O L dialup stuff, of c ours e, but it
has done a wonderful job on the media s ide. I t ha s built up a ton of really good growing s ites . ” “D epending on how much the hang i s, we’d
definitely be i nteres ted in it, ’’ D iller s a id, referring to the cos t of the ac quis ition.
S ites earc h Co rporation (OT CB B :S T P C) S ites ea rch C orp. R eports E arnings R es ults for the S ites ea rch C orporation reported ea rnings res ults for the quarter ended A pril 30, 2009. The company reported a net los s of $303,451. In
Q uarter E nded April 30, 2009 contrast, the compa ny posted a net los s of $221, 450 for the same qua rter in the previous y ea r.
W izz ard S oftware Co rporation W izz ard S oftwa re C orporati on, Annual G eneral Meeting, W izza rd S oftwa re C orporation, A nnual G eneral Meeting, J un 10, 2009, at 14:00 E as tern Da y light. Loca tion: Ma rriott C ourty ard, 5308 Liberty
(A ME X: WZE ) J un 10, 2009 Ave. , P itts burgh, P A 15224,U nited S tates . Agenda: T o elec t five directors to s erve unti l the nex t annual meeting of s tock holders, or until their
suc ces s ors a re duly elec ted a nd qualifi ed; to approve 2009 s tock option plan; to a pprove the is sua nc e of unregistered and res tricted s tock to
cons ulta nts ; to ra tify the s elec tion by the B oa rd of Directors of G regory & As s ocia tes L LC a s independent auditors of Wiz za rd for the fisca l
yea r ending D ecember 31, 2009; a nd to trans a ct such other busines s a s ma y properly come before the annual meeting and a ny a nd all
a djournments or postponements thereof.
W izz ard S oftware Co rporation W izz ard S oftwa re I ntroduces N ew iP hone App and W izza rd S oftwa re C orporation a nnounc ed the a cquis ition of a new iP hone App and the mark eting launc h of its recently a cquired Apps via
(A ME X: WZE ) L aunches App M a rketing V ia P odc as ts podca s ts a nd the I nternet. I t a cquired the dis trib ution rights to S uper M a stermind, a high quality App pois ed for sa les growth through the
company's podca s t ma rk eting and distribution network ta rgeti ng iP hone a nd iP od T ouch users . W iz zard has focus ed its rec ent acquis ition
efforts on Apps that cross a wide ra nge of cons umer interests and ma tc h up well with targeted podca st audi ences . The c ompany pla ns to
ma rk et the Apps i n targeted podca s ts. T he company believes the new price point for the iP hone wi ll c ause more people to s elect the
pla tform, increa s ing audi ences for the podca s ts on the W iz za rd Media Network and adding potential cons umers for new Apps.
V OIS , Inc . (OTC BB :VOIS ) V O IS , Inc. ha s filed a S helf R egistration in the amount of V O IS , Inc. ha s filed a S helf R egistration in the amou nt of $1.75 million.
$1.75 million.
IB 3 Networks , Inc. (OT CB B: IB NW ); iB 3 N etwork s R ec eives C ontract F rom L anca ster IB 3 Network s I nc. and its wholly owned s ubsidiary iB eam S olutions L LC a nnounc ed that it has been retained by L anca ster C ommunity
iB eam S o lu tions L LC Community C hurch Churc h. The contrac t inc ludes complete des ign a nd ins ta lla tion of a new network to s upport the organiz ati on's growth. iB ea m S olutions ha s
been hired by L anca s ter C ommunity Church to insta ll c abling, network s ervers and phones and als o inc ludes a contra ct for on going monthly
support for the next 12 months c overing their I T needs going forwa rd.
T heS treet.c om, Inc . (Nas daqG M: T S CM) T heS treet.com, Inc., $ 0. 025, Ca s h Div idend, J un-12- T heS treet. com, I nc., $ 0.025, Ca s h D ividend, J un-12-2009
2009
G ravity Co., L td (N as daqG M: G R VY ) G ravity Co. , Ltd, S pec ial/E x tra ordinary S hareholders G ravity Co. , Ltd, S pecial/E xtra ordinary S hareholders M eeting, J un 12, 2009, at 01: 00 G M T T ime. L oc ation: Nuritk um S qua re B usines s T ower
Meeting, J un 12, 2009 15F, 1605 S a nga m-Dong, M a po-G u, S eoul 121-270,S outh K orea. Agenda : T o consider a ppointment of director a nd to c onsider approval of
a mendment of Artic les of I ncorpora tion.
Figure 7. Key Developments
Source. Capital IQ

8. Page 8
VALUATION
Online Gaming companies lead market-cap charts: Eleven companies in our W eb 2.0 universe top US$1 billion in
market capitalization (Figure 8). Fifty-nine of the 92 companies have market caps under US$100 million, with 26 under
US$10 million. Online gaming companies dominate the top of the list, led by Tencent Holdings with a market cap over
US$18 billion.
Market C ap (US D m)
Tencent Holdings L td.
Neteas e. c om Inc.
S handa Interac tive Entertainment L td. 3774. 4
S ohu. c om Inc. 2522. 0
IA C/InterA ctiveCorp. 2458. 4
Changy ou. com L imited 2123. 6
Open Tex t Corp. 1877. 1
G iant Interac tive Group, Inc. 1858.9
Modern Times G roup Mtg A B 1801. 8
Gree, Inc. 1397. 1
Perfec t World Co. , L td. 1245.2
V alueClick Inc. 1048. 0
Chines e Gamer International
K ings oft Co. L td. 732. 1 0
797.
Mix i, Inc. 721.7
United Online Inc. 546.6
NEOWIZ Games Corporation 502. 9
S K Communications Co. , L td. 365. 5
NetDragon WebS oft, Inc. 341. 0
S hutterf ly , Inc. 339. 1
GigaMedia L td. 298. 8
The9 L imited 280. 5
G ungHo Online Entertainment, Inc. 263. 0
Gamania Digital Entertainment Co. , L td. 256. 5
XING A G 245. 7
Openw ave S y s tems Inc. 191. 6
A c toz S of t Co. , L td. 184. 9
CDC Corp. 164. 4
OA O R B C Inf ormation S ys tems 138. 7
DA DA S pA 134. 1
Y edangOnline Corp. 115. 6
G ameOn Co L td. 112. 8
My riad Group A G 100. 3
Cy berplex Inc. 99. 8
Tree. Com, Inc. 94.4
Moggle, Inc 83. 5
HanbitS oft, Inc. 82. 0
K A B Dis tribution Inc. 76. 4
J umpTV Inc. 73. 1
DigitalTow n, Inc. 67. 7
TheS treet.c om, Inc. 64. 3
GeoS entric Oy j 49.5
S park Netw orks , Inc. 46.3
Ngi G roup Inc. 45.5
Eolith Co. L td. 43. 8
A Q Interactive, Inc. 42. 6
B ey ond Commerc e, Inc. 40. 4
Webz en Inc. 40. 3
NeXplore Corporation 39. 0
Fluid Mus ic Canada, Inc. 34. 7
Wiz z ard S oftw are Corporation 31. 1
Northgate Tec hnologies L imited 30. 6
Gravity Co., L td 30. 6
S ocialw is e, Inc. 30. 3
S ites earch Corporation 28. 2
Dolphin Digital Media, Inc. 27. 4
Y nk K orea Inc. 27. 1
DXN Holdings B hd 26. 1
Frogs ter Interac tive Pic tures A G 25. 9
LookS mart, L td. 23.1
B roadWebA s ia Inc. 19.5
IA S Energy , Inc. 16. 1
J umbuck Entertainment Pty L td. 15. 7
Ex tens ions , Inc. 14. 2
UOMO Media, Inc 14. 1
L ingo Media Corporation 12. 8
S pec trumDNA , Inc. 9. 7
A c celeriz e New Media, Inc. 9. 7
Wynds torm Corporation 9. 2
Quepas a Corp. 7. 9
S NA P Interac tive, Inc. 7. 6
Magnitude Information S y s tems Inc. 5. 5
B right Things plc 4. 8
Worlds . c om Inc. 4. 7
CornerWorld Corporation 4. 5
MOK O. mobi L imited 3. 5
is eemedia Inc. 3. 4
L iveWorld Inc. 3. 1
B etaw ave Corporation 2. 9
V OIS , Inc. 2. 9
DigitalPos t Interac tive, Inc. 1. 6
B igs tring Corp. 1. 5
Unis erve Communications Corp. 1. 1
A s s oc iated Media Holdings Inc. 0. 9
The Parent Company 0. 8
China Gatew ay Corporation 0. 4
ZipLocal Inc. 0. 4
Financ ial Media Group, Inc. 0. 3
Total S port Online A S 0. 1
S NM Global Holdings 0. 0
Dibz International, Inc. 0. 0
S ocial Media V enures , Inc. 0. 0
0 500 1, 000 1, 500 2, 000 2, 500 3, 000 3,500 4, 000
Figure 8. Market Cap Ranking
Source. Capital IQ
TEV/Revenue (LTM) averages 5.3x: The overall average TEV/Revenue (LTM) multiple for our group is 5.3x (versus 5.4x
last week) (Figure 9). One company trades at more than 40x revenue – Gree, Inc. (TSE:3632) at 43.9x – closely followed

9. Page 9
by with Dolphin Digital (OTCBB:DPDM) at 39.0x. The median is only 2.0x. Note that we exclude multiples greater than
50x. Twenty-eight companies have multiples under 1.9x.
T E V/L T M R evenue (x)
50. 0
43.9
45. 0
39. 0
40. 0 36.7
35. 0
30. 0
25. 0 22.8
18.8 2
19.
20. 0 17.6
15. 0 13.03.0
1
10. 0 7.67. 88.7
A verage, 5.3 5. 86.3
3.53.74.54.64.64.74.95.25.2
5. 0 2.32.32.52.52.83.13.4
1.11.21.21.31.31.41.61.61. 71.91.92. 02.12.22. 3
0.00.10.10.10.20.20. 20.20.30. 40.40.40. 50.50.60.70.80.80.91.01.1
0. 0
N E O WIZ G ames C orporation
MO K O .mobi L imited
UO MO Media, Inc
J umbuck E nterta inment P ty L td.
G a mania Digital E ntertainment C o., Ltd.
G ungH o O nline E ntertainment, Inc.
C hines e G amer Interna tional
U nis erve C ommunications C orp.
O AO R B C Information S y s tems
N orthgate T echnologies L imited
DXN Holdings B hd
C ha ngy ou.com L imited
T ree.C om, Inc.
C DC C orp.
G a meO n C o Ltd.
S K C ommunica tions C o., Ltd.
DigitalP os t Intera ctive, Inc.
F luid Mus ic C a nada , Inc.
B ey ond C ommerc e, Inc.
Dolphin Digital Media, Inc.
T he P a rent C ompany
Modern T imes G roup Mtg AB
G eoS entric O y j
S N M G loba l Holdings
C ornerWorld C orporation
Lingo Media C orporation
S handa Interac tive E ntertainment Ltd.
United O nline Inc .
S NAP Intera ctive, Inc.
O pen T ex t C orp.
J umpT V Inc .
C hina G atewa y C orporation
AQ Intera ctive, Inc .
IAC /InterAc tiveC orp.
S pa rk N etwork s , Inc .
G igaMedia Ltd.
C y berplex Inc .
V alueC lic k Inc .
is eemedia Inc .
NetDra gon WebS oft, Inc .
E olith C o. Ltd.
XIN G AG
S ohu.com Inc .
Mix i, Inc .
F rogs ter Intera ctiv e P ic tures AG
T encent Holdings Ltd.
As s ociated Media Holdings Inc .
G ree, Inc .
B right T hings plc
P erfect World C o., Ltd.
L iveWorld Inc .
O penwave S y s tems Inc .
ZipLoca l Inc .
K AB Dis tribution Inc .
H anbitS oft, Inc .
Y edangO nline C orp.
Y nk K orea Inc .
B igs tring C orp.
My riad G roup AG
T otal S port O nline AS
S hutterfly , Inc .
Acceleriz e New Media , Inc .
K ings oft C o. Ltd.
DADA S pA
Ac toz S oft C o. , Ltd.
Wiz z ard S oftware C orporation
Figure 9. TEV/Revenue Ranking
Source. Capital IQ
TEV/Revenue (LTM) by country/exchange: W e have also calculated multiples based on where the companies are listed
or domiciled. Figure 10 shows the average TEV/Revenue multiples by stock exchange. The OTCBB has the largest
number of companies (20), trading at an average multiple of 14.9x (below from 15.6x last week). On a geographic basis,
the United States has the most companies (40), trading at an average of 6.1x revenue (versus 6.3x last week) (Figure 11).
Ten of the companies are Canadian (average 5.2x revenue).
Average TEV/LTM Revenue - By Exchange Average TEV/LTM Revenue - By Country
20.0 17.6 20.0
17.6
18.0 18.0
16.0 14.9 16.0
14.0 14.0
12.4
12.0 12.0 10.4
(x)
10.0
(x)
8.8 10.0
8.0 7.8 7.4 7.8
8.0 6.1 5.7
6.0 5.7 4.6 5.7 5.4 5.2
4.0 3.83.5 3.3 2.8 2.8 6.0
2.2 2.2 1.9 1.4 1.4 4.0
4.6
2.0 0.8 0.5 2.8 2.2 1.4 1.4
0.0 0.4 0.30.0 2.0 0.8 0.5
0.5 0.3 0.0
OTCNO
OTCPK
0.0
OTCBB
GTSM
NasdaqGM
TSE
SEHK
HLSE
OSE
KOSE
NasdaqGS
RTS
OM
CM
XTRA
AMEX
TSX
KLSE
BSE
AIM
TSXV
SWX
ASX
Germany
United
Japan
Finland
United
China
Canada
Malaysia
Hong Kong
India
Russia
Italy
South
Taiwan
Australia
Norway
Switzerland
Sweden
# Companies 1 20 5 3 1 2 2 1 4 10 2 1 4 1 7 14 2 1 1 1 5 1 1
# Companies 1 6 1 40 10 2 3 10 1 1 9 2 1 1 1 1 1 1
Figures 10 & 11. TEV/Revenue Ranking (Exchange, Country)
Source. Capital IQ
TEV/EBITDA (LTM) averages 10.2x: The average multiple for the 34 companies with positive EBITDA (and multiples
under 100x) is 10.2x LTM EBITDA (vs. 10.3 last week), led by Tencent Holding’s (700-SEHK) 39.2x multiple (Figure 12).
Thirteen of the companies have EBITDA multiples under 7x. The median multiple is 9.6x (vs. 9.4x last week).