The document discusses trends in the Italian digital market, including rising internet and mobile connectivity, the growth of social media use, and challenges in monetizing social networks. It provides statistics on internet and mobile usage in Italy as well as the size and engagement of Italian social networks. The rise of new media platforms and individual media creation are changing the traditional media landscape.

1. Italian Digital Market Luca Colombo Marketing Director Online Services Group Microsoft Italy May 12 th , 2008

2. # Internet Connectivity # All Digital Devices will be connected & networked # Rise of the Mobile Internet # Rise of individual & enterpreneur # Stride against digital divide # Almost no privacy on the web # The rise of the virtual universe # Information pollution & overload # More googles & facebooks

3. Italian Market Overview Nielsen Online, Mar08 Nielsen Online, Mar08

4. Italian Internet Audience

5. Italian Mobile Market Source: M:Metrics, Feb08 * Browser based activities (include Played Games, Messaging, Personal Utilities, News and Media) Source: M:Metrics, Feb08

6. Mobile Internet from Telcos

7. Mobile in Italy – IM, Email, SN Source: M:Metrics, Feb08

8. Advertising Market “ 2007 has been a positive year for online advertising market in Italy growing by 40%. In 2008 we expect to register the same trend bringing the overall online ad market close to the €1B mark” Mauro Lupi President, Ad Maiora Vice President, IAB Italy (*) SEAT Pagine Gialle

9. # Internet Connectivity # All Digital Devices will be connected & networked # Rise of the Mobile Internet # Rise of individual & enterpreneur # Stride against digital divide # Almost no privacy on the web # The rise of the virtual universe # Information pollution & overload # More googles & facebooks Media distribution & production Fragmented Media Environment Everyone is a media player Roles of media changes Is the end of print ?

10. Verticals outpacing Population Source: Nielsen Online, Mar08

11. Social Networks in Italy Source: Nielsen Online, Member Communities, Mar08

12. Social Networks Potential Hi Sat How much is reliable the following media to gather information before buying a product? How often an info/opinion found on ... affected your buying decisions? 58% 51% 67% Digital PR , Millward Brown Delfo , Mar08 Incredibly optimistic about social media. Specific challenges 1) Tons of inventory . Lack of scarcity creates a liquidity challenge. Working on bringing big brands aboard. 2) People who are visiting social networks there for different reasons, different uses . Figuring out how to target. 3) What's the value of a "friend"? Trying to figure out new metrics to communicate with marketers. One area of specific weakness : social networking . The company is having trouble monetizing "social networking" inventory (e.g., MySpace). Guaranteed payments to MySpace, et al, caused the "Traffic Acquisition Cost" rate to jump to almost 90% of network revenue from 84% last quarter. This is not a big deal for Google, but unless Google can figure out a more effective monetization scheme, it's bad news for MySpace. 2007 Q4 Earnings Conference Call

13. Instant Messaging Source: Nielsen Online, Mar08

14. Source: Microsoft, Feb08 Source: Microsoft, Feb08 25M (Feb07)

15. Windows Live Agents

16. Windows Live Activities/Games