India Internet has Finally Arrived

Sandeep Aggarwal ● (415) 489-2518 ● saggarwal@cariscompany.com Caris & Company
Stan Velikov, CFA ● (415) 489-2510 ● svelikov@cariscompany.com 44 Montgomery Street
Suite 1500
San Francisco, CA 94104
FINRA SIPC
For full disclosure, please see end of report 1
T e c h n o l o g y : I n t e r n e t & S o f t w a r e
Industry Update
Thursday, September 16, 2010
Indian Internet Has Finally Arrived!
Summary
India is the least penetrated Internet economy among the large nations but has
finally hit the inflection point, in our view. The last decade of the Internet ramp-up
has been painfully slow in India (vs. US/China) constrained by poor IT
infrastructure, low broadband penetration, low PC shipments, lack of home-grown
innovations, lack of local content/reasons, and VC money chasing more mature
non-Internet companies with equally compelling growth prospects. However, in our
view, the next 10-years will bring massive growth in the Internet sector in India
supported by highly favorable demographics, growing Internet/broadband
penetration, launch of one of the world’s best 3G networks, growing middle
class/income levels, noticeable pick-up in tech/gadget and mobile culture, and surge
in home-grown Internet start-ups. In our view, India's Internet market is 10 years
behind US's and 6 years behind China's in terms of several key factors namely –
overall Internet adoption, broadband penetration, Internet adverting, E-Commerce,
quality content, and sophistication & functionality of websites. However, until
2015, we expect CAGR of 15% for Internet users, 20% for Internet advertising,
25% for E-Commerce and OTAs. There are four public Internet companies in India
i.e. SIFY, REDF and MMYT listed on NASDAQ and Info Edge listed in Hong
Kong & India. We are initiating on MMYT with a Buy and $46 PT.
Key Points
• Inflection point. In our view, India Internet has finally hit the inflection point.
With 81mm Internet users base, increasing time spent online, upcoming best
3G mobile network, younger demographic, growing wealth, and surge in
Internet start-ups, India is saliently creating a solid ‘Net economy & ecosystem.
• Internet users and penetration. In our view, India has taken much more time
to reach 7% Internet penetration than the US, China, and many emerging
markets. We believe that by 2015, India will have achieved 15%-18%
penetration i.e. 180mm to 200mm Internet users.
• Internet advertising. The global ad industry is $700bn and Internet is $50bn of
that. The Indian ad industry is $5bn and Internet ad is a miniscule $200mm. We
expect Internet advertising to grow at 30% for the next several years.
• E-Commerce. E-Commerce adoption is fairly low in India. In our view, E-
Commerce is trying to grow in India at the same time as the organized retail
revolution – E-Commerce is only $1.4bn vs. $350bn retail sector in India.
• Online Travel. The most exciting segment of India's Internet sector is online
travel which accounts for $4bn vs. $20bn total travel industry.
• Mobile Internet. Supported by good wireless infrastructure, economical voice/
data plans, availability of cheap handsets, and lower PC installed base, India's
mobile market is in many ways more advanced than many mature markets.
• Noteworthy private Internet Co's. While there are many Internet companies
with massive growth, the following are some of the noteworthy private ones in
India – Yatra, Cleartrip, Via, Indiamart, Shaadi, Interactive Avenues, Komli,
Quikr, Sulekha, JustDial, and BharatMatrimony. The established Internet Co's
with traditional media roots are – Times, HT Media, NDTV, Network18.
Company Ticker Price Rating
Amazon AMZN $145.45 3/Average
Digital River DRIV $30.35 1/Buy
eBay EBAY $24.19 1/Buy
Expedia EXPE $26.66 3/Average
Google GOOG $480.64 3/Average
GSI Commerce GSIC $23.34 1/Buy
MakeMyTrip MMYT $38.39 1/Buy
Microsoft MSFT $25.12 1/Buy
Priceline.com PCLN $332.06 1/Buy
comScore SCOR $19.40 1/Buy
TechTarget TTGT $5.11 1/Buy
ValueClick VCLK $12.26 3/Average
Yahoo! YHOO $14.27 1/Buy

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Table of Contents:
# Section Page
1 Economic and Demographic Overview .......................... 3-5
2 Overview of the Internet Sector in India......................... 5-9
3 Overview of Internet Advertising in India ...................... 10-11
4 Overview of E-Commerce in India................................. 11-12
5 Overview of Online Travel in India................................ 12-13
6 Overview of Mobile Internet in India ............................. 13-15
7 Growth Segments in Indian Internet ............................... 15
8 Overview of Indian Public Internet Companies.............. 16-17
9 IPO/M&A Outlook for the Internet Sector in India ........ 17-18
10 Worldwide and US Internet Overview............................ 19-25
11 Valuation Framework ..................................................... 26

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Section 1: Economic and Demographic Overview
Indian economy has been on a massive growth trajectory for the past one decade infused by young demographics, rising capital
investments in key sectors (including infrastructure), increasing wealth, robust job market, high savings rates, government-led
liberalization of the economy, high-tech revolution, and increasing foreign investments.
India was the center of global economic activities until 1600 AD
India accounted for anywhere from 35% to 25% of world GDP between 1 AD and 1600 AD but since then its share of the global
economy kept going down and reached under 3% by the 1980s.
Source: Angus Maddison, The World Economy: Historical Statistics
Share of World GDP Over Time
0%
5%
10%
15%
20%
25%
30%
35%
USA Europe China India
Today, India is re-emerging very fast and is firmly positioned among the 5 largest world economies
India and China are the emerging-world powers with growth rates well above developed countries'. Nowadays India accounts for
about 5% of world GDP and is expected to reach 10% by 2020. The country is currently the fifth largest world economy (by 2009
GDP at PPP) after only the EU, the US, China, and Japan and has the 10th best GDP real growth rate in the world. India is also
the second most populous country in the world and one of the youngest among the major world economies (the median age of its
population is 25.9 years). Although the country ranks fourth in terms of total Internet users, Internet penetration in India (at 7%) is
the lowest among the emerging economies and has a great potential for growth.
Source: CIA World Factbook; Caris & Company
2009 GDP at Purchasing Power Parity ($bn)
$14.1
$8.7
$4.2
$3.6
$2.8
$2.1
USA China Japan India Germany UK

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GDP Trends in India
Indian GDP and GDP growth over the last six years look very compelling.
Source: IMF; Caris & Company
Indian GDP (at PPP) and GDP Growth
$2.36
$2.67
$3.01
$3.30
$3.53
$3.8613.4%
12.5%
9.6%
6.9%
9.5%
2005 2006 2007 2008 2009 2010
GDP ($ trillion) GDP Growth (Y/Y)
Comparing India with the US and China on Key Economic and Other Relevant Measures
Below we compare India with the US and China on key economic factors and several sectors relevant to this report i.e. total
advertising and Internet advertising, total retail and E-Commerce, and total travel and online travel.
United States China India
Population (mm) 307 1,339 1,157
Median Age 36.8 35.2 25.9
GDP - PPP ($ trillion) 14.14 8.75 3.57
GDP Growth -2.6% 9.1% 7.4%
GDP per Capita ($) 46,000 6,600 3,100
Internet Users (mm) 239 420 81
Internet Penetration 77% 32% 7%
Internet Users Growth 152% 1767% 1520%
Advertising ($ billion) - CY10E 266.6 45.0 5.7
Advertising LT Growth Outlook 2%-3% 8%-10% 10%-12%
Online Advertising ($ billion) - CY10E 25.9 3.6 0.2
Online Advertising LT Growth Outlook 13%-15% 24%-27% 32%-35%
Online Advertising Penetration 10% 8% 4%
Retail ($ billion) - CY10E 3,600.0 1,000.0 350.0
Retail LT Growth Outlook 2%-3% 10%-12% 12%-14%
E-Commerce ($ billion) - CY10E 156.3 24.0 1.4
E-Commerce LT Growth Outlook 10%-12% 20%-24% 50%-55%
E-Commerce Penetration 4.3% 2.4% 0.4%
Travel* ($ billion) - CY10E 255.0 65.0 42.0
Travel LT Growth Outlook 2%-3% 6%-8% 8%-10%
Online Travel* ($ billion) - CY10E 106.3 8.5 5.5
Online Travel LT Growth Outlook 10%-12% 24%-26% 35%-40%
Online Travel Penetration 42% 13% 13%
* Travel includes leisure and unmanaged corporate travel only
Source: CIA World Factbook; Internet World Stats; Caris & Company
Comparison of the Largest Countries in the World

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Rising Middle Class in India
Today, India experiences profound demographic/socio-economic changes as well and its middle class (defined as Seekers and
Strivers by McKinsey & Company) is expected to increase from 50mm in 2005 to 225mm in 2015 and 585mm by 2025.
* Income Brackets in Thousand Indian Rupees per Annum (2000)
Source: McKinsey Global Institute
Share of Indian Population (% of Households) by Income Bracket*
93
80
54
35
22
6
18
41
43
36
4
19
32
1 2
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1985 1995 2005 2015 2025
Deprived (<90) Aspirers (90- 200) Seekers (200- 500) Strivers (500- 1,000) Globals (>1,000)
2
9
1 21
Section 2: Overview of the Internet Sector in India
In our view, Internet has only scratched the surface in India so far. However, that has been the case for the past decade during
which Internet adoption in the country has been painfully slow. India has not only one of the lowest Internet penetration levels
among the major world economies but also a very small Internet economy when it comes to the overall economic impact and new
job creation. More specifically, Internet advertising and E-Commerce remain very small industries. However, India's Internet has
given boost to online travel as well as B2B businesses and both of these segments have seen astronomical growth.
Indian Internet Population & Penetration
India has the 4th largest Internet population in the world after China, the US, and Japan. However, India is the slowest among the
large nations in terms of Internet adoption. As of June 2010, Internet penetration in the country has only reached 7% – way below
any major developed or emerging economy in the world.
The country accounts for 17% of the worldwide population and for only 4% of Internet users. Still, Internet has been growing
very fast in India (1,520% between 2000 and 2010) and we expect penetration to accelerate even further with the current
infrastructure improvements and growth in wealth and education levels in the country.

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# Country Population
% of WW
Population
Internet
Users
% of WW
Internet
2000-'10
Growth
Internet
Penetration
1 China 1,330,141,295 19% 420,000,000 21% 1,767% 32%
2 United States 310,232,863 5% 239,232,863 12% 152% 77%
3 Japan 126,804,433 2% 99,143,700 5% 111% 78%
4 India 1,173,108,018 17% 81,000,000 4% 1,520% 7%
5 Brazil 201,103,330 3% 75,943,600 4% 1,419% 38%
6 Germany 82,282,988 1% 65,123,800 3% 171% 79%
7 Russia 139,390,205 2% 59,700,000 3% 1,826% 43%
8 United Kingdom 62,348,447 1% 51,442,100 3% 234% 83%
9 France 64,768,389 1% 44,625,300 2% 425% 69%
10 Nigeria 152,217,341 2% 43,982,200 2% 21,891% 29%
WW Total 6,845,609,960 53% 1,966,514,816 60% 445% 29%
Source: Internet World Stats (Jun '10)
Number of Internet Users - Top 10 Countries
Broadband Penetration in India
At 5.1Mbps USA is ranked 28th
in the world for bandwidth speed (Korea at 21.4Mbps, Japan at 15.8Mbps, Sweden at 12.8Mbps,
and the Netherlands at 11Mbps lead the pack) while India continues to struggle with 256kbps and highly limited broadband
penetration at 9mm subscribers (out of 81mm Internet users in India). We do not see PC-based broadband becoming more
ubiquitous in India any time soon, however, India is in the middle of implementing one of the most advanced 3G mobile networks
in the world and we believe with that mobile Internet will get a much needed impetus as an industry.
Worldwide Internet Population and Penetration
Internet adoption has been increasing not only in India but throughout the world. Over the past 10 years, the number of Internet
users worldwide has grown 445% and there is still plenty of room for growth – Internet penetration as of June 2010 has just
reached 29% on a global basis.
WW Regions Population
% of Total
Population
Internet
Users
% of Total
Internet
2000-'10
Growth
Internet
Penetration
Africa 1,013,779,050 15% 110,931,700 6% 2,357% 11%
Asia 3,834,792,852 56% 825,094,396 42% 622% 22%
Europe 813,319,511 12% 475,069,448 24% 352% 58%
Middle East 212,336,924 3% 63,240,946 3% 1,825% 30%
North America 344,124,450 5% 266,224,500 14% 146% 77%
Latin America/Caribbean 592,556,972 9% 204,689,836 10% 1,033% 35%
Oceania/Australia 34,700,201 1% 21,263,990 1% 179% 61%
WW Total 6,845,609,960 100% 1,966,514,816 100% 445% 29%
Number of Worldwide Internet Users
Indian Internet Landscape
Given the size of the country and its global economic impact, India remains in an arguably nascent state of Internet evolution.
Google, Yahoo!, MSN, AOL, and Facebook are among the most visited websites in India. The other popular public and mostly
private Internet companies in the country are presented in the exhibit below roughly classified in eight major categories.

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Online Ad/ Classifieds
Online Marketing
Services E-Commerce Online Travel
E-Commerce
Services Mobile
Social Media &
Gaming
Content & Digital
Media
US Popular Public
Companies
Google, Yahoo!, MSN,
AOL, Monster,
ValueClick, 24/7Media
(WPP), Google, Yahoo!
Amazon, eBay, Rediff
(REDF), Apple
Expedia, Priceline DigitalRiver Google, Apple Google, MSN, Sify
(SIFY), Rediff (REDF)
Google, Yahoo!,
MSN, AOL
India Popular Public
Companies
InfoEdge, Sify (SIFY),
Rediff (REDF) N/A N/A
Makemytrip
(MMYT) N/A N/A N/A
Sify (SIFY), Rediff
(REDF)
Popular US/Indian
Private Companies
Quikr, Shaadi, Sulekha,
Bharatmatrimony,
Justdial, Ideacts
Komli, Interactive
Avenues
Fashonandyou,
Flipcart, Indiamart,
Future Bazar
Yatra, Cleartrip,
Via, Travelguru
mCheck, Paymate One97, Nazara,
inmobi, IMImobile,
July System, Kirusa
Facebook, Orkut,
Linkedin, Twitter, Hi5,
Chakpak, Minglebox,
Games2win
Seventymm,
Canvera
Market Size 250mm 30mm 1.4bn 5.5bn $50mm $500mm $25mm $350mm
Long-Term Growth
Rate 32%-35% 35.0% 50%-55% 35%-40% 40.0% 40.0% 40.0% 40.0%
Entrepreneurial
Opportunities
High High High High High High High High
M&A Activity High High Moderate High Moderate High Low Moderate
Source: Caris & Company
India Internet Market Overview
Trends for Active Internet Users in India
The Internet user base in India has been growing over the past 10 years but still remains materially limited in reach.
Source: Internet and Mobile Association of India; Caris & Company
Claimed and Active Internet Users in India (MM)
2
4
8
11
21
29
32
36
42
46
52
5
9
12
16
32
42
46
50
57
63
71
2000 2001 2003 2004 2006 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09
Active Internet Users Claimed Inte rnet Users
Time Spent on the Internet in India Rising…Finally
In addition to growth of the overall Internet user base, the time spend on the Internet has gone up, especially quite dramatically in
the last two years.

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Internet Usage - Average Hours per Week
5.6
4.8
6.2
8.2
6.9
9.3
15.7
2001 2003 2004 2006 2007 2008 2009
Top Internet Activities in India
Below we present the top activities that bring people in India online.
Top Online Activities (% of Respondents): 2008 vs. 2009
20
13 13
21 21
41
37
46
32
49
76
91
12
14
16
18
24
33 33
40
45
65
80
87
Online
Banking
VoIP Calls
& Chat
Online
News
Book Rail
Tickets
Financial
Info
Online
Gaming
Online
Jobsites
Text Chat Music/
Video
Education
Info
General
Search
E-Mail
2008 2009

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Below we present the top search activities on the Internet in India.
Source: eMarketer; JuxtConsult; Caris & Company
Most Popular Online Activities in India (% of Respondents)
84%
71%
68%
67%
62%
55%
53%
52%
49%
49%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Online Travel Search
Job Search
Product Search
Instant Messaging/Chatting
Check General News
Dating/Friendship
Check Cricket Content/Scores
Check Sports Other Than Cricket
Marriage Search
English Information Search Engine
Why India’s Internet Adoption has been Slower than Other Large Countries?
While US-based portals and search companies have traditionally seen a large user base out of India, the pure-play India Internet
has not seen the kind of growth observed in the US, China, Western Europe, Japan, etc. In our view, the major Internet growth
drivers and impediments in India include the following:
# Growth Drivers # Growth Impediments
1 Availability of Internet access points 1 Limited reach of the Internet
2 Increasing broadband penetration 2 Poor Internet infrastructure
3 PC shipment and installed base 3 Low bandw idth
4 Rise in w hite collar jobs w ith PC and Internet at w ork 4 Low adoption
5 Internet-capable mobile phones/best 3G Netw ork 5 Small PC installed base
6 Affordable voice and data plans 6 Lack of local content
7 Rising income levels 7 E-Commerce adoption limited
8 New s, Email, Search, Social and E-Commerce 8 Low credit Card penetration
9 Younger Demographics 9 Product development and management lack global standards
10 Emergence of home-grow n companies 10 Traditional businesses are in early stage of evolution as w ell
Major Internet Growth Drivers and Impediments

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Section 3: Overview of Internet Advertising in India
India Internet Advertising Market Forecast
The Indian Internet advertising market is still relatively small in absolute terms – about $154mm in 2009, by our estimates – but it
shows extraordinary growth rates. We are estimating CAGR of 32.9% between 2009 and 2012 for Internet advertising which
compares to 14.5% CAGR for total Indian advertising over the same period. Total Internet ad spend is expected to grow to
$360mm by 2012, up from $65mm in 2007 and $210mm in 2010. Currently, Internet advertising is about 3.0% - 3.5% of total
advertising and we expect its share to grow to 5% by 2012.
$MM 2007 2008 2009E 2010E 2011E 2012E '09-'12 CAGR
Total India Advertising $4,663 $4,962 $4,798 $5,738 $6,484 $7,198 14.5%
Y/Y Change 32.1% 6.4% -3.3% 19.6% 13.0% 11.0%
India Internet Advertising $65 $114 $154 $210 $275 $360 32.9%
Y/Y Change 85% 75% 34.5% 36.8% 31.0% 30.9%
India Internet as a % of Total 1.4% 2.3% 3.2% 3.7% 4.2% 5.0%
Y/Y Increase in Penetration 40 bps 90 bps 90 bps 46 bps 58 bps 76 bps
Source: PricewaterhouseCoopers; eMarketer; Caris & Company estimates; Excludes Online Classifieds
India Internet Advertising Revenue ($MM)
Looking at Various Formats of Internet Advertising in India
State of Search Advertising in India. Similar to most other countries, search in India is dominated by Google and the other
leading search engines such as Yahoo! and Bing. There are two notable home-grown search services that are worth mentioning
and those are guruji.com and justdial.com. We believe that Google, Yahoo! and Bing together generate search revenue close to
$125mm from India.
State of Display Advertising in India. In addition to the leading US portals i.e. MSN, Yahoo!, AOL, etc., the display ad business
has dozens of strong home-grown companies especially many with traditional media roots i.e. The Times Group, Hindustan
Times, Network18, Rediff, and Sify.
State of Other Online Ad Formats in India. Besides search and display, lead generation is another online ad format that has
potential in India but marketing sophistication is still not very high. Email marketing and video advertising remain small
categories in India but, with retail and brand revolution, will grow in the coming years.
State of Online Classifieds in India. In our view, online classifieds is perhaps the biggest category for online advertising in India
with jobs, real estate, auto, and matrimony having multiple companies with sizeable revenue and growth. As per our estimates,
online classifieds is a $200mm category in India.
State of Online Marketing Services in India. We include online ad networks, interactive ad agencies, search engine marketing
agencies (SEMs), and search engine optimization agencies (SEOs) as part of online marketing services in India. Because Internet
advertising remains a small category in India, online marketing services, which is a derivative of the Internet ad spend, remains
very small as well.
Advertising by Media in India
Unlike in most of the mature markets, advertising is a growth industry in India. While this data are relatively old, below we
highlight India’s adverting industry by format.

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Spending Y/Y Change % Share
Print $2,242.4 16% 47.4%
TV $1,898.7 17% 40.2%
Outdoor $323.9 11% 6.8%
Radio $151.1 38% 3.2%
Internet $82.8 45% 1.8%
Cinema $29.4 24% 0.6%
Total $4,728.3 17% 100.0%
Source: eMarketer; Pitch-Madison; Caris & Company
2008 Advertising Spend in India ($bn)
Section 4: Overview of E-Commerce in India
India E-Commerce Market Forecast
The Indian retail market is the 5th largest in the world at approximately $350bn with less than 10% in the organized retail sector
(retail chains/corporate play vs. mom-and-pop shops). What is more important, though, is that unlike in the US, the Indian retail
sector is growing at an estimated growth rate of 10% Y/Y until 2018. Consultancy McKinsey expects the Indian retail market to
grow 4x by 2025.
In India, the retail E-Commerce market is currently a tiny fraction of the total retail market – about 0.5% – and is expected to
reach $1.4bn in 2010. By our estimates, its share will more than double by 2012 due to much faster growth compared to overall
retail. We expect E-Commerce in India to grow almost 3x to 4x faster than the overall retail market (58.5% CAGR vs. 15.4%
CAGR between 2009 and 2012). We estimate retail E-Commerce to reach $5bn by 2012 (up from $500mm in 2008 and $1.4bn in
2010). We think by 2013, E-Commerce in India will achieve 1% penetration.
Sales in $MM 2008 2009 2010E 2011E 2012E 2013E '09-'12 CAGR
Total Retail $260,000 $300,000 $350,000 $404,250 $460,845 $520,755 15.4%
Y/Y Change 15.6% 15.4% 16.7% 15.5% 14.0% 13.0%
Total Retail E-Commerce $500 $850 $1,400 $2,212 $3,384 $5,009 58.5%
Y/Y Change 81.8% 70.0% 64.7% 58.0% 53.0% 48.0%
E-Commerce as % of Retail 0.2% 0.3% 0.4% 0.5% 0.7% 1.0%
Y/Y Increase in Penetration 0.07% 0.09% 0.12% 0.15% 0.19% 0.23%
* Excludes sales of travel products and services
Source: Caris & Company estimates
India Retail and E-Commerce Sales ($MM)
Shift in Spending Behavior in India is a Catalyst for E-Commerce Growth
Younger demographics, higher education levels, global cultural awareness, and increasing affordability are brining shifts in the
spending behavior of consumers in India. We believe that these shifts may serve as a catalyst for the E-Commerce growth, which
has lagged behind on the adoption curve.
Below we present a chart that shows where the average Indian consumer is allocating his or her share of wallet.

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Source: McKinsey Global Institute
Share of Average Household Consumption in India
56
42
34
25
5
6
5
5
14
12
12
10
2
3
3
3
4
8
9
11
11
17
19
20
1
2
3
6
3
5
6
9
4 7 9
13
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1995 2005 2015 2025
Health care
Education & recreation
Communication
Transportation
Personal products & services
Household products
Housing & utilities
Apparel
Food, beverages, tobacco
Section 5: Overview of Online Travel in India
India Online Travel Market Forecast
Tourism demand in India is growing not only from domestic sources – more Indians taking vacation – but also from international
sources – foreign tourists visiting the country. The Indian Ministry of Tourism has set a goal of reaching 10mm foreign tourist
arrivals (FTAs) in 2010 (compared to 5.1mm in 2009) and 675mm domestic tourists. This target seems somewhat ambitious
today (FTAs have reached just 3.5mm by August 2010) but the efforts the Indian government puts in promoting the country as a
tourist destination (i.e. its Incredible India media campaign, etc.) should pay off in the near future (most likely once macro
economic uncertainties ease around the world).
India is among the fastest growing travel and tourism markets in the world. Travel and tourism is a $40bn industry in India
(includes managed corporate travel; $20bn for leisure and unmanaged corporate travel) and online is expected to reach $5.5bn in
gross bookings by the end of 2010. While online travel has low penetration, relative to India’s E-Commerce market, it is the
biggest category online. We estimate the online travel market will grow at a CAGR of 27.8% between 2009 and 2012 and reach
$8.9bn by 2012. Online travel is expected to grow almost twice as fast as the overall Indian travel market during that period.
2008 2009 2010E 2011E 2012E '09-'12 CAGR
Indian Total Travel $35,200 $36,000 $42,000 $48,426 $55,254 15.4%
Y/Y Change -- 2.3% 16.7% 15.3% 14.1%
Indian Online Travel $3,100 $4,250 $5,500 $7,040 $8,870 27.8%
Y/Y Change 82% 37.1% 29.4% 28.0% 26.0%
Online Travel as % of Total 8.8% 11.8% 13.1% 14.5% 16.1%
Y/Y Increase in Penetration -- 3.00% 1.29% 1.44% 1.52%
Source: WTTC; Caris & Company estimates
Indian Total and Online Travel Sales ($MM)

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Travel is Among the Top Products Indians Search For Online
One interesting trend in India is that travel products are the most popular type of products which Internet users research and
purchase online. This is very encouraging for the Indian online travel industry and bodes well for all OTAs – domestic and multi-
national.
Source: eMarketer; Google; Caris & Company
Types of Products Researched and Purchased Online
66%
40%
26%
0% 10% 20% 30% 40% 50% 60% 70%
Travel Products
Entertainment Products
Technology Products
Section 6: Overview of Mobile Internet in India
Indian Mobile Internet
India has more than half a billion mobile subscribers today (2nd
large mobile subs in the world) and very soon it is set to launch
the world’s most advanced 3G network that many experts claim to be as fast as WiMAX. In our view, mobile Internet in India is
way ahead of mobile Internet in the US and Western Europe because of several factors – 1) the telecom sector picked-up in India
later than in Western countries but that allowed India to benefit from best practices, 2) the PC is less affordable and Internet
connections are not that pervasive so mobile has become a gadget of choice to access the Internet, 3) mobile plans for voice and
data are highly affordable.
CAGR
2008 2009 2010 2011 2012 2013 2014 '09 - '12
Total Population 1,140.6 1,156.9 1,173.1 1,189.2 1,205.1 1,220.8 1,236.3 1.4%
Y/Y Growth -- 1.4% 1.4% 1.4% 1.3% 1.3% 1.3%
Mobile Phone Subs 346.9 525.2 604.1 666.0 723.1 787.4 853.0 11.2%
Y/Y Growth -- 51.4% 15.0% 10.2% 8.6% 8.9% 8.3%
Penetration 30.4% 45.4% 51.5% 56.0% 60.0% 64.5% 69.0%
Mobile Internet Users 2.0 5.0 12.1 30.0 65.1 114.2 162.1 135.3%
Y/Y Growth -- 150.0% 142.0% 147.9% 117.0% 75.4% 41.9%
Penetration 0.2% 0.4% 1.0% 2.5% 5.4% 9.4% 13.1%
Source: eMarketer; US Census Bureau; Caris & Company
Mobile Phone and Mobile Internet Users in India: 2008 - 2014 (MM)
India Is the 3rd
Largest Nation for Mobile Internet
Given this favorable environment, it is not surprising that India is one of the countries with the highest mobile Internet traffic in
the world. According to eMarketer, the country accounted for 11% of total mobile Internet traffic in February 2009 – surpassed
only by the US and the UK which together accounted for half of all the traffic.

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Source: eMarketer; Bango; Caris & Company
Top 10 Countries Ranked by Mobile Internet Traffic, Feb. 2009
US 29.3%
UK 20.3%
India 11.1%
Indonesia 5.5%
South Africa 5.4%
Egypt 1.7%
Malaysia 1.4%
Spain 1.4%
Portugal 1.2%
Sweden 1.1%
Other 21.6%
0% 5% 10% 15% 20% 25% 30% 35%
India has the Highest Mobile Users Growth Among BRIC Nations
Mobile Internet usage is also expected to grow materially over the next 4-5 years as the country upgrades its network and smart-
phones become more affordable (due to increasing wealth and competitive pricing pressure). According to eMarketer, the number
of mobile Internet users in India is expected to grow at the astonishing 111% CAGR between 2009 and 2012. This is about 4x
faster than the other BRIC countries.
CAGR
2009 2010 2011 2012 2013 2014 '09 - '12
Brazil 19.1 31.6 46.2 58.6 71.3 82.8 31.2%
Russia 15.7 23.6 29.8 42.1 50.9 60.1 29.2%
India 5.0 12.1 30.0 65.1 114.2 162.1 111.3%
China 233.0 372.8 526.4 686.9 831.9 956.7 30.7%
Source: eMarketer; Caris & Company
Mobile Internet Users in BRIC: 2009 - 2014 (MM)
India is the 2nd
Largest BRIC Country for Mobile Ad Spend
At the same time, growth of mobile advertising spend in the country is expected to be less robust, compared to the other BRIC
countries, but still at a remarkable 60% CAGR between 2009 and 2012.
CAGR
2009 2010 2011 2012 '09 - '12
Brazil 6.1 11.8 23.8 40.9 88.6%
Russia 4.8 6.4 12.1 22.4 67.1%
India 20.8 35.4 56.5 85.4 60.1%
China 101.0 223.2 448.7 699.9 90.7%
Mobile Ad Spend in BRIC: 2009 - 2012 ($MM)

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Mobile Internet Advertising Trends in India and China
Mobile Internet advertising is also a small market today – about $21mm in 2009 – but is also expected to show tremendous
growth over the next couple of years. Per eMarketer, mobile ad spend will see CAGR of around 60% between 2009 and 2012.
Mobile Ad Spend - India vs. China: 2009 - 2012 ($MM)
$20.8
$35.4
$56.5
$85.4
$101.0
$223.2
$448.7
$699.9
2009 2010 2011 2012
India China
Section 7: Growth Segments in Indian Internet
In our view, Internet as an industry remains in an early stage of evolution compared to how it ramped up in the US and China.
That also means that almost any category in India presents a long-term growth opportunity. While India's Internet overall will
outperform the rest of the big nations, below we present the 10 specific Internet segments where we expect to see the most
remarkable growth over the next several years. We also show some of the key players in each segment.
# Category Popular Companies
1 Online Travel MakeMyTrip, Yatra, Cleartrip, Via, Travelguru, redBus
2 E-Commerce Flipkart.com, Fashionyou.com, Rediff.com, Future Bazaar, Naaptol, Infibeam
3 Matrimony and Dating Shaadi.com, BharatMatrimony.com, Jeevansathi.com
4 Internet Advertising/Search Justdial, Guruji, Web18, Rediff.com, Sify, Time, PubMatic, Ideacts
5 Mobile Content and VAS Kirusa, Cellcast, InMobi, Comviva, One97 Communications, IMImobile.com, July Systems
6 Digital Agency/ Ad Networks Interactive Avenues/Ad Magnate, Komli, RS LiveMedia
7 Online Classifieds Naukri, Sulekha, MotorExchange, Carwale, 99acres.com, magicbricks.com, Quikr.com, Makaan.com, Indiamart.com
8 Online/Mobile Payment mCheck, PayMate
9 Online Education TutorVista, TopChalks
10 Content/Social/Gaming Minglebox.com, Nazara, Chakpak, Games2win
Top 10 Growth Segments in India's Internet Sector

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Section 8: Overview of Indian Public Internet Companies
India is a small market when it comes to publicly traded Internet companies. Against roughly 50 public Internet companies in the
US and close to 25-30 in China, there are four notable public Internet companies in India – MakeMyTrip, Info Edge (ticker:
532777-BOM), Rediff.com (ticker: REDF), and Sify (ticker: SIFY). Below we present some key metrics on these companies.
MakeMyTrip Info Edge Rediff Sify
Ticker MMYT 532777-BOM REDF SIFY
Year Established 2000 1995 1996 1998
FY10 Revenue ($MM) $40.3 $57.4 $18.8 $156.9
Total Employees 800 1,550 330 3,000
Monthly Uniques ('000) 2,159 4,662 9,917 2,443
Source: Company reports; comScore; Caris & Company
Public Internet Companies
MakeMyTrip
MakeMyTrip (NASDAQ: MMYT) is the largest online travel company in India, based on gross bookings, and offers a wide range
of travel and travel-related services and products to residents of India and non-resident Indians and others traveling to India from
the United States, Canada, the United Arab Emirates, and other countries. It provides business and leisure travelers with stand-
alone and packaged travel products and services that include air tickets, hotels, packages, rail tickets, bus tickets, car hire, and
ancillary travel services such as facilitating access to travel insurance, visa processing, etc. Through its websites focused on its
four core markets (i.e. India, US, Canada, and UAE), call centers, 19 travel stores in major Indian cities, and a network of 2,000
agents the company provides travelers with the tools and information they need to efficiently research, plan, book, and purchase
travel services and products in India and overseas. MakeMyTrip started operations in 2000 and spent its first five years focused
on the non-resident Indian market in the US (selling primarily air tickets for India-bound travel). The company started its Indian
business in September 2005 with the launch of its Indian website – www.makemytrip.com.
Info Edge
Info Edge (India) Limited (532777-BOM) is India’s premier online classifieds company in recruitment, matrimony, real estate,
education, and related services. Its Recruitment business includes online recruitment classifieds (www.naukri.com, India’s top
job-search website, and www.naukrigulf.com, a website focused at the Middle East job market) and offline executive search
(www.quadranglesearch.com). Other websites in this business include professional networking site (www.brijj.com) and a new
hiring website (www.firstnaukri.com). Info Edge's Matrimony business comprises of online matrimony classifieds
(www.jeevansathi.com) and 14 offline Jeevansathi Match Points. Its Real Estate business includes online real estate classifieds
(www.99acres.com) and a real estate brokerage business (www.allcheckdeals.com). Its Education business comprises of online
education classifieds (www.shiksha.com). Info Edge was incorporated on May 1, 1995 and is headquartered in Noida, Uttar
Pradesh, India. The company maintains a network of 49 offices located in 32 cities throughout India and employs about 1,550
people.
Rediff.com
Rediff.com (NASDAQ: REDF) is one of the premier worldwide web portals providing news, information, communication,
entertainment, and shopping services. Its website is one of the most visited in India (among the Top 5 based on unique visitors
data by comScore). The company provides a platform for Indians across the world to connect with each other online. Rediff.com
also offers the Indian American community one of the oldest and largest Indian weekly newspapers, India Abroad. The company
was founded in 1996 and is headquartered in Mumbai, India with offices in New Delhi, Bangalore, Chennai, Hyderabad, and New
York, USA. Rediff.com employed 329 people at the end of June 2010.
Sify Technologies Limited
Sify Technologies Limited (NASDAQ: SIFY) provides Internet, network, and E-Commerce services mostly in India. It was one
of the first private companies to offer Internet access in India when the sector was opened to private operators. The company
offers corporate network/data services as well as application services, such as website design, development, content management,
search engine optimization, hosting, domain name management, secure socket layer certificate for websites, and server space in

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required operating system and database. Further, it offers Internet access services, including high-speed/broadband access to
homes over cable, public Internet access from its network of e-ports, and VoIP and dial-up access to homes. The company has set
up a chain of franchised internet cafes – a network of over 3,300 cyber-cafes. Sify was incorporated in December 1995 and began
commercial operations in April 1998. It is headquartered in Chennai, India.
Section 9: IPO/M&A Outlook for the Internet Sector in India
So far, Internet has not been among the top sectors for M&A deals and IPOs in India. However, this may change in the coming
years.
India Internet IPO Outlook
As far as IPO is concerned, we believe that Indian Internet companies with compelling fundamentals and sizeable revenue and
balance sheets have an opportunity to tap into a global investors base that is looking for growth and thematic stories with a
possible listing on NASDAQ (similar to IPO and listing of Makemytrip on NASDAQ in Aug 2010).
In 2005, the US Internet sector had created $350bn in market capitalization while China was at under $5bn and India stood at
under $500mm. By the end of 2009, the US Internet sector market capitalization reached $450bn, China was at $100bn and India
remained under $5bn. As per our estimates, there are roughly 50-60 public Internet companies in the US, 20-25 in China, and
fewer than 5 in India. However, in the next 3-5 years, we think India's Internet sector will finally create bigger economic
activities/impact and draw global attention.
India Internet M&A Outlook
We believe that global Internet companies will get more active in India-focused Internet M&A in the next 2-3 years as they search
for hyper-growth regions across the world and India starts looking more attractive on absolute numbers basis. eBay and
Monster.com have made Internet acquisition in India to expand their geographical presences but other large Internet companies
have focused on organic growth to expand in India so far. However, we believe that the US-based Internet companies will get
more aggressive in India's Internet market. For M&A perspective, we find the entire market to be attractive but in our view the
following 5 categories are very attractive i.e. online travel, interactive ad agencies, Internet ad networks, mobile Internet, and
online music and content.
Overview of Private Internet Companies
The majority of private Internet companies in India are concentrated in several segments – travel, portals, Internet advertising,
content (both Internet and mobile consumption), E-Commerce, social networking, classifieds, matrimony/dating, and education.
Some of the most popular names include Yatra, Cleartrip, Travelguru, Shaadi.com, Interactive Avenues, Komli, Quikr, Sulekha,
JustDial, and BharatMatrimony.com.
Top 50 Hot Internet Companies
Below we have compiled a list of the Top 50 private Internet companies in India.

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# Company Description # Company Description
1 9.9 Media Traditional and online media 26 mChek Mobile payment platform
2 BharatMatrimony.com Matrimonial services 27 Minglebox.com Social networking site
3 Canvera Online/offline digital photography 28 MotorExchange B2B marketplace for used vehicles
4 Cellcast Interactive mobile content 29 Naaptol Comparison-based social shopping portal
5 Chakpak Media Online movie portal 30 Nazara Technologies Brand-led mobile entertainment content
6 ClearTrip Online travel portal 31 ngpay Mobile commerce service platform
7 ClickIndia.com Online classifieds 32 OLX Free online classifieds
8 Desi Hits South Asian digital media entertainment hub 33 One97 Mobile content and VAS
9 DimDim Web conferencing solutions 34 PayMate Wireless payments
10 FashionandYou.com Private (invitation only) shopping club 35 PubMatic Ad monetization and management solutions
11 Flipkart.com Online shopping site 36 Quikr Online classifieds
12 Future Bazaar Online shopping site 37 redBus Online bus ticketing
13 Games2win Online gaming 38 RS LiveMedia Digital display network
14 GETIT Multi-media information services 39 Saffronart Modern art website
15 Gingersoft Media SMS based targeted advertising platform 40 Seventymm Online movie and entertainment services
16 Guruji Search engine 41 Shaadi.com Matrimonial services
17 IMImobile Mobile VAS 42 SMS GupShup Social SMS service
18 Infibeam.com Online shopping site 43 Sulekha Classifieds & yellow pages
19 InMobi Mobile ad network 44 TopChalks Digital education services
20 Interactive Avenues Digital marketing agency 45 Travelguru Online travel agency
21 July Systems Mobile media company 46 TutorVista Educational portal
22 JustDial Local search engine 47 ValueFirst Enterprise mobility and mobile marketing
23 Kirusa Advanced mobile solutions 48 Vdopia Internet video ad network
24 Komli Online ad network platform 49 Via Travel services
25 mCarbon Mobile content and service management 50 Yatra Online travel agency
Source: Company website; Caris & Company
Private Indian Internet Companies
Top Internet-focused VCs in India
Most Internet-focused VCs in India either funded Silicon Valley-style early stage companies in the late 1990s in the midst of the
“.com” bubble or invest today on opportunistic basis. However, the majority of VCs operating in India tend to invest in non-
Internet companies or start-ups that have already achieved some traction with self funding or seed money. In our view, VCs in
India tend to stay away from early stage start-ups as they can find growth companies with rewarding exit options in categories
that are saturated in mature markets.
Below we present a list of 12 notable venture capital firms that invest in the Indian Internet sector. In our view, Sequoia, Helion,
and SAIF are the most Internet-focused VCs in India with series of noteworthy investments and successful exits.
# Name
1 Sequoia Capital
2 Helion Venture Partners
3 SAIF Partners
4 Kliener Perkins/Sherpalo
5 Draper Fisher Jurvetson
6 NEA
7 Matrix Partners
8 Canaan Partners
9 Nexus Venture Partners
10 Reliance Technology Ventures Ltd
11 Indo-US Ventures
12 Sierra Ventures
Notable India-Focused VCs

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Section 10: Worldwide and US Internet Overview
Global Internet Population and Penetration by Region
There are close to 7 billion people living on the Earth today and roughly 2 billion of them are Internet users. Over the past 10
years, the number of Internet users has grown 445% and there is still plenty of room for growth – Internet penetration as of June
2010 has just reached 29% on a global basis. In the US, Internet users are close to 240 million for a penetration rate of 77% – one
of the highest across the world.
WW Regions Population
% of Total
Population Internet Users
% of Total
Internet
2000-'10
Growth
Internet
Penetration
Africa 1,013,779,050 15% 110,931,700 6% 2,357% 11%
Asia 3,834,792,852 56% 825,094,396 42% 622% 22%
Europe 813,319,511 12% 475,069,448 24% 352% 58%
Middle East 212,336,924 3% 63,240,946 3% 1,825% 30%
North America 344,124,450 5% 266,224,500 14% 146% 77%
Latin America/Caribbean 592,556,972 9% 204,689,836 10% 1,033% 35%
Oceania/Australia 34,700,201 1% 21,263,990 1% 179% 61%
WW Total 6,845,609,960 100% 1,966,514,816 100% 445% 29%
Number of Worldwide Internet Users
Overview of the Internet Landscape
Internet Advertising
Online Marketing
Services E-Commerce Online Travel
E-Commerce
Services
Social Media &
Gaming
Content & Digital
Media
Popular US Public
Companies
Google,Microsoft, Yahoo!,
AOL, Ask
Marchex, ValueClick,
Websense
Amazon, BlueNile, eBay,
Overstock.com, Shutterfly,
TigerDirect, Alibaba
Expedia, Priceline, Orbitz,
Travelzoo
Digital River, GSI
Commerce, PSFw eb
N/A Netflix, RealNetw orks,
TechTarget, The Knot,
TheStreet.com, WebMD
Popular US Private
Companies
Motelyfools, Bankrate,
Netshelter, Glam,
Plentyoffish
AdBrite, AudienceScience,
Casale Media, Collective,
Didit, Efficient Frontier,
ExactTarget, JumpTap,
Specific Media
Become, Etsy, New egg,
Nextag, Zazzle, Zillow
Kayak, Travelocity Bazaarvoice,
Pow erReview s,
Retrevo, Shopw iki,
Wise
Facebook, LinkedIn,
Tw itter, Yelp, Zynga,
Playfish, Rock You,
Mindjolt Games,
SlashKey, Country Life
Edmunds, Fool.com,
Hulu, Joost, LoveFilm,
Metacafe, Oanda,
Pandora
Global Market Size $46bn $3-$5bn $518bn $275bn $8-$10bn $2-$3bn $4-$5bn
Global LT Growth
Rate 15% 14%-16% 15% 13% 18%-20% 40%-50% 15%-17%
Entrepreneurial
Opportunities
High High Moderate Moderate Low High High
M&A Activity High High Moderate Moderate Moderate High Moderate
Internet Landscape
Worldwide Online Advertising Forecast
We expect worldwide online advertising to reach $46.5bn in 2010, up 15.0% from 2009. We estimate worldwide online
advertising will reach $62bn by 2012, a CAGR of 15.4% from 2009 to 2012, and will become 8.7% of total worldwide
advertising in 2012, up from 6.3% in 2009.

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$MM 2007 2008 2009E 2010E 2011E 2012E '09-'12 CAGR
Total Worldwide Advertising $639,700 $659,103 $637,543 $655,937 $684,683 $715,493 3.9%
Y/Y Change 5.8% 3.0% -3.3% 2.9% 4.4% 4.5%
WW Internet Advertising $35,663 $40,218 $40,354 $46,459 $53,593 $61,978 15.4%
Grow th Rate 27% 13% 0.3% 15.1% 15.4% 15.6%
WW Internet as % of Total 5.6% 6.1% 6.3% 7.1% 7.8% 8.7%
Source: Universal McCann; IAB & PricewaterhouseCoopers; Caris & Company estimates
Worldwide Internet Advertising Revenue ($MM)
Worldwide Online Advertising by Format
We believe that Search will remain the largest online ad category and its market share will go up worldwide from 51% of total
online advertising in 2009 to 53% in 2012. We estimate Display advertising to account for 32% of total online advertising in 2012
(down 300bps from 2009) and Classifieds to decline to 7% of total online advertising in 2012 (down 200bps from 2009). We also
believe that search will grow faster than the overall market but we expect rich media and video advertising to grow even faster
than search.
Ad Revenue ($MM) 2006 2007 2008 2009E 2010E 2011E 2012E
Total $28,000 $35,663 $40,218 $40,354 $46,459 $53,593 $61,978
Search $11,867 $15,923 $19,188 $20,712 $23,779 $27,801 $32,872
Classifieds $3,817 $4,405 $4,457 $3,536 $3,775 $4,131 $4,619
Referrals/Lead Gen $1,740 $2,063 $2,354 $2,273 $2,607 $2,950 $3,359
Email $449 $569 $637 $696 $754 $902 $1,008
Display Related Ads $10,128 $12,704 $13,817 $13,964 $15,544 $17,808 $20,121
Banners Ads $7,439 $8,646 $9,469 $9,618 $10,756 $12,030 $13,179
Rich Media/Video ads $1,738 $2,843 $3,183 $3,464 $4,044 $4,953 $6,023
Sponsorships $951 $1,214 $1,165 $883 $745 $825 $919
Ad Revenue (Y/Y Growth) 2006 2007 2008 2009E 2010E 2011E 2011E
Total 33.3% 27.4% 12.8% 0.3% 15.1% 15.4% 15.6%
Search 34% 34% 21% 8% 15% 17% 18%
Classifieds 40% 15% 1% -21% 7% 9% 12%
Referrals/Lead Gen 73% 19% 14% -3% 15% 13% 14%
Email 43% 27% 12% 9% 8% 20% 12%
Display Related Ads 25% 25% 9% 1% 11% 15% 13%
Banners Ads 33% 16% 10% 2% 12% 12% 10%
Rich Media/Video ads 25% 64% 12% 9% 17% 22% 22%
Sponsorships -1% 28% -4% -24% -16% 11% 11%
Ad Revenue (% of Total) 2006 2007 2008 2009E 2010E 2011E 2012E
Total 100% 100% 100% 100% 100% 100% 100%
Search 42% 45% 48% 51% 51% 52% 53%
Classifieds 14% 12% 11% 9% 8% 8% 7%
Referrals/Lead Gen 6% 6% 6% 6% 6% 6% 5%
Email 2% 2% 2% 2% 2% 2% 2%
Banners Ads 27% 24% 24% 24% 23% 22% 21%
Sponsorships 3% 3% 3% 2% 2% 2% 1%
Worldwide Internet Advertising by Category/Format

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U.S. Online Advertising Forecast
We expect U.S. online advertising to reach $25.9bn in 2010, up 14.4% from 2009. We estimate U.S. online advertising will reach
$33.4bn by 2012, a CAGR of 13.8% from 2009 to 2012, and will become 11.8% of total U.S. advertising in 2012, up from 8.7%
in 2009.
$MM 2007 2008 2009E 2010E 2011E 2012E '09-'12 CAGR
Total U.S. Advertising $279,600 $280,998 $261,328 $266,555 $273,885 $282,102 2.6%
Y/Y Change -0.7% 0.5% -7.0% 2.0% 2.75% 3.00%
U.S. Internet Advertising $21,206 $23,448 $22,661 $25,935 $29,375 $33,401 13.8%
Y/Y Change 26% 11% -3.4% 14.4% 13.3% 13.7%
U.S. Internet as a % of Total 7.6% 8.3% 8.7% 9.7% 10.7% 11.8%
U.S. Internet Advertising Revenue ($MM)
U.S. Online Advertising by Format
We believe that Search will remain the largest online ad category and its market share will go up in the U.S. from 47% of total
online advertising in 2009 to 51% in 2012. We estimate Display advertising to account for 33% of total online advertising in 2012
(down 200bps from 2009) and Classifieds to decline to 8% of total online advertising in 2012 (down 200bps from 2009). We also
believe that search will grow faster than the overall U.S. market but we expect rich media and video advertising to grow even
faster than search.
Ad Revenue ($MM) 2006 2007 2008 2009 2010E 2011E 2012E
Total $16,879 $21,206 $23,448 $22,661 $25,935 $29,375 $33,401
Search $6,752 $8,694 $10,552 $11,290 $12,645 $14,542 $16,868
Classifieds $3,038 $3,393 $3,283 $2,298 $2,390 $2,557 $2,762
Referrals/Lead Gen $1,350 $1,484 $1,641 $1,477 $1,581 $1,739 $1,930
Email $338 $424 $469 $519 $549 $624 $679
Banners Ads $3,713 $4,453 $4,924 $4,973 $5,471 $6,072 $6,649
Rich Media/Video ads $1,182 $2,121 $2,345 $2,579 $2,966 $3,500 $4,165
Sponsorships $506 $636 $469 $352 $334 $341 $348
Total 34.6% 25.6% 10.6% -3.4% 14.4% 13.3% 13.7%
Search 31% 29% 21% 7% 12% 15% 16%
Classifieds 42% 12% -3% -30% 4% 7% 8%
Referrals/Lead Gen 79% 10% 11% -10% 7% 10% 11%
Email 47% 26% 11% 11% 6% 14% 9%
Banners Ads 51% 20% 11% 1% 10% 11% 10%
Sponsorships -19% 26% -26% -25% -5% 2% 2%
Total 100% 100% 100% 100% 100% 100% 100%
Search 40% 41% 45% 47% 49% 50% 51%
Classifieds 18% 16% 14% 10% 9% 9% 8%
Email 2% 2% 2% 1% 2% 2% 2%
Banners Ads 22% 21% 21% 22% 21% 21% 20%
Sponsorships 3% 3% 2% 2% 1% 1% 1%
U.S. Internet Advertising by Category/Format

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U.S. Online Advertising Historical Trends
Internet advertising spend in the US has been growing consistently between 2002 and 2008 and only in 2009 saw a decline due to
the economic recession which started in 2008.
US Internet Ad Revenue History ($MM)
$8,087
$7,134
$6,009
$7,267
$10,095
$12,542
$16,879
$21,206
$23,448
$22,66175%
-12%
-16%
21%
39%
24%
35%
26%
11%
-3%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
OnlineAdRevenue($MM) Y/YChange
54% CAGR from 1995 to 2009
16% CAGR from 2005 to 2009
Non-U.S. Online Advertising Forecast
We believe that non-U.S. online advertising will continue to grow faster than the overall U.S. online ad growth but we also think
the U.S. will remain the largest online ad market in the world for the foreseeable future. We expect non-U.S. online advertising to
reach $20.5bn in 2010, up 16.0% from 2009. We estimate non-U.S. online advertising will reach $28.6bn by 2012, a CAGR of
17.3% from 2009 to 2012.
$MM 2007 2008 2009E 2010E 2011E 2012E '09-'12 CAGR
Total Non-U.S. Advertising $360,100 $378,105 $376,214 $389,382 $410,798 $433,392 4.8%
Y/Y Change 11.5% 5.0% -0.5% 3.5% 5.5% 5.5%
Non-U.S. Internet Advertising $14,457 $16,770 $17,693 $20,524 $24,218 $28,577 17.3%
Y/Y Change 30.0% 16.0% 5.5% 16.0% 18.0% 18.0%
Non-U.S. Internet as a % of Total 4.0% 4.4% 4.7% 5.3% 5.9% 6.6%
Non-U.S. Internet Advertising Revenue ($MM)
Non-U.S. Online Advertising by Format
We believe that Search will remain the largest online ad category internationally as well and its market share will go up from 53%
of total online advertising in 2009 to 56% in 2012. We estimate Display advertising to account for 31% of total non-U.S. online
advertising in 2012 (down 300bps from 2009) and Classifieds to stay flat at 7% of total non-U.S. online advertising in 2012.

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Ad Revenue ($MM) 2006 2007 2008 2009E 2010E 2011E 2012E
Total $11,121 $14,457 $16,770 $17,693 $20,524 $24,218 $28,577
Search $5,116 $7,229 $8,637 $9,421 $11,134 $13,259 $16,003
Classifieds $778 $1,012 $1,174 $1,238 $1,385 $1,574 $1,858
Referrals/Lead Gen $389 $578 $713 $796 $1,026 $1,211 $1,429
Email $111 $145 $168 $177 $205 $279 $329
Banners Ads $3,726 $4,193 $4,545 $4,644 $5,285 $5,958 $6,530
Rich Media/Video ads $556 $723 $839 $885 $1,077 $1,453 $1,858
Sponsorships $445 $578 $696 $531 $410 $484 $572
Total 31.5% 30.0% 16.0% 5.5% 16.0% 18.0% 18.0%
Search 37% 41% 19% 9% 18% 19% 21%
Classifieds 31% 30% 16% 5% 12% 14% 18%
Email 31% 30% 16% 5% 16% 36% 18%
Banners Ads 19% 13% 8% 2% 14% 13% 10%
Sponsorships 31% 30% 20% -24% -23% 18% 18%
Total 100% 100% 100% 100% 100% 100% 100%
Search 46% 50% 52% 53% 54% 55% 56%
Classifieds 7% 7% 7% 7% 7% 7% 7%
Email 1% 1% 1% 1% 1% 1% 1%
Banners Ads 34% 29% 27% 26% 26% 25% 23%
Sponsorships 4% 4% 4% 3% 2% 2% 2%
Non-U.S. Internet Advertising by Category/Format
Worldwide E-Commerce Forecast
After hitting a bottom in 4Q08 – 1Q09 and stabilizing in 2Q09, E-Commerce trends have improved in 2H-09, in our view. We
expect worldwide E-Commerce to reach $517.5bn in 2010, up 13% from 2009. We are also forecasting worldwide E-Commerce
sales to reach $697.8bn in 2012, up from $457.5bn in 2009 (a CAGR of 15.1%).
Sales in $MM 2007 2008 2009E 2010E 2011E 2012E '09-'12 CAGR
North America $146,768 $152,490 $153,906 $167,936 $188,088 $211,599 11.2%
US $136,768 $142,100 $143,420 $156,328 $175,087 $196,973 11.2%
Canada $10,000 $10,390 $10,486 $11,608 $13,001 $14,626 11.7%
Western Europe $121,600 $145,920 $150,298 $159,315 $176,840 $194,524 9.0%
Asia $74,075 $94,563 $104,182 $119,043 $138,939 $161,896 15.8%
Japan $43,700 $53,533 $56,744 $61,284 $67,412 $74,154 9.3%
S Korea $10,900 $14,170 $15,445 $17,144 $19,716 $22,476 13.3%
Australia $13,600 $17,000 $18,530 $20,939 $24,080 $27,451 14.0%
China $3,800 $6,840 $9,337 $13,771 $19,280 $26,414 41.4%
India $275 $500 $850 $1,400 $2,212 $3,384 58.5%
Rest of Asia $1,800 $2,520 $3,276 $4,505 $6,239 $8,017 34.8%
ROW $28,000 $37,800 $49,140 $71,253 $97,973 $129,814 38.2%
Worldwide $370,443 $430,772 $457,526 $517,547 $601,840 $697,833 15.1%
Y/Y Grow th 24.8% 16.3% 6.2% 13.1% 16.3% 15.9%
Source: US Department of Commerce, eMarketer, Caris & Company estimates
Worldwide E-Commerce Forecast

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24
U.S. E-Commerce Forecast
We expect E-Commerce in the US to reach $156.3 in 2010, up 9% from 2009. We are also forecasting US E-Commerce sales to
reach $197.0bn in 2012, up from $143.4bn in 2009 (a CAGR of 11.2%).
Sales in $MM 2007 2008 2009A 2010E 2011E 2012E '09-'12 CAGR
Total U.S. Retail $4,007,581 $3,951,865 $3,671,881 $3,780,855 $3,932,089 $4,099,203 3.7%
Y/Y Change 3.1% -1.4% -7.1% 3.0% 4.0% 4.3%
Total U.S. Retail E-Commerce $136,768 $142,100 $143,420 $156,328 $175,087 $196,973 11.2%
Y/Y Change 20.0% 3.9% 0.9% 9.0% 12.0% 12.5%
E-Commerce as % of Retail 3.4% 3.6% 3.9% 4.1% 4.5% 4.8%
Y/Y Increase in Penetration 0.48% 0.18% 0.31% 0.23% 0.32% 0.35%
Source: U.S. Department of Commerce; Caris & Company estimates; Does not include travel, financial services, or event ticket sales.
E-Commerce sales are goods and services where an order is placed by the buyer or price and terms of sale are negotiated over an
Internet, extranet, EDI network, e-mail, or other online system. Payment may or may not be made online.
U.S. Retail and E-Commerce Sales
U.S. Online Travel
We expect U.S. online travel to reach $106.3bn in 2010, up 11.5% from 2009. We estimate U.S. online travel will reach $134.5bn
by 2012, a CAGR of 12.2% from 2009 to 2012.
2008 2009 2010E 2011E 2012E '09-'12 CAGR
B2C E-Commerce $237.4 $238.7 $262.6 $294.1 $331.5 11.6%
Y/Y Change 5.2% 0.6% 10.0% 12.0% 12.7%
Retail E-Commerce* $142.1 $143.4 $156.3 $175.1 $197.0 11.2%
Y/Y Change 4.9% 2.5% 8.5% 12.0% 12.0%
Online Travel** $95.3 $95.3 $106.3 $119.0 $134.5 12.2%
Y/Y Change 6.2% 0.0% 11.5% 12.0% 13.0%
As % of B2C E-Commerce Sales 40% 40% 40% 40% 41%
* Excludes sales of travel, financial services and event tickets
** Includes online leisure and unmanaged business travel sales
Source: U.S. Department of Commerce; eMarketer; Caris & Company estimates
U.S. B2C E-Commerce Sales by Segment ($bn)

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Key Internet Growth Drivers

Major Internet M&A Themes for 2010
Below we highlight 15 different Internet M&A themes along with the likely top acquirers for each of the 15 themes.
# Internet M&AThemes Possible Acquirer Categories Examples of Possible Acquirers
1 Social media/gaming Large Internet or Traditional Media GOOG, YHOO, ABC, Viacom, AOL, CBS
2 Ad networks Traditional Advertising, Top 4 Internet, Large Ad Networks IPG, WPP, Omnicom, MSFT, YHOO, VCLK
3 Digital media download E-Commerce or Traditional Media AMZN, ABC, Viacom, AAPL
4 Web analytics & optimization Top 4 Internet, Ad Networks MSFT, AOL, VCLK, Advertising.com
5 International Top 20 US Internet Companies GOOG, TTGT
6 Vertical content play Large Portals, Small-to-mid Size Vertically Focused YHOO, AOL, KNOT, WBMD, TTGT
7 Vertical E-Commerce play Top E-Commerce AMZN, EBAY
8 Ad targeting Top 4 Internet, Large Social Networks, Traditional Media IPG, WPP, Omnicom, GOOG, MSFT, YHOO, VCLK
9 Apps and widgets Top 4 Internet, Handset Manufacturers GOOG, AOL, YHOO, MSFT, NOK, MOT, Samsung
10 Online office productivity tools Top 4 Internet, Large Tech Companies GOOG, MSFT, AMZN, CSCO, IBM, HPQ
11 Other Cloud computing models Top 4 Internet, Large Tech Companies GOOG, MSFT, AMZN, CSCO, IBM, HPQ
12 Mobile Internet Top 4 Internet, IT Hardware, Handset OEMs GOOG, AOL, YHOO, MSFT, AAPL, HPQ, DELL, NOK
13 E-Commerce infrastructure Large E-Commerce AMZN, EBAY
14 Email marketing Industry Consolidation ExactTarget, VCLK
15 Digital market intelligence Audience Measurement, Online Market Research SCOR, Nielsen
M&A Themes in 2010
Display Growth Drivers
1. Wide reach, more time spent
2. Adoption of banner advertising by
CPG and other big advertisers
3. Video advertising - attractive to
broader advertisers; high CPM
4. Behavioral targeting - higher
conversion and CPM
5. Contextual ads - better targeting
technologies, CPC pricing
Display Growth Drivers
1. Wide reach, more time spent
2. Adoption of banner advertising by
CPG and other big advertisers
3. Video advertising - attractive to
broader advertisers; high CPM
4. Behavioral targeting - higher
conversion and CPM
5. Contextual ads - better targeting
technologies, CPC pricing
Mobile Internet Growth Drivers
1. 3x more mobile users than PC users
2. 24/7 access and often primary way to
go online
3. Location and time-sensitive usage on
the rise
4. Software, content, and mobile
applications creating new opportunities
for start-ups
5. Form-factors and data plans getting
better
6. Google generated approximately $1
per PC in the worldwide installed base
in 2002 and $21 in 2009
Mobile Internet Growth Drivers
1. 3x more mobile users than PC users
2. 24/7 access and often primary way to
go online
3. Location and time-sensitive usage on
the rise
4. Software, content, and mobile
applications creating new opportunities
for start-ups
5. Form-factors and data plans getting
better
6. Google generated approximately $1
per PC in the worldwide installed base
in 2002 and $21 in 2009
Search Growth Drivers
1. ROI for search is one of the most
compelling among formats
2. Search providers are the leading
innovators in the advertising industry
3. Search converts high upfront fixed
marketing cost into low variable cost
4. Low cost of development, higher
targetability, better measurement, no
intrusiveness, higher campaign control
5. Scope of search is expanding beyond
direct marketers to brand advertisers
6. Search is highly under-penetrated
internationally
7. Only 10% of total ad dollars flow to
online formats
Search Growth Drivers
1. ROI for search is one of the most
compelling among formats
2. Search providers are the leading
innovators in the advertising industry
3. Search converts high upfront fixed
marketing cost into low variable cost
4. Low cost of development, higher
targetability, better measurement, no
intrusiveness, higher campaign control
5. Scope of search is expanding beyond
direct marketers to brand advertisers
6. Search is highly under-penetrated
internationally
7. Only 10% of total ad dollars flow to
online formats
Social Media Growth Drivers
1. Top 3 social media websites account
for 15% of total pages viewed in the
US vs. only 3% in 2005
2. Influx of huge new ad inventory and
pressure on CPM and sell-thru for
premium content providers
3. Emergence of hundreds of new
publishers
4. Fully engaged and targeted audiences
for advertisers
5. Ad networks are the big beneficiaries
Social Media Growth Drivers
1. Top 3 social media websites account
for 15% of total pages viewed in the
US vs. only 3% in 2005
2. Influx of huge new ad inventory and
pressure on CPM and sell-thru for
premium content providers
3. Emergence of hundreds of new
publishers
4. Fully engaged and targeted audiences
for advertisers
5. Ad networks are the big beneficiaries
International Growth Drivers
1. Under-penetration of the ‘Net
2. Broadband penetration increasing
3. Media time spent on the Internet
increasing
4. In many countries the only source of
entertainment that is easily accessible
5. E-Commerce growth
6. 65mm SMBs; 45mm in the US
International Growth Drivers
1. Under-penetration of the ‘Net
2. Broadband penetration increasing
3. Media time spent on the Internet
increasing
4. In many countries the only source of
entertainment that is easily accessible
5. E-Commerce growth
6. 65mm SMBs; 45mm in the US

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Section 11: Valuation Framework
We usually value the Internet stocks we cover by using EV/EBITDA and/or P/E methods but we also consider free cash flow
yield. For EV/EBITDA we look for EV/EBITDA/Growth of 0.5x to 0.7x with an average of 0.6x. For P/E we look for PEG of
0.8x to 1.0x with an average of 0.9x. We tend to apply higher multiples to the companies with not only the top fundamentals in
our sector but also for having relatively higher international exposure and for being takeout targets. Our multiple ranges may vary
based on macro economic outlook, historical valuation trends, market trends, earnings revisions, competitive landscape, and
market sentiments. Below we present the current multiples and our target multiples for the stocks we cover.
LT 2010 LT 2010
Ticker 2009 2010E 2011E Growth GAAP PEG 2009 2010E 2011E 2009 2010E 2011E Growth EV/EBITDA/G 2010E 2011E
AMZN 71.3x 53.1x 38.9x 37% 1.4x 50.6x 39.1x 30.5x 30.4x 22.8x 18.4x 27% 0.8x 2.5% 7.1%
DRIV 23.0x 93.3x 35.1x 5% 18.7x 17.9x 36.9x 21.5x 7.4x 13.4x 9.3x 7% 1.9x -1.0% 6.0%
EBAY 13.2x 19.0x 15.9x 14% 1.4x 15.3x 14.7x 12.9x 8.8x 8.4x 7.3x 12% 0.7x 5.2% 7.4%
EXPE 26.0x 17.9x 14.7x 17% 1.1x 19.4x 15.8x 13.3x 8.7x 7.8x 6.8x 12% 0.7x 8.3% 11.7%
GOOG 23.5x 19.6x 17.2x 19% 1.0x 20.7x 17.5x 15.3x 11.2x 9.6x 8.4x 17% 0.6x 5.6% 6.6%
GSIC (108.9x) (471.3x) 55.8x 65% (7.3x) 74.7x 47.2x 27.6x 11.4x 10.7x 9.2x 22% 0.5x 2.6% 5.7%
MMYT (148.1x) 420.0x 117.2x 90% 4.7x (438.2x) 366.4x 112.7x 698.5x 221.9x 91.6x 80% 2.8x 2.0% 2.5%
MSFT 13.8x 11.3x 9.5x 12% 0.9x 13.5x 11.3x 9.5x 8.0x 6.7x 5.9x 10% 0.7x 11.4% 12.2%
PCLN 33.6x 34.2x 26.9x 26% 1.3x 39.0x 26.5x 22.1x 28.3x 18.9x 15.4x 26% 0.7x 3.6% 4.6%
SCOR 151.3x 93.2x 46.0x 21% 4.4x 27.8x 21.5x 14.6x 17.2x 13.6x 9.8x 20% 0.7x 5.4% 5.8%
TTGT (41.8x) (161.0x) 94.7x 18% (8.9x) 29.3x 21.1x 17.1x 10.6x 7.8x 6.4x 18% 0.4x 3.2% 2.3%
VCLK 15.6x 17.1x 18.3x 0% n/m 13.5x 15.1x 13.6x 7.0x 6.8x 6.1x 10% 0.7x 8.7% 9.4%
YHOO 33.8x 19.8x 19.0x 14% 1.4x 22.8x 17.5x 15.7x 7.5x 7.0x 6.6x 9% 0.8x 4.3% 4.2%
Average 8.2x 12.8x 39.2x 26% 1.7x (7.2x) 50.0x 25.1x 65.8x 27.3x 15.5x 20.8% 0.9x 4.8% 6.6%
Avg. w/o GSIC, MMYT & TTGT 40.5x 37.9x 24.1x 17% 3.5x 24.0x 21.6x 16.9x 13.5x 11.5x 9.4x 15.0% 0.8x 5.4% 7.5%
FCF YieldEV/EBITDA
Current Valuation Multiples - Based on Our Estimates
PF P/EGAAP P/E
P/E/G Valuation 2011E Long-Term PEG Target P/E
Stock EPS Growth Multiple Multiple Target
AMZN $3.74 37% N/A N/A N/A
DRIV $1.41 5% N/A N/A N/A
EBAY $1.88 14% N/A N/A N/A
EXPE $1.81 17% N/A N/A N/A
GOOG $31.38 19% 0.9 17.0x $533
GSIC $0.42 65% N/A N/A N/A
MMYT $0.33 90% N/A N/A N/A
MSFT $2.65 12% 1.1 13.0x $34
PCLN $15.06 26% 0.9 23.0x $346
SCOR $0.42 21% N/A N/A N/A
TTGT $0.30 18% N/A N/A N/A
VCLK $0.67 0% N/A N/A N/A
YHOO $0.91 14% N/A N/A N/A
Average: 21% 1.0x 17.7x
EV/EBITDA/G Valuation 2011E Long-Term EV/EBITDA/G Target EV/EBITDA
Stock EBITDA Growth Multiple Multiple Target
AMZN $7.27 27% 0.6 17.0x $139
DRIV $2.29 7% 1.6 11.5x $36
EBAY $2.80 12% 0.8 9.5x $32
EXPE $3.78 12% 0.5 6.5x $24
GOOG $46.19 17% 0.7 11.5x $637
GSIC $2.57 22% 0.5 12.0x $33
MMYT $0.87 80% 0.6 50.0x $44
MSFT $3.69 10% N/A N/A N/A
PCLN $20.29 26% 0.6 16.0x $350
SCOR $1.67 20% 0.7 13.0x $25
TTGT $0.55 18% 0.6 11.0x $8
VCLK $1.55 10% 0.6 5.5x $12
YHOO $1.28 9% 1.1 9.5x $20
Average: 16% 0.8x 11.2x
P/FCF/G Valuation 2011E Long-Term P/FCF/Growth Target P/FCF
Stock FCF Growth Multiple Multiple Target
AMZN $10.26 15% N/A N/A N/A
DRIV $1.83 2% N/A N/A N/A
EBAY $1.80 8% N/A N/A N/A
EXPE $3.12 20% N/A N/A N/A
GOOG $31.81 31% N/A N/A N/A
GSIC $1.33 11% N/A N/A N/A
MMYT $0.96 90% N/A N/A N/A
MSFT $3.06 12% 1.0 11.5x $35
PCLN $15.38 11% N/A N/A N/A
SCOR $1.13 6% N/A N/A N/A
TTGT $0.12 10% N/A N/A N/A
VCLK $1.16 -3% N/A N/A N/A
YHOO $0.60 3% N/A N/A N/A
Average: 11% 1.0x 11.5x
Source: Caris & Company estimates; MMYT EBITDA per share is '12 est
Target Valuation Multiples

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Valuation and Risks
Valuation
AMZN: Our rating for AMZN is 3/Average with $140 PT. We reach our $140 PT by applying a multiple of 17.0x to our 2011E
EBITDA per share of $7.27 and adding $14.87 in net cash per share and $0.44 in NOLs per share (rounding up). This implies
EV/EBITDA to Growth of 0.6x based on our LT EBITDA growth rate of 27%. Because of continuing concerns about margins
and Cap-Ex, we are using a lower multiple vs. the overall LT growth for Amazon.
DRIV: Our rating for DRIV is 1/Buy with $36 PT. We reach our $36 PT by assigning a multiple of 11.5x to our 2011E EBITDA
per share of $2.29, adjusting for 2010E year-end net cash of $9.15 per share.
EBAY: Our rating for EBAY is 1/Buy with $32 PT. We derive our $32 PT by applying a multiple of 9.5x to our 2011E EBITDA
of $3.74bn (EBITDA per share of $2.80), adjusting for 2010E year-end net debt of $5.38bn, or $4.04 per share, and $1.00 for
eBay’s stake in Skype. This implies EV/EBITDA to Growth of 0.8x based on our LT EBITDA growth rate of 12%.
EXPE: Our rating for EXPE is 3/Average with $24 PT. We arrive at our $24 PT by using an EV/EBITDA multiple on our 2011
estimates. We assign 6.5x to our pro-forma 2011E EBITDA of $1.10bn (EBITDA per share of $3.78), adjusted for 2010E year-
end net debt of $0.35 per share (EV/EBITDA/Growth of 0.5x).
GOOG: Our rating for GOOG is 3/Average with $550 PT. We arrive at our $550 PT by using a combination of EV/EBITDA and
P/E multiples on our ’11 estimates. We assign a multiple of 11.5x to our 2011E EBITDA of $15.00bn (EBITDA per share of
$46.19) to reach $637, adjusting for 2010E year-end net cash of $34.26bn or $106.12 per share. This implies EV/EBITDA to
Growth of 0.7x based on our LT EBITDA growth rate of 17%. We assign a multiple of 17.0x to our 2011E PF EPS of $31.38 to
reach a $533 price. This implies a PEG of 0.9x based on our LT PF EPS growth rate of 19%.
GSIC: Our rating for GSIC is 1/Buy with $33 PT. We derive our $33 PT by applying a multiple of 12.0x to our 2011E EBITDA
of $180.3mm (EBITDA per share of $2.57), adjusted for 2010E year-end net debt of $55.1mm (or $0.85 per share) and
$1.60/share in NOLs (rounding down). This implies EV/EBITDA/Growth 0.5x.
MMYT: We are rating MMYT a Buy and assigning a $46 price target. Our $46 price target is a combination of EV/EBITDA and
Price to Gross Bookings. We assign 50x to our pro-forma 2012E EBITDA per share of $0.87 to reach $44, adjusting for 2011E
year-end net cash of $0.81/share (EV/EBITDA/Growth of 0.6x). In terms of Price to Gross Bookings, we are assigning 0.95x
multiple to our 2012 Gross Bookings estimates of $1.69bn to reach $47. We assign our highest EV/EBITDA multiple to MMYT
because its LT EBITDA growth is 80%, highest for any name we cover, and our 50x multiple implies 0.6x EV/EBITDA to
Growth. Also, we are using 2012 estimates (vs. 2011 for the rest of our names) since, in our view, MMYT is in an early stage of
margin improvement/evolution and using 2011 estimates may not capture the true earnings potential of the company.
MSFT: Our rating for MSFT is 1/Buy with $35 PT. We arrive at our $35 PT by using P/E and P/FCF multiples on our CY11
estimates. We assign a P/E multiple of 13.0x to our CY2011 GAAP EPS of $2.65 to reach $35 (rounding up). This implies a PEG
of 1.1x based on our LT GAAP EPS growth rate of 12%. We assign a P/FCF multiple of 11.5x to our CY2011 FCF/share of
$3.06 to reach $35. This implies P/FCF to Growth of 0.9x based on our LT FCF growth rate of 12%.
PCLN: Our rating for PCLN is 1/Buy with $348 PT. We reach our $348 PT by using a combination of EV/EBITDA and P/E
multiples on our 2011 estimates. We assign 16x to our 2011E EBITDA per share of $20.29 to reach $350, adjusted for 2010E
year-end net cash per share of $20.09 and $5.41 in NOLs (EV/EBITDA/Growth of 0.5x). We assign 23x to our 2011 PF EPS of
$15.06 (PEG of 0.8x) to reach $346. We are assigning higher multiples now because of our improving outlook for online travel
trends.
SCOR: Our rating for SCOR is 1/Buy with $25 PT. We derive $25 by applying a multiple of 13.0x to our 2011E EBITDA of
$53.4mm (EBITDA per share of $1.67), adjusting for 2010E year-end net cash of $94.0mm, or $2.96 a share
(EV/EBITDA/Growth 0.7x) and $0.36/share in NOLs.
TTGT: Our rating for TTGT is 1/Buy with $8 PT. We reach our $8 PT by assigning a multiple of 11.0x to our 2011E EBITDA
per share of $0.55, adjusting for $1.81 per share in net cash and $0.02 in off-balance sheet assets (rounding up). This implies
EV/EBITDA to Growth of 0.6x based on our LT EBITDA growth rate of 18%.
VCLK: Our rating for VCLK is 3/Average with $12 PT. We arrive at our $12 PT by applying a multiple of 5.5x to our 2011E
EBITDA of $129.1mm (EBITDA per share of $1.55), adjusting for 2010E year-end net cash of $268.2mm or $3.24 per share
(rounding up). This implies EV/EBITDA to Growth of 0.55x based on our LT EBITDA growth rate of 10%.
YHOO: Our rating for YHOO is 1/Buy with $20 PT. We reach our $20 PT by assigning 9.5x to our 2011E EBITDA of $1.79bn
(EBITDA per share of $1.28), adjusting for $3.19 per share in 2010E year-end net cash and $4.50 in off-balance sheet assets
(Yahoo! Japan and Alibaba post illiquidity discount and tax and NOLs).

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28
Risks
AMZN: 1) Competition with pure-play/multi-channel retailers; 2) Economic weakness/depressed retail environment; 3) Low
prices, free shipping and product mix affecting margins; 4) Material FX exposure; 5) Seasonality of the business; 6) Inventory
risk; 7) Evolving regulation of E-Commerce; 8) Macro concerns, especially in Europe.
DRIV: 1) Diverse competition; 2) Cloud computing; 3) Revenue growth dependent on the success of partners’ products; 4)
Business model for revenue and costs not fully stable after Symantec loss; 5) Exposed to macro-economic slowdown; 6)
Consolidation of software vendors; 7) Macro concerns, especially in Europe.
EBAY: 1) Rapidly growing competition; 2) Economic weakness/depressed retail environment; 3) Marketplaces still under
transformation; 4) Transitioning business model with long overdue sizeable investments and initiatives; 5) Legal lawsuits –
counterfeit and patents; 6) Motors pressurizing GMV; 7) FX headwinds; 8) Macro uncertainties, especially in Europe.
EXPE: 1) Material macro-economic headwinds; 2) Strong competition; 3) Occupancy tax issue remaining an overhang; 4)
Voting control; 5) External events disrupting the travel industry; 6) Competition for ad revenue; 7) Changes in search engine
algorithms; 8) Macro concerns, especially in Europe and Asia.
GOOG: 1) Google’s competition is getting more intense; 2) Google is still a one-trick pony with nearly 93% of revenue coming
from search; 3) Execution risk with recent acquisitions; 4) Google is vulnerable to threats from computing platforms, browsing
technologies, and ad blocking technologies; 5) Cap-Ex spending continues to be very high; 6) Rising cost of revenue; 7) Privacy
issues and click fraud continue to be a nagging problem; 8) More experienced search marketers are diverting part of search ad
dollars to search engine optimization; 9) Macro concerns, especially in Europe.
GSIC: 1) Multi-dimensional competition; 2) High seasonality of the business; 3) Revenue concentration; 4) Investment mode
inhibits margin expansion; 5) New acquisitions integration risk; 6) Revenue growth highly dependent on new customer
acquisitions; 7) Exposed to macro-economic slowdown; 8) Limited disclosure of business metrics; 9) Macro concerns, especially
in Europe.
MMYT: 1) Limited history of margins and operations; 2) Competition from homegrown and multinational OTAs; 3) Stronger
supplier direct competition in India; 4) Socio-political uncertainties; 5) Possible fee cuts in air ticketing business; 6) Internet and
broadband penetration lagging rest of emerging markets; 7) Other emerging-market risks; 8) Key man risk.
MSFT: 1) Competition; 2) Slowing PC market growth; 3) Disappointing ramp-up of the online business so far; 4) Piracy; 5)
Investment mode; 6) Cloud Computing/SaaS; 7) Virtualization; 8) Exposed to macro-economic headwinds; 9) Macro
uncertainties, especially in Europe.
PCLN: 1) Material macro-economic headwinds; 2) Strong competition; 3) Occupancy tax issue remaining an overhang; 4)
External events disrupting the travel industry; 5) Convertible senior notes can bring substantial dilution; 6) Limited number of
online media assets; 7) Changes in search engine algorithms; 8) Macro concerns, especially in Europe and Asia.
SCOR: 1) Diverse and strong competition; 2) Ongoing concern with the accuracy of data/measurements; 3) Revenue
concentration; 4) Lack of cross-platform measurements; 5) Newest technologies making Web measurement challenging and less
relevant; 6) Evolving industry standards; 7) Exposure to macro-economic slowdown; 8) Potential downward pressure on the stock
from insiders’ selling; 9) Macro concerns, especially in Europe (but relatively small exposure).
TTGT: 1) Competition with both online and offline companies; 2) International presence still limited; 3) Move to performance-
based marketing by some software vendors; 4) Moderate growth in worldwide IT spending; 5) Lower margins in Events; 6)
Limited business disclosures; 7) Macro concerns, especially in Europe.
VCLK: 1) Increasing competition, especially from the big four; 2) High dependence on search engines for monetization; 3)
Slowing growth of innovations; 4) Exposure to economic headwinds; 5) Material deceleration in comparison shopping segment;
6) Emergence of vertically focused ad networks; 7) Macro concerns, especially in Europe.
YHOO: 1) Increasing competitive pressure from Google and others; 2) Current growth materially lower than overall Internet ad
growth; 3) Limited traction internationally; 4) Mass talent attrition; 5) Execution risk with recent acquisitions; 6) Future business
strategy not fully firmed up; 7) Macro concerns, especially in Europe.

Internet & Software
29
Ratings Distribution Chart:
Number of % of No. Provided % Provided
Ratings Ratings IB Services IB Services
102 61.45% 0 0.00%
61 36.75% 2 3.28%
3 1.81% 0 0.00%
Sell
Total Securities Rated
166
Buy
Hold/Neutral
First Call ratings are adapted to the above chart as follows: 1 & 2 = Buy, 3 = Hold/Neutral, 4 & 5 = Sell
Ticker Rating Price Cap ($Bil) Date Analyst
AMZN Average $145.45 $65.14 9/15/2010 Sandeep Aggarwal
DRIV Buy $30.35 $1.20 9/15/2010 Sandeep Aggarwal
EBAY Buy $24.19 $31.74 9/15/2010 Sandeep Aggarwal
EXPE Average $26.66 $6.90 9/15/2010 Sandeep Aggarwal
GOOG Average $480.64 $118.46 9/15/2010 Sandeep Aggarwal
VLO Average $17.34 $9.82 9/15/2010 Sandeep Aggarwal
GSIC Buy $23.34 $1.55 9/15/2010 Sandeep Aggarwal
MSFT Buy $25.12 $217.33 9/15/2010 Sandeep Aggarwal
PCLN Buy $332.06 $16.07 9/15/2010 Sandeep Aggarwal
SCOR Buy $19.40 $0.60 9/15/2010 Sandeep Aggarwal
TTGT Buy $5.11 $0.22 9/15/2010 Sandeep Aggarwal
VCLK Average $12.26 $1.00 9/15/2010 Sandeep Aggarwal
YHOO Buy $14.27 $19.24 9/15/2010 Sandeep Aggarwal
Companies mentioned in this report:
*Note: Caris & Company utilizes the First Call rating system when assigning ratings in equity research reports. The following is a list of each
numerical rating and its respective definition.
1 Buy
2 Above Average
3 Average
4 Below Average
5 Sell
Unless otherwise noted, stock prices reflected herein are the closing price through the business day immediately preceding the date of this report.

Internet & Software
30
10
15
20
25
30
35
40
AVERAGE -
$21.00
AVERAGE -
$23.00
AVERAGE -
$25.00
AVERAGE -
$27.00
AVERAGE -
$28.00
BUY - $37.00
Microsoft Corp. (MSFT-US) High:37.50
14-Sep-2007 to 15-Sep-2010 (Daily) Low: 14.87
USD Last: 25.11
10/07 1/08 4/08 7/08 10/08 1/09 4/09 7/09 10/09 1/10 4/10 7/10
0
50
100
150
200
250
300

Internet & Software
31
Analyst Certification
The analyst responsible for the content of this publication, Sandeep Aggarwal, hereby certifies that the views expressed in this publication
regarding the company or companies and their securities accurately represent that analyst’s personal views, and that no direct or indirect
compensation is to be received by the analyst for any specific recommendation or views contained in this note.
Other Important Disclosures
The research analyst and/or research associate responsible for this report has received or will receive compensation based on various factors,
including quality of research, investor client feedback, and the Firm's overall revenues, but not based on investment banking revenues.
This information is not intended to be used as the primary basis for investment decisions. The information contained herein shall not be
construed as an offer, or the solicitation of an offer to buy or sell any securities, products, or services. Because of individual client risk and
return requirements and client investment constraints, this material should not be construed as advice designed to meet the particular needs of
any investor. CRIS accepts no liability whatsoever for loss or damage of any sort arising out of use of all or part of this publication.
This material is based on data obtained from sources considered to be reliable. Caris & Company (CRIS) makes every effort to use reliable,
comprehensive information, however, we make no representation that it is accurate or complete and it should not be relied upon as such. Past
performance is not necessarily a guide to future performance. Estimates of future performance are based on assumptions that may not be
realized. Any opinions expressed herein are subject to change and CRIS disclaims any obligation to advise you of any such change.
The securities described herein may not be eligible for sale in all jurisdictions, or to any particular investors. Options, derivative products, and
futures involve risk, and are not suitable for all investors. CRIS, its affiliates, their respective directors, officers, employees, or members of their
families may have long or short positions in, and buy or sell, the equities or issues referred to herein, or options thereon.
Neither the author of this report nor a member of his or her household maintains a position in the securities mentioned in this report.
The firm has not provided any investment banking services for the companies mentioned in this report.
Additional information on recommended securities is available upon request.
Neither this report, nor any portion thereof may be reprinted, sold, or redistributed without the express written consent of Caris & Company, Inc.
Copyright Caris & Company 2010

32
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cellis@cariscompany.com
Consumer
Media & Entertainment
David Miller 213 802 1648
dmiller@cariscompany.com
Specialty Retail
Dorothy Lakner 917 464 1564
dlakner@cariscompany,com
HouseholdProducts, Personal Care & Toys
Linda Bolton Weiser 917 464 1604
lweiser@cariscompany.com
Energy
Oil & Gas, Refiners
Ann Kohler 917 464 1608
akohler@cariscompany.com
Healthcare
Specialty Pharmaceuticals
James Molloy 617 728 0712
jmolloy@cariscompany.com
Specialty Pharma & BioPharma
Mario Corso 617 728 4906
mcorso@cariscompany.com
Devices & Diagnostics
Paul K. Choi 917 464 1602
pchoi@cariscompany.com
Healthcare IT
Leo Carpio 917 464 1605
lcarpio@cariscompany.com
Healthcare Services
Ann Hynes 617 728 0713
ahynes@cariscompany.com
Technology
Semiconductors
Craig A. Ellis 415 489 2514
cellis@cariscompany.com
Semiconductor Capital Equipment
Ben Pang 415 489 2522
bpang@cariscompany.com
Enterprise Software
Curtis Shauger, CFA 415 489 2517
cshauger@cariscompany.com
Hardware
Robert Cihra 917 464 1610
rcihra@cariscompany.com
Internet & Software
Sandeep Aggarwal 415 489 2518
saggarwal@cariscompany.com
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