$25m in financings in Feb so far.

1. SOFTWARE & SERVICES 10 FEBRUARY 2009
DAVID SHORE, CFA, MBA 416.860.6784
WEB 2.O WEEKLY david.shore@researchcapital.com
Arun Thomas (Associate) 416.860.7666
$25 MILLION IN FINANCING MONTH-TO-DATE
S U MMA R Y
We have identified 80 public companies for our Web 2.0 universe with a combined market cap of almost $25 billion.
These include a wide variety of companies, including MMOG (Massive Multi-Player Online Gaming) companies, social
networking software companies, media sharing companies, and social lending companies. The average market cap for
the group is over $300 million, with average trailing revenue of $100 million. The companies are also highly profitable
with an average EBITDA margin of 16.6%. On a valuation basis, the overall average is 4.1x trailing revenue and 9.4x
trailing EBITDA. Seventeen of the companies have more than 500 employees.
CAPITAL MARKET ACTIVITY
January was the busiest month since April 2008, with 29 financings totalling $199.5 million (average $6.9 million).
February has started well, with $25 million in financings so far. The largest financing in the last three months was of
GoFish for $22.5 million in December. Ten companies raised more than $10 million each in January – with AdMob the
largest at $12.5 million.
Financing Transactions by Month
35
30
25
20
(#)
15
29
28
27
26
10
19
18
17 17 17 17
16
15
12
11
5 10 10
9
7 7 7 7 7
6 6 6 6
5 5 5 5
4 4 4 4 4
3 3 3
2 2
1 1 1
0
May-06
May-07
May-08
Nov-05
Mar-06
Nov-06
Mar-07
Nov-07
Mar-08
Nov-08
Jul-05
Aug-05
Sep-05
Oct-05
Dec-05
Jan-06
Feb-06
Apr-06
Jun-06
Jul-06
Aug-06
Sep-06
Oct-06
Dec-06
Jan-07
Feb-07
Apr-07
Jun-07
Jul-07
Aug-07
Sep-07
Oct-07
Dec-07
Jan-08
Feb-08
Apr-08
Jun-08
Jul-08
Aug-08
Sep-08
Oct-08
Dec-08
Jan-09
Feb-09
I ND US T R Y NEW S
This section discusses corporate activity such as partnerships, new product launches, and financial results.
VAL UAT ION
This section provides an overview of valuation metrics for the 80 public Web 2.0 companies we have identified thus
far. We calculate TEV/Revenue, TEV/EBITDA, and P/E multiples for the companies in our universe. We also compare
multiples by country and exchange.
This report has been created by Anal ysts that are employed by Research Capital Corporation, a Canadian Investment Dealer.
www.researchcapital.com
Toronto 416.860.7600 Montreal 514.399.1500 Vancouver 604.662.1800 Calgary 403.265.7400 Regina 306.566.7550

2. Page 2
THE WEB 2.0 UNIVERSE
80 public Web 2.0 companies identified: We have identified 80 public companies for our Web 2.0 universe with a
combined market cap of almost $25 billion. These include a wide variety of companies, including MMOG (Massive Multi-
Player Online Gaming) companies, social networking software companies, media sharing companies, and social lending
companies. See below for a summary of the full universe (Figure 1). Note that we have not included the large technology
and media companies such as Google, Yahoo, Disney, and Sony in our universe as they would skew the results due to
their immense size relative to the rest of the group. The average market cap for the group is over $300 million, with
average trailing revenue of $100 million. The companies are also highly profitable with an average EBITDA margin of
16.6%. On a valuation basis, the overall average is 4.1x trailing revenue and 9.4x trailing EBITDA. Seventeen of the
companies have more than 500 employees.
Comparable Company Analys is > W eb 2.0
S u mmary
US D LTM
Trad ing C urrent USD Market T otal US D LTM Total TEV /LT M T EV /LTM
C omp any Name LTM as of Tic ker E xc h an ge C urrenc y HQ P ric e C ap ($m) R ev ($m) E B ITDA ($m ) E B ITDA % R evenue E B ITDA E mployees Webs ite
A cc elerize New Media, Inc. 9/30/2008 ACLZ O TCB B US D United S ta tes 0. 35 9. 4 3. 2 ( 4.7) NM 4. 3x - 20 www. a c celer iz enewmedia . c om
A ctoz S oft C o. , L td. 9/30/2008 A 052790 KO S E KR W S outh Kor ea 12, 150. 00 77. 7 53.0 9.7 18. 3% 1. 0x 5. 4x NA www. ac toz. com
A Q Inter a ctiv e, Inc . 9/30/2008 3838 T SE JP Y J a pa n 33, 100. 00 19. 7 60.3 4.8 8. 0% - - NA www.a qi. co. jp
A ss oc ia ted Media Holdings Inc . 6/30/2007 A SMH O TCP K US D United S ta tes 0. 01 0. 2 0. 1 ( 2.3) NM 10. 2x - 3 www. mac gregorener gy. com
B oomJ Inc 9/30/2008 B O MJ O TCB B US D United S ta tes 0. 75 30. 7 1. 1 ( 7.7) NM 31. 1x - 25 www. boomj. c om
B right Things plc 9/30/2008 AIM: BG T A IM GB P United K ingdom 0. 02 3. 8 0. 2 ( 1.7) NM 15. 0x - 9 www. brightthings . com
B roa dW ebA sia Inc . 9/30/2008 BWBA O TCP K US D United S ta tes 1. 50 127. 3 0. 0 ( 4.6) NM - - 46 www. broa dwebas ia . c om
C DC C orp. 9/30/2008 C HIN. A Na s da qG S US D Hong K ong 0. 94 101. 4 428. 1 18. 8 4. 4% 0. 4x 8. 4x 3,125 www. cdc corpora tion. net
C hina Ga tewa y C orpora tion 9/30/2008 C GW Y O TCB B US D United S ta tes 0. 00 0. 0 6. 7 ( 6.6) -98. 9% - - 37 -
C hines e G a mer Interna tiona l 9/30/2008 G T S M: 3083 G TS M TW D T a iwa n 111. 00 280. 0 38.2 18. 0 47. 1% 5. 9x 12.4x NA www. chines egamer. net
C ornerW orld C or por a tion 10/31/2008 CWR L O TCB B US D United S ta tes 0. 41 19. 3 0. 6 3.1 506. 8% 33. 7x 6. 7x NA www. cornerworld. com
DA DA S pA 9/30/2008 C M:D A CM EUR Ita ly 6. 19 131. 1 221. 4 35. 4 16. 0% 0. 8x 4. 9x 574 da da . da da . net
Digita lF X Inter na tiona l, Inc . 9/30/2008 DXN AME X US D United S ta tes 0. 11 2. 7 16.9 ( 4.5) -26. 4% 0. 3x - 68 www. digita lfx .c om
Digita lP ost Intera ctive, Inc. 9/30/2008 DGL P O TCB B US D United S ta tes 0. 02 1. 0 0. 4 ( 3.3) NM 4. 8x - 11 www. digita lpos tintera ctive. c om
Digita lT own, Inc. 11/30/2008 DG T W O TCB B US D United S ta tes 1. 50 40. 7 NM ( 2.5) NM - - 3 www. enetpc. c om
Dolphin Digita l Media, Inc. NA DP DM O TCB B US D United S ta tes 0. 59 28. 7 NA NM -0. 3% - - 6 www. dolphindigita lmedia . com
E olith C o. L td. 12/31/2007 A 041060 KO S E KR W S outh Kor ea 605. 00 20. 5 18.1 ( 0.0) NM 1. 1x - NA www.eolith. c o. k r
E xtensions , Inc . 9/30/2008 E XT I O TCP K US D United S ta tes 0. 20 18. 9 NM NM 18. 3% - - 2 www. ext. c om
F inanc ia l Media G roup, Inc . 11/30/2008 F NGP O TCB B US D United S ta tes 0. 02 1. 0 6. 8 1.2 NM - 0. 1x 22 www. wa llst. net
F luid Mus ic C a nada , Inc. 9/30/2008 TS X: F MN TS X C AD United S ta tes 0. 56 24. 1 4. 2 ( 8.6) -60. 6% 2. 7x - 29 www. fluidmedia network s . com
F rogs ter Intera c tiv e P ictures A G 6/30/2008 FR G XT R A EUR Germa ny 4. 68 14. 4 5. 3 ( 3.2) 16. 9% 2. 6x - NA www. frogs ter -ip. de/en/index. php
Ga ma nia Digita l E nterta inment C o., L td. 9/30/2008 6180 G TS M TW D T a iwa n 22. 00 99. 1 110. 3 18. 7 25. 4% 0. 7x 4. 0x NA www.ga ma nia . c o. k r
Ga meOn C o L td. 9/30/2008 3812 T SE JP Y J a pa n 119, 700. 00 130. 2 81.4 20. 7 NM 0. 8x 3. 2x NA www. ga meon. co. jp
GeoS entr ic Oyj 9/30/2008 GE O 1V HL S E EUR F inla nd 0. 04 46. 8 5. 4 ( 12. 3) 63. 5% 7. 7x - 92 www. benefon. c om
Gia nt Intera c tive G roup, Inc. 9/30/2008 GA NYS E US D C hina 6. 18 1, 469. 0 245. 1 155. 6 23. 9% - - 1,016 www. ga -me. com
Giga Media L td. 9/30/2008 GIG M Na s da qG S US D T a iwa n 7. 44 402. 0 200. 5 48. 0 NM 1. 7x 7. 0x 975 www. gigamedia. c om. tw
GoF ish C orpora tion 9/30/2008 GO F H O TCB B US D United S ta tes 0. 20 5. 1 6. 3 ( 11. 0) 19. 2% 2. 5x - 41 www.gofish. com
Gr av ity C o., L td 9/30/2008 G R VY Na sda qGM US D S outh Kor ea 0. 70 19. 5 35.5 6.8 NM - - 636 www. gra vity. co. k r
Gr ee, Inc. NA TS E: 3632 T SE JP Y J a pa n 5, 470. 00 0. 0 NA NM 14. 7% - - NA www. gree. co. jp
GungHo Online Enterta inment, Inc. 9/30/2008 3765 OS E JP Y J a pa n 103, 000. 00 128. 7 111. 6 16. 4 -25. 6% 0. 9x 6. 2x NA www. gungho. co. jp/english/
Ha nbitS oft, Inc. 9/30/2008 A 047080 KO S E KR W S outh Kor ea 3, 355. 00 53. 4 50.3 ( 12. 9) NM 0. 7x - NA www. hanbitsoft. co. k r
IAS E ner gy, Inc . 10/31/2008 IA S C . A O TCB B US D C a nada 0. 03 1. 8 0. 0 ( 0.9) NM - - NA www. ia s ener gy . com
Idea E dge, Inc . 9/30/2008 OT C BB : IDA E O TCB B US D United S ta tes 0. 50 21. 1 0. 0 ( 3.5) 46. 0% - - NA www. idea edge. com
Jumbuck E nterta inment P ty L td. 6/30/2008 A S X: JMB AS X AUD A ustr alia 0. 40 13. 5 10.8 4.9 -15. 3% 0. 8x 1. 8x 72 www. jumbuck . com
JumpT V Inc. 6/30/2008 TS X :J TV TS X C AD C a nada 0. 49 45. 7 11.5 ( 1.8) 7. 6% 4. 8x - NA www. jumptv. c om
K aboos e Inc. 9/30/2008 T S X : KA B TS X C AD C a nada 0. 40 46. 0 60.9 4.6 33. 8% 0. 9x 11.5x NA www. ka boose. com
K ingsoft C o. L td. 9/30/2008 3888 S E HK HKD C hina 3. 05 422. 3 106. 7 36. 0 -42. 5% 3. 2x 9. 5x 1,660 www. kingsoft. com
L ingo Media C or por a tion 9/30/2008 T S X V: L M TS X V C AD C a nada 0. 95 10. 0 3. 3 ( 1.4) -10. 1% 3. 2x - NA www. lingomedia . com
L iv eW orld Inc. 9/30/2008 L VW D O TCP K US D United S ta tes 0. 04 1. 2 11.7 ( 1.2) -3. 7% - - 73 www. liv eworld. c om
L ook S ma rt, Ltd. 9/30/2008 L O OK Na sda qGM US D United S ta tes 1. 39 23. 7 69.5 ( 2.6) NM - - 93 www. looks ma rt. com
Magnitude Informa tion Sy stems Inc. 9/30/2008 MA G Y O TCB B US D United S ta tes 0. 03 12. 7 0. 1 ( 3.2) 39. 4% - - 13 www. ma gnitude. com
Mix i, Inc. 9/30/2008 2121 T SE JP Y J a pa n 454, 000. 00 759. 2 123. 0 48. 5 NM 5. 3x 13.4x NA www. mix i. c o.jp
Moggle, Inc 12/31/2008 MMO G O TCB B US D United S ta tes 2. 00 70. 6 NM ( 1.1) 26. 9% - - 3 www. pla y moggle. c om
NE OW IZ Ga mes C or por ation 12/31/2007 A 095660 KO S E KR W S outh Kor ea 27, 700. 00 192. 9 130. 8 35. 2 48. 6% 1. 4x 5. 2x NA www. neowiz . com/kor /
NetDra gon W ebS oft, Inc. 9/30/2008 777 S E HK HKD C hina 2. 83 192. 9 95.2 46. 3 64. 9% 0. 2x 0. 3x 1,482 www. nd. com. c n
Neteas e. com Inc. 9/30/2008 NTE S Na s da qG S US D C hina 20. 23 2, 489. 3 422. 4 274. 2 NM - - 2,413 cor p. 163. com
NeXplore C orpor a tion 9/30/2007 NX P C O TCP K US D United S ta tes 0. 84 46. 9 NM ( 4.9) 30. 8% - - 19 www. nex plore. com
Ngi G roup Inc . 12/31/2008 2497 T SE JP Y J a pa n 27, 410. 00 37. 0 107. 4 33. 1 17. 8% - - NA www. netage. c o. jp/en/index . html
Northga te T ec hnologies Limited 9/30/2008 590057 BSE INR India 39. 55 28. 4 137. 2 24. 5 25. 4% 0. 2x 1. 2x 286 www. nor thga tetech. com
Open T ext C orp. 12/31/2008 OTE X Na s da qG S US D C a nada 36. 17 1, 877. 2 769. 3 195. 4 -5. 2% 2. 6x 10.3x 2,915 www. opentext. com
Openwa ve S ystems Inc . 12/31/2008 O PW V Na s da qG S US D United S ta tes 0. 74 61. 6 199. 6 ( 10. 4) 53. 5% - - 657 www. openwa v e.c om
P er fect W orld C o. , L td. 9/30/2008 PWRD Na s da qG S US D C hina 15. 74 897. 9 186. 8 99. 9 -17. 7% - - 1,401 www. wa nmei. com/en/index. htm
P hotoC ha nnel Networ ks Inc . 9/30/2008 TS X V: P N TS X V C AD C a nada 1. 61 44. 3 14.0 ( 2.5) NM 3. 1x - NA www. photoc hannel.c om
Quepa sa C orp. 9/30/2008 Q PS A Na sda qC M US D United S ta tes 1. 82 23. 1 0. 1 ( 11. 8) 47. 8% - - 63 www. quepa sa . c om
S ha nda Inter ac tiv e E nterta inment L td. 9/30/2008 S NDA Na s da qG S US D C hina 31. 30 2, 171. 7 477. 7 228. 2 13. 9% - - 2,564 www. s nda . c om
S hutterfly, Inc. 12/31/2008 S FLY Na s da qG S US D United S ta tes 8. 84 222. 2 213. 5 29. 8 9. 4% 0. 6x 4. 5x NA www. shutterfly . com
S K C ommunic a tions C o. , L td. 12/31/2007 A 066270 KO S E KR W S outh Kor ea 8, 030. 00 239. 6 150. 4 14. 2 10. 1% 1. 6x 16.9x NA -
S NAP Inter a ctive, Inc . 9/30/2008 S TV I O TCB B US D United S ta tes 1. 00 10. 7 2. 3 0.2 -34. 8% 4. 2x 41.2x 5 www. s na p- intera ctive. c om
S NM G loba l Holdings 9/30/2008 S NMN O TCP K US D United S ta tes 0. 00 0. 0 2. 0 ( 0.7) -60. 5% 1. 1x - 33 www. snmgloba lholdings . com
S oc ial Media Venures, Inc. 12/31/2008 S MV I O TCP K US D United S ta tes 1. 39 0. 0 0. 1 ( 0.1) 19. 5% 0. 1x - NA -
S pa r k Network s, Inc. 9/30/2008 L OV AME X US D United S ta tes 2. 40 51. 5 60.1 11. 7 NM 0. 8x 4. 0x 176 www. s pa rk . net
S pec trumDNA , Inc . 9/30/2008 SP X A O TCB B US D United S ta tes 0. 10 4. 9 0. 1 ( 2.7) 49. 5% - - 7 -
Tencent Holdings L td. 9/30/2008 700 S E HK HKD C hina 45. 10 10,448. 0 903. 3 447. 5 -12. 0% 12. 5x 25.2x 6,039 www. tencent. c om. hk /index_e. shtml
The P ar ent C ompa ny 8/2/2008 K IDS . Q O TCP K US D United S ta tes 0. 05 1. 3 112. 0 ( 13. 5) 37. 7% 0. 2x - 347 www. thepar entc ompa ny. c om
The9 L imited 9/30/2008 NC T Y Na s da qG S US D C hina 14. 92 411. 9 252. 4 95. 1 16. 2% - - 1,361 www. the9. c om
TheS treet. c om, Inc . 9/30/2008 T SC M Na sda qGM US D United S ta tes 2. 81 85. 7 75.2 12. 2 -11. 8% 0. 1x 0. 7x 349 www. thestr eet. c om
Tr ee. C om, Inc . 12/31/2008 TR E E Na sda qGM US D United S ta tes 4. 17 39. 1 228. 6 ( 27. 0) 0. 4% 0. 2x - NA www. lendingtree. com
Unis erv e C ommunic a tions C orp. 11/30/2008 T S XV : US S TS X V C AD C a nada 0. 08 1. 6 24.5 0.1 24. 2% 0. 2x 36.9x NA www. uniser ve. com
United Online Inc. 9/30/2008 UNT D Na s da qG S US D United S ta tes 5. 88 482. 0 538. 7 130. 6 -91. 6% 1. 6x 6. 4x 928 www. unitedonline. net
UOMO Media , Inc 10/31/2008 UO MO O TCB B US D C a nada 0. 08 6. 8 0. 5 ( 0.4) NM 15. 1x - NA www. uomolife. com
V OIS , Inc . 9/30/2008 VO IS O TCB B US D United S ta tes 0. 75 5. 4 0. 0 ( 4.0) -29. 5% - - 4 www. vois. com
W ebzen Inc . 9/30/2008 W ZE N Na sda qGM US D S outh Kor ea 1. 46 17. 3 20.5 ( 6.0) NM - - 338 www. webzen. co. k r
W iz za rd S oftwa r e C or por ation 9/30/2008 W ZE AME X US D United S ta tes 0. 64 28. 9 6. 2 ( 6.5) NM 4. 7x - 110 www. wizza rds oftwa r e. c om
W oozyF ly, Inc. 9/30/2008 W ZY F O TCB B US D United S ta tes 0. 15 2. 6 0. 0 NM NM - - 14 www. wooz yfly. com
W orlds . com Inc. 9/30/2008 W DDD O TCB B US D United S ta tes 0. 22 11. 5 0. 1 NM NM - - 1 www. worlds . com
W yndstorm C orpora tion NA W Y ND O TCB B US D United S ta tes 0. 12 2. 2 NA NM 38. 8% - - NA www. wynds tor m. c om
XING AG 9/30/2008 O1BC XT R A EUR Germa ny 31. 00 210. 7 40.9 15. 9 22. 4% 3. 8x 9. 8x 161 www. xing. c om
Yeda ngOnline C orp. 12/31/2007 A 052770 KO S E KR W S outh Kor ea 6, 750. 00 76. 6 49.7 11. 1 -7. 6% 1. 5x 6. 8x NA www. yeda ngonline. com/indexhome. a sp
Ynk K or ea Inc. 12/31/2007 A 023770 KO S E KR W S outh Kor ea 4, 515. 00 8. 0 14.1 ( 1.1) NM 0. 6x - NA www. y nk . net
ZipLoc a l Inc. 9/30/2008 TS XV : ZIP TS X V C AD C a nada 0. 02 1. 3 2. 9 ( 3.9) 0. 0% 0. 7x - NA www. z iploc a l. c om
High 10,448. 0 903.3 447. 5 506. 8% 33. 7x 41.2x 6, 039
L ow 0. 0 0. 0 -27. 0 -98. 9% 0. 1x 0. 1x 1
Average 314.6 100.6 26.5 16.6% 4.1x 9.4x 607
Figure 1. Web 2.0 Universe Summary
Source. Capital IQ

3. Page 3
CAPITAL MARKETS ACTIVITY (M&A AND FINANCING)
$25 Million in financing month-to-date: After 18 financings in December totalling $122.1 million (average $6.8 million),
January was the busiest month since April 2008, with 29 financings totalling $199.5 million (average $6.9 million). As of
yesterday, February recorded transactions totalling a little below $25 million. The largest financing in the last three
months was of GoFish for $22.5 million in December (Figure 2). Ten companies raised more than $10 million each in
January – with AdMob the largest at $12.5 million. For additional details, see Figure 27 (at end of note).
Financing - Last Three Months
25.0
20.0
15.0
Feb-09
(US$m)
Jan-09
Dec-08
10.0
5.0
0.0
Mixpo
Motionbox
TextDigger
Xobni
CoveritLive
NewsGator
SundaySky
Gbox
Meez
AdMob
IMVU
Go Internet Media
FooMojo
One True Media
Tvtrip
Social Median
InsideView
Kewego
SocialMedia
Playdo
Overlay.TV
Tripwolf
VirtuOz
NetShelter
GoFish
Nurien
Yodle
Taptu
Play Hard Sports
Scribd
JibJab
E-Global Sports Network
StockTwits
Superfish
Jackbe
Geni
Tagged
Identi.ca
Snapmylife
7 Billion People
DotBlu
Hubdub
Snooth
DECA
ChakPak
Sportsblogs
AboutUs
Clickpass
Aster Data Systems
Blue Kai
OneSpot
RatePoint
Tumblr
Angie's List
Pulse Entertainment
Figure 2. Financings, Last Three Months
Source. Company reports
Travel site Tvtrip raises $9 million: Activity in February so far was led by Tvtrip, a travel-related site, raising about $9
million (Figure 3). Further, single transactions in Search, Aggregation, and Video sectors raised about $4 million each in
the first 10 days of the month.

4. Page 4
Financing by Sector - February 2009
10.0
9.0
8.0
7.0
6.0
(US$m)
5.0
9.0
4.0
3.0
4.3 4.2
2.0 4.0
3.0
1.0
0.0
Travel Search Aggregation Video Analytics
1 1 1 1 1
# companies
Figure 3. Financings, by Sector, January 2009
Source. Company reports
Average round size increases slightly: On a trailing 12-month basis, total financing dollars are down for the third month
in the last four. However; average round sizes increased slightly as of February (Figure 4).
LTM Financing
4,000.0 20.0
18.0
3,500.0
16.0
3,000.0
14.0
2,500.0
12.0
(US$m)
(US$m)
2,000.0 10.0
8.0
1,500.0
6.0
1,000.0
4.0
500.0
2.0
0.0 0.0
May-06
May-07
May-08
Nov-05
Mar-06
Nov-06
Mar-07
Nov-07
Mar-08
Nov-08
Jul-05
Sep-05
Jan-06
Jul-06
Sep-06
Jan-07
Jul-07
Sep-07
Jan-08
Jul-08
Sep-08
Jan-09
Total Average
Figure 4. Financings, Last 12 Months
Source. Company reports
Cumulative total nears $5.3 billion: Overall, on a cumulative basis, Web 2.0 financings have totalled nearly $5.3 billion,
with the majority of the financing coming in late 2007 and the first three quarters of 2008 (Figure 5).

5. Page 5
Web 2.0 Financing (cumulative)
1,400.0 6,000.0
1,313.3
1,200.0
5,000.0
1,000.0 944.7
4,000.0
800.0
(US$m)
(US$m)
701.7
3,000.0
600.0
524.9
2,000.0
400.0 338.5
301.8
224.0
1,000.0
200.0 145.7
130.6 116.3 97.0
87.2 73.4
37.5 33.5 18.2 41.9 49.1 29.4
35.5 28.8 20.1
0.0 0.0
Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1
2003 2004 2005 2006 2007 2008 2009
Figure 5. Financing, Cumulative
Source. Company reports
U.S. remains dominant: U.S. companies continue to dominate capital market activity – with almost 73% of
financings/M&A involving U.S. companies (based on dollars) (Figure 6). Canadian companies generated under 1% of
capital market activity based on dollar volume (Figure 6). Based on number of transactions, the U.S. leads with 73.6% of
deals, while Canada is third in number of financings at 5.5% (Figure 7).
Financing/M&A by Country - LTM (#)
Financing/M&A by Country - LTM ($)
Canada
UK UK
5.5%
13.2% 5.1%
Israel
3.4%
France
China 3.0%
8.1%
Russia ROW
1.7% Israel 9.4%
0.8%
Canada
0.7%
France
0.7%
ROW
2.0%
USA
USA
73.6%
72.8%
Figures 6 & 7. Financing/M&A, by Country (LTM, $, #)
Source. Company reports
Larger volume of early-stage funding (by count): Almost half of financings in the last 12 months are for early-stage
companies (Angel/Seed or Series A) (Figure 8). Series B rounds are 28.8% of the total, with later-stage (Series D, E and
PIPE) deals accounting for just 7.3%.

6. Page 6
Financing by Type - LTM
Series B Series C
28.8% 13.7%
Series D
4.6%
Angel/Seed
10.0%
Debt financing
2.7%
Series A
PIPE
37.9%
2.3%
Figure 8. Financing, by Type (LTM, $)
Source. Company reports
“D” series remain largest equity rounds (by dollar): In the last 12 months, there have been 10 “D” series rounds,
averaging $23.8 million per financing (Figure 9). Note that we have excluded the $430 million Series C financing of Oak
Pacific Interactive as it skews the results substantially.
Average financing round size - LTM
45.0
40.0
35.0
30.0
25.0
(US$m)
41.9
20.0
15.0
23.8
10.0
18.5
11.2
5.0 10.0
8.8
6.1
3.5
0.0
Angel/Seed Debt financing PIPE Series A Series B Series C Series D Series E
# rounds
22 6 5 83 63 30 10 1
Figure 9. Average Size per Round
Source. Company reports

7. Page 7
CAPITAL MARKETS ACTIVITY (PRICE PERFORMANCE)
Price Performance: Our Web 2.0 index (market-cap weighted) has closely tracked the performance of the NASDAQ
composite index, although it has outperformed the index since late October 2008 (Figure 10).
Web 2.0 Index Price Performance
140
120
100
80
60
40
20
0
2/11/2008
2/25/2008
3/10/2008
3/24/2008
4/7/2008
4/21/2008
5/5/2008
5/19/2008
6/2/2008
6/16/2008
6/30/2008
7/14/2008
7/28/2008
8/11/2008
8/25/2008
9/8/2008
9/22/2008
10/6/2008
10/20/2008
11/3/2008
11/17/2008
12/1/2008
12/15/2008
12/29/2008
1/12/2009
1/26/2009
2/9/2009
NASDAQ COMP Web 2.0 (Market Cap Weighted)
Figure 10. Web 2.0 Price Performance
Source. Capital IQ
Chinese Gamer leads; NGI falls: NGI Group Inc. (2497-TSE) had the worst performance in the group (for stocks with
prices greater than $1) (Figure 11), falling 20.1% on the week. Chinese Gamer International (3083-GTSM) increased the
most, +22.9 %.

8. Page 8
1 Week Pric e P erformanc e
C hines e G a mer Interna tional 22. 9%
Y nk K orea Inc. 18. 7%
NE O W IZ G ames C orporation 17. 4%
K ings oft C o. L td. 14. 7%
E olith C o. L td. 14. 2%
G iga Media L td. 14. 1%
P erfect W orld C o. , L td. 13. 2%
HanbitS oft, Inc. 10. 4%
DADA S pA 9. 9%
XING AG 9. 9%
Netea s e. com Inc. 8.0%
S ocia l Media V enures , Inc. 7.8%
S ha nda Intera ctive E ntertainment L td. 7. 1%
G iant Interactive G roup, Inc. 6. 6%
G a mania Digita l E nterta inment C o. , L td. 5. 8%
Actoz S oft C o. , L td. 5. 2%
T ree. C om, Inc. 4. 3%
O pen T ext C orp. 4. 1%
S K C ommunications C o. , L td. 3. 2%
LookS mart, L td. 3. 0%
NetDra gon W ebS oft, Inc. 2. 9%
Northgate T echnologies Limited 1. 7%
F rogs ter Intera ctive P ictures AG 1. 1%
W ebzen Inc. 0. 7%
G a meO n C o L td. 0. 2%
T he9 Limited 0. 1%
S park Networks , Inc. -0. 4%
Y edangO nline C orp. -1. 2%
United O nline Inc. -2. 0%
T heS treet. com, Inc. -2. 1%
Q uepa s a C orp. -2. 7%
T encent Holdings L td. -4. 1%
P hotoC ha nnel Networks Inc. -6. 4%
G ree, Inc. -7. 8%
Mixi, Inc. -15. 0%
AQ Intera ctive, Inc. -15. 1%
Ngi G roup Inc. -20. 1%
-25. 0% -20. 0% -15. 0% -10. 0% -5. 0% 0. 0% 5. 0% 10. 0% 15. 0% 20. 0% 25. 0% 30. 0%
Figure 11. 1-Week Price Performance
Source. Capital IQ
INDUSTRY NEWS (PARTNERSHIPS, FINANCIAL RESULTS, NEW PRODUCTS)
Open Text Corp. Announces Availability of Latest Release of Open Text Web Solutions: Open Text Corp. announced
availability of the latest release of Open Text Web Solutions. Available to customers now, this new release offers a
number of additional enhancements to what is already a core strength of Open Text Web Solutions: Helping customers
translate, manage and synchronize multiple websites worldwide. Web Solutions is an integral component of the Open Text
ECM Suite, the industry's most comprehensive suite of content services used by tens of thousands of organizations
worldwide. The enhanced functionality is part of a complete solution called Open Text Web Solutions for Multi-Sites that
gives customers everything they need to develop a global Web presence. It helps large enterprises to more efficiently
share corporate information, leverage existing translation memory tools such as Across Systems(R) or SDL TRADOS(R),
and to personalize the user experience. For small and mid-size businesses, it provides a simple and cost-effective tool for
expanding globally. For organizations with a global presence, Web Solutions for Multi-Sites adds new content distribution
services that make it easy for Web localization teams to share and update content via a centralized content pool. Team
members are automatically notified when content changes or updates become available. Once localized content is added
to this pool all countries that use the same language can use this content for their local websites. A new Content
Translation Management module offers translation workflow integration, expanded support for computer-aided translation
tools, and export to standardized XLIFF formats. XLIFF, which stands for XML Localization Interchange File Format,
streamlines the exchange of localization data among companies, vendors and across software tools.
Openw ave Systems Announces Executive Appointments: Openwave Systems Inc. announced the appointment of
Martin McKendry as senior vice president, engineering, effective immediately. Mr. McKendry most recently held this role
with Openwave on an interim basis. He brings more than 22 years of executive leadership experience in leading global
engineering organizations. He will report to Openwave's chief executive officer, Kenneth Denman. Openwave also
announced the appointment of Bruce K. Posey as senior vice president, general counsel and corporate secretary
responsible for leading Openwave's legal team and overseeing the company's vital regulatory and governmental relations
efforts. Mr. Posey brings over 28 years of senior legal, public policy and regulatory experience to Openwave. Mr. Posey
will also report to Mr. Denman. Most recently, Mr. Posey was senior vice president, general counsel and corporate
secretary at iPass Inc.
Bright Things plc Announces Launch of SocialGO: Bright Things plc announced the launch of the first of its
subscription based products going live with effect from 2nd February 2009. SocialGO is a subscription based revenue

9. Page 9
earning product with many additional features being released over the next few months. The product has been in full beta
test for the last four months offering customers a free trial period. During that period over 22,000 networks have been
registered.
United Online Declares Quarterly Dividend Payable on February 27, 2009: United Online Inc. announced that its Board
of Directors has declared a regular quarterly cash dividend of $0.10 per share. The dividend is payable on February 27,
2009 to shareholders of record on February 13, 2009.
Open Text Corp. Extends eDiscovery Offering: Open Text Corp. announced that it has extended its new eDiscovery
solution to its Open Text eDOCS customers. Now organizations, particularly corporate legal departments, will be able to
significantly minimize the need for third-party processing and control the high costs of legal reviews by culling irrelevant
information. Open Text eDiscovery Early Case Assessment is being offered through a strategic relationship with
Recommind, the leader in search-powered information risk management (IRM). The solution combines Recommind's Insite
Legal Hold application with the Open Text ECM Suite. The combination not only addresses the critical need for eDiscovery
in an age of growing regulatory and legal challenges, it also lets customers tightly integrate eDiscovery within their
broader ECM initiatives. Open Text eDOCS customers will gain expanded eDiscovery capabilities woven into their overall
content, records and email management practices.
Wizzard Media to Provide Catalog of Branded and Independent Streaming Video Content to Sevenload: Wizzard
Media announced that it will provide a catalog of branded and independent streaming video content to sevenload. The
sevenload network reaches 15 million users monthly with independent, intelligent and creative content through twelve
international country portals including the USA, Germany, Spain, France, Italy, Turkey, Russia, the UK, India, Australia,
Singapore and Poland. The delivery of video content through sevenload or on sevenload properties/portals/platforms is an
ideal distribution channel for the Wizzard Media Network catalog. Through this partnership, Wizzard will reach a large
audience of fans across Europe and the United States and offer more opportunities for monetization to its network of
video producers.
Shutterfly Inc. Reports Unaudited Consolidated Earnings Results for the Fourth Quarter and Full Year Ended
December 31, 2008; Provides Earnings Guidance for the First Quarter Ending March 31, 2009 and Full Year Ending
December 31, 2009: quot;Shutterfly Inc. reported unaudited consolidated earnings results for the fourth quarter and full year
ended December 31, 2008. For the fourth quarter, the company reported net income of $14.92 million or $0.59 diluted net
income per share on sales of $107.74 million compared to net income of $16.9 million or $0.63 diluted net income per
share on sales of $97.54 million for the same period last year. For the year, the company reported net income of $4.56
million or $0.18 diluted net income per share on sales of $213.48 million compared to net income of $10.09 million or
$0.38 diluted net income per share on sales of $186.72 million for the same period last year. The company also provided
earnings guidance for the first quarter ending March 31, 2009 and full year ending December 31, 2009. For the first
quarter, the company expects operating loss from $15 million to $13 million. GAAP diluted net loss per share to range
from $0.35 to $0.14. Non-GAAP operating loss to range from $12 million to $10 million. Non-GAAP diluted net loss per
share to range from $0.69 to $0.26. Adjusted EBITDA was from $5.6 million to $3.2 million. Net revenues to range from
$28 million to $32 million, a year-over-year decrease of 7% to 19%. For the full year, the company expects operating loss
from $14 million to $2 million. GAAP diluted net loss per share to range from $0.30 to $0.01. Non-GAAP operating loss to
range from $1 million to $13 million. Non-GAAP diluted net income per share to range from $0.08 to $0.35. Adjusted
EBITDA was from $26 million to $38 million. Net revenues to range from $190 million to $210 million, a year-over-year
decrease of 11% to 2%.quot;
CDC Corp. Reaffirms Earnings Guidance for the Second Half of 2008: CDC Corp. reaffirmed earnings guidance for the
second half of 2008. The company reaffirmed its previously provided guidance for adjusted EBITDA for the second half of
2008, despite announced preliminary plans by China.com Inc., to record an approximately $2.7 million investment
impairment loss in the fourth quarter of 2008, subject to final year-end audit. Based upon preliminary financial results and
estimates, the company expects its Adjusted EBITDA from continuing operations to be in the range of approximately $17.0
million to $19.0 million for the second half of 2008. The Company does not expect that China.com's preliminary planned
fourth quarter 2008 net impairment loss charges of approximately $2.2 million (after the impact of minority interest)
announced by China.com in a filing made to the Growth Enterprise Market of the Stock Exchange of Hong Kong Limited,
or GEM Market, will impact the Company's previously announced second half guidance. The company currently has
significant cash on hand and expect to report strong Adjusted EBITDA from continuing operations for the fourth quarter
2008.
Tree.Com, Inc. (NasdaqGM: TREE) Acquired JustThrive.com.: Tree.Com, Inc. (NasdaqGM: TREE) acquired
JustThrive.com on February 4, 2009. The financial terms of the transaction were not disclosed.
Best of Malayalam TV Chooses NeuLion as End-to-End Service Provider: Best of Malayalam TV (BoMTV) announces
the launch of a new broadcast service throughout the United States and Canada. BoMTV offers a full range of high quality
South Indian entertainment made possible through JumpTV Inc., an iPTV service provider and NeuLion's proprietary set
top box solution. Viewers will be able to watch live Malayalam content directly on the television.
Tree.Com Inc. Reports Earnings Results for the Fourth Quarter and Year of 2008: quot;Tree.Com Inc. reported earnings
results for the fourth quarter and year of 2008. The company reported a net loss of $7 million, or 75 cents per share, on
revenue of $48.1 million. That was considerably better than the loss of $22.6 million, or $2.41 per share, it reported in the
third quarter. Revenue in the third quarter was $50.3 million. A year ago, the businesses making up Tree.com lost $531.5
million on $50.8 million in revenue, largely because of the write-down and impairment charges. For the full year, Tree.com

10. Page 10
reports a net loss of $202.3 million, or $21.59 per share. That compares with a net loss of $550.42 million, or $59 per
share in 2007. Again, the year ago figures are skewed by the special charges. Revenue last year dropped to $228.6
million from $346.4 million in 2007.quot;
GeoSentric Oyj Announces Availability of its Mobile Social Networking Application on Nokia and BlackBerry
Devices: GeoSentric Oyj's GyPSii announced that its market leading mobile social networking application is now available
on over 25 more Nokia devices, as well as the BlackBerry Bold, Curve and Pearl devices from Research in Motion - a
move that extends the reach of GyPSii to millions of potential new customers. GyPSii users can uniquely experience a
broad range of location-specific functions and mobile lifestyle services - including sharing user generated content, mobile
geo-location content search, and social networking, as well the ability to view it all on a map - all within a single user
experience. The latest version of the GyPSii software extends these features to even more devices and markets in
particular, China. Supported Nokia phones include: N96, N95-8GB, N95, N93/N931, N92, N85, N82, N81, N80, N79, N78,
N77, N76, N75, N73, N72, N71, E90, E71, E70, E66, E65, E62, E61/E61i, E60, E51, E50, Touch Xpress 5800, 6220
Classic, 6210 Navigator, 6120 Classic, 6110 Navigator, 5700, 5500, 5320XM. Supported Blackberry Smartphones include:
Bold; Pearl series 8110, 8120, 8130; Curve series 8310, 8320, 8330 and 8800, 8820, 8830.
Perfect World Co., Ltd. Partners with HI-WIN Co., Ltd. to License 'Pocketpet Journey West' in Korea: Perfect World
Co., Ltd. signed an agreement with HI-WIN Co., Ltd. to license 'Pocketpet Journey West' in Korea. This is the company's
fifth game licensed in the country.
VALUATION
MMOG companies lead market cap charts: Just five (same as last week) companies in our Web 2.0 universe top US$1
billion in market capitalization (Figure 12). Fifty-eight of the 80 (down from 60 last week) companies have market caps
under US$100 million, with 22 (same as last week) under $10 million. Online gaming companies dominate the top of the
list with five of the top six by market cap.
Market C ap (US D m)
T encent Holdings L td.
Netea s e. com Inc. 2489. 3
2171. 7
S ha nda Intera ctive E nterta inment
O pen T ext C orp. 1877. 2
G ia nt Intera ctive G roup, Inc. 1469.0
P erfect W orld C o. , L td. 897. 9
Mixi, Inc. 759. 2
United O nline Inc. 482. 0
K ings oft C o. L td. 422. 3
T he9 L imited 411. 9
G iga Media L td. 402. 0
280. 0
C hines e G a mer Interna tiona l
S K C ommunica tions C o. , L td. 239. 6
S hutterfly, Inc. 222. 2
X ING AG 210. 7
NetDra gon W ebS oft, Inc. 192. 9
NE O W IZ G a mes C orpora tion 192. 9
DADA S pA 131. 1
G a meO n C o L td. 130. 2
G ungHo O nline E nterta inment, Inc. 128. 7
127. 3
B roa dW ebAs ia Inc.
C DC C orp. 101. 4
G a mania Digita l E nterta inment 99. 1
T heS treet. com, Inc. 85. 7
77. 7
Actoz S oft C o. , L td.
Y edangO nline C orp. 76. 6
Moggle, Inc 70. 6
O penwa ve S ys tems Inc. 61.6
Ha nbitS oft, Inc. 53. 4
S park Networks , Inc. 51.5
NeX plore C orpora tion 46. 9
G eoS entric O yj 46. 8
K aboos e Inc. 46. 0
45. 7
J umpT V Inc.
P hotoC ha nnel Networks Inc. 44. 3
DigitalT own, Inc. 40. 7
T ree. C om, Inc. 39. 1
Ngi G roup Inc. 37. 0
B oomJ Inc 30. 7
W izza rd S oftwa re C orpora tion 28. 9
Dolphin Digita l Media , Inc. 28. 7
Northga te T echnologies L imited 28. 4
24. 1
F luid Mus ic C ana da , Inc.
L ookS ma rt, L td. 23. 7
Q uepa s a C orp. 23. 1
Idea E dge, Inc. 21. 1
E olith C o. L td. 20.5
AQ Intera ctive, Inc. 19. 7
G ra vity C o. , L td 19. 5
C ornerW orld C orpora tion 19. 3
E xtens ions , Inc. 18. 9
17. 3
W ebzen Inc.
F rogs ter Intera ctive P ictures AG 14. 4
J umbuck E nterta inment P ty L td. 13. 5
Ma gnitude Informa tion S ys tems 12. 7
W orlds . com Inc. 11. 5
S NAP Intera ctive, Inc. 10.7
L ingo Media C orpora tion 10. 0
Accelerize New Media , Inc. 9. 4
Y nk K orea Inc. 8. 0
6. 8
UOMO Media , Inc
V O IS , Inc. 5. 4
G oF is h C orpora tion 5. 1
S pectrumDNA, Inc. 4. 9
3.8
B right T hings plc
DigitalF X Interna tiona l, Inc. 2. 7
W oozyF ly, Inc. 2. 6
W ynds torm C orpora tion 2. 2
IAS E nergy, Inc. 1. 8
Unis erve C ommunica tions C orp. 1. 6
ZipL oca l Inc. 1. 3
T he P a rent C ompa ny 1. 3
L iveW orld Inc. 1. 2
1. 0
Digita lP os t Intera ctive, Inc.
F ina ncia l Media G roup, Inc. 1. 0
As s ocia ted Media Holdings Inc. 0. 2
C hina G a tewa y C orpora tion 0. 0
S ocia l Media V enures , Inc. 0. 0
S NM G loba l Holdings 0. 0
G ree, Inc. 0. 0
0 500 1, 000 1, 500 2, 000 2, 500 3, 000 3, 500 4, 000
Figure 12. Market Cap Ranking
Source. Capital IQ