Internet opportunities in Russia and Ukraine by segments (e-commerce, mobile, SaaS, gaming)

1. 2012 INTERNET OPPORTUNITIES IN RUSSIA AND UKRAINE: MAJOR
VERTICALS:
E-COMMERCE
SAAS
MOBILE GAMING
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2. UKRAINE AND RUSSIA COMBINED TO REACH 100 MILLION
INTERNET USERS IN THE NEXT FEW YEARS
GDP per
capita, $
(2011) UKRAINE
143.0M
13,262 30 # of users*, M Penetration, % people,
25 90% the world`s 6th
25 CAGR largest
+22% economy
20 70%
58%
CAGR RUSSIA
15 +34%
14
50% 80 # of users**, M Penetration, %
10
10 8 32% CAGR
70 90%
6 70
25% 30% +11%
5 15%
20%
60 70%
CAGR
0 10% +14%
51
2008 2009 2010 2011 2014F 50 45
62%
53% 50%
39
45.8M
40
3,560  In September 2011, Russia 32 39%
people overtook Germany as 34% 30%
Europe’s largest Internet 30 28%
market by number of users
 65M users combined in
Russia and Ukraine as of 20 10%
2008 2009 2010 2011 2014F
end of 2011
163 1,9 GDP, $B
Source: comScore, GFK Ukraine, IMF (2011)
*older than 18 years old
**older than 15 years old
2

3. E-COMMERCE IN RUSSIA TO MAKE EVEN BIGGER GAINS
GDP (PPP) per capita in Russia and Europe E-commerce is gaining momentum, capturing increasing share in
Russia`s retail turnover CAGR
2009-11,%
 Russians and Total retail turnover, $B
621 7%  E-commerce in
Disposable S32.7K Europeans have Russia is to
almost the same E-commerce turnover, $B grow by 40-50%
income
shopping power 579 10.3 51% to reach $30-
40B in the next
 16M people (33% few years
S15.0K of Internet users) 545 7.6
made online  E-commerce in
$13.1K Europe will
$10.5K purchases over 4.5
a 6-month- grow just 12%
period p.a. over the
Average VS Average next 5 years
Russian European 2009 2010 2011
Selected retail sectors most heavily disrupted by e-commerce sales
Clothes, Consumer Cosmetics Children`s Air tickets
footwear and electronics and toiletries toys
accessories and home
appliances 52M women
+10.0% 15-64 spend 22M children
$62.5 12% of under the age
$56.8 income on 14
+81.8%
Total, $B
cosmetics (2X
$40.0 vs. US&EU)
2010 $21.5 +9.2% +15.2% +23.6%
2011 $10.9 $11.9 $9.8 $11.3 $9.2
$7.4
+75.1% +31.7% +44.7% +41.8% +106.7%
Online
$641M 1,11B $2.6B $3.4B 47M 69M $322M $457M $537M 1,10B

4. ONLINE ADVERTISING IN RUSSIA AND UKRAINE: THE
FASTEST GROWTH RATES IN THE WORLD
RUSSIA UKRAINE
Revenues from online advertising to Advertising budgets in Ukraine are yet
double every other year to move online
+50% p.a. +50% p.a
$2.8B
$123M
$1.8B
$83M
$0.8B $1.4B $55M
$35M
2010 2011 2012E 2013F 2010 2011 2012E 2013F
Online ads per capita, $ Online ads per capita, $
$5,7 $9.5 $12.8 $19.2 $0.8 $1.2 $1.8 $2.7
Online ads in Russia exceeded ads in Although online ads have increased by
the press for the first time in 2011 and 57% over the last year, they still represent
finished the year with 56% growth the smallest market when compared to
(highest growth rate in the industry) other media Online
$55M
Online Out-
TV TV Press Out-
$1.4B door
$4.3B $440M $305M door
$1.1B
$125M
Press
$1.3B
+18% +56% +6% +15% +33% +57% +10% +25%
4

5. ENTERPRISE SAAS MARKET CAN REACH $4-5B, IS SET
TO GROW BY 100-150% P.A. FROM A MODEST BASE OF
$100 MILLION
Russia Ukraine
Quantity 536K 67K
LLCs and
corporations Potential SaaS $5,000 $3,000
budget, $
Quantity 1.7M 381K
SMBs
Potential SaaS $1,000 $500
budget, $
Potential SaaS
$4.4B $0.4B
market size
Existing enterprise
$9.1B $0.1B
software market
 In Russia, the SAAS market (~100M in 2011) is likely to grow by seizing share from the existing $9B enterprise
software market, especially in collaboration, business intelligence, CRM, ERP and security segments (to reach
$4.5B in the next few years).
 In Ukraine, the SaaS market is yet to emerge and is likely to grow organically thanks to new users (to reach $0.4-
0.5B in the next few years)
Source: IDC, Russian and Ukrainian Statisctics Committees

6. OPPORTUNITY IN MOBILE APPLICATIONS
SMARTPHONE USAGE IN RUSSIA SMARTPHONE USAGE IN UKRAINE
45M
total # of mobile internet 5-9M total # of mobile internet
21-29M 4M
users (3G USB modems & users (3G USB modems &
SIMs, 2G) SIMs, 2G) 12M
1.5-3M 2G mobile internet users
15M 3G mobile internet users 1M
(microSIMS) 21M
3G mobile internet users
50K
(microSIMs)
6M
16.1M +116% 5.79M +28%
4.54M 1.10M +80%
5.3M +60%
+200%
7.6M +292% 0.45M
20M
2.0M 4.69M +15% 5M
10.8M +95% 4.09M
5.6M
6
01`2011 01` 2012 01` 2014F 01`2011 01` 2012 01` 2014F
Major drivers:
 Growth of mobile-only Internet users;
 25-40% of social network users check in via mobile devices (up to 10M daily unique mobile users in Russia and Ukraine(
 Emerging interest to social/local mobile commerce
 Middle-class and younger users demand more engaging mobile content
 LTE network development in Russia in 2012 and beyond
 New licenses for 3G mobile internet via carriers` microSIM expected in Ukraine in 2012-2013
 Alternative monetization models preferred (affiliate programs etc.) - Apple's App store and Google's Play accept payments almost
exclusively through bank cards, which Russians and Ukrainians are reluctant to use for digital payments
Source: MTS, Kyivstar, Life:), AIN.UA, Informa Telecoms & Media, eMarketer, Svyaznoy, Xyologic, i-Free

7. OPPORTUNITIES IN GAMES: RUSSIA
Russian online gaming market, $B TOP-5 Russian original game developers*
$1.40
+35-40% Revenue,
Company Game type 2011
Social, Casual,
Mail.ru Games $129M
+21% p.a. $1.00 Browser
$0.74 Game Insight Mobile $40M
$0.68
MMOG and
Innova Systems $36M
browser
Alawar Casual $30M
ZeptoLabs Mobile $24M
2009 2010 2011 2012E
Highlights:
 Russian gaming industry is relatively young, most of its top players emerged in mobile/social era
 Total gaming audience represented by 38M people, casual games being the most popular (played by 29M people), while console
games attract some 14M players only.
 Total industry revenue reached estimated $1B, despite the fact that 75% of PC or console games are being downloaded illegally.
 Casual and mobile game developers are globally oriented businesses, while social games are fine-tuned for domestoc social
network users
 The market is still fragmented and awaits consolidation
*other successful gaming companies include
VC-backed Drimmi and Pixonic
Source: Discovery Research Group, NewZoo, Forbes.ru 7

8. OPPORTUNITIES IN GAMES: UKRAINE
Major original game developers in Ukraine
Company Game type Examples of games International publisher/ client
GSC Game World Console & PC S.T.A.L.K.E.R, Cossaks: European WARS THQ Inc (USA)
Action Forms / Tatem Console & PC/ iOS
Carnivores, Vivisector Beeplex Group (USA)
Games mobile
4A Games Console & PC Metro 2033, etc., Men of War THQ Inc , Best Way (USA)
Quest games Sherlock Holmes, World of
Frogwares Console & PC, mobile Frogwares Games (Ireland)
Battle, etc.
Dereza Production Studio Console & PC, casual Turnips Quest games, Sinbad IDDK Group (Russia)
Overload, Family Game Night, World of Microsof, Disney, Zynga,
Persha Studia Console & PC, casual
tanks, World of warplanes etc.
Casual, social, mobile
Absolutist 100+ titles Self-publisher
& PC
Mistery of the Earl, Celtic Lore, online
Zen-producers Social, casual, PC Self-publisher
portal Funlinker
Highlights:
 Ukrainian gaming industry emerged in the late 1990s when Ukraine became a hotbed of outsourced labor for major Western
games publishers
 Most Ukrainian game developers are represented by “legacy” players specializing on expensive AAA console games; cumulative
annual budget of top players is greater than $100M
 The monetary value of internal market is unclear, with lion`s share of revenues going to Russian social networks` gaming
applications
 Casual and mobile game developers are globally oriented / most of them combine original products with outsourcing work
Source: Bagnet org, team analysis 8