- The first quarter of 2009 saw a rebound in financing for web 2.0 companies, with $521 million invested across 77 financings, up 54% from the previous quarter but down 44% from the first quarter of 2008. - Video and social networking sectors attracted the most investment in the quarter, with Twitter raising the most of any single company at $35 million. - The document identifies 90 public web 2.0 companies, with a total market cap of $34.8 billion, and provides a table comparing various financial metrics like revenue, market cap, employees and valuation for these companies.

1. SOFTWARE & SERVICES 31 MARCH 2009
DAVID SHORE, CFA, MBA 416.860.6784
WEB 2.O WEEKLY david.shore@researchcapital.com
Arun Thomas (Associate) 416.860.7666
FINANCING REBO UND IN Q1
F IR ST Q UA RT E R CL O S E S B ET T E R T HA N P R E VI OU S QU A RT ER
The first quarter of 2009 finished with 77 financings totalling $521 million, up 54% Q/Q (Q4/08 at $338.5 million) and
down 44% Y/Y (Q1/08 at $748.2 million). March was the weakest month in the first quarter at $118.7 million, with
January and February closing at $216.8 million and $185.5 million, respectively. Does this rise in quarterly rise over
Q4/F08 portend what 2009 will look like? W e will be keeping track and discussing trends in our upcoming reports.
Sectors that attracted the most amount of capital in the first quarter are Video ($121 million) and social networking
($60 million), with gaming not far behind at $43 million. W e wonder if the interest in the video sector is a leading
indicator of where the next big innovation is located or companies’ looking to capitalize on the massive traffic online
video is driving?
Among individual companies, Twitter leads the pack in the quarter, raising $35 million, with Synthasite taking the
runners-up at $20 million.
Financing by Month
800.0 35
720.8
700.0
30
649.9
600.0
25
500.0
461.7
20
(US$mm)
(#)
400.0
360.5
15
318.7
304.3
300.0
244.0
216.8 10
192.6 185.5
200.0
142.0
132.3
122.8 114.6 118.7
111.0
101.1
99.0 5
82.6
82.5
100.0
69.5
68.8 69.0 69.0
56.3
40.5 48.7 42.0 38.0
40.9
38.8 38.8 38.6 38.6
24.4 22.0
21.4 21.2 18.8
16.5
15.4
12.5 12.2
8.0
0.0 0
5
6
6
7
7
8
8
05
06
6
06
07
7
07
08
8
08
09
9
5
6
7
8
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
l-0
l-0
l-0
l-0
p-
n-
p-
n-
p-
n-
p-
n-
ov
ay
ov
ay
ov
ay
ov
ar
ar
ar
ar
Ju
Ju
Ju
Ju
Se
Ja
Se
Ja
Se
Ja
Se
Ja
M
M
M
M
N
M
N
M
N
M
N
This report has been created b y Anal ysts that are emplo yed b y Research Capital Corporation, a Canadian Investment Dealer.
For further disclosures, please see last page of this report.
w w w . r e s e a rc h c a p i t a l . c o m
T o ro n t o 4 1 6 . 8 6 0 . 7 6 0 0 Montreal 514.399.1500 Vancouver 604.662.1800 Calgary 403.265.7400 Regina 306.566.7550

2. Page 2
THE WEB 2.0 UNIVERSE
Ninety public Web 2.0 companies identified: Our W eb 2.0 universe contains 90 companies, with a combined market cap
of $34.8 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). The average market cap for the group is ~$386 million (but a median of only
$31 million), with average trailing revenue of $138.6 million (median $48 million). The companies are also generally
profitable, with a median EBITDA margin of 16.4%. On a valuation basis, the overall average is 4.7x trailing revenue
(median 1.3x) and 8.9x trailing EBITDA (median 6.6x). Twelve of the companies have more than 500 employees.
C omparable C o mpany A nalys is > W eb 2.0
Trading Current U S D Market U S D LT M To tal US D L TM T otal E B ITDA TE V/LT M T E V/LT M
C om pany Nam e L TM as of T ic ker E xc hang e Curr enc y H Q P ric e C ap ($m) R ev ($m) E B ITDA ($m) % R evenu e E B IT DA E mployees
Acce le rize New Me dia, Inc. 9 /30 /200 8 AC LZ OT C B B US D U nited S ta tes 0 .35 9 .4 3.2 (4 .7) NM 4.3 x - 20
Actoz S oft C o., L td. 9 /30 /200 8 A0 527 90 K OS E KR W S outh K orea 11, 150 7 1.1 52. 9 9 .7 18 .3% 0.9 x 4.7x NA
AQ Inte ractive , Inc. 1 2/31 /200 8 38 38 TSE J PY J apan 40 ,000 .00 2 2.4 62. 1 5 .0 8 .0% - - NA
As s ocia ted Media H oldings Inc. 6 /30 /200 7 AS MH OT C P K US D U nited S ta tes 0 0 .1 0.1 (2 .3) NM 8.0 x - 3
B igstring Corp. 9 /30 /200 8 BS GC OT C B B US D U nited S ta tes 0 .02 0 .8 0.1 (2 .1) NM 29.8 x - 8
B e tawave Corpora tion 9 /30 /200 8 B W AV OT C B B US D U nited S ta tes 0 4 .4 6.3 (1 1.0) NM 2.4 x - 41
B e yond Commerce, Inc. 9 /30 /200 8 B Y OC OT C B B US D U nited S ta tes 0 .51 2 0.9 1.1 (7 .7) NM 21.8 x - 25
B right T hings plc 9 /30 /200 8 AIM:B G T AIM GBP U nited K ingdom 0 2 .5 0.2 (1 .6) NM 10.5 x - 9
B roa dW ebAs ia Inc. 9 /30 /200 8 BW BA OT C P K US D U nited S ta tes 0 .51 4 3.3 0.0 (4 .6) NM - - 46
C DC C orp. 9 /30 /200 8 C HIN.A N as da qG S US D H ong K ong 1 11 6.5 428 .1 1 8.8 4 .4% 0.4 x 9.2x 3 ,12 5
C hina G ate wa y C orpora tion 9 /30 /200 8 C GW Y OT C B B US D U nited S ta tes 0 .00 0 .0 6.7 (6 .6) -9 8.9% 0.0 x - 37
C hine s e G amer International 9 /30 /200 8 G T S M:308 3 GTSM TWD T aiwan 171 42 5.9 37. 8 1 7.8 47 .1% 9.8 x 2 0.8 x NA
C ornerW orld C orporation 1 /31 /200 9 C WR L OT C B B US D U nited S ta tes 0 .14 6 .6 1.3 NM NM 6.1 x - NA
D ADA S pA 9 /30 /200 8 C M:D A CM E UR Ita ly 5 10 1.2 223 .0 3 5.6 16 .0% 0.6 x 4.1x 574
D XN Holdings B hd 1 1/30 /200 8 D XN KL SE MY R Ma la ys ia 0 .30 1 8.8 76. 0 1 0.1 13 .3% 0.5 x 3.8x NA
D ibz Inte rnational, Inc. NA D IB Z OT C P K US D U nited S ta tes 0 0 .0 NA NM NM - - NA
D igitalP ost Inte ra ctive , Inc. 9 /30 /200 8 D G LP OT C B B US D U nited S ta tes 0 .01 0 .7 0.4 (3 .3) NM 3.9 x - 11
D igitalT own, Inc. 1 1/30 /200 8 DGT W OT C B B US D U nited S ta tes 3 6 7.9 NM (2 .5) NM - - 3
D olphin Digital Me dia, Inc. NA D P DM OT C B B US D U nited S ta tes 0 .59 2 8.7 NA NM NM 1.0 x - 6
E olith C o. L td. 1 2/31 /200 7 A0 410 60 K OS E KR W S outh K orea 515 1 7.4 18. 1 (0 .0) -0 .3% - - NA
E xte ns ions , Inc. 9 /30 /200 8 E XT I OT C P K US D U nited S ta tes 0 .15 1 4.2 NM NM NM - - 2
F inancia l Media G roup, Inc. 1 1/30 /200 8 F NG P OT C B B US D U nited S ta tes 0 0 .5 6.8 1 .2 18 .3% 0.7 x - 22
F luid Mus ic Ca nada, Inc. 9 /30 /200 8 T S X:F MN TSX C AD U nited S ta tes 0 .40 1 6.7 4.2 (8 .6) NM 3.8 x - 29
F rogs te r Interactive P icture s AG 6 /30 /200 8 F RG XT R A E UR G ermany 7 2 0.4 5.3 (3 .2) -6 0.6% 1.1 x 6.5x NA
G a ma nia D igital E ntertainment C o., L td. 9 /30 /200 8 61 80 GTSM TWD T aiwan 32 .60 14 5.5 109 .3 1 8.5 16 .9% 0.5 x 1.8x NA
G a me On C o L td. 1 2/31 /200 8 38 12 TSE J PY J apan 93, 600 9 3.2 76. 8 1 9.9 25 .9% 3.6 x - NA
G e oS e ntric O yj 9 /30 /200 8 G E O1 V H LS E E UR F inland 0 .03 2 4.6 5.4 (1 2.4) NM - - 92
G iant Intera ctive G roup, Inc. 1 2/31 /200 8 GA NYS E US D C hina 7 1,5 43.6 233 .2 14 4.4 61 .9% 1.3 x 5.3x NA
G iga Media Ltd. 9 /30 /200 8 G IG M N as da qG S US D T aiwan 5 .91 31 9.3 200 .5 4 8.0 23 .9% - - 975
G ravity C o., L td 9 /30 /200 8 GR VY N as da qG M US D S outh K orea 1 1 9.2 35. 4 6 .8 19 .2% 40.4 x - 636
G ree, Inc. 6 /30 /200 8 T S E : 363 2 TSE J PY J apan 5 ,600 .00 1,2 86.4 30. 3 1 0.9 36 .0% 1.2 x 6.7x NA
G ungH o O nline E ntertainment, Inc. 1 2/31 /200 8 37 65 OS E J PY J apan 1 35, 300 15 9.6 115 .8 2 0.7 17 .8% 0.7 x - NA
H anbitS of t, Inc. 1 2/31 /200 8 A0 470 80 K OS E KR W S outh K orea 3 ,210 .00 5 0.9 50. 3 (1 4.2) -2 8.2% 0.3 x 6.1x NA
IAC /InterActiveC orp. 1 2/31 /200 8 IAC I N as da qG S US D U nited S ta tes 15 2,1 48.0 1 ,44 5.1 6 4.6 4 .5% - - 3 ,20 0
IAS E nergy, Inc. 1 /31 /200 9 IAS C.A OT C B B US D C ana da 0 .05 3 .2 0.0 (0 .8) NM - - NA
IdeaE dge, Inc. 1 2/31 /200 8 OT C B B :IDAE OT C B B US D U nited S ta tes 0 1 4.8 0.0 (4 .6) NM 1.8 x - NA
is ee media Inc. 1 2/31 /200 8 IE E T S XV C AD C ana da 0 .09 3 .7 1.2 (4 .7) NM 1.0 x 2.8x NA
J umbuck E ntertainment P ty Ltd. 1 2/31 /200 8 AS X:J MB AS X AU D Aus tra lia 1 1 6.9 12. 2 4 .5 37 .2% 5.3 x - 72
J umpT V Inc. 6 /30 /200 8 T S X:J T V TSX C AD C ana da 0 .54 4 8.9 11. 5 (1 .8) -1 5.3% 0.9 x 1 1.5 x NA
K a boos e Inc. 9 /30 /200 8 T S X:K AB TSX C AD C ana da 0 4 4.6 59. 1 4 .5 7 .6% 3.5 x 1 0.3 x NA
K ings oft Co. Ltd. 9 /30 /200 8 38 88 S E HK HKD C hina 3 .25 45 0.3 106 .8 3 6.1 33 .8% 2.4 x - 1 ,66 0
Lingo Media Corporation 9 /30 /200 8 T S XV : LM T S XV C AD C ana da 1 7 .2 3.2 (1 .4) -4 2.5% 0.3 x - NA
Live World Inc. 9 /30 /200 8 LV WD OT C P K US D U nited S ta tes 0 .13 4 .0 11. 7 (1 .2) -1 0.1% - - 73
LookS mart, Ltd. 1 2/31 /200 8 LOOK N as da qG M US D U nited S ta tes 1 1 7.2 65. 0 (2 .0) -3 .1% - - NA
Magnitude Information S ys tems Inc. 9 /30 /200 8 MA G Y OT C B B US D U nited S ta tes 0 .02 8 .3 0.1 (3 .2) NM 4.1 x 1 0.7 x 13
Mixi, Inc. 1 2/31 /200 8 21 21 TSE J PY J apan 3 78, 000 59 7.5 120 .8 4 5.9 38 .0% 1.0 x 6.2x NA
Mode rn Times G roup Mtg AB 1 2/31 /200 8 MT G B OM S EK S weden 135 .25 1,0 68.9 1 ,57 9.2 25 2.5 16 .0% - - NA
Moggle , Inc 1 2/31 /200 8 MMOG OT C B B US D U nited S ta tes 2 8 3.5 NM (1 .1) NM 4.5 x - 3
MOK O.mobi L imited 1 2/31 /200 8 MK B AS X AU D Aus tra lia 0 .09 5 .4 1.0 (2 .0) NM 2.4 x 8.8x NA
N E OW IZ G ames C orpora tion 1 2/31 /200 7 A0 956 60 K OS E KR W S outh K orea 45, 400 31 5.9 130 .4 3 5.1 26 .9% 1.5 x 3.3x NA
N etD ragon W ebS oft, Inc. 1 2/31 /200 8 77 7 S E HK HKD C hina 4 .09 27 8.9 87. 2 3 9.9 45 .7% - - NA
N ete as e.com I nc. 1 2/31 /200 8 NT ES N as da qG S US D C hina 25 3,1 12.0 451 .1 29 3.3 65 .0% - - NA
N eXplore Corpora tion 9 /30 /200 7 N XP C OT C P K US D U nited S ta tes 0 .60 3 3.5 NM (4 .9) NM - - 19
N gi G roup Inc. 1 2/31 /200 8 24 97 TSE J PY J apan 24, 300 3 0.9 101 .3 3 1.2 30 .8% 0.2 x 0.9x NA
N orthgate Te chnologies L imited 1 2/31 /200 8 59 005 7 BS E INR India 31 .30 2 1.3 131 .8 2 3.2 17 .6% 2.5 x 9.8x 286
Open T e xt Corp. 1 2/31 /200 8 OT E X N as da qG S US D C ana da 34 1,7 71.3 769 .3 19 5.0 25 .3% - - 3 ,40 0
Openwave S ys tems Inc. 1 2/31 /200 8 OP W V N as da qG S US D U nited S ta tes 0 .90 7 5.0 199 .6 (1 0.2) -5 .1% - - 627
P e rf ect W orld C o., Ltd. 1 2/31 /200 8 PW R D N as da qG S US D C hina 14 71 6.4 210 .2 11 3.7 54 .1% 2.6 x - NA
P hotoChannel N etwork s Inc. 1 2/31 /200 8 T S XV : P N T S XV C AD C ana da 1 .60 4 2.7 15. 9 (0 .8) -4 .9% - - NA
Quepa s a C orp. 9 /30 /200 8 QP S A N as da qC M US D U nited S ta tes 1 1 2.2 0.1 (1 1.8) NM 0.0 x 0.1x 63
OA O R B C Information S ys tems 1 2/31 /200 7 R BC I R TS US D R us s ia 0 .38 5 2.7 139 .3 1 8.2 13 .1% - - NA
S handa Interactive E ntertainme nt L td. 1 2/31 /200 8 S N DA N as da qG S US D C hina 37 2,5 54.0 522 .0 23 9.9 46 .0% 0.7 x 5.2x NA
S hutte rf ly, Inc. 1 2/31 /200 8 S F LY N as da qG S US D U nited S ta tes 9 .34 23 4.9 213 .5 2 8.4 13 .3% 1.4 x 1 5.4 x 514
S K C ommunications Co., Ltd. 1 2/31 /200 7 A0 662 70 K OS E KR W S outh K orea 7, 300 21 7.2 150 .0 1 4.1 9 .4% 3.3 x 3 2.5 x NA
S N AP Inte ra ctive , Inc. 9 /30 /200 8 S T VI OT C B B US D U nited S ta tes 0 .80 8 .6 2.3 0 .2 10 .1% 1.1 x - 5
S N M G lobal H oldings 9 /30 /200 8 S N MN OT C P K US D U nited S ta tes 0 0 .0 2.0 (0 .7) -3 4.8% 0.1 x - 33
S ocia l Media V e nures , Inc. 1 2/31 /200 8 S MV I OT C P K US D U nited S ta tes 1 .20 0 .0 0.1 (0 .1) -6 0.5% 2.8 x 6.8x NA
S ohu. com Inc. 1 2/31 /200 8 S OH U N as da qG S US D C hina 40 1,5 28.4 429 .1 18 0.5 42 .1% - - 3 ,19 7
S ite s earch C orporation 1 /31 /200 9 S T PC OT C B B US D U nited S ta tes 3 .50 2 8.2 NM (1 .1) NM 0.8 x 3.9x 15
S park N etworks , Inc. 1 2/31 /200 8 LOV AME X US D U nited S ta tes 2 4 7.3 57. 3 1 2.3 21 .5% - - NA
S pectrumDN A, Inc. 9 /30 /200 8 S P XA OT C B B US D U nited S ta tes 0 .19 9 .2 0.1 (2 .7) NM 13.7 x 2 7.8 x 7
T encent Holdings L td. 1 2/31 /200 8 70 0 S E HK HKD C hina 58 13,3 41. 9 1 ,04 6.4 51 7.5 49 .5% 0.2 x - 6 ,19 4
T he P arent C ompany 8/2/2008 K ID S .Q OT C P K US D U nited S ta tes 0 .05 1 .3 112 .0 (1 3.5) -1 2.0% - - 347
T he 9 L imited 1 2/31 /200 8 N CT Y N as da qG S US D C hina 12 33 1.7 249 .8 8 4.1 33 .7% - - NA
T he S treet.com, Inc. 1 2/31 /200 8 TSCM N as da qG M US D U nited S ta tes 1 .99 6 0.7 71. 9 7 .0 9 .7% 4.6 x - 310
T otal S port Online A S 3 /31 /200 6 T OS O OT C NO NOK N orwa y 0 0 .2 2.0 (1 .0) -5 0.6% 0.2 x - 16
T ree.C om, Inc. 1 2/31 /200 8 TR EE N as da qG M US D U nited S ta tes 4 .47 4 4.6 228 .6 (2 3.9) -1 0.4% 0.1 x 2 9.5 x 700
U nis erve C ommunications Corp. 1 1/30 /200 8 T S XV : US S T S XV C AD C ana da 0 0 .8 23. 8 0 .1 0 .4% 1.0 x 4.3x NA
U nited Online Inc. 1 2/31 /200 8 U NT D N as da qG S US D U nited S ta tes 4 .35 35 7.3 669 .4 15 3.9 23 .0% 18.1 x - 1 ,46 9
U OMO Media , Inc 1 /31 /200 9 U OMO OT C B B US D C ana da 0 1 1.1 0.6 (0 .5) -7 8.2% 44.0 x - NA
V O IS , Inc. 1 2/31 /200 8 V OIS OT C B B US D U nited S ta tes 0 .12 1 .0 0.0 (1 .3) NM - - 4
W ebze n Inc. 1 2/31 /200 8 W ZE N N as da qG M US D S outh K orea 2 2 0.7 20. 6 (2 .1) -1 0.1% 3.1 x - 330
W iz za rd S of twa re Corpora tion 9 /30 /200 8 W ZE AME X US D U nited S ta tes 0 .43 1 9.4 6.2 (6 .5) NM - - 110
W oozyF ly, Inc. 9 /30 /200 8 W ZY F OT C B B US D U nited S ta tes 0 2 .6 0.0 NM NM - - 14
W orlds .com Inc. 9 /30 /200 8 W DDD OT C B B US D U nited S ta tes 0 .18 9 .4 0.1 NM NM - - 1
W ynds torm C orporation NA W Y ND OT C B B US D U nited S ta tes 0 2 .2 NA NM NM 3.1 x 9.6x NA
XIN G AG 1 2/31 /200 8 O1B C XT R A E UR G ermany 28 .80 19 7.1 45. 9 1 4.7 32 .0% 1.9 x 8.5x NA
Y e dangOnline Corp. 1 2/31 /200 7 A0 527 70 K OS E KR W S outh K orea 8, 400 9 5.1 49. 6 1 1.1 22 .4% 0.5 x - NA
Y nk K orea Inc. 1 2/31 /200 7 A0 237 70 K OS E KR W S outh K orea 3 ,780 .00 6 .7 14. 1 (1 .1) -7 .6% 0.8 x - NA
ZipLocal Inc. 1 2/31 /200 8 T S XV : ZIP T S XV C AD C ana da 0 1 .0 2.6 (2 .8) NM - - NA
H igh 13,3 41. 9 1 ,579 .2 51 7.5 65 .0% 44.0 x 3 2.5 x 6 ,194
Low 0 .0 0.0 -23.9 -9 8.9% - - 1
A vera ge 386.3 138.6 31.3 8.9% 4.7x 8.9x 603
Median 3 0.9 47. 8 0 .2 16 .4% 1.3 x 6.6x 83
Figure 1. Web 2.0 Universe Summary
Source. Capital IQ
C A P I T A L M A R K E T S A C T I V I T Y (M & A A N D F I N A N C I N G )
March activity slows below busy February: In the month of March there were 19 financings announced (total $118.7
million, average $6.1 million) compared to 25 financings announced in February, totalling $185.5 million, or $7.4 million on

3. Page 3
average (Figure 2). The average value for February was above the $6.8 million average for January, with four financings
over $15 million in February (Twitter, Synthasite, Tremor Media, and Offerpal Media) vs. no deals over $15 million in
January. There was only one $15 million deal in March – Vidyo.
Financing Activity Last Three Months
250.0 25.0
200.0 20.0
150.0 15.0
(US$m)
(US$m)
100.0 10.0
50.0 5.0
0.0 0.0
Jan-09 Feb-09 Mar-09
Total Average
Figure 2. Financings, Last Three Months
Source. Company reports
Vidyo largest deal in March: The largest deal in March was the $15 million Series D round for Vidyo (Figure 3). For
additional details, see Figures 30 and 31 (at end of note).

4. (US$m)
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
Twitter
Synthasite
Tremor Media
Aster Data Systems
Source. Company reports
Vidyo
Offerpal Media
Imagini
Yodle
Buzznet
Emergent Game
AdMob
LendingClub
SendMe Inc.
Outbrain
Miva
Figure 3. Capital Market Activity, Last Three Months
VirtuOz
Auditude
Visible Measures
companies raising $60.5 million.
SuperSecret
RatePoint
Nurien
DECA
Go Internet Media
IMVU
NewsGator
One True Media
Tvtrip
GoViral
Play Hard Sports
SundaySky
JibJab
Xobni
InsideView
Kewego
Tongxue
Motionbox
SocialMedia
Fliqz
Oodle
Greystripe
Wamba
OMGPOP
Geni
Gbox
Sportsblogs
AboutUs
TextDigger
OneSpot
Apture
FetchDog
Simulmedia
Virtual Fairground
Mixpo
Tynt
E-Global Sports Network
AnySource Media
Pixazza
Financing Summary - Last Three Months
7 Billion People
FamilyLink.com
Tripwolf
mEgo
WhistleBox
Mendeley
Sports Composite DE
Outright
Hunch
Tvinci
Filtrbox
MMO Life
AdultSpace
Cake Financial
Myngle
Hubdub
Snooth
CoveritLive
33Across
fav.or.it
Three Melons
TweetDeck
BackType
Identi.ca
Meez
Pulse Entertainment
Jan-09
Mar-09
Feb-09
Page 4
16 companies raising over $120 million (Figure 4). Social networking companies have the next highest totals, with 11
Video continues to be the most active sector: Activity over the last three months was busiest in the video sector, with

5. Page 5
Capital Market Activity by Sector - Last Three Months
140.0
120.0
100.0
80.0
(US$m)
121.1
60.0
40.0
60.5
42.9 42.3
20.0 35.8
26.5 25.0 22.5 20.9 19.5 15.6 15.0 12.4 12.0 12.0 11.5 11.4 10.0 6.2 5.5 4.3 4.1 3.2 3.1 2.0 1.3
0.0
Comment/Reputation
Gaming
Micromedia
Visual Commerce
Wiki
Travel
RSS
Microblog
Media
Mobile
Publishing
Online Learning
Financial Services
Infrastructure
Lending
Blog
Mobile Ad
Search
Social Networks
Virtual Goods
Video
Virtual World
Aggregation
Crowdsourced
Ad Network
Analytics
Content
# companies
16 11 8 5 3 4 2 4 2 3 2 1 3 1 1 2 1 1 3 1 1 1 2 1 1 1
Figure 4. Capital Market Activity, by Sector, Last Three Months
Source. Company reports
Average round size decreases: On a trailing 12-month basis, total financing dollars fell as of March 2009, with average
round sizes decreasing slightly. (Figure 5).
LTM Financing
4,000.0 18.0
16.0
3,500.0
14.0
3,000.0
12.0
2,500.0
10.0
(US$m)
(US$m)
2,000.0
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
Mar-09
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 5. Financings, Last 12 Months
Source. Company reports

6. Page 6
Cumulative total nears $5.8 billion: Overall, on a cumulative basis, W eb 2.0 financings have totalled nearly $5.8 billion,
with the majority of the financing coming in late 2007 and the first three quarters of 2008 (Figure 6).Financing for the first
quarter of 2009 passed that raised in the fourth quarter of 2008 – reversing the downtrend since the second quarter last
year. However, for the period ended Q1-C2009, total capital raised was below Q1-C2008 level (at $748.2 million).
Web 2.0 Financing (cumulative)
1,400.0 7,000.0
1,314.8
1,200.0 6,000.0
963.4
1,000.0 5,000.0
800.0 4,000.0
748.2
(US$m)
(US$m)
600.0 3,000.0
528.9 521.0
400.0 2,000.0
338.5
330.1
151.7 159.3
200.0 1,000.0
126.4 135.6 129.5
87.2 84.0
37.5 33.5 18.2 41.9 57.8
38.8 20.1
0.0 0.0
Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1
2004 2005 2006 2007 2008 2009
Figure 6. Financing, Cumulative
Source. Company reports
U.S. remains dominant: U.S. companies continue to dominate capital market activity – with almost 67.5% of
financings/M&A involving U.S. companies (based on dollars) (Figure 7). Based on number of transactions, the U.S. leads
with 73.1% of deals, while Canada is third in number of financings at 4.7% (Figure 8).
Financing/M&A by Country - LTM (#)
Financing/M&A by Country - LTM ($)
China
Canada
UK
Israel
16.0%
4.7%
5.6%
3.4%
Russia France
4.1%
2.6%
UK
Israel
2.4%
1.9%
ROW
France
10.7%
1.6%
Denmark
1.6%
ROW
5.0%
USA
73.1%
USA
67.5%

7. Page 7
Figures 7 & 8. 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 9). Series B rounds are 29.2% of the total, with later-stage (Series D, E and
PIPE) deals accounting for just 9.2%.
Financing by Type - LTM
Series C
15.2%
Series B
29.2%
Series D
4.4%
Angel/Seed
11.2%
Debt financing
Series A 2.8%
35.2%
PIPE
2.0%
Figure 9 Financing, by Type (LTM, #)
Source. Company reports
Equity financings smaller over last 12 months: In the last 12 months, the average size of Series A, B, C and D rounds
have all been lower than the overall average (Figure 10).

8. Page 8
Average financing round size
40.0
36.1
35.0
33.5
31.6
30.0
27.4
25.0
22.7
(US$m)
20.0
17.5
15.0
11.4 11.7 11.3 11.3
10.0
7.9
7.3
6.3
5.4
5.0
3.3
2.4
0.0
Angel/Seed Debt financing PIPE Series A Series B Series C Series D Series E
LTM Average Size Overall Average
Figure 10. Average Size per Round
Source. Company reports
C A P I T A L M A R K E T S A C T I V I T Y (P R I C E P E R F O R M A N C E )
Price Performance: Our W eb 2.0 index (market-cap weighted) underperformed the NASDAQ composite index from mid
2008 until recently when it has moved sharply higher than the NASDAQ index (Figure 11).