January 2009 busiest month for financing since April 2008.

1. SOFTWARE & SERVICES 27 JANUARY 2009
DAVID SHORE, CFA, MBA 416.860.6784
WEB 2.O WEEKLY david.shore@researchcapital.com
Arun Thomas (Associate) 416.860.7666
BUSIEST FINANCING MONTH SINCE APRIL 2008
S UMM AR Y
W e have identified 80 public companies for our W eb 2.0 universe. 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 ~$300 million, with
average trailing revenue of $100 million. The companies are also highly profitable, with an average EBITDA margin of
17.5%. On a valuation basis, the overall average is 3.8x trailing revenue and 8.4x trailing EBITDA. Seventeen of the
companies have more than 500 employees.
CA P IT AL M AR K ET A CT I V IT Y
After 18 financings in December totalling $122.1 million (average $6.8 million), the New Year has started strong, with
23 financings already totalling $158.1 million (average $6.9 million). This is the largest number of financings since
April 2008. The largest financing in the last three months was of HuffingtonPost for $25.0 million in November (Figure
2). Eight companies have raised more than $10 million each thus far in January – with Aster Data Systems the largest
at $12 million so far. Microblogging phenomenon Twitter is rumoured to be raising more than $20 million with a
valuation of $250 million.
Financing Transactions by Month
30
25
20
(#)
15
28
27
25
23
10
19
18
17 17
16 16
15
13
11 11
5 10
9 9
7 7 7 7
6 6 6 6 6
5 5 5
4 4 4 4
3 3 3 3
1 1 1 1 1
0
Nov-05
Feb-06
Mar-06
May-06
Nov-06
Feb-07
Mar-07
May-07
Nov-07
Feb-08
Mar-08
May-08
Nov-08
Jul-05
Aug-05
Sep-05
Oct-05
Dec-05
Jan-06
Apr-06
Jun-06
Jul-06
Aug-06
Sep-06
Oct-06
Dec-06
Jan-07
Apr-07
Jun-07
Jul-07
Aug-07
Sep-07
Oct-07
Dec-07
Jan-08
Apr-08
Jun-08
Jul-08
Aug-08
Sep-08
Oct-08
Dec-08
Jan-09
IN DU ST R Y N E W S
This section discusses corporate activity such as partnerships, new product launches, and financial results.
V AL U AT I O N
This section provides an overview of valuation metrics for the 80 public W eb 2.0 companies we have identified thus
far. W e 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 b y Anal ysts that are emplo yed b y Research Capital Corporation, a Canadian Investment Dealer.
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
80 public Web 2.0 companies identified: W e have identified 80 public companies for our W eb 2.0 universe. 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 ~$300 million, with average trailing revenue of $100 million. The
companies are also highly profitable with an average EBITDA margin of 17.5%. On a valuation basis, the overall average
is 3.8x trailing revenue and 8.4x trailing EBITDA. Seventeen of the companies have more than 500 employees.
C omparable C ompany Analys is > Web 2.0
S ummary
US D L TM
Trading C urrent US D Market Total US D L TM Total TE V /L TM TEV /L TM
C ompany Name L TM as of Ticker E xc hange C urrency HQ P rice Cap ($m) R ev ($m) EB ITDA ($m) E B ITDA % R evenue EB ITDA Employees Website
Acce lerize N ew Media, Inc. 9/30 /2 00 8 AC LZ OTCB B U SD United S tates 0 .3 5 9. 4 3. 2 (4.7 ) NM 4. 3x - 20 www. acce lerizene wmedia. com
Actoz S oft C o. , Ltd. 9/30 /2 00 8 A0 52 790 K OSE KRW S outh K orea 10 ,6 00 .0 0 67 . 2 52 . 6 9 .6 18. 3% 0. 8x 4. 4x NA www. actoz.com
AQ Interactive, Inc. 9/30 /2 00 8 383 8 TSE J PY J apa n 29 ,8 00 .0 0 18 . 1 61 . 7 4 .9 8 .0 % - - NA www. aqi.co.jp
As s ociated Me dia Holdings Inc. 6/30 /2 00 7 A S MH OTCP K U SD United S tates 0 .0 1 0. 2 0. 1 (2.3 ) NM 10 .2 x - 3 www. ma cgregor ene rgy. com
B oomJ I nc 9/30 /2 00 8 B O MJ OTCB B U SD United S tates 0 .7 5 30 . 7 1. 1 (7.7 ) NM 31 .1 x - 25 www. boomj. com
B r ight T hi ngs plc 9/30 /2 00 8 A IM: B GT AIM GBP United K ingdom 0 .0 1 2. 3 0. 2 (1.6 ) NM 9. 8x - 9 www. brightthings . com
B r oadW ebA s ia Inc. 9/30 /2 00 8 B W BA OTCP K U SD United S tates 1 .0 1 85 . 7 0. 0 (4.6 ) NM - - 46 www. broadweba s ia. com
C DC C orp. 9/30 /2 00 8 C HIN.A Na s daqGS U SD H ong Kong 0 .8 6 92 . 8 428 .1 18. 8 4 .4 % 0. 3x 7. 9x 3 , 125 www. cdccorpora tion.net
C hina G ateway C orpora tion 9/30 /2 00 8 CG WY OTCB B U SD United S tates 0 .0 0 0. 0 6. 7 (6.6 ) -98 . 9% 0. 0x - 37 -
C hines e G amer International 9/30 /2 00 8 G T S M: 30 83 GTSM T WD T a iwan 90 .3 0 2 27.9 38 . 2 18. 0 47. 1% 4. 5x 9. 5x NA www. chines e gamer. net
C ornerW orld C orporation 10 /31/2008 CWRL OTCB B U SD United S tates 0 .4 1 19 . 3 0. 6 3 .1 50 6. 8% 33 .7 x 6. 7x NA www. cornerworld. com
DAD A S pA 9/30 /2 00 8 C M:DA CM E UR Ita ly 6 .4 3 1 37.1 222 .9 35. 6 16. 0% 0. 8x 5. 1x 574 da da .dada . net
Digi ta lF X Inte rnational, Inc. 9/30 /2 00 8 DXN A ME X U SD United S tates 0 .1 0 2. 6 16 . 9 (4.5 ) -26 . 4% 0. 3x - 68 www. digitalfx.com
Digi ta lP os t Inter active, Inc. 9/30 /2 00 8 DG LP OTCB B U SD United S tates 0 .0 2 1. 4 0. 4 (3.3 ) NM 5. 9x - 11 www. digitalpos tinte ractive. com
Digi ta lT own, Inc. 11 /30/2008 DG T W OTCB B U SD United S tates 2 .3 0 62 . 5 NM (2.5 ) NM - - 3 www.e ne tpc.com
Dolphin Digita l Me dia , Inc. NA DP DM OTCB B U SD United S tates 0 .7 0 34 . 1 NA NM NM - - 6 www.dolphindigitalmedia. com
E olith C o. Ltd. 12 /31/2007 A0 41 060 K OSE KRW S outh K orea 5 15 .0 0 17 . 3 17 . 9 (0.0 ) - 0. 3% 1. 0x - NA www. eolith. co. kr
E xtensi ons, Inc. 9/30 /2 00 8 E XT I OTCP K U SD United S tates 0 .1 5 14 . 2 NM NM NM - - 2 www. ext. com
F ina ncia l Me dia Group, Inc. 11 /30/2008 F NGP OTCB B U SD United S tates 0 .0 2 1. 0 6. 8 1 .2 18. 3% 0. 0x 0. 1x 22 www.wa lls t.net
F luid Mus ic C anada , Inc. 9/30 /2 00 8 T S X: F MN TSX C AD United S tates 0 .3 1 13 . 3 4. 2 (8.6 ) NM - - 29 www.fluidmedia networks . com
F rogs ter Inte ractive P icture s A G 6/30 /2 00 8 FR G XT R A E UR G ermany 4 .9 5 15 . 3 5. 3 (3.2 ) -60 . 6% 2. 8x - NA www. frogste r-ip.de/en/inde x.php
Ga mania Digital E nterta inme nt C o. , L td. 9/30 /2 00 8 618 0 GTSM T WD T a iwan 21 .5 5 97 . 2 110 .4 18. 7 16. 9% 0. 6x 3. 8x NA www. ga mania. co. kr
Ga meO n C o L td. 9/30 /2 00 8 381 2 TSE J PY J apa n 123 ,0 00 .0 0 1 37.0 83 . 4 21. 1 25. 4% 0. 9x 3. 4x NA www.gameon.co. jp
Ge oS entric O yj 9/30 /2 00 8 G E O1 V HL S E E UR F inland 0 .0 3 35 . 3 5. 4 ( 12. 4) NM 5. 6x - 92 www.benefon.com
Giant Inte ractive G roup, Inc. 9/30 /2 00 8 GA NY S E U SD C hina 5 .9 6 1 ,4 16 .7 245 .1 15 5. 6 63. 5% - - 1 , 016 www. ga-me. com
GigaMe dia L td. 9/30 /2 00 8 GIGM Na s daqGS U SD T a iwan 6 .6 0 3 56.6 200 .5 48. 0 23. 9% 1. 4x 6. 1x 975 www.giga media. com.tw
GoF is h C or por ation 9/30 /2 00 8 G OF H OTCB B U SD United S tates 0 .1 8 4. 6 6. 3 ( 11. 0) NM 2. 4x - 41 www. gofis h. com
Gr avity C o., Ltd 9/30 /2 00 8 GRVY Nas da qG M U SD S outh K orea 0 .6 4 17 . 8 35 . 2 6 .8 19. 2% - - 636 www.gra vity. co. kr
Gr ee, Inc. NA T S E : 363 2 TSE J PY J apa n 5 ,4 70 .0 0 0. 0 NA NM NM - - NA www.gree. co. jp
GungHo Online E ntertainment, Inc. 9/30 /2 00 8 376 5 OS E J PY J apa n 104 ,5 00 .0 0 1 33.7 114 .3 16. 8 14. 7% 0. 9x 6. 3x NA www. gungho. co. jp/e nglis h/
HanbitS oft, Inc. 9/30 /2 00 8 A0 47 080 K OSE KRW S outh K orea 3 ,0 75 .0 0 48 . 4 49 . 9 ( 12. 8) -25 . 6% 0. 6x - NA www. hanbits oft. co. kr
IA S E ne rgy, Inc. 10 /31/2008 IAS C . A OTCB B U SD C anada 0 .0 2 1. 5 0. 0 (0.9 ) NM - - NA www. ia s ene rgy. com
IdeaE dge, Inc. 9/30 /2 00 8 OT C B B :IDA E OTCB B U SD United S tates 0 .6 5 27 . 5 0. 0 (3.5 ) NM - - NA www. idea edge. com
J umbuck E ntertainment P ty Ltd. 6/30 /2 00 8 AS X: J MB AS X A UD Aus tr alia 0 .3 9 12 . 7 10 . 4 4 .8 46. 0% 0. 8x 1. 7x 72 www. jumbuck. com
J umpT V I nc. 6/30 /2 00 8 T S X :J T V TSX C AD C anada 0 .3 0 27 . 9 11 . 5 (1.8 ) -15 . 3% 2. 9x - NA www. jumptv.com
K a boos e Inc. 9/30 /2 00 8 T S X :K AB TSX C AD C anada 0 .3 8 43 . 6 60 . 8 4 .6 7 .6 % 0. 8x 11 . 0x NA www. kaboos e .com
K ings oft C o. Ltd. 9/30 /2 00 8 388 8 S E HK H KD C hina 2 .6 6 3 68.1 106 .7 36. 0 33. 8% 2. 6x 7. 8x 1 , 660 www. kings oft. com
Lingo Me dia C orpora tion 9/30 /2 00 8 T S X V: LM T S XV C AD C anada 0 .9 8 10 . 3 3. 3 (1.4 ) -42 . 5% 3. 3x - NA www.l ingome dia .com
Live World Inc. 9/30 /2 00 8 LV W D OTCP K U SD United S tates 0 .0 3 0. 9 11 . 7 (1.2 ) -10 . 1% - - 73 www. live world. com
LookS mar t, Ltd. 9/30 /2 00 8 LO OK Nas da qG M U SD United S tates 1 .3 2 22 . 5 69 . 5 (2.6 ) - 3. 7% - - 93 www. looks mar t. com
Magnitude Informa tion S ys tems Inc. 9/30 /2 00 8 MA GY OTCB B U SD United S tates 0 .0 2 8. 8 0. 1 (3.2 ) NM - - 13 www. ma gnitude. com
Mixi, Inc. 9/30 /2 00 8 212 1 TSE J PY J apa n 485 ,0 00 .0 0 8 30.3 125 .9 49. 6 39. 4% 5. 7x 14 . 5x NA www.mixi. co. jp
Moggle , Inc 12 /31/2008 MMOG OTCB B U SD United S tates 2 .0 0 70 . 6 NM (1.1 ) NM - - 3 www. playmoggle . com
National L ampoon Inc. 7/31 /2 00 8 NLN A ME X U SD United S tates 0 .7 3 6. 9 7. 4 (1.6 ) -21 . 1% 1. 6x - 24 www. nationallampoon. com
NE O W IZ G ame s C orpora tion 12 /31/2007 A0 95 660 K OSE KRW S outh K orea 23 ,0 00 .0 0 1 58.7 129 .6 34. 8 26. 9% 1. 2x 4. 3x NA www. neowiz.com/kor/
NetDra gon We bS oft, Inc. 9/30 /2 00 8 7 77 S E HK H KD C hina 2 .6 5 1 80.6 95 . 2 46. 3 48. 6% 0. 0x 0. 0x 1 , 482 www. nd. com. cn
Netea s e. com Inc. 9/30 /2 00 8 NT E S Na s daqGS U SD C hina 17 .7 2 2 ,1 80 .5 422 .4 27 4. 2 64. 9% - - 2 , 413 corp. 16 3. com
NeXplore C or por ation 9/30 /2 00 7 NXP C OTCP K U SD United S tates 0 .5 5 30 . 7 NM (4.9 ) NM - - 19 www.nexplore .com
Ngi G roup Inc. 9/30 /2 00 8 249 7 TSE J PY J apa n 44 ,6 00 .0 0 61 . 6 102 .3 34. 2 33. 5% - - NA www. ne ta ge .co.j p/en/index. html
Northgate T echnologies L imited 9/30 /2 00 8 5 90057 B SE INR I ndia 42 .5 0 30 . 5 137 .3 24. 5 17. 8% 0. 2x 1. 2x 286 www.northgatetech. com
Open T ext C or p. 9/30 /2 00 8 OTEX Na s daqGS U SD C anada 32 .4 1 1 ,6 80 .9 744 .2 18 7. 9 25. 3% 2. 3x 9. 3x 3 , 000 www.ope ntext.com
Openwa ve S ys tems Inc. 9/30 /2 00 8 OPW V Na s daqGS U SD United S tates 0 .6 2 51 . 5 199 .0 ( 22. 8) -11 . 5% - - 618 www. openwa ve. com
P e rfect W orld C o., Ltd. 9/30 /2 00 8 P WR D Na s daqGS U SD C hina 15 .4 5 8 81.4 186 .8 99. 9 53. 5% - - 1 , 401 www. wanmei .com/en/inde x. htm
P hotoC hannel Ne tworks Inc. 9/30 /2 00 8 T S XV : PN T S XV C AD C anada 1 .7 4 47 . 7 14 . 0 (2.5 ) -17 . 7% 3. 4x - NA www. photocha nnel. com
Quepas a C orp. 9/30 /2 00 8 QP S A Nas daqC M U SD United S tates 1 .8 9 24 . 0 0. 1 ( 11. 8) NM - - 63 www.que pas a . com
S handa Intera ctive E ntertainment L td. 9/30 /2 00 8 S NDA Na s daqGS U SD C hina 27 .8 5 1 ,9 32 .3 477 .7 22 8. 2 47. 8% - - 2 , 564 www. snda .com
S hutterfly, Inc. 9/30 /2 00 8 S F LY Na s daqGS U SD United S tates 6 .0 2 1 50.9 203 .3 25. 7 12. 6% 0. 5x 4. 3x 512 www.s hutterfly.com
S K C ommunications C o. , Ltd. 12 /31/2007 A0 66 270 K OSE KRW S outh K orea 7 ,0 50 .0 0 2 08.4 149 .0 14. 0 9 .4 % 1. 4x 14 . 8x NA -
S NA P I nter active, Inc. 9/30 /2 00 8 S TV I OTCB B U SD United S tates 0 .9 9 10 . 6 2. 3 0 .2 10. 1% 4. 1x 40 . 7x 5 www. s nap-inte ractive .com
S NM G lobal Holdings 9/30 /2 00 8 S NMN OTCP K U SD United S tates 0 .0 0 0. 0 2. 0 (0.7 ) -34 . 8% 1. 1x - 33 www. s nmglobalholdings .com
S park Ne tworks , Inc. 9/30 /2 00 8 LO V A ME X U SD United S tates 2 .4 3 52 . 1 60 . 1 11. 7 19. 5% 0. 8x 4. 1x 176 www. spar k.net
S pectrum DNA, Inc. 9/30 /2 00 8 S P XA OTCB B U SD United S tates 0 .1 0 4. 9 0. 1 (2.7 ) NM - - 7 -
T encent Holdings Ltd. 9/30 /2 00 8 7 00 S E HK H KD C hina 44 .2 5 10, 25 1. 1 903 .3 44 7. 5 49. 5% 12 .2 x 24 . 7x 6 , 039 www. tencent. com. hk /inde x_ e. s html
T he P ar ent C ompany 8 /2/2008 K IDS .Q OTCP K U SD United S tates 0 .0 4 1. 0 112 .0 ( 13. 5) -12 . 0% 0. 2x - 347 www. thepare ntcompany. com
T he 9 Limited 9/30 /2 00 8 NC T Y Na s daqGS U SD C hina 15 .8 1 4 36.5 252 .4 95. 1 37. 7% - - 1 , 361 www. the9 .com
T he S tre et.com, Inc. 9/30 /2 00 8 T SCM Nas da qG M U SD United S tates 2 .9 0 88 . 4 75 . 2 12. 2 16. 2% 0. 1x 0. 9x 349 www. thes tre et. com
T ree . C om, Inc. 9/30 /2 00 8 TRE E Nas da qG M U SD United S tates 4 .3 1 40 . 4 231 .2 ( 39. 6) -17 . 1% 0. 1x - 1 , 000 www. le ndingtre e. com
Unis e rve C ommunications C or p. 8/31 /2 00 8 T S XV :US S T S XV C AD C anada 0 .0 8 1. 6 26 . 5 0 .7 2 .8 % 0. 5x 19 . 5x NA www. unis erve. com
Unite d Online Inc. 9/30 /2 00 8 UNT D Na s daqGS U SD United S tates 6 .0 9 4 99.2 538 .7 13 0. 6 24. 2% 1. 6x 6. 5x 928 www.unitedonline. net
UOMO Media, Inc 10 /31/2008 UO MO OTCB B U SD C anada 0 .0 8 6. 8 0. 5 (0.4 ) -91 . 6% 15 .1 x - NA www. uomolife .com
VO IS , I nc. 9/30 /2 00 8 VO IS OTCB B U SD United S tates 0 .7 5 5. 4 0. 0 (4.0 ) NM - - 4 www.vois . com
W ebzen Inc. 9/30 /2 00 8 W ZE N Nas da qG M U SD S outh K orea 1 .4 3 17 . 0 20 . 3 (6.0 ) -29 . 5% - - 338 www. webzen. co. kr
W izza rd S oftwa re C orporation 9/30 /2 00 8 W ZE A ME X U SD United S tates 0 .7 2 32 . 5 6. 2 (6.5 ) NM 5. 3x - 110 www.wizzar ds oftware .com
W oozyF ly, Inc. 9/30 /2 00 8 W ZY F OTCB B U SD United S tates 0 .1 5 2. 6 0. 0 NM NM - - 14 www. woozyfly. com
W orlds .com Inc. 9/30 /2 00 8 W DDD OTCB B U SD United S tates 0 .1 6 8. 4 0. 1 NM NM - - 1 www. wor lds . com
W ynds torm C orporation NA W YND OTCB B U SD United S tates 0 .5 1 9. 2 NA NM NM - - NA www. wynds torm.com
XING A G 9/30 /2 00 8 O 1B C XT R A E UR G ermany 29 .0 0 1 98.4 41 . 2 16. 0 38. 8% 3. 5x 8. 9x 161 www.xing. com
Y e dangO nli ne C orp. 12 /31/2007 A0 52 770 K OSE KRW S outh K orea 7 ,0 90 .0 0 79 . 7 49 . 3 11. 0 22. 4% 1. 6x 7. 2x NA www. yeda ngonli ne. com/i ndexhome. as p
Y nk K or ea I nc. 12 /31/2007 A0 23 770 K OSE KRW S outh K orea 3 ,9 50 .0 0 7. 0 14 . 0 (1.1 ) - 7. 6% 0. 5x - NA www. ynk. ne t
ZipL ocal I nc. 9/30 /2 00 8 T S X V: ZIP T S XV C AD C anada 0 .0 2 1. 3 2. 9 (3.9 ) NM 0. 7x - NA www. ziplocal. com
High 10, 25 1. 1 90 3. 3 4 47 .5 50 6. 8% 33 .7 x 40 . 7x 6 ,0 39
Low 0. 0 0.0 -39 .6 -98 . 9% 0. 0x 0. 0x 1
Average 298.8 100.3 26.0 17.5% 3.8x 8.4x 602
Figure 1. Web 2.0 Universe Summary
Source. Capital IQ

3. Page 3
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 )
Financing activity continues: After 18 financings in December totalling $122.1 million (average $6.8 million), the New
Year has started strong, with 23 financings already totalling $158.1 million (average $6.9 million). This is the largest
number of financing since April 2008. The largest financing in the last three months was of HuffingtonPost for $25.0
million in November (Figure 2). Eight companies have raised more than $10 million each thus far in January – with Aster
Data Systems the largest at $12 million so far. Microblogging phenomenon Twitter is rumoured to be raising more than
$20 million with a valuation of $250 million. W e will add this to our database once details are confirmed. For additional
details, see Figure 27 (at end of note).
Financings - Last Three Months
30.0
25.0
20.0
Jan-09
(US$m)
15.0 Dec-08
Nov-08
10.0
5.0
0.0
NewsGator
IMVU
InsideView
Motionbox
Gbox
Multiply
Meez
Xobni
Overlay.TV
GoFish
Rockyou
PlaySpan
NetShelter
Go Internet Media
Nurien
Yodle
Taptu
FooMojo
Scribd
One True Media
Social Median
JibJab
Kewego
Superfish
Snapmylife
Tagged
Jackbe
Playdo
DotBlu
Hubdub
Casual Collective
Snooth
Identi.ca
HuffingtonPost
Angie's List
KickApps
Aster Data Systems
RatePoint
Play Hard Sports
ChakPak
Sportsblogs
AboutUs
E-Global Sports
StockTwits
Clickpass
Blue Kai
DECA
Geni
Machinima.com
Tumblr
Pulse Entertainment
Worlds.com Inc.
Figure 2. Financings, Last Three Months
Source. Company reports
January activity doesn’t offset weak 2H/08: However, on a trailing 12-month basis, financings are down for the third
month in the last four, with average round sizes decreasing slightly as of January (Figure 3).

4. Page 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
Jul-05
Sep-05
Nov-05
Jan-06
Mar-06
Jul-06
Sep-06
Nov-06
Jan-07
Mar-07
Jul-07
Sep-07
Nov-07
Jan-08
Mar-08
Jul-08
Sep-08
Nov-08
Jan-09
Total Average
Figure 3. Financings, Last 12 Months
Source. Company reports
Cumulative total $5.2 billion: Overall, on a cumulative basis, W eb 2.0 financings have totalled almost $5.2 billion, with
the majority of the financing coming in late 2007 and the first three quarters of 2008 (Figure 4).
Web 2.0 Financing (cumulative)
1,400.0 6,000.0
1,303.0
1,200.0
5,000.0
1,000.0 941.2
4,000.0
800.0
(US$m)
(US$m)
701.7
3,000.0
600.0
524.9
2,000.0
400.0
311.8
296.0
1,000.0
158.1
200.0 145.7
124.1
101.3 97.0
87.2 69.4
37.5 33.5 18.2 40.0 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 4. Financing, Cumulative
Source. Company reports

5. Page 5
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 5). Canadian companies generated under 1% of
capital market activity based on dollar volume (Figure 5). Based on number of transactions, the U.S. leads with
approximately 74% of deals, while Canada is third in number of financings at 5.2% (Figure 6).
Financing/M&A by Country - LTM ($) Financing/M&A by Country - LTM (#) Canada
5.2%
UK
UK
6.0%
13.4%
Israel
2.8%
China
China
2.4%
7.9%
Russia Canada
ROW
1.7% 0.7%
9.3%
Israel
0.7%
Denmark
0.7%
ROW
2.1%
USA
72.8%
USA
74.2%
Figures 5 & 6. Financing/M&A, by Country (LTM, $, #)
Source. Company reports
More 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 7). Series B rounds are 30.7% of the total, with later-stage (Series D, E and PIPE) deals
accounting for just 7.3%.
Financing by Type - LTM
Series B
30.7% Series C
12.1%
Series D
4.8%
Angel/Seed
9.1%
Debt financing
3.0%
PIPE
Series A 2.2%
38.1%
Figure 7. Financing, by Type (LTM, $)
Source. Company reports
But “D” series are largest equity rounds (by dollar): In the last 12 months, there have been eleven “D” series rounds,
averaging over $25 million per financing (Figure 8). Note that we have excluded the $430 million Series C financing of
Oak Pacific Interactive as it skews the results substantially.

6. Page 6
Average financing round size - LTM
40.0
35.0
30.0
25.0
(US$m)
20.0
38.1
15.0
26.2
10.0
18.9
11.3
5.0 10.0
8.8
6.4
3.4
0.0
Angel/Seed Debt financing PIPE Series A Series B Series C Series D Series E
# rounds
21 7 5 88 71 28 11 1
Figure 8. 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) has closely tracked the performance of the NASDAQ
composite index, although it has outperformed the index since late October 2008 (Figure 9).
Web 2.0 Index Price Performance
140
120
100
80
60
40
20
0
1/28/2008
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
NASDAQ COMP Web 2.0 (Market Cap Weighted)
Figure 9. Web 2.0 Price Performance
Source. Capital IQ

7. Page 7
DigitalTown reverses fortune, BroadWeb Asia leads: After leading last week with a 1-week return of 11.1%,
DigitalTown (DGTW -OTCBB) had the worst performance in the group (for stocks with prices greater than $1) (Figure 10),
falling 23.3% on the week. BroadW eb Asia (BW BA-OTCPK) increased the most, +83.6%.
1 Week P ric e P erformanc e
B roadW ebAs ia Inc. 83.6%
W ebzen Inc. 41. 6%
33.3%
Moggle, Inc
S K C ommunica tions C o., Ltd. 21.6%
NE O W IZ G ames C orpora tion 20.4%
Y edangOnline C orp. 9.1%
P hotoC ha nnel Networks Inc. 7.4%
G iant Interactive G roup, Inc. 6. 2%
G ameOn C o Ltd. 5.9%
T he9 Limited 5.8%
F rogs ter Interactive P ictures AG 4. 2%
Open T ext C orp. 3. 6%
3. 4%
Actoz S oft C o., Ltd.
T encent Holdings Ltd. 3.3%
G ungHo Online E ntertainment, Inc. 2.9%
AQ Interactive, Inc. 2.8%
LookS ma rt, Ltd. 2.3%
1. 0%
Neteas e.com Inc.
C hines e G a mer Internationa l -0.3%
P erfect W orld C o., Ltd. -1. 4%
K ings oft C o. Ltd. -1.5%
United O nline Inc. -1.6%
-2.1%
Quepas a C orp.
S handa Interactive E ntertainment Ltd. -2.5%
HanbitS oft, Inc. -2.7%
S park Networks , Inc. -2.8%
G amania Digital E nterta inment C o., Ltd. -2.9%
G iga Media Ltd. -3. 2%
T heS treet.com, Inc. -4. 0%
G ree, Inc. -4.0%
E olith C o. Ltd. -4.6%
XING AG -4.7%
DADA S pA -5.3%
Northga te T echnologies Limited -6. 3%
T ree. C om, Inc. -6.3%
-6.4%
NetDragon W ebS oft, Inc.
Y nk K orea Inc. -8.1%
Ngi G roup Inc. -14.4%
Mixi, Inc. -14. 9%
S hutterfly, Inc. -15. 2%
-23. 3%
DigitalT own, Inc.
-40.0% -20.0% 0.0% 20.0% 40. 0% 60. 0% 80. 0% 100. 0%
Figure 10. 1-Week Price Performance
Source. Capital IQ
INDUSTRY NEWS (PARTNERSHIPS, FINANCIAL RESULTS, NEW PRODUCTS)
Tencent Holdings Ltd. Launches English Version of QQ: Tencent Holdings Ltd. launched the English-language version
of its popular instant messaging (IM) tool QQ. It is the right time to launch the new program considering the increasing
demand for communication between Chinese Internet users and their overseas counterparts. The company has recently
developed an international version of the IM program. The English language users can register and download software
through the new service.
Perfect World Co. Ltd. Partners with KTHitel Co. Ltd. to License 'Chi Bi' in Korea: Perfect W orld Co. Ltd. announced
that it recently signed an agreement with KTHitel Co. Ltd. to license 'Chi Bi,' the Company's 3D massively multiplayer
online role playing game (MMORPG) based on the Three Kingdoms period in Chinese history, to the Korean market. 'Chi
Bi' was launched domestically in January 2008 and is Perfect W orld's first historical theme-based 3D MMORPG. The
game's unique features, such as the '18 Legendary W eapons System,' the 'Battle of the Three Kingdoms System,' and
cutting edge graphic design, have proven to be quite popular with players. 'Chi Bi' has previously been licensed in a
number of countries and regions including Taiwan, Malaysia and Japan.
Spark Files Shelf: Spark Networks, Inc. has filed a Shelf Registration in the amount of $2.67 million.
DADA Acquired: RCS MediaGroup SpA (CM: RCS) acquired remaining 50.5% stake in DADA SpA (CM: DA) on January
21, 2009. The transaction was approved by Italy’s antitrust authorities. RCS MediaGroup S.p.A (CM: RCS) completed the
acquisition of remaining 50.5% stake in DADA SpA (CM: DA) on January 21, 2009.
The9 Limited Declares Special Cash Dividend Payable On or Around February 9, 2009: The9 Limited announced that
its Board of Directors has declared a special cash dividend in an aggregate amount of $29,410,000, or approximately of
$1.11 per share on its ordinary shares, par value $0.01 per share, based on the number of shares outstanding on the date
hereof. The actual dividend per share will be based on the number of shares outstanding on the record date. The special
cash dividend, net of taxes withheld pursuant to applicable law, is payable on or around February 9, 2009 to shareholders
of record as of the close of business on February 2, 2009, U.S. Eastern Standard Time.
GoFish Corporation to Amend and Restate Articles of Incorporation: GoFish Corporation announced that on January
20, 2009, pursuant to the approval of the Board and the written consent of at least a majority of the outstanding shares of
the company's capital stock, the company filed a Certificate of Amendment to the company's Amended and Restated
Articles of Incorporation with the Secretary of State of Nevada to change the name of the company from 'GoFish
Corporation' to 'Betawave Corporation'. The Certificate of Amendment became effective upon filing. The company intends
on notifying FINRA of the name change and expects to receive a new ticker symbol for the company's common stock,

8. Page 8
which is currently quoted on FINRA's OTC Bulletin Board. In addition, the company intends on contacting the CUSIP
Service Bureau and expects to receive a new CUSIP number for the company's common stock.
Playbo y Mexico and Quepasa Corp. Announce Strategic Partnership: Quepasa Corp. and Playboy Mexico announced
a strategic partnership to launch a model search to find the next Playboy Mexico Playmate of the Year for 2009. The
model search will be largely judged by Quepasa members who will vote for which models advance to the finalist's pool. As
part of the partnership Quepasa, one of the fastest growing online social communities for young Latinos, will develop a
fully interactive online community for Playboy Mexico in which Quepasa members can enter to become a Playboy
Playmate or vote for which models make it to the finals. The community, which will launch in February, will feature a
vibrant, interactive viral community, including model profiles, pictures, and user-generated content.
Open Text Corp. Announces the Release of Open Text Recruiting Management for Microsoft SharePoint: Open Text
Corp. announced the release of Open Text Recruiting Management for Microsoft SharePoint, a native Microsoft Office
SharePoint Server 2007 application for collaborative hiring case management that helps to simplify the recruiting process
within organizations. This release is part of a continuing Open Text strategy to build applications that extend Office
SharePoint Server 2007, based on the Open Text ECM Suite. Features for Open Text Recruiting Management for
Microsoft SharePoint include: Integration with Oracle's PeopleSoft Enterprise: Open Text Recruiting Management for
Microsoft SharePoint automatically imports relevant HR data from PeopleSoft; Full Auditing Capabilities and Records
Retention: Built upon the compliance strengths of long term retention and archival of Open Text Enterprise Library
Services, the application shares central records management practices and maintains compliance with corporate and
legislative regulations; Automated W orkflow and Approval: Open Text Recruiting Management for Microsoft SharePoint
leverages request forms, automated tasks and notifications to simplify the hiring process; and Dedicated Collaborative
W ork Area: Information related to the job is available within the Office SharePoint Server 2007 site. Users work with
everyone involved in the hiring process and take advantage of the collaborative features of Office SharePoint Server
2007.
Shanda Signs Agreement w ith Zhejiang Satellite Television: Shanda Interactive Entertainment Ltd. announced that it
would launch an interactive music program through collaboration with Zhejiang Satellite Television. The program is wholly
based on its year-consuming music community game and interactive music platform, 'Juxing', which integrates such
functions as singing, making friends and competition. The move marks the first trial promotion of online game via
Televisions in China and indicates the formal operation of 'Juxing' under way, noted market watchers.
Snap Interactive Inc. Provides Revenue Guidance for the Fourth Quarter and Year Ending December 31, 2008:
SNAP Interactive Inc. provides revenue guidance for the fourth quarter and year ending December 31, 2008. The company
anticipates revenue in excess of $1.08 million for the quarter ended December 31, 2008. The company anticipates total
revenue in excess of $3.0 million for the year ended December 31, 2008.
The9 to Launch ‘Wrath of the Lich King’ in China: The9 Limited is set to launch W rath of the Lich King, the second
expansion set for the massively multiplayer online role-playing game (MMORPG) W orld of W arcraft, in China soon, but
they have not determined the date. The expansion set has made a hit in some western countries such as the U.S. Sales of
W rath of the Lich King gained the top spot during the Christmas.
Financial Media Seeks Financing: Financial Media Group, Inc. plans to raise funds. The firm said in a SEC filing that it
anticipates that the firm will need an additional $2,000,000 to fund its anticipated operations for the next 12 months,
depending on revenues from operations. The firm added that it presently does not have any available credit, bank
financing or other external sources of liquidity. It also said that it will need to obtain additional capital in order to expand
operations and become profitable. In order to obtain capital, the firm may need to sell additional shares of its common
stock or borrow funds from private lenders.
NetDragon WebSoft Inc. Launches New Expansion Pack for Eudemons Online, Divine Path: NetDragon W ebSoft Inc.
has launched a new expansion pack--'Divine Path'--for its major online game Eudemons Online on 16 January 2009.
'Divine Path' is the fifth expansion pack of the game following the previous expansion pack 'The W ings of the Ruler', which
launched in April 2008. 'Divine Path' combines mythical elements of Greece and launches a brand-new map 'Land of the
God', which brings players a new era of 'god incarnation'. The latest expansion pack with enriched game features such as
new challenges, maps, skills and equipment will enable NetDragon to continue to offer a fantastic entertainment
experience for the Company's players.
GoFish Name Change: GoFish Corporation has changed its name to Betawave Corporation.
Perfect World to Launch Closed Beta Testing for 'Pocketpet Journey West' in North America: Perfect W orld Co. Ltd.
announced that it will begin closed beta testing for 'Pocketpet Journey West,' a 3D MMORPG, in North America on
February 10, 2009. The game will be released as 'Ether Saga Online' through its wholly owned U.S. subsidiary, Perfect
W orld Entertainment Inc. Based on the Chinese literary classic, Journey to the W est, 'Ether Saga Online' features youthful
anime graphics, as well as exciting in-game systems, and has been localized to cater to North American game players.
Since the game's launch in China in October 2008, it has been well-received by domestic online game players.

9. Page 9
VALUATION
Five companies top US$1 billion market cap: Just five (same as last week) companies in our Web 2.0 universe top
US$1 billion in market capitalization (Figure 11). In addition, 60 of the 80 (up from 55 last week) companies have market
caps under US$100 million, with 24 (21 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 H oldings Ltd.
Netea s e. com Inc. 2180.5
S handa Interactive E nterta inment 1932. 3
O pen T ext C orp. 1680. 9
G iant Interactive G roup, Inc. 1416.7
P erfect W orld C o., Ltd. 881. 4
Mixi, Inc. 830.3
U nited O nline Inc. 499. 2
T he9 Limited 436. 5
K ings oft C o. Ltd. 368.1
G igaMedia Ltd. 356. 6
C hines e G amer Internationa l 227. 9
S K C ommunications C o., Ltd. 208. 4
X ING AG 198. 4
N etDra gon W ebS oft, Inc. 180. 6
N E O W IZ G ames C orporation 158.7
S hutterfly, Inc. 150.9
DA DA S pA 137.1
G a meO n C o Ltd. 137.0
G ungH o O nline E ntertainment, Inc. 133.7
G amania Digital E nterta inment 97. 2
C DC C orp. 92.8
T heS treet.com, Inc. 88. 4
B roa dW ebA s ia Inc. 85.7
Y eda ngO nline C orp. 79.7
Moggle, Inc 70. 6
A ctoz S oft C o., Ltd. 67. 2
DigitalT own, Inc. 62. 5
Ngi G roup Inc. 61. 6
S park Networks , Inc. 52.1
O penwave S ys tems Inc. 51. 5
Ha nbitS oft, Inc. 48.4
P hotoC hannel Networks Inc. 47. 7
K a boos e Inc. 43.6
T ree. C om, Inc. 40.4
G eoS entric O yj 35.3
Dolphin Digital Media , Inc. 34.1
W izzard S oftwa re C orporation 32. 5
B oomJ Inc 30.7
N eXplore C orporation 30.7
Northgate T echnologies Limited 30.5
J umpT V Inc. 27. 9
IdeaE dge, Inc. 27. 5
Q uepas a C orp. 24.0
LookS mart, Ltd. 22. 5
C ornerW orld C orporation 19.3
AQ Interactive, Inc. 18.1
G ravity C o. , Ltd 17. 8
E olith C o. Ltd. 17. 3
W ebzen Inc. 17.0
F rogs ter Interactive P ictures AG 15. 3
E xtens ions , Inc. 14. 2
F luid Mus ic C a nada , Inc. 13.3
J umbuck E ntertainment P ty Ltd. 12.7
S NA P Interactive, Inc. 10. 6
Lingo Media C orporation 10. 3
Accelerize New Media , Inc. 9.4
W ynds torm C orporation 9.2
Ma gnitude Informa tion S ys tems 8. 8
W orlds . com Inc. 8.4
Y nk K orea Inc. 7.0
Nationa l La mpoon Inc. 6.9
UO MO Media, Inc 6.8
V O IS , Inc. 5. 4
S pectrumDNA , Inc. 4.9
G oF is h C orporation 4.6
W oozyF ly, Inc. 2.6
DigitalF X Interna tional, Inc. 2.6
B right T hings plc 2. 3
Unis erve C ommunications C orp. 1.6
IAS E nergy, Inc. 1.5
Digita lP os t Interactive, Inc. 1.4
ZipLoca l Inc. 1.3
F inancial Media G roup, Inc. 1.0
T he P arent C ompany 1.0
LiveW orld Inc. 0.9
A s s ociated Media Holdings Inc. 0.2
C hina G ateway C orporation 0.0
S N M G lobal Holdings 0.0
G ree, Inc. 0.0
0 500 1, 000 1,500 2,000 2,500 3,000
Figure 11. Market Cap Ranking
Source. Capital IQ
TEV/Revenue (LTM) averages 3.8x: The overall average TEV/Revenue (LTM) multiple for our group is 3.8x (Figure 12).
However, this is skewed by CornerW orld (CW RL-OTCBB) at 33.7x and BoomJ at 31.1x (BOMJ-OTCBB). Excluding those
companies, the average is 2.6x. Note that we exclude multiples greater than 50x. Twenty-seven of the companies have
multiples under 1.5x.