China Internet: Opportunities for 10x Return in the Next 12-24 Months

1. China Internet:
Opportunities For 10x Return

2. Was Youku Worth
US$7 Billion?
2

3. GSR Ventures:
Early Stage VC, Long Term
Fundamental Investor
F ndamental In estor
3

4. Most Valuable Internet Companies
December 31, 2005 vs. December 31, 2010
Market Market
Rank Company
C Rank Company
C
Capitalization Capitalization
1 Google $ 122.50 1 Google $ 191.50
2 eBay $ 60.24 2 Amazon $ 82.02
3 Yahoo! Japan $ 60.09 3 Tencent $ 40.55
4 Yahoo! $ 55.59 4 eBay $ 36.67
5 Amazon $ 19.54 5 Baidu $ 34.59
6 Rakuten $ 16.51 6 Yahoo! $ 21.85
7 Apollo (UOP) $ 10.67 7 Yahoo! Japan $ 20.35
8 IAC $ 9 04
9.04 8 Priceline $ 19 85
19.85
9 E*Trade $ 8.55 9 Salesforce $ 17.38
10 Expedia $ 8.22 10 Activision Blizzard $ 15.16
In US$ Billion, excluding some acquired companies
Source: Bloomberg 4

5. Global Leaders Emerging From China
Market Capitalization of Selected Internet Companies Worldwide
Source: Bloomberg 5

6. Driven By Internet Users
IPO on Dec 2003
Stock Price: $4.24 12x return 2010/12/31
Stock Price: $40.45
Market Cap: $516M Market Cap: $6B
Total Internet Users Penetration %
(Million)
Source: CNNIC, Bloomberg, WSJ.com 6

7. Driven By Internet Users
IPO on June 2004
Stock Price: $0.53 45x return 2010/12/31
Stock Price: $21.73
Market Cap: $894M Market Cap: $40B
Total Internet Users Penetration %
(Million)
Source: CNNIC, Bloomberg, WSJ.com 7

8. Driven By Internet Users
IPO on August 2005
Stock Price: $12.25 9x return 2010/12/31
Stock Price: $96.53
Market Cap: $4.0B Market Cap: $34B
Total Internet Users Penetration %
(Million)
Source: CNNIC, Bloomberg, WSJ.com 8

9. Is 1% Better Than 7%?
9

10. YoY GMV Growth Total China Market $75B
Taobao
$58B
80% Share
Others
$17B 90% Growth
Total U.S. Market $165B
eBay
$30B
20% Share
Others
$135B 10% Growth
Share of Total eCommerce Market
Source: Alibaba, eBay 10

11. Can OTAs Be Disrupted?
11

12. 12

13. How Many Multi Billion $
Multi-Billion
Opportunities are there in
eCommerce?
13

14. 14

15. Is th
I there another
th
y
eBay/Amazon?
15

16. 16

17. 17

18. Can China Lead Th W ld
C Chi L d The World
g
In Online Advertising?
18

19. 19

20. What About Mobile?
20

21. In The Next 12-24 Months
Online Travel
Apparel Brand
Cross-Border
eCommerce
Group Buying
Online Advertising
21