1. SOFTWARE & SERVICES 3 NOVEMBER 2009
DAVID SHORE, CFA, MBA 416.860.6784
WEB 2.O WEEKLY david.shore@researchcapital.com
Damian Wojcichowsky, CFA (Associate), 416.860.7652
YOUR GPS SYSTEM IS OBSOLETE ALREADY…
GO OGL E P RO V ID E S F R E E V OI C E- B A S ED T UR N- B Y- T UR N D RI VI NG D IR E CT IO NS
Google Maps and Google Streetview are among the most popular applications in the Google stable. Layered on to
these, Google has recently announced, will be free audio turn-by-turn navigation directions included with every
Android mobile OS shipped. This free innovation is made possible courtesy of the army of automobiles prowling the
world’s city streets building Google’s proprietary mapping database (at considerable cost to Google, no doubt).
DO OM F O R T O MT O M, GA RMI N
Not unexpectedly, the share prices of the proprietary (and non-free product vending) GPS device makers, TomTom
and Garmin, plummeted on the news of Google’s latest application. Observe the latest 10-day stock charts for the two
GPS device makers.
AN D ROI D A T H R EA T T O P RO P RI ET AR Y P L AT F O R MS , SU C H A S A PP L E A N D BL A C KB E R RY
This Google development threatens the two leading smartphone players, Apple and BlackBerry. Since both of these
companies must purchase their own mapping data to offer a similar service, they are faced with the choice of taking a
hit to margins or shipping their smartphones without free navigation.
AN D ROI D ST E A DIL Y S IN KI NG IT S HO O KS I NT O T H E M OB IL E M A RK ET
The possibilities for disruption in the mobile device space on the part of Google and its ad-based revenue model are
beginning to come to light with every new, free application press release. Though Android-equipped phones have not
made the same kind of splash as the iPhone nor have they the user-base loyalty of the BlackBerry, we expect that
developments along the lines of Google’s latest will continue to bring the Android phone segment into the forefront.
CAPITAL MARKETS ACTIVITY SLOWS DOWN AS OCTOBER WINDS UP
October finishes limping: Total transaction value in the W eb 2.0 universe for October is $170.8 (vs. $151.2 million
at time of last publication). The month ended with 26 financings in the sector averaging $6.6 million each (vs. an
average of $7.6 million last week). In comparison, total capital raised in September was $232.8 million, averaging
$9.0 million (26 deals); August was $221.6 million, averaging $7.6 million (29 deals); and July (35 deals) $191.4
million, averaging $5.5 million.
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
Eighty-nine public Web 2.0 companies: Our W eb 2.0 universe contains 89 companies, with a combined market cap of
approximately $69 billion (Figure 1). The median market cap for the group is $41.8 million, with average trailing revenue
of $162 million (median $57 million). The companies are also generally profitable with a median EBITDA margin of 12.6%.
On a valuation basis, the overall average is 5.2x trailing revenue (median 1.7x) and 10.2x trailing EBITDA (median 7.6x).
Twenty of the companies have more than 500 employees.
C omparable C ompany Analys is > Web 2.0
Trading C urrent US D Market US D L TM Total US D L TM Total E B ITDA TE V/L TM TE V/L TM
C ompany Name L TM as of Ticker E xc hange C urrency HQ P rice C ap ($m) R ev ($m) E B ITDA ($m) % R evenue E B ITDA E mployees
Accelerize New Media , Inc. 6/30/2009 AC LZ OT C B B US D United S ta tes 0. 55 15. 4 4. 4 (3.7) -83. 3% 4. 6x - 11
Actoz S oft C o. , Ltd. 6/30/2009 A052790 K OS E KR W S outh K orea 14,500 105. 2 108.7 25. 9 23. 8% 0. 7x 2. 8x NA
AQ Interactive, Inc. 6/30/2009 3838 TS E JPY J a pan 46,800 28. 5 66. 1 (2.0) -2.9% 0. 1x - NA
As s ociated Media Holdings Inc. 6/30/2007 AS MH OT C P K US D United S ta tes 0. 01 0.4 0. 1 (2.3) NM 12.6x - 3
B igs tring C orp. 6/30/2009 BS GC OT C B B US D United S ta tes 0. 03 2.0 0. 1 (1.5) NM 49.2x - 4
B eta wave C orporation 6/30/2009 B W AV OT C B B US D United S ta tes 0. 03 0.9 9. 4 (12. 6) NM - - 51
B eyond C ommerce, Inc. 6/30/2009 B Y OC OT C B B US D United S ta tes 0. 08 4.2 11. 7 (12. 8) NM 0. 9x - 101
B right T hings plc 3/31/2009 AIM: B G T AIM GBP United K ingdom 0. 01 5.9 0. 0 (2.7) NM - - NA
B roa dW ebAs ia Inc. 9/30/2008 BWBA OT C P K US D United S ta tes 0. 03 2.5 0. 0 (4.6) NM - - 46
C DC C orp. 6/30/2009 C HIN. A Na s daqG S US D Hong K ong 2. 35 249. 1 361.6 25. 1 6.9% 0. 7x 9. 7x 2, 227
C hangyou. com L imited 9/30/2009 C Y OU Na s daqG S US D C hina 30. 35 1,669. 3 255.3 157.4 61. 7% 5. 3x 8. 6x 628
C hina G a teway C orporation 9/30/2008 CGWY OT C P K US D United S ta tes 0. 00 0.0 6. 7 (6.6) -98. 9% 0. 0x - 37
C hines e G amer Interna tiona l 6/30/2009 G T S M: 3083 GTS M TWD T aiwa n 426 1,104. 8 61. 6 34. 7 56. 3% 16.8x 29. 8x NA
C LIC K E R Inc. 5/31/2009 C LK Z OT C B B US D United S ta tes 0. 01 0.7 2. 5 (1.2) -45. 8% 0. 3x - 22
C ornerW orld C orpora tion 7/31/2009 CWR L OT C B B US D United S ta tes 0. 06 5.7 6. 8 NM NM 2. 4x - 16
C yberplex Inc. 6/30/2009 T S X :C X TS X C AD C anada 1 83. 6 89. 8 9.7 10. 8% 0. 7x 6. 6x NA
DADA S pA 6/30/2009 C M: DA CM E UR Italy 7. 07 167. 7 241.9 31. 8 13. 1% 0. 9x 6. 8x NA
DXN Holdings B hd 5/31/2009 DX N K LS E MY R Ma la ys ia 0. 64 41. 6 77. 1 11. 1 14. 4% 0. 7x 5. 1x NA
Dibz International, Inc. NA DIB Z OT C P K US D United S ta tes 0. 00 0.0 NA NM NM - - NA
DigitalP os t Interactive, Inc. 6/30/2009 DG LP OT C B B US D United S ta tes 0. 05 3.9 1. 0 (1.4) NM 5. 9x - 7
DigitalT own, Inc. 8/31/2009 DG T W OT C B B US D United S ta tes 1. 01 27. 6 0. 0 (1.8) NM - - 3
Dolphin Digital Media , Inc. 6/30/2009 DP DM OT C B B US D United S ta tes 0. 40 21. 5 0. 6 (3.4) NM 38.6x - NA
E olith C o. Ltd. 12/31/2008 A041060 K OS E KR W S outh K orea 530 32. 2 15. 4 (3.6) -23. 6% 2. 2x - NA
E xtens ions , Inc. 6/30/2009 E XT I OT C P K US D United S ta tes 0. 40 17. 8 NM NM NM - - 2
F luid Mus ic C a nada , Inc. 6/30/2009 T S X :F MN TS X C AD United S ta tes 1. 79 86. 4 5. 3 (5.1) -95. 2% 15.3x - NA
F rogs ter Interactive P ictures AG 6/30/2009 FRG XT R A E UR G ermany 19. 05 71. 5 9. 6 (4.5) -47. 0% 7. 3x - NA
G ama nia Digita l E ntertainment C o., Ltd. 6/30/2009 6180 GTS M TWD T aiwa n 44. 80 209. 8 140.6 25. 1 17. 9% 1. 3x 7. 4x NA
G ameOn C o Ltd. 6/30/2009 3812 TS E JPY J a pan 85,200 92. 1 81. 9 20. 1 24. 5% 0. 2x 0. 9x NA
G eoS entric O yj 6/30/2009 G E O 1V HL S E E UR F inland 0. 05 65. 8 5. 4 (17. 4) NM 12.1x - 115
G iant Interactive G roup, Inc. 6/30/2009 GA NY S E US D C hina 7 1,644. 0 198.5 124.1 62. 5% - - 1, 570
G iga Media Ltd. 3/31/2009 G IG M Na s daqG S US D T aiwa n 3. 98 217. 0 183.6 NM NM 0. 8x - 751
G ravity C o., Ltd 6/30/2009 GR VY Na s daqG M US D S outh K orea 1. 57 43. 6 49. 1 16. 6 33. 9% - - 469
G ree, Inc. 6/30/2009 T S E : 3632 TS E JPY J a pan 5,090 2,548. 3 156.0 93. 7 60. 1% 15.6x 25. 9x NA
G ungHo O nline E ntertainment, Inc. 6/30/2009 3765 OS E JPY J a pan 211,500 271. 0 119.5 26. 6 22. 2% 2. 0x 8. 9x NA
HanbitS oft, Inc. 6/30/2009 A047080 K OS E KR W S outh K orea 3,420 62. 8 60. 7 1.4 2.3% 0. 8x 34. 8x NA
IAC /InterActiveC orp. 9/30/2009 IAC I Na s daqG S US D United S ta tes 19. 02 2,510. 1 1, 359. 6 82. 4 6.1% 0. 6x 10. 5x 3, 200
IAS E nergy, Inc. 4/30/2009 IAS A. E OT C B B US D C anada 0. 12 8.5 0. 0 (0.6) NM - - NA
is eemedia Inc. 3/31/2009 IE E T S XV C AD C anada 0. 15 6.8 1. 6 (5.0) NM 3. 7x - NA
J umbuck E nterta inment Limited 6/30/2009 AS X :J MB AS X AUD Aus tralia 0. 34 14. 5 16. 7 7.2 42. 8% 0. 5x 1. 1x 79
K AB Dis tribution Inc. 6/30/2009 T S X :K AB TS X C AD C anada 0 0.6 67. 9 4.0 5.8% - - NA
K ings oft C o. Ltd. 6/30/2009 3888 S E HK HK D C hina 8 1,058. 1 139.1 61. 4 44. 2% 7. 6x 17. 2x 2, 463
Lingo Media C orporation 6/30/2009 T S X V :LM T S XV C AD C anada 0. 95 10. 9 1. 2 (1.9) NM 8. 3x - NA
LiveW orld Inc. 6/30/2009 LVW D OT C P K US D United S ta tes 0. 04 1.2 10. 6 (0.1) -1.2% 0. 0x - NA
LookS mart, Ltd. 6/30/2009 L OO K Na s daqG M US D United S ta tes 1. 29 22. 1 56. 8 (4.4) -7.8% - - 90
Magnitude Information S ys tems Inc. 6/30/2009 MAG Y OT C B B US D United S ta tes 0. 01 5.4 0. 1 (2.5) NM - - 14
Mixi, Inc. 6/30/2009 2121 TS E JPY J a pan 781000. 00 1,345. 8 136.8 46. 2 33. 8% 9. 0x 26. 5x NA
Modern T imes G roup Mtg AB 9/30/2009 MT G B OM SEK S weden 307. 10 2,906. 3 2, 002. 6 282.9 14. 1% 1. 7x 12. 2x 2, 969
MO K O .mobi Limited 6/30/2009 MK B AS X AUD Aus tralia 0. 09 8.3 0. 7 (2.4) NM 10.6x - NA
Myriad G roup AG 6/30/2009 MY R N SWX C HF S witzerland 4. 89 209. 7 63. 0 3.4 5.4% 3. 3x - 405
NE O W IZ G ames C orpora tion 12/31/2008 A095660 K OS E KR W S outh K orea 38600. 00 681. 9 207.3 55. 7 26. 8% 3. 2x 12. 1x NA
NetDragon W ebS oft, Inc. 6/30/2009 777 S E HK HK D C hina 5 326. 7 89. 3 25. 7 28. 7% 2. 0x 7. 0x 3, 109
Neteas e. com Inc. 6/30/2009 NT E S Na s daqG S US D C hina 37. 69 4,878. 1 472.4 297.4 63. 0% - - 3, 109
NeuLion Incorporated 6/30/2009 T S X :NLN TS X C AD C anada 0. 70 71. 1 21. 5 (13. 0) -60. 3% 2. 8x - 237
NeXplore C orporation 6/30/2009 NX P C OT C P K US D United S ta tes 1 41. 8 1. 7 (13. 3) NM 27.0x - NA
Ngi G roup Inc. 6/30/2009 2497 TS E JPY J a pan 27550. 00 38. 2 93. 0 6.9 7.4% - - NA
Northgate T echnologies L imited 6/30/2009 590057 BSE INR India 29. 30 21. 3 82. 9 (41. 5) -50. 0% 0. 3x - NA
O pen T ext C orp. 9/30/2009 OT E X Na s daqG S US D C anada 36. 93 2,082. 2 814.5 211.1 25. 9% 2. 6x 10. 2x 3, 411
O penwave S ys tems Inc. 9/30/2009 OP W V Na s daqG S US D United S ta tes 2. 06 172. 0 190.5 5.6 3.0% 0. 4x 11. 9x 590
P erfect W orld C o. , Ltd. 6/30/2009 PWRD Na s daqG S US D C hina 43. 24 2,178. 9 255.6 142.2 55. 6% 0. 7x 1. 2x 2, 096
P NI Digital Media Inc. 6/30/2009 T S X V :P N T S XV C AD C anada 1. 80 56. 6 21. 0 2.3 11. 0% 2. 6x 23. 6x NA
Q uepa s a C orp. 6/30/2009 QP S A OT C B B US D United S ta tes 1 15. 3 0. 2 (10. 6) NM - - 74
O AO R B C Information S ys tems 12/31/2007 R BCI R TS US D R us s ia 1. 60 222. 0 157.4 20. 6 13. 1% 0. 0x 0. 4x NA
S handa Interactive E nterta inment Ltd. 6/30/2009 S NDA Na s daqG S US D C hina 45. 20 3,039. 9 629.0 296.7 47. 2% - - 3, 124
S hutterfly, Inc. 9/30/2009 S FLY Na s daqG S US D United S ta tes 14. 24 365. 3 223.1 28. 2 12. 6% 1. 1x 9. 0x 514
S K C ommunications C o., Ltd. 12/31/2008 A066270 K OS E KR W S outh K orea 7050. 00 247. 4 192.7 12. 5 6.5% 1. 3x 19. 7x NA
S NAP Interactive, Inc. 6/30/2009 S TVI OT C B B US D United S ta tes 0 2.3 3. 5 0.9 27. 0% 0. 2x 0. 7x 11
S NM G loba l Holdings 9/30/2008 S NMN OT C P K US D United S ta tes 0. 00 0.0 2. 0 (0.7) -34. 8% 1. 1x - 33
S ocial Media V entures Inc. 12/31/2008 S MV I OT C P K US D United S ta tes 0 0.0 0. 1 (0.1) -60. 6% 4. 5x - NA
S ocialwis e, Inc. 6/30/2009 S C LW OT C B B US D United S ta tes 0. 50 22. 1 0. 0 (5.6) NM - - NA
S ohu. com Inc. 9/30/2009 S O HU Na s daqG S US D C hina 54. 07 2,072. 7 501.0 218.5 43. 6% 3. 1x 7. 0x 3, 197
S park Networks , Inc. 6/30/2009 L OV AME X US D United S ta tes 3 59. 3 50. 5 10. 8 21. 3% 1. 1x 5. 3x 183
S pectrumDNA, Inc. 6/30/2009 S P XA OT C B B US D United S ta tes 0 7.3 0. 1 (2.5) NM - - 7
T encent Holdings Ltd. 6/30/2009 700 S E HK HK D C hina 143 33, 542.7 1, 391. 6 680.3 48. 9% 26.6x - 6, 421
T he P arent C ompany 8/2/2008 K IDS . Q OT C P K US D United S ta tes 0. 01 0.2 112.0 (13. 5) -12. 0% 0. 2x - 347
T he9 Limited 12/31/2008 NC T Y Na s daqG S US D C hina 7. 82 196. 2 250.6 85. 5 34. 1% - - 1, 626
T heS treet. com, Inc. 3/31/2009 TS CM Na s daqG M US D United S ta tes 2. 41 73. 8 67. 0 1.9 2.9% 0. 1x 4. 7x 310
T ree.C om, Inc. 6/30/2009 TR E E Na s daqG M US D United S ta tes 8. 05 87. 7 216.6 (0.7) -0.3% 0. 4x - 700
Unis erve C ommunica tions C orp. 5/31/2009 T S X V :US S T S XV C AD C anada 0. 05 1.1 17. 1 (0.2) -1.0% 0. 2x - NA
United O nline Inc. 6/30/2009 UNT D Na s daqG S US D United S ta tes 7. 86 659. 0 949.8 203.2 21. 4% 1. 0x 4. 5x 1, 469
UOMO Media, Inc 7/31/2009 UO MO OT C B B US D C anada 0 6.6 0. 8 (0.4) -54. 2% 8. 9x - NA
V alueC lick Inc. 9/30/2009 V C LK Na s daqG S US D United S ta tes 9 802. 7 545.7 130.8 24. 0% 1. 2x 4. 9x 1, 189
V OIS , Inc. 6/30/2009 V O IS OT C B B US D United S ta tes 0 3.3 0. 0 (1.0) NM - - 4
W ebzen Inc. 6/30/2009 W ZE N Na s daqG M US D S outh K orea 3. 03 35. 9 23. 2 2.3 9.9% - - 328
W izzard S oftwa re C orporation 6/30/2009 W ZE AME X US D United S ta tes 0. 43 21. 7 5. 3 (4.5) -84. 9% 4. 3x - 110
W orlds . com Inc. 6/30/2009 W DDD OT C B B US D United S ta tes 0. 10 5.2 0. 1 (0.7) NM - - 1
W ynds torm C orpora tion NA W Y ND OT C P K US D United S ta tes 0. 10 1.8 NA NM NM - - NA
XING AG 6/30/2009 O 1B C XT R A E UR G ermany 34. 88 269. 3 58. 9 17. 0 28. 8% 3. 7x 12. 8x 246
Y D O nline C orp. 12/31/2007 A052770 K OS E KR W S outh K orea 6810. 00 85. 6 57. 4 12. 4 21. 6% 1. 6x 7. 6x NA
Y nk K orea Inc. 12/31/2008 A023770 K OS E KR W S outh K orea 3900. 00 17. 4 11. 9 1.3 10. 5% - - NA
High 33, 542.7 2,002. 6 680. 3 63. 0% 49.2x 34. 8x 6, 421
Low 0.0 0. 0 -41.5 -98. 9% - - 1
Average 780.0 161.7 39.9 6.2% 5.2x 10.2x 936
Median 41. 8 57.1 1. 7 12. 6% 1. 7x 7. 6x 246
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 )
October finishes limping: Total transaction value in the W eb 2.0 universe for October is $170.8 (vs. $151.2 million at
time of last publication). The month ended with 26 financings in the sector averaging $6.6 million each (vs. an average of
$7.6 million last week). In comparison, total capital raised in September was $232.8 million, averaging $9.0 million (26
deals); August was $221.6 million, averaging $7.6 million (29 deals); and July (35 deals) $191.4 million, averaging $5.5
million.
Financing Activity Last Twelve Months
400.0 16.0
14.6
350.0 14.0
300.0 12.0
9.7
250.0 10.0
9.0
(US$m)
(US$m)
200.0 7.6 8.0
7.0 7.0 7.1
6.5 6.6 6.6
6.2
150.0 5.5 6.0
4.9
100.0 4.0
50.0 2.0
0.0 0.0
Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09
*May-09 includes $200m FB investment Total Average
Figure 2. Financings, Last Twelve Months
Source. Company reports

4. Page 4
Deal round-up for October end: The large deal highlights for the month include:
• DailyMotion – a French online video content provider – raised $25.3 million through a Series C financing.
• Yext – an online directory provider – raised $25 million.
• PopCap Games – a developer of casual games played on multiple types of devices – raised $22.5 million in its first
round of funding.
• Engine Yard – provider of managed hosting and deployment solutions for Ruby and Rails applications – raised $19
million in a Series C financing.
• Ecast Network – operator of a broadband touch screen network in the U.S. – raised $17 million in a follow-on
unattributed financing.
• HubSpot – provider of online enterprise marketing application – received $16 million in Series C financing.
• Jive Software – maker of enterprise collaboration and social community software – raised $12 million in a Series B
financing by returning VC fund, Sequoia.
All other deals in the month were in the amount of $10 million or less. For additional details on financings, see Figures 23
and 24 (at end of note).
Financing & M/A Summary - Last Three Months
200.0
180.0
160.0
140.0
120.0
Nov-09
(US$m)
Oct-09
100.0
Sep-09
Aug-09
80.0
60.0
40.0
20.0
0.0
DailyMotion
Jive Software
MediaMath
Mzinga
InXpo
NextBio
Reality Mobile
HiveLive
Boxee
Polyvore
Fwix
Yext
Box.net
RightsFlow
Skype
Zoove
RichRelevance
Ooyala
Edo Interactive
Jobvite
InnoCentive
Booyah
YuMe
Z2Live
Overtone
Greystripe
DailyBooth
iSyndica
OnLive
Aviary
Mocapay
Vantrix
Fizzback
Roblox
Linkedex
Twitter
Dopplr
MOG
Unisfair
Fluther
Scoopler
Mint
Turbine
Friends Reunited
Ensequence
iLike
Engine Yard
Traffiq
CubeTree
Balihoo
Vuclip
Fanbase
Vdopia
NeoEdge
Alliance Health
ViVu
OurStage
Scoreloop
Godengo
Tremor Media
Plista
FourSquare
Onehub
EduFire
ChessCube
Hot Potato
IngBoo
Chango
Listia
NowPublic
Ecast Network
Livebookings
Scout Labs
Conduit Labs
MashLogic
Tiny Pictures
DataSync
Linksify
Gigpark
Smith & Tinker
VEVO
HubSpot
Spigit
ScanScout
OneRiot
iSocket
StatusNet
Aurora Feint
KODA
Technorati
Loomia
TransGaming
PopCap Games
Riot Games
Sometrics
FeedRoom
Bill.com
Amie Street
Imeem
Gamelab.com
Watercooler
Figure 3. Capital Market Activity, Last Three Months
Source. Company reports

5. Page 5
Social Networks the most active sector: Social Networks experienced the most financing activity among our W eb 2.0
sector categories in the past three months by number of transactions (12). Advertising continues to be among the highest
activity sectors with 11 deals in the past quarter. Gaming follows with nine transactions followed by Collaboration (7)
(Figure 4). The $2.0 billion acquisition of Skype skews the dollars transacted to the SMS/Voice segment, while the $170
million acquisition of Mint brings the Vertical Communities segment to the second highest total.
Capital Market Activity by Sector - Last Three Months
200.0
180.0
160.0
140.0
120.0
(US$m)
100.0
80.0
60.0
40.0
20.0
2,025.0 192.3 122.0 100.9 97.4 70.3 70.3 46.0 37.5 37.9 35.5 34.0 26.1 17.1 15.8 14.0 13.2 13.0 11.5 3.9 3.6 2.2 2.0 1.3
0.0
Comment/Reputation
Social Commerce
Communities
Gaming
Microblog
Collaboration
Enterprise
Mobile
Media
Publishing
Online Learning
Music
SMS/Voice
Infrastructure
Search
Advertising/Mobile
Mobile Ad
Social Networks
Advertising
Video
Crowdsourced
Virtual World
Aggregation
Analytics
Vertical
Content
# companies
1 3 9 2 12 11 6 4 7 4 5 4 4 3 5 2 1 2 4 1 2 1 1 1
Figure 4. Capital Market Activity, by Sector, Last Three Months
Source. Company reports

6. Page 6
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 )
Web 2.0 index continues to outpace NASDAQ recovery: Our W eb 2.0 index (market-cap weighted) essentially mirrored
the performance of the NASDAQ composite index from mid-2008 until Q1/09. Since then, the index has diverged in a much
stronger recovery relative to the NASDAQ index (Figure 5).
Web 2.0 Index Price Performance
250
200
150
100
50
0
11/3/2008
11/17/2008
12/1/2008
12/15/2008
12/29/2008
1/12/2009
1/26/2009
2/9/2009
2/23/2009
3/9/2009
3/23/2009
4/6/2009
4/20/2009
5/4/2009
5/18/2009
6/1/2009
6/15/2009
6/29/2009
7/13/2009
7/27/2009
8/10/2009
8/24/2009
9/7/2009
9/21/2009
10/5/2009
10/19/2009
11/2/2009
Index: Web 2.0 (Market Cap) ^COMP - Share Pricing
Figure 5. Web 2.0 Price Performance
Source. Capital IQ

7. Page 7
Broad-based price declines: Eight companies in our universe had positive stock price performances over the past week
(for stocks with prices greater than $1) (Figure 6), while 38 companies showed negative 1-week returns.
1 Week P rice P erformance
S park Netw orks , Inc. 12.5%
Webz en Inc. 9.5%
My riad Group A G 8.9%
Y nk K orea Inc. 6.6%
PNI Digital Media Inc. 6.5%
Mix i, Inc. 6.0%
G ree, Inc. 1.0%
Neteas e.com Inc. 0.7%
OA O R B C Information S y s tems 0.0%
K ings of t Co. Ltd. 0.0%
Cy berplex Inc. 0.0%
Chines e Gamer International -0.5%
Fluid Mus ic Canada , Inc. -0.6%
Tree.Com, Inc. -0.9%
LookS mart, Ltd. -1.5%
IA C/InterA ctiveCorp. -1.7%
XING A G -1.9%
The9 Limited -2.9%
S handa Interactive Entertainment Ltd. -3.0%
G ravity Co., Ltd -3.1%
A Q Interactiv e, Inc. -3.3%
S hutterf ly , Inc. -3.3%
G ameOn Co Ltd. -3.6%
Tencent Holdings Ltd. -3.8%
United Online Inc. -3.9%
HanbitS of t, Inc. -3.9%
Giant Interactive G roup, Inc. -4.0%
Y D Online Corp. -4.2%
Frogs ter Interactiv e Pictures A G -4.3%
NEOWIZ Games Corporation -4.7%
CDC Corp. -4.9%
DA DA S pA -5.4%
Perfect World Co., Ltd. -5.7%
Modern Times G roup Mtg A B -5.7%
Changy ou.com Limited -6.0%
Open Tex t Corp. -6.3%
NetDragon WebS of t, Inc. -6.6%
V alueClick Inc. -7.1%
Eolith Co. Ltd. -7.8%
Gamania Digital Entertainment Co., -8.3%
Ngi G roup Inc. -9.1%
S K Communications Co., Ltd. -9.6%
S ohu.com Inc. -9.8%
A ctoz S of t Co., Ltd. -11.0%
Quepas a Corp. -11.1%
G igaMedia Ltd. -11.9%
TheS treet.com, Inc. -13.3%
Openw ave S y s tems Inc. -24.0%
DigitalTow n, Inc. -49.5%
-0.6 -0.5 -0.4 -0.3 -0.2 -0.1 0 0.1 0.2
Figure 6. 1-Week Price Performance
Source. Capital IQ

8. Page 8
P U B L I C C O M P A N Y I N D U S T R Y N E W S (P A R T N E R S H I P S , F I N A N C I A L R E S U L T S , N E W P R O D U C T S )
K ey Developments
C ompany Headline Notes
S ohu.com Inc. (Nas daqGS : S OHU) Q uarterly Update to S ohu.com, Inc. ’s E quity B uyback on O n O ctober 26, 2009, S ohu. com, Inc. announced that during the qua rter ending S eptember 30, 2009, it has ma de no
O ctober 26, 2009 repurcha s es under the program. As of S eptember 30, 2009, S ohu has repurcha s ed 501,686 s ha res a t an avera ge price of
$39.86 for a tota l cons ideration of $20 million under the program.
C hangyou.com L imited C ha ngyou. com L imited R eports Unaudited C ons olidated C hangyou. com Limited reported unaudited cons olidated earnings res ults for the third quarter and nine months ended
(Nas daqG S :C YOU) E arnings R es ults for the T hird Q ua rter a nd Nine Months S eptember 30, 2009. F or the qua rter, the company's total revenues were $68, 684, 000 a gains t $54,604,000 a year ago. T he
E nded S eptember 30, 2009; P rovides E arnings increas es were mainly due to increas ed popula rity of the company's flags hip game, T L B B . O perating profit wa s
G uidance for the F ourth Q ua rter of 2009 $42,288, 000 agains t $32, 474,000 a year ago. Income before income ta x expens e wa s $43, 288,000 aga ins t $32,791, 000 a
yea r ago. Net income was $37,794,000 agains t $32, 084, 000 a year a go. Diluted net income per ADS wa s $0.71 a gains t
$0. 68 a year ago. Non-G AAP opera ting profit was $45,842, 000 a gains t $33, 725,000 a yea r ago. Non-G AAP net income
was $41, 348, 000 a gains t $33, 335,000 a yea r ago. Non-G AAP diluted net income per ADS was $0. 77 agains t $0.70 a year
ago. O perating cas h flow was a net inflow of $46. 2 million.
T he compa ny es timates tota l revenues for the fourth qua rter of 2009 to be between $69.0 million and $71. 0 million. Non-
G AAP net income for the fourth quarter of 2009 to be between $41. 5 million and $42.5 million. Non-G AAP fully diluted
earnings per ADS for the fourth quarter of 2009 to be between $0. 78 and $0.80.
S ohu.com Inc. (Nas daqGS : S OHU) S ohu.com Inc. R eports Unaudited C ons olida ted S ohu.com Inc. reported unaudited cons olida ted earnings res ults for the third qua rter a nd nine months ended S eptember 30,
E arnings R es ults for the T hird Q ua rter a nd Nine Months 2009. F or the quarter, the compa ny reported net income a ttributable to company of $37,354, 000 or $0. 88 per s hare on tota l
E nded S eptember 30, 2009; P rovides E arnings revenue of $136, 585,000 aga ins t net income a ttributa ble to company was $40,261, 000 or $1. 02 per s ha re on total revenue
G uidance for the F ourth Q ua rter of 2009 of $120, 676,000 in the s ame period of las t year. O pera ting profit was $52,953, 000 agains t $43, 758,000 in the s ame period
of las t year. Income before income tax expens e was $54,102, 000 a gains t $45, 230,000 in the s ame period of las t year.
Income from continuing operations was $47, 080, 000 a gains t $40, 238,000 in the s a me period of las t yea r. As per non-
G AAP , net income attributable to company was $40,921, 000 or $0. 96 per s hare on tota l revenue of $136,585, 000 agains t
net income attributable to company was $42,822, 000 or $1. 08 per s hare on tota l revenue of $120,676, 000 in the s a me
period of las t year. As per non-G AAP , operating profit was $57, 077,000 agains t $46,319, 000 in the s a me period of las t yea r.
T he compa ny provided earnings guidance for the fourth quarter of 2009. It es tima tes tota l revenues to be between
$134.5 million and $138. 5 million. It es tima tes non-G AAP net income before deducting the s ha re of non-G AAP net
income perta ining to the non-controlling interes t in C ha ngyou to be between $49. 5 million to $51. 5 million. After
deducting the s hare of non-G AAP net income pertaining to the non-controlling interes t in C hangyou, it es timates
non-G AAP net income to be between $35.0 million to $37.0 million a nd non-G AAP fully diluted earnings per s ha re to
be between 90 cents and 95 cents . C ons idering its s hare in C hangyou, the es timated impa ct of this expens e is
expected to reduce its fully diluted earnings per s hare for the fourth quarter of 2009 under US G AAP by US 6 cents to
US 8 cents .
Quepas a C orp. (OTC B B : QP S A) Q uepas a La unches Developer Interface and O pen Q uepas a C orp. a nnounced the launch of its Developer Interface and O pen S ocial S andbox. T he launch of the Developer
S ocial S a ndbox Interfa ce is pa rt of Q uepas a's overall s trategy to open the s ite to third party O pen S ocial developers who would like to
develop applica tions for its global audience. T he compa ny believes that this new Developer Interfa ce and O pen S ocial
S andbox will become an ea s y mechanis m for developers to tes t a nd s ubmit their applica tions for inclus ion in the s ite's
Application a nd/or G a mes s ections a nd thus enhance the overall us er experience a nd drive s ite traffic and monetiza tion.
T he Developer Interface cons is ts of a toolbox that developers us e when s ubmitting a n O pen S ocia l application for inclus ion
on any s ocial s ite. T he toolbox includes documentation of the interfaces a vailable, a news area, a community built for the
developers where they can communicate and interact with other application developers a s well as with Quepa s a's
development tea m, a nd the O pen S ocial S a ndbox where they can tes t completed applications with va lid tes t data.
IAC /InterActiveC orp. (Nas daqG S : IAC I) Update to IAC /InterActiveC orp’s E quity B uyback IAC /InterActiveC orp announced that it has repurcha s ed approximately 5,600, 000 s hares at an average price of $16. 69 per
s hare during the qua rter ended S eptember 30, 2009. T ill J une 30, 2009, IAC has repurcha s ed 22,874, 884 s hares for a total
cos t of $653.16 million under the progra m. As of S eptember 30, 2009, the company has repurcha s ed approximately
28, 474,884 s hares for a tota l of $746. 62 million.
Open Text C orp. (Nas daqG S : OTE X) O pen T ext C orp. announces an E quity B uyback O pen T ext C orp. (Nas da qG S : O T E X ) announced its intention to ma ke a normal cours e is s uer bid through the facilities of
the NAS DAQ G loba l S elect Ma rk et on O ctober 27, 2009. Under the bid, O pen expects to repurcha s e approximately up to
2,819, 037 s hares . T he maximum number of s hares tha t ma y be purcha s ed is calculated as 5% of the outs tanding common
s hares of O pen T ext at the beginning of the bid. T he repurcha s es over the NAS DAQ could commence in November 2009 if
des irable. T he bid will expire one year from the commencement date.
IAC /InterActiveC orp. (Nas daqG S : IAC I) IAC /InterActiveC orp. R eports Unaudited C ons olida ted IAC /InterActiveC orp. reported unaudited cons olida ted earnings res ults for the third qua rter a nd nine months ended
E arnings R es ults for the T hird Q ua rter a nd Nine Months S eptember 30, 2009. F or the qua rter, the company reported net income attributa ble to IAC s hareholders of $21. 6 million or
E nded S eptember 30, 2009 $0. 16 per diluted s hare on revenue of $336. 5 million agains t net los s attributable to IAC s hareholders of $14. 8 million or
$0. 11 per diluted s hare on revenue of $369. 2 million a year a go. E a rnings from continuing operations were $23.8 million or
$0. 18 per diluted s hare aga ins t los s from continuing operations $1. 2 million or $0. 01 per diluted s hare a year ago. O perating
income was $7.1 million a gains t operating los s of $22.6 million a year a go. E a rnings from continuing operations before
income taxes were $58. 08 million a gains t los s from continuing operations before income taxes of $86. 6 million a yea r ago.
Adjus ted E P S was $0. 34 agains t adjus ted los s per s hare of $0. 14 a year ago.
S ocial Media Ventures Inc. S ocial Media V entures Inc. S igns Marketing Agreement S ocial Media V entures Inc. announce tha t it has s igned a marketing a ffiliate a greement with P ets criptions .com.
(OTC P K : S MVI) with P ets criptions . com P ets criptions . com is a provider of pharma ceuticals , medicine, a nd other innova tive products for pets . P ets criptions .com
offers pet owners acces s to inexpens ive pet products including medicine a nd pha rmaceutica ls . T he online reta iler offers
direct s hipments of pet pha rmaceutica ls and other pet s upply products directly to its cus tomers , offering cus tomer s avings
on a wide arra y of pet medicines . All products a re ins pected by the K entucky B oard of P ha rmacy.
Figure 7a. Key Developments
Source. Capital IQ

9. Page 9
K ey Developments - c ontinued
C ompany Headline Notes
Open Text C orp. (Nas daqG S : OTE X) O pen T ext C orp. Announces Unaudited C ons olida ted O pen T ext C orp. announced unaudited cons olidated fina ncial res ults for the firs t quarter ended S eptember 30, 2009. T ota l
F inancia l R es ults for the F irs t Q ua rter E nded S eptember revenue for the firs t quarter wa s $211.4 million, up 16% compa red to $182.6 million for the s a me period in the prior fis cal
30, 2009 yea r. Adjus ted net income in the quarter was $32. 8 million or $0.58 per s hare on a diluted ba s is , up 16% compared to $28. 2
million or $0. 53 per s hare on a diluted bas is for the s a me period in the prior fis cal year. Net income in accordance with U. S .
generally accepted accounting principles wa s $1.7 million or $0.03 per ba s ic a nd diluted s hare compared to $14. 7 million or
$0. 28 per s ha re on a diluted bas is for the s ame period in the prior fis cal yea r. T he company reported income before income
tax of $5.186 million and income from opera tions of $4. 792 million compared to income before income ta x of $20. 712
million and income from opera tions of $22. 977 million for the s ame period of la s t year. T he compa ny reported net cas h
provided by opera ting activities of $4.502 million a nd additions of ca pital as s ets , net of $7.665 million compared to net cas h
provided by opera ting activities of $24. 813
million and a dditions of capital a s s ets , net of $3.887 million for the s ame period of las t year.
ValueC lic k Inc. (Nas daqG S : VC L K ) V alueC lick Inc. R eports Unaudited C ons olida ted V alueC lick Inc. reported unaudited cons olida ted earnings res ults for the third qua rter a nd nine months ended S eptember
E arnings R es ults for the T hird Q ua rter a nd Nine Months 30, 2009. F or the qua rter, revenue was $130.2 million, adjus ted-E B IT DA of $33. 4 million. T he C ompany genera ted
E nded S eptember 30, 2009 ; P rovides E arnings approximately $22. 6 million in free cas h flow in the third qua rter, defined as net cas h from opera tions les s capital
G uidance for the F ourth Q ua rter of 2009 expenditures . G AAP net income was $25.0 million, or $0. 29 per bas ic and diluted common s hare. T he C ompany recorded
an income tax benefit in the third quarter of 2009 of $2.7 million due to favorable income tax adjus tments recorded in the
qua rter. E xcluding thes e adjus tments and as s uming the normaliz ed 42% effective tax rate included in the company's
previous ly-is s ued third quarter guida nce, net income would have been $13. 0 million, or $0. 15 per diluted common s hare.
Non-G AAP net income, which excludes dis continued operations , s tock -bas ed compens a tion and a mortiz ation of inta ngible
as s ets wa s $30. 3 million, or $0. 34 per diluted common s hare. T he company reported net income of $1.999 million or $0.02
per bas ic and diluted s hare on revenue of $148.065 million for the third qua rter of 2008. T he company reported income before
T he compa ny provided earnings guidance for the fourth quarter of 2009. T he company expects adjus ted E B IT DA
of $32 million to $35 million on revenue of $128 million to $138 million for the fourth qua rter of 2009. T he company
expects G AAP diluted net income per common s ha re of $0. 15 to $0.16 a nd Non-G AAP diluted net income per
common s hare of $0.21 to $0. 22 for the fourth qua rter of 2009.
S handa Interactive E ntertainment L td. S handa Interactive E nterta inment Ltd. , Annua l G eneral S handa Interactive E nterta inment Ltd., Annua l G enera l Meeting, O ct 28, 2009, at 10:00 C C T -C hina C oas t, US S R Zone 7.
(Nas daqG S :S NDA) Meeting, O ct 28, 2009 Loca tion: Is land S hangri-La, L evel 7, executive boardroom, P a cific P lace, S upreme C ourt R oad, C entral, Hong K ong.
Agenda: T o elect 8 directors to s erve for the ens uing year or until their s ucces s ors are elected and duly qua lified; and to
cons ider any other bus ines s properly brought before the meeting.
Quepas a C orp. (OTC B B : QP S A) Q uepas a C orp. - C onference P res entation C a ll T o communicate progres s achieved in developing its bus ines s model
S hutterfly, Inc . (Nas daqG S :S FL Y) S hutterfly Inc. R eports C apita l E xpenditure for the T hird S hutterfly Inc. reported capita l expenditure of $4. 9 million for the third quarter ended S ep. 30, 2009, which included $2. 7
Q uarter E nded S ep. 30, 2009; P rovides F ree C as h F low million for technology equipment a nd s oftware, approximately $1. 1 million for ma nufacturing equipment and building
O utlook for the Y ear 2009 improvements a nd $1. 1 million in capita liz ed s oftware development cos ts .
T he compa ny now expects full year 2009 free cas h flow to ra nge from approximately $14 million to a pproxima tely $22
million.
Open Text C orp. (Nas daqG S : OTE X) O pen T ext C orp. Announces New R elea s e of its O pen T ext C orp. announced a new relea s e of its enterpris e porta l s olution, V ignette P ortal vers ion 8. 0. T he s olution allows
E nterpris e P ortal S olution, V ignette P orta l V ers ion 8.0 organiz ations to provide cus tomers , employees a nd pa rtners with a rich internet experience where they can find relevant
and pers onalized informa tion aggrega ted from multiple bus ines s and cons umer-ba s ed s ys tems . V ignette P orta l 8. 0
s implifies the adminis tration a nd creation of dynamic, content-rich W eb s ites with the ability to rapidly s yndicate porta l
applications acros s W eb properties powered by multiple s ys tems . V ignette P orta l 8 from O pen T ext expands on the
vers a tility and rich interopera bility a fforded a pioneer in the enterpris e portal s pace. It helps bus ines s es unify their W eb
s oftware portfolios into s leek, eas y-to-us e W eb s ites a nd allows thos e s a me bus ines s es to engage cus tomers and partners
with rich a nd s ocially ena bled W eb experiences . T he relea s e of P ortal 8. 0 not only demons trates O pen T ext's continued
commitment to V ignette cus tomers and technology, but als o ena bles additional s ocial media ca pabilities that align with the
company's s tra tegic development of E nterpris e 2. 0 s olutions . O pen T ext recently announced that it plans to enhance its E C M S uite w
technology from its exis ting W eb S olutions and V ignette. B y offering a variety of s olutions , the company will
allow organiz ations -regardles s of s iz e a nd indus try-to s ucces s fully addres s their bus ines s needs .
Tencent Holdings L td. (S E HK : 700) C hina Unicom T eams Up with T encent's T enP ay for T enpay, an online payment s ervice operated by C hina's T encent H oldings Ltd. , has s igned a contra ct with C hina U nicom
O nline P ayments (Hong K ong) Ltd. to provide online pa yment s ervices . Under the terms of the contract, the carrier's us ers ca n us e T enpay to
recharge their phones via C hina Unicom's online s ervice center and a pply for C hina Unicom's online value-added s ervices .
T hey can als o buy prepaid cards , mobile hands ets and 3G data cards from the ca rrier's online s tore. T encent's T enpay
handled €2. 53 billion worth of tra ns actions in the s econd quarter of 2009. C hina Unicom will a ls o us e T enpay's e-billing
s ervices to handle pa yments between online s ervice centers and provincial divis ions .
OAO R B C Information S ys tems O AO R B C Information S ys tems R eaches $208 Million O AO R B C Information S ys tems reached a $208 million debt res tructuring deal with the creditors .
(R TS :R B C I) Debt R es tructuring Deal
K ings oft C o. L td. (S E HK : 3888) K ings oft La unches W ap. s houji. cn K ings oft C o. L td. la unched wireles s Internet webs ite wa p.s houji.cn in an attempt to offer va rious mobile phone application
s ervices for us ers . S ince the open beta tes ting on O ctober 1, 2009, wa p.s houji.cn has been luring 600,000 unique vis itors at
mos t per day, with da ily pa ge view of 2.3 million or s o. T he new s ite, which offers mobile phone-ba s ed s oftware, ga me,
theme, as well a s picture downloading s ervices , will be opened not only to K ings oft us ers but a ls o to mobile phone us ers ,
noted an official from the Hong K ong-lis ted compa ny. S o far, K ings oft ha s joined hands with nea rly 100 mobile phone
s oftware companies , collecting approximately 1, 000 kinds of mobile phone s oftware and more tha n 10, 000 mobile phone
games and theme products . T he products ca n meet the dema nd of mobile phone us ers .
P ay88, Inc. (OTC B B : P AYI); S ohu.com P ay88, Inc. E nters Dis tribution Agreement with S ohu.com P ay88, Inc. announced that it ha s entered into a dis tribution agreement with S ohu. com Inc. T hrough its s ubs idiary, Q ianbao
Inc. (Nas daqG S :S OHU) T echnology, P ay88 will act a s a dis tributor of S O HU digita l products , with a pa rticular focus on mobile phone games . As a
res ult of this new rela tions hip, Q ianbao T echnology will now be a ble to offer mobile ga mes to the domes tic market in C hina .
Figure 7b. Key Developments – continued
Source. Capital IQ