Twitter raised $35 million in a new funding round, valuing the company at $230 million despite having no revenue. Twitter has experienced tremendous 800% growth in unique visitors over the past year. The document also provides an overview of 86 public web 2.0 companies, their market caps, revenues, EBITDA margins, and other financial details.

1. SOFTWARE & SERVICES 17 FEBRUARY 2009
DAVID SHORE, CFA, MBA 416.860.6784
WEB 2.O WEEKLY david.shore@researchcapital.com
Arun Thomas (Associate) 416.860.7666
NO REVENUE? NO PROBLEM
T WIT T E R R AI S E S $ 35 MI L L IO N
The largest W eb 2.0 financing of the last three months was for perhaps the hottest W eb 2.0 company on the planet –
Twitter. On Friday, the company announced that it had closed on a new funding round of $35 million that rumour has
it valued the company at approximately $230 million. This for a company with no revenue! However, Twitter has
undergone tremendous growth over the last year. According to compete.com, Twitter had 6 million unique visitors as
of January 2009, up an astounding 800% Y/Y, and moving ahead of social networks like Bebo (bought by AOL for
$850 million). Overall, there have been 15 financings announced in February, totalling $89.0 million, or $5.9 million
on average. The average value in February is below the $6.9 million average for January, with more early-stage
financings announced in February relative to January – 64% of financings in February have been Series A rounds
versus just 27% in January.
Financing - Last Three Months
40.0
35.0
30.0
25.0
Feb-09
(US$m)
20.0 Jan-09
Dec-08
15.0
10.0
5.0
0.0
ChakPak
Cake Financial
Go Internet Media
One True Media
Pulse Entertainment
DECA
GoFish
FooMojo
JibJab
Jackbe
FetchDog
RatePoint
IMVU
Tumblr
TextDigger
Play Hard Sports
E-Global Sports
Clickpass
Geni
Tvinci
Overlay.TV
Outbrain
Nurien
Taptu
Tvtrip
Social Median
SocialMedia
Oodle
Tagged
Playdo
Mixpo
7 Billion People
DotBlu
Hubdub
CoveritLive
Identi.ca
OneSpot
Outright
NetShelter
SundaySky
Fliqz
Motionbox
Gbox
Meez
Blue Kai
Xobni
AdMob
Aster Data
Scribd
Snapmylife
Snooth
NewsGator
VirtuOz
Sportsblogs
AboutUs
WhistleBox
StockTwits
Yodle
Superfish
Angie's List
fav.or.it
Twitter
Kewego
Tripwolf
InsideView
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
86 public Web 2.0 companies identified: W e have identified 86 public companies for our W eb 2.0 universe, with a
combined market cap of $30 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 almost $350
million, with average trailing revenue of $130 million. The companies are also highly profitable, with an average EBITDA
margin of 17.3%. On a valuation basis, the overall average is 4.3x trailing revenue and 8.7x trailing EBITDA. Fifteen of the
companies have more than 500 employees.
C omparable C ompany Analys is > Web 2.0
Trading C ur rent US D Mark et US D L T M T otal US D L TM Total E B ITDA T E V /L TM T E V /L TM
C ompany Na me L T M as of Ti c ker E xc hange C urrenc y HQ Pr ic e C ap ($m) R ev ($m ) E B IT DA ($m ) % R evenue E B ITDA E mployees
Acce lerize N ew Media, I nc. 9 /3 0/20 08 A C LZ OT CB B US D United S tates 0. 35 9. 4 3. 2 ( 4. 7) NM 4. 3 x - 20
Actoz S oft C o. , Ltd. 9 /3 0/20 08 A 05 279 0 K OS E KR W S outh K orea 12 ,7 00 7 8. 4 5 1. 2 9. 4 18 .3 % 1. 0 x 5 .7 x NA
AQ Inte ractive, Inc. 1 2/31 /200 8 3 838 TS E JP Y J a pan 32 ,6 50 1 9. 3 6 5. 7 5. 3 8. 0% - - NA
As s oci ated Me dia Holdings Inc. 6 /3 0/20 07 A S MH OT CP K US D United S tates 0. 01 0. 2 0. 1 ( 2. 3) NM 1 0. 2x - 3
B igs tring C orp. 9 /3 0/20 08 B SG C OT CB B US D United S tates 0. 02 0. 8 0. 1 ( 2. 1) NM 3 0. 7x - 8
B oomJ Inc 9 /3 0/20 08 B OMJ OT CB B US D United S tates 0. 70 2 8. 6 1. 1 ( 7. 7) NM 2 9. 1x - 25
B right T hi ngs plc 9 /3 0/20 08 A IM: B GT A IM G BP United K ingdom 0. 02 3. 5 0. 2 ( 1. 6) NM 1 4. 4x - 9
B roadW ebA s ia Inc. 9 /3 0/20 08 B W BA OT CP K US D United S tates 1. 50 127 . 3 0. 0 ( 4. 6) NM - - 46
C DC C orp. 9 /3 0/20 08 C HIN. A Na s daqG S US D Hong K ong 0. 88 9 4. 9 428 . 1 18 .8 4. 4% 0. 4 x 8 .1 x 3 ,1 25
C hina G ateway C orpora tion 9 /3 0/20 08 CG WY OT CB B US D United S tates 0. 00 0. 0 6. 7 ( 6. 6) -9 8. 9% 0. 0 x - 37
C hines e G amer International 9 /3 0/20 08 G T S M: 3 083 GTS M TWD T a iwan 11 4. 00 282 . 5 3 7. 5 17 .7 47 .1 % 6. 0 x 12. 8x NA
C ornerW orld C orporation 1 0/31 /200 8 CW RL OT CB B US D United S tates 0. 15 7. 0 0. 6 3. 1 5 06. 8 % 1 3. 8x 2 .7 x NA
DAD A S pA 9 /3 0/20 08 C M: DA CM E UR Italy 6. 26 129 . 7 216 . 7 34 .6 16 .0 % 0. 8 x 5 .0 x 5 74
Digi ta lF X Inte rnational, Inc. 9 /3 0/20 08 DX N OT CB B US D United S tates 0. 08 2. 0 1 6. 9 ( 4. 5) -2 6. 4% 0. 3 x - 68
Digi ta lP os t Inter active, Inc. 9 /3 0/20 08 DG LP OT CB B US D United S tates 0. 01 0. 9 0. 4 ( 3. 3) NM 4. 4 x - 11
Digi ta lT own, Inc. 1 1/30 /200 8 DG T W OT CB B US D United S tates 2. 00 5 4. 3 NM ( 2. 5) NM - - 3
Dolphin Digita l Me dia , Inc. NA DP DM OT CB B US D United S tates 0. 53 2 5. 8 NA NM NM - - 6
E olith C o. Ltd. 1 2/31 /200 7 A 04 106 0 K OS E KR W S outh K orea 5 90 1 9. 3 1 7. 5 ( 0. 0) -0 .3 % 1. 1 x - NA
E xtensions, Inc. 9 /3 0/20 08 E XT I OT CP K US D United S tates 0. 20 1 8. 9 NM NM NM - - 2
F ina ncia l Me dia Group, I nc. 1 1/30 /200 8 F NG P OT CB B US D United S tates 0. 02 1. 0 6. 8 1. 2 18 .3 % 0. 0 x 0 .1 x 22
F luid Mus ic C anada , I nc. 9 /3 0/20 08 T S X: F MN TS X CAD United S tates 0. 60 2 5. 3 4. 2 ( 8. 6) NM 3. 2 x - 29
F rogs te r Inte ractive P icture s A G 6 /3 0/20 08 FRG XT R A E UR G ermany 4. 32 1 3. 0 5. 1 ( 3. 1) -6 0. 6% 2. 4 x - NA
Ga mania Digital E nterta inme nt C o. , L td. 9 /3 0/20 08 6 180 GTS M TWD T a iwan 2 3. 40 103 . 6 108 . 4 18 .3 16 .9 % 0. 7 x 4 .3 x NA
Ga meO n C o L td. 1 2/31 /200 8 3 812 TS E JP Y J a pan 1 14 ,0 00 120 . 1 8 1. 3 21 .5 26 .4 % 0. 7 x 2 .8 x NA
Ge oS entric O yj 9 /3 0/20 08 G E O 1V HL S E E UR F inland 0. 04 4 5. 8 5. 2 (12 .1 ) NM 7. 7 x - 92
Giant Inte ractive G roup, Inc. 9 /3 0/20 08 GA NY S E US D C hina 6. 22 1, 478 . 5 245 . 5 1 55. 8 63 .5 % - - 1 ,0 16
GigaMe dia L td. 9 /3 0/20 08 G IG M Na s daqG S US D T a iwan 7. 38 398 . 7 200 . 5 48 .0 23 .9 % 1. 7 x 6 .9 x 9 75
GoF is h C orporation 9 /3 0/20 08 G OF H OT CB B US D United S tates 0. 20 5. 1 6. 3 (11 .0 ) NM 2. 5 x - 41
Gravity C o., Ltd 9 /3 0/20 08 GRVY Na s daqG M US D S outh K orea 0. 71 1 9. 7 3 4. 3 6. 6 19 .2 % - - 6 36
Gree, Inc. 6 /3 0/20 08 T S E : 3 632 TS E JP Y J a pan 5 ,3 60 1, 302 . 5 3 2. 0 11 .5 36 .0 % 4 0. 7x - NA
GungHo Online E nte rtainme nt, Inc. 9 /3 0/20 08 3 765 OS E JP Y J a pan 98 ,6 00 122 . 8 111 . 3 16 .3 14 .7 % 0. 9 x 5 .9 x NA
HanbitS oft, Inc. 9 /3 0/20 08 A 04 708 0 K OS E KR W S outh K orea 4 ,0 60 6 2. 3 4 8. 6 (12 .4 ) -2 5. 6% 0. 9 x - NA
IA C /Inte rA ctive C orp. 1 2/31 /200 8 I AC I Na s daqG S US D United S tates 1 5. 05 2, 120 . 5 1 , 445 . 1 64 .6 4. 5% 0. 3 x 5 .7 x NA
IA S E ne rgy, Inc. 1 0/31 /200 8 I AS C . A OT CB B US D C a na da 0. 03 1. 8 0. 0 ( 0. 9) NM - - NA
IdeaE dge, Inc. 1 2/31 /200 8 O T C B B: ID AE OT CB B US D United S tates 0. 44 1 8. 6 0. 0 ( 4. 6) NM - - NA
is ee media Inc. 9 /3 0/20 08 IEE T S XV CAD C a na da 0. 12 4. 9 1. 1 ( 4. 4) NM 2. 0 x - NA
J umbuck E ntertainme nt P ty Ltd. 6 /3 0/20 08 A S X :J MB AS X A UD A us tra lia 0. 41 1 3. 2 1 0. 2 4. 7 46 .0 % 0. 9 x 1 .9 x 72
J umpT V I nc. 6 /3 0/20 08 T S X: J T V TS X CAD C a na da 0. 44 4 0. 2 1 1. 5 ( 1. 8) -1 5. 3% 4. 3 x - NA
K a boos e Inc. 9 /3 0/20 08 T S X: K A B TS X CAD C a na da 0. 38 4 2. 8 5 9. 7 4. 5 7. 6% 0. 8 x 11. 0x NA
K ings oft C o. Ltd. 9 /3 0/20 08 3 888 S EHK HK D C hina 2. 90 401 . 5 106 . 9 36 .1 33 .8 % 3. 0 x 8 .8 x 1 ,6 60
Lingo Me dia C orpora tion 9 /3 0/20 08 T S XV :L M T S XV CAD C a na da 0. 90 9. 3 3. 3 ( 1. 4) -4 2. 5% 3. 1 x - NA
Live World Inc. 9 /3 0/20 08 L VW D OT CP K US D United S tates 0. 04 1. 2 1 1. 7 ( 1. 2) -1 0. 1% 0. 0 x - 73
LookS mart, Ltd. 9 /3 0/20 08 L OO K Na s daqG M US D United S tates 1. 37 2 3. 3 6 9. 5 ( 2. 6) -3 .7 % - - 93
Magnitude Informa tion S ys tems I nc. 9 /3 0/20 08 MA GY OT CB B US D United S tates 0. 03 1 0. 9 0. 1 ( 3. 2) NM - - 13
Mixi, Inc. 1 2/31 /200 8 2 121 TS E JP Y J a pan 4 13 ,0 00 688 . 7 127 . 8 48 .6 38 .0 % 4. 5 x 11. 8x NA
Mode rn T imes Group Mtg A B 1 2/31 /200 8 MT G B OM SE K S weden 13 2. 00 1, 015 . 0 1 , 536 . 5 2 45. 7 16 .0 % 1. 0 x 6 .1 x NA
Moggle , Inc 1 2/31 /200 8 MMO G OT CB B US D United S tates 2. 00 7 0. 6 NM ( 1. 1) NM - - 3
MOK O. mobi L imited 6 /3 0/20 08 MK B AS X A UD A us tra lia 0. 04 2. 1 1. 3 ( 2. 0) NM 0. 7 x - NA
NE O W IZ G ame s C orpora tion 1 2/31 /200 7 A 09 566 0 K OS E KR W S outh K orea 33 ,6 50 226 . 2 126 . 3 33 .9 26 .9 % 1. 7 x 6 .4 x NA
NetDra gon We bS oft, Inc. 9 /3 0/20 08 7 77 S EHK HK D C hina 2. 95 201 . 1 9 5. 4 46 .3 48 .6 % 0. 3 x 0 .5 x 1 ,4 82
Netea s e. com Inc. 9 /3 0/20 08 NT E S Na s daqG S US D C hina 1 9. 25 2, 368 . 8 423 . 1 2 74. 7 64 .9 % - - 2 ,4 13
NeXplore C orporation 9 /3 0/20 07 NX PC OT CP K US D United S tates 0. 79 4 4. 1 NM ( 4. 9) NM - - 19
Ngi G roup Inc. 1 2/31 /200 8 2 497 TS E JP Y J a pan 26 ,1 70 3 5. 2 107 . 1 33 .0 30 .8 % - - NA
Northgate T e chnologies L imited 1 2/31 /200 8 5 900 57 BSE INR India 4 4. 30 3 1. 6 138 . 1 24 .3 17 .6 % 0. 2 x 1 .3 x 2 86
Open T e xt C orp. 1 2/31 /200 8 OTE X Na s daqG S US D C a na da 3 5. 55 1, 845 . 0 769 . 3 1 95. 0 25 .3 % 2. 6 x 10. 1x 3 ,4 00
Openwa ve S ys tems I nc. 1 2/31 /200 8 OPW V Na s daqG S US D United S tates 0. 89 7 4. 1 199 . 6 (10 .2 ) -5 .1 % - - 6 27
P e rfect W orld C o., Ltd. 9 /3 0/20 08 PWRD Na s daqG S US D C hina 1 4. 30 815 . 8 187 . 1 1 00. 0 53 .5 % - - 1 ,4 01
P hotoC hannel Ne tworks Inc. 9 /3 0/20 08 T S XV :P N T S XV CAD C a na da 1. 77 4 7. 6 1 3. 7 ( 2. 4) -1 7. 7% 3. 4 x - NA
Quepas a C orp. 9 /3 0/20 08 QPS A Na s daqC M US D United S tates 1. 43 1 8. 1 0. 1 (11 .8 ) NM - - 63
OA O R B C Informa tion S ys tems 1 2/31 /200 7 R B CI RTS US D R us s ia 0. 30 4 1. 6 134 . 8 17 .6 13 .1 % 0. 0 x 0 .1 x NA
S handa Intera ctive E nte rtainment L td. 9 /3 0/20 08 S NDA Na s daqG S US D C hina 3 0. 55 2, 119 . 6 478 . 5 2 28. 6 47 .8 % - - 2 ,5 64
S hutterfly, Inc. 1 2/31 /200 8 S F LY Na s daqG S US D United S tates 8. 49 213 . 4 213 . 5 29 .8 13 .9 % 0. 6 x 4 .2 x NA
S K C ommunications C o. , Ltd. 1 2/31 /200 7 A 06 627 0 K OS E KR W S outh K orea 8 ,1 30 234 . 2 145 . 2 13 .7 9. 4% 1. 6 x 17. 1x NA
S NA P Interactive, Inc. 9 /3 0/20 08 S TVI OT CB B US D United S tates 0. 99 1 0. 6 2. 3 0. 2 10 .1 % 4. 1 x 40. 7x 5
S NM G lobal Holdings 9 /3 0/20 08 S NMN OT CP K US D United S tates 0. 00 0. 0 2. 0 ( 0. 7) -3 4. 8% 1. 1 x - 33
S ocial Me dia V enure s , Inc. 1 2/31 /200 8 S MVI OT CP K US D United S tates 1. 42 0. 0 0. 1 ( 0. 1) -6 0. 5% 0. 1 x - NA
S park Ne tworks , Inc. 9 /3 0/20 08 L OV A ME X US D United S tates 2. 55 5 4. 7 6 0. 1 11 .7 19 .5 % 0. 8 x 4 .3 x 1 76
S pectrumDNA, Inc. 9 /3 0/20 08 S PX A OT CB B US D United S tates 0. 10 4. 9 0. 1 ( 2. 7) NM - - 7
T encent Holdings Ltd. 9 /3 0/20 08 7 00 S EHK HK D C hina 4 8. 30 11 ,1 92 .8 904 . 8 4 48. 2 49 .5 % 1 3. 4x 27. 1x 6 ,0 39
T he P arent C ompany 8/2/2 008 K IDS . Q OT CP K US D United S tates 0. 03 0. 7 112 . 0 (13 .5 ) -1 2. 0% 0. 2 x - 3 47
T he 9 Limited 9 /3 0/20 08 NC T Y Na s daqG S US D C hina 1 4. 49 400 . 1 252 . 8 95 .2 37 .7 % - - 1 ,3 61
T he S tre et.com, Inc. 9 /3 0/20 08 TS CM Na s daqG M US D United S tates 2. 60 7 9. 3 7 5. 2 12 .2 16 .2 % 0. 0 x 0 .1 x 3 49
T ree . C om, Inc. 1 2/31 /200 8 TRE E Na s daqG M US D United S tates 3. 91 3 6. 6 228 . 6 (27 .0 ) -1 1. 8% 0. 2 x - NA
Unis e rve C ommunications C or p. 1 1/30 /200 8 T S XV :U S S T S XV CAD C a na da 0. 08 1. 6 2 4. 0 0. 1 0. 4% 0. 2 x 36. 9x NA
Unite d Online Inc. 9 /3 0/20 08 UNT D Na s daqG S US D United S tates 5. 19 425 . 4 538 . 7 1 30. 6 24 .2 % 1. 4 x 6 .0 x 9 28
UOMO Medi a, I nc 1 0/31 /200 8 UO MO OT CB B US D C a na da 0. 08 6. 8 0. 5 ( 0. 4) -9 1. 6% 1 5. 1x - NA
V O IS , I nc. 9 /3 0/20 08 V OIS OT CB B US D United S tates 0. 75 5. 4 0. 0 ( 4. 0) NM - - 4
W ebzen Inc. 1 2/31 /200 8 W ZE N Na s daqG M US D S outh K orea 1. 50 1 7. 8 2 0. 0 ( 2. 0) -1 0. 1% - - 3 30
W izza rd S oftwa re C orporation 9 /3 0/20 08 W ZE A ME X US D United S tates 0. 73 3 3. 0 6. 2 ( 6. 5) NM 5. 3 x - 1 10
W oozyF ly, Inc. 9 /3 0/20 08 W ZYF OT CB B US D United S tates 0. 15 2. 6 0. 0 NM NM - - 14
W orlds .com Inc. 9 /3 0/20 08 W DDD OT CB B US D United S tates 0. 20 1 0. 5 0. 1 NM NM - - 1
W ynds torm C orporation NA W YN D OT CB B US D United S tates 0. 12 2. 2 NA NM NM - - NA
XING A G 9 /3 0/20 08 O 1B C XT R A E UR G ermany 2 9. 75 197 . 8 4 0. 1 15 .6 38 .8 % 3. 6 x 9 .2 x 1 61
Y e dangO nline C orp. 1 2/31 /200 7 A 05 277 0 K OS E KR W S outh K orea 7 ,3 00 8 0. 0 4 8. 0 10 .7 22 .4 % 1. 7 x 7 .4 x NA
Y nk K orea Inc. 1 2/31 /200 7 A 02 377 0 K OS E KR W S outh K orea 4 ,6 30 8. 0 1 3. 7 ( 1. 0) -7 .6 % 0. 6 x - NA
ZipL ocal I nc. 9 /3 0/20 08 T S XV :ZIP T S XV CAD C a na da 0. 02 1. 3 2. 8 ( 3. 9) NM 0. 7 x - NA
High 11 ,1 92 .8 1 ,5 36 .5 44 8. 2 5 06. 8 % 4 0. 7x 40. 7x 6, 03 9
Low 0. 0 0. 0 -2 7. 0 -9 8. 9% 0. 0 x 0 .1 x 1
Average 348.3 131.0 28.3 17.3% 4.3x 8.7x 604
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 )
Twitter raises $35 million: The largest W eb 2.0 financing of the last three months was for perhaps the hottest W eb 2.0
company on the planet – Twitter (Figure 2). On Friday, the company announced that it had closed on a new funding round
of $35 million that rumour has it valued the company at approximately $230 million. This for a company with no revenue!
However, Twitter has undergone tremendous growth over the last year. According to compete.com, Twitter had 6 million
unique visitors as of January 2009, up an astounding 800% Y/Y, and moving ahead of social networks like Bebo (bought
by AOL for $850 million) (Figure 3). Overall, there have been 15 financings announced in February, totalling $89.0 million,
or $5.9 million on average. The average value in February is below the $6.9 million average for January with more early
stage financings announced in February relative to January – 64% of financings in February have been Series A rounds
versus just 27% in January. For additional details, see Figure 30 (at end of note).
Financing - Last Three Months
40.0
35.0
30.0
25.0
Feb-09
(US$m)
20.0 Jan-09
Dec-08
15.0
10.0
5.0
0.0
Mixpo
CoveritLive
Motionbox
IMVU
InsideView
TextDigger
Overlay.TV
Xobni
AdMob
Go Internet Media
FooMojo
Tvtrip
One True Media
Social Median
Kewego
SocialMedia
Playdo
SundaySky
Gbox
Meez
Twitter
NetShelter
NewsGator
Tripwolf
fav.or.it
Blue Kai
Tvinci
GoFish
Yodle
Outbrain
Nurien
Taptu
Scribd
JibJab
Oodle
Superfish
Snapmylife
Tagged
Jackbe
FetchDog
7 Billion People
DotBlu
Hubdub
Snooth
Identi.ca
VirtuOz
Play Hard Sports
Fliqz
Sportsblogs
E-Global Sports
StockTwits
Clickpass
Tumblr
RatePoint
DECA
OneSpot
Outright
Angie's List
Geni
Cake Financial
Aster Data Systems
ChakPak
AboutUs
WhistleBox
Pulse Entertainment
Figure 2. Financings, Last Three Months
Source. Company reports

4. Page 4
Figure 3. Twitter vs. Bebo – Unique Visitors
Source. www.compete.com
Four aggregation companies raise $22.5 million (total): Activity in February has been busiest among aggregation
companies (Figure 4). Four companies, Outbrain, Oodle, OneSpot and fav.or.it, have raised a total of $22.5 million. There
have also been three video-related transactions, although the transactions were much smaller on average, with
W histleBox, Tvinci, and Mixpo raising a total of $7.9 million.
Financing by Sector - February 2009
40.0
35.0
30.0
25.0
(US$m)
20.0
35.0
15.0
22.5
10.0
5.0
9.0
7.9
5.3
4.3
3.0
2.0
0.0
Microblog Aggregation Travel Video Social Networks Search Analytics Financial Services
1 4 1 3 2 1 1 1
# companies
Figure 4. Financings, by Sector, February 2009
Source. Company reports

5. Page 5
Average round size increases slightly: On a trailing 12-month basis, total financing dollars inched up as of February
2009, with average round sizes increasing slightly as well (Figure 5).
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
Nov-05
Mar-06
Nov-06
Mar-07
Nov-07
Mar-08
Nov-08
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
Cumulative total nears $5.4 billion: Overall, on a cumulative basis, W eb 2.0 financings have totalled nearly $5.4 billion,
with the majority of the financing coming in late 2007 and the first three quarters of 2008 (Figure 6).

6. Page 6
Web 2.0 Financing (cumulative)
1,400.0 6,000.0
1,313.3
1,200.0
5,000.0
1,000.0 944.7
4,000.0
800.0
(US$m)
(US$m)
701.7
3,000.0
600.0
524.9
2,000.0
400.0 338.5
301.8 297.5
1,000.0
200.0 145.7133.0
135.6
97.0
87.2 74.4
37.5 33.5 18.2 41.9 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 6. Financing, Cumulative
Source. Company reports
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 7). Canadian companies generated under 1% of
capital market activity based on dollar volume (Figure 6). Based on number of transactions, the U.S. leads with 73.6% of
deals, while Canada is third in number of financings at 5.3% (Figure 8).
Financing/M&A by Country - LTM ($) Financing/M&A by Country - LTM (#)
Canada
UK
UK
5.3% Israel
5.3%
13.1%
4.1%
France
China 2.8%
8.0%
Russia ROW
1.7%
8.9%
Israel
1.0%
Canada
0.7%
France
0.7%
ROW
2.0%
USA USA
72.9%
73.6%
Figures 7 & 8. Financing/M&A, by Country (LTM, $, #)
Source. Company reports

7. Page 7
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 28.4% of the total, with later-stage (Series D, E and
PIPE) deals accounting for just 7.0%.
Financing by Type - LTM
Series B
Series C
28.4%
14.0%
Series D
4.4%
Angel/Seed
9.6%
Debt financing
2.6%
Series A PIPE
38.9% 2.2%
Figure 9. Financing, by Type (LTM, #)
Source. Company reports
“D” series remain largest equity rounds (by dollar): In the last 12 months, there have been 10 “D” series rounds,
averaging $23.8 million per financing (Figure 10). Note that we have excluded the $430 million Series C financing of Oak
Pacific Interactive as it skews the results substantially.

8. Page 8
Average financing round size - LTM
45.0
40.0
35.0
30.0
25.0
(US$m)
41.9
20.0
15.0
23.8
10.0
18.4
11.3
5.0 10.0
8.8
5.8
3.5
0.0
Angel/Seed Debt financing PIPE Series A Series B Series C Series D Series E
# rounds
22 6 5 89 65 32 10 1
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) has closely tracked the performance of the NASDAQ
composite index, although it has outperformed the index since mid 2008 (Figure 11).

9. Page 9
Web 2.0 Index Price Performance
140
120
100
80
60
40
20
0
2/19/2008
3/4/2008
3/18/2008
4/1/2008
4/15/2008
4/29/2008
5/13/2008
5/27/2008
6/10/2008
6/24/2008
7/8/2008
7/22/2008
8/5/2008
8/19/2008
9/2/2008
9/16/2008
9/30/2008
10/14/2008
10/28/2008
11/11/2008
11/25/2008
12/9/2008
12/23/2008
1/6/2009
1/20/2009
2/3/2009
NASDAQ COMP Web 2.0 (Market Cap Weighted)
Figure 11. Web 2.0 Price Performance
Source. Capital IQ
DigitalTown leads; NGI falls: DigitalTown Inc. (DGTW -OTCBB) had the best performance in the group (for stocks with
prices greater than $1) (Figure 12), increasing 33.3% on the week. Quepasa Corporation (QPSA-NasdaqCM) fell the most,
-19.2%.

10. Page 10
1 Week P rice P erformance
DigitalTow n, Inc. 33.3%
NEOWIZ G ames Corporation 30.1%
Northgate Technologies Limited 19.0%
Y nk K orea Inc. 14.0%
HanbitS oft, Inc. 12.5%
S park Netw orks , Inc. 10.9%
Eolith Co. Ltd. 9.4%
PhotoChannel Netw orks Inc. 8.6%
A ctoz S oft Co., Ltd. 8.1%
Tencent Holdings Ltd. 6.2%
G amania Digita l Entertainment Co., 5.6%
S ocial Media V enures , Inc. 5.2%
Chines e G amer International 4.9%
Y edangOnline Corp. 4.6%
NetDragon WebS oft, Inc. 2.8%
DA DA S pA 2.7%
GigaMedia Ltd. 2.6%
IA C/InterA ctiveCorp. 1.8%
G iant Interactive G roup, Inc. 1.3%
Webz en Inc. 0.7%
A Q Interactive, Inc. 0.6%
Tree.Com, Inc. 0.0%
LookS mart, Ltd. 0.0%
Open Tex t Corp. -0.6%
S hutterfly , Inc. -1.3%
K ings oft Co. Ltd. -1.3%
S handa Interactive Entertainment -1.6%
G ree, Inc. -1.8%
The9 Limited -2.3%
G ungHo Online Enterta inment, Inc. -4.3%
X ING A G -5.0%
S K Communications Co., Ltd. -5.1%
Neteas e.com Inc. -6.3%
Perf ect World Co., Ltd. -8.6%
Modern Times Group Mtg A B -8.8%
G ameOn Co Ltd. -8.9%
Frogs ter Interactive Pictures A G -9.3%
Mix i, Inc. -9.4%
United Online Inc. -11.4%
Ngi G roup Inc. -11.5%
TheS treet.com, Inc. -11.6%
Quepas a Corp. -19.2%
-30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0%
Figure 12. 1-Week Price Performance
Source. Capital IQ

11. Page 11
INDUSTRY NEWS (PARTNERSHIPS, FINANCIAL RESULTS, NEW PRODUCTS)
Key Developments
Company Headline Notes
T ree . C om, Inc. announc ed it ex pec ts to T ree . C om, Inc. (N as daqG M : T R E E ) a nnou nc ed a private plac ement o f 93 5, 00 0 c ommo n s hares a t $3 . 91 per s hare f or gros s proc eeds of
T ree .C om, Inc. (Na s daqG M: T R E E )
rec eive $3. 65 million in fun ding. $ 3, 65 5,85 0 on F ebrua ry 8, 200 9. Do ug L ebda , C ha irman a nd C hief E xec utive O ffic er of the c ompa ny will inves t in the transa ction .
NetDragon W ebS oft, Inc. (S E HK :777); N e tDrago n P artners with S aigonT e l to N etDrago n W ebS o ft Inc. announc ed tha t it ha s signe d an agree me nt with S aigon T elec ommunic ation & T e chnologies C orpo ra tio n to lic ens e
L ic ens e Zero O nline in V ietnam Ze ro O nline in V ietnam ma rk et. Z ero O nline is the firs t 2 . 5D M MO R P G develo ped in C hina that is s et in a s cienc e-fic tio n univers e with robo t
S aigon T ele communica tion &
a vatars. It wa s well rec eive d by play ers both in C hina and ove rs ea s mark et sinc e its launc h in April 2007 . NetDra gon has already launched
T echnologie s C or poration
the E nglish and S panish ve rs ion o f Zero Online in E urop ean and Americ an ma rk ets, and the traditional C hines e ve rs ion in Ho ng K ong,
(HO S E : S G T )
M ac ao, and T aiwa n.
B roadW ebA sia Inc . announce d that it has B roadW ebA s ia Inc . ( O T C P K : B W B A) a nnou nc ed a private plac ement of 1 8% s ec ured co nve rtible pro mis so ry no te with Able I ncome F und,
B r oa dW ebAs ia Inc. (O T C PK : B W B A)
rec eive d $0 .15 millio n in fu nding. L LC fo r gros s proc eeds o f $1 50, 0 00 o n F ebrua ry 9, 200 9. T he no te h as a c onvers io n price of $ 0.50 per s ha re . T he c ompany promis es to pa y
to the ho lde r $150 ,000 in c as h on May 10 , 20 09. The de benture be ars interes t at the ra te o f 18 % per a nnum u ntil the matu rity date. T he
c ompa ny will a ls o is su e a warra nt fo r the purc has e o f up to 5 0,00 0 s hares o f the c ompany ’s co mmon stoc k at an ex ercis e price of $0. 7 5 pe r
s ha re . T he warra nts are exerc is able , in whole o r in part, any time from and afte r the date of is s uanc e of the warrant for a perio d of five ye ars .
O pe n T ex t C o rp. T eams Up with F us e Digital O pe n T ex t C o rp. announce d that it ha s teamed up with F us e Digital to deliver the la tes t web s olu tio ns to F us e c lient the G S MA . The G S MA
O pen T ext C or p. (Nas daqG S : O T E X )
to Deliver the La tes t W eb S olutions to F us e a pproac he d F us e Digital, o ne o f the UK 's leading digita l mark eting agencies , to improve its pu blic image online a nd move to a more sc alable
C lient the G S MA a nd func tional website. P revious ly the G S M A site was hard to mana ge, it wa s re liant on c ode and ex porting co ntent which was ineff ic ie nt a nd
time c onsu ming. T he G S MA wanted F us e to pro vide the c reative inpu t s urro unding the site and foc us on the brand and online ima ge. F u se
s elec ted the O pen T ext W eb S olution to deliver the func tiona lity behind the s ce nes . Du e to the natu re of the site and the e nterprise le ve l
f eatu re s the G S MA requ ired, F us e look ed to O pe n T ex t, to de live r the high le ve l f ra mewo rk required . O pen T ext W eb S o lutions enabled the
G S MA to tak e c omplete co ntrol of all online o utpu t and mes s aging, whic h in turn s treamline d work flow proc es s es , and inc re as ed e fficienc y ,
pro duc tivity and va lue for mone y. F urthermore, the n ew fu nc tio nality will ena ble the organis ation to deliver c ontent in a va riety of la ngua ges
to a wo rldwide a udienc e. T his wa s critic al to the organis ation as it has o ver 7 50 G S M mobile pho ne o perato rs a nd o ver 2 00 manufac turers and s upp
W iz zard Media a nd A ttentionS pan Media W iz za rd Media, a divis io n of W izz ard S oftwa re , ha s signe d an agree me nt with A tte ntion S pa n Me dia , LL C to dis tribute the s tudio's 'S oc k
Attention S pan Media , L L C ; W izzard
S ign Dis tribu tio n A greement T u be P res ents ' original video c on tent for do wnlo ad to pe rs onal mobile d evic es , c ompute rs a nd via A pple's iT unes s ervic e a nd M ic ros oft' s
S oftwar e C or poration (AME X: W ZE )
Zu ne M arke tplac e.
Do pod Inte rnational C o rp. Ltd. and is eemedia I nc . and Dopod I nterna tio nal C orp. Ltd. have e ntered into a n ag re eme nt that will s ee is ee me dia 's is ee doc s (T M ) E mail a ttac hment
is eemedia Inc. (TS X V: IE E )
is eemedia I nc . A gree to P re -ins tall Is eedo cs s olution pre-ins ta lled o n hu ndreds o f thous ands of Do pod W indows Mo bile devic es in S pring 200 9. T he Dopod a greement in unis on with
o n S ma rtphones T hroughout C hina is eemedia's rec ent agree me nt with H os t C hina Mobile ( Hos tC HN ) is intended to promote the us e o f ise edoc s , by giving S ma rtphone us ers
immedia te and ea sy a cc es s to the tec hno logy with the clic k of an ic on on the hands et.
X ING A G Ann ounc es E arnings R e su lts for X ING A G anno unc ed earnings res ults for the y ear 2 008. T he c ompa ny re ported reve nues inc reas ed by 80% to € 35. 3 million c ompared to
X ING A G (X T R A: O 1B C )
the Y ear 2 008 € 19. 6 million. T he C o mpany also increa se d its ope ra tio nal res ult ( E B IT DA ) by mo re tha n 85 % . T he E B IT DA ( adjus ted for no n rec urring
e xpe ns es res ulting from disc ontinued M& A pro ce ss es totaling €0 . 77 millio n) the re fore ros e by 86% to €1 2. 82 million in the 2 008 financ ia l
y ear c ompa re d to €6.8 9 million for the s ame pe riod la st ye ar.
P erfec t W orld Announce s C lo se B e ta T e st P erfect W orld C o. Ltd. announc ed on that its multimedia online role-pla ying game, ' K ou daixiyo u', o r E therS a ge O nlin e, h as s tarted clos e
P erfec t W or ld C o., L td.
f or 'K ouda ix iy ou' in North A meric a beta tes t in No rth A me ric a.
(Nas da qGS : PW R D)
S handa to C o llaborate with S torm S ha nda Interac tive E nterta inment Ltd. ha s re ached an a greement with Ac c es s C hina H olding Ltd. on c oope ra tio n in operating o ne o f the
Acces s C hina Holding L td.; S handa
E nte rtainme nt o n G ame O peration latter's online ga me s. S handa will adopt th e s ame mode as is u se d in its c ollaboration with K ings oft C orp. in operating the game, but
Interactive E nterta inment L td.
dec lined to dis c lo se mo re details on the co operation.
(Nas da qGS : S N DA)
M odern T imes G ro up M tg A B R eports M odern T imes G roup Mtg AB reporte d ea rn ings re su lts f or the full y ea r o f 20 08. F or the ye ar, the company po sted a n op erating pro fit of S E K
Modern T ime s G roup Mtg AB
E arnings R e su lts f or the F ull Y ear of 200 8 ; 3 , 671 million, as c ompared to S E K 2, 027 millio n in 20 07. G rou p ne t s ales amounted to S E K 13 ,166 million, up by 1 6% fro m S E K 1 1,35 1
(O M: MT G B )
A nno unc es No n-C as h A s se t Impairme nt million in 200 7. E arnings per share ended at S E K 4 3.36 , up from S E K 20. 35. B oth s ales and earnings rea ched a n all time high. T he
C harge c ompa ny anno unc ed non-c as h a ss et impa irme nt c ha rg e of S E K 76 millio n relating to MT G 's O nline bu sines s area .
DigitalF X Internation al, Inc . has file d a S he lf D igitalF X In ternational, Inc . has file d a S he lf R egis tration in the a mou nt o f $0 . 42 millio n.
Digi ta lF X Inte rnational, Inc.
R e gistration in the amount of $0.4 2 million.
(AME X: DX N)
T o ys quot;R quot;Us , I nc . ac qu ired T o ys quot;R quot;Us , I nc . ac qu ired B a byUnivers e.c om, eT o ys . c om and eP regna nc y. c om o f T he P a re nt C o mpa ny on Fe bruary 12, 2009 . T he financ ial
T he P are nt C ompany
B aby Universe .c om, eT oy s . c om and terms of the dea l we re not disc los ed. T he P arent C ompany f iled for bankruptcy p ro tectio n in De ce mber, 200 8. T o ys quot;R quot;Us , I nc . c ompleted
(O TC P K : K ID S .Q ); T he P are nt
e P regnanc y .c om of T he P arent C ompany . the a cquis itio n of B a by U nivers e. c om, e T oys .c om and eP regnanc y. co m of T he P a re nt C ompany on F ebruary 12, 200 9.
C ompany, B abyUnivers e. com,
eP re gna ncy.com a nd eT oys .com;
T oys quot;R quot; Us Inc.
W e bz en I nc . R eports E a rnings R es ults for W ebz en I nc . repo rte d ea rnings re su lts for the fou rth qua rter and full yea r 2008 . F or the qu arter, the c ompan y reported net los s of K R W 2, 0 19
W ebzen Inc. (K O S E : A069080)
the F ou rth Q uarte r and F ull Y ear 20 08 million on re venue o f K R W 7 ,211 million a gains t ne t inco me of K R W 2, 07 3 million on revenu e of K R W 6,9 64 millio n a y ea r ago. F or the ye ar,
the c ompa ny re ported net los s of K R W 14 , 266 million on revenue of K R W 28,4 81 million aga ins t net los s of K R W 9,5 36 million on re venue
o f K R W 28 , 216 million a ye ar ago .
Figure 13. Key Developments
Source. Capital IQ

12. Page 12
VALUATION
MMOG companies lead market cap charts: Eight companies in our Web 2.0 universe top US$1 billion in market
capitalization (Figure 14). Sixty-one of the 80 (up from 58 last week) companies have market caps under US$100 million,
with 26 (vs. 22 last week) under $10 million. Online gaming companies dominate the top of the list with four of the top six
by market cap.
Market C ap (US D m)
Tencent Holdings Ltd.
Neteas e.c om Inc. 2368. 8
IA C/InterA c tiveCorp. 2120.5
S handa Interac tive Entertainment Ltd. 2119.6
Open Tex t Corp. 1845.0
G iant Interactive G roup, Inc. 1478. 5
Gree, Inc. 1302.5
Modern Times Group Mtg A B 1015.0
Perfec t World Co., Ltd. 815.8
Mix i, Inc. 688.7
United Online Inc. 425. 4
K ings of t Co. Ltd. 401.5
The9 L imited 400.1
G igaMedia Ltd. 398.7
Chines e Gamer International 282.5
S K Communic ations Co., Ltd. 234. 2
NEOWIZ Games Corporation 226.2
S hutterf ly , Inc. 213.4
NetDragon WebS of t, Inc. 201. 1
XING A G 197. 8
DA DA S pA 129. 7
B roadWebA s ia Inc. 127. 3
122.8
GungHo Online Entertainment, Inc.
GameOn Co Ltd. 120.1
Gamania Digital Entertainment Co., 103.6
CDC Corp. 94.9
80.0
Y edangOnline Corp.
TheS treet. com, Inc. 79.3
A c toz S oft Co., Ltd. 78.4
Openw ave S y s tems Inc. 74. 1
70. 6
Moggle, Inc
HanbitS of t, Inc. 62. 3
S park Netw orks , Inc. 54.7
DigitalTow n, Inc. 54.3
47. 6
PhotoChannel Netw orks Inc.
G eoS entric Oy j 45. 8
NeXplore Corporation 44. 1
K aboos e Inc. 42.8
41.6
OA O R B C Inf ormation S y s tems
J umpTV Inc. 40.2
Tree.Com, Inc. 36.6
Ngi Group Inc. 35.2
33.0
Wiz z ard S of tw are Corporation
Northgate Technologies L imited 31.6
B oomJ Inc 28.6
Dolphin Digital Media, Inc. 25.8
Fluid Mus ic Canada, Inc. 25.3
LookS mart, Ltd. 23.3
Gravity Co., L td 19.7
A Q Interac tive, Inc. 19.3
Eolith Co. Ltd. 19.3
Ex tens ions , Inc. 18.9
IdeaEdge, Inc. 18.6
Quepas a Corp. 18.1
Webz en Inc. 17.8
J umbuck Entertainment Pty Ltd. 13. 2
Frogs ter Interactive Pictures A G 13. 0
Magnitude Inf ormation S y s tems Inc. 10. 9
S NA P Interac tive, Inc. 10. 6
Worlds .c om Inc. 10. 5
A c celeriz e New Media, Inc. 9.4
L ingo Media Corporation 9.3
Y nk K orea Inc. 8.0
CornerWorld Corporation 7.0
UOMO Media, Inc 6.8
V OIS , Inc. 5.4
GoFis h Corporation 5.1
4.9
is eemedia Inc.
S pec trumDNA , Inc. 4.9
B right Things plc 3.5
Wooz yFly , Inc. 2.6
2.2
Wynds torm Corporation
MOK O.mobi L imited 2.1
DigitalFX International, Inc. 2.0
IA S Energy , Inc. 1.8
1.6
Unis erve Communic ations Corp.
ZipL ocal Inc. 1.3
LiveWorld Inc. 1.2
Financ ial Media G roup, Inc. 1.0
0.9
DigitalPos t Interac tive, Inc.
B igs tring Corp. 0.8
The Parent Company 0.7
A s s oc iated Media Holdings Inc. 0.2
0.0
China Gatew ay Corporation
S ocial Media V enures , Inc. 0.0
S NM G lobal Holdings 0.0
0 500 1, 000 1, 500 2, 000 2,500 3,000 3, 500 4,000
Figure 14. Market Cap Ranking
Source. Capital IQ