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www.mackieresearch.com
Web 2.0 Weekly
“What Recession? Online Luxury Heats Up”
Copyright © 2000-2010, Mackie Research Capital Corporation, All rights reserved
May 18, 2010
David Shore, CFA, MBA 416.860.6784dshore@mackieresearch.com
Damian Wojcichowsky, CFA 416.860.7652
This report has been created by Analysts that are employed by Mackie Research Capital Corporation, a Canadian Investment Dealer.For further disclosures, please see last page of this report.
www.mackieresearch.com
www.mackieresearch.com2
Key Developments (past week)Deals (M&A, Finance) – Online Luxury – Hot Sector in a Poorer World Booyah (virtual world operator) raised $20 mm in Series C financing. Social media brand and charity promoter, SocialVibe, raised an $11.7 mm financing
round. Activity in the online luxury retail space headed up this week with Brandsclub (Brazilian
luxury flash retailer) in a $17 mm funding and Gilt Groupe raising $35 mm.
Financial Results/Guidance Fluid Music (TSX:FMN, digital music distributor) reported Q1/F10 revenue of $15.9 mm
(vs. $1.3 mm in the same period last year) and EPS of ($0.06) vs. ($0.03) in Q1/F09. Points International (TSX:PTS, rewards program manager) reported strong revenue
growth – up 11% Y/Y to $23.5 mm, and break-even EPS. Excluding contribution last year from a discontinued relationship with a major customer (Delta Airlines), revenue growth was 205% Y/Y.
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Public Company Data
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Aggregate Public Data
Web 2.0 Public Companies Total Median Max Min# Companies 100 - - -Market Cap (US$ mm) 82,162.9 67.9 36,142.4 1.2Revenue (US$ mm) 23,048.3 59.8 3,057.7 0.01 Year revenue growth 5.3% 857.0% -91.4%EBITDA as % of revenue - 13.4% 67.7% -75.0%Net cash (US$ mm) 9,044.1 2.1 1,827.7 -670.8TEV/Revenue - 1.9x 41.8x 0.1xTEV/EBITDA - 8.4x 36.6x 0.8xP/E - 16.0x 83.4x 0.0xRelative to 52 week high -37.8% 0.0% -97.6%
Source: CapitalIQ
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Public Company Distribution
27
17
10
76
5
3 3 3 32 2 2 2
1 1 1 1 1 1 1 1
0
5
10
15
20
25
30
Gam
ing
Soc
ial N
etw
orki
ng
Med
ia
Div
ersi
fied
Mar
ketin
g
Mob
ile
Infra
stru
ctur
e
SM
S/V
oice
Ent
erpr
ise
Adv
ertis
ing
Inte
rnet
Ret
ail
Virt
ual W
orld
Dat
ing
Mus
ic
Ver
tical
Com
mun
ities
Col
labo
ratio
n
Pod
cast
ing
Lear
ning
Vid
eo
Sea
rch
Pay
men
t
Fina
ncia
l Ser
vice
s
By Sector By Country
0
5
10
15
20
25
30
35
40
45
Uni
ted
Sta
tes
Can
ada
Chi
na
Sou
th K
orea
Japa
n
Taiw
an
Ger
man
y
Aus
tralia
Uni
ted
Kin
gdom
Hon
g K
ong
Pol
and
Rus
sia
Finl
and
Sw
eden
Mal
aysi
a
Indi
a
Italy
Sw
itzer
land
Isra
el
Source: CapitalIQ
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Valuation Dashboard – 1 Week
Rising36%
Falling59%
Flat5% Rising
29%
Falling68%
Flat3%
Rising21%
Falling77%
Flat2%
Market Cap
Rising34%
Falling66%
Flat0%
EV/Revenue
EV/EBITDA P/E
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Median EV/Revenue
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
3.0x
3.5x
4.0x
4.5x
5.0x
3/30
/200
94/
6/20
094/
13/2
009
4/20
/200
94/
27/2
009
5/4/
2009
5/11
/200
95/
18/2
009
5/25
/200
96/
1/20
096/
8/20
096/
15/2
009
6/22
/200
96/
29/2
009
7/6/
2009
7/13
/200
97/
20/2
009
7/27
/200
98/
3/20
098/
10/2
009
8/17
/200
98/
24/2
009
8/31
/200
99/
7/20
099/
14/2
009
9/21
/200
99/
28/2
009
10/5
/200
910
/12/
2009
10/1
9/20
0910
/26/
2009
11/2
/200
911
/9/2
009
11/1
6/20
0911
/23/
2009
11/3
0/20
0912
/7/2
009
12/1
4/20
0912
/21/
2009
12/2
8/20
091/
4/20
101/
11/2
010
1/18
/201
01/
25/2
010
2/1/
2010
2/8/
2010
2/15
/201
02/
22/2
010
3/1/
2010
3/8/
2010
3/15
/201
03/
22/2
010
3/29
/201
04/
5/20
104/
12/2
010
4/19
/201
04/
26/2
010
5/3/
2010
5/10
/201
05/
17/2
010
373638383939393841414344444545454648494949485154545859596264646562626467687069726968677072707574757879787977788080848181
Mul
tiple
(x)
Median Long-term average
# companies
Source: CapitalIQ
Revenue multiples down second
consecutive week
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Median EV/EBITDA
0. 0x
5. 0x
10. 0x
15. 0x
20. 0x
25. 0x
3/30
/200
94/
6/20
094/
13/2
009
4/20
/200
94/
27/2
009
5/4/
2009
5/11
/200
95/
18/2
009
5/25
/200
96/
1/20
096/
8/20
096/
15/2
009
6/22
/200
96/
29/2
009
7/6/
2009
7/13
/200
97/
20/2
009
7/27
/200
98/
3/20
098/
10/2
009
8/17
/200
98/
24/2
009
8/31
/200
99/
7/20
099/
14/2
009
9/21
/200
99/
28/2
009
10/5
/200
910
/12/
2009
10/1
9/20
0910
/26/
2009
11/2
/200
911
/9/2
009
11/1
6/20
0911
/23/
2009
11/3
0/20
0912
/7/2
009
12/1
4/20
0912
/21/
2009
12/2
8/20
091/
4/20
101/
11/2
010
1/18
/201
01/
25/2
010
2/1/
2010
2/8/
2010
2/15
/201
02/
22/2
010
3/1/
2010
3/8/
2010
3/15
/201
03/
22/2
010
3/29
/201
04/
5/20
104/
12/2
010
4/19
/201
04/
26/2
010
5/3/
2010
5/10
/201
05/
17/2
010
20 20 21 22 23 23 22 22 23 24 23 23 23 24 26 26 26 26 26 25 26 26 28 32 29 32 34 36 37 41 39 39 37 39 40 40 38 38 41 42 41 42 42 42 42 44 43 45 43 44 49 50 49 51 52 52 50 51 49 48
Mul
tiple
(x)
Median Long-term average
# companies
Source: CapitalIQ
EV/EBITDA multiples remain depressed below LT average
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Median P/E
0. 0x
5. 0x
10. 0x
15. 0x
20. 0x
25. 0x
30. 0x
3/30
/200
94/
6/20
094/
13/2
009
4/20
/200
94/
27/2
009
5/4/
2009
5/11
/200
95/
18/2
009
5/25
/200
96/
1/20
096/
8/20
096/
15/2
009
6/22
/200
96/
29/2
009
7/6/
2009
7/13
/200
97/
20/2
009
7/27
/200
98/
3/20
098/
10/2
009
8/17
/200
98/
24/2
009
8/31
/200
99/
7/20
099/
14/2
009
9/21
/200
99/
28/2
009
10/5
/200
910
/12/
2009
10/1
9/20
0910
/26/
2009
11/2
/200
911
/9/2
009
11/1
6/20
0911
/23/
2009
11/3
0/20
0912
/7/2
009
12/1
4/20
0912
/21/
2009
12/2
8/20
091/
4/20
101/
11/2
010
1/18
/201
01/
25/2
010
2/1/
2010
2/8/
2010
2/15
/201
02/
22/2
010
3/1/
2010
3/8/
2010
3/15
/201
03/
22/2
010
3/29
/201
04/
5/20
104/
12/2
010
4/19
/201
04/
26/2
010
5/3/
2010
5/10
/201
05/
17/2
010
19 20 19 18 18 19 19 19 19 20 20 18 18 19 19 20 21 24 24 25 25 25 26 28 26 30 31 32 30 32 32 33 34 36 37 37 37 37 38 39 40 38 38 38 38 36 37 33 32 31 34 34 34 34 34 34 34 34 32 36
Mul
tiple
(x)
Median Long-term average
# companies
Source: CapitalIQ
P/E multiples also below LT average
www.mackieresearch.com10
Average Valuation – by Sector
-
5.0
10.0
15.0
20.0
25.0
Infra
stru
ctur
e
Mus
ic
Lear
ning
Soc
ial N
etw
orki
ng
Mob
ile
Ver
tical
Com
mun
ities
Div
ersi
fied
Mar
ketin
g
SM
S/V
oice
Gam
ing
Sea
rch
Pod
cast
ing
Col
labo
ratio
n
Med
ia
Adv
ertis
ing
Inte
rnet
Ret
ail
Ent
erpr
ise
Vid
eo
Dat
ing
Fina
ncia
l Ser
vice
s
Virt
ual W
orld
2 2 1 8 4 1 5 6 3 20 1 1 1 9 3 2 3 1 2 1 0# Companies
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
Ent
erpr
ise
Mob
ile
Div
ersi
fied
Soc
ial N
etw
orki
ng
Inte
rnet
Ret
ail
Col
labo
ratio
n
Gam
ing
Med
ia
Mar
ketin
g
Dat
ing
Adv
ertis
ing
2 1 5 6 2 1 13 6 3 1 1# Companies
EV/Revenue EV/EBITDA
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EV/Revenue Ranking
0.20.20.30.30.40.40.40.4 0.50.60.60.6 0.70.70.70.70.80.80.80.80.8 1.0 1.0 1.0 1.2 1.2 1.3 1.3 1.4 1.4 1.4 1.4 1.5 1.5 1.6 1.8 1.8 1.9 2.12.12.22.22.2 2.72.82.82.93.03.0 3.13.13.13.4 3.74.4 4.54.6 4.74.74.95.5 5.6 5.8
8.08.99.2
10.412.2
13.815.415.5
19.019.7
31.4
41.8
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
Look
Sm
art,
Ltd.
Cyb
erpl
ex In
c.A
ctoz
Sof
t Co.
, Ltd
.G
ameO
n C
o Lt
d.Ju
mbu
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nter
tain
men
t Lim
ited
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wor
ks In
c.G
igaM
edia
Ltd
.T
ree.
Com
, Inc
.O
penw
ave
Sys
tem
s In
c.D
AD
A S
pAG
lu M
obile
, Inc
.N
orth
gate
Tec
hnol
ogie
s Li
mite
dP
oint
s In
tern
atio
nal L
td.
Uni
serv
e C
omm
unic
atio
ns C
orp.
CD
C C
orp.
AQ
Inte
ract
ive,
Inc.
Inte
rnet
Gro
up S
AA
OL,
Inc.
IAC
/Inte
rAct
iveC
orp.
Uni
ted
Onl
ine,
Inc.
The
New
Yor
k T
imes
Com
pany
Cor
nerW
orld
Cor
pora
tion
The
Str
eet.c
om, I
nc.
OA
O R
BC
Info
rmat
ion
Sys
tem
sH
anbi
tSof
t, In
c.N
etD
rago
n W
ebS
oft,
Inc.
info
GR
OU
P, I
nc.
Hut
chis
on T
elec
omm
unic
atio
ns H
ong
Spa
rk N
etw
orks
, Inc
.O
rient
ed M
edia
Gro
up B
erha
dG
aman
ia D
igita
l Ent
erta
inm
ent C
o., L
td.
SN
AP
Inte
ract
ive,
Inc.
YD
Onl
ine
Cor
p.Y
nk K
orea
Inc.
Neu
Lion
Inco
rpor
ated
Shu
tterf
ly, I
nc.
Val
ueC
lick,
Inc.
Sco
re M
edia
Inc.
PN
I Dig
ital M
edia
Inc.
Mod
ern
Tim
es G
roup
Mtg
AB
Gun
gHo
Onl
ine
Ent
erta
inm
ent,
Inc.
XIN
G A
GS
ohu.
com
Inc.
UO
MO
Med
ia, I
ncis
eem
edia
Inc.
Web
zen
Inc.
Ope
n T
ext C
orp.
Wiz
zard
Sof
twar
e C
orpo
ratio
nM
yria
d G
roup
AG
NE
OW
IZ G
ames
Cor
pora
tion
Vel
ti P
lcF
rogs
ter
Inte
ract
ive
Pic
ture
s A
GS
K C
omm
unic
atio
ns C
o., L
td.
Tal
eo C
orp.
Cha
ngyo
u.co
m L
imite
dD
igita
lPos
t Int
erac
tive,
Inc.
Mix
i, In
c.K
ings
oft C
orpo
ratio
n Li
mite
dW
ebM
edia
Bra
nds
Inc
HU
GH
ES
Tel
emat
ics,
Inc.
Uni
lava
Cor
pora
tion
Acc
eler
ize
New
Med
ia, I
nc.
Ling
o M
edia
Cor
pora
tion
Gre
e, In
c.D
ena
Co.
Ltd
.T
rans
Gam
ing,
Inc.
Flu
id M
usic
Can
ada,
Inc.
Chi
nese
Gam
er In
tern
atio
nal
Bey
ond
Com
mer
ce, I
nc.
Geo
Sen
tric
Oyj
MO
KO
.mob
i Lim
ited
Ten
cent
Hol
ding
s Lt
d.P
aid
Inc.
Brig
ht T
hing
s pl
cS
pect
rum
DN
A, I
nc.
Source: CapitalIQ
SpectrumDNA has highest revenue multiple at 41.8x
www.mackieresearch.com12
EV/EBITDA Ranking
1.3 1.6 2.4 2.44.2 5.2 5.3 5.4 5.8 6.4 6.5 6.6 6.6 6.7 6.7 7.0 7.4 8.1 8.2 8.4 8.8
10.1 10.5 11.1 11.5 12.013.2 13.3 14.0 14.2 15.2 15.2 15.4
17.0 17.419.5
20.6
23.8
27.9
36.6
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
Gam
eOn
Co
Ltd.
Act
oz S
oft C
o., L
td.
Cyb
erpl
ex In
c.
AO
L, In
c.
Uni
ted
Onl
ine,
Inc.
The
New
Yor
k T
imes
Com
pany
Soh
u.co
m In
c.H
utch
ison
Tel
ecom
mun
icat
ions
Hon
g K
ong
Hol
ding
sLt
d.
DA
DA
SpA
Net
Dra
gon
Web
Sof
t, In
c.
CD
C C
orp.
Spa
rk N
etw
orks
, Inc
.
Val
ueC
lick,
Inc.
YD
Onl
ine
Cor
p.
info
GR
OU
P, I
nc.
Cha
ngyo
u.co
m L
imite
d
Uni
serv
e C
omm
unic
atio
ns C
orp.
XIN
G A
G
Gam
ania
Dig
ital E
nter
tain
men
t Co.
, Ltd
.
PN
I Dig
ital M
edia
Inc.
Gun
gHo
Onl
ine
Ent
erta
inm
ent,
Inc.
IAC
/Inte
rAct
iveC
orp.
Ope
n T
ext C
orp.
Kin
gsof
t Cor
pora
tion
Lim
ited
NE
OW
IZ G
ames
Cor
pora
tion
Sco
re M
edia
Inc.
Shu
tterf
ly, I
nc.
Han
bitS
oft,
Inc.
Gre
e, In
c.
Ynk
Kor
ea In
c.
Mix
i, In
c.
Vel
ti P
lc
Mod
ern
Tim
es G
roup
Mtg
AB
Ope
nwav
e S
yste
ms
Inc.
The
Str
eet.c
om, I
nc.
Fro
gste
r In
tera
ctiv
e P
ictu
res
AG
Den
a C
o. L
td.
Chi
nese
Gam
er In
tern
atio
nal
Tal
eo C
orp.
Ten
cent
Hol
ding
s Lt
d.
Excluding EV/EBITDA > 100xSource: CapitalIQ
Tencent leads the group at 36.6x
www.mackieresearch.com13
P/E Ranking
5.5 6.4 7.9 8.1 10.1 10.2 10.3 12.3 14.3 15.4 15.5 16.4 16.5
22.4 22.927.7
30.8 30.9 31.3 33.8
42.545.9 47.2 47.5 48.4
54.0
70.9
77.983.4
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
Uni
serv
e C
omm
unic
atio
ns C
orp.
Cyb
erpl
ex In
c.
DA
DA
SpA
YD
Onl
ine
Cor
p.
Cha
ngyo
u.co
m L
imite
d
Gam
eOn
Co
Ltd.
Uni
ted
Onl
ine,
Inc.
AO
L, In
c.
Soh
u.co
m In
c.
Val
ueC
lick,
Inc.
The
New
Yor
k T
imes
Com
pany
Kin
gsof
t Cor
pora
tion
Lim
ited
Hut
chis
on T
elec
omm
unic
atio
ns H
ong
Kon
g H
oldi
ngs
Ltd.
Fro
gste
r In
tera
ctiv
e P
ictu
res
AG
Net
Dra
gon
Web
Sof
t, In
c.
Gre
e, In
c.
Gam
ania
Dig
ital E
nter
tain
men
t Co.
, Ltd
.
Vel
ti P
lc
Chi
nese
Gam
er In
tern
atio
nal
NE
OW
IZ G
ames
Cor
pora
tion
Mix
i, In
c.
Ope
n T
ext C
orp.
info
GR
OU
P, I
nc.
Den
a C
o. L
td.
Ten
cent
Hol
ding
s Lt
d.
CD
C C
orp.
Han
bitS
oft,
Inc.
Act
oz S
oft C
o., L
td.
Shu
tterf
ly, I
nc.
Source: CapitalIQ
Shutterfly has the highest P/E at 83.4x
www.mackieresearch.com14
Total Market Capitalization - $80 BN
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
5/25
/200
96/
1/20
09
6/8/
2009
6/15
/200
96/
22/2
009
6/29
/200
97/
6/20
09
7/13
/200
97/
20/2
009
7/27
/200
98/
3/20
098/
10/2
009
8/17
/200
98/
24/2
009
8/31
/200
99/
7/20
099/
14/2
009
9/21
/200
99/
28/2
009
10/5
/200
910
/12/
2009
10/1
9/20
0910
/26/
2009
11/2
/200
9
11/9
/200
911
/16/
2009
11/2
3/20
0911
/30/
2009
12/7
/200
912
/14/
2009
12/2
1/20
09
12/2
8/20
091/
4/20
10
1/11
/201
01/
18/2
010
1/25
/201
02/
1/20
102/
8/20
10
2/15
/201
02/
22/2
010
3/1/
2010
3/8/
2010
3/15
/201
0
3/22
/201
03/
29/2
010
4/5/
2010
4/12
/201
0
4/19
/201
04/
26/2
010
5/3/
2010
5/10
/201
05/
17/2
010
95 96 96 96 96 96 96 96 96 96 96 96 96 96 96 95 96 96 96 96 97 97 97 97 97 98 98 99 99 99 99 99 99 99 99 99 99 99 99100100100100100100100100100100100100100
(US
$m)
# companies
Source: CapitalIQ
www.mackieresearch.com15
Total Market Cap – by Sector
-
5,000.0
10,000.0
15,000.0
20,000.0
25,000.0
30,000.0
35,000.0
40,000.0
45,000.0D
iver
sifie
d
Gam
ing
Med
ia
Soc
ial N
etw
orki
ng
Col
labo
ratio
n
Mar
ketin
g
Ent
erpr
ise
Sea
rch
Inte
rnet
Ret
ail
Mob
ile
SM
S/V
oice
Mus
ic
Fina
ncia
l Ser
vice
s
Dat
ing
Adv
ertis
ing
Virt
ual W
orld
Vid
eo
Ver
tical
Com
mun
ities
Pay
men
t
Infra
stru
ctur
e
Pod
cast
ing
Lear
ning
7 27 10 17 1 6 3 1 2 5 3 2 1 2 3 2 1 1 1 3 1 1# Companies
27 Gaming companies totaling over $15 bn in market cap
www.mackieresearch.com16
Market Cap Ranking
0
1,000
2,000
3,000
4,000
5,000
6,000
Mob
ile D
ata
Cor
p.Br
oadW
ebAs
ia In
c.C
orne
rWor
ld C
orpo
ratio
nU
OM
O M
edia
, Inc
Uni
serv
e C
omm
unic
atio
ns C
orp.
Orie
nted
Med
ia G
roup
Ber
had
Beyo
nd C
omm
erce
, Inc
.D
igita
lPos
t Int
erac
tive,
Inc.
Wor
lds.
com
Inc.
En2G
o In
tern
atio
nal,
Inc.
Kiw
ibox
.Com
, Inc
.Sa
hara
Med
ia H
oldi
ngs,
Inc.
Spec
trum
DN
A, In
c.SN
AP In
tera
ctiv
e, In
c.Br
ight
Thi
ngs
plc
Kent
Inte
rnat
iona
l Hol
ding
s In
c.R
eal V
alue
Est
ates
, Inc
.is
eem
edia
Inc.
VOIS
, Inc
.Li
ngo
Med
ia C
orpo
ratio
nM
OKO
.mob
i Lim
ited
Inte
rnet
Gro
up S
AJu
mbu
ck E
nter
tain
men
t Lim
ited
IAS
Ener
gy, I
nc.
Nor
thga
te T
echn
olog
ies
Lim
ited
Wiz
zard
Sof
twar
e C
orpo
ratio
nAc
cele
rize
New
Med
ia, I
nc.
Dol
phin
Dig
ital M
edia
, Inc
.Yn
k Ko
rea
Inc.
Askn
et A
GN
eXpl
ore
Cor
pora
tion
Soci
alw
ise,
Inc.
Look
Smar
t, Lt
d.M
ultip
lied
Med
ia C
orpo
ratio
nW
ebM
edia
Bran
ds In
cTr
ansG
amin
g, In
c.U
nila
va C
orpo
ratio
nG
lu M
obile
, Inc
.G
eoSe
ntric
Oyj
Cyb
erpl
ex In
c.D
igita
lTow
n, In
c.G
ravi
ty C
o., L
tdN
gi G
roup
Inc.
PNI D
igita
l Med
ia In
c.N
euLi
on In
corp
orat
edM
oggl
e, In
cFr
ogst
er In
tera
ctiv
e Pi
ctur
es A
GSc
ore
Med
ia In
c.Q
uepa
sa C
orp.
DAD
A Sp
ASp
ark
Net
wor
ks, I
nc.
AQ In
tera
ctiv
e, In
c.H
anbi
tSof
t, In
c.Po
ints
Inte
rnat
iona
l Ltd
.YD
Onl
ine
Cor
p.Tr
ee.C
om, I
nc.
Acto
z So
ft C
o., L
td.
HU
GH
ES T
elem
atic
s, In
c.Pa
id In
c.G
ameO
n C
o Lt
d.Th
eStre
et.c
om, I
nc.
Flui
d M
usic
Can
ada,
Inc.
The9
Lim
ited
Web
zen
Inc.
Gig
aMed
ia L
td.
XIN
G A
GO
AO R
BC In
form
atio
n Sy
stem
sM
yria
d G
roup
AG
Ope
nwav
e Sy
stem
s In
c.C
DC
Cor
p.Ve
lti Pl
cG
aman
ia D
igita
l Ent
erta
inm
ent C
o., L
td.
Net
Dra
gon
Web
Soft,
Inc.
Gun
gHo
Onl
ine
Ente
rtain
men
t, In
c.in
foG
RO
UP,
Inc.
Rea
lNet
wor
ks In
c.Sh
utte
rfly,
Inc.
Uni
ted
Onl
ine,
Inc.
NEO
WIZ
Gam
es C
orpo
ratio
nSK
Com
mun
icat
ions
Co.
, Ltd
.M
ixi,
Inc.
King
soft
Cor
pora
tion
Lim
ited
Chi
nese
Gam
er In
tern
atio
nal
Valu
eClic
k, In
c.H
utch
ison
Tel
ecom
mun
icat
ions
Hon
g Ko
ng H
oldi
ngs
Tale
o C
orp.
Perfe
ct W
orld
Co.
, Ltd
.Th
e N
ew Y
ork
Tim
es C
ompa
nyC
hang
you.
com
Lim
ited
Gia
nt In
tera
ctiv
e G
roup
, Inc
.So
hu.c
om In
c.AO
L, In
c.IA
C/In
terA
ctiv
eCor
p.O
pen
Text
Cor
p.G
ree,
Inc.
Shan
da In
tera
ctiv
e En
terta
inm
ent L
td.
Mod
ern
Tim
es G
roup
Mtg
AB
Den
a C
o. L
td.
Net
ease
.com
Inc.
Tenc
ent H
oldi
ngs
Ltd.
Source: CapitalIQ
Tencent’s $36 bn market cap dominates group
www.mackieresearch.com17
Price Performance – 1 Week
Rising30%
Flat8%
Falling62%
Price Momentum• Negative momentum for yet another
week with 62% of stocks falling over the past week (following on last week’s 69% decliner figure and 62% in the week prior to that).
www.mackieresearch.com18
Average Price Performance – 1 Week, by Sector
25.0%
13.2%11.3%
2.3%
-1.9% -1.9% -1.9% -2.1% -2.3% -2.5% -2.7% -3.3% -3.4% -3.5% -4.2% -4.8% -6.0% -7.3% -7.3%-12.1%
-16.7%-21.4%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
Pod
cast
ing
Mar
ketin
g
Lear
ning
Col
labo
ratio
n
Pay
men
t
Adv
ertis
ing
Inte
rnet
Ret
ail
Med
ia
Dat
ing
Mob
ile
Div
ersi
fied
Mus
ic
Ent
erpr
ise
Gam
ing
Fina
ncia
lS
ervi
ces
Ver
tical
Com
mun
ities
SM
S/V
oice
Sea
rch
Soc
ial
Net
wor
king
Infra
stru
ctur
e
Vid
eo
Virt
ual W
orld
Source: CapitalIQ
Podcasting securities get biggest boost
www.mackieresearch.com19
Price Performance – 1 Week
-60.0%
-40.0%
-20.0%
0.0%
20.0%
40.0%
60.0%
BW
BAP
WR
D24
97SH
HD
WD
DD
3838
TSX:
NLN
MB
YL
OM
ED
IAA0
5279
021
21V
OIS
TSX
V:M
MC
CM
:DA
DG
LPD
B:M
0CC
HIN
.AB
YOC
NX
PC
SPX
AW
SE:
IGR
NC
TYU
NLA
KIW
B37
65 IEE
3812
TSXV
:US
SA0
6627
0TS
X:FM
NA0
9566
0IA
SC
.A38
88TS
XV
:PN
A023
770
WEB
MA0
5277
0LO
VS
ND
ATS
E:24
32N
TES
CYO
UTR
EE
ASX:
JMB
RN
WK
SEH
K:21
5TS
X:P
TSTS
X:S
CR
777
A047
080
GR
VY
SOH
USC
LWA
CLZ
OP
WV
KN
TH GA
NY
TQ
PSA
KO
SE:
A06
HU
TCU
NTD
RV
LU 700
GE
O1V
STV
ID
GTW
ETG
ID
PD
MC
WR
LM
TG B
UO
MO
IUSA
5900
57TS
CM
PA
YDO
1BC
S
FLY
AO
LTS
E:36
32O
TEX
GTS
M:3
08R
BC
I61
80M
YR
NG
LUU
TLE
OFR
GG
IGM
IAC
ITS
XV:T
NG
AIM
:BG
TX
TRA
:A5A
TSX
V:LM
TSX
:CX
MKB
VC
LKLO
OK
WZE VE
L
Source: CapitalIQ
www.mackieresearch.com20
Price Performance (Top 10)1 Month
0%
20%40%
60%80%
100%120%
140%
Dig
italT
own,
Inc.
Look
Smar
t, Lt
d.
Velti
Plc
IAS
Ener
gy, I
nc.
SKC
omm
unic
atio
nsC
o., L
td.
Uni
serv
eC
omm
unic
atio
nsC
orp.
Glu
Mob
ile, I
nc.
SNAP
Inte
ract
ive,
Inc.
Que
pasa
Cor
p.
Flui
d M
usic
Can
ada,
Inc.
3 Month
0%20%40%60%80%
100%120%140%160%180%
IAS
Ene
rgy,
Inc.
Bey
ond
Com
mer
ce, I
nc.
Uni
lava
Cor
pora
tion
SN
AP
Inte
ract
ive,
Inc.
Look
Sm
art,
Ltd.
Que
pasa
Cor
p.
Vel
ti P
lc
Gam
eOn
Co
Ltd.
Dig
italT
own,
Inc.
SK
Com
mun
icat
ions
Co.
, Ltd
.
6 Month
0%
500%
1000%
1500%
2000%
2500%
OA
O R
BC
Info
rmat
ion
Sys
tem
s
Que
pasa
Cor
p.
Uni
serv
eC
omm
unic
atio
nsC
orp.
AQ
Inte
ract
ive,
Inc.
SN
AP
Inte
ract
ive,
Inc.
Vel
ti P
lc
SK
Com
mun
icat
ions
Co.
, Ltd
.
Den
a C
o. L
td.
Sco
re M
edia
Inc.
Poi
nts
Inte
rnat
iona
l Ltd
.
1 Year
0%
500%1000%
1500%
2000%
2500%3000%
3500%
OAO
RBC
Info
rmat
ion
Syst
ems
Que
pasa
Cor
p.
Velti
Plc
Dig
italP
ost
Inte
ract
ive,
Inc.
Uni
serv
eC
omm
unic
atio
nsC
orp.
Tran
sGam
ing,
Inc.
Flui
d M
usic
Can
ada,
Inc.
Den
a C
o. L
td.
Frog
ster
Inte
ract
ive
Pict
ures
AG
Gre
e, In
c.
Source: CapitalIQ
www.mackieresearch.com21
Price Performance (Bottom 10)1 Week
-60.0%
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
Acto
z So
ftC
o., L
td.
Mob
ile D
ata
Cor
p.
Orie
nted
Med
iaG
roup
Ber
had
Neu
Lion
Inco
rpor
ated
AQ In
tera
ctiv
e,In
c.
Wor
lds.
com
Inc.
Saha
ra M
edia
Hol
ding
s, In
c.
Ngi
Gro
up In
c.
Perfe
ct W
orld
Co.
, Ltd
.
Broa
dWeb
Asia
Inc.
1 Month
-60.0%
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
Neu
Lion
Inco
rpor
ated
DAD
A Sp
A
The9
Lim
ited
Ngi
Gro
up In
c.
Wor
lds.
com
Inc.
Saha
ra M
edia
Hol
ding
s, In
c.
Orie
nted
Med
iaG
roup
Ber
had
Mob
ile D
ata
Cor
p.
Broa
dWeb
Asia
Inc.
Cor
nerW
orld
Cor
pora
tion
6 Month
-100.0%-90.0%-80.0%-70.0%-60.0%-50.0%-40.0%-30.0%-20.0%-10.0%
0.0%
Perfe
ct W
orld
Co.
, Ltd
.
Cyb
erpl
ex In
c.
Kiw
ibox
.Com
,In
c.
DAD
A Sp
A
isee
med
ia In
c.
Saha
ra M
edia
Hol
ding
s, In
c.
UO
MO
Med
ia,
Inc
Cor
nerW
orld
Cor
pora
tion
En2G
oIn
tern
atio
nal,
Inc.
Broa
dWeb
Asia
Inc.
1 Year
-120.0%
-100.0%
-80.0%
-60.0%
-40.0%
-20.0%
0.0%
Dol
phin
Dig
ital
Med
ia, I
nc.
Ynk
Kore
a In
c.
Spec
trum
DN
A,In
c.
Mob
ile D
ata
Cor
p.
Cor
nerW
orld
Cor
pora
tion
En2G
oIn
tern
atio
nal,
Inc.
Beyo
ndC
omm
erce
,In
c.
Saha
ra M
edia
Hol
ding
s, In
c.
Broa
dWeb
Asia
Inc.
UO
MO
Med
ia,
Inc
Source: CapitalIQ
www.mackieresearch.com22
Capital Market Activity (Financing, M&A)
www.mackieresearch.com23
Financing Activity – Current MonthFin. Am ount (Million) T ype of financing
Month C om pany Nam e C ountry S e ctor Acquis ition Ange l/S e e d S e rie s A S e rie s B S e rie s C Grand T otal
May-10 C ube T re e US A Collaboration 50.0 50.0
Gilt Groupe US A Internet R etail 35.0 35.0
S cout L abs US A A naly tics 20.0 20.0
Booyah US A V irtual World 20.0 20.0
Fatfoogoo A us tria V irtual Goods 10.0 10.0
Worldw ide w ork e r UA E V ertical Communities 9.0 9.0
V antrix Canada Mobile 8.7 8.7
BuzzFe e d US A A ggregation 8.0 8.0
S w ipe ly US A S ocia l Commerce 7.5 7.5
C rite o US A A dvertis ing 7.0 7.0
Grock it US A V irtual World 7.0 7.0
J e lli US A Mus ic 7.0 7.0
WordS tre am US A S earch 6.0 6.0
S tack Ove rflow US A V ertical Communities 6.0 6.0
Enquis ite US A A naly tics 5.2 5.2
Ad.ly US A A dvertis ing 5.0 5.0
He lloWalle t US A Financia l S erv ices 3.6 3.6
T ick e tfly US A V ertical Communities 3.0 3.0
Woozw orld Canada V irtual World 3.0 3.0
Groupalia S pain S ocia l Commerce 2.5 2.5
Ne w s y US A Media 2.0 2.0
T he Extraordinar ie s US A Mobile 1.1 1.1
L ocalytics US A A naly tics 0.7 0.7
Etacts US A Inf ras tructure 0.7 0.7
MightyMe e ting US A Collaboration 0.3 0.3
apprupt Germany Mobile A d
May-10 T otal 89.0 4.1 33.3 19.0 82.9 228.3
www.mackieresearch.com24
Financing Activity – Current Month, by Sector
Other51%
Internet Retail14%
Collaboration14%
Virtual World8%
Advertising6%Analytics
7%
$ Raised # Deals
Internet Retail7%
Collaboration7%
Virtual World13%
Analytics10%
Advertising10%Vertical
Communities10%
Social Commerce
7%
Virtual Goods3%
Mobile7%
Gaming3%
Aggregation3%
Music3%
Search3%
Financial Services
3%
Media3%
Enterprise3%
Infrastructure3%
www.mackieresearch.com25
Financing Activity
4.65.5
6.6
8.9
6.2
10.1
12.2
9.18.2
5.3
16.6
6.6
12.5
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
900.0
May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10
(US
$m)
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
(US
$m)
Total Average*May-09 includes $200m FB investment Dec-09 includes $180m Zynga investmentApr-10 includes $300m DST investment
$513 mm (ex-DST) with $10.7 mm average deal size
www.mackieresearch.com26
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
Div
ersi
fied
Mob
ile
Col
labo
ratio
n
Gam
ing
Cro
wds
ourc
edC
onte
ntS
ocia
lC
omm
erce
Med
ia
Vid
eo
Adv
ertis
ing
Soc
ial
Net
wor
ksIn
tern
et R
etai
l
Ana
lytic
sFi
nanc
ial
Ser
vice
sV
irtua
l Wor
ldV
ertic
alC
omm
uniti
esM
obile
Ad
Wid
get
Sea
rch
Mob
ileP
aym
ent
Ent
erpr
ise
Loca
tion-
base
d S
NS
Onl
ine
Lear
ning
Mus
ic
Virtu
al G
oods
Trav
el
Infra
stru
ctur
e
Agg
rega
tion
Blo
g
Cla
ssifi
ed
Mic
rom
edia
Onl
ine
Dat
ing
Mic
robl
og
1 8 4 8 6 6 6 9 16 10 4 10 7 6 9 3 2 6 2 3 4 1 2 1 3 2 1 2 1 1 1 1
(US
$m)
# companies
Capital Market Activity Ranking – by Sector, last three months
Advertising has most deals in last 3 months
www.mackieresearch.com27
Top 5 Sectors (2008-present)
$ Raised # Deals
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
Jan-
08
Feb-
08
Mar
-08
Apr
-08
May
-08
Jun-
08
Jul-0
8
Aug
-08
Sep
-08
Oct
-08
Nov
-08
Dec
-08
Jan-
09
Feb-
09
Mar
-09
Apr
-09
May
-09
Jun-
09
Jul-0
9
Aug
-09
Sep
-09
Oct
-09
Nov
-09
Dec
-09
Jan-
10
Feb-
10
Mar
-10
Apr
-10
May
-10
(US
$ m
m)
Social Networks Gaming Advertising Virtual World Video
0
5
10
15
20
25
30
Jan-
08
Feb-
08
Mar
-08
Apr
-08
May
-08
Jun-
08
Jul-0
8
Aug
-08
Sep
-08
Oct
-08
Nov
-08
Dec
-08
Jan-
09
Feb-
09
Mar
-09
Apr
-09
May
-09
Jun-
09
Jul-0
9
Aug
-09
Sep
-09
Oct
-09
Nov
-09
Dec
-09
Jan-
10
Feb-
10
Mar
-10
Apr
-10
May
-10
(# D
eals
)
Social Networks Advertising Gaming Virtual World Video
Top 5 sectors average $155m & 14 deals per month (aggregate)
www.mackieresearch.com28
Upcoming Events/Earnings
Source: CapitalIQ
Company Date Time Quarter Conf Call DetailsGiant Interactive Group, Inc. (NYSE:GA) 17-May-10 9:00 PM (EST) Q1/10 1-866-804-6921Wizzard Softw are Corporation (AMEX:WZE) 18-May-10 1:00 PM (EST) Q1/10 1-877-407-8033Netease.com Inc. (NasdaqGS:NTES) 19-May-10 9:00 PM (EST) Q1/10 877-941-2069
www.mackieresearch.com29
Public Company ListingC ompany Name Tic ker E xc hange
Trading C urrenc y HQ
C urrent P rice
US $ Market C ap (mm) E mployees
Accelerize New Media , Inc. AC LZ OT C B B US D United S tates 1 16.6 10 Actoz S oft C o. , L td. A052790 K OS E K R W S outh K orea 11,100 84.8 NA AOL, Inc. AOL NY S E US D United S tates 24 2,554.9 6,700 AQ Interactive, Inc. 3838 T S E J P Y J apan 122,500 72.3 NA As knet AG XT R A:A5A XT R A E UR G ermany 4 22.3 NA B eyond C ommerce, Inc. B Y OC OT C B B US D United S tates 0 4.3 NA B right T hings plc AIM:B G T AIM G B P United K ingdom 0 6.4 9 B roadW ebAs ia Inc. B W B A OT C P K US D United S tates 0 1.7 46 C DC C orp. C HIN.A Nas daqG S US D Hong K ong 2 244.2 NA C hangyou.com L imited C Y OU Nas daqG S US D C hina 29 1,489.8 1,308 C hines e G amer International G T S M:3083 G T S M T W D T aiwan 344 925.3 NA C ornerW orld C orporation C W R L OT C B B US D United S tates 0 1.9 16 C yberplex Inc. T S X:C X T S X C AD C anada 1 46.1 NA DADA S pA C M:DA C M E UR Ita ly 3 67.0 NA Dena C o. L td. T S E :2432 T S E J P Y J apan 792,000 4,079.9 NA Digita lP os t Interactive, Inc. DG LP OT C B B US D United S tates 0 4.5 6 Digita lT own, Inc. DG T W OT C B B US D United S tates 2 48.0 3 Dolphin Digita l Media , Inc. DP DM OT C B B US D United S tates 0 17.0 NA E n2G o Internationa l, Inc. E T G I OT C B B US D United S tates 0 4.8 NA F luid Mus ic C anada , Inc. T S X:F MN T S X C AD United S tates 2 112.4 NA F rogs ter Interactive P ictures AG F R G XT R A E UR G ermany 19 59.6 NA G amania Digita l E nterta inment C o. , L td. 6180 G T S M T W D T aiwan 52 253.8 NA G ameOn C o Ltd. 3812 T S E J P Y J apan 87,000 94.0 NA G eoS entric Oyj G E O1V HLS E E UR F inland 0 44.2 120 G iant Interactive G roup, Inc. G A NY S E US D C hina 7 1,644.4 NA G igaMedia L td. G IG M Nas daqG S US D T aiwan 2 134.7 751 G lu Mobile, Inc. G LUU Nas daqG M US D United S tates 1 40.4 479 G ravity C o. , L td G R V Y Nas daqG M US D S outh K orea 2 51.4 469 G ree, Inc. T S E :3632 T S E J P Y J apan 5,590 2,743.0 NA G ungHo Online E nterta inment, Inc. 3765 OS E J P Y J apan 230,000 286.3 NA HanbitS oft, Inc. A047080 K OS E K R W S outh K orea 3,935 74.7 NA HUG HE S T elematics , Inc. HUT C OT C B B US D United S tates 3 85.2 276 Hutchis on T elecommunications Hong K ong HS E HK :215 S E HK HK D Hong K ong 2 987.4 1,732 IAC /InterActiveC orp. IAC I Nas daqG S US D United S tates 23 2,561.5 3,200 IAS E nergy, Inc. IAS C .A OT C P K US D C anada 0 11.3 NA infoG R OUP , Inc. IUS A Nas daqG S US D United S tates 8 461.9 3,146 Internet G roup S A W S E : IG R W S E P LN P oland 1 9.5 NA
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Public Company Listing cont.C ompany Name Tic ker E xc hange
Trading C urrenc y HQ
C urrent P ric e
US $ Market C ap (mm) E mployees
is eemedia Inc. IE E T S XV C AD C anada 0.11 7.0 79 J umbuck E nterta inment L imited AS X: J MB AS X AUD Aus tra lia 0.24 10.0 NA K ent International Holdings Inc. K NT H O T C P K US D United S tates 1.80 6.4 NA K ings oft C orporation L imited 3888 S E HK HK D C hina 5.54 773.6 6 K iwibox.C om, Inc. K IW B O T C B B US D United S tates 0.01 4.9 NA L ingo Media C orporation T S XV :L M T S XV C AD C anada 0.69 8.3 65 LookS mart, L td. LOOK Nas daqG M US D United S tates 1.80 30.9 NA Mixi, Inc. 2121 T S E J P Y J apan 457,000.00 766.4 NA Mobile Data C orp. MB Y L O T C B B US D United S tates 0.05 1.2 2,936 Modern T imes G roup Mtg AB MT G B O M S E K S weden 415.10 3,513.0 2 Moggle, Inc DB :M0C DB E UR United S tates 1.00 57.5 NA MO K O.mobi L imited MK B AS X AUD Aus tra lia 0.08 8.3 NA Multiplied Media C orporation T S XV :MMC T S XV C AD C anada 0.15 36.1 405 Myriad G roup AG MY R N S W X C HF S witzerland 4.14 176.8 NA NE OW IZ G ames C orporation A095660 K OS E K R W S outh K orea 36,750.00 672.0 NA NetDragon W ebS oft, Inc. 777 S E HK HK D C hina 3.79 256.8 NA Neteas e.com Inc. NT E S Nas daqG S US D C hina 32.15 4,164.1 224 NeuLion Incorporated T S X:NLN T S X C AD C anada 0.50 56.2 NA NeXplore C orporation NXP C O T C P K US D United S tates 0.45 25.1 NA Ngi G roup Inc. 2497 T S E J P Y J apan 38,750.00 52.1 160 Northgate T echnologies L imited 590057 B S E INR India 17.00 13.0 2,523 OAO R B C Information S ys tems R B C I MIC E X R UB R us s ia 39.51 174.4 3,700 Open T ext C orp. OT E X Nas daqG S US D C anada 45.22 2,567.6 590 Openwave S ys tems Inc. OP W V Nas daqG S US D United S tates 2.35 197.1 NA Oriented Media G roup B erhad OME DIA K LS E MY R Malays ia 0.10 4.2 20 P aid Inc. P AY D O T C B B US D United S tates 0.35 93.6 NA P erfect W orld C o. , L td. P W R D Nas daqG S US D C hina 24.71 1,231.2 NA P NI Digita l Media Inc. T S XV :P N T S XV C AD C anada 1.70 55.5 91 P oints Internationa l L td. T S X:P T S T S X C AD C anada 0.54 77.9 71 Quepas a C orp. QP S A O T C B B US D United S tates 4.95 64.2 NA R ea l V a lue E s tates , Inc. R V L U O T C B B US D Is rael 1.03 6.6 1,754 R ea lNetworks Inc. R NW K Nas daqG S US D United S tates 3.94 532.9 NA S ahara Media Holdings , Inc. S HHD O T C B B US D United S tates 0.16 5.4 220 S core Media Inc. T S X:S C R T S X C AD C anada 0.81 63.3 NA S handa Interactive E nterta inment Ltd. S NDA Nas daqG S US D C hina 42.43 2,853.6 519 S hutterfly, Inc. S F L Y Nas daqG S US D United S tates 22.65 608.3 NA
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Public Company Listing cont.
C ompany Name Tic ker E xc hangeTrading
C urrenc y HQC urrent
P riceUS $ Market
C ap (mm) E mployees
S K C ommunications C o. , L td. A066270 K OS E K R W S outh K orea 18,550.00 675.5 15 S NAP Interactive, Inc. S T V I OT C B B US D United S tates 0.19 6.3 NA S ocia lwis e, Inc. S C LW OT C B B US D United S tates 0.53 26.5 3,997 S ohu.com Inc. S OHU Nas daqG S US D C hina 44.89 1,697.7 155 S park Networks , Inc. LOV AME X US D United S tates 3.34 68.8 NA S pectrumDNA, Inc. S P XA OT C B B US D United S tates 0.09 6.2 916 T a leo C orp. T LE O Nas daqG M US D United S tates 25.21 1,002.3 7,515 T encent Holdings L td. 700 S E HK HK D C hina 154.20 36,142.4 7,665 T he New Y ork T imes C ompany NY T NY S E US D United S tates 9.26 1,348.3 1,010 T he9 L imited NC T Y Nas daqG S US D C hina 4.84 123.5 274 T heS treet.com, Inc. T S C M Nas daqG M US D United S tates 3.26 102.9 28 T rans G aming, Inc. T S XV :T NG T S XV C AD C anada 0.69 39.5 700 T ree.C om, Inc. T R E E Nas daqG M US D United S tates 7.21 80.8 39 Unilava C orporation UNLA OT C B B US D United S tates 0.40 40.0 NA Unis erve C ommunications C orp. T S XV :US S T S XV C AD C anada 0.12 3.3 1,699 United Online, Inc. UNT D Nas daqG S US D United S tates 7.22 629.1 NA UOMO Media , Inc UOMO OT C B B US D C anada 0.03 2.2 1,086 V alueC lick , Inc. V C LK Nas daqG S US D United S tates 11.41 927.9 450 V elti P lc V E L AIM G B P United K ingdom 4.60 252.8 2 V OIS , Inc. V OIS OT C B B US D United S tates 0.01 8.0 83 W ebMediaB rands Inc W E B M Nas daqG S US D United S tates 1.00 37.4 NA W ebzen Inc. K OS E :A069080 K OS E K R W S outh K orea 12,550.00 129.0 80 W izzard S oftware C orporation W ZE AME X US D United S tates 0.25 14.5 NA W orlds .com Inc. W DDD OT C B B US D United S tates 0.08 4.6 NA XING AG O1B C XT R A E UR G ermany 27.03 171.8 NA Y D Online C orp. A052770 K OS E K R W S outh K orea 6,100.00 79.4 NA Y nk K orea Inc. A023770 K OS E K R W S outh K orea 2,800.00 19.4 -
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