Jefferies Domainfest Global 2007

Jefferies BroadviewA division of Jefferies & Company, Inc.

DOMAINfest Global 2007

February 2007

CONFIDENTIAL DRAFT

Member, SIPC

Ask the Experts: Venture Capital & Technology Overview

Global Investment Banking Franchise

A leading institutional brokerage and investment banking firm – led by one of the most powerful capital markets trading platforms in the industryPrincipal operating subsidiary of Jefferies Group, Inc. (NYSE: JEF), a holding company with an equity market capitalization of over $3.5B, $1.5B in 2005 revenue and 2,000 employees in over 25 offices worldwide“Investment grade” ratings by Standard & Poor’s and Moody’s#1 performing investment bank by stock price(2), with over 50% employee ownership, over the past 10 yearsSince 2005 Jefferies has executed 129 equity offerings raising in excess of $30B

San Francisco

Los AngelesDallas

HoustonNew Orleans

Chicago

Nashville

Atlanta Richmond

Boston

StamfordNew York

Jersey CityWashington

LondonParisZurich

Tokyo

Sydney*Melbourne*

Silicon Valley

Israel*

Waltham

Cities in blue indicate Jefferies Broadview locations* Indicates Affiliates

Since 1998, Jefferies has advised on(1):

544 technology transactions globally worth approximately $72.0 billion

189 cross-border transactions

137 public-to-public transactions

Denver

(1) As of 12/1/2006.(2) Wall Street Journal, April 2006.

Investment Dealers Digest

2005

Middle Market

Bank of the Year

Shanghai

Mumbai

Hong Kong

Dubai

Singapore

1

Jefferies Delivers The Full Spectrum Of Products And Services ToTechnology Clients

Investment Banking

Leading banking franchise focused on high growth companies with over 400 Investment Bankers (90 in technology) in over 25 offices worldwide

Equity Offerings – Completed approximately 300 public equity offerings in the past 10 years

M&A – Ranked #1 in technology M&A advisory assignments in 2005 and 2006(1)

Private Equity – Regular dialogue and relationships with over 250 financial sponsors

Restructuring – Restructured approximately $150B in securities and liabilities

Equity

Over 135 institutional salespeople that cover over 2,200 institutional accounts; make markets in nearly 3,500 stocks

#2 volume trader of NASDAQ and OTC stocks in 2006(2); top 5 trader in nearly 1,700 NASDAQ stocks

79 research analysts covering over 1,100 companies

Debt

Dedicated high yield team of over 40 experienced senior professionals

Integrated sales, trading, research, capital markets and banking functions

#1 underwriter of mid-cap high yield debt(3); led by team that joined Jefferies from Drexel Burnham Lambert

Jefferies Finance LLC –Commercial bank with nearly $2B in capital

Offers A Full Suite Of Investment Banking Products And Services To Serve High Growth Companies Throughout The

Corporate Lifecycle

Asset Management

Private Client Services / Cash Management – Advisory, portfolio management and customized financial solutions

Jefferies Capital Partners – More than $685MM in private equity funds under management

Investm

ent Bankin

g

Equity

Asset ManagementDebt

Cash Management

Capital Partners

High Yield

PrivatePlacements

Structured Finance

Trading

Sales

Research

Capital Markets

IndustryCoverageMergers

andAcquisitions

FinancialSponsors

Restructuring

Private ClientServices

Bank Lending

(1) Source: SDC. All announced North America and Western Europe technology deals with transaction value less than $1B excluding bio-tech and telecom deals.(2) Source: Autex. Ranking amongst investment banks; 1/1/2006 – 12/31/2006 (2006). (3) Source: SDC, 1/1/06-9/30/06. Excludes split rated, mortgage and asset-backed securities. Full credit to lead manager, equal if joint.

2

The Investment Bank Of Choice For Growth Companies

Jefferies Broadview’s team of 90 Bankers is one of the largest dedicated to the technology industry

#1 Technology M&A Advisor in 2005 and 2006 (YTD)1,2

#2 Sales and Trading Platform for NASDAQ stocks3

Leading Issuer of Debt for Digital Media and Software companies

“There is a hole in the marketplace where the Four

Horsemen have gone. Jefferies has a chance to fill

it. They always had great trading and great

distribution. Now they’ve got the whole puzzle.”

— Sandy Robertson, founder Robertson Stephens

New York Times

($ in Millions)

6Merrill Lynch

5Bear Stearns

4Morgan Stanley

3Citigroup

2

1UBS

RankBroker

2005 NASDAQ Trade Volume 3

6

5

4

2Jefferies & Company

1UBS

RankBroker

2006 NASDAQ Trade Volume 3

8Deutsche Bank

5 40Citigroup6 40Morgan Stanley6 38Goldman Sachs8 37Houlihan Lokey

44

# of Deals

8Rothschild

4JP Morgan3UBS2Credit Suisse1Jefferies & Company

RankFinancial Advisor

2006 Technology M&A League Table 1

8 31Deutsche Bank

5Citigroup6Morgan Stanley6Goldman Sachs8Houlihan Lokey

28

41465055

# of Deals

8Rothschild

4JP Morgan3UBS2Credit Suisse1Jefferies & Company

RankFinancial Advisor


Jefferies & Company

Lehman Brothers

UBSJPMorganHoulihan LokeyCredit Suisse

Merrill Lynch

Morgan StanleyCitigroupGoldman Sachs


20

24222220

283037

20

24222220

20

283037

9

5578

10

4321

(1) Source: SDC. All announced North America and Western Europe technology deals with transaction value less than $1B excluding bio-tech and telecom deals. January 1, 2006 to September 29, 2006.(2) Source: SDC. All announced North America and Western Europe technology deals with transaction value less than $1B excluding bio-tech and telecom deals. January 1, 2005 to December 31, 2005.(3) Source: Autex. Ranking amongst investment banks; 1/1/2006 – 12/31/2006 (2006).

3

Web Content / Services Mobile Content

Online Marketing / Lead Generation

eCommerce

With Leadership In Digital Media And Internet Investment Banking

Financial Advisor to the Seller

November 2005

€180,000,000valuing the Company at

has sold an equity stake to

April 2004

has been acquired by


€475,000,000$78,000,000

March 2005

Initial Public OfferingCo-Manager

August 2006

$95,310,000Initial Public Offering

Co-Manager Financial Advisor to the Seller$29,000,000

March 2006

has sold a majority stake to

May 2006

$30,000,000144A Block TradeSole Bookrunner

May 2006


Confidential


September 2006


Co-Manager


Confidential

December 2005


July 2006

$130,000,000Financial Advisor to the Company

September 2006

has agreed to acquire

Motorola, Inc.

BroadbusTechnologies, Inc.

ConfidentialFinancial Advisor to the Buyer

May 2006

$113,189,000Follow-On Offering

Co-Manager

$207,000,000Follow-On OfferingJoint Bookrunner

March 2006



December 2005

Confidential

July 2004

$75,900,000Follow-On OfferingCo-Manager

May 2006


Confidential


May 2006

$87,500,000Follow-On Offering

Co-Manager

September 2005


Co-Manager


Confidential

April 2006


Financial Advisor to Seller

January 2006


€115,000,000

SearchOctober 2004



Confidential


$353,500,000

October 2006

RealNetworks , Inc.

has agreed to be acquired by


ConfidentialFinancial Advisor to the Seller

January 2007 May 2005

$85,000,000Senior Credit Facility

Financial Advisor

Who Have We Helped?Online Marketing: aQuantive, BankRate, Kelkoo, etc.

eCommerce: Shutterfly, VistaPrint, etc.Mobile: WiderThan, Musiwave, etc.

Content Distribution: LimeLight, etc.

4

All Major Sectors Of The Internet Continue To Experience Strong Growth And Convergence

Jefferies Broadview Internet Market Taxonomy

180solutions ($40MM), Demand Media ($120MM & $100MM), DoubleClick ($1.2B), Double Fusion ($26MM), Right Media ($45MM), Spot Runner ($40MM)

RazorGator ($25MM), Glam Media ($18.5MM),Zappos ($20MM), HomeAway ($160MM), WrenchHead.com ($18MM)

FaceBook ($25MM), Topix.net ($15MM), PodShow($15.5MM), Red 5 Studios ($18.5MM), BrightCove($60MM), Heavy ($20MM)

Notable VC/PE Investments

ValueClick / FastClick, WebClientsExperian / LowerMyBills, PriceGrabberPublicis Groupe / Digitas

Liberty Media / Provide Commerce eBay / Verisign (assets), Shopping.com, Skype

NBC Universal / iVillageNews Corp / IGN, MySpaceGoogle / YouTube

Notable M&A Transactions

28%114%228%1Projected Growth Rate

Website Pros, FastClick, Interchange, OmnitureVistaPrint, LoopNet, Gmarket, InnerWorkings, Shutterfly, eHealthInsuranceWebMD, Baidu.com, PlanetOut, Traffic.com (Acquired)Notable IPOs

Leaders: aQuantive, ValueClick, DigitasContenders: 24/7, Marchex, MIVA, OmniturePrivate: Demand Media, Exponential, VendareNetBlueMedian 2006E TEV / Revenue: 2.9xMedian 2006E TEV / EBITDA: 17xMedian 2007E Revenue Growth: 21%

Leaders: Amazon, eBay, InterActiveCorpContenders: Netflix, Overstock, Monster, PricelinePrivate: HomeAway, Zappos, RazorGatorMedian 2006E TEV / Revenue: 1.6xMedian 2006E TEV / EBITDA: 20xMedian 2007E Revenue Growth: 19%

Leaders: Google, Yahoo, AOL, MSNContenders: TheStreet, CNET, BankRatePrivate: FaceBook, MyFamily, Reply Median 2006E TEV / Revenue: 3.4xMedian 2006E TEV / EBITDA: 20xMedian 2007E Revenue Growth: 21%

Representative Companies

& Median Multiples

$26 billion in 20061$170 billion in 20062$26 billion in 20061Market Size

Providers of technology and services focused on delivering messages to consumers on behalf of advertisers and direct marketers via the Internet

Consumer facing shopping destinations that either sell direct or match buyers and sellersIncludes both physical (books & CDs) and non-physical (travel & finance) ecommerce and subscription online services

Consumer facing Internet destinations providing content and services to a community of usersBusiness model is primarily advertising-supportedAdvertising formats can include search, banner, rich media, classifieds, etc.

Market Definition

Interactive Marketing ServicesOnline CommerceDigital Media

(1) Jefferies research.(2) eMarketer.

Convergence Is The Name of the Game!

5

($Millions)

(1) Online marketing and domain name companies are highlighted.(2) Lead investors are in bold.

With Substantial Capital Chasing Relatively Few High Quality Opportunities, The Number Of $20MM+ Investments Has Increased

Internet Venture Investments Greater Than $20 Million Since 1/1/06

“Hot” Sectors:Next generation advertising and lead networksOnline video and rich media content and distributionOrganic traffic (e.g., domain aggregators, social networks)International (e.g., China, Korea, India)Consolidation themesB2B

Date Company(1)Amount Raised

($MM) Investor(s)(2)

Dec-06 Heavy $20.00 Polaris Venture Partners, Jacobsen InvestmentsDec-06 Double Fusion $26.00 Norwest Venture Partners, Accel, IDG Ventures, Sedona CapitalDec-06 Venda $20.00 Investor Growth CapitalNov-06 BitTorrent $20.00 Accel, DCMNov-06 Slide $20.00 Kohsla Ventures, Mayfield FundNov-06 HomeAway $160.00 Austin Ventures, Redpoint, American Capital, IVP, Trident CapitalOct-06 Spot Runner $40.00 WPP, CBS, Interpublic GroupOct-06 Jingle Networks $30.00 Goldman Sachs, HearstOct-06 Right Media $45.00 Yahoo!Sep-06 Demand Media $100.00 3i, Oak Investment PartnersSep-06 Handango $60.50 Institutional Venture Partners, Advanced Technology PartnersAug-06 ChinaCars $25.00 Goldman Sachs GroupJul-06 Digital Chocolate $22.50 Bridgescale Partners, DN Capital, Sequoia Capital, Outlook VenturesJul-06 Zillow.com $25.00 PAR Capital Management, TCV, Benchmark CapitalJul-06 CinemaNow $20.30 EchoStar Communications, Index Holdings, Menlo VenturesJul-06 CacheLogic $20.00 Amadeus Capital Partners, 3i, Pentech VenturesJul-06 DangDang.com $27.00 DCM, Alto Global Investment, IDG Ventures, Rakuten, Softbank ChinaJun-06 HomeAway $39.00 Austin VenturesJun-06 Global Market Insite $35.00 TCV, FT Ventures, Voyager Capital May-06 DemandMedia $120.00 Oak Investment Partners, Generation Partners, Spectrum Equity InvestorsApr-06 FaceBook.com $25.00 GreyLock, Meritech CapitalMar-06 AdKnowledge $48.00 TCVMar-06 CoreMetrics $31.00 FT Ventures, Accel, Highland, Mar-06 US Auto Parts $45.00 Oak Investment PartnersFeb-06 Claria $40.25 Softbank Capital, Sand Hill Capital & Rogers CommunicationsJan-06 Innerworkings $50.00 New Enterprise AssociatesJan-06 Webpay $24.30 3iJan-06 Revenue Science $24.00 Meritech Capital, Integral Capital, Mayfield, Mohr Davidow

6

Venture Capital Investments In Internet And Digital Media Have Been Explosive, With Interactive Marketing Leading The Way

Venture Capital Investments Since January 2005

eCommerce18%

Social Media & User Generated Content

19%

Interactive Marketing33%

Domain Names9%

Other Internet & Digital Media

21%VCs continue to pour capital into Internet and Digital Media at a rapid pace

Approximately 2-3 deals per day since Jan 2005

Total invested capital in excess of $3.5 billion!

Mini-bubble in certain sectors?

Source: Dow Jones VentureSource. 7

Internet Media & Services M&A Transactions (2003 – 2006YTD) > $20MM

Internet M&A Saw A Substantial Pick-up In 2004-2005, But Activity Trailed Off Last Year

Q1 Q2 Q3 Q4

2003 2004 2005

5 5

3

11 12 1214

12

1916

20

26

1.9x

4.1x

1.7x 2.1x3.3x 2.8x

3.1x

6.5x

3.4x 3.4x

4.8x3.7x

0

5

10

15

20

25

30

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q40.0x

4.0x

10.0x

Median TTM TEV / R

2006200520042003Quarter

EW Scripps / uSwitch ($366)United Internet / Web.De ($442)eBay / Mobile.de ($152)Lasminute.com / Holiday Autos ($65)

Google / DMARC Broadcasting ($670)Interactive Corp / Ask Jeeves ($1,781)Yahoo! / Kelkoo ($577)Overture / Altavista ($140)

Quarter 1

Alliance Data / DoubleClick Email Mktg. ($90)New York Times / About.com ($410)MemberWorks / LavaLife ($117)

John Fairfax / TradeMe ($466)Interactive Corp / Cornerstone ($720)FindWhat / eSpotting Media ($179)Overture / Fast Search & Transfer ($85)

Alliance Data Systems / Abacus ($435)Liberty Media / Provide Commerce ($417)eBay / MarktPlaats ($290)Drugstore.com / International Vision ($56)aQuantive / Accipiter ($30)Yellow Pages Group / Trader Media ($379)Marchex / NameDevelopment ($164)ValueClick / Commission Junction ($37)

Google / YouTube ($1,650)Bet&Win.com / OnGame E-Solutions ($569)Dow Jones / MarketWatch ($462)T-Online / Scout24 ($220)

Quarter 4Navteq / Traffic.com ($157)Experian / PriceGrabber ($485)eBay / Rent.com ($415)Yahoo! / 3721 Network Software ($120)

Publicis Groupe / Digitas ($1,020)Industri Kapital / WehKamp ($456)Cendant / eBookers ($330)Interactive Corp / Transat At Inc ($63)

NBC Universal / iVillage ($657)Telefonica / Terra Lycos ($1,714)Ask Jeeves / Interactive Search ($335)Rank Group / Blue Square ($105)

Microsoft / Massive Gaming ($300)Hellman & Friedman / DoubleClick ($1,206)AOL / Advertising.com ($387)USA Interactive / Lending Tree ($710)

Quarter 2Viacom / Xfire ($102)Sabre Holdings / Lastminute.com ($1,132)aQuantive / SBI.Razorfish ($160)eBay / Eachnet ($224)

DMGT / Allegran & Data Media ($86)EW Scripps / Shopzilla ($525)Monster Worldwide / Jobpilot ($105)Deutsche Telekom / T-Online ($101)eBay / Tradera ($48)eBay / Shopping.com ($521)Monster Worldwide / Tickle ($74)Roxio / PressPlay ($39)

aQuantive / Franchise Gator ($22)Experian / LowerMyBills ($380)DoubleClick / Performics ($62)RealNetworks / Listen.com ($36)

The Irish Times / MyHome.ie ($57)eBay / Skype ($2,600)Cendant / Orbitz ($1,032)Yahoo! / Overture ($1,442)

Quarter 3Viacom / AtomShockwave ($200)News Corp / IGN Entertainment ($650)Interactive Corp / eLong ($321)Interactive Corp / Hotwire ($685)

Sony / Grouper ($65)News Corp / Intermix Media ($580)Priceline / ActiveHotels ($161)Barnes & Noble / B&N.com ($328)Conde Nast / Wired.com ($25) Rakuten / LinkShare ($425)Yahoo! / MusicMatch ($160)

WebMD / Medsite ($41)Banco Popular / E-Loan ($296)Digitas / Modem Media ($137)

Representative Transactions (Consideration $MM)

Q1 Q2

16

2.0x

6.0x

8.0x

4.3x

Q3 Q4

Num

ber o

f Dea

ls

Median TTM TEV / Revenue

2006

74.4x

6

5.2x

3.2x

5

8

Observations:M&A driven by combination of “Fear” and “Greed”Valuation based on “Build vs. Buy”M&A started off Hot from 2003 to 2005 but then trailed off in 2006High multiple deals done by mega-Internet companies (GOOG, YHOO, EBAY) or Diversified Media companies (NWS, LM)Currently in M&A 2.0 phase…more to come!

Serv ices13%

EMS5%

Semis29%

New Media21%

Comm. Equipment

18%Softw are

11%

Computer Equip.

3%

Technology IPO Market Conditions Have Started To Improve

Sector Breakdown (LTM)

Quarterly Technology IPO issuance

Aftermarket Performance (LTM)

IPO pricing performance vs. range

Average P/E multiples by Quarter

Source: Dealogic / CapIQ

10

7

98

14

9

$0.0

$500.0

$1,000.0

$1,500.0

$2,000.0

Q3 '05 Q4 '05 Q1 '06 Q2 '06 Q3 '06 Q4 '06

Amou

nt R

aised

($M

M)

42.9%

12.5%

55.6%

14.3% 10.0%

14.3%

12.5% 10.0%

14.3%

37.5%

14.3%12.5%

11.1%

12.5% 22.2%

57.1%

20.0%

14.3% 12.5% 11.1%28.6%

60.0%

0%

20%

40%

60%

80%

100%

Q4 '05 Q1 '06 Q2' 06 Q3' 06 Q4' 06

% p

ricin

g re

lativ

e to

mid

poin

t

Below Bottom Within Mid Top Above

28x23x

17x

30x

23x18x

31x29x33x 32x30x

43x

18x

42x

26x

0x5x

10x15x20x25x30x35x40x45x50x

Q4 '05 Q1 '06 Q2 '06 Q3 '06 Q4 '06

Aver

age

P/E

mul

itple

Forw ard PE at f iling Forw ard PE at pricing Forw ard PE at T+1

6 5

1

23

0

4

8

12

16

20

24

28

<-15% -15% - 0% 0% - 15% >15%Performance in aftermarket (offer / current)

# of

IPOs

Average aftermarket performance: 30.9%

Tech IPO environment very similar to that of the mid 1990s before the dotcom boom

9

Internet IPOs have been few and far between:Totals: 2004 2005 2006Marketing 6 3 3Other 14 5 6

200620052004

Online Marketing Services Companies Represented 30% Of NASDAQ Internet IPO Activity In 2004-06

* Forward P/Es at IPO are shown in parenthesis next to each company’s name.

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Fastclick (18x) Baidu.com (47x) Website Pros (29x)

Hurray! (9x)Gravity (20x)Odimo (NM)

WebMD (46x)VistaPrint (40x)

6

3

3

1

12

1

3

1

1

Traffic.com (NM)Digital MusicGroup (NM)

LiquidityServices (44x)

Gmarket (23x) InnerWorkings (31x)

Shutterfly (48x)

Loopnet (27x)Omniture (NM)

eHealth (22x)

3

3

1

2

3

21

12

10

2

4

6

8

10

12

Q1 Q2 Q3 Q4

Marchex (23x) Google (39x)WebSideStory

(37x)

Interchange (NA)Shopping.com

(25x)HouseValues

(34x)Marketing*

Other*

LinkTone (NA)Tom Online (17x)

Shanda (13x)Blue Nile (32x)

Kongzhong (13x)eCOST.com (NA)JAMDAT (28x)51job (NA)

PlanetOut (48x)China Finance

(30x)eLong (NM)zipRealty (32x)Inphonic (29x)The9 (NA)

2

1

3

2

2

2

6

46

3

9

10

Industry Predictions For 2007 and Beyond

Venture CapitalNew advertising technologies which better monetize online video / rich

mediaTechnologies that create new ad inventory (e.g., advergaming)Search technologies that optimize better than natural language searchLead generation and CPA or CPS based platformsInternational: China and Korea

Mergers And AcquisitionsConvergence between different ad units, media and agenciesDiversified media continuing to invest, buy online media and technologiesTechnology R&D to assist in online marketing arms raceInternational: Cross-border investment and M&A

Capital MarketsIPOs for many large private interactive marketing service companiesFollow-on and debt offerings by public players to consolidate the market

11

NYSE: JEFwww.jefferies.com

www.jefferiesbroadview.com

Questions?

David A. Liu Managing Director

[email protected]

12

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