SagePoint Software & Services 100 Q2 09 Performance Revie...7Baidu, Inc. X X 32 Global IP Solutions X 8 Billing Services Group Ltd X 33 Google Inc. X 9Bitstream Inc. X34Gree X 10 Buongiorno

SagePoint Software & Services 100Q2 2009 Performance Review

An Analysis of Public Communications Software & Services Companies from a Valuation and M&A Perspective

August 31, 2009

Prepared By:Prepared By:

For more information contact David Michaels at (858) 926‐5950 or [email protected]

Table of Contents

Section

• SagePoint Software & Services 100 Universe

Page

3‐4

• SagePoint’s Viewpoint – Key Takeaways

• Stock Performance

• Q2 Performance Versus Estimates

5‐6

7‐8

9‐10Q2 Performance Versus Estimates

• Revenue & EPS Growth

• Margin Analysis

9 10

11‐14

15‐19

• Revenue Multiples

• EBITDA Multiples

• P/E Multiples

20‐21

22‐23

24‐25P/E Multiples

• Balance Sheet Strength

• Detailed Financial Metrics By Company

24 25

26

27‐33

• Introduction to SagePoint

2

34

SagePoint Software & Services 100 – Q2 2009

SagePoint Communications Software & Services 100 Universe

. y . y

Market Segment Market Segment

work & App. Mgmt.

arrier Back Office

nnectivity & Mobility

Messaging & Conf.

oIP & Voice Apps

ocation SW

& Svcs

ideo & Multim

edia

ntent Dist. & Deliv.

Portals & SNs

earch & Mktg Svcs

work & App. Mgmt.

arrier Back Office


Messaging & Conf.

oIP & Voice Apps

ocation SW

& Svcs

ideo & Multim

edia

ntent Dist. & Deliv.

Portals & SNs

earch & Mktg Svcs

Company Netw Ca

Con M Vo

Lo Vi

Con Se

Company Netw Ca

Con M Vo

Lo Vi

Con Se

1 Access Corp X 26 DigitalGlobe X2 Adobe X 27 Divx X3 Akamai X 28 Dolby X4 Amdocs Ltd. X 29 DTS X5 AsiaInfo Holdings X 30 Easylink Services X6 Avid X 31 Enghouse Systems Ltd X7 Baidu, Inc. X X 32 Global IP Solutions X

8 Billing Services Group Ltd X 33 Google Inc. X9 Bitstream Inc. X 34 Gree X

10 Buongiorno SPA X 35 IAC/InterActiveCorp. X X10 Buongiorno SPA X 35 IAC/InterActiveCorp. X X11 CA, Inc. X 36 Index Holdings X

12 Chordiant Software X 37 InfoSpace Inc. X13 Citrix Systems, Inc. X 38 InfoVista X14 Click Software X 39 Infraware X15 Comptel Oyj X 40 Intec Telecom Systems plc X

16 comScore Inc. X 41 Interactive Intelligence X17 Constant Contact X 42 Intermap Technologies X

18 Convergys Corporation X 43 iPass Inc. X19 CounterPath Corporation X 44 Ituran Location and Control X

20 CSG Systems Intʹl Inc. X 45 j2 Global Communications, Inc. X21 CyberLink X 46 KANA Software X

SagePoint Software & Services 100 – Q2 2009 3

21 CyberLink X 46 KANA Software X

22 Daum Communications X 47 Keynote Systems X23 DG FastChannel X 48 KongZhong X

24 DigiCore X 49 Limelight Networks X25 Digital River Inc. X 50 Live Person X

SagePoint Software & Services 100 Universe – Continued

. y . y

Market Segment Market Segment

twork & App. Mgmt.

Carrier Back Office


Messaging & Conf.

VoIP & Voice Apps

ocation SW

& Svcs

ideo & Multim

edia

ontent Dist. & Deliv.

Portals & SNs

earch & Mktg Svcs

twork & App. Mgmt.

Carrier Back Office


Messaging & Conf.

VoIP & Voice Apps

ocation SW

& Svcs

ideo & Multim

edia

ontent Dist. & Deliv.

Portals & SNs

earch & Mktg Svcs

Company Net C

Con M V Lo Vi

Co Se

Company Net C

Con M V Lo Vi

Co Se

51 Marchex X 76 Shutterfly X52 Meetic X 77 Sina X53 Melbourne IT Ltd X 78 Smith Micro Software Inc. X54 Microsoft Corporation X 79 Sohu X55 Mixi X 80 Sonic Solutions X55 Mixi X 80 Sonic Solutions X56 ModaVox X 81 SRS X57 Myriad X 82 Sybase, Inc. X X

58 NetScout X 83 Synchronoss Technologies, Inc. X59 NeuStar, Inc. X 84 Syniverse Holdings Inc X

60 Neutral Tandem X 85 TechTarget Inc X61 NHN Corp X 86 TeleCommunications Systems X

62 NICE Systems X 87 Teleperformance Group X63 Novell X 88 Teletech X64 Nuance X 89 Tencent Holdings X65 Omniture X 90 The Knot X66 On2 Technologies Inc X 91 TNS Inc X66 On2 Technologies Inc. X 91 TNS, Inc. X67 OpenTV Corp. X 92 TradeDoubler AB X68 Openwave Systems Inc. X X 93 Universo Online, Inc. X69 Opera Software ASA X 94 ValueClick X70 OPNET Technologies X 95 VIZRT X71 PCTel X 96 WebTech Wireless X

SagePoint Software & Services 100 – Q2 2009 4

72 Premiere Global Services, Inc. X 97 Xata X73 Real Networks X 98 Xing X

74 Rovi Corporation X 99 Yahoo Japan X X75 SeaChange International Inc. X 100 Yahoo! Inc. X X

SagePoint’s Viewpoint ‐ Key Takeaways

• Stock price recovery is well underway in the communications software and services segment− The SagePoint Software & Services 100 recovered significantly since the beginning of Q2 with a median gain of 37%

− The Content Distribution & Delivery segment was particularly oversold and has recovered 59%− The Content Distribution & Delivery segment was particularly oversold and has recovered 59%

• Expectations have been reset and companies are now delivering on those expectations− 79% of the Software & Services 100 met or beat Q2 revenue targets while 77% met or beat EPS targets− Most Q2 surprises are positive with 37% beating EPS targets by 20% or more− Most Q2 surprises are positive with 37% beating EPS targets by 20% or more

• Revenue growth has vanished but has not turned significantly negative like some other parts of the communications value chain− Median revenue contraction was 1% in Q2 versus more than 20% growth in the first half of 2008Median revenue contraction was 1% in Q2 versus more than 20% growth in the first half of 2008− Revenue growth is expected to return with median growth of 3.3% over the next twelve months

• EPS growth came to an abrupt halt in Q2 after 4 consecutive quarters of double digit growth− The Software & Services 100 posted virtually no median EPS growth (0.3%)The Software & Services 100 posted virtually no median EPS growth (0.3%) − LBS posted growth of 88% while Messaging / Conferencing and VoIP/Voice Applications also outperformed with growth of about 30%

− Portals / Social Networks segment experienced a 21% EPS declineEPS th l k i i th t t l th ith di th t f th

5SagePoint Software & Services 100 – Q2 2009

− EPS growth looks promising over the next twelve months with a median growth rate of more than 50% and four of the ten segments expecting EPS growth of about 90% or more as cost cutting takes hold

SagePoint’s Viewpoint ‐ Key Takeaways Continued

• Operating models have remained healthy despite the economic downturn− Median gross margins have remained at the high end of the historical range of 62‐64% − Median R&D spending as a % of revenues has remained at the high end of the 13‐14% historical range− Median SG&A spending was 36% of revenues returning to reasonable levels following cost cutting− Median net margins are also at the high end of their historical levels of 7‐10%

• Valuation multiples have rebounded significantly but remain well below recent peaks− Median LTM revenue multiple of 2.2x remains 45% off the 2007 peak− Median LTM P/E multiple of 23.4x remains 36% off 2006 levels− Portals & Social Networks and Search & Marketing Services segments trade at an 89% and 56% premium to the median NTM P/E multiple of 18.6x, respectively

• SagePoint expects M&A activity to pick up in H2 2009 and 2010 as stock prices continue to recover, revenues and earnings stabilize and buyers leverage their strong cash positions− With more than 50% of the Software & Services 100 at less than $200 million in LTM revenues and more th 25% t l th $100 illi th t i it f t d hi h h ld b t l t fthan 25% at less than $100 million, the sector remains quite fragmented which should be a catalyst for further consolidation

− Balance sheet strength remains very healthy and several active buyers have cash war chests− The large amount of venture capital invested in Web 2.0 and mobile software and services companies


over the last 5 years suggests that hundreds of private companies will be looking for M&A exits− Buyers may increasingly need to look outside for revenue growth as organic growth slows

SagePoint Software & Services 100 Index Performance

• The Software & Services 100 has traded in line with the SagePoint Communications Index, outperforming the Nasdaq and Dow throughout the recovery from March’s lows

160.0%

Stock Performance

120.0%

140.0%

80.0%

100.0%

40.0%

60.0%


Software & Services 100 SagePoint Comm Index NASDAQ DJIA

Stock Performance Since Beginning of Q2

• The SagePoint Software & Services 100 rebounded significantly with a median gain of 37%• The SagePoint Software & Services 100 rebounded significantly with a median gain of 37%• LBS and Content Distribution & Delivery led the rally with 49% and 59% gains, respectively,

while Network & Application Mgmt and Search & Marketing Services underperformed• Big winners included Sonic Solutions, TNS, Openwave, Intec Telecom and TradeDoubler, all

up over 150%• TCS, OpenTV, Synchronoss, Akamai and DG FastChannel all missed out on the rally

Stock Performance ‐ Since 3/31/09 Best/Worst Performers ‐ Since 3/31/09

37.141.6

36 0

48.942.6

59.3

44.8

40%

50%

60%

70%o e o a e i e / /

342.5

217.4250%

300%

350%

400%

e / o e o e i e / /

37.1

26.932.7 34.2 36.0

23.0

10%

20%

30%

40% 185.6 180.2 171.6

37.150%

100%

150%

200%

0%

Since 3/31/09Software & Services Top 100 Network & Application MgtCarrier Back Office Connectivity / MobilityMessaging / Conferencing VoIP / Voice ApplicationsLBS Vid / M l i di

(7.6) (9.1) (13.3)(15.2)(17.8)(50)%

0%

8

Source: SagePoint Advisors & Capital IQ Source: SagePoint Advisors & Capital IQ


LBS Video / MultimediaContent Distribution & Delivery Portals & Social NetworksSearch & Marketing Services

Q2 Performance Versus Analyst Estimates ‐ Revenue

• 79% of the Software & Services 100 met or beat revenue estimates with 33% beating• 79% of the Software & Services 100 met or beat revenue estimates with 33% beating expectations versus 19% missing targets

• Enghouse, Dolby, InfoSpace and AsiaInfo were the only ones to beat by more than 10%• Intermap was the biggest surprise coming in 27% below expectations but raised guidance

on strong backlog for the second half• Webtech, NetScout, Microsoft and Marchex all underperformed estimates

Biggest Revenue Estimate Beats/MissesRevenue Estimate

39.0

16.3 15.011.0 8 6

20%

30%

40%

50%

igge e e ue E i a e ea / i e

46%

e e ue E i a e

11.0 8.61.3

(6.2) (9.6) (10.6)(16.2)

(30)%

(20)%

(10)%

0%

10%

28%(27.2)

(40)%

(30)%

1%4%15%

3%1%Beat 20%+ Beat 10 20% Beat 2 10% Hit +/ 2%



Beat 20%+ Beat 10‐20% Beat 2‐10% Hit +/‐2%

Miss 2‐10% Miss 10‐20% Miss 20%+

Q2 Performance Versus Analyst Estimates ‐ EPS

• 77% of the Software & Services 100 met or beat estimates with 37% of companies beating by• 77% of the Software & Services 100 met or beat estimates with 37% of companies beating by more than 20%

• DTS beat by 650%, however the increase was largely due to settlement of a licensing dispute• The Knot, DivX, Enghouse and Marchex all beat by over 100%• Openwave, Webtech, SeaChange and IAC all missed by 75‐100%; RealNetworks’ huge miss

was from an impairment charge for the write off of goodwill due to declining market value

Biggest EPS Estimate Beats/MissesEPS Estimate652.6

117.4 100.0 100.0 100.08 8

200%

400%

600%

800%

igge E E i a e ea / i e

11% 20%

E E i a e

8.8

(76.5) (84.1)(100.0)(100.0)

(800)%

(600)%

(400)%

(200)%

0%

37%

9%

6%(824.5)(1,000)%

(800)%37%2%

15%

Beat 20%+ Beat 10 20% Beat 2 10% Hit +/ 2%


Source: SagePoint Advisors & Capital IQ Source: SagePoint Advisors & Capital IQNote: Excludes companies projected to have a net margin below 1%

Beat 20%+ Beat 10‐20% Beat 2‐10% Hit +/‐2%

Miss 2‐10% Miss 10‐20% Miss 20%+

Operating Metrics – Revenue Growth

• Software & Services posted median revenue contraction of 1% which was well below• Software & Services posted median revenue contraction of 1% which was well below historical levels of 20+% growth but significantly better than the Semis 50 and Equipment 100

• Revenue contraction appears to have stabilized with a return to growth expected in the NTM• Openwave revenue grew 187% as the turnaround continues to progress while DigitalGlobe,

DTS, Tencent and Rovi also showed strong growth• Marchex, Index Holdings, Modavox, TradeDoubler and PCTEL all had 30‐45% contraction

MRQ / PYQ Revenue Growth High/Low Revenue Growth

24.8

21.5

18.5 18.921.3

24.7

20.6 21.4

20%

25%

30%

Q / YQ e e ue o187.4

128.8

88.4 80.6100%

150%

200%

ig / o e e ue o

14.0

6.710%

15%

0%63.5

(1.0)

(50)%

0%

50%

(0.4) (1.0)(5)%

0%

5% (34.1) (34.2) (39.4) (41.6) (43.6)

(100)%

(50)%



Operating Metrics – Revenue Growth by Segment

• Connectivity/Mobility LBS and Portals & Social Networks all posted 5‐6 5% median growth• Connectivity/Mobility, LBS and Portals & Social Networks all posted 5‐6.5% median growth despite the tough overall market

• Network & Application Mgmt and Content Distribution & Delivery had 6.5‐7.5% median contraction with Video/Multimedia also underperforming

• Modest growth is projected in most segments with LBS showing strongest growth while Video/Multimedia projects a median 6% drop

MRQ / PYQ Revenue Growth NTM/LTM Revenue Growth Projection

0 2

5.5

1.8

6.4 6.2

2.35%

10%Q / YQ e e ue o

3.34.8

9.5

4.1 3.85%

10%

15%/ e e ue o oje io

(1.0)

0.2

(0.7)

(3.8)

(6 5)

(5)%

0%3.3

0.42.0 2.0

0.3

(6 0)

2.3

(5)%

0%

5%

(7.6)(6.5)

(10)%

Q2ʹ09Software & Services Top 100 Network & Application MgtCarrier Back Office Connectivity / MobilityMessaging / Conferencing VoIP / Voice Applications

/

(6.0)(10)%

NTM/LTM Revenue Growth ProjectionSoftware & Services Top 100 Network & Application MgtCarrier Back Office Connectivity / MobilityMessaging / Conferencing VoIP / Voice Applications

/





Operating Metrics – EPS Growth

• Median EPS growth for the Software & Services 100 was flat for Q2 following 4 quarters of g Q g qstrong growth

• Kongzhong posted huge EPS increase on strong revenue growth and improving margins and Keynote showed a large increase on improving margins as well

• Modavox Comptel OPNET and DivX were all hit by the slowdown with EPS dropping• Modavox, Comptel, OPNET and DivX were all hit by the slowdown with EPS dropping more than 100%− RealNetworks’ huge drop was primarily due to an impairment charge

MRQ /PYQ EPS Growth High/Low EPS Growth

61.8

46.750%

60%

70%

Q / YQ E o

800.0600.0

300.0 258.4 235.6200%400%600%800%1,000%

ig / o E o

19.3 21.5

28.531.4

21.8

29.0

20%

30%

40%0.3

(100.0)(150.0)(166.7)(238.8)

(800)%(600)%(400)%(200)%

0%200%

(2.5)

5.1 7.1

0.3

(10)%

0%

10% (916.7)(1,200)%(1,000)%


Source: SagePoint Advisors & Capital IQNote: Excludes companies with a net margin below 1% in the PYQ


Operating Metrics – EPS Growth by Segment

• LBS delivered very strong median EPS growth on revenue growth and improved margins as• LBS delivered very strong median EPS growth on revenue growth and improved margins as did Messaging/Conferencing and VoIP/Voice Applications

• Portals & Social Networks had the weakest performance, down 20%, with Content Distribution & Delivery and Search & Marketing Services also showing EPS contraction

• NTM EPS growth looks promising with a median growth rate of more than 50% and four of the ten segments expecting growth of more than about 90+%

MRQ / PYQ EPS Growth NTM / LTM EPS Growth Projection

30 0

87.5

40%

60%

80%

100%Q / YQ E o

53 8

106.1

90.7

65.6

89.3 93.6

60%

80%

100%

120%/ E o oje io

0.312.5

0.08.5

30.0 29.6

10.0

(2.4) (7.5)(20)%

0%

20%

40% 53.8

30.6

45.9

27.7 28.0

0%

20%

40%

60%

(20.5)(40)%


/

(4.2)(20)%

NTM/LTM EPS Growth ProjectionSoftware & Services Top 100 Network & Application MgtCarrier Back Office Connectivity / MobilityMessaging / Conferencing VoIP / Voice Applications

/






Operating Metrics – Gross Margins

• Median gross margins bumped up to 64 1% near their three year high of 64 5% in Q2• Median gross margins bumped up to 64.1%, near their three year high of 64.5% in Q2 following two quarters of margins below 63%

• Network & Application Mgmt and Video/Multimedia show the strongest margins as the fast growth of traffic and their highly specialized solutions enable high price points

• Carrier Back Office is the only segment with sub 50% margins as the crowded space and pricing pressure from carriers squeezes margins

Quarterly Gross Margin Quarterly Gross Margin

61.0 62.9 61.563.6 62.0 61.9 62.6 63.5 64.1 62.4 62.8 64.1

50%

60%

70%

Qua e y o a gi

64.1

78.3

60.2

71.0 67.6

55.9

87.2

56.4

69.961.1

60%

80%

100%Qua e y o a gi

30%

40%

50%48.5

20%

40%

60%

0%

10%

20%0%


/




Operating Metrics – R&D as a % of Revenues

• Median R&D as a % of revenues has increased in each of the past two quarters which• Median R&D as a % of revenues has increased in each of the past two quarters which suggests that companies are continuing to invest in R&D despite stagnant revenues

• Network & Application Mgmt, Connectivity/Mobility, VoIP/Voice Applications and Video/Multimedia median R&D spend remains about 20‐21% as companies must invest i ifi tl t t h d f thsignificantly to stay ahead of the curve

• Carrier Back Office, LBS and Search & Marketing Services have a median R&D spend of less than 10% of revenues

R&D % Spend R&D % Spend

12.9 13.213.6 13.7 13.9

13.113.7

14.313.2 13.1

13.7 14.1

12.0%

14.0%

16.0%

% pe

14.1

20.121.1

13.8

19.7 20.4

13.515%

20%

25%% pe

6.0%

8.0%

10.0%9.2 9.6

11.59.4

5%

10%

15%

0.0%

2.0%

4.0% 0%


/




Operating Metrics – SG&A as a % of Revenues

• Median SG&A as a % of revenues has flattened to reasonable levels as cost cuts are catching• Median SG&A as a % of revenues has flattened to reasonable levels as cost cuts are catching up to revenue drops

• Network & Application Mgmt has the highest SG&A spend at 45%• Carrier Back Office segment operates with relatively low SG&A costs (18.3% of revenue) as

they sell directly to a limited number of carriers

SG&A % SpendSG&A % Spend

36.4

45.2

36.134.0

38.5

32.5

41.1 39.8 39.637.0

30%

40%

50%A % pe

35.8 35.9

40.138.5 38.5

36.638.8 38.2 37.0 36.7 36.4 36.4

35%

40%

45%

A % pe

18.3

10%

20%

30%

15%

20%

25%

30%

0%


/

0%

5%

10%




Operating Metrics – EBITDA Margins

• Median EBITDAmargins are healthy at 17%, following two quarters of decreasing marginsMedian EBITDA margins are healthy at 17%, following two quarters of decreasing margins as companies have successfully contained spending as revenues stabilize

• Messaging/Conferencing and Portals & Social Networks not surprisingly deliver strong EBITDA margins on high gross margins and lower R&D costsC i B k Offi d LBS h t EBITDA i d it k th i d t• Carrier Back Office and LBS show strong EBITDA margins despite weaker than industry gross margins due to low R&D and SG&A spending

Quarterly EBITDA Margin Quarterly EBITDA Margin

17.4 17.0

14.7

17.2 17.5

13.812 7

14.3

18.0

16.0

13.8

17.0

14%

16%

18%

20%

Qua e y E I A a gi

17.015.4

21.4

13.9

23.5

19.0

21.5

14.215%

20%

25%Qua e y E I A a gi

12.7

6%

8%

10%

12%

14%11.9

9.7

12.1

5%

10%

15%

0%

2%

4%

6%0%


/




Operating Metrics – Net Margins

• Median net margins are returning towards recent highs after a sharp drop in Q1 as cost• Median net margins are returning towards recent highs after a sharp drop in Q1 as cost cutting takes hold and revenues stabilize

• Messaging/Conferencing and Portals & Social Networks deliver 14‐15% median net margin• Content Distribution & Delivery is the only segment to post a negative median net margin

as solidly profitable companies such as Akamai, Digital River and Keynote are counterbalanced by the poor performance of Modavox, RealNetworks, Limelight and Index

Quarterly Net Margin Quarterly Net Margin

8.58.0 8.1 7 8 7 8

10.710.1 10.2

7 7

10.010%

12%

Qua e y e a gi

10.0 10.7 9.87 6

14.2

9.7 10.4

15.0

10.510%

15%

20%Qua e y e a gi

7.27.8 7.8

5.5

7.7

4%

6%

8% 7.6

3.9

0%

5%

10%

0%

2%(3.3)(5)%


/




Valuation Metrics – LTM Revenue Multiples

• The median LTM revenue multiple has rebounded to 2 2x from its low of 1 3x but remains• The median LTM revenue multiple has rebounded to 2.2x from its low of 1.3x but remains 45% below the recent peak of 4.0x

• Modavox’ investors appear to be convinced that dramatic revenue growth lies ahead• Several Asian Internet and mobile companies trade at high multiples due to strong margins

and growth such as Baidu, Tencent and Gree and to a lesser extent Infraware• 27% of vendors are trading at less than 1x revenues with Real and iPass really languishing

LTM Enterprise Value / Revenue High/Low LTM EV/Rev Multiples

3.1

3.63.4

4.03.6

3.2

3.0x

3.5x

4.0x

4.5x

E e p i e a ue / e e ue

76.4

60.0x

70.0x

80.0x

90.0x

ig / o E / e u ip e

2.4 2.21.9

1.3 1.3

1.82.2

1.0x

1.5x

2.0x

2.5x

20.0 18.613 020.0x

30.0x

40.0x

50.0x

60.0

0.0x

0.5x13.0 10.0

2.2 0.5 0.5 0.4 0.2 0.10.0x

10.0x



Software & Services Top 100

Valuation Metrics – Revenue Multiples By Segment

• Portals & Social Networks command the highest median revenue multiples at 3 1x with• Portals & Social Networks command the highest median revenue multiples at 3.1x with Connectivity/Mobility next at 2.6x

• Network & Application Mgmt and Carrier Back Office trade at less than 1.5x• On an NTM basis the segments primarily trade in a fairly tight range between 1.8‐2.2x

− Video/Multimedia’s high NTM multiple is due to lack of projections for lower valued companies

LTM Enterprise Value / Revenue NTM Enterprise Value / Revenue

2.2

2.6

2.2

1 82.1 2.2

3.1

2.3

2 0%

2.5%

3.0%

3.5%E e p i e a ue / e e ue

2.11.9

2.2 2.21 8

2.0

3.0

1.9

2.6 2.5

2 0x

2.5x

3.0x

3.5xE e p i e a ue / e e ue

0.9

1.4

1.8 1.7

0.5%

1.0%

1.5%

2.0%

0.7

1.9 1.8

0.5x

1.0x

1.5x

2.0x

0.0%

CurrentSoftware & Services Top 100 Network & Application MgtCarrier Back Office Connectivity / MobilityMessaging / Conferencing VoIP / Voice Applications

/

0.0x

CurrentSoftware & Services Top 100 Network & Application MgtCarrier Back Office Connectivity / MobilityMessaging / Conferencing VoIP / Voice ApplicationsLBS Vid / M l i di





Valuation Metrics – LTM EBITDA Multiples

• Median EBITDAmultiples have rebounded the past two quarters as confidence has returned• Median EBITDA multiples have rebounded the past two quarters as confidence has returned− However, multiples still remain about half of their 2007 highs

• Baidu, Tencent, Meetic and Omniture trade at premium multiples on very strong growth and high margins while Infraware’s valuation appears to be less grounded in fundamentals

• Several vendors are trading at below 5x EBITDA, most of whom experienced significant revenue contraction in Q2

High/Low LTM EV/EBITDA MultiplesLTM Enterprise Value / EBITDA

51.8

46.0

38.133 8

40.0x

50.0x

60.0x

ig / o E /E I A u ip e

16.4 16.8

19.4 19.717.8

15.4

20.0x

25.0x

E e p i e a ue / E I A

33.829.1

10.3

4 0 3 8 3 7 3 3 3 110.0x

20.0x

30.0x12.1 11.79.5

7.2 7.79.5 10.3

5.0x

10.0x

15.0x

4.0 3.8 3.7 3.3 3.1

0.0x0.0x


Source: SagePoint Advisors & Capital IQNote: Excludes companies with an LTM EBITDA margin below 7.5%



Valuation Metrics – EBITDA Multiples By Segment

• Connectivity/Mobility and VoIP/Voice Applications appear to trade at higher median LTM• Connectivity/Mobility and VoIP/Voice Applications appear to trade at higher median LTM EBITDA multiples as many companies only slightly beat the 7.5% EBITDA margin cutoff, resulting in higher margins

• Portals & Social Networks and Search & Marketing Services trade at premium multiples on LTM d NTM b i th t ti d t fit bilitan LTM and NTM basis on growth expectations and strong profitability

• LBS and Video/Multimedia high NTM multiples are due to a lack of forecasts for lower valued companies

LTM Enterprise Value / EBITDA NTM Enterprise Value / EBITDA

10 3

18.8

15.6

10 5

13.1 12.715.0x

20.0xE e p i e a ue / E I A

7.5

10.19.3

13.1

8.4

10.111.1

8 0x

10.0x

12.0x

14.0xE e p i e a ue / E I A

10.3

7.8 8.5 8.17.0

10.5

7.5

5.0x

10.0x7.5

6.2 6.76.0 6.5

2.0x

4.0x

6.0x

8.0x

0.0x


0.0x



Source: SagePoint Advisors & Capital IQNote: Excludes companies with a projected NTM EBITDA margin below 7.5%




Valuation Metrics – LTM P/E Multiples

• Median P/E multiples continue to recover but remain 36% off their 2006 levels• Median P/E multiples continue to recover but remain 36% off their 2006 levels• Rovi, DivX, and Baidu trade at high P/E multiples on expectations of strong EPS growth as

the companies put restructuring costs behind them− Keynote’s P/E is inflated by its high cash balance relative to its market cap− Infraware’s valuation does not appear to be justified by the fundamentals

• Several struggling vendors trade at less than 10x EPS

LTM P/E High/Low LTM P/E Multiples36.8 36.2 36.1

32.9 34.4

25.7 26.023 4 23 425 0

30.0x

35.0x

40.0x

/E

182.6

140.0x160.0x180.0x200.0x

ig / o /E u ip e

20.7

15.617.4

21.723.4 23.4

10.0x

15.0x

20.0x

25.0x

82.868.5 65.2 65.1

23.440.0x60.0x80.0x100.0x120.0x

0.0x

5.0x 9.3 8.4 7.2 6.7 6.6

0.0x20.0x


Source: SagePoint Advisors & Capital IQNote: Excludes companies with an LTM net margin below 2.5%



Valuation Metrics – P/E Multiples By Segment

• Most of the Software & Services 100 companies trade at a relatively tight NTM P/E range• Most of the Software & Services 100 companies trade at a relatively tight NTM P/E range with median multiples of 14.5‐20x − Portals & Social Networks and Search & Marketing Services trade at a 89% and 56% premium to the Software & Services 100 median NTM multiple, respectively

• As you would expect in estors are focusing on future profits as the economy begins to• As you would expect, investors are focusing on future profits as the economy begins to recover and growth resumes

LTM P/E NTM P/E

39.041.3

32.7 31.8

26 2 26 330.0x

40.0x

50.0x/E

20 0

24.4

35.2

29.030.0x

40.0x/E

23.4

17.2 15.3

10.1

22.226.2 26.3

10.0x

20.0x

30.0x18.6 18.0

14.5

20.0

14.8

19.316.8

18.6

10.0x

20.0x

0.0x


0.0x



Source: SagePoint Advisors & Capital IQNote: Excludes companies with a projected NTM net margin below 2.5%




Balance Sheet Strength – Net Cash Position

• Median Net Cash relative to market cap remains above historical levels but is moving backMedian Net Cash relative to market cap remains above historical levels but is moving back down as stock prices recover

• 12 companies have over $500M in Net Cash which provides a war chest for acquisitions• 21 companies have more debt than cash and this debt is becoming increasingly difficult to

i fit t dservice as profits get squeezed− May lead to further consolidation if financing markets remain difficult to access

Net Cash / Market Value High/Low Net Cash

13.4

19.018.1

16.5 16.0

14%

16%

18%

20%

e a / a e a ue

24,151

19,344$20,000

$25,000

$30,000

ig / o e a

11.610.2 10.5

11.0 11.110.0

11.2 11.2

6%

8%

10%

12%

14%

3,7702,314 1,739

68$5,000

$10,000

$15,000

0%

2%

4%

6%

(272) (324) (325) (345) (478)$(5,000)

$0



Software & Services 100 Financial Metrics

($ in millions e cept per share data)($ in millions, except per share data)Sto ck P rice M arket Enterprise % C hange Ent. Value/ R ev. Ent . Value/ EB IT D A P rice/ EP S Est imate Surprise N et C ash / N et D ebt / SG&A / R &D /

C o mpany N ame 8/ 31/ 09 C ap Value C ash D ebt 3/ 31/ 09 LT M N T M LT M N T M LT M N T M R evenue EP S M kt C ap EB IT D A R evenue R evenue

Software & Services Top 100So ftware & Services 100 5,515 4,893 773 151 48.5% 3.5 x 2.4 x 12.7 x 9.6 x 31.7 x 24.7 x 1.3 % 8.5 % 13.5 % (4.6) x 39.3 % 15.5 %So ftware & Services 100 422 341 88 3 37.1% 2.2 x 2.1 x 10.3 x 7.5 x 23.4 x 18.6 x 1.3 % 8.4 % 16.0 % (2.2) x 36.4 % 14.1 %

N etwo rk & A pplicat io n M gtCA, Inc. 22.29 11,676 10,616 2,979 1,919 26.6% 2.5 x 2.4 x 7.6 x 6.6 x 17.3 x 13.1 x 2.3 % 10.2 % 9.1 % (0.8) x 37.2 % 11.3 %InfoVista SA 4.13 72 32 40 0 69.8% 0.5 x 0.5 x 4.5 x 4.7 x 23.3 x 18.0 x 2.1 % NA 55.7 % (5.6) x 45.2 % 20.3 %Keynote Systems Inc. 10.06 146 90 56 0 26.9% 1.1 x 1.1 x 8.8 x 6.7 x 68.5 x 70.3 x 8.6 % NM 38.4 % (5.5) x 39.7 % NANetScout Systems Inc. 11.46 463 440 113 90 60.1% 1.7 x NA 8.0 x 6.9 x 19.8 x NA (10.6)% (6.7)% 4.9 % (0.4) x 47.1 % 15.9 %Novell Inc. 4.35 1,502 580 921 0 2.1% 0.7 x 0.7 x 4.5 x 3.3 x 64.5 x 14.0 x (0.3)% (2.8)% 61.4 % (7.2) x 46.7 % 21.1 %OPNET Technologies Inc. 9.46 196 105 91 0 9.1% 0.9 x 0.8 x 10.2 x 5.8 x 54.8 x NM 0.7 % 20.0 % 46.6 % (8.9) x 45.7 % 28.4 %PCTEL, Inc. 5.90 111 43 68 0 37.2% 0.7 x 0.7 x NM NM NM 44.9 x (2.9)% NM 61.3 % (19.5) x 33.3 % 19.8 %

M ean 2,024 1,701 610 287 33.1% 1.1 x 1.0 x 7.3 x 5.7 x 41.4 x 32.1 x (0 .0)% 5.2 % 39.6 % (6.8) x 42.1 % 19.5 %M edian 196 105 91 0 26.9% 0.9 x 0.7 x 7.8 x 6.2 x 39.0 x 18.0 x 0.7 % 3.7 % 46.6 % (5.6) x 45.2 % 20.1 %

($ in millions, except per share data)R evenue EB IT D A EP S M R Q/ P YQ Gro wth N T M / LT M Gro wth LQ M argin

C o mpany N ame M R Q LT M N T M M R Q LT M N T M M R Q LT M N T M R evenue EB IT D A EP S R evenue EB IT D A EP S Gro ss EB IT D A N et

Software & Services Top 100So ftware & Services 100 M ean 319 1,343 1,971 102 447 727 0.23 0.91 1.26 5.6 % 13.2 % 15.9 % 6.2 % 39.6 % 89.2 % 63.4 % 14.9 % 3.9 %So ftware & Services 100 M edian 44 186 301 6 28 64 0.10 0.21 0.61 (1.0)% 9.6 % 0.3 % 3.3 % 25.9 % 53.8 % 64.1 % 17.0 % 10.0 %

N etwo rk & A pplicat io n M gtCA, Inc. 1,050 4,234.0 4,355.2 407 1,393.0 1,602.7 0.42 1.29 1.71 (3.4)% 4.1 % 5.0 % 2.9 % 15.1 % 32.0 % 87.3 % 38.8 % 21.6 %InfoVista SA 16 63.3 66.3 2 7.1 6.7 0.10 0.18 0.23 (7.6)% NM 64.5 % 4.6 % (5.5)% 29.2 % 78.8 % 15.4 % 10.4 %Keynote Systems Inc. 20 81.4 79.8 4 10.2 13.5 0.15 0.15 0.14 (1.6)% 220.5 % 600.0 % (2.0)% 31.9 % (2.6)% 52.3 % 19.2 % 10.7 %NetScout Systems Inc. 58 265.1 NA 12 55.2 63.7 0.18 0.58 NA (4.2)% 66.6 % 12.5 % NA 15.5 % NA 79.0 % 21.4 % 12.7 %Novell Inc. 216 891.3 869.3 32 128.2 175.4 0.07 0.07 0.31 (11.9)% 37.8 % 16.7 % (2.5)% 36.7 % 359.3 % 78.3 % 14.9 % 11.2 %OPNET Technologies Inc. 28 120.5 135.4 1 10.3 18.2 (0.02) 0.17 0.15 (7.9)% (70.7)% (150.0)% 12.3 % 76.6 % (13.1)% 73.4 % 2.5 % (1.5)%PCTEL, Inc. 13 65.9 60.5 (0) 3.5 4.2 0.02 (0.16) 0.13 (34.1)% (128.7)% (86.7)% (8.2)% 20.7 % 181.1 % 45.3 % (3.7)% 2.6 %

M ean 200 817 928 65 230 269 0.13 0.32 0.44 (10.1)% 21.6 % 66.0 % 1.2 % 27.3 % 97.7 % 70.6 % 15.5 % 9.7 %M edian 28 121 108 4 10 18 0.10 0.17 0.19 (7.6)% 20.9 % 12.5 % 0.4 % 20.7 % 30.6 % 78.3 % 15.4 % 10.7 %



($ in millions except per share data)($ in millions, except per share data)Sto ck P rice M arket Enterprise % C hange Ent. Value/ R ev. Ent . Value/ EB IT D A P rice/ EP S Est imate Surprise N et C ash / N et D ebt / SG&A / R &D /


C arrier B ack Off iceAmdocs Ltd. 24.32 4,960 3,982 1,280 302 31.3% 1.3 x 1.4 x 6.6 x 6.4 x 15.7 x 12.1 x 1.7 % 9.3 % 19.7 % (1.6) x 11.8 % 7.4 %AsiaInfo Holdings Inc. 17.22 787 574 213 0 2.2% 2.8 x 2.2 x 20.1 x 13.6 x 37.3 x 23.0 x 11.0 % 13.5 % 27.1 % (7.5) x 23.2 % 15.0 %Billing Services Group Limited 0.28 79 141 19 81 80.2% 1.0 x NA 4.0 x NA 6.6 x NA NA NA (79.1)% 1.8 x 14.4 % NAComptel Oyj 1.12 120 123 11 14 38.0% 1.1 x NA 14.0 x NA NM NA NA NA (3.0)% 0.4 x NA NAConvergys Corporation 10.84 1,332 1,603 336 608 34.2% 0.6 x 0.6 x NM 5.4 x NM 10.4 x 0.4 % 28.4 % (20.4)% 1.8 x 23.7 % 3.0 %CSG Systems International Inc. 15.07 529 550 133 153 5.5% 1.1 x 1.1 x 4.8 x 4.8 x 8.4 x 9.4 x 1.9 % 5.5 % (3.9)% 0.2 x 12.0 % 14.1 %Intec Telecom Systems plc 1 39 425 349 76 1 180 2% 1 5 x NA 9 1 x NA 19 3 x NA NA NA 17 7 % (2 0) x 26 1 % 9 9 %Intec Telecom Systems plc 1.39 425 349 76 1 180.2% 1.5 x NA 9.1 x NA 19.3 x NA NA NA 17.7 % (2.0) x 26.1 % 9.9 %NeuStar, Inc. 23.18 1,723 1,475 268 20 38.4% 3.1 x 3.0 x 7.0 x 7.1 x 50.1 x 17.1 x 1.3 % 2.2 % 14.4 % (1.2) x 29.0 % 3.9 %Neutral Tandem, Inc. 25.01 837 677 161 1 1.6% 4.7 x 3.7 x 10.2 x 7.7 x 24.6 x 19.2 x 2.4 % 8.4 % 19.1 % (2.4) x 10.1 % NASynchronoss Technologies, Inc. 10.63 330 263 76 9 (13.3)% 2.2 x 2.0 x 11.2 x 6.7 x 34.3 x 18.6 x 1.3 % (3.6)% 20.2 % (2.8) x 18.3 % 9.8 %Syniverse Holdings Inc. 17.87 1,229 1,554 188 513 13.4% 3.2 x 3.0 x 8.5 x 7.0 x 16.2 x 11.1 x (2.9)% 1.9 % (26.4)% 1.8 x 22.8 % NATeleperformance 34.37 1,942 1,880 361 298 24.8% 0.7 x NA 5.6 x NA 12.1 x NA NA NA 3.2 % (0.2) x 16.3 % NATeleTech Holdings Inc. 17.06 1,058 1,009 84 35 56.7% 0.8 x 0.9 x 6.1 x 6.5 x 17.2 x 16.9 x 3.3 % 60.8 % 4.7 % (0.3) x 14.9 % NATNS Inc. 25.96 656 1,000 23 368 217.4% 2.7 x 1.8 x 12.5 x 6.7 x NM 10.4 x 6.2 % 28.1 % (52.6)% 4.3 x 18.5 % 8.6 %

M ean 1,143 1,084 231 172 50.7% 1.9 x 2.0 x 9.2 x 7.2 x 22.0 x 14.8 x 2.7 % 15.5 % (4.2)% (0.6) x 18.5 % 9.0 %M edian 812 839 147 58 32.7% 1.4 x 1.9 x 8.5 x 6.7 x 17.2 x 14.5 x 1.8 % 8.8 % 3.9 % (0.2) x 18.3 % 9.2 %



C arrier B ack Off iceAmdocs Ltd. 690 2,980.5 2,747.5 143 601.7 623.5 0.53 1.54 2.01 (15.9)% (9.4)% (13.1)% (7.8)% 3.6 % 29.8 % 35.9 % 20.7 % 15.6 %AsiaInfo Holdings Inc. 59 208.0 261.7 7 28.5 42.1 0.16 0.46 0.75 39.3 % 64.7 % 45.5 % 25.8 % 47.6 % 62.1 % 49.1 % 12.0 % 12.5 %Billing Services Group Limited 36 148.5 NA 9 35.4 NA 0.01 0.04 NA 9.0 % 9.5 % 258.4 % NA NA NA 40.7 % 25.6 % 8.0 %Comptel Oyj 25 111.1 NA 2 8.8 NA (0.01) 0.01 NA (24.3)% (63.8)% (166.7)% NA NA NM 43.5 % 8.0 % (2.8)%Convergys Corporation 683 2,757.3 2,672.6 (5) 149.3 295.7 0.28 (1.65) 1.04 (1.0)% (106.5)% (12.5)% (3.1)% 98.1 % 163.1 % 25.9 % (0.7)% 5.0 %CSG Systems International Inc 125 490 0 508 0 28 114 6 114 6 0 40 1 80 1 60 6 8 % (4 6)% 0 0 % 3 7 % (0 1)% (10 7)% 47 8 % 22 8 % 11 0 %CSG Systems International Inc. 125 490.0 508.0 28 114.6 114.6 0.40 1.80 1.60 6.8 % (4.6)% 0.0 % 3.7 % (0.1)% (10.7)% 47.8 % 22.8 % 11.0 %Intec Telecom Systems plc 58 228.1 NA 9 38.2 NA 0.02 0.07 NA 1.5 % 97.8 % 235.6 % NA NA NA 52.2 % 15.9 % 8.6 %NeuStar, Inc. 116 480.2 492.1 49 210.0 208.2 0.32 0.46 1.36 (3.7)% (1.8)% 3.2 % 2.5 % (0.9)% 193.6 % 75.5 % 42.7 % 20.8 %Neutral Tandem, Inc. 41 145.6 183.1 20 66.4 88.1 0.31 1.02 1.30 44.3 % 74.7 % 82.4 % 25.8 % 32.7 % 28.3 % 58.1 % 48.0 % 25.5 %Synchronoss Technologies, Inc. 31 117.7 134.0 7 23.4 39.3 0.08 0.31 0.57 25.7 % 30.3 % 0.0 % 13.9 % 67.8 % 84.5 % 50.3 % 22.2 % 8.2 %Syniverse Holdings Inc. 113 485.5 514.7 47 183.6 222.0 0.37 1.10 1.61 (11.1)% (13.4)% (2.6)% 6.0 % 20.9 % 45.9 % 64.0 % 41.2 % 22.2 %Teleperformance 665 2,596.9 NA 83 334.3 NA 0.65 2.85 NA (4.2)% (5.6)% (14.5)% NA NA NA 29.5 % 12.6 % 5.6 %TeleTech Holdings Inc. 302 1,280.6 1,173.8 44 166.3 155.2 0.32 0.99 1.01 (15.6)% (4.4)% 0.0 % (8.3)% (6.7)% 1.5 % 29.3 % 14.7 % 6.8 %TNS Inc. 122 366.9 571.2 31 79.7 148.8 0.56 0.05 2.49 35.3 % 58.3 % 30.2 % 55.7 % 86.6 % NM 52.2 % 25.1 % 11.7 %

M ean 219 885 926 34 146 194 0.29 0.65 1.38 6.1 % 9.0 % 31.8 % 11.4 % 35.0 % 66.5 % 46.7 % 22.2 % 11.4 %


M edian 115 424 511 24 97 152 0.32 0.46 1.33 0.2 % (3.1)% 0.0 % 4.8 % 26.8 % 45.9 % 48.5 % 21.4 % 9.8 %


($ in millions, except per share data)Sto ck P rice M arket Enterprise % C hange Ent. Value/ R ev. Ent . Value/ EB IT D A P rice/ EP S Est imate Surprise N et C ash / N et D ebt / SG&A / R &D /


C o nnectivity / M o bilityAccess Company, Ltd. 2,688.14 1,053 869 219 34 37.1% 2.9 x NA 18.5 x NA NM NA NA NA 17.5 % (3.9) x 68.6 % 41.6 %Bitstream Inc. 5.08 50 33 17 0 14.4% 1.5 x NA NM NA 48.1 x NA NA NA 34.8 % (12.0) x 29.0 % 22.7 %Citrix Systems, Inc. 35.66 6,527 5,948 580 0 57.5% 3.8 x 3.6 x 19.1 x NA 41.3 x 20.0 x 1.7 % 3.4 % 8.9 % (1.9) x 57.7 % 19.1 %Infraw are Inc. 29.73 227 218 13 4 96.4% 10.0 x NA 51.8 x NA 65.1 x NA NA NA 3.8 % (2.0) x 25.2 % 5.3 %iPass Inc. 1.46 91 21 70 0 46.0% 0.1 x NA NM NA NM NA NA NA 77.0 % (13.6) x 29.3 % 7.9 %Myriad Group AG 4.08 87 89 4 6 11.6% 2.2 x NA NM NA NM NA NA NA (3.0)% 3.4 x 38.9 % 21.1 %Openw ave Systems Inc. 2.77 231 122 109 0 185.6% 0.6 x 0.6 x NM 5.5 x NM 43.3 x 8.2 % (100.0)% 47.3 % (20.6) x 38.2 % 23.0 %Opera Softw are ASA 3 71 441 350 91 0 8 6% 3 7 x NA 19 1 x NA 28 6 x NA NA NA 20 6 % (5 0) x 2 2 % NAOpera Softw are ASA 3.71 441 350 91 0 8.6% 3.7 x NA 19.1 x NA 28.6 x NA NA NA 20.6 % (5.0) x 2.2 % NASmith Micro Softw are Inc. 11.55 374 330 44 0 120.8% 3.2 x NA 17.8 x NA NM NA 0.8 % 18.9 % 11.7 % (2.4) x 41.0 % 33.6 %Sybase, Inc. 34.85 2,821 2,489 784 453 15.1% 2.2 x 2.2 x 8.1 x 6.5 x 18.9 x 14.8 x 1.7 % 7.3 % 11.7 % (1.1) x 34.0 % 12.9 %

M ean 1,190 1,047 193 50 59.3% 3.0 x 2.1 x 22.4 x 6.0 x 40.4 x 26.0 x 3.1 % (17.6)% 23.0 % (5.9) x 36.4 % 20.8 %M edian 302 274 81 0 41.6% 2.6 x 2.2 x 18.8 x 6.0 x 41.3 x 20.0 x 1.7 % 5.4 % 14.6 % (3.1) x 36.1 % 21.1 %

M essaging / C o nferencingConstant Contact, Inc. 20.83 590 483 107 0 48.9% 4.5 x 3.2 x NM 35.7 x NM 120.4 x 0.7 % NM 18.1 % (38.6) x 57.0 % 14.6 %EasyLink Services International Corporation 1.68 44 71 10 37 (6.1)% 0.8 x NA 3.3 x NA NM NA NA NA (61.6)% 1.3 x 47.0 % 8.4 %j2 Global Communications, Inc. 21.37 963 770 193 0 (2.4)% 3.2 x 3.0 x 6.5 x 5.8 x 13.9 x 11.6 x 2.2 % 8.1 % 20.0 % (1.6) x 33.1 % 4.7 %LivePerson Inc 4 12 197 166 31 0 81 5% 2 1 x 1 8 x 14 6 x 8 1 x NM 18 1 x (1 1)% 33 3 % 15 9 % (2 8) x 49 0 % 15 3 %LivePerson Inc. 4.12 197 166 31 0 81.5% 2.1 x 1.8 x 14.6 x 8.1 x NM 18.1 x (1.1)% 33.3 % 15.9 % (2.8) x 49.0 % 15.3 %Microsoft Corporation 24.65 219,648 195,497 29,907 5,756 34.2% 3.3 x 3.3 x 8.4 x 8.7 x 15.2 x 14.5 x (9.6)% (1.1)% 11.0 % (1.0) x 31.1 % 17.0 %Openw ave Systems Inc. 2.77 231 122 109 0 185.6% 0.6 x 0.6 x NM 5.5 x NM 43.3 x 8.2 % (100.0)% 47.3 % (20.6) x 38.2 % 23.0 %Premiere Global Services, Inc. 9.36 569 806 35 273 6.1% 1.3 x 1.3 x 6.4 x 5.7 x 15.3 x 12.9 x (0.2)% (24.4)% (41.7)% 1.9 x 33.8 % 2.8 %Sybase, Inc. 34.85 2,821 2,489 784 453 15.1% 2.2 x 2.2 x 8.1 x 6.5 x 18.9 x 14.8 x 1.7 % 7.3 % 11.7 % (1.1) x 34.0 % 12.9 %Tencent Holdings Ltd. 14.88 26,993 25,919 1,089 15 100.9% 18.6 x NA 38.1 x NA 48.6 x NA NA NA 4.0 % (1.6) x 19.8 % NA

M ean 28,006 25,147 3,585 726 51.5% 4.1 x 2.2 x 12.2 x 10.9 x 22.4 x 33.7 x 0.3 % (12.8)% 2.7 % (7.1) x 38.1 % 12.3 %M edian 590 770 109 15 34.2% 2.2 x 2.2 x 8.1 x 6.5 x 15.3 x 14.8 x 0.7 % 3.1 % 11.7 % (1.6) x 34.0 % 13.8 %



C o nnect ivity / M o bilityAccess Company, Ltd. 29 300.3 NA (15) 46.9 NA (27.16) 17.98 NA (30.7)% (147.4)% (22.4)% NA NA NA 53.2 % (51.4)% (36.9)%Bitstream Inc. 5 21.4 NA 0 1.5 NA 0.03 0.11 NA (19.5)% (46.7)% (60.2)% NA NA NA 59.2 % 8.9 % 6.1 %Citrix Systems, Inc. 393 1,576.5 1,652.7 76 312.1 NA 0.39 0.86 1.78 0.3 % 25.5 % 2.6 % 4.8 % NA 106.7 % 91.7 % 19.3 % 18.3 %Infraw are Inc. 6 21.8 NA 1 4.2 NA 0.07 0.46 NA 14.1 % (4.0)% (63.4)% NA NA NA 57.4 % 21.9 % 9.0 %iPass Inc. 44 183.0 NA 2 5.1 NA 0.02 (1.49) NA (10.1)% NM 57.8 % NA NM NA 40.2 % 5.6 % 2.2 %Myriad Group AG 11 40.0 NA 1 0.8 NA (0.01) (0.27) NA 11.2 % 135.1 % 98.0 % NA NM NA 61.3 % 8.7 % (2.1)%Openw ave Systems Inc. 48 191.7 193.5 2 5.3 22.0 0.00 (1.05) 0.06 187.4 % 115.0 % 100.0 % 0.9 % NM 106.1 % 61.9 % 3.9 % 0.0 %Opera Softw are ASA 27 95.8 NA 5 18.4 NA 0.03 0.13 NA 21.0 % 32.8 % (2.1)% NA NA NA 42.2 % 18.9 % 12.9 %Smith Micro Softw are Inc. 26 102.9 NA 5 18.6 NA 0.17 0.04 NA 10.8 % NM 41.7 % NA NA NA 84.9 % 20.0 % 21.6 %Sybase, Inc. 278 1,134.5 1,156.8 87 308.1 384.1 0.56 1.85 2.36 (1.7)% 15.1 % 14.3 % 2.0 % 24.7 % 27.7 % 71.0 % 31.4 % 17.6 %

M ean 87 367 1,001 17 72 203 (2.59) 1.86 1.40 18.3 % 15.7 % 16.6 % 2.6 % 24.7 % 80.2 % 62.3 % 8.7 % 4.9 %M edian 28 143 1,157 2 12 203 0.03 0.12 1.78 5.5 % 20.3 % 8.5 % 2.0 % 24.7 % 106.1 % 60.2 % 13.9 % 7.6 %

M essaging / C o nferencingConstant Contact, Inc. 31 107.4 151.8 2 2.8 13.5 0.04 (0.11) 0.17 49.0 % NM 300.0 % 41.3 % NM 263.6 % 71.3 % 6.1 % 3.8 %EasyLink Services International Corporation 21 88.6 NA 5 21.4 NA 0.05 0.06 NA (10.9)% (26.2)% (71.7)% NA NA NA 69.1 % 23.5 % 5.6 %j2 Global Communications, Inc. 62 244.3 253.3 31 118.9 133.3 0.48 1.54 1.84 1.8 % 12.0 % 20.0 % 3.7 % 12.1 % 19.8 % 81.2 % 49.5 % 35.0 %


LivePerson Inc. 21 79.4 91.1 3 11.3 20.4 0.06 (0.44) 0.23 10.5 % NM 50.0 % 14.7 % 79.4 % 151.2 % 74.5 % 15.8 % 14.2 %Microsoft Corporation 13,099 58,437.0 59,350.7 4,630 23,267.0 22,509.6 0.36 1.62 1.70 (17.3)% (24.9)% (21.7)% 1.6 % (3.3)% 4.8 % 80.3 % 35.3 % 24.5 %Openw ave Systems Inc. 48 191.7 193.5 2 5.3 22.0 0.00 (1.05) 0.06 187.4 % 115.0 % 100.0 % 0.9 % NM 106.1 % 61.9 % 3.9 % 0.0 %Premiere Global Services, Inc. 155 620.4 623.9 34 125.5 141.2 0.13 0.61 0.72 (2.5)% 1.3 % 30.0 % 0.6 % 12.5 % 18.6 % 57.1 % 21.7 % 5.0 %Sybase, Inc. 278 1,134.5 1,156.8 87 308.1 384.1 0.56 1.85 2.36 (1.7)% 15.1 % 14.3 % 2.0 % 24.7 % 27.7 % 71.0 % 31.4 % 17.6 %Tencent Holdings Ltd. 421 1,391.3 NA 217 680.2 NA 0.09 0.31 NA 80.6 % 81.2 % 86.2 % NA NA NA 67.5 % 51.6 % 41.4 %

M ean 1,571 6,922 8,832 557 2,727 3,318 0.20 0.49 1.01 33.0 % 24.8 % 56.3 % 9.2 % 25.1 % 84.5 % 70.4 % 26.5 % 16.4 %M edian 62 244 253 31 119 133 0.09 0.31 0.72 1.8 % 12.0 % 30.0 % 2.0 % 12.5 % 27.7 % 71.0 % 23.5 % 14.2 %


($ in millions, except per share data)Sto ck P rice M arket Enterprise % C hange Ent . Value/ R ev. Ent . Value/ EB IT D A P rice/ EP S Est imate Surprise N et C ash / N et D ebt / SG&A / R &D /


Vo IP / Vo ice A pplicat io nsChordiant Softw are, Inc. 3.91 118 61 57 0 29.0% 0.7 x 0.8 x NM NM NM NM (5.9)% 13.2 % 47.9 % (28.0) x 44.5 % 21.3 %CounterPath Corporation 0.73 22 19 3 0 51.6% 1.9 x NA NM NA NM NA NA NA 13.6 % NA 87.9 % 37.4 %Enghouse Systems Ltd. 5.69 142 57 85 0 42.9% 0.8 x 0.9 x 3.7 x 4.3 x 22.8 x 28.5 x 39.0 % NA 60.0 % (5.5) x 30.5 % 13.5 %Global IP Solutions 1.04 23 19 4 0 94.7% 1.7 x NA NM NA NM NA NA NA 17.3 % NA 89.9 % 34.1 %Interactive Intelligence, Inc. 17.22 295 241 54 0 90.1% 1.9 x 1.8 x 17.7 x 11.3 x 54.7 x 21.6 x 0.5 % 4.3 % 18.3 % (4.0) x 40.5 % 18.2 %KANA Softw are Inc. 0.88 36 37 3 4 27.5% 0.7 x NA NM NA NM NA NA NA (3.2)% NA 36.5 % 28.4 %NICE Systems Ltd. 27.57 1,679 1,311 368 0 9.8% 2.2 x 2.2 x 13.5 x NA 32.7 x 17.1 x (0.8)% 0.8 % 21.9 % (3.8) x 35.8 % 12.4 %Nuance Communications Inc 12 33 3 317 3 795 419 897 13 7% 4 0 x 3 5 x 19 9 x 10 1 x NM 11 3 x 0 8 % 5 3 % (14 4)% 2 5 x 32 6 % 11 9 %Nuance Communications, Inc. 12.33 3,317 3,795 419 897 13.7% 4.0 x 3.5 x 19.9 x 10.1 x NM 11.3 x 0.8 % 5.3 % (14.4)% 2.5 x 32.6 % 11.9 %

M ean 704 693 124 113 44.9% 1.7 x 1.8 x 13.7 x 8.6 x 36.7 x 19.6 x 6.7 % 5.9 % 20.2 % (7.8) x 49.8 % 22.1 %M edian 130 59 55 0 36.0% 1.8 x 1.8 x 15.6 x 10.1 x 32.7 x 19.3 x 0.5 % 4.8 % 17.8 % (4.0) x 38.5 % 19.7 %

LB SClickSoftw are Technologies Ltd. 6.26 181 149 33 0 68.3% 2.6 x 2.3 x 12.6 x 11.3 x 14.2 x 17.2 x 4.5 % 53.8 % 18.0 % (2.8) x 38.5 % 11.2 %DigiCore Holdings Limited 0.48 103 106 4 7 43.9% 1.5 x NA 4.4 x NA 6.7 x NA NA NA (3.1)% 0.1 x NA NADigitalGlobe, Inc. 20.06 901 1,110 133 342 NA 4.0 x 3.6 x 7.0 x 6.0 x 18.9 x 22.7 x 7.2 % 14.5 % (23.3)% 1.3 x 30.7 % NAIntermap Technologies Corp. 2.45 128 107 24 3 66.5% 3.1 x 3.1 x NM NM NM NM (27.2)% (60.9)% 16.0 % NA 105.8 % 16.0 %Ituran Location & Control Ltd. 9.43 206 171 45 9 27.4% 1.4 x NA 4.9 x NA 10.1 x NA NA NA 17.3 % (1.0) x 28.1 % 0.3 %TeleCommunication Systems Inc 7 54 360 330 59 29 (17 8)% 1 2 x 1 1 x 10 2 x 7 3 x 7 2 x 13 0 x (1 8)% 48 9 % 8 4 % (0 9) x 18 7 % 7 3 %TeleCommunication Systems Inc. 7.54 360 330 59 29 (17.8)% 1.2 x 1.1 x 10.2 x 7.3 x 7.2 x 13.0 x (1.8)% 48.9 % 8.4 % (0.9) x 18.7 % 7.3 %Webtech Wireless Inc. 1.08 63 61 3 1 65.6% 3.1 x 1.6 x NM 14.2 x NM 16.8 x (16.2)% (100.0)% 3.7 % NA 40.8 % 16.9 %XATA Corp. 3.50 31 36 4 9 48.9% 0.5 x 0.5 x NM NA NM 13.9 x 3.5 % NM (16.3)% 1.4 x 32.5 % 8.0 %

M ean 247 259 38 50 43.3% 2.2 x 2.1 x 7.8 x 9.7 x 11.4 x 16.7 x (5 .0)% (8.7)% 2.6 % (0.3) x 42.2 % 10.0 %M edian 155 128 28 8 48.9% 2.1 x 2.0 x 7.0 x 9.3 x 10.1 x 16.8 x 0.8 % 14.5 % 6.1 % (0.4) x 32.5 % 9.6 %



Vo IP / Vo ice A pplicat io nsChordiant Softw are, Inc. 21 90.7 73.2 2 2.0 (2.2) 0.06 (0.17) (0.02) (32.0)% NM (25.0)% (19.2)% NM 89.7 % 75.5 % 11.5 % 8.6 %CounterPath Corporation 2 9.8 NA (1) (9.5) NA (0.15) (0.57) NA (21.8)% 79.7 % 29.6 % NA NA NA 60.6 % (38.2)% (194.2)%Enghouse Systems Ltd. 22 67.6 64.3 5 15.5 13.1 0.09 0.25 0.20 50.7 % 71.3 % 52.4 % (4.9)% (15.4)% (20.0)% 67.3 % 23.3 % 10.4 %Global IP Solutions 3 11.6 NA (1) (7.5) NA (0.05) (0.35) NA 16.8 % 65.1 % 68.5 % NA NA NA 88.8 % (33.3)% (34.8)%Interactive Intelligence, Inc. 33 123.7 131.4 4 13.6 21.3 0.24 0.31 0.80 7.5 % 86.2 % 84.6 % 6.3 % 56.8 % 153.2 % 67.9 % 12.4 % 13.2 %KANA Softw are Inc. 12 53.1 NA 1 (3.2) NA (0.01) (0.18) NA (28.5)% NM NM NA NA NA 68.2 % 6.0 % (5.1)%NICE Systems Ltd. 140 605.2 607.0 23 97.2 NA 0.36 0.84 1.62 (8.9)% 13.2 % (7.7)% 0.3 % NA 91.7 % 59.6 % 16.7 % 15.8 %Nuance Communications, Inc. 241 940.4 1,085.9 54 190.6 376.8 0.26 0.01 1.09 11.2 % 46.9 % 18.2 % 15.5 % 97.7 % NM 65.2 % 22.6 % 28.1 %

M ean 59 238 392 11 37 102 0.10 0.02 0.74 (0.6)% 60.4 % 31.5 % (0.4)% 46.4 % 78.6 % 69.1 % 2.6 % (19.7)%M edian 21 79 131 3 8 17 0.07 (0.08) 0.80 (0.7)% 68.2 % 29.6 % 0.3 % 56.8 % 90.7 % 67.6 % 11.9 % 9.5 %

LB SClickSoftw are Technologies Ltd. 14 57.1 64.0 3 11.8 13.2 0.10 0.44 0.36 30.7 % NM NA 11.9 % 12.0 % (17.9)% 66.9 % 19.2 % 21.5 %DigiCore Holdings Limited 15 70.7 NA 5 23.9 NA 0.01 0.07 NA (32.0)% (24.8)% (18.6)% NA NA NA 27.4 % 30.5 % 18.9 %DigitalGlobe, Inc. 70 276.2 310.9 43 158.9 183.9 0.19 1.06 0.88 128.8 % 264.7 % 109.0 % 12.6 % 15.8 % (16.7)% 88.6 % 62.0 % 12.1 %Intermap Technologies Corp. 6 34.1 34.1 (3) (2.9) (0.1) (0.14) (0.37) (0.34) (10.3)% (3.1)% (7.7)% (0.0)% 97.4 % 8.2 % 73.5 % (48.3)% (114.3)%Ituran Location & Control Ltd. 28 120.3 NA 9 34.9 NA 0.12 0.93 NA (19.2)% (4.4)% 0.6 % NA NA NA 49.5 % 31.3 % 8.6 %


( ) ( )TeleCommunication Systems Inc. 67 273.5 291.5 13 32.5 45.3 0.28 1.05 0.58 52.9 % 121.0 % 133.3 % 6.6 % 39.5 % (44.7)% 44.8 % 18.7 % 21.7 %Webtech Wireless Inc. 6 19.6 36.8 0 (7.7) 4.3 0.00 (0.15) 0.06 3.9 % 127.5 % 100.0 % 87.9 % 155.6 % 143.4 % 62.3 % 4.6 % 0.0 %XATA Corp. 18 66.9 71.6 1 3.7 NA (0.01) (0.19) 0.25 8.8 % NM 87.5 % 7.1 % NA 230.0 % 42.7 % 6.5 % (0.5)%

M ean 28 115 135 9 32 49 0.07 0.36 0.30 20.5 % 80.2 % 57.7 % 21.0 % 64.0 % 50.4 % 57.0 % 15.6 % (4.0)%M edian 16 69 68 4 18 13 0.06 0.26 0.31 6.4 % 59.0 % 87.5 % 9.5 % 39.5 % (4.2)% 55.9 % 19.0 % 10.4 %


($ in millions, except per share data)Sto ck P rice M arket Enterprise % C hange Ent. Value/ R ev. Ent . Value/ EB IT D A P rice/ EP S Est imate Surprise N et C ash / N et D ebt / SG&A / R &D /


Video / M ult imediaAdobe Systems Inc. 31.42 16,495 14,181 2,664 350 46.9% 4.3 x 5.0 x 12.1 x 11.6 x 23.4 x 21.7 x 1.4 % 1.2 % 14.0 % (2.0) x 44.6 % 19.7 %Avid Technology Inc. 13.03 487 369 119 0 42.6% 0.5 x 0.6 x NM NM NM NM (2.9)% (18.1)% 24.3 % NA 36.2 % 20.4 %CyberLink Corp. 3.93 448 311 137 0 7.6% 2.2 x NA 8.6 x NA 15.1 x NA NA NA 30.6 % (3.8) x 62.6 % 14.1 %DivX, Inc. 5.22 171 35 136 0 3.8% 0.4 x 0.5 x 3.1 x NM 82.8 x 42.1 x 4.8 % 100.0 % 79.7 % (12.2) x 78.0 % 30.4 %Dolby Laboratories Inc. 39.01 4,430 3,886 575 30 14.4% 5.4 x 5.5 x 10.5 x 11.3 x 18.2 x 21.3 x 16.3 % 41.5 % 12.3 % (1.5) x 32.5 % 10.1 %DTS Inc. 26.80 469 390 79 0 11.4% 5.3 x 5.5 x 13.9 x 16.9 x 54.8 x 40.6 x (5.7)% 652.6 % 16.8 % (2.8) x 41.1 % 9.8 %On2 Technologies Inc. 0.58 102 102 3 3 97.3% 5.8 x NA NM NA NM NA NA NA (0.1)% NA 54.8 % 37.9 %OpenTV Corp. 1.28 177 66 111 0 (15.2)% 0.6 x NA 4.8 x NA 28.9 x NA 4.2 % (50.0)% 62.7 % (8.1) x 20.3 % 30.9 %R i C ti 30 44 3 095 3 361 310 575 71 1% 7 3 6 7 19 4 14 7 182 6 18 4 6 8 % 28 8 % (8 6)% 1 5 27 0 % 19 3 %Rovi Corporation 30.44 3,095 3,361 310 575 71.1% 7.3 x 6.7 x 19.4 x 14.7 x 182.6 x 18.4 x 6.8 % 28.8 % (8.6)% 1.5 x 27.0 % 19.3 %SeaChange International Inc. 8.94 275 195 80 0 56.3% 1.0 x 0.9 x 9.6 x 8.1 x 31.8 x 24.4 x (6.0)% NA 29.2 % (4.0) x 24.6 % 25.8 %Sonic Solutions 5.31 141 118 24 0 342.5% 1.0 x 1.1 x NM NM NM NM 1.2 % (38.5)% 16.8 % NA 45.1 % 27.9 %SRS Labs Inc. 7.24 105 65 39 0 47.2% 3.3 x NA NM 20.6 x NM NM 5.8 % 69.7 % 37.6 % NA 80.8 % 23.5 %VIZRT Ltd. 2.63 171 126 45 0 18.0% 1.4 x NA 11.2 x NA 37.4 x NA NA NA 26.2 % (4.0) x 40.6 % 15.5 %

M ean 2,044 1,785 332 74 57.2% 3.0 x 3 .2 x 10.4 x 13.9 x 52.8 x 28.1 x 2.6 % 87.5 % 26.3 % (4.1) x 45.2 % 21.9 %M edian 275 195 111 0 42.6% 2.2 x 3 .0 x 10.5 x 13.1 x 31.8 x 23.1 x 2.8 % 28.8 % 24.3 % (3.8) x 41.1 % 20.4 %

C o ntent D istribut io n & D eliveryAkamai Technologies Inc. 17.64 3,041 2,624 617 200 (9.1)% 3.2 x 3.1 x 7.5 x 6.9 x 22.2 x 11.7 x (3.0)% 5.0 % 13.7 % (1.2) x 37.4 % 4.6 %Buongiorno SpA 1 72 183 271 61 149 102 4% 0 7 x NA 5 7 x NA NM NA NA NA (48 5)% 1 8 x 0 0 % NABuongiorno SpA 1.72 183 271 61 149 102.4% 0.7 x NA 5.7 x NA NM NA NA NA (48.5)% 1.8 x 0.0 % NADigital River Inc. 35.32 1,362 1,021 350 9 18.4% 2.6 x 2.5 x 10.5 x 8.9 x 22.7 x 18.6 x 0.1 % 1.4 % 25.1 % (3.5) x 50.8 % 13.6 %Index Holdings 61.63 215 540 65 390 96.7% 0.6 x NA NM NA NM NA NA NA (150.7)% 40.7 x 26.5 % NAKongzhong Corp. 11.50 412 283 132 3 127.3% 2.5 x 1.9 x NM 10.5 x NM 26.1 x 2.8 % 42.9 % 31.4 % (15.3) x 23.5 % 13.5 %Limelight Netw orks, Inc. 3.34 282 118 164 0 (0.3)% 0.9 x 0.9 x NM 7.9 x 13.7 x NM (1.6)% 50.8 % 58.3 % (92.8) x 42.1 % 6.0 %Modavox Inc. 3.50 178 178 0 0 66.7% 76.4 x NA NM NA NM NA NA NA 0.2 % NA 260.3 % NARealNetw orks Inc. 3.54 477 118 363 4 51.9% 0.2 x 0.2 x NM NM NM NM (0.4)% (824.5)% 75.3 % NA 50.5 % 21.3 %

M ean 769 644 219 94 56.8% 10.9 x 1.7 x 7.9 x 8 .5 x 19.6 x 18.8 x (0.4)% (144.9)% 0.6 % (11.7) x 61.4 % 11.8 %M edian 347 277 148 6 59.3% 1.7 x 1.9 x 7.5 x 8 .4 x 22.2 x 18.6 x (0.4)% 5.0 % 19.4 % (2.4) x 39.8 % 13.5 %

($ i illi t h d t )($ in millions, except per share data)R evenue EB IT D A EP S M R Q/ P YQ Gro wth N T M / LT M Gro wth LQ M argin


Video / M ult imediaAdobe Systems Inc. 705 3,293.6 2,849.1 230 1,174.2 1,221.8 0.35 1.34 1.45 (20.5)% (30.2)% (30.0)% (13.5)% 4.1 % 7.7 % 89.8 % 32.6 % 26.2 %Avid Technology Inc. 151 725.9 646.6 (2) (14.4) 38.1 (0.15) (5.39) 0.05 (32.5)% NM NA (10.9)% NM 101.0 % 51.8 % (1.5)% (3.7)%CyberLink Corp. 33 143.7 NA 8 36.0 NA 0.04 0.26 NA (3.8)% (28.8)% (52.7)% NA NA NA 99.4 % 24.0 % 15.0 %DivX, Inc. 15 81.5 71.9 (2) 11.2 4.6 0.00 0.06 0.12 (28.5)% (160.5)% (100.0)% (11.7)% (58.5)% 96.7 % 84.9 % (13.8)% 0.0 %Dolby Laboratories Inc. 171 718.8 703.9 86 371.2 345.3 0.44 2.15 1.83 11.0 % 15.7 % 10.0 % (2.1)% (7.0)% (14.6)% 88.5 % 50.0 % 29.7 %DTS Inc. 24 73.6 71.4 12 28.1 23.1 0.21 0.49 0.66 88.4 % 372.5 % 200.0 % (3.0)% (17.8)% 34.9 % 98.1 % 50.9 % 15.4 %On2 Technologies Inc. 5 17.6 NA 0 (6.6) NA (0.00) (0.25) NA 53.0 % 105.9 % 97.0 % NA NA NA 91.1 % 7.3 % (4.5)%On2 Technologies Inc. 5 17.6 NA 0 (6.6) NA (0.00) (0.25) NA 53.0 % 105.9 % 97.0 % NA NA NA 91.1 % 7.3 % (4.5)%OpenTV Corp. 28 112.9 NA 3 13.8 NA 0.01 0.04 NA 2.9 % 63.7 % NA NA NA NA 58.4 % 12.1 % 5.0 %Rovi Corporation 119 457.3 503.8 49 173.3 228.8 0.38 0.17 1.66 63.5 % 278.0 % 171.4 % 10.2 % 32.0 % 894.6 % 87.2 % 41.0 % 31.9 %SeaChange International Inc. 47 201.1 213.8 2 20.2 24.0 (0.01) 0.28 0.37 (8.3)% (45.0)% (124.4)% 6.3 % 18.8 % 30.3 % 51.0 % 3.9 % (0.8)%Sonic Solutions 26 115.4 105.1 (0) (1.6) (2.5) (0.09) (4.38) (0.17) (15.2)% 92.0 % 35.7 % (8.9)% NM 96.2 % 69.1 % (1.2)% (9.4)%SRS Labs Inc. 5 20.0 NA (0) (0.0) 3.2 (0.01) 0.00 0.20 21.0 % 79.9 % 66.7 % NA NM NM 98.8 % (2.2)% (2.9)%VIZRT Ltd. 21 88.5 NA 2 11.3 NA 0.01 0.07 NA (15.0)% (63.6)% (78.5)% NA NA NA 58.5 % 9.7 % 3.9 %

M ean 104 465 646 30 140 210 0.09 (0 .40) 0 .69 8.9 % 56.6 % 17.7 % (4.2)% (4.7)% 155.9 % 79.0 % 16.4 % 8.1 %M edian 28 115 359 2 14 24 0.01 0.07 0.37 (3.8)% 39.7 % 10.0 % (6.0)% (1.5)% 65.6 % 87.2 % 9.7 % 3.9 %

C o ntent D istribut io n & D elivery

31

Akamai Technologies Inc. 205 824.9 843.6 80 350.8 381.4 0.40 0.79 1.50 5.5 % 9.7 % (2.4)% 2.3 % 8.7 % 89.3 % 70.7 % 38.9 % 37.1 %Buongiorno SpA 90 408.2 NA 11 48.0 NA 0.02 0.08 NA (28.5)% (5.4)% (55.2)% NA NA NA 12.4 % 12.5 % 2.5 %Digital River Inc. 97 391.7 408.6 19 97.2 115.3 0.42 1.55 1.90 (1.8)% (4.2)% 13.5 % 4.3 % 18.6 % 22.3 % 84.6 % 20.2 % 16.4 %Index Holdings 178 980.3 NA 21 8.0 NA (5.11) (109.99) NA (41.6)% (50.1)% NM NA NM NA 33.8 % 11.8 % (9.1)%Kongzhong Corp. 32 113.7 148.2 5 8.5 27.0 0.09 (0.42) 0.44 37.3 % NM 800.0 % 30.4 % 219.1 % 204.1 % 51.3 % 16.2 % 10.7 %Limelight Netw orks, Inc. 32 134.5 135.8 2 1.8 15.0 (0.06) 0.24 (0.38) 6.7 % NM 14.3 % 0.9 % NM (257.2)% 53.8 % 5.6 % (15.6)%Modavox Inc. 1 2.3 NA (1) (4.2) NA (0.03) (0.14) NA (39.4)% (711.2)% (238.8)% NA NA NA 64.3 % (225.4)% (241.4)%RealNetw orks Inc. 136 581.1 564.9 (10) (63.6) 34.9 (0.49) (3.29) (0.27) (11.1)% NM (916.7)% (2.8)% 154.9 % 91.7 % 59.0 % (7.0)% (48.5)%

M ean 96 430 420 16 56 115 (0.59) (13 .90) 0 .64 (9.1)% (152.2)% (55.0)% 7.0 % 100.3 % 30.0 % 53.7 % (15.9)% (31.0)%M edian 93 400 409 8 8 35 (0.00) (0 .03) 0 .44 (6.5)% (5.4)% (2.4)% 2.3 % 86.8 % 89.3 % 56.4 % 12.1 % (3.3)%




P o rtals & So cial N etwo rksBaidu, Inc. 330.06 11,425 10,934 491 0 86.9% 20.0 x 13.5 x 46.0 x 31.8 x 65.2 x 42.4 x 1.5 % 8.8 % 4.3 % (2.1) x 16.4 % 8.7 %Daum Communications Corp. 35.87 466 426 55 16 72.4% 2.1 x NA 9.9 x NA 64.0 x NA NA NA 8.5 % (0.9) x 44.9 % NAGree, Inc. 89.10 1,994 1,884 110 0 62.4% 13.0 x NA 21.6 x NA 45.6 x NA NA NA 5.5 % (1.3) x 39.6 % NAIAC/InterActiveCorp. 18.52 2,452 713 1,862 123 21.6% 0.5 x 0.5 x NM 4.2 x 11.6 x 35.2 x 1.9 % (76.5)% 70.9 % (33.0) x 55.3 % 4.8 %Meetic 32.45 735 707 39 11 58.8% 3.8 x NA 33.8 x NA 37.4 x NA NA NA 3.8 % (1.3) x NA NAMixi, Inc. 6,453.70 994 882 112 0 72.1% 6.9 x NA 20.6 x NA 52.0 x NA NA NA 11.3 % (2.6) x 51.3 % NANHN Corp 136 40 6 175 5 976 402 202 24 4% 5 5 x NA 13 5 x NA 21 3 x NA NA NA 3 2 % (0 5) x NA NANHN Corp. 136.40 6,175 5,976 402 202 24.4% 5.5 x NA 13.5 x NA 21.3 x NA NA NA 3.2 % (0.5) x NA NAShutterf ly, Inc. 14.46 368 305 64 0 54.3% 1.4 x 1.4 x 11.1 x 7.0 x NM NM 6.1 % (3.3)% 17.3 % (2.3) x 44.4 % 28.2 %Sina Corp. 30.00 1,615 1,132 582 99 29.0% 3.1 x 2.6 x 13.7 x 10.9 x 26.6 x 20.5 x 2.0 % (1.7)% 29.9 % (5.8) x 31.5 % 8.7 %Sohu.com Inc. 61.02 2,339 1,834 547 42 47.7% 3.8 x 3.3 x 8.7 x 7.3 x 13.8 x 16.6 x 3.2 % 7.8 % 21.6 % (2.4) x 27.6 % 11.5 %The Knot, Inc. 10.10 341 265 76 0 23.2% 2.5 x 2.4 x 19.2 x 15.2 x NM NM 5.6 % 117.4 % 22.4 % (5.5) x 42.5 % 17.2 %Universo Online SA 4.19 504 252 277 24 44.8% 0.8 x NA 3.8 x NA 9.3 x NA NA NA 50.1 % (3.8) x 44.6 % NAXING AG 42.30 223 173 50 0 10.1% 3.1 x NA 10.6 x NA 23.9 x NA NA NA 22.5 % (3.1) x 12.6 % NAYahoo Japan Corporation 341.00 19,815 19,504 544 232 30.4% 7.0 x NA 12.7 x NA 25.9 x NA NA NA 1.6 % (0.2) x 37.7 % NAYahoo! Inc. 14.61 20,504 16,733 3,878 108 14.1% 2.5 x 3.6 x 12.7 x 10.1 x NM 41.3 x (0.5)% 26.6 % 18.4 % (2.9) x 26.6 % 18.5 %

M ean 4,663 4,114 606 57 43.5% 5.1 x 3.9 x 17.0 x 12.4 x 33.1 x 31.2 x 2.8 % 11.3 % 19.4 % (4.5) x 36.5 % 14.0 %M edian 1,615 882 277 16 44.8% 3.1 x 2.6 x 13.1 x 10.1 x 26.2 x 35.2 x 2.0 % 7.8 % 17.3 % (2.4) x 39.6 % 11.5 %

($ )($ in millions, except per share data)R evenue EB IT D A EP S M R Q/ P YQ Gro wth N T M / LT M Gro wth LQ M argin


P o rtals & So cial N etwo rksBaidu, Inc. 161 545.9 807.4 72 237.9 344.2 1.71 5.06 7.79 37.2 % 53.8 % 39.0 % 47.9 % 44.7 % 53.8 % 69.9 % 44.9 % 37.0 %Daum Communications Corp. 46 198.7 NA 13 43.0 NA 0.75 0.56 NA (19.2)% (23.9)% (6.4)% NA NA NA 74.4 % 28.3 % 21.1 %Gree, Inc. 53 144.8 NA 27 87.0 NA 0.61 1.96 NA NA NA NA NA NA NA 90.7 % 51.3 % 27.6 %IAC/InterActiveCorp. 340 1,392.3 1,375.2 29 52.7 170.3 0.02 1.60 0.53 (4.0)% 54.1 % (97.1)% (1.2)% NM (67.1)% 68.6 % 8.5 % 0.9 %Meetic NA 188.0 NA NA 20.9 NA NA 0.87 NA NA NA NA NA NA NA NA NA NAMixi, Inc. 32 126.9 NA 10 42.9 NA 30.75 124.05 NA 16.9 % (3.9)% (7.8)% NA NA NA 79.7 % 31.9 % 15.0 %NHN C NA 1 092 6 NA NA 441 9 NA NA 6 40 NA NA NA NA NA NA NA NA NA NANHN Corp. NA 1,092.6 NA NA 441.9 NA NA 6.40 NA NA NA NA NA NA NA NA NA NAShutterf ly, Inc. 39 218.6 224.7 (3) 27.3 43.6 (0.22) 0.01 0.09 9.6 % NM (37.5)% 2.8 % 59.3 % NM 48.4 % (6.8)% (14.3)%Sina Corp. 90 371.0 442.2 18 82.6 104.2 0.29 1.13 1.46 (1.2)% (22.8)% (32.6)% 19.2 % 26.2 % 29.4 % 55.7 % 19.9 % 18.7 %Sohu.com Inc. 127 485.1 564.2 53 209.6 252.0 0.79 4.41 3.68 24.6 % 21.0 % (14.1)% 16.3 % 20.2 % (16.7)% 77.4 % 41.7 % 24.3 %The Knot, Inc. 29 104.6 108.9 6 13.8 17.4 0.05 0.05 0.07 2.8 % 11.4 % (28.6)% 4.1 % 25.9 % 28.0 % 78.7 % 19.1 % 5.6 %Universo Online SA 84 317.3 NA 15 66.8 NA 0.10 0.45 NA (5.3)% (27.5)% (26.8)% NA NA NA 65.1 % 17.2 % 14.3 %XING AG 15 56.3 NA 3 16.3 NA 0.13 1.77 NA 13.8 % (20.1)% (67.9)% NA NA NA 64.6 % 18.2 % 4.6 %Yahoo Japan Corporation 702 2,780.5 NA 384 1,538.9 NA 3.43 13.16 NA 13.7 % 14.6 % 15.0 % NA NA NA 88.4 % 54.7 % 28.4 %Yahoo! Inc. 1,573 6,745.8 4,690.1 338 1,313.1 1,649.5 0.10 0.02 0.35 (12.5)% 11.4 % 0.0 % (30.5)% 25.6 % NM 54.7 % 21.5 % 9.0 %

M ean 253 985 1,173 74 280 369 2.96 10.77 1.99 6.4 % 6.2 % (22.1)% 8.4 % 33.7 % 5.5 % 70.5 % 27.0 % 14.8 %


, ( )M edian 84 317 564 18 67 170 0.29 1.60 0.53 6.2 % 11.4 % (20.5)% 4.1 % 26.0 % 28.0 % 69.9 % 21.5 % 15.0 %




Search & M arket ing ServicesBaidu, Inc. 330.06 11,425 10,934 491 0 86.9% 20.0 x 13.5 x 46.0 x 31.8 x 65.2 x 42.4 x 1.5 % 8.8 % 4.3 % (2.1) x 16.4 % 8.7 %comScore Inc. 13.91 419 346 74 0 15.1% 2.8 x 2.5 x 22.5 x 11.3 x 19.0 x 21.6 x 1.9 % 31.8 % 17.5 % (4.8) x 45.7 % 14.4 %DG FastChannel, Inc. 17.34 412 504 21 113 (7.6)% 2.8 x 2.4 x 7.8 x 6.1 x 27.9 x 15.1 x (2.6)% 73.1 % (22.2)% 1.4 x 22.2 % 2.2 %Google Inc. 461.67 146,151 126,807 19,344 0 32.6% 5.7 x 5.2 x 14.4 x 11.3 x 32.0 x 20.1 x 0.5 % 5.4 % 13.2 % (2.2) x 15.1 % 12.8 %IAC/InterActiveCorp. 18.52 2,452 713 1,862 123 21.6% 0.5 x 0.5 x NM 4.2 x 11.6 x 35.2 x 1.9 % (76.5)% 70.9 % (33.0) x 55.3 % 4.8 %InfoSpace Inc. 8.10 286 86 200 0 55.8% 0.5 x NA NM NA NM 50.0 x 15.0 % NM 70.0 % (21.4) x 26.3 % 3.7 %Marchex Inc 4 28 155 126 29 0 24 4% 1 1 x 1 5 x 10 6 x 11 8 x NM 49 8 x (6 2)% 100 0 % 18 5 % (2 4) x 36 4 % 16 3 %Marchex, Inc. 4.28 155 126 29 0 24.4% 1.1 x 1.5 x 10.6 x 11.8 x NM 49.8 x (6.2)% 100.0 % 18.5 % (2.4) x 36.4 % 16.3 %Melbourne IT Ltd. 1.47 116 150 20 54 (1.5)% 0.9 x NA 5.7 x NA 9.8 x NA NA NA (29.4)% 1.3 x 39.4 % NAOmniture Inc. 14.31 1,103 1,000 117 15 8.5% 3.0 x 2.7 x 29.1 x 12.2 x NM 25.0 x (0.7)% 10.2 % 9.3 % (3.0) x 51.7 % 10.2 %TechTarget, Inc. 6.42 268 200 69 2 167.5% 2.1 x 2.3 x 19.3 x 11.0 x NM 29.0 x 0.6 % 16.3 % 25.4 % (6.6) x 55.6 % 10.1 %TradeDoubler AB 11.10 317 337 10 29 171.6% 0.8 x NA NM NA 26.8 x NA NA NA (6.2)% 1.1 x 19.6 % 1.4 %ValueClick Inc. 10.25 893 758 135 0 20.4% 1.3 x 1.4 x 7.7 x 5.4 x NM 16.0 x 1.7 % 22.3 % 15.1 % (1.4) x 41.0 % 5.6 %Yahoo Japan Corporation 341.00 19,815 19,504 544 232 30.4% 7.0 x NA 12.7 x NA 25.9 x NA NA NA 1.6 % (0.2) x 37.7 % NAYahoo! Inc. 14.61 20,504 16,733 3,878 108 14.1% 2.5 x 3.6 x 12.7 x 10.1 x NM 41.3 x (0.5)% 26.6 % 18.4 % (2.9) x 26.6 % 18.5 %

M ean 14,594 12,728 1,914 48 45.7% 3.7 x 3.6 x 17.1 x 11.5 x 27.3 x 31.4 x 1.2 % 21.8 % 14.7 % (5.4) x 34.9 % 9.1 %M edian 656 609 126 8 23.0% 2.3 x 2.5 x 12.7 x 11.1 x 26.3 x 29.0 x 0.6 % 19.3 % 14.2 % (2.3) x 37.0 % 9.4 %

($ )($ in millions, except per share data)R evenue EB IT D A EP S M R Q/ P YQ Gro wth N T M / LT M Gro wth LQ M argin


Search & M arket ing ServicesBaidu, Inc. 161 545.9 807.4 72 237.9 344.2 1.71 5.06 7.79 37.2 % 53.8 % 39.0 % 47.9 % 44.7 % 53.8 % 69.9 % 44.9 % 37.0 %comScore Inc. 31 124.2 138.1 4 15.4 30.7 0.17 0.73 0.65 9.1 % (0.2)% (15.0)% 11.1 % 99.6 % (12.1)% 69.1 % 14.3 % 16.8 %DG FastChannel, Inc. 44 178.5 206.2 16 64.4 82.7 0.27 0.62 1.15 26.9 % 21.7 % (37.2)% 15.5 % 28.4 % 85.0 % 60.3 % 35.9 % 13.6 %Google Inc. 5,523 22,274.2 24,246.4 2,251 8,817.2 11,232.1 5.36 14.43 22.98 2.9 % 14.3 % 15.8 % 8.9 % 27.4 % 59.2 % 61.8 % 40.8 % 30.9 %IAC/InterActiveCorp. 340 1,392.3 1,375.2 29 52.7 170.3 0.02 1.60 0.53 (4.0)% 54.1 % (97.1)% (1.2)% NM (67.1)% 68.6 % 8.5 % 0.9 %InfoSpace Inc. 44 159.1 NA 4 9.3 NA 0.07 (0.56) 0.16 14.2 % 11.7 % (66.7)% NA NA 129.2 % 39.0 % 9.1 % 5.6 %M h I 21 119 6 85 6 1 11 9 10 7 0 03 (3 74) 0 09 (43 6)% (89 2)% (66 7)% (28 4)% (9 8)% 102 3 % 47 7 % 2 7 % 6 3 %Marchex, Inc. 21 119.6 85.6 1 11.9 10.7 0.03 (3.74) 0.09 (43.6)% (89.2)% (66.7)% (28.4)% (9.8)% 102.3 % 47.7 % 2.7 % 6.3 %Melbourne IT Ltd. 42 164.5 NA 6 26.1 NA 0.03 0.15 NA 1.7 % (21.7)% (32.5)% NA NA NA 59.0 % 14.1 % 6.0 %Omniture Inc. 88 335.5 370.7 11 34.4 81.9 0.13 (0.52) 0.57 22.3 % NM 30.0 % 10.5 % 138.4 % 210.5 % 57.9 % 13.1 % 11.3 %TechTarget, Inc. 22 93.9 88.5 1 10.4 18.2 0.05 (0.04) 0.22 (21.3)% (63.4)% (50.0)% (5.7)% 75.7 % 640.7 % 71.3 % 5.6 % 9.6 %TradeDoubler AB 95 410.3 NA 6 18.6 NA 0.15 0.41 NA (34.2)% (31.8)% 51.0 % NA NM NA 25.5 % 5.9 % 4.6 %ValueClick Inc. 130 563.6 540.8 32 99.0 140.1 0.17 (2.58) 0.64 (17.8)% (16.9)% 0.0 % (4.0)% 41.4 % 124.8 % 69.4 % 24.4 % 11.4 %Yahoo Japan Corporation 702 2,780.5 NA 384 1,538.9 NA 3.43 13.16 NA 13.7 % 14.6 % 15.0 % NA NA NA 88.4 % 54.7 % 28.4 %Yahoo! Inc. 1,573 6,745.8 4,690.1 338 1,313.1 1,649.5 0.10 0.02 0.35 (12.5)% 11.4 % 0.0 % (30.5)% 25.6 % NM 54.7 % 21.5 % 9.0 %

M ean 630 2,563 3,255 225 875 1,376 0.84 2.05 3.19 (0.4)% (3.2)% (15.3)% 2.4 % 52.4 % 132.6 % 60.2 % 21.1 % 13.7 %M edian 91 373 456 14 44 111 0.14 0.28 0.57 2.3 % 11.4 % (7.5)% 3.8 % 41.4 % 93.6 % 61.1 % 14.2 % 10.5 %


Introduction to SagePoint Advisors


Introduction to SagePoint Advisors

SagePoint Advisors is a boutique investment banking firm providing merger, acquisition and strategic advisory services to technology and telecom companies and their venture backers.

MissionTo deliver the senior‐level attention, trusted relationships and market insight on $10‐100 million M&A transactions that other investment banks reserve only for much larger transactionsinvestment banks reserve only for much larger transactions.

Services Sell Side Advisory; Divestitures; Buy Side Advisory; Strategic Investments

IndustryFocus

Software, hardware and services in the Wireless, VoIP, IP Video, Networking, Internet, Telecom Equipment, IT Infrastructure and Enabling Technology sectorsg gy

Offices San Diego, CA


SagePoint Advisors Team

D id P Mi h l F d &M i DiDavid P. Michaels ‐ Founder & Managing DirectorPrior to founding SagePoint Advisors in 2008, David Michaels was a Co‐Founder, Partner and Managing Director atMontgomery & Co., a leading investment bank focused on serving emerging‐growth technology companies and their venturebackers. Mr. Michaels co‐founded Montgomery’s investment banking business in 1996 as the lead banker and played aninstrumental role in building the business to over $50 million in revenues and 80 employees. Mr. Michaels launchedMontgomery’s San Diego office in 2003 and established Montgomery as the dominant brand in the region. Mr. Michaels alsog y g g y gran the firm’s Communications and Digital Media Technology practice areas for several years prior to his departure. Duringhis 14 year tenure at Montgomery, Mr. Michaels advised CEOs and Boards on more than 75 corporate strategy, M&A and fundraising engagements.

Mr. Michaels has intimate knowledge of the strategic landscape, market dynamics and technology underpinnings of severalhigh technology market segments including wireless infrastructure, software and services, voice, video and datainfrastructure software and services storage infrastructure and software networking equipment Internet software andinfrastructure, software and services, storage infrastructure and software, networking equipment, Internet software andservices and semiconductors. Prior to co‐founding Montgomery’s investment banking business, Mr. Michaels managedstrategic consulting assignments for the firm including market entry analysis, acquisition search studies and strategic portfolioassessments.

Prior to joining the Montgomery in 1994, Mr. Michaels held various investment banking positions including a position withinBankers Trust Corporate Finance Department, where he helped execute merger and acquisition assignments such as salemandates and valuation analyses. Prior to that, Mr. Michaels worked as a structural engineer at General Dynamics, where heassisted on the Advanced Tactical Fighter program. Mr. Michaels received an M.B.A. with an emphasis in marketing andentrepreneurship from the Anderson School of Management at UCLA and holds a B.S. in Mechanical Engineering from theUniversity of Michigan.

Teak Murphy ‐ Senior AssociatePrior to joining SagePoint, Teak worked as a Senior Associate with Enterprise Partners Venture Capital, the largest SouthernCalifornia based VC firm, where he evaluated investment opportunities and worked closely with senior management andboard members to successfully grow portfolio companies. Prior to Enterprise Partners, Teak worked as an Associate intechnology investment banking at Montgomery & Co. where he spent three years working closely with SagePointʹs founderDavid Michaels on buy‐side and sell‐side M&A transactions. Prior to Montgomery, Teak worked at Cowen & Co. advisingtechnology companies on M&A and IPO transactions.

36

gy p

Teakʹs experience working on fund raising, mergers and acquisitions, and initial public offerings as both an advisor andinvestor provides unique insight into the needs of venture‐backed companies. Teak graduated from the University of SouthernCalifornia with honors, receiving a B.S. in Business Administration and Finance .


Primary Industry Focus – Communications & Networking

Value Chain Wireless VoIP Video Data

Mobile messaging, content search

VoIP serviceproviders voice

Cable & DBS, Internet video Internet access, web

Servicescontent, search, LBS, social networking, gaming, etc.

providers, voice search, website

voice enablement, etc.

Internet video, conferencing, video delivery networks,

etc.

hosting, co‐location, SaaS delivery networks, etc.

b l d f d I f h d d

SoftwareMobile and fixed

wireless application and infrastructuresoftware , etc.

VoIP softphoneclient and server software, FMC software, etc.

Video encoding, transcoding,

editing, sharing and player software, etc.

Networking &Internet client and server software, etc.

EquipmentHandsets and

modules, fixed and mobile wireless equipment, etc.

VoIP handsets,gateways, IP‐PBXs,

SBCs, media servers, etc.

Cable & IPTV equipment, video conferencing, VOD, DVRs, STBs, etc.

WAN, LAN and optical data

networking and telecom equipment,

etc.

Semiconductors3G/4G, WiMax,

WLAN, & WPAN RF & BB ICs, etc.

VoIP DSPs and ASICs

Video encode/decode,processing and

transport ICs etc

WAN, LAN, I/O storage and security networking ICs


transport ICs, etc. g

Transaction Experience

SagePoint’s Founder has led more than 75 M&A and fund raising engagements with deal experience across the entire communications and networking value chain.

Value Chain Wireless VoIP Video DataValue Chain Wireless VoIP Video Data

Services• Sale of Mobile Social Networking Vendor

• Capital Raise for

• Sale of AccessLine to Telanetix

• Strategic Advisory for Voice 2 0 Service

• Strategic Advisory for DirecTV Reseller

• Sale of Compute Intensive to Verio

• Sale of GeoNet to Level 3

InfoSonics Voice 2.0 Service Provider • Capital Raise for

Speakeasy

Software• Sale of Neven Vision to Google

• Sale of SKY

• Sale of CrystalVoice to Global IP Solutions

• Buyside Advisory for

• IPO for Divx• Strategic Advisory for Mobile Video SW

• Sale of LVL7 to Broadcom

Sale of SKYMobileMedia; VOIP Softphone

Vendor

Mobile Video SW Vendor • Sale of Netreon to CA

Equipment• Sale of Strix to Idream• Sale of Aiprime to

• Strategic Advisory for Unified Messaging Vendor

• Sale of Gyration to Philips

• Sale of Network Physics to OpNet

• Capital Raise for kSierra Wireless • Strategic Advisory for

IP‐PBX Vendor• Sale of TIR to Philips Raptor Networks

• Sale of Procom to Sun

Semis

• Sale of CommAsic to Freescale

• Peregrine Strategic • Strategic Advisory for Noise Cancellation IC

• Sale of Vativ to Entropic

• Strategic Advisory for • Strategic Advisory for Storage Networking IC


Investment• Sale of Synad to ST

Vendorg y

Video Processing IC Vendor

Vendor

Representative Buyer Relationships

Internet / Media Service Providers Communications Equipment

CommunicationsSemiconductors

CommunicationsSoftware / SaaS


Why Work With SagePoint?

• SagePoint delivers the senior‐level attention trusted relationships and market insight on• SagePoint delivers the senior‐level attention, trusted relationships and market insight on $10‐100M transactions that larger investment banks reserve only for much larger transactions

• SagePoint’s domain knowledge is world‐class across the entire communications and g gnetworking value chain

• SagePoint has developed trusted relationships with the most active strategic buyers across the communications value chain

• SagePoint has the M&A expertise that comes only from decades of experience focusing on strategic transactions

• SagePoint’s unwavering integrity and commitment to intellectual honesty ensures that we tell our clients what they need to hear to make sound business decisions

• At SagePoint, we offer sage advice that points our clients in the right direction to ensure an optimal outcome


Documents

SagePoint Software & Services 100 Q2 09 Performance Revie...7Baidu, Inc. X X 32 Global IP Solutions X 8 Billing Services Group Ltd X 33 Google Inc. X 9Bitstream Inc. X34Gree X 10 Buongiorno