In its recent research report, “State of Video in e-Commerce,” SundaySky, the leader in dynamically generated videos for optimized SEO and improved conversion rates, found that while most of the top Internet retailers are using video, few of them are using it in a way that positively affects the bottom line. For these retailers, video is window dressing when it could be a powerful force to drive SEO and, by extension, sales. This report specifically references the video practices of top retailers including Overstock.com, Amazon, Apple and QVC.

1. State of E-Commerce Video Report September 2010

2. Background and Methodology This report focused on the top 50 online retailers as published by Internet Retailer’s 2010 guide The research measures the current snapshot of video in the e-commerce market Online businesses have found that video improves the following: Amount of time spent on websites, repeat visitation, increased search engine ranking, etc. Search engine rankings Increased conversion rate to product sale Research Shows: The number of videos on each website, including type, etc. Implementation of these videos on the website Leading sources for e-commerce videos Methods for optimizing search engine results Best practices for YouTube syndication Best practices for video implementation strategies to maximize user adoption Confidential 2

3. Key Findings More than 65% of retailers use videos to some degree. Retailers currently not realizing video SEO potential: fewer than 10% have more than 10 videos indexed. The e-commerce industry is polarized on use of YouTube: 24% of retailers are not present on YouTube, while 30% have more than 1 million video views. 42% of the top retailer sites have little to no video presence Confidential 3

4. Top 10 online retailers (by number of videos) Confidential 4 Number of videos on e-commerce sites

5. SEO effect The top 100 retailers report that, on average, about 30% of their traffic is search-engine based. Confidential 5 Heat-map depiction of human interaction with search result pages shows that video-powered results draw users’ attention even when those are not the highest ranked result (though often they are).

6. Additional SEO Substantiation Confidential 6

7. Who provides the videos? Considerations when choosing a video production service include: Cost – creating video content for websites can be costly when you consider manual production hours and the maintenance required. Ability to scale – videos must be applied to all products and categories in the catalogue to be effective. Easily updated – video content must reflect the dynamic nature of product catalogues. Quality of video – customers will respond to videos that are interactive, branded and engaging. Three, often complementary, options for video production are: Manual production Syndication of manufacturer videos Automatic video generation Confidential 7

8. Video delivery and management Our research indicates that the vast majority of videos are delivered from a content delivery network (CDN) and not hosted onsite. Akamai dominates the top 50 retailer list by a large margin, and we also see videos being served from Amazon’s cloud services (Either S3 or CloudFront), LimeLight and CDNetworks Confidential 8

9. Youtube presence YouTube has been the number two search engine since 2008 and is the fourth overall web property. There are two main objectives for online retailers to promote their videos on YouTube: 1. Brand promotion 2. Increase qualified traffic Confidential 9 Top 10 online retailers by number of Views on their Youtube channel Top 10 online retailers by number of videos uploaded to their youtube channels

10. Conclusion The research presented here is the first of its kind trying to explore different impacts of online video on the e-commerce industry. What we have included: What retailers may hope to achieve by deploying videos What they currently achieve How they achieve goals and next steps for success Video e-commerce has moved from experimental to the scaling phase, however: There is a relatively small portion of top retailers who actually use video and exploit its potential to the maximum extent. This initial, limited adoption by retailers demonstrates the early stage of the market. Companies like Overstock.com and Nike have defined a clear and successful video strategy and are setting the stage for full industry adoption. Confidential 10

11. State of Video in Ecommerce: Q3’2010 The second report in the series: Updates trends discussed in this report Highlights new trends and findings regarding the usage of video in mobile and in social media NOW AVAILABLE ON OUR WEBSITE!http://www.sundaysky.com/resources/state-of-video-in-e-commerce-q32010.html Confidential 11

12. About SundaySky SundaySky is the leader in dynamically generated video, enabling e-commerce businesses to reinforce their brands and drive website traffic by creating limitless, high-quality, always up-to-date videos to showcase products and services. SundaySky’s software-as-a-service (SaaS)-based video generation platform helps customers personalize web experiences, enhance customer engagement and increase conversions, ultimately improving marketing ROI. SundaySky is headquartered in Tel Aviv with a product and technology center there and a business center in New York. The company is funded by Carmel Ventures and Globespan Capital. Learn more at www.sundaysky.com 12

13. Sundaysky contacts Confidential 13 Yaniv Axen, co-founder and CTO Yaniv.axen@sundaysky.com SundaySky 242 West 27th St., New York, NY 10001 P: 212-929-8111 Courtney Hurst, partner Metis Communications 121 East Berkeley St., Boston, MA 02118 P: 617-236-0500