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April 5, 2011
                                                                                                   Industry Report



Think Entertainment: Gaming                                                     Reason for Report:
China Gaming: Server Checks Suggest Continued                                   Industry Update
                                                                                Atul Bagga
Industry Momentum
                                                                                415-249-6362, abagga@thinkequity.com
THINK SUMMARY:
We believe that server checks could directionally give a good sense to
investors about the games performance in any given period; in our analysis we
found 70% correlation to server count and APA for the four publically listed
gaming companies. Our server checks suggest that Q1 was likely a strong
quarter for most of the games companies in China. Given continued
momentum in the gaming industry, coupled with some of the strong games
launches scheduled for 2011, leads us to believe that the overall Chinese
gaming industry could see a rebound in 2011, which we believe could allay
some investors' concern around an industry slowdown and help drive multiple
expansion for Chinese gaming shares.
KEY POINTS:
• While we acknowledge that server data alone cannot accurately predict the
  game performance; our analysis finds approximately 70% correlation of
  server count with the usage (APA), and we believe that server data could be
  a good directional indicator of the health of games.
• Our server checks suggest that a few of Perfect World's games have made a
  healthy comeback in 1Q11 after declining usage in 2H10. Similarly, Shanda's
  Legend of Mir 2 and World of Legend seem to have stabilized in 1Q11 after
  steep decline in 1H10. ChangYou's TLBB and Giant's ZT series games seem
  to have seen stable server growth in 1Q11.
• Valuation multiple on Chinese game shares seem to bake in a lot of
  negativity around a potential slowdown in the space and potential
  government regulations changes. We like investment in CYOU shares ahead
  of the DMD release and in NTES shares driven by, in our view, a strong
  pipeline of games.




Please see analyst certification (Reg. AC) and other important disclosures on pages 11-12 of this report.
April 5, 2011
                                                                                                 Industry Report


While we acknowledge that server count alone may not accurately predict the game usage in a given period, we believe
that server data gives a good sense directionally about the game usage during a given period. Based on our server count
data and the companies’ reported data around APA, we found 70% correlation between the two.

Exhibit 1: Correlation Between APA And Server Count
                              Q/Q Growth 3Q10                     Q/Q Growth 3Q10
                      GAME     PWRD        GA    CYOU      GAME    PWRD        GA     CYOU
APA Growth              -5%      -11%       4%     -6%       2%      10%       13%       3%
Server Count Growth      2%       -7%       6%      5%       3%      11%        6%      14%
R2: 47%;
Correlation: 69%
Source: Company reports, ThinkEquity LLC Proprietary Server Checks

We conduct server counts in China every couple of weeks. During 1Q11, the game usages seemed to have improved
across all games. Our checks suggest that a few of Perfect World’s games had what we viewed as a nice rebound in 1Q
after declining usage in 2H10. Likewise, Shanda’s Legend of Mir series and World of Legend usage seem to be stabilizing
as well after a steep decline in 2010. ChangYou’s TLBB and Giant’s ZT Series games seem to have remained stable in
1Q11.




                                                                                                              Page 2
April 5, 2011
                                                                                                                  Industry Report


Exhibit 2: Server Count On Select Games
Operator        Key Games                               Number of Servers As On                                Average Number of Servers           Q/Q Server Count Growth
                                     2-Jan    9-Jan    23-Jan    13-Feb    27-Feb      13-Mar    27-Mar    2Q10     3Q10      4Q10     1Q11        3Q10     4Q10      1Q11
Shanda          Legend of Mir2          172      169       170       170       169         169       170     157       164      167         170       4%        2%        2%
                Woool                   142      144       141       142       141         141       142     137       140      143         142       2%        2%        0%
                Mirs                     20       20        20        20        22          22        22      19        17       18          20     -11%        8%       11%
                Mir Returns              19       19        19        19        21          21        21      17        16       17          19      -9%       12%       11%
                Aion                     96       96       102       102       103         103       103      91        94       96         100       4%        2%        4%
                Maple Story              44       44        46        46        47          47        47      42        42       43          45       1%        2%        5%
                BNB                       5        5         5         5         5           5         5       5         5        5           5       0%        0%        0%
                JX World                 25       25        25        28        28          28        26      23        23       25          26       1%        6%        6%
                Dragon Nest             111      105       104       102        94          82        73               109      116         103                 6%      -11%
                                                                                                             491       611      630         631      24%        3%        0%
NetEase         FWJ                     408      408       395       397       398         399       400     434       419      407         401      -3%       -3%       -1%
                WWJ3                     79       79        80        81        82          77        78      61        66       75          80       8%       14%        6%
                WWJ2                    175      176       177       178       179         183       183     177       172      177         177      -3%        3%        0%
                TX2                      78       78        79        79        78          76        75      59        61       76          78       4%       23%        4%
                WoW                     365      365       367       367       367         363       357     354       359      363         366       1%        1%        1%
                Fly for Fun              24       24        21        21        21          21        21      23        25       24          22       9%       -5%       -8%
                WWJ Genesis                                                                           22
                                                                                                            1,108    1,102     1,122       1,125     -1%        2%        0%
Perfect World   LOMA                     36       36        36        36          36        35        34       37       36        36          36     -3%       -1%        0%
                Zhu Xian                 94       94        96        96          91        93        93      100       87        89          94    -14%        3%        6%
                PW2                      84       87        86        86          85        87        81       80       81        79          86      1%       -2%        8%
                Chi Bi                   26       26        26        26          26        26        27       33       37        29          26     13%      -21%      -12%
                Foresaken World          46       46        46        46          48        48        50               NM         39          46      NM        NM        NM
                HDP                                                                                            9
                FZX                      55       56        56        57          51        55        58      38        35        50         55      -6%       41%      11%
                World of Immortals                33        39        39          38        41        56                                     37
                Dragon Excalibur                  26        28        28          28        28        26                                     28
                BOI                      28       25        28        27          26        25        26      45        43       30          27      -4%      -31%      -11%
                                                                                                             342       319      353         435      -7%       11%       23%
Continued…




                                                                                                                                                                     Page 3
April 5, 2011
                                                                                                               Industry Report


Operator    Key Games                                Number of Servers As On                               Average Number of Servers         Q/Q Server Count Growth
                                  2-Jan    9-Jan    23-Jan    13-Feb    27-Feb      13-Mar    27-Mar    2Q10     3Q10     4Q10     1Q11      3Q10     4Q10      1Q11
Giant       ZT Online                 66       63        63        63          63        63        66      67       61       62         64     -9%        2%        2%
            Giant                     25       25        22        22          22        23        24      24       23       22         23     -5%       -5%        5%
            KOK3                      32       32        33        32          33        33        33      12       27       30         32    122%       13%        7%
            ZT Classic                25       21        20        23          23        23        23      19       18       20         22     -4%       11%       10%
            ZT Green                  35       35        29        31          31        26        26      41       41       38         32      2%       -9%      -15%
            ZT2                       10       10        10         9          12        13        15              NM         9         10      NM        NM        NM
            ZT Green Tencent          10       10        10        10          10        10        10       8       10       10         10     25%        0%        0%
                                                                                                          171      180      192        194      6%        6%        1%
Sohu        TLBB                     508      509       513       513       513         513       523     454      476      500        511      5%        5%        2%
            Blade                     78       78        78        78        78          80        80      65       68       74         78      5%        8%        6%
            ZHYX                      31       31        31        31        31          31        31               28       30         31                9%        3%
            Jiu Ding Chuan Shuo       54       53        54        54        56          56        56              NM        53         54      NM        NM        NM
                                                                                                          519      572      657        674     10%       15%        3%
Tencent     DNF                               116       116       116       116         116       116                                  116
            CF                                 37        37        37        37          37        37                                   37
            DMLQ                               18        18        18        18          18        18                                   18
            Xunxian                            48        48        48        48          48        48                                   48
            QQ Fantasy                         50        51        47        47          37        33                                   49
            QQ Dancer                          27        31        31        31          31        27                                   30
                                                                                                                                       279
The9        FIFA Online 2             16       16        16        16          16        16        16      15       16       16         16      6%        0%        0%
            GE                        12       12        12        12          12        12        12      11       12       12         12      8%        1%        0%
            SUN                       31       31        31        31          31        31        31      31       31       31         31      0%        0%        0%
            WoF                       90       90        90        90          90        90       110     156      129       94         90    -17%      -27%       -4%
                                                                                                          213      188      153        149    -12%      -19%       -2%
Source: ThinkEquity LLC Proprietary Checks




                                                                                                                                                               Page 4
April 5, 2011
                                                                                                                                                                                                                                            Industry Report


Exhibit 3: Server Count Of Key Games – ChangYou

  600

  500

  400
                                                                                                                                                                                                                                  TLBB
  300                                                                                                                                                                                                                             Blade Online
                                                                                                                                                                                                                                  ZHYX
  200

  100

    0

                                                                                                                                                Nov-10
                                                      Jun-10

                                                                        Jul-10




                                                                                                                                                                                    Jan-11
          Mar-10


                      Apr-10


                                    May-10




                                                                                          Aug-10


                                                                                                            Sep-10


                                                                                                                              Oct-10




                                                                                                                                                                  Dec-10




                                                                                                                                                                                                      Feb-11

                                                                                                                                                                                                                   Mar-11
Source: ThinkEquity LLC Proprietary Checks

Exhibit 4: Server Count Of Key Games – Giant Interactive

  80
  70

  60
                                                                                                                                                                                                                            ZT Online
  50                                                                                                                                                                                                                        ZT Classic
  40                                                                                                                                                                                                                        ZT Green
  30                                                                                                                                                                                                                        ZT2
                                                                                                                                                                                                                            ZT Green Tencent
  20

  10
   0
                                                                                                                                       Nov-10
                                             Jun-10

                                                               Jul-10




                                                                                                                                                                           Jan-11
       Mar-10

                   Apr-10

                               May-10




                                                                                 Aug-10


                                                                                                   Sep-10

                                                                                                                     Oct-10




                                                                                                                                                         Dec-10




                                                                                                                                                                                             Feb-11

                                                                                                                                                                                                          Mar-11




Source: ThinkEquity LLC Proprietary Checks




                                                                                                                                                                                                                                                      Page 5
April 5, 2011
                                                                                                                                                                                                                 Industry Report


Exhibit 5: Server Count Of Key Games – NetEase

  500
  450
  400                                                                                                                                                                                             FWJ
  350                                                                                                                                                                                             WWJ3
  300                                                                                                                                                                                             WWJ2
  250                                                                                                                                                                                             TX2
  200                                                                                                                                                                                             WoW
  150                                                                                                                                                                                             Fly for Fun
  100                                                                                                                                                                                             WWJ Genesis
   50
    0

                                                                                                                 Nov-10
                                      Jun-10


                                                  Jul-10




                                                                                                                                                     Jan-11
        Mar-10


                 Apr-10

                           May-10




                                                               Aug-10


                                                                             Sep-10

                                                                                               Oct-10




                                                                                                                                   Dec-10




                                                                                                                                                                       Feb-11

                                                                                                                                                                                     Mar-11
Source: ThinkEquity LLC Proprietary Checks

Exhibit 6: Server Count Of Key Games – Perfect World

  140
                                                                                                                                                                                              LOMA
  120
                                                                                                                                                                                              Zhu Xian
  100                                                                                                                                                                                         PW2
   80                                                                                                                                                                                         Chi Bi
                                                                                                                                                                                              Foresaken World
   60                                                                                                                                                                                         Fantasy Zhu Xian
   40                                                                                                                                                                                         World of Immortals
                                                                                                                                                                                              Dragon Excalibur
   20
                                                                                                                                                                                              Battle of Immortals
    0
                                                                                                        Nov-10
                                    Jun-10

                                               Jul-10




                                                                                                                                            Jan-11
        Mar-10

                 Apr-10

                          May-10




                                                           Aug-10

                                                                        Sep-10

                                                                                      Oct-10




                                                                                                                          Dec-10




                                                                                                                                                              Feb-11

                                                                                                                                                                            Mar-11




Source: ThinkEquity LLC Proprietary Checks




                                                                                                                                                                                                                          Page 6
April 5, 2011
                                                                                                                                           Industry Report


Exhibit 7: Server Count Of Key Games – Shanda Games

  300

  250

  200                                                                                                                        Legend of Mir 2
                                                                                                                             AION
  150
                                                                                                                             Maple Story
  100                                                                                                                        Dragon Nest

   50

    0
                                                                                Nov-10
                                   Jun-10

                                            Jul-10




                                                                                                  Jan-11
        Mar-10

                 Apr-10

                          May-10




                                                     Aug-10


                                                              Sep-10

                                                                       Oct-10




                                                                                         Dec-10




                                                                                                           Feb-11

                                                                                                                    Mar-11
Source: ThinkEquity LLC Proprietary Checks


VALUATION
Given what we view as strong server data, we believe that the gaming industry has maintained momentum in 1Q11.
Additionally, we expect industry growth to pick up with the launch of a few highly anticipated games, including DMD, World
of Warcraft Cataclysm, Swordsman Online, among others. On the other hand, Chinese gaming shares trade at a
significant discount to the U.S. gaming and Chinese internet media multiples—Chinese gaming shares trade at an
average 11x PE on 2011E EPS with 37% expected revenue growth in 2011 (7.7x for the shares that trade on U.S.
exchanges, per FactSet data); versus U.S. gaming companies’ shares trading at 12x with a flat revenue growth projection
in 2011; versus Chinese Internet companies’ shares trading at a 35x PE with a 40% revenue growth projection in 2011,
which we believe reflects the negative sentiment toward the gaming shares (see Exhibit 8). We believe that an industry
growth rebound in 2011 could allay some of the investors’ concerns around the growth potential and drive multiple
expansions for the Chinese gaming shares.




                                                                                                                                                    Page 7
April 5, 2011
                                                                                                                                                  Industry Report


Exhibit 8: Comp Table

                                     Stock Price ($)                         EV/Rev                   P/E           PE (Net of Cash)          EV/CFO          y/y Rev    y/y EPS
                                                       Market Cap
                           Ticker      4/04/2011       ($ million)   2010 E       2011 E      2010E         2011E   2010E     2011E    2010E       2011E       2011E      2011E


China Online Games
ChangYou                   CYOU          33.42           1,776        4.4x            3.5x    10.2x         8.7x    8.2x       7.0x    7.9x            5.9x    25%        17%
Giant                      GA             7.38           1,723        4.0x            3.2x    13.9x         12.1x   6.5x       5.7x    5.9x            4.8x    28%        15%
Kingsoft                   3888-HK        0.58            673         NM              NM      11.9x         12.1x   NM         NM      NM              NM      13%        -2%
NetDragon                  777-HK         0.49            259         NM              NM      39.0x         35.7x   NM         NM       NM             NM       3%         9%
NetEase                    NTES          51.71           6,755        6.3x            5.0x    19.9x         15.9x   15.6x     12.5x    17.3x       11.8x       27%        25%
Perfect World              PWRD          22.36           1,181        2.5x            2.1x    9.0x          8.6x    6.9x       6.6x    4.9x            5.2x    18%         5%
Shanda Games               GAME           6.32           1,800        2.2x            1.9x    9.1x          8.5x    7.4x       6.9x    5.6x            5.5x    16%         7%
Tencent                    700-HK        25.26           46,957      11.5x            8.4x    37.1x         27.8x   27.1x     20.3x    28.3x       17.2x       37%        33%
The9                       NCTY           6.62            166         NM              NM       NM            NM     NM         NM       NM             NM      177%       -27%
Average                                                  6,810        5.1x            4.0x    18.8x         14.5x   11.9x      9.8x    11.6x           8.4x    38%         9%
Median                                                   1,723        4.2x            3.3x    12.9x         12.1x   7.8x       6.9x    6.9x            5.7x    25%         9%


US Games
Activision Blizzard Inc.   ATVI          11.01           13,190       2.0x            2.4x    13.9x         15.1x   10.2x     11.1x    8.2x            7.4x    -15%        -8%
Majesco                    COOL           3.90            147         1.7x            1.3x     NM           15.1x   NM        14.3x     NM             NM      35%         NM
Electronic Arts Inc.       ERTS          19.69           6,537        1.2x            1.2x    32.2x         24.4x   22.3x     17.0x    39.1x       20.1x        1%        32%
Konami                     KNM           18.46           2,464        NM              NM      15.6x         13.1x   NM         NM       NM             NM       6%        19%
THQ Inc.                   THQI           4.48            304         0.1x            0.1x     NM           23.9x   NM         8.7x     NM             NM       9%         NM
Take-Two                   TTWO          15.10           1,190        NM              NM      15.1x         21.4x   NM         NM       NM             NM      -23%       -30%
Glu Mobile Inc.            GLUU           4.28            154         2.3x            2.8x     NM            NM     NM         NM       NM             NM      -18%       156%
Sony                       SNE           31.45           31,613       NM              NM      42.8x         19.3x   NM         NM       NM             NM       3%        122%
Nintendo                   NTDOY         33.05             NA         NM              NM      24.4x         22.3x   NM         NM       NM             NM       1%         9%
ZOO Entertainment          ZOOG           4.44             33         0.5x            0.4x     7.5x         5.0x    NM         NM       NM             NM      35%        49%
Average                                                  6,950        1.5x            1.5x    24.0x         19.3x   16.3x     12.7x    23.6x       13.7x        0%        43%
Median                                                   1,827        1.7x            1.3x    20.0x         20.3x   16.3x     12.7x    23.6x       13.7x        1%        19%


Chinese Internet
51Jobs                     JOBS          67.07           1,916       12.0x            8.5x     NM            NM     NM        35.1x     NM         35.0x       40%        164%
Baidu                      BIDU         143.11           50,005      40.6x            25.5x    NM            NM     NM        54.7x     NM             NM      59%        62%
Ctrip                      CTRP          42.84           6,550       13.8x            10.9x   63.0x         40.4x   37.1x     32.3x    38.1x       37.9x       27%        15%
eLong                      LONG          14.42             NA         NM              NM       NM            NM     NM         NM       NM             NM      21%        158%
SINA Corp.                 SINA         116.56           7,673       17.4x            14.0x    NM           66.9x   60.1x     58.9x    59.0x           NM      25%         2%
Sohu.com Inc.              SOHU          97.30           3,734        5.0x            4.0x    24.4x         23.1x   18.9x     16.1x    13.1x       15.5x       25%        18%
Yoku                       YOKU          48.84           4,221       67.8x            36.3x    NM            NM      NM        NM       NM          NM         87%        -53%
Tencent                    700-HK        25.26           46,957      11.5x            8.4x    61.1x         37.1x   27.1x     20.3x    28.3x       17.2x       37%         33%
Average                                                  17,294      24.0x            15.4x   49.5x         41.9x   35.8x     36.2x    34.6x       26.4x       40%        50%
Median                                                   6,550       13.8x            10.9x   61.1x         38.8x   32.1x     33.7x    33.2x       26.1x       32%        26%

Source: FactSet




                                                                                                                                                                        Page 8
April 5, 2011
                                                                                                    Industry Report


VALUATION
Valuation for CYOU Shares
We maintain our Buy rating on CYOU shares, with a $40 price target, based on a 9.1x PE (net of cash) on our 2011E EPS
versus 7.7x average for shares of the peer group. We believe that a premium multiple is appropriate given our view of the
company's strong positioning (strong development capability and strong platform from its association with SOHU).

Valuation for NTES Shares
We maintain our Buy rating on NTES shares with a $55 price target, based on a 14x PE (net of cash) on our 2011 EPS
estimate (versus 7.7x average for the shares of the Chinese gaming peer group, 19x for the diversified Chinese gaming
and Internet group shares, and 35x for the broader Chinese internet and media group shares), which we believe is
appropriate, given what we view as the company's strong pipeline and strong publishing platform.

Valuation for GAME Shares
We are incrementally positive on stabilizing Mir 2 performance and a healthy pipeline, and we reiterate our Buy rating on
GAME shares with a price target of $8, which is based on an approximate 8x PE (net of cash) on our 2011 EPS estimate.
We believe that an 8x multiple (roughly in line with an average multiple of 7.7x for shares of the peer group multiple) is
appropriate given slightly higher risks with existing franchises.

Valuation for GA Shares
We are positive on an investment in GA shares given our view of a stabilizing ZT franchise and maintain our Hold rating
with a price target to $8, which is predicated at a 13x PE on our 2011E EPS of $0.62 (6x PE net of cash) versus 14x for
the peer group (7.7x net of cash). We believe that a small discount to the peer group shares is appropriate given the
company’s dependence on a major franchise.

Valuation for PWRD Shares
We are optimistic about the company's international strategy and the longer-term prospect, given what we believe is a
strong pipeline for 2011/2012—Swordsman Online, Sword Heaven Dragon Saber, Empire of Immortals, Torchlight,
Meteor Online, and a couple unnamed games. We reiterate are Hold rating on PWRD shares with a price target of $24
predicated on a P/E multiple of approximately 8x our 2011E EPS (net of cash), roughly in line with an average 7.7x PE
multiple for shares of companies in the Chinese gaming group, which we believe is appropriate given higher risks related
to disruption in the company's existing franchises.

Valuation for NCTY Shares
Trading below cash (cash in hand at $9.15 per share), NCTY shares may look inexpensive. However, given our view of
the company's relatively weaker positioning in China (no track record of a successful game over the last 12 months and a
relatively weaker pipeline) and potential for more distraction stemming from its global strategy and given our expectation
of cash burn, we base our price target of $4.50 per share on about 50% of the cash in hand.




                                                                                                                 Page 9
April 5, 2011
                                                                                                  Industry Report


RISKS TO PRICE TARGETS

  •   Gaming continues to be a hit-or-miss-driven business, and predicting successful titles versus
      unsuccessful titles is extremely difficult. The risk is especially high for the new and unproven IPs, and a
      company's reliance on the new IPs and the titles in the established franchises to reach the revenue target opens it
      to risk of a revenue miss.
  •   Macro headwinds and popularity of the used games and free-to-play online games. Given the current macro
      headwinds, used games and free-to-play online games create higher substitute competition for video games.
  •   The industry is dependent on the console cycle; unexpected start of the new console cycle will likely
      constrain the revenue growth and affect profitability of gaming vendors.
  •   Foreign currency exchange risk. These companies generate revenue from international operations, which
      exposes the companies to foreign currency exchange risk




                                                                                                               Page 10
April 5, 2011
                                                                                                                   Industry Report


COMPANIES MENTIONED IN THIS REPORT:
Company                                                         Exchange               Symbol             Price         Rating
Activision Blizzard, Inc.                                       NASDAQ                  ATVI              $11.01         Buy
Amazon.com, Inc.                                                NASDAQ                  AMZN             $182.94          Buy
Apple Inc.                                                      NASDAQ                  AAPL             $341.19          Buy
Baidu, Inc.                                                     NASDAQ                  BIDU             $143.11          Buy
Changyou.com Limited                                            NASDAQ                  CYOU              $33.42         Buy
Ctrip.com International, Ltd.                                   NASDAQ                  CTRP              $42.84          Buy
Electronic Arts Inc.                                             NASDAQ                 ERTS              $19.69          Buy
Expedia, Inc.                                                   NASDAQ                  EXPE              $22.43         Hold
Giant Interactive Group, Inc.                                     NYSE                   GA               $7.38          Hold
Google, Inc.                                                    NASDAQ                 GOOG              $587.68          Buy
NetEase.com, Inc.                                               NASDAQ                  NTES              $51.71         Buy
Netflix, Inc.                                                   NASDAQ                  NFLX             $244.72          Buy
OpenTable, Inc.                                                 NASDAQ                 OPEN              $108.87         Hold
Orbitz Worldwide, Inc.                                            NYSE                  OWW               $3.55          Hold
Perfect World Co., Ltd.                                         NASDAQ                 PWRD              $22.36          Hold
priceline.com Incorporated                                      NASDAQ                  PCLN             $518.59          Buy
Shanda Games                                                    NASDAQ                  GAME              $6.32           Buy
Shanda Interactive Entertainment Limited                        NASDAQ                  SNDA              $43.83         Hold
Shutterfly, Inc.                                                NASDAQ                  SFLY             $50.09          Hold
SINA Corporation                                                NASDAQ                  SINA             $116.56         Hold
Take-Two Interactive Software                                   NASDAQ                 TTWO              $15.10          Buy
The9 Limited                                                    NASDAQ                  NCTY              $6.62           Sell
THQ, Inc.                                                       NASDAQ                  THQI              $4.48          Hold
Travelzoo Inc.                                                  NASDAQ                 TZOO              $76.29          Buy
VistaPrint Ltd.                                                 NASDAQ                  VPRT              $52.90         Buy
Yahoo!                                                          NASDAQ                 YHOO               $16.87         Buy
Zoo Entertainment, Inc.                                          NASDAQ                 ZOOG              $4.44           Buy


Important Research Disclosures
Analyst Certification
I, Atul Bagga, hereby certify that all of the views expressed in this research report accurately reflect my personal views about the subject
securities and issuers. I also certify that no part of my compensation was, is, or will be directly or indirectly related to the specific
recommendations or views expressed in this research report.

The analyst(s) responsible for preparing this report has/have received compensation based on various factors, including the firm's total
revenues, a portion of which is generated by investment banking activities.

ThinkEquity LLC and/or an affiliate managed or co-managed a public offering of securities for Zoo Entertainment, Inc. in the past 12
months.
ThinkEquity LLC makes a market in Activision Blizzard, Inc., Changyou.com Limited, Electronic Arts Inc., Giant Interactive Group, Inc.,
Shanda Games, The9 Limited, NetEase.com, Inc., Perfect World Co., Ltd., Shanda Interactive Entertainment Limited, THQ, Inc.,
Take-Two Interactive Software, Zoo Entertainment, Inc., Google, Inc., Apple Inc., Baidu, Inc., Ctrip.com International, Ltd., SINA
Corporation, Amazon.com, Inc., Expedia, Inc., OpenTable, Inc., Netflix, Inc., Orbitz Worldwide, Inc., priceline.com Incorporated, Shutterfly,
Inc., Travelzoo Inc., VistaPrint Ltd., and Yahoo! securities; and/or associated persons may sell to or buy from customers on a principal
basis.
ThinkEquity LLC has made affirmative disclosures concerning each of the covered securities mentioned in this report, including analyst
holdings (if any), rating definitions and overall ratings distributions. These disclosures can be found in the most recent complete research
report for each of the respective companies. Reports are available upon request.


Rating Definitions

                                                                                                                                  Page 11
April 5, 2011
                                                                                                                      Industry Report



Effective October 7, 2009, ThinkEquity LLC moved from a four-tier Buy/Accumulate/Source of Funds/Sell rating system to a three-tier
Buy/Hold/Sell system. The new ratings appear in our Distribution of Ratings, Firmwide chart. To request historical information, including
previously published reports or statistical information, please call: 866-288-8206, or write to: Director of Research, ThinkEquity LLC, 600
Montgomery Street, San Francisco, California, 94111.

Buy: ThinkEquity expects the stock to generate positive risk-adjusted returns of more than 10% over the next 12 months. ThinkEquity
recommends initiating or increasing exposure to the stock.

Hold: ThinkEquity expects the stock to generate risk-adjusted returns of +/-10% over the next 12 months. ThinkEquity believes the stock
is fairly valued.

Sell: ThinkEquity expects the stock to generate negative risk-adjusted returns of more than 10% during the next 12 months. ThinkEquity
recommends decreasing exposure to the stock.

                                                  Distribution of Ratings, Firmwide

                                                           ThinkEquity LLC

                                                                                                                 IB Serv./Past 12 Mos.
Rating                                                              Count                Percent                 Count          Percent
BUY [B]                                                                149                  66.80                    24            16.11
HOLD [H]                                                                72                  32.30                     0             0.00
SELL [S]                                                                 2                   0.90                     0             0.00




This report does not purport to be a complete statement of all material facts related to any company, industry, or security mentioned. The
information provided, while not guaranteed as to accuracy or completeness, has been obtained from sources believed to be reliable. The
opinions expressed reflect our judgment at this time and are subject to change without notice and may or may not be updated. Past
performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or
implied, is made regarding future performance. This notice shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall
there be any sale of these securities in any state in which said offer, solicitation, or sale would be unlawful prior to registration or
qualification under the securities laws of any such state. This research report was originally prepared and distributed to institutional clients
of ThinkEquity LLC. Recipients who are not market professionals or institutional clients of ThinkEquity LLC should seek the advice of their
personal financial advisors before making any investment decisions based on this report. Additional information on the securities
referenced is available upon request. In the event that this is a compendium report (covers more than six ThinkEquity LLC-covered
subject companies), ThinkEquity LLC may choose to provide specific disclosures for the subject companies by reference. To request
more information regarding these disclosures, please call: 866-288-8206, or write to: Director of Research, ThinkEquity LLC, 600
Montgomery Street, San Francisco, California, 94111. Stocks mentioned in this report are not covered by ThinkEquity LLC unless
otherwise mentioned. Member of FINRA and SIPC. Copyright 2011 ThinkEquity LLC, A Panmure Gordon Company




                                                                                                                                      Page 12

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25680

  • 1. April 5, 2011 Industry Report Think Entertainment: Gaming Reason for Report: China Gaming: Server Checks Suggest Continued Industry Update Atul Bagga Industry Momentum 415-249-6362, abagga@thinkequity.com THINK SUMMARY: We believe that server checks could directionally give a good sense to investors about the games performance in any given period; in our analysis we found 70% correlation to server count and APA for the four publically listed gaming companies. Our server checks suggest that Q1 was likely a strong quarter for most of the games companies in China. Given continued momentum in the gaming industry, coupled with some of the strong games launches scheduled for 2011, leads us to believe that the overall Chinese gaming industry could see a rebound in 2011, which we believe could allay some investors' concern around an industry slowdown and help drive multiple expansion for Chinese gaming shares. KEY POINTS: • While we acknowledge that server data alone cannot accurately predict the game performance; our analysis finds approximately 70% correlation of server count with the usage (APA), and we believe that server data could be a good directional indicator of the health of games. • Our server checks suggest that a few of Perfect World's games have made a healthy comeback in 1Q11 after declining usage in 2H10. Similarly, Shanda's Legend of Mir 2 and World of Legend seem to have stabilized in 1Q11 after steep decline in 1H10. ChangYou's TLBB and Giant's ZT series games seem to have seen stable server growth in 1Q11. • Valuation multiple on Chinese game shares seem to bake in a lot of negativity around a potential slowdown in the space and potential government regulations changes. We like investment in CYOU shares ahead of the DMD release and in NTES shares driven by, in our view, a strong pipeline of games. Please see analyst certification (Reg. AC) and other important disclosures on pages 11-12 of this report.
  • 2. April 5, 2011 Industry Report While we acknowledge that server count alone may not accurately predict the game usage in a given period, we believe that server data gives a good sense directionally about the game usage during a given period. Based on our server count data and the companies’ reported data around APA, we found 70% correlation between the two. Exhibit 1: Correlation Between APA And Server Count Q/Q Growth 3Q10 Q/Q Growth 3Q10 GAME PWRD GA CYOU GAME PWRD GA CYOU APA Growth -5% -11% 4% -6% 2% 10% 13% 3% Server Count Growth 2% -7% 6% 5% 3% 11% 6% 14% R2: 47%; Correlation: 69% Source: Company reports, ThinkEquity LLC Proprietary Server Checks We conduct server counts in China every couple of weeks. During 1Q11, the game usages seemed to have improved across all games. Our checks suggest that a few of Perfect World’s games had what we viewed as a nice rebound in 1Q after declining usage in 2H10. Likewise, Shanda’s Legend of Mir series and World of Legend usage seem to be stabilizing as well after a steep decline in 2010. ChangYou’s TLBB and Giant’s ZT Series games seem to have remained stable in 1Q11. Page 2
  • 3. April 5, 2011 Industry Report Exhibit 2: Server Count On Select Games Operator Key Games Number of Servers As On Average Number of Servers Q/Q Server Count Growth 2-Jan 9-Jan 23-Jan 13-Feb 27-Feb 13-Mar 27-Mar 2Q10 3Q10 4Q10 1Q11 3Q10 4Q10 1Q11 Shanda Legend of Mir2 172 169 170 170 169 169 170 157 164 167 170 4% 2% 2% Woool 142 144 141 142 141 141 142 137 140 143 142 2% 2% 0% Mirs 20 20 20 20 22 22 22 19 17 18 20 -11% 8% 11% Mir Returns 19 19 19 19 21 21 21 17 16 17 19 -9% 12% 11% Aion 96 96 102 102 103 103 103 91 94 96 100 4% 2% 4% Maple Story 44 44 46 46 47 47 47 42 42 43 45 1% 2% 5% BNB 5 5 5 5 5 5 5 5 5 5 5 0% 0% 0% JX World 25 25 25 28 28 28 26 23 23 25 26 1% 6% 6% Dragon Nest 111 105 104 102 94 82 73 109 116 103 6% -11% 491 611 630 631 24% 3% 0% NetEase FWJ 408 408 395 397 398 399 400 434 419 407 401 -3% -3% -1% WWJ3 79 79 80 81 82 77 78 61 66 75 80 8% 14% 6% WWJ2 175 176 177 178 179 183 183 177 172 177 177 -3% 3% 0% TX2 78 78 79 79 78 76 75 59 61 76 78 4% 23% 4% WoW 365 365 367 367 367 363 357 354 359 363 366 1% 1% 1% Fly for Fun 24 24 21 21 21 21 21 23 25 24 22 9% -5% -8% WWJ Genesis 22 1,108 1,102 1,122 1,125 -1% 2% 0% Perfect World LOMA 36 36 36 36 36 35 34 37 36 36 36 -3% -1% 0% Zhu Xian 94 94 96 96 91 93 93 100 87 89 94 -14% 3% 6% PW2 84 87 86 86 85 87 81 80 81 79 86 1% -2% 8% Chi Bi 26 26 26 26 26 26 27 33 37 29 26 13% -21% -12% Foresaken World 46 46 46 46 48 48 50 NM 39 46 NM NM NM HDP 9 FZX 55 56 56 57 51 55 58 38 35 50 55 -6% 41% 11% World of Immortals 33 39 39 38 41 56 37 Dragon Excalibur 26 28 28 28 28 26 28 BOI 28 25 28 27 26 25 26 45 43 30 27 -4% -31% -11% 342 319 353 435 -7% 11% 23% Continued… Page 3
  • 4. April 5, 2011 Industry Report Operator Key Games Number of Servers As On Average Number of Servers Q/Q Server Count Growth 2-Jan 9-Jan 23-Jan 13-Feb 27-Feb 13-Mar 27-Mar 2Q10 3Q10 4Q10 1Q11 3Q10 4Q10 1Q11 Giant ZT Online 66 63 63 63 63 63 66 67 61 62 64 -9% 2% 2% Giant 25 25 22 22 22 23 24 24 23 22 23 -5% -5% 5% KOK3 32 32 33 32 33 33 33 12 27 30 32 122% 13% 7% ZT Classic 25 21 20 23 23 23 23 19 18 20 22 -4% 11% 10% ZT Green 35 35 29 31 31 26 26 41 41 38 32 2% -9% -15% ZT2 10 10 10 9 12 13 15 NM 9 10 NM NM NM ZT Green Tencent 10 10 10 10 10 10 10 8 10 10 10 25% 0% 0% 171 180 192 194 6% 6% 1% Sohu TLBB 508 509 513 513 513 513 523 454 476 500 511 5% 5% 2% Blade 78 78 78 78 78 80 80 65 68 74 78 5% 8% 6% ZHYX 31 31 31 31 31 31 31 28 30 31 9% 3% Jiu Ding Chuan Shuo 54 53 54 54 56 56 56 NM 53 54 NM NM NM 519 572 657 674 10% 15% 3% Tencent DNF 116 116 116 116 116 116 116 CF 37 37 37 37 37 37 37 DMLQ 18 18 18 18 18 18 18 Xunxian 48 48 48 48 48 48 48 QQ Fantasy 50 51 47 47 37 33 49 QQ Dancer 27 31 31 31 31 27 30 279 The9 FIFA Online 2 16 16 16 16 16 16 16 15 16 16 16 6% 0% 0% GE 12 12 12 12 12 12 12 11 12 12 12 8% 1% 0% SUN 31 31 31 31 31 31 31 31 31 31 31 0% 0% 0% WoF 90 90 90 90 90 90 110 156 129 94 90 -17% -27% -4% 213 188 153 149 -12% -19% -2% Source: ThinkEquity LLC Proprietary Checks Page 4
  • 5. April 5, 2011 Industry Report Exhibit 3: Server Count Of Key Games – ChangYou 600 500 400 TLBB 300 Blade Online ZHYX 200 100 0 Nov-10 Jun-10 Jul-10 Jan-11 Mar-10 Apr-10 May-10 Aug-10 Sep-10 Oct-10 Dec-10 Feb-11 Mar-11 Source: ThinkEquity LLC Proprietary Checks Exhibit 4: Server Count Of Key Games – Giant Interactive 80 70 60 ZT Online 50 ZT Classic 40 ZT Green 30 ZT2 ZT Green Tencent 20 10 0 Nov-10 Jun-10 Jul-10 Jan-11 Mar-10 Apr-10 May-10 Aug-10 Sep-10 Oct-10 Dec-10 Feb-11 Mar-11 Source: ThinkEquity LLC Proprietary Checks Page 5
  • 6. April 5, 2011 Industry Report Exhibit 5: Server Count Of Key Games – NetEase 500 450 400 FWJ 350 WWJ3 300 WWJ2 250 TX2 200 WoW 150 Fly for Fun 100 WWJ Genesis 50 0 Nov-10 Jun-10 Jul-10 Jan-11 Mar-10 Apr-10 May-10 Aug-10 Sep-10 Oct-10 Dec-10 Feb-11 Mar-11 Source: ThinkEquity LLC Proprietary Checks Exhibit 6: Server Count Of Key Games – Perfect World 140 LOMA 120 Zhu Xian 100 PW2 80 Chi Bi Foresaken World 60 Fantasy Zhu Xian 40 World of Immortals Dragon Excalibur 20 Battle of Immortals 0 Nov-10 Jun-10 Jul-10 Jan-11 Mar-10 Apr-10 May-10 Aug-10 Sep-10 Oct-10 Dec-10 Feb-11 Mar-11 Source: ThinkEquity LLC Proprietary Checks Page 6
  • 7. April 5, 2011 Industry Report Exhibit 7: Server Count Of Key Games – Shanda Games 300 250 200 Legend of Mir 2 AION 150 Maple Story 100 Dragon Nest 50 0 Nov-10 Jun-10 Jul-10 Jan-11 Mar-10 Apr-10 May-10 Aug-10 Sep-10 Oct-10 Dec-10 Feb-11 Mar-11 Source: ThinkEquity LLC Proprietary Checks VALUATION Given what we view as strong server data, we believe that the gaming industry has maintained momentum in 1Q11. Additionally, we expect industry growth to pick up with the launch of a few highly anticipated games, including DMD, World of Warcraft Cataclysm, Swordsman Online, among others. On the other hand, Chinese gaming shares trade at a significant discount to the U.S. gaming and Chinese internet media multiples—Chinese gaming shares trade at an average 11x PE on 2011E EPS with 37% expected revenue growth in 2011 (7.7x for the shares that trade on U.S. exchanges, per FactSet data); versus U.S. gaming companies’ shares trading at 12x with a flat revenue growth projection in 2011; versus Chinese Internet companies’ shares trading at a 35x PE with a 40% revenue growth projection in 2011, which we believe reflects the negative sentiment toward the gaming shares (see Exhibit 8). We believe that an industry growth rebound in 2011 could allay some of the investors’ concerns around the growth potential and drive multiple expansions for the Chinese gaming shares. Page 7
  • 8. April 5, 2011 Industry Report Exhibit 8: Comp Table Stock Price ($) EV/Rev P/E PE (Net of Cash) EV/CFO y/y Rev y/y EPS Market Cap Ticker 4/04/2011 ($ million) 2010 E 2011 E 2010E 2011E 2010E 2011E 2010E 2011E 2011E 2011E China Online Games ChangYou CYOU 33.42 1,776 4.4x 3.5x 10.2x 8.7x 8.2x 7.0x 7.9x 5.9x 25% 17% Giant GA 7.38 1,723 4.0x 3.2x 13.9x 12.1x 6.5x 5.7x 5.9x 4.8x 28% 15% Kingsoft 3888-HK 0.58 673 NM NM 11.9x 12.1x NM NM NM NM 13% -2% NetDragon 777-HK 0.49 259 NM NM 39.0x 35.7x NM NM NM NM 3% 9% NetEase NTES 51.71 6,755 6.3x 5.0x 19.9x 15.9x 15.6x 12.5x 17.3x 11.8x 27% 25% Perfect World PWRD 22.36 1,181 2.5x 2.1x 9.0x 8.6x 6.9x 6.6x 4.9x 5.2x 18% 5% Shanda Games GAME 6.32 1,800 2.2x 1.9x 9.1x 8.5x 7.4x 6.9x 5.6x 5.5x 16% 7% Tencent 700-HK 25.26 46,957 11.5x 8.4x 37.1x 27.8x 27.1x 20.3x 28.3x 17.2x 37% 33% The9 NCTY 6.62 166 NM NM NM NM NM NM NM NM 177% -27% Average 6,810 5.1x 4.0x 18.8x 14.5x 11.9x 9.8x 11.6x 8.4x 38% 9% Median 1,723 4.2x 3.3x 12.9x 12.1x 7.8x 6.9x 6.9x 5.7x 25% 9% US Games Activision Blizzard Inc. ATVI 11.01 13,190 2.0x 2.4x 13.9x 15.1x 10.2x 11.1x 8.2x 7.4x -15% -8% Majesco COOL 3.90 147 1.7x 1.3x NM 15.1x NM 14.3x NM NM 35% NM Electronic Arts Inc. ERTS 19.69 6,537 1.2x 1.2x 32.2x 24.4x 22.3x 17.0x 39.1x 20.1x 1% 32% Konami KNM 18.46 2,464 NM NM 15.6x 13.1x NM NM NM NM 6% 19% THQ Inc. THQI 4.48 304 0.1x 0.1x NM 23.9x NM 8.7x NM NM 9% NM Take-Two TTWO 15.10 1,190 NM NM 15.1x 21.4x NM NM NM NM -23% -30% Glu Mobile Inc. GLUU 4.28 154 2.3x 2.8x NM NM NM NM NM NM -18% 156% Sony SNE 31.45 31,613 NM NM 42.8x 19.3x NM NM NM NM 3% 122% Nintendo NTDOY 33.05 NA NM NM 24.4x 22.3x NM NM NM NM 1% 9% ZOO Entertainment ZOOG 4.44 33 0.5x 0.4x 7.5x 5.0x NM NM NM NM 35% 49% Average 6,950 1.5x 1.5x 24.0x 19.3x 16.3x 12.7x 23.6x 13.7x 0% 43% Median 1,827 1.7x 1.3x 20.0x 20.3x 16.3x 12.7x 23.6x 13.7x 1% 19% Chinese Internet 51Jobs JOBS 67.07 1,916 12.0x 8.5x NM NM NM 35.1x NM 35.0x 40% 164% Baidu BIDU 143.11 50,005 40.6x 25.5x NM NM NM 54.7x NM NM 59% 62% Ctrip CTRP 42.84 6,550 13.8x 10.9x 63.0x 40.4x 37.1x 32.3x 38.1x 37.9x 27% 15% eLong LONG 14.42 NA NM NM NM NM NM NM NM NM 21% 158% SINA Corp. SINA 116.56 7,673 17.4x 14.0x NM 66.9x 60.1x 58.9x 59.0x NM 25% 2% Sohu.com Inc. SOHU 97.30 3,734 5.0x 4.0x 24.4x 23.1x 18.9x 16.1x 13.1x 15.5x 25% 18% Yoku YOKU 48.84 4,221 67.8x 36.3x NM NM NM NM NM NM 87% -53% Tencent 700-HK 25.26 46,957 11.5x 8.4x 61.1x 37.1x 27.1x 20.3x 28.3x 17.2x 37% 33% Average 17,294 24.0x 15.4x 49.5x 41.9x 35.8x 36.2x 34.6x 26.4x 40% 50% Median 6,550 13.8x 10.9x 61.1x 38.8x 32.1x 33.7x 33.2x 26.1x 32% 26% Source: FactSet Page 8
  • 9. April 5, 2011 Industry Report VALUATION Valuation for CYOU Shares We maintain our Buy rating on CYOU shares, with a $40 price target, based on a 9.1x PE (net of cash) on our 2011E EPS versus 7.7x average for shares of the peer group. We believe that a premium multiple is appropriate given our view of the company's strong positioning (strong development capability and strong platform from its association with SOHU). Valuation for NTES Shares We maintain our Buy rating on NTES shares with a $55 price target, based on a 14x PE (net of cash) on our 2011 EPS estimate (versus 7.7x average for the shares of the Chinese gaming peer group, 19x for the diversified Chinese gaming and Internet group shares, and 35x for the broader Chinese internet and media group shares), which we believe is appropriate, given what we view as the company's strong pipeline and strong publishing platform. Valuation for GAME Shares We are incrementally positive on stabilizing Mir 2 performance and a healthy pipeline, and we reiterate our Buy rating on GAME shares with a price target of $8, which is based on an approximate 8x PE (net of cash) on our 2011 EPS estimate. We believe that an 8x multiple (roughly in line with an average multiple of 7.7x for shares of the peer group multiple) is appropriate given slightly higher risks with existing franchises. Valuation for GA Shares We are positive on an investment in GA shares given our view of a stabilizing ZT franchise and maintain our Hold rating with a price target to $8, which is predicated at a 13x PE on our 2011E EPS of $0.62 (6x PE net of cash) versus 14x for the peer group (7.7x net of cash). We believe that a small discount to the peer group shares is appropriate given the company’s dependence on a major franchise. Valuation for PWRD Shares We are optimistic about the company's international strategy and the longer-term prospect, given what we believe is a strong pipeline for 2011/2012—Swordsman Online, Sword Heaven Dragon Saber, Empire of Immortals, Torchlight, Meteor Online, and a couple unnamed games. We reiterate are Hold rating on PWRD shares with a price target of $24 predicated on a P/E multiple of approximately 8x our 2011E EPS (net of cash), roughly in line with an average 7.7x PE multiple for shares of companies in the Chinese gaming group, which we believe is appropriate given higher risks related to disruption in the company's existing franchises. Valuation for NCTY Shares Trading below cash (cash in hand at $9.15 per share), NCTY shares may look inexpensive. However, given our view of the company's relatively weaker positioning in China (no track record of a successful game over the last 12 months and a relatively weaker pipeline) and potential for more distraction stemming from its global strategy and given our expectation of cash burn, we base our price target of $4.50 per share on about 50% of the cash in hand. Page 9
  • 10. April 5, 2011 Industry Report RISKS TO PRICE TARGETS • Gaming continues to be a hit-or-miss-driven business, and predicting successful titles versus unsuccessful titles is extremely difficult. The risk is especially high for the new and unproven IPs, and a company's reliance on the new IPs and the titles in the established franchises to reach the revenue target opens it to risk of a revenue miss. • Macro headwinds and popularity of the used games and free-to-play online games. Given the current macro headwinds, used games and free-to-play online games create higher substitute competition for video games. • The industry is dependent on the console cycle; unexpected start of the new console cycle will likely constrain the revenue growth and affect profitability of gaming vendors. • Foreign currency exchange risk. These companies generate revenue from international operations, which exposes the companies to foreign currency exchange risk Page 10
  • 11. April 5, 2011 Industry Report COMPANIES MENTIONED IN THIS REPORT: Company Exchange Symbol Price Rating Activision Blizzard, Inc. NASDAQ ATVI $11.01 Buy Amazon.com, Inc. NASDAQ AMZN $182.94 Buy Apple Inc. NASDAQ AAPL $341.19 Buy Baidu, Inc. NASDAQ BIDU $143.11 Buy Changyou.com Limited NASDAQ CYOU $33.42 Buy Ctrip.com International, Ltd. NASDAQ CTRP $42.84 Buy Electronic Arts Inc. NASDAQ ERTS $19.69 Buy Expedia, Inc. NASDAQ EXPE $22.43 Hold Giant Interactive Group, Inc. NYSE GA $7.38 Hold Google, Inc. NASDAQ GOOG $587.68 Buy NetEase.com, Inc. NASDAQ NTES $51.71 Buy Netflix, Inc. NASDAQ NFLX $244.72 Buy OpenTable, Inc. NASDAQ OPEN $108.87 Hold Orbitz Worldwide, Inc. NYSE OWW $3.55 Hold Perfect World Co., Ltd. NASDAQ PWRD $22.36 Hold priceline.com Incorporated NASDAQ PCLN $518.59 Buy Shanda Games NASDAQ GAME $6.32 Buy Shanda Interactive Entertainment Limited NASDAQ SNDA $43.83 Hold Shutterfly, Inc. NASDAQ SFLY $50.09 Hold SINA Corporation NASDAQ SINA $116.56 Hold Take-Two Interactive Software NASDAQ TTWO $15.10 Buy The9 Limited NASDAQ NCTY $6.62 Sell THQ, Inc. NASDAQ THQI $4.48 Hold Travelzoo Inc. NASDAQ TZOO $76.29 Buy VistaPrint Ltd. NASDAQ VPRT $52.90 Buy Yahoo! NASDAQ YHOO $16.87 Buy Zoo Entertainment, Inc. NASDAQ ZOOG $4.44 Buy Important Research Disclosures Analyst Certification I, Atul Bagga, hereby certify that all of the views expressed in this research report accurately reflect my personal views about the subject securities and issuers. I also certify that no part of my compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed in this research report. The analyst(s) responsible for preparing this report has/have received compensation based on various factors, including the firm's total revenues, a portion of which is generated by investment banking activities. ThinkEquity LLC and/or an affiliate managed or co-managed a public offering of securities for Zoo Entertainment, Inc. in the past 12 months. ThinkEquity LLC makes a market in Activision Blizzard, Inc., Changyou.com Limited, Electronic Arts Inc., Giant Interactive Group, Inc., Shanda Games, The9 Limited, NetEase.com, Inc., Perfect World Co., Ltd., Shanda Interactive Entertainment Limited, THQ, Inc., Take-Two Interactive Software, Zoo Entertainment, Inc., Google, Inc., Apple Inc., Baidu, Inc., Ctrip.com International, Ltd., SINA Corporation, Amazon.com, Inc., Expedia, Inc., OpenTable, Inc., Netflix, Inc., Orbitz Worldwide, Inc., priceline.com Incorporated, Shutterfly, Inc., Travelzoo Inc., VistaPrint Ltd., and Yahoo! securities; and/or associated persons may sell to or buy from customers on a principal basis. ThinkEquity LLC has made affirmative disclosures concerning each of the covered securities mentioned in this report, including analyst holdings (if any), rating definitions and overall ratings distributions. These disclosures can be found in the most recent complete research report for each of the respective companies. Reports are available upon request. Rating Definitions Page 11
  • 12. April 5, 2011 Industry Report Effective October 7, 2009, ThinkEquity LLC moved from a four-tier Buy/Accumulate/Source of Funds/Sell rating system to a three-tier Buy/Hold/Sell system. The new ratings appear in our Distribution of Ratings, Firmwide chart. To request historical information, including previously published reports or statistical information, please call: 866-288-8206, or write to: Director of Research, ThinkEquity LLC, 600 Montgomery Street, San Francisco, California, 94111. Buy: ThinkEquity expects the stock to generate positive risk-adjusted returns of more than 10% over the next 12 months. ThinkEquity recommends initiating or increasing exposure to the stock. Hold: ThinkEquity expects the stock to generate risk-adjusted returns of +/-10% over the next 12 months. ThinkEquity believes the stock is fairly valued. Sell: ThinkEquity expects the stock to generate negative risk-adjusted returns of more than 10% during the next 12 months. ThinkEquity recommends decreasing exposure to the stock. Distribution of Ratings, Firmwide ThinkEquity LLC IB Serv./Past 12 Mos. Rating Count Percent Count Percent BUY [B] 149 66.80 24 16.11 HOLD [H] 72 32.30 0 0.00 SELL [S] 2 0.90 0 0.00 This report does not purport to be a complete statement of all material facts related to any company, industry, or security mentioned. The information provided, while not guaranteed as to accuracy or completeness, has been obtained from sources believed to be reliable. The opinions expressed reflect our judgment at this time and are subject to change without notice and may or may not be updated. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future performance. This notice shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which said offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state. This research report was originally prepared and distributed to institutional clients of ThinkEquity LLC. Recipients who are not market professionals or institutional clients of ThinkEquity LLC should seek the advice of their personal financial advisors before making any investment decisions based on this report. Additional information on the securities referenced is available upon request. In the event that this is a compendium report (covers more than six ThinkEquity LLC-covered subject companies), ThinkEquity LLC may choose to provide specific disclosures for the subject companies by reference. To request more information regarding these disclosures, please call: 866-288-8206, or write to: Director of Research, ThinkEquity LLC, 600 Montgomery Street, San Francisco, California, 94111. Stocks mentioned in this report are not covered by ThinkEquity LLC unless otherwise mentioned. Member of FINRA and SIPC. Copyright 2011 ThinkEquity LLC, A Panmure Gordon Company Page 12