1.
Quarterly Market Update: Q3 2013
Digital Media & Internet

2.
Contact Us
Sandy Kory
Managing Director
650.776.8806
skory@horizonpartners.com
Executive Summary (3)
II.
Sector Trends (4)
III.
Mike Firmage
Managing Director
650.861.9090
mfirmage@horizonpartners.com
I.
M&A Overview (9)
IV.
Market Performance (16)
V.
IPO Overview (21)
VI.
Deals Outlook (27)
Allen Carey
Associate
440.554.2129
acarey@horizonpartners.com
Farooq Abbasi
Associate
708.228.7582
fabbasi@horizonpartners.com
1
1821 Union Street San Francisco, CA 94123

3.
Digital Media & Internet Industry Landscape
Marketing Technology
Automation/Analytics/SaaS
E
N
T
E
R
P
R
I
S
E
Digital Media
B2C
Social Networking
Comparison Shopping
Diversified
Gaming
2
Online Media
Traditional Media
C
O
N
S
U
M
E
R

4.
Executive Summary
Sector Trends

Developments in online commerce, big data, mobile apps , social engagement, content marketing and video are redefining consumers’ online engagement and hence, creating new ways for
businesses to connect with their audiences

Marketers are perceiving content marketing as a vehicle for long-lasting consumer engagement and effective digital targeting. Content marketers are using a multitude of platforms to
engage target audiences; number of channels used has increased by 50% over the last year

Companies offering content solutions that help consumers navigate the marketplace are partnering with technology companies to deliver innovative offerings that enhance the users’ digital
experience

As cloud services become the center of competition in many IT market segments, SaaS continues to be a hot sector, yielding high trading multiples
2013’Q3 Digital Media & Internet M&A Activity

2013’Q3 was the busiest 3rd quarter in the last 5 years as deal volumes registered an uptick with 632 deals. Aggregate deal values stood at $13.4 bn in 2013’Q3, up 86.8% over the same
quarter last year

In the mid-market space, deal volume was flat in 2013’Q3 compared to the previous quarter, and up 64% over the same quarter last year. YTD’2013 saw average deal sizes trending
upward, with 17 upper mid-market transactions (>$500 mn deal value), the highest in the last 5 years

2013’Q3 deals priced at an average EV/Revenue multiple of 3.6x, up from 2.9x in the previous quarter and higher than the 20-quarter average of 3.2x

North America attracted 51% of the global M&A activity; Asia/Pacific, Europe and Latin America exhibited strong increase in dealflow
Market Performance & IPO Activity

S&P Software outperformed the broader NASDAQ and S&P500 indices; this is indicative of an upbeat sector performance. CBOE Volatility Index (VIX) fell to 14.7%, below the one-year
average. Strength in investors’ confidence and interest in the sector continues to stimulate primary market activity


3
The last two quarters were the busiest quarters for IPOs since the Facebook public offering. Gross offerings stood at $2 bn in 2013’Q3, nearly 2x the offerings’ amount in the previous quarter
In 2013’Q3, IPOs exhibited an impressive performance, registering strong one-day and one-week gains, trending above the five-year averages. The pipeline is strong with announced IPOs
totalling >$2 bn YTD

5.
II. SECTOR TRENDS

6.
Digital Trends Reshaping the Way Businesses
Engage with Consumers
New ways in which consumers engage online and businesses connect with them
31% growth in worldwide smartphone
usage
 Digital media publishers are increasing focus on
optimizing website content and advertisements for
mobile devices
14x time spent online via mobile
compared to desktop
 Marketing analytics solutions are being increasingly
used to extract insights from digital information –
documents, Tweets, posts, pictures and video
100 hours of video/minute added on
YouTube each day
 Online businesses and marketers are looking for
innovative ways to engage with customers through
mobile apps
Consumer
5 mn photos added on Instagram
each day
Engagement…
…Is Driving Online
Media Trends
102 bn app downloads in 2013 (up 60%
from 2012)
2 bn user count crossed on Facebook
45% consumers searching for local
products use mobile first
Source: Edison Research; Centre for Media Research; Kleiner, Perkins, Caufield and Byers
5
 Consumers frequently use digital word of mouth to
make decisions; Social media and review sites become
important for marketers
 91% of in-house marketers use content marketing;
Focus is shifting to the integrated use of multiple online
platforms
 Video content is increasingly becoming an important
medium of communication with target audiences
 New ways to access information: trend is emerging in
wearable devices, such as Google Glass and Jawbone

7.
Technology Companies Forming Partnerships to
Enhance Consumers’ Experiences
Select indicative partnerships
 Allows Yelp’s site visitors to directly use
Booker’s booking capabilities
 Allows consumers to pay at ShopKeep POS
merchants using PayPal
 Integrate Square mobile payments for
Angie’s List service providers
 Partnership to enable users to book home
services directly on Yelp
 Allows Facebook users to book restaurant
reservations online
 Amex rewards and discounts tie-up with
Foursquare checkins
 Allows consumers to pay at Revel POS
merchants using LevelUp

Content providers that help consumers navigate the marketplace are looking for innovative ways to provide a better user experience

Partnerships with emerging cloud-based technologies like Square, Reachlocal, LevelUp, among others allow technology companies to
automate customer acquisition and monetization
Source: Street Fight Insights
6

8.
Content Marketing – Capitalizing on Engagement
Content rises in priority

% of respondents (marketing solution providers) citing the
following digital themes as one of their top 3 priorities
Content Marketing
36%
21%
38%
37%
Mobile Optimisation
37%
Social Media Engagement
Targeting & Personalization*
Conversion Rate Optimisation
54%
33%
32%
22%
Social Media Analytics
22%
Brand Building/Viral Marketing
21%
Content Optimisation
21%
Marketing Automation
Connected TV*
29%
39%
29%
2012
2013
2012
27%
32%

2013
While social media engagement still ranks highly with 37% of
respondents, it saw a meaningful drop from 54% in 2012. Social
media was a top priority for marketers a year ago – a promising but
unproven channel; it has apparently lost some of that luster in 2013
29%
12%
6%
9%
Video Marketing
“The most important opportunity is content, as this pervades all the
digital media that we are using to reach our audiences”
18%
3%
Source: Adobe & Econsultancy’s Digital Marketing Trends Survey
7
% of respondents citing
content marketing as
one of the top 3 digital
priorities
33%
Integrating Online and Offline
Data
Content marketing emerged as a key focus area for marketing
solution providers with a jump to 36% from only 21% a year ago. A
similar result was observed for in-house marketers:
*Newly added survey options
– Adobe’s Digital Marketing Trends
Survey Responder

9.
Marketing Technologies Driven by Content
Marketers’ Multi-Platform Focus
Content marketers use a multitude of platforms to engage target audiences
100%
87%
83%
78%
80%
Average Number of
Channels Used by a
Content Marketer
77%
71%
70%
70%
69%
61%
2010-11 Avg.
2012
59%
60%
50%
44%
38%
Digital Media
Source: Content Marketing Institute B2B Marketers’ Survey 2013
Traditional Print
34%
20%
11%
Filings
Print Newsletters
26%
Digital Magazines
26%
Mobile Apps
27%
Licensed Content
28%
Podcasts
29%
Virtual Conference
31%
Games
0%
35%
32%
Books
Mobile Content
Branded Content Tools
Infographics
Microsites
Research Reports
Webinars/Webcasts
White Papers
In-person Events
Articles on Other Websites
Videos
Case Studies
Blogs
20%
eNewsletters
30%
Articles on Own Website
33%
Print Magazines
38%
eBooks
40%
40%
10%
8
12
8
70%
Social Media
% of B2B Marketers claiming to use a channel for marketing
90%

10.
III. M&A OVERVIEW

11.
Momentum Building in Digital Media & Internet
M&A Activity
Deal volumes register an uptick in the latest quarter
$25
608
567
$20
700
647
517
513
535
510
584
581
603
632
583
567
555
577
600
529
480
500
449
415
414
$15
357
353
371
400
300
$10
19.9
13.7
$5
11.5
7.8
3.3
4.2
3.5
6.1
3.6
7.7
8.7
7.3
8.4
7.2
6.9
100
6.8
4.9
4.2
2.8
$0
0
08'Q1
08'Q2
08'Q3
08'Q4
09'Q1
09'Q2
09'Q3
09'Q4
10'Q1
Deal Value in $ bn (LHS)
10'Q2
10'Q3
10'Q4
11'Q1
Deal Volume (RHS)
11'Q2
11'Q3
11'Q4
12'Q1
12'Q2
12'Q3
12'Q4
13'Q1
13'Q2
13'Q3
Average Annual Deal Value

2013'Q3 saw deal volume in the Digital Media & Internet space up 9.5% Q/Q, and up 8.4% over the same quarter last year

In terms of the number of deals, 2013'Q3 was the second busiest quarter in the last 5 years, and the busiest 3rd quarter in the last 5 years

Aggregate deal values were relatively flat from the prior quarter and up 86.8% over 2012’Q3

The average deal raised $84 mn, maintaining the uptrend over the 20-quarter (5-year) average of $54 mn
Source: Capital-IQ; Note: Deals refer to announced deals not cancelled till date
10
200
10.6
9.8
7.1
13.4

12.
Mid-Market Deal Volume Stabilizes; Ticket Size
Continues To Rise
Mid-market deal activity off the year’s highs, but remains on an uptrend
$7.0
30
28
$6.0
27
25
24
23
$5.0
25
23
20
18
18
16
$4.0
16
12
$3.0
8
$1.0
2.8
2.2
2.2
1.3
2.2
15
11
10
4.3
3.8
3.8
3.6
2.4
18
13
11
8
$2.0
18
14
14
12
20
18
2.6
5
1.8
1.3
3.7
0.8
2.9
2.4
2.0
1.9
1.6
3.3
2.8
2.5
$0.0
0
08'Q1
08'Q2
08'Q3
08'Q4
09'Q1
09'Q2
09'Q3
09'Q4
10'Q1
Deal Value in $ bn (LHS)
10'Q2
10'Q3
10'Q4
11'Q1
11'Q2
11'Q3
Deal Volume (RHS)
11'Q4
12'Q1
12'Q2
12'Q3
12'Q4
13'Q1
13'Q2
13'Q3
Average Annual Deal Value

2013’Q3 deal volume in the mid-market Digital Media & Internet space was flat compared to the prior quarter and up 64% over 2012’Q3

Aggregate mid-market deal value was down 11% from the prior quarter and up 219% over 2012’Q3

The average mid-market deal raised $161 mn, higher than the 20-quarter (5-year) average of $147 mn
Source: Capital-IQ; Note: Deals in range $50-$500 mn are considered Mid Market Deals; Deal statistics refer to deals with disclosed values only
11

13.
Larger Deals Boost Average Transaction Sizes
Rise in high-value deals… Leading to higher average transaction sizes
Deal Values ($ bn)
YTD’13,
$73.1 mn
85
3.8
3.2
3.8
8.0
3.5
6.9
2.1
5.8
7.1
3.3
7.7
23.2
20.2
13.7
11.5
6.9
YTD'08
YTD'09
Deals (>=$500 mn)
5.6
YTD'10
YTD'11
Deals (~$50-$500 mn)
YTD'12
75
Average Deal Size ($ mn)
9.9
Deals (<=$50 mn)
7
YTD’12,
$53.1 mn
55
YTD’08,
$42.2 mn
45
YTD’09,
$43.4 mn
35
35
13
70
17
YTD’10,
$36.2 mn
* Bubble Size reflects Deal Value
(Disclosed deals > $50 mn)
25
13
46
65
YTD'13
Deal Volume
7
YTD’11,
$71.8 mn
45
55
65
75
Deal Volume (Deals >$50 mn)
85
95
52
50
49

YTD’2013 saw deal sizes climbing up, with 17 deals in the midto-large market space, the highest in the last 5 years

Big ticket deals (>$500 mn) raised $20.2 bn in YTD’2013, up
47% over the same period last year

6
The average deal raised $73.1 mn in YTD’2013, higher than any
comparable period in the last 5 years
38
465
400
432
401
297
YTD'08
YTD'09
Deals (<=$50 mn)
YTD'10
YTD'11
Deals (~$50-$500 mn)
YTD'12
Deals (>=$500 mn)
Source: Capital-IQ; Note: Deal statistics refer to deals with disclosed values only
12
364
YTD'13

14.
M&A Activity Marked by Higher Purchase Multiples
Acquisition multiples higher than the five-year average
$368
$213
$146
$100
$38
$29
$46
$120
$104
$40
$36
$104
$72
$29
$51
5.3x
3.8x
3.5x
2.9x
2.3x
08'Q2
08'Q3
2.2x
08'Q4
2.1x
09'Q1
09'Q2
1.9x
09'Q3
09'Q4
2.2x
10'Q1
2.8x
10'Q2
EV/Revenues (LHS)
10'Q3
3.2x
10'Q4
$39
2.8x
2.6x
11'Q1
$32
$24
$64
$47
$62
5.6x
5.0x
3.4x
08'Q1
$108
$68
11'Q2
11'Q3
11'Q4
3.3x
12'Q1
3.8x
12'Q2
3.5x
12'Q3
3.3x
12'Q4
3.6x
2.9x
2.9x
13'Q1
13'Q2
13'Q3
Average Target LTM Revenues (RHS)

2013'Q3 M&A deals exhibited an average acquisition EV/Revenue multiple higher than that of the previous quarter and above the 20-quarter
average of 3.2x

The average revenue size of the acquired company shot up to $368 mn, nearly a 5x increase compared to the previous quarter. Average size
was boosted by EBay's acquisition of Bureau of Trade ($15 bn company), and Blackberry’s deal with ScrOOn ($10 bn company)

The quarter witnessed average target stock premiums (from 1-week prior to announcement) of 25%
Source: Capital-IQ; Note: Multiples based on non-cancelled deals with reported multiples only
13

15.
2013’Q3 Announced Transactions
Select List
Date Announced
Target
Acquirer
Deal Value ($ mn)
Target Rev. ($ mn)
EV/REV.
Announced
1050.0
441.3
2.1x
Announced
147.0
NA
NA
Sep 30
The Active Network, Inc.
Sep 30
Leshi Internet Information and Technology
Dongyang Huaer Entertainment Media Co Ltd.
Corporation
Sep 30
FastConnect SAS
Bull Société Anonyme
Closed
NA
NA
NA
Sep 30
AdStack, Inc.
TellApart, Inc.
Closed
NA
NA
NA
Sep 30
Find A Grave, Inc.
Ancestry.com LLC
Closed
NA
NA
NA
Sep 30
pepperbill GmbH
Sky & Sand GmbH
Closed
NA
NA
NA
Sep 30
Lainetar Oy
Innofactor Plc
Closed
NA
NA
NA
Sep 30
Choose Energy, LLC
Power2Switch LLC
Closed
NA
NA
NA
Sep 30
My New Financial Advisor, Inc.
Invested.in Inc.
Effective
NA
NA
NA
Sep 30
ScrOOn SA
BlackBerry Limited
Closed
NA
NA
NA
Sep 30
Funshion Networks Co., Ltd.
Bestv New Media Co., Ltd.
Closed
NA
NA
NA
Sep 27
Think Design Media Inc., Certain Assets
Ubiquity Broadcasting Corporation
(OTCBB:UBIQ)
Closed
2.4
NA
NA
Sep 26
Braintree Payment Solutions, LLC
PayPal, Inc.
Announced
800.0
NA
NA
Sep 25
Meetic S.A.
Match.com, L.L.C.
Announced
73.8
223.9
2.4x
Sep 23
VINtek, Inc.
Dealertrack Technologies, Inc.
Closed
53.4
NA
NA
Sep 09
MoPub, Inc.
Twitter, Inc.
Closed
350.0
NA
NA
Sep 05
Grapple Mobile Limited
Monitise Create Limited
Closed
59.7
NA
NA
Sep 04
Renesas Mobile Europe Oy and LTE-Related
Assets
Broadcom Corp.
Closed
164.0
NA
NA
Sep 04
OB10 Ltd.
Tungsten Corporation Plc
Announced
154.9
NA
NA
Aug 30
Cumulus Media Inc., 53 Radio Stations
Townsquare Media LLC
Announced
238.0
NA
NA
Aug 23
Omnitracs, Inc.
Vista Equity Partners
Announced
800.0
NA
NA
Source: Capital-IQ
14
Vista Equity Partners
Status

16.
2013’Q3 Announced Transactions
Select List
Date Announced
Target
Acquirer
Status
Deal Value ($ mn)
Target Rev. ($ mn)
EV/REV.
Announced
186.8
53.4
3.5x
Aug 19
Arsys Internet S.L.
1&1 Internet AG
Aug 19
e-conomic international a/s
HgCapital; HgCapital Trust plc
Closed
120.6
NA
NA
Aug 19
Locu, Inc.
The Go Daddy Group, Inc.
Closed
70.0
NA
NA
Aug 19
NMD Interactive, Inc.
Zillow, Inc.
Closed
50.0
NA
NA
Aug 17
ShopRunner, Inc.
Alibaba Group Holding Limited
Effective
75.0
NA
NA
Aug 13
Jumptap, Inc.
Millennial Media Inc. (NYSE:MM)
Announced
261.3
63.6
4.1x
Aug 12
Digital Generation, Inc., TV Business And
Advertising Distribution Business Unit
Extreme Reach, Inc.
Announced
490.0
NA
NA
Aug 07
Adap.tv, Inc.
AOL Inc.
Closed
405.0
NA
NA
Aug 05
Adam Internet Holdings Pty Ltd
iiNet Ltd.
Closed
53.4
NA
NA
Aug 01
Monoprice, Inc.
Blucora, Inc.
Closed
180.0
131.1
1.4x
Jul 26
Activision Blizzard, Inc.
Leonard Green & Partners, L.P.; Davis Selected
Advisers LP; Tencent Holdings Ltd.
Closed
2338.8
4984.0
2.1x
Jul 22
Fortress Paradise Limited
China Public Procurement Limited
Announced
773.4
NA
NA
Jul 19
Host Europe WVS Limited
Cinven Limited
Closed
668.0
NA
NA
Jul 18
LOEN Entertainment, Inc.
Star Invest Holdings Limited
Closed
236.3
175.0
2.1x
Jul 17
Cineplex Digital Networks
Cineplex Inc.
Closed
112.3
24.9
4.5x
Jul 17
Quest Resource Management Group, LLC
Earth911 Inc.
Closed
77.0
131.0
1.2x
Jul 15
91 Wireless Websoft Limited
Baidu, Inc.
Closed
1847.9
45.2
40.9x
Jul 15
Cupid plc, Casual Dating Businesses
Grendall Investment Limited
Announced
65.0
NA
NA
Jul 10
Voxeo Corporation
Aspect Software, Inc.
Closed
145.0
NA
NA
Jul 03
Opta Sportsdata Limited
Perform Group plc.
Effective
61.1
16.5
3.7x
Jul 01
Digital Insight Corporation
Thoma Bravo, LLC
Closed
1025.0
305.0
3.4x
Source: Capital-IQ
15

17.
IV. MARKET PERFORMANCE

18.
Upbeat Market Performance
S&P Software outperforms; Low volatility signals higher investor confidence
S&P Software outperformed the broader NASDAQ and S&P500 indices
Index Returns
Last 3-month
Last 6-month
LTM
S&P 500
8.4%
32.9%
10.5%
14.8%
40.5%
S&P 500 Software Industry Index
140
8.2%
NASDAQ Composite
150
7.7%
15.0%
43.2%
130
120
110
100
90
11/12
12/12
01/13
02/13
03/13
S&P 500
04/13
05/13
NASDAQ Composite
06/13
07/13
S&P Select Software
08/13
09/13
10/13
11/13
Low volatility signals higher investor confidence
Volatility trading in a narrow range below 1-year average; Investor
confidence expected to lead to increased capital market activity
24.0%
22.0%
20.0%
18.0%
16.0%
14.0%
12.0%
10.0%
11/12
Source: Bloomberg
17
12/12
01/13
02/13
03/13
04/13
05/13
CBOE Volatility Index
06/13
Average Volatility
07/13
08/13
09/13
10/13
11/13

19.
Trading Comparables – Digital Media
Comparables
Market data
Company
Name
Operational Data
% of 52
Share Price
Market
Week High
Cap.
3,436
Trading Multiples
Revenues
2yr Rev.
LTM EBITDA
EV/Revenues
EV/EBITDA
EV
LTM
CAGR (%)
Margin (%)
LTM
CY+1
LTM
CY+1
3,374
2,240
0.4%
18.6%
1.5x
1.5x
8.1x
7.2x
All values are in $ mn, except share price and per share data
Digital Media
AOL
44.66
95.1%
Yahoo
36.30
99.0%
36,824
35,092
4,760
-4.2%
24.9%
7.4x
7.9x
29.6x
23.3x
Google
1034.07
98.6%
345,470
297,871
57,386
26.7%
30.7%
5.2x
5.0x
16.9x
13.8x
Trulia
37.50
71.1%
1,399
1,363
115
NA
-2.6%
11.9x
9.5x
NM
NM
TripAdvisor
87.27
96.5%
12,398
12,342
901
20.4%
36.3%
13.7x
13.2x
37.7x
32.9x
Shutterstock
73.24
96.2%
2,564
2,368
217
NA
20.6%
10.9x
10.1x
NM
46.5x
LinkedIn
220.61
85.7%
26,342
24,070
1,385
78.2%
12.1%
17.4x
15.8x
NM
NM
Bankrate
18.94
81.8%
1,922
2,027
428
5.1%
21.8%
4.7x
4.5x
21.7x
17.3x
Demand Media
5.24
53.0%
470
414
401
13.0%
15.8%
1.0x
1.0x
6.6x
4.8x
Facebook
46.70
85.2%
114,640
105,887
6,871
NA
47.5%
15.4x
13.9x
32.4x
23.5x
Gannett
26.46
93.6%
6,030
7,442
5,312
0.0%
20.0%
1.4x
1.4x
7.0x
7.2x
IAC/InterActiveCorp
56.25
96.2%
4,685
4,583
3,064
26.5%
17.6%
1.5x
1.5x
8.5x
7.8x
WebMD Health
38.75
94.8%
1,742
1,665
502
-6.7%
12.2%
3.3x
3.2x
27.1x
13.9x
Yelp
63.93
84.8%
4,444
4,343
203
66.2%
-0.3%
21.3x
18.9x
NM
NM
Zillow
74.98
72.8%
2,920
2,555
174
76.5%
-5.5%
14.7x
13.1x
NM
NM
j2 Global
46.72
83.1%
2,142
2,079
485
23.8%
41.7%
4.3x
4.0x
10.3x
9.1x
RetailMeNot
31.13
78.8%
1,574
1,481
182
NA
34.9%
8.1x
7.4x
23.3x
19.4x
Netflix
348.50
89.6%
20,651
20,016
4,145
19.0%
5.1%
4.8x
4.6x
NM
NM
Mean
8.3x
7.6x
19.1x
17.4x
Median
6.3x
6.2x
19.3x
13.9x
Min
1.0x
1.0x
6.6x
4.8x
Max
21.3x
18.9x
37.7x
46.5x
Source: Capital-IQ; Note: All values as of November 21, 2013
18

20.
Trading Comparables – Marketing Technology
Comparables
Market data
Company
Name
Operational Data
% of 52
Share Price
Market
Week High
Cap.
28,109
Trading Multiples
Revenues
2yr Rev.
LTM EBITDA
EV/Revenues
EV/EBITDA
EV
LTM
CAGR (%)
Margin (%)
LTM
CY+1
LTM
CY+1
26,465
4,167
1.2%
23.3%
6.4x
6.5x
27.3x
22.1x
All values are in $ mn, except share price and per share data
Marketing Technology
Adobe Systems
56.23
97.0%
Constant Contact
27.03
91.0%
829
722
277
16.4%
8.5%
2.6x
2.5x
30.8x
15.7x
Demandware
55.83
85.7%
1,785
1,675
95
36.9%
-15.8%
17.7x
16.5x
NM
NM
Bazaarvoice
7.38
64.2%
551
476
176
45.1%
-17.8%
2.7x
2.7x
NM
NM
Brightcove
13.91
85.6%
400
366
104
34.9%
-5.6%
3.5x
3.4x
NM
NM
Jive Software
10.56
57.1%
731
624
139
41.5%
-38.9%
4.5x
4.3x
NM
NM
ValueClick
21.21
65.8%
1,416
1,556
684
19.1%
32.7%
2.3x
2.7x
6.9x
7.0x
Web.com
27.85
82.6%
1,327
1,910
473
70.1%
19.2%
4.0x
3.6x
21.0x
12.4x
Responsys
16.26
89.2%
836
728
194
23.0%
6.9%
3.7x
3.6x
NM
30.2x
Rocket Fuel
48.15
70.2%
1,580
1,482
195
NA
-7.7%
7.6x
6.4x
NM
NM
Salesforce.com
54.44
93.3%
32,446
34,200
3,760
34.1%
0.2%
9.1x
8.4x
NM
NM
LivePerson
11.65
76.7%
631
553
173
17.1%
5.4%
3.2x
3.1x
NM
27.6x
Marketo
29.46
74.0%
1,119
986
85
NA
-42.7%
11.7x
10.4x
NM
NM
OpenTable
84.00
96.0%
1,955
1,852
181
16.5%
31.3%
10.2x
9.8x
32.7x
22.8x
1,159.11
99.6%
59,611
55,333
6,443
25.4%
37.4%
8.6x
8.2x
22.9x
21.1x
12.71
73.1%
353
268
502
18.8%
1.9%
0.5x
0.5x
27.9x
9.3x
Mean
6.1x
5.8x
24.2x
18.7x
Median
4.3x
3.9x
27.3x
21.1x
Min
0.5x
0.5x
6.9x
7.0x
Max
17.7x
16.5x
32.7x
30.2x
Priceline.com
ReachLocal
Source: Capital-IQ; Note: All values as of November 21, 2013
19

21.
Trading Comparables – Other Notable Companies
Comparables
Market data
Company
Name
Operational Data
Trading Multiples
% of 52
Share Price
Market
Revenues
2yr Rev.
LTM EBITDA
Week High
Cap.
EV
LTM
CAGR (%)
Margin (%)
LTM
EV/Revenues
CY+1
LTM
EV/EBITDA
CY+1
All values are in $ mn, except share price and per share data
Other Notable Companies
Amazon.com
368.92
98.8%
168,867
164,221
70,133
26.8%
4.5%
2.3x
2.2x
NM
32.7x
Apple
521.14
87.6%
468,886
445,256
170,910
25.7%
32.6%
2.6x
2.6x
8.0x
8.0x
AVG Technologies
17.48
65.8%
952
936
400
25.2%
33.0%
2.3x
2.3x
7.1x
6.6x
eBay
50.21
86.5%
65,002
59,262
15,510
20.0%
29.7%
3.8x
3.7x
12.9x
11.0x
IBM
184.13
85.3%
199,938
225,976
101,356
-2.4%
25.6%
2.2x
2.3x
8.7x
8.4x
Intuit
73.16
98.9%
20,683
19,521
4,231
5.3%
34.4%
4.6x
4.5x
13.4x
11.6x
Oracle
34.94
95.9%
159,238
144,669
37,371
1.2%
43.5%
3.9x
3.9x
8.9x
7.9x
SAP AG
81.36
93.0%
97,101
99,860
22,646
10.1%
35.0%
4.4x
4.4x
12.6x
12.6x
Microsoft
37.40
97.9%
312,214
248,805
80,370
6.3%
39.0%
3.1x
3.0x
7.9x
7.9x
Mean
3.3x
3.2x
9.9x
11.8x
Median
3.1x
3.0x
8.8x
8.4x
Min
2.2x
2.2x
7.1x
6.6x
Max
4.6x
4.5x
13.4x
32.7x
Source: Capital-IQ; Note: All values as of November 21, 2013
20

22.
V. IPO OVERVIEW

23.
Buzzing IPO Activity in Digital Media & Internet
IPOs remain on an uptrend
$4
35
31
$4
28
27
$3
23
$3
23
24
25
21
20
23
$2
18
15
3.1
10
$1
2.8
10
7
7
1.9
4
2.4
0.1
$0
08'Q2
08'Q3
0.4
08'Q4
0.2
09'Q2
8
1.8
1.1
9
2.1
0.7
0.5
2.5
0.3
0.6
0
09'Q3
09'Q4
10'Q1
10'Q2
Deal Value in $ bn (LHS)
10'Q3
10'Q4
11'Q1
11'Q2
11'Q3
11'Q4
12'Q1
12'Q2
12'Q3
12'Q4
13'Q1
13'Q2
13'Q3
Deal Volume (RHS)

2013'Q3 announced IPOs in the Digital Media & Internet space were up 9.5% Q/Q, relatively flat from the prior quarter and up 80% over
2012’Q2

2013'Q3, together with 2013'Q2, were the busiest quarters for IPOs since the Facebook public offering. Gross offerings in 2013’Q3 stood at
nearly 2x the offered amount in the previous quarter

The average IPO raised $123 mn, up from $58 mn in the same quarter last year
Source: Capital-IQ; Note: 2012’Q1 deal value exclusive of the 16 bn Facebook IPO; Deals refer to effective, closed and announced IPOs not withdrawn till date
22
10
5
1.1
0.9
0.1
09'Q1
10
2.3
1.8
0.7
08'Q1
20
15
3.4
3.2
$1
18
16
14
$2
30
27

24.
Impressive IPO Performance
2013'Q3 IPOs Fared Well, Registering Notable 1-Day and 1-Week Gains
Avg. 1-Day Return (%)
100%
37%
2013'Q3 IPOs registered the best average
one-day performance in the last 18 quarters
20-Quarter Average
64%
41%
38%
30%
37%
42%
39%
30%
24%
35%
45%
39%
38%
43%
32%
28%
25%
18%
15%
22%
28%
-1%
08'Q1
37%
08'Q2
08'Q3
08'Q4
20-Quarter Average
09'Q1
09'Q2
09'Q3
09'Q4
10'Q1
100%
10'Q2
10'Q3
10'Q4
11'Q1
11'Q2
11'Q3
11'Q4
12'Q1
12'Q2
12'Q3
12'Q4
13'Q1
13'Q2
13'Q3
2013”Q3 IPO Avg. 1-Week gain nearly
3x that in same period last year
Avg. 1-Week Return (%)
65%
54%
48%
37%
20%
41%
33%
50%
42%
33%
40%
33%
31%
28%
23%
20%
44%
32%
17%
15%
13%
-9%
08'Q1
08'Q2
08'Q3
08'Q4
09'Q1
09'Q2
09'Q3
09'Q4
10'Q1
10'Q2
10'Q3
Source: Capital-IQ; Note: Deals refer to effective, closed and announced IPOs not withdrawn till date
23
10'Q4
11'Q1
11'Q2
11'Q3
11'Q4
12'Q1
12'Q2
12'Q3
12'Q4
13'Q1
13'Q2
13'Q3

25.
Vibrant IPO Activity Marked by Well-Performing
Offerings
YTD’2013 Closed IPOs
Date Announced
Company
Offering Size ($ mn)
IPO Price/Share ($)
1-Day Performance Business
416.0
1.89
28.0%
Online foreign exchange services
Mobile messaging platform
Sep 23, 2013
OzForex Group Limited
Sep 06, 2013
Macromac
0.8
0.16
50.0%
Aug 26, 2013
RingCentral
97.5
13.00
-
Aug 16, 2013
Rocket Fuel
116.0
29.00
93.5%
Artificial-intelligence digital advertising solutions
Aug 14, 2013
Benefitfocus
130.8
26.50
102.1%
Cloud based solutions for insurance carriers
Aug 13, 2013
CentralNic
10.8
0.85
19.1%
Domain name registry services
Jul 31, 2013
RapidCloud International
1.6
0.83
28.7%
SaaS solutions for Web and mobile online applications
Jul 23, 2013
99 Wuxian
18.9
0.38
12.5%
Mobile online marketplace
Jul 08, 2013
Cvent
117.6
21.00
-
Online events and meetings
Jul 02, 2013
YuMe
46.1
9.00
-
Digital video brand advertising solutions
Jul 01, 2013
Control4 Corporation
64.0
16.00
-
Automation and control solutions for the connected home
Jun 17, 2013
RetailMeNot
190.9
21.00
-
Digital coupon marketplace
Jun 06, 2013
Photocreate
3.3
16.51
130.2%
E-commerce platform for event photos
May 23, 2013
Tremor Video
75.0
10.00
-10.0%
Technology-driven video advertising solutions
May 14, 2013
Covisint Corporation
64.0
10.00
23.1%
Business process management platform
May 09, 2013
Outsourcery
19.2
1.66
15.0%
Mobile virtual service provider
May 06, 2013
SLI Systems
21.5
1.20
18.7%
site search and navigation technology provider
Apr 17, 2013
Ymagis Société Anonyme
15.2
10.07
-8.5%
Digital cinema solutions for exhibitors and distributors
Apr 11, 2013
Liquid Holdings Group
28.6
9.00
-
Apr 11, 2013
ChannelAdvisor
80.5
14.00
31.7%
E-Commerce channel management
Apr 05, 2013
Textura Corporation
75.0
15.00
39.4%
Online collaboration platform for the construction industry
Source: Capital-IQ
24
SaaS solutions for business communications
Trading and real-time risk management solutions

26.
Vibrant IPO Activity Marked by Well-Performing
Offerings (Contd.)
YTD’2013 Closed IPOs
Date Announced
Company
Offering Size ($ mn)
IPO Price/Share ($)
1-Day Performance Business
Apr 04, 2013
Cyan
88.0
11.00
1.0%
Carrier-grade networking solutions
Apr 02, 2013
Marketo
78.8
13.00
77.7%
Cloud-based marketing software platform
Apr 02, 2013
Tableau Software
254.2
31.00
63.7%
Business analytics software products
Apr 02, 2013
Halogen Software
55.0
11.47
-
Mar 22, 2013
Aucfan
8.4
26.15
130.0%
Mar 21, 2013
SoMedia Networks
3.1
0.81
5.9%
Cloud-based video content platform
Mar 11, 2013
Rally Software Development
84.0
14.00
27.2%
Software lifecycle management solutions
Feb 19, 2013
Starcom
4.1
0.30
12.5%
Remote tracking and fleet monitoring solutions
Feb 15, 2013
Broadleaf
213.4
11.36
37.0%
After-market automobile software solutions
Feb 14, 2013
MC-link
3.4
10.08
-
Voice, Internet, data and managed services
Feb 13, 2013
Marin Software
105.0
14.00
16.1%
Feb 13, 2013
Model N
104.5
15.50
-
Revenue management solutions
Jan 11, 2013
Xoom Corporation
101.2
16.00
-
Consumer-to-consumer online money transfers services
Dec 26, 2012
Mono Technology
91.8
0.37
4.4%
Nov 28, 2012
GankIt
0.1
0.01
-
E-Commerce bidding website
Oct 24, 2012
Energizer Tennis
0.0
0.04
-
Resources for tennis players
Aug 13, 2012
Just Dial
154.2
8.62
-
Local services' search platform
May 22, 2012
Professional Diversity Network
21.0
8.00
-
Professional networking site and job board
Dec 22, 2011
Gogo
187.0
17.00
-5.9%
Oct 02, 2009
West Corporation
425.5
20.00
-
Source: Capital-IQ
25
SaaS based talent management solutions
Online auction services
Cloud-based digital advertising management platform
Digital content and services
In-flight digital entertainment solutions
Technology-driven communication services

27.
IPO Pipeline Encouraging
YTD’2013 Announced IPOs
Date Announced
Company
Logo
Offering Size ($ mn)
IPO Price/Share ($) Business
Sep 30, 2013
Qunar Cayman Islands
125.0
-
Online travel commerce and advertising platform
Sep 27, 2013
58.com
150.0
-
On-line classified advertisement services
Sep 18, 2013
Criteo
187.2
23.00 to 26.00
Advertisement analytics
Sep 09, 2013
Endurance International
374.2
14.00 to 16.00
Cloud-based marketing solutions
Oct 10, 2013
Twitter
1,400.0
17.00 to 20.00
Online microblogging platform
Aug 27, 2013
Globant
86.3
-
Content management systems, marketing solutions
Aug 14, 2013
Chegg,
150.0
-
Student-first connected learning platform
Source: Capital-IQ
26

28.
VI. DEALS OUTLOOK

29.
Optimistic Outlook for Deals
Strategic Transactions and Strong Buyer Interest to Drive Deal Activity
Technology Companies to
Stay in Demand
Marketing Automation &
SaaS Attractive
Consolidation among
Marketing Agencies
Industry-Focused and
Content Marketing
Companies to Garner
Interest
Buzzing Primary Market
Activity
Source: Mtech Advisors
28
 As technology players continue to challenge conventional operating models, larger companies will snap up emerging
innovative players in the Digital Media and Internet space
 The trend in acquisitions at high multiples is expected to continue
 The prevalence of marketing automation is accelerating. Increasing focus by digital marketers and local companies on
automating certain aspects of their workflow is expected to be one of the major drivers for M&A
 Cloud computing continues to be a bright spot, with software as a service (SaaS) companies specifically being a hot target
for high-multiple deals
 There has been a substantial increase in interactive/digital marketing agencies in the past five years
 Such businesses will continue to experience consolidation, similar to the “dot com” experience a decade ago
 Companies with an industry-specific focus (healthcare, insurance, retail, communications and financial services among
others) will attract much strategic investor interest
 Given the increased focus by enterprises on content marketing, an opportunity exists for vendors with proven track
records and quantifiable ROI across multiple channels such as search, display/web, social, mobile, e-mail, video
 Capital market activity is expected to be vibrant as fresh companies pique investor interest
 The IPO pipeline is strong with over $2 bn in announced IPOs YTD, including the much anticipated Twitter IPO

30.
Digital Media
29
Interactive Marketing
Mobile
Software