Grouper Service Update Presentation for the Board September 26, 2006 Draft v2

1. Grouper Service UpdatePresentation for the Board September 26, 2006 Draft v2 CONFIDENTIAL

2. Deal Status Service Summary Strategic Rationale Grouper Acquisition Summary • SPE completed the Grouper Networks acquisition on August 21, 2006 • Total consideration of up to $65MM • $52.5MM was paid at closing • $12.5MM contingent consideration will be paid subject to performance metrics for the next three years (revenue, streams, employee retention) • Represents a compelling standalone business opportunity • Provides SPE opportunity from the growth of online advertising • Provides upside opportunity as Grouper leverages SPE’s content and advertising sales, and SPE’s traditional businesses work with Grouper • Offers potential support for other Sony businesses and additional digital services • Multi-platform Video Distribution Network focused on watching, sharing, and creating user generated video • Significant traction demonstrated with customers • Robust technology • Syndicates video to other sites through one-click posting • P2P proprietary technology • Video portability to multiple devices (PSP, iPod) • Widely distributes easy-to-use video editing tools

3. User Generated Video • Allow audience to watch and share videos created and uploaded by users • Primarily advertising based revenues Grouper Expands SPE’s Online Presence With a Specific Focus on User Generated Video Social Network Store Channel Promotional • Online communities enabling interactivity between users • Primarily advertising based revenues • Aggregate video across providers for purchase • Includes sell-thru, rental, and subscription • On-demand videos programmed in channels or on a show-by-show basis • Advertising supported, with some upsell to subscription • Short video clips promoting the site owner’s content, merchandise, and brand • May include some advertising and limited commerce capabilities

4. Positive Market Reaction to the Grouper Acquisition The market sees Grouper’s value as a standalone service for user-generated video . . . • The acquisition of Grouper is, without a doubt, an interesting one and furtherunderlines the importance of user-generated content (Inside Digital TV) • A good strategic grab. Grouper was a shiny target for Sony (Business Week Online) • Immediately gives Sonya significant presence in Internet video distribution (Variety) • Reinforces positive investment thesis for the broadband video sharing subsector, driven by: (1) strong usage growth, (2) current excess of demand relative to supply of advertising inventory, (3) synergies with mainstream content, (4) the proliferation of digital video capture devices for consumers, and (5) innovation in consumer-oriented video editing tools (Rutberg and Co., Investment bank) Updating to be more graphical, including pictures of quoting publications . . . and upside opportunity to leverage SPE content and Sony devices • A ready-made network to deliver both Hollywood produced content and niche-market consumer-created videos using viral distribution (eWeek) • Gives Grouper access to Sony’s television and movie content, enabling it to develop video community sites around the new material, thus generating more traffic and ad dollars (Business Week Online) • A way to distribute video content through broadband Internet connections directly to the TV (Variety) • Sony could use Grouper to sell and distribute TV shows and films that can be then moved to computers or its PlayStation Portable (Creative Strategies Analyst quoted in CNN Money)

5. Grouper Demonstration Flash based demo will include the “Grouper on CNN” Clip User-generated Sony ad from Current TV CONFIDENTIAL

6. Grouper Product Roadmap (1/2) Q3/FYE07 Q4/FYE07 Q1/FYE08 Q2/FYE08 Platform Release Text Features • Text Paull requesting detail form Grouper management • Text Device Support • Text Back-end

7. Grouper Product Roadmap (2/2) Q3/FYE08 Q4/FYE08 Q1/FYE09 Q2/FYE09 Platform Release Text Features • Text Paull requesting detail form Grouper management • Text Device Support • Text Back-end

8. Grouper Budget and Mid-range Plan

9. Revenue Assumptions

10. Video ads Sponsored placement Search Banner ads Overview of Grouper Revenue Strategy Revenue drivers Description Operational Approach • Traditional banner ads driven by page views, banner CPM, and inventory sales rate • Expand and leverage SPT ad sales • Incorporate with offerings to traditional customer base • Expand to new customers • Led by current head of SPT Ad Sales • Hiring dedicated new media sales force • Leverage ad agency relationships • In-stream pre-roll ads placed in 1/4 to 1/3 of videos driven by number of ad-supported streams, ad duration, video CPM, and inventory sales rate • Premium advertising, placement, and promotion bundles customized for select major advertisers • Leverage distribution relationships • Strike partnership deals with major “new media” players, e.g., AOL, Yahoo!, Google • Contextual ads delivered during the search process Ad Revenues Commencing Early CY 2007

11. Phase 1 Phase 2 Phase 3 Cross-Sony Grouper Integration Timeline March 2007 Sept 2007 March 2008 SPE integration • Primary focus on growing traffic • Complete basic integration • Payroll • Technology infrastructure • Marketing integration • Ad sales • Maintain primary focus on growing traffic; begin monetizing traffic • Implement limited number of high-impact new features • Develop Grouper-focused ad sales capabilities/organization • Maintain focus on growth and increase focus on profitability • Implement limited number of high-impact new features • Continue to evolve ad sales toward “world class” levels Sony co-marketing • In-depth planning • Launch selected intra-Sony initiatives that require limited resources • Launch initial campaigns with light product integration • Launch longer lead-time campaigns with heavy product integration Sony product integration • Identification, prioritization, and evaluation of initiatives • Familiarize Sony hardware and service group with standard Grouper API • Develop “proof of concept”/prioritize initiatives across Sony groups • Implement low-touch, “quick win” initiatives identified in Phase 1 • Launch 2-3 top integration initiatives • Corporate Alliances to facilitate communications between Sony divisions and Grouper • Close working relationship between Tim Schaaff and Grouper engineering team/CEO

12. Examples of Cross-Sony Integration Opportunities Sony Hardware Products Other Sony Business Units PlayStation • Incorporate Grouper into PS3 online service Sony BMG • Add music videos to Grouper mylo • Include Grouper in second generation product Sony Ericsson • Upload videos from mobile phones Televisions • Align IPTV plans with Grouper product roadmap Camcorders • Potential direct posting of video from WiFi enabled camcorders Technology Strategy / Business Development Groups Digital Cameras • Potential direct posting of video from WiFi enabled digital cameras • SEL Corporate Development • SCA Advanced Technologies • Tokyo Electronics Strategy • Tokyo IPTV Group • PSBG • Inclusion of a Grouper shortcut on the VAIO desktop VAIO • Download of Grouper content if eBooks expand to support video eBooks Connect (hardware) • Incorporate Grouper in product planning for Digital Video Players

13. Back-up Slides CONFIDENTIAL

14. User Generated Video is Growing Quickly and Attracting Large Audiences for Digital Video Content Monthly Unique Users (mm) Grouper* User Generated Video Sites Social Networks Store Channel Promotional Source: Nielsen NetRatings. Figures as of 9/19/06. Grouper unique user numbers as provided by company. Number of unique users represents US base of direct and embedded. Worldwide unique users total approximately 8 million.

15. Store Channel Promotional • Aggregate video across providers for purchase • Includes sell-thru, rental, and subscription • On-demand videos programmed in channels or on a show-by-show basis • Advertising supported, with some upsell to subscription • Short video clips promoting the site owner’s content, merchandise, and brand • May include some advertising and limited commerce capabilities Grouper Expands SPE’s Online Presence With a Specific Focus on User Generated Video User Generated Video • Allow audience to watch and share videos created and uploaded by users • Primarily advertising based revenues

16. User Generated Video is Growing Quickly and Attracting the Largest Audiences for Digital Video Content Monthly Unique Users (mm) Grouper* User Generated Video Store Channel Promotional Source: Nielsen NetRatings. Figures as of 9/19/06. Grouper unique user numbers as provided by company. Number of unique users represents US base of direct and embedded. Worldwide unique users total approximately 8 million.