CONFIDENTIAL

1. CONFIDENTIAL PRESENTATION TO: Annual EcoSystem Meeting Technology IPO Perspectives October 29, 2004

2. Table of Contents • Technology IPO Perspectives • 2005 IPO Market Outlook • Software Overview • Semiconductor Overview • Communications Overview • Google Case Study

3. 1 Technology IPO Perspectives

4. Technology IPO Perspectives 2004 Technology IPO Observations • 39 Technology IPOs priced YTD; up from 16 in 2003 • Technology is 25% of IPO market dollar volume; healthcare leads with 27% • Year-to-date returns up 24.2%; better than all other equity indices • Since Q2, it has been a buyer’s market • Window has opened a crack for smaller transactions (versus 2003) • Internet-related IPOs returned (with profits!) • First year that China has had a material impact; more to come • It was a nice media event, but Google did not impact investors’ technology IPO perceptions • High public company costs create barriers to IPO supply • IPOs occur in brief windows of opportunity

5. Technology IPO Perspectives Number of IPOs From All Industries (January 1, 1980 – October 22, 2004) Source: Securities Data Corporation

6. Technology IPO Perspectives Number of Technology IPOs (January 1, 1980 – October 28, 2004) Cyclicality of IPOs follows the evolution of new industries and broader economic themes Source: Securities Data Corporation

7. PC Revolution PC Revolution Networking Networking Internet Revolution Internet Revolution Retrenchment Retrenchment Retrenchment Retrenchment Technology IPO Perspectives Average Technology IPO Market Value and IPO Size (January 1, 1980 – October 28, 2004) Average IPO market value and size have steadily increased as investors demand greater liquidity and companies with greater critical mass Source: Securities Data Corporation Excludes Accenture and Agere IPOs in 2001; median data for 2004

8. Technology IPO Perspectives Technology IPOs by Sector Breakdown 2001– 2004 YTD (By # of Deals) 2004 YTD 2003 Software and Semiconductors consistently account for the largest IPO sectors 2002 2001 Source: Equidesk Excludes deals under $30M

9. Technology IPO Perspectives 2004 Technology IPO Market by Month • 39 deals have priced 2004 YTD, raising $9.3B • Since June, the IPO market has deteriorated • Equity funds flow is a key leading indicator • Deteriorating earnings forecasts and high energy prices on investor minds in 2H04 Technology IPO Issuance1 Equity Funds Flow ($ in billions)2 1 Dealogic; IPOs and IDSs filed/ revised within the last 180 days, current amount filed greater than or equal to $30mm 2 Bloomberg, AMG Database; AMG estimates based on a 1,000 firm survey

10. Technology IPO Perspectives 2004 Technology IPO Price Performance IPO pricing was strong in Q1 as investors were more confident in projected earnings Subsequent market shortcomings has led to poor aftermarket pricing results Since Q2, it has been a buyer’s market, leading to strong aftermarket gains Excludes deals under $30M

11. Technology IPO Perspectives 2004 Technology IPO Multiples Demonstrated earnings are an investor focus Excludes deals under $30M

12. Technology IPO Perspectives 2004 Technology IPO Multiples Excludes deals under $30M

13. Technology IPO Perspectives Impact of Election on New Issue Receptivity • New issue activity has historically continued through the US election period (including IPOs) • During the last two election years, November activity levels have been lower than October due to the election and (more importantly) U.S. Thanksgiving Holiday • Who wins may not be as important as how it is won… divisiveness is not good 1996 Election Equity Issuance Activity 2000 Election Equity Issuance Activity Source: Dealogic, Equidesk

14. Technology IPO Perspectives Asia’s Billion Boomers: The Case for Asia • Domestic consumption and infrastructure spending is driving Asian economic growth • All Asian economies will continue to report good economic growth. Intra-regional trade will continue to grow faster than the region’s trade with Europe and America • The economic growth center of gravity has shifted from U.S./Europe to China/India. India and China dominate the region and impact the world • Asia’s Billion Boomers will underpin regional economic growth just as America’s baby boomers shaped the U.S. economy from 1963-1999 • Asian natives with Silicon Valley executive experience are populating decision-making roles at companies, leading to greater comfort for U.S. investors • Increased presence by U.S. VCs adding to diligence comfort level • 5 IPOs in 2004; several in the shadow pipeline

15. Technology IPO Perspectives What are Company Metrics for a Technology IPO? Sizable end-market opportunity with leading market position Product and customer diversification Good visibility one year forward (the period valuation will be based upon) Critical mass – at least annual revenue rate of $60 mm Demonstrated momentum through quarterly sequential revenue and earnings growth Profitability in year of issuance Post-money market capitalization of at least $200 million Experienced management

16. 2 2005 IPO Market Outlook

17. 2005 IPO Market Outlook Technology IPOs Currently in Registration • 19 Technology IPOs in registration versus 10 at same time last year • Semiconductors and Software are largest sector components, consistent with history • Demands of marketplace are being heard… creating better supply/demand equilibrium Distribution by # of IPOs

18. 2005 IPO Market Outlook Software IPO Market Outlook • Overall sentiment for the software IPO market is “fair” • Salesforce.com and RightNow Technologies were both fairly well received • Up 83% and 95% respectively since IPO • Market will demand double digit revenue growth and profitability • Companies will need to project $80 – 100M of revenue within 18 months of an IPO • Uncertainty whether there is a “hot” area in the application sector • Security remains very strong within infrastructure software

19. 2005 IPO Market Outlook Semiconductor IPO Market Outlook • Only 4 of the 11 IPOs have outperformed Nasdaq since going public • Famously cyclical market • Inventory movements exacerbate cycle • Ever present threat of disruptive technologies • September pre-announcements spooked market • Temporary inventory correction? or beginning of cyclical downturn? • Wall Street has bi-polar view • Pollyanna or chicken little? • All eyes on a few marquee names

20. 2005 IPO Market Outlook Communications IPO Market Outlook • 2004 CapEx by carriers was a catch-up year; 2005 looks to be modestly up for wireless and more robust for wireline • FTTx trials hope to convert to revenue • Enterprise IT spending expected to grow slightly faster than economic growth (5%+) • Key areas of focus are security, storage, IP everywhere • Combination of factors make public markets difficult • Concentrated customer base • Accounting (revenue recognition) • Quarterly volatility / lumpiness of orders • Some segments will be more attractive • Security • Broadband/Triple play

21. 3 Google Case Study

22. Google Case Study Google: A Dutch-Auction Experiment • Despite feverish anticipation, Google failed to price within its range • After choosing an auction methodology designed to leave no “money-on-the-table”, Google priced below its range (43% below mid-point), and then saw its stock rise immediately after the IPO • Google’s shares traded up 18% after the first day of trading, and 25% after the first week • The auction process spooked institutional investors who feared involvement in an offering where terms could be significantly affected by retail investors • 60% of Google’s publicly traded shares are held by retail investors, which leads to the potential for excessive volatility • In addition to the lessons learned regarding auctions, Google’s IPO reinforced common wisdom regarding the IPO process • Avoid silly gun-jumping mistakes • Take care to adhere to all federal and blue sky requirements relating to options and private company stock • Avoid conducting a roadshow in August Filing Data Pricing Data