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What’s The New Deal In E-Commerce?

What’s The New Deal In E-Commerce?. Montpellier, 2004. Internet: ACT II. Ben Tompkins Managing Director (London). I N F O R M A T I O N T E C H N O L O G Y C O M M U N I C A T I O N S H E A L T H C A R E T E C H N O L O G Y D I G I T A L M E D I A.

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What’s The New Deal In E-Commerce?

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  1. What’s The New Deal In E-Commerce? Montpellier, 2004 Internet: ACT II Ben Tompkins Managing Director (London) I N F O R M A T I O N T E C H N O L O G Y C O M M U N I C A T I O N S H E A L T H C A R E T E C H N O L O G Y D I G I T A L M E D I A BROADVIEW INTERNATIONAL, A DIVISION OF JEFFERIES INTERNATIONAL LTD, AUTHORISED AND REGULATED BY THE FINANCIAL SERVICES AUTHORITY

  2. Broadview Overview • Leading global M&A advisor serving the digital media, IT, communications and healthcare technology industries • As a division of Jefferies, Broadview provides access to a full suite of investment banking services and capabilities • Broadview’s team of 90 bankers is one of the largest dedicated to the technology industry • 30-year track record bringing superior industry expertise and access • Over 430 M&A transactions valued at more than $62 billion since 1998* • Over $1.6 billion raised in strategic private placements over the same period* * As of August 2004, includes services provided by Broadview International LLC, Broadview International Ltd., and Broadview International, A Division of Jefferies & Company, Inc.

  3. China Finance Online Co. Limited has been acquired by has sold a minority interest in StepStone Deutschland AG has agreed to acquire Initial Public Offering to Co-Manager Axel Springer $80,600,000 Confidential Confidential €14,000,000 October 2004 Pending October 2004 Pending has been acquired by has been acquired by has been acquired by Follow-On Public Equity Offering Co-Manager €46,000,000 €475,000,000 Confidential $75,900,000 July 2004 July 2004 April 2004 May 2004 has sold substantially all of its operating assets to has been acquired by has been acquired by Follow-On Public Equity Offering Lead Manager C$153,000,000 $150,000,000 $56,000,000 December 2003 September 2003 April 2004 April 2003 Leadership In Digital Media Transactions

  4. All Internet Indexes Have Outperformed The NASDAQ In The Last 12 Months, Although It’s Been A Rocky Ride Daily Indexed Price Performance of Worldwide Consumer Internet Segments November 22, 2003 – November 22, 2004 180 160 +35% -40% 140 120 100 Index Performance 80 Marketing Services 55.0% Content & Services 27.4% Commerce / Retail 25.0% Commerce / Listings 17.2% NASDAQ 7.1% China 1.8% 60 40 20 0 Jul-04 Jun-04 Oct-04 Jan-04 Apr-04 Mar-04 Nov-03 Aug-04 May-04 Feb-04 Dec-03 Sep-04 Indexed prices are equally weighted. Commerce / Retail Composite Includes: ALOY, AMZN, BFLY, DSCM, ECST, FLWS, NFLX, NILE, OSTK, PCLN, PRVD, REDE Content / Media / Portal Composite Includes: CNET, EDET, KNOT, IVIL, JUPM, LOUD, MKTW, RATE, RNWK, T-Online, Tiscali, TSCM, YHOO Marketing Services Composite Includes: AQNT, ASKJ, CSAV, DCLK, DIGI, DTAS, FWHT, GOOG, INSP, LOOK, MAMA, MCHX, NTRT, RCOM, SHOP, TCOW, TFSM, TRFX, VCLK, WSSI Commerce/ Listings Composite Includes: ABTL, EBAY, EBKR, HOMS, IACI, LMIN, MNST, ORBZ, STMP, YPNT China Composite Includes: CTRP, JOBS, JRJC, KONG, LONG, LTON, NTES, SINA, SNDA, SOHU, TOMO

  5. The Leading US Buyers Are Back In The Market … • Europe is not a problem any more • Now profitable and twice the size • New European-based management • Fully integrated Overture – great fit with TradeDoubler • Very successful IPO and impressive execution (gmail, new paid search functionality, localisation search etc) • Strong focus on international expansion • Head of M&A is moving to Europe • Done with restructuring and is now focused on growth again • Clearer ‘buy-in’ at TW • Focus on expansion within marketing services • Acquired advertising.com

  6. … And There Are Some Interesting New Entrants • Telitas • Mobivillage • Highly valued Japanese mobile services company • Using stock and cash to diversify geographically • Zingy • iTouch • US payments / security technology provider • Acquired Jamba! • Focused on building digital media content that drives payments • Back in acquisition mode • Renewed interest in Europe post Active Hotels deal

  7. Broadview Forecasts Over 50 Digital Media M&A Deals In 2004 – Up Over 100% Worldwide Internet Media & Services M&A Transactions, Announced Equity Consideration $20 Million Or Greater January 1, 1999 – November 22, 2004 60 290 Q1 Q2 50 240 Q3 Q4 40 NASDAQ 190 30 Deal Count Indexed Prices 140 20 90 10 0 40 1999 2000 2001 2002 2003 2004YTD 1) Broadview Estimate

  8. … And There Have Been Some High Value Digital Media M&A Exits acquired by acquired by acquired by acquired by acquired by Value:$575m P/R:12x P/EBIT:40x Currency: Cash Value:$57m P/R:9x P/EBIT:NM Currency: Shares Value:Conf. P/R:8x P/EBIT:23x Currency:Cash Value:$161m P/R:7x P/EBIT:15x Currency:Cash Value:$273m P/R:3x P/EBIT:NM Currency:Cash/ Shares

  9. The IPO Market Is Demonstrating a Recovery on a Selective Basis for High Quality Issuers • Median IPO on NASDAQ has had the following: • Revenue of $73 million • Revenue growth of 54% • EBIT margin of 7.5% • 4 quarters of profitability Tech IPO Activity – Number of Transactions 800 US Western Europe 415 700 289 600 500 No. of deals 400 398 323 300 200 23 100 20 55 17 78 25 35 16 0 1999 2000 2001 2002 2003 2004F

  10. 35 Sep 04 Nov 04 Digital Media IPOs In 2004 Have Received A Mixed Reception Date:18/08/04 Offering Amount:$1,700m TTM Revenue:$2,258m TTM RevenueGrowth:157% Quarters ofProfitability: 10 TTM EBIT Margin: 8.4% % Changefrom IPO: +98% Date:25/10/04 Offering Amount:$123.7m TTM Revenue:$84.0m TTM RevenueGrowth:113% Quarters ofProfitability: 5 TTM EBIT Margin: 11.1% % Changefrom IPO: +55% Date:28/09/04 Offering Amount:$88.8m TTM Revenue: $25.5m TTM RevenueGrowth:376% Quarters ofProfitability: 1 TTM EBIT Margin: NM % Changefrom IPO: +53% Stock Chart ($) Stock Chart ($) Stock Chart ($) 35 200 Nov 04 Aug 04 Oct 03 Nov 04

  11. As A Result Of High Value ‘Exits’, Investment Is Returning received investment from received investment from received investment from received investment from and Target:Developer of mobile multimedia entertainment Amount Raised:$18m (November 2004) To date Digital Bridges has raised $56.4m through Apax and Argo Target:Wireless games publisher Amount raised:$20m (Jul 2004) Target:Mobile games provider Amount raised:$19m (August 2004) adding to $44m received in June 2004 by General Catalyst Partners, Bessemer Venture Partners and eFund LLC Target:Mobile games provider Amount raised:$27m (August 2004)

  12. 60 50 40 30 Deal Count 20 10 0 1999 2000 2001 2002 2003 2004 What Buyers Want: Back To The Future ADVERTISING SUBSCRIPTION / LISTINGS / E-COMMERCE ADVERTISING

  13. What’s Hot For 2005? • Advertising is back • Mobile media is here (finally) … but get ready for a rough ride • Search, in all its forms, becomes more pervasive • Contextual search • Location search • etc. • Payments technology further enables all forms of ecommerce

  14. I N F O R M A T I O N T E C H N O L O G Y C O M M U N I C A T I O N S H E A L T H C A R E T E C H N O L O G Y M E D I A

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