Software Equity Group Flash Report Flash Report_January2009.pdfCAD Computer-aided Design CAM...

Software Equity Group, L.L.C.

p: (858) 509-2800f: (858) 509-2818

January 2009

Software Equity Group Flash Report

Selected M&A Transactionsand

Financial and Stock Market PerformancePublic Software Companies By Product Category

[email protected]

Copyright © 2009 by Software Equity Group, L.L.C., All Rights Reserved

San Diego, CA 9213012220 El Camino Real, #320

Public SaaS CompaniesPublic Internet Companies

www.softwareequity.com

mailto: [email protected]


ABOUT OUR FIRM

Software Equity Group is an investment bank and M&A advisory serving the software and technology sectors. Founded in 1992, our firm has represented and guided private companies throughout the United States and Canada, as well as Europe, Asia Pacific, Africa and Israel. We have advised public companies listed on the NASDAQ, NYSE, American, Toronto, London and Euronext exchanges. Software Equity Group also represents several of the world's leading private equity firms. We were recently ranked among the top ten investment banks worldwide for application software mergers and acquisitions.

Our value proposition is unique and compelling. We are skilled and accomplished investment bankers with extraordinary software, internet and technology domainexpertise. Our industry knowledge and experience span virtually every software product category, technology, market and delivery model, including Software-as-a Service (Saas), software on-demand and perpetual license. We have profound understanding of software company finances, operations and valuation. We monitor and analyze every publicly disclosed software M&A transaction, as well as the market, economy and technology trends that impact these deals. We're formidable negotiators and savvy dealmakers who facilitate strategic combinations that enhance shareholder value.

THE SEG SOFTWARE COMPANY MENTORING PROGRAM

As part of our informal mentoring program, we are currently guiding and advising some fifty software companies around the globe that are not yet exit candidates, but aspire to be in the next few years. We meet with them periodically, invite them to call whenever they’d like our opinion on an operational issue that might have exit implications later on, and we keep them apprised of M&A activity and financings in their product category. And the best news – we don’t charge for this mentoring advice. It’s complimentary. It’s our way of building value, and relationships.

We’re looking for a few more such relationships. We begin with an introductory phone call with companies interested in being mentored, followed by a more in-depth telephone conversation. We’ll then invite qualified candidates to meet personally with four or five members of our team at our San Diego office. During this three to four hour sit-down, we’ll discuss the current market, specifically as it relates to valuations, transactions and trends in your product category. We’ll assess the strengths and weakness of your financial performance, how that compares to other software companies your size, and how that relates to buyer expectations. We’ll discuss your market strategy, sales strategy, sales team track record, software and maintenance pricing strategies, equity structure, and a wide array of other factors that can materially impact your salability and valuation down the road. We’re a terrific sounding board. We’ll give you an informed, honest and frank opinion – that’s what we’re known for. And we’ll offer informed and insightful observations, ideas and options based on 17 years of working with countless software companies worldwide.

If you run a profitable software company with 2008 revenue in excess of $10 million, and you’re interested in learning more about SEG’s complimentary, no obligation mentoring program, please contact Kris Beible at [email protected] or 858-509-2800.

ADDITIONAL RESEARCH

For our complimentary current and archived Quarterly Reports from 1Q07, please visit: http://www.softwareequity.com/research_quarterly_reports.aspx

For our complimentary current and archived Monthly Flash Reports from July 2008, please visit: http://www.softwareequity.com/research_flash_reports.aspx

For our Annual Reports from 2003 through 2007, please visit: http://www.softwareequity.com/research_annual_reports.aspx


http://www.softwareequity.com/research_quarterly_reports.aspx

http://www.softwareequity.com/research_flash_reports.aspx

http://www.softwareequity.com/research_annual_reports.aspx

CAD Computer-aided DesignCAM Computer-aided ManufacturingCRM Customer Relationship ManagementEBITDA Earnings before Interest, Taxes, Depreciation, and AmortizationEV Enterprise ValueFCF Free Cash FlowFORWARD Current EV / Next Four Quarters' Consensus Financial EstimatesHR Human ResourcesNASDAQ National Association of Securities Dealers Automated Quotation SystemOS Operating SystemPLM Product Lifecycle ManagementR&D Research and DevelopmentS&P Standard & Poor'sSaaS Software-as-a-ServiceSEG Software Equity GroupSG&A Selling, General, & AdministrativeSW SoftwareTTM Trailing Twelve MonthYoY Year-over-YearYTD Year-to-date

List of Commonly Used Acronyms



December 2008

Selected Software Industry M&A Transactions

Selected December 2008 Software Industry M&A Transactions

Date Announced Target EV/ Revenue

12/30/2008 Eclipsys Corp. (NasdaqGS:ECLP) Premise Corporation - $38.5 -12/24/2008 Sagem Securite SA CardBASE Technologies Ltd. - $3.2 -12/24/2008 Lockheed Martin Corporation (NYSE:LMT) Universal Systems & Technology, Inc. - - -12/23/2008 BDNA Corporation PS’SOFT - - -12/23/2008 MER Telemanagement Solutions Ltd. (NasdaqCM:MTSL) AnchorPoint, Inc. - - -12/22/2008 Check Point Software Technologies Ltd. (NasdaqGS:CHKP) Nokia Corp., Security Appliance Business - - -12/20/2008 Ray Flame Entertainment, Inc. Peak Virtual Entertainment, Inc. - - -12/19/2008 Pegasus Imaging Corporation AccuSoft Corporation - - -12/19/2008 Trimble Navigation Ltd. (NasdaqGS:TRMB) KOREC, FastMap and GeoSite Software Assets - - -12/19/2008 OXSEED Aktiengesellschaft Maas High Tech Software GmbH - - -12/17/2008 ECI Partners, LLP Ascribe plc (AIM:ASP) $26.8 $48.9 1.8x12/17/2008 Autodesk, Inc. (NasdaqGS:ADSK) ALGOR, Inc. - $34.0 -12/17/2008 Rubik Financial Limited (ASX:RFL) Admerex Ltd., Software Business Operations - - -12/16/2008 Axeda Corporation Questra Corporation - - -12/16/2008 Alliance Imaging Inc. (NYSE:AIQ) Shared PET Imaging LLC $29.0 $43.0 1.5x12/16/2008 Tekelec International, SPRL mBalance BV - $60.1 -12/16/2008 Being Co. Ltd. (JASDAQ:4734) Plus by Plus.com $11.8 $2.9 0.2x12/15/2008 Sercel S.A. Quest Geo Solutions Limited - - -12/11/2008 Filogix Limited Partnership Cyence International Inc. - $31.1 -12/10/2008 Experian plc (LSE:EXPN) SearchAmerica, Inc. - $90.0 -12/10/2008 Emotive Communications, Inc. Sennari, Inc. - - -12/10/2008 Parametric Technology Corp. (NasdaqGS:PMTC) Synapsis Technology Inc. - - -12/09/2008 Salary.com, Inc. (NasdaqGM:SLRY) Genesys Software Systems, Inc. $8.0 $8.8 1.1x12/09/2008 Voxeo Corporation VoiceObjects AG - - -12/09/2008 Infogrames Entertainment SA (ENXTPA:IFG) Cryptic Studios, Inc. $17.0 $74.8 4.4x12/09/2008 Jonckers Translation & Engineering S.A. Locatech GmbH and Crossgap S.r.l. - - -12/08/2008 Micro Focus International plc (LSE:MCRO) Relativity Technologies, Inc. - $9.7 -12/08/2008 Flash Networks, Inc. Unipier Ltd. - - -12/08/2008 Altus Group Income Fund (TSX:AIF.UN) Harfan Technologies Inc. - - -12/08/2008 Norriq A/S Helios-IT SAK $14.9 - -12/07/2008 CSG Systems International Inc. (NasdaqGS:CSGS) Quaero Corporation - $24.5 -12/04/2008 Morningstar Inc. (NasdaqGS:MORN) 10-K Wizard Technology, LLC - $12.5 -12/03/2008 Orbis Technology Limited Electracade Ltd. - $3.8 -12/03/2008 PlanSource Instant Benefits Network, Inc. - - -12/02/2008 Electronic Arts Inc. (NasdaqGS:ERTS) J2MSoft Inc. - - -12/02/2008 Autodesk, Inc. (NasdaqGS:ADSK) Logimetrix, Inc. - - -12/01/2008 The FeedRoom, Inc. ClearStory Systems Inc. (OTCPK:CSYS) - - -12/01/2008 Cooper Industries Ltd. (NYSE:CBE) Cyme International, Inc. - - -12/01/2008 Crossflo Systems, Inc. Verras Medical, Inc. - - -12/01/2008 Versant Corp. (NasdaqCM:VSNT) Servo Software, Inc. - $2.4 -12/01/2008 I Power Solutions India Ltd (BSE:512405) Vanavil Technology Pvt. Ltd. - - -12/01/2008 Easy Retail AB; Ninetech AB FDT AB $3.6 - -


Target TTM Revenue ($mm)Acquirer

Implied Enterprise Value ($mm)

Category Performance

SEG Software Index


SEG Software Index: All CategoriesMarket Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth

EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/

EBITDA

YoY Stock Market Return

SEG Software Index $246.10 $246.69 $192.85 66.2% 13.1% 13.3% 1.1x 7.6x 1.3x 7.7x -47.9% Billing & Service Provisioning $560.19 $494.30 $312.26 48.2% 15.7% 14.2% 1.2x 5.1x 1.6x 5.6x -20.5% Business Intelligence $428.95 $262.40 $199.05 81.0% 18.2% 13.0% 1.0x 6.1x 1.2x 5.7x -62.0% Content/Document Management $383.73 $230.41 $219.21 72.5% 19.4% 13.2% 1.5x 7.6x 2.1x 7.7x -43.9% CRM, Marketing & Sales Software $43.17 $15.07 $92.99 58.7% 0.0% 4.7% 0.4x 7.9x 0.5x 9.5x -69.0% Database & File Management $694.46 $549.88 $270.02 83.1% 20.2% 17.5% 1.6x 7.0x 1.8x 7.7x -28.5% Development Tools, OS & Application Testing So $81.79 $59.19 $153.76 78.7% 6.8% 11.0% 1.0x 4.5x 1.3x 7.1x -54.5% eCommerce Enablement Software $135.93 $95.01 $174.28 61.7% 4.0% 36.8% 0.6x 15.3x 2.2x 14.4x -59.3% Education & eLearning $61.46 $33.31 $110.76 66.6% 7.3% 6.6% 0.4x 9.3x 0.7x 14.2x -66.5% Electronic Design Automation $433.17 $594.39 $831.28 82.4% 9.5% 2.8% 0.7x 5.4x 0.6x 1.7x -80.0% Engineering, PLM & CAD/CAM Software $871.35 $813.71 $831.28 82.4% 19.4% 10.1% 1.2x 6.3x 1.2x 5.3x -57.0% Enterprise Application Integration $899.92 $677.36 $644.47 70.8% 17.7% 13.7% 1.1x 6.0x 1.5x 6.5x -37.7% Enterprise Resource Planning $205.08 $370.24 $428.12 55.5% 13.0% 10.2% 0.7x 7.7x 0.8x 6.0x -63.3% Entertainment $246.10 $202.03 $186.99 51.5% 9.9% 5.5% 0.8x 5.4x 1.0x 6.9x -73.8% Financial Services Software $534.80 $534.18 $249.82 58.1% 21.1% 21.4% 1.7x 8.9x 2.0x 9.6x -42.7% Healthcare $358.29 $265.61 $145.82 55.8% 16.2% 6.5% 1.6x 11.0x 1.8x 13.1x -42.6% HR & Workforce Management $80.15 $38.77 $105.34 63.6% 3.8% 20.1% 0.8x 42.6x 0.8x 13.1x -55.8% Messaging, Conferencing & Communications $97.03 $58.25 $119.43 61.4% 10.9% 13.7% 0.5x 5.0x 0.7x 8.3x -47.7% Multimedia, Graphics, Digital Media $182.87 $220.36 $271.26 74.5% 13.3% 13.4% 0.8x 7.2x 0.9x 4.3x -51.0% Networking & Connectivity $811.34 $351.85 $445.54 76.5% 10.3% 14.9% 1.4x 12.3x 2.1x 7.5x -36.0% Security $277.37 $229.00 $126.37 71.8% 9.4% 20.3% 2.0x 11.5x 2.1x 9.1x -49.4% Storage & Systems Management Software $4,761.46 $3,981.28 $1,804.50 80.0% 20.6% 14.9% 1.5x 6.9x 1.8x 7.5x -41.4% Supply Chain Management & Logistics $144.43 $105.97 $239.98 57.4% 14.7% 5.4% 0.8x 5.3x 0.8x 4.9x -45.3% Web Analytics $556.92 $516.74 $293.05 75.2% 14.8% 24.5% 1.8x 9.3x 2.2x 8.9x -33.1% Wireless $138.94 $89.50 $134.94 44.1% 9.4% 27.8% 1.6x 12.6x 1.9x 8.8x -35.8%

TTM Revenue Growth 13.3%TTM EBITDA Growth 19.5%TTM Earnings Growth 1.9%Gross Profit Margin 66.2%EBITDA Margin 13.1%Net Income Margin 6.0%SG&A Expenses as a % of Total Revenue 39.9%R&D Expenses as a % of Total Revenue 15.8%

Current Ratio 1.9Quick Ratio 1.5Cash as Percent of Market Cap 32.8%Avg Days Outstanding: Accounts Receivable 71Avg Days Outstanding: Accounts Payable 42Working Capital to TTM Operating Expense Ratio 0.3

Levered FCF Margin 6.1%Cash from Operations Growth (YoY) 14.1%Cash from Investing Growth (YoY) 18.1%Cash from Financing Growth (YoY) -21.5%Levered FCF Growth (YoY) 9.3%


Category Name

Income Statement Analysis (Median)

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

January 2009 Monthly Flash Report

SEG SW Index Stock Market Return: Jan - Dec 2008

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S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Billing and Service ProvisioningCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth

EV/ Revenue EV/ EBITDA Forward EV/ Revenue

Forward EV/ EBITDA


Amdocs Limited DOX $3,726.17 $2,933.46 $3,162.10 35.9% 19.4% 11.5% 0.9x 4.8x 1.0x 4.5x -46.3%AsiaInfo Holdings, Inc. ASIA $523.46 $326.42 $162.63 49.0% 12.0% 31.0% 2.0x 16.7x 3.0x 28.0x 5.3%CSG Systems International, Inc. CSGS $596.93 $662.18 $461.90 47.5% 26.1% 14.8% 1.4x 5.5x 1.6x 5.6x 16.9%MIND C.T.I. Ltd. MNDO $15.33 $4.42 $20.40 67.8% 10.8% 13.6% 0.2x 2.0x n/a n/a -70.3%

Median: $560.19 $494.30 $312.26 48.2% 15.7% 14.2% 1.2x 5.1x 1.6x 5.6x -20.5%

TTM Revenue Growth 14.2%TTM EBITDA Growth 10.7%TTM Earnings Growth -3.1%Gross Profit Margin 48.2%EBITDA Margin 15.7%Net Income Margin 12.0%SG&A Expenses as a % of Total Revenue 19.4%R&D Expenses as a % of Total Revenue 13.4%


Levered FCF Margin 10.1%Cash from Operations Growth (YoY) 3.2%Cash from Investing Growth (YoY) -10.1%Cash from Financing Growth (YoY) 20.6%Levered FCF Growth (YoY) -6.4%






Billing & Service Provisioning Software Stock Market Return: Jan -Dec 2008

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0%

10%

20%

Billing & Service Provisioning SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Business IntelligenceCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth


Forward EV/ EBITDA


Actuate Corporation ACTU $175.29 $109.15 $137.01 81.0% 13.1% 0.3% 0.8x 6.1x 0.9x 4.2x -64.0%Datawatch Corporation DWCH $6.98 $2.09 $23.03 71.8% 5.9% -8.8% 0.1x 1.5x n/a n/a -80.1%Informatica Corporation INFA $1,206.49 $985.21 $445.16 81.2% 18.2% 20.6% 2.2x 12.1x 2.6x 14.8x -22.7%MicroStrategy Incorporated MSTR $428.95 $301.66 $375.92 81.2% 21.9% 13.0% 0.8x 3.7x 0.9x 3.1x -62.0%Pegasystems Inc. PEGA $433.83 $262.40 $199.05 59.6% 5.7% 31.7% 1.3x 23.1x n/a n/a 3.2%PROS Holdings PRO $146.11 $98.06 $73.61 74.3% 20.6% 28.0% 1.3x 6.5x 1.7x 8.4x -71.4%SPSS Inc. SPSS $471.64 $314.64 $308.46 93.2% 23.6% 9.2% 1.0x 4.3x 1.2x 5.7x -29.4%

Median: $428.95 $262.40 $199.05 81.0% 18.2% 13.0% 1.0x 6.1x 1.2x 5.7x -62.0%



Levered FCF Margin 9.0%Cash from Operations Growth (YoY) 1.2%Cash from Investing Growth (YoY) 29.1%Cash from Financing Growth (YoY) -40.7%Levered FCF Growth (YoY) -8.7%





Income Statement Analysis (Median) Business Intelligence Software Stock Market Return: Jan - Dec 2008

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Business Intelligence SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Content & Document ManagementCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth


Forward EV/ EBITDA


Adobe Systems Incorporated ADBE $11,176.62 $9,507.42 $3,579.89 89.9% 37.1% 13.4% 2.7x 7.2x 3.0x 6.4x -51.0%Datawatch Corporation DWCH $6.98 $2.09 $23.03 71.8% 5.9% -8.8% 0.1x 1.5x n/a n/a -80.1%EasyLink Services International ESIC $32.17 $62.69 $93.99 71.0% 23.7% 153.7% 0.7x 2.8x 0.7x n/a -56.7%Interwoven, Inc. IWOV $553.18 $390.31 $253.37 72.2% 15.0% 16.9% 1.5x 10.3x 1.8x n/a -16.3%Macrovision Corporation MVSN $1,261.75 $1,860.83 $270.82 83.8% 27.6% 432.1% 6.9x 24.9x 7.0x 21.3x -34.2%Ninetowns Internet Tech Grp Ltd. NINE $29.74 -$64.14 $15.92 72.8% -74.6% -1.0% n/a 5.4x n/a n/a -75.5%Open Text Corporation OTEX $1,587.07 $1,652.11 $744.19 74.0% 25.3% 13.0% 2.2x 8.8x 2.3x 8.9x -3.1%Vignette Corporation VIGN $214.28 $70.51 $185.05 65.6% 4.8% -3.5% 0.4x 8.0x 0.4x 2.5x -36.8%

Median: $383.73 $230.41 $219.21 72.5% 19.4% 13.2% 1.5x 7.6x 2.1x 7.7x -43.9%



Levered FCF Margin 3.4%Cash from Operations Growth (YoY) 1.0%Cash from Investing Growth (YoY) -45.0%Cash from Financing Growth (YoY) -31.3%Levered FCF Growth (YoY) -65.9%






Content & Document Management Software Stock Market Return: Jan - Dec 2008

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10%

Content & Document Management SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: CRM, Marketing, and SalesCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth


Forward EV/ EBITDA


Astea International Inc. ATEA $7.41 $3.71 $24.76 36.8% -1.3% -14.4% 0.1x n/a n/a n/a -65.0%Blackbaud, Inc. BLKB $570.38 $618.79 $292.05 62.3% 21.6% 23.5% 2.1x 9.8x 2.5x 9.4x -53.8%Chordiant Software, Inc. CHRD $69.19 $13.67 $112.96 69.0% 2.0% -9.3% 0.1x 6.0x 0.3x n/a -73.1%I-Many Inc. IMNY $10.71 $16.48 $37.24 55.1% -25.8% 1.6% 0.4x n/a 0.5x n/a -94.0%Rainmaker Systems Inc. RMKR $17.16 -$2.23 $73.01 43.9% -4.5% 7.8% n/a 0.7x n/a n/a -86.6%Unica Corporation UNCA $101.73 $54.45 $121.13 74.0% 1.4% 18.5% 0.4x 32.9x 0.6x 9.5x -47.6%

Median: $43.17 $15.07 $92.99 58.7% 0.0% 4.7% 0.4x 7.9x 0.5x 9.5x -69.0%

TTM Revenue Growth 4.7%TTM EBITDA Growth -64.0%TTM Earnings Growth -190.6%Gross Profit Margin 58.7%EBITDA Margin 0.0%Net Income Margin -10.9%SG&A Expenses as a % of Total Revenue 37.9%R&D Expenses as a % of Total Revenue 19.1%


Levered FCF Margin -6.8%Cash from Operations Growth (YoY) 33.8%Cash from Investing Growth (YoY) 27.4%Cash from Financing Growth (YoY) -0.4%Levered FCF Growth (YoY) 216.6%





Income Statement Analysis (Median) CRM, Marketing, & Sales Software Stock Market Return: Jan - Dec 2008

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CRM, Marketing, & Sales SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Database and File ManagementCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth


Forward EV/ EBITDA


BMC Software, Inc. BMC $5,102.04 $4,509.84 $1,830.10 76.9% 30.8% 11.7% 2.5x 8.0x 2.7x 7.7x -25.0%Double-Take Software DBTK $182.43 $114.54 $94.87 89.6% 22.2% 21.2% 1.2x 5.4x 1.6x 6.5x -60.4%Guidance Software, Inc. GUID $84.88 $51.15 $88.78 71.2% -4.7% 20.9% 0.6x n/a 0.8x n/a -73.0%Informatica Corporation INFA $1,206.49 $985.21 $445.16 81.2% 18.2% 20.6% 2.2x 12.1x 2.6x 14.8x -22.7%Oracle Corporation ORCL $89,973.34 $90,565.34 $23,526.00 78.4% 43.7% 17.1% 3.8x 8.8x 4.2x 9.1x -22.4%Pervasive Software Inc. PVSW $70.65 $23.85 $44.18 85.0% 13.9% 7.8% 0.5x 3.9x 0.8x n/a -1.5%Quest Software, Inc. QSFT $1,336.77 $1,055.60 $720.52 90.3% 15.9% 17.8% 1.5x 9.2x 1.7x n/a -32.0%Sybase, Inc. SY $1,954.21 $1,858.12 $1,122.04 70.8% 27.6% 13.7% 1.7x 6.0x 1.9x 6.5x -7.7%TigerLogic, Corp. TIGR $52.06 $39.83 $18.56 90.4% -14.1% -4.3% 2.1x n/a n/a n/a -62.5%Versant Corporation VSNT $55.72 $28.53 $25.30 92.6% 41.8% 19.6% 1.1x 2.7x n/a n/a -47.8%

Median: $694.46 $549.88 $270.02 83.1% 20.2% 17.5% 1.6x 7.0x 1.8x 7.7x -28.5%



Levered FCF Margin 11.0%Cash from Operations Growth (YoY) 9.2%Cash from Investing Growth (YoY) -94.2%Cash from Financing Growth (YoY) -18.4%Levered FCF Growth (YoY) 40.7%






Database & File Management Software Stock Market Return: Jan - Dec 2008

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10%

Database & File Management SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Development Tools, OS, and App TestingCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth


Forward EV/ EBITDA


Borland Software Corporation BORL $74.28 $66.80 $233.82 81.5% -3.5% -3.8% 0.3x n/a 0.3x n/a -66.8%BSQUARE Corporation BSQR $23.46 $13.68 $64.25 27.7% 5.9% 11.0% 0.2x 3.6x n/a n/a -65.2%Magic Software Enterprises Ltd. MGIC $37.75 $5.14 $62.59 57.1% 9.6% -6.6% 0.1x 0.9x n/a n/a -40.4%Microsoft Corporation MSFT $172,040.38 $154,304.38 $61,719.00 80.9% 42.6% 14.1% 2.5x 5.9x 2.7x 6.2x -46.5%Phoenix Technologies Ltd. PTEC $89.30 $51.58 $73.70 88.4% 2.3% 56.8% 0.7x 31.0x 1.0x 5.3x -75.8%Progress Software Corporation PRGS $757.41 $638.89 $515.56 67.7% 23.4% 4.5% 1.2x 5.3x 1.3x 5.4x -42.8%Red Hat, Inc. RHT $2,529.22 $2,056.09 $627.84 83.8% 19.0% 27.4% 3.3x 17.3x 4.2x 17.1x -37.5%SourceForge, Inc. LNUX $54.66 $17.69 $57.11 35.6% -4.7% 19.6% 0.3x n/a 0.5x 8.0x -63.4%TigerLogic, Corp. TIGR $52.06 $39.83 $18.56 90.4% -14.1% -4.3% 2.1x n/a n/a n/a -62.5%Wind River Systems, Inc. WIND $676.30 $595.64 $355.67 76.5% 7.6% 11.0% 1.7x 21.9x 1.9x 17.8x -1.9%

Median: $81.79 $59.19 $153.76 78.7% 6.8% 11.0% 1.0x 4.5x 1.3x 7.1x -54.5%








Income Statement Analysis (Median) Development Tools, OS, and App Testing Software Stock Market Return: Jan - Dec 2008

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Development Tools, OS, and App Testing SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: eCommerce Enablement SoftwareCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth


Forward EV/ EBITDA


Art Technology Group, Inc. ARTG $225.49 $168.93 $158.57 59.9% 5.3% 22.0% 1.1x 20.1x 1.4x 14.4x -60.2%CyberSource Corporation CYBS $805.88 $732.71 $212.21 50.9% 15.3% 129.5% 3.5x 22.6x 6.7x 52.4x -38.5%Imergent, Inc. IIG $46.37 $21.10 $122.85 72.2% -1.5% -20.8% 0.2x n/a n/a n/a -62.2%Optimal Group Inc. OPMR $11.62 -$22.08 $189.99 34.4% 2.7% 58.8% n/a n/a n/a n/a -88.9%Selectica, Inc. SLTC $20.68 -$4.24 $14.58 68.2% -49.3% -1.7% n/a 0.6x 0.0x n/a -58.4%VeriSign, Inc. VRSN $3,719.67 $4,390.91 $1,584.82 63.4% 26.7% 51.6% 2.8x 10.4x 3.1x 9.9x -49.4%

Median: $135.93 $95.01 $174.28 61.7% 4.0% 36.8% 0.6x 15.3x 2.2x 14.4x -59.3%

TTM Revenue Growth 36.8%TTM EBITDA Growth 53.1%TTM Earnings Growth -101.7%Gross Profit Margin 61.7%EBITDA Margin 4.0%Net Income Margin -16.8%SG&A Expenses as a % of Total Revenue 41.1%R&D Expenses as a % of Total Revenue 10.0%







Income Statement Analysis (Median) eCommerce Enablement Software Stock Market Return: Jan - Dec 2008

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eCommerce Enablement SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Education and eLearningCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth


Forward EV/ EBITDA


Blackboard Inc. BBBB $813.90 $857.96 $290.32 70.7% 17.0% 27.5% 3.0x 17.4x 3.7x 14.2x -36.8%PLATO Learning, Inc. TUTR $29.96 $9.94 $68.40 46.8% 7.8% -1.8% 0.1x 1.9x 0.1x 2.1x -66.5%Renaissance Learning, Inc. RLRN $260.81 $231.10 $113.89 75.1% 18.5% 7.9% 2.0x 10.9x 2.4x 18.8x -39.3%Saba Software, Inc. SABA $40.55 $25.87 $107.62 62.5% 3.1% 5.3% 0.2x 7.7x 0.3x 4.2x -72.9%Scientific Learning Corporation SCIL $29.25 $23.18 $46.57 74.9% -7.2% 3.4% 0.5x n/a 0.7x 16.3x -69.8%SumTotal Systems, Inc. SUMT $82.36 $40.74 $130.36 61.8% 6.9% 10.3% 0.3x 4.6x 0.4x 5.0x -43.9%

Median: $61.46 $33.31 $110.76 66.6% 7.3% 6.6% 0.4x 9.3x 0.7x 14.2x -66.5%

TTM Revenue Growth 6.6%TTM EBITDA Growth 52.8%TTM Earnings Growth 0.9%Gross Profit Margin 66.6%EBITDA Margin 7.3%Net Income Margin -2.7%SG&A Expenses as a % of Total Revenue 45.9%R&D Expenses as a % of Total Revenue 14.4%








Education & eLearning Software Stock Market Return: Jan - Dec 2008

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Education & Computer Based Training SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Electronic Design AutomationCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth


Forward EV/ EBITDA


Cadence Design Systems, Inc. CDNS $871.35 $813.71 $1,269.22 83.0% 11.0% -20.1% 0.6x 5.8x 0.6x 1.7x -80.0%Magma Design Automation, Inc. LAVA $41.28 $82.97 $214.42 77.0% 8.4% 20.4% 0.4x 4.6x 0.4x 1.7x -92.6%Mentor Graphics Corporation MENT $433.17 $594.39 $831.28 85.4% 9.5% n/a 0.7x 7.6x 0.7x 4.9x -57.0%PDF Solutions, Inc. PDFS $38.89 -$2.37 $84.78 62.6% -5.6% -4.6% n/a n/a 0.0x 0.3x -85.0%Synopsys, Inc. SNPS $2,582.54 $1,633.94 $1,336.95 82.4% 24.0% 10.3% 1.2x 5.1x 1.3x 5.6x -29.7%

Median: $433.17 $594.39 $831.28 82.4% 9.5% 2.8% 0.7x 5.4x 0.6x 1.7x -80.0%



Levered FCF Margin 0.0%Cash from Operations Growth (YoY) -38.0%Cash from Investing Growth (YoY) 18.1%Cash from Financing Growth (YoY) -231.0%Levered FCF Growth (YoY) -68.7%





Income Statement Analysis (Median) Electronic Design Automation Software Stock Market Return: Jan - Dec 2008

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Electronic Design Automation SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Engineering, PLM, & CAD/CAMCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth


Forward EV/ EBITDA


ANSYS, Inc. ANSS $2,545.69 $2,633.56 $454.27 86.0% 45.4% 26.4% 5.8x 12.8x 7.1x 13.7x -32.5%Autodesk, Inc. ADSK $4,292.70 $3,363.40 $2,424.50 90.9% 24.9% 17.1% 1.4x 5.6x 1.7x 6.0x -62.3%Cadence Design Systems, Inc. CDNS $871.35 $813.71 $1,269.22 83.0% 11.0% -20.1% 0.6x 5.8x 0.6x 1.7x -80.0%Dassault Systèmes DSY $5,046.63 $4,190.60 $1,790.28 84.5% 26.5% 5.6% 2.3x 8.8x 2.6x 9.1x -23.2%Magma Design Automation, Inc. LAVA $41.28 $82.97 $214.42 77.0% 8.4% 20.4% 0.4x 4.6x 0.4x 1.7x -92.6%Mentor Graphics Corporation MENT $433.17 $594.39 $831.28 85.4% 9.5% n/a 0.7x 7.6x 0.7x 4.9x -57.0%MSC.Software Corporation MSCS $280.79 $132.90 $260.46 80.8% 6.8% 7.8% 0.5x 7.5x 0.7x 15.8x -52.2%Parametric Technology Corporation PMTC $1,419.94 $1,251.70 $1,070.33 69.1% 19.4% 13.7% 1.2x 6.0x 1.2x 5.1x -32.5%PDF Solutions, Inc. PDFS $38.89 -$2.37 $84.78 62.6% -5.6% -4.6% n/a n/a 0.0x 0.3x -85.0%Stratasys, Inc. SSYS $210.46 $187.49 $122.76 54.1% 22.9% 9.8% 1.5x 6.7x 1.7x n/a -62.1%Synopsys, Inc. SNPS $2,582.54 $1,633.94 $1,336.95 82.4% 24.0% 10.3% 1.2x 5.1x 1.3x 5.6x -29.7%

Median: $871.35 $813.71 $831.28 82.4% 19.4% 10.1% 1.2x 6.3x 1.2x 5.3x -57.0%









Engineering, PLM, & CAD/CAM Software Stock Market Return: Jan - Dec 2008

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Engineering, PLM, & CAD/CAM SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Enterprise Application IntegrationCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth


Forward EV/ EBITDA


BluePhoenix Solutions, Ltd. BPHX $35.14 $18.87 $99.00 53.4% 8.1% 20.3% 0.2x 2.4x 0.4x n/a -90.3%Citrix Systems, Inc. CTXS $4,261.56 $3,800.49 $1,567.22 92.1% 17.9% 19.3% 2.4x 13.5x 2.9x 10.1x -38.1%Jacada Ltd. JCDA $45.27 $27.03 $23.68 49.3% -33.3% 6.7% 1.1x n/a n/a n/a -25.7%Sybase, Inc. SY $1,954.21 $1,858.12 $1,122.04 70.8% 27.6% 13.7% 1.7x 6.0x 1.9x 6.5x -7.7%TIBCO Software Inc. TIBX $899.92 $677.36 $644.47 72.4% 17.7% 11.6% 1.1x 5.9x 1.1x 5.0x -37.7%

Median: $899.92 $677.36 $644.47 70.8% 17.7% 13.7% 1.1x 6.0x 1.5x 6.5x -37.7%

TTM Revenue Growth 13.7%TTM EBITDA Growth -3.3%TTM Earnings Growth 1.0%Gross Profit Margin 70.8%EBITDA Margin 17.7%Net Income Margin 11.5%SG&A Expenses as a % of Total Revenue 43.1%R&D Expenses as a % of Total Revenue 17.8%







Income Statement Analysis (Median) Enterprise Application Integration Software Stock Market Return: Jan - Dec 2008

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Enterprise Application Integration SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Enterprise Resource PlanningCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth


Forward EV/ EBITDA


American Software, Inc. AMSW.A $106.20 $52.15 $82.71 52.1% 13.5% -7.4% 0.6x 4.7x 0.7x 4.4x -50.0%CDC Corporation CHIN.A $119.73 $176.45 $428.12 45.3% 4.4% 11.5% 0.4x 9.4x 0.5x 6.0x -77.6%Deltek PROJ $205.08 $370.24 $294.69 62.5% 21.0% 9.8% 1.3x 6.0x 1.4x 5.4x -67.9%Epicor Software Corporation EPIC $262.41 $506.49 $485.63 51.3% 13.0% 17.2% 1.0x 8.0x 1.3x 7.0x -63.3%Intuit Inc. INTU $7,550.24 $8,098.23 $3,107.42 81.3% 29.2% 12.3% 2.6x 8.9x 2.7x 8.9x -25.9%Lawson Software, Inc. LWSN $742.57 $629.63 $855.43 51.5% 11.6% 10.2% 0.7x 6.3x 0.8x 6.1x -55.7%QAD Inc. QADI $107.80 $88.62 $279.42 55.5% 4.1% 10.0% 0.3x 7.7x 0.4x 4.6x -64.3%SAP SAP $40,507.29 $38,335.89 $15,409.43 66.9% 29.5% 13.8% 2.5x 8.4x 2.9x 9.8x -29.7%SoftBrands, Inc. SBN $15.51 $55.54 $98.69 59.8% 9.2% 5.7% 0.6x 6.1x 0.6x 5.1x -80.3%

Median: $205.08 $370.24 $428.12 55.5% 13.0% 10.2% 0.7x 7.7x 0.8x 6.0x -63.3%








Income Statement Analysis (Median) Enterprise Resource Planning Software Stock Market Return: Jan - Dec 2008

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Enterprise Resource Planning SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: EntertainmentCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth


Forward EV/ EBITDA


Electronic Arts Inc. ERTS $4,922.31 $2,457.31 $4,328.00 51.5% -0.4% 47.7% 0.6x n/a 0.8x 7.4x -73.8%Giant Interactive GA $1,450.03 $622.70 $245.33 86.7% 63.5% n/a 2.5x n/a 3.6x 5.0x -51.5%Glu Mobile, Inc. GLUU $11.54 -$9.20 $86.33 72.3% -9.6% 37.0% n/a n/a n/a n/a -92.7%Konami Corporation KNM $3,365.88 $3,227.70 $3,335.26 33.6% 18.0% 5.5% 1.0x 5.4x 1.0x 6.4x -37.7%Majesco Entertainment Company COOL $14.16 $6.97 $57.74 37.7% 9.9% -4.7% 0.1x 1.2x 0.2x n/a -67.6%Midway Games Inc. MWY $16.58 $202.03 $182.29 2.2% -14.7% 3.3% 1.1x n/a 1.3x n/a -93.5%Perfect World PWRD $951.54 $750.02 $186.99 87.1% 53.5% n/a 4.0x 7.5x 9.7x 19.0x -41.2%Silverstar Holdings Ltd. SSTR $1.41 $9.46 $30.52 49.0% 2.1% 30.4% 0.3x 14.7x n/a n/a -96.0%THQ Inc. THQI $246.10 $86.94 $999.03 57.6% 13.7% 1.8% 0.1x 0.6x 0.1x n/a -87.0%

Median: $246.10 $202.03 $186.99 51.5% 9.9% 5.5% 0.8x 5.4x 1.0x 6.9x -73.8%









Entertainment Software Stock Market Return: Jan - Dec 2008

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Entertainment SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Financial ServicesCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth


Forward EV/ EBITDA


ACI Worldwide, Inc. ACIW $534.80 $515.46 $411.65 58.9% 8.6% n/a 1.3x 14.6x 1.5x 25.1x -19.5%Advent Software, Inc. ADVS $528.04 $451.92 $249.82 67.9% 12.0% 21.2% 1.8x 15.1x 2.3x 12.1x -63.9%Blackbaud, Inc. BLKB $570.38 $618.79 $292.05 62.3% 21.6% 23.5% 2.1x 9.8x 2.5x 9.4x -53.8%Bottomline Technologies EPAY $179.68 $149.30 $135.39 55.0% 5.0% 8.8% 1.1x 21.9x 1.1x 9.6x -49.0%DST Systems, Inc. DST $1,884.80 $3,063.80 $2,298.50 20.6% 20.6% 0.3% 1.3x 6.5x 1.9x 6.4x -54.3%Ebix, Inc. EBIX $228.99 $272.20 $66.81 81.9% 43.3% 67.4% 4.1x 9.4x n/a n/a -2.9%EPIQ Systems, Inc. EPIQ $559.83 $611.83 $216.97 52.6% 22.5% 22.9% 2.8x 12.5x 3.7x 12.7x -10.1%Fair Isaac Corporation FIC $749.96 $1,133.23 $744.84 63.1% 23.1% -5.0% 1.5x 6.6x 1.6x 7.4x -52.3%Fiserv FISV $5,706.22 $9,493.22 $4,808.00 34.5% 26.1% 54.3% 2.0x 7.6x 2.1x 9.7x -36.4%Fundtech Ltd. FNDT $102.85 $61.36 $120.65 54.9% 12.2% 22.7% 0.5x 4.2x 0.7x 4.9x -51.9%Goldleaf Financial Solutions, Inc. GFSI $13.42 $61.19 $76.47 75.9% 14.6% 36.2% 0.8x 5.5x 1.1x 9.6x -55.7%Jack Henry & Associates, Inc. JKHY $1,597.33 $1,591.67 $751.15 41.3% 30.2% 8.7% 2.1x 7.0x 2.2x 7.1x -24.2%Longtop Financial Technologies LFT $761.06 $552.91 $82.01 58.1% 16.2% 95.2% 6.7x 41.5x 9.0x 24.6x -35.6%Metavante Technologies, Inc. MV $1,916.00 $3,751.62 $1,682.10 34.1% 27.7% 6.7% 2.2x 8.0x 2.4x 8.0x -30.6%MSCI MXB $1,696.94 $1,873.04 $425.20 72.0% 41.5% 21.6% 4.4x 10.6x 5.6x 14.4x -54.6%NetSol Technologies Inc. NTWK $16.16 $28.59 $37.29 59.8% 25.9% 16.3% 0.8x 3.0x 0.8x 2.4x -73.4%Risk Metrics Group, Inc RMG $878.38 $1,017.34 $288.53 71.1% 29.0% 45.3% 3.5x 12.1x 4.4x 16.5x n/aS1 Corporation SONE $393.63 $331.53 $223.26 53.7% 16.7% 10.7% 1.5x 8.9x 1.8x 11.7x -1.1%Sapiens International SPNS $44.98 $45.90 $42.70 42.6% 11.1% -1.7% 1.1x n/a n/a n/a 44.4%TradeStation Group, Inc. TRAD $259.73 n/a $159.22 77.0% n/a 9.1% n/a n/a n/a n/a -57.8%Tyler Technologies, Inc. TYL $418.89 $394.61 $255.98 41.1% 19.3% 21.6% 1.5x 8.0x 1.9x n/a -12.9%

Median: $534.80 $534.18 $249.82 58.1% 21.1% 21.4% 1.7x 8.9x 2.0x 9.6x -42.7%



Levered FCF Margin 13.3%Cash from Operations Growth (YoY) 42.5%Cash from Investing Growth (YoY) -96.4%Cash from Financing Growth (YoY) 67.7%Levered FCF Growth (YoY) 50.6%






Financial Services Software Stock Market Return: Jan - Dec 2008

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Financial Services SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: HealthcareCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth


Forward EV/ EBITDA


Allscripts Healthcare Solutions Inc. MDRX $1,435.71 $1,437.23 $383.34 54.0% 16.7% n/a 3.7x 22.5x 5.1x 27.3x -44.4%AMICAS, Inc. AMCS $54.16 $0.14 $50.31 51.1% -3.2% 1.3% 0.0x n/a 0.2x n/a -41.6%Cerner Corporation CERN $3,098.25 $2,976.07 $1,604.79 82.7% 25.0% 6.5% 1.9x 7.4x 2.0x 8.4x -33.6%Computer Programs and Sys, Inc. CPSI $288.34 $264.26 $115.73 44.1% 20.7% 3.3% 2.3x 11.0x 2.6x 14.0x 17.5%Eclipsys Corporation ECLP $770.09 $731.56 $513.35 43.1% 11.0% 9.5% 1.4x 12.9x 1.6x 12.2x -45.3%Emageon Inc. EMAG $34.32 $14.89 $82.30 48.0% -6.9% -24.6% 0.2x n/a 0.2x 6.1x -60.8%eResearchTechnology, Inc. ERES $329.27 $266.95 $131.98 54.7% 41.4% 47.1% 2.0x 4.9x 2.8x n/a -45.1%MedAssets MDAS $766.27 $1,031.62 $249.89 81.4% 25.6% 45.6% 4.1x 16.1x 5.1x 16.8x -37.3%Merge Healthcare MRGE $69.72 $69.40 $57.28 67.6% 12.7% 0.8% 1.2x 9.6x 1.3x n/a 12.6%Omnicell, Inc. OMCL $387.31 $262.27 $247.76 51.8% 11.3% 25.0% 1.1x 9.4x 1.3x 8.1x -54.2%Phase Forward Incorporated PFWD $527.08 $371.76 $159.66 56.9% 15.6% 26.0% 2.3x 14.9x 3.1x 17.3x -43.7%Quality Systems, Inc. QSII $1,237.83 $1,169.95 $213.53 65.5% 34.7% 25.0% 5.5x 15.8x 6.2x 17.8x 37.8%Simulations Plus, Inc. SLP $15.59 $9.70 $8.97 76.6% 30.4% 1.2% 1.1x 3.6x 1.1x 3.0x -75.9%Vital Images, Inc. VTAL $203.59 $45.84 $67.41 77.2% -8.0% -8.3% 0.7x n/a 0.8x n/a -26.2%

Median: $358.29 $265.61 $145.82 55.8% 16.2% 6.5% 1.6x 11.0x 1.8x 13.1x -42.6%



Levered FCF Margin 7.1%Cash from Operations Growth (YoY) 15.2%Cash from Investing Growth (YoY) 7.3%Cash from Financing Growth (YoY) 9.7%Levered FCF Growth (YoY) 61.5%





Income Statement Analysis (Median) Healthcare Software Stock Market Return: Jan - Dec 2008

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Healthcare SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: HR and Workforce ManagementCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth


Forward EV/ EBITDA


Callidus Software Inc. CALD $80.15 $38.77 $105.34 43.8% -6.2% 5.1% 0.4x n/a 0.5x n/a -47.9%ClickSoftware Technologies Ltd. CKSW $51.69 $27.19 $48.55 63.6% 8.7% 24.7% 0.6x 6.5x 0.8x n/a -55.9%The Ultimate Software Group, Inc. ULTI $349.48 $330.36 $171.02 56.1% 3.8% 20.1% 1.9x 51.5x 2.5x 13.9x -55.8%Websense, Inc. WBSN $642.21 $718.84 $277.65 84.8% 6.1% 40.3% 2.6x 42.6x 3.2x 12.2x -16.6%Workstream Inc. WSTM $1.68 $20.03 $26.02 74.3% -42.2% -10.0% 0.8x n/a 0.8x n/a -95.4%

Median: $80.15 $38.77 $105.34 63.6% 3.8% 20.1% 0.8x 42.6x 0.8x 13.1x -55.8%



Levered FCF Margin -1.9%Cash from Operations Growth (YoY) 3.0%Cash from Investing Growth (YoY) 40.1%Cash from Financing Growth (YoY) -63.6%Levered FCF Growth (YoY) n/a






HR & Workforce Management Software Stock Market Return: Jan - Dec 2008

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HR & Workforce Management SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Messaging, Conferencing, and CommsCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth


Forward EV/ EBITDA


8x8 Inc. EGHT $28.05 $12.38 $64.84 66.2% 3.9% 13.3% 0.2x 4.9x 0.2x n/a -47.7%Evolving Systems, Inc. EVOL $15.91 $17.75 $36.86 61.0% 13.3% 3.3% 0.5x 3.6x 0.5x 2.9x -70.5%Interactive Intelligence, Inc. ININ $97.03 $47.71 $119.43 67.9% 7.8% 14.3% 0.4x 5.1x 0.6x 4.7x -79.2%NDS Group plc NNDS $3,280.89 $2,569.73 $827.44 60.7% 21.9% 10.3% 3.1x 14.2x 3.2x 11.9x -4.1%OpenTV Corp. OPTV $160.38 $64.22 $125.78 61.4% 17.2% 29.9% 0.5x 3.0x 0.7x n/a -17.3%SeaChange International, Inc. SEAC $206.67 $139.01 $195.72 52.8% 10.9% 13.7% 0.7x 6.5x 0.9x 12.3x -9.0%Zix Corporation ZIXI $71.39 $58.25 $27.85 63.3% -17.5% 22.8% 2.1x n/a 2.9x n/a -76.8%

Median: $97.03 $58.25 $119.43 61.4% 10.9% 13.7% 0.5x 5.0x 0.7x 8.3x -47.7%



Levered FCF Margin -0.4%Cash from Operations Growth (YoY) 57.6%Cash from Investing Growth (YoY) 112.2%Cash from Financing Growth (YoY) -39.0%Levered FCF Growth (YoY) -15.2%






Messaging, Conferencing, & Comms Software Stock Market Return: Jan - Dec 2008

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10%

Messaging, Conferencing, & Comms SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Multimedia, Graphics, and Digital MediaCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth


Forward EV/ EBITDA


Adobe Systems Incorporated ADBE $11,176.62 $9,507.42 $3,579.89 89.9% 37.1% 13.4% 2.7x 7.2x 3.0x 6.4x -51.0%Avid Technology, Inc. AVID $388.06 $265.62 $896.72 48.9% 1.4% -1.5% 0.3x 20.6x 0.3x 4.3x -63.3%Bitstream Inc. BITS $43.80 $27.98 $24.65 61.3% 11.9% 7.7% 1.1x 9.6x n/a n/a -25.2%Corel Corporation CRE $111.89 $220.36 $271.26 77.9% 21.0% 20.3% 0.8x 3.9x 0.9x 3.9x -46.7%DivX, Inc. DIVX $164.60 $51.55 $95.22 94.9% 13.7% 23.6% 0.5x 3.9x 0.7x 1.9x -63.1%MakeMusic! Inc. MMUS $11.59 $5.99 $15.27 84.6% 7.7% 9.0% 0.4x 5.1x n/a n/a -75.0%Monotype Imaging Holdings TYPE $182.87 $270.97 $111.01 91.8% 40.1% 7.7% 2.4x 6.1x 2.9x 6.7x -66.3%NICE Systems Ltd. NICE $1,317.95 $1,065.14 $604.65 61.2% 13.3% 23.3% 1.8x 13.2x 2.2x 10.4x -37.1%Nuance Communications, Inc. NUAN $2,388.31 $3,032.54 $868.46 66.5% 16.3% 44.3% 3.5x 21.4x 3.6x 12.2x -46.4%RealNetworks, Inc. RNWK $479.47 $79.45 $609.05 61.4% -3.7% 13.6% 0.1x n/a 0.2x 1.6x -42.9%Sonic Solutions SNIC $43.83 $13.90 $131.68 74.5% -1.9% -5.2% 0.1x n/a 0.2x 2.1x -84.9%

Median: $182.87 $220.36 $271.26 74.5% 13.3% 13.4% 0.8x 7.2x 0.9x 4.3x -51.0%








Income Statement Analysis (Median) Multimedia, Graphics, & Digital Media Software Stock Market Return: Jan - Dec 2008

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Multimedia, Graphics, & Digital Media SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Networking and ConnectivityCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth


Forward EV/ EBITDA


CA, Inc. CA $9,474.29 $9,313.29 $4,379.00 86.0% 32.8% 6.8% 2.1x 6.5x 2.3x 7.5x -28.0%Catapult Communications Corp CATT $79.24 $37.86 $37.91 81.5% -11.4% -3.6% 1.0x n/a n/a n/a -13.6%Cisco Systems, Inc. CSCO $95,028.06 $75,160.06 $40,317.00 64.6% 27.9% 11.1% 1.9x 6.7x 2.0x 6.5x -41.1%Citrix Systems, Inc. CTXS $4,261.56 $3,800.49 $1,567.22 92.1% 17.9% 19.3% 2.4x 13.5x 2.9x 10.1x -38.1%F5 Networks, Inc. FFIV $1,793.76 $1,603.58 $650.17 77.1% 19.7% 23.7% 2.5x 12.5x 2.5x 9.1x -22.7%NetScout Systems Inc. NTCT $321.01 $339.40 $240.90 72.7% 11.5% 116.4% 1.4x 12.3x 2.2x n/a -33.8%Novell, Inc. NOVL $1,301.67 $364.29 $956.51 75.2% 9.2% 2.6% 0.4x 4.1x 0.4x 3.2x -45.5%OPNET Technologies, Inc. OPNT $187.18 $105.74 $115.48 76.0% 5.2% 18.8% 0.9x 17.8x 1.2x n/a -1.9%Radware Ltd. RDWR $101.54 $13.56 $94.12 80.9% -23.8% 10.4% 0.1x n/a 0.2x n/a -65.5%TTI Team Telecom International Ltd. TTIL $9.44 -$16.16 $52.76 54.2% 5.9% 20.4% n/a n/a n/a n/a -73.7%

Median: $811.34 $351.85 $445.54 76.5% 10.3% 14.9% 1.4x 12.3x 2.1x 7.5x -36.0%








Income Statement Analysis (Median) Networking & Connectivity Software Stock Market Return: Jan - Dec 2008

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Networking and Connectivity SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: SecurityCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth


Forward EV/ EBITDA


ActivCard Corp. ACTI $74.63 -$4.89 $59.01 63.9% -23.3% -0.9% n/a n/a 0.2x n/a -55.5%Aladdin Knowledge Systems Ltd. ALDN $87.21 $81.24 $116.88 71.7% 9.1% 15.7% 0.7x 7.6x 0.8x 4.5x -75.6%ArcSight, Inc. ARST $229.07 $153.39 $117.55 82.5% 4.2% 35.7% 1.3x 31.4x 2.1x n/a n/aBlue Coat Systems, Inc. BCSI $325.66 $304.62 $391.14 72.0% 9.6% 64.8% 0.8x 8.1x 1.1x n/a -75.6%Check Point Software Tech Ltd. CHKP $4,062.92 $3,258.48 $797.63 91.7% 48.9% 16.6% 4.1x 8.4x 4.7x 9.1x -14.8%Cogent, Inc. COGT $1,201.98 $821.23 $107.58 68.6% 37.9% -14.8% 7.6x 20.1x 7.7x 34.5x 15.2%Commtouch Software Ltd. CTCH $42.75 $27.66 $13.89 87.1% 17.4% 36.9% 2.0x 11.5x n/a n/a -73.3%Entrust, Inc. ENTU $89.09 $65.69 $101.44 61.8% 3.9% 0.4% 0.6x 16.7x 0.8x n/a -24.5%McAfee, Inc. MFE $5,134.88 $4,354.73 $1,532.60 79.6% 20.7% 21.9% 2.8x 13.7x 3.5x 12.5x -10.2%SonicWALL, Inc. SNWL $210.01 $110.94 $220.40 70.7% 3.9% 16.1% 0.5x 12.9x 0.6x 4.9x -63.0%Sourcefire, Inc. FIRE $138.13 $45.12 $69.30 76.3% -11.7% 32.0% 0.7x n/a 0.9x n/a -39.0%Symantec Corporation SYMC $10,859.81 $10,655.17 $6,223.32 85.8% 29.4% 13.3% 1.7x 5.8x 2.1x 6.2x -20.1%VASCO Data Security International VDSI $372.98 $322.28 $135.20 69.7% 26.6% 18.6% 2.4x 8.9x 2.7x 8.9x -64.6%VeriSign, Inc. VRSN $3,719.67 $4,390.91 $1,584.82 63.4% 26.7% 51.6% 2.8x 10.4x 3.1x 9.9x -49.4%Websense, Inc. WBSN $642.21 $718.84 $277.65 84.8% 6.1% 40.3% 2.6x 42.6x 3.2x 12.2x -16.6%Zix Corporation ZIXI $71.39 $58.25 $27.85 63.3% -17.5% 22.8% 2.1x n/a 2.9x n/a -76.8%

Median: $277.37 $229.00 $126.37 71.8% 9.4% 20.3% 2.0x 11.5x 2.1x 9.1x -49.4%









Security Software Stock Market Return: Jan - Dec 2008

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Security SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Storage and Systems ManagementCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth


Forward EV/ EBITDA


BMC Software, Inc. BMC $5,102.04 $4,509.84 $1,830.10 76.9% 30.8% 11.7% 2.5x 8.0x 2.7x 7.7x -25.0%CA, Inc. CA $9,474.29 $9,313.29 $4,379.00 86.0% 32.8% 6.8% 2.1x 6.5x 2.3x 7.5x -28.0%CommVault Systems, Inc. CVLT $535.86 $434.60 $225.24 86.7% 13.6% 30.7% 1.9x 14.2x 2.4x 12.9x -39.2%Compuware Corporation CPWR $1,658.91 $1,486.78 $1,216.68 60.2% 21.3% 0.6% 1.2x 5.7x 1.3x 6.2x -23.8%EMC EMC $21,223.84 $19,102.65 $14,690.30 55.2% 20.0% 16.5% 1.3x 6.5x 1.5x 7.2x -43.6%FalconStor Software, Inc. FALC $124.86 $78.18 $88.43 85.0% 12.8% 21.4% 0.9x 6.9x 1.2x n/a -76.8%Network Appliance, Inc. NTAP $4,420.88 $3,452.71 $3,602.14 60.4% 13.2% 19.6% 1.0x 7.3x 1.2x 7.5x -47.1%SupportSoft, Inc. SPRT $94.99 $18.92 $48.64 51.3% -38.3% -1.4% 0.4x n/a 0.5x n/a -52.9%Symantec Corporation SYMC $10,859.81 $10,655.17 $6,223.32 85.8% 29.4% 13.3% 1.7x 5.8x 2.1x 6.2x -20.1%VMWare VMW $9,085.52 $7,844.15 $1,778.90 83.2% 24.5% 55.6% 4.4x 18.0x 6.0x 16.9x -72.1%

Median: $4,761.46 $3,981.28 $1,804.50 80.0% 20.6% 14.9% 1.5x 6.9x 1.8x 7.5x -41.4%








Income Statement Analysis (Median) Storage & Systems Management Software Stock Market Return: Jan - Dec 2008

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Storage & Systems Management SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Supply Chain Management and LogisticsCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth


Forward EV/ EBITDA


American Software, Inc. AMSW.A $106.20 $52.15 $82.71 52.1% 13.5% -7.4% 0.6x 4.7x 0.7x 4.4x -50.0%Ariba, Inc. ARBA $626.14 $539.34 $328.06 59.1% -3.2% 8.7% 1.6x n/a 1.7x 15.0x -35.4%Aspen Technology, Inc. AZPN $578.23 $632.32 $341.70 74.8% 21.9% 14.4% 1.9x 8.5x 2.1x n/a -61.0%i2 Technologies, Inc. ITWO $128.10 $96.98 $255.34 55.8% 12.6% -7.7% 0.4x 3.0x 0.4x n/a -53.2%JDA Software Group JDAS $390.61 $390.29 $382.58 63.3% 22.8% 5.2% 1.0x 4.5x 1.1x 4.6x -39.1%Logility, Inc. LGTY $53.73 $15.89 $41.68 66.2% 24.8% -11.8% 0.4x 1.5x 0.5x n/a -67.6%Manhattan Associates, Inc. MANH $371.36 $291.55 $346.54 55.4% 15.9% 5.6% 0.8x 5.3x 0.9x 5.2x -40.5%Retalix Ltd. RTLX $127.73 $105.61 $224.63 41.0% 2.7% 0.9% 0.5x 17.6x 0.5x n/a -60.9%The Descartes Systems Group Inc. DSG $160.76 $106.32 $66.38 65.2% 23.8% 17.3% 1.6x 6.7x n/a n/a -10.0%XATA Corporation XATA $16.67 $41.92 $53.73 47.4% 0.2% 75.1% 0.8x 411.0x 0.8x n/a -36.7%

Median: $144.43 $105.97 $239.98 57.4% 14.7% 5.4% 0.8x 5.3x 0.8x 4.9x -45.3%

TTM Revenue Growth 5.4%TTM EBITDA Growth -1.0%TTM Earnings Growth 4.0%Gross Profit Margin 57.4%EBITDA Margin 14.7%Net Income Margin 7.4%SG&A Expenses as a % of Total Revenue 33.4%R&D Expenses as a % of Total Revenue 13.7%








Supply Chain Management & Logistics Software Stock Market Return: Jan - Dec 2008

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Supply Chain Management & Logistics SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: Web AnalyticsCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth


Forward EV/ EBITDA


Google Inc. GOOG $95,405.12 $80,992.51 $20,921.33 59.9% 36.4% 39.7% 3.9x 10.6x 5.2x 12.4x -56.9%SPSS Inc. SPSS $471.64 $314.64 $308.46 93.2% 23.6% 9.2% 1.0x 4.3x 1.2x 5.7x -29.4%Vignette Corporation VIGN $214.28 $70.51 $185.05 65.6% 4.8% -3.5% 0.4x 8.0x 0.4x 2.5x -36.8%Websense, Inc. WBSN $642.21 $718.84 $277.65 84.8% 6.1% 40.3% 2.6x 42.6x 3.2x 12.2x -16.6%

Median: $556.92 $516.74 $293.05 75.2% 14.8% 24.5% 1.8x 9.3x 2.2x 8.9x -33.1%

TTM Revenue Growth 24.5%TTM EBITDA Growth -15.9%TTM Earnings Growth -18.8%Gross Profit Margin 75.2%EBITDA Margin 14.8%Net Income Margin 8.1%SG&A Expenses as a % of Total Revenue 52.8%R&D Expenses as a % of Total Revenue 16.9%







Income Statement Analysis (Median) Web Analytics Software Stock Market Return: Jan - Dec 2008

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Web Analytics SW S&P 500 NASDAQ SEG SW Index

SEG Software Index Category: WirelessCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth


Forward EV/ EBITDA


Hurray! Holding Co., Ltd. HRAY $38.48 -$22.33 $55.42 32.8% 7.2% -11.7% n/a n/a n/a n/a -56.4%Itron, Inc. ITRI $2,150.14 $3,207.61 $1,957.77 34.4% 16.0% 71.2% 1.6x 10.3x 2.3x 14.4x -36.8%Openwave Systems Inc. OPWV $49.86 -$38.35 $198.95 57.1% -11.5% -6.1% n/a n/a 1.7x 7.5x -77.4%PCTEL, Inc. PCTI $105.78 $38.13 $77.81 48.1% 9.9% 26.2% 0.5x 5.0x 0.7x 8.8x -12.0%Smith Micro Software, Inc. SMSI $172.10 $140.87 $91.94 77.8% 8.9% 30.2% 1.5x 17.1x 1.9x 6.1x -34.8%TeleCommunication Systems, Inc. TSYS $374.78 $348.06 $177.93 40.0% 13.1% 29.3% 2.0x 14.9x 2.4x 22.3x 143.1%

Median: $138.94 $89.50 $134.94 44.1% 9.4% 27.8% 1.6x 12.6x 1.9x 8.8x -35.8%

TTM Revenue Growth 27.8%TTM EBITDA Growth 83.2%TTM Earnings Growth 202.9%Gross Profit Margin 44.1%EBITDA Margin 9.4%Net Income Margin -0.1%SG&A Expenses as a % of Total Revenue 30.7%R&D Expenses as a % of Total Revenue 10.5%







Income Statement Analysis (Median) Wireless Software Stock Market Return: Jan - Dec 2008

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10%

Wireless SW S&P 500 NASDAQ SEG SW Index

Company Performance

SEG SaaS Index


SEG SaaS IndexCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth


Forward EV/ EBITDA


Athenahealth ATHN $1,221.06 $1,151.01 $126.32 57.2% 12.2% 35.2% 9.1x 74.6x 11.1x 103.4x -0.1%Concur CNQR $1,572.07 $1,307.18 $215.49 68.3% 22.2% 66.9% 6.1x 27.3x 6.4x 23.8x -13.6%Constant Contact CTCT $361.11 $255.36 $77.66 73.3% 2.4% 80.1% 3.3x 139.5x 5.7x n/a -38.9%DealerTrack TRAK $455.26 $261.91 $248.76 55.4% 21.9% 13.7% 1.1x 4.8x 1.3x 4.5x -65.4%DemandTec DMAN $207.31 $131.02 $70.04 67.7% -5.1% 37.6% 1.9x n/a 2.7x 56.7x -62.2%Kenexa KNXA $163.11 $137.41 $206.42 71.0% 20.0% 21.0% 0.7x 3.3x 0.8x 3.4x -63.3%LivePerson LPSN $84.93 $61.15 $71.82 72.6% 6.6% 56.8% 0.9x 12.9x 1.2x 6.6x -66.1%Netsuite N $486.07 $353.64 $142.81 68.4% -7.7% 47.2% 2.5x n/a 3.5x n/a -80.0%Omniture OMTR $718.37 $653.73 $255.73 58.3% 3.1% 107.1% 2.6x 81.6x 5.2x 32.3x -71.2%RightNow RNOW $240.22 $142.71 $135.02 63.3% -4.8% 22.6% 1.1x n/a 1.7x n/a -54.4%Salary.com SLRY $34.70 $6.68 $38.66 71.3% -41.6% 35.9% 0.2x n/a 0.4x n/a -83.8%Salesforce.com CRM $3,777.12 $3,190.90 $1,004.09 79.2% 9.0% 48.5% 3.2x 35.5x 4.8x 36.8x -51.9%SoundBite Communications SDBT $19.35 -$18.97 $43.88 62.8% -3.0% 17.7% n/a n/a n/a n/a -83.0%SuccessFactors SFSF $283.35 $181.87 $98.10 61.4% -80.9% 76.9% 1.9x n/a 3.6x n/a -55.0%Taleo TLEO $217.02 $170.00 $157.37 67.4% 7.2% 31.2% 1.1x 14.9x 1.6x 12.9x -77.7%Vocus VOCS $323.77 $234.55 $73.23 81.3% 5.1% 35.9% 3.2x 63.2x 4.7x 24.7x -51.6%

Median: $303.56 $208.21 $130.67 68.0% 4.1% 36.8% 1.9x 31.4x 3.5x 24.3x -62.8%








Income Statement Analysis (Median) SEG SaaS Index Stock Market Return: Jan - Dec 2008

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SEG SaaS Index S&P 500 NASDAQ SEG SW Index

Category Performance

SEG Internet Index


SEG Internet Index: All CategoriesMarket Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth

EV/ Revenue EV/ EBITDA

Forward EV/ Revenue

Forward EV/

EBITDA


SEG Internet Index $234.22 $188.95 $152.58 58.6% 14.5% 18.3% 0.8x 6.6x 2.6x 13.3x -59.1% Advertising $354.67 $288.38 $159.04 58.6% 15.8% 22.5% 1.9x 10.4x 2.9x 10.0x -56.9% eCommerce & Portals $255.14 $328.62 $274.24 76.8% 8.6% 20.5% 1.0x 7.0x 1.3x 9.1x -47.5% Financial $139.08 $72.22 $49.84 52.7% 18.5% 20.7% 1.7x 10.2x 3.4x 9.5x -66.0% Networking & Connectivity $93.73 $76.43 $223.01 41.1% 8.0% 13.1% 0.5x 2.9x 0.5x 3.9x -71.2% New Media $207.97 $98.15 $121.80 60.0% 15.2% 16.0% 0.8x 7.0x 0.9x 4.0x -62.5% Search Engine $3,066.50 $2,761.28 $396.21 59.3% 27.1% 37.3% 3.9x 10.5x 5.2x 21.4x -53.2%









Category Name

SEG Internet Index Stock Market Return: Jan - Dec 2008

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SEG Internet Index S&P 500 NASDAQ SEG SW Index

SEG Internet Index Category: AdvertisingCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth


Forward EV/ EBITDA


Autobytel Inc. ABTL $18.09 -$14.08 $75.84 33.8% -35.2% -1.6% n/a n/a n/a n/a -85.7%Baidu.com, Inc. BIDU $4,352.15 $4,016.98 $419.59 66.9% 43.0% 98.5% 9.6x 22.3x 18.6x 43.1x -68.2%comScore Inc. SCOR $354.67 $288.38 $111.06 72.3% 15.8% 38.6% 2.6x 16.5x 3.5x 17.3x -61.9%Google Inc. GOOG $95,405.12 $80,992.51 $20,921.33 59.9% 36.4% 39.7% 3.9x 10.6x 5.2x 12.4x -56.9%InfoSpace, Inc. INSP $254.81 $62.61 $159.04 44.5% -25.9% n/a 0.4x n/a 0.3x 5.6x -61.0%LookSmart, Ltd. LOOK $27.09 $0.32 $69.52 40.3% -3.7% 34.9% 0.0x n/a 0.0x n/a -49.5%Marchex Inc. MCHX $207.78 $179.71 $148.57 51.7% 14.5% 10.1% 1.2x 8.4x 1.4x 6.2x -48.6%MIVA, Inc. MIVA $6.24 -$3.29 $126.97 51.3% -10.7% -20.6% n/a n/a n/a n/a -90.2%SINA Corporation SINA $1,277.79 $814.30 $338.74 59.7% 25.2% 46.1% 2.4x 9.5x 3.6x 12.4x -48.5%Sohu.com Inc. SOHU $1,780.86 $1,505.59 $372.82 85.7% 38.9% 136.0% 4.0x 10.4x 8.8x 30.4x -13.0%Tucows Inc. TCX $26.61 $30.23 $77.55 30.6% 5.9% 5.4% 0.4x 6.6x 0.4x 3.4x -48.6%ValueClick, Inc. VCLK $569.08 $480.21 $675.89 67.7% 17.6% 8.5% 0.7x 4.0x 0.8x 3.2x -70.8%Yahoo! Inc. YHOO $16,610.97 $13,475.17 $7,234.11 58.6% 17.9% 5.8% 1.9x 10.4x 2.9x 7.6x -49.0%

Median: $354.67 $288.38 $159.04 58.6% 15.8% 22.5% 1.9x 10.4x 2.9x 10.0x -56.9%








Income Statement Analysis (Median) SEG Internet: Advertising Stock Market Return: Jan -Dec 2008

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S&P 500 NASDAQ SEG SW Index SEG Internet: Advertising

SEG Internet Index Category: eCommerce and PortalsCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth


Forward EV/ EBITDA


1-800-FLOWERS.COM, Inc. FLWS $225.57 $366.94 $931.62 42.5% 6.3% 1.1% 0.4x 6.2x 0.4x 6.5x -59.1%Amazon.com, Inc. AMZN $21,767.51 $19,878.51 $18,135.00 22.6% 5.8% 37.9% 1.1x 18.8x 1.5x 19.6x -46.3%Bluefly, Inc. BFLY $10.51 $11.64 $98.08 36.2% -13.1% 10.4% 0.1x n/a 0.1x n/a -89.9%Digital River Inc. DRIV $881.28 $581.13 $395.19 86.0% 25.0% 17.8% 1.5x 5.9x 1.9x 6.0x -28.9%eBay Inc. EBAY $17,826.14 $14,182.29 $8,686.02 75.2% 33.7% 20.4% 1.6x 4.8x 2.0x 5.2x -58.7%Expedia, Inc. EXPE $2,238.16 $2,700.77 $2,993.56 78.1% 24.4% 18.3% 0.9x 3.7x 1.1x 4.2x -75.6%Gmarket Inc. GMKT $852.66 $592.48 $208.71 48.0% 19.6% 34.4% 2.8x 14.5x 2.5x 15.6x -32.1%GSI Commerce, Inc. GSIC $476.53 $717.41 $910.67 57.7% 4.6% 35.5% 0.8x 17.2x 1.0x 13.8x -48.7%InsWeb Corp. INSW $10.28 $1.15 $38.58 100.0% 0.9% 23.3% 0.0x 3.3x n/a n/a -74.2%Internet Brands, Inc INET $242.13 $188.95 $101.95 75.5% 30.3% 20.5% 1.9x 6.1x 2.3x 7.4x -19.7%Liquidity Services, Inc. LQDT $212.22 $149.09 $263.94 57.3% 8.1% 32.9% 0.6x 6.9x 0.7x 6.8x -37.5%LiveDeal, Inc. LIVE $7.94 $3.55 $25.28 82.6% 9.0% -4.0% 0.1x 1.6x 0.2x n/a -66.4%LoopNet, Inc. LOOP $248.49 $179.05 $84.58 87.8% 37.5% 30.1% 2.1x 5.7x 2.4x 5.0x -48.9%Market Leader, Inc. LEDR $44.01 -$16.04 $42.77 100.0% -0.9% -35.9% n/a n/a n/a n/a -38.1%Mercadolibre, Inc. MELI $695.02 $682.63 $130.47 78.8% 29.3% 77.0% 5.2x 17.9x 9.0x 33.7x -80.1%Move, Inc. MOVE $234.22 $290.30 $284.55 78.9% 3.7% 14.8% 1.0x 27.2x 1.1x 10.8x -37.6%NetEase.com, Inc. NTES $2,719.46 $1,948.52 $422.88 82.2% 64.9% 33.1% 4.6x 7.1x 7.0x 11.7x 16.3%Overstock.com, Inc. OSTK $261.80 $257.81 $873.02 16.7% 0.1% 15.3% 0.3x 207.4x 0.3x 26.5x -28.1%priceline.com Incorporated PCLN $2,874.51 $2,889.80 $1,813.62 50.2% 18.1% 34.0% 1.6x 8.8x 2.3x 14.8x -40.0%Travelzoo, Inc. TZOO $79.71 $63.65 $80.64 95.7% 6.9% 4.1% 0.8x 11.5x 0.8x 2.8x -60.1%

Median: $255.14 $328.62 $274.24 76.8% 8.6% 20.5% 1.0x 7.0x 1.3x 9.1x -47.5%









SEG Internet: eCommerce & Portals Stock Market Return: Jan - Dec 2008

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SEG Internet: eCommerce and Portals S&P 500 NASDAQ SEG SW Index

SEG Internet Index Category: FinancialCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth


Forward EV/ EBITDA


Bankrate Inc. RATE $725.67 $684.46 $151.92 61.1% 26.8% 66.8% 4.5x 16.8x 7.1x 15.8x -20.9%Banks.com, Inc BNX $2.32 $7.17 $14.20 52.7% -8.0% -51.8% 0.5x n/a n/a n/a -91.3%China Finance Online Co. Ltd. JRJC $154.75 $72.22 $49.84 84.1% 25.9% 155.0% 1.4x 5.6x 3.4x 9.5x -69.6%Online Resources Corp. ORCC $139.08 $289.23 $152.58 49.6% 18.5% 20.7% 1.9x 10.2x 2.1x 8.9x -60.3%Track Data Corp. TRAC $6.71 -$14.73 $31.91 36.8% 7.5% -8.8% n/a n/a n/a n/a -66.0%

Median: $139.08 $72.22 $49.84 52.7% 18.5% 20.7% 1.7x 10.2x 3.4x 9.5x -66.0%



Levered FCF Margin 10.8%Cash from Operations Growth (YoY) -10.7%Cash from Investing Growth (YoY) 43.7%Cash from Financing Growth (YoY) -110.5%Levered FCF Growth (YoY) 53.0%






SEG Internet: Financial Stock Market Return: Jan - Dec 2008

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SEG Internet: Financial S&P 500 NASDAQ SEG SW Index

SEG Internet Index Category: Networking and ConnectivityCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth


Forward EV/ EBITDA


Delta Three, Inc. DDDC $0.49 -$1.02 $21.88 25.7% -26.5% -31.3% n/a n/a n/a n/a -96.4%EarthLink Inc. ELNK $720.61 $546.83 $1,021.50 47.5% 28.4% -19.1% 0.5x 1.9x 0.5x 4.0x -6.3%Internap Network Services Corp. INAP $124.52 $80.83 $251.41 41.1% 10.5% 13.5% 0.3x 3.1x 0.4x 2.3x -71.3%Internet Gold Golden Lines Ltd. IGLD $48.87 $223.14 $297.53 31.8% 27.6% 13.1% 0.7x 2.7x 0.8x 3.7x -80.7%Internet Initiative Japan Inc. IIJI $237.14 $301.98 $752.82 19.9% 13.0% 15.7% 0.4x 3.1x n/a n/a -70.8%iPass Inc. IPAS $71.70 $3.67 $194.61 41.2% 1.0% 3.9% 0.0x 1.8x 0.0x n/a -71.3%Keynote Systems Inc. KEYN $101.78 $52.73 $76.91 60.3% 5.5% 13.5% 0.7x 12.5x 0.8x 7.6x -49.1%Sify Technologies Limited SIFY $85.68 $72.04 $136.76 41.4% -1.4% 13.0% 0.5x n/a n/a n/a -71.1%

Median: $93.73 $76.43 $223.01 41.1% 8.0% 13.1% 0.5x 2.9x 0.5x 3.9x -71.2%









SEG Internet: Networking & Connectivity Stock Market Return: Jan - Dec 2008

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SEG Internet: Networking & Connectivity S&P 500 NASDAQ SEG SW Index

SEG Internet Index Category: New MediaCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth


Forward EV/ EBITDA


Jupitermedia Corporation JUPM $15.13 $89.81 $136.72 55.8% 12.5% -1.6% 0.7x 5.2x 0.6x 3.4x -89.5%KowaBunga!, Inc. KOW $3.28 $12.26 $93.82 42.7% 7.5% 145.9% 0.1x 1.8x 0.2x 1.2x -96.3%RealNetworks, Inc. RNWK $479.47 $79.45 $609.05 61.4% -3.7% 13.6% 0.1x n/a 0.2x 1.6x -42.9%TechTarget, Inc. TTGT $162.05 $106.49 $106.88 69.4% 14.2% 19.6% 1.0x 7.0x 1.2x 4.5x -73.8%The Knot, Inc. KNOT $253.89 $184.92 $103.62 81.4% 16.5% 7.7% 1.8x 10.8x 2.1x 8.0x -51.2%TheStreet.com, Inc. TSCM $84.44 $6.88 $75.24 57.2% 16.2% 25.6% 0.1x 0.6x 0.4x 1.5x -82.7%WebMD Health Corp. WBMD $1,323.82 $991.22 $367.89 64.9% 20.9% 18.4% 2.7x 12.9x 3.2x 12.8x -45.0%Yahoo! Inc. YHOO $16,610.97 $13,475.17 $7,234.11 58.6% 17.9% 5.8% 1.9x 10.4x 2.9x 7.6x -49.0%

Median: $207.97 $98.15 $121.80 60.0% 15.2% 16.0% 0.8x 7.0x 0.9x 4.0x -62.5%

TTM Revenue Growth 16.0%TTM EBITDA Growth -15.8%TTM Earnings Growth -70.0%Gross Profit Margin 60.0%EBITDA Margin 15.2%Net Income Margin 5.6%SG&A Expenses as a % of Total Revenue 43.6%R&D Expenses as a % of Total Revenue 17.8%







Income Statement Analysis (Median) SEG Internet: New Media Stock Market Return: Jan - Dec 2008

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SEG Internet: New Media S&P 500 NASDAQ SEG SW Index

SEG Internet Index Category: Search EngineCompany Name Ticker Market Cap EV TTM Revenue TTM Gross

MarginTTM EBITDA

MarginTTM

Revenue Growth


Forward EV/ EBITDA


Baidu.com, Inc. BIDU $4,352.15 $4,016.98 $419.59 66.9% 43.0% 98.5% 9.6x 22.3x 18.6x 43.1x -68.2%Google Inc. GOOG $95,405.12 $80,992.51 $20,921.33 59.9% 36.4% 39.7% 3.9x 10.6x 5.2x 12.4x -56.9%LookSmart, Ltd. LOOK $27.09 $0.32 $69.52 40.3% -3.7% 34.9% 0.0x n/a 0.0x n/a -49.5%MIVA, Inc. MIVA $6.24 -$3.29 $126.97 51.3% -10.7% -20.6% n/a n/a n/a n/a -90.2%Sohu.com Inc. SOHU $1,780.86 $1,505.59 $372.82 85.7% 38.9% 136.0% 4.0x 10.4x 8.8x 30.4x -13.0%Yahoo! Inc. YHOO $16,610.97 $13,475.17 $7,234.11 58.6% 17.9% 5.8% 1.9x 10.4x 2.9x 7.6x -49.0%

Median: $3,066.50 $2,761.28 $396.21 59.3% 27.1% 37.3% 3.9x 10.5x 5.2x 21.4x -53.2%









SEG Internet: Search Engine Stock Market Return: Jan - Dec 2008

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SEG Internet: Search Engine S&P 500 NASDAQ SEG SW Index


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