Software Equity Group Flash Report Flash Report_July2008.pdf · SEG Software Index: All Categories...

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Copyright © 2008 by Software Equity Group, L.L.C., All Rights Reserved

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July 2008

Software Equity Group Flash Report

Financial and Stock Market PerformancePublic Software Companies By Product Category

www.softwareequity.com

CAD Computer-aided DesignCAM Computer-aided ManufacturingCRM Customer Relationship ManagementEBITDA Earnings before Interest, Taxes, Depreciation, and AmortizationEV Enterprise ValueFCF Free Cash FlowHR 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


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 $332.74 $344.93 $161.99 66.5% 12.7% 14.4% 1.9x 12.9x 1.8x 9.8x -15.9% Billing & Service Provisioning $622.39 $562.99 $300.84 48.0% 15.6% 12.6% 1.7x 7.6x 2.2x 12.9x -22.5% Business Intelligence $405.31 $301.84 $155.56 77.3% 15.7% 13.8% 1.6x 11.2x 1.7x 7.1x -18.4% Content/Document Management $180.32 $118.90 $126.76 72.8% 11.1% 23.3% 1.6x 10.5x 2.2x 7.5x -34.5% CRM, Marketing & Sales Software $109.30 $66.10 $94.51 60.7% 4.2% 17.8% 0.9x 13.7x 1.1x 10.7x -46.4% Database & File Management $842.25 $708.20 $259.79 83.1% 20.1% 18.8% 2.7x 9.5x 2.3x 9.6x 13.6% Development Tools, OS & Application Testing So $228.13 $214.38 $162.73 81.7% 6.1% 14.2% 2.1x 9.3x 1.9x 13.6x -7.0% eCommerce Enablement Software $296.82 $259.79 $148.45 59.9% 3.6% 7.2% 1.7x 22.8x 5.1x 18.6x -11.2% Education & eLearning $119.46 $90.37 $109.41 68.0% 5.5% 6.8% 1.0x 22.8x 2.4x 14.2x -34.7% Electronic Design Automation $1,261.22 $1,330.48 $864.45 82.3% 12.2% 8.1% 1.4x 11.1x 1.5x 9.2x -57.2% Engineering, PLM & CAD/CAM Software $1,592.26 $1,547.44 $635.74 83.2% 21.5% 7.4% 2.0x 12.2x 1.8x 9.6x -4.3% Enterprise Application Integration $824.26 $689.25 $356.01 71.3% 16.4% 15.6% 2.2x 10.8x 1.6x 10.4x 0.1% Enterprise Resource Planning $366.00 $491.02 $405.52 55.1% 13.8% 13.8% 1.3x 10.3x 1.2x 7.4x -42.0% Entertainment $678.89 $583.08 $154.09 55.4% 6.9% 9.2% 1.4x 7.5x 1.5x 8.3x -38.5% Financial Services Software $672.13 $641.40 $240.45 60.7% 21.9% 18.3% 2.5x 12.6x 2.1x 10.1x -0.6% Healthcare $603.54 $503.28 $132.46 55.0% 15.8% 10.9% 2.2x 15.2x 2.1x 10.9x -22.0% HR & Workforce Management $144.59 $100.29 $101.86 61.2% 3.6% 14.3% 1.1x 29.6x 1.7x 8.1x -51.0% Messaging, Conferencing & Communications $171.33 $136.07 $110.40 62.2% 6.6% 12.7% 1.2x 11.6x 1.2x 8.1x 4.5% Multimedia, Graphics, Digital Media $355.45 $447.36 $199.14 70.8% 10.4% 22.1% 1.8x 21.3x 1.9x 10.3x -11.0% Networking & Connectivity $1,253.95 $788.40 $413.08 76.3% 8.4% 11.2% 2.0x 15.9x 2.5x 9.5x -20.5% Security $343.29 $318.72 $118.56 74.8% 11.3% 19.4% 2.8x 18.5x 2.6x 10.4x -23.8% Storage & Systems Management Software $7,300.88 $6,472.29 $1,724.35 80.1% 21.5% 16.3% 2.8x 10.3x 2.3x 10.0x -9.8% Supply Chain Management & Logistics $276.98 $333.56 $257.30 57.1% 15.0% 6.5% 1.5x 9.3x 1.4x 7.7x -15.2% Web Analytics $770.31 $737.28 $278.63 75.7% 20.3% 20.7% 2.8x 15.3x 2.3x 7.5x -13.3% Wireless $221.38 $173.39 $118.31 45.1% 7.1% 17.0% 1.7x 21.0x 2.0x 10.3x -2.0%

TTM Revenue Growth 14.4%TTM EBITDA Growth 19.2%TTM Earnings Growth 10.2%Gross Profit Margin 66.5%EBITDA Margin 12.7%Net Income Margin 5.5%SG&A Expenses as a % of Total Revenue 41.5%R&D Expenses as a % of Total Revenue 15.9%

Current Ratio 1.9Quick Ratio 1.7Cash as Percent of Market Cap 19.4%Avg Days Outstanding: Accounts Receivable 71Avg Days Outstanding: Accounts Payable 43Working Capital to TTM Operating Expense Ratio 0.3

Levered FCF Margin 5.9%Cash from Operations Growth (YoY) 25.7%Cash from Investing Growth (YoY) 19.6%Cash from Financing Growth (YoY) -21.3%Levered FCF Growth (YoY) 29.9%

Copyright © 2008 by Software Equity Group, L.L.C., All Rights Reserved July 2008

Income Statement Analysis (Median)

Balance Sheet Analysis (Median)

Cash Flow Statement Analysis (Median)

Category Name

SEG SW Index Stock Market Return: Jan - Jul 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 $6,296.39 $5,568.02 $3,063.51 36.1% 19.2% 10.4% 1.8x 9.5x 1.6x 7.3x -16.0%AsiaInfo Holdings, Inc. ASIA $624.99 $424.40 $150.20 48.4% 11.3% 25.7% 2.8x 24.9x 2.7x 18.4x 67.7%CSG Systems International, Inc. CSGS $619.78 $701.58 $451.48 47.7% 26.9% 14.8% 1.6x 5.8x n/a n/a -29.1%MIND C.T.I. Ltd. MNDO $22.89 $10.48 $18.45 68.6% 12.0% -8.0% 0.6x 4.7x n/a n/a -59.5%

Median: $622.39 $562.99 $300.84 48.0% 15.6% 12.6% 1.7x 7.6x 2.2x 12.9x -22.5%






July 2008


Income Statement Analysis (Median) Billing & Service Provisioning Software Stock Market Return: Jan - Jul 2008

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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 $274.66 $217.65 $138.17 80.6% 14.0% 5.7% 1.6x 11.2x 1.5x 6.5x -29.9%Datawatch Corporation DWCH $13.76 $9.31 $24.57 72.8% 8.4% 3.5% 0.4x 4.5x n/a n/a -55.6%Informatica Corporation INFA $1,432.91 $1,200.47 $427.35 81.1% 17.4% 21.4% 2.8x 16.1x 2.5x 13.2x 16.1%Insightful Corporation IFUL $23.95 $13.92 $20.89 74.0% -15.8% -16.5% 0.7x n/a n/a n/a -21.0%MicroStrategy Incorporated MSTR $718.03 $618.15 $364.86 82.7% 25.9% 16.3% 1.7x 6.5x 1.6x 7.1x -17.3%Pegasystems Inc. PEGA $535.97 $375.11 $172.94 60.0% 3.8% 28.8% 2.2x 57.3x 1.8x n/a 40.7%PROS Holdings PRO $274.05 $228.57 $66.55 72.4% 20.1% 33.5% 3.4x 17.1x 2.7x 12.6x -16.3%SPSS Inc. SPSS $598.70 $442.71 $305.85 93.6% 23.4% 11.3% 1.4x 6.2x 1.4x 5.8x -19.5%

Median: $405.31 $301.84 $155.56 77.3% 15.7% 13.8% 1.6x 11.2x 1.7x 7.1x -18.4%



Levered FCF Margin 10.1%Cash from Operations Growth (YoY) -1.8%Cash from Investing Growth (YoY) -5.6%Cash from Financing Growth (YoY) -60.2%Levered FCF Growth (YoY) 11.9%




July 2008


Business Intelligence Software Stock Market Return: Jan - Jul 2008

-35%

-30%

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-15%

-10%

-5%

0%

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 $21,934.27 $20,419.54 $3,540.23 89.9% 38.6% 32.1% 5.8x 14.9x 5.6x 12.2x 2.6%Captaris, Inc. CAPA $88.93 $58.75 $102.24 68.5% -2.2% 10.0% 0.6x n/a n/a n/a -34.5%Convera Corporation CNVR $60.26 $28.91 $1.20 n/a -1992.6% 108.7% 24.2x n/a n/a n/a -65.8%Datawatch Corporation DWCH $13.76 $9.31 $24.57 72.8% 8.4% 3.5% 0.4x 4.5x n/a n/a -55.6%EasyLink Services International ESIC $77.81 $104.07 $73.61 67.9% 27.2% 239.1% 1.4x 5.2x n/a n/a n/aInterwoven, Inc. IWOV $641.16 $454.11 $242.96 72.1% 13.8% 14.5% 1.9x 13.5x n/a n/a 1.7%Macrovision Corporation MVSN $1,562.65 $1,441.75 $151.29 88.1% 39.0% 49.9% 9.5x 24.4x 2.2x 5.7x -36.1%Ninetowns Internet Tech Grp Ltd. NINE $75.16 -$18.11 $15.10 77.9% -73.3% -32.5% -1.2x 1.6x n/a n/a -30.5%Open Text Corporation OTEX $1,589.69 $1,690.54 $700.46 73.6% 25.8% 33.2% 2.4x 9.4x 2.2x 8.1x 65.7%Vignette Corporation VIGN $271.70 $133.73 $186.72 66.0% 6.2% -5.5% 0.7x 11.6x 0.7x 7.0x -46.5%

Median: $180.32 $118.90 $126.76 72.8% 11.1% 23.3% 1.6x 10.5x 2.2x 7.5x -34.5%






July 2008


Income Statement Analysis (Median) Content & Document Management Software Stock Market Return: Jan - Jul 2008

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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 $13.27 $10.67 $27.88 44.4% 9.3% 16.9% 0.4x 4.1x n/a n/a -29.3%Blackbaud, Inc. BLKB $798.66 $798.98 $271.33 63.4% 23.4% 33.7% 2.9x 12.6x 2.6x 9.7x -14.7%Chordiant Software, Inc. CHRD $156.63 $92.30 $116.65 70.0% 5.3% 2.2% 0.8x 14.8x n/a n/a -63.6%I-Many Inc. IMNY $37.78 $39.91 $39.70 57.9% -20.7% 18.8% 1.0x n/a n/a n/a -72.6%Rainmaker Systems Inc. RMKR $61.97 $39.28 $77.63 46.6% 3.0% 27.5% 0.5x 16.6x 0.5x n/a -63.6%Unica Corporation UNCA $184.88 $143.83 $111.40 75.5% -0.5% 16.0% 1.3x n/a 1.1x 11.6x -23.2%

Median: $109.30 $66.10 $94.51 60.7% 4.2% 17.8% 0.9x 13.7x 1.1x 10.7x -46.4%

TTM Revenue Growth 17.8%TTM EBITDA Growth 16.9%TTM Earnings Growth -74.0%Gross Profit Margin 60.7%EBITDA Margin 4.2%Net Income Margin -1.6%SG&A Expenses as a % of Total Revenue 36.4%R&D Expenses as a % of Total Revenue 18.6%


Levered FCF Margin -1.0%Cash from Operations Growth (YoY) 57.7%Cash from Investing Growth (YoY) 44.1%Cash from Financing Growth (YoY) -180.7%Levered FCF Growth (YoY) -3.1%




July 2008


CRM, Marketing, & Sales Software Stock Market Return: Jan - Jul 2008

-45%

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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 $6,250.05 $5,584.65 $1,784.10 77.3% 30.4% 11.2% 3.1x 10.3x 2.9x 9.4x 14.5%Double-Take Software DBTK $242.30 $168.54 $92.23 89.9% 22.7% 25.6% 1.8x 8.1x n/a n/a -27.7%Guidance Software, Inc. GUID $251.58 $215.94 $82.97 72.0% -0.3% 33.2% 2.6x n/a 2.1x n/a -8.0%Informatica Corporation INFA $1,432.91 $1,200.47 $427.35 81.1% 17.4% 21.4% 2.8x 16.1x 2.5x 13.2x 16.1%Oracle Corporation ORCL $111,005.28 $111,567.28 $22,430.00 77.8% 42.3% 24.6% 5.0x 11.8x 4.4x 9.8x 12.6%Pervasive Software Inc. PVSW $77.55 $32.60 $42.47 85.1% 11.8% 4.1% 0.8x 6.5x 0.8x n/a -18.6%Quest Software, Inc. QSFT $1,570.53 $1,281.10 $653.99 90.2% 14.8% 12.3% 2.0x 13.2x 1.7x 6.9x 2.1%Sybase, Inc. SY $2,664.47 $2,549.62 $1,093.33 71.1% 26.8% 16.2% 2.3x 8.7x n/a n/a 41.7%TigerLogic, Corp. TIGR $124.19 $111.10 $19.77 90.6% -1.2% 5.5% 5.6x n/a n/a n/a 21.9%Versant Corporation VSNT $98.11 $72.82 $23.81 92.8% 44.8% 27.5% 3.1x 6.8x n/a n/a 21.1%

Median: $842.25 $708.20 $259.79 83.1% 20.1% 18.8% 2.7x 9.5x 2.3x 9.6x 13.6%



Levered FCF Margin 12.3%Cash from Operations Growth (YoY) 25.7%Cash from Investing Growth (YoY) 47.9%Cash from Financing Growth (YoY) 6.0%Levered FCF Growth (YoY) 40.0%



July 2008


Income Statement Analysis (Median) Database & File Management Software Stock Market Return: Jan - Jul 2008

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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 $113.09 $142.79 $256.09 82.7% -2.1% -16.3% 0.6x n/a 0.6x n/a -70.8%BSQUARE Corporation BSQR $37.79 $30.77 $61.32 27.0% 5.2% 15.0% 0.5x 9.6x n/a n/a -42.9%Magic Software Enterprises Ltd. MGIC $50.22 $18.31 $59.67 54.1% 6.9% -5.0% 0.3x 4.4x n/a n/a -35.4%Microsoft Corporation MSFT $235,363.72 $214,192.72 $60,420.00 80.8% 43.0% 18.2% 3.5x 8.2x 3.2x 7.4x -11.3%Phoenix Technologies Ltd. PTEC $332.07 $285.97 $69.37 88.5% 8.8% 74.7% 4.1x 47.0x n/a n/a 4.7%Progress Software Corporation PRGS $1,211.13 $953.61 $508.14 84.3% 20.9% 8.5% 1.9x 9.0x 1.8x n/a -2.7%Red Hat, Inc. RHT $4,090.70 $3,764.63 $560.78 84.2% 19.7% 28.8% 6.7x 34.2x 5.4x 26.9x 2.7%SourceForge, Inc. LNUX $95.17 $49.79 $54.07 38.8% 3.5% 24.7% 0.9x 26.6x 0.8x 12.7x -62.5%TigerLogic, Corp. TIGR $124.19 $111.10 $19.77 90.6% -1.2% 5.5% 5.6x n/a n/a n/a 21.9%Wind River Systems, Inc. WIND $902.91 $798.28 $338.45 75.9% 4.3% 13.4% 2.4x 55.1x 2.1x 14.5x 22.7%

Median: $228.13 $214.38 $162.73 81.7% 6.1% 14.2% 2.1x 9.3x 1.9x 13.6x -7.0%







July 2008


Development Tools, OS, and App Testing Software Stock Market Return: Jan - Jul 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 $472.62 $423.72 $153.66 59.4% 4.1% 32.6% 2.8x 66.8x 2.6x 18.6x 15.4%CyberSource Corporation CYBS $1,224.43 $1,159.79 $181.06 49.6% 13.0% 117.4% 6.4x 49.4x 5.1x 25.5x 54.2%Imergent, Inc. IIG $121.02 $95.86 $143.23 69.2% 3.1% 5.7% 0.7x 21.9x n/a n/a -50.5%Optimal Group Inc. OPMR $55.09 $2.69 $124.51 36.2% 3.0% -26.6% 0.0x 0.7x n/a n/a -69.4%Selectica, Inc. SLTC $32.43 $3.11 $16.00 73.7% -51.7% 8.7% 0.2x n/a n/a n/a -31.9%VeriSign, Inc. VRSN $6,335.73 $7,316.89 $1,522.09 60.3% 21.1% 0.0% 4.8x 22.8x 7.6x 15.4x 9.6%

Median: $296.82 $259.79 $148.45 59.9% 3.6% 7.2% 1.7x 22.8x 5.1x 18.6x -11.2%



Levered FCF Margin 5.2%Cash from Operations Growth (YoY) 44.4%Cash from Investing Growth (YoY) -73.1%Cash from Financing Growth (YoY) 92.7%Levered FCF Growth (YoY) n/a




July 2008


eCommerce Enablement Software Stock Market Return: Jan - Jul 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 $1,236.04 $1,335.66 $252.64 72.4% 19.3% 25.9% 5.3x 27.4x 4.1x 20.1x -9.7%PLATO Learning, Inc. TUTR $46.80 $33.86 $69.77 46.3% 4.8% -12.2% 0.5x 10.1x n/a n/a -49.7%Renaissance Learning, Inc. RLRN $370.10 $351.58 $111.50 74.6% 17.3% 6.2% 3.2x 18.2x n/a n/a 12.4%Saba Software, Inc. SABA $94.65 $78.94 $107.31 63.6% 2.5% 7.5% 0.7x 29.3x 0.7x 8.4x -34.7%Scientific Learning Corporation SCIL $59.49 $57.21 $45.23 75.6% -9.0% 3.7% 1.3x n/a n/a n/a -55.0%SumTotal Systems, Inc. SUMT $144.27 $101.81 $130.59 62.6% 6.3% 12.7% 0.8x 12.4x n/a n/a -42.0%

Median: $119.46 $90.37 $109.41 68.0% 5.5% 6.8% 1.0x 22.8x 2.4x 14.2x -34.7%

TTM Revenue Growth 6.8%TTM EBITDA Growth 38.4%TTM Earnings Growth 44.3%Gross Profit Margin 68.0%EBITDA Margin 5.5%Net Income Margin -3.3%SG&A Expenses as a % of Total Revenue 46.8%R&D Expenses as a % of Total Revenue 13.9%


Levered FCF Margin 6.4%Cash from Operations Growth (YoY) 41.3%Cash from Investing Growth (YoY) n/aCash from Financing Growth (YoY) -20.9%Levered FCF Growth (YoY) -3.4%



July 2008


Income Statement Analysis (Median) Education & eLearning Software Stock Market Return: Jan - Jul 2008

-35%

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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 $1,923.29 $1,764.41 $1,475.53 85.1% 21.6% -5.0% 1.2x 5.5x 1.6x 24.9x -65.5%Magma Design Automation, Inc. LAVA $279.02 $292.79 $214.42 77.0% 8.4% 20.4% 1.4x 16.3x 1.4x 4.4x -57.2%Mentor Graphics Corporation MENT $1,261.22 $1,330.48 $864.45 85.6% 12.2% n/a 1.5x 12.6x 1.5x 9.2x 15.6%PDF Solutions, Inc. PDFS $126.23 $84.37 $90.08 63.8% -2.0% 7.0% 0.9x n/a 1.2x 13.1x -59.0%Synopsys, Inc. SNPS $3,427.73 $2,610.23 $1,259.35 82.3% 21.5% 9.2% 2.1x 9.6x 1.9x 6.3x -1.8%

Median: $1,261.22 $1,330.48 $864.45 82.3% 12.2% 8.1% 1.4x 11.1x 1.5x 9.2x -57.2%



Levered FCF Margin -2.2%Cash from Operations Growth (YoY) -11.8%Cash from Investing Growth (YoY) -26.4%Cash from Financing Growth (YoY) -606.4%Levered FCF Growth (YoY) -43.1%




July 2008


Electronic Design Automation Software Stock Market Return: Jan - Jul 2008

-60%

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0%

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 $3,598.19 $3,445.17 $407.03 85.6% 44.4% 33.2% 8.5x 19.0x 7.0x 15.2x 76.2%Autodesk, Inc. ADSK $7,141.70 $6,239.70 $2,262.10 90.6% 23.6% 18.3% 2.8x 11.7x 2.6x 8.4x -24.7%Cadence Design Systems, Inc. CDNS $1,923.29 $1,764.41 $1,475.53 85.1% 21.6% -5.0% 1.2x 5.5x 1.6x 24.9x -65.5%Dassault Systèmes DSY $7,565.86 $6,737.80 $1,995.61 84.1% 26.6% 6.0% 3.4x 12.7x 3.1x 10.1x -5.8%Magma Design Automation, Inc. LAVA $279.02 $292.79 $214.42 77.0% 8.4% 20.4% 1.4x 16.3x 1.4x 4.4x -57.2%Mentor Graphics Corporation MENT $1,261.22 $1,330.48 $864.45 85.6% 12.2% n/a 1.5x 12.6x 1.5x 9.2x 15.6%MSC.Software Corporation MSCS $566.18 $425.11 $250.21 81.4% 7.5% 0.1% 1.7x 22.8x 1.6x 11.8x -2.9%NAVTEQ Corporation NVT $75.87 $60.56 $7.93 100.0% n/a -36.3% 7.6x n/a n/a n/a 0.0%Parametric Technology Corporation PMTC $2,230.40 $2,097.93 $1,037.44 69.5% 18.8% 12.9% 2.0x 10.7x 1.9x 7.6x 9.9%PDF Solutions, Inc. PDFS $126.23 $84.37 $90.08 63.8% -2.0% 7.0% 0.9x n/a 1.2x 13.1x -59.0%Stratasys, Inc. SSYS $320.86 $292.15 $118.66 54.0% 22.2% 7.4% 2.5x 11.1x n/a n/a -29.3%Synopsys, Inc. SNPS $3,427.73 $2,610.23 $1,259.35 82.3% 21.5% 9.2% 2.1x 9.6x 1.9x 6.3x -1.8%

Median: $1,592.26 $1,547.44 $635.74 83.2% 21.5% 7.4% 2.0x 12.2x 1.8x 9.6x -4.3%






July 2008


Income Statement Analysis (Median) Engineering, PLM, & CAD/CAM Software Stock Market Return: Jan - Jul 2008

-25%

-20%

-15%

-10%

-5%

0%

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 $100.15 $77.12 $94.20 58.1% 16.9% 30.8% 0.8x 4.8x 0.8x 12.7x -60.4%Citrix Systems, Inc. CTXS $4,889.37 $4,500.54 $1,518.25 91.9% 18.6% 22.3% 3.0x 15.9x 2.8x 10.4x -26.3%IONA Technologies PLC IONA $145.08 $107.21 $78.52 79.9% -0.2% 2.8% 1.4x n/a 1.3x n/a -0.7%Jacada Ltd. JCDA $72.93 $40.20 $16.20 47.1% -68.6% -26.1% 2.5x n/a n/a n/a 2.9%Sybase, Inc. SY $2,664.47 $2,549.62 $1,093.33 71.1% 26.8% 16.2% 2.3x 8.7x n/a n/a 41.7%TIBCO Software Inc. TIBX $1,503.44 $1,271.29 $617.83 71.5% 16.0% 14.9% 2.1x 12.9x 1.9x 8.2x 1.0%

Median: $824.26 $689.25 $356.01 71.3% 16.4% 15.6% 2.2x 10.8x 1.6x 10.4x 0.1%

TTM Revenue Growth 15.6%TTM EBITDA Growth -2.8%TTM Earnings Growth -15.6%Gross Profit Margin 71.3%EBITDA Margin 16.4%Net Income Margin 9.7%SG&A Expenses as a % of Total Revenue 50.5%R&D Expenses as a % of Total Revenue 17.1%


Levered FCF Margin 6.3%Cash from Operations Growth (YoY) 11.2%Cash from Investing Growth (YoY) -197.8%Cash from Financing Growth (YoY) -77.9%Levered FCF Growth (YoY) 29.3%




July 2008


Enterprise Application Integration Software Stock Market Return: Jan - Jul 2008

-25%

-20%

-15%

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-5%

0%

5%

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. AMSWA $139.02 $68.50 $89.00 51.7% 15.0% 5.5% 0.8x 5.1x 0.7x 4.2x -53.1%AXS-One Inc. AXO $542.36 $493.07 $398.31 27.5% 16.8% 48.7% 1.2x 7.4x n/a n/a -42.0%CDC Corporation CHINA $294.23 $325.76 $412.74 45.8% -0.7% n/a 0.8x n/a 0.8x 14.5x -69.0%Deltek PROJ $331.01 $488.96 $285.14 61.8% 22.3% 20.0% 1.7x 7.7x 1.5x 6.4x n/aEpicor Software Corporation EPIC $400.98 $656.04 $452.97 52.6% 12.7% 11.3% 1.4x 11.4x 1.2x 7.4x -48.2%Intuit Inc. INTU $8,773.15 $8,880.38 $3,025.49 81.9% 29.6% 19.4% 2.9x 9.9x 2.9x 9.9x -4.6%Lawson Software, Inc. LWSN $1,411.16 $1,173.93 $851.93 51.5% 11.4% 13.5% 1.4x 12.0x 1.2x 8.1x -14.9%QAD Inc. QADI $214.06 $185.19 $272.94 57.6% 6.6% 14.3% 0.7x 10.3x 0.6x 6.3x -13.6%SAP SAP $68,322.08 $65,999.75 $16,904.60 66.2% 28.0% 12.7% 3.9x 13.9x 3.4x 10.9x -6.3%SoftBrands, Inc. SBN $41.88 $81.43 $92.86 60.3% 6.2% 13.8% 0.9x 14.2x 0.8x 4.6x -53.1%

Median: $366.00 $491.02 $405.52 55.1% 13.8% 13.8% 1.3x 10.3x 1.2x 7.4x -42.0%



Levered FCF Margin 6.8%Cash from Operations Growth (YoY) 21.0%Cash from Investing Growth (YoY) 23.4%Cash from Financing Growth (YoY) -74.6%Levered FCF Growth (YoY) -45.6%




July 2008


Enterprise Resource Planning Software Stock Market Return: Jan - Jul 2008

-40%

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

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


Atari, Inc. ATAR $22.10 $25.02 $80.13 46.1% -14.7% -34.5% 0.3x n/a 0.3x n/a -37.2%Electronic Arts Inc. ERTS $13,749.29 $11,070.29 $4,074.00 52.5% 0.9% 32.6% 2.7x 291.3x n/a n/a -11.2%Giant Interactive GA $2,402.64 $2,279.74 $245.54 88.3% n/a n/a 9.3x n/a 6.5x 9.8x n/aGlu Mobile, Inc. GLUU $115.05 $84.74 $71.76 72.7% -5.5% 33.4% 1.2x n/a 0.7x 5.9x -67.1%Konami Corporation KNM $4,294.24 $4,256.95 $2,719.35 31.0% 15.4% 6.1% 1.6x 10.1x 1.5x 8.3x 26.4%Majesco Entertainment Company COOL $25.64 $17.57 $53.30 34.8% 6.9% -15.4% 0.3x 4.8x n/a n/a -59.2%Midway Games Inc. MWY $345.69 $436.40 $176.04 12.2% -1.7% 9.2% 2.5x n/a 1.7x n/a -38.5%Perfect World PWRD $1,502.87 $1,276.50 $132.14 84.8% 53.1% 410.2% 9.7x 18.2x 5.8x 11.2x 9.8%Silverstar Holdings Ltd. SSTR $11.15 $17.91 $32.49 58.2% 16.3% 291.0% 0.6x 3.4x n/a n/a -63.6%THQ Inc. THQI $1,012.08 $729.75 $1,063.56 59.0% 20.9% 7.2% 0.7x 3.3x 0.6x 6.3x -47.2%

Median: $678.89 $583.08 $154.09 55.4% 6.9% 9.2% 1.4x 7.5x 1.5x 8.3x -38.5%



Levered FCF Margin 5.1%Cash from Operations Growth (YoY) -1.6%Cash from Investing Growth (YoY) 11.0%Cash from Financing Growth (YoY) 339.6%Levered FCF Growth (YoY) 19.0%



July 2008


Income Statement Analysis (Median) Entertainment Software Stock Market Return: Jan - Jul 2008

-30%

-25%

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0%

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 $672.13 $638.47 $376.85 60.7% 7.0% n/a 1.7x 24.1x 1.6x 19.1x -35.9%Advent Software, Inc. ADVS $1,161.82 $1,079.38 $240.45 69.0% 12.7% 22.4% 4.5x 35.4x n/a n/a 14.5%Blackbaud, Inc. BLKB $798.66 $798.98 $271.33 63.4% 23.4% 33.7% 2.9x 12.6x 2.6x 9.7x -14.7%Bottomline Technologies EPAY $299.27 $222.34 $127.57 54.7% 5.4% 13.9% 1.7x 32.5x 1.6x 14.7x 2.7%DST Systems, Inc. DST $3,220.92 $4,421.02 $2,310.90 20.3% 20.2% 3.1% 1.9x 9.5x n/a n/a -20.4%Ebix, Inc. EBIX $318.05 $344.93 $58.45 82.9% 41.6% 65.1% 5.9x 14.2x n/a n/a 165.2%EPIQ Systems, Inc. EPIQ $414.75 $461.80 $202.93 55.0% 23.4% 18.8% 2.3x 9.7x 2.1x 6.8x -31.5%Fair Isaac Corporation FIC $1,082.35 $1,506.84 $803.43 61.5% 21.9% 0.2% 1.9x 8.6x n/a n/a -43.3%Fiserv FISV $7,839.37 $12,144.37 $4,644.00 33.3% 24.4% 30.1% 2.6x 10.7x 2.8x 9.2x -3.2%Fundtech Ltd. FNDT $237.84 $195.22 $109.52 55.0% 11.8% 22.7% 1.8x 15.1x 1.5x 10.1x 2.1%Goldleaf Financial Solutions, Inc. GFSI $32.74 $82.02 $62.82 77.8% 11.2% 12.8% 1.3x 11.7x 0.9x 5.6x -67.3%Jack Henry & Associates, Inc. JKHY $1,888.78 $1,932.47 $736.76 42.0% 31.1% 13.5% 2.6x 8.4x 2.4x 8.0x -10.1%Longtop Financial Technologies LFT $848.12 $644.34 $65.92 61.1% 14.9% 115.6% 9.8x 65.7x 7.8x 15.1x n/aMetavante Technologies, Inc. MV $2,661.47 $4,224.51 $1,664.54 33.6% 28.5% 7.7% 2.5x 8.9x n/a n/a n/aMSCI MXB $2,976.55 $3,186.97 $407.21 70.4% 41.9% 20.8% 7.8x 18.7x 6.9x 16.6x n/aNetSol Technologies Inc. NTWK $83.14 $89.63 $34.70 61.4% 29.2% 36.9% 2.6x 8.8x 2.1x 7.0x 110.3%Risk Metrics Group, Inc RMG $1,090.44 $1,300.10 $259.16 70.4% 27.8% 102.2% 5.0x 18.0x 4.9x 15.8x n/aS1 Corporation SONE $459.71 $408.13 $212.03 53.2% 15.6% 7.9% 1.9x 12.3x 1.8x 10.1x 11.7%Sapiens International SPNS $39.85 $44.40 $41.88 40.9% n/a -7.3% 1.1x n/a n/a n/a n/aTradeStation Group, Inc. TRAD $470.67 n/a $157.71 77.4% n/a 14.4% n/a n/a n/a n/a 2.0%Tyler Technologies, Inc. TYL $615.57 $582.50 $242.27 40.0% 18.6% 17.8% 2.4x 13.0x 2.0x n/a 32.8%

Median: $672.13 $641.40 $240.45 60.7% 21.9% 18.3% 2.5x 12.6x 2.1x 10.1x -0.6%



Levered FCF Margin 11.5%Cash from Operations Growth (YoY) 58.7%Cash from Investing Growth (YoY) -18.8%Cash from Financing Growth (YoY) 41.5%Levered FCF Growth (YoY) 44.1%



July 2008


Income Statement Analysis (Median) Financial Services Software Stock Market Return: Jan - Jul 2008

-25%

-20%

-15%

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-5%

0%

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 $690.71 $772.16 $288.98 49.9% 15.8% 15.2% 2.7x 16.9x 2.2x 11.9x -47.0%AMICAS, Inc. AMCS $110.75 $38.74 $50.24 52.4% -3.7% 4.9% 0.8x n/a 0.8x 45.4x -26.0%Cerner Corporation CERN $3,598.12 $3,492.68 $1,555.00 83.1% 24.5% 5.2% 2.2x 9.2x 2.0x 7.5x -15.5%Computer Programs and Sys, Inc. CPSI $268.44 $244.00 $113.37 43.7% 20.0% 1.8% 2.2x 10.8x 2.1x 9.7x -7.4%Eclipsys Corporation ECLP $1,198.84 $1,187.16 $502.01 44.0% 12.1% 10.0% 2.4x 19.6x 2.2x 13.6x 1.5%Emageon Inc. EMAG $44.65 $26.44 $96.54 47.3% 1.2% -22.1% 0.3x 23.1x 0.3x n/a -77.4%eResearchTechnology, Inc. ERES $737.78 $689.27 $111.29 51.9% 39.5% 29.3% 6.2x 15.7x 4.2x n/a 51.7%MedAssets MDAS $672.31 $752.22 $204.97 84.3% 25.5% 34.3% 3.7x 14.4x 3.2x 9.9x n/aMerge Healthcare MRGE $36.75 $28.23 $57.44 64.7% -38.6% -22.4% 0.5x n/a n/a n/a -80.1%Omnicell, Inc. OMCL $534.77 $411.99 $238.56 52.6% 11.4% 29.4% 1.7x 15.2x 1.6x 11.7x -32.0%Phase Forward Incorporated PFWD $787.21 $594.56 $151.54 57.5% 15.7% 26.4% 3.9x 25.0x n/a n/a 7.0%Quality Systems, Inc. QSII $912.08 $850.53 $186.50 66.5% 35.3% 18.7% 4.6x 12.9x 3.6x 10.2x -15.2%Simulations Plus, Inc. SLP $25.32 $19.33 $9.37 77.6% 35.4% 11.7% 2.1x 5.8x n/a n/a -67.3%Vital Images, Inc. VTAL $261.50 $86.16 $66.67 77.6% -6.2% -11.7% 1.3x n/a 1.2x n/a -22.0%

Median: $603.54 $503.28 $132.46 55.0% 15.8% 10.9% 2.2x 15.2x 2.1x 10.9x -22.0%

TTM Revenue Growth 10.9%TTM EBITDA Growth 12.4%TTM Earnings Growth -8.3%Gross Profit Margin 55.0%EBITDA Margin 15.8%Net Income Margin 8.8%SG&A Expenses as a % of Total Revenue 37.6%R&D Expenses as a % of Total Revenue 13.4%






July 2008


Healthcare Software Stock Market Return: Jan - Jul 2008

-35%

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0%

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 $144.59 $100.29 $101.86 42.6% -9.8% 9.7% 1.0x n/a n/a n/a -51.0%ClickSoftware Technologies Ltd. CKSW $69.68 $45.44 $42.94 61.2% 3.6% 14.3% 1.1x 29.6x n/a n/a -52.3%The Ultimate Software Group, Inc. ULTI $645.32 $623.11 $164.93 57.5% 7.2% 23.7% 3.8x 52.5x n/a n/a -3.3%Websense, Inc. WBSN $941.93 $1,031.85 $251.41 85.4% 17.2% 30.1% 4.1x 23.9x 3.1x 8.1x 4.6%Workstream Inc. WSTM $8.35 $5.16 $27.98 75.0% -50.0% -6.0% 0.2x n/a 0.2x n/a -85.8%

Median: $144.59 $100.29 $101.86 61.2% 3.6% 14.3% 1.1x 29.6x 1.7x 8.1x -51.0%

TTM Revenue Growth 14.3%TTM EBITDA Growth -6.3%TTM Earnings Growth -57.6%Gross Profit Margin 61.2%EBITDA Margin 3.6%Net Income Margin -13.3%SG&A Expenses as a % of Total Revenue 44.6%R&D Expenses as a % of Total Revenue 17.7%


Levered FCF Margin -13.5%Cash from Operations Growth (YoY) 25.2%Cash from Investing Growth (YoY) -19.4%Cash from Financing Growth (YoY) 169.6%Levered FCF Growth (YoY) n/a



July 2008


Income Statement Analysis (Median) HR & Workforce Management Software Stock Market Return: Jan - Jul 2008

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

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 $69.64 $54.89 $63.19 63.1% -0.9% 13.6% 0.9x n/a 0.7x 6.9x -15.8%Captaris, Inc. CAPA $88.93 $58.75 $102.24 68.5% -2.2% 10.0% 0.6x n/a n/a n/a -34.5%Evolving Systems, Inc. EVOL $38.94 $40.68 $36.62 60.2% 12.9% 7.2% 1.1x 8.6x 1.1x 7.8x 9.8%Interactive Intelligence, Inc. ININ $167.99 $118.34 $118.57 67.6% 8.7% 22.1% 1.0x 11.5x n/a n/a -54.8%Intervoice, Inc. INTV $319.54 $266.84 $206.22 52.6% 13.4% 3.9% 1.3x 9.6x 1.2x 7.9x 2.8%NDS Group plc NNDS $3,353.38 $2,657.14 $835.00 62.7% 27.4% 26.2% 3.2x 11.6x 3.2x 11.9x 31.8%OpenTV Corp. OPTV $247.51 $153.80 $118.71 57.8% 8.7% 24.5% 1.3x 14.9x 1.3x 8.5x -6.8%SeaChange International, Inc. SEAC $228.68 $156.47 $186.43 46.1% 4.5% 11.7% 0.8x 18.8x 0.8x 8.2x 6.3%Tumbleweed Communications Corp. TMWD $133.96 $105.44 $57.70 77.8% -13.5% -6.9% 1.8x n/a 1.7x n/a 10.5%Zix Corporation ZIXI $174.67 $161.67 $27.33 61.6% -19.6% 28.9% 5.9x n/a n/a n/a 31.1%

Median: $171.33 $136.07 $110.40 62.2% 6.6% 12.7% 1.2x 11.6x 1.2x 8.1x 4.5%






July 2008


Income Statement Analysis (Median) Messaging, Conferencing, & Comms Software Stock Market Return: Jan - Jul 2008

-25%

-20%

-15%

-10%

-5%

0%

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 $21,934.27 $20,419.54 $3,540.23 89.9% 38.6% 32.1% 5.8x 14.9x 5.6x 12.2x 2.6%Avid Technology, Inc. AVID $818.25 $679.79 $906.48 49.8% 3.5% -0.9% 0.7x 21.3x n/a n/a -31.1%Bitstream Inc. BITS $54.43 $38.20 $24.50 62.5% 15.4% 15.6% 1.6x 10.1x n/a n/a -13.7%Corel Corporation CRE $229.85 $349.73 $265.40 78.5% 20.1% 28.6% 1.3x 6.6x 1.3x 5.5x n/aDivX, Inc. DIVX $266.19 $152.85 $89.67 94.9% 5.5% 37.0% 1.7x 31.1x 1.4x 4.9x -39.2%Enliven Marketing Tech Corp. ENLV $82.25 $84.54 $19.82 46.2% -42.0% 20.0% 4.3x n/a n/a n/a -20.2%MakeMusic! Inc. MMUS $34.48 $28.99 $14.93 84.3% 8.3% 13.4% 1.9x 23.3x n/a n/a 25.7%Monotype Imaging Holdings TYPE $444.71 $545.00 $106.79 91.9% 40.1% 14.3% 5.1x 12.7x 4.7x 10.4x 8.0%NICE Systems Ltd. NICE $1,775.55 $1,549.03 $545.88 60.5% 12.7% 24.7% 2.8x 22.4x 2.5x 10.9x -11.0%Nuance Communications, Inc. NUAN $3,352.65 $3,907.13 $734.84 66.6% 12.4% 45.0% 5.3x 42.9x 4.0x 14.1x -5.8%RealNetworks, Inc. RNWK $980.18 $568.45 $602.19 61.9% -1.8% 24.2% 0.9x n/a 0.7x 7.5x -3.5%Sonic Solutions SNIC $135.87 $92.87 $132.87 75.1% -0.4% -10.6% 0.7x n/a 0.7x 10.1x -53.9%

Median: $355.45 $447.36 $199.14 70.8% 10.4% 22.1% 1.8x 21.3x 1.9x 10.3x -11.0%

TTM Revenue Growth 22.1%TTM EBITDA Growth -3.0%TTM Earnings Growth 25.3%Gross Profit Margin 70.8%EBITDA Margin 10.4%Net Income Margin 2.9%SG&A Expenses as a % of Total Revenue 42.3%R&D Expenses as a % of Total Revenue 17.9%


Levered FCF Margin 6.3%Cash from Operations Growth (YoY) 33.6%Cash from Investing Growth (YoY) 77.2%Cash from Financing Growth (YoY) 103.9%Levered FCF Growth (YoY) 20.9%




July 2008


Multimedia, Graphics, & Digital Media Software Stock Market Return: Jan - Jul 2008

-25%

-20%

-15%

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-5%

0%

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 $12,448.51 $12,267.51 $4,339.00 85.9% 31.1% 8.0% 2.8x 9.1x 2.5x 8.6x -4.2%Catapult Communications Corp CATT $96.44 $47.96 $39.46 80.4% -13.6% -7.1% 1.2x n/a n/a n/a -13.1%Cisco Systems, Inc. CSCO $129,897.92 $112,442.92 $38,609.00 64.5% 28.4% 15.3% 2.9x 10.2x 2.7x 8.3x -23.9%Citrix Systems, Inc. CTXS $4,889.37 $4,500.54 $1,518.25 91.9% 18.6% 22.3% 3.0x 15.9x 2.8x 10.4x -26.3%F5 Networks, Inc. FFIV $2,338.76 $2,071.47 $624.52 77.0% 20.6% 27.0% 3.3x 16.1x 2.9x 10.7x -32.7%NetScout Systems Inc. NTCT $536.85 $557.08 $201.65 72.6% 9.6% 88.8% 2.8x 28.8x 2.1x 12.4x 40.3%Novell, Inc. NOVL $1,971.05 $1,019.72 $948.32 73.5% 6.8% 5.3% 1.1x 15.9x 1.0x 7.9x -17.0%OPNET Technologies, Inc. OPNT $209.07 $130.21 $101.35 75.6% 0.6% 6.5% 1.3x 217.0x 1.1x n/a -1.5%Radware Ltd. RDWR $163.38 $72.75 $93.63 81.0% -19.3% 13.5% 0.8x n/a n/a n/a -42.1%TTI Team Telecom International Ltd. TTIL $31.21 $1.36 $48.26 55.5% 7.1% 8.9% 0.0x 0.4x n/a n/a -35.6%

Median: $1,253.95 $788.40 $413.08 76.3% 8.4% 11.2% 2.0x 15.9x 2.5x 9.5x -20.5%



Levered FCF Margin -0.8%Cash from Operations Growth (YoY) 6.3%Cash from Investing Growth (YoY) 32.2%Cash from Financing Growth (YoY) -232.6%Levered FCF Growth (YoY) -32.3%




July 2008


Networking & Connectivity Software Stock Market Return: Jan - Jul 2008

-25%

-20%

-15%

-10%

-5%

0%

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 $119.03 $32.62 $59.12 67.0% -27.8% -2.0% 0.6x n/a 0.5x n/a -39.0%Aladdin Knowledge Systems Ltd. ALDN $125.19 $34.06 $111.64 73.1% 12.0% 16.4% 0.3x 2.5x 0.3x 3.4x -59.0%ArcSight, Inc. ARST $351.19 $279.24 $101.55 84.0% 1.2% 45.4% 2.7x 239.1x 2.2x n/a n/aBlue Coat Systems, Inc. BCSI $557.33 $395.15 $305.44 76.6% 10.6% 71.9% 1.3x 12.1x 0.8x n/a -40.4%Check Point Software Tech Ltd. CHKP $4,989.57 $4,237.04 $781.92 91.8% 48.3% 21.6% 5.4x 11.2x n/a n/a -6.3%Cogent, Inc. COGT $906.11 $576.96 $100.32 67.6% 43.7% -8.0% 5.8x 13.1x 4.4x 11.7x -23.8%Commtouch Software Ltd. CTCH $88.16 $73.56 $13.20 87.2% 18.1% 45.3% 5.6x 30.8x n/a n/a -45.5%Entrust, Inc. ENTU $136.63 $111.21 $100.93 62.0% 2.4% -0.2% 1.1x 46.5x n/a n/a -20.6%McAfee, Inc. MFE $5,134.19 $4,002.86 $1,444.91 79.3% 22.1% 18.2% 2.8x 12.5x 2.9x 9.1x -8.7%Secure Computing Corporation SCUR $266.66 $358.20 $248.89 73.0% 2.2% 20.4% 1.4x 64.2x n/a n/a -50.3%SonicWALL, Inc. SNWL $335.39 $229.21 $218.11 71.1% 2.1% 18.5% 1.1x 50.7x n/a n/a -33.9%Sourcefire, Inc. FIRE $197.41 $99.07 $63.81 76.5% -12.7% 31.4% 1.6x n/a n/a n/a -35.0%Symantec Corporation SYMC $17,656.09 $17,469.79 $6,124.40 85.7% 28.2% 14.8% 2.9x 10.1x n/a n/a 9.7%Tumbleweed Communications Corp. TMWD $133.96 $105.44 $57.70 77.8% -13.5% -6.9% 1.8x n/a 1.7x n/a 10.5%VASCO Data Security International VDSI $509.65 $467.57 $125.47 68.8% 26.2% 22.2% 3.7x 14.2x 2.9x 11.7x -48.3%VeriSign, Inc. VRSN $6,335.73 $7,316.89 $1,522.09 60.3% 21.1% 0.0% 4.8x 22.8x 7.6x 15.4x 9.6%Websense, Inc. WBSN $941.93 $1,031.85 $251.41 85.4% 17.2% 30.1% 4.1x 23.9x 3.1x 8.1x 4.6%Zix Corporation ZIXI $174.67 $161.67 $27.33 61.6% -19.6% 28.9% 5.9x n/a n/a n/a 31.1%

Median: $343.29 $318.72 $118.56 74.8% 11.3% 19.4% 2.8x 18.5x 2.6x 10.4x -23.8%






July 2008


Income Statement Analysis (Median) Security Software Stock Market Return: Jan - Jul 2008

-30%

-25%

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-10%

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0%

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 $6,250.05 $5,584.65 $1,784.10 77.3% 30.4% 11.2% 3.1x 10.3x 2.9x 9.4x 14.5%CA, Inc. CA $12,448.51 $12,267.51 $4,339.00 85.9% 31.1% 8.0% 2.8x 9.1x 2.5x 8.6x -4.2%CommVault Systems, Inc. CVLT $644.75 $553.09 $198.30 86.4% 13.5% 31.2% 2.8x 20.6x 2.0x 10.6x -10.3%Compuware Corporation CPWR $2,815.53 $2,542.65 $1,248.81 61.3% 22.7% 4.4% 2.0x 9.0x n/a n/a 17.9%EMC EMC $31,029.23 $28,880.85 $14,274.46 55.2% 20.2% 17.7% 2.0x 10.0x 1.8x 9.3x -18.9%FalconStor Software, Inc. FALC $333.41 $281.08 $87.34 85.5% 15.7% 29.8% 3.2x 20.5x 2.5x n/a -33.5%Network Appliance, Inc. NTAP $8,351.71 $7,359.92 $3,303.17 61.0% 13.9% 17.8% 2.2x 16.1x 1.9x 12.3x -9.8%SupportSoft, Inc. SPRT $157.32 $79.70 $47.19 50.9% -43.1% -5.4% 1.7x n/a 1.6x n/a -38.4%Symantec Corporation SYMC $17,656.09 $17,469.79 $6,124.40 85.7% 28.2% 14.8% 2.9x 10.1x n/a n/a 9.7%VMWare VMW $13,908.33 $12,818.07 $1,664.59 83.0% 23.3% 70.9% 7.7x 33.1x 5.7x 18.0x n/a

Median: $7,300.88 $6,472.29 $1,724.35 80.1% 21.5% 16.3% 2.8x 10.3x 2.3x 10.0x -9.8%







July 2008


Storage & Systems Management Software Stock Market Return: Jan - Jul 2008

-25%

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0%

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. AMSWA $139.02 $68.50 $89.00 51.7% 15.0% 5.5% 0.8x 5.1x 0.7x 4.2x -53.1%Ariba ARBA $1,402.83 $1,324.28 $318.05 57.1% -9.1% 6.5% 4.2x n/a n/a n/a 96.5%Ariba, Inc. ARBA $1,402.83 $1,324.28 $318.05 57.1% -9.1% 6.5% 4.2x n/a n/a n/a 96.5%Aspen Technology, Inc. AZPN $1,201.63 $1,255.72 $341.70 74.8% 21.9% 14.4% 3.7x 16.8x 3.5x n/a 7.3%CAM Commerce Solutions, Inc. CADA $165.71 $138.46 $36.60 76.5% 23.0% 29.5% 3.8x 16.4x n/a n/a 30.7%CMGI, Inc. CMGI $600.21 $352.16 $1,044.48 13.3% 4.0% -9.4% 0.3x 8.5x n/a n/a -22.5%i2 Technologies, Inc. ITWO $276.98 $333.56 $257.30 55.0% 12.5% -8.5% 1.3x 10.4x 1.4x n/a -20.5%JDA Software Group JDAS $522.29 $528.67 $377.78 62.7% 22.2% 5.1% 1.4x 6.3x n/a n/a -24.5%Logility, Inc. LGTY $86.90 $44.81 $44.91 67.1% 28.0% 2.6% 1.0x 3.6x 0.9x n/a n/aManhattan Associates, Inc. MANH $605.70 $528.77 $348.40 55.8% 16.5% 10.3% 1.5x 9.2x 1.4x 7.7x -11.9%Retalix Ltd. RTLX $236.87 $212.88 $222.62 49.0% 1.5% 8.2% 1.0x 64.9x 0.9x n/a -37.7%The Descartes Systems Group Inc. DSG $178.27 $133.11 $62.03 64.9% 22.9% 15.8% 2.1x 9.4x 2.0x 8.6x -18.5%XATA Corporation XATA $34.12 $60.55 $34.56 47.5% -10.2% 8.9% 1.8x n/a n/a n/a 5.4%

Median: $276.98 $333.56 $257.30 57.1% 15.0% 6.5% 1.5x 9.3x 1.4x 7.7x -15.2%

TTM Revenue Growth 6.5%TTM EBITDA Growth 4.9%TTM Earnings Growth -28.5%Gross Profit Margin 57.1%EBITDA Margin 15.0%Net Income Margin 6.5%SG&A Expenses as a % of Total Revenue 32.4%R&D Expenses as a % of Total Revenue 13.5%





July 2008


Income Statement Analysis (Median) Supply Chain Management & Logistics Software Stock Market Return: Jan - Jul 2008

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0%

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 $148,801.48 $136,067.82 $19,611.29 59.8% 36.5% 46.0% 6.9x 19.0x 5.4x 13.0x -7.1%SPSS Inc. SPSS $598.70 $442.71 $305.85 93.6% 23.4% 11.3% 1.4x 6.2x 1.4x 5.8x -19.5%Vignette Corporation VIGN $271.70 $133.73 $186.72 66.0% 6.2% -5.5% 0.7x 11.6x 0.7x 7.0x -46.5%Websense, Inc. WBSN $941.93 $1,031.85 $251.41 85.4% 17.2% 30.1% 4.1x 23.9x 3.1x 8.1x 4.6%

Median: $770.31 $737.28 $278.63 75.7% 20.3% 20.7% 2.8x 15.3x 2.3x 7.5x -13.3%







July 2008


Web Analytics Software Stock Market Return: Jan - Jul 2008

-25%

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0%

5%

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 $66.69 $4.20 $58.17 30.4% n/a -16.9% 0.1x n/a n/a n/a -20.2%Itron, Inc. ITRI $3,151.96 $4,271.30 $1,906.99 33.6% 15.5% 118.2% 2.2x 14.5x 2.2x 15.0x 16.2%Openwave Systems Inc. OPWV $118.91 $53.18 $252.29 54.2% -13.7% -15.2% 0.2x n/a 0.2x 2.5x -72.8%PCTEL, Inc. PCTI $217.62 $147.86 $75.35 47.5% 7.1% 12.4% 2.0x 27.6x n/a n/a 27.7%Smith Micro Software, Inc. SMSI $225.13 $198.92 $77.59 74.1% 6.4% 24.6% 2.6x 40.2x 2.0x 10.3x -47.3%TeleCommunication Systems, Inc. TSYS $232.90 $217.02 $159.04 42.7% 13.8% 21.6% 1.4x 9.9x n/a n/a 27.6%

Median: $221.38 $173.39 $118.31 45.1% 7.1% 17.0% 1.7x 21.0x 2.0x 10.3x -2.0%



Levered FCF Margin -2.9%Cash from Operations Growth (YoY) 38.0%Cash from Investing Growth (YoY) 90.2%Cash from Financing Growth (YoY) -91.3%Levered FCF Growth (YoY) n/a




July 2008


Wireless Software Stock Market Return: Jan - Jul 2008

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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 $977.36 $912.52 $108.58 55.7% 11.4% 34.1% 8.4x 73.8x 7.2x 46.2x n/aConcur CNQR $1,771.02 $1,778.93 $193.69 67.8% 22.1% 60.3% 9.2x 41.6x 7.4x 28.6x 72.8%Constant Contact CTCT $499.50 $397.57 $58.95 74.4% -1.6% 85.2% 6.7x n/a 4.5x 128.0x n/aDealerTrack TRAK $664.14 $458.49 $246.43 56.6% 26.3% 31.7% 1.9x 7.1x 1.7x 6.8x -56.8%DemandTec DMAN $269.88 $194.36 $66.08 67.0% -4.2% 41.6% 2.9x n/a 2.6x n/a n/aKenexa KNXA $421.09 $374.51 $187.92 72.0% 20.6% 43.1% 2.0x 9.7x 1.7x 7.5x -47.8%LivePerson LPSN $133.51 $111.96 $58.34 73.2% 9.1% 55.1% 1.9x 21.0x 1.3x 6.9x -46.0%Netsuite N $1,039.66 $870.50 $119.43 69.0% -11.6% 55.3% 7.3x n/a 4.9x n/a n/aOmniture OMTR $1,246.89 $1,197.42 $215.33 59.4% 1.7% 101.0% 5.6x 333.0x 3.3x 15.8x -24.1%RightNow RNOW $540.21 $445.97 $128.03 63.7% -7.2% 15.3% 3.5x n/a n/a n/a 21.9%Salary.com SLRY $66.58 $31.88 $36.58 73.1% -36.2% 43.9% 0.9x n/a n/a n/a -68.3%Salesforce.com CRM $7,664.75 $7,180.13 $833.91 78.0% 7.6% 50.3% 8.6x 113.7x 6.7x 38.5x 64.2%SoundBite Communications SDBT $47.30 $11.38 $41.37 63.3% 4.9% 26.7% 0.3x 5.6x 0.2x 2.7x n/aSuccessFactors SFSF $577.97 $491.61 $74.42 58.8% -100.1% 92.5% 6.6x n/a 4.8x n/a n/aTaleo TLEO $496.84 $392.14 $144.31 68.8% 9.4% 29.9% 2.7x 28.9x n/a n/a -12.9%Vocus VOCS $656.39 $575.45 $68.35 81.4% 6.0% 37.9% 8.4x 140.0x n/a n/a 26.7%

Median: $559.09 $452.23 $114.01 68.3% 5.5% 43.5% 4.5x 35.3x 3.9x 15.8x -18.5%







July 2008


SEG SaaS Index Stock Market Return: Jan - Jul 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

Stock Market Return YTD

SEG Internet Index $324.64 $299.34 $143.20 58.9% 14.8% 19.5% 1.4x 12.3x 2.6x 13.3x -30.4% Advertising $506.42 $456.94 $145.03 55.6% 16.1% 17.5% 2.2x 19.8x 2.2x 12.9x -16.6% eCommerce & Portals $405.09 $401.51 $270.56 75.7% 13.7% 19.5% 1.6x 12.4x 1.6x 10.3x -27.7% Financial $197.14 $298.45 $32.96 52.1% 19.0% 23.4% 2.3x 14.9x 3.3x 8.4x -37.4% Networking & Connectivity $183.60 $163.41 $217.78 43.0% 4.7% 15.2% 0.8x 9.3x 0.9x 3.7x -46.4% New Media $286.06 $233.57 $133.78 60.6% 18.4% 22.9% 2.0x 10.0x 2.0x 9.0x -47.3% Search Engine $7,370.45 $7,118.71 $330.28 59.4% 27.1% 34.7% 5.2x 21.7x 4.7x 12.9x -7.4%





Category Name

July 2008




SEG Internet Index Stock Market Return: Jan - Jul 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 $52.54 $8.76 $83.14 34.3% -37.8% 1.0% 0.1x n/a 0.1x n/a -66.7%Baidu.com, Inc. BIDU $11,886.54 $11,606.06 $356.89 65.4% 41.1% 105.9% 32.5x 79.2x 17.8x 41.0x 71.9%comScore Inc. SCOR $546.13 $480.32 $102.78 73.4% 17.4% 39.1% 4.7x 26.9x 3.6x 15.1x -18.7%Google Inc. GOOG $148,801.48 $136,067.82 $19,611.29 59.8% 36.5% 46.0% 6.9x 19.0x 5.4x 13.0x -7.1%InfoSpace, Inc. INSP $324.64 $133.68 $146.86 46.5% -49.8% 47.8% 0.9x n/a 0.7x 5.7x -54.7%LookSmart, Ltd. LOOK $52.99 $21.45 $61.79 42.5% -7.3% 23.4% 0.3x n/a 0.2x 2.9x -7.7%Marchex Inc. MCHX $466.71 $433.56 $142.21 47.6% 14.8% 8.7% 3.0x 20.6x 2.9x 13.5x -13.8%MIVA, Inc. MIVA $27.43 $4.78 $143.20 52.3% -5.0% -15.3% 0.0x n/a 0.0x 51.4x -87.6%SINA Corporation SINA $2,524.87 $2,112.32 $266.16 61.3% 24.8% 22.4% 7.9x 32.0x 5.5x 17.5x 5.1%Sohu.com Inc. SOHU $2,854.35 $2,631.35 $303.66 87.3% 35.7% 114.1% 8.7x 24.3x 5.5x 12.9x 134.9%Think Partnership, Inc. THK $24.42 $37.17 $76.96 48.1% 8.9% -0.7% 0.5x 5.5x 0.4x 5.3x -83.6%Tucows Inc. TCX $39.16 $45.95 $75.58 33.0% 9.4% 11.9% 0.6x 6.4x 0.5x 4.6x -56.9%ValueClick, Inc. VCLK $1,132.48 $971.72 $679.88 68.3% 22.9% 12.6% 1.4x 6.2x 1.5x 5.7x -44.3%Yahoo! Inc. YHOO $27,468.27 $24,410.65 $7,215.19 58.9% 18.5% 8.5% 3.4x 18.3x 4.1x 11.8x -14.5%

Median: $506.42 $456.94 $145.03 55.6% 16.1% 17.5% 2.2x 19.8x 2.2x 12.9x -16.6%







July 2008


SEG Internet: Advertising Stock Market Return: Jan - Jul 2008

-30%

-25%

-20%

-15%

-10%

-5%

0%

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

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 $349.26 $381.57 $931.40 43.1% 6.7% 4.4% 0.4x 6.1x 0.4x 6.6x -40.8%Amazon.com, Inc. AMZN $32,514.81 $31,008.81 $17,132.00 22.5% 6.2% 40.5% 1.8x 29.1x 1.5x 20.5x -2.8%Bluefly, Inc. BFLY $37.44 $31.93 $94.63 35.2% -14.8% 15.0% 0.3x n/a n/a n/a -68.0%Digital River Inc. DRIV $1,480.80 $1,197.57 $381.43 86.4% 24.8% 16.2% 3.1x 12.6x 3.0x 8.9x -11.4%eBay Inc. EBAY $32,735.20 $28,683.83 $8,457.71 75.9% 33.4% 24.9% 3.4x 10.1x 3.1x 8.3x -22.3%Expedia, Inc. EXPE $5,609.74 $5,535.80 $2,919.82 78.4% 24.3% 22.4% 1.9x 7.8x n/a n/a -26.5%Gmarket Inc. GMKT $1,066.58 $810.47 $253.32 47.3% 17.4% 33.4% 3.2x 18.4x 2.8x 13.2x -1.3%Greenfield Online Inc. SRVY $364.29 $299.34 $132.48 75.6% 24.1% 24.7% 2.3x 9.4x 1.9x 7.3x -14.8%GSI Commerce, Inc. GSIC $722.77 $939.93 $861.16 56.1% 4.5% 31.8% 1.1x 24.1x 0.9x 11.6x -31.5%HouseValues, Inc. SOLD $69.06 $8.34 $47.31 100.0% -2.1% -36.1% 0.2x n/a n/a n/a -31.2%IAC/InterActiveCorp IACI $4,881.81 $4,258.85 $6,588.62 46.0% 10.3% 7.5% 0.6x 6.3x 0.7x 4.8x -39.2%InsWeb Corp. INSW $28.81 $18.13 $38.80 100.0% 3.4% 31.2% 0.5x 13.6x n/a n/a -15.3%Internet Brands, Inc INET $254.07 $177.19 $95.69 74.3% 15.2% 16.7% 1.9x 12.2x 1.6x 4.9x n/aLiquidity Services, Inc. LQDT $307.31 $244.88 $226.28 57.5% 8.5% 30.8% 1.1x 12.8x 0.9x 8.8x -28.9%LiveDeal, Inc. LIVE $13.11 $7.01 $26.82 84.2% 14.4% -11.0% 0.3x 1.8x n/a n/a -72.2%LoopNet, Inc. LOOP $406.42 $336.90 $80.81 88.2% 39.4% 36.8% 4.2x 10.6x n/a n/a -45.1%Mercadolibre, Inc. MELI $1,585.61 $1,537.37 $97.51 77.9% 27.6% 69.5% 15.8x 57.0x 9.0x 28.8x n/aMove, Inc. MOVE $353.82 $410.16 $287.79 79.5% 5.7% 2.8% 1.4x 24.8x 1.2x 12.6x -30.4%NetEase.com, Inc. NTES $2,759.00 $2,207.47 $339.35 81.7% 60.1% 6.2% 6.5x 10.8x 6.0x 10.3x 33.5%Overstock.com, Inc. OSTK $403.77 $392.87 $842.85 17.2% 0.6% 11.2% 0.5x 76.4x 0.4x 16.7x -4.9%priceline.com Incorporated PCLN $4,427.64 $4,467.62 $1,513.91 46.3% 16.0% 26.3% 3.0x 18.5x 2.3x 12.1x 80.2%Travelzoo, Inc. TZOO $97.90 $76.68 $81.77 96.5% 13.1% 8.9% 0.9x 7.2x n/a n/a -66.7%

Median: $405.09 $401.51 $270.56 75.7% 13.7% 19.5% 1.6x 12.4x 1.6x 10.3x -27.7%






July 2008


Income Statement Analysis (Median) SEG Internet: eCommerce & Portals Stock Market Return: Jan - Jul 2008

-25%

-20%

-15%

-10%

-5%

0%

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 $593.97 $527.89 $115.83 68.7% 30.0% 41.1% 4.6x 15.2x 3.3x 9.9x -29.9%Banks.com, Inc BNX $6.35 $12.50 $21.91 52.1% 3.9% -23.0% 0.6x 14.5x n/a n/a -86.6%China Finance Online Co. Ltd. JRJC $380.63 $298.45 $32.96 83.9% 22.8% 239.2% 9.1x 39.8x 3.2x 6.8x 62.4%Online Resources Corp. ORCC $197.14 $347.23 $148.69 50.5% 19.0% 23.4% 2.3x 12.3x n/a n/a -37.4%Track Data Corp. TRAC $16.28 $4.23 $32.70 29.6% -1.7% -19.5% 0.1x n/a n/a n/a -39.5%

Median: $197.14 $298.45 $32.96 52.1% 19.0% 23.4% 2.3x 14.9x 3.3x 8.4x -37.4%






July 2008


Income Statement Analysis (Median) SEG Internet: Financial Stock Market Return: Jan - Jul 2008

-40%

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

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 $3.62 $3.03 $26.56 25.2% -23.4% -25.2% 0.1x n/a n/a n/a -90.5%EarthLink Inc. ELNK $987.62 $941.78 $1,088.66 46.8% 24.4% -16.0% 0.9x 3.5x 1.0x 3.7x 29.5%Internap Network Services Corp. INAP $231.93 $190.51 $242.61 42.9% 12.1% 26.2% 0.8x 6.5x 0.6x 3.7x -68.8%Internet Gold Golden Lines Ltd. IGLD $177.27 $327.86 $327.31 32.4% n/a 86.5% 1.0x n/a 0.9x 3.7x -31.3%Internet Initiative Japan Inc. IIJI $749.93 $811.66 $611.12 20.9% 14.3% 17.1% 1.3x 9.3x n/a n/a 17.0%iPass Inc. IPAS $113.11 $43.16 $192.96 44.0% -0.7% 4.1% 0.2x n/a 0.2x 2.4x -61.5%Keynote Systems Inc. KEYN $189.93 $136.32 $73.69 59.6% 4.1% 13.2% 1.8x 44.7x 1.6x 11.0x -8.3%Sify Technologies Limited SIFY $118.13 $96.45 $154.00 43.1% 4.7% 19.5% 0.6x 13.3x n/a n/a -62.5%

Median: $183.60 $163.41 $217.78 43.0% 4.7% 15.2% 0.8x 9.3x 0.9x 3.7x -46.4%



Levered FCF Margin 1.7%Cash from Operations Growth (YoY) -23.8%Cash from Investing Growth (YoY) 96.2%Cash from Financing Growth (YoY) -125.6%Levered FCF Growth (YoY) -66.1%



July 2008


Income Statement Analysis (Median) SEG Internet: Networking & Connectivity Stock Market Return: Jan - Jul 2008

-45%

-40%

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

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 $42.52 $116.19 $140.11 57.7% 17.4% 1.3% 0.8x 4.8x 0.9x 4.9x -84.8%Napster, Inc. NAPS $64.67 -$5.12 $127.45 28.5% -9.3% 14.7% 0.0x 0.4x n/a n/a -51.6%RealNetworks, Inc. RNWK $980.18 $568.45 $602.19 61.9% -1.8% 24.2% 0.9x n/a 0.7x 7.5x -3.5%TechTarget, Inc. TTGT $292.70 $237.55 $100.19 70.6% 18.2% 21.5% 2.4x 13.0x 2.1x 9.0x -47.4%The Knot, Inc. KNOT $279.41 $229.60 $101.46 81.8% 22.6% 28.5% 2.3x 10.0x 2.0x 10.2x -51.7%TheStreet.com, Inc. TSCM $207.05 $126.60 $74.64 59.4% 20.9% 31.5% 1.7x 8.1x 1.3x 6.2x -38.8%WebMD Health Corp. WBMD $1,393.10 $1,092.22 $341.69 64.8% 19.2% 26.2% 3.2x 16.7x 2.9x 10.8x -47.2%Yahoo! Inc. YHOO $27,468.27 $24,410.65 $7,215.19 58.9% 18.5% 8.5% 3.4x 18.3x 4.1x 11.8x -14.5%

Median: $286.06 $233.57 $133.78 60.6% 18.4% 22.9% 2.0x 10.0x 2.0x 9.0x -47.3%







July 2008


SEG Internet: New Media Stock Market Return: Jan - Jul 2008

-50%

-45%

-40%

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

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 $11,886.54 $11,606.06 $356.89 65.4% 41.1% 105.9% 32.5x 79.2x 17.8x 41.0x 71.9%Google Inc. GOOG $148,801.48 $136,067.82 $19,611.29 59.8% 36.5% 46.0% 6.9x 19.0x 5.4x 13.0x -7.1%LookSmart, Ltd. LOOK $52.99 $21.45 $61.79 42.5% -7.3% 23.4% 0.3x n/a 0.2x 2.9x -7.7%MIVA, Inc. MIVA $27.43 $4.78 $143.20 52.3% -5.0% -15.3% 0.0x n/a 0.0x 51.4x -87.6%Sohu.com Inc. SOHU $2,854.35 $2,631.35 $303.66 87.3% 35.7% 114.1% 8.7x 24.3x 5.5x 12.9x 134.9%Yahoo! Inc. YHOO $27,468.27 $24,410.65 $7,215.19 58.9% 18.5% 8.5% 3.4x 18.3x 4.1x 11.8x -14.5%

Median: $7,370.45 $7,118.71 $330.28 59.4% 27.1% 34.7% 5.2x 21.7x 4.7x 12.9x -7.4%






July 2008


Income Statement Analysis (Median) SEG Internet: Search Engine Stock Market Return: Jan - Jul 2008

-25%

-20%

-15%

-10%

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0%

5%

10%

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


July 2008

Selected Software Industry M&A Transactions

Selected July 2008 Software Industry M&A Transactions

Date Announced Target EV/ Revenue

07/02/2008 Xandros Corporation Linspire, Inc. - - -07/02/2008 SemanticSpace Technologies Limited Prolifics Corporation $52.0 $40.0 0.8x07/02/2008 Constellation Homebuilder Systems, Inc. Carbiz Inc., Software Division - $2.7 -07/02/2008 The Active Network Inc. T&C Products, Inc. - - -07/02/2008 SilverBirch Inc. (TSXV:SVB) Red Mile Entertainment Inc. (OTCBB:RDML) $10.2 $5.1 0.5x07/03/2008 Temenos UK Ltd. Financial Objects plc (AIM:FIO) $42.1 $43.3 1.0x07/03/2008 Medworxx Solutions Inc (TSXV:MWX) HealthCast Inc. - $3.5 -07/04/2008 AddNode AB (OM:ANOD B) Ravalik Oy $5.8 $3.1 0.5x07/07/2008 Sangoma Technologies Corp. (TSXV:STC) Paraxip Technologies, Inc. - $4.6 -07/07/2008 Triple Point Technology, Inc. ROME Corporation - - -07/08/2008 McCabe Software, Inc. Agitar Software, Inc. - - -07/08/2008 Hyland Software, Inc. Liberty Information Management Solutions, Inc. - - -07/09/2008 iMagiclab LLC 5Square Systems Corporation - - -07/09/2008 Aspect Software, Inc. BlueNote Networks, Inc. - - -07/10/2008 Artesia Technologies, Inc. eMotion, Inc. - $5.0 -07/10/2008 NetSocket Operax AB - - -07/14/2008 Microsoft Israel Ltd. Zoomix Data Mastering, Ltd. - - -07/15/2008 NitroSecurity, Inc. Ripple Technologies, Inc. - - -07/15/2008 Convergys Corporation (NYSE:CVG) Intervoice Inc. (NasdaqGS:INTV) $206.2 $269.6 1.3x07/15/2008 BlackRock, Inc. (NYSE:BLK) Impact Investing Pty Ltd - - -07/16/2008 Exor Group Limited TiVA Services Limited - - -07/16/2008 Healthvision Inc. MediSolution Ltd., Healthcare Products and Services Division - $49.3 -07/17/2008 Quark, Inc. In.vision Research Corporation - - -07/17/2008 Sage Group plc (LSE:SGE) DCS Automotive Iberica SL $1.3 - -07/17/2008 Medical Present Value, Inc. TeraHealth, Inc. - - -07/17/2008 Sage Group plc (LSE:SGE) Eurowin Soft S.L. $20.6 - -07/18/2008 Rebellion Studios Razorworks Limited - - -07/22/2008 OutStart, Inc. Eedo Knowledgeware Corporation - - -07/22/2008 Visionapp Ag visionapp NA, Inc. - - -07/22/2008 Totvs Sa (BOVESPA:TOTS3) Datasul S/A (BOVESPA:DSUL3) $152.2 $71.8 0.5x07/23/2008 Interwoven Inc. (NasdaqGM:IWOV) Discovery Mining, Inc. - $36.0 -07/23/2008 InterGis LLC Vericom Technologies, Inc. - - -07/23/2008 Hellman & Friedman LLC SSP Holdings PLC (AIM:SSPH) $128.8 $393.6 3.1x07/23/2008 Cisco Systems, Inc. (NasdaqGS:CSCO) Pure Networks, Inc. - $120.0 -07/24/2008 Phoenix Technologies Ltd. (NasdaqGM:PTEC) General Software, Inc. - $20.0 -07/27/2008 International Business Machines Corp. (NYSE:IBM) ILOG SA (ENXTPA:ILO) $214.7 $268.5 1.3x07/28/2008 Rearden Commerce, Inc. SamePage Solutions - - -07/28/2008 Double-Take Software (NasdaqGM:DBTK) emBoot Inc. - $10.0 -07/28/2008 Global TV, Inc. DCL Environmental Systems, Inc. - - -07/28/2008 Motorola Inc. (NYSE:MOT) AirDefense, Inc. - - -07/29/2008 Bluepoint Solutions, Inc. Avalon International, Inc. - - -07/29/2008 Aladdin Knowledge Systems Ltd. (NasdaqGS:ALDN) Secure Computing Corp., Secure SafeWord $32.0 $64.3 2.0x07/30/2008 Broadridge Financial Solutions Inc. (NYSE:BR) Investigo Corporation - - -07/30/2008 Wright Express Corp. (NYSE:WXS) Financial Automation Limited - $9.0 -07/31/2008 Ebix Inc. (NasdaqGS:EBIX) Acclamation Systems, Inc. - $25.0 -07/31/2008 Monster Worldwide, Inc. (NasdaqGS:MNST) Trovix, Inc. - $72.5 -07/31/2008 Logi XML, Inc. OnDemandIQ, Inc. - - -07/31/2008 Oracle Corp. (NasdaqGS:ORCL) Global Knowledge Software, LLC - - -


Target TTM Revenue ($mm)Acquirer

Implied Enterprise Value ($mm)


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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, 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.

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