FIRST HALF DEAL NOTES 2011

M&A and Investments Review for the Marketing, DEAL NOTES Media, Technology, and Service Industries

1H11 Marketing, Media, Technology and Service Industries Transaction Activity Up 241 Percent; Deal Value Up 193 Percent on a Year-Over-Year Basis 1H11 Review: 1,353 Transactions Totaling $63.3 Billion Digital Media/Commerce Most Active and Highest Value Segment in 1H11 With 577 Transactions and $29.9 Billion in Deal Value and investment activity in the Marketing, Media, Technology and Service industries MARKETING, MEDIA, TECHNOLOGY & SERVICE INDUSTRIES 1H11 &A AND INVESTMENT ACTIVITY grew 241 percent in the first half of 2011, while ($ in Millions) aggregate transaction value increased 193 percent, compared to 1H10. During the first half of 2011, Petsky Digital Media/ Commerce Prunier tracked 1,353 transactions for a total of $63.3 $29,937 billion across six broad segments: Digital Advertising, Agency/Consulting, Marketing Technology, Digital Digital Agency/ Advertising Consulting Media/Commerce, Software & Information and $2,937 $2,639 Marketing Services. Digital Media/Commerce was the most active and highest value segment with 577 transactions worth $29.9 billion in deal value. While strategic buyers accounted for approximately half of the combined M&A and investment activity, their Marketing Software & transactions represented 64 percent of the total value. Technology Information $9,338 Marketing $15,060 Venture and growth capital investors announced 705 Services transactions worth $13.8 billion. While there were $3,369 only 37 private transactions, the deals accounted for $9.0 billion in value. (Continued on page 2)

IN THIS ISSUE MARKETING, MEDIA, TECHNOLOGY & SERVICE INDUSTRIES M&A and Investments Overview 1 M&A AND INVESTMENT ACTIVITY: 2Q10 - 2Q11 Monetizing : Advertisers, Developers Look to Capitalize ($ in Billions) on Explosive Growth in Facebook Applications Platform 3 The DMP Debate: The Benefits of Pure Play vs. Mixed Model Data DOLLAR Management Platforms 4 VALUE Rising Above the Din: Professional Services Help Technology $38.2 Solutions Providers Differentiate From the Pack 5 Segment Analysis: $25.1 Digital Advertising 6 $19.8 Agency/Consulting 7 $13.3 $12.8 Marketing Technology 8 DEAL Digital Media/Commerce 9 VOLUME 219 205 414 651 702 Software & Information 10 2Q10 3Q10 4Q10 1Q11 2Q11 Marketing Services 11 Recent Transactions 17 What’s New at Petsky Prunier 18 About Petsky Prunier 18

Securities offered through Petsky Prunier Securities, LLC FIRST HALF DEAL NOTES 2011

1H11 M&A Overview (continued from pg. 1)

M&A ACTIVITY M&A activity in the Software & Information segment Looking at control transactions only, Digital Media/ also increased substantially in 1H11. There were 84 Commerce was the most active and highest value transactions worth approximately $14.0 billion, M&A segment in the first half of 2011 with 242 compared to 30 transactions worth approximately transactions and $20.4 billion in M&A deal value. The $7.3 billion in the same year-ago period. The largest Social Media/Apps subsegment accounted for almost deal in the segment was Infor Global Solutions’ half of the segment’s aggregate transaction value, while $2.1 billion acquisition of Lawson Software. Market eCommerce represented 27 percent. Compared to Research accounted for 26 percent of M&A activity the first half of 2010, M&A transaction volume in in this segment. the Digital Media/Commerce segment increased by nearly 284 percent, while aggregate transaction value In Agency/Consulting, M&A activity in the first half increased by 801 percent. Of the largest transactions of the year increased by 147 percent, with 89 deals in 1H11, Digital Media/Commerce deals accounted announced for approximately $2.5 billion. The Digital for five of the top 12 deals, including Microsoft’s Agency subsegment generated the highest value with $8.5 billion acquisition of Skype at 9.9x revenue and 35 deals announced for $1.2 billion, a 41 percent 32.2x EBITDA, Allstate’s $1.0 billion acquisition of increase in deal value compared to 1H10. Within Esurance and Answer Financial, Apax Partners’ $745 Agency/Consulting, the General Agency subsegment million buyout of Trader Corporation, Kuoni Reisen saw a significant year-over-year increase in activity with Holding’s $720 million acquisition of Gullivers Travel 15 deals announced for $187 million compared to two Associates and AXA ’s $682 million deals for $55 million in the first half of 2010. Notable buyout of Opodo. transactions within the segment included acquisitions of two of the largest independent agencies: Publicis The second most active M&A segment in 1H11 was Groupe’s $575 million acquisition of Rosetta at 1.62x Marketing Technology, with 131 transactions valued revenue and 12.5x EBITDA and Epsilon’s $345 million at $7.7 billion. Marketing Technology deals accounted acquisition of Aspen Marketing Services at 1.4x revenue for three of the top 12 highest-value transactions across and 8.6x EBITDA. Additional transactions included all segments, including eBay’s $2.4 billion buyout of Barclays Private Equity’s $193 million buyout of The GSI Commerce, DG’s $414 million acquisition of Mill at 1.6x revenue and dunnhumby’s $60 million MediaMind Technologies and Google’s $400 million acquisition of social agency BzzAgent at 3.0x revenue. acquisition of AdMeld. (Continued on page 12)

1H11 Most Active Strategic Buyers by # of Transactions

# of Buyer Transactions Representative Targets

Publicis Groupe 11 Rosetta, Tailor Made, GP7, Talent Group, Airlock, Kitcatt Nohr, Interactive Communications Google 8 SageTV, AdMeld, Rank, Sparkbuy, TalkBin, Pushlife, BeatThatQuote.com, fflick Groupon 7 Crowdmass, Pelago, Disdus, Groupmore, SoSasta.com, Twangoo, Grouper eBay 6 GSI Commerce, Magento, MissionFish, FigCard, Where, MissionFish, Gittigidiyor.com CrowdGather 5 PbNation.com, Forumer.com, Rapmusic.com, PbNation.com, DigiShopTalk.com LivingSocial.com 5 DealKaren, GoNabIt, Ensogo, Dealissime.com, SocialMedia.com Evolve Media 3 Crowd Ignite, WholesomeBabyFood.com, PlayStationLifeStyle Experian 3 Medical Present Value, Computec, Techlightenment, eLong Thomson Reuters 3 CorpSmart, Manatron, World-Check VMware 3 Digital Fuel Technologies, Socialcast, SlideRocket Yellow Pages Group 3 Ad Splash Media, Mediative, UPTREND Media Avos Systems 2 Tap11.com, Delicious HomeAway 2 Second Porch, Realholidays.com.au Microsoft 2 Prodiance, Skype

2 FIRST HALF DEAL NOTES 2011 Monetizing Facebook: Advertisers, Developers Look to Capitalize on Explosive Growth in Facebook Applications Platform

While Facebook continues to capture the time and SponsorPay, which was founded in 2009 and attention of consumers worldwide, marketers have is seeking to grow its business with U.S.-based struggled to find targeted ways to reach and connect application developers, plugs into developers’ currency with the massive Facebook audience. But that struggle modules and helps them sell the to may be coming to an end, as Facebook’s application end users, who can pay for Facebook goods in cash platform – the springboard for software developers – is or by completing an advertising offer. Facebook’s now experiencing explosive growth, leading to a wave introduction of Facebook Credits, making it easier for of new advertising and marketing opportunities. consumers to buy virtual goods, will further encourage developers to monetize their online games. “An army of software application developers is building out the Facebook ecosystem,” explains Mitchell “Facebook has become a very lucrative environment Weisman, CEO of LifeStreet Media, the largest social for application developers. The platform has media ad network. “As a result of the increasing size matured, dominant players like and Electronic and maturity of that ecosystem, there is more and Arts have cemented their positions and the quality more demand for advertising inventory from both “of the games has become more important.” direct response advertisers and brand advertisers. It’s a Andreas Bodczek, CEO, SponsorPay wonderful portfolio of business opportunities.”

LifeStreet serves nearly half of Facebook’s in-application PERFORMANCE DOMINATES PRICING advertising inventory, the display ads owned by In a shift from traditional CPM pricing, many of application developers. According to Weisman, that these new social media advertising opportunities percentage has doubled over the last year, providing are being offered as pay-for-performance. “The vast advertisers with an audience of more than 300 million majority of what we do for advertisers – 95 percent users globally, including more than 70 million in – is performance-based,” says LifeStreet’s Weisman. the U.S. Facebook also offers its own marketplace “We’re not paid on a CPM or CPC [cost-per-click] inventory, the ads on the right side of the screen that basis, we’re paid on a per-conversion basis.” are owned and sold by Facebook itself. Social gaming companies, some of LifeStreet’s largest An army of software application developers is advertisers, have several objectives for their online building out the Facebook ecosystem. As a result of advertising, including growing their new user bases the increasing size and maturity of that ecosystem, and encouraging return players. “A valuable conversion there is more and more demand for advertising could be a new installation of a game’s software – so “inventory from both direct response advertisers we have a cost-per-install metric,” explains Weisman. and brand advertisers. It’s a wonderful portfolio of “A returning game user is more valuable than a new business opportunities.” user, so we can offer a cost-per-returning-user metric Mitchell Weisman, CEO, LifeStreet Media as well.”

“Facebook has become a very lucrative environment “Pricing really depends on the marketer’s objectives,” for application developers,” agrees Andreas Bodczek, adds Reggie Bradford, CEO of ViTrue, a SaaS-based CEO of SponsorPay, the European market leader marketing platform that manages social media brand in virtual currency monetization for online games, presences and communities. “Many are driven by social networks and virtual worlds. “The platform has a ‘cost-per-like’ model where the brand will ask the matured, dominant players like Zynga and Electronic application developer to guarantee a certain level of Arts have cemented their positions and the quality of ‘likes’ on their Facebook button.” the games has become more important.” (Continued on page 14 )

3 FIRST HALF DEAL NOTES 2011 The DMP Debate: The Benefits of Pure Play vs. Mixed Model Data Management Platforms

DMPs – data management platforms – are one of “DMPs have been around for a long time,” agrees Jim the hot technologies (and acronyms) of 2011. By Soss, CEO at Red Aril. “We’re seeing more attention performing a range of services, from collecting and to them now, because many traditional brands don’t storing online audience data to analyzing, segmenting know how to deal with the rapid advancements in real- and sharing that data, DMPs provide online publishers time, online media channels.” and marketers with secure platforms that manage, monitor and monetize their data assets. “DMPs have been around for a long time. We’re seeing more attention to them now because But with so much publicity and money pouring many traditional brands don’t know how to deal into the market, a wide range of technology providers with the rapid advancements in real-time, online are positioning themselves as DMPs, leaving these “media channels.” same publishers and marketers with a bewildering Jim Soss, CEO, Red Aril array of choices. Launched in the third quarter of 2010, Red Aril is “A lot of vendors are pivoting their business models a “pure-play” DMP, meaning its primary business is and technology to fit into the DMP mold,” says Marc the secure collection and storage of marketing data. Kiven, founder and chief revenue officer at DMP Like the majority of DMPs, Red Aril is SaaS-based, BrightTag. “Everyone is trying to take advantage of the requiring little to no installation with legacy systems. DMP phenomena.” “This is no different than how a publisher interacts with an email or search marketing platform,” says Soss. DEFINING DMPS “We support numerous ways to put data into or get Some argue that the concept of a data management data out of our platform, including pixel integration, platform is not new, particularly among traditional APIs and FTP systems.” direct marketers that have managed and marketed their customer data as assets for years. “Direct Data and consumer privacy are important marketers have always viewed their customer lists as issues for DMPs, with each vendor offering proprietary their most valuable asset,” says Mark Zagorski, CEO safeguards. “Each of our clients has full inventory of eXelate. The company’s DMP, called DataLinX, data rights management, all separately housed centralizes and manages all data tags through one and managed,” explains Soss about Red Aril’s data platform and allows owners to sell their data through protection standards. “Our contracts have a rider the eXelate Marketplace. about data rights, and, if any client is using third-party data, we verify those providers’ certifications.” “A lot of vendors are pivoting their business models and technology to fit into the DMP mold.” eXelate’s Privacy Shield allows data owners to manage external threats, such as outside sites putting cookies on Marc Kiven, Chief Revenue Officer, BrightTag their website visitors. Preference Manager, the company’s “ opt-out technology, enables sites to provide full Launched in May 2008, eXelate claims to manage 20 transparency to consumers about what data eXelate has. billion real-time data connections for more than 200 publishers and marketers. The majority of the data is While few DMP executives are willing to talk specifically anonymous, cookie-based files that are easily connected about their rates, DMP pricing typically includes to existing CRM, campaign management or marketing licensing or subscription fees based on the volume of platforms through aggregated log files or APIs. data assets collected, as well as transaction fees for data pushed through plugs or to partners. Training and technical support are usually included with these fees.

(Continued on page 15)

4 FIRST HALF DEAL NOTES 2011 Rising Above the Din: Professional Services Help Technology Solutions Providers Differentiate From the Pack

Technologies today may be easily commoditized. Wister Walcott, executive vice president of professional Capabilities offered by one company can be quickly services at Marin Software, an enterprise-class paid search matched by another, flattening the playing field and platform, agrees. “One of the unique things for Marin is making it difficult for any solution to maintain a that, without professional services, we wouldn’t be able leading position. Commoditization drives both new to kick off the customer relationship at all. Professional product launches and industry consolidation, as services is what delivers the onboarded customer. It’s a companies continually try to rise above the din and distinct competitive advantage and, because of its value, increase their product value. we have a separate team handling services, unlike some of our competitors.” Another way that solutions providers attempt to differentiate is through professional services. Layering “One of the unique things for Marin is that, without consulting, training, systems integration and other professional services, we wouldn’t be able to kick services on top of their software creates a more off the customer relationship at all. Professional complete offering and helps the technology stand out services is what delivers the onboarded customer. from the competition. “It’s a distinct competitive advantage.” Wister Walcott, EVP, Professional Services, Pearson eCollege offers an online learning solution that Marin Software marries technology with content, student assessment and data analytics. Just 2 percent of the company’s fees come Walcott describes Marin as a high-touch service, with a from pure services, which are enhanced by technologies client base that typically spends between $10,000 and such as built-in help desk, training and instructor support. $20,000 a month. “Because of that high price, they receive pretty generous support built in,” says Walcott, “At some level, we think the ‘empty vessel technology noting that Marin’s onboarding team steps in at the offer’ to universities is not a strong going-forward beginning of the relationship and creates a statement business,” says CEO Matt Leavy. “We think the of work, which formalizes in writing the services being services we bring are what create the value. We rarely offered. “It’s part of our brand, and the marketplace foresee a future for selling just an empty technology seems to appreciate and value that.” that has no services or content associated with it. We think that’s a significant difference between us and our AN EXCEPTION TO THE RULE competitors that are still pursuing that dying model.” One company that views the services model as an ancillary rather than core component of their business “At some level, we think the ‘empty vessel is Blackarrow.tv. To make services work, they need to be technology’ offer to universities is not a strong scalable and repeatable, and at Blackarrow, a worldwide going-forward business. We think the services we provider of advanced advertising solutions for new bring are what create the value. We rarely foresee a television platforms, each installation has a significant “future for selling just an empty technology that has level of unique or custom integration. no services or content associated with it.” Matt Leavy, CEO, Pearson eCollege As a result, “professional services are a necessary and important aspect, but not the core focus of our While a minority of small clients still pay for the business,” says CEO Dean Denhart. The company offers company’s services a la carte, Leavy believes the strength offer integration, training and product customization of eCollege’s solution comes from bundling. “Services services, but doesn’t see services as the only competitive and technology are tightly intertwined. When you’re differentiator. “Without the ability to scale services, trying to achieve a given result for your client, if you the profit margins are less attractive relative to product go into an engagement with that kind of partnership margins,” explains Denhart. “We will, however, provide model in mind, services are an integral part of it, so services to help somebody integrate the Blackarrow separating doesn’t make sense.” (Continued on page 16)

5 DIGITAL ADVERTISING FIRST HALF DEAL NOTES 2011 Mergers and acquisitions and investment activity in the Digital Advertising segment decreased in 2Q11 from the previous quarter in both number of transactions and aggregate transaction value. Petsky Prunier recorded 62 transactions this quarter (31 acquisitions and 31 investments) totaling $946 million. In comparison to 1Q11, total deal value within Digital Advertising fell 52 percent, driven by a lack of +$100 million value transactions this quarter. At the end of 2Q11, publicly traded Digital Advertising companies had an adjusted weighted average EV/ LTM EBITDA multiple of 20.4x, up from 14.8x at the end of the prior quarter.

ACTIVE SUBSEGMENTS Online Lead Generation and Mobile Marketing were the most active subsegments in Digital Advertising with 15 transactions each valued at approximately $220 million and $125 million, respectively. Ten of the Mobile Marketing transactions were venture or growth capital investments, including AllianceBernstein’s $25 million investment in mobile ad network JumpTap and Trident Capital’s $20 million investment in location-based mobile advertising company JiWire. There were 12 investments within Online Lead Generation, including Scottish Equity Partners’ $28 million investment in Media Ingenuity, a UK-based online lead generation provider for financial services intermediation, New World Ventures’ $23 million investment in Sittercity, an online directory for child care, pet care, senior care, housekeeping, house-sitting and tutoring, and Azure Capital’s $8 million investment in Open Road Media, which markets eBooks.

Ad Networks/Exchanges was the next most active subsegment with 14 transactions, three of which were investments. As seen in the previous quarter, acquisitions by strategic buyers drove the subsegment’s activity, including Ozura World’s $60 million acquisition of Tatto Media, which offers an online ad network, blinkx’s $30 million acquisition of Burst Media, which sells ad inventory on behalf of specialty-content web publishers to brand-focused advertisers, and Collective’s acquisition of Web TV Enterprise, an online video ad network.

Most Active Digital Advertising Subsegments

2Q10 3Q10 4Q10 1Q11 2Q11 # of Deal Value # of Deal Value # of Deal Value # of Deal Value # of Deal Value Subsegment Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Online Lead Generation 8 983 8 180 6 102 16 208 15 220 Mobile Marketing 7 47 5 37 4 50 23 332 15 125 Ad Networks/Exchanges 11 87 7 124 7 106 22 518 14 263 Digital Video 7 129 5 157 12 144 16 862 9 168 Search Marketing 0 0 2 7 2 12 3 44 4 75 Email Services 1 30 4 244 1 13 1 2 3 21 Game Advertising 1 4 0 0 2 13 0 0 2 74 Affiliate/CPA Network 1 11 1 17 1 8 2 25 0 0

Total 36 1,292 32 767 35 448 83 1,991 62 946

BUYERS Strategic buyers announced 31 transactions for $644 million, down from 1Q11’s 37 acquisitions worth $903 million. Venture and growth capital investments had a larger decline in transaction number and value from the first quarter, with 31 investments announced for $303 million, falling 33 percent and 72 percent, respectively. There were no private equity of Digital Advertising companies in 2Q11.

Digital Advertising Transactions by Type of Buyer

1Q10 3Q10 4Q10 1Q11 2Q11 # of Deal Value # of Deal Value # of Deal Value # of Deal Value # of Deal Value Type of Buyer Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Strategic 15 474 14 419 16 313 37 903 31 644 Private Equity - Buyout 2 31 1 109 0 0 0 0 0 0 Private Equity - VC/Growth Capital 19 787 17 239 19 136 46 1,088 31 303

Total 36 1,292 32 767 35 448 83 1,991 62 946

TRANSACTIONS Other significant transactions included ValueClick’s $70 million acquisition of Greystripe, an in- game mobile advertising network that provides technology to support free, ad-supported mobile content, KIT digital’s $79.4 million acquisition of multi-screen video delivery software and technology services provider ioko365 at 1.5x revenue, and Reply!’s $60 million acquisition of MerchantCircle, an online marketing network and business directory comprised of more than one million small businesses.

6 AGENCY/CONSULTING FIRST HALF DEAL NOTES 2011 The Agency/Consulting segment had 45 deals in 2Q11 – a drop from the previous quarter, in which 51 deals were announced. The aggregate value of transactions in the segment, however, increased by 148 percent from last quarter to approximately $1.9 billion, driven by strategic buyer activity. Valuations for agency holding companies traded at the end of the quarter at an adjusted weighted average EV/LTM EBITDA multiple of 8.8x, up from 8.6x at the end of 1Q11.

ACTIVE SUBSEGMENTS As in the prior two quarters, Digital Agency continued to be the most active subsegment, with 18 transactions announced worth approximately $912 million. While there were five Healthcare Agency transactions worth $107 million completed in 1Q11, the only deal within the healthcare vertical in 2Q11 was Publicis Healthcare Communications’ acquisition of Dreams Communication, a China-based agency providing design, digital, medical education and event planning services to pharmaceutical and healthcare clients.

Most Active Agency/Consulting Subsegments

2Q10 3Q10 4Q10 1Q11 2Q11 # of Deal Value # of Deal Value # of Deal Value # of Deal Value # of Deal Value Subsegment Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Digital Agency 12 433 11 333 12 220 20 335 18 912 Social Agency 0 0 0 0 0 0 2 40 5 120 Public Relations 2 30 1 13 3 71 4 45 5 72 General Agency 1 40 3 32 8 198 11 122 4 65 Branded Communications 0 0 0 0 0 0 0 0 2 30 Design Agency 0 0 0 0 0 0 2 25 2 203 Media Planning/Buying 1 20 1 325 0 0 1 6 2 39 DM Agency 0 0 0 0 2 17 1 30 2 356 Experiential Marketing 0 0 1 20 0 0 1 2 2 38 Healthcare Agency 2 1,139 1 24 7 175 5 107 1 35 Promotion Agency 0 0 1 2 2 15 2 25 1 9 Specialty Agency 1 5 3 35 1 25 2 23 1 1

Subtotal 19 1,668 22 783 35 721 51 759 45 1,880 Other 2 53 1 26 1 0 0 0 0 0

Total 21 1,720 23 809 35 721 51 759 45 1,880

Other subsegments include B-to-B Agency, DR Media Buying and Ethnic/Multicultural Agency

BUYERS Two-thirds of the transaction value in the segment for 2Q11 resulted from four acquisitions, each more than $100 million: Publicis’ acquisition of Rosetta for $575 million at 1.62x revenue and 12.5x EBITDA, Epsilon’s buyout of Aspen Marketing Services for $345 million at 1.4x revenue and 8.6x EBITDA, Barclays Private Equity’s $193 million acquisition of The Mill and EQT Partners’ $139 million buyout of nine Germany-based digital agencies. There were two buyers in the segment that made multiple acquisitions; in addition to Rosetta, Publicis acquired Tailor Made, GP7, Talent Group and Dreams Communication; and WPP bought F.biz and Commarco Holding. There were three investments in the segment in the second quarter.

Agency/Consulting Transactions by Type of Buyer

2Q10 3Q10 4Q10 1Q11 2Q11

# of Deal Value # of Deal Value # of Deal Value # of Deal Value # of Deal Value Type of Buyer Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Strategic 18 581 20 659 30 566 44 607 38 1,490 Private Equity - Buyout 2 1,134 1 124 1 15 3 61 4 373 Private Equity - VC/Growth Capital 1 5 2 26 4 140 4 91 3 17

Total 21 1,720 23 809 35 721 51 759 45 1,880

TRANSACTIONS Additional transactions in the Agency/Consulting segment included the Petsky Prunier-led sale of Alloy, a niche media marketing business that enables advertisers to target the college demographic through place- based media and student venue-based sampling, to Prospect Capital, dunnhumby’s $60 million acquisition of social media marketing firm BzzAgent at 3.0x revenue, Ark Systems’ acquisition of interactive marketing agency Zertia and Chime Communications’ $18 million acquisition of experiential sports marketing business The Icon Group at 0.6x revenue.

7 MARKETING TECHNOLOGY FIRST HALF DEAL NOTES 2011 In 2Q11, the Marketing Technology segment recorded 156 transactions (64 acquisitions and 92 investments) valued at approximately $3.5 billion. Compared to the previous quarter, transaction activity was flat and aggregate value decreased by 41 percent. ABRY Partners’ $176 million investment in Datapipe was the largest transaction. Other large transactions included Nuance Communications’ $157 million acquisition of Equitrac and Lloyds Development Capital’s $78 million buyout of registration and hosting company The UK2 Group.

ACTIVE SUBSEGMENTS For the second quarter in a row, Mobile Technology was the most active subsegment with 22 deals worth $399 million. Representative transactions in 2Q11 included Kleiner Perkins Caufield & Byers’ $100 million investment in mobile payments company Square at a reported of more than $1 billion, PayPal’s acquisition of FigCard, also a mobile payments company, and Mavenir Systems’ acquisition of Airwide Solutions, a provider of mobile messaging and wireless infrastructure solutions.

In 2Q11, there were 20 transactions in valued at $468 million, led by ABRY Partners’ $176 million investment in Datapipe, Conduit’s $45 million acquisition of Wibiya, SmartBear Software’s acquisition of AlertSite and Cloud Sherpas’ acquisition of Beloit Solutions Group.

Social Technology was also active with 11 financings and seven acquisitions, including Efficient Frontier’s acquisition of social marketing software and services company Context Optional and Jive Software’s acquisitions of OffiSync and Proximal Labs, a social analytics software company.

Most Active Marketing Technology Subsegments

2Q10 3Q10 4Q10 1Q11 2Q11 # of Deal Value # of Deal Value # of Deal Value # of Deal Value # of Deal Value Subsegment Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Mobile Technology 7 235 11 211 25 799 28 578 22 399 Content Management 6 104 8 434 14 1,082 11 122 20 468 Social Technology 4 56 3 50 6 81 28 637 18 220 Commerce Management 9 1,480 4 61 8 101 14 2,790 16 225 Analytics & Reporting 4 186 5 74 6 46 12 456 14 122 Online Targeting/Optimization 12 168 6 49 8 104 14 137 9 482 Ad Serving 6 64 4 42 5 74 2 21 6 98 CRM 2 77 4 2,104 6 1,071 4 48 6 106 Email/Messaging Software 0 0 2 47 6 255 8 108 5 62 MRM/Workflow Management 0 0 2 483 1 525 3 35 5 52 Search & Discovery 0 0 2 35 1 15 2 79 5 58 Content Delivery Network 2 102 1 15 6 69 4 95 4 54

Subtotal 30 2,027 30 2,798 53 2,788 60 3,900 76 1,184 Other 38 720 30 934 53 1,667 99 1,970 80 2,282

Total 68 2,747 60 3,732 106 4,455 159 5,871 156 3,467 Other subsegments include BI tools, Creative Production Platform, Data Quality, Internet Service Providers, Marketing Asset Management, Media Management System, Product/Price Software, Segmentation/ Data Mining, SEM/SEO tools, SFA/Lead Management, Teleservices/eServices and Web to Print

BUYERS Strategic buyers announced 61 transactions for $2.3 billion in value, compared to 65 transactions worth $5.1 billion last quarter. Venture and growth capital investors announced 92 transactions for approximately $943 million in value, up 35 percent in value compared to 1Q11.

Marketing Technology Transactions by Type of Buyer

2Q10 3Q10 4Q10 1Q11 2Q11

# of Deal Value # of Deal Value # of Deal Value # of Deal Value # of Deal Value Type of Buyer Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Strategic 28 2,439 27 3,339 44 3,876 65 5,096 61 2,331 Private Equity - Buyout 0 0 0 0 0 0 2 75 3 193 Private Equity - VC/Growth Capital 40 308 33 393 62 579 92 699 92 943

Total 68 2,747 60 3,732 106 4,455 159 5,871 156 3,467

TRANSACTIONS Other 2Q11 transactions in Marketing Technology included Apax Partners’ $65 million buyout of Vocalcom, a French provider of software and technology solutions to customer contact and call centers, Chicago Growth Partners’ buyout of FineLine Technologies and DirecTV’s $49 million growth capital investment in INVIDI Technologies.

8 FIRST HALF DEAL NOTES 2011 DIGITAL MEDIA/COMMERCE Digital Media/Commerce was the most active segment in 2Q11, with 313 transactions valued at approximately $18.9 billion, including 119 acquisitions and 194 investments. Compared to 1Q11, deal volume increased by 19 percent, while deal value increased by 71 percent – primarily as a result of Microsoft’s acquisition of Skype for $9 million at 9.9x revenue and 32.2x EBITDA. Within Petsky Prunier’s index of publicly-traded companies, Digital Media/Commerce holds the highest valuation multiples. At the end of 2Q11, the index traded at an adjusted weighted average of 24.5x EV/LTM EBITDA, up from 17.6x at the end of 1Q11.

ACTIVE SUBSEGMENTS Following 1Q11 trends, Social Media/Apps was again the most active subsegment, with 66 transactions valued at approximately $9.9 billion, up from 46 transactions worth approximately $2.0 billion in the previous quarter. Within the subsegment, 65 percent of the transactions were investments, including T. Rowe Price Associates’ $191 million investment in Facebook, the $30 million investment in Lockerz from undisclosed contributors and Redpoint Ventures’ $18 million investment in BranchOut. eCommerce was the second most active subsegment with 60 transactions worth approximately $4.4 billion, out- performing 1Q11’s 43 deals for approximately $4.2 billion. As in the previous quarter, deal volume favored invest- ments, with 77 percent of transactions coming from venture or growth capital. eCommerce investments in 2Q11 were also significant, with investment size increasing in 2Q11 by 452 percent. A total of 46 investments accounted for 59 percent of aggregate value within the subsegment, compared to 25 investments representing 11 percent of the value in the previous quarter. Strategic acquisitions were led by traditional retailers moving into eCommerce, in- cluding Walgreen’s’ $429 million acquisition of Drugstore.com at 0.9x revenue and 55.0x EBITDA, Allstate’s $1.0 billion acquisition of Esurance and Answer Financial and Wal-Mart’s acquisition of Kosmix.

Most Active Digital Media/Commerce Subsegments

2Q10 3Q10 4Q10 1Q11 2Q11 # of Deal Value # of Deal Value # of Deal Value # of Deal Value # of Deal Value Subsegment Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Social Media/Apps 11 105 11 299 33 566 46 1,963 66 9,877 eCommerce 16 896 12 325 28 1,126 43 4,182 60 4,416 Gaming 16 612 11 953 23 775 29 824 45 1,525 Digital Promotion/Coupon 5 189 5 72 15 907 24 914 39 1,296 Niche Content 10 258 8 760 15 605 48 871 35 345 Mobile Content/Apps 2 10 1 20 9 143 38 473 24 336 Classifieds/Auctions/P-to-P 0 0 1 3 4 94 7 1,403 22 365 Domain Portfolio/Marketplace 0 0 0 0 0 0 2 23 7 23 Comparison Shopping 0 0 1 25 6 50 5 86 5 551 Local Search 1 20 0 0 5 114 4 81 5 78 Digital Place-Based Media 3 62 5 214 1 7 4 70 3 38 Vertical Search 2 34 1 25 7 84 8 54 2 25

Subtotal 66 2,186 56 2,696 146 4,470 258 10,944 313 18,873 Other 2 143 1 36 2 15 6 120 0 0

Total 68 2,329 57 2,732 148 4,484 264 11,064 313 18,873 Other subsegments include Virtual Goods and Web Search/Portals

BUYERS Activity increased among large strategic buyers (Microsoft/Skype and Allstate/Esurance and Answer Financial). Nine investments met or exceeded the $100 million threshold, including Mail.Ru’s $1.5 billion investment in 360buy.com, a China B2C website that sells branded consumer electronics, and .com’s $400 million investment in LivingSocial.com.

Digital Media/Commerce Transactions by Type of Buyer

2Q10 3Q10 4Q10 1Q11 2Q10

# of Deal Value # of Deal Value # of Deal Value # of Deal Value # of Deal Value Type of Buyer Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Strategic 36 1,523 33 1,609 56 2,546 117 5,571 117 12,820 Private Equity - Buyout 1 104 3 830 2 129 6 1,507 2 500 Private Equity - VC/Growth Capital 31 703 21 293 90 1,809 141 3,985 194 5,554

Total 68 2,329 57 2,732 148 4,484 264 11,064 313 18,873 TRANSACTIONS Other transactions in the Digital Media/Commerce segment included Match.com’s acquisition of Meetic, a French online dating service provider, for $363 million at 1.7x revenue and 8.4x EBITDA, Goldman Sachs’ $200 million investment in Chinese group purchasing site 55tuan.com and Andreessen Horowitz’s $100 million investment in online marketplace Airbnb.

9 SOFTWARE & INFORMATION FIRST HALF DEAL NOTES 2011 In 2Q11, overall deal activity in the Software & Information segment kept pace with the high volume of strategic acquisitions occurring in the previous quarter. A total of 110 transactions worth approximately $12.4 billion, including 49 acquisitions and 61 investments, were announced. The two largest transactions were Infor Global Solutions’ $2.1 billion acquisition of Lawson Software and Providence Equity Partners’ $1.9 billion buyout of SRA International.

ACTIVE SUBSEGMENTS Infrastructure Software and Market Research were the most active subsegments with a combined total of 37 deals worth $176 million and $1.3 billion, respectively. All of the Infrastructure Software deals were investments, including Adams Street Partners’ $25 million investment in Spiceworks and Triangle Peak Partners’ $21 million investment in Ping Identity. The highest value subsegment was ERP Software with 13 deals announced for $4.2 billion. Of the 18 Market Research deals in 2Q11, 14 were acquisitions, including New Mountain Capital’s $800 million buyout of SymphonyIRI Group and Survey Sampling International’s $300 million acquisition of Opiniology.

Most Active Software & Information Subsegments

2Q10 3Q10 4Q10 1Q11 2Q11 # of Deal Value # of Deal Value # of Deal Value # of Deal Value # of Deal Value Subsegment Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Infrastructure Software 0 0 1 1,503 1 10 11 187 19 176 Market Research 9 173 3 38 9 282 11 454 18 1,324 ERP Software 2 33 0 0 7 2,174 8 296 13 4,156 HC-Providers Software 0 0 0 0 7 185 6 41 9 589 HR Software 0 0 1 80 3 77 6 68 9 407 Financial Software 0 0 1 6 9 634 6 326 8 637 Financial 3 3,448 1 300 6 226 2 40 3 1,299 HC-BioPharma Software 0 0 0 0 0 0 2 220 3 24 HC-Payors Software 0 0 0 0 0 0 0 0 3 148 Legal Software 0 0 0 0 1 10 2 73 3 772 Credit/Risk Management 1 1,020 5 438 0 0 1 165 2 946 Credit/Risk Software 1 9 0 0 1 90 3 18 2 150

Subtotal 16 4,684 12 2,365 44 3,687 58 1,887 92 10,628 Other 3 168 11 2,181 24 2,677 11 728 18 1,817

Total 19 4,851 23 4,546 68 6,364 69 2,615 110 12,444

Other subsegments include Engineering/Scientific/Tech, Financial Consulting, Geo-Demo Consulting, Geo-demographic, HC-Payors Consulting, HC-Providers Consulting, Healthcare-BioPharma, Healthcare- BioPharma Consulting, Healthcare-Payors, Healthcare-Providers, HR, HR Consulting, IT, Legal, Legal Consulting, Management Consulting, Marketing Data, Product/Price, Product/Price Consulting and Software NEC

BUYERS Strategic buyers were the most active in the Software & Information segment, with 42 transactions worth $8.7 billion, compared to seven private equity-backed buyouts worth $3.2 billion and 61 venture capital/growth equity deals worth $555 million. PE buyouts included Apax Partners’ $2.0 billion buyouts of Activant Solutions and Epicor Software, the CCMP Capital/Medpace deal and Investcorp Technology Partners’ $50 million buyout of eviivo Limited. PE firms’ portfolio companies also completed a number of sizeable acquisitions, including Infor Global’s acquisition of Lawson Software and inVentive Health’s purchase of PharmaNet Development Group.

Venture and growth capital investors announced 42 deals for $8.9 billion, compared to 32 for $1.8 billion in 1Q11. Bain Capital’s $27 million investment in ABILITY Network, which operates a web-based health information network for hospitals and home health agencies, was the largest announced investment in the segment.

Software & Information Transactions by Type of Buyer

2Q10 3Q10 4Q10 1Q11 2Q11

# of Deal Value # of Deal Value # of Deal Value # of Deal Value # of Deal Value Type of Buyer Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Strategic 12 388 15 4,069 43 4,721 32 1,808 42 8,681 Private Equity - Buyout 3 4,430 1 294 3 1,376 3 301 7 3,208 Private Equity - VC/Growth Capital 4 33 7 183 22 268 34 506 61 555

Total 19 4,851 23 4,546 68 6,364 69 2,615 110 12,444

TRANSACTIONS Other significant transactions in the segment included CoStar Group’s $762 million acquisition of LoopNet, an online commercial real estate marketplace, for 9.5x revenue and 35.3x EBITDA, Solera Holdings’ $520 million acquisition of Explore Information Services, a provider of data and analytics systems to automotive property and casualty insurers, for 6.8x revenue and 15.3x EBITDA and KKR’s $425 million buyout of Ipreo, a provider of market intelligence, deal execution platforms and investor communication tools to investment banks and corporations, for 3.3x revenue and 12.1x EBITDA.

10 FIRST HALF DEAL NOTES 2011 MARKETING SERVICES A total of 16 transactions were announced in the Marketing Services segment in 2Q11 for approximately $561 million, the fewest number of deals of all six segments Petsky Prunier tracks. Compared to the previous quarter, which had 25 deals for $2.8 billion, both deal value and volume decreased dramatically. Publicly traded Marketing Services companies had a median EV/LTM EBITDA multiple of 8.2x at the end of the quarter, down from 8.5x at the end of the first quarter.

ACTIVE SUBSEGMENTS One-third of the segment’s transaction value in 2Q11 can be attributed to the Printer subsegment, which includes Sun European Partners’ buyout of Polestar UK Print, a provider of newspaper supplements, magazines and travel brochures, Hewlett-Packard’s acquisition of Printelligent, which offers managed printing services for business clients, and American Litho’s acquisition of Berlin Industries, a commercial printing firm specializing in catalogs, direct mailings and inserts.

In 2Q11, there were also two transactions in Database/Analytics: MEDSEEK’s acquisition of Third Wave Research, a research and technology firm specializing in customer analytics solutions and customer data management, and Merkle-owned CognitiveDATA’s acquisition of LENSER, a full-service, multi-channel direct marketing firm offering analytics, consulting, database, merge/purge and creative services.

Most Active Marketing Services Subsegments

2Q10 3Q10 4Q10 1Q11 2Q11 # of Deal Value # of Deal Value # of Deal Value # of Deal Value # of Deal Value Subsegment Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Printer 2 108 3 15 2 23 5 85 4 178 Loyalty/Retention 2 34 0 0 6 810 2 13 3 17 Call Center 1 70 1 50 1 48 1 41 2 250 Retail Services 0 0 0 0 1 1800 3 2376 2 18 Database/Analytics 2 140 3 115 3 63 2 20 2 38 Ad Specialty/Premiums 0 0 0 0 0 0 3 25 1 25 Collections 0 0 0 0 2 30 0 0 1 25 Data Processing/Enhancement 0 0 2 21 1 1 1 18 0 0 Fulfillment 0 0 1 4 1 30 1 20 0 0 List Broker/Manager 0 0 0 0 0 0 1 11 0 0 Logistics 0 0 0 0 1 500 3 56 0 0 Performance/Contract Sales 0 0 0 0 2 45 2 85 0 0

Subtotal 7 351 10 205 20 3,350 24 2,749 15 551 Other 0 0 0 0 2 15 1 60 1 10

Total 7 351 10 205 22 3,365 25 2809 16 561 Other subsegments include Collections, Lettershop, Offine Lead Generation and Printer-Transactional

BUYERS Similar to the first quarter, strategic buyers accounted for the majority of transaction activity with 11 transactions valued at $236 million. Buyout firms announced only three transactions; two investments were announced, compared with five in 1Q11.

Marketing Services Transactions by Type of Buyer

2Q10 3Q10 4Q10 1Q11 2Q11

# of Deal Value # of Deal Value # of Deal Value # of Deal Value # of Deal Value Type of Buyer Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Transactions ($ Millions) Strategic 6 344 7 109 15 921 16 368 11 236 Private Equity - Buyout 0 0 1 15 4 2,414 4 2,422 3 323 Private Equity - VC/Growth Capital 1 8 2 81 3 30 5 18 2 2

Total 7 351 10 205 22 3,365 25 2,809 16 561

TRANSACTIONS Other transactions announced in this segment included NCO Group’s acquisition of Protocol Global Solutions, which offers contact center services for the healthcare, energy, government and insurance markets, Bounds Equity Partners’ buyout of Beacon Promotions, a provider of logo-imprinted promotional products, and Everest Capital Partners’ acquisition of Expresscopy, an on-demand digital printing company.

11 FIRST HALF DEAL NOTES 2011

1H11 M&A Overview (continued from pg. 2)

In the Digital Advertising segment, accelerating demand investment in 360buy.com, Goldman Sachs’ $1.5 for mobile marketing and digital video services propelled billion investment in Facebook, Andreessen Horowitz’s acquisition activity. Digital Video M&A increased $450 million investment in Groupon, Amazon.com’s substantially with 14 deals announced for $535 million $400 million investment in LivingSocial.com and compared to just two deals for $38 million in the year- Kleiner Perkins Caufield & Byers’ $100 million Series ago period. M&A activity in the Ad Networks/Exchanges C investment in Square at a reported valuation of more subsegment increased from a total of six deals announced than $1 billion. 1H10 to 18 deals in 1H11. BUYER & INVESTOR ACTIVITY INVESTMENT ACTIVITY Strategic buyers accounted for approximately half There were 705 investments announced in the first half of all deals in 1H11, announcing 611 transactions of 2011 worth approximately $13.8 billion. Compared for approximately $40.6 billion. Compared to to 1H10, investment activity grew in each segment, 1H10, strategic deal volume surged 170 percent, with the largest increase occurring in the Digital Media/ while aggregate deal value increased by 234 percent. Commerce segment, where investment activity soared Publicis Groupe and Google were the most active 598 percent. The next biggest jump in investment strategic buyers in the first half of the year with activity occurred in the Marketing Technology segment, 11 and eight transactions, respectively. CrowdGather where there was a 207 percent rise in activity compared and LivingSocial.com each acquired five companies. to the same period last year. Together, investments in Digital Media/Commerce and Marketing Technology Buyout firms announced 37 transactions for a total accounted for 74 percent of overall investment activity. of $9.0 billion, an increase in activity of 147 percent from 1H10 and a 37 percent increase in deal value. Within the Digital Media/Commerce segment, the Social Significant buyout transactions announced during Media/Apps, eCommerce and Gaming subsegments 1H11 included Thomas H. Lee’s buyout of Acosta accounted for 56 percent of all investments, while the Sales & Marketing and Apax Partners’ buyouts Mobile Technology and Social Technology subsegments of Activant Solutions for $1.0 billion, Epicor for within Marketing Technology accounted for one-third $976 million and the auto assets ofTrader Corporation of that segment’s investments. Notable investments for $682 million. included Digital Sky Technologies’ $1.5 billion (Continued on page 13)

1H11 Most Active Investors by # of Transactions

# of Buyer Transactions Representative Targets

Intel Capital 14 AlterGeo, Sapato.ru, PerspecSys, Music Mastermind, iStreamPlanet, CrowdStar, Yatra Online Private Sequoia Capital 13 Mu Sigma, Taykey, Mobile, Sourcebits Technologies, Funzio, Milanoo.com, WhatsApp, Color Labs Andreessen Horowitz Fund 12 FourSquare Labs, Bromium, Airbnb, ShoeDazzle.com, Silver Tail Systems, Grubwithus, Magnet Systems Spark Capital 12 OnSwipe, Group Commerce, exfm, txteagle, Group Commerce, Vurve, Contextin, Storenvoy, eToro Accel Partners 12 RockMelt, Blue Jeans Network, Cloud9, LearnVest, Supercell, 99designs, StylistPick, Rovio Mobile Kleiner Perkins Caufield & Byers 11 Square, WorkSmart Labs, Shazam Entertainment, Rent the Runway, Datameer, Xiu, Offermatic, Cooliris Index Ventures 8 EDITD, Big Switch Networks, Funding Circle, HouseTrip, Stack Overflow Internet Services, Grey Area Mohr, Davidow Ventures 7 VirtuOz, PunchTab, Mantara, Ticketfly, HealthTap, Coupa Software, RootMusic, HipGeo Redpoint Ventures 7 Viajanet, 9flats.com, ThredUp, FreeMonee, BranchOut, Bluefin Labs, Kabam Draper Fisher Jurvetson 7 OkBuy.com, Prosper Marketplace, Do@, Jibe, Ranker, AdXpose, Z2Live Battery Ventures 6 CSN Stores, Hotel Tonight, Send the Trend, STELLA Service, Glassdoor.com, Narrative Science SoftBank Capital 6 BestVendor, Gilt Groupe, Rivet Games, SocialFlow, Boxee, PPLive New Enterprise Associates 6 Pulse, Inporia, Tabbedout, Poggled, TidalTV, Sprout Social Lightbank 6 Pawngo, OpenChime, Benzinga, Gtrot, DoubleDutch, Qwiki

12 FIRST HALF DEAL NOTES 2011

1H11 M&A Overview (continued from pg. 12) Venture and growth capital investors announced 705 MARKETING, MEDIA, TECHNOLOGY & SERVICE INDUSTRIES 2Q11 M&A AND INVESTMENT ACTIVITY transactions worth an estimated $13.8 billion. Compared ($ in Millions) to the first half of 2010, investment transaction volume and value increased by 352 percent and 371 percent, Digital Media/ Marketing respectively. Accel Partners, Andreessen Horowitz, Intel Commerce Technology $3,467 Capital, Kleiner Perkins Caufield & Byers, Sequoia $18,873 Capital and Spark Capital were the most active financial Agency/ Consulting investors, announcing more than 15 investments each $1,880 during the first half of the year. Redpoint Ventures Digital Advertising announced 13 and Index Ventures announced 12. $946

IPO ACTIVITY

There were 17 IPOs in the Marketing, Media, Technology Software & and Service industries in the first half of 2011. The Marketing Information Services $12,444 majority of IPOs were well received by the marketplace, $561 with 12 closing above their first day pricing. U.S. companies CornerStone, Demand Media, Epocrates, HomeAway, Responsys and ServiceSource each priced 2Q11 M&A AND INVESTMENT SUMMARY their respective offerings at the high end or above their In 2Q11, Petsky Prunier tracked 702 M&A and investments initial filing ranges and traded up significantly, on average transactions worth approximately $38.2 billion. Compared 47 percent, during their first trading day. China-based to 1Q11, deal activity increased by 8 percent, while IPOs had mixed performance in 1H11, with Phoenix aggregate deal value increased by 52 percent. Digital New Media, Renren and Qihoo360 each trading up 30 Media/Commerce was the most active and highest value percent, on average, during their first day of trading. In segment accounting for 45 percent of all deals announced contrast, China-based Taomee Holdings, Jiayuan.com and half of aggregate deal value. Venture and growth capital and NetQin traded down, on average, 10 percent on investments accounted for more than half of all transactions, their first day of trading. 1H11 also saw some of the while strategic buyers represented 43 percent and buyout first successful social media company IPOs, notably firms just 3 percent. The largest acquisition was Microsoft’s LinkedIn and Renren, which traded up by 109 percent purchase of Skype for $8.5 billion. The largest investment and 29 percent, respectively, in their market debuts. was a $1.5 billion growth capital transaction with China- based 360buy.com, led by a $500 million contribution from Digital Sky Technologies.

13 FIRST HALF DEAL NOTES 2011 Monetizing Facebook: Advertisers, Developers Look to Capitalize on Explosive Growth in Facebook Applications Platform (continued from pg. 3)

CPM pricing is still being sought by some brand WILL COMPLEXITY LEAD TO CONSOLIDATION? advertisers that are using social media to drive As the Facebook ecosystem continues to grow, each awareness and positive brand attribution. The challenge of its participants is one link in a complex chain of for developers and other players in the Facebook providers connecting end users with advertisers. “There ecosystem is waiting for the shift in corporate culture is a dizzying array of point solutions that application to accept a different pricing structure. “Ultimately, developers can daisy chain together to reach the social marketing is more transparent than traditional advertiser,” says LifeStreet’s Weisman. He believes advertising, but it takes time to warm up to the concept that consolidation – and even disintermediation – and get the advertiser ready to work along those lines,” is inevitable. “There are point solutions that add a says SponsorPay’s Bodczek. tremendous amount of value to the market and others that don’t add that much value – they’re just an extra step in the chain.” “The vast majority of what we do for advertisers – 95 percent – is performance-based. We’re not paid on Weisman attributes LifeStreet’s success to its deep a CPM or CPC [cost-per-click] basis, we’re paid on a per-conversion basis.” investment in the company’s technology platform, which utilizes proprietary iterative, high-velocity testing. “Mitchell Weisman, CEO, LifeStreet Media “We started building this in late 2005 and have spent tens of millions of dollars and more than 150 man years One solution that LifeStreet will test in the in research and development. We test more things more third quarter is LS Exchange, which will allow brand quickly than others. Our software is able to maximize advertisers, their agencies and DSPs to use the CPM profits and revenue through sheer volume.” model to bid in real-time on LifeStreet ad inventory. “This concept opens up a pipeline between Facebook “There is an incredible amount of noise in the space, ad inventory and brand advertisers that want to run and there has been an influx of companies and funding retargeting campaigns to re-engage consumers who from VCs to anything with a social tag on it,” agrees have already visited their websites,” explains Weisman. ViTrue’s Bradford. “There are a lot of companies making claims they can’t back up.” ANALYTICS, INTEGRATION BECOME CRITICAL With so much emphasis on performance, analytics has “There is an incredible amount of noise in the space, become a critical component of social marketing. “This is and there has been an influx of companies and a big opportunity,” claims ViTrue’s Bradford. “The sweet funding from VCs to anything with a social tag on spot is coupling our platform with analytics and social it. There are a lot of companies making claims they listening tools and tying it all back to CRM and sales.” “can’t back up.” Reggie Bradford, CEO, ViTrue Integration will also be a key to making sense of the insight generated by analytics software, Bradford adds. “These marketers and agencies have multiple platforms Still, Bradford is optimistic that Facebook’s skill in and systems. What they need is one log-in to see all knowing what its users want will balance well with the different channels and make better decisions as a the needs of advertisers. Facebook, he says, “has kept result.” Several companies are pursuing social analytics its focus on the user experience while also supporting solutions, including Omniture and Salesforce.com, the advertising business model and marketers’ need to which acquired Radian6, a leading social media have a unique and compelling Facebook presence.” monitoring, engagement and insights platform, in May.

14 FIRST HALF DEAL NOTES 2011 The DMP Debate: The Benefits of Pure Play vs. Mixed Model Data Management Platforms (continued from pg. 4)

PURE PLAY VS. MIXED MEDIA Larger players entering the field through acquisition The benefits of a pure play DMP focused on secure and more technology providers positioning themselves data collection and management versus a mixed model as DMPs are also blurring the lines between pure play allowing owners to monetize data through an ad and mixed model DMPs. For example, Demdex, exchange or data marketplace is the subject of debate. which was considered a pure play DMP, was acquired by Adobe Systems earlier this year and is now part of eXelate’s mixed model, for example, includes both its Adobe’s Online Marketing Suite anchored by another DMP and the eXelate Marketplace. “Our advantage is acquisition, web analytics firm Omniture. As a result, that we’ve built our platform and allow customers to Demdex clients can now access a portfolio of online make money on their data as well,” says CEO Zagorski. services that range from content creation to web “Everyone in this business is involved with third parties analytics, data management and storage. and has to enable lots of connections and integrations that pull you away from being pure play.” INTERNATIONAL MARKETS SPUR GROWTH DMP executives agree that there is plenty of room for “Everyone in this business is involved with third market growth. “Every brand that has a marketing parties and has to enable lots of connections database or digital marketing initiative is going to and integrations that pull you away from being need this functionality,” says Red Aril’s Soss. There are pure play.” international growth opportunities as well, with Red “Mark Zagorski, CEO, eXelate Aril closing its first business in Japan and having existing business in the Netherlands, the UK and France.

Red Aril’s Soss argues that such businesses are a conflict Here in the U.S., online publishers and retailers have of interest that allows the DMP to profit from the sale of been the first data owners to embrace DMPs, thanks to data it doesn’t own. “We don’t place restrictions on how their existing cultures of creating value from customer clients can use the data, nor do we run a data exchange or data. Although designed for the high volume, real-time ad network that we make money on.” pace of online data, DMPs can be used to analyze and optimize offline marketing data as well. BrightTag, whose founder Kiven sees his business as a pure technology play focused exclusively on “data rights “The opportunity – and challenge – is dealing with management,” addresses problems with data collection growth and making the right decisions every day,” says and control while connecting sites with service providers BrightTag’s Kiven. “We’ve been in the market for nine that offer modeling, segmentation and retargeting months; we have 25 clients and already have a global capabilities. “Our system creates a unified set of first- footprint.” His advice for publishers in the market for a party data that can be shared in real-time with any third- DMP: “Ask how broad their solution is versus how deep party marketing partner – be it in the context of a targeted it goes into any specific aspect of the technology stack display campaign, search campaign or cross-channel and decide what best serves your needs.” analytics,” he explains. “We are trying to eliminate third- party tracking code as we know it and move the data- Note: Jonathan Margulies, vice president of strategic consulting sharing process into the cloud, because sites have become firm Winterberry Group, a Petsky Prunier company, will be overrun with third-party code that kills page load time, hosting the DMP Panel at the DMA Strategic Summit in creates privacy issues and reduces flexibility when it Boston on October 1, with panelists to include leaders from comes to working with multiple partners.” BrightTag, Demdex, eXelate and Red Aril.

15 FIRST HALF DEAL NOTES 2011 Rising Above the Din: Professional Services Help Technology Solutions Providers Differentiate From the Pack (continued from pg. 5) integration, training and product customization technology. It’s about improving the value proposition services, but doesn’t see services as its only competitive for the institution and, ultimately, controlling your differentiator. “Without the ability to scale services, own destiny. With the pressures on higher ed today, the profit margins are less attractive relative to product if you can’t prove the value of your offering, you don’t margins,” explains Denhart. “We will, however, have a very good selling proposition.” provide services to help somebody integrate the Blackarrow solution into their unique business and LOOKING AHEAD operational environments to ensure optimal efficiency Adding services is a continuing part of both Pearson and performance.” eCollege’s and Marin’s growth strategies. Pearson eCollege is moving toward more joint venture “Without the ability to scale services, the profit margins arrangements with colleges and universities, and, as are less attractive relative to product margins.” the company plays a more consultative role, services Dean Denhart, CEO, Blackarrow.tv become a larger factor. “ Marin plans to continue streamlining and standardizing LEVERAGING SERVICE OFFERINGS TO ACCELERATE some home-grown functionalities onto common SALES CYCLES technology capabilities. Walcott also anticipates more a Walcott feels that professional services, such as systems la carte services pricing for companies of all sizes. “I see integration, help close the deal and differentiate the clients in the future picking and choosing their services company in the marketplace. “There are two dozen to go with their software. You typically see that in a inventory or order management systems out there software lifecycle,” he says. “Prices get pushed down, that our technology needs to interface with,” he says, and professional services make up the difference.” a number he expects to increase. Marin, however, can realize additional value from its services as each new I see clients in the future picking and choosing their implementation is completed. Once the company has services to go with their software. You typically see invested the time to integrate with a client’s software, that in a software cycle. Prices get pushed down, and Marin can then include the implementation in its professional services make up the difference. “portfolio” and market the solution to other customers. “Wister Walcott, EVP, Professional Services, Marin Software Pearson eCollege positions its services to remain a leader in increasing results and performance for the Technology is an area where it can be difficult to stand higher ed institution. “You can’t control that if you out, and companies are eager to find ways to differentiate don’t have services,” Leavy says. “You can’t offer to themselves amid the competition. Provided value- drive enrollments or improve student retention unless added services can be replicated and scaled, they will you have services that allow schools to optimize the continue to play a larger role in technology offerings.

16 RECENT TRANSACTIONS

17 WHAT’S NEW AT PETSKY PRUNIER

In addition to completing 13 transactions in the first half of 2011 (see pg. 17), Petsky Prunier has been engaged by a number of companies to raise capital to fund growth, including: • An out-of-home advertising marketplace that simplifies • A leading out-of-home media company offering digital the process of buying and selling media TV screens installed on gas station pumps and digital • An operator of social commerce marketplaces and static media in health clubs that enable brands to connecting merchants to consumers both locally and increase consumer targeting capabilities nationally and providing discounted products and • An out-of-home media company offering media services, coupons and shopping incentives, as well as displays and integrated transportation-oriented media membership in unique loyalty programs embedded in programs that enable brands to reach mass audiences each community with highly recognizable and visible displays

Petsky Prunier is also advising a diverse group of marketing, media, technology and service businesses on strategic alternatives, including: • The largest and fastest growing independent direct-to- • One of the top 10 largest ICANN-accredited global consumer marketer of dental savings plans domain registrars • A leading digital solutions agency that provides corpo- • A diversified healthcare services company rations and interactive agencies with creative staffing • A SaaS provider of personalization and marketing resources and digital services automation technology for enterprises • One of the premier multichannel marketers of superior- • A leading pure-play data management platform quality items for enthusiasts of automobiles, golf, travel, (DMP) business photography, high-end audio/video and physical fitness • A marketing database and analytic services company that • A leading response-driven, full-service advertising helps Fortune 1000 marketers integrate offline and online agency specializing in student recruitment for the for- data to better communicate with prospects and clients profit, post-secondary education industry • A leading multichannel retail aggregator providing • A premier retargeting solution for Internet retailers, eCommerce, merchandising and consumer loyalty providing technologically-advanced, dynamic and solutions for retail marketers and some of the largest personalized ad units, as well as associated media consumer-facing companies in the U.S. buying, on a performance basis to the web’s top brands • A performance-based digital media marketing • A leading consumer packaged goods marketing company that generates online consumer leads for database company providing valuable content and Fortune 500 companies advertising tools for local and national retailers, media companies and CPG manufacturers

ABOUT PETSKY PRUNIER

Petsky Prunier (www.petskyprunier.com) is one of the leading investment banks serving the marketing, media, technology and service industries, including businesses focused on digital advertising, digital media, eCommerce, marketing technology, software, information, marketing services and agencies and consultancies. Our firm’s mergers and acquisitions and private placements advisory services reflect a unique blend of product specialization and industry expertise. Together with strategic consulting firm Winterberry Group (www.winterberrygroup.com), a Petsky Prunier company, the organization represents one of the largest industry-specific advisors providing strategic and transactional services. Securities transactions are processed through Petsky Prunier Securities LLC.

Expertise. Commitment. Results. [email protected] 60 Broad Street, 38th Floor New York, NY 10004

Securities offered through Petsky Prunier Securities, LLC, member FINRA/SIPC

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