Opentable Strategic Discussions April 2009

OpenTable Strategic Discussions April 2009

Nicole Campbell Timothy DeGrange Jack Grigoryan Henry Wang Executive Summary OpenTable’s unique SaaS model in conjunction with its customer base and clientele has the potential for immense additional upside in the largely untapped online reservations market 1 OpenTable has a distinct advantage over U.S. competitors due to its deployment of proprietary in restaurant reservation taking technology (Electronic Reservation Book) in addition to its developed network of consumer users. 2 OpenTable currently captures 6% of an estimated 600 million reservations made in the U.S. annually and has the potential to increase to as much as 50%, in line with industries where online reservation usage has mature. 3 Internationally, the UK, Germany and Japan have been slated for international expansion and OpenTable has the opportunity to expand more aggressively into these markets given their large aggregate GDP relative to the U.S.

The U.S. equity markets are in recovery in light of QE announcement by the Federal Reserve. Given OpenTable’s dominance in the online reservations market, it is well positioned for an IPO

1 Credit is still relatively expensive and the general decrease in private placement and debt financed deals would come at a discount to valuations sought in the equity markets. OpenTable also has the market share and strength to grow organically. 2 Given improving equity market conditions in the U.S., OpenTable’s inherent market share in the U.S. , competitive barrier and an opportunity to capture greater revenues per restaurant would be attractive to investors.

3 The proceeds of the IPO can be utilized to finance OpenTable’s growth both domestically or abroad through organic growth with its current offering and or acquisitions to diversify its offerings. 4 IPO Pricing etc.

1 Industry & Company Overview

Restaurant Opportunities in North America OpenTable’s Value Proposition

The number of reservation taking restaurants in North America Large amount current reservations taken by restaurant staff over the currently is estimated at 30,000. phone in advance.  It is inconvenient in for the customer to make reservations and to Restaurant reservation data suggests that there are approximately cancel at the last minute, decreasing efficient usage of restaurant 600mn total annual reservations made in North America. seats. Online reservations for restaurants is still a relatively new phenomena  Restaurants risk losing customers looking to make reservation during in the North American market and has immense upsides to mature to a non-business hours. similar level of adoption as in the online air travel industry. OpenTable automates the reservation process for consumers through its proprietary technology.  Electronic Reservation Book is a proprietary computer system that UK, Germany & Japan allows restaurants to manage online, phone and in-person reservations while providing live analytics on restaurant reservations. The UK, Germany and Japan represent industrialized economies with an  Restaurant customers are able to book online and see latest updates established base of restaurants and a viable market for internet based on availability and can also quickly cancel to free up reservations for reservations. other guests. Based on GDP scaling, there is an opportunity of approximately 20,000 reservation taking restaurants suitable for internet reservation. OpenTable’s has an established client and consumer base, with the ability to place 4,000 diners per restaurant and offer an immensely high Based on GDP scaling, there is an opportunity of approximately 20,000 ROI to its restaurant clients. reservation taking restaurants suitable for internet reservation. OpenTable North American Market Share Restaurant Penetration Reservation Penetration Reservation Taking Geographic Region GDP ($Bn) Total Restaurants Est. OpenTable Other OpenTable Traditional & Other North America 15,276 1,279,000 30,000 US 13,844 945,000 Canada 1,432 84,000 6% Mexico 250,000 32% International 10,479 719,000 20,000 Germany 3,322 184,000 68% Japan 4,384 400,000 94% UK 2,773 135,000 Source: Bank of America Merrill Lynch Equity Research Report

2 OpenTable Growth Strategy

Projected Revenues by Source Domestic Growth Fueled by Modernization of Reservation Systems ($mm) $140 The online restaurant reservation market still has ample room for growth. $120  Similar reservation models in different industries such as airlines $100 command over 50% of reservation share.  OpenTable only controls an estimated 6% of reservations, despite $80 partnering with an estimated 30% of restaurants. $60 As OpenTable begins to seat more diners in restaurants, it will be able to drive a larger portion of its revenue from recurring patrons seated. $40  We believe that the diners seated will expand from 27 million to 55 $20 million as OpenTable improves its value proposition to customers by offering an increasing number of restaurants and rewards programs. $0 2008A 2009E 2010E 2011E 2012E 2013E The natural shift in revenue mix to more subscription revenue will produce proportionately higher cash flows as most expenses are fixed Subscription Revenue Reservation Revenue Installation & Other Revenue and relating to the deployment of the OpenTable reservation systems. Projected Diners and Restaurants by Region ($mm) ($k) International Growth Driven by Restaurant Expansion $90 $18 $80 $16 We believe the international division will have enough restaurant $70 $14 penetration to break even by 2013. $60 $12  OpenTable partnerships will expand to 17% of international $50 $10 restaurant market share.  Restaurants/employee in the international division will increase to $40 $8 approximately 5 as the restaurant user base expands and the $30 $6 international team becomes more experienced. $20 $4 International growth will be driven by the increasing restaurant base $10 $2 from approximately 1,000 to 3,000. $0 $0  This increased restaurant base will boost diners both through the 2008A 2009E 2010E 2011E 2012E 2013E increase in volume as a direct result of adding the new restaurant, as well as through an increase in diners per restaurant as diners take Domestic Diners Int'l Diners greater advantage of the OpenTable convenience Domestic Restaurants Int'l Restaurants Because of the limited free cash flow as a result of the capital expenditures required in order to grow the international division, growth should be funded through an equity offering

3 IPO for OpenTable

Firm Valuation & IPO Pricing Valuation Range

Trading Day June 30th  DCF NPV = 342 mm Trading Company OpenTable Inc.  Public Comps DCF Market Value 342 NPV Range: of Equity (mm) 315 - 501 mm Less: Preferred Equity 21 Public Comps  M&A Comps Common Stock 321 NPV Range 152 - 401 mm Stocks Issued to Public 64 M&A Comps % Public Offered 20% # of Shares Issued 4,000,000 Enterprise Value - 200 400 600 Price pe share 16 342 mm USD IPO price per share 16 Millions IPO Value 64

2009E 2010E 2011E 2012E 2013E Value

Free Cash Flow NPV of FCF 61,492,213

EBITDA 18,930,245 24,171,204 31,041,082 36,967,447 50,233,564 NPV of TV 280,577,755

NPV 342,069,968 Less: Tax Payable on EBIT 2,854,981 4,054,688 5,611,758 6,604,162 9,671,388

Less: Change in Working Capital 5,643,235 3,186,007 4,060,107 4,822,868 7,029,375 Enterprise Value 342,069,968 Plus: Decrease in CapEx (3,633,753) (4,161,259) (4,027,456) (5,911,848) (5,430,383) Less: Debt - Free Cash Flow 6,798,276 12,769,250 17,341,762 19,628,569 28,102,417 Equity Value 342,069,968

4 Equity Market Overview Quantitative Easing and DJIA, NASDAQ, S&P500 30% Market Rebound 20%  U.S. equity markets have seen a 10% recovery from early March pricing as the Federal Reserve has promised a $1tn 0%

quantitative easing package.

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 Despite concerns of economic weakness, Mar May -20% May U.S. retail sales improved in April, a positive sign for growth outlook. -30% Since mid March, the DJIA, NASDAQ and S&P 500 have all seen recovery -40% in relative value to the start of 2007  All three major indices have lifted off their March lows and have steadily -50% increased over the past fortnight. -60% S&P NASDAQ DJIA Source: FactSet Research Systems Recovery Across the Board Tech, Financial Services & Construction ETF Performance 45 Despite being hit the hardest, financial services and construction ETFs  Technology stocks have seen a strong 40 have witnessed a recovery hinting that March may have been a bottom recovery from their March lows, however 35 for the equity markets the rally also extends to construction ETFs 30 and REITs, the sectors hit hardest by the 25 Financial Crisis of last year.

Price 20  Sector wide rally indicates an oversold 15 market . Recovery of REIT and construction 10 ETF prices indicates that the equity markets 5

have hit a bottom. 0

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Mar Mar Mar May by the announcement of Quantitative May Easing. Powershares Tech ETF Powershares Financial Services ETF SPDR Construction ETF

5 US Debt Markets Overview Despite Quantitative Easing, IG & HY Bond Spreads Over Treasuries (bps) Credit is Still Expensive 1,800.00 1,600.00  Although the spreads for U.S. Corporate 1,400.00 QE1 Announced Investment Grade credits have declined 1,200.00 from the Nov. 2008 peak, they are still far 1,000.00 above the pre-Credit Crisis levels. 800.00  600.00 400.00  Management prefers the freedom to operate without being constrained by 200.00

liquidity and debt covenants. -

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Investment Grade High Yield Source: The Yield Book Average IG Bond Issuance and Total IG bond offerings Jump in Average IG Credit 600.0 1,200,000 Issuance Signals Lack of

Market Access by Smaller 500.0 1,000,000 Players 400.0 800,000  The steep increase in average Investment Grade issuance combined with the decrease in IG offerings reveals that 300.0 600,000 small companies were unable to access the credit markets during the credit crisis. 200.0 400,000  The lack of new issues indicates that Open Table would have difficulty accessing 100.0 200,000 the Investment Grade credit markets at the beginning of 2009. 0.0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008

Average IG Issuance Total IG Offerings Source: Bloomberg 6 M&A & Private Placement Market Not Ideal Private Placements Still Shaky Amidst Growth $25,000 160 140 Concerns $20,000 120  The increase in count and decrease in volume of private placements in the 100 Consumer industry demonstrates Venture Capital firms’ reluctance to invest $15,000 heavily in individual companies. 80

$10,000  The average private placement in Q1 2009 was $98 million, significantly 60 less than the capital requirements of OpenTable. Financial sponsors may not 40 be interested in the equity stake for the amount of capital required to be $5,000 committed to OpenTable. 20

Additional private placement is unlikely as OpenTable already has over 10 $0 0

private investors. Current investors will be highly against additional preferred

Q1 2005Q1 2005Q4 2006Q1 2006Q4 2007Q1 2007Q4 2008Q1 2008Q4 2009Q1 Q3 2005Q3 2006Q2 2006Q3 2007Q2 2007Q3 2008Q2 2008Q3 equity dilution. 2005Q2

Volume ($mm) Count $300,000 M&A in the Consumer Industry $250,000 The total deal volume in the Consumer sector mergers and $200,000 acquisitions is off 88% from their peak in Q2 2007. As the US consumer stops spending and begins to pay down debt, there is $150,000 less money flowing into the consumer sector

$100,000  The lack of access to the debt markets following the collapse of Lehman Brothers resulted in a dramatic decline in total M&A $50,000 volume, as potential buyers are unable to finance their acquisitions. $0  Financial sponsors have decreased from 39% of M&A activity to

15% as investors are uncertain about the future and are reluctant

Q1 2005Q1 2005Q2 2005Q4 2006Q1 2006Q2 2006Q3 2007Q2 2007Q3 2007Q4 2008Q3 2008Q4 2009Q1 Q3 2005Q3 2006Q4 2007Q1 2008Q1 2008Q2 to commit capital without better clarity on the economic outlook Strategic Financial and future earnings.

Strategic buyers are hoarding cash to ensure they have enough liquidity to weather the financial crisis. As a result, even though cash ratios are high, companies are unwilling to spend the cash. 7 OpenTable Financing Options

Sale to Private Debt Partnerships IPO Strategies Equity

Description Finance capital needs Achieve cost and Offer 19% of company’s Sell majority of Sell majority of the entirely through long- revenue synergies total equity value at company to company to financial term debt through partnerships $64MM strategic partners sponsors with other companies

Financial Annual interest Potential decrease in Raise $64MM in cash. Relinquish financial Relinquish financial payments at of $4.5 expenses and capital No interest payment on responsibilities to responsibilities to the Implication - $6.5MM requirements the offering companies companies

Control Retain full control of Retain full control of Retain majority control Lose majority control Lose majority Implication company company of company of company control of company

Conclusion Not optimal due to Lack of suitable Optimal method to OpenTable is not OpenTable is not high interest partners, and raise capital before seeking a transfer of seeking a transfer of payments during the synergies hard to Opentable becomes company’s majority company’s majority first few projected realize profitable ownership ownership years

Source: Bank of America Merrill Lynch Equity Research Report

8 Risks & Mitigants

Risks Involving IPO Risks Involving OpenTable’s Growth

Insufficient investor interest in the IPO Current recession could impact OpenTable’s short-term growth • Stock price decline following IPO due to lack • Declines in consumer discretionary spending may have of investor demand in secondary market an outsized impact on OpenTable • Though backlog is increasing, IPO activity • A large portion of OpenTable’s revenue is derived has been mediocre compared to several directly from its users visiting restaurant partners months ago, and the market could continue to Cyclical revenue do to seasonally affected business pose challenges • Requires short-term debt to finance working capital Risks • Failure to price shares at the desired target needs price • Due to the inherent cyclicality in the restaurant • Failure to sell enough shares business, OpenTable’s reservation revenue could decline

Emphasize to potential investors OpenTable’s strong Seasonality market could slow down growth projected growth and unique product offering • OpenTable has already financed its working • Strong investments in the private sector capital revolver show strong demand for OpenTable • Seasonality comes in a predictable manner, with • Five year top-line growth forecast at 25% increased restaurant activity in Q1 and Q4 • Large market share with a first mover’s OpenTable has 3 sources of revenue advantage in a network effect driven market • Continue strong performance through monthly

• With over 60% of North American service fee and installment fee Mitigants restaurants still untapped, OpenTable’s • OpenTable’s strong growth potential will growth opportunities are strong compensate for seasonality

9 Appendix

1. Income Statement 2. Balance Sheet 3. Cash Flow Statement 4. OpenTable Value Proposition 5. International Growth Projections 6. North American Growth Projections 7. Comparable Company Analysis eCommerce 8. Comparable Company Analysis Saas 9. M&A Comparables Analysis 10. DCF Valuation 11. Sensitivity Analysis 12. Fixed Income Markets Comparison

10 OpenTable Income Statement

2006A 2007A 2008A 2009E 2010E 2011E 2012E 2013E Revenue Subscription Revenue 15,454,081 22,434,197 30,293,056 38,018,796 42,823,122 47,537,867 54,501,925 63,976,332 Reservation Revenue 10,664,433 17,010,102 23,135,152 27,905,887 32,139,233 39,148,786 45,963,865 57,072,560 Installation & Other 1,049,612 1,703,963 2,416,229 1,163,200 1,311,728 1,455,481 1,666,493 1,860,320 Total Revenue 27,168,126 41,148,262 55,844,437 67,087,883 76,274,084 88,142,133 102,132,283 122,909,213 Y/Y Growth 63.0% 51.5% 35.7% 20.1% 13.7% 15.6% 15.9% 20.3% International 4,005,696 5,106,821 6,604,329 8,549,921 13,608,026 % Total 6% 7% 7% 8% 11% North America 62,256,492 70,111,884 80,095,168 91,608,636 106,715,430 % Total 93% 92% 91% 90% 87%

Expenses Operations & Support 9,547,922 12,602,682 17,760,028 19,371,863 19,566,832 21,091,551 23,598,245 25,331,173 % Revenue 35.1% 30.6% 31.8% 28.9% 25.7% 23.9% 23.1% 20.6% Sales & Marketing 7,674,952 11,326,549 14,830,135 16,716,226 17,982,195 19,069,834 20,569,242 22,788,654 % Revenue 28.2% 27.5% 26.6% 24.9% 23.6% 21.6% 20.1% 18.5% Technology 4,024,321 5,863,542 9,511,101 9,599,107 10,817,005 11,991,267 13,718,560 15,302,821 % Revenue 14.8% 14.2% 17.0% 14.3% 14.2% 13.6% 13.4% 12.5% General & Administrative 5,971,587 12,211,653 13,117,253 12,293,032 14,904,423 17,853,621 22,232,361 27,248,602 % Revenue 22.0% 29.7% 23.5% 18.3% 19.5% 20.3% 21.8% 22.2% Total Expenses 27,218,783 42,004,427 55,218,518 57,980,228 63,270,457 70,006,273 80,118,409 90,671,251

Operating Income (50,657) (856,165) 625,919 9,107,655 13,003,627 18,135,860 22,013,874 32,237,962 Other Income (net) 421,123 951,503 468,133 408,950 512,000 570,000 EBIT 370,466 95,338 1,094,052 9,516,605 13,515,627 18,705,860 22,013,874 32,237,962

Income Tax 175,965 (9,119,647) 2,117,477 2,854,981 4,054,688 5,611,758 6,604,162 9,671,388 Tax Rate 47% -9566% 194% 30% 30% 30% 30% 30%

Net Income 194,501 9,214,985 (1,023,425) 6,661,623 9,460,939 13,094,102 15,409,712 22,566,573

11 OpenTable Balance Sheet

2006A 2007A 2008A 2009E 2010E 2011E 2012E 2013E Assets Cash & Cash Equivalents 10,264,263 21,661,071 5,528,109 23,305,445 44,014,959 70,311,641 98,935,512 138,716,161 Short-Term Investments - - 17,258,910 17,431,499 17,605,814 17,781,872 17,959,691 18,139,288 Restricted Cash 196,832 206,315 156,163 156,163 156,163 156,163 156,163 156,163 Accounts Receivable, Net 3,771,909 5,224,731 6,330,715 8,479,294 9,640,346 11,140,358 12,908,585 15,534,599 Prepaids & Other Current Assets 304,341 675,842 941,842 951,260 960,773 970,381 980,085 989,885 Deferred Tax on Current Asset - 1,668,822 4,827,884 4,876,163 4,924,924 4,974,174 5,023,915 5,074,155 Total Current Assets 14,537,345 29,436,781 35,043,623 55,199,824 77,302,979 105,334,589 135,963,951 178,610,251

Fixed Assets 6,018,685 8,377,557 11,125,286 14,957,991 18,417,297 21,537,870 26,380,678 30,223,418 Deferred Tax Asset - 7,786,188 3,342,828 - - - - - Other Assets 567,633 213,385 1,371,487 3,772,346 3,810,069 3,848,170 3,886,652 3,925,518 Total Assets 21,123,663 45,813,911 50,883,224 73,930,161 98,837,361 132,718,835 170,676,737 229,996,120

Liabilities & Shareholder's Equity Accrued Expense & Other Liabilities 3,567,226 10,545,943 7,854,683 11,812,972 13,430,497 15,520,247 17,983,661 21,642,105 Accrued Compensation 1,599,073 2,309,919 2,772,450 2,800,175 2,828,176 2,856,458 2,885,023 2,913,873 Deferred Revenue, Current 646,826 986,803 1,209,657 1,163,200 1,311,728 1,455,481 1,666,493 1,860,320 Dining Rewards Payable 3,498,912 5,836,030 8,461,906 10,165,585 11,557,537 13,355,859 15,475,736 18,623,989 Total Current Liabilities 9,312,037 19,678,695 20,298,696 25,941,931 29,127,938 33,188,045 38,010,913 45,040,288 Deferred Revenue 2,904,598 3,651,425 Total Liabilities 12,216,635 23,330,120 20,298,696 25,941,931 29,127,938 33,188,045 38,010,913 45,040,288

Common Stock 11,505 12,225 12,774 12,500 12,500 12,500 12,500 12,500 Preferred Stock 21,908,878 21,908,878 21,908,878 21,908,878 21,908,878 21,908,878 21,908,878 21,908,878 Additional Paid-In-Capital 53,553,812 57,934,041 63,401,486 70,063,109 79,524,048 92,618,150 108,027,862 130,594,435 Deferred Stock-Based Compensation ------Other Comprehensive Income (Loss) - - 65,934 - - - - - Cumulative Translation Adjustment (32,175) (51,353) (362,376) - - - - - Accumulated Deficit (66,729,498) (66,534,992) (57,319,504) (50,657,881) (41,196,942) (28,102,840) (12,693,128) 9,873,445 YTD Income/Loss 194,506 9,214,992 (1,023,422) 6,661,623 9,460,939 13,094,102 15,409,712 22,566,573 Total Shareholders' Equity 8,907,028 22,483,791 26,683,770 47,988,230 69,709,423 99,530,790 132,665,824 184,955,832

Total Liabilities & Shareholder's Equity 21,123,663 45,813,911 46,982,466 73,930,161 98,837,361 132,718,835 170,676,737 229,996,120

12 OpenTable Cash Flow Statement

OpenTable Inc. Cash Flow Statement

2006A 2007A 2008A 2009E 2010E 2011E 2012E 2013E Cash flows from operations Net Income/(loss) 194,506 9,214,989 (1,023,769) 6,661,623 9,460,939 13,094,102 15,409,712 22,566,573 Ajustments to Reconcile to Net Cash from Operations Depreciation of Fixed Assets 2,118,076 3,000,696 4,357,717 5,126,438 5,828,391 6,735,273 7,804,313 9,391,957 Provision of Bad Debt 427,490 328,865 1,041,646 963,297 1,095,200 1,265,610 1,466,491 1,764,821 Non-cash Compensation Expense 708,988 3,102,528 3,970,145 4,009,846 4,049,945 4,090,444 4,131,349 4,172,662 Write-off of Fixed Assets 147,907 223,459 265,059 267,710 270,387 273,091 275,821 278,580 Deferred Taxes (9,455,010) 1,284,298 1,297,141 1,310,112 1,323,214 1,336,446 1,349,810 Changes in operating assets & liabilities Net Accounts Receivable (1,166,202) (1,781,687) (2,210,508) (2,148,579) (1,161,052) (1,500,013) (1,768,227) (2,626,014) Prepaids & Other Assets (110,984) (17,252) (305,493) (9,418) (9,513) (9,608) (9,704) (9,801) Other Assets ------AP, Accrued Expenses & Other Laiblities 449,217 6,978,717 (2,472,405) 3,958,289 1,617,525 2,089,750 2,463,414 3,658,444 Accrued Compensation 375,160 710,845 478,480 27,725 28,002 28,282 28,565 28,850 Deferred Revenue 991,397 1,086,804 515,405 1,209,657 1,163,200 1,311,728 1,455,481 1,666,493 Dining Rewards Payable 1,476,881 2,337,119 2,625,876 1,703,679 1,391,952 1,798,323 2,119,877 3,148,253 Net Cash Provided by/(used in) Operating Activities 5,612,436 15,730,073 8,526,451 23,067,408 25,045,088 30,500,196 34,713,538 45,390,630

Cash Flows from Investing Activities Acquisition of Fixed Assets (CapEx) (3,664,827) (5,583,028) (7,202,821) (3,633,753) (4,161,259) (4,027,456) (5,911,848) (5,430,383) % Change N/A 52% 29% -50% 15% -3% 47% -8% Absolute Change - (1,918,201) (1,619,793) 3,569,068 (527,506) 133,803 (1,884,393) 481,465 Change in Short-term Investments 756,971 - (17,118,167) (172,589) (174,315) (176,058) (177,819) (179,597) Increase in Restricted Cash (196,832) (9,483) (8,455) - - - - - Net Cash Used in Investing Activities (3,104,688) (7,510,711) (24,329,443) (3,806,342) (4,335,574) (4,203,514) (6,089,667) (5,609,980)

Cash Flows from Financing Activities Proceeds from Issuance of Common Stock (322,276) 1,278,422 76,121 - - - - - Proceeds Early Exercise of Common Stock - - 28,384 - - - - - Net Cash Provided by Financing Activity (322,276) 1,278,422 104,505 - - - - -

Effect of Exchange Rates on Cash 2,053 (19,179) (80,495) - - - - -

Net Increases/Decreases in Cash 2,187,525 9,478,605 (15,698,487) 19,261,065 20,709,514 26,296,682 28,623,871 39,780,649 Cash & Cash Equivalents at Beginning of Period 8,076,737 10,264,262 19,742,867 4,044,380 23,305,445 44,014,959 70,311,641 98,935,512 Total Cash & Cash Equivalents at End of Period 10,264,262 19,742,867 4,044,380 23,305,445 44,014,959 70,311,641 98,935,512 138,716,161

13 OpenTable Value Proposition OpenTable Customer Monthly ROI % Diners Considered Incremental Average Average Diner Check 40 Diners/Month 30% 35.00% 40.00% 45.00% 50.00% 55.00% 60.00% Variable Cost 14 Contribution 26 200 316% 369% 422% 475% 527% 580% 633% Average Monthly 250 396% 461% 527% 593% 659% 725% 791% Subscription Cost 275 300 475% 554% 633% 712% 791% 870% 949% Average Monthly Diner Fees 218 350 554% 646% 738% 831% 923% 1015% 1108% Total Cost 493 400 633% 738% 844% 949% 1055% 1160% 1266% Source: Bank of America Merrill Lynch Equity Research, OpenTable Estimates 450 712% 831% 949% 1068% 1187% 1305% 1424%

500 791% 923% 1055% 1187% 1318% 1450% 1582%

550 870% 1015% 1160% 1305% 1450% 1595% 1740%

600 949% 1108% 1266% 1424% 1582% 1740% 1899%

650 1028% 1200% 1371% 1543% 1714% 1885% 2057%

700 1108% 1292% 1477% 1661% 1846% 2030% 2215%

 We estimate that for each 100bp increase in incremental diners proportion, OpenTable’s clients stand to gain approximately 23.7% in ROI.  Similarly for each additional monthly diner placed through OpenTable ERB system, there is an increase of 0.34% to the restaurant’s ROI.

14 International Growth Projections

Intl Growth Projections Subscription Revenue - - - 3,180,000 4,051,442 5,161,693 6,576,196 11,022,269 Reservation Revenue - - - 693,196 886,569 1,227,565 1,699,717 2,251,748 Installation & Other - - - 132,500 168,810 215,071 274,008 334,008 Total - 1,547,000 2,779,000 4,005,696 5,106,821 6,604,329 8,549,921 13,608,026 % Change - - 80% 44% 27% 29% 29% 59% Suscription Fees/Month 200 200 200 200 200 200 200 275 N.o of Restaurants - 470 1,040 1,325 1,688 2,151 2,740 3,340 % Change - - 121% 27% 27% 27% 27% 22% Actual Annual Change - - 570 285 363 463 589 600

Reservation Revenue Diners Seated - 244,000 542,000 693,196 886,569 1,227,565 1,699,717 2,251,748 % Change - - 122% 28% 28% 38% 38% 32% Diners /Restaurant - 519 521 523 525 571 620 674 % Change - - 0.39% 0.39% 8.68% 8.68% 8.68% 8.68%

Intl Expenses Operations & Support - 2,246,000 3,930,499 5,592,388 3,990,414 4,020,713 4,051,242 3,905,569 Restaurant/Employee - 29 37 47 59 75 95 120 % Change - - 26% 26% 26% 26% 26% 26% Sales & Marketing - 2,003,071 3,204,914 2,952,456 2,719,884 2,505,633 1,974,264 2,406,572 Restaurant/Employee - 31 43 60 83 115 185 185 % Change - - 38% 38% 38% 38% 62% 0% Technology - 410,968 821,145 1,046,170 1,332,861 1,698,116 2,163,466 2,637,203 Restaurant/Employee - 125 139 139 139 139 139 139 % Change - - 11% 0% 0% 0% 0% 0% General & Administrative - 603,636 1,408,485 1,152,818 1,468,734 1,871,224 2,384,011 2,906,042 Restaurant/Employee - 157 149 231 231 231 231 231 % Change - - -5% 56% 0% 0% 0% 0% Total - 7,377,000 11,241,000 10,743,832 9,511,893 10,095,686 10,572,982 11,855,386 % Change - - 52% -4% -11% 6% 5% 12% Operating Income (5,830,000) (8,462,000) (6,738,136) (4,405,072) (3,491,357) (2,023,061) 1,752,640

15 North American Growth Projections

North American Revenue Subscription Revenue 18,423,900 24,390,300 30,673,500 34,013,100 37,716,301 40,933,538 45,952,004 50,368,306 Reservation Revenue 10,316,280 16,737,520 22,872,480 27,212,692 31,252,664 37,921,221 44,264,148 54,820,812 Installation & Other 558,300 739,100 929,500 1,030,700 1,142,918 1,240,410 1,392,485 1,526,312 Total 29,298,480 41,866,920 54,475,480 62,256,492 70,111,884 80,095,168 91,608,636 106,715,430 % Change Suscribtion/Month 275 275 275 275 275 275 275 275 N.o of Restaurants 5,583 7,391 9,295 10,307 11,429 12,404 13,925 15,263 % Change - 32% 26% 11% 9% 12% 10% 14% Actual Annual Change - 1,808 1,904 1,012 1,122 975 1,521 1,338

US Consumer Spending Consumer Spending 9073.5 9313.9 9290.9 9235.1 9381.6 9595.5 9767 10015.9 % Change 2.9% 2.6% -0.2% -0.6% 1.6% 2.3% 1.8% 2.5%

Reservation Revenue Diners Seated 15,171,000 24,614,000 33,636,000 40,018,664 45,959,800 55,766,501 65,094,335 80,618,841 % Change 82% 62% 37% 19% 15% 21% 17% 24% Diners/Restaurant 2,717 3,330 3,619 3,879 4,104 4,436 4,724 5,146

North American Expenses Operations & Support 8,843,623 10,949,248 13,779,474 15,576,419 17,070,838 19,547,003 21,425,604 Restaurant/Employee 117 119 105 103 102 100 100 % Change 2% -12% -2% -1% -2% 0% Sales & Marketing 5,341,523 6,676,904 13,763,770 15,262,311 16,564,201 18,594,977 20,382,082 Restaurant/Employee 185 186 100 100 100 100 100 % Change 1% -46% 0% 0% 0% 0% Technology 6,462,687 7,338,983 8,552,937 9,484,144 10,293,151 11,555,095 12,665,618 Restaurant/Employee 125 139 132 132 132 132 132 % Change 11% -5% 0% 0% 0% 0% General & Administrative 6,036,364 8,652,121 11,140,214 13,435,689 15,982,397 19,848,350 24,342,560 Restaurant/Employee 246 216 186 171 156 141 126 % Change -12% -14% -8% -9% -10% -11% N.A. Total 26,684,197 33,617,256 47,236,396 53,758,563 59,910,586 69,545,426 78,815,865

Operating Income 15,182,723 20,858,224 15,020,096 16,353,321 20,184,582 22,063,211 27,899,565

16 OpenTable Public Comparables - eCommerce

Capitalization Enterprise Value / Enterprise Value / Enterprise Value /

Share Equity Enterprise Revenue EBIT EBITDA P / E Multiple Company Name Price Value Value LTM LTM LTM LTM

Amazon AMZN 79.77 34,188.07 31,125.07 1.6x 37.3x 31.3x 49.9x

Atrinsic, Inc. ATRN 1.18 24.43 1.89 0.0x -0.5x 0.6x -0.2x

Baidu, Inc. BIDU 19.03 6,575.97 6,184.09 12.0x 35.9x 28.4x 38.1x comScore, Inc. SCOR 13.43 391.98 321.50 2.6x 36.5x 20.9x 16.8x eHealth, Inc. EHTH 16.65 414.66 264.17 2.3x 12.0x 11.0x 27.8x

Google Inc. GOOG 89.96 117,599.51 101,753.74 4.6x 14.6x 11.9x 6.5x

InterActiveCorp. IACI 16.51 2,517.87 765.90 0.5x -13.0x 18.0x -9.7x

MICROS Systems, Inc. MCRS 21.11 1,696.84 1,371.30 1.5x 9.4x 8.4x 16.2x Netflix, Inc. NFLX 46.95 2,746.34 2,488.21 1.7x 17.4x 14.0x 31.3x priceline.com Incorporated PCLN 89.96 3,686.65 3,616.20 1.9x 12.0x 10.6x 18.7x

Radiant Systems Inc. RADS 5.95 193.05 277.18 0.9x 13.4x 8.0x 19.8x

SAP AG SAP 38.60 45,270.87 46,140.83 3.1x 12.3x 10.4x 19.3x

Maximum 89.96 117,599.51 101,753.74 12.0x 37.3x 31.3x 49.9x

Median 20.07 2,632.11 1,929.76 1.8x 12.8x 11.4x 19.0x

Mean 36.59 17,942.19 16,192.51 2.7x 15.6x 14.4x 19.5x

Minimum 1.18 24.43 1.89 0.0x -13.0x 0.6x -9.7x

17 OpenTable Public Comparables - SaaS

Valuation Statistics Capitalization Enterprise Value / Enterprise Value / Enterprise Value / Share Equity Enterprise Revenue EBIT EBITDA P / E Multiple Company Name Price Value Value LTM LTM LTM LTM Citrix Systems CTXS 26 4,618 4,043 2.6x 24.3x 13.6x 32.1x Concur Tech CNQR 1,157.13 949.88 23.88 4.1x 28.4x 17.1x 47.8x Salesforce.com CRM 4,596.46 3,916.00 38.17 3.6x 61.5x 42.1x 95.4x

Maximum 38 4,618 4,043 4.1x 61.5x 42.1x 95.4x

Median 26 4,596 3,916 3.6x 28.4x 17.1x 47.8x

Mean 27 3,225 2,755 3.4x 38.0x 24.3x 58.4x Minimum 23.88 1,157.13 949.88 2.6x 24.3x 13.6x 32.1x

Weighted 50/50 Average 3.1x 26.8x 19.4x 39.0x

Enterprise Value Maximum 4.1x 501,068,671 Mean 3.4x 421,155,127 Minimum 2.6x 315,412,620

18 OpenTable M&A Comparables

Comparable Companies - OpenTable ($ in millions, except per share amounts)

Precident Transactions

Target LTM Transaction Implied TEV Announce Date Target Acuiror Revenue EBITDA Value Revenue EBITDA 04/18/2007 Aldata Solution Oyj Symphony 97.9 5.36 39.5 0.40x 7.37x Technology Group 06/18/2007 IntraLinks Holdings, Inc. 143.4 12.8 215.0 1.50x 16.80x Rho Capital Partners 06/22/2007 Moneysupermarket.com Group 260.5 64.4 323.39 1.24x 5.02x - 06/25/2007 NetVision Ltd. Discount Investment 326.8 67.2 41.92 0.13x 0.62x Corp. 07/20/2007 auFeminin.com 34.5 14.6 112.79 3.27x 7.73x Axel Springer AG 09/12/2007 Nuance Communications, Inc. 890.3 146.2 82.98 0.09x 0.57x - 10/01/2007 LHS Telekommunikation LM Ericsson 156.2 33.3 407.47 2.61x 12.24x Telephone Co. (OM:ERIC B) 12/05/2007 Ancestry.com Inc. Spectrum Equity 197.6 59.3 300.0 1.52x 5.06x Investors 04/07/2008 Fundtech Ltd. Clal Industries and 121.0 13.1 29.23 0.24x 2.23x Investments Ltd. 08/19/2008 Net Entertainment NE AB 26.1 13.1 45.65 1.75x 3.48x -

Maximum 3.27x 16.80x Mean 1.25x 6.15x Median 1.24x 5.02x Minimum 0.09x 0.57x

Enterprise Value Revenue Multiple Enterprise Value Maximum 3.27x 401,824,052 Mean 2.00x 246,228,050 Minimum 1.24x 152,581,994

19 DCF Valuation

OpenTable DCF Valuation 2009E 2010E 2011E 2012E 2013E Key Assumptions Free Cash Flow

EBITDA 18,930,245 24,171,204 31,041,082 36,967,447 50,233,564 Terminal Growth 3% Corporate Tax Less: Tax Payable on EBIT 2,854,981 4,054,688 5,611,758 6,604,162 9,671,388 Rate 30% Less: Change in Working Capital 5,643,235 3,186,007 4,060,107 4,822,868 7,029,375

Plus: Decrease in CapEx (3,633,753) (4,161,259) (4,027,456) (5,911,848) (5,430,383)

Free Cash Flow 6,798,276 12,769,250 17,341,762 19,628,569 28,102,417 % Change 88% 36% 13% 43%

NPV of Free Cash Flows 2009E 2010E 2011E 2012E 2013E Discount Rate

Free Cash Flow 6,798,276 12,769,250 17,341,762 19,628,569 28,102,417 WACC 9.54%

Net Present Value 6,206,147 10,641,724 13,193,594 13,632,698 17,818,049

Terminal Value Into Perpetuity Terminal Value 442,523,912 Net Present Value of TV 280,577,755

Value NPV of FCF 61,492,213 NPV of TV 280,577,755 NPV 342,069,968 Enterprise Value 342,069,968 Less: Debt - Equity Value 342,069,968

20 Sensitivity Analysis

OpenTable DCF Valuation

DCF Sensitivity Table

Discount NPV of Term Val. PV of Terminal Enterprise Value Equity Value

Rate FCF at 2013 Value

7.54% 65,521,548 637,565,838 443,276,674 508,798,222 508,798,222

8.04% 64,479,886 574,315,259 390,146,287 454,626,172 454,626,172

8.54% 63,461,872 522,481,752 346,834,300 410,296,172 410,296,172

9.04% 62,466,837 479,229,951 310,895,717 373,362,554 373,362,554

9.54% 61,494,136 442,591,576 280,633,466 342,127,602 342,127,602

10.04% 60,543,143 411,157,515 254,832,799 315,375,942 315,375,942

10.54% 59,613,254 383,892,428 232,601,357 292,214,611 292,214,611

11.04% 58,703,884 360,018,521 213,268,924 271,972,808 271,972,808

11.54% 57,814,467 338,940,153 196,322,385 254,136,852 254,136,852

12.04% 56,944,457 320,193,463 181,362,277 238,306,735 238,306,735

21 Fixed Income Securities Comparison

Corporate Debenture Offerings Q408 – Q109 Fixed Income Coupon Offering Credit Maturity Date Issuer Security Type Seniority Level Coupon Rate (%) Type (USD mm) Rating Corporate Feb-24-2011 Hewlett-Packard Company (NYSE:HPQ) Debentures Senior Unsecured 2.034 Variable 275 A Corporate Feb-26-2014 Western Union Co. (NYSE:WU) Debentures Senior Unsecured 6.5 Fixed 500 A- Corporate Mar-15-2014 Anixter International Inc. (NYSE:AXE) Debentures Senior Unsecured 10 Fixed 200 BB Corporate Feb-15-2015 Aeroflex Holding Corp (NYSE:ARX) Debentures Senior Unsecured 11.75 Fixed 225 B- Corporate Apr-15-2018 Dell Inc. (NasdaqGS:DELL) Debentures Senior Unsecured 5.65 Fixed 500 A- Corporate Apr-15-2038 Dell Inc. (NasdaqGS:DELL) Debentures Senior Unsecured 6.5 Fixed 400 A- Total Offering 2,100.00 Coupon Rate Weighted Average 6.61%

22 Fixed Income Securities Comparison

Corporate Debenture Offerings Q407 – Q108 Fixed Income Security Coupon Offering Maturity Date Issuer Type Seniority Level Rate (%) Coupon Type ($USD mm) Credit Rating International Business Machines Corp. Nov-08-2008 (NYSE:IBM) Corporate Debentures Senior Unsecured4.103 Variable 100.0 - International Business Machines Corp. Feb-08-2009 (NYSE:IBM) Corporate Debentures Senior Unsecured0.451 Variable 105.0 -

Jan-01-2012 IKON Office Solutions, Inc. Corporate Debentures Senior Unsecured7.698 Variable 150.0 BB-

Nov-15-2012 Motorola Inc. (NYSE:MOT) Corporate Debentures Senior Unsecured5.375 Fixed 400.0 BB+ Senior Feb-15-2015 Vangent, Inc. Corporate Debentures Subordinate 9.625 Fixed 183.7 CCC+

Jan-15-2016 Unisys Corporation (NYSE:UIS) Corporate Debentures Senior Unsecured12.5 Fixed 210.0 B+

Nov-15-2017 Motorola Inc. (NYSE:MOT) Corporate Debentures Senior Unsecured6.0 Fixed 400.0 BB+

Nov-20-2017 Fiserv, Inc. (NasdaqGS:FISV) Corporate Debentures Senior Unsecured6.8 Fixed 500.0 BBB-

Dec-01-2017 Harris Corp. (NYSE:HRS) Corporate Debentures Senior Unsecured5.95 Fixed 400.0 BBB+

Mar-15-2018 Jabil Circuit Inc. (NYSE:JBL) Corporate Debentures Senior Unsecured8.25 Fixed 250.0 BB+

Total Offering 2,698.7 Coupon Rate Weighted Average 6.82%

The Corporate Debentures offered from Q408 – Q109 had a similar weighted average of coupon rates despite a large majority of those offerings getting A- ratings or above