Monthly Report August2008

Software Equity Group Flash Report

August 2008

Financial and Stock Market Performance Public Software Companies By Product Category Public SaaS Companies Public Internet Companies and Selected M&A Transactions

Software Equity Group, L.L.C. 12220 El Camino Real, #320 San Diego, CA 92130 p: (858) 509-2800 f: (858) 509-2818 [email protected]

CAD Computer-aided Design CAM Computer-aided Manufacturing CRM Customer Relationship Management EBITDA Earnings before Interest, Taxes, Depreciation, and Amortization EV Enterprise Value FCF Free Cash Flow HR Human Resources NASDAQ National Association of Securities Dealers Automated Quotation System OS Operating System PLM Product Lifecycle Management R&D Research and Development S&P Standard & Poor's SaaS Software-as-a-Service SEG Software Equity Group SG&A Selling, General, & Administrative SW Software TTM Trailing Twelve Month YoY Year-over-Year YTD Year-to-date

Category Name Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ Forward Forward YoY Stock Margin Margin Revenue EBITDA EV/ Revenue EV/ Market Growth EBITDA Return SEG Software Index $332.74 $343.47 $166.30 66.2% 12.7% 14.6% 1.9x 12.7x 1.8x 10.1x -15.9% Billing & Service Provisioning $622.39 $562.99 $300.84 48.0% 15.6% 12.6% 1.7x 7.6x 2.1x 12.6x -22.5% Business Intelligence $405.31 $301.84 $163.23 77.2% 15.5% 14.6% 1.6x 11.7x 1.7x 7.4x -18.4% Content/Document Management $180.32 $118.90 $149.04 72.8% 11.1% 25.8% 1.6x 10.5x 2.3x 8.6x -34.5% CRM, Marketing & Sales Software $109.30 $66.10 $97.14 60.6% 4.2% 21.9% 0.9x 14.8x 1.0x 12.1x -46.4% Database & File Management $842.25 $708.20 $259.79 83.1% 20.1% 18.8% 2.7x 9.5x 2.4x 9.7x 13.6% Development Tools, OS & Application Testing So $228.13 $214.38 $159.66 81.5% 6.1% 14.2% 2.1x 9.3x 2.0x 13.3x -7.0% eCommerce Enablement Software $296.82 $259.79 $148.45 60.4% 3.6% 7.2% 1.7x 35.6x 5.0x 20.0x -11.2% Education & eLearning $119.46 $90.37 $109.41 67.5% 5.5% 6.8% 1.0x 23.8x 2.4x 13.3x -34.7% Electronic Design Automation $1,261.22 $1,330.48 $864.45 82.3% 12.2% 8.1% 1.4x 11.1x 1.5x 7.7x -57.2% Engineering, PLM & CAD/CAM Software $1,592.26 $1,547.44 $645.26 83.2% 21.5% 7.4% 2.0x 12.2x 1.8x 9.2x -4.3% Enterprise Application Integration $824.26 $689.25 $357.94 71.3% 16.3% 15.6% 2.2x 10.8x 1.9x 10.0x 0.1% Enterprise Resource Planning $366.00 $486.95 $402.24 55.1% 13.8% 13.5% 1.3x 9.9x 1.2x 7.5x -42.0% Entertainment $678.89 $583.08 $149.82 55.4% 6.9% 8.6% 1.3x 7.0x 1.6x 9.4x -38.5% Financial Services Software $672.13 $641.40 $240.45 60.7% 21.9% 18.3% 2.5x 12.3x 2.2x 9.9x -0.6% Healthcare $603.54 $503.28 $136.78 55.2% 15.4% 10.9% 2.2x 14.4x 2.2x 12.2x -22.0% HR & Workforce Management $144.59 $100.29 $101.86 61.2% 3.6% 14.3% 1.1x 29.6x 3.1x 13.5x -51.0% Messaging, Conferencing & Communications $171.33 $136.07 $114.97 62.1% 6.6% 16.5% 1.2x 11.0x 1.2x 7.8x 4.5% Multimedia, Graphics, Digital Media $355.45 $444.24 $199.14 70.8% 10.4% 23.6% 1.8x 19.9x 2.0x 10.8x -11.0% Networking & Connectivity $1,253.95 $788.40 $413.08 76.4% 8.4% 13.0% 2.0x 15.9x 2.6x 10.2x -20.5% Security $343.29 $318.72 $118.56 74.8% 11.3% 19.4% 2.8x 17.3x 2.8x 9.7x -23.8% Storage & Systems Management Software $7,300.88 $6,472.29 $1,724.35 80.1% 21.5% 16.3% 2.7x 10.3x 2.5x 9.7x -9.8% Supply Chain Management & Logistics $276.98 $333.56 $257.04 57.1% 15.0% 6.5% 1.4x 9.2x 1.4x 8.7x -15.2% Web Analytics $770.31 $737.28 $278.63 75.7% 20.3% 20.7% 2.8x 15.3x 2.3x 8.3x -13.3% Wireless $221.38 $173.39 $122.37 45.1% 7.4% 19.2% 1.7x 20.5x 1.9x 11.6x -2.0%

Income Statement Analysis (Median) SEG SW Index Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 14.6% 0% TTM EBITDA Growth 21.0% TTM Earnings Growth 11.6% Gross Profit Margin 66.2% EBITDA Margin 12.7% -5% Net Income Margin 5.5% SG&A Expenses as a % of Total Revenue 40.9% R&D Expenses as a % of Total Revenue 15.9% -10% Balance Sheet Analysis (Median) Current Ratio 1.9 Quick Ratio 1.7 Cash as Percent of Market Cap 19.4% -15% Avg Days Outstanding: Accounts Receivable 71 Avg Days Outstanding: Accounts Payable 43 Working Capital to TTM Operating Expense Ratio 0.3 -20% Cash Flow Statement Analysis (Median) Levered FCF Margin 6.4% Cash from Operations Growth (YoY) 22.5% Cash from Investing Growth (YoY) 32.7% -25% Cash from Financing Growth (YoY) -27.8% S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) 30.0%

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return Amdocs Limited DOX $6,296.39 $5,568.02 $3,063.51 36.1% 19.2% 10.4% 1.8x 9.5x 1.7x 7.5x -16.0% AsiaInfo Holdings, Inc. ASIA $624.99 $424.40 $150.20 48.4% 11.3% 25.7% 2.8x 24.9x 2.6x 17.7x 67.7% CSG Systems International, Inc. CSGS $619.78 $701.58 $451.48 47.7% 26.9% 14.8% 1.6x 5.8x n/a n/a -29.1% MIND C.T.I. Ltd. MNDO $22.89 $10.48 $18.45 68.6% 12.0% -8.0% 0.6x 4.7x n/a n/a -59.5% Median: $622.39 $562.99 $300.84 48.0% 15.6% 12.6% 1.7x 7.6x 2.1x 12.6x -22.5%

Income Statement Analysis (Median) Billing & Service Provisioning Software Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 12.6% 10% TTM EBITDA Growth 10.0% TTM Earnings Growth 4.4% Gross Profit Margin 48.0% 5% EBITDA Margin 15.6% Net Income Margin 12.7% SG&A Expenses as a % of Total Revenue 19.5% 0% R&D Expenses as a % of Total Revenue 13.4%

-5% Balance Sheet Analysis (Median) Current Ratio 2.9 Quick Ratio 2.6 -10% Cash as Percent of Market Cap 28.0% Avg Days Outstanding: Accounts Receivable 103 Avg Days Outstanding: Accounts Payable 53 -15% Working Capital to TTM Operating Expense Ratio 0.6

Cash Flow Statement Analysis (Median) -20% Levered FCF Margin 11.9% Cash from Operations Growth (YoY) 346.3% Cash from Investing Growth (YoY) 109.3% -25% Cash from Financing Growth (YoY) -9.3% Billing & Service Provisioning SW S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) 144.1%

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return Actuate Corporation ACTU $274.66 $217.65 $138.07 80.5% 13.5% 3.2% 1.6x 11.7x 1.4x 5.9x -29.9% Datawatch Corporation DWCH $13.76 $9.31 $24.57 72.8% 8.4% 3.5% 0.4x 4.5x n/a n/a -55.6% Informatica Corporation INFA $1,432.91 $1,200.47 $427.35 81.1% 17.4% 21.4% 2.8x 16.1x 2.7x 14.1x 16.1% Insightful Corporation IFUL $23.95 $13.92 $20.89 74.0% -15.8% -16.5% 0.7x n/a n/a n/a -21.0% MicroStrategy Incorporated MSTR $718.03 $618.15 $376.52 82.3% 24.3% 18.0% 1.6x 6.8x 1.7x 7.4x -17.3% Pegasystems Inc. PEGA $535.97 $375.11 $188.39 59.8% 5.5% 32.1% 2.0x 36.4x 1.7x n/a 40.7% PROS Holdings PRO $274.05 $228.57 $70.75 73.6% 20.6% 32.1% 3.2x 15.7x 1.8x 8.8x -16.3% SPSS Inc. SPSS $598.70 $442.71 $305.85 93.6% 23.4% 11.3% 1.4x 6.2x 1.4x 6.0x -19.5% Median: $405.31 $301.84 $163.23 77.2% 15.5% 14.6% 1.6x 11.7x 1.7x 7.4x -18.4%

Income Statement Analysis (Median) Business Intelligence Software Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 14.6% 0% TTM EBITDA Growth 26.2% TTM Earnings Growth 51.4% Gross Profit Margin 77.2% -5% EBITDA Margin 15.5% Net Income Margin 12.7% SG&A Expenses as a % of Total Revenue 51.3% -10% R&D Expenses as a % of Total Revenue 16.0%

-15% Balance Sheet Analysis (Median) Current Ratio 2.0 Quick Ratio 1.9 -20% Cash as Percent of Market Cap 32.3% Avg Days Outstanding: Accounts Receivable 77 Avg Days Outstanding: Accounts Payable 37 -25% Working Capital to TTM Operating Expense Ratio 0.5

Cash Flow Statement Analysis (Median) -30% Levered FCF Margin 12.9% Cash from Operations Growth (YoY) 16.7% Cash from Investing Growth (YoY) 28.8% -35% Cash from Financing Growth (YoY) -61.6% Business Intelligence SW S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) 4.6%

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return Adobe Systems Incorporated ADBE $21,934.27 $20,419.54 $3,540.23 89.9% 38.6% 32.1% 5.8x 14.9x 5.9x 12.7x 2.6% Captaris, Inc. CAPA $88.93 $58.75 $111.37 68.0% -2.5% 19.4% 0.5x n/a 0.4x n/a -34.5% Convera Corporation CNVR $60.26 $28.91 $1.20 n/a -1992.6% 108.7% 24.2x n/a n/a n/a -65.8% Datawatch Corporation DWCH $13.76 $9.31 $24.57 72.8% 8.4% 3.5% 0.4x 4.5x n/a n/a -55.6% EasyLink Services International ESIC $77.81 $104.07 $73.61 67.9% 27.2% 239.1% 1.4x 5.2x n/a n/a n/a Interwoven, Inc. IWOV $641.16 $454.11 $242.96 72.1% 13.8% 14.5% 1.9x 13.5x n/a n/a 1.7% Macrovision Corporation MVSN $1,562.65 $1,441.75 $232.06 82.0% 31.5% 265.8% 6.2x 19.7x 2.5x 6.8x -36.1% Ninetowns Internet Tech Grp Ltd. NINE $75.16 -$18.11 $15.08 77.9% -73.3% -32.5% -1.2x 1.6x n/a n/a -30.5% Open Text Corporation OTEX $1,589.69 $1,690.54 $700.46 73.6% 25.8% 33.2% 2.4x 9.4x 2.3x 8.6x 65.7% Vignette Corporation VIGN $271.70 $133.73 $186.72 66.0% 6.2% -5.5% 0.7x 11.6x 0.8x 8.6x -46.5% Median: $180.32 $118.90 $149.04 72.8% 11.1% 25.8% 1.6x 10.5x 2.3x 8.6x -34.5%

Income Statement Analysis (Median) Content & Document Management Software Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 25.8% 0% TTM EBITDA Growth 30.4% TTM Earnings Growth 69.1% Gross Profit Margin 72.8% EBITDA Margin 11.1% -5% Net Income Margin 6.4% SG&A Expenses as a % of Total Revenue 45.4% R&D Expenses as a % of Total Revenue 16.7% -10% Balance Sheet Analysis (Median) Current Ratio 2.3 Quick Ratio 2.2 Cash as Percent of Market Cap 32.8% -15% Avg Days Outstanding: Accounts Receivable 61 Avg Days Outstanding: Accounts Payable 64 Working Capital to TTM Operating Expense Ratio 0.6 -20% Cash Flow Statement Analysis (Median) Levered FCF Margin 14.5% Cash from Operations Growth (YoY) 47.3% Cash from Investing Growth (YoY) 129.0% -25% Cash from Financing Growth (YoY) 13.9% Content & Document Management SW S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) 35.1%

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return Astea International Inc. ATEA $13.27 $10.67 $27.88 44.4% 9.3% 16.9% 0.4x 4.1x n/a n/a -29.3% Blackbaud, Inc. BLKB $798.66 $798.98 $279.79 63.2% 23.3% 28.1% 2.9x 12.3x 2.9x 9.9x -14.7% Chordiant Software, Inc. CHRD $156.63 $92.30 $116.65 70.0% 5.3% 2.2% 0.8x 14.8x 1.0x 14.7x -63.6% I-Many Inc. IMNY $37.78 $39.91 $39.70 57.9% -20.7% 18.8% 1.0x n/a n/a n/a -72.6% Rainmaker Systems Inc. RMKR $61.97 $39.28 $77.63 46.6% 3.0% 27.5% 0.5x 16.6x 0.5x n/a -63.6% Unica Corporation UNCA $184.88 $143.83 $121.84 75.2% 2.3% 25.1% 1.2x 52.3x 1.0x 12.1x -23.2% Median: $109.30 $66.10 $97.14 60.6% 4.2% 21.9% 0.9x 14.8x 1.0x 12.1x -46.4%

Income Statement Analysis (Median) CRM, Marketing, & Sales Software Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 21.9% 0% TTM EBITDA Growth 18.4% TTM Earnings Growth -42.4% -5% Gross Profit Margin 60.6% EBITDA Margin 4.2% -10% Net Income Margin -1.1% SG&A Expenses as a % of Total Revenue 36.3% R&D Expenses as a % of Total Revenue 17.9% -15%

Balance Sheet Analysis (Median) -20% Current Ratio 1.2 Quick Ratio 1.1 -25% Cash as Percent of Market Cap 31.2% Avg Days Outstanding: Accounts Receivable 76 -30% Avg Days Outstanding: Accounts Payable 79 Working Capital to TTM Operating Expense Ratio 0.1 -35%

Cash Flow Statement Analysis (Median) -40% Levered FCF Margin -1.0% Cash from Operations Growth (YoY) 3.6% Cash from Investing Growth (YoY) 45.2% -45% Cash from Financing Growth (YoY) -178.9% CRM, Marketing, & Sales SW S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) 7.4%

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return BMC Software, Inc. BMC $6,250.05 $5,584.65 $1,784.10 77.3% 30.4% 11.2% 3.1x 10.3x 3.0x 9.7x 14.5% Double-Take Software DBTK $242.30 $168.54 $92.23 89.9% 22.7% 25.6% 1.8x 8.1x n/a n/a -27.7% Guidance Software, Inc. GUID $251.58 $215.94 $85.93 71.6% -2.1% 26.5% 2.5x n/a 1.2x n/a -8.0% Informatica Corporation INFA $1,432.91 $1,200.47 $427.35 81.1% 17.4% 21.4% 2.8x 16.1x 2.7x 14.1x 16.1% Oracle Corporation ORCL $111,005.28 $111,567.28 $22,430.00 77.8% 42.3% 24.6% 5.0x 11.8x 4.6x 10.4x 12.6% Pervasive Software Inc. PVSW $77.55 $32.60 $42.47 85.1% 11.8% 4.1% 0.8x 6.5x 0.8x n/a -18.6% Quest Software, Inc. QSFT $1,570.53 $1,281.10 $685.11 90.1% 14.2% 14.9% 1.9x 13.2x 1.6x 6.5x 2.1% Sybase, Inc. SY $2,664.47 $2,549.62 $1,093.33 71.1% 26.8% 16.2% 2.3x 8.7x 2.4x 8.3x 41.7% TigerLogic, Corp. TIGR $124.19 $111.10 $19.77 90.6% -1.2% 5.5% 5.6x n/a n/a n/a 21.9% Versant Corporation VSNT $98.11 $72.82 $23.81 92.8% 44.8% 27.5% 3.1x 6.8x n/a n/a 21.1% Median: $842.25 $708.20 $259.79 83.1% 20.1% 18.8% 2.7x 9.5x 2.4x 9.7x 13.6%

Income Statement Analysis (Median) Database & File Management Software Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 18.8% 5% TTM EBITDA Growth 31.4% TTM Earnings Growth 16.4% Gross Profit Margin 83.1% 0% EBITDA Margin 20.1% Net Income Margin 14.0% SG&A Expenses as a % of Total Revenue 50.3% R&D Expenses as a % of Total Revenue 15.9% -5%

Balance Sheet Analysis (Median) Current Ratio 2.0 -10% Quick Ratio 1.9 Cash as Percent of Market Cap 21.3% Avg Days Outstanding: Accounts Receivable 66 -15% Avg Days Outstanding: Accounts Payable 57 Working Capital to TTM Operating Expense Ratio 0.5

-20% Cash Flow Statement Analysis (Median) Levered FCF Margin 14.5% Cash from Operations Growth (YoY) 23.9% Cash from Investing Growth (YoY) 19.6% -25% Cash from Financing Growth (YoY) 16.9% Database & File Management SW S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) 40.0%

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return Borland Software Corporation BORL $113.09 $142.79 $249.96 82.3% -2.3% -14.5% 0.6x n/a 0.7x n/a -70.8% BSQUARE Corporation BSQR $37.79 $30.77 $61.32 27.0% 5.2% 15.0% 0.5x 9.6x n/a n/a -42.9% Magic Software Enterprises Ltd. MGIC $50.22 $18.31 $59.67 54.1% 6.9% -5.0% 0.3x 4.4x n/a n/a -35.4% Microsoft Corporation MSFT $235,363.72 $214,193.72 $60,420.00 80.8% 43.0% 18.2% 3.5x 8.2x 3.5x 8.0x -11.3% Phoenix Technologies Ltd. PTEC $332.07 $285.97 $69.37 88.5% 8.8% 74.7% 4.1x 47.0x n/a n/a 4.7% Progress Software Corporation PRGS $1,211.13 $953.61 $508.14 84.3% 20.9% 8.5% 1.9x 9.0x 1.8x n/a -2.7% Red Hat, Inc. RHT $4,090.70 $3,764.63 $560.78 84.2% 19.7% 28.8% 6.7x 34.2x 5.7x 28.7x 2.7% SourceForge, Inc. LNUX $95.17 $49.79 $54.07 38.8% 3.5% 24.7% 0.9x 26.6x 0.7x 11.8x -62.5% TigerLogic, Corp. TIGR $124.19 $111.10 $19.77 90.6% -1.2% 5.5% 5.6x n/a n/a n/a 21.9% Wind River Systems, Inc. WIND $902.91 $798.28 $338.45 75.9% 4.3% 13.4% 2.4x 55.1x 2.1x 14.8x 22.7% Median: $228.13 $214.38 $159.66 81.5% 6.1% 14.2% 2.1x 9.3x 2.0x 13.3x -7.0%

Income Statement Analysis (Median) Development Tools, OS, and App Testing Software Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 14.2% 0% TTM EBITDA Growth 49.2% TTM Earnings Growth 70.7% Gross Profit Margin 81.5% -5% EBITDA Margin 6.1% Net Income Margin 3.8% SG&A Expenses as a % of Total Revenue 49.1% R&D Expenses as a % of Total Revenue 17.2% -10%

Balance Sheet Analysis (Median) Current Ratio 1.9 -15% Quick Ratio 1.7 Cash as Percent of Market Cap 20.0% Avg Days Outstanding: Accounts Receivable 70 -20% Avg Days Outstanding: Accounts Payable 55 Working Capital to TTM Operating Expense Ratio 0.4

-25% Cash Flow Statement Analysis (Median) Levered FCF Margin 3.5% Cash from Operations Growth (YoY) 35.9% Cash from Investing Growth (YoY) 88.1% -30% Cash from Financing Growth (YoY) -45.8% Development Tools, OS, and App Testing SW S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) 41.1%

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return Art Technology Group, Inc. ARTG $472.62 $423.72 $153.66 59.4% 4.1% 32.6% 2.8x 66.8x 2.8x 20.0x 15.4% CyberSource Corporation CYBS $1,224.43 $1,159.79 $181.06 49.6% 13.0% 117.4% 6.4x 49.4x 5.0x 24.8x 54.2% Imergent, Inc. IIG $121.02 $95.86 $143.23 69.2% 3.1% 5.7% 0.7x 21.9x n/a n/a -50.5% Optimal Group Inc. OPMR $55.09 $2.69 $138.05 36.3% -1.4% -5.0% 0.0x n/a n/a n/a -69.4% Selectica, Inc. SLTC $32.43 $3.11 $16.00 73.7% -51.7% 8.7% 0.2x n/a n/a n/a -31.9% VeriSign, Inc. VRSN $6,335.73 $7,316.89 $1,567.28 61.4% 24.4% 4.7% 4.7x 19.2x 6.9x 14.4x 9.6% Median: $296.82 $259.79 $148.45 60.4% 3.6% 7.2% 1.7x 35.6x 5.0x 20.0x -11.2%

Income Statement Analysis (Median) eCommerce Enablement Software Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 7.2% 5% TTM EBITDA Growth 37.0% TTM Earnings Growth -134.0% Gross Profit Margin 60.4% 0% EBITDA Margin 3.6% Net Income Margin -8.8% SG&A Expenses as a % of Total Revenue 40.9% -5% R&D Expenses as a % of Total Revenue 10.3%

-10% Balance Sheet Analysis (Median) Current Ratio 1.4 Quick Ratio 1.2 -15% Cash as Percent of Market Cap 15.6% Avg Days Outstanding: Accounts Receivable 44 Avg Days Outstanding: Accounts Payable 30 -20% Working Capital to TTM Operating Expense Ratio 0.2

Cash Flow Statement Analysis (Median) -25% Levered FCF Margin 1.1% Cash from Operations Growth (YoY) 50.3% Cash from Investing Growth (YoY) -56.9% -30% Cash from Financing Growth (YoY) 91.9% eCommerce Enablement SW S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) n/a

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return Blackboard Inc. BBBB $1,236.04 $1,335.66 $268.79 71.4% 17.2% 24.2% 5.0x 28.8x 4.0x 18.2x -9.7% PLATO Learning, Inc. TUTR $46.80 $33.86 $69.77 46.3% 4.8% -12.2% 0.5x 10.1x n/a n/a -49.7% Renaissance Learning, Inc. RLRN $370.10 $351.58 $111.50 74.6% 16.8% 6.2% 3.2x 18.7x n/a n/a 12.4% Saba Software, Inc. SABA $94.65 $78.94 $107.31 63.6% 2.5% 7.5% 0.7x 29.3x 0.7x 8.4x -34.7% Scientific Learning Corporation SCIL $59.49 $57.21 $45.23 75.6% -9.0% 3.7% 1.3x n/a n/a n/a -55.0% SumTotal Systems, Inc. SUMT $144.27 $101.81 $130.59 62.6% 6.3% 12.7% 0.8x 12.4x 0.7x 6.9x -42.0% Median: $119.46 $90.37 $109.41 67.5% 5.5% 6.8% 1.0x 23.8x 2.4x 13.3x -34.7%

Income Statement Analysis (Median) Education & eLearning Software Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 6.8% 0% TTM EBITDA Growth 36.6% TTM Earnings Growth 44.3% Gross Profit Margin 67.5% -5% EBITDA Margin 5.5% Net Income Margin -3.3% SG&A Expenses as a % of Total Revenue 47.0% -10% R&D Expenses as a % of Total Revenue 14.1%

-15% Balance Sheet Analysis (Median) Current Ratio 1.0 Quick Ratio 0.8 -20% Cash as Percent of Market Cap 11.3% Avg Days Outstanding: Accounts Receivable 76 Avg Days Outstanding: Accounts Payable 21 -25% Working Capital to TTM Operating Expense Ratio 0.0

Cash Flow Statement Analysis (Median) -30% Levered FCF Margin 5.7% Cash from Operations Growth (YoY) 31.7% Cash from Investing Growth (YoY) n/a -35% Cash from Financing Growth (YoY) -62.3% Education & Computer Based Training SW S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) -19.6%

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return Cadence Design Systems, Inc. CDNS $1,923.29 $1,764.41 $1,475.53 85.1% 21.6% -5.0% 1.2x 5.5x 1.6x 25.3x -65.5% Magma Design Automation, Inc. LAVA $279.02 $292.79 $214.42 77.0% 8.4% 20.4% 1.4x 16.3x 1.2x 3.5x -57.2% Mentor Graphics Corporation MENT $1,261.22 $1,330.48 $864.45 85.6% 12.2% n/a 1.5x 12.6x 1.5x 9.2x 15.6% PDF Solutions, Inc. PDFS $126.23 $84.37 $90.08 63.8% -2.0% 7.0% 0.9x n/a 1.3x n/a -59.0% Synopsys, Inc. SNPS $3,427.73 $2,610.23 $1,259.35 82.3% 21.5% 9.2% 2.1x 9.6x 1.9x 6.3x -1.8% Median: $1,261.22 $1,330.48 $864.45 82.3% 12.2% 8.1% 1.4x 11.1x 1.5x 7.7x -57.2%

Income Statement Analysis (Median) Electronic Design Automation Software Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 8.1% 0% TTM EBITDA Growth 35.1% TTM Earnings Growth 50.1% Gross Profit Margin 82.3% -10% EBITDA Margin 12.2% Net Income Margin 0.1% SG&A Expenses as a % of Total Revenue 37.2% R&D Expenses as a % of Total Revenue 33.8% -20%

Balance Sheet Analysis (Median) Current Ratio 1.7 -30% Quick Ratio 1.5 Cash as Percent of Market Cap 23.8% Avg Days Outstanding: Accounts Receivable 66 -40% Avg Days Outstanding: Accounts Payable 35 Working Capital to TTM Operating Expense Ratio 0.5

-50% Cash Flow Statement Analysis (Median) Levered FCF Margin -2.2% Cash from Operations Growth (YoY) -11.8% Cash from Investing Growth (YoY) -26.5% -60% Cash from Financing Growth (YoY) -606.4% Electronic Design Automation SW S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) -43.1%

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return ANSYS, Inc. ANSS $3,598.19 $3,445.17 $426.06 85.7% 45.6% 27.0% 8.1x 17.7x 6.7x 14.1x 76.2% Autodesk, Inc. ADSK $7,141.70 $6,239.70 $2,262.10 90.6% 23.6% 18.3% 2.8x 11.7x 2.7x 8.8x -24.7% Cadence Design Systems, Inc. CDNS $1,923.29 $1,764.41 $1,475.53 85.1% 21.6% -5.0% 1.2x 5.5x 1.6x 25.3x -65.5% Dassault Systèmes DSY $7,361.79 $6,556.06 $1,941.78 84.1% 26.6% 6.0% 3.4x 12.7x 3.2x 10.3x -5.8% Magma Design Automation, Inc. LAVA $279.02 $292.79 $214.42 77.0% 8.4% 20.4% 1.4x 16.3x 1.2x 3.5x -57.2% Mentor Graphics Corporation MENT $1,261.22 $1,330.48 $864.45 85.6% 12.2% n/a 1.5x 12.6x 1.5x 9.2x 15.6% MSC.Software Corporation MSCS $566.18 $425.11 $253.92 81.2% 6.0% 4.6% 1.7x 27.7x 1.6x 11.9x -2.9% NAVTEQ Corporation NVT $74.62 $59.56 $7.80 100.0% n/a -36.3% 7.6x n/a n/a n/a 0.0% Parametric Technology Corporation PMTC $2,230.40 $2,097.93 $1,037.44 69.5% 18.6% 12.9% 2.0x 10.8x 1.9x 7.7x 9.9% PDF Solutions, Inc. PDFS $126.23 $84.37 $90.08 63.8% -2.0% 7.0% 0.9x n/a 1.3x n/a -59.0% Stratasys, Inc. SSYS $320.86 $292.15 $118.66 54.0% 22.2% 7.4% 2.5x 11.1x n/a n/a -29.3% Synopsys, Inc. SNPS $3,427.73 $2,610.23 $1,259.35 82.3% 21.5% 9.2% 2.1x 9.6x 1.9x 6.3x -1.8% Median: $1,592.26 $1,547.44 $645.26 83.2% 21.5% 7.4% 2.0x 12.2x 1.8x 9.2x -4.3%

Income Statement Analysis (Median) Engineering, PLM, & CAD/CAM Software Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 7.4% 0% TTM EBITDA Growth 35.1% TTM Earnings Growth 6.0% Gross Profit Margin 83.2% EBITDA Margin 21.5% -5% Net Income Margin 12.1% SG&A Expenses as a % of Total Revenue 37.4% R&D Expenses as a % of Total Revenue 23.2% -10% Balance Sheet Analysis (Median) Current Ratio 1.8 Quick Ratio 1.7 Cash as Percent of Market Cap 16.5% -15% Avg Days Outstanding: Accounts Receivable 88 Avg Days Outstanding: Accounts Payable 43 Working Capital to TTM Operating Expense Ratio 0.5 -20% Cash Flow Statement Analysis (Median) Levered FCF Margin 11.0% Cash from Operations Growth (YoY) 3.6% Cash from Investing Growth (YoY) 30.2% -25% Cash from Financing Growth (YoY) -132.5% Engineering, PLM, & CAD/CAM SW S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) 11.8%

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return BluePhoenix Solutions, Ltd. BPHX $100.15 $77.12 $98.06 56.2% 16.7% 28.3% 0.8x 4.7x 0.9x 13.8x -60.4% Citrix Systems, Inc. CTXS $4,889.37 $4,500.54 $1,518.25 91.9% 18.6% 22.3% 3.0x 15.9x 3.1x 11.5x -26.3% IONA Technologies PLC IONA $145.08 $107.21 $78.52 79.9% -0.2% 2.8% 1.4x n/a 1.3x n/a -0.7% Jacada Ltd. JCDA $72.93 $40.20 $16.20 47.1% -68.6% -26.1% 2.5x n/a n/a n/a 2.9% Sybase, Inc. SY $2,664.47 $2,549.62 $1,093.33 71.1% 26.8% 16.2% 2.3x 8.7x 2.4x 8.3x 41.7% TIBCO Software Inc. TIBX $1,503.44 $1,271.29 $617.83 71.5% 16.0% 14.9% 2.1x 12.9x 1.9x 8.5x 1.0% Median: $824.26 $689.25 $357.94 71.3% 16.3% 15.6% 2.2x 10.8x 1.9x 10.0x 0.1%

Income Statement Analysis (Median) Enterprise Application Integration Software Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 15.6% 5% TTM EBITDA Growth -1.4% TTM Earnings Growth -15.6% Gross Profit Margin 71.3% 0% EBITDA Margin 16.3% Net Income Margin 9.7% SG&A Expenses as a % of Total Revenue 50.5% R&D Expenses as a % of Total Revenue 17.7% -5%

Balance Sheet Analysis (Median) Current Ratio 1.9 -10% Quick Ratio 1.7 Cash as Percent of Market Cap 20.8% Avg Days Outstanding: Accounts Receivable 77 -15% Avg Days Outstanding: Accounts Payable 36 Working Capital to TTM Operating Expense Ratio 0.3

-20% Cash Flow Statement Analysis (Median) Levered FCF Margin 9.0% Cash from Operations Growth (YoY) 11.4% Cash from Investing Growth (YoY) -197.8% -25% Cash from Financing Growth (YoY) -77.9% Enterprise Application Integration SW S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) 29.3%

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return American Software, Inc. AMSWA $139.02 $68.50 $89.00 51.7% 15.0% 5.5% 0.8x 5.1x 0.8x 4.8x -53.1% AXS-One Inc. AXO $533.42 $484.94 $391.75 27.5% 16.8% 48.7% 1.2x 7.4x n/a n/a -42.0% CDC Corporation CHINA $294.23 $325.76 $412.74 45.8% -0.7% n/a 0.8x n/a 0.9x 16.1x -69.0% Deltek PROJ $331.01 $488.96 $294.14 62.3% 22.1% 17.6% 1.7x 7.5x 1.7x 6.8x n/a Epicor Software Corporation EPIC $400.98 $656.04 $452.97 52.6% 12.7% 11.3% 1.4x 11.4x 1.2x 7.5x -48.2% Intuit Inc. INTU $8,773.15 $8,880.38 $3,025.49 81.9% 29.6% 19.4% 2.9x 9.9x 2.9x 10.2x -4.6% Lawson Software, Inc. LWSN $1,411.16 $1,173.93 $851.93 51.5% 11.4% 13.5% 1.4x 12.0x 1.3x 8.4x -14.9% QAD Inc. QADI $214.06 $185.19 $272.94 57.6% 6.6% 14.3% 0.7x 10.3x 0.7x 6.5x -13.6% SAP SAP $66,479.27 $64,219.58 $16,448.64 66.2% 28.0% 12.7% 3.9x 13.9x 3.5x 11.1x -6.3% SoftBrands, Inc. SBN $41.88 $81.43 $96.61 61.4% 9.3% 8.4% 0.8x 9.0x 0.7x 4.4x -53.1% Median: $366.00 $486.95 $402.24 55.1% 13.8% 13.5% 1.3x 9.9x 1.2x 7.5x -42.0%

Income Statement Analysis (Median) Enterprise Resource Planning Software Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 13.5% 0% TTM EBITDA Growth 12.6% TTM Earnings Growth 19.5% -5% Gross Profit Margin 55.1% EBITDA Margin 13.8% Net Income Margin 6.4% -10% SG&A Expenses as a % of Total Revenue 33.0% R&D Expenses as a % of Total Revenue 14.6% -15%

Balance Sheet Analysis (Median) Current Ratio 1.4 -20% Quick Ratio 1.2 Cash as Percent of Market Cap 25.1% -25% Avg Days Outstanding: Accounts Receivable 72 Avg Days Outstanding: Accounts Payable 32 Working Capital to TTM Operating Expense Ratio 0.2 -30%

Cash Flow Statement Analysis (Median) -35% Levered FCF Margin 5.9% Cash from Operations Growth (YoY) 15.2% Cash from Investing Growth (YoY) 14.9% -40% Cash from Financing Growth (YoY) -40.2% Enterprise Resource Planning SW S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) -45.6%

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return Atari, Inc. ATAR $22.10 $25.02 $80.13 46.1% -14.7% -34.5% 0.3x n/a 0.3x n/a -37.2% Electronic Arts Inc. ERTS $13,749.29 $11,070.29 $4,074.00 52.5% 0.9% 32.6% 2.7x 291.3x 2.3x 15.8x -11.2% Giant Interactive GA $2,402.64 $2,279.74 $245.22 88.3% n/a n/a 9.3x n/a 7.3x 10.8x n/a Glu Mobile, Inc. GLUU $115.05 $84.74 $79.09 73.7% -9.1% 34.7% 1.1x n/a 0.8x 6.8x -67.1% Konami Corporation KNM $4,268.48 $4,231.42 $2,795.34 31.7% 16.4% 8.6% 1.5x 9.2x 1.4x 8.1x 26.4% Majesco Entertainment Company COOL $25.64 $17.57 $53.30 34.8% 6.9% -15.4% 0.3x 4.8x n/a n/a -59.2% Midway Games Inc. MWY $345.69 $436.40 $167.68 6.9% -8.0% 0.3% 2.6x n/a 1.8x n/a -38.5% Perfect World PWRD $1,502.87 $1,276.50 $131.97 84.8% 53.1% 410.2% 9.7x 18.2x 5.7x 11.0x 9.8% Silverstar Holdings Ltd. SSTR $11.15 $17.91 $32.49 58.2% 16.3% 291.0% 0.6x 3.4x n/a n/a -63.6% THQ Inc. THQI $1,012.08 $729.75 $1,063.56 59.0% 17.3% 7.2% 0.7x 4.0x 0.6x 6.7x -47.2% Median: $678.89 $583.08 $149.82 55.4% 6.9% 8.6% 1.3x 7.0x 1.6x 9.4x -38.5%

Income Statement Analysis (Median) Entertainment Software Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 8.6% 0% TTM EBITDA Growth 22.0% TTM Earnings Growth -35.4% Gross Profit Margin 55.4% -5% EBITDA Margin 6.9% Net Income Margin -7.6% SG&A Expenses as a % of Total Revenue 27.6% R&D Expenses as a % of Total Revenue 13.7% -10%

Balance Sheet Analysis (Median) Current Ratio 2.0 -15% Quick Ratio 1.1 Cash as Percent of Market Cap 20.9% Avg Days Outstanding: Accounts Receivable 32 -20% Avg Days Outstanding: Accounts Payable 38 Working Capital to TTM Operating Expense Ratio 0.3

-25% Cash Flow Statement Analysis (Median) Levered FCF Margin 6.8% Cash from Operations Growth (YoY) 19.9% Cash from Investing Growth (YoY) 37.9% -30% Cash from Financing Growth (YoY) 640.1% Entertainment SW S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) 18.1%

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return ACI Worldwide, Inc. ACIW $672.13 $638.47 $376.85 60.7% 7.0% n/a 1.7x 24.1x 1.6x 19.7x -35.9% Advent Software, Inc. ADVS $1,161.82 $1,079.38 $240.45 69.0% 12.7% 22.4% 4.5x 35.4x 4.3x 19.8x 14.5% Blackbaud, Inc. BLKB $798.66 $798.98 $279.79 63.2% 23.3% 28.1% 2.9x 12.3x 2.9x 9.9x -14.7% Bottomline Technologies EPAY $299.27 $222.34 $131.24 54.7% 4.6% 10.9% 1.7x 36.5x 1.6x 71.0x 2.7% DST Systems, Inc. DST $3,220.92 $4,421.02 $2,310.90 20.4% 20.4% 3.1% 1.9x 9.4x n/a n/a -20.4% Ebix, Inc. EBIX $318.05 $344.93 $58.45 82.9% 41.6% 65.1% 5.9x 14.2x n/a n/a 165.2% EPIQ Systems, Inc. EPIQ $414.75 $461.80 $202.93 55.0% 23.4% 18.8% 2.3x 9.7x 2.2x 6.9x -31.5% Fair Isaac Corporation FIC $1,082.35 $1,506.84 $803.43 61.5% 21.9% 1.3% 1.9x 8.6x n/a n/a -43.3% Fiserv FISV $7,839.37 $12,144.37 $4,644.00 33.3% 24.4% 39.5% 2.6x 10.7x 2.8x 9.4x -3.2% Fundtech Ltd. FNDT $237.84 $195.22 $109.52 55.0% 11.8% 22.7% 1.8x 15.1x 1.5x 10.0x 2.1% Goldleaf Financial Solutions, Inc. GFSI $32.74 $82.02 $62.82 77.8% 11.2% 12.8% 1.3x 11.7x 0.9x 5.4x -67.3% Jack Henry & Associates, Inc. JKHY $1,888.78 $1,932.47 $736.76 42.0% 31.1% 13.5% 2.6x 8.4x 2.6x 8.6x -10.1% Longtop Financial Technologies LFT $848.12 $644.34 $65.92 61.1% 14.9% 115.6% 9.8x 65.7x 7.5x 14.5x n/a Metavante Technologies, Inc. MV $2,661.47 $4,224.51 $1,664.54 33.6% 28.5% 7.9% 2.5x 8.9x n/a n/a n/a MSCI MXB $2,976.55 $3,186.97 $407.21 70.4% 41.9% 20.8% 7.8x 18.7x 6.9x 16.5x n/a NetSol Technologies Inc. NTWK $83.14 $89.63 $34.70 61.4% 29.2% 36.9% 2.6x 8.8x 2.0x 7.0x 110.3% Risk Metrics Group, Inc RMG $1,090.44 $1,300.10 $275.13 70.7% 28.3% 74.2% 4.7x 16.7x 5.3x 19.2x n/a S1 Corporation SONE $459.71 $408.13 $215.92 53.4% 15.9% 6.7% 1.9x 11.9x 1.6x 8.9x 11.7% Sapiens International SPNS $39.85 $44.40 $41.88 40.9% n/a -7.3% 1.1x n/a n/a n/a n/a TradeStation Group, Inc. TRAD $470.67 n/a $157.71 77.4% n/a 14.4% n/a n/a n/a n/a 2.0% Tyler Technologies, Inc. TYL $615.57 $582.50 $242.27 40.0% 18.6% 17.8% 2.4x 13.0x 2.1x n/a 32.8% Median: $672.13 $641.40 $240.45 60.7% 21.9% 18.3% 2.5x 12.3x 2.2x 9.9x -0.6%

Income Statement Analysis (Median) Financial Services Software Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 18.3% 0% TTM EBITDA Growth 37.3% TTM Earnings Growth 1.9% Gross Profit Margin 60.7% EBITDA Margin 21.9% -5% Net Income Margin 7.1% SG&A Expenses as a % of Total Revenue 30.8% R&D Expenses as a % of Total Revenue 11.7% -10% Balance Sheet Analysis (Median) Current Ratio 1.2 Quick Ratio 1.0 Cash as Percent of Market Cap 8.3% -15% Avg Days Outstanding: Accounts Receivable 76 Avg Days Outstanding: Accounts Payable 25 Working Capital to TTM Operating Expense Ratio 0.1 -20% Cash Flow Statement Analysis (Median) Levered FCF Margin 11.9% Cash from Operations Growth (YoY) 73.4% Cash from Investing Growth (YoY) -18.8% -25% Cash from Financing Growth (YoY) 46.5% Financial Services SW S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) 16.7%

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return Allscripts Healthcare Solutions Inc. MDRX $690.71 $772.16 $300.45 49.9% 15.0% 15.2% 2.6x 17.1x 2.6x 14.0x -47.0% AMICAS, Inc. AMCS $110.75 $38.74 $51.32 52.3% -1.9% 6.5% 0.8x n/a 0.9x 87.4x -26.0% Cerner Corporation CERN $3,598.12 $3,492.68 $1,555.00 83.1% 24.7% 5.2% 2.2x 9.1x 2.1x 7.9x -15.5% Computer Programs and Sys, Inc. CPSI $268.44 $244.00 $113.37 43.7% 20.0% 1.8% 2.2x 10.8x 2.2x 10.0x -7.4% Eclipsys Corporation ECLP $1,198.84 $1,187.16 $502.01 43.9% 11.2% 10.0% 2.4x 21.1x 2.3x 14.1x 1.5% Emageon Inc. EMAG $44.65 $26.44 $96.54 47.3% 1.2% -22.1% 0.3x 23.1x 0.3x n/a -77.4% eResearchTechnology, Inc. ERES $737.78 $689.27 $122.03 53.0% 40.5% 38.7% 5.6x 13.9x 4.4x n/a 51.7% MedAssets MDAS $672.31 $752.22 $204.97 84.3% 25.5% 34.3% 3.7x 14.4x 3.4x 10.5x n/a Merge Healthcare MRGE $36.75 $28.23 $57.44 64.7% -38.6% -22.4% 0.5x n/a n/a n/a -80.1% Omnicell, Inc. OMCL $534.77 $411.99 $238.56 52.6% 11.4% 29.4% 1.7x 15.2x 1.7x 12.2x -32.0% Phase Forward Incorporated PFWD $787.21 $594.56 $151.54 57.5% 15.7% 26.4% 3.9x 25.0x 3.5x 16.1x 7.0% Quality Systems, Inc. QSII $912.08 $850.53 $199.69 66.4% 35.8% 22.4% 4.3x 11.9x 4.2x 11.7x -15.2% Simulations Plus, Inc. SLP $25.32 $19.33 $9.37 77.6% 35.4% 11.7% 2.1x 5.8x n/a n/a -67.3% Vital Images, Inc. VTAL $261.50 $86.16 $66.84 77.8% -7.3% -9.9% 1.3x n/a 0.9x n/a -22.0% Median: $603.54 $503.28 $136.78 55.2% 15.4% 10.9% 2.2x 14.4x 2.2x 12.2x -22.0%

Income Statement Analysis (Median) Healthcare Software Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 10.9% 0% TTM EBITDA Growth 10.3% TTM Earnings Growth -2.5% Gross Profit Margin 55.2% -5% EBITDA Margin 15.4% Net Income Margin 8.8% SG&A Expenses as a % of Total Revenue 37.6% -10% R&D Expenses as a % of Total Revenue 13.4%

-15% Balance Sheet Analysis (Median) Current Ratio 2.7 Quick Ratio 2.5 -20% Cash as Percent of Market Cap 21.0% Avg Days Outstanding: Accounts Receivable 84 Avg Days Outstanding: Accounts Payable 32 -25% Working Capital to TTM Operating Expense Ratio 0.6

Cash Flow Statement Analysis (Median) -30% Levered FCF Margin 3.8% Cash from Operations Growth (YoY) 34.7% Cash from Investing Growth (YoY) -7.2% -35% Cash from Financing Growth (YoY) -96.9% Healthcare SW S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) 82.5%

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return Callidus Software Inc. CALD $144.59 $100.29 $101.86 42.6% -9.8% 9.7% 1.0x n/a n/a n/a -51.0% ClickSoftware Technologies Ltd. CKSW $69.68 $45.44 $42.94 61.2% 3.6% 14.3% 1.1x 29.6x n/a n/a -52.3% The Ultimate Software Group, Inc. ULTI $645.32 $623.11 $164.93 57.5% 7.2% 23.7% 3.8x 52.5x 3.3x 19.0x -3.3% Websense, Inc. WBSN $941.93 $1,031.85 $251.41 85.4% 17.2% 30.1% 4.1x 23.9x 3.1x 8.0x 4.6% Workstream Inc. WSTM $8.35 $5.16 $27.98 75.0% -50.0% -6.0% 0.2x n/a 0.2x n/a -85.8% Median: $144.59 $100.29 $101.86 61.2% 3.6% 14.3% 1.1x 29.6x 3.1x 13.5x -51.0%

Income Statement Analysis (Median) HR & Workforce Management Software Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 14.3% 15% TTM EBITDA Growth -6.3% TTM Earnings Growth -57.6% 10% Gross Profit Margin 61.2% EBITDA Margin 3.6% Net Income Margin -13.3% 5% SG&A Expenses as a % of Total Revenue 44.6% R&D Expenses as a % of Total Revenue 17.7% 0%

Balance Sheet Analysis (Median) Current Ratio 1.1 -5% Quick Ratio 0.9 Cash as Percent of Market Cap 30.6% -10% Avg Days Outstanding: Accounts Receivable 74 Avg Days Outstanding: Accounts Payable 27 Working Capital to TTM Operating Expense Ratio 0.1 -15%

Cash Flow Statement Analysis (Median) -20% Levered FCF Margin -13.5% Cash from Operations Growth (YoY) 25.2% Cash from Investing Growth (YoY) -19.4% -25% Cash from Financing Growth (YoY) 169.6% HR & Workforce Management SW S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) n/a

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return 8x8 Inc. EGHT $69.64 $54.89 $63.19 63.1% -0.9% 13.6% 0.9x n/a 0.7x 7.4x -15.8% Captaris, Inc. CAPA $88.93 $58.75 $111.37 68.0% -2.5% 19.4% 0.5x n/a 0.4x n/a -34.5% Evolving Systems, Inc. EVOL $38.94 $40.68 $37.14 61.1% 13.9% 6.0% 1.1x 7.9x 1.1x 7.7x 9.8% Interactive Intelligence, Inc. ININ $167.99 $118.34 $118.57 67.6% 8.7% 22.1% 1.0x 11.5x n/a n/a -54.8% Intervoice, Inc. INTV $319.54 $266.84 $206.22 52.6% 13.4% 3.9% 1.3x 9.6x 1.2x 8.0x 2.8% NDS Group plc NNDS $3,353.38 $2,657.14 $850.15 62.5% 27.2% 19.8% 3.1x 11.5x 3.2x 12.3x 31.8% OpenTV Corp. OPTV $247.51 $153.80 $122.54 59.6% 11.9% 24.9% 1.3x 10.6x 1.3x 7.0x -6.8% SeaChange International, Inc. SEAC $228.68 $156.47 $186.43 46.1% 4.5% 11.7% 0.8x 18.8x 0.8x 8.0x 6.3% Tumbleweed Communications Corp. TMWD $133.96 $105.44 $59.33 78.4% -9.1% -2.6% 1.8x n/a 1.6x n/a 10.5% Zix Corporation ZIXI $174.67 $161.67 $27.33 61.6% -19.6% 28.9% 5.9x n/a n/a n/a 31.1% Median: $171.33 $136.07 $114.97 62.1% 6.6% 16.5% 1.2x 11.0x 1.2x 7.8x 4.5%

Income Statement Analysis (Median) Messaging, Conferencing, & Comms Software Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 16.5% 0% TTM EBITDA Growth 40.6% TTM Earnings Growth 60.6% Gross Profit Margin 62.1% EBITDA Margin 6.6% -5% Net Income Margin 4.0% SG&A Expenses as a % of Total Revenue 41.6% R&D Expenses as a % of Total Revenue 19.9% -10% Balance Sheet Analysis (Median) Current Ratio 1.6 Quick Ratio 1.3 Cash as Percent of Market Cap 21.9% -15% Avg Days Outstanding: Accounts Receivable 69 Avg Days Outstanding: Accounts Payable 50 Working Capital to TTM Operating Expense Ratio 0.2 -20% Cash Flow Statement Analysis (Median) Levered FCF Margin -1.9% Cash from Operations Growth (YoY) 17.3% Cash from Investing Growth (YoY) 53.7% -25% Cash from Financing Growth (YoY) -39.1% Messaging, Conferencing, & Comms SW S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) 30.1%

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return Adobe Systems Incorporated ADBE $21,934.27 $20,419.54 $3,540.23 89.9% 38.6% 32.1% 5.8x 14.9x 5.9x 12.7x 2.6% Avid Technology, Inc. AVID $818.25 $679.79 $906.48 49.8% 3.5% -0.9% 0.7x 21.3x n/a n/a -31.1% Bitstream Inc. BITS $54.43 $38.20 $24.50 62.5% 15.4% 15.6% 1.6x 10.1x n/a n/a -13.7% Corel Corporation CRE $225.74 $343.47 $265.40 78.5% 20.1% 28.6% 1.3x 6.4x 1.3x 5.5x n/a DivX, Inc. DIVX $266.19 $152.85 $92.71 94.9% 8.3% 31.4% 1.6x 19.9x 1.6x 5.0x -39.2% Enliven Marketing Tech Corp. ENLV $82.25 $84.54 $21.60 45.1% -37.7% 47.5% 3.9x n/a n/a n/a -20.2% MakeMusic! Inc. MMUS $34.48 $28.99 $14.93 84.3% 8.3% 13.4% 1.9x 23.3x n/a n/a 25.7% Monotype Imaging Holdings TYPE $444.71 $545.00 $106.79 91.9% 40.1% 14.3% 5.1x 12.7x 4.7x 10.4x 8.0% NICE Systems Ltd. NICE $1,775.55 $1,549.03 $573.82 61.0% 12.6% 23.1% 2.7x 21.4x 2.4x 11.1x -11.0% Nuance Communications, Inc. NUAN $3,352.65 $3,907.13 $734.84 66.6% 12.4% 45.0% 5.3x 42.9x 4.3x 15.3x -5.8% RealNetworks, Inc. RNWK $980.18 $568.45 $602.19 61.9% -1.8% 24.2% 0.9x n/a 0.8x 8.1x -3.5% Sonic Solutions SNIC $135.87 $92.87 $132.87 75.1% -0.4% -10.6% 0.7x n/a 0.8x 11.8x -53.9% Median: $355.45 $444.24 $199.14 70.8% 10.4% 23.6% 1.8x 19.9x 2.0x 10.8x -11.0%

Income Statement Analysis (Median) Multimedia, Graphics, & Digital Media Software Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 23.6% 0% TTM EBITDA Growth -3.0% TTM Earnings Growth 10.9% Gross Profit Margin 70.8% EBITDA Margin 10.4% -5% Net Income Margin 2.9% SG&A Expenses as a % of Total Revenue 42.3% R&D Expenses as a % of Total Revenue 17.9% -10% Balance Sheet Analysis (Median) Current Ratio 1.9 Quick Ratio 1.7 Cash as Percent of Market Cap 15.6% -15% Avg Days Outstanding: Accounts Receivable 46 Avg Days Outstanding: Accounts Payable 56 Working Capital to TTM Operating Expense Ratio 0.3 -20% Cash Flow Statement Analysis (Median) Levered FCF Margin 6.9% Cash from Operations Growth (YoY) 21.3% Cash from Investing Growth (YoY) 89.0% -25% Cash from Financing Growth (YoY) -5.6% Multimedia, Graphics, & Digital Media SW S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) 20.5%

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return CA, Inc. CA $12,448.51 $12,267.51 $4,339.00 85.9% 31.1% 8.0% 2.8x 9.1x 2.6x 9.0x -4.2% Catapult Communications Corp CATT $96.44 $47.96 $39.46 80.4% -13.6% -7.1% 1.2x n/a n/a n/a -13.1% Cisco Systems, Inc. CSCO $129,897.92 $112,442.92 $39,540.00 64.5% 28.3% 13.2% 2.8x 10.0x 2.9x 9.0x -23.9% Citrix Systems, Inc. CTXS $4,889.37 $4,500.54 $1,518.25 91.9% 18.6% 22.3% 3.0x 15.9x 3.1x 11.5x -26.3% F5 Networks, Inc. FFIV $2,338.76 $2,071.47 $624.52 77.0% 20.6% 27.0% 3.3x 16.1x 3.3x 12.1x -32.7% NetScout Systems Inc. NTCT $536.85 $557.08 $201.65 72.6% 9.6% 88.8% 2.8x 28.8x 2.2x 12.8x 40.3% Novell, Inc. NOVL $1,971.05 $1,019.72 $948.32 73.5% 6.8% 5.3% 1.1x 15.9x 1.0x 7.9x -17.0% OPNET Technologies, Inc. OPNT $209.07 $130.21 $108.11 75.7% 1.8% 12.8% 1.2x 66.7x 1.3x n/a -1.5% Radware Ltd. RDWR $163.38 $72.75 $93.63 81.0% -19.3% 13.5% 0.8x n/a n/a n/a -42.1% TTI Team Telecom International Ltd. TTIL $31.21 $1.36 $48.26 55.5% 7.1% 8.9% 0.0x 0.4x n/a n/a -35.6% Median: $1,253.95 $788.40 $413.08 76.4% 8.4% 13.0% 2.0x 15.9x 2.6x 10.2x -20.5%

Income Statement Analysis (Median) Networking & Connectivity Software Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 13.0% 0% TTM EBITDA Growth 9.4% TTM Earnings Growth 6.2% Gross Profit Margin 76.4% EBITDA Margin 8.4% -5% Net Income Margin 4.3% SG&A Expenses as a % of Total Revenue 49.3% R&D Expenses as a % of Total Revenue 19.1% -10% Balance Sheet Analysis (Median) Current Ratio 2.6 Quick Ratio 2.3 Cash as Percent of Market Cap 28.6% -15% Avg Days Outstanding: Accounts Receivable 73 Avg Days Outstanding: Accounts Payable 61 Working Capital to TTM Operating Expense Ratio 0.6 -20% Cash Flow Statement Analysis (Median) Levered FCF Margin -0.8% Cash from Operations Growth (YoY) 1.5% Cash from Investing Growth (YoY) 49.7% -25% Cash from Financing Growth (YoY) -133.1% Networking and Connectivity SW S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) -25.5%

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return ActivCard Corp. ACTI $119.03 $32.62 $59.12 67.0% -27.8% -2.0% 0.6x n/a 0.6x n/a -39.0% Aladdin Knowledge Systems Ltd. ALDN $125.19 $34.06 $111.64 73.1% 12.0% 16.4% 0.3x 2.5x 0.4x 4.6x -59.0% ArcSight, Inc. ARST $351.19 $279.24 $101.55 84.0% 1.2% 45.4% 2.7x 239.1x 2.4x n/a n/a Blue Coat Systems, Inc. BCSI $557.33 $395.15 $305.44 76.6% 10.6% 71.9% 1.3x 12.1x 0.9x n/a -40.4% Check Point Software Tech Ltd. CHKP $4,989.57 $4,237.04 $781.92 91.8% 48.3% 21.6% 5.4x 11.2x 5.4x 10.3x -6.3% Cogent, Inc. COGT $906.11 $576.96 $95.06 64.9% 39.2% -25.2% 6.1x 15.5x 4.2x 10.8x -23.8% Commtouch Software Ltd. CTCH $88.16 $73.56 $13.20 87.2% 18.1% 45.3% 5.6x 30.8x n/a n/a -45.5% Entrust, Inc. ENTU $136.63 $111.21 $100.93 62.0% 2.3% -0.2% 1.1x 48.8x n/a n/a -20.6% McAfee, Inc. MFE $5,134.19 $4,002.86 $1,444.91 79.3% 22.1% 18.2% 2.8x 12.5x 2.9x 9.1x -8.7% Secure Computing Corporation SCUR $266.66 $358.20 $248.89 73.0% 2.2% 20.4% 1.4x 64.2x n/a n/a -50.3% SonicWALL, Inc. SNWL $335.39 $229.21 $218.11 71.1% 2.6% 18.5% 1.1x 41.2x n/a n/a -33.9% Sourcefire, Inc. FIRE $197.41 $99.07 $63.81 76.5% -11.6% 31.4% 1.6x n/a 1.4x n/a -35.0% Symantec Corporation SYMC $17,656.09 $17,469.79 $6,124.40 85.7% 28.2% 14.8% 2.9x 10.1x 2.8x 9.1x 9.7% Tumbleweed Communications Corp. TMWD $133.96 $105.44 $59.33 78.4% -9.1% -2.6% 1.8x n/a 1.6x n/a 10.5% VASCO Data Security International VDSI $509.65 $467.57 $125.47 68.8% 26.1% 22.2% 3.7x 14.3x 2.8x 11.3x -48.3% VeriSign, Inc. VRSN $6,335.73 $7,316.89 $1,567.28 61.4% 24.4% 4.7% 4.7x 19.2x 6.9x 14.4x 9.6% Websense, Inc. WBSN $941.93 $1,031.85 $251.41 85.4% 17.2% 30.1% 4.1x 23.9x 3.1x 8.0x 4.6% Zix Corporation ZIXI $174.67 $161.67 $27.33 61.6% -19.6% 28.9% 5.9x n/a n/a n/a 31.1% Median: $343.29 $318.72 $118.56 74.8% 11.3% 19.4% 2.8x 17.3x 2.8x 9.7x -23.8%

Income Statement Analysis (Median) Security Software Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 19.4% 0% TTM EBITDA Growth 22.0% TTM Earnings Growth 1.7% Gross Profit Margin 74.8% -5% EBITDA Margin 11.3% Net Income Margin 3.5% SG&A Expenses as a % of Total Revenue 50.7% R&D Expenses as a % of Total Revenue 18.6% -10%

Balance Sheet Analysis (Median) Current Ratio 2.0 -15% Quick Ratio 1.8 Cash as Percent of Market Cap 19.5% Avg Days Outstanding: Accounts Receivable 74 -20% Avg Days Outstanding: Accounts Payable 63 Working Capital to TTM Operating Expense Ratio 0.4

-25% Cash Flow Statement Analysis (Median) Levered FCF Margin 3.5% Cash from Operations Growth (YoY) 14.0% Cash from Investing Growth (YoY) 100.7% -30% Cash from Financing Growth (YoY) -79.1% Security SW S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) -28.2%

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return BMC Software, Inc. BMC $6,250.05 $5,584.65 $1,784.10 77.3% 30.4% 11.2% 3.1x 10.3x 3.0x 9.7x 14.5% CA, Inc. CA $12,448.51 $12,267.51 $4,339.00 85.9% 31.1% 8.0% 2.8x 9.1x 2.6x 9.0x -4.2% CommVault Systems, Inc. CVLT $644.75 $553.09 $209.31 86.5% 13.1% 29.5% 2.6x 20.2x 2.4x 12.5x -10.3% Compuware Corporation CPWR $2,815.53 $2,542.65 $1,248.81 61.3% 22.7% 4.4% 2.0x 9.0x n/a n/a 17.9% EMC EMC $31,029.23 $28,880.85 $14,274.46 55.2% 20.2% 17.7% 2.0x 10.0x 1.8x 9.1x -18.9% FalconStor Software, Inc. FALC $333.41 $281.08 $87.34 85.5% 15.7% 29.8% 3.2x 20.5x 2.5x n/a -33.5% Network Appliance, Inc. NTAP $8,351.71 $7,359.92 $3,303.17 61.0% 13.9% 17.8% 2.2x 16.1x 2.0x 12.0x -9.8% SupportSoft, Inc. SPRT $157.32 $79.70 $47.19 50.9% -43.1% -5.4% 1.7x n/a 1.7x n/a -38.4% Symantec Corporation SYMC $17,656.09 $17,469.79 $6,124.40 85.7% 28.2% 14.8% 2.9x 10.1x 2.8x 9.1x 9.7% VMWare VMW $13,908.33 $12,818.07 $1,664.59 83.0% 23.3% 70.9% 7.7x 33.1x 6.2x 19.4x n/a Median: $7,300.88 $6,472.29 $1,724.35 80.1% 21.5% 16.3% 2.7x 10.3x 2.5x 9.7x -9.8%

Income Statement Analysis (Median) Storage & Systems Management Software Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 16.3% 0% TTM EBITDA Growth 28.4% TTM Earnings Growth 28.8% Gross Profit Margin 80.1% EBITDA Margin 21.5% -5% Net Income Margin 12.4% SG&A Expenses as a % of Total Revenue 43.7% R&D Expenses as a % of Total Revenue 13.5% -10% Balance Sheet Analysis (Median) Current Ratio 1.7 Quick Ratio 1.5 Cash as Percent of Market Cap 15.5% -15% Avg Days Outstanding: Accounts Receivable 65 Avg Days Outstanding: Accounts Payable 42 Working Capital to TTM Operating Expense Ratio 0.3 -20% Cash Flow Statement Analysis (Median) Levered FCF Margin 10.0% Cash from Operations Growth (YoY) 22.0% Cash from Investing Growth (YoY) -50.1% -25% Cash from Financing Growth (YoY) 43.8% Storage & Systems Management SW S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) 76.9%

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return American Software, Inc. AMSWA $139.02 $68.50 $89.00 51.7% 15.0% 5.5% 0.8x 5.1x 0.8x 4.8x -53.1% Ariba ARBA $1,402.83 $1,324.28 $318.05 57.1% -6.1% 6.5% 4.2x n/a 3.8x 20.0x 96.5% Ariba, Inc. ARBA $1,402.83 $1,324.28 $318.05 57.1% -6.1% 6.5% 4.2x n/a 3.8x 20.0x 96.5% Aspen Technology, Inc. AZPN $1,201.63 $1,255.72 $341.70 74.8% 21.9% 14.4% 3.7x 16.8x 3.4x n/a 7.3% CAM Commerce Solutions, Inc. CADA $165.71 $138.46 $36.60 76.5% 23.0% 29.5% 3.8x 16.4x n/a n/a 30.7% CMGI, Inc. CMGI $600.21 $352.16 $1,044.48 13.3% 4.0% -9.4% 0.3x 8.5x n/a n/a -22.5% i2 Technologies, Inc. ITWO $276.98 $333.56 $257.04 55.1% 13.2% -8.7% 1.3x 9.8x 1.4x n/a -20.5% JDA Software Group JDAS $522.29 $528.67 $377.78 62.7% 22.2% 5.1% 1.4x 6.3x n/a n/a -24.5% Logility, Inc. LGTY $86.90 $44.81 $44.91 67.1% 28.0% 2.6% 1.0x 3.6x 0.8x n/a n/a Manhattan Associates, Inc. MANH $605.70 $528.77 $348.40 55.8% 16.5% 10.3% 1.5x 9.2x 1.4x 7.8x -11.9% Retalix Ltd. RTLX $236.87 $212.88 $222.62 49.0% 1.5% 8.2% 1.0x 64.9x 0.9x n/a -37.7% The Descartes Systems Group Inc. DSG $175.08 $130.73 $62.03 64.9% 22.9% 15.8% 2.1x 9.2x 2.1x 8.7x -18.5% XATA Corporation XATA $34.12 $60.55 $42.74 47.6% -4.4% 32.5% 1.4x n/a 0.9x n/a 5.4% Median: $276.98 $333.56 $257.04 57.1% 15.0% 6.5% 1.4x 9.2x 1.4x 8.7x -15.2%

Income Statement Analysis (Median) Supply Chain Management & Logistics Software Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 6.5% 0% TTM EBITDA Growth 5.5% TTM Earnings Growth -16.3% Gross Profit Margin 57.1% EBITDA Margin 15.0% -5% Net Income Margin 7.3% SG&A Expenses as a % of Total Revenue 32.4% R&D Expenses as a % of Total Revenue 13.5% -10% Balance Sheet Analysis (Median) Current Ratio 2.4 Quick Ratio 1.9 Cash as Percent of Market Cap 23.8% -15% Avg Days Outstanding: Accounts Receivable 58 Avg Days Outstanding: Accounts Payable 25 Working Capital to TTM Operating Expense Ratio 0.3 -20% Cash Flow Statement Analysis (Median) Levered FCF Margin 8.2% Cash from Operations Growth (YoY) 30.4% Cash from Investing Growth (YoY) 154.6% -25% Cash from Financing Growth (YoY) -100.7% Supply Chain Management & Logistics SW S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) 102.9%

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return Google Inc. GOOG $148,801.48 $136,067.82 $19,611.29 59.8% 36.5% 46.0% 6.9x 19.0x 5.6x 13.4x -7.1% SPSS Inc. SPSS $598.70 $442.71 $305.85 93.6% 23.4% 11.3% 1.4x 6.2x 1.4x 6.0x -19.5% Vignette Corporation VIGN $271.70 $133.73 $186.72 66.0% 6.2% -5.5% 0.7x 11.6x 0.8x 8.6x -46.5% Websense, Inc. WBSN $941.93 $1,031.85 $251.41 85.4% 17.2% 30.1% 4.1x 23.9x 3.1x 8.0x 4.6% Median: $770.31 $737.28 $278.63 75.7% 20.3% 20.7% 2.8x 15.3x 2.3x 8.3x -13.3%

Income Statement Analysis (Median) Web Analytics Software Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 20.7% 5% TTM EBITDA Growth 22.6% TTM Earnings Growth 3.2% Gross Profit Margin 75.7% 0% EBITDA Margin 20.3% Net Income Margin 9.7% SG&A Expenses as a % of Total Revenue 52.5% R&D Expenses as a % of Total Revenue 16.7% -5%

Balance Sheet Analysis (Median) Current Ratio 2.5 -10% Quick Ratio 2.4 Cash as Percent of Market Cap 29.7% Avg Days Outstanding: Accounts Receivable 69 -15% Avg Days Outstanding: Accounts Payable 57 Working Capital to TTM Operating Expense Ratio 0.7

-20% Cash Flow Statement Analysis (Median) Levered FCF Margin 12.8% Cash from Operations Growth (YoY) 36.6% Cash from Investing Growth (YoY) 4.1% -25% Cash from Financing Growth (YoY) -99.8% Web Analytics SW S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) 109.5%

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return Hurray! Holding Co., Ltd. HRAY $66.69 $4.20 $58.17 30.4% n/a -16.9% 0.1x n/a n/a n/a -20.2% Itron, Inc. ITRI $3,151.96 $4,271.30 $1,906.99 33.6% 15.5% 118.2% 2.2x 14.5x 2.3x 15.6x 16.2% Openwave Systems Inc. OPWV $118.91 $53.18 $200.88 57.9% -14.9% -30.8% 0.3x n/a 0.2x NM -72.8% PCTEL, Inc. PCTI $217.62 $147.86 $75.35 47.5% 7.4% 16.7% 2.0x 26.5x n/a n/a 27.7% Smith Micro Software, Inc. SMSI $225.13 $198.92 $85.70 74.8% 7.2% 31.8% 2.3x 32.3x 1.9x 7.6x -47.3% TeleCommunication Systems, Inc. TSYS $232.90 $217.02 $159.04 42.7% 14.6% 21.6% 1.4x 9.4x n/a n/a 27.6% Median: $221.38 $173.39 $122.37 45.1% 7.4% 19.2% 1.7x 20.5x 1.9x 11.6x -2.0%

Income Statement Analysis (Median) Wireless Software Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 19.2% 10% TTM EBITDA Growth 120.5% TTM Earnings Growth 139.4% Gross Profit Margin 45.1% 5% EBITDA Margin 7.4% Net Income Margin 0.8% SG&A Expenses as a % of Total Revenue 33.3% 0% R&D Expenses as a % of Total Revenue 10.6%

-5% Balance Sheet Analysis (Median) Current Ratio 3.7 Quick Ratio 3.3 -10% Cash as Percent of Market Cap 22.2% Avg Days Outstanding: Accounts Receivable 80 Avg Days Outstanding: Accounts Payable 45 -15% Working Capital to TTM Operating Expense Ratio 0.4

Cash Flow Statement Analysis (Median) -20% Levered FCF Margin 3.7% Cash from Operations Growth (YoY) 89.1% Cash from Investing Growth (YoY) 69.6% -25% Cash from Financing Growth (YoY) -2.8% Wireless SW S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) n/a

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return Athenahealth ATHN $977.36 $912.52 $117.06 56.6% 12.3% 34.7% 7.8x 63.6x 7.1x 42.0x n/a Concur CNQR $1,771.02 $1,778.93 $193.69 67.8% 22.1% 60.3% 9.2x 41.6x 9.4x 36.3x 72.8% Constant Contact CTCT $499.50 $397.57 $58.95 74.4% -1.6% 85.2% 6.7x n/a 4.4x 98.6x n/a DealerTrack TRAK $664.14 $458.49 $246.43 56.6% 26.3% 31.7% 1.9x 7.1x 1.8x 6.9x -56.8% DemandTec DMAN $269.88 $194.36 $66.08 67.0% -4.2% 41.6% 2.9x n/a 2.7x n/a n/a Kenexa KNXA $421.09 $374.51 $199.19 71.3% 20.3% 31.3% 1.9x 9.3x 1.9x 8.5x -47.8% LivePerson LPSN $133.51 $111.96 $65.27 72.8% 7.1% 55.9% 1.7x 24.0x 1.4x 8.6x -46.0% Netsuite N $1,039.66 $870.50 $130.47 69.5% -6.3% 50.2% 6.7x n/a 4.9x n/a n/a Omniture OMTR $1,246.89 $1,197.42 $215.33 59.4% 1.7% 101.0% 5.6x 333.0x 3.6x 17.1x -24.1% RightNow RNOW $540.21 $445.97 $128.03 63.7% -7.2% 15.3% 3.5x n/a 3.0x 46.8x 21.9% Salary.com SLRY $66.58 $31.88 $36.58 73.1% -36.2% 43.9% 0.9x n/a n/a n/a -68.3% Salesforce.com CRM $7,664.75 $7,180.13 $833.91 78.0% 7.6% 50.3% 8.6x 113.7x 6.9x 39.3x 64.2% SoundBite Communications SDBT $47.30 $11.38 $43.34 63.6% 0.3% 23.8% 0.3x 104.4x 0.0x NM n/a SuccessFactors SFSF $577.97 $491.61 $85.13 59.8% -93.3% 80.9% 5.8x n/a 4.9x n/a n/a Taleo TLEO $496.84 $392.14 $144.31 68.8% 9.4% 29.9% 2.7x 28.9x 2.5x 14.0x -12.9% Vocus VOCS $656.39 $575.45 $68.35 81.4% 6.0% 37.9% 8.4x 140.0x 7.3x 38.4x 26.7% Median: $559.09 $452.23 $122.55 68.3% 3.8% 42.8% 4.5x 52.6x 3.6x 36.3x -18.5%

Income Statement Analysis (Median) SEG SaaS Index Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 42.8% 0% TTM EBITDA Growth 20.1% TTM Earnings Growth 35.1% -5% Gross Profit Margin 68.3% EBITDA Margin 3.8% Net Income Margin 4.2% -10% SG&A Expenses as a % of Total Revenue 60.9% R&D Expenses as a % of Total Revenue 13.3% -15%

Balance Sheet Analysis (Median) Current Ratio 1.8 -20% Quick Ratio 1.7 Cash as Percent of Market Cap 17.5% -25% Avg Days Outstanding: Accounts Receivable 77 Avg Days Outstanding: Accounts Payable 37 Working Capital to TTM Operating Expense Ratio 0.4 -30%

Cash Flow Statement Analysis (Median) -35% Levered FCF Margin 8.7% Cash from Operations Growth (YoY) 62.3% Cash from Investing Growth (YoY) 6.0% -40% Cash from Financing Growth (YoY) 58.3% SEG SaaS Index S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) 69.2%

Category Name Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ Forward Forward Stock Market Margin Margin Revenue EBITDA EV/ Revenue EV/ Return YTD Growth EBITDA SEG Internet Index $324.64 $299.34 $144.91 58.9% 14.4% 19.1% 1.4x 12.3x 2.6x 13.3x -30.4% Advertising $506.42 $456.94 $149.16 55.6% 15.8% 17.3% 2.2x 20.1x 2.2x 12.4x -16.6% eCommerce & Portals $405.09 $401.51 $267.79 75.7% 13.7% 22.0% 1.6x 11.3x 1.9x 9.5x -27.7% Financial $197.14 $298.45 $32.96 52.1% 19.0% 23.4% 2.3x 14.7x 3.3x 8.6x -33.6% Networking & Connectivity $183.60 $163.41 $220.21 42.3% 4.7% 15.2% 0.8x 11.3x 0.9x 3.7x -46.4% New Media $286.06 $233.57 $133.95 60.6% 18.3% 17.8% 2.0x 12.2x 1.8x 9.0x -47.3% Search Engine $7,370.45 $7,118.71 $330.04 59.4% 27.1% 34.1% 5.2x 21.7x 4.7x 12.9x -7.4%

Income Statement Analysis (Median) SEG Internet Index Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 19.1% 0% TTM EBITDA Growth 18.3% TTM Earnings Growth 18.0% -5% Gross Profit Margin 58.9% EBITDA Margin 14.4% Net Income Margin 6.1% -10% SG&A Expenses as a % of Total Revenue 40.1% R&D Expenses as a % of Total Revenue 8.2% -15% Balance Sheet Analysis (Median) Current Ratio 2.4 -20% Quick Ratio 2.2 Cash as Percent of Market Cap 19.9% -25% Avg Days Outstanding: Accounts Receivable 41 Avg Days Outstanding: Accounts Payable 44 Working Capital to TTM Operating Expense Ratio 0.4 -30%

Cash Flow Statement Analysis (Median) -35% Levered FCF Margin 5.4% Cash from Operations Growth (YoY) 20.3% Cash from Investing Growth (YoY) -2.7% -40%

Cash from Financing Growth (YoY) -35.8% SEG Internet Index S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) 36.7%

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return Autobytel Inc. ABTL $52.54 $8.76 $80.48 32.8% -36.3% 2.0% 0.1x n/a 0.1x n/a -66.7% Baidu.com, Inc. BIDU $11,886.54 $11,606.06 $356.42 65.4% 41.1% 105.9% 32.6x 79.3x 17.2x 39.6x 71.9% comScore Inc. SCOR $546.13 $480.32 $102.78 73.4% 17.4% 39.1% 4.7x 26.9x 3.8x 16.1x -18.7% Google Inc. GOOG $148,801.48 $136,067.82 $19,611.29 59.8% 36.5% 46.0% 6.9x 19.0x 5.6x 13.4x -7.1% InfoSpace, Inc. INSP $324.64 $133.68 $153.42 45.0% -31.2% 191.2% 0.9x n/a 1.3x 9.5x -54.7% LookSmart, Ltd. LOOK $52.99 $21.45 $65.38 41.1% -4.9% 22.1% 0.3x n/a 0.2x 2.7x -7.7% Marchex Inc. MCHX $466.71 $433.56 $144.91 48.1% 14.1% 8.3% 3.0x 21.2x 2.9x 13.6x -13.8% MIVA, Inc. MIVA $27.43 $4.78 $143.20 52.3% -5.0% -15.3% 0.0x n/a 0.1x 132.5x -87.6% SINA Corporation SINA $2,524.87 $2,112.32 $297.67 61.2% 26.8% 33.2% 7.1x 26.5x 4.8x 15.7x 5.1% Sohu.com Inc. SOHU $2,854.35 $2,631.35 $303.66 87.3% 35.7% 114.1% 8.7x 24.3x 5.3x 12.4x 134.9% Think Partnership, Inc. THK $24.42 $37.17 $76.96 48.1% 8.9% -0.7% 0.5x 5.5x 0.4x 5.2x -83.6% Tucows Inc. TCX $39.16 $45.95 $75.58 33.0% 9.4% 11.9% 0.6x 6.4x 0.6x 4.7x -56.9% ValueClick, Inc. VCLK $1,132.48 $971.72 $679.88 68.3% 22.9% 12.6% 1.4x 6.2x 1.6x 6.4x -44.3% Yahoo! Inc. YHOO $27,468.27 $24,410.65 $7,215.19 58.9% 18.5% 8.5% 3.4x 18.3x 4.1x 11.9x -14.5% Median: $506.42 $456.94 $149.16 55.6% 15.8% 17.3% 2.2x 20.1x 2.2x 12.4x -16.6%

Income Statement Analysis (Median) SEG Internet: Advertising Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 17.3% 0% TTM EBITDA Growth 10.9% TTM Earnings Growth 36.0% Gross Profit Margin 55.6% -5% EBITDA Margin 15.8% Net Income Margin 13.5% SG&A Expenses as a % of Total Revenue 37.0% R&D Expenses as a % of Total Revenue 10.1% -10%

Balance Sheet Analysis (Median) Current Ratio 2.7 -15% Quick Ratio 2.5 Cash as Percent of Market Cap 13.3% Avg Days Outstanding: Accounts Receivable 51 -20% Avg Days Outstanding: Accounts Payable 32 Working Capital to TTM Operating Expense Ratio 0.4

-25% Cash Flow Statement Analysis (Median) Levered FCF Margin 4.0% Cash from Operations Growth (YoY) 57.4% Cash from Investing Growth (YoY) -63.5% -30% Cash from Financing Growth (YoY) 33.6% SEG Internet: Advertising S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) 194.1%

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return 1-800-FLOWERS.COM, Inc. FLWS $349.26 $381.57 $919.39 42.8% 6.3% 0.7% 0.4x 6.6x 0.5x 7.6x -40.8% Amazon.com, Inc. AMZN $32,514.81 $31,008.81 $17,132.00 22.5% 6.2% 40.5% 1.8x 29.1x 1.5x 20.8x -2.8% Bluefly, Inc. BFLY $37.44 $31.93 $94.63 35.2% -14.8% 15.0% 0.3x n/a n/a n/a -68.0% Digital River Inc. DRIV $1,480.80 $1,197.57 $381.43 86.4% 24.8% 16.2% 3.1x 12.6x 3.1x 9.2x -11.4% eBay Inc. EBAY $32,735.20 $28,683.83 $8,457.71 75.9% 33.4% 24.9% 3.4x 10.1x 3.2x 8.6x -22.3% Expedia, Inc. EXPE $5,609.74 $5,535.80 $2,919.82 78.4% 24.3% 22.4% 1.9x 7.8x n/a n/a -26.5% Gmarket Inc. GMKT $1,066.58 $810.47 $248.90 47.3% 17.4% 33.4% 3.3x 18.7x 2.8x 13.2x -1.3% Greenfield Online Inc. SRVY $364.29 $299.34 $132.48 75.6% 24.1% 24.7% 2.3x 9.4x 2.5x 9.3x -14.8% GSI Commerce, Inc. GSIC $722.77 $939.93 $861.16 56.1% 4.5% 31.8% 1.1x 24.1x 0.9x 11.8x -31.5% HouseValues, Inc. SOLD $69.06 $8.34 $47.31 100.0% -0.4% -36.1% 0.2x n/a n/a n/a -31.2% IAC/InterActiveCorp IACI $4,881.81 $4,258.85 $6,588.62 46.0% 10.4% 8.3% 0.6x 6.2x 0.7x 5.0x -39.2% InsWeb Corp. INSW $28.81 $18.13 $38.80 100.0% 3.4% 31.2% 0.5x 13.6x n/a n/a -15.3% Internet Brands, Inc INET $254.07 $177.19 $99.56 75.6% 30.0% 21.7% 1.8x 5.9x 2.0x 5.9x n/a Liquidity Services, Inc. LQDT $307.31 $244.88 $245.25 57.3% 8.5% 31.4% 1.0x 11.7x 1.0x 10.1x -28.9% LiveDeal, Inc. LIVE $13.11 $7.01 $26.82 84.2% 14.4% -11.0% 0.3x 1.8x n/a n/a -72.2% LoopNet, Inc. LOOP $406.42 $336.90 $80.81 88.2% 39.4% 36.8% 4.2x 10.6x 3.3x 7.2x -45.1% Mercadolibre, Inc. MELI $1,585.61 $1,537.37 $97.51 77.9% 27.6% 69.5% 15.8x 57.0x 10.1x 32.1x n/a Move, Inc. MOVE $353.82 $410.16 $286.69 79.3% 3.4% 2.5% 1.4x 42.4x 1.7x 12.0x -30.4% NetEase.com, Inc. NTES $2,759.00 $2,207.47 $338.91 81.7% 60.1% 6.2% 6.5x 10.8x 5.4x 9.2x 33.5% Overstock.com, Inc. OSTK $403.77 $392.87 $842.85 17.2% 0.6% 11.2% 0.5x 76.4x 0.4x 16.6x -4.9% priceline.com Incorporated PCLN $4,427.64 $4,467.62 $1,669.69 47.8% 16.6% 33.7% 2.7x 16.2x 1.9x 9.7x 80.2% Travelzoo, Inc. TZOO $97.90 $76.68 $81.77 96.5% 13.1% 8.9% 0.9x 7.2x n/a n/a -66.7% Median: $405.09 $401.51 $267.79 75.7% 13.7% 22.0% 1.6x 11.3x 1.9x 9.5x -27.7% Income Statement Analysis (Median) SEG Internet: eCommerce & Portals Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 22.0% 0% TTM EBITDA Growth 23.7% TTM Earnings Growth 7.9% Gross Profit Margin 75.7% EBITDA Margin 13.7% -5% Net Income Margin 4.4% SG&A Expenses as a % of Total Revenue 41.5% R&D Expenses as a % of Total Revenue 7.9% -10% Balance Sheet Analysis (Median) Current Ratio 2.1 Quick Ratio 1.6 Cash as Percent of Market Cap 18.1% -15% Avg Days Outstanding: Accounts Receivable 25 Avg Days Outstanding: Accounts Payable 46 Working Capital to TTM Operating Expense Ratio 0.3 -20% Cash Flow Statement Analysis (Median) Levered FCF Margin 8.4% Cash from Operations Growth (YoY) 21.0% Cash from Investing Growth (YoY) -3.8% -25% Cash from Financing Growth (YoY) -8.8% SEG Internet: eCommerce and Portals S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) 43.7%

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return Bankrate Inc. RATE $593.97 $527.89 $132.74 63.9% 26.8% 54.9% 4.0x 14.8x 3.5x 10.6x -29.9% Banks.com, Inc BNX $6.35 $12.50 $21.91 52.1% 3.9% -23.0% 0.6x 14.5x n/a n/a -86.6% China Finance Online Co. Ltd. JRJC $380.63 $298.45 $32.96 83.9% 22.8% 239.2% 9.1x 39.8x 3.1x 6.7x 62.4% Online Resources Corp. ORCC $197.14 $347.23 $148.69 50.5% 19.0% 23.4% 2.3x 12.3x n/a n/a -37.4% Track Data Corp. TRAC $16.28 $4.23 $32.70 29.6% -1.7% -19.5% 0.1x n/a n/a n/a n/a Median: $197.14 $298.45 $32.96 52.1% 19.0% 23.4% 2.3x 14.7x 3.3x 8.6x -33.6%

Income Statement Analysis (Median) SEG Internet: Financial Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 23.4% 10% TTM EBITDA Growth 33.6% TTM Earnings Growth 29.5% 5% Gross Profit Margin 52.1% EBITDA Margin 19.0% 0% Net Income Margin 1.3% SG&A Expenses as a % of Total Revenue 39.2% -5% R&D Expenses as a % of Total Revenue 6.6% -10% Balance Sheet Analysis (Median) Current Ratio 2.1 -15% Quick Ratio 2.1 Cash as Percent of Market Cap 12.7% -20% Avg Days Outstanding: Accounts Receivable 42 Avg Days Outstanding: Accounts Payable 34 -25% Working Capital to TTM Operating Expense Ratio 0.6 -30% Cash Flow Statement Analysis (Median) Levered FCF Margin 2.0% -35% Cash from Operations Growth (YoY) 7.7% Cash from Investing Growth (YoY) 74.6% -40% Cash from Financing Growth (YoY) -102.4% SEG Internet: Financial S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) -19.0%

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return Delta Three, Inc. DDDC $3.62 $3.03 $26.56 25.2% -23.4% -25.2% 0.1x n/a n/a n/a -90.5% EarthLink Inc. ELNK $987.62 $941.78 $1,088.66 46.8% 24.4% -16.0% 0.9x 3.5x 1.0x 3.7x 29.5% Internap Network Services Corp. INAP $231.93 $190.51 $246.44 42.2% 10.8% 19.1% 0.8x 7.1x 0.4x 2.8x -68.8% Internet Gold Golden Lines Ltd. IGLD $177.27 $327.86 $325.67 32.4% n/a 86.5% 1.0x n/a 0.9x 3.7x -31.3% Internet Initiative Japan Inc. IIJI $749.93 $811.66 $607.46 20.9% 14.3% 17.1% 1.3x 9.4x n/a n/a 17.0% iPass Inc. IPAS $113.11 $43.16 $193.98 42.4% 0.2% 4.5% 0.2x 118.9x 0.2x 2.5x -61.5% Keynote Systems Inc. KEYN $189.93 $136.32 $73.69 59.6% 4.1% 13.2% 1.8x 44.7x 1.6x 11.1x -8.3% Sify Technologies Limited SIFY $118.13 $96.45 $154.00 43.1% 4.7% 19.5% 0.6x 13.3x n/a n/a -62.5% Median: $183.60 $163.41 $220.21 42.3% 4.7% 15.2% 0.8x 11.3x 0.9x 3.7x -46.4%

Income Statement Analysis (Median) SEG Internet: Networking & Connectivity Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 15.2% 0% TTM EBITDA Growth 22.2% TTM Earnings Growth 8.3% -5% Gross Profit Margin 42.3% EBITDA Margin 4.7% -10% Net Income Margin 0.5% SG&A Expenses as a % of Total Revenue 28.9% R&D Expenses as a % of Total Revenue 9.6% -15%

Balance Sheet Analysis (Median) -20% Current Ratio 2.0 Quick Ratio 2.0 -25% Cash as Percent of Market Cap 29.0% Avg Days Outstanding: Accounts Receivable 47 -30% Avg Days Outstanding: Accounts Payable 57 Working Capital to TTM Operating Expense Ratio 0.3 -35%

Cash Flow Statement Analysis (Median) -40% Levered FCF Margin 2.0% Cash from Operations Growth (YoY) -9.2% Cash from Investing Growth (YoY) 179.2% -45% Cash from Financing Growth (YoY) -155.1% SEG Internet: Networking & Connectivity S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) -66.1%

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return Jupitermedia Corporation JUPM $42.52 $116.19 $140.44 56.7% 14.7% 1.8% 0.8x 5.6x 0.8x 4.8x -84.8% Napster, Inc. NAPS $64.67 -$5.12 $127.45 28.5% -9.3% 14.7% 0.0x 0.4x n/a n/a -51.6% RealNetworks, Inc. RNWK $980.18 $568.45 $602.19 61.9% -1.8% 24.2% 0.9x n/a 0.8x 8.1x -3.5% TechTarget, Inc. TTGT $292.70 $237.55 $100.19 70.6% 18.2% 21.5% 2.4x 13.0x 2.1x 9.0x -47.4% The Knot, Inc. KNOT $279.41 $229.60 $101.65 81.7% 18.5% 13.3% 2.3x 12.2x 1.8x 11.2x -51.7% TheStreet.com, Inc. TSCM $207.05 $126.60 $74.64 59.4% 20.9% 31.5% 1.7x 8.1x 1.4x 6.5x -38.8% WebMD Health Corp. WBMD $1,393.10 $1,092.22 $353.60 64.9% 20.2% 20.9% 3.1x 15.3x 3.6x 13.5x -47.2% Yahoo! Inc. YHOO $27,468.27 $24,410.65 $7,215.19 58.9% 18.5% 8.5% 3.4x 18.3x 4.1x 11.9x -14.5% Median: $286.06 $233.57 $133.95 60.6% 18.3% 17.8% 2.0x 12.2x 1.8x 9.0x -47.3%

Income Statement Analysis (Median) SEG Internet: New Media Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 17.8% 0% TTM EBITDA Growth -7.4% TTM Earnings Growth 19.4% -5% Gross Profit Margin 60.6% EBITDA Margin 18.3% -10% Net Income Margin 8.0% SG&A Expenses as a % of Total Revenue 43.0% -15% R&D Expenses as a % of Total Revenue 16.4% -20% Balance Sheet Analysis (Median) Current Ratio 3.1 -25% Quick Ratio 2.8 Cash as Percent of Market Cap 22.8% -30% Avg Days Outstanding: Accounts Receivable 51 Avg Days Outstanding: Accounts Payable 44 -35% Working Capital to TTM Operating Expense Ratio 0.6 -40% Cash Flow Statement Analysis (Median) Levered FCF Margin 6.9% -45% Cash from Operations Growth (YoY) 24.9% Cash from Investing Growth (YoY) -77.6% -50% Cash from Financing Growth (YoY) 48.2% SEG Internet: New Media S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) 37.2%

Company Name Ticker Market Cap EV TTM Revenue TTM Gross TTM EBITDA TTM EV/ Revenue EV/ EBITDA Forward Forward YoY Stock Margin Margin Revenue EV/ Revenue EV/ EBITDA Market Growth Return Baidu.com, Inc. BIDU $11,886.54 $11,606.06 $356.42 65.4% 41.1% 105.9% 32.6x 79.3x 17.2x 39.6x 71.9% Google Inc. GOOG $148,801.48 $136,067.82 $19,611.29 59.8% 36.5% 46.0% 6.9x 19.0x 5.6x 13.4x -7.1% LookSmart, Ltd. LOOK $52.99 $21.45 $65.38 41.1% -4.9% 22.1% 0.3x n/a 0.2x 2.7x -7.7% MIVA, Inc. MIVA $27.43 $4.78 $143.20 52.3% -5.0% -15.3% 0.0x n/a 0.1x 132.5x -87.6% Sohu.com Inc. SOHU $2,854.35 $2,631.35 $303.66 87.3% 35.7% 114.1% 8.7x 24.3x 5.3x 12.4x 134.9% Yahoo! Inc. YHOO $27,468.27 $24,410.65 $7,215.19 58.9% 18.5% 8.5% 3.4x 18.3x 4.1x 11.9x -14.5% Median: $7,370.45 $7,118.71 $330.04 59.4% 27.1% 34.1% 5.2x 21.7x 4.7x 12.9x -7.4%

Income Statement Analysis (Median) SEG Internet: Search Engine Stock Market Return: Jan - Jul 2008 TTM Revenue Growth 34.1% 10% TTM EBITDA Growth 43.7% TTM Earnings Growth 63.9% Gross Profit Margin 59.4% 5% EBITDA Margin 27.1% Net Income Margin 19.5% SG&A Expenses as a % of Total Revenue 31.1% 0% R&D Expenses as a % of Total Revenue 12.6%

-5% Balance Sheet Analysis (Median) Current Ratio 2.8 Quick Ratio 2.7 -10% Cash as Percent of Market Cap 9.9% Avg Days Outstanding: Accounts Receivable 40 Avg Days Outstanding: Accounts Payable 26 -15% Working Capital to TTM Operating Expense Ratio 0.6

Cash Flow Statement Analysis (Median) -20% Levered FCF Margin 8.4% Cash from Operations Growth (YoY) 60.7% Cash from Investing Growth (YoY) -107.1% -25% Cash from Financing Growth (YoY) -10.9% SEG Internet: Search Engine S&P 500 NASDAQ SEG SW Index Levered FCF Growth (YoY) 198.4%

Date Target TTM Implied Enterprise EV/ Revenue Announced Acquirer Target Revenue ($mm) Value ($mm) 07/02/2008 Xandros Corporation Linspire, Inc. - - - 07/02/2008 SemanticSpace Technologies Limited Prolifics Corporation $52.0 $40.0 0.8x 07/02/2008 Constellation Homebuilder Systems, Inc. Carbiz Inc., Software Division - $2.7 - 07/02/2008 The Active Network Inc. T&C Products, Inc. - - - 07/02/2008 SilverBirch Inc. (TSXV:SVB) Red Mile Entertainment Inc. (OTCBB:RDML) $10.2 $5.1 0.5x 07/03/2008 Temenos UK Ltd. Financial Objects plc (AIM:FIO) $42.1 $43.3 1.0x 07/03/2008 Medworxx Solutions Inc (TSXV:MWX) HealthCast Inc. - $3.5 - 07/04/2008 AddNode AB (OM:ANOD B) Ravalik Oy $5.8 $3.1 0.5x 07/07/2008 Sangoma Technologies Corp. (TSXV:STC) Paraxip Technologies, Inc. - $4.6 - 07/07/2008 Triple Point Technology, Inc. ROME Corporation - - - 07/08/2008 McCabe Software, Inc. Agitar Software, Inc. - - - 07/08/2008 Hyland Software, Inc. Liberty Information Management Solutions, Inc. - - - 07/09/2008 iMagiclab LLC 5Square Systems Corporation - - - 07/09/2008 Aspect Software, Inc. BlueNote Networks, Inc. - - - 07/10/2008 Artesia Technologies, Inc. eMotion, Inc. - $5.0 - 07/10/2008 NetSocket Operax AB --- 07/14/2008 Microsoft Israel Ltd. Zoomix Data Mastering, Ltd. - - - 07/15/2008 NitroSecurity, Inc. Ripple Technologies, Inc. - - - 07/15/2008 Convergys Corporation (NYSE:CVG) Intervoice Inc. (NasdaqGS:INTV) $206.2 $269.6 1.3x 07/15/2008 BlackRock, Inc. (NYSE:BLK) Impact Investing Pty Ltd - - - 07/16/2008 Exor Group Limited TiVA Services Limited - - - 07/16/2008 Healthvision Inc. MediSolution Ltd., Healthcare Products and Services Division - $49.3 - 07/17/2008 Quark, Inc. In.vision Research Corporation - - - 07/17/2008 Sage Group plc (LSE:SGE) DCS Automotive Iberica SL $1.3 - - 07/17/2008 Medical Present Value, Inc. TeraHealth, Inc. - - - 07/17/2008 Sage Group plc (LSE:SGE) Eurowin Soft S.L. $20.6 - - 07/18/2008 Rebellion Studios Razorworks Limited - - - 07/22/2008 OutStart, Inc. Eedo Knowledgeware Corporation - - - 07/22/2008 Visionapp Ag visionapp NA, Inc. - - - 07/22/2008 Totvs Sa (BOVESPA:TOTS3) Datasul S/A (BOVESPA:DSUL3) $152.2 $71.8 0.5x 07/23/2008 Interwoven Inc. (NasdaqGM:IWOV) Discovery Mining, Inc. - $36.0 - 07/23/2008 InterGis LLC Vericom Technologies, Inc. - - - 07/23/2008 Hellman & Friedman LLC SSP Holdings PLC (AIM:SSPH) $128.8 $393.6 3.1x 07/23/2008 Cisco Systems, Inc. (NasdaqGS:CSCO) Pure Networks, Inc. - $120.0 - 07/24/2008 Phoenix Technologies Ltd. (NasdaqGM:PTEC) General Software, Inc. - $20.0 - 07/27/2008 International Business Machines Corp. (NYSE:IBM) ILOG SA (ENXTPA:ILO) $214.7 $268.5 1.3x 07/28/2008 Rearden Commerce, Inc. SamePage Solutions - - - 07/28/2008 Double-Take Software (NasdaqGM:DBTK) emBoot Inc. - $10.0 - 07/28/2008 Global TV, Inc. DCL Environmental Systems, Inc. - - - 07/28/2008 Motorola Inc. (NYSE:MOT) AirDefense, Inc. - - - 07/29/2008 Bluepoint Solutions, Inc. Avalon International, Inc. - - - 07/29/2008 Aladdin Knowledge Systems Ltd. (NasdaqGS:ALDN) Secure Computing Corp., Secure SafeWord $32.0 $64.3 2.0x 07/30/2008 Broadridge Financial Solutions Inc. (NYSE:BR) Investigo Corporation - - - 07/30/2008 Wright Express Corp. (NYSE:WXS) Financial Automation Limited - $9.0 - 07/31/2008 Ebix Inc. (NasdaqGS:EBIX) Acclamation Systems, Inc. - $25.0 - 07/31/2008 Monster Worldwide, Inc. (NasdaqGS:MNST) Trovix, Inc. - $72.5 - 07/31/2008 Logi XML, Inc. OnDemandIQ, Inc. - - - 07/31/2008 Oracle Corp. (NasdaqGS:ORCL) Global Knowledge Software, LLC - - - Copyright © 2008 by Software Equity Group, L.L.C., All Rights Reserved Software Equity Group is an investment bank and M&A advisory serving the software and technology sectors. Founded in 1992, our firm has represented and guided private companies throughout the United States and Canada, as well as Europe, Asia Pacific, Africa and Israel. We have advised public companies listed on the NASDAQ, NYSE, Toronto, London and Euronext exchanges. Software Equity Group also represents several of the world's leading private equity firms. We were recently ranked among the top ten investment banks worldwide for application software mergers and acquisitions.

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

Perhaps most important are the relationships we've built, and the industry reputation we enjoy. Software Equity Group is known and respected by publicly traded and privately owned software and technology companies worldwide, and we speak with them often. Our Quarterly and Annual Software Industry Equity Reports are read and relied upon by more than fifteen thousand industry executives, entrepreneurs and equity investors in twenty-eight countries, and we have been quoted widely in such leading publications as Information Week, The Daily Deal, Barrons, U.S. News & World Report, Reuters, Mergers & Acquisitions, USA Today, Arizona Republic, Detroit Free Press, Entrepreneur Magazine, Softletter, Software Success, Software CEO Online and Software Business Magazine. Software Equity Group’s senior bankers have keynoted and spoken at more than one hundred software industry conferences and seminars, including Software Business, SoftExpo, Culpepper, VAR Conference, ACETECH, and the Arizona, Colorado, Chicago, Southern California, Denver, San Diego, Washington State and Boulder Software Associations.

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Software Equity Group is an investment bank and M&A advisory serving the software and technology sectors. Since 1992, our firm has represented and guided private companies throughout the United States and Canada, as well as Europe, Asia Pacific, Africa and Israel. We have advised public companies listed on the NASDAQ, NYSE, Toronto, London and Euronext exchanges. Software Equity Group also represents several of the world's leading private equity firms. For a confidential consultation without obligation, please contact Managing Director, Ken Bender (858 509-2800, [email protected]).

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