confidential digital services and distribution acquisition strategy
TRANSCRIPT
CONFIDENTIAL
Digital Services and DistributionAcquisition Strategy
page 2
Executive Summary
• Grouper’s initial focus positioned it for growth during the early development of the UGV market
– Strong, seasoned management team
– Small but compelling base of content; focus on user-generated videos
– Easy-to-navigate interface and technology for sharing content
• Emerging leaders are dictating a new set of minimum success requirements, broadening their audience, functionality, and content through acquisitions and new product introductions
– Google acquires YouTube
– MySpace launches MySpace Videos
– Yahoo acquires JumpCut and partners with CurrentTV
• Sony must acquire to continue to meet the minimum threshold for audience size and breadth of content/functionality
– Near-term focus on increasing audience through syndication plays and acquiring broadly appealing content and functionality
– Once minimum thresholds are met, seek opportunities to build a deeper offering, including expertise in specific content verticals and targeted functionality
page 3
The Current State of Market Evolution Rewards Broader Offerings
Deeper OfferingsInception Tipping Point /
Audience GrowthBroader
Offerings
• Multiple market entrants grow at similar rates
Market Dynamic
Minimum Requirements
to Compete
Areas of Differentiation
Examples
(2004 – 2005) (Early 2006) (Late ’06 / Early ‘07) (Late ’07 / Early ‘08)
• Content and features on-par with competitors
• Limited differentiation
• Dozens of pure-play UGV sites struggle to reach a million unique users
• Leaders break-out from the pack
• Single compelling characteristic
• Unique piece of content
• Ease-of-use
• YouTube explodes with “Lazy Sundays”
• MySpace users flock to improved community features
• Leaders expand to adjacent markets
• Larger audience• Breadth of content• Range of functionality
• Broadest range of content
• Network effect of larger audiences
• MySpace launches videos
• Google acquires YouTube
• Market rewards players with deep content catalogs and robust technology
• Ability to supplement broad offering with depth in specific verticals
• Content verticals have not yet gained traction
– Yahoo media group continues to struggle
• Larger audience• Broad offering• Brand known for an
area of expertise
page 4
Distinct Service Categories Formed at the Outset of Digital Video
Aggregators Channel Promotional
• On-demand videos programmed in channels or on a show-by-show basis
• Advertising supported, with some upsell to subscription
• Short video clips promoting the site owner’s content, merchandise, and brand
• May include some advertising and limited commerce capabilities
• Aggregate video across providers for purchase
• Includes sell-thru, rental, and ad-support
User Generated Video (UGV)
• Allow audience to watch and share videos created and uploaded by users
• Primarily advertising based revenues
Social Network
• Online communities enabling interactivity between users
• Primarily advertising based revenues
page 5
Players with the Largest Audience are Broadening their Offerings, Blurring the Line Between Service Categories
Service Original Focus Areas of Expansion
• Aggregator
• Social Network
• Channel (e.g., Music Videos on Yahoo! Music)
• UGV – Acquired YouTube for $1.65BN
• UGV – Launched MySpace Videos
• Channel – Fox Full Throttle
• Store – Download-to-own Episodes
• UGV Tools – Acquired JumpCut
• UGV Content – CurrentTV Partnership
page 6
Digital Service Acquisition Considerations
Considerations
Near-term ApproachSony Skill Set
M&A Landscape
Phase of Market Growth
• Audience and 3rd party distribution currently lagging and difficult to build organically
• SPE has expertise in-house to expand content and functionality
–Repurposing SPE content and licensing from 3rd party partners
–Grouper leading development and licensing as needed
• Focus on narrow universe of significant acquisition targets
• Prioritize audience / syndication• Seek partners that pair audience
with broadly appealing content or functionality
• Limited window for compelling acquisitions
–Competitors acquiring aggressively
–Valuations increasing
• Current market phase demands broader offerings
• As market matures, it will reward depth
Potential Future Expansion
• Point acquisitions to reinforce areas of differentiation
–Targeted content–Features and functionality
page 7
Digital Service Acquisition Priorities
Description
Valuations
Speed
Priority
Audience:Syndicators
Breadth DepthAudience:
Destinations
Attractive Moderate Moderate Expensive
• Companies that syndicate video to a network of online partners
• Content and/or functionality with established audience
• Targeted content or functionality
• Sites with audience but no differentiated content
FastGain traction
quickly
FastGain traction
quickly
SlowRequires multiple
acquisitions
SlowRequires content and functionality
deals to supplement
1st 2nd Low
page 8
Functionality + Audience
Six Apart (10.4)
Image Shack (9.3)
Xanga (5.5)
Reunion (4.7)
MetaCafe (3.1)
Digg (2.1)
Putfile (1.4)
Friendster (1.0)
Tagged (0.8)
Audience SyndicatorsPhotoBucket (12.0)
Roo Media (5.8)Veoh (N/A)
Brightcove (N/A)FeedRoom (N/A)
Functionality
Meetup (0.7)
Piczo (0.5)
Text America (0.5)
Imeem (0.2)
VideoEgg (0.2)
eyeSpot (0.2)
MotionBox (0.2)
Famster (N/A)
Content
College Humor (0.9)
JibJab (0.6)
SingingFool/VideoDetecitve
Broadband Sports (0.1)
RocketBoom(0.04)
Ruckus (0.02)
Revision3 (0.02)
Channel 101 (0.02)
Content + Functionality
Pure Video (0.9)
Castpost (0.2)
Now Public (0.09)
Bix (0.08)
Blip.tv (0.06)
Dave.tv (N/A)
Acquisition Candidates
Audience Destinations
DailyMotion (0.8)
vidiLife (0.8)
Content + Audience
Break.com (3.3)
eBaum’s World (3.0)
Bolt.com (2.9)
Heavy.com (2.7)
Tier 1 Candidates
Tier 2 Candidates
Low Priority
page 9
Tier 1 Acquisition CandidatesCompany M&A Benefits Description Audience(1) Estimated Valuation Range
Break
Los Angeles
Breadth
Content with large audience
• Primarily 15-35 year old male demo • Provides an incentive for content (pays
up to $1,000 for featured videos), and owns a subset of its content
• Focus on humor, sports, games
3.3MM UUs • Approximately $100MM based on early guidance from Montgomery
Roo(2)
New York
Audience / Syndicator
• Video syndication platform• Hosts and streams to third party sites• Also has network of destination sites
5.8MM Unique Video Streamers
(primarily syndicated)
• $33MM (Public RGRP.OB)• $200K debt
Heavy
New York
Breadth
Content with large audience
• Skews toward 15-35 year old male demo• Mix of video, animation, and games
created by Heavy and/or its partners• Takes full and exclusive ownership of
content
2.7MM UUs • May want $200MM per paidcontent.org
• Would be <$150MM at $50 / UU• Polaris led $10MM round in (1/06)
Digg
San Francisco
Breadth Functionality with large audience
• Focuses on user ratings• Content is a mix of categorized text
(primary) and video (secondary) postings from blogs, news, and other sites
2.1MM UUs • Approximately $150MM• Passed on Newscorp offer because
it was <$150MM
Bolt
New York
Breadth
Content with large audience
• Skews younger (31% 12-16, 32% 18-34)• Content, includes video, photos, music• Some social net features on Bolt2.com• Does not own content, takes non-
exclusive license
2.9MM UUs • Approximately $150-$200MM based on Digg and Heavy comps
• Rumored to be for sale
Metacafe
Palo Alto
Tel Aviv
Breadth Functionality with large audience
• Primarily a UGV destination, does not own content
• Recently tested user rev sharing• Has a robust on-site search tool
3.1MM UUs • Approximately $150-$200MM based on Digg and Heavy comps
(1) Monthly Unique Users per Nielsen Net Ratings except for Roo(2) Roo audience estimate is of unique streamers per ComScore
page 10
Tier 2 Acquisition Candidates
Company M&A Benefits Description Audience(1) Valuation Considerations
PutFile
London
Breadth
Functionality with large udience
• Free file hosting and sharing site• Has some UGV destination site features
1.4MM UUs • $4MM asking price
PhotoBucket
Palo Alto
Denver
Audience / Syndicator
• Hosts photos and videos, enables linking to sites like MySpace and Blogger
12.0MM UUs • Approximately $250-$450MM based on rough guidance from Jeffries
• Trinity led $10.5MM round (5/06)
Pure Video
Los Angeles
Depth
Functionality
• Operates a video search engine in partnership with Pixsy
• Runs StupidVideos and Grind (action sports videos)
0.9MM UUs
StupidVideos=596K
Grind = 282K
• Raised $5.6MM from Soft Bank in December 2005
JibJab
Santa Monica
Depth
Content
• Focuses on jokes, humor, and animation• Includes sponsored content (e.g., Bud
Light commercials)
0.6MM UUs • Raised undisclosed amount of funding from Polaris in June 2006
Revision3
San Francisco
Depth
Content
• Positioned as an online TV network• Produces its own original content• Founded by Digg’s founders
0.02MUUs • Raised $1MM in funding from Marc Andreessen and Greylock Partners in September 2006
Bix
Palo Alto
Depth
Content &
Functionality
• User-generated contest site• Users create and enter online talent
competitions
0.08MM UUs • Raised $6.77MM in first round• Investors include Trinity and Sutter
Hill
Blip.tv
New York
Depth
Content &
Functionality
• Hosts high quality “Prosumer” shows• Syndicates and licenses out tech (e.g.,
Oxygen is a licensee)• Lets producers opt-in for post-roll ads
0.06MM UUs • Raised undisclosed amount of funding in a July 2006 Series A round
Imeem
Palo Alto
Depth
Functionality
• Instant messaging with social networking• Integrates with existing IM services• Profiles with photos, music, and videos
0.2MM • Venture backed by Morgenthaler Ventures
(1) Monthly Unique Users per Nielsen Net Ratings
CONFIDENTIAL
APPENDIX A – COMPANY PROFILES
page 12
Break.com
Content OfferingContent Offering
• Online entertainment network and community powered by traditional user-generated content
• Content base skews heavily toward 15-35 year old male-oriented humor, sports and racy categories
• Majority of the content is original and created by users specifically for Break.com (Break owns much of its content. Takes an exclusive license to uploaded content it doesn’t own)
• Pays $250/ video for videos it wants to feature, incentivizing users to create high-quality videos (est. to spend ~$250K/ month buying user videos)
PartnershipsPartnerships
Strategic ProfileStrategic Profile
• Established in 1998 as Big-Boys.com, a video-sharing site
• Purchased in May 2004 by Keith Richman, co-founder of Billpoint, and changed name to Break.com
• 100% owned by Richman and a few business partners – has never taken any venture financing
• Generate revenue through custom advertising deals, PPC content plugs, banners and text links
• Based in Beverly Hills, CA with 33 employees
• Leverages AdBrite to sell its banner and text ads
• Established partnerhsip with Amp’d Mobile in Nov. 2005 to distribute videos through mobile, charging $2.99/ month for unlimited access
User MetricsUser Metrics
2.6 2.53.5
2.6 2.9 3.3
Jul-06 Aug-06 Sep-06
MM NR
Web page views (MM)
Time/ person(min.)
141.2 189.2 135.4
16.1 21.5 15.3
Internal Break.com sources estimate uniques of approx 14.7MM.
Unique Users (MM)Note:
estimated to generate ~100MM streams/ month
Source: Nielsen//NetRating used for page view, time data, AdBrite; BambiBlogs.com; Break.com; Multichannel News; Amp’d Mobile; PureVideo; ComScore Video Matrix
page 13
Break.com
Advertising:
• Banner ads – no pre-rolls or text
Content
• User-generated
• Share it with friends (viae-mail)
• Embed & blog it
Interactivity:
• Promote to home page
• Rate It
• Recommend
• Comment
page 14
ROO Group Business Overview
Content Partners Sites
Advertisers
Entertainment
News
Lifestyle and Family
Partners
Owned and Managed
Ingestion Engine
Ad Network and Insertion
Program Channels
Video Player
Licensing fees, payment-per-stream
and ad revenue share
page 15
ROO Group, Inc. (NASDAQ: RGRP)
Roo Group Inc. 5,841 186 31.3
page 16
ROO Group, Inc. (NASDAQ: RGRP)Key DevelopmentsKey Developments
• ROO Group is an online broadcast network and a leading global provider of digital media solutions and technology that enable the activation, marketing, and distribution of video content over the Internet and emerging broadcasting platforms such as set top boxes and mobile communication devices
• Core activities include the aggregation of video content, media management, advertising, hosting, and content delivery
• Proprietary technology platform and infrastructure is largely based in the United States and is designed to be accessed and maintained from satellite offices anywhere in the world via a Virtual Private Network (VPN) over the Internet
• Operates a global network of individual destination portals under the brand ROO TV, that enables end users in different regions around the world to view video content over the Internet
• An independent research report which tracks the video streams sent to users per month placed us as the 10th largest broadcaster of video in the world (Source: iBroadcast Stream report released November 21, 2005 prepared by AccuStream iMedia Research. )
• ComScore MediaMetrix ranks ROO Group as #10 among US streamed video sites (5.8 MM streams in July 2006)
• ROO was founded in 2001 and went public in 2003
• Over 100 employees with worldwide operations in New York, Los Angeles, London and Australia
August 1998• Originally incorporated as Virilitec Industries, Inc.; main business
was to license and distribute a line of bioengineered virility nutritional supplements designed to enhance human male sperm count and potency; venture failed
December 2003 • Virilitec Industries, VRLT Acquisition Corp., a Delaware
corporation and wholly-owned subsidiary of Virilitec Industries, ROO Media, Jacob Roth and Bella Roth, merged
April 2004 • Purchased 80% of Reality Group Pty Ltd, a corporation formed
under the laws of Australia
May 2004 • Purchased the business and business assets of Undercover
Media Pty Ltd., operating a music and entertainment site (www.undercover.com.au)
September 2004 • Purchased Bickhams Media, Inc. and the VideoDome property,
an embedded video player integrated in to the ROO offering
October 2005 • Reality Group shareholders agreed to exercise their buyback
option and ROO reduces ownership of Reality Group to 51%
October 2005 • Purchased 51% of Factory 212 Pty Ltd through its subsidiary,
ROO Broadcasting Limited
Company OverviewCompany Overview
page 17
ROO Group, Inc. (NASDAQ: RGRP)
Technology and Service OverviewTechnology and Service Overview
Core Services provided include:
• ROO Video Solutions - Customized video solutions for specific customers or industry segments; platform has been designed to be flexible in accommodating various opportunities for activating video for broadcast over the Internet and accommodating emerging technologies such as wireless devices (i.e., mobile phones and PDAs) and set top boxes
• ROO Syndication of Licensed Video Content - Provide a turnkey solution for customers located throughout the world to activate licensed topical video content on their web sites;
• Current customers for this service include Verizon in the United States, Bulldog Broadband in the United Kingdom and News Interactive a subsidiary of News Corp
• ROO’s Online Advertising Network - Through syndication clients, ROO has developed a network of web sites across which the company can sell advertising inventory
• The advertising includes traditional banner ads and television-style 15 second and 30 second commercials, which can be programmed to play before and after topical video clips that are most likely to be viewed by the advertisers' chosen demographic
• Syndication clients can receive a percentage of the advertising revenue generated on their websites
• Recent advertisers utilizing in-stream advertising have included Microsoft, Apple, Honda, Hyundai, Target, Proctor & Gamble and Pfizer
page 18
NASDAQ Yearly Performance (as of 11/10/2006)NASDAQ Yearly Performance (as of 11/10/2006)Financial OverviewFinancial Overview
ROO Group, Inc. (NASDAQ: RGRP)
Recent DevelopmentsRecent Developments
• On August 18, 2006, the Company entered into a Common Stock Purchase Agreement pursuant to which the Company sold an aggregate of $5,506,250 of shares of common stock and warrants; each investor will be issued warrants to purchase a number of shares of common stock equal to 50% of the number of shares of common stock purchased
Management TeamManagement Team
• Robert Petty, CEO and Chairman of the Board, ROO Group• Robin Smyth, CFO and Executive Director, ROO Group• Steve Quinn, COO• Tristan Place, VP Sales/Strategic Partnerships• Max Moore, VP Business Development
page 19
Ownership DetailOwnership Detail
ROO Group, Inc. (NASDAQ: RGRP)
Common Stock
% of Common
Stock
Series A
Preferred (1)% of Series A Preferred
% of Total Vote
Robert Petty 2,120,000 16.1% 6,000,000 63.2% 57.4%
Robin Smyth 360,000 2.7% 1,500,000 15.8% 14.2%
Avenue Group, Inc. 673,210 5.1% - 0.0% 0.6%
Cobble Creek Consulting, Inc. 40,000 0.3% 1,000,000 10.5% 9.3%
Rubin Irrevocable Family Trust 60,000 0.5% 1,000,000 10.5% 9.3%
Southpoint Capital Advisors LP 866,667 6.6% - 0.0% 0.8%
William D. Witter, Inc. 1,323,333 10.0% - 0.0% 1.2%
Total Outstanding 13,176,436 9,500,000
(1) Holders of Series A Preferred Stock are entitled to vote on all matters submitted to shareholders of the Company and are entitled to ten votes for each share of Series A Preferred Stock owned.
page 20
Comparison of Video Syndicators
Roo BrightCove Veoh
Background and Business Model
•Syndicates licensed content; offers customized video platform solutions; operates a network of ROO TV branded sites
•Payment includes licensing fees, payment-per-stream and/or ad revenue share
•Video syndication and publishing syndication
•Partners can syndicate to AOL and through TiVo
•Keeps 50% of ad revenue and 30% of product sales
•Initial focus was on using P2P to distribute free TV quality video over broadband
•Expanding to ad-supported and paid models
Content •Generally topical content (news, sports)
•Organized in 80+ channels and sub-channels
•Initially high quality professional content
•Opened platform to accept content from individuals
•Initially UGV•Expanding to prosumer & professional content
•6/06 started removing adult content
Technology •Content prep / hosting•Ad insertion•Content tracking
•In-video ad placement services•Hosted video stores
•P2P platform focus•Expanding to ad insertion and commerce
Customers •Verizon, NewsCorp, EMI, A&E, FashionTV, Virgin,Reuters, Financial Times, TimesOnline
•National Geographic, Travel Channel, Warner Music, The New York Times, Washington Post
•TNT, Skateboard.com
Traffic 5.8MM Unique Streamers(1)
186MM Monthly Streams(1)
Not Available Unique Streamers N/A
15MM Monthly Streams (2)
Valuation / Funding $30MM (public on NASDAQ) •$28MM in total funding including $16MM in 11/05 from AOL, IAC, and others
•$14.75MM in total funding including $12.5 in 4/06 from Michael Eisner and Spark Capital
(1) Per comScore Video Metric(2) Per Veoh management estimate of roughly 500K streams per day
page 21
8.3 7.5 6.8
3.0 3.5 2.7
Jul-06 Aug-06 Sep-06
MM NR
Heavy.com
Content OfferingContent Offering
• Broadband entertainment network focused on providing high-quality content
• Content base skews toward 18-34 year old male-oriented humor and racy categories
• Takes full and exclusive ownership of a range of content (mix of video, animation, and games) created by Heavy and/or its partners, e.g., NBC delivered through distinct channels
• Generates revenue through banner ads, pre-rolls, and branded production, e.g., Burger King videos
PartnershipsPartnerships
Strategic ProfileStrategic Profile
• Established in 1999 as a P2P digital content sharing site by Simon Asaad & David Carson
• Polaris venture capital holds a 25% stake in Heavy; Polaris lead a $10MM round in January 2006
• Expected to generate ~$20MM adv. revenues in 2006, a 300% increase over 2005 (recently valued at ~$200MM – source: paidContent.org)
• Ad sales and marketing conducted internally
• Based in New York, NY with 20 employees
• Recently announced partnership with TiVo to provide content for TiVo’s VoD service
• Established partnership with Verizon Wireless in April 2006 and created a channel on V-Cast subscription mobile offering
• Parnter with Sony PSP, video iPod, and Virgin Mobile to distribute non-wireless mobile content
User MetricsUser Metrics
Web page views (MM)
Time/ person(min.)
9.3 10.4 6.6
1.5 1.2 1.0
Unique Users (MM)Note:
estimated to
generate 80-90MM streams/ month
Source: Nielsen//NetRating used for page view, time data, Heavy.com; Multichannel News; PureVideo; ComScore Video Matrix; paidContent.org; FT.com; VCMike’s Blog
page 22
Heavy.com
Advertising:
• Banner ads
• Pre-rolls
Content sharing:
• Heavy/ partner produced channels
• Share it with friends (via e-mail)
• Blog it
Interactivity:
• Rate It
• Comment
page 23
1.2 1.2 1.31.6 1.8
2.1
Jul-06 Aug-06 Sep-06
MM NR
digg.com
Content OfferingContent Offering
• Online user-driven news/ information community providing direct links to stories and video sites
• Target IT professionals, developers, professional “geeks” and news junkies
• Content is a mix of categorized text (primary) and video (secondary) postings from blogs, professional news sites and random Web sites
• Users tag news stories they like (dig) and dislike, driving what content appears on the home page
PartnershipsPartnerships
Strategic ProfileStrategic Profile
• Established in Nov. 2004 as an information and news sharing site by Kevin Rose
• Closely held (Rose owns ~30-40%) with minimal venture financing – received $2.8MM round in Oct. 2005 to support initial growth
• Expects ~$3MM in advertising revenues in 2006 (recently valued at $200MM – source: BusinessWeek, 8/2006)
• Generate revenue through banner and text ads only – focused on growing audience with minimally invasive ads
• Based in San Francisco, CA with ~20 employees
• Leverages Federated Media to sell its banner ads
• Digg.com founders started a video production company, Revision3, in Sept. 2006
– Focused on high-end humor and tech content targeted at young, tech-oriented people
– Advertising model is 1950s throwback – based on sponsors named in advance of ‘shows’ by hosts
User MetricsUser Metrics
Web page views (MM)
Time/ person(min.)
6.1 4.9 11.7
2.2 2.1 2.5
Unique Users (MM)Note:
estimated to
generate 20-30MM streams/ month
Source: Nielsen//NetRating used for page view, time data, Digg.com; Multichannel News; PureVideo; ComScore Video Matrix; Federated Media; HowStuffWorks.com; BusinessWeek (8/06); Red Herring
page 24
digg.com
Advertising:
• Limited banner and text ads
• No pre-rolls (link directly to other video sites, e.g., YouTube)
Content
• User-posted and recommended
• Share it (viae-mail)
• Blog it
Interactivity:
• Edit It
• Rate (Digg) It
• Comment
page 25
Bolt Media
Content OfferingContent Offering
• Online entertainment network and community powered by social network aspects where creative users can upload and submit content for competition
• Content base skews toward 18-34 year olds with focus on “prosumer” content
• Encourages interaction/feedback through the user's content – facilitating comments and blogs
PartnershipsPartnerships
Strategic ProfileStrategic Profile
• Established in 1996 as a teen community, Bolt has relaunched as an online network and community focused on posting creative content and network
• Focus on 18-34 year old audience
• Bolt Media has also launched Bolt2.com, enabling kids, tweens, and younger teens to create content, meet people, and play games in a safe and age-appropriate environment
• Based in New York, NY
• Currently leveraging creative relationships with the Hip Hop Theater Festival
• Developed significant advertising partnerships with companies such as Toyota, Coke P&G and Nike where users can enter immersive environments
User MetricsUser Metrics
3.54.3
3.4
Jul-06 Aug-06 Sep-06
MM NR
Web page views (MM)
Time/ person(min.)
20.9 25.0 82.4
2.3 1.5 6.2
Unique Users (MM)Note:
estimated to generate ~100MM streams/ month
NA NA NA
Source: Nielsen//NetRating used for page view, time data, Bolt.com; ComScore Video Matrix; BusinessWeek (8/06); TechCrunch.
page 26
Advertising:
• Banner ads – no pre-rolls or text
Content
• User-generated
• Embed & blog it
Interactivity:
• Community
• Rate It
• Recommend
• Comment
Bolt Media
Advertising:
• Banner Ads
• Video Ads
page 27
Metacafe
Content OfferingContent Offering
• Online entertainment network and community powered by traditional user-generated content and high-end produced content that is licensed in
• Utilizes VideoRank™ technology, allowing the site to mine and filter content
• Filtering system focuses Metacafe on a smaller number of high-quality selected videos to drive a large amount of traffic
• Developing revenue share with posters based on CPMs
PartnershipsPartnerships
Strategic ProfileStrategic Profile
• Founded in 2004, Metacafe boasts a global audience of 17 million unique visitors (comScore Media Metrix)
• A desktop client is used to upload and download the videos only about two dozen of which are newly approved each day
• Revenue model based on advertising (banner ads)
• Original round of funding yielded $5 MM from Benchmark Capital; Significant backing from Accel Partners and Benchmark Capital in second round, receiving $15MM in venture funding in July 2006
• Based in Tel Aviv, Israel and Palo Alto, CA
• Currently seeking significant partners for licensing content
User MetricsUser Metrics
3.54.3
3.4
Jul-06 Aug-06 Sep-06
MM NR
Web page views (MM)
Time/ person(min.)
84.6 78.8 101.4
31.4 23.0 25.5
Unique Users (MM)Note:
estimated to generate ~100MM streams/ month
NA NA NA
Source: Nielsen//NetRating used for page view, time data, Metacafe.com; ComScore Video Matrix; BusinessWeek (8/06); TechCrunch.
page 28
Content
• User-generated
• Embed & blog it
Interactivity:
• Community
• Rate It
• Recommend
• Comment
Advertising:
• Banner Ads
• Video Ads
Metacafe
page 29
0.2
0.5
0.8
1.0
0.03
Aug-06 Sep-06 Oct-06 Nov-06 Dec-06
bix.com
Recent InvestorsRecent Investors • Enables consumers to create their Web-based talent competitions and enter existing competitions
• “Bix is a platform for creating contests online much in the mold of American Idol … The company plans to allow end-users to download their own audio clips and use them as ringtones for a small charge. Eventually the same content could be sold to others, and at that point the company is going to split the proceeds with the creators … Bix is hoping to cash in on the shift of ad-dollars to the online medium … these contests will be ideal vehicles for brand advertising.” (gigaOm)
Content OfferingContent Offering
Strategic ProfileStrategic Profile
• Formerly known as 900Seconds.com, bix.com was recently launched and operates a user-generated contest site
• Mike Speiser, Co-Founder and CEO was also the Co-Founder of ePinions
• Currently, the website is ad-free, depending solely on corporate-sponsored contests for revenue
• Bix.com is seeking alternative revenue sources, including advertisements on its site and user-generated ringtones
• Based in Palo Alto, California
• Workforce of 16 employees, mostly engineers from eBay
User MetricsUser Metrics
Unique Users (MM)
* Bix was launched on August 8th, 2006. Forward estimates provided by Citigroup.
Number of Rounds: 1
Total Amount Raised ($ in mm): $6.77
Investors:
Geoff Ralston
Source: Motngomery & Co.
page 30
bix.com
Advertising:
• Sponsored Contests
Content
• Contest featuring user-generated content
page 31
Photobucket
Ranking Among Photo SitesRanking Among Photo Sites
• Popular sites offers subscriber based services for uploading and sharing photos
• Reliable service that enables efficient sharing and publishing of visual digital content online
• Images and videos can be directly linked form Photobucket to an site, including MySpace, eBay, LiveJournal, Xanga, Friendster, and Neopets
Content OfferingContent Offering
Strategic ProfileStrategic Profile
• Founded in 2003 and managed by Alex Welch
• Named fasting growing site of 2005 by Nielsen/Netratings and now has over 25 million users
• The site features free sharing and publishing of online images, graphic art and videos that can be directly linked from Photobucket to any site
• Revenues based on subscription for premiere products and banner advertising
• Based in Palo Alto, California and has workforce of 25
User MetricsUser Metrics
Unique Users (MM)15.9 14.6 15.0
10.4 11.4 11.9
Jul-06 Aug-06 Sep-06
MM NR
Web page views (MM)
Time/ person(min.)
453.8 522.3 375.8
12.1 11.6 8.4
Source: Citigorup Corporate and Investment Bank.1. ComScore MediaMetric. September 2006.
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Advertising:
• Banner Ads
Content
• Slideshows and sharing
• Premiere product bundles
Photobucket
CONFIDENTIAL
APPENDIX B(Alternative Strategic Frameworks)
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Market Evolution: Observations and Hypothesis
Inception(2004 – 2005)
Rapid Growth(Early 2006)
Breadth(Late ’06 / Early ’07)
Depth(Late ’07 / Early ’08)
• Multiple market entrants grow at a similar rate
• Players refine offerings to “good enough” status and focus on a small base of content and/or functionality
• Leading destination sites emerge based on differentiated feature or piece of content– YouTube explodes as users discover “Lazy Sundays”– MySpace users flock to improved community features
• Successful followers begin to build audience through partners/syndication– Grouper grows through Yahoo links and Friendster partnership– BrightCove, Veoh, and Roo build successful syndicator businesses
• Leaders broaden offerings through acquisition and product extensions– MySpace launches video– Google acquires YouTube
• Succesful followers continue to invest in audience and broaden offerings
• Laggards focus on narrow vertical offerings, hoping to differentiate and find audience
• Leaders build or acquire to create depth in specific verticals
• Targeted offerings that have found an audience are acquired at a premium or survive on a smaller scale
• Targeted offerings with smaller audiences languish or exit
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ContentCollege Humor (0.9)
JibJab (0.6)RocketBoom(0.04)Revision3 (0.02)
Channel 101 (0.02)
Audience + Content
Break.com (3.3)
eBaum’s World (3.0)
Bolt.com (2.9)
Heavy.com (2.7)
Audience+Functionality
Six Apart (10.4)
Image Shack (9.3)
Xanga (5.5)
Reunion (4.7)
MetaCafe (3.1)
Digg (2.1)
Friendster (1.0)
Tagged (0.8)
PhotoBucket (12.0)
Roo Media (5.8)
Veoh (N/A)
Brightcove (N/A)
Feedroom (N/A)
Acquisition Candidates
Audience:Syndicators
Breadth DepthAudience:
Destinations
1st 2nd Avoid
AddictingClips (1.9)
Putfile (1.4)
DailyMotion (0.8)
vMix (0.8)
vidiLife (0.8)
ManiaTV (0.6)
Revver (0.5)
Vimeo (0.5)
Content + FunctionalityPure Video (0.9)
Bix (0.08)Blip.tv (0.06)Dave.tv (N/A)
FunctionalityMeetup (0.7)Piczo (0.5)
Text America (0.5)Imeem (0.2)eyeSpot (0.2)
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Digital Service Acquisition Priorities
Deep
Content + Functionality
Lower Priority
Potential for small to medium acquisitions
Deep
Lower Priority
Potential for small acquisitions to round-out feature set
Audience - Destination Site
Avoid
Pureplay destination sites generally overvalued
Broad
Audience + Content
High Priority
May require significant investment
Broad
Audience + Functionality
High Priority
May require significant investment
Deep
Lower Priority
Potential for small acquisitions to address specific demographics
Audience - Syndicators
High Priority
High-value opportunities