Status Update

May 2008

– Confidential –

GSN & FUN

2– Confidential –

Status and Alternatives

• Prior to David Goldhill’s arrival, SPE was considering an exit of GSN– GSN’s core business was languishing– Governance issues associated with a 50/50 venture limited flexibility

• Our interest in GSN increased and governance concerns receded when:– David Goldhill arrived, began to reinvigorate GSN, and significantly improved earnings– GSN/FUN merger appeared to offer further expansion for the business on economically compelling

terms, with limited risk, and no negative impact on governance

• Diligence on FUN implies a deal may be feasible, but is not clearly compelling– Legal risks of skill games can be managed but not eliminated– We do not yet have an indication that Tokyo is comfortable with skill games– Although not obstructing the deal, IGT would not be enthusiastic– Liberty’s $200MM asking price is at best “fully valued,” potentially overvalued by up to $50MM

• A GSN/FUN partnership (rather than merger) can be structured to protect our financial interests, but is unattractive as it will make management more cumbersome

• Given these facts, we have 3 alternatives– Acquire ½ of FUN at $200MM, assuming significant financial risk and some legal risk– Negotiate FUN’s price to $150-$175MM, assuming some legal risk– Revisit an exit of GSN

3– Confidential –

• The slide J&J already created “FUN Forecasts an Aggressive Revenue CAGR of 52% from 2007-2010”

4– Confidential –

• The slide J&J already created “FUN’s 2008 Revenue Targets Represent a 3x Increase Over 2007 Performance”

5– Confidential –

$200MM for GUN is At Best “Fully Valued;” May be Overvalued by $50MM

Case Assumptions ’07-’10 Revenue

CAGR

NPV Considerations

FUN Management FUN hits all financial targets with the exception of acquiring free games companies

47% $252 Assumptions are aggressive and appear unrealistic

Liberty View at Acquisition

FUN EBITDA performance is in-line with projections included in proxy Liberty issued at acquisition

35% $204

Assumptions are possible and would imply Liberty’s price represents “Full and Fair Value”

Existing Revenues + Aggressive View of “Speculative”

Q4 revenues are annualized

Modest haircuts to speculative revenues (see next page)

34% $198

Existing Revenues + Conservative View of “Speculative”

Q4 revenues are annualized

Significant haircuts to speculative revenues (see next page)

27% $150

Let’s nudge up from $135

With conservative assumptions, fun is overvalued

Industry Growth FUN revenues grow in-line with overall casual game market growth

20% $102 If FUN tracks the industry, it is seriously over-valued

6– Confidential –

• Appendix

7– Confidential –

• Show their revenue build, our classification of revenues as “High Likelihood”, “Medium,” Low, and associated haircuts

8– Confidential –

• Show the resulting revenue forecasts and NPVs (as you already included in your two page “mystery envelope”