m&a snapshot: q4 2010

M&A SNAPSHOTQ4 2010

JANUARY 4, 2011

M&A SNAPSHOTOVERVIEW COMMENTARY

M&A activity dropped a bit in Q4 2010 although the overall tone remains good.

M&A activity within the crucial $25 million - $1 billion transaction value range in our sector was down 22%, while median transaction size increased slightly by 7%. VC-backed company exits remained fairly consistent with the past several quarters.

The biggest M&A headline of the quarter was the deal that didn’t get done, Google’s attempted acquisition of Groupon. While not completed, transactions with rumored valuations at these levels are very important tone setters for the overall internet | mobile | digital media M&A market. In this particular case, it also illuminated the strategic importance of local business merchants to Google, and by extension, its competitors.

Other notable transactions include DeNA’s $403mm purchase of ngmoco (following Disney’s acquisition of Playdom in Q3 2010), eBay’s announcement of three acquisitions (Milo.com, Critical Path and Private Sale) and Amazon’s continued aggressive consolidation within online retailing (Quidsi and BuyVIP). We are also seeing an increase in M&A activity level in the internet | mobile | digital media sectors from traditional IT vendors, as demonstrated by Teradata's purchase of Aprimo and Oracle’s acquisition of Art Technology Group.

FOLLOWING ANALYSIS

M&A DASHBOARD:

NOTABLE ACQUIRERS:

M&A TRANSACTIONS:

OTHER NOTABLE TRANSACTIONS:

COMING SOON

ANALYSIS OF VC-BACKED M&A EXITS

STRATEGIC THEMES DRIVING M&A ACTIVITY

SUMMARY OF QUARTERLY ACTIVITY IN NUMBERS AND TONE

ACTIVE INFLUENTIAL BUYER ACTIVITY

SUMMARY OF TRANSACTIONS BETWEEN $25MM-$1B IN VALUE, AP INSIGHTSM M&A ALERT LINKS

SUMMARY OF NOTABLE TRANSACTIONS WITHOUT ANNOUNCED VALUE OR ABOVE $1B. AP INSIGHTSM M&A ALERT LINKS

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M&A DASHBOARDCOVERAGEArchitect Partners tracks M&A activity within the converging internet | mobile | digital media sectors. The following assessment is focused on M&A transactions with announced values of between $25mm and $1B as these typically represent successful business-building endeavors.

MARKET TONEGood. Slight increase in exit values offset by decrease in volume. Generally balanced buyer/seller dynamics.

Note: 1) Includes all internet | mobile | digital media transactions regardless of transaction value

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M&A Exits (#)..................................................................................

Total Consideration Paid ($b)......................................................

Venture-Backed M&A Exits (#)...................................................

Median Transaction Size ($mm).................................................

U.S.-based Target (%)....................................................................

All Internet | Mobile | Digital Media M&A Exits(1)(#)............

2010Q1 Q2 Q3 Q4

2009Q1 Q2 Q3 Q4

41% 48% 43%

38% 45%

55% 52% 49%

$6 $9

$11 $14

$6 $5

$12 $12

41 46 53

68

38 40

68 53

7 5

10

18

$100

$146

$85

$128

$75 $100 $98 $105

12

17 18 16

362 372 368 341

NOTABLE ACQUIRERSThe following acquirers are generally active or influential buyers within the internet | mobile | digital media sectors. Below, we highlight announced acquisitions in the fourth quarter of 2010.

4

ACQUIRER # TARGET

WALLETIN

4

3

3

3

2

2

2

2

2

2

2

2 SPECTRUM LICENSES

NOTABLE ACQUIRERS (continued)

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ACQUIRER # TARGET

INDIA

2

2

1

1

1

1

1

1

1

1

1

1

1

NON-SERVICE PROVIDER TRANSACTIONS

1 11/02/2010 Oracle Art Technology Group

2 12/22/2010 Rovi Sonic Solutions

3 11/08/2010 Amazon.com Quidsi

4 12/21/2010 Teradata Aprimo

5 10/12/2010 DeNA ngmoco

6 10/26/2010 Francisco Partners Source Photonics

7 12/07/2010 Salesforce.com Heroku8 12/03/2010 j2 Global

Communications Protus IP Solutions

9 10/01/2010 Arrow Electronics Richardson Electronics, RF, Wireless and Power Division

10 12/23/2010 Consolidated Media Holdings Limited, Macquarie Investment Management Limited; SEEK Limited; Tiger Global

JobsDB

11 12/20/2010 eBay Private Sale

12 12/15/2010 Scantron GlobalScholar

13 11/12/2010 Discovery Communications

50% Stake in Animal Planet and 50% Stake in Liv

14 11/16/2010 Juniper Networks Trapeze Networks (divestiture by Belden)

15 11/04/2010 American Express Accertify

$951 Provides eCommerce software that enables enterprises to provide a cohesive online and mobile customer shopping experience.

$698 Develops digital content delivery solutions over the Internet.

$545 Operates as an online retailer for baby care, health, beauty, and household essentials. !

$525 Provides marketing software and solutions which enable marketers to efficiently automate, deliver, analyze and manage their multi-channel marketing campaigns.

!

$403 Develops social games and social game networking platform. !

$259 Designs, manufactures, and sells optical communication products for telecommunication systems and data communications networks.

$252 Operates an online platform for software development. !$212 Provides software-as-a-service communication tools for small to

medium businesses and enterprise organizations. !$210 Designs and distributes electronic components serving the wireless

communications, electron device and display systems markets.

$206 Online recruitment network serving recruiters, job seekers and employers.

$200 Germany-based online shopping services through its platform www.brands4friends.de. !

$167 Online learning platform for college students.

$156 Operates a television broadcasting network.

$152 Offers wireless local area network (WLAN) mobility systems for the mobile enterprise workforce.

$150 Provides software solutions, tools, and strategies for e-commerce companies. !

M&A TRANSACTIONS: $25MM-$1BBelow highlights M&A transactions that have announced values of between $25mm and $1b announced in Q4 2010 within the converging internet | mobile | digital media sectors.

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#ANNOUNCED

DATE ACQUIRER TARGET












JobsDB







TRANSACTIONVALUE ($mm) TARGET DESCRIPTION

AP INSIGHTSM

M&A ALERT VC-BACKED





!












M&A TRANSACTIONS: $25MM-$1B (continued)

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#ANNOUNCED













JobsDB








AP INSIGHTSM

M&A ALERT VC-BACKED





!












16 10/21/2010 EasyLink Services International Corporation

Xpedite Systems, Premiere Global Services and Premiere Conferencing

17 10/26/2010 Broadcom Percello

18 10/05/2010 Amazon.com BuyVIP

19 11/22/2010 Broadcom Gigle Networks

20 12/02/2010 eBay Milo.com

21 11/05/2010 Novatel Wireless Enfora

22 12/15/2010 KDDI KKBOX

23 11/03/2010 PDI group DCA

24 10/13/2010 Qualcomm Innovation Center

iSkoot

25 12/01/2010 Ericsson (China) Communications

Guangdong Nortel Telecommunications Equipment

26 11/05/2010 QuinStreet Car Insurance.Com

27 11/17/2010 Imagination Technologies

HelloSoft

28 11/04/2010 Pace Latens Systems

29 12/23/2010 Chengdu B-ray Media

Shanghai Chenyan Information Technology

30 12/21/2010 QSC IP Partner

31 11/09/2010 The Hut Group Lookfantastic Group

32 10/21/2010 Advanced Digital Broadcast

Pirelli Broadband Solutions

33 12/06/2010 VODone 3guu.com

34 12/14/2010 Imagination Technologies

Caustic Graphics

35 10/12/2010 Platinum Equity Ulticom

$105 Provides enterprise unified fax services.

$98 Fabless semiconductor company that provides digital baseband integrated circuits. !

$97 Allows members to participate in limited-time sales campaigns that offer high-quality fashion and lifestyle products. !

$83 Develops System-on-a-Chip (SoC) integrated circuits for home networking adapters, which plug into a power outlet. !

$75 Operates an online service that allows users to research product availability and prices online for purchase in a local store. !

$71 Provides wireless networking devices and applications that enable companies to access and analyze location and other important information from their geographically dispersed assets.

!

$60 Online streaming music operator based in Taiwan.

$55 Multichannel interactive digital communications agency.

$52 Optimizes non-video data traffic between host servers and processing - limited feature phones. !

$50 Joint venture between Nortel and local Chinese corporations and telecom operators. Offers research and development, manufacturing, network support and customer services in China.

$50 Online auto insurance comparison site.

$47 Provides Video over IP, Voice over IP and wireless LAN technologies. !$46 Develops software-based Conditional Access and Middleware for pay-

TV and Internet protocol television (IPTV) operators.$40 Mobile game developer for iOS.

$33 Offers data center and storage solutions that enable audio and video streaming.

$31 Online shopping site for hair and beauty products.

$31 Provides broadband access and photonics solutions for telecom operators and service providers.

$30 Designs and develops mobile game platform that allows users to download games on their mobile phones. !

$27 Offers 3D graphic rendering services.

$26 Designs, develops, markets, licenses, and supports network signaling solutions software and hardware for use in the communications industry.

M&A TRANSACTIONS: $25MM-$1B (continued)

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#ANNOUNCED


SERVICE PROVIDER TRANSACTIONS

1 12/06/2010 UPC Polska Aster Sp

2 12/06/2010 Macquarie Capital Funds (EU) Investment Arm

Ceske Radiokomunikace

3 10/01/2010 EarthLink ITC^DeltaCom

4 11/16/2010 Mobile Telesystems Sistema Telecom Group

5 10/05/2010 Rogers Communications

Atria Networks

6 10/13/2010 Partner Communications Company

012 Smile Telecom

7 12/20/2010 EarthLink One Communications

8 11/29/2010 Cequel Communications

NPG Cable

9 10/21/2010 C&M 84.8% stake in GS Gangnam Broadcasting Corporation and 99.8% stake in GS Ulsan Broadcasting

10 12/22/2010 EQT Partners Hafslund Fibernett

11 12/02/2010 Cable & Wireless Communications

The Bahamas Telecommunications Company

12 11/01/2010 LAP Green Network Societe des Telecommunications du Tchad

13 10/07/2010 Open joint stock company MegaFon

Metrocom JSC

14 11/10/2010 Daisy Group Spiritel

15 12/16/2010 Narodowy Fundusz Inwestycyjny Midas

Mobyland

16 11/11/2010 Primus Telecommunications

Arbinet

17 10/06/2010 Empresa Nacional de Telecomunicaciones

Transam Comunicaciones and Will

18 12/24/2010 ZAO Comstar-Regions

Lanck Telecom


AP INSIGHTSM

M&A ALERT VC-BACKED

$805 Provides cable television, broadband Internet, and fixed line telephone services in Poland.

$762 Operates as television broadcasting company enabling digital distribution of TV signal and digital terrestrial TV broadcasting in the Czech Republic.

$573 Provides communication services including data and voice for small and medium-sized businesses in the Southeast states.

$429 Provides wireless and fixed-line communications services and Internet banking services in Russia.

$418 Owns and operates fibre-optic networks in Canada.

$416 Israeli-based telecommunication service provider offering telephone and internet services.

$370 Provides telecommunication services including data and Internet, VoIP and voice, Web and converged IP VPN, mobility, and managed services in the Northeast, Mid-Atlantic, Upper Midwest states, and in the District of Columbia.

!

$350 Provides cable communications and services in California and Arizona.

$337 Cable broadcasting and Internet service provider in South Korea.

$247 Operates dark fiber networks in Norway.

$210 Provides telecommunications services including wireless, mobile trunking, private line, ISDN, cellular and, high speed DSL Internet services in the Bahamas.

$90 Provides fixed and international telecommunications services including DSL internet service, CDMA mobile services and prepaid calling plans in the Republic of Chad.

$67 Provides telecommunication services, Internet access, and data transmission services in Russia.

$64 Provides integrated communications services including IP communications, mobile telecommunications and network services in the U.K.

$59 Mobile operator. Offers telecommunication services in Poland.

$33 Provide data and voice communications services (including VoIP routing, traffic monitoring and internet exchange) for fixed, mobile, and wholesale carriers in the U.S.

$27 Offers wireless telephony and broadband services in Chile.

$25 Offers voice services to carriers and retail operators including PSTN, GSM and packet based voice connections in Russia.

#ANNOUNCED


1 12/03/2010 Google Widevine

2 10/29/2010 Microsoft Canesta

3 10/19/2010 Critical Path Mirapoint Software

4 10/19/2010 NCR Mobiqa

5 10/05/2010 Yahoo! Dapper

6 10/05/2010 BMC Software Neptuny

7 10/05/2010 Ticketscript Trinity Mobile

8 10/01/2010 Microsoft Vivaty9 10/01/2010 Velti Mobclix

10 10/01/2010 Google BlindType

TARGET DESCRIPTIONAP INSIGHTSM

M&A ALERT VC-BACKED

Offers a multiplatform, multiformat DRM (Digital Rights Management) and video optimization solution. !

Develops 3D motion-sensing chips and software which enable developers to add motion recognition capabilities. !

Designs and supplies mail server and messaging appliances for enterprises, service providers, educational institutions, and government entities.Provides mobile ticketing and mobile couponing solutions in the United Kingdom and internationally.Provides technical solutions for companies and developers to interact with Web content. !

Provides optimization solutions for telecommunication operators and IPTV providers. Provides mobile ticketing, couponing, and marketing solutions in the United Kingdom. Operates a 3D virtual community Website. !Operates a mobile ad exchange network through its open marketplace platform and account management solution.Virtual keyboard developer.

A number of transactions are announced without disclosing transaction values. Below, we highlight a select few notable transactions which occurred within the fourth quarter of 2010.

M&A TRANSACTIONS: OTHER NOTABLE

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m&a snapshot: q4 2010

Documents

ma transactions

ma snapshotq4

ma activity level

venture ma exits

ma exitsstrategic themes

biggest ma headline

notable acquirersthe

transaction value range