M&A SNAPSHOT

Q4 2010
JANUARY 4, 2011
M&A SNAPSHOT
OVERVIEW COMMENTARY COMING SOON
M&A activity dropped a bit in Q4 2010 although the overall tone remains
good.  ANALYSIS OF VC-BACKED M&A EXITS
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 STRATEGIC THEMES DRIVING M&A ACTIVITY
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
SUMMARY OF QUARTERLY ACTIVITY IN
M&A DASHBOARD: NUMBERS AND TONE

NOTABLE ACQUIRERS: ACTIVE INFLUENTIAL BUYER ACTIVITY

M&A TRANSACTIONS: SUMMARY OF TRANSACTIONS BETWEEN

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

OTHER NOTABLE TRANSACTIONS: SUMMARY OF NOTABLE TRANSACTIONS

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

2
M&A DASHBOARD
COVERAGE MARKET TONE
Good. Slight increase in exit values offset
Architect Partners tracks M&A activity within the
by decrease in volume. Generally balanced
converging internet | mobile | digital media sectors.
buyer/seller dynamics.
The following assessment is focused on M&A
transactions with announced values of between
$25mm and $1B as these typically represent successful 2009 2010
business-building endeavors. Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
68 68
53 53
46
41 38 40

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

$14
$11 $12 $12
$9
$6 $6
$5

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

18 17 18
16
12
10
7
5
Venture-Backed M&A Exits (#)...................................................
$146
$128
$100 $100 $98 $105
$85 $75

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

55% 52%
48% 49%
43% 45%
41% 38%

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

372 368
362
341

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

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

3
NOTABLE ACQUIRERS
The 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.

ACQUIRER # TARGET

2 WALLETIN

2 SPECTRUM
LICENSES

4
NOTABLE ACQUIRERS (continued)
ACQUIRER # TARGET
2

1
INDIA

5
M&A TRANSACTIONS: $25MM-$1B
Below 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.

ANNOUNCED TRANSACTION AP INSIGHT SM

# DATE ACQUIRER TARGET VALUE ($mm) TARGET DESCRIPTION M&A ALERT VC-BACKED

NON-SERVICE
NON-SERVICEPROVIDER
PROVIDERTRANSACTIONS
TRANSACTIONS
1 11/02/2010 Oracle Art Technology $951 Provides eCommerce software that enables enterprises to provide a
1 11/02/2010 Oracle Art Technology
Group $951 Providesonline
cohesive eCommerce software
and mobile that enables
customer shoppingenterprises to provide a
experience.
2 12/22/2010 Rovi GroupSolutions
Sonic $698 cohesive digital
Develops online content
and mobile customer
delivery shopping
solutions experience.
over the Internet.
2 12/22/2010 Rovi Sonic Solutions $698 Develops digital content delivery solutions over the Internet.
3 11/08/2010 Amazon.com Quidsi $545 Operates as an online retailer for baby care, health, beauty, and
3 11/08/2010 Amazon.com Quidsi $545 Operates as
household an online retailer for baby care, health, beauty, and
essentials. !
household essentials. !
4 12/21/2010 Teradata Aprimo $525 Provides marketing software and solutions which enable marketers to
4 12/21/2010 Teradata Aprimo $525 Provides marketing
efficiently automate, software and solutions
deliver, analyze whichtheir
and manage enable marketers to
multi-channel !
efficientlycampaigns.
marketing automate, deliver, analyze and manage their multi-channel !
5 10/12/2010 DeNA ngmoco marketing
$403 Develops campaigns.
social games and social game networking platform.
5 10/12/2010 DeNA ngmoco $403 Develops social games and social game networking platform.
!
!
6 10/26/2010 Francisco Partners Source Photonics $259 Designs, manufactures, and sells optical communication products for
6 10/26/2010 Francisco Partners Source Photonics $259 Designs, manufactures,
telecommunication andand
systems sellsdata
optical communication
communications products for
networks.
7 12/07/2010 Salesforce.com Heroku $252 telecommunication
Operates systemsfor
an online platform andsoftware
data communications
development. networks.
7 12/07/2010 Salesforce.com Heroku $252 Operates an online platform for software development.
!
8 12/03/2010 j2 Global Protus IP Solutions $212 Provides software-as-a-service communication tools for small to !
8 12/03/2010 j2 Global
Communications Protus IP Solutions $212 Providesbusinesses
medium software-as-a-service communication
and enterprise organizations.tools for small to !
Communications mediumandbusinesses andelectronic
enterprise organizations. !
9 10/01/2010 Arrow Electronics Richardson $210 Designs distributes components serving the wireless
9 10/01/2010 Arrow Electronics Richardson RF,
Electronics, $210 Designs and distributes
communications, electronelectronic
device andcomponents serving
display systems the wireless
markets.
Electronics,
Wireless and RF,
Power communications, electron device and display systems markets.
Wireless and Power
Division
10 12/23/2010 Consolidated Media Division
JobsDB $206 Online recruitment network serving recruiters, job seekers and
10 12/23/2010 Consolidated
Holdings Media
Limited, JobsDB $206 employers.
Online recruitment network serving recruiters, job seekers and
Holdings Limited,
Macquarie employers.
Macquarie
Investment
Investment
Management
Management
Limited; SEEK
Limited;Tiger
Limited; SEEK
Limited; Tiger
Global
Global
11 12/20/2010 eBay Private Sale $200 Germany-based online shopping services through its platform
11 12/20/2010 eBay Private Sale $200 Germany-based online shopping services through its platform
www.brands4friends.de. !
www.brands4friends.de. !
12 12/15/2010 Scantron GlobalScholar $167 Online learning platform for college students.
12 12/15/2010 Scantron GlobalScholar $167 Online learning platform for college students.
13 11/12/2010 Discovery 50% Stake in Animal $156 Operates a television broadcasting network.
13 11/12/2010 Discovery
Communications 50% Stake
Planet in Animal
and 50% $156 Operates a television broadcasting network.
Communications Planetinand
Stake Liv 50%
14 11/16/2010 Juniper Networks Stake inNetworks
Trapeze Liv $152 Offers wireless local area network (WLAN) mobility systems for the
14 11/16/2010 Juniper Networks Trapeze Networks
(divestiture by $152 mobile
Offers enterprise
wireless local area network (WLAN) mobility systems for the
workforce.
(divestiture by
Belden) mobile enterprise workforce.
15 11/04/2010 American Express Belden)
Accertify $150 Provides software solutions, tools, and strategies for e-commerce
15 11/04/2010 American Express Accertify $150 companies.
Provides software solutions, tools, and strategies for e-commerce !
companies. !

6
M&A TRANSACTIONS: $25MM-$1B (continued)
ANNOUNCED TRANSACTION AP INSIGHT SM
# DATE ACQUIRER TARGET VALUE ($mm) TARGET DESCRIPTION M&A ALERT VC-BACKED

16 10/21/2010
NON-SERVICE PROVIDER EasyLink Services
TRANSACTIONS Xpedite Systems, $105 Provides enterprise unified fax services.
International Premiere Global
1 11/02/2010 Corporation
Oracle Services
Art and
Technology $951 Provides eCommerce software that enables enterprises to provide a
Premiere
Group cohesive online and mobile customer shopping experience.
2 12/22/2010 Rovi Conferencing
Sonic Solutions $698 Develops digital content delivery solutions over the Internet.
17 10/26/2010 Broadcom Percello $98 Fabless semiconductor company that provides digital baseband
3 11/08/2010 Amazon.com Quidsi $545 Operates ascircuits.
integrated an online retailer for baby care, health, beauty, and !
household essentials. !
18 10/05/2010 Amazon.com BuyVIP $97 Allows members to participate in limited-time sales campaigns that
4 12/21/2010 Teradata Aprimo $525 Provides marketing
offer high-quality software
fashion andand solutions
lifestyle which enable marketers to
products. !
19 11/22/2010 Broadcom Gigle Networks $83 efficiently automate, deliver,(SoC)
Develops System-on-a-Chip analyze and manage
integrated their
circuits formulti-channel
home !
marketing campaigns.
networking adapters, which plug into a power outlet. !
5
20 10/12/2010
12/02/2010 DeNA
eBay ngmoco
Milo.com $403
$75 Develops
Operates ansocial games
online andthat
service social gameusers
allows networking platform.
to research product !!
availability and prices online for purchase in a local store.
6 10/26/2010 Francisco Partners Source Photonics $259 Designs, manufactures, and sells optical communication products for
21 11/05/2010 Novatel Wireless Enfora $71 Provides wireless networking
telecommunication devices
systems and and applications networks.
data communications that enable
7 12/07/2010 Salesforce.com Heroku $252 companiesantoonline
Operates accessplatform
and analyze locationdevelopment.
for software and other important !!
8 12/03/2010 j2 Global Protus IP Solutions $212 information from their geographically
Provides software-as-a-service dispersedtools
communication assets.
for small to
22 12/15/2010 KDDI
Communications KKBOX $60 Online streaming
medium music
businesses and operator based
enterprise in Taiwan.
organizations. !
9
23 10/01/2010
11/03/2010 Arrow Electronics
PDI Richardson
group DCA $210
$55 Designs and distributes
Multichannel interactive electronic components serving
digital communications agency.the wireless
24 10/13/2010 Qualcomm Electronics, RF,
iSkoot $52 communications,
Optimizes electron
non-video data device and display
traffic between hostsystems
serversmarkets.
and processing -
Innovation Center Wireless and Power limited feature phones. !
25 12/01/2010 Ericsson (China) Division
Guangdong Nortel $50 Joint venture between Nortel and local Chinese corporations and
10 12/23/2010 Consolidated Media
Communications JobsDB
Telecommunications $206 Online recruitment
telecom operators. network serving and
Offers research recruiters, job seekers
development, and
manufacturing,
Holdings Limited, Equipment employers.
network support and customer services in China.
Macquarie
Investment
26 11/05/2010 QuinStreet
Management Car Insurance.Com $50 Online auto insurance comparison site.
27 11/17/2010 Limited; SEEK
Imagination HelloSoft $47 Provides Video over IP, Voice over IP and wireless LAN technologies.
Limited; Tiger
Technologies !
28 11/04/2010 Global
Pace Latens Systems $46 Develops software-based Conditional Access and Middleware for pay-
TV and Internet protocol television (IPTV) operators.
29
11 12/23/2010
12/20/2010 Chengdu
eBay B-ray Shanghai Chenyan
Private Sale $40
$200 Mobile game developer
Germany-based for iOS. services through its platform
online shopping
Media Information www.brands4friends.de. !
12 12/15/2010 Scantron Technology
GlobalScholar $167 Online learning platform for college students.
30 12/21/2010 QSC IP Partner $33 Offers data center and storage solutions that enable audio and video
13 11/12/2010 Discovery 50% Stake in Animal $156 Operates a television broadcasting network.
streaming.
Communications Planet and 50%
Stake in Liv
31
14 11/09/2010
11/16/2010 The Hut Networks
Juniper Group Lookfantastic Group
Trapeze Networks $31
$152 Online shoppinglocal
Offers wireless site area
for hair and beauty
network (WLAN)products.
mobility systems for the
32 10/21/2010 Advanced Digital (divestiture
Pirelli by
Broadband $31 mobile enterprise
Provides broadbandworkforce.
access and photonics solutions for telecom
Broadcast Belden)
Solutions operators and service providers.
15
33 11/04/2010
12/06/2010 American Express
VODone Accertify
3guu.com $150
$30 Providesand
Designs software solutions,
develops mobiletools,
gameand strategies
platform that for e-commerce
allows users to
companies.games on their mobile phones.
download !
34 12/14/2010 Imagination Caustic Graphics $27 Offers 3D graphic rendering services.
Technologies
35 10/12/2010 Platinum Equity Ulticom $26 Designs, develops, markets, licenses, and supports network signaling
solutions software and hardware for use in the communications
industry.

7
M&A TRANSACTIONS: $25MM-$1B (continued)
ANNOUNCED TRANSACTION AP INSIGHT SM
# DATE ACQUIRER TARGET VALUE ($mm) TARGET DESCRIPTION M&A ALERT VC-BACKED

SERVICE PROVIDER TRANSACTIONS

1 12/06/2010 UPC Polska Aster Sp $805 Provides cable television, broadband Internet, and fixed line telephone
services in Poland.
2 12/06/2010 Macquarie Capital Ceske $762 Operates as television broadcasting company enabling digital
Funds (EU) Radiokomunikace distribution of TV signal and digital terrestrial TV broadcasting in the
Investment Arm Czech Republic.
3 10/01/2010 EarthLink ITC^DeltaCom $573 Provides communication services including data and voice for small
and medium-sized businesses in the Southeast states.
4 11/16/2010 Mobile Telesystems Sistema Telecom $429 Provides wireless and fixed-line communications services and Internet
Group banking services in Russia.
5 10/05/2010 Rogers Atria Networks $418 Owns and operates fibre-optic networks in Canada.
Communications

6 10/13/2010 Partner 012 Smile Telecom $416 Israeli-based telecommunication service provider offering telephone
Communications and internet services.
Company
7 12/20/2010 EarthLink One $370 Provides telecommunication services including data and Internet, VoIP
Communications 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.
8 11/29/2010 Cequel NPG Cable $350 Provides cable communications and services in California and Arizona.
Communications
9 10/21/2010 C&M 84.8% stake in GS $337 Cable broadcasting and Internet service provider in South Korea.
Gangnam
Broadcasting
Corporation and
99.8% stake in GS
Ulsan Broadcasting
10 12/22/2010 EQT Partners Hafslund Fibernett $247 Operates dark fiber networks in Norway.

11 12/02/2010 Cable & Wireless The Bahamas $210 Provides telecommunications services including wireless, mobile
Communications Telecommunications trunking, private line, ISDN, cellular and, high speed DSL Internet
Company services in the Bahamas.
12 11/01/2010 LAP Green Network Societe des $90 Provides fixed and international telecommunications services including
Telecommunications DSL internet service, CDMA mobile services and prepaid calling plans in
du Tchad the Republic of Chad.
13 10/07/2010 Open joint stock Metrocom JSC $67 Provides telecommunication services, Internet access, and data
company MegaFon transmission services in Russia.
14 11/10/2010 Daisy Group Spiritel $64 Provides integrated communications services including IP
communications, mobile telecommunications and network services in
the U.K.
15 12/16/2010 Narodowy Fundusz Mobyland $59 Mobile operator. Offers telecommunication services in Poland.
Inwestycyjny Midas

16 11/11/2010 Primus Arbinet $33 Provide data and voice communications services (including VoIP
Telecommunications routing, traffic monitoring and internet exchange) for fixed, mobile,
and wholesale carriers in the U.S.
17 10/06/2010 Empresa Nacional Transam $27 Offers wireless telephony and broadband services in Chile.
de Comunicaciones and
Telecomunicaciones Will
18 12/24/2010 ZAO Comstar- Lanck Telecom $25 Offers voice services to carriers and retail operators including PSTN,
Regions GSM and packet based voice connections in Russia.

8
M&A TRANSACTIONS: OTHER NOTABLE
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.

ANNOUNCED AP INSIGHT SM
# DATE ACQUIRER TARGET TARGET DESCRIPTION M&A ALERT VC-BACKED

1 12/03/2010 Google Widevine Offers a multiplatform, multiformat DRM (Digital Rights Management)
!
and video optimization solution.
2 10/29/2010 Microsoft Canesta Develops 3D motion-sensing chips and software which enable
!
developers to add motion recognition capabilities.
3 10/19/2010 Critical Path Mirapoint Software Designs and supplies mail server and messaging appliances for
enterprises, service providers, educational institutions, and government
entities.
4 10/19/2010 NCR Mobiqa Provides mobile ticketing and mobile couponing solutions in the United
Kingdom and internationally.
5 10/05/2010 Yahoo! Dapper Provides technical solutions for companies and developers to interact
!
with Web content.

6 10/05/2010 BMC Software Neptuny Provides optimization solutions for telecommunication operators and
IPTV providers.
7 10/05/2010 Ticketscript Trinity Mobile Provides mobile ticketing, couponing, and marketing solutions in the
United Kingdom.
8 10/01/2010 Microsoft Vivaty Operates a 3D virtual community Website. !
9 10/01/2010 Velti Mobclix Operates a mobile ad exchange network through its open marketplace
platform and account management solution.
10 10/01/2010 Google BlindType Virtual keyboard developer.