Gridley’s Mobile New York Industry Roadmap

Tips for a Successful

Mobile Fundraise

March 2012

2

13%

48%

74%

56%

2%

29%

8%

27%

9%10%

46%

36%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2005 2006 2007 2008 2009 2010 2011

Africa Arab States Asia & PacificCIS Europe The Americas

Globally, Mobile Penetration is Significantly Higher

than Penetration of Landline Phones or the Internet

Source: International Telecommunication Union, 2011

10%13%

39%

2% 1%

9%

15%

26%23%

46%

29%33%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2005 2006 2007 2008 2009 2010 2011

Africa Arab States Asia & PacificCIS Europe The Americas

53%

74%

143%

12%

27%

97%

23%

60%

120%

92%

52%

103%

0%

20%

40%

60%

80%

100%

120%

140%

160%

2005 2006 2007 2008 2009 2010 2011

Africa Arab States Asia & Pacific CIS Europe The Americas

Mobile phone penetration increased in the Americas from 52% in 2005 to 103% in 2011…

…while landline phone penetration decreased 3%.. . .. and Internet penetration increased to 56% or ~half mobile

Internet User Penetration RatesFixed Telephone Lines Penetration Rates

Mobile Cellular Subscriptions Penetration Rates

3

Conversion from Feature Phones to Smartphones Has

Been Accelerating Over the Past Few Quarters…

…This trend is likely to continue as hardware costs continue to fall. By 2015, over 80% of US

mobile users are expected to have smartphones, up from 48% at the end of 2011

US Smartphone Penetration(1) % of US Users with Smartphones(2)

Note: Dashed lines indicate extrapolated data.

(1) Source: The Nielsen Company.

(2) Source: Goldman Sachs (June 2011).

(3) Source: Forrester Research (2010).

% of US Users with Tablets (3)

52%48%

79%

90%87% 86%

84% 83%81%

77%75%

72%

62%

57%

10%13% 14%

16% 17%19%

21% 23%25%

28%

38%43%

2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11

Feature Phone Smartphone

Accelerating User Growth

1-3%

5%

Almost

50/50

8%

15%

20%

25% 25%

2011 2012 2013 2014 2015

48%

64%71%

77% 81%

2011 2012 2013 2014 2015

4

Mobile Ecosystem

Mobile Coupons

e-Commerce Mobilizers

Payments

Digital Inventory Rewards / CLOs

Bar Code Scanners

Marketing Services Integrated Systems

Social

Mobile Discovery

Marketing Services / Advertising / Analytics Content / Social M-Commerce Payments / In-Store

Mobile Ad Networks

AnalyticsDSPs Exchanges

M-Commerce Tech

Content

Gaming

Video

5

The More Developed Japanese Market Gives a Hint

of What To Expect in the US in the Next Few Years

Mobile Activities in the U.S., EU5, and Japan by % Share of Total Mobile Users

Source: comScore MobiLens, 3 month average ending December 2010, Japan data for December 2010 only

23%

21%

20%

18%17%

16% 16%

10% 10%

8%7%

7%6%

4%

25%

15%

26%

13%

14%

12%

25%

8%

7%7%

5% 5%6%

5%

16%

32%

16%

17%

4%

18%

13%

17%

10%

14%

4%

9%

23%

3%

Games Search Capture

Video

Maps Instant

Messaging

Sports Info Music Financial

News / Stock

Quotes

Restaurant

Info

Traffic

Reports

Classifieds Online Retail TV / Video Travel

Service

U.S. EU5 Japan

In the future, US consumers will probably spend more time viewing videos and TV, searching,

and accessing financial news and traffic reports using their mobile devices

Poised for

Growth

Poised for

Growth

6

Sources: (1) Chetan Sharma (January 2011), (2) eMarketer (September 2011)

Breakdown of US Mobile Ad Spending ($MM)(2)

Relative Efficacy of Mobile vs. Other Advertising Media (1)

Mobile Ads Are More Targeted, Making them More

Effective and Compelling Than Other Media

$633

$1,600

$1,767

$396

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

$5,000

2010 2011 2012 2013 2014 2015

Messaging Display Search Video

US Mobile Ad Spending ($MM)(2)

100 90 70 80 80Mobile

50 50 80 40 60Internet

50 30 901

020TV

401

020

1

0

1

0Print

601

040

1

0Radio

Reach Targeting Engagement Viral Transaction

$4,396

$3,381

$2,523

$1,802

$1,226

$743

79%

65%

47%

40%

34%30%

2010 2011 2012 2013 2014 2015

0 %

1 0 %

2 0 %

3 0 %

4 0 %

5 0 %

6 0 %

7 0 %

8 0 %

9 0 %

7

52% 51%

34%

21%17%

7%

1%

Found it online for a

better price

Found it at another

store for a better price

Saw a negative review

about the item

Bought a similar item

instead

It was not available in-

store

No longer needed item Nove of the above

12%

3%

18%

24%

21%

24%

10% 9%

1%

13-15 16-17 18-19 20-24 25-34 35-44 45-54 55-64 65+

Source: KPMG.

% of Age Group Interested in Mobile TransactionsConsider Mobile Payments Mainstream

9% consider mobile

payments mainstream

globally today

83% believe mobile

payments will be

mainstream globally within

the next four yearsSource: Yankee Group.

Reasons for In-Store Purchase Abandonment Among US Smartphone Users

Mobile Phones Are Creating New In-Store

Purchasing Behavior and Transforming Payments

Source: comScore, US Smartphone User Survey (July 2011).

II. Digital New York

9

80

53

71

62 60

2007 2008 2009 2010 2011

Over 300 NY Digital Start-Ups Founded in the Last

Few Years…

Sources: CapIQ and Gridley estimates

Digital Start-Ups Founded in NY

10

Foster City

3%

McLean

6%

San Mateo

4% Redwood City

4%

Los Angeles

11%

Palo Alto

4%

San Francisco

34%

New York

27%

Chicago

4%

Seattle

3%

Foster City, 2

McLean, 1

San Mateo, 8 Redwood City, 4

Los Angeles, 8

Palo Alto, 11

San Francisco, 44

New York, 59

Chicago, 7

Seattle, 9

NY’s Emergence as a Tech Hub

New York City has become a true digital media innovation center

Source: CB Insights “Venture Capital Activity Report”

Total of Top Cities = $2,165 billion

Total including Others = $2,989 billion

Q3 2011 Internet VC Funding by Top Cities Q3 2011 Internet VC Deals by Top Cities

Total of Top Cities = 153

Total including Others = 308

Bay Area

77

Bay Area

$1,277 bn

11

NY Ecosystem has Very Different Roots and Growth

Opportunities than Silicon Valley

Operational

Efficiencies

LeadershipTalent

Engineering

Talent

Creative

Talent

Strategic

Partnerships

Strategic

Acquirers

Key

Customers

Internet Services

AdvertisingData Services

Wall Street

Business

DevelopmentMediaFashion

12

Source: Capital IQ, TechCrunch, public filings, and press releases

$0

$800

(Enterprise Value

in $M)

$200

$400

2007 2008 2009 2010 2011

$1,000

Top 25 Private Digital NY Sale TransactionsJanuary 2007 – December 2011 (Disclosed deals / rumored pricing available)

13

SocialMarketingeCommerceContent 9 4 15 4

NY Area Private Mobile Companies (32)

14

Source: Capital IQ, TechCrunch, public filings, and press releases. *rumored value

Date

06/15/2011

06/13/2011

02/06/2011

01/19/2011

02/03/2010

01/25/2010

09/08/2011

06/17/2010

08/05/2008

09/07/2010

Acquirer/Target

Transaction

Value (in $M)

$524

400*

315

296

225

200*

151

135

125

120

1)

2)

3)

4)

5)

6)

7)

8)

9)

10)

Top 10 Private Digital NY Sale TransactionsJanuary 2008 – December 2011 (Disclosed deals / rumored pricing available)

15

BuyoutGrowth Equity

($10M-$50M)

Seed

(<$2M)

Early Stage

($1M-$10M)23 27 20 7

Note: Firms may be active in more than one category. Source: Capital IQ, TechCrunch, public filings, and press releases

“The Locals” - Digital Focused VC/PE Firms

Headquartered in NY Area (61)

16

Source: Capital IQ, TechCrunch, public filings, and press releases

Seed

Early Stage

Growth

1-3 4-10 >10

Buyout

1-3 4-10 >10 71921

“The Locals” - Digital Focused VC/PE Firms

Headquartered in NY Area

By Number of NY Area Digital Investments January 2008 – December 2011

17

BuyoutGrowth Equity

($10M-$50M)

Seed

(<$2M)

Early Stage

($1M-$10M)9 10 11 5

“The Satellites” - Digital Focused VC/PE Firms

With a NY Office (24)

Note: Firms may be active in more than one category. Source: Capital IQ, TechCrunch, public filings, and press releases

18

“The Satellites” - Digital Focused VC/PE Firms With a NY Area Office

Source: Capital IQ, TechCrunch, public filings, and press releases

Seed

Early Stage

Growth

1-3 4-10 >10 276

By Number of NY Area Digital Investments January 2008 – December 2011

19

Growth Equity ($10M-$50M)

Seed (<$2M)

Early Stage ($1M-$10M)

8 30 27

Note: Firms may be active in more than one category. Source: Capital IQ, TechCrunch, public filings, and press releases

“The Outsiders” - Digital Focused Non-NY VC/PE

Firms (44)

20

“The All-Stars” - VC/PE Firms with at Least 5 NY Area Digital Investments

Source: Capital IQ, TechCrunch, public filings, and press releases

“The Locals” “The Satellites” “The Outsiders”

Seed

Early Stage

Growth

11720

January 2008 – December 2011

21

• Digital NY is getting crowded with lots of startups. Be sure of your objectives and how to

achieve them.

• There is a quality group of NY-based technology focused lawyers, accountants and recruiters –

network into them.

• Not everyone will be able to sell for $100MM+ valuations. Be realistic about where you stand

on your chances.

• The scope of what is "strategic" to a buyer is constantly expanding. Make sure to keep as many

lines of communication open to large organizations.

• There are LOTS of outside capital. Think through what is the

right amount for you.

• Choosing a VC is as important as choosing a co-founder. It

could be a 5+ year relationship, so get as much outside

perspective on them as possible.

− Focus on the partner involved, not the firm overall.

Advice for the Entrepreneur

III. Gridley Overview

23

Gridley Overview

Gridley & Company, a New York-based boutique investment bank, provides advisory

services to companies in the Information Services industry

Leading Boutique • Sharp focus provides clients with valuable strategic insights and perspectives

• Specialize in Internet Services, Digital Media & Marketing Services, Data

Services, Financial Technology, and SaaS & Outsourcing Services

• Founded in 2001

• Headquartered in New York, NY

Strong Reputation • Strong industry reputation on assignments led by senior bankers

• Experienced, bulge-bracket trained M&A bankers – The “A” Team

Trusted Advisor • Thoughtful ideas – not just logical combinations

• Deliver value to buyers, sellers, and investors alike

• Broad industry network developed over 25+ years with industry leaders,

emerging growth companies, and senior investors

Gridley & Company

24

INDEPENDENT ADVICE

INTEGRITY

Gridley’s Differentiated Strategic Approach

Our broad network allows us to discern important trends early in their development, advise

clients on the best strategies to profit from those trends, and execute successful transactions

Strong Network of Relationships

• Split time 1/3, 1/3, 1/3 between strategics,

VC/PE firms, and private company CEOs

• Built our business by visiting over 400

companies a year annually for 10 years

• Have set up over 1,000 one-on-one “meet

and greet” meetings at our annual January

conference

INDEPENDENT ADVICE

INTEGRITY

Well-Known Thought Leadership

• Often hired by public company leaders to

advise them on major growth initiatives

• Approximately 25% of business is

retained, strategic buy-side work for

industry leaders and selected PE investors

• Use industry overviews to effectively guide

strategic buyers and PE investors

Ability to Strategically Position Companies Impressive Track Record

• Spend more time than our competitors on

the strategic positioning of our clients

• Work together to optimize market

positioning

• Offer strategic insights based on our

understanding and perspective of the

industry

• Over 25 year history of successfully

completing transactions

• Clients like us and the job we do

• Goal is 100% referencable clients

• “No client gets left behind”

25

Strategic Thought Leadership is Well Known

• Highly respected

quarterly newsletter

about industry trends

and corporate

finance/M&A activity

• Received by over 2,200

industry CEOs and

CFOs, investors, and

financial sponsors

• Business Insider:

IGNITION

• OMMA Display

• Capital RoundTable

• SIIA Midmarket Growth

Conference

• IAB Marketplace: Mobile

• OMMA Mobile

• Upstream Seller Forum

• Digital Hollywood NYC:

Media Disruption

• ad:tech NYC 2010

• Digital NY

• January Conference

• Mobile in May

• Annual Golf Outing

• AdTech Cocktail

Party

Quarterly Newsletter:

The Compass

Industry

Guides

Frequent

Industry Speaker

Gridley Hosted

Events

26

Our Team is Experienced, Focused, and Trained for

Success• Gridley’s bankers are experienced, bulge-bracket trained bankers – The “A” Team

• Recent additional hires add execution capability and further outreach

Team Member Background

Linda Gridley

President & CEO

• 25+ years relevant banking experience

• Prior firm experience at Lehman Brothers, Furman Selz, and ING Barings

• In depth knowledge of marketing services sector

– Successful sale transactions with KBM, M/A/R/C Group, PRIMIS, Communifx, and Digitaria

• Frequent industry conferences circuit speaker

Peg Jackson

Managing Director

• Extensive knowledge and experience in digital media and technology sectors as venture capitalist

• Managing Director at NeoCarta Ventures. Served on boards including Data Synapse (Acquired by Tibco),

Silverpop, and Zoom Systems

• Vice President of Business Development at NBC. Responsible for investments including Tivo, Preview

Travel (acquired by Microsoft), Whowhere (acquired by Lycos), Wink (acquired by Liberty)

Pratik Patel

Director

• 9 years banking experience, 5 years covering software and digital media sectors

• Prior firm experience at JPMorgan

Maura O’Neill

Vice President

• 7 years banking experience, extensively working with media and marketing services companies

• Prior firm experience at Lehman Brothers and CDG Group

Michael Lambe

Vice President

• 7 years transaction experience, executing transactions for leading private equity firms

• Prior firm experience at Harris Williams & Co.

Feng Hong

Associate

• 3 years tech banking experience

• Prior firm experience at Credit Suisse

27

Selected Recent Gridley Transactions

Gridley clients include industry leaders and premier emerging growth companies

Advisor

Undisclosed

Acquired by

WPP Group plc

Advisor

Undisclosed

Acquired by

ISIS Equity Partners, Inc.

Advisor

$138,000,000

Acquired

Modem Media, Inc.

Advisor

Undisclosed

Acquired by

ValassisCommunications, Inc.

Advisor

$58,000,000

Acquired

Performics, Inc.

Advisory Communications

Advisor

Acquired by

Systems, Inc. (ACS) d/b/a

Undisclosed

ARAG Group

Advisor

Acquired by

Channel Intelligence, Inc.

Undisclosed

Advisor

Acquired by

Minicom Digital Signage

Undisclosed

Advisor

Acquired by

Oversee.net

Undisclosed

Advisor

Acquired by

TeleTech Holdings

Undisclosed $20,500,000

Advisor

Acquired by

The Dolan Company

Advisor

Acquired by

WPP Group plc

Undisclosed

Advisor

Acquired

M3 Mobile Marketing

Undisclosed

Advisor

Acquired by

MDC Partners Inc.

Undisclosed

Advisor

Acquired

Pepperjam

Undisclosed

Advisor

Acquired

SilverlignGroup Inc.

Undisclosed $20,000,000

Placement Agent

Investment by

TZP Group LLCAcquired by

Roper Industries, Inc.

Advisor

$367,000,000

Advisor

$157,000,000

Acquired

e-Dialog, Inc.

Advisor

Acquired

FetchBack Inc.

Undisclosed

Advisor

SAS

Undisclosed

Acquired by

Advisor

Undisclosed

Acquired bySchulman, Ronca, &

Bucuvalas, Inc..Advisor

Acquired by

Undisclosed

Quest Software

Undisclosed

Email Business of

Advisor

Sold to

One to One Interactive, Inc.

Sold to

Ad Serving Business of

Advisor

Undisclosed

Aegis plcCo-Manager

$113,189,337

Secondary Offering

Issued Fairness Opinion

$17,450,000

Acquired by

Verisign

PrePay Intelligent Network Solutions Business Unit of

Advisor

Undisclosed

Parthenon Capital LLCSold to

$55,200,000

Follow-On Offering

Co-Manager

Undisclosed

Acquired by

Alliance Data Systems, Inc.

Advisor

Undisclosed

Acquired by

Carlson Marketing Group

Advisor

Marketing One to One, Inc. d/b/a

Advisor

GfK

Undisclosed

Acquired by

Gridley & Company LLC

10 East 53rd Street, 24th Floor

New York, NY 10022

212.400.9720 tel

212.400.9717 fax

Twitter: @gridleyco

www.gridleyco.com