2009. March

by Semantics. Co., Ltd.

Challenge

Business Plan

Confidential : This proposal and all contents herein are the sole property of Semantics. Co., Ltd.Any reproduction or distribution of this document without the written consent of Semantics. Co., Ltd. is prohibited.

2

Table of Contents

1. Company Overview

2. Product , Service

3. Market & Marketing Strategy

4. Operations

5. Key People & Management

6. Finance

7. Risk Assessment

8. Viability

Appendix. Press Release Data

3

1. Company Overview

1. Vision2. Key Information3. Summary

4

1. Company Overview

• Vision

Our vision is

to make wonderful world

that shares and enjoys

fruitful information & knowledge on the web

without a obstacle of language & country

By using the next generation search platform

* Semantic Web ?

It derives from W3C director Sir Tim Berners-Lee's vision of the Web as a universal medium for data,

information, and knowledge exchange. World IT industry has been trying to develop the core technology of

the next generation search engine that understands meaning of words.

SemanticWeb is the next generation intelligent Web: a computer can understands words and sentences and

carry out logical reasoning. The intelligent Web analyses analogies and interrelations of words to search a

result that a user wishes to locate. It is the Stem Cell technology of IT industry.

5

1. Company Overview

• Key Information

Company SEMANTICS, Inc. / SEMANTICS, Lab.

CEO Arthur Cho

Head of Research CI Chung

Establishment April 2006

Business Internet search service, podcating servicing

Main Business www.qrobo.com / www.podics.com

Employee 47

Company URL www.semantics.co.kr

TEL 02) 6000-6002

FAX 0505-690-6000

6

1. Company Overview

• Summary

Intelligent Internet Company; Semantics Established SEMANTICS, Inc. in 2006 after it has invested 10 years to develop semantic based search engine

In 2008 the company has launched ‘Qrobo’; It is the world first commercialization of a semantic based

search engine

Built the world largest ‘Ontology’, Holding unique technology of building up ‘Ontology’ automatically

99.9% Automated/Computerized Search Engine:

Qrobo’s search robot can analyses meaning of web information and automatically sort them under

prefixed categories

Ranks web information by exposure order by the prefixed categories. It is called ‘Semantic Rank’ and

it helps to carry out accurate/relevant search

Intelligent Robotic Semantic Search Engine : Qrobo (www.qrobo.com)

Multimedia Listing Service Podcast – Podics (www.podics.com)

7

2. Product , Service

1. Technology2. Compare Competitors

8

2. Product, Service

• Technology

Technology that numerates meaning of words. Despite of a language

type whether it is English of French, the technology understands the

structure of the language, the meaning, numerically.

(This is the world unique commercialized technology)

The core technology can be applied to any language. A language

adaptation period is circa 1 month and then the technology can build

any adapted language search engine.

(2 months after the language adaptation period an Alpha site can be

launched. Within 1 year after the language adaptation period an official

site can be launched.)

I. Numerical Vector Language

9

2. Product, Service

• Technology

II. Application of the Numerical Vector Language has no limit

No, Linguists No, Dictionary No, Morpheme Analyzer

Machine Language 10001010110011010001100010101100110100010001010110011010001000101011001101000

Assembly Language

English Japanese Chinese French German

Qrobo Vector LanguageAutomated Transposition

EnglishVector

JapaneseVector

ChineseVector

FrenchVector

GermanVector

All Languages -‘One Standard Process’

10

2. Product, Service

• Technology

III. Intelligent Search Agent equipped with Semantic Web technology

The world largest ‘Ontology’

Real time ontology update : automatically abstracting ontology form

the web builds up its own ‘Ontology’ (the world unique technology)

At present 35 billion ontology has been built up (this is the world

largest)

More accurate/relevant search result through ‘Semantic Rank’ system

Searched information through the ‘Ontology(Knowledge Foundation)’

is analyzed by number of algorithms, such as semantic relation, birth

of the information and etc., then expose the most relevant

information on top rank. This allows Qrobo to provide more

accurate/relevant search result.

11

2. Product, Service

• Technology

Qrobo Original Technology

W3C Standard Technology

DataStudy Input

Humans

WebCrawling Automated Make

Robots

III. Intelligent Search Agent equipped with Semantic Web technology

12

2. Product, Service

• Technology

Qrobo.com35,000,000,000 Ontologies

about 3 months,no humans only robot

Qrobo Original TechnologyW3C Standard Technology

Another Site 10,000 ~ 100,000 Ontologies

about for many years

(2~5 years), many humans

III. Intelligent Search Agent equipped with Semantic Web technology

13

2. Product, Service

• Technology

IV. 99.9% Automation/Computerization (robot does it all)

Full automation from a planning to managing

Once a web site developer let the robot knows definition of a planned

service then the robot abstracts all relevant web information, ranks

them, monitors, and update information automatically

Reduces huge amount of manual work, such as sorting and editing

operation, therefore it requires the minimum manpower who can cover

the creative work that the robot can not do.

Automated/computerized management will let you have a huge

budget saving

14

2. Product, Service

• Technology

OriginalSemantic Search Technology

Automated Ontology Builder

Super Fast Development Timefor All language Service

Robot Management System

Highly Efficient System

Time & Real Cost SavingProfit Margin Increase

Focus on Service PlanningInnovative Trials for New Services

with Technology Barrier

IV. 99.9% Automation/Computerization (robot does it all)

15

2. Product, Service

• Technology

ONTOrobo Automatically builds up Qrobo Ontology Dictionary with abstracting web

information. (Ontology Builder)

DOCUrobo

ISSUErobo

TAGrobo

PERSONALrobo

- Qrobo’s 5 core ‘Serve Robot’

Analyses document/information within 0.03 seconds and then sort it out

under 1250 categories, such as culture, politics, finance and etc.

Analyses a keyword in real-time by year, month, date, season. Manages

lifecycle, popularity and preference of a keyword and then monitors

transition of issues that are relevant to the keyword.

Locate core words from a document/information and locate words that

they have high relevancy, and then automatically tags them to

document/information.

By the users various circumstantial information and previous search

preference, the robot recommends the most relevant search results.

16

2. Product, Service

• Technology

KnowledgeINFO

INFO

People

Intelligence

INFO

None Semantic Technology1(Human) : n(Info)

Semantic Technology1(Human) : 1(Robot) : n(Info)

ROBOT

KnowledgeINFO

INFO

People

Intelligence

INFO

17

2. Product, Service

• Technology

vs

vs

W3CSemantic Web

QroboSemantic Technology

OWL RDFXML

Manual

Semantic web Solution

Search Solution

Automated Ontology

Automated Semantic

Search Solution

Qrobo Original Technology

Qrobo Original TechnologyW3C Standard Technology

W3C Standard Technology

18

2. Product, Service

• Technology

Server Unit

Operating System

Clustering

Database System

Storage System

Making Server For Qrobo

Linux Based ‘Qrobo SemanNUX’

Qrobo Logical Clustering System

Mysql Based ‘Qrobo SemanSQL’

Qrobo Enterprise Storage System

Own Technology

19

2. Product, Service

• Compare Competitors

Yahoo

GoogleAltavista

Excite

Lycos

AskSEMANTIC

Powerset

Hakia

Quintura

Transition of Search Engine and Technology Comparison

20

2. Product, Service

• Compare Competitors

Supports -Yahoo

Supports -Wikipedia,Freebase

HAKIA.com POWERSET.com QUINTURA.com

HakiaManual

HakiaAutomated

Powerset Quintura

Semantic Technology Base

None Next Google.com

Transition of Search Engine and Technology Comparison

21

3. Market & Marketing Strategy

1. Forecast of IT2. Status & Forecast of Web Environment3. Status & Forecast of Search Engine4. Comparison Search Engine5. Search Ads (Korea)

22

3. Market & Marketing Strategy

• Forecast of IT

1990s 2000s 2010s

IT withIntelligence

Source: http://www.nri.co.jp/english/opinion/papers/2006/pdf/np2006102.pdf

Semantic Web Autonomic Computing

Agent-embedded Automobile Navigation Systems

Robots and Agents will Autonomically make Decisions by gathering and Accumulating expert knowledge.

IT Road Map Toward 2010 / Nomura Research Institute, Ltd.

IT Road Map Toward 2010, Semantic & Autonomic

23

3. Market & Marketing Strategy

• Status & Forecast of Web Environment

Artificial Intelligence

Personal Assistants

Ontologies

Taxonomies

KnowledgeBases

KnowledgeManagement

SemanticWebs

Intelligent AgentsEnterprise

Minds

GroupMinds

Lifelogs

SemanticWeblogs

The“Relationship”

WebDecentralisedCommunities

SmartMarketplaces

The GlobalBrain

Search Engines

Content Portals

Databases

File Servers

“Push”

PIMs

Web Sites

EnterprisePortals

Pub-Sub

MarketplacesAuctions

Groupware

Weblogs

Wikis

RSSCommunity

Portals

eMail

P2P File-sharing

Conferencing

IM

USENETSocial

Networks

Degree of Social Connectivity

Deg

ree

of In

form

atio

n C

onne

ctiv

ity

Semantic WebConnects Knowledge

Web 3.0The Metaweb

Connects Intelligence

Web 4.0

The WebConnects Information

Web 1.0Social Software

Connects People

Web 2.0

- The Intelligence is in the Connections

24

3. Market & Marketing Strategy

• Status & Forecast of Web Environment

Email

Social Networking

Groupware

JavascriptWeblogs

Databases

File Systems

HTTPKeyword Search

USENET

Wikis

Websites

Directory Portals

2010 - 2020

Web 1.0

2000 - 2010

1990 - 2000

PC Era1980 - 1990

RSS Widgets

PC’s

2020 - 2030

Office 2.0

XML

RDF

SPARQLAJAX

FTP IRC

SOAP

Mashups

File Servers

Social Media Sharing

Lightweight Collaboration

ATOM

Web 3.0

Web 4.0

Semantic SearchSemantic Databases

Intelligent personal agents

JavaSaaS

Web 2.0 Flash

OWL

HTML

SGML

SQLGopher

P2P

The Web

The PC

Windows

MacOS

SWRL

OpenID

BBS

MMO’s

VR

Semantic Web

Intelligent Web

Social Web

Web OS

Connections between people

Con

nect

ions

bet

wee

n In

form

atio

n

The Internet

Semantic Technology

- The Intelligence is in the Connections

25

3. Market & Marketing Strategy

• Status & Forecast of Search Engine

Databases

2010 - 2020

Web 1.0 2000 - 2010

1990 - 2000

PC Era1980 - 1990

2020 - 2030

Web 3.0

Web 4.0

Web 2.0 The World Wide Web

The Desktop Keyword search

Natural language search

Reasoning

Tagging

Semantic SearchThe Semantic Web

The Intelligent Web

Directories

The Social Web

Files & Folders

Keyword Search

Directory Search

Database Search

Semantic Search

2010-2020

2000-2010

Amount of data

Pro

duct

ivity

of S

earc

h

- Intelligent Search Services, Evolutionary trends of Web Search Technology, Semantic Search

26

3. Market & Marketing Strategy

• Comparison Search Engine

1st Generation 1.5th Generation 2nd Generation 3rd Generation

Name Yahoo AltaVista Google Qrobo

Method Directory Search Keyword SearchKeyword

+Ranking SearchKeyword

+Semantic Search

TechnologyDirectory sortingby manually

Search robotlocates webinformation butmanually sortthem out

Search robot locatesand evaluatesreliance of webinformation butsemi automaticallylist them

The next generationtechnology to protectuser from a flood ofirrelevant information

ProfitMakingModel

Banner AdsDisplay BannerPrematureKeyword Ads

ProactiveKeyword Ads

SemanticWeb OntologyKeyword Search Ads.Multi Linguistic Service

27

3. Market & Marketing Strategy

• Search Ads (Korea)

NaverOverture

KoreaInternet Advertisers

35,000

User

Daum

AdWordsInternet Advertisers

1,000,000Google Korea

Yahoo Korea

Advertising Sales Request Advertising Sales

Qrobo(Korea)

Qrobo(Japan)

Qrobo(Global)

Overture Korea

Overture Japan

AdWords

Internet Advertisers35,000

Internet Advertisers50,000

Internet Advertisers1,000,000

Click search adsPay per click advertisingRevenue Sharing

28

3. Market & Marketing Strategy

• Search Ads (Korea)

Dec. 2008 Rankey Data 2008 I.R Data Analyzing Rankey & I.R DatasReasoning Data

1Day AverageU/V

1Day AverageU/V Annual Total Hit

Search ad revenues in 2008 total

(100 million Won)

Average search times by a

person per day

Unit Ads cost per a search

(Won)

Annual Unit cost per a

person (Won)

Naver Portal 12,361,491 Naver Search 9,734,170 63,304,541,500 6,084 18 9 62,501

Daum Portal 9,138,910 Daum Search 4,201,555 14,293,622,285 1,230 9 8 29,275

Empas Portal 2,307,106 Empas Search 968,188 2,447,831,255 223 7 7 17,765

Google KoreaSearch 800,623 3,517,678,740 247 12 7 17,765

EmpasSearch Ads Turnover

2.23billion Won (12.4million pounds) / 2008 / 960K person

Google KoreaSearch Ads Turnover

2.47billion Won (13.7million pounds) / 2008 / 800K person

Profit making model for Qrobo

1 st Year Goal: Levels with Empass and Google Korea

Search Ads

29

3. Market & Marketing Strategy

• Roadmap

2011Qrobo services in 199 countries with

135 different languages

2009Qrobo launch its service in 50 countries,

UK, US, China, Germany and etc, with 22 languages

November 2008Launch Qrobo Japan Beta Version

June 2008Launch Qrobo Korea Beta Version

2012Entering into the big 4 global search engine

30

3. Market & Marketing Strategy

• Goal of Business

Google | Yahoo | MS LiveWorld Market Share

US UK Europe Australia Japan

74.6 81.1 91.4 89.2 51.5

17.6 10.5 4.2 7.0 43.3

4.8 4.0

Google | Yahoo | Live | QroboBy 2012 Qrobo enters in world 4 major search engine group

World 3 major search engine •Google.com•Yahoo.com•Msn.com(Live.com)

8 popular search engines•Ask.com•Aol.com•Altavista.com •Netscape.com•Alltheweb.com •Go.com •Alexa.com •Dogplie.com

- 2008.2Q Efficient Frontier 2008.11 -

31

4. Operations

1. Operational Plan

32

4. Operations

• Operational Plan

Plan

2009

1st half : Inviting Government grant and overseas investment move IDC facility and increa

se sever up to 20,000 units

April launch Qrobo Korea, Aug launch Qrobo Japan

2nd half: Beta service in 22 countries increase server up to 30,000 units

2010

Meets(levels with) Yahoo Global Service

Increase server up to 50,000 units at the IDC

Market Qrobo Search Engine to the major portal sites

2011

Levels with Googles Global Service

Qrobo builds up world largest documents

(Secure over 10% of Korean and Japanese search engine market.)

2012 Entering in world 4 major search engine group (Google, Yahoo, MS Live, Qrobo)

2013 World top 2 search engine (Google, Qrobo)

33

5. Key People / Management

1. Executive profiles2. Organization

34

5. People / Management

• Executive profiles

CEO / CTO Arthur Cho

Research Institute

CI Chung

COO KY Kim

Experience: NewTech Information and Communication LabWebbizline Inc. Street Journal Mysearch Korea Inc. Semantics Korea Inc.

Senior ResearcherCEOCEO & PublisherCEOCEO

Education: Korea UniversityGraduate School of International StudiesExperience:National Intelligence ServiceORG STUDIO Inc.

IT & VentureAuditor

Education:Kyungpook National University(Doctorate, Physical Science)Experience:NewTech ZigZag LabMondex Telecom Inc.Mondex Network Inc.Semantics Korea

Head of R&D LabCEOCEOHead of R&D Lab

35

5. People / Management

• Organization Chart

Executive

Administration R&D

Platform Development Division Service Division

AuditorOversea

Intelligence Platform Development

Service OperationBusiness Service

Platform DevelopmentService Planning

36

6. Finance

1. Investment Plan

37

6. Finance

• Investment Plan

2009 2010 2011

KoreanService

April Grand Open

Levels with Google Korea 22.3 bil won turn over with 5.8

bil won profit

Secure 10% of Korean search engine market

Japanese Service

Aug Grand OpenLevels with

Goo.ne.jp and Google Japan

Secure 10% of Japanese search engine market

Global Service Beta Service in 22 countries

Levels up with Yahoo Regional

service

Levels up with Google Regional

service

2012

Global Service

Entering World 4 major search engine group

Inviting Investment

By Semantics

By Semantics

Inviting Investment

38

7. Risk Assessment

1. Profit Projection by US Keyword Ads Market Share2. Investment Highlight

39

7. Risk Assessment

• Profit Projection by US Keyword Ads Market Share

2009 2010 2011

USMarket 0.3%

About 40 millon dollor

3%About

450 million dollor

15%About

2.5 billion dollor

12,935,000,000 14,906,000,000 16,590,000,000 38,805,000 447,180,000 2,488,500,000$$ $

Only Search Keywords Advertisement

40

7. Risk Assessment

• Investment Highlight

Increase Profit

Maximize User SatisfactionUser can locate accurate/relevant web information faster searching by

Qrobo

Maximize Ads Effect Sponsor can expose theirs Ads to the targeted audience located by Qrobo.

Save Running Cost

Semantic Search Engine

▶Operated by automatic robotic search agent, operation efficiency gets

better but running cost reduces

▶Semantic Agent automatically collects data for new linguistic service

Unique Server Management

Technology

Unique Server Management Technology helps to reduce number of

computer processors and bands width to assist search engine. Low grade

(low cost) server meets the requirements.

Advanced High Performance Search Engine by SemanticWeb Technology

41

8. Viability

1. Advanced and Unique Technology promises rapid growth

42

8. Viability

• Advanced and Unique Technology promises rapid growth

Advanced High Performance Search Engine by SemanticWeb Technology

99.9% automatic/computerization provides low running cost business model

Intelligent Robotic operation requires at the very least manpower

Secure bigger growth engine with locating floating manpower from operation

to R&D

The advanced technology allows operating with low grade (low cost) server.

Floating budget can be invested for further growth.

Due to automatic development system and advanced numerical computer language,

it is possible to build up Global Service in a short period

With less than 10 manpower it takes 2 month to launch Alpha service, 6month to

launch Beta service and less than a year to launch official service.

(ex: Qrobo Japan only took 2 month to launch the current Alpha service with only 5 staff)

43

Appendix. Company Press Release

2007~2008 December

44

Appendix. Press Release Data

2007.3.8 The Electronic Times, Page 1 Top News

'Semantic Web Search engine, the First Commercial'

2007.03.08

2007.10.17

2008.01.22

2008.03.05

2008.06.17

2008.07.10

2008.07.11

2008.08.12

2008.09.09

2008.12.12

2008.12.19

2008.12.26

2008.12.29

45

Appendix. Press Release Data

2007.11.30 The Electronic Times

Qrobo.com, 2nd Patent Registration

2007.10.17 The Electronic Times

Qrobo.com, 1st Patent Registration

2007.03.08

2007.10.17

2008.01.22

2008.03.05

2008.06.17

2008.07.10

2008.07.11

2008.08.12

2008.09.09

2008.12.12

2008.12.19

2008.12.26

2008.12.29

46

Appendix. Press Release Data

2008.1.22 The Electronic Times

Qrobo.com, Released next week

2007.03.08

2007.10.17

2008.01.22

2008.03.05

2008.06.17

2008.07.10

2008.07.11

2008.08.12

2008.09.09

2008.12.12

2008.12.19

2008.12.26

2008.12.29

47

Appendix. Press Release Data

Semantics unveiled the world's first semantic search engine 'Qrobo' at CeBIT 2008

2008.3.5 Global news network AVING | USA

The world's first semantic search engine ‘Qrobo’ at CeBIT 2008

2007.03.08

2007.10.17

2008.01.22

2008.03.05

2008.06.17

2008.07.10

2008.07.11

2008.08.12

2008.09.09

2008.12.12

2008.12.19

2008.12.26

2008.12.29

48

Appendix. Press Release Data

2008.6.17 The Electronic Times,

The world's first semantic search engine ‘Qrobo’ at World IT Show

2007.03.08

2007.10.17

2008.01.22

2008.03.05

2008.06.17

2008.07.10

2008.07.11

2008.08.12

2008.09.09

2008.12.12

2008.12.19

2008.12.26

2008.12.29

49

Appendix. Press Release Data

2008.7.10 JoongAng Ilbo

Prevent distortion of public opinion Search Engine, Qrobo

2007.03.08

2007.10.17

2008.01.22

2008.03.05

2008.06.17

2008.07.10

2008.07.11

2008.08.12

2008.09.09

2008.12.12

2008.12.19

2008.12.26

2008.12.29

50

Appendix. Press Release Data

2008.7.11 CHOSUN Ilbo

Meaning the search engine ‘Qrobo’, Over Google

2007.03.08

2007.10.17

2008.01.22

2008.03.05

2008.06.17

2008.07.10

2008.07.11

2008.08.12

2008.09.09

2008.12.12

2008.12.19

2008.12.26

2008.12.29

51

Appendix. Press Release Data

2008.8.12 The Electronic Times

Qrobo Plan in Japan2008.11.5 The Electronic Times

Japanese trial Qrobo

1

2

1 2

Open for 2 months

2007.03.08

2007.10.17

2008.01.22

2008.03.05

2008.06.17

2008.07.10

2008.07.11

2008.08.12

2008.09.09

2008.12.12

2008.12.19

2008.12.26

2008.12.29

52

Appendix. Press Release Data

2008.9.9 Money Today

Qrobo, IPone visual search releases

2007.03.08

2007.10.17

2008.01.22

2008.03.05

2008.06.17

2008.07.10

2008.07.11

2008.08.12

2008.09.09

2008.12.12

2008.12.19

2008.12.26

2008.12.29

53

Appendix. Press Release Data

2009.12.12 KOREA Ministry, MKE Announcement No. 2008-198

Qrobo, Selected ‘World Class Product’

World Class Product

QroboNext-generation first-class product

Ontology automatically build an artificial intelligent robot, and to give meaning to all the live Web Search Engine

2008y, Score Comparison

SemanticsQrobo

SAMSUNGCDMA Station

DOOSANMedicine

Price 50 80 120

Quality 200 180 100

Technology 200 180 100Source: KOREA Ministry, MKE Announcement No. 2008-198

2007.03.08

2007.10.17

2008.01.22

2008.03.05

2008.06.17

2008.07.10

2008.07.11

2008.08.12

2008.09.09

2008.12.12

2008.12.19

2008.12.26

2008.12.29

54

Appendix. Press Release Data

2009.12.19 Computer Times / KIPO / MKE / Korea Ministry

‘Qrobo’ Korea 100 patents for Excellence

2007.03.08

2007.10.17

2008.01.22

2008.03.05

2008.06.17

2008.07.10

2008.07.11

2008.08.12

2008.09.09

2008.12.12

2008.12.19

2008.12.26

2008.12.29

55

Appendix. Press Release Data

2008.12.26 DongA Ilbo

The New Search Engine Google Surpasses

TIMAX vs MSQROBO vs GOOGLE(TIMAX: Korea No.1 SW Company)

2007.03.08

2007.10.17

2008.01.22

2008.03.05

2008.06.17

2008.07.10

2008.07.11

2008.08.12

2008.09.09

2008.12.12

2008.12.19

2008.12.26

2008.12.29

56

Appendix. Press Release Data

2008.12.29 Electronic Times

Qrobo, Asia's Largest Green IDC building

Government Techno ValleySupport for free

Electric Facilities 1,500kw ~ 5,000kwInternet Backbone

5GB ~ 20GBServer Facility

50,000 EA

2007.03.08

2007.10.17

2008.01.22

2008.03.05

2008.06.17

2008.07.10

2008.07.11

2008.08.12

2008.09.09

2008.12.12

2008.12.19

2008.12.26

2008.12.29

57

㈜시맨틱스www.sematics.co.krwww.qrobo.compodics.qrobo.com