Opportunity Recognition Project Copyright 2008 by Luong & Lau Content-Based Image Search Engine It’s What’s on the Inside That Counts! Opportunity Recognition Project Copyright 2008 by Luong & Lau

Problems with Current Image Search Engines Heavily relies on file names / tagging 1 2 Hard to find similar images Our image search engine is different from current image search engines, which are heavily based on file names or user tagging. Based on image’s content, our image search engine will overcome the following problems: 1. Almost no one labels the image. 2. Most image tagging software do not use controlled vocabulary but allow free-form. 3. Point-and-shoot cameras give images generic file names 4. What if what I’m looking for is not the subject of the image? 5. What if I want to look for similar images? Moreover, our image search engine enables efficient management and further disposal of a lot of images, therefore paves the way for a large scale business application. 3 Desired image is within another image 4 Hard to organize photos efficiently

Why Isn’t Google Enough? We do not get what we really want! Why and How do we recognize this opportunity? Personal experience— If we input “candy” in Google, we do not always get the image related to candy. If I type in “Tiger” I get Tiger Woods on the front page as well as a “Tiger Cheerleading Team.” “Tiger” is a word in the file name and the images were from sites with a large page rank. I found the perfect image of a flower I wanted but it was in the background of an image of a barn. I have a picture of an insect but have no idea what it is. 2. Business investigation— Hospital need such technology to recognize cancers and other syndromes. Scholars need such technology to facilitate their research. Industries need such technology to facilitate their operations, for example, car rental firms need to use it to recognize their cars and manage their car database. Government need such technology to recognize criminals, etc.

Solution: Our Product and Its Benefits General-purpose content-based image search engine that can take an image as input Benefits: Find relevant images according to your criteria File name and metadata independent More accurate, refined categorization of images Ability to zone into individual pictures Could be used to narrow a large category to a specific category. Copyright regulation Criminal investigation Discovery and analysis for specific area Help categorize images automatically/efficiently Provide assistance in areas such as medical image processing and criminal facial recognition

Who Are Our Customers? Low End: Personal customers High End: Enterprise customers Search images (e.g., Candy Canes) Academia / Research (e.g., Copyright protection) Expand their collection (e.g., Facebook) Business (e.g., Mobile Phone Apps) Low End – Personal customers People who want to search images, expand their collection, categorize their pictures High End – Enterprise customers Academia/Research Plagiarism detection Unknown diseases Business Mobile phone applications Medical devices / New drug development Government Law Enforcement – Facial recognition of criminals Security Categorize their pictures (e.g., Cameras) Government (e.g., Law Enforcement)

Various Distribution Channels Online search Revenue by Ad. Direct Sales to Firms Image Search Service Search on PC Software free Expand user base Agent Sales to Firms Personal Users – Distributed free. Acquire revenue from advertisements and expand user base at the same time Official website provides on-line service Standalone product running on Desktop/Laptop Optional install for software partnerships Enterprise Users Direct sales – website, telephone, etc. Agent sales

Why it’s a prosperous opportunity? 1.Popularity of Digital Camera 2. Ubiquitous Digital Cameras 3. Large amount of image data on the web and corporate world Why it’s a prosperous opportunity? Popularity of Digital Camera – it grows from 53million in 2004 to estimated 92 million in 2008, a 15% CAGR. Further, Digital camera is ubiquitous in all kinds of mobile devices such as mobile phone, PDA – even camera phone grows from 2 Billion in 2005 to estimated 5 billion in 2008. Large amount of image data on the web and corporate world – even photos hosted on Flickr grows from 2.7 million in 2004 to 350 million in 2006. Cheaper and Faster storage media – cost per Giga bit goes from $3/Giga bit in 2002 to $.3/Giga bit in 2008. Booming Image processing demand – take just one section, medical-imaging market, it will go from 8.2 billion in 2002 to 11.4 billion in 2012. In sum, this is a really huge opportunity. 4. Cheaper and Faster Storage Media 5. Booming Image processing demand

Pro Forma Income Statement 2008 2009 Image Hosted on the web 500000000 600000000 Online-search Market Share 0.50% 5.00% Ad. Revenue 250,000.00 3,000,000.00 Enterprise mkt size 10,200,000,000.00 10,800,000,000.00 Enterprise Share 0.10% Enterprise Revenue 10,200,000.00 540,000,000.00 Yearly Revenues 10,450,000 543,000,000 Yearly Expenses Salary 384,000 2,256,000 Rental 48,000 120,000 Total Direct Costs 432,000 2,376,000 General and Administrative Insurance Expense 1,600 Advertising and Promotion 125,000 1,500,000 Accounting and Legal Fees 1,000 Website Design 25,000 Other G&A 10,000 15,000 Total G&A 162,600 1,542,600 Total Expenses 594,600 3,918,600 Net Income Before Taxes 9,855,400 539,081,400 Income Taxes @ 25% 2,463,850 134,770,350 Net Income   $7,391,550 $404,311,050 8 workers initially--- 4 R&D—outsourcing, 2000/month 2 Markets – 8000/month 1 Finance & Investor Relation – 5000/month 1 Operations – 3000/month Advertising & Promotion will use 50% of advertisement revenue – we will do a lot of marketing & promotion at first stage. Rental is direct cost since we calculate office space in accordance with number of employees. Other data pls refer to the xls file. The key is: even we make a conservative market share (.1%) in online service, we can still break even in the first year.