Intel Confidential – For Internal Use Only Connecting the World Lisa Lambert Managing Director, Intel Capital Software Solutions Group November 14, 2007

2 Web Evolution 2004: “Web 2.0” coined from conference. Headline companies mostly small and known to few Web 1.0: Building the web foundation (from static to dynamic) XML, RSS, Java, Web Services, AJAX, Flash, Web APIs : Entry of large corporations fuel growth (via acquisition, investment or engagement) : Major startups emerge as household names for consumer and enterprise (similar to first wave of the internet) The near future: Full force adoption and engagement from the enterprise; next generation of consumer soln’s *Other marks and brands are property of their respective owners

3 Environmental Trends Status Web 2.0 for the consumer remains very active and web 2.0 for the enterprise is experiencing strong growth. Majority of Web 2.0 technologies have enterprise penetration 85% for fortune 500 are users of multiple vendors for blogs, wikis, rss, and podcasting M&A Market still VERY active. Google & Yahoo remain very active. Cisco & Saleforce beginning to address the enterprise market. SAP & Oracle actively evaluating acquisition candidates Acquired by Google: Acquired by Cisco: Acquired by Salesforce: Acquired by eBay: Del.icio.us Acquired by Yahoo: Acquired by Microsoft: Reason for Consolidation: User acquisitions (monitizable via advertising) Talent acquisitions (primarily engineering – #1 reason for Google) Gap fillers for full internet “platform” High demand for Web 2.0 features by customers Competitive differentiation Low entry barriers into new markets (Cisco, Amazon) New technologies solving old problems (i.e., wikis for collaboration) *Other marks and brands are property of their respective owners

4 Web 2.0 Evolution Internet evolving into the next application platform – Application platform – Open Social – Open Platform – Widget platform Major movements to applications in the “cloud” Microsoft’s “Live” platform storage Cisco’s “virtual networked applications” Application Exchange moving components to SaaS model Unleashing from Windows: Very rich applications & media being developed – Focus back on computing power Online Video (Joost), Virtual Worlds (Second Life), Gaming (WorldsOfWarcraft), Online Office (MSFT, Google) *Other marks and brands are property of their respective owners

5 How does this impact the user? Internet All applications from any device, anywhere New Class of Collaborative Online Applications and Usage Models Dev ToolsConsumer Business

6 Internet Ecosystem Internet based applications for business, move from client/server Online MS Office, Desktop Next Gen B2C – Often via Mashups Social, Blogging, Tagging Information gathered via crawling then monetized Community Commerce Virtual Desktop & Office Services & Solutions Search Enabled Business Content Tools quick dev for web 2.0 Tools & Middleware Audio/Video/Gaming/Photo/Wikis monitor110 Consumer Internet Business Internet *Other marks and brands are property of their respective owners

7 Consumer Internet: Investment Focus

8 Consumer Internet Penetration Very high Year over Year growth numbers in Internet Usage Highest growth outside the US Majority of new users going to websites created as “web 2.0” companies. First evidence of sites with majority of users outside the US making top ten list. This list in 5 yrs will have much more global influence *Other marks and brands are property of their respective owners Source: Morgan Stanley, Alexa Global Tracking Rankings, 2007

9 Consumer Investment Opportunity Heavy activity and competition for content & community Space dominated by large corporations Likely Exit M&A Most white space completed by large players Intel should continue active engagement with large corps, with selective engagement with startups B A A B B B B *Other marks and brands are property of their respective owners

10 Consumer Internet Maturation Consumer Maturation Cycle of Web 2.0 Technologies Continued M&A frenzy sparked by Media Companies Some IPOs for Mature companies, slowing of M&A due to feature completion by large acquirers Popularity of Consumer Internet (Blogging penetration) 2007: “Web 2.0” mature and at its peak for M&A Early M&A Mostly via Google & Yahoo

11 Business Internet: Investment Focus

12 Enterprise Penetration Growth From 2006 to 2007, 50% increase in deployment (from ~20% to ~30%) Consumer web 2.0 technologies are now being consumed by the enterprise Consumers bringing their tools to work Estimated $4.4B market by –2007: the period of transformation 2008–2009: integration of the enterprise collaboration platform 2010 and beyond: “joined up” collaboration (.e.g., LinkedIn/Jive/Meebo for the enterprise)

13 Enterprise Investment Opportunity EnterpriseMicrosoftYahooGoogleAOLNewsCorpKey Startup(s) BloggingAASixApart WikiSocialText RSSNewsGator PodcastingPodShow Virtual OfficeBA, BZimbra Virtual DesktopBBBBBNetVibes Online Data StoreBABox.net 2.0 Dev ToolsLaszlo A = Acquired B = Built Activity still light but heating up in enterprise (including SAP & Oracle). Cisco is acquiring to fill gaps Space dominated by start ups, expected consolidation in 2007/2008 – likely via M&A by large companies Exception is MSFT who is building own capabilities Above list are most likely exit given their attention to web 2.0 and their recent interest in broadening into the enterprise (blogging first, wikis expected to be second) B B B B A A B *Other marks and brands are property of their respective owners

14 Enterprise Software Maturation Enterprise Maturation Cycle of Web 2.0 Technologies Expected Enterprise Penetration of Virtual Office, Social Networking Expected Enterprise Penetration of Virtual Desktop, Online Storage Popularity of Business Internet (Blogging enterprise penetration) 2007: Still early but real penetration and revenues 30%+ Enterprise Penetration of Blogging, Wikis, Podcasting and RSS (SuiteTwo)

15 Exits: Web 1.0 vs. Web 2.0 Less expensive internet bubble Recent average exits at > 10x revenues Although higher barriers for IPO today, advertising revenue is large enough for large potential IPOs today Source: Morgan Stanley, 2007

16 Intel Capital Web 2.0 Portfolio Social NetworksSecurity and ToolsVoice and Online Revenue Enterprise Collaboration *Other marks and brands are property of their respective owners

17 Intel Web 2.0 Appliance Operating System Software Infrastructure (Database, Web Server, etc.) Xeon 2.66 GHz System Admin Console, Single Sign-On, and Authen- tication SpikeNet Update Manager Integrated User Interface and User Management Wikis Social Text RSS Read News Gator RSS Pub Simple Feed Blogs Six Apart Social Networks Visible Path Search Lucene Document Repository & Workflow Reporting Engine *Other marks and brands are property of their respective owners

Intel Confidential – For Internal Use Only Intel Capital Investing for Global Impact

19 About Intel Capital Intel Capital, Intel's venture capital organization, makes equity investments in innovative technology start-ups and companies worldwide. Intel Capital invests in a broad range of companies offering hardware, software, and services targeting enterprise, home, mobility, health, consumer Internet and semiconductor manufacturing. Since 1991, Intel Capital has invested more than US$6 billion in nearly 1,000 companies in more than 40 countries. In that time, about 180 portfolio companies have been acquired by other companies and another 155 have gone public on various exchanges around the world. In 2006, Intel Capital invested about US$1.07 billion in 163 deals with approximately 60 percent of funds (excluding Clearwire) invested outside the United States. For more information on Intel Capital and its differentiated advantages, visit