MASiV 2014: The M&A Silicon Valley Gathering

The Key M&A Market Driver: CEO Confidence Source: Vistage CEO Survey, responses from 1,601 U.S. CEOs, surveyed between December 9 and December 18, 2013

MASiV 2014: The M&A Silicon Valley Gathering Global Tech Acquisitions Source: Capital IQ In Dollar Volume (Billions)

MASiV 2014: The M&A Silicon Valley Gathering Global Software and Internet Acquisition Activity – Last Ten Years Source: Capital IQ

MASiV 2014: The M&A Silicon Valley Gathering Source: Capital IQ Top-25 Acquirers in Software – Announced Acquisitions, Last Five Years 100+

MASiV 2014: The M&A Silicon Valley Gathering Source: Capital IQ Breakdown of Software-Internet Transactions by Transaction size – Last five years

MASiV 2014: The M&A Silicon Valley Gathering Source: Capital IQ Valuations in M&A – Avg. Multiples of Revenue

MASiV 2014: The M&A Silicon Valley Gathering Thoughts on What’s Going On Around Us Perspective - Five Years Ago – January, 2009: MySpace was bigger than Facebook and generated $490M revenue Nokia and RIM were the #1 and #2 smartphone manufacturers: 59% market share Tablets were a “failed market” - Newton Web access was 85% from PC’s (And in the general economy, we were on the precipice of the next Great Depression)

MASiV 2014: The M&A Silicon Valley Gathering So What’s Happened in Five Years?

MASiV 2014: The M&A Silicon Valley Gathering A Watershed Moment … High-growth marketplaces Uber, Etsy, AirBnB, etc High-growth social mobile apps - Snapchat, Foursquare, Tinder, Yelp, etc New finance platforms – Square, Bitcoin, Lending Club, etc Companies that are unable to innovate their way into these new markets must acquire, or they risk being marginalized, commoditized, or being made obsolete. New content platforms – Spotify, Hulu, Netflix, etc And others – health, travel, cloud storage, etc

MASiV 2014: The M&A Silicon Valley Gathering RevsEBITDACash Enterprise Value Google$59.6$21.5$54.7$336 Facebook$7.6$4.5$9.3$138 Yahoo!$4.4$1.5$1.8$40 Twitter$639M$52M$1.8B$32B Selected Financial Information (All $ in billions except Twitter)

MASiV 2014: The M&A Silicon Valley Gathering Google

MASiV 2014: The M&A Silicon Valley Gathering Google

MASiV 2014: The M&A Silicon Valley Gathering Google

MASiV 2014: The M&A Silicon Valley Gathering Google

MASiV 2014: The M&A Silicon Valley Gathering Google

MASiV 2014: The M&A Silicon Valley Gathering Google Google’s challenges: How do you continue to innovate at such a large scale? What do you do with all that cash? Search as it exists today may not look the same in 5 years Google’s opportunity: Contextual search and advertising Google play (payments) Still the most important acquirer in the land - $48B cash; $1B EBITDA monthly; investing across industries, geographies and stages 18 announced acquisitions in 2013; most notable was Waze; Eight robotics acquisitions Strategic growth areas for Google: 1.Search and Display advertising 2.YouTube, Android, and Chrome 3.New businesses to drive adoption and innovation - Social, Commerce, and Enterprise

MASiV 2014: The M&A Silicon Valley Gathering Yahoo Comeback acquirer of the year – 28 acquisitions in 15 months Marissa & Jackie Reses reinventing the company largely through acquisition Buying stock, talent and technology - investing in Yahoo’s core strength – content Tumblr – big bet, jury is still out. $1.8B cash to do more now; remaining 24% stake in Alibaba may bring $20B later What they need: Big bets to move the needle now, and great integration Speculative, emerging growth bets to to build the company’s future More talent acquisitions to bring more good people into the company Potential big buys: Pinterest, Foursquare, Zynga, Hulu, Millenial Media, something clever and unexpected in the content space?

MASiV 2014: The M&A Silicon Valley Gathering Facebook $7B revenues TTM, $2B EBITDA, $9B Cash + Short Term Investments Solved the mobile problem – half of revenue now coming from mobile advertising; great personal information; ideally situated for contextual search 2013: Seven announced acquisitions; four of which were mobile-related Strategic Need: -Address fragmenting mind share caused by new mobile social networks like Snapchat, Pinterest, Nextdoor -Diversify beyond their core social product -Targets: Yelp, Opentable, Pandora or Spotify, Blackberry, Yahoo!

MASiV 2014: The M&A Silicon Valley Gathering Twitter Public offering put $1.8B on Twitter’s balance sheet Key strategic priorities: -Increase user engagement and growth; revenue growth -Engagement with the TV industry One of the most active and acquirers in 2013: 9 Acquisitions Acquisition Opportunities: More mobile / mobile ad-tech acquisitions More entertainment acquisitions Build a Yahoo!-like eco-system Partner with another large content company -Ad management, optimization, reporting: Mo-Pub -TV: Trendrr -Contextual: Spindle -Big Data: Lucky Sort -Back-end technical: Ubalo -Music: We are hunted -User-Generated-Content: Vine -Talent: Boilerplate

MASiV 2014: The M&A Silicon Valley Gathering The Next Five Years