Shotech America Business Plan
Shotech America, the future leader of the North American e-marketing and e-communication industry
Last updated: July, 2006
Shotech America.
Confidential and Proprietary to Shotech America,  2000. Do Not Distribute.
DISCLAIMER
This BUSINESS PLAN has been prepared by Shotech America (hereafter referred to as
“the Company”), and contains confidential information. It is being delivered to select
parties who have expressed interest in providing financing to the Company. The sole
purpose of this memorandum is to help recipients decide whether to investigate this
opportunity in depth, with a view to submitting a proposal to finance.
While the information herein has been developed by the Company and is believed to be
accurate, the Company expressly disclaims any and all liability for the representations
or warranties, expressed or implied, contained in this business plan or for any omission
of information. In addition, the Company is not responsible for any other written or oral
communication transmitted or made available to a prospective financier excepting only
those particular representations and warranties which may form a part of a written
agreement to finance, if, as, and when, an agreement is executed, and subject to the
limitations and restrictions as may be specified in such an agreement.
NOTICE
This business plan shall not be copied, reproduced or distributed to others at any time
for any reason whatsoever without the prior written consent of the Company. It has
been delivered to prospective financiers for informational purposes only and upon the
express understanding that they will use it only for the purpose set forth herein.
Upon request, the recipient will promptly return or destroy all material received from the
Company (including this information package and related analysis), without retaining
any copies thereof. In furnishing this information package, the Company undertakes no
obligation to provide the recipient with access to additional information.
FINANCIAL NOTE
The projected financial information presented herein is unaudited and
has been
based on assumptions regarding future events. It is expected that as the Company
refines its operating policies and strategic relationships operating cost structure and
growth rate will be greatly affected. The projection is a work in progress and potential
investors and partners will receive updated versions of the projection as it progresses
at the discretion of the Company.
Actual events will likely differ from the assumptions that have been used, and the
projected financial information will change. Based on the revenue model incorporated
in this projection, Management is confident that the provision of data protection
services is a sustainable business model with positive benefits to the Company,
Management, employees, and partners. The Company reserves the right to request the
return of the Business Plan at any time.
Confidential and Proprietary to Shotech America,  2000. Do Not Distribute.
CONTACT:
SHOTECH AMERICA, INC.
515 CONSUMERS ROAD, SUITE 405
TORONTO, ONTARIO M2J 4Z2 CANADA
TEL 416 750 4002, FAX 416 750 8802
WWW.SHOTECH.COM
Shotech America Online Marketing
CONTENTS
EXECUTIVE SUMMARY .......................................................................................................................................... 3
BUSINESS HISTORY .............................................................................................................................................. 5
ABOUT SHOTECH KOREA ...................................................................................................................................... 5
THE EXECUTIVE TEAM ........................................................................................................................................... 5
ACHIEVEMENTS .................................................................................................................................................... 6
CUSTOMERS......................................................................................................................................................... 6
SHOTECH’S FUTURE ............................................................................................................................................. 6
MYLINKER AND PRODUCT STRATEGY..................................................................................................................... 7
HOW THE SHOTECH ENGINE WORKS ..................................................................................................................... 7
COMPETITIVE ADVANTAGES .................................................................................................................................. 8
PRODUCT DEVELOPMENT SCHEDULE ..................................................................................................................... 9
CORPORATE APPLICATIONS .................................................................................................................................. 9
MARKET OPPORTUNITIES.................................................................................................................................... 11
MARKET VALIDATION ........................................................................................................................................... 11
ADVERTISING .................................................................................................................................................. 11
E-COMMERCE ................................................................................................................................................. 11
INTERNAL COMMUNICATIONS SPENDING ........................................................................................................... 12
COMPETITION ..................................................................................................................................................... 13
UNMATCHABLE BUSINESS CASE OF MYLINKER: CHOSUN.COM ............................................................................ 13
BUSINESS MODEL AND DEVELOPMENT PLAN ....................................................................................................... 14
SALES STRATEGY ............................................................................................................................................... 14
PRICING STRATEGY ............................................................................................................................................ 15
SALES TARGET BY SECTOR ................................................................................................................................. 15
TARGET INDUSTRIES FOR MYLINKER ENTERPRISE AND SELF-SERVE ASP SERVICES ........................................... 15
TARGET PARTNERS AND ALLIANCES FOR MYLINKER ASP SERVICES ................................................................... 16
TARGET EYEBALLS FOR MYLINKER ASP SERVICES............................................................................................ 16
SHOTECH AMERICA TEAM ................................................................................................................................... 18
MANAGEMENT TEAM AND KEY TECHNICAL STAFF ................................................................................................. 18
THE ADVISORY BOARD........................................................................................................................................ 18
ORGANIZATIONAL STRUCTURE ............................................................................................................................ 18
FINANCIAL PROJECTION ..................................................................................................................................... 19
REVENUE FORECAST .......................................................................................................................................... 19
PROJECTED REVENUE ASSUMPTIONS BY FOCUS MARKET ..................................................................................... 20
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COST OF SALES ASSUMPTIONS ........................................................................................................................... 20
EXIT STRATEGY.................................................................................................................................................. 22
POTENTIAL ACQUIRERS....................................................................................................................................... 22
APPENDICES ...................................................................................................................................................... 23
APPENDIX A: MARKET VALIDATION ...................................................................................................................... 23
APPENDIX B: SHOTECH VS. COMPETITORS ........................................................................................................... 29
APPENDIX C: KOREAN ACTIVE USER RATES ......................................................................................................... 30
APPENDIX D: TARGETED PARTNERS AND ALLIANCES ............................................................................................ 30
APPENDIX E: REVENUE FORECASTS .................................................................................................................... 38
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EXECUTIVE SUMMARY
Welcome to Shotech America, the future leader of the North American e-marketing and e-communication industry.
The Shotech name is already associated with unparalleled e-marketing solutions success in Korea and Japan,
where its award winning software myLinker has been met with acclaim by end-users and corporations alike.
Shotech Korea enjoys a long list of loyal customers which is impressive by any standard. It includes not only
every major media corporation (newspapers, TV stations, online providers) but also multinationals such as
Samsung, LG, HP and Coca-Cola. Shotech aims to build on this regional success and establish a premier global
e-marketing brand.
PRODUCTS
Shotechs’s flagship product myLinker is an award winning Real-time Desktop Syndication (RDS) software that
enables users to send information real-time according to request specifics. MyLInker is powered by the
impressive Shotech engine, which has won over users with its simple setup process and unfailing reliability.
MyLinker’s unmatched versatility allows Shotech to offer two distinct product lines to cater to e-communications
and e-marketing needs of customers.
MyLinker Enterprise is an internal e-communication software designed to break through the overwhelming
information clutter that haunts companies today. Workers are constantly bombarded with product and procedures
updates and information that is often irrelevant. As a result, actually important emails and voicemails go
unchecked, leading to increased efforts and inefficiencies.
With the implementation of myLinker Enterprise, employees will have the ability to customize the information they
receive or would like to receive. This platform not only allows content customization, but also gives users a wide
array of delivery choices such as frequency. As a result, employees will spend less time and effort sorting through
irrelevant information and companies will see their productivity levels rise.
Meanwhile, myLinker ASP will provide solutions to both content providers and online transaction companies.
Content providers will feel the immediate impact of myLinker ASP as it allows end-users to customize the kind and
frequency of the information they receive. As a result, they will see the demand for their services increase to
reflect user satisfaction.
Online transaction companies arguably stand to gain the most from myLinker ASP. The advertising industry’s
abysmal success rates (4% click-through rate or even less sometimes) is a reflection of lack of focus and
customer preference identification. However, with myLinker ASP’s click-through rates of 40% or more, companies
will see their marketing dollars bear fruits within a short period of time. MyLinker can achieve this because unlike
its competition (spam e-mail, banner ads, etc.), it only sends content that is of interest to the potential online buyer.
Furthermore, this content is sent in rich-media, which was previously unavailable to e-marketers, increasing the
impact and appeal of the message.
MARKET POTENTIAL
The online advertising industry is a booming intersection of two trends: growing e-commerce popularity among
buyers and increasing online marketing expenditures. E-commerce is projected to reach an all-time high of $211
billion in 2006 thanks to the continually growing consumer confidence on the safety of online transactions. Not
surprisingly, companies have responded by vamping up their online marketing expenditures with the hopes of
capturing more sales. Within 5 years, the share of advertising expenditure spent on online market has doubled.
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Despite these impressive statistics, some sectors are more attractive than others. Travel leads online purchases
with $73 billion, thanks to the nature of its products. However, marketing expenditures have not reflected this
statistics, and today, travel marketing expenditures remain low both on expenditures and rich media content.
Equally impressive is the statistics for internal communications. Increasing internal communications efficiency has
consistently topped the list of priorities across every industry, and the world has seen internal IT expenditures
reach $500 billion. These statistics validate the e-communication market that myLinker Enterprise aims to capture.
STRATEGY
Shotech America will use distinct strategies for each product line to reflect the uniqueness of each market. Firstly,
an ASP sales team will be created to cater content, search and navigation services providers that will concentrate
primarily on establishing partnerships with these channels and their respective ad agencies that will lead to future
client contacts. A second ASP sales team will target online transaction companies with the goal of bringing in
revenue. In addition, direct sales will be a large component of revenue as it is ideally positioned to attract growing
industries such as online travel. This will allow Shotech America to diversify their revenue streams.
The pricing of myLinker ASP will reflect the overwhelming effectiveness of the product (40% click-through rates)
as opposed to the industry benchmark of a mere 4%. It is therefore crucial that customers are effectively
persuaded of the benefits that this higher price brings them ultimately.
MyLinker Enterprise will be a stable source of revenue that will be particularly important in the initial stages of
Shotech America. The Enterprise sales team will target companies that fit the correct profile: those who have a
growing number of employees that make an extensive use of intranet to transfer information.
The exit strategy being contemplated at this point is an acquisition from an interested buyer that will be able to
reap the potential synergies. Given the product profiles of Shotech America, the following companies are
potential acquirers: Google, Yahoo, AOL, Microsoft and marketing firms.
FINANCIALS
Thanks to the diversification of its revenue streams, Shotech America will enjoy an early revenue start that will
grow steadily gaining momentum. MyLinker Enterprise will provide the revenue stability in the early stages of the
business, until the main product, myLinker ASP, has sufficiently large revenue streams to be the profit driver of
Shotech America.
Even by conservative projections, it is expected that initial ASP revenues will start flowing in after 7 months and
Enterprise sales revenue will not start until month 10, accumulating a first year total revenue of $418,098. As the
ASP sales gather momentum, revenues will increase to $3,980,295in second year and reach $11,033,748 by the
third.
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BUSINESS HISTORY
ABOUT SHOTECH KOREA
Established in 1996, Shotech Korea has, within a span of a few years, established itself as the premier emarketing solution developer in Korea. Specializing in information delivery and rich media display technologies, it
has a long list of corporate clients that is impressive by any industry standard. Its flagship product myLinker,
based on the real-time desktop syndication technology, has handed Shotech an industry-wide recognition and
respect, culminating in 2004 with the prestigious Korea Software Award and the Korea Good Technology (KT)
Award.
THE EXECUTIVE TEAM
Shotech boasts an executive team of unparalleled technical and business expertise in the Korean IT industry.
Together, the members of the executive team took Shotech Korea to new levels, and aim to establish a
successful global brand.
CHAIRMAN/CSO/COO: JAE-MIN KIM
Education
- MBA, Rochester University (1984~1987)
- M.S. (Computer Engineering), Syracuse University (1981~1983)
- B.S. (Physics), Sogang University (1971~1977)
Professional Experience
- Chairman/CSO/COO, Shotech (2005~Present)
- President/CSO, Duzon Digitalware (2002~2005)
- President/CEO, Unisys Korea (2000~2002)
- President/CEO, Microsoft Korea (1997~1999)
CEO: Sho Ryu
Education
- South Baylor University (1991~1992)
- B.S., Suwon University (1988~1992)
Professional Experience
- President/CSO, Shotech (1999~Present)
- President/CEO, Wavex Co. (1995~1998)
- President/CEO, China Business Consulting (1991~1994)
CTO: Young-Sun Kang
Education
- M.S., KAIST (1978~1980)
- B.S. (Electronic Engineering), Seoul National University (1974~1978)
Professional Experience
- Vice-President, Shotech (2003~Present)
- President/CEO, Superstar Software (1998~2002)
- President/CEO, Cosmos Systems (1987~1989)
- R&D Department Team Manager, HP Korea (1984~1987)
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SHOTECH’S ACHIEVEMENTS
Shotech’s revolutionary myLinker software has gathered industry-wide acclaim, culminating in the Korea Software
Awards and the Korea Good Technology (KT) Award both in 2004. These awards are just a reflection of the
popularity that myLinker has experienced in the industry and ensuing financial success. Today, their client
network covers all the major media companies (newspapers and broadacting), major internationals (such as
Samsung Electronics, Coca-Cola, Hewlett Packard, Yahoo, etc.) and various government agencies.
Shotech is building on its acclaimed success in Korea to launch a global brand that offers B2B and B2C solutions
worldwide.
SHOTECH’S CUSTOMERS
Shotech’s customer list is impressive by any standard. It includes all the major Korean media, as well as
multinational corporations from around the world.
Newspaper
Broadcast
Media
Univ
Gov’t
Woman/Edu
Shopping Mall
Entertainment
Enterprise
Major
Advertiser
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SHOTECH’S FUTURE
Shotech has already established itself as the leading online marketer, penetrating 90% of major online media.
Domestically, it is currently expanding into value-added services and using hybrid services such as myLinker.NET
to increase its existing market size and expand its customer base to include small and medium businesses and
various community organizations. Following its successful licensing of myLinker to Japan and Thailand, Shotech
intends to build upon its award-winning performance to date to establish a global brand by offering B2B and B2C
services. An increased focus will be placed on its Enterprise clients with the upcoming release of myLinker
Enterprise v2.0.
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MYLINKER AND PRODUCT STRATEGY
HOW THE SHOTECH ENGINE WORKS
MyLinker is a Real-time Desktop Syndication (RDS) software that allows companies to deliver information realtime as per the user’s requests. At the core of myLinker lies the Shotech engine, which has been developed by
Shotech Korea, and is now enjoying wide spread popularity thanks to its seemingly endless list of applications.
The setup process for the Shotech engine has been streamlined and simplified to allow the engine to run with just
six steps. First, a simple transfer process of the client information allows the engine access to the pertinent
information. Following the registration of the client information on the myLinker server, the client can insert an
HTML JS tags into its web server. When users visit a page containing these tags, they are prompted to install the
myLinker client module, which will allow them to request and view updated contents from the myLinker server.
myLinker Admin
Client Web Server
myLinker Server
User (End Users)
MyLinker makes full use of this Shotech engine by delivering relevant content to the end user. The active browser
window triggers a pop-up screen with the identified relevant content offered in rich media. Unlike pesky pop-up
ads, however, the myLinker interface offers an unsubscribe option, further narrowing down the content of interest
to the end-user. This choice is entered into the database to form part of a continually evolving user profile.
Active Window
User can unsubscribe
at any time
POP under
display
Alert Message
Blinks when contents arrive
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COMPETITIVE ADVANTAGES
MyLinker’s RDS architecture offers multiple advantages over its competitors. From the start of the installation
process, myLinker’s easy and simple installation is designed to reach the broader internet user population.
Despite this simple setup process (it only takes 4 seconds to download), myLinker’s skin design allows for a level
of user specificity that was previously unavailable. Users can not only customize the content they are interested
in, but even set the frequency with which these are provided and the method of alert.
This places myLinker at a great advantage over its competition because the end-user has actually requested this
information, hence they are more likely to click on the content. As a result, myLinker enjoys unparalleled clickthrough rates of 40% (compared to less than 4% for its competitors).1 With the introduction of myLinker, costineffective, mass spamming is bound to become an obsolete method of advertising.
MyLinker further raises its attractiveness by allowing content providers to send information in rich media,
overcoming the text-only limitations of its RSS competition. Moreover, advertisers have now the option to target
the user geographically thanks to myLinker’s IP tracking features.
myLinker vs. Competitors
Content Customization
3
User Adoption
2
Rich Media Display
1
Management & Reporting
Targeting
0
Contents Open Rate
Easy to set-up
No Personal Info Required
myLinker
E-mail
Banner Ads
The result of these features is that both the end-user and the advertiser benefit greatly from myLinker. The enduser will find that only contents of interest to them are delivered to their desktop in eye-catching rich media form.
Satisfaction and trust build up between these users and content providers, maintaining high click-through rates
while keeping advertising costs at a minimum.
1
Appendix C: Korean Active User Rates
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PRODUCT DEVELOPMENT SCHEDULE FOR ASP APPLICATIONS
The development of myLinker is well under track, with features being continually added to the already impressive
package. Following the implementation of the global area targeting in mid 2006, skinned RSS, merged RSS and
keyword ad features are set to be complete before year-end. Development will be complete in 2007 when user
created skins, widgets and standardized banner ads are complete. Rapid progress is being made to meet these
milestones with ease.
myLinker
1Q
2Q
2006
3Q
4Q
1Q
2Q
2007
3Q
4Q
R38 Feedback,
improve UI,
Global Area Targeting
R38.5 Skinned RSS
R39 Merged RSS,
Keyword Ad.
R40 User Created Skins &
Widgets, Standardized Banner Ad
CORPORATE APPLICATIONS FOR MYLINKER ENTERPRISE
The Problem
Employees today are burdened by overloaded email inboxes, irrelevant broadcast messages, stale information,
endless PowerPoint presentations and impossible to navigate intranets. These problems are exacerbated by the
difficulty of actually finding the newest and most critical information for their specific field. The relatively recent
trend of corporate blogs seem to do nothing more than add another layer of confused corporate messaging to the
mix.
Faced with this frenetic environment, businesses are increasingly relying on instant messaging and cell phone
communication. However, the sheer volume and complexity of the information only leads to communication
ineffectiveness as an increasing number of emails and voicemails are going unattended.
In particular, corporate communications behind firewalls are becoming increasingly more difficult as the workforce
disperses globally. Moreover, corporate knowledge workers have to now monitor changes and updates related to
their jobs at an ever-increasing pace, lowering productivity.
The Solution: MyLinker Enterprise
MyLinker Enterprise, Shotech’s content delivery platform, allows it to flow freely and effectively throughout the
company. MyLinker Enterprise addresses this problem by standardizing, prioritizing, gathering historical and real
time information, followed by monitoring and alerting.
For example, employees are constantly directed to the corporate intranet to find out all relevant updates to their
company, products, policies, procedures, and hundreds of other areas, preventing them from being productive.
MyLinker Enterprise alleviates this concern by monitoring the corporate intranet and feeding the information back
to the internal subscriber on a real-time basis. With myLinker Enterprise, the information is packaged, delivered,
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prioritized based on the requester’s preferences and needs insuring a much greater uptake of knowledge as well
as huge productivity savings.
Corporate Showtech Enterprise Modules and Content Management Services
MyLinker Enterprise allows corporate end-users to customize the actual content, feeds, delivery schedules,
audience segmentation, and formatting. The available myLinker Enterprise Modules templates will enable fast
setup because they offer a standard look, feel and context by providing recommended content that is widely
published in most enterprises as well as internal audience segmentation templates. In essence, modules are the
infrastructure that the corporate end-user manager will use to design, deliver, and monitor the content being
published through myLinker Enterprise. It allows for a much more rapid adoption within the enterprise because the
templates are pre-designed and require minimal adjustments for the specific company.
For example, a major public corporation that needs a program to provide on-going training related to SarbanesOxley can usemyLinker Enterprise, to deploy the Regulatory Compliance Module which already knows which
external feeds to monitor related to Sarbanes Oxley regulation. Additionally the templates in the module will offer
content recommendations that need to be provided from internal sources. In this example, the internal audit
department will want to provide a feed to everyone in the company to ensure that they have received the
company’s internal policies on Sarbanes. The company can also monitor whether employees have actually read
the policy.
The module will also contain check box lists of subscription menus to recommend which internal audience needs
to receive which content related to Sarbanes-Oxley. For instance, the sales management team has far different
content requirements than the sales accounting team and each can receive customized real-time content updates
(through their subscription menus) through myLinker Enterprise and be monitoring both internal and external
content sites automatically.
Some of the modules contemplated by myLinker Enterprise are: HR, Regulatory Compliance, Training, Marketing,
Sales, Competitive Intelligence, PR, Product Development, Research & Development, General Information ,
Channel Partners and Alliance.
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MARKET OPPORTUNITIES
MARKET VALIDATION
Advertising2
The past few years have seen dramatic shifts in the advertising industry’s revenue sources and targets. Since
2003, for example, media revenues from consumers have overtaken those from advertisers, as more consumers
are willing to spend on content. This is surprising particularly in light of the fact that advertising spending has
been making a strong comeback since its decline in 2001. Meanwhile, consumers have steadily spent more on
content, even though free content is more readily available than ever before. This shows that consumers are
increasingly more willing to pay for relevant content, instead of being boggled down in the midst of ads and
uninteresting information.
Meanwhile, online advertising has been continually growing and capturing a higher share of the total industry
spending. It is projected that 5.7% of ad industry spending will be online, up from 2.5% just in 2002. In April 2006
alone, the top 50 spenders combined to spend $235 million online, showing a significant growth from past years.
This growth can be attributed to an increase in large corporations’ demand for online advertising. In 2004 alone,
Fortune 500 companies’ share of online display ad impressions has increased from 23% in Q1 to 30% in Q4.
The conclusion that can be drawn from these industry trends is that although advertising spending is lagging
behind as a revenue leader for media, large companies are still willing to increase their spending. The challenge,
however, is to capture the attention of the consumer through relevant content that is customized to suit their
needs and demands.
E-commerce3
One reason why online advertising spending is booming is due to the fact that consumers are increasingly more
willing to spend online. Increasing familiarity and comfort with online transactions is at the core of this continuous
trend. As a result, e-commerce revenues are expected to grow 20% from last year to reach an unprecedented
$211 billion this year. This increasing trend in online spending further boosts the importance of effective, relevant
and eye-catching advertisements on the net in order to capture the attention of today’s online consumer, who is
often overwhelmed by irrelevant ads.
Not surprisingly, this increase online spending is fuelled primarily by traditional online purchase categories that
due to their product nature, have always facilitated their online purchase. Travel, traditionally the largest category,
captured over a third of all online spending with $73 billion. Computer hardware and software followed with a
distant yet strong $17 billion. One thing is clear from this increase: consumers are increasingly viewing the
Internet as a shopping mall, rather than a mere catalog to find the lowest price. Retailers have further fuelled this
process by offering increased availability, wider selection of products, and special online discounts not available at
brick and mortar store locations.
Despite these figures, online advertising for the travel industry is lagging both in terms of quantity and quality. Of
the $228 million spend on online advertising in April 2006, only $10 million was dedicated to travel, lagging heavily
2
3
Appendix A.1: Advertising Market Validation
Appendix A.2: E-Commerce Market Validation
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behind financial services ($63 million), retail goods and services ($44 million) and telecommunications ($33
million).
Furthermore, travel industry ads have largely been unavailable in rich media, with three-quarters of them utilizing
simple text and/or pictures. This is a heavy contrast from the automotive, telecommunications and entertainment
industries, all of which offer over 50% of their ads in rich media form.
Given these current trends in e-commerce and the related online advertising statistics, the travel industry is the
most promising target for a rich media ad provider such as myLinker. The travel industry has so far been able to
reap great online benefits with relatively low advertising expenditures, leaving room for applications such as
myLinker to add value. Research shows that B2B represents another great opportunity for online advertisers.
Although B2B has been a traditionally competitive field, studies indicate that industrial equipment and services are
lagging behind other industries’ marketing efforts. Although e-commerce is not a widely utilized method of
purchase, three quarters of potential customers turn to the web for distributor information which leads to actual
purchases, which creates a great opportunity for online marketers to bridge this information supply-demand gap.
Currently, less than 15% of all B2B online advertising is in rich media form, creating a large void that myLinker can
potentially fill.
Internal Communications4
Given that internal spending on IT represents one-third of the $1.43 trillion world-wide IT spending. Moreover,
companies are increasingly allocating higher portions of their budget to internal logistics and data sharing (website
analytics spending alone has doubled to $1 billion from last year). Even with these impressive growth figures,
there is a virtually untapped potential for further revenue growth. Currently, one fifth of companies are withholding
IT investments because there are no new functionalities available in products found in the market today.
No IT topic raises as much debate and concern as the subject of communications, both internal and external.
Companies are experiencing increasing difficulties in both sectors. Externally, customers are seeing their
inquiries being carelessly handled, with close to 50% of companies not responding until several days after. Even
when a response is finally sent, half of them tend to be partial answers that do not satisfy the customer’s
questions fully.
This inefficiency can be traced back to poor internal communication. Employees handling customer requests
rarely have all the necessary information to provide informed answers, and must rely on the expertise of their
colleagues to do so. The flow of information arising for internal purposes account for over 60% of data sharing
which needs to be done in a fast and accurate manner.
As a result, companies have been searching for innovative ways to communicate. Blogging, for example, is a
particularly popular method, with 58% of small companies using it for internal communication. However, its
adoption is lagging behind among larger companies, which are the ones that experience communication problems
the most. Hence, there is a great opportunity for innovative solutions such as myLinker Enterprise to capture this
growing demand.
4
Appendix A.3: Internal Communications Market Validation
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COMPETITION
Shotech America identifies email service providers such as DoubleClick for its myLinker ASP services and
Feeddemon and Feedburner as its competitors to myLinker Enterprise. DoubleClick’s low click thru rate, 4%, and
advertisers’ general perception about email marketing as ineffective tool help Shotech America’s launch of
myLinker ASP services. Even the pricing of myLinker ASP benchmarked DoubleClick’s lowest rate per 1,000
sends. The Company offers much more competitive pricing as a new market entrant.
Feeddemon has a corporate application called NewsGator, whose corporate users are largely medium sized law
firms. They have huge intranet information and prefer to use the RSS aggregator integrated with Outlook.
NewsGator’s feeds go to employees via email, which fails to break through the clutter of inboxes.
FeedBurner currently claims to have 140,000 commercial publishers, podcasters and bloggers. But its revenue
models are not concrete and its users complain about less user-friendliness. Shotech America’s flagship product
myLinker Enterprise has proved its commercial success in Korea with its visually appealing designs and userfriendliness.
What separates myLinker from competitors is its compelling and working business cases in Korea, Japan and
Thailand.5
THE UNMATCHABLE BUSINESS CASE OF MYLINKER: CHOSUN.COM
Chosun Daily has the 4 million circulation, boasting the largest nationwide subscription in Korea. Chosun.com is
its online news site, providing contents from its newspaper and sister monthly magazine and other partnering
media. It partnered with Shotech Korea and let its visitors download myLinker to their desktops. Within 3 months
of such move, Chosun.com experienced its visitors increase from 1.1 million to 1.53 million and page view rank up
from 33rd to 17th. Such increase of page view drove an increase of online advertising revenue by 10% for
Chosun.com. More surprisinglywithin the 3 month period myLinker was downloaded by 537,000 users or almost
50% of subscribers of Chosun.com.
5
Appendix B: Shotech vs. Competitors
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BUSINESS MODEL AND DEVELOPMENT PLAN
Nielsen/NetRatings indicate that online spending leaped to $5.3 billion in June, 2006, a 71% jump from the
previous year and offline spending generated by online research/shopping rose to nearly $5.5 billion. These
statistics well supports retailers’ plan to spend more money on online advertising. Travel industry is another
sector seeing rapid growth in online sales. According to USDM’s report on Top 10 Travel Forecasts 2006 43
percent of all travelers and 75 percent of online travel planners are booking or making travel reservations online.
Email marketing has been the mainstream for online marketing for these advertisers, who want to reach out their
potential customers. But online marketers are frustrated with the limit of email marketing, being unable to tract
users’ behavior, let alone the low click through rate of email marketing. Knowing who your online visitors are, how
they react to offers, and what their purchasing or booking patterns are is critical in 2006. Better technology
tracking and analysis will build the case for more advertising revenue and provide assumptions for web site
modifications and additions. myLinker will be the solution to these online marketers as the alternative to email
marketing in a proven ROI.
MyLinker’s value propositions over email marketing to online marketers are:
- Deliverability: only customized feeds delivered to the myLinker box and no spam
- Creative and dynamic content: visually creative and appealing messages including rich media
- Content: what people want from you and what they will respond to (information, offers, tips)
- Personalization: personalized contents
- Segmentation & Targeting: Audiences are targeted and segmented
- Offer: when publishing an offer, you will get informed about how people respond to the offer
- Day of Week/Time of Day/Frequency: what is best for your recipients and less intrusive
- Landing Pages: where recipients go after they click on your feed; tracking subscribers’ behavior
SALES STRATEGY
Channels Sales
Shotech USA will create two channel sales teams: a team focusing on content providers, internet search and
navigation services providers, and the other focusing on internet music distribution and downloads, online travel
and retailers. The first channel sales team focuses on signing up with these channels and their advertising
agencies because these partners are not only potential clients for myLinker ASP services but also an excellent
conduit to get myLinker out to individual users. For the initial year the first sales team’s priority is an increase of
the number of signed partners. The second channel sales team puts revenue increase before anything else. The
second channel will be more aggressive using myLinker because they immediately see revenue increases from
online sales when they publish customized timely news about their products. In addition, these channel’s online
users value a tool that will allow them to receive news about what they are interested in at their convenience, and
are likely to quickly download myLinker to their desktops. Hence, the second channel sales team ensures
revenue growing from myLinker ASP service sales to these channels.
Direct Sales (Should we include the top three online advertiser verticals such as financial, automotive and retail?)
Given the growth and the techno savvy user demographics, online travel sites including airline websites will make
an excellent target clients for myLinker ASP services. Shotech America will have a direct sales team targeting
each online travel company with its special promotion using rich media ad campaign in alliance with their
advertising agencies. That way the Company ensures that it doesn’t just rely on its channel partners’ push for
myLinker ASP and successfully locks in the most desire target for myLinker ASP services.
Confidential and Proprietary to Shotech America,  2000. Do Not Distribute.
15
As the Company grows, the direct sales teams target will grow from the online travel to online content providers,
consumer electronics and retailers but for the initial year it focuses on the online travel.
Enterprise Sales
Selling myLinker Enterprise is key to Shotech America’s revenue stability. The Enterprise sales team focuses on
companies with a growing number of employees with extensive use of entranet and frequent communications with
their large number of distributors and resellers.
PRICING STRATEGY
MyLinker Enterprise
MyLinker Enterprise is priced with a declining per seat price as the number of seats grow. In addition, annual
maintenance service fees of 15% apply to each customer. MyLinker Enterprise is priced competitively in order to
take full advantage of the lump-sum cash flows that the sale of already developed software can generate.
myLinker Enterprise
Tier
Employees
1
5,000
2
10,000
3
20,000
4
50,000
5
100,000
6
100000 +
Price per Seat
$15.00
$12.50
$10.00
$7.50
$5.00
Custom
Package Prices
$75,000.00
$125,000.00
$200,000.00
$375,000.00
$500,000.00
Custom Quote
MyLinker ASP
MyLinker ASP’s pricing strategy reflects the diversity in the needs of its customers. The pricing is set such that
customers with different purposes are quoted prices based on their success metric of most importance. For
example, manufacturers that need to communicate with channels will be primarily concerned with the price per
feed, whereas ad agencies making sales to consumers will measure costs in terms of price per acquisition. This
separate pricing strategy also allows Shotech to reap the maximum benefits of the different willingness to pay
points of customer groups.
Corporte Categories by Needs for External Communications
Communicating
with Channels
Product/Service
Information
Last Min Sales
Customer
Acquisition
Price/1,000
Feed
Price/1,000 Click
Price/Acquisition
Corporate Vertical (Avg.
Frequency/Month 10)
yes
no
no
Manufacturers
yes
yes
yes
yes
no
yes
Content
providers
Travel
yes
yes
yes
Ad. Agencies
Confidential and Proprietary to Shotech America,  2000. Do Not Distribute.
8
20
10
16
For conservatism, financial projections have been made by pricing myLinker ASP’s prices at 50% of the industry
standard (such as Doubleclick):
User #s
<100,000
<500,000
>=1,000,000
Shotech America CPM
$4.25
$2.00
$0.75
Industry Standard CPM
$8.50
$4.00
$1.50
The financial projections based on this strategy and assumptions will be further explored later.
SALES TARGET BY SECTOR AND PRODUCT
Target Industries for myLinker Enterprise
Shotech America team used the following matrix in order to identify myLinker’s target market based on myLinker’s
superior selling points – rich media and customized real-time delivery:
-
Fasted online market growth rate
Growing allocated budget for online advertising
Growing use of rich media in online marketing
Growing need for customized information
Importance of realtime updates
Based on this analysis criteria, target industries have been further narrowed down to automotive, travel,
entertainment, consumer goods/retail goods, hardware & electronics and financial.
Shotech America will approach industry leaders with two products: myLinker Enterprise and myLinker ASP.
These corporaions will find myLinker Enterprise very useful as a customized real-time tool that facilitates the
monitoring of the rapidly changing market. Moreover, it will prove to be a vital internal communication tool
exchanging up-to-date information interanlly.
However, although myLinker Enterprise allows enterprise users to easily publish news, updated powerpoints or
any webcast to their distributors or the new promotion information to end-users, most organizations lack the
internal resources to manage the constantly changing complexities of contents or to analyze hundreds or millions
of recipients’ reaction to countless feeds. As a result, they will be likely to outsource their external communication
to Shotech America that can deliver an on-demand, inexpensive ASP solution that allows enterprises to monitor
customers and distributors behaviour to their publishing.
Target Partners and Alliances for myLinker ASP Services6
Currently, marketing budgets are increasingly shifting into internet, experiential and database/CRM marketing, as
clients demand quantifiable results and non-traditional media solutions to build brands and grow sales. As a result,
leading advertising agencies are under tremendous pressure to get ‘smart’ about new and online media,
increasing their demand for intelligent data.
6
For a list of target partners and alliances, please refer to Appendix D: Target Partners and Alliances
Confidential and Proprietary to Shotech America,  2000. Do Not Distribute.
17
While Shotech America contacts enterprises directly with myLinker Enterprise, the team will concurrently partner
with advertising agencies that cater to corporate clients in these sectors since advertising agencies set trends and
execute their online marketing budgets. The team has identified the following advertising agencies as our first
target partners based on our analysis of the following factors:
-
Client base: their client base should cover automotive, travel, entertainment, consumer goods/retail
goods, hardware & electronics and financial sectors.
Usage of rich media: their online advertisings use rich media or tend to increase usage of rich media
Keen to adopt new technologies in their online advertising
Target Eyeballs for myLinker ASP Services
Shotech America’s immediate priority is to establish and strengthen the myLinker brand and encourage
downloads by end-users. Based on this strategy, Shotech will aim to partner with highly frequented sites in order
to obtain as much information as possible on user behaviour. The most trafficked sites in USA are the below by
category:
-
-
-
Retailers: Walmart, JCPenny, Kmart, Target, Sears and Amazon
Content Providers: The Walt Disney Company, CBS corporation, IAC (ASK Jeeve, Ticketmaster,
Citysearch), MTV Networks Company, Cox Enterprises, Inc. (ESPN, autotrader.com, ivillage.com),
Advance Publications, Inc. (American City Business Journal), Discovery Communications, Inc.,
Bertelsmann AG (Sony BMG Music Entertainment), The Hearst Corporation (Cosmo and Esquire), AOL
Time Warner, Weather Channel, New York Times, WebMD Health, CareerBuilder LLC
Internet Search and Navigation Services: ASK jeeve, CNET Networks, Inc., Autonomy, Inc., Shopzilla,
Inc., LowerMyBills, Inc., Cisneros Group of Companies (America Online Latin America), TOM Group
Limited (Business Weekly and PC Home), Rediff.com India Limited (e-commerce marketplace, India
Abroad)
Internet Music Distribution and Downloads: Apple Computer, Inc., CNET Networks, Inc., Volcom, Inc.,
AOL Music Now LLC, MusicNet, Inc., ARTISTdirect, Inc., EMusic.com, Inc., easyGroup (UK) Ltd.
Online Travel: Expedia, Orbitz, Travelocity, hotel.com, priceline, Flyertalk, Breezenet, Concierge,
Gridskipper, Hotelchatter, IgoUgo, Kayak, MyTripJournal, SeatGuru, Site59, TravelZoo,
Vijaydandapani.com, and online airline sites
Confidential and Proprietary to Shotech America,  2000. Do Not Distribute.
18
SHOTECH AMERICA TEAM
Management Team (I forwarded you their bios)
Interim CEO – Wayne Kim
VP of Marketing (Diane)
VP of Product Development (Brock Taylor)
VP of Sales/Alliances & Partnerships (coming)
Director of Technical Liaise between Shotech Korea and SHotech America (Jay Lee)
Organizational Structure (Pls, modify the chart with Jay Lee)
CEO
VP of Marketing
VP of Partnerships and
Alliances/Sales
VP of Product Development
Jay Lee
Marketing Manager
Channel Marketing
Corporate Marketing
Marketing Campaign
Programs
Channel Sales Team
Direct Sales Team
Corporate Sales Team
Product Manager
Technical Manager
Client Service Manager
Technical/Client Service Staff
Operational Staff
Confidential and Proprietary to Shotech America,  2000. Do Not Distribute.
19
FINANCIAL PROJECTION
REVENUE FORECAST7
Two separate revenue streams have been identified: myLinker Enterprise and myLinker ASP. Pricing
assumptions were made conservatively by assuming a 50% of industry standard pricing for Shotech.
It is expected that myLinker Enterprises will yield revenues starting from month 11 and gradually increase its
monthly revenue as new customers are acquired. The majority of the revenue comes from the lump-sum package
price paid by companies to provide internal communication solutions to their employees. This tier pricing is based
on the number of employees using this service (seats). Because these lump-sum amounts are paid at the time of
sale, it will provide Shotech America the necessary cash income to fund its ongoing expenses at the beginning of
the business.
It is expected that continuing operation and market penetration will increase the number of customer companies
and their respective seats, increasing both the total and per-company figures. Because of this two-fold increase,
combined myLinker Enterprise revenues are expected to grow from $704,375 in first year to $6,727,500 and
$13,800,000 in years two and three respectively.
MyLinker ASP will be offered to two different customer groups: content providers and online transaction
customers such as online travel, e-commerce, retail and downloadable music sites. Revenues from content
providers are expected to contribute approximately 10% to total revenue. Although it doesn’t generate substantial
amount, the content provider stream is a crucial component that will allow myLinker access to customer
databases. Online transaction customers are expected to be the primary revenue source of Shotech America in
its first three years. Although their feed based revenues contribute 10% of total revenue, the same as content
providers, MyLinker’s high click-through rate (CPL) will enable it to reap the benefits of its increasing e-commerce
transactions of online transaction customers. As a result, revenues from CPL are forecasted to reflect the strong
growth of its user base, growing from $1,248,483 in year 1 to $32,972,508 in year 3, when it will account for threequarters of Shotech America’s revenues.
Overall, revenue growth for Shotech America looks strong. Thanks to its proven success record in Korea and the
already-working engine, it is expected that it will only take 6 months before revenues start flowing in. Increasing
market penetration and the expected level of success in the North American market is expected to lead to a
strong yet realistic revenue growth, from $1,952,858 in year 1 to $18,621,945 and $46,772,508 in subsequent
years.
3 Year Summary of Revenue
Even with the conservative 50% discount pricing assumption, the revenue inflow for Shotech is promising.
Revenues are expected to enjoy an exponential revenue growth in three years.
Financial Projection Summary - Shotech America with 50% discounted ASP pricing
# of Users
Year 1
Year 2
Year 3
CP Full-Serve
2,091,000
9,231,000
21,369,000
Transac Full-Serve
1,230,000
5,430,000
12,570,000
Total Unigue Users
1,660,500
7,330,500
16,969,500
7
For a full forecast, please refer to Appendix E: Revenue Forecast
Confidential and Proprietary to Shotech America,  2000. Do Not Distribute.
20
Enterprise Rev
CP Full-Serve ASP
Transac Full-Serve ASP
CPL Rev
Total Revenue
$
$
$
$
$
704,375
303,042
153,585
791,856
1,952,858
$
$
$
$
$
6,727,500
2,927,655
1,722,150
7,244,640
18,621,945
$
$
$
$
$
13,800,000
8,115,732
4,773,960
20,082,816
46,772,508
Relaxing the 50% discount assumption and using the more realistic industry standard pricing, the revenue
projections are even more appealing:
Fiancial Projection Summary - Industry Standard ASP pricing
# of Users
Year 1
Year 2
Year 3
CP Full-Serve
2,091,000
9,231,000
21,369,000
Transac Full-Serve
1,230,000
5,430,000
12,570,000
Total Unigue Users
1,660,500
7,330,500
16,969,500
Enterprise Rev
$
704,375
$
6,727,500
$ 13,800,000
CP Full-Serve ASP
$
606,084
$
5,855,310
$ 16,231,464
Transac Full-Serve ASP $
307,170
$
3,444,300
$
9,547,920
CPL Rev
$
791,856
$
7,244,640
$ 20,082,816
Total Revenue
$
2,409,485
$ 23,271,750
$ 59,662,200
PROJECTED REVENUE ASSUMPTIONS BY FOCUS MARKET
MyLinker Enterprise revenue forecast is based on the conservative assumption that the average product price will
be $90,000, which is the tier 1 level, representing the lowest package price. The final earned revenue is based on
the success rate of the sales people. It is assumed that sales success rates will start from an initial 35% for the
first 12 months, and gradually grow to 45% for months 13-16, 65% for months 17-20 before reaching a plateau of
80% for the remaining term. In addition, myLinker Enterprise is expected to generate 15% in annual maintenance
revenues.
For myLinker ASP, different sets of assumptions are required for content providers and online transaction
companies. For content providers, it was assumed that the number of daily users per provider was 4,000,000,
which is conservative, given the fact that average number of daily visitors to top 25 content providers is 33.6
million users. The content provider, expected to publish 20 times a month on average, will pay the same amount
as email marketing fees. A click per lead price of $4.00 is also a very conservative number because email service
providers charge 30% - 40% of net profit of e-Commerce transaction or $10 per customer acquisition. Email
service providers claim that average CPL is 0.8% and Shotech America projects its CPL rate to be 0.4%.
As for online transaction companies, the starting assumption is that each company site handles on average
1,500,000 daily users. The myLinker CPL rate will be higher at 4% since online buyers have stronger, ongoing
relationship as well as developing trust with sellers. Each site is expected to publish 30 times monthly on average.
Shotech Korea’s CPL rate is proven to be from 15% to 22.5% in 2005 and 2006 so Shotech America’s projected
click per lead rate being 4% is conservative as well.
COST ASSUMPTIONS
The following cost assumptions apply to the financial projection:
- Royalty: A royalty of 10% of EBITDA is payable to Shotech Korea
Confidential and Proprietary to Shotech America,  2000. Do Not Distribute.
21
-
-
Sales Commissions:
o ASP sales commissions are 30%
o Corporate solution sales commissions are 14%
Payroll:
o The average salary is $10,000 per month
o The number of management and staff employees will increase from 4 at inception to 11 by end of
year 3
o The number of sales professionals will increase from 6 to 24
Overhead: Overhead costs are assumed to be 30% of total salary
Hardware costs: After an initial setup cost of $250,000, hardware costs will increase by $40,000 for
every 2 million user increase.
Bandwidth and space: Space and bandwidth will be monthly expense but it will increase by $2,500 per
month for every 2 million user increase.
Operational costs:
o The initial co-location space per 5 million users is 3,000
o Internet usage and co-location space costs will increase by $2,500 every 2 million users
3 Year Summary of Expenses
Year 3
Year 2
Year 1
Fixed Expenses
$ 13,010,750
$
6,091,350
$ 3,540,000
Salary
Overhead
sub total
Tech & Op & HW
Accumulated User # for ASP
S/W, Co-lo
Office
Costs of Sales
$
$
3,570,000
1,190,000
$
$
2,400,000
800,000
$ 1,440,000
$
520,000
$ 7,800,000
$ 37,485,000
$
400,750
$
50,000
$21,853,706
$
2,693,600
$ 1,394,000
$
$
147,750
50,000
$8,030,421
myLinker Enterprise
myLinker ASP
$1,209,600
$20,644,106
Total
$ 34,864,456
$
$
$
96,000
90,000
$933,896
$589,680
$7,440,741
$123,480
$810,416
6,091,350
$ 3,540,000
3 Year Summary of Revenue, EBITDA and Profit
Total Revenue
Total Expenses
EBITDA
Royalty Payment
$
$
-$
$
Year 1
1,952,858
3,729,892
1,868,909
-
Profit
-$
1,868,909
$
$
$
$
Year 2
18,621,945
8,471,309
9,273,136
927,314
$
$
$
Year 3
46,772,508
17,108,473
27,864,036
$2,786,404
$
8,345,822
$
25,077,632
Confidential and Proprietary to Shotech America,  2000. Do Not Distribute.
22
EXIT STRATEGY (PLEASE, ADD JD POWER, AUTO INDUSTRY SPECIALIST AS A POTENTIAL ACQUIRER.)
Exit strategies for the Company would involve a strategic merger/acquisition or an IPO. An IPO would be pursued
if public markets were receptive in a 36-month timeframe. If consolidation in the market were to occur, a merger
could be concluded in the interim. With the clearly define target market focus, emphasis on achieving profitability
and strong strategic partnerships the Company will achieve enviable valuation. The Company foresees possible
acquirers in the following scenarios:
Acquired by marketing firms
As online marketers look for stronger user-defined of marketing activities, the current marketing model will
experience pressure to once again rapidly growing technology RSS adapt. And such move will add more values to
myLinker, the user-friendly syndication technology. As was the case in 2005, interactive marketing and
marketing/strategic consulting firms are the most popular areas for expansion. M&A is key driver for this.
Acquired by Google
Currently, Google’s information syndication software (Google Desktop), is experiencing limited success. The lack
of appealing and customizable content has stifled usage, even though it was offered free of charge. Shotech’s
myLinker would therefore be the ideal complement for the limited Google Desktop technology, as it will allow the
users to customize the content and frequency of the information, as well as receive them in rich media. Having
gone public two years ago, Google has the required size for such a merger.
Acquired by Yahoo
Yahoo is a search engine with very strong content providing capabilities and resources. However, one of the
limitations is their lack of a real-time delivery option is stifling further growth potential. MyLinker is the ideal
channel through which Yahoo can get on the users’ desktop and increase consumer dependency. Therefore,
acquiring Shotech America will allow Yahoo to compete with other content providers such as Google Desktop.
Acquired by AOL
AOL’s customer segment consists largely of non-internet-savvy users. These users are dependent on AOL to
effectively present the content that is of interest to them. MyLinker is the ideal channel through which the
company can do this. Rich media and high customization possibilities will strongly appeal to this customer
segment. One additional synergy to be created through this acquisition is that myLinker would no longer have to
be downloaded separately because it will be bundled with the AOL software.
Acquired by Microsoft
MSN already is a content provider for countless Windows users. However, Microsoft has yet to find an effective
way to bring this content directly to the desktop. MyLinker would be the ideal companion to Internet Explorer,
while adding the benefits of rich media and customization. Again, this case would allow myLinker to be a part of
the Internet Explorer package, eliminating the need for download.
Acquired by JD Powers
JD Powers is a trusted global marketing services information firm that provides consumer ratings on goods, most
notably car customer satisfaction rates. Unlike other consumer reports issuers, however, JD Powers sells its
surveys to automakers who use them in advertisements. It offers both syndicated and proprietary research that
needs to be easily accessible by the end-user. MyLinker could prove to the ideal content delivery platform for
such a vast research database.
Confidential and Proprietary to Shotech America,  2000. Do Not Distribute.
23
APPENDIX A: MARKET VALIDATION
A.1: ADVERTISING MARKET VALIDATION
Advertising Market Trend
• Consumers spend on satellite, cable TV, video on demand, iPods content
• On-line advertising spending as % of total advertising spending is increasing.
On-line Advertising Trend
• On-line Ads are promoted with fortune 500 companies.
• Rich media share of Ad impression is 37% at Dec. 2004 and growing.
Rich media is advertising with animation, audio or video effect: muti-media Ad.
Confidential and Proprietary to Shotech America,  2000. Do Not Distribute.
24
On-line Usage and Ad Trend in 5 countries
USA
$1,200
$ 676
$1,000
Korea
208
35
67%
85%
54%
90%
$ 9,600
$ 400
33%
45%
3.6%
5.9%
39%
45%
• On-line Ad spend, Rich Media usage and Broadband penetration
are growing in all 5 countries.
New Waves
• Dating services, music and business/investment content are popular.
• 8% of all Internet users maintained a blog as Nov. 2004, 27% called
themselves regular blog readers. While 38% said they are familiar with.
Confidential and Proprietary to Shotech America,  2000. Do Not Distribute.
25
E-mail Marketing Report
Q2 2005 Overall Performance
• The average non-bounce rate grew to a new
all-time high of 92.1%, Q2 2004 (89.5%).
• The average open rate (27.5%) declined
23.6% from Q2 2004 (36.0%),
• The average click-through rate (7.2%)
decreased 6.5% from Q2 2004 (7.7%).
• The average click-to-purchase rate (4.6%)
increased 27.8% from Q2 2004 (3.6%).
• The average orders-per-email-delivered rate
(0.26%), Q2 2004 (0.22%).
• Revenue per email ($0.20) remained flat,
despite a 14% decline in average order size,
Page View Balance Shifting
•
Few site dominates page
view: 12% from Yahoo
•
Top 100 domains generated
58% of the page views.
•
The bottom 15,5000 sites
collectively generates 25%
•
The fast growing user
generated content as blogs,
social networks is changing
the online landscape.
•
Google is one of the largest players in the online ad world
•
Connecting more than 150,000 mostly small advertisers with hundreds
of thousand of small sites and blogs through its contextually targeted
AdSense program
•
AdWorld is search-target program
Confidential and Proprietary to Shotech America,  2000. Do Not Distribute.
26
A.2: E-COMMERCE MARKET VALIDATION
Advertising Breakdown by Industry, Monthly Comparison
Industry
Total Impressions
April 2006 (M)
Total Impressions
March 2006 (M)
Change from Previous
Month (%)
Automotive
3,351.5
4,237.4
-20.91
B2B
7,560.3
7,075.0
6.86
Consumer Goods
6,561.2
7,905.1
-17.00
Entertainment
3,322.0
6,864.7
-51.61
Financial Services
63,461.4
63,321.7
0.22
Hardware and Electronics
5,414.3
5,007.9
8.11
Health
3,942.8
4,338.3
-9.12
Public Services
16,067.7
13,116.2
22.50
Retail Goods and Services
43,519.2
42,411.6
2.61
Software
5,977.6
5,393.7
10.83
Telecommunications
33,485.5
34,158.4
-1.97
Travel
10,130.9
8,815.7
14.92
Web Media
41,024.8
43,709.9
-6.14
Source: Nielsen//NetRatings, 2006
Advertising Breakdown by Industry, Ad Unit Types
Industry
Flash (Generic)
(M)
Rich Media Sponsored
(M)
Link (M)
Standard
Image (M)
Standard Image/Text
Link (M)
Automotive
1,698.2
191.7
305.8
796.9
358.8
Business to Business
1,159.7
56.9
2,699.0
3,169.9
474.9
Consumer Goods
2,417.2
255.7
1,640.8
1,926.6
320.8
Entertainment
1,336.8
187.1
387.0
1,040.2
370.9
Financial Services
11,079.1
271.0
4,738.5
9,162.2
38,210.7
Hardware and Electronics
1,710.3
46.2
380.8
1,799.8
1,477.2
Health
1,566.9
41.7
887.5
1,345.1
101.8
Public Services
1,299.9
92.0
2,352.8
4,499.2
7,823.8
Retail Goods and Services
5,233.4
233.0
13,190.7
11,956.6
12,905.4
Software
2,444.3
62.2
1,041.6
1,760.8
668.6
Telecommunications
6,860.5
196.3
823.2
20,157.6
5,448.0
Travel
3,038.3
641.7
3,009.2
2,631.1
810.5
Web Media
8,969.0
103.9
15,370.8
8,958.9
7,622.3
Source: Nielsen//NetRatings, 2006
Online Consumer Spending, 2004 and 2005
2004 ($B)
2005 ($B)
Change (%)
Holiday Season (November and December)
Non-travel (retail)
15.7
19.6
25
Confidential and Proprietary to Shotech America,  2000. Do Not Distribute.
27
Travel
7.4
8.6
16
Total
23.1
28.2
22
Non-travel (retail)
66.5
82.3
24
Travel
50.7
60.9
20
Total
117.2
143.2
22
Full Year
Note: Spending excludes auctions and large corporate
purchases.
Source: comScoure, 2006
Selected Product Categories' Sales Growth, 2004 and
2005 (%)
Growth
Apparel and accessories
36
Computer software (excludes PC games)
36
Home and garden
32
Toys and hobbies
32
Jewelry and watches
27
Event tickets
26
Furniture
24
Flowers, greetings, and gifts
23
Notes:
1. Sales exclude auctions and large corporate purchases.
2. Sales are non-travel online comsumer spending.
Source: comScore, 2006
Confidential and Proprietary to Shotech America,  2000. Do Not Distribute.
28
A.3: INTERNAL COMMUNICATIONS SPENDING
Most Significant Factors Impacting IT
Spending in 2003
Lower profits/revenue
42%
Current systems are adequate
23%
Need new functionality for business competitiveness 19%
No pressure to change/upgrade
8%
Need to integrate old systems more tightly
6%
Lack of support from senior management
4%
Source: Software & Information Industry Association
Preliminary Worldwide IT Services End-User
Spending Estimates for 2002 (Millions of Dollars)
Company
2002
2002
2001
2002 Growth
Revenue Market Revenue Market
Share
Share
IBM
40,139.0
7.5%
40,664.0
7.5%
-1.3%
EDS
21,122.0
3.9%
20,702.0
3.8%
2.0%
Fujitsu
13,867.4
2.6%
14,351.6
2.6%
-3.4%
Hewlett-Packard 12,211.2
2.3%
12.963.6
2.4%
-5.8%
Accenture
11,514.0
2.1%
11,599.8
2.1%
-0.7%
Others
437,402.1 81.5% 439,291.5 81.4%
-0.4%
Total
536,255.7 100.0% 539,572.5 100.0% -0.6%
Source: Gartner Dataquest, May 2003
Confidential and Proprietary to Shotech America,  2000. Do Not Distribute.
29
APPENDIX B: SHOTECH VS. COMPETITORS
1
FEATURES
Customization
Feedburner
May customize
metrics (admin)
page for extra fee
Limited ad (TEXT
ONLY) display and
choice
Feeddemon
N/A
N/A
N/A
MS Outlook like
options, but can be
confusing to novice
computer users
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Content
Provider
Advertiser
myLinker
Able to customize GUI of
content window for each content provider
(like RSS to aggregator)
Able to design specifically according to
advertiser's demand
1. Control creativity
2. Flexibility of adding features
Environment setting from client program
has delivery/content/alert options
1. Time to receive
2. Content alert methods
E-Commerce (Auction)
Shows price and item in one page
Campaign (depending on creativity)
can instantly be displayed.
Simple or rich media contents
can be viewed instantly in a single
customized window
Able to send specified contents to specific
group of subscribers based on their
preference
Able to send advertisements to
preference group
Able to received request specific
contents only
Send regional sensitive contents to
subscribers
Send ad to desired location
End User
Content
Provider
Content
Provider
Advertiser
End User
2
Rich Media Display
Content
Provider
Advertiser
End User
3
Membership
Targeting
Content
Provider
Advertiser
End User
4
5
IP Targeting
Customized
ASP/AD
delivery mechanism
Advertiser
End User
6
Real-time News
Flash
Content
Provider
Advertiser
End User
7
Easy Approach /
Installation / 300kb
download
Content
Provider
Advertiser
End User
N/A
N/A
N/A
N/A
N/A
N/A
Receive corresponding contents
N/A
N/A
Able to send contents at specific delivery
schedule (ex. send during high traffic time
to maximize readership)
Control impression delivery by ime/day
and select media
N/A
N/A
Yes, may set
schedule for
text ad impression
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Easy to setup
account and
use metrics
N/A
N/A
N/A
Difficult for novice
users
Confusing as
Sets final delivery time (default time is
selected by content provider)
Send breaking news instantly (simple text
only, but within 1 minute-server setup
req.)
N/A
Receive breaking news real-time,
"be the first to know"
Little or no html knowledge required to
prepare and manage contents
Choose media and decide on method
of ad execution: CPM, CPC, CPA
Little or no html/xml knowledge required to
obtain or use service
Confidential and Proprietary to Shotech America,  2000. Do Not Distribute.
Limited
N/A
30
Outlook's
many functions
8
9
FEATURES
myLinker
Feedburner
Feeddemon
Proven Ad /
Content
monetization
Content
Provider
Opt-in window method is simple to
setup and easy to obtain subscribers
(no personal info required)
N/A
Advertiser
N/A
Auto RSS tag and
worthy
Metrics solution
attracts
content provider
N/A
End User
N/A
N/A
Content
Provider
Advertiser
Method of Ad does not interfere
content readership
Choose from simple banner to
Dynamic or interactive flash ad with
limited functions
Can close Ad at anytime
('X' button displays at all times)
Opt-in window method is simple to
setup and easy to obtain subscribers
(no personal info required)
N/A
Word of mouth
Hundreds of RSS
readers out in market
N/A
N/A
N/A
N/A
N/A
N/A
Word of mouth, but
there
are hundreds of RSS
readers out in market
N/A
Diverse &
Functional Ad
Types
End User
10
11
Easy to obtain
Users
Management &
Reporting
Content
Provider
Advertiser
N/A
Auto RSS tag and
worthy metrics
solution attracts
content provider
N/A
End User
N/A
N/A
Content
Provider
Manages content and ad delivery,
including impressions, CTR,
install/uninstall rate, subscriber
metrics, etc
Complete report of ad impression
count with specific time, CTR, DB
collection
N/A
RSS metrics:
display count and
content CTR
Tracks whether contents sent to
subscribers were active or inactive
and how long was it active on
desktop for each CP
Tracks how many subscribers
viewed ad from which category of
media at what time
N/A
Advertiser
End User
12
Tracking
Content
Provider
Advertiser
End User
Ad display rate and
CTR
N/A
N/A
N/A
Tracks # of end user
of RSS
media
N/A
Tracks # of end user
of RSS
media and category
N/A
N/A
Confidential and Proprietary to Shotech America,  2000. Do Not Distribute.
N/A
31
APPENDIX C: KOREAN ACTIVE USER RATES
Category/Site
Chosun
Sports Chosun
SBSi
Media
E-Commerce
Misc.
SBSi World Cup
Registered
Subscribers
1,872,474
Monthly Active
Subscribers
150,848
Monthly Web Visitors
1,000,000
811,275
172,407
n/a
5,000,344
447,496
1,000,000
431,498
419,197
n/a
iMBC
3,493,023
739,882
n/a
EBS
1,215,254
395,323
n/a
Ohmynews
891,736
119,924
n/a
Hyundai Shopping
531,024
137,118
n/a
Doosan Otto
371,826
68,119
n/a
Auction
426,627
48,366
n/a
Cherrya
403,224
45,994
n/a
BC Card
351,164
55,423
n/a
Real-Estate Guide114
793,931
285,019
n/a
Hi Seoul City Gov't
550,299
143,565
n/a
God People
(Christian Portal)
185,453
56,272
n/a
Confidential and Proprietary to Shotech America,  2000. Do Not Distribute.
32
APPENDIX D: TARGET PARTNERS AND ALLIANCES
Ad agencies
Main Clients
Usage of Rich Media
Agency.com
British Airway, Chevron, e-Bay, CNN
Avenue A/Razorfish
Capital One, Bath & Body Works
Mercedes, Levi’s
Buick, GMC, Pontiac and Saab
IBM global Web communications, Cingular
media, AARP, InterContinental’s Hotel Indigo
American Express
Computer Associates, Jaguar
Sony Australia, Lexmark International
Orange
Motorola, Hampton Inn, HP in Latin America, Diet
Coke, iTV for SkyTV in UK
Innovative usage of media
Feeding realtime news of CNN
Levi’s rich media banners
Digitas
Euro RSCG 4D
FCBi
Grey Digital Marketing
Isobar
Media Contacts
H&M, Shell, Western Union, Manpower, CIBA
Vision, M & M, 3M, Dow Corning, Aleve
Revlon, Motorola, Liberty Mutual, Adidas
Modem Media
Vonage (U.S. and U.K.), Dell (Singapore), CocaCola (Argentina) and Bayer (U.K. and Mexico)
BBC, Revlon, Delta Airlines, Kraft
MRM Worldwide
Intel, US Army, Mastercard, Nikon Camera, Dell
Nurun|Ant Farm
Home Depot (Canada), Louis Vuitton,
AutoTrader.com, Gore-Tex
Organic
Bank of America, Mitsubishi, Sirius Satellite
Radio, Skip Barber Racing School, Sony
Entertainment, Warner Brothers, Jeep
AmEx MyWish list -dynamic banner ads
Digital Land, virtual city for Intel Brazil
Visually appealing HP ad
Diet Coke’s “Slice of Life” - real-time wire headlines in
banner
Building credibility as digital specialist
Infotainment with media themed
Work notable for media use: the new Adidas_1 employed
range of digital media
Volkswagen ad using rich media
Trolli Web site combines edgy video, cool graphics.
Embrel site - introduced drug with Webcasts, radio and
banners
Engaging Nikon camera banners invite users to play by
letting them take a picture of one part of a banner ad and
then introducing them to specs about Coolpix digital
cameras.
effort for AutoTrader.com brings rich site features to
expandable banner; rich media livens up Home Depot
Canada customer e-mail
Jeep campaign - adding Google maps to a promo Web site
that also included video and a virtual geo-caching game.
Top 50 Internet Advertisers by Media Value, April 2006
Position
Advertiser
Media Value ($000)
1
Vonage
19,654
2
Monster
11,330
3
Classmates.com
10,915
4
Dollar Rent A Car
9,691
5
Ameritrade
8,144
6
Netflix
7,948
7
Scottrade
7,630
8
Forex Capital Markets (FXCM.com)
7,428
9
Fidelity Investments
7,210
10
Cingular Wireless
6,211
11
Dell VAR Computers
6,109
Confidential and Proprietary to Shotech America,  2000. Do Not Distribute.
Sector
Tech
Class
Misc
T/H
Fin
M/E
Fin
Fin
Fin
Tech
Tech
33
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
Dell Dimension Computers
FreeCreditReport.com
University of Phoenix Online
MLB.TV
HomePages
E*Trade Financial
Amazon.com
HP Printers
Wal-Mart
Dice
LowRateSource.com
Target.com
Verizon Wireless
Charles Schwab
LowerMyBills.com
LendingTree
NexTag Serivces
eBay
Comstock
Mensfacts.com
VacationsToGo.com
Bank of America
Discover Card
Wal-Mart
Overstock.com
DISH Network Satellite
AT&T
ShareBuilder
Circuit City
Lamisil Toenail Fungus RX
JCPenny
Blockbuster Online
PlanetOut.com
CyberTrader
Strayer University
Cingular Wireless & HBO Mobile
T-Mobile Wireless
Thrifty Car Rental
State Farm Insurance
GRAND TOTAL
5,895
5,515
5,498
5,469
5,282
5,270
4,367
4,079
4,052
3,879
3,793
3,762
3,554
3,520
3,460
3,441
3,414
3,383
2,965
2,876
2,869
2,775
2,754
2,750
2,709
2,696
2,691
2,683
2,649
2,601
2,582
2,500
2,422
2,422
2,408
2,387
2,381
2,366
2,334
Tech
Fin
Edu
M/E
Class
Fin
Ret
Tech
Ret
Class
Fin
Ret
Tech
Fin
Fin
Fin
Misc
Misc
Misc
M/E
T/H
Fin
Fin
Ret
Ret
M/E
Tech
Fin
Ret
Misc
Ret
M/E
M/E
Fin
Edu
Tech
Tech
T/H
Fin
$234,720
Confidential and Proprietary to Shotech America,  2000. Do Not Distribute.
34
THE TOP 50 INTERACTIVE AGENCIES
2003
projected
Rank Agency (Affiliation)
Headquarters
revenue
(000)
1
Euro RSCG Interaction (Havas) 1
New York
$260,000*
2
Grey Digital Marketing (Grey Global Group)
New York
185,000*
3
OgilvyInteractive (WPP)
New York
176,000*
4
SBI.Razorfish 2
Salt Lake City
120,000
5
Agency.com (Omnicom) 3
New York
84,000*
5
Digitas
Boston
84,000*
7
Zentropy Partners (IPG)
Los Angeles
76,400*
8
Tribal DDB (Omnicom)
New York
68,000*
9
R/GA (IPG)
New York
67,800*
10
Digital@JWT (WPP)
New York
63,000*
11
Modem Media 4
Norwalk, Conn.
60,500*
12
Wunderman Interactive (WPP) 5
New York
57,000*
13
Avenue A/I-Frontier (aQuantive)
Seattle
52,500
14
Carat Interactive (Aegis) 6
Boston
47,000
15
FCBi (IPG)
New York
45,500*
16
DraftDigital (IPG)
New York
44,000*
17
Organic (Omnicom) 7
San Francisco
43,000*
18
iDeutsch (IPG )
New York
42,000*
19
Tocquigny Advertising, Interactive + Marketing 8 Austin, Texas
41,000
20
Critical Mass (50% owned by Omnicom)
Chicago
37,000*
21
AKQA
San Francisco
36,000
22
The Digital Edge (WPP) 5
New York
34,000*
23
Nurun (Quebecor)
Montreal
32,000
Medical Broadcasting Company (10% owned by
24
Philadelphia
28,100*
WPP)
Morristown,
25
DVC Worldwide
27,600
N.J.
26
Universal McCann Interactive (IPG)
New York
25,100*
27
IconNicholson
New York
24,000
28
Macquarium Intelligent Communications
Atlanta
24,000
29
imc2
Dallas
23,700
Kansas City,
30
VML (WPP)
23,500*
Mo.
31
Planning Group
Miami
23,500
31
Semaphore Partners (Publicis) 9
New York
23,000*
33
Slingshot
Dallas
22,500
34
Starcom IP (Publicis)
Chicago
20,900*
Emeryville,
35
Wirestone
20,000*
Calif.
36
Blast Radius
New York
19,000
37
Blue Dingo
New York
18,000
38
Risdall Advertising Agency
New Brighton
17,500
2002
actual
revenue
$239,000
161,000
160,000
75,000
80,000*
72,000*
69,500
52,000
56,500
55,600
70,000
49,198
45,900
36,000
36,400
39,192
37,802
38,056
33,000
32,000
30,000
30,000
39,000
percent 2003
increase employees
9%
15
10
60
5
17
10
31
20
13
-14
16
14
31
25
12
14
10
24
16
20
13
-18
1,225*
1,070*
1,150*
700
348
440
490
475*
264
240
218
305*
225
271
257
237
225
131
80
250*
280
195
398
26,000*
8
141
27,500
0
56*
22,800
21,000
20,000
16,400
10
14
20
45
150*
140
116
113
18,800
25
85
18,000
27,000
17,000
19,000*
31
-15
32
10
87
140*
45
125*
20,000
0
109
17,400
17,000
16,000
9
6
9
225
56
29
Confidential and Proprietary to Shotech America,  2000. Do Not Distribute.
35
39
Genex
39
Molecular
41
42
43
44
Campbell-Ewald Digital (IPG)
RappDigital (Omnicom)
atmosphereBBDO (Omnicom)
Multimedia Solutions
45
Ten/Resource
46
47
48
49
50
*
1
2
3
4
5
6
7
8
Los Angeles
Watertown,
Mass.
Warren, Mich.
New York
New York
Edgewater, N.J.
Columbus,
Ohio
Los Angeles
Philadelphia
Conshohocken
Princeton, N.J.
Cincinnati
17,000
12,000
42
100
17,000
11,700
45
77
16,700*
15,500*
14,500*
13,500
16,641
14,100
7,900
9,900
0
10
84
36
85
84*
80*
85
12,500
10,500
19
60
9,100
10,400
8,700
13,000
9,100
23
5
21
-23
5
102
78
50
54
24
DNA Studio
11,200
Refinery
10,900
Cadient
10,500
SimStar Internet Solutions
10,000
HSR Business to Business
9,600
Estimated numbers
Absorbed Havas siblings Magnet, Brann, others from Arnold and Media Planning Group
Acquired Razorfish, March 2003; Xcelerate, January 2003
Acquired by Omnicom, July 2003
Interpublic divests to 0.6% ownership, December 2003
Wunderman Interactive media billings merged into The Digital Edge, June 2003
Acquired Freestyle Interactive, May 2003
Acquired by Omnicom, February 2003
Fiscal year numbers reported, April '02 through March '03 /font>
Confidential and Proprietary to Shotech America,  2000. Do Not Distribute.
36
APPENDIX E: REVENUE FORECASTS
50% OF INDUSTRY STANDARD PRICING, YEAR 1
Y1Q1
$160,000
Y1Q2
$290,000
Y1Q3
$410,000
Y1Q3
$420,000
Year 1
$1,280,000
$64,000
$116,000
$136,667
$140,000
$456,667
$458,000
$0
$312,000
$0
$312,000
$1,579,500
$312,000
$4,131,000
$1,394,000
$5,710,500
$24,000
$60,000
$24,000
$30,000
$24,000
$0
$24,000
$0
$96,000
$90,000
$766,000
$1,694,000
$772,000
$3,756,000
$882,667
$6,366,000
$896,000
$9,054,000
$3,316,667
$20,870,000
myLinker Enterprise
Maintenance Fees
$0
$0
$0
$0
$0
$0
$612,500
$0
$612,500
$0
Full-Serve ASP Services
Content Providers
ASP New User Numbers
Accumulated Users
CPL Revenue
$0
0
0
$0
$0
0
0
$0
$71,553
1,020,000
1,989,000
$31,824
$231,489
1,071,000
5,202,000
$83,232
$303,042
2,091,000
7,191,000
$115,056
Online Transaction
ASP New User Numbers
Accumulated Users
CPL Revenue
$0
0
0
$0
$0
0
0
$0
$31,590
600,000
1,170,000
$187,200
$121,995
630,000
3,060,000
$489,600
$153,585
$1,230,000
4,230,000
$676,800
Quarterly Revenue
$0
$0
$322,167
$1,538,816
$1,860,983
Costs of Sales
myLinker Enterprise
myLinker ASP
Total Cost of Sales
$0
$0
$0
$0
$0
$0
$0
$67,118
$67,118
$153,125
$192,983
$346,108
$153,125
$260,101
$413,226
($766,000)
$0
($772,000)
$0
($627,618)
$0
$296,709
$0
($1,868,909)
$0
Quarter
Salary
Overhead
sub total
Tech & Op & HW
Accumulated User # for ASP
User # overlap discount
S/W, Co-lo
Office
Total
Accumulate Expense Total
EBITDA
Royalty Payment
Confidential and Proprietary to Shotech America,  2000. Do Not Distribute.
37
50% OF INDUSTRY STANDARD PRICING, YEAR 2
Quarter
Salary
Y2Q1
$480,000
Y2Q2
$560,000
Y1Q3
$640,000
Y1Q3
$720,000
Year 2
$2,400,000
Overhead
sub total
Tech & Op & HW
Accumulated User # for ASP
User # overlap discount
S/W, Co-lo
Office
$160,000
$186,667
$213,333
$240,000
$800,000
$488,800
$19,075,500
$561,600
$22,477,500
$676,000
$26,973,000
$800,800
$32,319,000
$2,527,200
$100,845,000
$24,250
$0
$28,500
$0
$34,000
$50,000
$40,500
$0
$127,250
$50,000
$1,153,050
$12,244,950
$1,336,767
$16,007,550
$1,613,333
$20,610,333
$1,801,300
$25,829,350
$5,904,450
$74,692,183
$900,000
$0
$975,000
$0
$2,475,000
$0
$1,500,000
$0
$5,850,000
$0
Full-Serve ASP Services
Content Providers
ASP New User Numbers
Accumulated Users
CPL Revenue
$1,068,935
1,224,000
24,021,000
$384,336
$1,259,573
1,632,000
28,305,000
$452,880
$1,511,487
1,989,000
33,966,000
$543,456
$1,811,061
2,295,000
40,698,000
$651,168
$5,651,055
7,140,000
126,990,000
$2,031,840
Online Transaction
ASP New User Numbers
Accumulated Users
CPL Revenue
$628,785
720,000
14,130,000
$2,260,800
$740,925
960,000
16,650,000
$2,664,000
$889,110
1,170,000
19,980,000
$3,196,800
$1,065,330
1,350,000
23,940,000
$3,830,400
$3,324,150
$4,200,000
74,700,000
$11,952,000
Quarterly Revenue
$5,242,856
$6,092,378
$8,615,853
$8,857,959
$28,809,045
Costs of Sales
myLinker Enterprise
myLinker ASP
Total Cost of Sales
$180,000
$904,762
$1,084,762
$195,000
$1,066,120
$1,261,120
$495,000
$1,279,344
$1,774,344
$300,000
$1,532,908
$1,832,908
$1,170,000
$4,783,134
$5,953,134
EBITDA
Royalty Payment
$3,005,044
$0
$3,494,491
$0
$5,228,175
$0
$5,223,751
$0
$16,951,461
$0
Total
Accumulate Expense Total
myLinker Enterprise
Maintenance Fees
Confidential and Proprietary to Shotech America,  2000. Do Not Distribute.
38
50% OF INDUSTRY STANDARD PRICING, YEAR 3
Quarter
Salary
Y3Q1
$720,000
Y3Q2
$840,000
Y3Q3
$960,000
Y3Q4
$1,050,000
Year 3
$3,570,000
Overhead
sub total
Tech & Op & HW
Accumulated User # for ASP
User # overlap discount
S/W, Co-lo
Office
$240,000
$280,000
$320,000
$350,000
$1,190,000
$7,935,200
$306,180,000
$8,080,800
$312,255,000
$8,268,000
$320,031,000
$8,476,000
$328,536,000
$32,760,000
$1,267,002,000
$383,250
$0
$390,750
$0
$400,250
$50,000
$411,000
$0
$1,585,250
$50,000
$9,278,450
$46,187,550
$9,591,550
$74,558,200
$9,998,250
$104,226,000
$10,287,000
$134,787,600
$39,155,250
$359,759,350
$1,500,000
$0
$3,500,000
$0
$2,200,000
$0
$4,800,000
$0
$12,000,000
$0
Full-Serve ASP Services
Content Providers
ASP New User Numbers
Accumulated Users
CPL Revenue
$17,157,420
2,295,000
385,560,000
$6,168,960
$17,497,845
2,805,000
393,210,000
$6,291,360
$17,933,589
3,366,000
403,002,000
$6,448,032
$18,410,184
3,672,000
413,712,000
$6,619,392
$70,999,038
12,138,000
1,595,484,000
$25,527,744
Online Transaction
ASP New User Numbers
Accumulated Users
CPL Revenue
$10,092,600
1,350,000
226,800,000
$36,288,000
$10,292,850
1,650,000
231,300,000
$37,008,000
$10,549,170
1,980,000
237,060,000
$37,929,600
$10,829,520
2,160,000
243,360,000
$38,937,600
$41,764,140
$7,140,000
938,520,000
$150,163,200
Quarterly Revenue
$71,206,980
$74,590,055
$75,060,391
$79,596,696
$300,454,122
Costs of Sales
myLinker Enterprise
myLinker ASP
Total Cost of Sales
$210,000
$14,522,288
$14,732,288
$490,000
$14,810,428
$15,300,428
$308,000
$15,179,248
$15,487,248
$672,000
$15,582,645
$16,254,645
$1,680,000
$60,094,609
$61,774,609
EBITDA
Royalty Payment
$47,196,243
$0
$49,698,077
$0
$49,574,893
$0
$53,055,051
$0
$199,524,263
$0
Total
Accumulate Expense Total
myLinker Enterprise
Maintenance Fees
Confidential and Proprietary to Shotech America,  2000. Do Not Distribute.
39
INDUSTRY STANDARD PRICING
Y1Q1
$160,000
Y1Q2
$290,000
Y1Q3
$410,000
Y1Q3
$420,000
Year 1
$1,280,000
$64,000
$116,000
$136,667
$140,000
$456,667
$458,000
$0
$312,000
$0
$312,000
$1,579,500
$312,000
$4,131,000
$1,394,000
$5,710,500
$24,000
$60,000
$24,000
$30,000
$24,000
$0
$24,000
$0
$96,000
$90,000
$766,000
$1,694,000
$772,000
$3,756,000
$882,667
$6,366,000
$896,000
$9,054,000
$3,316,667
$20,870,000
myLinker Enterprise
Maintenance Fees
$0
$0
$0
$0
$0
$0
$612,500
$0
$612,500
$0
Full-Serve ASP Services
Content Providers
ASP New User Numbers
Accumulated Users
CPL Revenue
$0
0
0
$0
$0
0
0
$0
$143,106
1,020,000
1,989,000
$31,824
$462,978
1,071,000
5,202,000
$83,232
$606,084
2,091,000
7,191,000
$115,056
Online Transaction
ASP New User Numbers
Accumulated Users
CPL Revenue
$0
0
0
$0
$0
0
0
$0
$63,180
600,000
1,170,000
$187,200
$243,990
630,000
3,060,000
$489,600
$307,170
$1,230,000
4,230,000
$676,800
Quarterly Revenue
$0
$0
$425,310
$1,892,300
$2,317,610
Costs of Sales
myLinker Enterprise
myLinker ASP
Total Cost of Sales
$0
$0
$0
$0
$0
$0
$0
$88,606
$88,606
$153,125
$266,625
$419,750
$153,125
$355,231
$508,356
($766,000)
$0
($772,000)
$0
($545,963)
$0
$576,550
$0
($1,507,413)
$0
Quarter
Salary
Overhead
sub total
Tech & Op & HW
Accumulated User # for ASP
User # overlap discount
S/W, Co-lo
Office
Total
Accumulate Expense Total
EBITDA
Royalty Payment
Confidential and Proprietary to Shotech America,  2000. Do Not Distribute.
40
INDUSTRY STANDARD PRICING, YEAR 2
Quarter
Salary
Y2Q1
$480,000
Y2Q2
$560,000
Y1Q3
$640,000
Y1Q3
$720,000
Year 2
$2,400,000
Overhead
sub total
Tech & Op & HW
Accumulated User # for ASP
User # overlap discount
S/W, Co-lo
Office
$160,000
$186,667
$213,333
$240,000
$800,000
$488,800
$19,075,500
$561,600
$22,477,500
$676,000
$26,973,000
$800,800
$32,319,000
$2,527,200
$100,845,000
$24,250
$0
$28,500
$0
$34,000
$50,000
$40,500
$0
$127,250
$50,000
$1,153,050
$12,244,950
$1,336,767
$16,007,550
$1,613,333
$20,610,333
$1,801,300
$25,829,350
$5,904,450
$74,692,183
$900,000
$0
$975,000
$0
$2,475,000
$0
$1,500,000
$0
$5,850,000
$0
Full-Serve ASP Services
Content Providers
ASP New User Numbers
Accumulated Users
CPL Revenue
$2,137,869
1,224,000
24,021,000
$384,336
$2,519,145
1,632,000
28,305,000
$452,880
$3,022,974
1,989,000
33,966,000
$543,456
$3,622,122
2,295,000
40,698,000
$651,168
$11,302,110
7,140,000
126,990,000
$2,031,840
Online Transaction
ASP New User Numbers
Accumulated Users
CPL Revenue
$1,257,570
720,000
14,130,000
$2,260,800
$1,481,850
960,000
16,650,000
$2,664,000
$1,778,220
1,170,000
19,980,000
$3,196,800
$2,130,660
1,350,000
23,940,000
$3,830,400
$6,648,300
$4,200,000
74,700,000
$11,952,000
Quarterly Revenue
$6,940,575
$8,092,875
$11,016,450
$11,734,350
$37,784,250
Costs of Sales
myLinker Enterprise
myLinker ASP
Total Cost of Sales
$180,000
$1,258,453
$1,438,453
$195,000
$1,482,891
$1,677,891
$495,000
$1,779,469
$2,274,469
$300,000
$2,132,156
$2,432,156
$1,170,000
$6,652,969
$7,822,969
EBITDA
Royalty Payment
$4,349,072
$0
$5,078,218
$0
$7,128,648
$0
$7,500,894
$0
$24,056,831
$0
Total
Accumulate Expense Total
myLinker Enterprise
Maintenance Fees
Confidential and Proprietary to Shotech America,  2000. Do Not Distribute.
41
INDUSTRY STANDARD PRICING, YEAR 3
Quarter
Salary
Y3Q1
$720,000
Y3Q2
$840,000
Y3Q3
$960,000
Y3Q4
$1,050,000
Year 3
$3,570,000
Overhead
sub total
Tech & Op & HW
Accumulated User # for ASP
User # overlap discount
S/W, Co-lo
Office
$240,000
$280,000
$320,000
$350,000
$1,190,000
$7,935,200
$306,180,000
$8,080,800
$312,255,000
$8,268,000
$320,031,000
$8,476,000
$328,536,000
$32,760,000
$1,267,002,000
$383,250
$0
$390,750
$0
$400,250
$50,000
$411,000
$0
$1,585,250
$50,000
$9,278,450
$46,187,550
$9,591,550
$74,558,200
$9,998,250
$104,226,000
$10,287,000
$134,787,600
$39,155,250
$359,759,350
$1,500,000
$0
$3,500,000
$0
$2,200,000
$0
$4,800,000
$0
$12,000,000
$0
Full-Serve ASP Services
Content Providers
ASP New User Numbers
Accumulated Users
CPL Revenue
$34,314,840
2,295,000
385,560,000
$6,168,960
$34,995,690
2,805,000
393,210,000
$6,291,360
$35,867,178
3,366,000
403,002,000
$6,448,032
$36,820,368
3,672,000
413,712,000
$6,619,392
$141,998,076
12,138,000
1,595,484,000
$25,527,744
Online Transaction
ASP New User Numbers
Accumulated Users
CPL Revenue
$20,185,200
1,350,000
226,800,000
$36,288,000
$20,585,700
1,650,000
231,300,000
$37,008,000
$21,098,340
1,980,000
237,060,000
$37,929,600
$21,659,040
2,160,000
243,360,000
$38,937,600
$83,528,280
$7,140,000
938,520,000
$150,163,200
Quarterly Revenue
$98,457,000
$102,380,750
$103,543,150
$108,836,400
$413,217,300
Costs of Sales
myLinker Enterprise
myLinker ASP
Total Cost of Sales
$210,000
$20,199,375
$20,409,375
$490,000
$20,600,156
$21,090,156
$308,000
$21,113,156
$21,421,156
$672,000
$21,674,250
$22,346,250
$1,680,000
$83,586,938
$85,266,938
EBITDA
Royalty Payment
$68,769,175
$0
$71,699,044
$0
$72,123,744
$0
$76,203,150
$0
$288,795,113
$0
Total
Accumulate Expense Total
myLinker Enterprise
Maintenance Fees
Confidential and Proprietary to Shotech America,  2000. Do Not Distribute.
42