E Commerce Panel New Generation E Commerce
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Jefferies & Company, Inc.
Jefferies 4th Annual Internet Conference
February 27, 2008
CONFIDENTIAL DRAFT
Member, SIPC
eCommerce Panel: New Generation eCommerce
Panelists
Will Harvey
Founder & Chairman
David Liu
Managing Director Internet & Digital Media Group
Roger Butterwick
CEO
John Delbridge
COO
Champ Mitchell
Chairman
1
Panelists arerepresentative of thenew frontiers ineCommerce
B-to-B
User Generated Commerce
Digital vs. Atoms
Sector Snapshot
2
133
139
144
149
152
156
120
125
130
135
140
145
150
155
160
2006 2007 2008 2009 2010 2011
What is the E-Commerce Opportunity?
100
116
131
145
158171
0
20
40
60
80
100
120
140
160
180
200
2006 2007 2008 2009 2010 2011
US Online Retail Revenue, 2006-2011E1 US Online Shoppers, 2006-2011E2
(1) Source: JupiterResearch, January 2007.(2) Source: eMarketer, May 2007. Note: ages 14+.
($ billions) (millions)
11% CAGR
3% CAGR
3
(1) Source: comScore Media Metrix, February 2008.
Who are the Leading E-Commerce Retailers?
(millions)
Total Unique Visitors – January 20081
78.8
59.0
48.4
30.7
27.9
26.9
24.2
17.8
17.4
16.8
0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0
AmericanGreetings Property
Moviefone
Best Buy
Shopzilla.com
Yahoo! Shopping
Target Corporation
Wal-Mart
Apple Inc.
Amazon Sites
eBay
4
What is the Market Opportunity for Digital Goods?
(terabyte; average per day)
Digital Downloads
179.3 229.4313.0
427.2562.9
729.2
907.0
10.515.8
20.6
25.5
28.9
31.8
34.4
162.3202.9
239.5
270.6
297.6
318.5
334.4
352.1
448.1
573.0
723.3
889.4
1,079.5
1,275.7
0
250
500
750
1,000
1,250
1,500
2006 2007 2008 2009 2010 2011 2012
Video Audio Other
Source: IDC, June 2007. 1
24% CAGR
Meet the Panelists
5
Roger ButterwickCEO
5
ATC-Onlane Business Overview
Makes the Purchase and Sale of Used Vehicles Easier, Faster, and More Cost Efficient
B2B model Connects Buyers and Sellers of Wholesale Used Vehicles
Sellers of Used Vehicles (OEMs, Independent Finance Companies, fleets, daily rental, repossessions, dealers, etc.)
Automotive Dealers (Franchised, Independent, and Wholesale dealers)
Streamlines the Used Vehicle Remarketing Process Traditional Vehicle Remarketing Process (25-45 days) ATC-Onlane Process (1-10 days)
Large Market Opportunity 23 million wholesale used vehicle transactions annually $190 billion in gross merchandise value 70,000 Franchise and Independent Automotive Dealers 60% gross margins
ATC-Onlane Business Overview
Sellers Preferred partner for 23 automotive brands Significant cost savings ($300-$900 per vehicle) Significant time savings (10-30 days) Greater control of asset portfolio
Dealers 30,000+ dealers nationwide registered (90% of all franchise
dealers) Approx. 6,000 unique dealer purchase a car from ATC-Onlane each
month Less time away from the dealership
Growth/Market Share Expected 50% compounded YOY growth through 2010 Currently less than 2% market share
Operating in Canada and the United States Headquartered in Menlo Park, CA; Offices in Mesa, AZ and Toronto,
ON Over 400 employees
Institutional consignors on the ATC-Onlane platform
Captive Finance &
OEM
Non-Captive/ OEM &
Commercial Fleet/Lease
Daily Rental
John DelbridgeCOO
5
New Generation eCommerce
Jefferies 4th Annual Internet Conference
February 27, 2007
John DelbridgeChief Operating Officer
Vision: Printing . . . Without a Printer
Mission: To Delight our Customers with the easiest, fastest and most reliable way to print, manage and distribute documents
» Investors: Goldman Sachs, HP, DFJ (Hotmail, Skype), Harbourvest
» Laser Focus on Online, On-Demand Document Printing and Distribution
» 490 People: HQ NYC, Production in Memphis
» Profitable and growing 40+% per year last 6 years
» 3 million pages a night and 4 million bound documents in 2007
Mimeo at a Glance:Founded 1998
Perspective on 4 Million Documents
4 million documents = 210,000 Feet
Airplanes = 50,000 feet
Empire State Building = 1,453 feet
150x the Height of the Empire State Building
“In Outer Space”
Simple Strategy Leveraged by Technology
» Premise: Internet greatly displaces need for copy shops and print centers
» Web based UI and technologies feeding centralized production enable . . . - Capacity to scale growth and handle large volumes
- Workflow to offer extremely quick turnaround
- Economies of scale low cost producer AND high value provider
- Highest quality
» On-Site and Kinkos/local copy shops can’t compete on any measure
4,000+ Corporate Accounts:Revenue Split: 35% Global 2000, 65% SMB
Sweet spot: bound documents to many locations, overnight
» HR• Training manuals (internal)
• Orientation guides, handbooks
» Sales & Marketing• Sales collateral, brochures
• RFP responses, Presentations
• Training materials (external)
» Operations• Reference guides
• User manuals
Memphis Production and Distribution Facility
» World’s largest (140,000 sq. ft.) and most automated facility dedicated to digital production and distribution
» Strategically located next to the FedEx hub in Memphis, TN
Thank You
Will HarveyFounder & Chairman
5
New Generation eCommerceWill Harvey, Founder and Chairman Jefferies Internet Conference 2008
Videohttp://www.youtube.com/watch?v=RmUeJFHSH5A
User
Developer IMVU
Catalog
$ for credits
Credits for item
~50% credits from item sale
~50% credits from item sale
Credits for $1
2
3
Developer EconomyDEVELOPER ECONOMICS
Retail price of 1000 credits $1.00
Retail price of virtual shirt 500 credits
Split to developer 250 credits
Market price of 1000 credits $0.50
Profit to developer 12.5 cents
Two Axes of Growth
0
3
6
9
$12
0 200 400 600 800M
$2BAnnual Revenue
ActiveCustomers
Yahoo
WoW
MySpace $2BAnnual Revenue
Mon
thly
Rev
enue
per
Use
r
Habbo
ClubPenguin
GaiaSlide
IMVU
MMOGs have high ARPU but smallavailable market. Grows upward.
Social networking has low ARPU but large available market. Grows to the right.
Avatar-Based Communication
0.00
0.50
1.00
1.50
$2.00
0 50 100 150 200M
$150MAnnual Revenue
ActiveCustomers
MySpace
Slide
$150MAnnual Revenue
Mon
thly
Rev
enue
per
Use
r
Habbo
ClubPenguinGaia
IMVU
Avatar based communication has potential for ARPU of MMOGs and market size of social networking. Grows upward and to the right.
0.00
1.00
$2.00
0 2 4 6 8 10M
$50MAnnual Revenue
ActiveCustomers
IMVU
$50MAnnual Revenue
Mon
thly
Rev
enue
per
Use
r
HabboClub
PenguinGaia
IMVU’s Next Step
Champ MitchellChairman
5
Network Solutions
Company OverviewChamp MitchellChairmanFebruary 27, 2008
Network Solutions Confidential
Network Solutions Timeline
NS acquired by VeriSign
Domain name industry opened to
competition
NS awarded grant from National Sciences Foundation
to develop the Internet’s domain name registration
service, becoming monopoly domain name registrar
NS goes public
NS begins transition to Web solutions provider
from domain name provider
Post-monopoly, NS experiences
plummeting sales and market share
NS started charging fees for
domain name registration
NS acquired by
SAIC
NS stabilized and becomes
cash flow positive in 3Q
2002
19931993 19941994 20002000 20012001 20032003 20052005 20062006 20072007200420042002200219951995 19971997
NS carved out of VeriSign and Taken Private
NS Sold to General Atlantic
NS enters Hosting market
NS enters eCommerce
& Online Marketing
Network Solutions Confidential
Network Solutions Today
• Leading Provider of Web Services to Small Businesses
• 4 MM Customers (3.5 MM Small Businesses) with Average Customer Life of 9 years
• Sales CAGR 30%; Revenue CAGR > 50% Since 2004 (Web Services Grows 88%)
• Added 119 Products in 20 months
• Number of Products per customer, ARPU and Ticket Grow Each Month
• While Generating 30% Operating Margin & 22%-24% Free Cash Flow Margin
• Top Two Box Customer Satisfaction 87%
RESULT: > 700% growth in value & >3,500% ROI in 39 months1
1 Source: Wall Street Journal, May 30,2007
Dave’s Top Five
12
Dave’s Top Five
1. Given its stage of development, is Internet Commerce (B2B, B2C, C2C) immune to a general U.S. recession?
2. Social lead generation (e.g., Facebook Beacon): future of ecommerce? Can this be applied in B2B?
3. Friend or foe? Neither? eBay Amazon Microsoft/Yahoo!, Google
4. Is User Generated Commerce the next BIG thing? Does this apply in B2B?
5. How are you or your customers addressing the growing customer reliance on search engines as part of the purchasing process?
2002
2003
2004
2005
2006
16
2007
Dave’s Top Five Back-up
1. If you could LONG or SHORT any stock to exploit the next phase of e-commerce what would it be?
2. Do you believe that community and social shopping will have a meaningful impact on e-commerce?
3. What will limit the growth of B2C and B2B ecommerce?
4. How important is event-triggered marketing and customer lifecycles in developing your customer relationship?
5. How are you exploiting the growing customer desire for product customization?
15
2002
2003
2004
2005
2006
2007
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