Emerging Markets Investment Proposal Local Presence Beyond Current 40 DSO Countries

1
Emerging Markets Investment Proposal
Local Presence Beyond Current 40 DSO Countries
April xx, 2010

Google Confidential and Proprietary
Significant opportunity
in countries outside of
existing DSO presence
With focus on 18
clusters, we can
capture $0.3-$1B
3-stage approach
to market entry
I) Market / Biz Dev
II) DSO Immed Opportunity
III) DSO Growth Focus
We require +140HC to
deliver revenue uplift in
the next three years
• 200 Countries outside existing DSO footprint have total ad market of
approximately $40B
• However, countries are in widely varying stages of maturity for both internet
users and advertisers, and many are not yet at a sufficient scale for entry
• 18 country clusters could sustain a local office based on ad market size, relative
sophistication and in-market traction
• We can capture ~$1.1B revenue, with incremental revenue of ~$650M, by
following existing revenue trajectory and accelerating with Local presence,
• 8 clusters require focus on mkt/biz dev of advertising and user eco-systems
– We should enter these clusters with a biz dev and marketing team, and then
ramp to scale once market dynamics improve
• 10 clusters are DSO sales-ready – i.e. have advertiser and consumer scale
– We should enter these clusters with a Local team of 7 HC + 3 AdOps
• 3 Countries currently entering “Growth Stage” – Ready to grow beyond $30m to
$70m+ but are not resourced to capture the opportunity (Rev/HC ~$5m per year) .
5-6 others will reach this stage in 1 year.
- Kept to be discussed as part of the Market Investment Framework.
• 140HC will add sufficient scale to drive growth across 18 country clusters
• Investment to be phased (over 4 quarters) with appropriate triggers for entry and
extension
Executive Summary
2

Markets with no local presence spend $40B on Ads
Total Ad Mkt$M Online Ad Mkt $M xxx $M Share % Opportunity 1-3 %
Colombia 3,880 99 x.x x.xx% 39 116
Philippines 2,776 4 x.x x.xx% 28 83
Indonesia 2,544 8 x.x x.xx% 25 76
Thailand 2,430 63 x.x x.xx% 24 73
Slovakia 1,900 23 x.x x.xx% 19 57
Malaysia 1,626 54 x.x x.xx% 16 49
Puerto Rico 1,430 38 x.x x.xx% 14 43
Estonia 1,350 19 x.x x.xx% 14 41
Venezuela 1,220 33 x.x x.xx% 12 37
Croatia 1,200 20 x.x x.xx% 12 36
Saudi Arabia 1,174 38 x.x x.xx% 12 35
Nigeria 1,100 28 x.x x.xx% 11 33
Bulgaria 1,100 25 x.x x.xx% 11 33
Chile 980 46 x.x x.xx% 10 29
Ecuador 960 21 x.x x.xx% 10 29
Ukraine 760 79 x.x x.xx% 8 23
Romania 755 61 x.x x.xx% 8 23
Lithuania 710 45 x.x x.xx% 7 21
Egypt 698 22 x.x x.xx% 7 21
Jordan 600 7 x.x x.xx% 6 18
Serbia 561 9 x.x x.xx% 6 17
Peru 440 18 x.x x.xx% 4 13
Vietnam 429 7 x.x x.xx% 4 13
Pakistan 380 5 x.x x.xx% 4 11
Panama 360 10 x.x x.xx% 4 11
Morocco 350 14 x.x x.xx% 4 11
Uganda 250 6 x.x x.xx% 3 8
Bosnia 225 4 x.x x.xx% 2 7
OTHERS 8,025 62 x.x x.xx% 80 241
Total 40,213 868 x.x x.xx% 404 1,208
Argentina Canada Finland Hungary Japan Norway South Africa Taiwan
Australia China France India Kenya Poland South Korea Turkey
Austria Czech Rep. Germany Ireland Mexico Portugal Spain UAE
Belgium Denmark Greece Israel Netherlands Russia Sweden UK
Brazil Egypt Hong Kong Italy N. Zealand Singapore Swiss US
OUT OF
SCOPE
40 DSO
Countries
ROEM - 176 Countries
Appendix P. 15
spend $8.0B on Ads
Top 28 Countries spend
> $30B on Ads
18 New Countries On Grey
List with legal / policy risk
Appendix P. 17 to 19
= No Expansion Ask
= Expansion Asks
Mid-Term
Opportunity
3
Discussion Point
Local / Remote Service?
1
2
3
4

0% 10% 20% 30% 40% 50% 60% 70%
Nature of opportunity
& xxx Coverage Vary significantly . .
Internet penetration 2010
CN
10,000
5,000
3,000
1,000
250
150
GR
Countries with internet penetration less than 15% but sizable total ad
market. xxx needs to lobby Internet Penetration Growth**
20,000
2,000
500
BR
RU
Country Legend:
AR: Argentina BA: Baltics BR: Brazil BG: Bulgaria CL: Chile CO: Colombia CN: China
CZ: Czech Rep. EC: Ecuador EG: Egypt GR: Greece HU: Hungary HR: Croatia ID: Indonesia
IN: India JO:Jordan MA: Morocco MY: Malaysia MX: Mexico NG: Nigeria PH: Philippines
PK: Pakistan RO: Romania SA: Saudi Arabia SK: Slovakia TH: Thailand TR: Turkey UA: Ukraine
VN: Vietnam ZA: South Africa
* Minimal investment defined as at least 7 HC **except India *** Central America includes Guatemala, Panama, El Salvador, Honduras, Nicaragua, Costa Rica, **** Puerto Rico + Dominican Republic ***** Peru+Ecuador
Ad market 2010 (log)
Countries with total
ad market less than
$500M too small to
warrant
monetization focus.
Include many
“mission markets”
such as SSA
DSO > 5 Employees
DSO < 5 Employees
Scout/DCS/OSO only
No Presence
Philippines
Chile
Saudi+NG
Thailand
Malaysia
NorthAfrica
Bulgaria
Andean
Caribbean
Indonesia
Balkans
Colombia
Romania
Levant
Centr.Amer.
Ukraine
Slovakia
Baltics
0
50
100
150
200
250
= 30M QPD
4
Markets were we are currently
small often offer larger long
term opportunity
Revenue Potential $M (5% AdMarket - xxx 09 Revenue
2
3
4
CN
CO
BR
PL
RU
MX
AR
TR
ZA
TH
PH
PK
SK
MY
Baltics
CL
HRBG
SA
RO
MA
UA
Andean*****
VN
NG
ID
CZ
GR
HU
EG
Caribbean****
JO
Immediate Opportunity
IN
Central
America***
1

Propose local presence in 18 country clusters that could
reach $30M (in 1 – 5 years)
Country
2009 Rev,
$M
Advertising
Market
1% of Total Ad
market
Comments on
Operating Model
Market / Biz
Dev.
Focus
Egypt + North Africa x.x 1,364 14 Serve From Egypt
Em. Central America x.x 1,747 17 Serve from Panama
Colombia x.x 3,880 39 Serve Locally
Andean x.x 1,470 15 Serve from Peru
Indonesia x.x 2,490 25 Serve Locally
Philippines x.x 2,760 28 Serve Locally or from Singapore? **
Levant x.x 725 7 Strategic Ask For Jordan*
Saudi Arabia + Gulf x.x 2,200 22 Serve Locally or From Dubai? **
DSO
Immediate
Opportunity
Ukraine x.x 760 8 Serve Locally
Romania x.x 830 8 Serve Locally
Thailand x.x 2,430 24 Serve Locally?
Slovakia x.x 1,930 19 Serve Locally – Report To CZ
Baltics x.x 2,205 22 Serve from Tallinn - Estonia
Balkans x.x 3,370 34 Serve from Croatia
Caribbean x.x 2,218 22 Serve from Puerto Rico
Chile x.x 990 10 Serve Locally
Bulgaria x.x 1,126 10 Serve Locally
Malaysia x.x 1,600 16 Serve Locally
TOTAL 18 MARKETS x.x 34,095 340
II
* Jordan is the ME HQ for Yahoo – Maktoob with more than 260 local employees
I
5** Pending Legal / Policy Due Diligence
1
2
3
4

New markets will require different operating models
Maturing
2007 2008 2009 2010 2011 2012 2013
500
400
300
200
100
0
600
2013TARGETREVDESCRIPTION
$30M scale in 3-5 years
1. Central America ($xxM)
2. Saudi ($xxM)*
3. Indonesia ($xxM)*
4. North Africa ($xxM)
5. Colombia ($xxM)
6. Andean ($xxM)
7. Philippines ($xxM)
8. Levant ($xxM)
• Markets >$7.5M / Q today
but with structures smaller
than growth structure.
• Have market potential and
momentum to hit $70M in
2012
• Markets< $5M in ’09 revenue
• Market development needed in
to increase online ad spend
• Projected to reach $30M in 3-5
years.
REVENUEUPLIFT
DSO IMMEDIATE OPPORTUNITYBIZ / MKT DEV FOCUS
2007 2008 2009 2010 2011 2012 2013
500
400
300
200
100
0
600
$30M scale in 2 years
1. Balkans($xxM)
2. Malaysia ($xxM)
3. Bulgaria ($xxM)
4. Chile ($xxM)
5. Caribbean1 ($xxM)
• Markets have expected
2010 revenue > $10M
• Projected to reach $30M in
2012 with HC investment at-
scale
2013 Uplift = $188M
2013 Uplift = $145M
III
(2013 revenue uplift from baseline)1. Includes revenue from small Caribbean islands that would serve as satellite markets
1. UAE ($27M)
2. South Africa ($10M)
3. Greece ($16M)
0
50
100
150
200
250
2007 2008 2009 2010 2011 2012 2013
2013 Uplift = $53M
6
$ 30M - $70M in 2-3 years
DSO GROWTH FOCUSIII
Out Of This Plan’s Scope
Next
Stage in
2011
* Actually uplift of 11M but bottom-u predicts $20M
1
$30M in 1 year
2007 2008 2009 2010 2011 2012 2013
500
400
300
200
100
0
600
2013 Uplift = $324M
1. Ukraine ($xxM)
2. Thailand ($xxM)
3. Slovakia ($xxM)
4. Baltics($xxM)
5. Romania ($xxM)
• Markets > $10M revenue in
‘09 with strong upward
trajectory
• Have market potential and
momentum to hit $30M in
2011

Countries in
Scope
Stage
A 3-stage market entry approach to serve New Clusters
& Existing Growth EMs . .
Maturing
$ 30M - $70M in 2-3 years$30M scale in 1-2 years$30M scale in 3-5 years
1. Ukraine
2. Thailand
3. Slovakia
4. Baltics
5. Romania
6. Balkans
7. Malaysia
8. Bulgaria
9. Chile
10. Caribbean
1. C. America
2. Saudi
3. Indonesia
4. North Africa
DSO IMMED. OPPORTUNITYBIZ / MKT DEV FOCUS III DSO GROWTH FOCUSIII
5. Colombia
6. Andean
7. Philippines
8. Levant
SALESMKTGFunctionsNON-SALES
CM / DSO
DCS
ISO
B2B
B2C
Partners
AdOps
Legal
PR/GR
Product
HC Market Entry Focus
1 CM
3 PODs
High Value / Growth Client Focus
Full Vertical Focus
2 Serve DTO / DCS NAL
? Consider As Per ISO Guidelines
3 Expand B2B / AA Focus
Continue To Serve Centrally
3+ **
Grow Capacity As Per Normal
Capacity Planning
- Serve Centrally
1 Manage Policy / PR Exposure
? EM GPS in Q3
1 CM
2 AM *
2 AS *
Top 30-40 Local / Export Clients
- No DCS NAL
? Awaiting ISO Plan Outcome !!
1
Evangelize Online Advertising
Focus On Advertiser Acquisition
Continue To Serve Centrally
3 ** Build Minimum Service Capacity
- Serve Centrally
1
Build Local Relations
? EM GPS in Q3
1 CM
1 AM *
1 AS *
Top 10 Export / high CPC Clients.
Field Based AA Activities.
- No DCS NAL
- Awaiting ISO Plan Outcome !!
2
Focus On Advertiser Acquisition
Drive Internet Growth
- Continue To Serve Centrally
3 ** Build Minimum Service Capacity
- Due Diligence Serve Centrally
1
Build Local relations
? EM GPS in Q3
* Redundant Mini-PODs to ensure operation continuity ** HC ask based on transaction workload @ 3 HC Per Language
Stage Trigger  Exit Q RR > $x.xm
 DSO Rev/HC > $2m PA
 Exit Q RR > $x.xm / BC Approval
 Legal / Policy Due Diligence
 BC Approval
 Legal / Policy Due Diligence
Stage Target
Further Details on appendix P. 28 Further Details on appendix P. 27 Further Details on appendix P. 26
Out Of This Plan’s Scope
7

Servicing these 18 new clusters requires additional +140HC . .
HC ASKS (2010) Cluster
Country
Manager
DSO DCS AdOps Mktg PR Support Total
Market / Biz
Development
Focus
Central America - +2 +0.5 +2 +1
+3
Staffing
& 1 PM
+5.5
Saudi (+NG) - +2 - +2 +1 +5
Indonesia +1 +2 +3 +2 +1 +9
Philippines +1 +2 +3 +2 +1 +9
Colombia - +2 +0.5 +2 +1 +5.5
Andean +1 +2 +0.5 +2 +1 +6.5
E + North Africa - +2 - +2 +1 +5
Levant +1 +2 - +2 +1 +6
DSO Growth
Focus
Ukraine - +2 - +1 +1 +4
Baltics +1 +4 +6 +1 +1 +13
Balkans +1 +4 +5 +1 +1 +12
Thailand - +4 +2 +1 +1 +8
Slovakia +1 +4 +1 +1 +1 +8
Malaysia +1 +4 +3 +1 +1 +10
Bulgaria +1 +4 +1 +1 +1 +8
Chile +1 +4 +1 +1 +7
Romania +1 +4 - +1 +1 +7
Caribbean +1 +4 +0.5 +1 +1 +7.5
TOTAL +12 +54 - +26 +26 +18 +4 +136
+4 Central HC
II
I
8

Realistic Hiring Targets with 3 Staffing HC & Headhunters
Q4’10Q3 ‘10 Q1’11Q2 ‘10
9
+2 +4 +3 +3 +2
+2 +2 +2 +2 +2
+2 +1 +2 +1
0
14
10
6
CM
DSO
MKT
P/G R
Q2’11 Q3’11 Q4’11
Markets Where CM
is Already Hired
Plan Ask
+1 +2 +2 +2 +2 +2 +1
+2 +2 +3 +5 +7 +10 +10 +1
+1 +1 +1 +2 +3 +3 +4 +1
0 +1 +2 +2 +3 +3 +1
12
40
16
12
CM
DSO
MKT
P/G R
Markets Where CM
is To Be Hired
+2 +6 +6 +4 +4 +2 +226PMAdOps
+1
+3*
1
3
PM
HR
Central Team
+4 +19 +17 +16 +16 +15 +16 +17 +17 +3140Total
Phasing Assumptions:
1- Approval to post all “Standard Roles” for all approved countries from Q2 ’10
2- Hiring Country Manager is a pre-requisite for hiring (but not posting roles and interviewing) other field resources.
3- Countries where CM is already hired are: Central America, Colombia, Saudi+NG, Egypt+NA, Ukraine and Thailand.
4- Hiring AdOps resources starts regardless of CM hiring.
5- PR/GR Targets not yet approved by Rachel.
6- Recruiting resources assessed based on metrics that 1 HC can recruit 8 Jr HC/Q, 4 Sr HC/Q and 3 CM/Q.
7- Timing for opening an office is also highly depending on legal procedures in local countries.
Q1’12 Q2’12 Q3’12

April May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar.
Plan
Sign off
Progress
Review
2011 Biz
Planning
Risk Mkts
Sign off
Facilities
Plan
Roll-Out Facilities for Office Expansion
Success
Metrics
Ops
Guide
EM “GPS”
C. Plan
Template
Detailed Plans To RVP 2 Month From CM Arrival
Key Milestones
Milestones:
Q4’10Q3 ‘10 Q1’11Q2 ‘10
BC / OCQ
Legal / Policy
Facilities
Ops Guide
Products
Review
Country Plans
10
1
2
3

Google Confidential and Proprietary 11
Open Questions and Next Steps
Next Steps
 Refine Legal Due Diligence framework
and apply to approved markets
 Develop “Individual Market Plans” (sample
in Appendix P.13) for review with RVPs.
 Define New Markets Operating Principles
& Integrated Dash Board For N-Staff
Monthly Review.
 Kick-start hiring process for approved
head count. (with Country Lead as a
prerequisite to local hiring).
 Initiate product review for approved
countries
Open Questions
 Validate Legal and Policy issues with
PR / Government Relations
 Finalize operating model for market /
business development countries

APPENDIX
Detailed Methodology and Country Plans

Appendix Contents
• Sample of Country Plan
• Market Prioritization
• Market Participation and Priorities

Baseline Expected Stretch
Revenue 2009 ($M) : $ xx.x m $ xx.x m $ xx.x m
Revenue 2012 ($M): $ xx.xm $ xx.x m $ xx.x m
Revenue Uplift - vs baseline
($M):
- $ xx.x m $ xx.x m
CAGR 2009-12 (%) 16% 36% 36%
14
Country Summary: Thailand
Internet Population 2009 (M) 19.8
Internet Penetration 2009 (%): 38%
Total Ad Market 2009 ($M): 2,430
Online Ad Market 2009 ($M): 63
Total HC Asks 8
Country Manager -
DSO 4
AdOps 2
Marketing 1
PR 1
MARKET DATA
REVENUE
Approve HC And Hiring Plans MARKET ENTRY PLAN
REVENUE UPLIFT CURVES
• High internet penetration & strong economy expected to
lead to increased online ad spending
• xxx commercial leadership in search can be converted to
significant revenues
• Limited knowledge about online ads, some market
development efforts needed
• Acquire top 3 advertisers in 6 main verticals (Telco, Auto,
Travel)
• Grow advertiser base by 100% to 5K
0
50
100
150
200
2007 2008 2009 2010 2011 2012 2013
Revenue ($M)
Baseline
Stretch
Expected

Appendix Contents

Invest in business
development
Drive consumer
marketing
Grouped shortlist: 30 non-DSO country groups based on
market maturity
Emerging Maturing
MARKET
DESCRIPTION
• Low xxx revenue
• Large internet population,
but low query volumes
• Daily G.com queries per
internet user < 0.5
• High xx revenue
• Large internet population
• High query volume and
hence, strong ad inventory
• High xxx revenue
• Low number of internet
users and queries
• Adjacent to large DSO
markets
• Low xxx revenue
• Large internet population
and query volume
• Daily G.com queries per
internet user > 0.5
Low Inventory
Markets
Low Revenue
Markets
“High Revenue”
Markets
Satellite
Markets
GOOGLE
OBJECTIVE&
MODEL
Increase search usage
(query volumes)
Direct participation with
dedicated sales FTE
Serve from existing
DSO office
(by ‘09 revenue)
1. Romania ($xxM)
2. Caribbean ($xxM)
3. Ukraine ($xxM)
4. Thailand ($xxM)
5. Balkans ($xxM)
6. Slovakia ($xxM)
7. Baltics ($xxM)
8. Bulgaria ($xxM)
9. Chile ($xxM)
10. Malaysia ($xxM)
11. Em. C. America ($xxM)
12. Colombia ($xxM)
13. Saudi ($xxM)
14. Indonesia ($xxM)
15. Andean ($xxM)
(by ‘09 revenue)
1. Gibraltar ($xxM)
2. Cyprus ($xxM)
3. Malta ($xxM)
4. Luxembourg ($xxM)
5. Monaco ($xxM)
6. Liechtenstein ($xxM)
(by ‘09 internet pop)
1. Levant ($xxM)
2. North Africa1($xxM)
3. Vietnam ($xxM)
4. Venezuela ($xxM)
5. Uruguay ($xxM)
6. Sri Lanka ($xxM)
(by ‘09 internet pop)
1. Philippines ($xxM)
2. Pakistan ($xxM)
3. W. Africa ($xxM)
Increase advertiser spend
through up-sell, optimization
Maximize revenue using
current DSO footprint
Educate advertisers on
value of online advertising
MARKETS
Maturity
1. Non-DSO only, $4.3M including Egypt 16

Appendix Contents

Core assumption is that minimum viable structure for
new DSO offices is 10 FTE
Position HC Role &Rationale
Country
Manager
1 • Lead set-up; drive evangelization; establish C-level contacts
DSO 4
• Acquire and manage top accounts
• 2 pod structure – with an account manager and an account strategist each
• Every cluster with total ad market >$500M has at least 10-12 very large accounts (>$1M) viz.,
airlines, hospitality, finance etc, in addition to several smaller DSO-level advertisers
• Every pod will serve 40-42 accounts in start-up phase, with 16-20 DSO accounts at scale
Ad Ops
(remote)
3 per
language
• Provide product & email support; approve ads
• At least 3 Account Associates per languageto ensure reliable service levels – based on historically
observed number of transactions per language
DCS (remote) -
• Support & manage high-tier accounts
• No DCS channel in ramp-up phase
• NAL clean-up and DCS account allocation to take place at annual DSO rev >$10M
Marketing 1 • Implement & scale co-marketing deals, drive user adoption, top accounts & agency outreach
Government
Relations & PR
1
• Initiate govt. contacts, build Google &AdWords awareness
• Experienced local HC necessary for countries where strong government relations are critical to
success
TOTAL ~10 MINIMUM VIABLE STRUCTURE (7 in country)
18

I) 8 country clusters require market/business
development before being ready for 10hc DSO focus
Operating Model Market Entry Activities
Country
Manager /
DSO team
1 CM
1 Pods x(1 Acct Mgr, 1 Acct Strat)*
• Establish 1 Pod Structure – 1AM & 1 AS
• Focus on Top 10 Export / high CPC Clients.
• Engage in Field Based AA Activities.
DCS - No DCS NAL
ISO ? Awaiting ISO Plan Outcome !!
B2B –
Adv. Acq.
2 Mktg Mgr
• Implement & Scale Co-Marketing deals
• Top-Accounts Outreach
• Organize Events & Case-studies
B2C
• Drive user adoption in new products
• Evangelize Online Advertising
Partnerships - Provide centralized support (remote)
AdOps 3 Account Associates (per lang)**
Build Minimum Service Capacity:
• Email support
• Ad Approval
• Provide Product Support
• Operate as Adsense
Legal - Perform Due Diligence Served Centrally
PR/Gov. Rel. 1 Govt Relations / PR Mgr
Build Adwords Awareness
Manage Country Launch
Inititate and manage Gov’t Contact
Product ? EM GPS in Q3
 Revenue curves as per appendix
 Total Users (targets tbc)
 Queries per User (target tbc)
 Top Accounts penetration - # accounts with
>$50k / year spending
SALES
MKTG
SALES
FCTNS
NON-
SALES
FCTNS
* Redundant Mini-PODs to ensure operation continuity
BIZ / MKT
Development
Focus
I
1. Central America
2. Saudi
3. Indonesia
4. North Africa
5. Colombia
6. Andean
7. Philippines
8. Levant
SUCCESS MEASURES
NEXT STAGE TRIGGER BC Approval – Legal / Policy Due Diligence
** HC ask based on transaction workload @ 3 HC Per Language 19

II) 10 country clusters are ready for 10hc DSO presence
as they will reach $30M in 2yrs
Country Mgr /
DSO team
1 CM
2 Pods x(1 Acct Mgr, 1 Acct Strat)
• Establish 2 Pod Structure - 1 AM & 1 AS
• Top 30 Local / Export Clients
DCS - No DCS NAL
ISO ? Awaiting ISO Plan Outcome!!
B2B –
Adv. Acq.
1 Mktg Mgr
• Implement & Scale Co-Marketing deals
• Top-Accounts & Agency Outreach
• Organize Events and Case-studies
B2C
(10 % of Marketing HC time on B2C)
Partnerships - Provide centralized support (remote)
AdOps 3 Account Associates (per lang)**
• Email support
• Ad approval
• Operate as AdSense
Legal - Provide centralized support (remote)
• Build Adwords Awareness
• Manage country launch
• Initiate and manage Gov’t Contact
SALES
MKTG
SALES
FCTNS
NON-
SALES
FCTNS
 NAL account list penetration
 Top Accounts penetration - # accounts
with >$50k / year spending
SUCCESS MEASURES
DSO growth
focus
II
1. Ukraine
2. Thailand
3. Slovakia
4. Baltics
5. Romania
6. Balkans
7. Malaysia
8. Bulgaria
9. Chile
10. Caribbean1
NEXT STAGE TRIGGER Exit Quarterly Run-Rate > $2.5M - BC Approval – Legal / Policy Due Diligence

III) 3 country clusters have reached $30M and scheduled
to reach $70M in 3 years
Country Mgr /
DSO team
1 CM
3 Pods x(1 Acct Mgr, 1 Acct Strat)
• Focus on High-Value/ Growth Client
• Full Vertical Focus
DCS
1 Account Strategist
1 Account Manager
HC to serve DTO / DCS NAL
ISO ? Consider as Per ISO Guidelines
B2B –
Adv. Acq.
3 Mktg Mgr
(80 % of Marketing HC time on B2B)
• Implement 3rd Party programs
• Scale acquisition via Call-Centers
• Organize Customer Seminars
B2C
(20 % of Marketing HC time on B2C)
Partnerships Provide centralized support (remote)
AdOps
3+ Account Associates (per lang)**
• Email support
• Ad approval
• Operate as AdSense
Legal - Provide centralized support (remote)
• Build Adwords Awareness
• Manage country launch
• Initiate and manage Gov’t Contact
SALES
MKTG
SALES
FCTNS
NON-
SALES
FCTNS
 NAL account list penetration
 Top Accounts penetration - # accounts
with >$50k / year spending
SUCCESS MEASURES
NEXT STAGE TRIGGER Exit Quarterly Run-Rate > $7.5M – DSO Rev/HC > $2M PA
DSO growth
focus
III
1. UAE
2. South Africa
3. Greece

Levant (Jordan and Lebanon) should be a
strategic investment
Market
Assessment
Countries Included : Jordan, Lebanon
Internet Population ’09 : 2.4M, 24% penetration
Total Ad Market ’09 : $725M
Online Ad Market ’09 : $12M
Google Revenue ’09 : $xxM
xxx queries per day : xxM
Business
Viability
 Levant Total ad market large enough to support an at-scale DSO office
• $30M revenue requires 3.2% share of the total ad market in 2012
 Online ad market projected to grow to ~$18M by 2012, indicating advertisers not moving
marketing dollars online
 To reach scale, massive evangelization efforts needed to expedite growth of online
ad market
Strategic
Assessment
• Jordan is the HQ of Yahoo-Maktoob
• Proposed government deal in Jordan will be aided by local presence
• Jordan offer strategic location to serve Levant as well as parts of Saudi Arabia

Historically, we have achieved 4x revenue increase
within 8 quarters of DSO office opening
0
1
2
3
4
5
6
7
8
9
1 2 3 4 5 6 7 8 9 10 11 12
PL
IL
RU
TR
HU
CZ
ZA
GR
Average
INDEXED REVENUE DEVELOPMENT POST DSO INVESTMENT
• Among offices opened in the last 5 years, Poland and Russia saw the highest growth, growing 6-7x in the first
two years post-DSO investment, at 130-140% CAGR
• Offices that have opened in the last 2-3 years have seen more conservative growth. E.g., South Africa,
Greece and Hungary have grown at a CAGR of ~60-80% in the first 8 quarters of DSO operations
• New DSO office openings expected to yield similar growth rates as recently opened offices (~60-80% CAGR)
as most countries have sizable OSO traction and consequently, will be growing off a larger base
Quarters
23
INDEXED REVENUE DEVELOPMENT COMPARISON COUNTRIES
Quarters

Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09
DSO
OSO - only
AdOps
We grow significantly cross-channel wherever we invest . .
2004 2005 2006 2007 2008 2009
PL x.x% x.x% x.x% x.x% x.x% x.x%
RO x.x% x.x% x.x% x.x% x.x% x.x%
Delta 0.0% 0.0% 0.1% 0.7% 1.8% 1.2%
xxx revenues as % of total ad market
Start of DSO office Start of scout
xxx Revenue in $K - Egypt - 2007 to 2009
Share of Online Ad Market and headcount growth
DSO – CZ Republic – Historical Data Q4’06 to Q3’09
0
2
4
6
8
10
12
14
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
Headcount
% of Google Revenue vs Online AdMarket
First POD
Complete
Q108
First POD
Complete
Q408
MS - DSO:
MS - OSO: x.x% x.x% x.x% ` x.x% x.x% x.x% x.x% x.x%
x.x% x.x% x.x% x.x%
2004 2005 2006 2007 2008 2009
Poland
Romania
xxx Revenue as % of total ad market
Poland and Romania – Historical Data 2004 to 2009
Start Of
Monetization
Focus (Hybrid)
24

 Facilities costs overwhelms the balance sheet and is distributed
across a small number of employees.
 Office setup and relocation costs as the business grows normally
exceed the compensation cost of a larger number of employees
from day 1.
 Offices of less than 7 suffer from operation interruption if one
employee is out of office.
 Had we started our CZ operation with 7 Employees (instead of
getting to 7 over 3 years), the incremental cost would have been <
$ 65 K/Q. Incremental revenue covered cost on 3rd Q.
25
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
1 2 3 4 5 6 7 8 9 10 11
Cost per headcount with every additional head
DSO – Emerging Markets JAPAC – Historical Data Q1’06 to Q4’09
AverageCostperHC
Number of DSO Headcount in local office
Productivity gains and cost per head reductions occure as office grows
Country
Q3’09 Total
Cost/HC
Total Cost
@7Local
HC+Temp
Cost/Local
HC as % of
current UK
Total Cost
@3AdOps
HC
Colombia xxx xxx xx% xxx
Balkans xxx xxx xx% xxx
Thailand* n/a xxx xx% xxx
Philippines* xxx xx% xxx
Slovakia* xxx xx% xxx
Malaysia xxx xx% xxx
Bulgaria* xxx xx% xxx
Chile xxx xxx xx% xxx
Romania* xxx xx% xxx
Indonesia* xxx xx% xxx
Caribbean* xxx xx% xxx
Central
America* xxx xx% xxx
Peru +
Ecuador* xxx xx% xxx
Baltics* xxx xx% xxx
Jordan xxx xx% xxx
25
Headcount investment In EMs Generally Costs Less
Nascent
DSO
Scout/DCS/OSO
Support
Nosupport
*PH, ID & MY based on 40% and TH 60% of Singapore current cost (to be confirmed next week), Baltics based on Czech Rep current cost, HR based on
Adriatic, BG & RO based on Hungary current cost, Caribbean, PE, EC & Central America based on 50% of Argentina current cost.
Average Quarterly Revenue per Headcount in $K
DSO – MENA Countries (RU, ZA, CZ, AE) – Historical Data Q1’06 to Q3’09
0
200
400
600
800
1000
1200
1 2 3 4 5 6 7 8
Number of DSO Headcount in local office
AveragerevenueperHC
Move to full PODs
PRELIMINARY
PRELIMINARY
25
Source: SalesFinance

Successful local minimum structures will reach operational
break-even after 1 to 5 Quarters
Cumulative Cost and Revenue according to different market
scenarios in M$
Cost & Revenue in $M
Quarters
Cumulated Cost Cumulated Revenue according to:
1% ad Market Gain per Year
0.5% ad Market Gain per Year
0.25% ad Market Gain per Year
Country
Assuming a 1% Ad
Market Gain per Year
Assuming a 0.5% Ad
Market Gain per Year
Colombia Qx Qx
Balkans Qx Qx
Thailand Qx Qx
Philippines Qx Qx
Slovakia Qx Qx
Malaysia Qx Qx
Bulgaria Qx Qx
Chile Qx Qx
Romania Qx Qx
Indonesia Qx Qx
Caribbean Qx Qx
Central America Qx Qx
Peru + Ecuador Qx Qx
Baltics Qx Qx
Jordan Qx Qx
Total Q2 Q3
Nascent
DSO
Scout/DCS/OSO
Support
No
support
Quarter of Break-Even by country and scenarios
0
5
10
15
20
25
30
35
40
1st Q 2nd Q 3rd Q 4th Q 5th Q

Emerging Markets Investment Proposal Local Presence Beyond Current 40 DSO Countries

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