Drecom Co., Ltd. · TSE:3793

Drecom — FY2009 Earnings Presentation

50 slides from Drecom's earnings presentation, May 15, 2009

1. Slide 1: Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment

   2009 3 8 2009/5/15 Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment

2. Slide 2: Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment

   1 2 3 2010 3 4 2009 3 5 Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 2

3. Slide 3: Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment

   1 Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 3

4. Slide 4: Highlights of FY2009 results

   1 2009 3 2008 4 2009 3 2,121 2,115 85 4 I LOVE TV DLE 4 1 3 ASP CMS ASP 2009 5 1 100% Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 4

5. Slide 5: Net sales trend

   1 2009 3 2,121 609 2,500 2,115 2,121 2,000 1,500 1,000 843 800 703 703 726 609 500 238 238 0 2005 ᐕ 3 ᦬ᦼ 2006 ᐕ 3 ᦬ᦼ 2007 ᐕ 3 ᦬ᦼ 2008 ᐕ 3 ᦬ᦼ 2009 ᐕ 3 ᦬ᦼ Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 5

6. Slide 6: Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment

   1 2009 3 85 146 400 300 256 256 200 89 89 85 100 4 0 100 146 200 172 249 300 356 400 2005 3 2006 3 2007 3 2008 3 2009 3 Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 6

7. Slide 7: Quarterly results

   1 4 581 75 700 597 572 581 600 567 529 479 492 500 417 400 333 300 240 200 170 101 98 80 101 75 100 33 0 4 25 23 54 100 161 134 152 200 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2007 3 2008 3 2009 3 Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 7

8. Slide 8: EBITDA

   1 EBITDA 4 EBITDA 121 EBITDA 200 150 100 50 50 140 111 96 0 106 32 143 165 24 83 50 121 50 100 150 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2007 3 2008 3 2009 3 + + Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 8

9. Slide 9: Quarterly segment results

   1 171 29 333 57 600 200 120 373 336 108 324 368 500 90 326 346 333 100 291 89 400 80 259 68 70 300 64 64 65 60 47 57 42 54 196 51 153 158 48 47 200 41 40 37 32 31 29 30 29 100 23 20 72 75 63 116 196 219 193 178 177 166 148 171 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 0 2007 3 2008 3 2009 3 Copyright ©

10. Slide 10: Quarterly segment results

    1 239 242 250 13 13 17 20 194 185 189 189 200 113 122 12 182 185 12 16 16 16 23 16 22 23 19 26 27 150 133 140 84 10 75 71 68 10 62 67 11 8 104 62 94 7 55 100 7 7 5 34 96 27 87 76 78 75 79 86 75 50 55 56 60 57 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2007 3 2008 3 2009 3 2009 3 1Q 2009 3 3Q Copyright ©

11. Slide 11: Income statement

    1 2009 3 2008 4 - 2009 3 2008 4-12 2007 4 -2008 3 2,121 1,539 2,115 1,457 1,047 1,328 31.7% 32.0% 37.2% 1,371 1,039 1,324 85 8 4 61 12 18 492 256 642 2009 4 17 415 581 69 63 Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 11

12. Slide 12: Balance sheet

    1 2009 3 2009 3 2008 12 2008 3 1,151 1,146 1,237 1,024 1,267 1,604 2,175 2,414 2,841 561 502 1,519 193 260 326 1,419 1,615 995 59.8 63. 7 29.6 Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 12

13. Slide 13: Cash flow

    1 2009 3 2008 4 - 2009 3 2008 4-12 2007 4 -2008 3 31 35 111 39 91 990 44 21 915 651 520 625 2009 3 2008 12 2008 3 651 520 625 326 392 1,281 325 128 656 Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 13

14. Slide 14: Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment

    2 2010 3 2012 3 Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 14

15. Slide 15: Business history

    2 2010 3 2 Net Marketing 04/06 News&Blog Search *1 06/06 GM 05/05 CMS 06/12 MK 05/09 BlogClick *2 07/03 SpaceHunter 08/07 ad4U Internet *12 ‘04/9 GoogleNews * 08/10 CGM Marketing Solution Communication 02/04 *3 04/03 MyClip *5 06/08 MONO+List *6 㗔ၞ 03/07 04/10 07/07 Buco 03/12 *4 05/12 RSS *3 *4 *5

16. Slide 16: Business domains

    2 Entertainment Web Service Internet Marketing Solution 㗔ၞ Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 16

17. Slide 17: Entertainment business

    2 㧞㧜㧜㧢ᐕ ̪ ̪ 㧞㧜㧜㧥ᐕ ̪ 1,633 336 848 2817 2009 3 25 8 Entertainment Communication Entertainment 50 4000 2009 3 2009 ‫ޓ‬ 2007 Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 17

18. Slide 18: Market trends

    2 㨪㧞㧜㧜㧡ᐕ 㧞㧜㧜㧢ᐕ 㧞㧜㧜㧣ᐕ 㧞㧜㧜㧤ᐕ 㧞㧜㧜㧥ᐕ × mixi Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 18

19. Slide 19: Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment

    2 㧞㧜㧜㧥ᐕ 㧞㧜㧝㧜ᐕ 1 1 1 2009 100 Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 19

20. Slide 20: Net marketing business

    2 㧞㧜㧜㧢ᐕ 1 2 1 3 㧞㧜㧜㧥ᐕ 4 2,136 680 134 40 3450 6,440 2009 3 6 Net Marketing Communication ⴕേ࠲࡯ࠥ࠹ࠖࡦࠣ Entertainment CMS CGM 50 1 2009 : 2008 PC 2 2009 : http://www.seedplanning.co.jp/press/2009/0127.html 3 2009 : 4 2010 : Dip Report http://www.dip-net.co.jp/pdf/trend/131F2C3_299A0.html Copyright © 2001

21. Slide 21: SNS and CGM market

    2 㨪㧞㧜㧜㧡ᐕ 㧞㧜㧜㧢ᐕ 㧞㧜㧜㧣ᐕ 㧞㧜㧜㧤ᐕ 㧞㧜㧜㧥ᐕ SNS CGM CMS EX EX Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 21

22. Slide 22: ad4U and CMS

    2 㧞㧜㧜㧥ᐕ 㧞㧜㧝㧜ᐕ ad4U CMS ad4U EX CMS Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 22

23. Slide 23: Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment

    2010 3 3 2010 3 Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 23

24. Slide 24: Market data and outlook

    2010 3 3 2009 5 1 100 4 2006 3 2007 3 2008 3 2009 3 828,145 756,5 79 877, 899 1, 055, 107 198,967 153,2 51 372, 261 340, 648 118,945 93,0 48 206, 796 178, 358 2009 3 2 39 92 2007 4 100 Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 24

25. Slide 25: FY2010 outlook

    2010 3 3 ฦ੐ᬺߦ߅ߌࠆ⷗ㅢߒ 3 1.5 EX ad4u / Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 25

26. Slide 26: FY2010 forecast

    2010 3 3 ਛ㑆ᦼ ㅢᦼ 2010 3 ೨ᦼታ ❣ 2010 ᐕ 3 ᦬ ᦼ 1,020 1,047 2, 190 2, 121 50 10 25 85 55 3 15 61 59 93 0 492 ਛ㑆ᦼ ㅢᦼ 2010 3 1 ೨ᦼታ ❣ 2010 ᐕ 3 ᦬ ᦼ 1 680 312 1, 570 609 65 92 15 146 60 105 8 166 2 130 124 180 633 1 2009 5 2 206 Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 26

27. Slide 27: Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment

    2009 3 4 2009 3 Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 27

28. Slide 28: CGM/UGC

    2009 3 4 3 CGM/ U GC CGM UGC CGM Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 28

29. Slide 29: Quarterly sales

    2009 3 4 700 600 274 278 (47.5%) (46.6%) 500 242 261 (49.0%) (51.1%) 400 300 273 262 (45.7%) (45.4%) 200 225 203 (46.0%) (39.7%) 100 25 41 47 46 (5.1%) (7.1%) (9.2%) (7.7%) 0 2009 ᐕ 3 ᦬ᦼ 1Q 2Q 3Q 4Q 2008 3 Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 29

30. Slide 30: Carrier content

    2009 3 4 4 docomo au ‫ ޡ‬I LOVE TV ‫ޢ‬ ‫ޠ‬ ‫ޡ‬ DLE ‫ޢ‬au ‫ޡ‬ ‫ޢ‬ docomo au‫ޔ‬SoftBank 2009 5 SoftBank 3 Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 30

31. Slide 31: ARPU

    2009 3 4 ARPU 30 ARPU 250 ARPU 320,000 500 290,000 400 260,000 300 230,000 200 200,000 100 170,000 0 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 2008 3 2009 3 33 3 Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 31

32. Slide 32: Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment

    2009 3 4 3 4 2010 3 100,000 20,000 80,000 16,000 60,000 12,000 40,000 8,000 20,000 4,000 0 0 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 2008 3 2009 3 Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 32

33. Slide 33: SEO

    2009 3 4 1 2 82 95 SEO 3 250,000 180,000 230,000 170,000 210,000 160,000 190,000 150,000 170,000 140,000 150,000 130,000 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 2008 3 2009 3 1 ಴ᚲ 2009 2 2008 3 2009 3 3 Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 33

34. Slide 34: ASP CMS

    2009 3 4 4 ASP CMS Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 34

35. Slide 35: Quarterly sales

    2009 3 4 300,000 197,906 250,000 185,657 (72.2㧑) (70.6㧑) 159,148 (70.2%) 200,000 130,263 (64.0㧑) 150,000 100,000 77,381 73,230 76,168 67,537 (29.4㧑) (27.8㧑) 50,000 (29.8%) (36.0㧑) 0 2009 3 1Q 2Q 3Q 4Q 2008 3 Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 35

36. Slide 36: ASP KPIs

    2009 3 4 ASP CMS 45,000 40,000 21,002 18,284 35,000 18,787 19,970 19,875 30,000 18,622 18,729 16,552 25,000 20,000 20,999 15,000 19,370 17,988 17,040 15,842 16,836 15,372 10,000 13,698 5,000 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2008 3 2009 3 Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with enter

37. Slide 37: ad4U

    2009 3 4 4 ad4U Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 37

38. Slide 38: ad4U

    2009 3 4 ad4U 3 4 ad4U ㈩ା࿷ᐶᢙ 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 4 5 6 7 8 9 10 11 12 1 2 3 2008 2009 Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 38

39. Slide 39: Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment

    5 Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 39

40. Slide 40: TOPICS

    5 2009 3 4 TOPICS ASP CMS 2009/3 EZ 2009/2 2009/1 2008/12 2008/11 2008/10 2008/9 2008/8 2008/7 2008/6 EZ 2008/5 VMO 2008/4 I LOVE TV ! Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 40

41. Slide 41: UGC

    5 100 80 UGC UGC J 60 40 20 BtoB 0 05 06 07 08 2007 Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 41

42. Slide 42: Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment

    5 ‫ޟ‬ 07 23 767 ‫ޠ‬ 2004 2005 2006 2007 1 , 167 1,048 843 80% 559 66% 201 562 759 135% 1, 074 142% (199) (463) (522) 113% (568) 109% (2) (99) (237) 239% (506) 214% 412 589 748 127% 848 113% 2 14 55 393% 116 211% 3 16 69 431% 221 320% 6 13 29 223% 87 300% 103 123 158 128% 182 115% 225 236 248 105% 22

43. Slide 43: CMS CGM PKG ASP

    5 CMS CGM PKG HP CGM BtoBtoC CGM CGM SNS CGM ASP ASP CGM ASP EC Web CMS Web Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 43

44. Slide 44: SNS market

    5 ‫ ޟ‬SNS 2008 4 SNS SNS 2008 3 500 ‫ޠ‬ R&D SNS 600 500 એ਄ 500 400 294 300 200 90 100 1.5 12 0 2004 2005 2006 2007 2008 (2005 3 ) (2006 3 ) (2007 3 ) (2008 3 ) (2009 3 ) CGM/SNS 2008 R&D http://www.impressrd.jp/news/080526/cgm_sns2008 Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with e

45. Slide 45: WIN WIN

    5 WIN WIN ad4U Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 45

46. Slide 46: http://www.microad.jp/press/20080703/

    5 2008 95 2009 134 2010 203 2011 300 350 318 300 250 203 200 150 134 95 100 50 0 2008 2009 2010 2011 http://www.microad.jp/press/20080703/ Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 46

47. Slide 47: Carrier mobile content

    5 50 docomo au Softbank J-KEN J J + J J J - J J J J SUPER SOUND J J Music J Music QUAKE call QUAKE LOVER QUAKE LOVER FULL OK 980 @ 3 5/14 DLE au 1/22 I LOVE TV docomo 1/19 , au 1/22 2009 3 Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 47

48. Slide 48: Flash

    5 ỂẨộẴẇ Flash GIF Flash Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 48

49. Slide 49: Service sites

    5 http://flash.mmelo.jp http://u-colle.jp/ Flash 3 UGC Flash Flash 100 http://seleho.jp DLE http://kisekae-dle.jp DLE I LOVE TV http://kisekae-tv.jp/ VMO VERBAL/MASATO OCHI Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 49

50. Slide 50: Drecom

    Drecom i-mode NTT SoftBank au EZweb EZ KDDI Copyright © 2001-2009 Drecom Co., Ltd All Rights Reserved. with entertainment 50

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