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Brad Greenspan, Pro Se 264 South La Cienega Suite 1016 Beverly Hills, CA 90211 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION ) JIM BROWN, Individually and on Behalf of All Others Similarly Situated, Plaintiff V. ) ) CLASS ACTION ) RULE 701 DECLARATION OF LAY ) WITNESS & DAMAGES ) VALUATION ) ) DATE: TBD BRETT C. BREWER, et atl., Defendants ) TIME: TBD ) COURTROOM: The Hon. George H. ) King CTRM 650 ) ) CASE NO: 2:06-cv-03731-GHK-Sh

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INTRODUCTION

pg. 4 pg. 6

OVERVIEW OF ASSIGNMENT SUMMARY: $3.75 - $32.453 Billion in damages suffered by Class Members II III IV TRANSACTION BACKGROUND COMPANY BACKGROUND INDUSTRY ENVIRONMENT IN 2005

pg. 6 pg. 6 pg. 7 pg. 7 pg. 11 pg. 13 pg. 19 pg. 21 pg. 22

V PROBLEMS WITH THE MANAGEMENT FORECAST AND DR. WILLIAM KENNEDYS DAMAGES REPORT VI VII TRANSACTION BACKGROUND AND ASSUMPTIONS DAMAGES ANALYSIS

VIII THE IMPORTANCE OF CONSIDERATION OF POSITIONING IN THE MARKET IXTHE GOOGLE $1 BILLION INVESTMENT IN AOL IN 2005

X THE VALUATION OF MYSPACE SHOULD BE BASED ON OCTOBER 2005 DATA AND VALUATION METRICS USED IN DECEMBER 2005 GOOGLE/AOL TRANSACTION XI USING COMPARISON OF MONTHLY SEARCH AUDIENCE pg. 27

pg. 23

XII - Lost opportunity of getting benefit of JP Morgan 2006 valuation report from Zakkour ($1.367 billion for MySpace)

XIII ADDING BACK OMITTED VALUE OF SEARCH ENGINE PARTNERSHIP REVENUE XIVVALUATION BASED ON GOOGLE SEARCH PARTNERSHIP

pg. 28 pg. 31 pg 32

XV- CONCLUSION: EXHIBIT 1 - BACKGROUND / WORK EXPERIENCE

pg. 33 pg. 35 pg. 36

EXHIBIT 2Chart - Monthly unique visitors MySpace EXHIBIT 3- DOCUMENTS REVIEWED (BATES #):

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CASES CITED

Lightning Lube, Inc. v, Witco Corp. 4F.3d 11433d Cir. 1993

pg.

United States v. Figueroa-Lopez, 125 F.3d 1241, 1246 (9th Cir. 1997) Asplundh Mfg. Div. v. Benton Harbor Eng'g, 57 F.3d 1190, 1196 (3d Cir. 1995) Benton Harbor Eng'g, 57 F.3d 1190, 1196 (3d Cir. 1995). In Doft & Co. V. Travelocity Marcel v. See, Inc Henry v. Hess Oil Virgin Islands Corp Rowe v. State Farm Mut. Auto. Ins. Co., United States v. Bighead, 128 F.3d 1329, 1335 (9th Cir. 1997)

pg. pg. Pg.

5 6 6

pg. pg. pg. pg.

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DECLARATION OF LAY OPINION TESTIMONY DAMAGES DUE CLASS UNDER RULE 701

DECLARATION OF LAY OPINION UNDER RULE 701 BY BRAD D. GREENSPAN: CEO, DIRECTOR, FOUNDER PAID SEARCH DIVISION, HEAD OF M&A THRU OCTOBER 30, 2003. ONLY EXECUTIVE TO HAVE COMPLETED A GOOGLE VS. YAHOO SEARCH AUCTION I INTRODUCTION I , Brad Greenspan, declare: 1. I submit this declaration in support of the Plaintiff Class Members.

The following is based on upon my personal knowledge and if called as a Witness I could and would testify competently thereto. 2. 3. This declaration is made under Rule 701 based on my experience. Rule 701 allows lay witness declarations limited to those opinions

or inferences, which are (a) rationally based on the perception of the witness, and (b) helpful to a clear understanding of the witness testimony or the determination of a fact in issue, and not based on scientific, technical, or other specialized knowledge within the scope of Rule 701. 4. I am also in a unique position to provide a valuation amount Under

Rule 701. Most courts have permitted the owner or officer of a business to testify to the value or projected profits of the business, without the necessity of 4

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qualifying the witness as an accountant, appraiser, or similar expert. See, e.g., Lightning Lube, Inc. v, Witco Corp. 4F.3d 11433d Cir. 1993) (no abuse of discretion in permitting the plaintiff's owner to give lay opinion testimony as to damages, as it was based on his knowledge and participation in the day-to-day affairs of the business). Such opinion testimony is admitted not because of experience, training or specialized knowledge within the realm of an expert, but because of the particularized knowledge that the witness has by virtue of his or her position in the business. 5. The amendment does not distinguish between expert and lay witnesses,

but rather between expert and lay testimony. Certainly it is possible for the same witness to provide both lay and expert testimony in a single case. See, e.g., United States v. Figueroa-Lopez, 125 F.3d 1241, 1246 (9th Cir. 1997) (law enforcement agents could testify that the defendant was acting suspiciously, without being qualified as experts; however, the rules on experts were applicable where the agents testified on the basis of extensive experience that the defendant was using code words to refer to drug quantities and prices). The amendment makes clear that any part of a witness' testimony that is based upon scientific, technical, or other specialized knowledge within the scope of Rule 702 is governed by the standards of Rule 702 and the corresponding disclosure requirements of the Civil and Criminal Rules. The amendment is not intended to affect the ''prototypical example(s) of the type of evidence contemplated by the adoption of Rule 701 relat(ing) to the appearance of 5
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persons or things, identity, the manner of conduct, competency of a person, degrees of light or darkness, sound, size, weight, distance, and an endless number of items that cannot be described factually in words apart from inferences.'' Asplundh Mfg. Div. v. Benton Harbor Eng'g, 57 F.3d 1190, 1196 (3d Cir. 1995). I OVERVIEW OF ASSIGNMENT

-Updated/revised damages assessment for benefit of Plaintiff Class Members. SUMMARY: $3.75 - $32.453 Billion in damages suffered by Class Members II TRANSACTION BACKGROUND i) $12.00 cash out merger with two investment banks providing fairness valuation reports created ii) after the $12.00 price was chosen by CEO and accepted by Board of Issuer. III COMPANY BACKGROUND

Company was online entertainment and social networking website creator and also for purposes of report owned 100% of MySpace, Inc. At the time of its sale in 2005 for approximately $649 million dollars, the purchase of the public shareholders equity was reported to be $580 million and there existed a $69 million dollar obligation to pay the minority shareholders of MySpace, Inc. according to agreements signed in February 2005 by and between Redpoint, Inc. and Intermix, Inc, and MSV LLC.

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IV

INDUSTRY ENVIRONMENT IN 2005 i) Unique in that the pace of online advertising was growing much faster then

other industries in the United States. ii) Google had just successfully raised $4.4 billion dollars and announced the sale in August 2005. iii) According to company documents and testimony of former head of online search and CEO and founder of MySpace.com and Issuer, Issuer had opportunity to run a search auction as of at least August 2005 between at least Google, Yahoo, Microsoft, AskJeeves, and AOL. iv) Google and AOL set market price for value of search assets on or around the 3rd and 4th quarters of calander 2005, closing a new Search Partnership in December 2005. v) In this transaction, Google invests $1 Billion into AOL, valuing AOL to be worth $20 billion by virtue of the 5% stake Google takes for its investment. V PROBLEMS WITH THE MANAGEMENT FORECAST AND DR. WILLIAM KENNEDYS DAMAGES REPORT i) The damage report by Anders Minkler & Diehl LLP is helpful to

confirm the problem areas with management forecasts and the banker fairness opinions. The expert also cites certain evidence that is useful in triangulating the valuations we calculate and conclude in this report are more accurate and sound. 7
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ii)

Because of both unreliable forecasting historically proven by management

for MySpace, Inc. and because MySpace was an early stage company experiencing significantly greater then average growth rates, Kennedy should not have opted to follow bankers fairness opinion method to use the 2009/20010 DCF method for a company like Intermix and merely hoped to gain accurate methods for an accurate valuation of MySpace merely by adjusting the underlying financials. iii) In Doft & Co. V. Travelocity, the Delaware Court made several

precedential determinations when faced with the task of weighing using management f forecasts for a new fast growing company in a fast changing market environment, stating: a) The court may consider proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court. Both parties used a DCF approach and a comparable company approach to value the shares. A DCF analysis is a useful tool for valuing shares and is frequently relied on by this court in appraisal actions. The utility of a DCF analysis, however, depends on the validity and reasonableness of the data relied upon. As this court has recognized, methods of valuation, including a discounted cash flow analysis, are only as good as the inputs to the model. The problem in this case is that the most fundamental input used by the expertsthe projections of future revenues, expenses and cash flowswere not shown to be reasonably reliable. 8
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b) c) d)

e)

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f)

Delaware law clearly prefers valuations based on contemporaneously prepared management projections because management ordinarily has the best first-hand knowledge of a companys operations. Here, management prepared the 5-year projections for the period 20022005 and gave them to Sabre for use in its routine planning processes. Often, projections of this sort are shown to be reasonably reliable and are useful in later performing a DCF analysis. In this case, however, the court is persuaded from a review of all the evidence that the Travelocity 5-year plan does not provide a reliable basis for forecasting future cash flows. Travelocitys management held the strong view that these projections should not be relied upon because the industry was so new and volatile that reliable projections were impossible. Punwani further testified that because of the limited financial history of Travelocity, together with a rapidly evolving marketplace, it was difficult to forecast the next quarter, let alone five years out. Id. We were really not in a position to be able to put any credence on the numbers, both on the revenue and on the cost side. And the only way to get credibility in our numbers would have been to take those models and put them through reasonability checks [that] were never done because, when we built these frameworks, Ill call them, in the year 2000, we were in a period of explosive growth. We were growing at 150 percent per year . No one really knew what the right number was. Id. at 381-82. Id. at 383. It was bad enough before when we did the data, and we had this new variable that got thrown into our lap, which totally destroyed our ability to have any confidence in projections beyond one quarter out. Id.

g) h)

i)

j)

k)

l)

m) Although it was aware of the 5-year forecasts, Salomon did not conduct a DCF analysis of Travelocity as part of its work in connection with the merger. The testimony of Anwar Zakkour, Salomons managing director, is especially relevant on this issue: n) Q. Did Salomon Smith Barney prepare a discounted cash flow analysis of 9
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Travelocity in connection with this transaction? A. Absolutely not. o) Q. Why was no discounted cash flow analysis prepared in connection with this transaction? A. Because this was an industry that was in flux. And the management team itself, which should have been the team that was most able to put together a set of projections, would have told you it was virtually impossible to predict the performance of this company into any sort of reasonable future term. And they in fact had very little confidence with even their 2002 forecast numbers because of that. p) Q. Is a discounted cash flow methodology a methodology that is commonly used by Salomon Smith Barney in valuing companies? A. Valuing mature companies, yes. q) The court reluctantly concludes that it cannot properly rely on either partys DCF valuation. The goal of the DCF method of valuation is to value future cash flows. Here, the record clearly shows that, in the absence of reasonably reliable contemporaneous projections, the degree of speculation and uncertainty characterizing the future prospects of Travelocity and the industry in which it operates make a DCF analysis of marginal utility as a valuation technique in this case. If no other method of analysis were available, the court would, reluctantly, undertake a DCF analysis and subject the outcome to an appropriately high level of skepticism. The court, however, now turns to the other method of valuation offered by the parties. iv) The application of the Daubert standard rests on the level of generality of the expert's study. The more removed the expert's data is from the facts of the particular case the more unreliable and speculative his testimony becomes. For example, in both Marcel v. See, Inc.,(116) and Henry v. Hess Oil Virgin Islands Corp.,(117) the court excluded the expert's testimony because the projections of future earnings were based on general industry studies that failed to take into consideration 10
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the specific circumstances of the plaintiff. In Rowe v. State Farm Mut. Auto. Ins. Co., by contrast, the court allowed the projections because they were based on the past billing history of the plaintiff, who as a result of his injuries could not longer practice Law.(118) v) Rule 702's analysis is ordinarily prospective. Expert testimony is helpful if it "will assist the trier of fact." Fed.R.Evid. 702 (emphasis added). Thus a District court may not exclude expert testimony simply because the court can, at the time of summary judgment, determine that the testimony does not result in a triable issue of fact. Rather the court must determine whether there is "a link between the expert's testimony and the matter to be proved." United States v. Bighead, 128 F.3d 1329, 1335 (9th Cir. 1997) VI TRANSACTION BACKGROUND AND ASSUMPTIONS i) Based on the evidence reviewed, the Intermix Board avoided

using the experienced valuation M&A technology banker, JP Morgans Zakkour. News Corp received the benefit of keeping this banker from representing Issuer. Namely that News Corp did not have to overcome or pay the up to $1.3+ Billion that Zakkour estimated MySpace was worth prior to the July 18, 2005 merger agreement being signed. a) Zakkour leads Citibanks valuation/fairness report and is engaged by Ask 11
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Jeeves Board of Directors along with Allen & Co. in February 2005 and values AskJeeves worth at least $1.85 million at the time it signs a merger agreement with IAC Corp. in March 2005. b) AskJeeves lead director David Carlick engaged Zakkour and Allen & co. to work for and represent Ask Jeeves in February 2005, while he was at the same time Director and Chairman of Intermix. In addition Andrew Sheehan, his partner in his venture capital fund VantagePoint, a control shareholder in Intermix was a director of both Intermix and MySpace, Inc. Geoff Yang a long time director of AskJeeves was also a director of MySpace, Inc. c) The AskJeeves/IAC a stock for stock merger does not close until July 19, 2005. d) In April 2005, Zakkour joins JPMorgan. JPMorgan served as the investment bank for IAC in the March 2005 announced merger with Ask Jeeves. e) One Board member of IAC Corp during this period is also the Chairman of Investment bank Allen & Co. IAC also discloses it retains and works with Allen & Co. as their banker in ongoing basis. f) News Corp Director Stan Schuman in 2005 was and is one of most senior bankers at Allen & Co. of senior bankers at Allen & Co. g) As of July 13, 2005 or earlier, Zakkour and JPMorgan have been retained to value Intermix, Inc. and on July 16, 2005, Zakkours team leading the efforts for JP 12
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Morgan and News Corp, provides a valuation for MySpace, Inc. of $1,040 - $1,367. Zakkour according to Kennedy, uses 2006 EBITDA Multiples h) Defendants further determined they would not allow Deutsche Bank to write a fairness opinion or be one of the two bankers it ultimately retained. i) On or around July 13, 2005, Issuer retained both Thomas Weisel and Montgomery. Both banks had not completed the valuation work or provided a full valuation report prior to being retained. Unlike Montgomery and Thomas Weisel, Deutsche Bank had already created and provided to at least Rosenblatt and Sheehan, a Valuation report as of May 2005. VII DAMAGES ANALYSIS

THRU 3 METHODOLOGIES (IN ORDER OF MOST ACCURATE AND PRUDENT) 1) Financial Projections for MySpace, Inc. using actual 2005 results known: a) The most accurate way to ascertain the valuation for MySpace, Inc. is to build a new set of financial projections more reliable then the management forecast and then combine this data with the most unconflicted comparable valuation report that existed at the time. b) We take the last actual quarter to quarter financial results for MySpace, Inc. and use these as the base information which we know is accurate and build a multi year forecast, initially we continue the actual growth rate and over time reduce such 13
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growth rate to be conservative. c) Last Actual results for MySpace, Inc.: $3.74 million in revenue for the March 2005 ending quarter which grew to $6.15 million in revenue for June 2005 quarter 64% growth quarter to quarter. d) Last actual results for MySpace, Inc: $463,000 in EBITDA for the March 2005 quarter which grew to $1.58 million in EBITDA for the June 2005 quarter. e) Using these growth rates, we then use Kennedys 55% EBITDA margin and being conservative we reduce this to 45% for 2006. In 2007, we reduce growth rate from 64% to 32%. In 2008, we reduce the quarterly growth rate to 22%. Exhibit (XX) shows the quarterly forecast and annual revenue and EBITDA for our MySpace, Inc. forecast. Below we summarize the annual forecast. f) (CY2006) Our MySpace, Inc. forecast using most recent actual results shows $264.21 million in annual revenue for 2006 and EBITDA of $118.89 million g) (CY2007) Our MySpace Inc. forecast shows $999 million in revenue and EBITDA of $449.55 million. h) (CY2008) Our MySpace, Inc. forecast shows $2.43 billion & EBITDA of $1.09 billion. 2) ITS APPROPRIATE TO CONSIDER AND USE A COMPARABLE COMPANY VALUATION ON A STAND-ALONE BASIS a) We then determine that the May 2005 Deutsche Bank valuation report which 14
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uses comparable company EBITDA valuations is reasonable and the prudent work of unconflicted investment bankers trying to demonstrate their good faith and knowledge of the internet sector to Intermix in their efforts to be retained by Intermix to contact potential buyers. b) Our decision is further confirmed thru review of the recent Delaware case

in Doft & Co. V. Travelocity where the court states as part of its decision to reject managements forecast and a valuation using DCF in favor of singularly using comparable company valuation method. c) A comparable company analysis is often used in connection with a DCF analysis. The court, however, may use a comparable company valuation on a stand-alone basis in an appraisal action when it is the only reliable method of valuation offered by the parties. In Borruso v. Communications Telesystems Intl, the court relied on a comparable company analysis because neither expert was comfortable using a DCF analysis to value the companys shares due to the limited financial data of the company available as of the merger date. 753 A.2d 451, 455 n.5 (Del. Ch. 1999). We use the Deutsche report 2008 multiple for MySpace, Inc. of 22.5X which

d)

is the top end of the Estimated multiple range as we believe this is appropriate since based on the Kennedy report, Google stood out as the most similar growth and profitability rates to MySpace, Inc. e) Next we plug in the MySpaces new forecast EBITDA for 2008 which is

multiplied by the 22.5X comparable company EBITDA, resulting in a Valuation of $24.52 Billion for 100% of MySpace, Inc. 15
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f)

We agree with Kennedys takeover premium analysis and the need to adjust

valuation based on this analysis. In addition, we again take heed of the recent Delaware court decision in Doft & Co. V. Travelocity where the court affirms this analysis and recommends adding a premium to the buyout value as final step, stating, Delaware law recognizes that there is an inherent minority trading discount in a comparable company analysis because the [valuation] method depends on comparisons to market multiples derived from trading information for minority blocks of the comparable companies. The equity valuation produced in a comparable company analysis does not accurately reflect the intrinsic worth of a corporation on a going concern basis. Therefore, the court, in appraising the fair value of the equity, must correct this minority trading discount by adding back a premium designed to correct it. g) Therefore, we use Kennedys 35% takeover premium and summarize:
control Controlling value Option Value premium Indication Exercise MySpace 35% $33.102B ($69M) $33.033 Billion

2008 EBITDA MULTIPLE Indication $24.52B

Based on the alternative guideline public company analysis provided above, MySpace was undervalued by $32.453 billion ($33.033B - $580M). h) This growth rate in fact is the core known variable by public issuer management that has become available as a triangulating confirmation of our methodology being appropriate.

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3) VALUATION BASED ON EISENMANN HARVARD BUSINESS STUDY THAT ESTABLISHED VALUATION FOR SEARCH AUDIENCE VIA GOOGLE/AOL TRANSACTIONS IN 2005. a) Intermix shareholders also lost out on the opportunity and failed to

receive consideration in 2005 for two different Paid Search assets 100% owned and controlled by Intermix. b) The value of the online audiences of the top paid search companies such

as Google, Yahoo, and AskJeeves/IAC have since at least 2004 have been increasingly followed by analysts and the public. Focus often is on monthly 3rd party audited audience or share of U.S. search market tracking services such as Comscore and Nielsen Netratings. c) One of the most read and reviewed analysis of the online search market

and the relative values of such market and its players in 2005 was an HBS study titled, Google Inc released in late 2006 by Professor Eisenmann. d) Eisenmanns analysis was combined with author and researcher Amy Shuens research and additional studies in her 2008 publication, "Web 2.0 A Strategy Guide by O'Reilly" (Amy Shuen, 2008 Oreilly Media). The author concluded that, "AOL helped tip the paid search market to make Google's average U.S. search revenue per query more than triple that of its competitors. Positive network effects explain why the value of AOL's 7-9% market share points were worth as much as $4 billion to Google, although analysts argued at the time that $1 billion was too much to protect Googles traffic from falling into Microsoft's hands." 17
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e) Below are additional highlights from the book that details the impetus and validates the valuation/transaction economics behind Googles $1 billion dollar investment for 5% of AOL that closed in December 2005, a $20 billion valuation, "U.S. advertising expenditures were about $100 billion in 2007, nearly half of the global total. " "Google is the big winner in online advertising, dominating in the U.S. and internationally. It not only generated the most global online revenue in 2006, but it also grew at nearly two times the rate of its peers." "Google's amazing success makes it easy to forget that it faced at least two critical make-or-break junctures in its race to dominate the "winner-takes-most" paid search marketplace" "A back-of-the-envelope calculation shows why 7% to 9% market share in a tippy market with strong positive effects can be worth $4.45 billion, not just $100 million" "By protecting its 7% to 9% of AOL's share of traffic, Google protected all of its 50% of paid search traffic from a precipitous decline in RPS (revenue per search). According to equity analysts, the RPS gap between Google and its followers, including Yahoo! was very large. RBC Capital Markets estimated that Google's RPS exceeded Yahoo's by at least 40%.' "Looking at simplified numbers may make this easier to see. If the entire industry made $12 billion in total online ad revenue and there were 400 billion inquiries, the industry-wide RPS for 2005 would be .3 cents. Google's ad revenue was $8 billion, and its queries totaled 200 billion. This would imply an RPS of .4 cents for Google and 2 cents for all others. So if Google's share is around 50% at the end of 2005, losing AOL would mean a decline of overall paid search share to 43%. This would have caused the advertiser base to contract in response, as well as the average RPS. If Google fell to a 2 cent RPS as a result of negative network effects and falling out of its dominant leadership position, it would not only lose 28 billion queries at .04 (7% share), but also 172 billion queries at .02 in revenue." "An extra $100 million for AOL's traffic is a tiny price to pay for avoiding a possible loss of $4.56 billion in a tippy market in which the leader is just at the 50% point" Explains Network Effect described in Harvard Google Study The AOL/Google Story 18
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"The tippy market example involving Google, AOL, and Microsoft in 2005 is drawn from the HBS case Google Inc. by HBS Professor Thomas Eisenmann. There are definite parallels to be drawn to the 2008 Google, Yahoo!, and Microsoft takeover struggle. (The HBS explanatory notes on these specific topics are also authored by Professor Eisenmann.) The case provides the contextual details and quantitative information on why the analysts at the time believed that Google had paid about $100 million too much in the AOL deal." "Tippy market" "The Google case data together with Christa Sober Quarles' Investment Analyst Report on Internet Services-reporting market shares of search engine players in 2005-gave me a significantly different perspective of the AOL deal as illustrative of a tippy market. The search market shares in 2005 reveal that Google was in a fairly vulnerable position because it was clearly in the battle zone for a tippy market, with AOL playing the swing vote." "Christa Sober Quarle's report and its detailed models of revenue per search for different competitors in the search market supported my hypothesis that the clearly dominant 50+ market share leader in a tippy and highly networked two-sided market, like the search market, could receive more than 2 times the average revenue per search query compared to search engines such as MSN or AskJeeves" "Markets with strong network effects also tend to be "winner-take-all" or "winnertake-most." Even leading companies can be vulnerable to a swing vote of six or seven market-share points. It may seem like the tail wagging the dog, but AOL played a decisive role in the early race between Google and Overture, as well as in the tippy race between Google, Yahoo!, and Microsoft. " VIII THE IMPORTANCE OF CONSIDERATION OF POSITIONING IN THE MARKET a) We cite as guidance the recent Delaware appraisal case which cites as

desirable if available, analysis that can contribute accurate or proper positioning in the market as Delaware court described having as part of the input into the best way to value corporate assets. According to the court, Zakkour testified in his deposition about Salomons approach to the valuation and 19
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discusses the metrics of the valuation that were emphasized and why. The court adopts Salomons valuation as a framework, and isolates the valuation metrics that should be of greater or lesser importance in determining the appropriate value for Travelocitys shares. Notably, Zakkours extensive and detailed testimony in his deposition about Travelocitys lost momentum to Expedia evidences Salomons awareness of Travelocitys positioning in the market vis--vis Expedia. See id. at 51-54. b) Therefore, it would have been appropriate for Intermix or its bankers to have had enough awareness in the marketplace of MySpaces positioning and value in the online paid search industry at the time of the sale to have factored this value into the management forecast. Therefore the omission of absence of MySpace Search revenue or value being mentioned or disclosed both in the Proxy and prior to the Proxy period proves that the management forecasts are defective for their lack of inclusion of factors in the forecasts that evidence awareness of MySpaces positioning in the market vis--vis Google c) There is also evidence cited that the Intermix CEO as early as July 18th, 2005 knew AOL was claiming or seeking a $20 billion dollar valuation for its search audience, that by August 8, 2005, Intermixs President had opted to skip a company business development meeting to attend a search engine show, and increasingly in August and September that there was massive demand by Google, Yahoo, and Microsoft to lock up or strike partnerships with companies that owned or controlled large blocks of search audience. 20
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d) Yet no action is taken by Intermix to consummate a search auction partnership before September 30, 2005. In fact, Intermixs CEO seems to lose momentum with a clearly partnership seeking Yahoo between June and August 2005. Intermix CEO revises at least Yahoos powerpoint according to email evidence to make it seem News Corp already owns MySpace to mislead potential bidders. IX - THE GOOGLE $1 BILLION INVESTMENT IN AOL IN 2005, -GIVES US A REASONABLE COMPARABLE TO YIELD METRICS TO ESTIMATE THE VALUE FOR TWO ISSUER SEARCH ENGINE ASSETS: MYSPACE SEARCH & INTERMIX SEARCH a) MYSPACE SEARCH ASSET New Evidence shows Issuers MySpace

Search had the opportunity to effect and close a Search Engine Auction prior to the September 30, 2005 shareholder vote but failed to do so. b) Both Yahoo and Google were in discussions with Issuer prior to the

Shareholder vote. c) Intermixs prior 2 year termed exclusive search agreement with Yahoo had expired on or about July 15, 2005, opening the way for new search agreement and partnership to be consummated and economic upside recognized before the September 30, 2005 shareholder vote. d) Issuer never discloses MySpace Search exists until October 2005 Comscore Search results show MySpace Searchs U.S. audience had already reached 21
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20% of the size of AOL Search monthly U.S. audience X THE VALUATION OF MYSPACE SHOULD BE BASED ON OCTOBER 2005 DATA AND DECEMBER 2005 GOOGLE/AOL TRANSACTION a) In October 2005, Comscore reported that AOL search had 36.0 million unique visitors as compared to MySpace Search having 8.0 million unique visitors. b) Therefore MySpace Search already by October 2005 had at least 22% of the Search Audience that AOL controlled c) If we assume Class claims that AOL had benefitted from or factored in its October 2005 Comscore. Then AOLs audience will be found smaller by 8.0 million users for October 2005, and MySpaces audience will be found to have already reached 28.5% of AOLs size (as in this scenario, AOL really only had 28 million unique Search users for month of October 2005). d) Therefore, MySpaces Valuation based on a competitive search marketplace existing before the shareholder vote would have cancelled the September 30, 2005 shareholder meeting based on the size of MySpace Search existing in August and September 2005, and could rely on the fact that the October 2005 metrics would have been public before another acquisition or revised offer could have been completed. Therefore, its reasonable to use the October 2005 Comscore search rankings in our calculations for the scenario the Issuer took action to take advantage of the upside value in MySpace Search that Shareholders contend defendants became 22
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aware of before the September 30, 2005 shareholder vote. XI USING COMPARISON OF MONTHLY SEARCH AUDIENCE TRANSLATES TO 100% OF MYSPACE WORTH: Value Between $4.4 Billion -$5.71 Billion (multiplying AOLs $20 billion valuation by either .22 or .285 because MySpace Search was between 22% to 28.5% of AOL Search in October 2005). Less $580 million, and based on the perhaps more reliable bona fide size of asset in an efficient and competitive marketplace, Issuer shareholders lost between $3.75 Billion (4.4 less $650 million received in total consideration already) - $5.06 Billion (5.71 less $650 million received in total consideration already) a) HITWISE INC, A 3RD PARTY ONLINE SEARCH TRACKING COMPANY, In August 2005 according to Hitwise, 3.62% of Googles search came from MySpace. b) This can be calculated by comparing unique users for months of August vs. February 2006 and following calculations: The Unique visitors for February 2006 as reported by Comscore are 37.34 million unique visitors for MySpace.com. Hitwise reports for February 2006, there were approximately 6.2% of Googles traffic coming from MySpace, Inc. (according to Hitwise data published in May 2006, Bill Tancer published story) c) Therefore, if we look at unique visitors for MySpace in August 2005 of

21.81 million unique visitors, thats 58.4% of the unique visitors of February 2006 23
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when 6.2% of Googles audience was coming from Myspace.com. Therefore, we can estimate that in August 2005, MySpace was generating 3.62% of Googles search audience. (This is calculated by taking 58.4% of the February hitwise data showing 6.2% of Googles audience was coming from MySpace.com). October 2005 vs February 2006 A) The Unique visitors for February 2006 as reported by Comscore are 37.34 million unique visitors for MySpace.com. Hitwise reports for February 2006, there were approximately 6.2% of Googles traffic coming from MySpace, Inc. B) Therefore, unique visitors in October 2005 of 24.25 million unique

visitors, thats 64.9% of the unique visitors of February 2006 when 6.2% of Googles audience was coming from MySpace.com c) Therefore, we can estimate that in October 2005, MySpace was generating Approximately 4.2% of Googles search audience. (This is calculated by taking 64.9% of the February Hitwise data showing 6.2% of Googles audience was coming from MySpace.com). d) Hitwise provides corroborating source in addition to Comscore that the MySpace Search audience was at least 22%-28.5% of AOLs search audience in October 2005. e) The Eisenmann HBS study claimed 5-7% of the U.S. Search audience 24
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was what Google was valuing thru its partnership announced in December 2005 with AOL. Then the Hitwise data confirming that MySpace was providing 6.2% of Googles total search audience by February 2006 allows us to estimate and conclude that Comscores October 2005 data on unique search users (the only month Comscore ever released this data) showing MySpace already had 2228.5% the search audience that AOL had was reasonably accurate. FACTORING IN LOST INTERMIX SEARCH ASSET A) We are also aware that Intermix had a second search asset focused around download search products and toolbar. B) Intermix Search was tracked by Comscore for internal data provided to

Issuer prior to the September 30, 2005 shareholder vote. C) We assume for this permutation that the Jury will find (or on summary judgment defendants will be found) guilty of corporate waste or fraudulent conveyance by their decision to voluntarily shut down Intermix Search on or around April 2005. f) Because Intermix competed directly with AskJeevess ISH division in the Search download toolbar sector, by management shutting down Intermix Search, AskJeeves benefitted while shareholders received no value for the Intermix Search assets. g) When Intermix stop operating its active online user base that had installed 25
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Intermix downloadable toolbars or other search products, AskJeeves immediately could capitalize on this because their already dominant distribution of their download search products allowed AskJeeves to instantly become the dominant toolbar or redirect on any users computers that may have been using Intermixs download search toolbar or search redirect products previously. h) Intermix Search division lost approximately 72% of its audience between March 2005 and June 2005. i) 72% of the total Search Audience lost according to Comscore is approximately 8.3 million unique Intermix search users that simply disappear and their value not factored into the Kennedy Damages Report. j) We determine to take the lost U.S. search audience which we can more accurately measure the value of. Such lost U.S. search audience can be calculated by reviewing Comscore historical metrics provided as part of discovery. In March 2005, Intermix Search received 3.154 million unique users compared to July 2005 when Intermix Search had decreased to 1.13 million unique users, a decline or loss of 2.02 million U.S unique users. k) If management had not voluntarily turned off its Intermix Search asset/division and instead attempted to keep these search users as an asset, and transferred these users to aggregate all search thru its MySpace Search asset, then we 26
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can establish a valuation. This is calculated by adding the Intermix Search users lost to the October 2005 MySpace Search audience. With 10 million MySpace Search users in October 2005, MySpace would have been valued between $5.55 Billion (27.7% of AOL audience) - $7.14 Billion (35.7% of AOL audience) XII - Lost opportunity of getting benefit of JP Morgan 2006 valuation report from Zakkour ($1.367 billion for MySpace) a) Zakkour led Citibanks valuation investment banking group that Carlick brought in to work with Allen & Co. and in March 2005 provided while at Citibank, a $1.85 million valuation for AskJeeves. b) If Issuer had got opportunity to receive investment banking services of Zakkour, then shareholders would have been able receive a bid of $1.367 billion for MySpace. just from News Corp a single bidder. This opportunity was lost. c) Carlick was the Director of Intermix who failed to disclose to the board or

Shareholders that he was conflicted by allowing Zakkour to be working for News Corp and adverse against Carlick and issuer. d) Therefore, the lost value for shareholders was $1.367Billion (the Zakkour valuation report he provided for News Corp) less $650 million paid by Acquirer, or $717 million dollars. e) Kennedy notes the Zakkour valuation report contributed by JP Morgan

was based on 2006 EBITDA. 27


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f)

The $1.367 billion valuation report from Zakkour awards MySpace with a

32.6X managements 2006 EBITDA multiple. XIII ADDING BACK OMITTED VALUE OF SEARCH ENGINE PARTNERSHIP REVENUE a) IF MANAGEMENT FORECASTS MUST BE USED, THE OMITTED SEARCH REVENUE FOR 2006 MUST BE CALCULATED AND CONTRIBUTED TO CREATE NEW SEARCH INCLUSIVE FORECASTS. b) Microsoft Search Partnership. According to Jim Heckerman, the head of Fox Interactives Search group, Microsoft was offering $800 million in January 2006 for being MySpaces exclusive search partner. c) Based on this new market information disclosed in a 2009 published book, we can match MySpaces unique user audience value to what that audience is worth to the Search Engine bidders at different points in time. d) In the book, Heckerman is offering search bidders 3 year terms and cites discussions with Microsoft as early as January 2006 where they allegedly offer $800 million which works out to $266 million per year. Since traffic data comes out mid month for the prior month, then we must assume Microsoft was most likely reviewing December 2005 audience/user statistics of MySpace.com if Heckerman was negotiating with them in January. e) Thus we know as of January, looking back at December 2005 Search 28
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audience size of MySpace, which is what was the most recent data available at that time, that Heckerman affirms Microsoft was willing to pay $22.1 million per month going forward based on Decembers 32.2 million unique users. f) This allows us to create a metric we can ascribe to proportion value for previous months if we assume the market had been efficient and competitive and Shareholders had been able to offer up or run a search auction in October 2005 or any months the value that can be generated or received by Issuer if it had wanted to close a transaction with a slightly smaller audience sooner then January 2006. g) If December 2005s unique audience is worth $22.1 million from Microsoft, then August 2005 which has 21.81 million unique monthly users which is 67% of MySpaces unique audience compared to December 2005, would be worth $14.807 million per month. Using Ratio to forecast prior months value for 12 months of 2006 a) Therefore, if Microsoft had been in discussions with Issuer in September 2005 and concluded a deal, they would instead of December 2005 data, be reviewing August 2005 3rd party unique user data that became available mid month typically. b) Microsoft would have valued the opportunity in September 2005 to lock up an exclusive search partnership with MySpace based on MySpaces August 2005 Unique user metrics. 29
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c) Since MySpace in August 2005 had 67% of the unique users compared to December 2005, Microsoft would have been willing to pay $14.807 million per month (67% of Decembers 32.2 million unique users) to conclude an exclusive search partnership with Issuer. d) Therefore, assuming its proven a Search Engine Partnership could have been completed before the September 30, 2005 shareholder vote with Microsoft, then management forecasts would have been revised to include the effects of closing such a material transaction in 2006. e) If Issuer closed such a transaction in September 2005, then 12 months of Paid Search revenue would have been generated in calendar 2006. This would added $177.68 million in revenue to the management 2006 forecasts for Myspace. f) Therefore, adding Online Search into the revised 2006 management forecasts put forth by Kennedy, cures the omission of online search revenue in the 2006 management forecasts and the deficiency of such forecasts that did not previously include near term search revenue as a component. g) Kennedys 2006 MySpace forecast of revenue was multiplied by Comparable companies that averaged a 25X revenue valuation. Kennedy assumed MySpace revenue was $63.052 and its EBITDA was $30.874. h) Kennedy multiplied MySpace 2006 forecasted Ebitda by 14X a factor he got from the comparable companies he determined fair. 30
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i) Finally Kennedy multiplied each valuation with a 35% premium, to create two valuations professed to be reasonable. j) Adding a Microsoft search partnership back into the Kennedy 2006 forecast for MySpace, increases 2006 revenue from $63.052M to $240.73M. k) Using Kennedys 14X Revenue multiple against the recast 2006 MySpace forecast with online search via the metrics received from evidence of Microsofts January 2006 offer, MySpace is attributed a value of $3.37 billion. l) With 35% premium for takeover added (as used by Kennedy), we receive final valuation for MySpace based on 2006 total revenue of $4,549,834,000 XIV- VALUATION BASED ON GOOGLE SEARCH PARTNERSHIP Using Ratio to forecast prior months value for 12 months of 2006 a) Therefore, if Google had concluded a deal in September 2005, they would instead of August 2006 data, be reviewing August 2005 3rd party unique user data that became available mid month typically. b) Google would have valued the opportunity in September 2005 to lock up an exclusive search partnership with MySpace based on MySpaces August 2005 Unique user metrics. c) MySpace in August 2005 had only 32.84% of the unique users compared to June 2006. d) If MySpaces June 2006 unique audience of 52.34 million users is worth 31
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$25.0 million per month from Google, then August 2005 MySpace unique audience which had 21.81 million unique monthly users would have been worth $10.4 million per month (41.6% of $25.0 million). e) MySpace could expect to receive at least $124 million in search revenue in 2006 from Search Partnership with Google in September 2005 ($10.4 pr. month X 12). f) Adding a Google search partnership back into the Kennedy 2006 forecast for MySpace, increases its 2006 revenue from $63.052 million to $187.052 per year. g) Using Kennedys 14X Revenue multiple against the recast 2006 MySpace forecast of $187.052 (via inclusion of search revenue generated from assumed Google agreement having been closed prior to September 30, 2005), provides for a MySpace Value of $2.618 billion. h) With the 35% premium for takeover added, we receive a final valuation for 100% of MySpace based on 2006 total revenue (with inclusion of a Google search partnership) $3,534,300,000. XV- CONCLUSION: I declare on penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed this 20th day of October, 2011, in Los Angeles

Brad D. Greenspan 32
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EXHIBIT 1 - BACKGROUND / WORK EXPERIENCE QUALIFICATIONS OF EXPERT -I have approximately 12 years of industry experience. -I was CEO and founder of eUniverse, Inc. from its inception in 1998 as my idea thru October 30, 2003. -I was the founder of MySpace.com while Chairman and CEO of eUniverse in 2003. PROFESSIONAL QUALIFICATIONS -Educational & Professional Certification i) Two years of Law Society Undergraduate at University of Santa Barbara ii) Bachelors of Political Science, 1996 University of Los Angeles PROFESSIONAL RECOGNITIONS AND AFFILIATIONS i) Morgan Stanleys Internet analyst announced in November 2003 that Issuer eUniverse as of October 2003s 6 month ending data, was the #1 fastest growing portal on the Internet eclipsing AOL and Yahoo. ii) Founder of Myspace.com. iii) Founder of eUniverse PRESENTATIONS AND PUBLICATIONS i) Between 1999-October 2003 I co-created and presented Issuers financial forecasts and was sole decision maker on all internet strategy and determined allocation of funds if any for any new project. PROFESSIONAL EXPERIENCE 1996-19980 President of Palisades Capital a merchant investment bank where I raised over $60 million dollars for 4 public companies. 33
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1999- October 30, 2003 Chairman and CEO of eUniverse, Inc. -I was initial and first head of Search for eUniverse, Inc., the issuer and signed first search partnership with Overture acquired and operated as Yahoo in 2003. 2004-2005- Palisades Technology I was partners with Yahoo and operated a search toolbar division for game companies including leading casual games company Big Fish Games and Browser companies like AvantFind.com 2006-president, President LiveUniverse, Inc. a network of entertainment websites 2008-present, President of LiveVideo, Inc. a Los Angeles based network of entertainment websites 2006-present, Chairman of BroadWebAsia, Inc., - operates HupoTV.CN a Chinese video entertainment website 2006-2009, Co-Founder and Board Member, Michigan based Draths Corporation, clean technology leader in renewable green chemistry. Management led by Michigan State University professors and green chemistry award winners Dr. Karen Draths and Dr. John Frost. 2006-present, Board Member, Borba Corporation 2010-present- Managing Director of Social Slingshot Pte Ltd, a Singapore based incubator fund partnered with the Singapore Governments National Research Foundation (NRF). I was awarded this $5 million dollar fund to encourage me to work with Singapore entrepreneurs and their universities entrepreneur programs. TESTIMONY IN TRIAL OR DEPOSITION i) Greenspan V. eUniverse, 2004, Delaware Judge Strine. (See summary of trial where I provided Delaware counsel evidence to uncover backdating fraud against defendants) ii) Delagado V. Intermix. I was expert witness for LA City and provided fact information and background for the city of Los Angeles prosecutors in their adware consumer case against Intermix that was settled after Intermixs listing expired. 34
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EXHIBIT 2- Monthly unique visitors as reported by Comscore for Myspace.com Compared to certain key months where Microsoft and Google offered MySpace or its parent company certain economic offers which provide a value per month these companies are willing to pay or value MySpace search at for the latest traffic/audience statistics that are available during the month a deal is offered up for MySpace.

July 2005 August 2005 September 2005 October 2005 November 2005 December 2005 January 2006 February 2006 March 2006 April 2006 May 2006 June 2006 July 2006 August 2006 September 2006

21.21M uniques 21.81M uniques 21.6M uniques 24.25M uniques 24.68M uniques 32.2M uniques 35.5M uniques 37.34M uniques 41.88M uniques 48.03M uniques 51.44M uniques 52.34M uniques 54.52M uniques 55.78M

$14.807

$22.1 Million Value MSFT $800M OFFER

$25.0 Million Value GOOGLE $900 OFFER

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