Analyst: Victor Sula, Ph.D.

Initial Report
October 15th, 2008

GTWO Daily 10/14/08

1.92

1.91

1.90

1.89
Gen2Media Corp.
146 W. Plant St., Ste. 360
1.88
Winter Garden, Fl. 34787 Volume
600
Telephone: (321) 293-3360
400
info@gen2media.com
Website: www.gen2media.com 200
0
Aug Sep Oct
MARKET DATA
Company Introduction
Gen2Media Corp. (GTWO) is a full-service digital media company
Symbol GTWO that creates, produces, manages and distributes customized and
Exchanges OTC OB targeted, high-quality online digital media to millions of viewers
Current Price $1.90
worldwide. GTWO develops and implements digital media strat-
Price Target $3.80
Rating Speculative Buy egies, managed Web casting services, and rich Internet applica-
Outstanding Shares 54.07 Million tions. The Company’s services enable content owners to distribute
Market Cap. $102.74 Million and monetize the value of their digital media across multiple plat-
Average 3-m Volume N/A forms.

Through its E360 LLC subsidiary, the Company operates the

Source: Yahoo Finance, Analyst
E360live.com Web site, an online digital television network pro-
viding multi-channel video programming. The E360Live Network
gives subscribers access to video channels transmitted directly to
the subscriber via the Internet and through mobile devices such
as PDAs, cell phones, smart phones and Blackberries. Subscribers
can watch pre-programmed channels or select from a list of ap-
proximately 15,000 music videos, television shows, movies, sports
events, concerts and exclusive content to create their own channel.
The network attracts more than 500,000 users per month. More-
over, through proprietary technologies, the E360Live platform and
Gen2 Core Technology can be licensed to service providers as an
alternative to satellite, terrestrial and cable transmission.

In addition to its E360Live Network, the Company creates and im-

plements digital media strategies for prominent corporate clientele
(Coca-Cola, Sprite and Lincoln); media companies (Clear Channel,
Emmis and Tribune); automated video and live concert productions
(Media Evolutions); and In-Store and On-Location TV networks
(GTV Network).
 Analyst: Victor Sula, Ph.D.
Initial Report
October 15th, 2008

GTWO has secured contracts with, or provided services for Clear Channel Radio, Tribune Media, Emmis Com-
munications, Coca- Cola, TiVo, American Express, AOL, Wal-Mart, Sam Goody, Media Play and Sun Coast Mo-
tion Pictures, and has provided automated video and live concert production services for major entertainers such
as Will Smith, Mary J. Blige, Justin Timberlake, Christina Aguilera and Brittney Spears, as well as events such as
Live 8 and the Billboard Awards show. The Company also handles full digital media production for Universal
Studios, Screenworks, Andre Agassi Foundation, NBC, DreamWorks, LiveWire Entertainment, Sheraton Taylor
Group, Chili’s, Monte Carlo Celebrity Golf Invitational, Spike TV, ABC, MTV, VH1, HBO, Showtime, Discovery
Channel, History Channel and A&E, among others.

Investment Highlights
Favorable industry outlook

The global entertainment and media industry is forecast to grow 6.6% annually to $1.8 trillion in 2010, accord-
ing to PricewaterhouseCoopers . Video games and the Internet will be the fastest-growing segments, with com-
pound annual growth rates averaging 8.9% and 8.4%, respectively 2.

Virtually every segment of the entertainment and media industry is shifting from physical distribution to digital
distribution of content. Global spending via online and wireless channels was estimated at $19 billion in 2005
and is expected to reach $67 billion by 2010. These channels include online rental subscriptions and digital
streaming of filmed entertainment, licensed digital downloads and mobile music, online and wireless video
games, electronic books and online casino gaming.

GTWO produces and delivers digital content via the Internet

GTWO is at the forefront of the digital media rev-

olution, combining the power of state-of-the-art,
patented compression software and automated
digital video delivery systems with the creativity
of one of the music industry’s top video produc-
tion teams. By successfully integrating managed
services, digital media and delivery applica-
tions, the Company enables content owners to
distribute and monetize the value of their prod-
uct across multiple platforms and channels.

E360Live attracts more than 500,000 viewers per

month

The Company’s E360Live.com Web site is an on-

line community where consumers can watch or
download more than 15,000 music videos, tele-
vision shows, movies, sporting events and con-
certs. On the E360Live Network, digital-quality

1.www.metrics2.com/blog/2006/09/19/global_entertainment_media_industry_will_grow_to_1.html
2.www.pwc.com/Extweb/ncpressrelease.nsf/docid/2AEEFF91BB40E4C2802571C0002A4572

Gen2media Corp. (OTCOB: GTWO) 2

 Analyst: Victor Sula, Ph.D.
Initial Report
October 15th, 2008

content is transmitted directly to subscriber via the Internet and any mobile device with Internet service. Subscrib-
ers can watch pre-programmed channels or create their own by selecting from E360Live’s content list. More than
500,000 users per month visit the site. Moreover, through proprietary technologies, the E360Live platform can be
also licensed to service providers.

At present, E360Live.com is a free service for the end-user. The Company anticipates finalizing agreements with
content providers that will soon make premium content available to users for a modest fee.

GTWO has technology for smart content delivery

The Company has developed a patent-pending, digital media delivery platform that incorporates a smart content
delivery network set atop a user-friendly interface for unbundled media programming and delivery. The plat-
form, which is compatible with any hardware or software, works with any end-user platform, be it television, PCs
or mobile devices. GTWO’s innovative technology enables a true interactive television experience with time-of-
day programming and playback, distribution features allowing an entire video channel to be embedded on a so-
cial networking site, intuitive drag-and-drop media functionality, and full interactive overlays for contests, linked
promotions, viral marketing (e-mail, embedded link, blog, tag, favorites) and integrated e-commerce.

Partnerships will increase visibility and revenue streams

The Company is partnering with corporate clients and traditional media companies to deliver its proprietary me-
dia player, licensed content and content produced in-house in one bundled contract. Producing content in-house
can be done at a fraction of the cost of outsourced production. Most of the content GTWO produces is for advertis-
ers and/or business partners. The Company also plans to provide content for video game communities and inter-
national wireless service providers. Because GTWO owns its own highly acclaimed production company, facilities
and leading-edge, patented digital media delivery technology, the Company is a true full-service digital media
services provider, capable of reaching hundreds of millions of people through its network and channel partners.

GTWO and/or it’s affiliates have contracts with, or has provided services for Clear Channel Radio, Tribune Me-
dia, Emmis Communications, Coca Cola, TiVo, American Express, AOL, Wal-Mart, Sam Goody, Media Play and
Sun Coast Motion Pictures, and has also provided concert production services to Will Smith, Mary J. Blige, Justin
Timberlake, Christina Aguilera and Brittney Spears. The Company’s customers for full digital media production
include Universal Studios, Screenworks, Andre Agassi Foundation, NBC, DreamWorks, LiveWire Entertainment,
Sheraton Taylor Group, Chili’s, Monte Carlo Celebrity Golf Invitational, Spike TV, ABC, MTV, VH1, HBO, Show-
time, Discovery Channel, History Channel and A&E.

GTWO anticipates revenue growth will come from building and expanding partnerships targeting digital media
publishing and content distribution, further penetrating radio and other traditional media markets, revenue-shar-
ing from existing partnership agreements, and then leveraging all of these channels to expand the E360 network.
We expect the Company to report revenue of $26.3 million and net income of $7.4 million by 2010.

Proven management team

The Company’s CEO, Jim Byrd, is a seasoned public company executive with more than 20 years experience
advising and building growth companies, from start-up to publicly-traded entities. Mr. Byrd founded Fortune
Financial Systems Inc., a business and Internet marketing company with sales exceeding $100 million in its first
full fiscal year. Mr. Byrd also founded Sobik’s Subs and Vanguard Capital, and closely consulted with two highly
successful publicly traded Internet start ups: World Commerce Online Inc., which was funded privately at $0.50

Gen2media Corp. (OTCOB: GTWO) 3

 Analyst: Victor Sula, Ph.D.
Initial Report
October 15th, 2008

per share and rose in value to over $35 per share, and Parts.com Inc., which was initially funded at $0.50 per
share and increased in value to more than $50 per share.

GTWO president and digital video pioneer Mary Spio holds the first patents ever issued for digital cinema
technology. While an engineer at Boeing, Ms. Spio invented customer engagement and demographic targeting
technologies that were used by Boeing’s digital cinema division to digitally distribute George Lucas’ Star Wars
movies. Her technology has been deployed in digital theaters worldwide and used to distribute high grossing
films such as Ocean’s 11, Planet of the Apes, Spy Kids, Monster’s Inc. and Bounce.

CCO Mark Argenti, along with CTO Ian McDaniel, form the award-winning, nationally recognized production
team, which has directed, produced and created cutting-edge imagery for Will Smith, Janet Jackson, Mary J.
Blige, Justin Timberlake, Black Sabbath, Christina Aguilera, Enrique Iglesies, No Doubt, Jessica Simpson and
Ozzy Osborne.

Business Model
GTWO is an online, interactive digital media “one stop shop” that creates, produces, packages and delivers cus-
tomized media content utilizing its patented digital media delivery system to penetrate a variety of high growth
media industry verticals. The Company’s innovative technology provides solutions for managing a wide range
of digital applications, including music, movies, television and radio. As a full-service marketer of entertainment
and media products, GTWO helps its clients and partners capture shares within their target segments and gain
access to hard-to-reach niche areas through relationships with traditional retailers, Internet retailers, and a vari-
ety of multifaceted marketing and promotions outlets. The Company delivers an enterprise-grade digital media
solution and video streaming over the Web for hundreds of customers and tens of thousands of users through
software-based services that significantly enhance functionality and management, secure and preserve digital
rights, and reduce both costs and time-to-market.

The Company generates, or plans to generate revenues through three distinct business units, in a variety of
digital media verticals:

 E360Live Network (Consumer Site and Network);

 Digital Media Publishing and Distribution for:
1. Corporate Clientele (Coca-Cola, Sprite, Lincoln and Toyota)
2.Traditonal Media Companies (Clear Channel, Tribune and Emmis)
3.Online Game Communities and Alternative Devices (like XBox, Zune etc.)
4. GTV In-Store TV Networks; and
 Content Creation and Production (Media Evolutions).

The cornerstone of the Company’s business is E360Live.com, an online digital television network providing
multi-channel video programming. The site is a community where consumers can watch or download more than
15,000 music videos, television shows, movies, sporting events, concerts and exclusive features. The E360Live
Network is delivered to subscribers via the Internet and Internet-enabled mobile devices. Subscribers can watch
pre-programmed channels or create their own from E360Live’s content list. At present, the service is free but
GTWO is finalizing agreements with content providers to offer premium content at a modest fee.

E360live.com accepts submissions of songs, music videos, concerts, artist interviews, comedy bits and other origi-
nal content. Licensing agreements vary with each piece of content; some use a revenue-sharing model, others are

Gen2media Corp. (OTCOB: GTWO) 4

 Analyst: Victor Sula, Ph.D.
Initial Report
October 15th, 2008

buyout agreements, and some are Interactive Broadcast License version 2.0. For a $29.99 setup fee, E360live.com
will sell the customer’s music videos, song downloads, CDs or DVDs worldwide via the Web site. The Company
creates a profile for each customer on E360live.com, which includes links to the customer’s own Web site, reviews,
artist bio and additional information. The customer sets the selling price for his content and pays the Company
a 40% commission on sales. Customers have access to a user-friendly back-end system for submitting additional
content, monitoring activity, updating products and other functionalities.

Partnership agreements

GTWO has already begun to develop partnership agreements with large corporate customers for the delivery of
its proprietary media player, licensed content and content produced in-house in a single, bundled contract. The
Company produces content for advertisers and/or business partners and also plans to supply content to digital
video game communities and international wireless service providers.

Emmis Communications
The Company has partnered with Emmis Communications, a diversified media company with radio broadcasting
and magazine publishing operations, and top radio stations such as Hot97 in New York - generally considered
the most influential Hip Hop station, and Q101 in Chicago - one of the top alternative rock stations. GTWO and
Emmis are converting these popular radio stations into digital television networks. In June 2008, the partnership
launched Hot97TV (www.hot97.com), which is already attracting 1 million video views per month, and Emmis
added Q101 in Chicago and their new mega rock station RXP to the partnership. An RXP site has been launched
(www.1019rxp.com) and a Q101 site is in development.

Clear Channel Communications

GTWO has also entered into a contract with media conglomerate Clear Channel Communications, the nation’s
largest owner of full-power AM, FM and shortwave radio stations, which operates 12 radio channels on XM Satel-
lite radio and is the largest pure-play radio station owner and operator. The Company recently launched the first
Clear Channel site, XLTV, for XL106.7 (www.xl1067.com), and initial results have been very successful, with site
traffic increasing dramatically from the first day
of site launch.

Tribune Company
The Company has teamed up with Tribune
Company to produce and broadcast a daily
news show for Hoy, America’s second-largest
Spanish-speaking newspaper. GTWO is creat-
ing the HoyTV Network for Tribune Company,
will produce the show from its studios in central
Florida, and broadcast the show via the Internet.
This is the first of several shows GTWO expects
to produce for Tribune properties.

Coca-Cola
GTWO has created and implemented digital
branding and marketing strategies for Coca-Co-
la (www.cocacolahiphop.com) and has imple-
mented similar programs for Toyota (Scion) and other corporate clients.

Gen2media Corp. (OTCOB: GTWO) 5

 Analyst: Victor Sula, Ph.D.
Initial Report
October 15th, 2008

Strategy
The Company develops effective consumer targeting via its platform, which provides sponsors with a pre-qual-
ified demographic. Advances in storage and display technology enable GTWO to offer high quality video online
at lower prices. By giving consumers access to a broad selection of interactive programs, GTWO will be able to
successfully compete with traditional TV, which offers only limited choices and no interactivity.

GTWO is pursuing partnerships with well-known video game developers and is preparing the launch of several
ventures involving international distribution of its digital content. In addition, the Company plans to roll out its
radio station partnership program nationwide beginning in October of 2008, and plans to aggressively market
this service, bringing new individual stations and radio groups online as quickly as possible. GTWO is also ne-
gotiating with retailers regarding the launch of several GTV networks (In Store virtual TV Networks) in 2009.
These relationships will involve revenue-sharing or fee-based arrangements.

Technology
The Company has developed a groundbreaking technology platform that provides centralized management,
transformation and analysis, and facilitates digital distribution of media content while bringing previously un-
available efficiencies and opportunities to the digital media supply chain.

GTWO’s core technology has a standardized user interface that is easily customizable to meet the specific needs
of the customer, and is recognizable across all media platforms. The user interface relies on a standard SQL-
based relational database management system to store the data in a Linux environment with Red Hat and De-
bian driving the application. The application uses a custom Model-View-Controller (MVC)-style framework for
interacting with the database. The Web pages are served by Apache. PHP is used for server-side scripting and
Web 2.0 practices are used throughout the application.
System Architecture

Source: Company’s presentation

Gen2media Corp. (OTCOB: GTWO) 6

 Analyst: Victor Sula, Ph.D.
Initial Report
October 15th, 2008

GTWO’s proprietary technology consists of three parts:

 Media Compression Techniques, used to compress the size of digital content to allow its transmission over the
Internet.

 Media Management Techniques, used to catalog and tag a large pool of media files in order to maximize search
capabilities for the end-user.

 Media Distribution Platform, used to allow the programming to travel from the transmission site to the end-
user.
Products and Services
The Company offers a full range of tools, services and digital media solutions for the creation, production, dis-
tribution, management and marketing of streaming digital media publishing and online marketing projects and
campaigns.

E360live.com

This site is a community where consumers can watch or download music and other video. The Company’s propri-
etary technology allows the users to create their own channels (the video equivalent of an audio playlist), drop-
and-drag, and watch, store and playback videos in a seamless manner without any downloading or buffering.
Although basic use of the site is free to the consumer, revenues are generated from consumer purchases of special
content and events on the site, as well as through advertising. E360live.com currently averages 20,000 daily visi-
tors and has more than 15,000 pieces of content. E360Live is linked to several blogging applications, giving users
a quick way to blog about a particular video and include a link to it.

GTWO’s technology allows its media player to be embedded in other sites such as MySpace or Facebook. This
ability creates exponential reach, actually driving new customers to the client and additional traffic to the E360
network. The Company’s media player is both browser- and platform-agnostic.

Comparison to competitors’ applications

E360LIVE ITUNES YOUTUBE MTV CINEMA NOW MOVIELINK

Delivery Format No Restrictions Download (Only) Click to Play Click to Play Download (Only) Download
Download(Only)
(Only)

Image/Audio Quality Excellent Good Poor Moderate Good Good

Good

Content management Yes x x x x xx

Subscription Service Yes x x x x xx

Content Type Niche/Mainstream/User Main Stream Only User Generated Main Stream Only Main Stream Only Main
MainStream
StreamOnly
Only

Community Features Yes x x x x xx

Exclusive Yes Yes Yes x x xx

Install Required No Yes Yes No Yes Yes

Yes

Multi Machine PlayBack Unlimited 3 3 3 3 33

Source: Company’s presentations

Gen2media Corp. (OTCOB: GTWO) 7

 Analyst: Victor Sula, Ph.D.
Initial Report
October 15th, 2008

Digital media creation/content distribution

Digital technologies are “democratizing” content creation, which has historically been closely held by Holly-
wood and major TV networks. Value in the entertainment supply chain is shifting from large content creators
(studios and labels) to a multitude of smaller creators, aggregators and packagers. GTWO’s application offers
these content creators an industrial-strength platform for streaming live or on-demand audio and video content
over the Internet.

GTV (In-Store/On-Location)

GTV (In-Store and On-Location TV) is a unique medium that helps retailers and marketers reach target custom-
ers with laser precision. GTV offers true customization by fitting the content to the needs of each location, based
on time of day/week, geo-demographics or anything else the retailer feels pertinent to their customer base and/
or target market. Sectional atmosphere is created by broadcasting different programs simultaneously. For ex-
ample, a restaurant can display a Diner’s Club message to those waiting to be seated, and display the special of
the day for customers who are already seated.

Creation and production

Through its Media Evolutions brand (www.mediaevolutions.com), GTWO produces content and visual imagery
for high-profile clients. Media Evolutions’ services include: creative, directorial and producer services; video
post services (finishing services, editing, composting, color correction); graphics and animation (3-D production,
broadcast design, character animation); audio production (original production music, sound fx, voice-overs);
Web/multimedia presentations (site design, dynamic programming, corporate presentations); and live event
services (live event capture, live video direction, on-site play back, media on demand systems, audio/video de-
sign and operations, technical support and consultation). Media Evolutions has worked with many high-profile
entertainers in the music business, including, Brittany Spears, Justin Timberlake, Tim McGraw, Faith Hill, Elton
John, Carlos Santana, Mary J. Blige, Rod Stewart and Christina Aguilera. In addition, the E360 digital video de-
livery system was utilized for Live8, the largest simultaneous video broadcast in entertainment history.

Gen2media Corp. (OTCOB: GTWO) 8

 Analyst: Victor Sula, Ph.D.
Initial Report
October 15th, 2008

Industry Outlook
Entertainment and media industry

The global entertainment and media (E&M) industry is forecast to grow 6.6% annually to $1.8 trillion in 2010,
according to PricewaterhouseCoopers3. The U.S. remains the largest E&M market, growing at a 5.6% annual rate
and forecast to reach $726 billion in 2010. Video games and the Internet will be the fastest-growing segments with
compound annual growth rates projected at 8.9% and 8.4%, respectively4.

Virtually every segment of the entertainment and media industry is shifting from physical distribution to digital
distribution of content. Global spending via online and wireless channels was estimated at $19 billion in 2005 and
is expected to reach $67 billion by 2010. These channels include online rental subscriptions and digital streaming
in filmed entertainment, licensed digital downloads and mobile music, online and wireless video games, elec-
tronic books and online casino gaming.

Internet usage

The continued rollout of broadband and high-speed wireless networks will stimulate mobile markets and be a
major driver of E&M industry growth. The continual growth in the number of Internet users also expands the
customer base for IP-based services.

The number of Internet users worldwide already exceeds 1 billion. As of June 30, 2008, there were 1.46 billion
Internet users worldwide, according to Internet World Stats.
Internet Usage

Population, Mn % Pop. Internet Users, Penetration % Usage User Growth

( 2008 Est. ) of World Latest Data, Mn (% Population) of World ( 2000-2008 )

Europe 800.4 11.9 % 384.6 48.1 % 26.3 % 266.0 %

North America 337.2 5.0 % 248.2 73.6 % 17.0 % 129.6 %
World’s total 6,676.1 100.0 % 1,463.6 21.9 % 100.0 % 305.5

Source: www.internetworldstats.com/stats.htm

3. www.metrics2.com/blog/2006/09/19/global_entertainment_media_industry_will_grow_to_1.html
4. www.pwc.com/Extweb/ncpressrelease.nsf/docid/2AEEFF91BB40E4C2802571C0002A4572

Gen2media Corp. (OTCOB: GTWO) 9

 Analyst: Victor Sula, Ph.D.
Initial Report
October 15th, 2008

At the end of 2007, the total number of global broadband subscribers was close to 305 million5. Over the past
year, the number of broadband subscribers in the OECD, which counts 30 countries, has increased by 24% to 221
million6 (June 2007). U.S. broadband penetration has increased more than 300% since 20027. The Telecommuni-
cations Industry Association (TIA) says that the total U.S. broadband subscriber base will hit 57 million in 2008,
up from 5 million in 2001 and 32.5 million in 2004.

Online activity

The average active U.S. Internet user went online 58 times during the month of June in 2008, according to Nielsen
Online9. While online, the average user accessed 107 Web sites and viewed about 2,373 pages. Other statistics for
the month of June show:
• Duration of Web page viewed, 0:00:53;
• PC time per person, 65:58:23;
• Active digital media universe, 164 million; and
• Current digital media universe (estimate), 223.1 million.

GTWO’s average page views for Hot97 and Clear Channel are lon-
ger than six minutes. Because its users are watching one or two
videos instead of surfing, the Company is able to serve up more
impressions for its advertisers. GTWO’s creative team has created
non-intrusive ad units in the form of “advertainment” which are
subtly embedded in the video rather than pre-rolled and/or post-
rolled as is typically seen with other online video sites. As a result,
the Company provides enhanced value for its advertisers which is
likely to support above-average ad revenue growth,

According to the Online Publisher Organization’s (OPA) Internet

Activity Index10, the bulk of consumer online activity has shifted
away from communications and toward content. Internet users are
spending nearly half their online time visiting content - a 37% in-
crease in share of time from four years ago and nearly as much time
as spent on communications and commerce combined. The increase in content’s share has been fairly steady,
growing 10% from 2003 to 2004, 13% from 2005 to 2006, and 13% from 2006 to 2007.

More often, content and programs are moving to IP platform as an alternate or sole means of distribution.

5. www.internetworldstats.com/dsl.htm
6. http://cordis.europa.eu/search/index.cfm?fuseaction=news.simpledocument&N_RCN=28639
7. www.webpronews.com/topnews/2008/04/15/broadband-penetration-up-300-since-2002
8. http://gigaom.com/2005/04/13/us-broadband-subscribers-57-million-in-2008/
9. www.internetretailer.com/dailyNews.asp?id=27105
10.The OPA’s Internet Activity Index is assembled using research conducted by Nielsen//NetRatings and
claims to incorporate data from approximately 90 percent of Web users and 55 percent of total usage time
online.

Gen2media Corp. (OTCOB: GTWO) 10

 Analyst: Victor Sula, Ph.D.
Initial Report
October 15th, 2008

Summary of OPA Internet Activity Index

Source: www.marketingcharts.com/interactive/users-online-time-spent-mostly-on-content-not-communications-commerce-1256/

The OPA attributes this shift to an increase in the volume of content online, the transition of traditionally offline
media activities to the Web and continued broadband adoption. The latter factor has enabled an increase in overall
time spent online, as opposed to share of time spent, across all four categories, i.e. content, search, commerce and
communications.

Online video market

According to In-Stat, the future of television is being defined online where the big Internet portals are finding
ways to blend professional video with high-touch services that follow consumers from screen to screen. World-
wide online video revenues are expected to top $4.5 billion by 2012, up from $1.2 billion in 2008, according to
In-Stat11. Much of that revenue is expected to come from online video rentals, with ad-supported online video
making up a major part.

Online video services and title availability are limited, pricing strategies are embryonic and the technology infra-
structure has yet to catch up, according to Understanding & Solutions. However, momentum is building; by 2011,
online video in the U.S. is expected to represent 8% of total home entertainment revenues, with Western Europe
close behind at 7%12.

July 2008 data from the comScore Video Metrix service indicates that Americans viewed more than 11.4 billion
videos and spent 558 million hours watching videos. During July, 75% of the U.S. Internet audience viewed online
videos. The duration of the average online video was 2.9 minutes. In July, Google Sites once again ranked as the
top U.S. video property, with more than 5 billion videos viewed. YouTube.com accounted for more than 98% of all
Google videos viewed. Fox Interactive Media ranked second with 446 million videos, followed by Microsoft with
282 million and Yahoo sites with 269 million. Hulu ranked eighth with 119 million videos viewed13.

11. www.podcastingnews.com/2008/08/14/online-video-market-to-reach-45-billion/
12. www.pcworld.com/businesscenter/article/140611/online_video_market_growing.html
13. www.comscore.com/press/release.asp?press=2444

Gen2media Corp. (OTCOB: GTWO) 11

 Analyst: Victor Sula, Ph.D.
Initial Report
October 15th, 2008

Top U.S. Online Video Properties by Videos Viewed, July, 2008

Videos Share (%) of

Property Videos
(000)

Total Internet 11,425,890 100.0

Google Sites 5,044,053 44.1
Fox Interactive Media 445,682 3.9
Microsoft Sites 282,748 2.5
Yahoo! Sites 269,452 2.4
Viacom Digital 246,413 2.2
Disney Online 186,700 1.6
Turner Network 171,065 1.5
Hulu 119,357 1.0
AOL LLC 95,106 0.8
CBS Corporation 69,316 0.6

Source: www.comscore.com/press/release.asp?press=2444

Online advertising
PricewaterhouseCoopers forecasts global advertising will expand 6.2% annually to $521 billion in 2010 from
$385 billion in 2005. In 2008, global spending for online ads is estimated to exceed $65.2 billion, or about 10% of
total advertising spending. The Internet will remain the fastest-growing advertising medium; spending is fore-
cast to grow 18% annually through 2010 and constitute nearly 10% of global advertising, up from 3% in 2002.

According to a new report from The Kelsey Group, the current economic crisis is not likely to impact U.S. small
and medium business advertising spending over the next year. About 81% of these advertisers plan to spend
the same amount or more on ads over the next 12 months. These businesses also plan to allocate 28% of their ad
budgets toward online advertising such as search and display ads, up from 25.4% last year. The average business
polled spent $2,828 on advertising over the past 12 months. Of that amount, 3.2% or $90.50 was spent on Internet
search advertising14.

In addition, the study found a large percentage of respondents plan to implement Web 2.0 technologies in the
next year. Approximately 40% will add customer reviews to their sites, 30% plan to add links or ads to social
networking sites or blogs, and 26% will add video to their sites.

According to eMarketer, worldwide ad spending on online social networks will increase from $1.2 billion in 2007
to more than $2.1 billion in 2008. Globally, social network ad spending is projected to surpass $4 billion in 2011.
In 2008, U.S. advertisers are expected to spend nearly $1.6 billion, up 69% from the $920 million spent in 2007.
In 2007, 37% of the U.S. adult internet population and 70% of teens used online social networking at least once
a month15.

14. www.internetretailer.com/dailyNews.asp?id=27516
15. www.marketingvox.com/social-network-ad-spend-to-grow-70-in-08-surpass-15b-035522/

Gen2media Corp. (OTCOB: GTWO) 12

 Analyst: Victor Sula, Ph.D.
Initial Report
October 15th, 2008

Financial Analysis

The Company will generate revenues from advertising on E360live.com, revenue-sharing agreements with part-
ners related to GTWO’s in-store platform and the development of micro-sites for clients.

Revenues were $79,686 in FY2008, reflecting the execution of initial contracts and services provided to customers
during 2008. Income statement,$

FY 2007 FY 2008 % Chg

Revenues - 79,686 n/m

Operating expenses 644,034 1,910,086 197%
Minority interest in loss of subsidiary -21,449 -56,476 n/m
Net loss 622,585 1,773,924 n/m
EPS -0.02 -0.04 n/m

Source: SEC Filings, Fiscal year ending June 30.

D uring FY 2007 and FY 2008, GTWO was a development-stage business. The Company began rolling out its rev-
enue partnerships and fee-based contracts in FY 2009.

In FY 2008, the Company expensed $1.9 million mainly for general and administrative purposes. The year-over-
year increase in operating expenses was due to operating activities and the costs associated with public filings
during the year.

At June 30, 2008, GTWO had liabilities of $639,539. Of $639,539 in current liabilities, $291,117 was converted to
shareholders’ equity subsequent to June 30.
Balance sheet, $

30-Jun-07 30-Jun-08

Cash and cash equivalents 321,497 3,079

Current Assets 321,497 23,074
Net Furniture and Equipment 40,545 57,753
Net Intangible Assets 405,912 279,622
Other Assets – Deposits 18,381 -
Total Assets 786,335 360,449

Current Liabilities 205,032 639,538

Minority Interest 380,651 324,176
Total Stockholders’ (Deficit) Equity, including 200,652 -603,265
Deficit accumulated during the development stage -644,185 -2,418,109

Source: SEC Filings.

The Company has operating losses and will likely need to raise additional capital to execute its business plan.

Gen2media Corp. (OTCOB: GTWO) 13

 Analyst: Victor Sula, Ph.D.
Initial Report
October 15th, 2008

GTWOValuation
estimates expenses of approximately $135,000 per month to operate through year-end 2008.

Outlook

The Company has developed a number of different revenue sources across a variety of industries and is produc-
ing revenues and securing partnership agreements. Its three businesses are:

• E360Live.com (Consumer Site and Network);

• Digital Media Publishing and Distribution (for Corporate, Radio, TV, Print, Wireless, Online Game Playing
and alternative devices, GTV In-Store and other Media Networks (Tribune, Clear Channel, Emmis); and
• Creation and Production for world class artists and events (Media Evolutions).

Revenue growth will come from building and expanding partnerships for digital media publishing and con-
tent distribution, further penetrating radio and other traditional markets, and revenue-sharing from established
partnership agreements.
Revenue and income estimates, $

2008 2009E 2010E

Revenue
E360live.com $ 6,650 $ 705,270 $ 2,002,576
Digital Media Creation 233,089 2,633,850 6,354,575
Digital Content Distribution 261,437 4,019,163 7,249,220
In Store - 315,000 9,562,500
Production 325,272 835,000 1,125,000
Total Revenue 826,448 8,508,283 26,293,871

Cost of Sales
E360live.com 998 95,791 288,386
Digital Media Creation 61,974 465,675 986,677
Digital Content Distribution 52,074 1,618,588 2,887,721
In Store - 210,000 7,500,000
Production 91,522 167,000 225,000
Total Cost of Sales 206,568 2,557,053 11,887,785

Gross Profit 619,880 5,951,230 14,406,086
S,G & A 744,571 2,671,969 3,146,451
Net Income Before Taxes (124,691) 3,279,261 11,259,635
Taxes - (168,363) (3,851,161)
Net Income $ (124,691) $ 3,110,898 $ 7,408,474 2009

Source: Analyst estimates

Going forward, we expect GTWO to record double-to-triple digit annual growth rates and to enter new un-
tapped markets such as In-Store TV. Many of the markets GTWO serves are emerging growth areas likely to
produce exponential growth over the next five to 10 years.

Gen2media Corp. (OTCOB: GTWO) 14

 Analyst: Victor Sula, Ph.D.
Initial Report
October 15th, 2008

Valuation analysis

GTWO competes with Google’s YouTube, Apple’s iTunes, Blockbuster‘s Movielink and MTV.com. In addition the
Company’s peer group includes Internet information providers, digital music and video distributors, social net-
working sites and other Internet entertainment providers.

Comparative analysis

Company Name Ticker Price per Mrkt. Cap. P/E P/S

10-Oct-08 symbol Share, $ $ Mn 2008 2009 2008 2009

RealNetworks Inc. RNWK 3.72 531 n/m 372.00 0.85 0.78

Scripps Networks Interactive. SNI 27.06 4,420 14.32 12.89 2.75 2.54
Discovery Communications. DISAD 11.12 3,130 19.51 15.62 4.05 3.88
Shutterfly Inc. SFLY 7.81 196 195.25 41.11 0.89 0.75
Apple Inc. AAPL 96.80 85,750 18.58 16.52 2.63 2.18
Yahoo! Inc. YHOO 12.29 17,030 27.93 23.19 3.05 2.76
Google Inc. GOOG 332.00 104,400 17.07 14.30 6.50 5.25

Median 19.04 16.52 2.75 2.54

Source: Yahoo Finance

The Company’s peer group was recently trading at 2.54 times forward Price/Sales multiples and 16.52 times for-
ward Price/Earnings multiples. We believe GTWO warrants a better valuation than the peer average, given its
strong growth prospects and significant partnership pipeline. As a result, we apply a 30 times forward P/E mul-
tiple to our $7.4 million 2010 earnings estimate to derive our $220 million market capitalization target for the
Company.

The Company will need to raise additional capital to implement its growth plan. We assume additional equity
sales will increase the share count to 58 million fully diluted shares outstanding. Dividing the $220 million equity
target by 58 million of shares outstanding, we obtain our $3.80 price target.

As a result, we are initiating coverage of Gen2Media Corp. with a Speculative Buy rating and a $3.80 share price
target. However, we strongly advise investors to consider the Company’s early development-stage status, capital
requirements and competitive environment as significant risk factors.

Gen2media Corp. (OTCOB: GTWO) 15

 Analyst: Victor Sula, Ph.D.
Initial Report
October 15th, 2008

Investment Risks
Limited operating history

The Company was formed in May 2007 and launched E360Live in July 2007. It has a limited operating history,
making it difficult to evaluate the success of its business plan. GTWO’s prospects must be considered in light of
the risks, difficulties and uncertainties frequently encountered by development-stage businesses.

Viability as a going concern

The Company’s negative working capital, operating losses and need for additional financing raise doubts about
its ability to continue as a going concern.

Significant additional capital required

The Company will require significant new capital for its development activities and completing the transition to
commercial operations. Management estimates operating expenses of approximately $135,000 per month through
year-end 2008. There can be no assurance that financing will be available in amounts or on terms acceptable to
the Company, if at all.

Competition from other entertainment and social networking sites

GTWO faces significant competition from other operators of entertainment and/or social networking sites. Many
of these competitors have longer operating histories and more established relationships with customers and end-
users. They may have a superior ability to make acquisitions, invest in research and development and compete
for advertisers. Some competitors operate Internet portals with a broader range of content and services. GTWO
may encounter difficulties luring users away from competitor digital content sites.

Gen2media Corp. (OTCOB: GTWO) 16

 Analyst: Victor Sula, Ph.D.
Initial Report
October 15th, 2008

Management

James S. Byrd, Jr. Mr. Byrd is a veteran public company executive who has had a 20-year career in advising, building and
managing growth companies from start-ups to successful public companies. He is the founder and former
Chairman and CEO president/CEO of Sobik’s Subs Inc., a regional sandwich shop chain he acquired in 1993 and grew from 32
units to more than 80 units in three years. He took this business public in 1996 and grew it into a large re-
gional multi-brand restaurant. In 1997, Mr. Byrd founded and became president/CEO of Fortune Financial
Systems Inc., an Internet marketing and training company. Mr. Byrd founded the company in 1997 and
grew it to more than $100 million in sales in its first full fiscal year and a public market cap exceeding $100
million. During that period, Mr. Byrd also served as the vice chairman of Success Magazine in New York.

In 1998, Mr. Byrd founded Vanguard Capital, a private equity firm specializing in start-ups and emerging
technology companies. Mr. Byrd closely consulted with two highly successful public Internet start-ups,
World Commerce Online Inc., which was funded privately at $0.50 per share and rose in value to more
than $35 per share, and Parts.com Inc. which was funded at $0.50 per share and increased in value to more
than $50 per share. In 2004, Mr. Byrd co-founded OE Source LLC, a private importer and distributor of
after market automotive parts and accessories. As managing director, Mr. Byrd oversaw OE’s growth from
initial sales of $3 million in 2004 to more than $12 million in 2005. OE Source was later merged into General
Automotive and taken public in early 2008.

Mary A. Spio As a pioneer of digital cinema, Mary Spio developed customer engagement and demographic targeting
technologies that Boeing Digital Cinema used to digitally distribute George Lucas’ Star Wars films. Her
President and Director technology can be seen in digital theaters worldwide and was used to deliver high grossing movies such
as Ocean’s 11, Planet of the Apes, Spy Kids, Monster’s Inc. and Bounce to theatres. Ms. Spio has provided
technical leadership and marketing to traditional gaming and music retailers such as Sam Goody, Media
Play, Sun Coast Motion Pictures, Trans World Entertainment, National CineMedia and AOL. She was one
of the first women to receive the Yueh-Ying Hu Memorial National Award for Innovation. Ms. Spio holds
a Master of Science degree in electrical engineering and computer science, global innovation management
from Georgia Institute of Technology and a Bachelor of Science degree in electrical engineering from Syra-
cuse University.

Mark Argenti Company co-founder Mark Argenti has directed, produced and created cutting-edge imagery for major
entertainment artists such as Will Smith, Janet Jackson, Mary J. Blige, Justin Timberlake, Black Sabbath,
Chief Creative Officer and Christina Aguilera, Enrique Iglesies, No Doubt, Jessica Simpson and Ozzy Osborne. Mr. Argenti has com-
Director pleted digital media production projects for Universal Studios, Screenworks, Andre Agassi, NBC, Dream-
Works, LiveWire Entertainment, Sheraton Taylor Group, Chili’s, Monte Carlo Celebrity Golf Invitational
and Spike TV.

Ian McDaniel GTWO co-founder Ian McDaniel has worked in the entertainment industry for more than 15 years in a
variety of media production roles. His knowledge of the technology that drives the entertainment business
Chief Technology Officer keeps him on the leading edge of his field. He has worked as a production editor for every star imaginable.
and Director Past projects include “Justin Timberlake, Live from Memphis,” “Will Smith Live in Concert” and other
shows for NBC, ABC, MTV, VH1, HBO, Showtime, Discovery Channel, History Channel and A&E.

Gen2media Corp. (OTCOB: GTWO) 17

 Analyst: Victor Sula, Ph.D.
Initial Report
October 15th, 2008

Thomas Moreland Mr. Moreland is a former audit manager with Ernst & Young, and an experienced public company CFO,
accounting and finance executive. Mr. Moreland served as controller and chief accounting officer for De-
Chief Financial Officer vereux, a national provider of behavioral healthcare services from 1998 through 2004. From January 2005
through October 2005, Mr. Moreland served as vice president of finance for Priority Healthcare, a publicly
traded company, where he was responsible for financial planning/analysis, internal audit and SOX compli-
ance, payroll, tax, information system integration and special projects. From October 2005 through July
2006, Mr. Moreland served as the senior director of reimbursement for Curascript. From 2006 through 2008,
he served as the vice president of finance for PainCare Holdings Inc., an AMEX-traded physician practice
management company.

Gen2media Corp. (OTCOB: GTWO) 18

 Analyst: Victor Sula, Ph.D.
Initial Report
October 15th, 2008

Disclaimer
DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or
an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither
licensed nor qualified to provide investment advice.

The information contained in our report should be viewed as commercial advertisement and is not intended to be investment advice. The report is not provided
to any particular individual with a view toward their individual circumstances. The information contained in our report is not an offer to buy or sell securities.
We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

Our newsletter and website have been prepared for informational purposes only and are not intended to be used as a complete source of information on any
particular company. An individual should never invest in the securities of any of the companies profiled based solely on information contained in our report.
Individuals should assume that all information contained in the report about profiled companies is not trustworthy unless verified by their own independent
research.

Any individual who chooses to invest in any securities should do so with caution. Investing in securities is speculative and carries a high degree of risk; you
may lose some or all of the money that is invested. Always research your own investments and consult with a registered investment advisor or licensed stock
broker before investing.

The report is a service of BlueWave Advisors, LLC, a financial public relations firm that has been compensated by the companies profiled. All direct and third
party compensation received has been disclosed within each individual profile in accordance with section 17(b) of the Securities Act of 1933. This compensa-
tion constitutes a conflict of interest as to our ability to remain objective in our communication regarding the profiled companies. BlueWave Advisors, LLC,
and/or its affiliated will hold, buy, and sell securities in the companies profiled. When compensated in shares, all readers should be aware that is our policy to
liquidate all shares immediately. We reserve the right to buy or sell the shares of any the companies mentioned in any materials we produce at any time. This
compensation constitutes a conflict of interest as to our ability to remain objective in our communication regarding the profiled companies. BeaconEquity.com
is a Web site wholly-owned by BlueWave Advisors, LLC. BlueWave Advisors, LLC has been compensated twelve thousand dollars directly from Gen2Media,
Inc., as a marketing budget to manage a comprehensive investor awareness program including the creation and distribution of this report as well as other
investor relations efforts.

Information contained in our report will contain “forward looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the
Securities Exchange Act of 1934. Subscribers are cautioned not to place undue reliance upon these forward looking statements. These forward looking state-
ments are subject to a number of known and unknown risks and uncertainties outside of our control that could cause actual operations or results to differ ma-
terially from those anticipated. Factors that could affect performance include, but are not limited to, those factors that are discussed in each profiled company’s
most recent reports or registration statements filed with the SEC. You should consider these factors in evaluating the forward looking statements included in
the report and not place undue reliance upon such statements.

We are committed to providing factual information on the companies that are profiled. However, we do not provide any assurance as to the accuracy or com-
pleteness of the information provided, including information regarding a profiled company’s plans or ability to effect any planned or proposed actions. We
have no first-hand knowledge of any profiled company’s operations and therefore cannot comment on their capabilities, intent, resources, nor experience and
we make no attempt to do so. Statistical information, dollar amounts, and market size data was provided by the subject company and related sources which
we believe to be reliable.

To the fullest extent of the law, we will not be liable to any person or entity for the quality, accuracy, completeness, reliability, or timeliness of the information
provided in the report, or for any direct, indirect, consequential, incidental, special or punitive damages that may arise out of the use of information we provide
to any person or entity (including, but not limited to, lost profits, loss of opportunities, trading losses, and damages that may result from any inaccuracy or
incompleteness of this information).
We encourage you to invest carefully and read investment information available at the websites of the SEC at http://www.sec.gov and FINRA at http://www.
finra.org.

All decisions are made solely by the analyst and independent of outside parties or influence.

I, Victor Sula, Ph.D, the author of this report, certify that the material and views presented herein represent my personal opinion regarding the content and
securities included in this report. In no way has my opinion been influenced by outside parties, nor has my compensation been either directly or indirectly
tied to the performance of any security listed. I certify that I do not currently own, nor will own and shares or securities in any of the companies featured in
this report.

Victor Sula, Ph.D. - Senior Analyst

Victor Sula, Ph.D. has held the position of Senior Analyst with several independent investment research firms since 2004. Prior to 2004, Mr. Sula held Senior
Financial Consultant positions within the World Bank sponsored Agency for Restructuring and Enterprise Assistance and TACIS sponsored Center for Produc-
tivity and Competitiveness of Moldova, where he was involved in corporate reorganization and liquidation. He is also employed as Associate Professor at the
Academy of Economic Studies of Moldova. Mr. Sula earned his Ph.D. degree in 2001 and bachelor’s degree in Finance in 1997 from the Academy of Economic
Studies of Moldova. Mr. Sula is currently a level III candidate in the CFA program.

Gen2media Corp. (OTCOB: GTWO) 19