GMO Financial Presentation

Presentation of Interim Financial Results for the Fiscal Year
August 16th 2006
Internet Inc.
(TSE First Section: 9449)
Supplementary Data
Internet
for
Everyone!
h t t p : / / w w w . g m o . j p /
Copyright (C) 2006 GMO Internet, Inc. All Rights Reserved.
1.Supplementary 1.Supplementary Data (Consolidated) 2.Internet 2.Internet Infrastructure Business 3.Internet 3.Internet Media Business
4.Internet 4.Internet Finance Business
Supplementary Data ( C o n s o l i d a t e d )
Stock Code: 9449
Interim Financial Results for the 2006 Fiscal Year: Scope of the Consolidation
1.Supplementary 1.Supplementary Data (Consolidated) 2.Internet 2.Internet Infrastructure Business 3.Internet 3.Internet Media Business Internet Infrastructure (Internet Use Support Business) 1st Quarter of the 2006 Fiscal Year Business Segment Company Name Internet Inc. GMO Hosting & Security Inc. GMO Research Institute Inc. GeoTrust Japan Inc. Grand Sphere Inc. WEBKEEPERSINCUSA INTERNET Number Inc. paperboy & co Inc. GMO Payment Gateway Inc. @YMC Inc. Payment One Inc. Blog Inc. Make Shop Inc. EpsilonInc. Mighty ServerInc. MagClick Inc. GMO Research Inc. GMO Media Inc. Net Clue Co. Ltd. (Korea) GMO San Planning Inc. Tea Cup Communication Inc. JWord Inc. Net Clue Japan Inc. GMO Affiliate Inc. Intertainment Inc. GMO NetCard GMO Internet Securities Inc. Proportion of Voting Rights (%) Parent Company 63.8 100.0 (97.1) 92.5 (70.0) 69.6 50.2 52.7 100.0 100.0 100.0 58.7 100.0 100.0 43.1 81.0 81.6 100.0 67.0 51.0 62.7 100.0 51.0 100.0 98.3 100.0 2006 Fiscal Year Interim Company Name Internet Inc. GMO Hosting & Security Inc. GMO Research Institute Inc. GeoTrust Japan Inc. Grand Sphere Inc. WEBKEEPERSINCUSA INTERNET Number Inc. paperboy & co Inc. GMO Payment Gateway Inc. @YMC Inc. Payment One Inc. Blog Inc. Make Shop Inc. EpsilonInc. Mighty Server Inc. MagClick Inc. GMO Research Inc. Media Holdings Inc. GMO Media Inc. Net Clue Co., Ltd. Korea GMO San Planning Inc. Tea Cup Communication Inc. JWord Inc. GMO Ad Networks Inc. GMOGames Inc. GMO NetCard GMO Internet Securities Inc. GMOVenturePartner Inc. GMO VenturePartners Investment Limited Partnership Bog Business Fund Investment Limited Partnership Proportion of Voting Rights (%) Parent Company 63.8 100.0 (97.1) 92.5 (70.0) 69.6 50.2 52.4 100.0 100.0 100.0 58.7 100.0 100.0 43.1 81.0 100.0 81.6 100.0 75.6 51.0 62.7 100.0 100.0 98.3 87.2 100.0 31.7 9.9 Notes
New New New
Internet Media (Internet Advertising Support Business)
New
Change of Name
Stock Code: 9449
Internet Finance Business
New New New New
State of Business: Sales Breakdown

Business
2005/2Q 716 380 1,763 221 68 303 377 20 3,851 447 1,587 834 210 19 (237) 2,861 -66 6,646
2005/3Q 696 367 1,795 190 70 432 202 55 3,809 492 1,581 783 199 37 236 2,857 4,759 -16 11,409
2005/4Q 655 396 1,819 231 67 371 209 76 3,827 474 1,946 712 184 74 257 3,135 4,629 -86 11,508
2006/1Q 633 457 1,872 268 108 384 99 202 4,027 442 1,837 834 192 82 146 3,243 4,506 63 11,713
2006/2Q 595 502 1,956 214 101 404 77 146 3,998 420 1,388 904 227 66 (232) 2,775 4,633 -78 11,329
Millions
Internet Infrastructure (Internet Use Support Business) Access Domain Acquisition Rental Server Home Page Building Support Security Payment Processing Communications for Business Other Sub Total Internet Media Development Internet Advertising Sales JWord Online Games Other Adjustment for Internal Transactions Sub Total Internet Finance Business Internet Finance Business
Special L i n e Shopping C a r t Business
Internet Media (Internet Advertising Support Business)
Stock Code: 9449

Adjustment for Internal Transactions Consolidated Sales
Changes in Costs and Cost Composition (Consolidated)

Millions
10000
8000
6000
4000
2000
0 Business Expenses + SGA Total Human Resource Costs Advertising and Promotion Costs Depreciation and Rental Costs Outsourcing and Subcontracting Expenses Communication Costs Rent Payment Handling Fees Media Costs Financing Costs and Bad Debts Adjustment for Doubtful Debts Other
04/2Q 4,390 1,065 670 298 641 91 205 446 290 27 652
04/3Q 5,555 1,337 693 321 734 116 227 408 989 49 675
04/4Q 6,535 1,521 673 365 968 145 217 696 1,092 34 820
05/1Q 6,743 1,819 708 386 767 222 305 464 1,113 154 802
05/2Q 6,438 1,827 540 379 437 206 386 657 942 137 922
05/3Q 10,077 2,060 642 698 696 234 428 655 944 1,839 338 1,539
05/4Q 9,620 2,019 688 710 839 213 421 653 1,222 1,452 326 1,071
06/1Q 10,732 2,138 666 731 977 211 400 541 1,180 2,474 333 1,076
06/2Q 10,301 2,245 620 753 768 221 431 626 827 2,283 333 1,190
Stock Code: 9449
Employees Number of EmployeesSales Per Employee, Ordinary Profit Per Employee (Consolidated)
People
2000 1800
Employee Numbers Workforce and Composition of Workforce
Thousands
14,000
Employee Sales and Ordinary Profit per Employee Thousands
1400 1200 1000
12,000
1600
1400 1200 1000
10,000 800 8,000 600 400 200 4,000 0 2,000 -200 -400
6,000
800 600 400 200 0
04/2Q 04/3Q 04/4Q 05/1Q 05/2Q 05/3Q 05/4Q 06/1Q 06/2Q 1,468 671 797 1,626 754 872 1,904 983 921 1,590 633 957 1,633 461 1,172 1,623 454 1,169 1,623 399 1,224 1,700 340 1,360
04/2 04/3 04/4 05/1 05/2 05/3 05/4 06/1 06/2 Q Q Q Q Q Q Q Q Q
Stock Code: 9449
900 Total 322 Part Time Employees Full Time / Contract Employees 578
Number of People shown is the number of people at the end of each term. Average Number of Employees is calculated as 1 for every full time employee and 0.5 for every part time employee Copyright (C) 2006 GMO Internet, Inc. All Rights Reserved.
760 631 866 667 163 920 1,278 713 605 Ordinary Profit Per Employee 6,787 6,291 6,519 5,457 4,986 9,019 8,242 8,278 7,468 Sales Per Employee Interim Average Number of 726 985 1,156 1,403 1,333 1,265 1,396 1,415 1,517 Employees
Internet Infrastructure
(Internet Use Support Business)
Stock Code: 9449
Access Business
S a
l e s
Millions
1200
1,400
1000
1,200
1,000
800 800 600 600 400 400 200
200
0 Sales Average Monthly Sales Price per Unit
05 2Q 716 1,234
05 3Q 696 1,240
05 4Q 655 1,211
06 1Q 633 1,218
06 2Q 595 1,193
People
Members Number of Members

22 0,00 0 20 0,00 0 18 0,00 0 16 0,00 0 14 0,00 0 12 0,00 0 10 0,00 0 8 0,00 0
Stock Code: 9449
6 0,00 0 4 0,00 0 2 0,00 0 0 Acce ss 0 5 2Q 19 1,32 8 05 3Q 18 4,93 0 0 5 4Q 17 8,07 7 06 1Q 17 1,10 2 06 2Q 16 3,81 8
Domain Acquisition Business

600 500 400 300 200 100 0 05 2Q 380 7,065 1,565 05 3Q 367 7,118 1,609 05 4Q 396 7,499 1,551 06 1Q 457 8,627 1,611 06 2Q 502 9,720 1,561
11,000 9,000 7,000 5,000 3,000 1,000 -1,000
Millions
Domain Average Unit Price Unit Price for Individual Customers (non corporate)
Registration Domain Registration

Thousands
600 500 400 300 200 100 0
05 2Q 376 70 591 05 3Q 436 72 666 05 4Q 456 78 709 06 1Q 480 86 752 06 2Q 516 89 798
Thousands
90 80 70 60 50 40 30 20 10 0
Stock Code: 9449
Total Managed Domains No. of Registrations and renewals Total no. of Registrations
Note Total Managed Domains refers to the number of active registered domain names
Number of New Domains and Domain Renewals

Renewals Number of Domain Renewals

140,000 130,000 120,000 110,000 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 4Q 3Q 2Q 1Q
2002 7,848 6,086 18,140 8,557
2003 14,314 11,939 19,646 14,162
2004 17,583 15,694 19,970 21,506
2005 34702 32,056 31,609 33,606
2006
43,693 42,000
Number of New Domains Domains

160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000
Stock Code: 9449
0 4Q 3Q 2Q 1Q
2002 22,970 13,908 21,557 20,636
2003 17,471 16,854 19,811 17,638
2004 32,098 27,465 26,707 27,999
2005 43,070 40,454 39,270 37,197
2006
45,631 43,833
10
Rental Server Business

S a l e s
Millions
a n d
l e s
S a l e s
P a r a m e t e r s
Hundreds
S a
Contracts Number of Contracts
2,000
6,000
4,000 3,500
1,500 4,000
3,000 2,500
1,000
2,000
2,000 500
1,500 1,000
0 Server Sales Average Monthly Sales Price per Unit Unit Price for Individual Customers (non corporate)
05 2Q 1,763 4,079 365
05 3Q 1,795 4,032 353
05 4Q 1,819 4,080 336
06 1Q 1,872 4,100 336
06 2Q 1,956 4,176 320
500 0 Individual Customer Contracts Corporate Contracts

.
05 2Q 1,388 1,332
05 3Q 1,585 1,342
05 4Q 1,739 1,358
06 1Q 2,004 1,371
06 2Q 2,217 1,402
Stock Code: 9449
11
I n t e r n e t
M e d i a
Business Internet Advertising Support Business
Stock Code: 9449
12
Word Business
1.Supplementary 1.Supplementary Data (Consolidated) 2.Internet 2.Internet Infrastructure Business
Active Sales and Number of ActiveRegistered Keywords

J W o r d
Millions
S a l e s
Number of Registered Keywords

Thousands
3.Internet 3.Internet Media Business
1,000
18,000 16,000
800
14,000 12,000
600
10,000 8,000 6,000
400
200
4,000 2,000
Stock Code: 9449
0 Sales
05 2Q 834
05 3Q 783
05 4Q 712
06 1Q 834
06 2Q 904
05 2Q No. of Registered Keywords 12,380
06 2Q 17,443 13 Copyright (C) 2006 GMO Internet, Inc. All Rights Reserved.
05 3Q 14,778
05 4Q 16,536
06 1Q 17,090
Online Gaming Business

Sales and Number of Members

Millions
S a l e s
People
Members Number of Members
250
400,000 350,000
200
300,000 250,000 200,000

100
150
150,000 100,000
50
50,000
0 Sales
Stock Code: 9449
05 2Q 210
05 3Q 199
05 4Q 184
06 1Q 192
06 2Q 227
0 Members
05 2Q 231,400
05 3Q 242,966
05 4Q 268,000
05 1Q 280,449
06 2Q 391,499
14
Internet Finance Business
Stock Code: 9449
15
Credit and Loan Business

Number of Contracts and Number of Accounts

Number of New / Established Contracts and Proporti on of Established Contracts Contracts Thousands
Number of Accounts
40%
220 200 180 160 140 120 100 80 60 40 20 0 No. of Accounts 05 2Q 192 05 3Q 189 05 4Q 184 06 1Q 180 06 2Q 176
35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 No. of new applications No. of established contracts Percentage of established contracts 05 2Q 18,924 5,456 28.80% 05 3Q 16,544 5,610 33.90% 05 4Q 15,900 4,363 27.40% 05 1Q 20,743 4,384 21.20% 05 2Q 36,447 6,325 17.40%
35% 30% 25% 20% 15% 10% 5% 0%
Stock Code: 9449
16

Loan LoanBalance
Hundreds of Million Hundreds of Million 72
Allowance for Doubtful Accounts and Credit Cost Spread

%
10 9 8 68 7 66 6 5 4 3 60 2 58 1 0
800
70
700 600 500

64
400
62
300 200 100

Stock Code: 9449
0 Business Loans
56
05 2Q 70 9.13
05 3Q 71 9.34
05 4Q 62 4.22
06 1Q 63 9.24
06 2Q 61 8.52
05 2Q 795
05 3Q 788
05 4Q 803
06 1Q 802
06 2Q 804
Allowance for Doubtful Accounts Credit Cost Spread
17

Objective: Increase Number of Accounts by 30% Progress Report

GMO NetCard Growth Projects and Number of A c c u m u l a t e d A c c o u n t s O t h e r G r o w t h M e a s u r e s
No. of Accounts
J u n e
Partnership with eBANK Started inducements to gain 300,000 accounts. Easy Easy application process for 145,000 customers Launch existing customers5/8 Launch Partnership with GMO Internet Securities Affiliation Affiliation One One Sign In Procedure Extended Business Hours
3,821 2,887 1,923 567 865 1,210
Inc. Company name is changed to NetCard Inc. Introduction of Small Business Loans Introduction of Debt Consolidation Loans
December
Launch of Stock Collateral Loan Group Common ID Project One Sign In Procedure Point Program One Stop Payment
47
175
357
Stock Code: 9449
Nov. Dec. Jan. Feb. Mar. Apr. '05 '05 '06 06 '06 '06
May Jun. '06 '06
Jul. Aug. Sep. Oct. Nov. Dec. '06 '06 '06 '06 '06 '06
Introduction of Credit Card Service

Net Card accumulated accounts are all active accounts with customer use records.
Actual Achievement
Projected Increase as a result of Synergy Effects
18

1.Supplementary 1.Supplementary Data (Consolidated) 2.Internet 2.Internet Infrastructure Business 3.Internet 3.Internet Media Business 30%
Finance Costs
Objective: Reduce Costs by 15% Progress Report

Forecast Earnings Spread with 18% a Maximum Interest Rate of 18%
() 600
Simulation of Required Staff if an 18% Maximum Interest Rate is Introduced

December 2006
Temp. Contract Workers Center Workers CC :Call CenterIncluding Temp. Contract Workers Center Staff SC :Collection Support CenterIncluding Part Time Staff Office Head OfficeIncluding Part Time Staff 500 Total 456 Total 411 400 Total 456 Total 492
December 2007
December 2008
4.Internet 4.Internet Finance Business 25%

2.5%
Credit Costs Excess Interest Repayments Staffing Costs P romotion Costs Other Costs Operating Profit
20%
7.8% 2.1%
205 161 300
201
Total 330 75
230
Total 354
15%
2.2% 2.8% 1.4% 3.8% 5.9%
92
10%
0.6% 1.9% 1.2% 200
67
67
69
69
72
72
5%
3.8%
2.8% 100 3.6%
102
102
105
105
109
109
81
81
81
81
81
81
0% Year Ending December 2006 Year Ending December 2007
Business Plan
% Interest Rate Restriction Scenario
Business Plan
18
18
18
Business Plan
Stock Code: 9449

When the calculation of the Credit Cost Spread excludes wholesale there is a yearly reduction of 0.6%.
Gross Annual Costs per Temporary Contract Worker are approx. 3 million 2Monthly Rate of Decrease in Temporary Contract Workers is 2% Copyright (C) 2006 GMO Internet, Inc. All Rights Reserved.
19

Expansion as a result of the purchase of another company in the same industry.

Comparison Portfolio Comparison Miki Credit Inc. GMONetCard Inc. 2006 77.55 billion yen March 2006 2006 180 000 March 2006 431 000 yen 3.59 2006 3.59March 2006 2006) 8.6% April 2005 to March 2006) 2006 5.5% March 2006 Over 151days 615 million yen April 2005 to March 2006)
Balance No. of Accounts Value per Account number The average numberof Lenders LendersExchange Default Rate Overdue Payments Days Over 31 Days Stock Code: 9449 Number of overdue dates for default Excess Interest Repayments
2006 9.26 billion yen March 2006 000 2006 28 000March 2006 331 000 yen 4.0 2006 4.0March 2006 2006 7.6% May 2005 to April 2006 3.3% 2006 3.3%April 2006 Over 365 days 65 million yen (August 2005 to July 2006)
20

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Presentation of Interim Financial Results for the Fiscal Year

August 16th 2006

4.Internet 4.Internet Finance Business

Stock Code: 9449

Copyright (C) 2006 GMO Internet, Inc. All Rights Reserved.

4.Internet 4.Internet Finance Business

New New New

Internet Media (Internet Advertising Support Business)

Stock Code: 9449

Internet Finance Business

New New New New

Copyright (C) 2006 GMO Internet, Inc. All Rights Reserved.

State of Business: Sales Breakdown

4.Internet 4.Internet Finance Business

Special L i n e Shopping C a r t Business

Internet Media (Internet Advertising Support Business)

Stock Code: 9449

Copyright (C) 2006 GMO Internet, Inc. All Rights Reserved.

Changes in Costs and Cost Composition (Consolidated)

Stock Code: 9449

Copyright (C) 2006 GMO Internet, Inc. All Rights Reserved.

Employee Numbers Workforce and Composition of Workforce

Employee Sales and Ordinary Profit per Employee Thousands

1400 1200 1000

1400 1200 1000

800 600 400 200 0

04/2 04/3 04/4 05/1 05/2 05/3 05/4 06/1 06/2 Q Q Q Q Q Q Q Q Q

Stock Code: 9449

4.Internet 4.Internet Finance Business

Stock Code: 9449

Copyright (C) 2006 GMO Internet, Inc. All Rights Reserved.

4.Internet 4.Internet Finance Business

800 800 600 600 400 400 200

0 Sales Average Monthly Sales Price per Unit

Members Number of Members

Stock Code: 9449

6 0,00 0 4 0,00 0 2 0,00 0 0 Acce ss 0 5 2Q 19 1,32 8 05 3Q 18 4,93 0 0 5 4Q 17 8,07 7 06 1Q 17 1,10 2 06 2Q 16 3,81 8

Copyright (C) 2006 GMO Internet, Inc. All Rights Reserved.

Domain Acquisition Business

11,000 9,000 7,000 5,000 3,000 1,000 -1,000

4.Internet 4.Internet Finance Business

Registration Domain Registration

Stock Code: 9449

Copyright (C) 2006 GMO Internet, Inc. All Rights Reserved.

Number of New Domains and Domain Renewals

Renewals Number of Domain Renewals

4.Internet 4.Internet Finance Business

2002 7,848 6,086 18,140 8,557

2003 14,314 11,939 19,646 14,162

2004 17,583 15,694 19,970 21,506

2005 34702 32,056 31,609 33,606

Number of New Domains Domains

Stock Code: 9449

2002 22,970 13,908 21,557 20,636

2003 17,471 16,854 19,811 17,638

2004 32,098 27,465 26,707 27,999

2005 43,070 40,454 39,270 37,197

Copyright (C) 2006 GMO Internet, Inc. All Rights Reserved.

Rental Server Business

Contracts Number of Contracts

05 2Q 1,763 4,079 365

05 3Q 1,795 4,032 353

05 4Q 1,819 4,080 336

06 1Q 1,872 4,100 336