Updated April 10, 2008

   Internet holding

Rambler Media has demonstrated the $5,7 million net income and high return by EBITDA according to 2007 results.

It happened first since the company IPO in 2005.

Experts mark that previous year Rambler owners have invited the team of efficient managers headed by the former Yahoo!

Europe director general Mark Opzoomer, and that has taken effect.

   Rambler Media audit earnings by International Financial Reporting Standards (IFRS) totaled $69,1 million in 2007, and went 125% up as compared to the analogical 2007 mark – $30,6 million. The company EBITDA has increased from $1,6 million to $7,6 million for a year, EBITDA return – from 5,3% to 11,1%. In 2007 Rambler Media became the profitable company for the first time.

The holding net income totaled $6,1 million against $3,2 million net loss previous year. The actual outcome turned out higher than Rambler Media forecasts, which the company had been giving at the beginning of February: then it went about the annual $63-65 million earnings. "The results are positive in the whole: the profit is higher than the forecast, EBITDA is within the forecast framework.

Thus, we already observe the activity results of the new management, which has come in March, 2007", said Uralsib Financial Company analyst Konstantin Belov.

Troika Dialog analyst Anna Lepetukhina marks that the Internet holding actual return by EBITDA totaled not 11,1%, but 13,7% as "we get such figure without taking into account the nonrecurring losses from currency conversion.

The company has transferred the dollar accounts into ruble ones and has lost $1,8 million".

    Analysts consider that Rambler Media current success was predetermined by the new team.

It came to the company in March, 2007 in charge of the former Yahoo!

Europe director general Mark Opzoomer, who headed the Internet holding, and former Synterra financial director Arthur Akopyan, who occupied the analogical post. The new team has consolidated the system of the Contextually Targeted Advertising "Runner", where as of August, 2007 Rambler Media has had 25% plus one stock, and now has 50% plus one stock.

Rambler paid $18 million to increase the stake. As the result "Runner" has increased the holding earnings by $14,9 million. In addition, they mark in the holding that the new team managed to reduce the stake of personnel costs from 40% in 2006 to 32% in 2007 and to formulate the clear development strategy. "We are currently developing a search, e-mail, entertainment and business services. For example, the number of the registered mailboxes has increased by 80% for the year", said Rambler Media PR director Alexander Kovalev. According to him, the development of the above-mentioned directions and the growth of Internet users' penetration in Russia have allowed increasing the audience by 44%, to 35 million users monthly. "It is obvious it positively affected the sales of Internet advertising", marked Mr. Kovalev. In January, 2007, before the new team coming, the company sold the unprofitable TV business for $23 million to Prof-Media holding.

   According to the Troika Dialog forecast, Rambler Media financial indices will continue to up in 2008, in spite of its stake loss at the Internet search market.

According to the statistics posted on LiveInternet website, in March, 2006 Rambler stake by search was 20,9%, and by March, 2008 it has reduced by 13,7%. "This index will, probably, continue to go down, but it will not affect the company dynamics, as the holding remains the third after Yandex and Mail.ru judging by its returns in the Ru.net and due to the users increase", says Anna Lepetukhina.

   In spite of the positive results, the Internet holding GDR value at the London stock exchange has edged down by 3,61%, to $24,04. Analysts explain the fall saying that Rambler Media positive results have been obvious, and

the company is not so large, so that investors have reacted to the changes right now.

"There are no fundamental reasons to fall. The current negative dynamics can be explained by small stocks liquidity of Rambler Media over the company size, therefore there are little speculators among the security holders", Mr. Belov explained. According to Troika Dialog estimation, Rambler Media target price for 12 months totals $45.