Making Money from Content

Many of you may have read the news release we sent out yesterday, May 28, 2008 announcing the beginning of our Itibiti test period with a major international sports organization.

For Itibiti, this is a “tipping point” as it validates a number of brand extension issues that we defined when we began second phase development of the program.

For many conventional and online brands, the costs associated with keeping your online brand in front of a customer are rising. Itibiti, as a integrated and value based desktop application, keeps the customer engaged as soon as they turn on their computer, and lowers the overall cost.

Why the desktop? The best way to explain this is to look at Supernarket / Grocery Store shopping. Many companies just put their products on shelves, just like all their competitors and when you’re going up and down the aisles, you can select from a variety of brands. If you’re familiar with the store, you know where everything is (it’s sort of “bookmarked” in your head”) and you can gravitate to that area immediately without having to search. That’s just like the Internet.

Sometimes, something grabs your attention, and if you don’t have a list in your hands (which none of us do when surfing) you might forget to get that familiar item and have to make a second trip or go without for the moment. This too, is just like the Internet. When we browse, we may see something on a home page or when searching around, and literally forget to visit our usual sites.

Now, if you’re a smart and aggressive marketer, you literally pay many dollars to be on the front of the aisle, on a display, or at the checkout counter. All these things increase your profile and the “impulse” factor for a consumer. Many of the celebrity newspapers are at the checkout counter and do an outstanding business as everyone takes a look at them while standing in line. Many buy them for the content, entertainment value and just to see our favorite celebrities acting badly.

This area is the same as the computer desktop. When a major brand wants attention, they can get it “NOW” from Itibiti’s platform. They can reside on a user’s desktop and be the “impulse” item visited each time the computer is turned on.

Best,

David

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China Goes for the Online Gold

May 27, 2008 – eMarketer

Like seemingly everything else in China, online advertising is growing fast

In terms of sheer numbers of users, 2008 marks the year that China overtakes the US as the largest Internet market in the world.

“By 2012 there will be 373 million Internet users in China, 150 million more than in the US at the same time,” says Ben Macklin, eMarketer senior analyst and author of the new report, Online Advertising in China: The Olympic Year. “Despite this fact, the Chinese Internet market is still relatively immature and only in its first phase of growth.

“This makes China a large—and growing—opportunity for online advertising.”

eMarketer forecasts that online advertising spending in China will grow from RMB7 billion ($924 million) in 2007 to RMB29.26 billion ($4.9 billion) in 2012. In projecting yearly growth rates, eMarketer assumed a strong uptick in 2008 due to the Beijing Olympics and annual growth above 30% to 2012.

“The 2008 Beijing Olympics will be a significant driver of advertising spending growth,” says Mr. Macklin, “but positive underlying economic and demographic indicators point to continued advertising spending growth well beyond this year.”

The strong online advertising growth “is predicated on continued Internet user and household broadband adoption, increased Internet usage and ongoing economic growth in the country,” says Mr. Macklin.

Age is also an important characteristic to consider when appraising online advertising options in China.

According to the China Internet Network Information Center (CNNIC), 69% of Chinese Internet users are ages 30 and younger. Only 39.7% of Internet users in the US are in that age category.

“The majority of Chinese Internet users may not have much disposable income today, but their spending power will increase over the next 10 years,” says Mr. Macklin. “Marketers should keep that in mind when developing online marketing plans.”

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Online Ad Spend to Grow Rapidly

Marketers are continuing to put ad dollars online at the expense of print advertising, according to the 2008 “State of the Marketer” survey report from Eloqua, which found that 55 percent of marketers anticipate a decrease in print ad spend three years from now, reports MarketingCharts.

Spending Trends

Online advertising spend is expected grow at a rapid rate, with 90 percent of marketers saying they will continue to increase their direct online advertising budgets – and 15 percent saying they will “radically” increase online ad spend.

Moreover, some 78 percent of marketers say they will increase their social media spend; 74 percent say they will increase their direct email spend; and 65 percent say they will increase their mobile texting/SMS spend.

Overall, more than 40 percent of marketers have radically increased their budgets for online advertising from three years ago. Also…

· Some 23 percent of all marketers surveyed say they have increased their spending on Google AdWords.
· 26 percent of marketers say they have increased their direct email spending.
· 60 percent said they have kept their text and SMS spending on par with spending three years ago.
· In general, print advertising, direct mail and broadcast spend remained the same vs. three years ago

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Good Morning,

Here is a recent article from eMarketer. Online Advertising spending continues to grow, even with a slowdown in the US Economy.

Online Ad Spending Holding Strong
MAY 23, 2008 – eMarketer

For the full year 2007, online ad revenues totaled $21.2 billion, according to the Interactive Advertising Bureau (IAB)/PricewaterhouseCoopers (PwC) “2007 Internet Advertising Revenue Report.” That was 26% higher than 2006, which was itself a record year.

The IAB and PwC said that Q4 2007 Internet advertising revenues reached $5.9 billion, the highest ever for a single quarter and 24% higher than the same period in 2006.

“Despite the current state of economic uncertainty, 2007 was another record year and the 13th consecutive record quarter,” said David Silverman, partner, Assurance, PwC, in a statement.

As in prior years, consumer advertisers were the largest category of Internet advertising spending, at 55% of 2007 full-year revenues, up from 52% from the full year 2006.

eMarketer predicts that despite continued strength relative to most other media, Internet ad spending growth will drop to about 16% in 2009. This slowdown reflects a combination of the maturing online ad market and overall economic weakness.

There will be a bounce back in 2010 due to a recovering economy and a much larger influx of branding-oriented ad dollars flowing online. One major source of those escalating spends will be video ads, which are relatively expensive and greatly desired.

“By 2012, the anticipated boom in online video advertising combined with continued strength in more established Internet ad categories, such as paid search and classifieds, will mean spending growth greater than 20% for the first time since 2008,” said David Hallerman, senior analyst at eMarketer.

Wow! Imagine you have a popular online platform with millions of users (under 10 million), with no defined business model, brown-outs, staff turnover and questionable mainstream adoption and you still get $15 Million second round funding with an $80 Million valuation.

It seems that the dotcom era is back and rather healthy. As people start moving out of resources and juniors start to take on a shine, the future could be very bright for Intertainment, especially with the upcoming launch of Itibiti. Once you have a chance to read the article below from PaidContent.org, take a few minutes and look at our itibiti pages on the blog. Better yet, take the tour of itibiti at www.intertainmentmedia.com/itibiti/presentation.html

Twitter Gets $15 Million Second Round; $80 Million Valuation: Report
By Joseph Weisenthal – Thu 22 May 2008

Given the obsession with all things Twitter, this has been one of the most anticipated and hotly discussed fundings in a while: Om reports that after much jostling, the micro-blogging/messaging company has nailed down a $15 million second round, bringing its total raise to around $20 million. The pre-money valuation is said to be $80 million. Past backer USV participated as well as an unspecified lead investor.

Pretty much every discussion about Twitter has to revolve around (at least) one of three things: reliability, mainstream adoption and business model. The new round comes amidst a particularly bad stretch at the company, which has been suffering blackouts on a daily basis as of late. While there’s hope that the new funding could help solve some of these woes, it’s not clear that the problem is something that will just go away with more money thrown at it. A recent post on the company’s blog basically states that the crux of the problem is unknown. As it wrestles with this issue the company has had some turnover among its key engineers. Still, it’s not obvious what long-term effects Twitter’s downtime will have on the company. Faithful customers are obviously frustrated by it, but not necessarily to the point where they’ll stop using it. Growth, meanwhile, has been off the chart.

Of course the business model remains a bit of a mystery, and perhaps more than anything, this new round is about buying the company time to figure that out without resorting to something cheap and obvious like banner ads across the site.

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Enjoy the day!

I was thinking how to keep people engaged with fresh brewed news and at the same time not have to get up earlier than I usually do (around 5 am or so). What I’ve come up with is a short morning post that will give you, the reader, an early view of the day with respect to New Media and related topics.

Having said that, I’d like to welcome you to Java Jots, our way to say good morning.

We look forward to serving you a cup full of the richest, yet bold, industry news that will get your morning energized. We suggest you sip it slowly.

David

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Mid 2007, we started to look at the opportunity of having our own blog, but frankly, there wasn’t much merit in it, as we found the idea initially to be too much of a promotional tool for our own offerings and we didn’t want to be viewed as promoting “sizzle” without the steak.

Well, a lot has changed in a year, especially in the New Media Industry.  Daily, there is a slew of sites that report bushels full of information that to the average investor, investment advisor and enthisiast is just plain “overload”.

We’ve decided that we should use our skills to provide interested parties with  an insider’s view of some of the key published content and post relevant information about the New Media Industry along with our own take on the reports as an essential part of our blogging.  Of course, we’re going to also include our own developments, releases and updates.  Combining these elements, should give you, the reader, an excellent view of the industry from 10 feet up. 

We welcome submissions and comments for review, so please feel free to post your relevant thoughts.

David

Good Morning,

Intertainment has announced that it will begin rolling out its Itibiti program to US Colleges beginning August 2008.

Working with a worldwide entertainment brand, which will be announced before launch, Itibiti will be available through the brand’s highly recognizable online web sites and on campus programs. The current online and college programs reach over 5 million people monthly.

This is a great opportunity for Itibiti to quickly reach the Generation Y crowd, who are the early adopters of the Internet. Itibiti can easily be shared among friends, increasing the viral opportunity for the application.

Intertainment is also testing the new Facebook integration tool, which will allow users to review and interact with their Facebook account directly from the Itibiti desktop.

In the past few weeks, Intertainment has announced a number of deals with major brand segments and we continue to work on additional revenue generating business programs.

Itibiti has been beta tested for the past 7 months and has been well received by all our users. Revenues will launch immediately with the application roll out, as the system has a number of “touch points” to create income.

I encourage you to read the release below and if you have any questions, please feel free to call me.

Best regards,

David

Intertainment’s Itibiti Rolling Out To US Colleges

TORONTO, CANADA, June 9, 2008- Intertainment Media Inc. (“Intertainment” or the “Company”) (TSXV:INT) is pleased to announce that it has negotiated a preliminary agreement to provide its voice powered social networking platform, Itibiti, to college age students with a major worldwide entertainment brand. In addition to the brand’s highly recognizable online programs, its linear broadcasting is connected to over 200 University and College campuses in the US. The current online and collegiate programs reach over 5 million US consumers monthly. The timetable for the first phase of the program begins with the back to school events scheduled for mid August 2008.

Itibiti will be co-branded with the entertainment company and various paid sponsors. Revenues will be generated through integrated advertising, promotions, custom applications and permission based marketing. Itibiti will receive operational fees of up to 40% of the gross revenues, with the balance of the revenues split among the partners.

University and college students will be able to have a feature rich Itibiti desktop application with exclusive content, the ability to upload their own video blogs to the desktop player channel and free communications services. The application will also connect to popular 3rd party social networking and entertainment sites. Users will have access to free communication services both over the Internet and to land and mobile phones across North America. Itibiti will also be available to alumni, increasing distribution to the graduate community.

“Itibiti is quickly gaining traction among a wide range of marketing channels. Consumer brands, educational platforms and commercial enterprises are embracing the ability to reach their target audience through the desktop, and provide them with a technically robust and value oriented application to increase mind share. Itibiti will provide students with a clutter-free desktop environment where they can watch content, engage in a number of social activities and communicate all from one location, while at the same time creating a revenue based environment for Itibiti and its brand partners,” said Mr. David Lucatch, CEO of Intertainment Media Inc.

In addition, Intertainment is pleased to announce that it has closed $390,000 of its previously announced private placement. The offering, consisting of units, was priced at $0.10 CDN and consisted of one common share and one common share purchase warrant at $0.18 for 2 years from the date of closing. The common purchase warrant has a feature that allows the Company to have the holder exercise the warrant if the stock reaches $0.30 CDN or higher for 30 consecutive days.

For industry information, comments and more, please visit the Intertainment Media blog at www.intertainmentmedia.com/blog

About Intertainment’s Itibiti
Intertainment’s Itibiti platform is a proprietary, social networking, multimedia and communications environment that can be installed directly on a user’s computer desktop. This provides clients with custom branding, loyalty and revenue opportunities prior to the user launching their Internet services. Key features of the Itibiti platform include IP Telephony, video/multimedia on demand, instant messaging, SMS, integrated in a feature rich interface that includes a mini web browser, desktop telephone and chat system which can be utilized to create active links to the affinity partners web pages, providing information and outside services and a complete advertising and marketing platform for revenue generation.

About Intertainment
Intertainment Media Inc. (www.intertainmentmedia.com) is a conventional and new media company with an experienced and innovative team of professionals focused on delivering leading edge technology and marketing solutions. Intertainment develops and invests in strategic programs that enable clients to increase their branding and loyalty relationships with their consumers while focusing on increased revenue generation. Intertainment owns, operates and invests in high value content, traffic management, advertising and social networking solutions including, Eye Rock Digital (www.eyerockdigital.com) No Good TV (www.ngtv.com), Trooker Inc. (www.trooker.com), and Itibiti Inc. Intertainment Media Inc. is headquartered in Richmond Hill, Ontario, Canada. The company is listed on the Toronto Venture Exchange (symbol: INT).

This news release may contain forward-looking statements. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors discussed in the management discussion and analysis section of our interim and most recent annual financial statements or other reports and filings with the TSX Venture Exchange and applicable Canadian securities regulations. We do not undertake any duty to update any forward-looking statements.

Corporate Inquiries:
David Lucatch, CEO
905-763-3510

Investor Communications:
Buchalter Consulting
1-866-631-6537
Stan.Buchalter@BuchalterConsulting.ca

Online Investor Relations Hub:
AGORACOM
INT@Agoracom.com
www.agoracom.com/IR/intertainment

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