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To: Ted Shelton who wrote (848)	11/19/1999 5:38:00 PM
From: Maverick	Respond to of 855

Smart Planet wasn't included in the $172 sale of ZD Edu; ZD target is $24 Excerpts from ML Research 11/17/99 Investment Highlights: ú ZD announced today the sale of its ZD Education unit, which targets corporations and governments, to an equity fund managed by Wasserstein Perella for $172MM in cash. Proceeds will be used to reduce debt. ú SmartPlanet, ZD?s recently launched online consumer education unit, is not included in the sale. ú According to management, the deal is being done at about 3X trailing revenues and over 30X EBITDA, a multiple that we believe is quite attractive. ú We believe the company is on track to complete the examination of its strategic options before yearend. ú We estimate that ZD is worth $20/sh to $24/sh in the private market based on the public market valuation of ZDNet (ZDZ Not Rated $20 5/8) and 9-11X ?00E EBITDA for the publishing/events units. Fundamental Highlights: ú ZD Education posted $46MM in revenues for the first nine months of this year. What Has Changed? ZD announced today the sale of its ZD Education unit, which provides IT training to the corporate and government markets, to U.S. Equity Partners, LP, an equity fund managed by Wasserstein Perella. We believe ZD will realize most of the $172MM purchase price after taxes and the net proceeds will be used to reduce debt. The transaction should close in the first quarter of 2000. SmartPlanet, ZD?s recently launched online consumer education unit, is not included in the sale. ZD Education posted $46MM in revenues for the first nine months of this year while SmartPlanet generated $2MM. SmartPlanet is expected to ramp up very quickly after its recent relaunch. According to management, the deal is being done at about 3X trailing revenues and over 30X EBITDA. Stripping out the newsletter/journal business, which is in decline, the multiple is closer to 4X revenues. It is difficult to find a good comparable for ZD Education. SmartForce (SMTF D-2-1-9 $23 1/8), a company that is in the transition to become a fully integrated e-learning solutions, has been mentioned as a comparable. We believe SmartForce is trading at about 6-7X ML Education analyst?s 1999E revenue estimate of $195MM. Given the size of ZD Education, we believe the multiple fetched is quite attractive.

To: Ted Shelton who wrote (848)	11/30/1999 2:11:00 PM
From: Maverick	Respond to of 855

ML: Vulcan Wants Its ZDTV, 11/19/99 Investment Highlights: ú ZD announced today the sale of its 64% interest in ZDTV, a 24-hour cable network focused on technology, to Vulcan Ventures for $204.8MM, valuing the whole network at $320MM ($20/sub). Deal to close in 45 days. ú ZD bought ZDTV in 2/99 for $81.4MM, and in turn sold 33% of ZDTV to Vulcan Ventures for $54MM. In 4/99, 4% of ZDTV was sold to ZDTV?s president. ú We conservatively did not assign any value to ZDTV when we valued ZD as it is a start-up. We think the purchase price is attractive. ú ZDTV posted $9.3MM in revenues and d$32.4MM in EBITDA for the first 9 months this year. ZD?s share of losses at $20.9MM. ú We estimate that ZD is worth $20-24/sh in the private market based on the public market valuation of ZDNet (ZDZ Not Rated $24 3/4) and 9-11X ?00E EBITDA for the core units. Fundamental Highlights: ú ZDTV will maintain agreements with ZDNet and ZD Publishing, including a joint news organization and promotion. ú ZDTV is now available to 14MM homes, and is on track to reach 16MM homes by yearend.