Income Statement 10-Year Summary Financial data in Canadian dollars (Values in millions, except for per-share items)

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1 TABLE OF CONTENTS Consistency Counts 1 The Internet Review Cheat Sheet 3 The Internet Review Stocks 5 Consistency Counts This week I wanted to take a break from my recent countdown of mistakes I made as a venture capitalist in order to focus on a more pressing concern adding a new pick to the Internet Review model portfolio. I ll come back to the countdown in coming weeks. The new pick, which I m adding to the model portfolio with a strong-buy rating, is CGI Group (GIB:NYSE). It s hard to find a more consistent company than this; just take a look at the numbers. CGI has increased sales and earnings before interest, taxes, depreciation and amortization in each of the past 10 years (see the table below). Net income and earnings per share (EPS) did see slight dips in the technology bust years of 2000 and 2001 but recovered quite nicely after that. Income Statement 10-Year Summary Financial data in Canadian dollars (Values in millions, except for per-share items) Year Sales EBIT Depreciation Total Net Income EPS Tax Rate (%) 09/05 $3, $ $ $ $ % 09/04 3, /03 2, /02 2, /01 1, /00 1, /99 1, / / / Source: MSN MoneyCentral October 9, 2006

2 Balance Sheet 10-Year Summary Financial data in Canadian Dollars (Values in millions, except for per-share items) Year Current Assets Current Liabilities Long-Term Debt Shares Outstanding 09/05 $3, $1, $ Mil 09/04 4, , Mil 09/03 3, , Mil 09/02 2, Mil 09/01 2, Mil 09/ Mil 09/ Mil 09/ Mil 09/ Mil 09/ Mil Source: MSN MoneyCentral Has the market rewarded that consistency? Not yet. Earnings per share are more than triple what they were five years ago, yet CGI s share price is exactly the same. The reason for that share-price stagnation is the general market malaise for information technology stocks since the bust. Yet despite that malaise, we regularly are seeing companies get bought. The most recent example is Illinois Tool Works (ITW) agreement (announced early last month) to purchase Click Commerce (CKCM) for more than a 25% premium over Click Commerce s stock price at the time. Note that Click Commerce is in the very same space as CGI. 2

3 CGI runs corporate Web sites, business-to-business online initiatives, supply chains, call centers, and document and payroll services for other companies and governments. Here s one example of a recent contract: The state of Virginia just renewed a contract for CGI to manage the state s procurement Web site, dubbed eva. (The renewal is $65 million over five years.) Although they may not sound flashy, Web sites like eva are important. Since 2001, Virginia has used eva, which it designed together with CGI, to process more than a million orders and buy $10 billion of goods and services for state programs. The Virginia contract renewal shows how services like CGI s are sticky. It s hard to let a company go if it s managing your entire procurement process. It s also easy to estimate a good chunk of CGI s future earnings by looking at its order backlog. Consider this from the press release announcing the Virginia contract renewal: CGI's annualized revenue run rate is currently $3.5 billion (US$3.1 billion), and at June 30, 2006, CGI's order backlog was $13.3 billion (US$11.9 billion). CGI found itself in the penalty box recently when its year-over-year earnings (third-quarter 2006 vs. third-quarter 2005) fell because of currency changes and a shortfall from one of its customers. The stock is down almost 10% since June and has only barely recovered with the market. But I expect we will see shares back at $8-$10 before long, so I m adding CGI to the model portfolio as a strong buy this morning. Shares closed Friday at $6.54. Internet Review Cheat Sheet CPRT Copart (CPRT) reported a solid fourth quarter, with EPS of 34 cents, better than the consensus estimate for 29 cents and the 27 cents the company reported a year ago. On the sales side, Copart recorded $137.2 million in revenue, beating the $130 million consensus. A year before, revenue was $110.6 million. The stock retreated Friday, however, after a Robert W. Baird analyst downgraded it to neutral from outperform. ELNK EarthLink (ELNK) announced it would report quarterly results and host a conference call after the bell on Thursday, Oct. 19. ET E*Trade (ET) announced it would report quarterly results and host a conference call after the bell on Wednesday, Oct. 18. IPAS ipass (IPAS): In my Blog Watch column on Wednesday, I provided a link to an excellent post by on ipass. If you haven t read it, I recommend that you do so in order to further acquaint yourself with the Shamrock activist situation at ipass. Speaking of the activist situation, ipass CEO Kenneth D. Denman replied to Shamrock's criticisms of management via an made public in an 8-K on Thursday. In the Denman 3

4 said: "Let me once again assure you that the ipass Board of Directors is committed to creating value for shareholders. The Board is aware of Shamrock's concerns and recommendations, and continues to consider them, as it considers input from all shareholders." JCP J.C. Penney (JCP) Thursday reported that sales rose faster than expected during August and September. As a result, the retailer raised its profit estimates for the third quarter and for fiscal On the negative side, J.C. Penney said October sales would be disappointing. The stock finished the week up $3 at $71. OXPS OptionsXpress (OXPS) announced Tuesday that it will now offer separately managed accounts (SMAs) under its subsidiary, brokersxpress. According to a press release, "Portfolio choices include multiple-style portfolios, which combine a number of managers in a single account; managed mutual fund portfolios; alternative investments such as hedge funds and fund of funds; and unified managed accounts, which integrate SMAs, mutual funds and ETFs into a single portfolio." Later in the week, OptionsXpress announced it will report earnings on Thursday, Oct. 19. PALM Palm (PALM) released its 10-Q on Thursday. I recommend readers read the Management's Discussion and Analysis section here: RNWK On Thursday, Best Buy (BBY) unveiled its new digital music store, which is powered by RealNetworks (RNWK) Rhapsody 4 music service. To promote its new service, Best Buy will carry the line of Rhapsody music players. I m actually beginning to think that, as strong as the itunes brand is, there will be significant competition from well-financed players like RealNetworks and Best Buy. RealNetworks has been one of the best performers in the Internet Review model portfolio, and I expect that to continue. TWX Also in Wednesday's Blog Watch, I provided a link to an interesting BloggingStocks.com post about Time Warner's (TWX) traffic: Please note: BloggingStocks.com is owned by Time Warner, so there could be a conflict of interest. YHOO Yahoo! (YHOO) has rolled out the beta version of its search ad product in the U.S. and U.K. These are pay-per-click text ads above or below search results for searches performed on a mobile phone. 4

5 INTERNET REVIEW MODEL PORTFOLIO OPEN POSITIONS Coding System: SB, for strong buy; B, for buy; SP, for speculative buy; N, for neutral and S, for sell. Company Name/Ticker Aptimus APTM Avaya AV Collectors Universe CLCT Copart CPRT EarthLink ELNK E-Trade Financial ET Global Sources GSOL Hurray! HRAY Intersections INTX ipass IPAS infousa IUSA J.C. Penney JCP Keynote KEYN KongZhong KONG Liberty Media LCAPA Liberty Media LINTA Liquidity Services LQDT Marchex MCHX Microsoft MSFT NetEase.com NTES News Corp. NWS optionsxpress OXPS RealNetworks RNWK Greenfield Online SRVY E.W. Scripps SSP TechTeam Global TEAM Technology Investment TICC Tom Online TOMO Date Initiated Rating Code Initiation Price Current Price Simple Return NASDAQ at Initiation Date NASDAQ Return 03/20/2006 SB $ 5.22 $ % 2, % 03/20/2006 B $ $ % 2, % 12/06/2005 B $ $ % 2, % 01/06/2006 B $ $ % 2, % 04/11/2006 SB $ 9.16 $ % 2, % 10/14/2005 SB $ $ % 2, % 11/21/2005 B $ 7.45 $ % 2, % 04/25/2006 B $ 9.40 $ % 2, % 03/06/2006 SB $ 9.19 $ % 2, % 10/17/2005 B $ 5.48 $ % 2, % 02/22/2006 SB $ $ % 2, % 06/05/2006 B $ $ % 2, % 10/10/2005 SB $ $ % 2, % 02/13/2006 SB $ $ % 2, % 05/15/2006 B $ $ % 2, % 05/10/2006 B $ $ % 2, % 08/28/2006 B $ $ % 2, % 11/14/2005 SP $ $ % 2, % 10/13/2005 B $ $ % 2, % 11/14/2005 N $ $ % 2, % 09/11/2006 SB $ $ % 2, % 08/28/2006 B $ $ % 2, % 10/18/2005 B $ 7.52 $ % 2, % 05/30/2006 SB $ 7.76 $ % 2, % 10/20/2005 B $ $ % 2, % 02/03/2006 B $ 9.90 $ % 2, % 10/19/2005 B $ $ % 2, % 11/14/2005 B $ $ % 2, % 5

6 Time Warner TWX United Online UNTD VeriSign VRSN Yahoo! YHOO 10/10/2005 SB $ $ % 2, % 01/03/2006 SB $ $ % 2, % 10/11/2005 SP $ $ % 2, % 11/14/2005 SP $ $ % 2, % INTERNET REVIEW PERFORMANCE Average Return Open Positions 2.37% Average Return Closed Positions -1.90% Total Average Return 1.30% 2006 YTD Return -2.16% Performance results listed here reflect values of stocks as of the close of the most recently completed trading day. They do not factor in dividends paid, interest earned and actual commissions paid. Results are updated overnight and posted prior to the market open the following business day. The YTD Return figures reflect changes since the first trading day of the current year. The Total Average Return figures reflect changes since inception on 10/10/2005. NASDAQ COMPOSITE Portfolio Inception Open Level Current Level % Gain/Loss Since Portfolio Inception 2006 YTD Return Nasdaq Composite (COMP) 10/10/2005 2, , % 3.76% 6

7 CONTACT INFORMATION Reader Feedback and Questions Please James Altucher directly. Please direct all account-related inquiries to customer service. Subscription/Account Info Please or call TSCM (8726) Mon. - Fri. 8 a.m. to 6 p.m. ET; or outside the U.S. and in Canada, call LEGAL INFORMATION James Altucher, writer of TheStreet.com Internet Review, is a managing partner at Formula Capital, an alternative asset management firm, and a contributor to TheStreet.com s RealMoney. TheStreet.com is a publisher and is registered as an investment advisor with the U.S. Securities and Exchange Commission. Mr. Altucher is restricted from transacting for his own benefit in securities discussed in TheStreet.com Internet Review. Formula Capital and its affiliates may, from time to time, have long or short positions in, or buy or sell the securities, or derivatives thereof, of companies mentioned in TheStreet.com Internet Review and may take positions inconsistent with the views expressed. TheStreet.com Internet Review contains Mr. Altucher s own opinions, and none of the information contained therein constitutes a recommendation by Mr. Altucher, Formula Capital, or TheStreet.com that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person. Past results are not necessarily indicative of future performance. Investing in the stocks chosen for TheStreet.com Internet Review model portfolio is risky and speculative. The companies may have limited operating histories and little available public information, and the stocks they issue may be volatile and illiquid. Trading in such securities can result in immediate and substantial losses of the capital invested. You should use only risk capital, and not capital required for other purposes, such as retirement savings, student loans, mortgages or education. TheStreet.com Internet Review portfolio is a model portfolio of stocks chosen by Mr. Altucher in accordance with his stated investment strategy. Your actual results may differ from results reported for the model portfolio for many reasons, including, without limitation: (i) performance results for the model portfolio do not reflect actual trading commissions that you may incur; (ii) performance results for the model portfolio do not account for the impact, if any, of certain market factors, such as lack of liquidity, that may affect your results; (iii) the stocks chosen for the model portfolio may be volatile, and although the purchase or sale of a security in the model portfolio will not be effected in the model portfolio until confirmation that the alert has been sent to all subscribers, delivery delays and other factors may cause the price you obtain to differ substantially from the price at the time the alert was sent; and (iv) the prices of stocks in the model portfolio at the point in time you begin subscribing to TheStreet.com Internet Review may be higher than such prices at the time such stocks were chosen for inclusion in the model portfolio. 7