Investor Newsletter - February 2008

Welcome to the IntelliSearch Investor Newsletter. This issue features the company status and major achievements of 2007. TheNewsletter contains updates onthe market situation, customers & partners, product development, organizational status, financials and future milestones.

2007 was for IntelliSearch a year of continued growth and positioning for the future. During the year, the company expanded its customer portfolio, reference base, geographical reach, product offering and organizational capabilities.

Our annual growth is in line with the expected market growth according to Gartner’s Dataquest, the industry analyst that expects the search technology market to double to $1.2 billion by 2011. IntelliSearch viewsthe demand for search technology as good. In 2007, IntelliSearch experienced an increased rate of customer referrals, invitation to larger bids and increased revenue per contract. Most encouraging is that the company signed a number of contracts with global customers - positioning us for further market recognition and growth. For 2008, the company sees an opportunity to grow both internationally and along our product-specific market segments. With the 2007 introduction of ready-made and market-oriented solution sets, IntelliSearch expects to grow in new market segments.

IntelliSearch views the market for search-driven portals as particularly interesting. With the introduction of the IntelliSearch platform 2.0, IntelliSearch positions itself for large search-based portals. IntelliSearch expects the portal market to undergo a dramatic shift in the next coming years. The new technologies Web 2.0 and Web 3.0 will significantly improve customer’s portals and their underlying technology. IntelliSearch expects portals to move from a collection of static ‘one-size-fits-all’ web pages - to dynamic and personalized workbenches adapted to the individual end-user role, interests and interaction-history. Search technology is the key enabler of this change. IntelliSearch intends to take a leading role in this market. By adding consulting skills and services - IntelliSearch expects to win important early-phase projects.

The company significantly increased its international presence with the establishment of sales-offices in Denmark and the US – in addition to its Norway and Sweden offices. IntelliSearch also increased its international sales and marketing activities with the participation in major international trade conferences. During 2007, the company achieved significant international market analyst coverage. The industry analysts KMWorld named IntelliSearch 2.0 among the winners of their ‘2007 Trendsetting Product Award’, and the technology analysts Gartner placed IntelliSearch in the “challengers” quadrant of its Magic Quadrant for Information Access 2007. IntelliSearch expects the increasedanalyst coverage and product recognition to fuel international sales.

The company continues to enjoy growth and the company signed a record number of customer contracts in 2007. Many of our new accounts were won in competition with global players and represents to IntelliSearch new market segments and important references. We intend to use these customer references to build future referral sales. We have also achieved major international sales – with the global agreements with Ericsson and Yara.

Examples of major new customers are:AkerUniversityHospital, DnV, Ericsson, Gecko, Hjemmet Mortensen, The Norwegian Directorate of Integration and Diversity, NorconsultAS, DnV, Norwegian Archive, Library and Museum Authority, Norwegian Red Cross andYara.

With the launch of the IntelliSearch 2.0 platform in May 2007, IntelliSearch added major new functionality and solution sets to its product portfolio. The IntelliSearch platform 2.0 enables search and monitoring of all business internal and external information related to the individual’s role and interest. Key to this release was the enablement of Web 2.0 and Ajax technologies into the Intellisearch platform. Web 2.0 is often referred to as the second generation of web-based services. IntelliSearch will include this technology to enable search in social networking sites, wikis, communications tools and folksonomies – in short all Web 2.0 tools that emphasize online collaboration and sharing among users.The result is a personalized search result that can be distributed to email, SMS and personalized monitoring page – all according to preferred frequency. The IntelliSearch 2.0 platform includes 6 new solution sets that are all Web 2.0 enabled.The platform solution sets are Enterprise, Website, eCommerce, Online-Media, Competitive Intelligence and OEM. The company is continuously monitors the market for technologies and features that will enhance our product attractiveness. We expect to make several product enhancements during 2008.

The company’s head office and development division is located in Norway. Owing to international demand for search technology,the company set up sales and delivery offices in the US andDenmarkin the mid-year. These are in addition to the well-established offices in Norway and Sweden. The company now has a 12 people strong sales force.

Late 2007, the company agreed to merge with Questpoint. Questpoint is an independent Content Management and technology consultancy specializing in Microsoft technology, primarily the Sharepoint portal and MS integration tools. Questpoint has 11 consultants offering collaboration and integration services based on Microsoft technology and especially SharePoint, BizTalk og SQL Server. Questpoint’s management consists of the two profiled IT-industry veterans Mr. Shahzad Rana and Mr. Lasse Ruud that will lead the consulting arm of the combined company. The combined company will have 49 FTE’s.

  1. Integration of Questpoint organisation.
  2. Building consulting services
  3. Further international expansion
  4. Continued product platform enhancements

The combined IntelliSearch and Questpoint had in 2007 a total revenue of 21,4 MNOK (UNAUDITED) and a net loss of -7,1 MNOK. IntelliSearch unaudited 2007 financial numbers asa standalone company are shown in the table below (MNOK).

FY2007* / FY2006
Total order volum / 17,5 / 9
Revenue bookings** / 12,44 / 8,23
Net Income*** / -9,55 / -0,43
Cash and receivables by year-end / 13,1 / 21,2

* Unaudited numbers

** Sales orders reflect the total value of contracts signed in 2007. This number differs from revenue

bookings due periodization rules.

*** Net Income was in line with plans and reflects investments required for international expansion

If you have any questions, please feel free to contact:

Harald Jellum
Founder & CEO


+47 91 54 34 32