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Wizzard Software: A Closer Look At The New Acquisition, Latest Press Release

Aug. 02, 2012 8:50 AM ETFU
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Podcast-leader Wizzard Software (WZE) will soon close its acquisition of Beijing-based Digital Entertainment International (a.k.a. FAB) in a move that we expect will transform the company's stock.

In one transaction, Wizzard will become a three and a half dollar stock earning 43 cents a share. Its revenues will jump to almost $80 million, and Wizzard will gain access to the world's largest consumer market.

In its acquisition, Wizzard is gaining an international partner in a quest to expand their digital media distribution into the world's larger consumer market. Wizzard is also spinning off its healthcare unit into its own public company after the merger. This should work to consolidate the company's focus on digital media.

To read our full report on the stock on SeekingAlpha, click here.



Wizzard Media (NYSE MKT: WZE), the leading digital media podcast network, today released an overview of Podcast and App data for China, one of its top five markets. This overview, ahead of the closing of the anticipated acquisition of FAB by Wizzard, focuses on the company's Podcast and mobile App network and business synergies for digital media distribution in China.

FAB & Wizzard - A Powerhouse in Digital Media Distribution in China

FAB had total overall revenues for the full fiscal year 2011 of $70.9 million and earnings of $15.3 million. For the nine months ending June 30 for fiscal 2012, FAB generated $62.7 million in revenue and $15.6 million in earnings.

"FAB is a high-growth company, uniquely positioned in the world's largest consumer market," said Chris Spencer, CEO of Wizzard Media. "We believe the combination of FAB and Wizzard represents a true win-win scenario that significantly expands the global reach and growth opportunities for both companies. As a result of this pending transaction, Wizzard would instantly avail itself of FAB's powerful digital media distribution channels in China, one of the world's fastest-growing media markets, while simultaneously FAB would be in a position to benefit from Wizzard's advanced media technologies and its U.S.-based media partners who desire access to China and its massive consumer market. We believe that combined, we have the opportunity to dominate mobile digital entertainment delivery throughout China."

Wizzard Media Podcast & App Network Stats for China

Having seen well over 1.65 billion download requests in 2011, China ranks in the top 5 countries (out of 240) for download requests for digital media on the Wizzard Network. Additionally, China is also in the Top 5 App markets for Wizzard Media iOS Apps (iOS Apps consist of Apps for the iPhone, iPad, iPod Touch, etc). The focus on the Chinese market by companies like Apple should naturally continue to drive growth in podcasts and apps. With 23 million unique audience members monthly on the Wizzard Network, China consistently ranks in the top 10 overall for audience size.

According to Beijing start-up entrepreneur and tech writer, Neo Zhang "Podcasts are increasing in China and the rising young professionals in China seem to be the perfect target users." Independently produced podcasts have gained mounting influence in China while commercial productions are taking top spots on the Chinese iTunes Podcast Directory. Wizzard hosted ESL (English as a Second Language) Podcast and Happy Tree Friends are prominently featured in the Chinese iTunes Podcast Directory.

In addition to Wizzard's popular language podcasts that appear in the Chinese iTunes Top 100 and show like Chinese Class 101, Cantonese Class 101 and One Minute Mandarin, there are several other genres including Anime and Society & Culture that attract a high percentage of downloads from China.

China is clearly one of the most active audiences on the Wizzard Network for Anime shows including: TheOtaku.com, Anime 3000, Anime Pulse, AnimeNation and Anime News, which have traditionally drawn large audiences from Asia and specifically China. Popular shows in the Society & Culture category include Fun English Lessons - china232 - hosted by two Canadian brothers living in Shanghai, Reports From Beijing - firedupness, Letters from China and Sexy Beijing.

"It is not surprising that both independent and professional podcasts continue to gain popularity in China," says Laurie Sims, President of Wizzard Media. "The incredible growth in China among mobile devices, Apps and overall digital media is evident as an emerging economy with a large populous embraces mobile technology. We see increasing opportunities for digital media distribution based on the rapidly expanding Chinese consumer market."

Mobile Device and Applications Growth in China

China has made up a growing slice of sales for Apple since the introduction of the iPhone in 2009. The world's most populous country accounted for $7.9 billion or 20% of Apple's 2012 second quarter revenue, according to Apple's Chief Executive Officer Tim Cook (300% growth). Apple recently launched the new iPad 2 in China. Andrew Milroy from Frost & Sullivan told the BBC's Asia Business Report that China is now the key to Apple's future success. "Apple's sales are increasing extraordinarily there," he added. "The market is growing at such a fast rate. It is very important for Apple."

Additionally, mobile Apps are seeing "astronomical" growth in China according to Peter Farago from Flurry Analytics. "While the top 100 countries are averaging session growth of over 200 percent, China is delivering more than four times this growth rate, spurred by a massive population voraciously adopting applications."

The acquisition of FAB by Wizzard is subject to approvals by each company's shareholders, the satisfaction of customary closing conditions and regulatory approvals both in the U.S. and China.

About Wizzard Media:

Wizzard Media provides podcast publishers with distribution and monetization services. Our clients include Microsoft, National Geographic, Harvard Business Review, NPR and more than 10,000 others who use Wizzard Media products to measure their podcast audience, deliver popular audio and video entertainment and monetize their content through advertising and App sales and subscriptions. In 2011, the Wizzard Media Network received well over 1.64 billion podcast requests from approximately 50 million people worldwide through iPods, iPhones, iPads, iTunes, Blackberrys, Windows Phones, Androids and many other devices and destinations. We are part of a publicly held, Pittsburgh based company with thousands of shareholders and a world-class team. Visit us on the web at www.wizzardsoftware.com/media, email us at contact@wizzard.tv.

Legal Notice

Legal Notice Regarding Forward-Looking Statements: "Forward-looking Statements" as defined in the Private Securities litigation Reform Act of 1995 may be included in this news release. These statements relate to future events or our future financial performance. These statements are only predictions and may differ materially from actual future results or events. We disclaim any intention or obligation to revise any forward-looking statements whether as a result of new information, future developments or otherwise. There are important risk factors that could cause actual results to differ from those contained in forward-looking statements, including, but not limited to risks associated with changes in general economic and business conditions, actions of our competitors, the extent to which we are able to develop new services and markets for our services, the time and expense involved in such development activities, the level of demand and market acceptance of our services and changes in our business strategies.

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