There are three types of sales projections to measure; product, service referral and advertising sales. Our combined income projections reflect a profit of just over $xxxx million by the end of first full year of operation (a projected xxxx% ROI) Our second full year projections are for a profit of $xxxx million, a xxxx% return on investment. Our analysis for our third year of operation project a xxxx% ROI. These projections are based upon profitability figures, they do not take into consideration market valuations if the company begins public trading (which would likely result in significantly higher ROI).

Within the content section of the website, each page will contain one "banner" advertisement and one or more smaller column ads. Each visitation to one of our content pages represents multiple advertising sales. Each advertising sale or "impression" is billable to the advertiser at the rate of between xxxx and xxxx cents per. Advertisements are typically presold in bundles of xxxx impressions.

Advertising sales are driven by visitor traffic to our site, that traffic is measured by page views. A site visitor can be expected to make an average of xxxx page views per article and will read an average of two articles. Therefore, each visitor makes an average of xxxx page views per visit. xxxx page views generates a minimum ad revenue of xxxx cents per visitation (using the conservative factor of only xxxx ads per page and xxxx cents per impression). The sale of focused advertising yields significantly greater revenue, potentially increasing the ad price by a factor anyhwere from xxxx to xxxx times. Focused advertising is the practice of matching particular advertisers with particular visitors based upon demographic data or article subject matter.

Our revenue calculations are based upon the very conservative figures described above. Non-directed advertising rates are used for the first quarter of operation. In the second and third quarter, new visitors are still calculated at the non-directed rate while return visitors are billed at a directed rate of fourteen cents per page view. In the fourth quarter, directed rates are increased to eighteen cents per page view.

During the first quarter of operation we estimate xxxx visitors (an average xxxx per day) will generate xxxx million page views representing ad revenues of $xxxx. Second quarter projections estimate xxxx return visitors will generate xxxx million page views, generating $xxxx. New visitors will make xxxx million page views, generating $xxxx, for a second quarter total of $xxxx. Third quarter projections reflect return visit revenue as $xxxx for xxxxmillion page views and new visit revenue as $xxxx for xxxx million page views. Fourth quarter estimates are for $xxxx in return visit ad sales and $xxxx in new visitor ad sales. Year-end total revenue projection for advertising sales is $xxxx million dollars.

As a point of reference, sites like Yahoo! measure impressions in the hundreds of millions on a daily basis. While ACME PARTS.com does not anticipate these volume levels, it is illustrative of the value that should be placed on advertising. Our target is xxxx million impressions by our sixth month of "live" operation and another xxxx million impressions by our first anniversary. This represents advertising revenue of xxxx for our first year. In the following year we anticipate a growth factor of xxxx over the first year. In years three, four and five the annual growth rate will decline as the company matures. Advertising revenue growth is anticipated to level out near xxxx% by the end of the fifth year. However this assumes a steady state for pricing, marketing, product offerings and site features. ACME PARTS.com will continue to add products and features to attract new customers.

Sales revenue is generated through sales transacted on the ACME PARTS.com website. Sales orders are taken from a customer on-line, the order is processed and then transmitted to a fulfillment partner who ships the products to our customer. Product margins range from xxxx% to xxxx% (margin is percentage over cost factor) depending upon the product category.

Site traffic is made up of visitors interested in product offerings and visitors interested in content offerings. Both types of visitors will also generate crossover interest thus developing additional product and advertising sales. Sales site traffic takes into account both visitors who come to the commerce site specifically in search of a product and those referred to it from the content site.

Content referrals are taken as a fixed percentage of visitations (not page views); the percentage is xxxx% (1 in xxxx visitations). This figure is supported by the consideration that visitors seeking out specific information have an interest that could reasonably lead to the sale of a product related to the information being sought. The projected number of visitations in the first year of operation is xxxx million, which converts to xxxx content conversion sales.

Commerce site visitors are persons who are actively seeking a product. In some product categories, we may be one of few or the sole retail source. In these categories, visits will have a high sales conversion rate on the order or xxxx% to xxxx%. In categories where we have competition, conversion ratios will be lower. The number of variables affecting the visitor’s decision cannot be fully considered in our projections. However, price, product availability and ease of transaction are of paramount importance. By maintaining multiple fulfillment resources we ensure the greatest ability to compete on the first two criterions. By design, we will ensure that the ease of transaction will never deter a sale. Therefore, if a person is presently visiting our site and they have found the product they require, the likelihood is high that that visit will be converted to a sale. So taking these factors into consideration, our estimate is that a visitor will convert to a sale xxxx% of the time. Our estimate of commerce visitations is roughly xxxx% of number of content visitations (these are independent visitations, not crossover visitations). Thus, first year commerce visitations will number xxxx. Sales conversions for difficult to find items will account for about xxxx% of these visitations and enjoy a high conversion rate; representing xxxx sales. Conversions in competitive categories will represent 124,800 sales. Total sales transactions will total xxxx in the first year (xxxx + xxxx + xxxx).

Using an average transaction price of $xxxx per sale and a product margin of xxxx%, first year income is projected to be $xxxx on revenue of $xxxx.

Growth in year five slows to xxxx% assuming a steady state. In reality, programs will be in place to facilitate higher growth rates. In order to illustrate the viability of our core concept, these programs are not calculated into our projections. This serves the purpose of preserving the clarity of analysis of revenue and income. Additionally, the rate of change is so great in the Internet arena, that projecting specific strategies for revenue growth is unlikely to yield accurate results.