Late last year, the Outlook team spent several months looking closely at software trends for 2005-6, identifying emerging opportunities. Many new services, applications and solutions on our "suspect" list are now coming to market in the form of exciting new ventures. We have been zeroing in on new opportunities in our three software areas: infrastructure (including communications), consumer applications, and enterprise applications.

Within the infrastructure sector, new approaches to storage, communications, identity management and security are occupying our time. One of Outlook's latest investments, Optena, is in grid computing, an area that we believe will see tremendous growth in the coming years. We are also closing an investment in a promising new company in the area of mobile communications infrastructure. This past quarter, recent portfolio companies completed significant new rounds of funding in the security and identity management areas of infrastructure. We also have a strong interest in the unstructured data market and are interested in hearing from startups creating innovative technologies around storing, accessing and analyzing unstructured data.

On the consumer software side, a wave of exciting new companies is under consideration, and Outlook is leveraging its history in consumer software and the Internet. We are currently completing a new investment in the area of "deep web" search, and are investing our team's time in the local advertising, improved search and mobile markets, home entertainment, and consumer communications spaces.

Within the area of enterprise and corporate communications, we're involved in a variety of software-as-services plays, including several interesting vertical market investments. For example, InStorecard, an investment the retail space is capturing key customers in the retail mid-market, and we are seeking a co-investor in an interesting new software-as-a-service play in the Insurance industry.

With all of these opportunities, Outlook is presently expanding its staff. We're currently searching for an additional Associate as well as Venture Partners with experience in enterprise software, infrastructure and consumer Internet.

The Outlook Ventures Team
May 2005