Corporate Overview of METASwarm's Current Efforts in China

Tuesday September 11, 4:05 pm ET

SANTA MONICA, Calif., Sept. 11 /PRNewswire-FirstCall/ -- METASwarm, Inc. (Pink Sheets: MSWM -News) today released a synopsis and update of its business efforts in China.

The Market:

There are currently 445,000,000 cellular users in China and the market is growing at a rate of 7,000,000 users per month. China already has one-third of all cellular users in the world and the current number of cellular users in China is already 50% larger than the entire population of the United States. These users get a combined 4.5 billion SMS messages per year -- averaging 1,000 text messages per year for each person. A burdensome majority of those SMS messages is spam. There is also a virtually untapped market for validated massaging as an advertising channel to the largest cellular market in the world.

What are the problems that METASwarm solves in China?

Problem #1: The cellular users in China have no way of trusting the advertising they get on their cellphones -- the sheer quantity of scam emails is too burdensome to sift through. The cellular service providers, such as China Unicom and China Mobile, also have no current method to benefit from the advertising revenues generated from their system. Large cellular advertising channels in China such as Yahoo and Google only allow the carriers to make revenue from the carriage fee for the SMS message. METASwarm's product is a solution that allows the phone carriers to participate in the advertising revenue stream. METASwarm is working at the top-level with the cellular service carriers themselves to be the gatekeeper for the validated messaging going out to users.

METASwarm has potential access to 445,000,000 unique users per day since it deals directly with the service providers. In comparison, Google has less than 400,000,000 users per month -- worldwide, according to Google's corporate website. Google generates most of its revenues from its advertising channels, AdSense and AdWords; METASwarm expects a similar breakdown for potential revenues.

In practice, advertisers that pay for METASwarm's validated messaging will have their messages flagged as priority communiques. All other bulk messages will be relegated to a standard bulk folder on their phones -- these non-validated messages will not be viewed unless users go through the unlikely effort of sorting through their bulk email folder.

Revenue Potential for Validated Messaging:

As the enabler/gatekeeper for the advertising going through China Unicom's system, METASwarm expects to receive up to 30% of revenues. Initially, METASwarm anticipates there will be six advertising placements per day going through the system. With 145,000,000 users on China Unicom's network, potentially 840,000,000 ad placements per day will go through METASwarm. The Company expects a standard 1.5-2% response rate for bulk messages, increasing to about 3% for targeted marketing.

METASwarm has not priced its validated messaging advertising channel product at this time since pricing will be settled once trial testing has been completed within the next few months with China Unicom.

Problem #2: If current trends continue, China will easily overtake the United States in the next few years as the spam (unsolicited commercial e-mail) capital of the world. The continued growth of China's vibrant economy could be seriously slowed and inhibited by the network bottlenecks and inefficiency created by spam due to the clogging of computer networks, slow Internet service and increase service costs for consumers. Businesses are faced with lost productivity, unexpected network maintenance upgrades and increased personnel expenses. Spam also increases the total number of consumer complaints, boosts system downtime, and wastes system storage space.

Of the 455,000,000 current cellular users in China, 145,000,000 belong to China Unicom. METASwarm has a partnership with China Unicom to install its anti-spam and validated messaging technology on China Unicom's data backbone. China Unicom will charge users a nominal fee for anti-spam services that will seamlessly run on their phones, using METASwarm's technology. Since METASwarm works with the entities at the top of the value chain and not the end users at the bottom, the Company does not have to go through the expense of marketing the service to the masses -- China Unicom will do the marketing of the anti-spam service under their own branding banner.

For the anti-spam revenues, METASwarm expects about 1 yuan per month in revenues per user. At full rollout to China Unicom, METASwarm expects $16,000,000 per month in total revenues to the group, of which METASwarm anticipates it will receive up to 30%, projected to be almost $5,000,000 per month. These revenue projections do not factor in potential revenues from advertising sales channels through validated messaging. When fully built out, METASwarm's profit margins are expected to be between 70-80 percent.

In synopsis, how does METASwarm generate revenues?

a) Revenues from advertising stream b) Management of commercial message stream C) Revenues from government-validated messaging

What is the Status of the China Unicom Tests?

METASwarm is setting up trials of its anti-spam technology on China Unicom's cellular network in HeNan province. Initial user trials should start in three months to approximately 500,000 users. Near the end of the trials, METASwarm will start testing its validated advertising system in the network. A full rollout to HeNan province's 35,000,000 China Unicom users is expected in the 4th quarter. After the successful rollout in HeNan province, METASwarm will open the system to China's other provinces.

It is important to emphasize that the tests are not to show that the METASwarm technology works -- all parties are satisfied, through previous testing, that the technology performs well. These live audience demonstrations in HeNan province are being performed mainly so that they can be overseen by government officials and then officially approved.

It should also be emphasized that there is no one competing for the China Unicom relationship -- METASwarm's system is the only technology that is currently being contemplated.

What are METASwarm's plans for international expansion?

Due to the nature of METASwarm's contract with China Unicom, the Company cannot release its technology to other nations until the China rollout commences. Since China is the largest unified cellular market in the world, cellular technology service providers, OS providers, etc. must cater to this market and bend towards its trends. Multiple industry pundits have stated that China will set the trends for at least the next decade. METASwarm believes its software will be the de facto service in China; the Company also believes that it will also become the de facto standard for other global carriers.

Safe Harbor Statement

Safe Harbor Statement Under The Private Securities Litigation Reform Act of 1995: Except for historical information

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contained herein, the statements in this news release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause a company's actual results, performance and achievement in the future to differ materially from forecasted results, performance, and achievement. These risks and uncertainties are described in the Company's periodic filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events or changes in the Company's plans or expectation.

Source: METASwarm, Inc.