Investor Relations

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BUSINESS STRATEGY

Our goal is to build the largest leisure travel agency in the world. To accomplish this, we have fueled our organic growth by creating innovative programs designed to attract and retain the industry's best and brightest travel sellers. We began developing our technology infrastructure and hosting service capabilities for the professional travel agent community in 2004. Today, the Joystar Travel Network consists of over 4000 leisure travel agents who primary sell cruises and vacations.

We believe we are uniquely positioned to capitalize on our brand strength as a host agency in the rapidly emerging virtual travel agency model. The potential for this business continues to expand as travel agents switch to virtual and hosted operations. The migration of the existing travel agency community to this new way of doing business, combined with the emergence of new entrants to the industry represents an especially large opportunity for Joystar in both revenue from travel bookings and from the set-up, monthly and annual renewal fees generated from our hosting services.

We intend to leverage the vast knowledge and travel industry experience of our network to become the recognized leader for delivering extraordinary vacation experiences. Our goal is to match a diverse population of leisure travelers with our certified travel experts to deliver the best possible travel planning service.

Our business strategy is as follows:

• Leverage the experience and knowledge base of our network of travel experts;
• Innovate on behalf of travel agents, travelers and our supplier partners;
• Expand our leisure group travel and corporate incentive travel businesses;
• Expand our host agency service offerings to a much broader base of entrepreneurs; and
• Leverage our scale in technology and operations.

We seek to leverage our brand and reputation as a trusted partner to the existing travel agent community and our relationships with travel suppliers by creating a complementary business opportunity targeted to home based and internet entrepreneurs and baby boomers who will be attracted to a viable home-based business in the travel industry. We will offer three types of programs:

1. GROUP LEADERS: Group travel leaders will be trained and supported to develop loyal followings from their friends and family, social clubs, civic organizations, businesses, and religious groups and student groups. For their part, and depending on the size of the group, group leader will have the opportunity to earn free travel and a share of the commission generated.
    
2. AFFILIATE (REFERRAL) AGENTS: The sole responsibility of an affiliate is to refer leisure travel customers to our agency network. This is a sales position in that the potential customer must be properly "pre-sold" on the value of working with one of the certified travel experts in our network for their vacation and cruise planning. The goal of the affiliate is to drive leads through a dedicated website and dedicated toll-free number that will track their business. The leads will be "hot transferred" to a certified travel expert in our virtual network who will handle the planning, booking and all related customer service. Affiliates will receive a portion of the lifetime commission generated from their "referred" clients.
    
3. BOOKING AGENTS: Booking agents are involved in all the planning, booking, and customer service functions. Because their role involves much more responsibility, including prospecting for leads, dealing with suppliers, and customer care, booking agents receive a higher percentage of the commissions generated. Once certified, booking agents will be able to receive leads generated by our affiliates.

We aim to appeal to the broadest possible range of travelers through our portfolio of brands. We target several different demographics, from the value-conscious traveler through our VacationCompare brand to luxury travelers demanding the personal service only an experienced travel agent can provide.

We intend to continue leveraging our substantial investment in technology, operations, host agency brand building, supplier integration and relationships when introducing agent support services, website features, adding supplier products and services or adding value-added content for travelers. We have been able to launch the VacationCompare.com relatively quickly and inexpensively by leveraging our existing technology and product supply.

TRAVEL AGENCY AND HOST AGENCY BUSINESS MODELS

Under the agency model, we sell through a rapidly expanding network of independent contractors and are the agency of record in the transactions booked by our independent travel agents with airlines, hotels, car rental companies, vacation providers and cruise lines.

Our travel agency business is comprised of the sale of airline tickets, hotel, cruise, vacation packages, and car rental reservations. Cruise and vacation package transactions make up the majority of this business. Gross revenue per transaction is much higher for cruises and vacation packages as compared to simple, stand alone products including air, car, and hotel. Cruises and vacation packages accounted for over 80% of total gross bookings for the year ended December 31, 2006.