Internet Capital Group Announces Second Quarter Financial Results

Core Partner Companies Report Positive Aggregate EBITDA

ICG Commerce Reports 22% Quarterly Revenue Growth Versus 2008
WAYNE, Pa.--(Business Wire)--
Internet Capital Group (NASDAQ:ICGE) today announced that consolidated revenue
in the second quarter ended June 30, 2009 was $22.1 million compared to $17.6
million in the comparable 2008 period. ICG`s consolidated net loss in the second
quarter was $(8.5) million, or $(0.23) per diluted share, compared with a loss
of $(12.3) million, or $(0.32) per diluted share, in the same period of 2008.

Aggregate Revenue of ICG`s core companies grew 8% year-over-year, to $68.7
million in the 2009 second quarter from $63.6 million in the same period of
2008. Aggregate EBITDA in the second quarter improved to $0.8 million from
$(11.9) million in the comparable 2008 quarter. Excluding the impact of
stock-based compensation and unusual items, Aggregate EBITDA for the core
companies was $3.1 million in the second quarter compared to $(8.0) million in
the 2008 quarter.

"We are encouraged by the overall results of our core companies and are pleased
to report positive Aggregate EBITDA for the second quarter," said Walter
Buckley, ICG`s Chairman and Chief Executive Officer. "ICG Commerce continues to
perform well, reporting 22% quarterly revenue growth. Additionally, a number of
our other partner companies, including Channel Intelligence, Freeborders and
InvestorForce, reported top and bottom line improvement. While the challenging
economic environment continues to impact revenue growth, we are confident that
the combination of our partner companies, our expertise and our strong financial
position will yield long-term stockholder value."

Highlights

ICG Commerce

ICG Commerce is an outsourced procurement services provider. In the second
quarter of 2009, ICG Commerce`s revenue grew to $19.5 million compared to $16.0
million in the comparable 2008 period. ICG Commerce`s EBITDA improved to $2.8
million in the second quarter compared to $2.0 million in the comparable 2008
period. ICG Commerce`s cash balance at June 30, 2009 is approximately $17.4
million. ICG has a 64% ownership position in ICG Commerce.

Metastorm

Metastorm is an enterprise software and services provider that enables its
customers to turn business strategies into business processes. Metastorm`s
revenue grew to $17.5 million in the second quarter of 2009 from $17.3 million
in the comparable 2008 period. Metastorm`s EBITDA improved to $1.0 million in
the second quarter compared to a loss of ($1.3) million in the comparable 2008
period. Metastorm`s cash balance at June 30, 2009 is approximately $9.1 million.
ICG has a 32% ownership position in Metastorm.

"Building on the progress made during the first half of this year, we expect our
core companies to continue to report positive Aggregate EBITDA for the rest of
2009," said R. Kirk Morgan, ICG`s Chief Financial Officer.

ICG Corporate

As of June 30, 2009, ICG`s corporate cash balance was $58.5 million, and the
value of its holdings in Blackboard (Nasdaq:BBBB) was $67.1 million, including
$4.0 million in hedge positions. The value of ICG`s equity holdings in
GoIndustry (LSE.AIM:GOI) at June 30, 2009 was $4.6 million.

ICG will host a webcast at 10:00 a.m. ET today to discuss its financial
results.As part of the live webcast for this call, ICG will post a slide
presentation to accompany the prepared remarks.To access the webcast, go to
http://www.internetcapital.com/investorinfo-preswebcast.htm and click on the
link for the second quarter conference call webcast.Please log on to the website
approximately ten minutes prior to the call to register and download and install
any necessary audio software.The conference call is also accessible through
listen-only mode at 800-901-5241.The international dial-in number is
617-786-2963.The passcode is 57149102.

For those unable to participate in the conference call, a replay will be
available from July 30, 2009 at 1:00 p.m. ET until August 6, 2009 at 11:59 p.m.
ET.To access the replay, dial 888-286-8010 (domestic) or 617-801-6888
(international).The pass code is 31475551.The replay and slide presentation also
can be accessed on the Internet Capital Group web site at
http://www.internetcapital.com/investorinfo-preswebcast.htm.

About Internet Capital Group

Internet Capital Group (www.internetcapital.com) acquires and builds Internet
software and services companies that drive business productivity and reduce
transaction costs between firms. Founded in 1996, ICG devotes its expertise and
capital to maximizing the success of these platform companies, which are
delivering software and service applications to customers worldwide.

Safe Harbor Statement under Private Securities Litigation Reform Act of 1995

The statements contained in this press release that are not historical facts are
forward-looking statements that involve certain risks and uncertainties
including but not limited to risks associated with the uncertainty of future
performance of our partner companies, acquisitions or dispositions of interests
in partner companies, the effect of economic conditions generally, capital
spending by customers, the development of the e-commerce and information
technology markets, and uncertainties detailed in the Company`s filings with the
Securities and Exchange Commission. These and other factors may cause actual
results to differ materially from those projected.

Internet Capital Group, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)

Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008

Revenue $ 22,077 $ 17,581 $ 43,729 $ 33,603

Operating Expenses
Cost of revenue 14,598 11,575 27,803 22,946
Selling, general and administrative 9,158 9,830 18,374 18,492
Research and development 2,592 2,771 5,240 4,236
Impairment related and other 3,867 117 3,974 192
Total operating expenses 30,215 24,293 55,391 45,866
(8,138 ) (6,712 ) (11,662 ) (12,263 )

Other income (loss), net 3,246 (359 ) 999 5,488
Interest income 98 404 240 1,233
Interest expense (73 ) (64 ) (157 ) (77 )
Income (loss) before income taxes and equity loss (4,867 ) (6,731 ) (10,580 ) (5,619 )

Income tax benefit (expense) (421 ) (239 ) (368 ) (293 )
Equity loss (2,924 ) (4,741 ) (7,877 ) (11,822 )
Net income (loss) $ (8,212 ) $ (11,711 ) $ (18,825 ) $ (17,734 )
Less: Net income (loss) attributable to the noncontrolling interest 337 584 729 1,114
Net income (loss) attributable to ICG $ (8,549 ) $ (12,295 ) $ (19,554 ) $ (18,848 )

Basic and diluted net income (loss) per share:
Income (loss) attributable to ICG common shareholders $ (0.23 ) $ (0.32 ) $ (0.53 ) $ (0.49 )

Shares used in computation of basic and diluted net income (loss) per 36,666 38,383 36,671 38,302
common share attributable to ICG common shareholders

Internet Capital Group, Inc.
Condensed Consolidated Balance Sheets
(In thousands)

June 30, December 31,
2009 2008

ASSETS
Cash and cash equivalents $ 77,187 $ 89,527
Other current assets 15,225 17,594
Total current assets 92,412 107,121
Marketable securities 63,119 57,367
Hedges of marketable securities 3,994 6,551
Fixed assets, net 2,785 1,783
Ownership interests in partner companies 81,416 83,751
Goodwill 22,908 26,658
Other assets, net 2,081 2,349
Total assets $ 268,715 $ 285,580

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 18,780 $ 23,836
Other non-current liabilities 6,250 6,918
Total liabilities 25,030 30,754
Equity:
Controlling (ICG) equity 235,513 247,509
Noncontrolling interest 8,172 7,317
Total stockholders' equity 243,685 254,826
Total liabilities and stockholders' equity $ 268,715 $ 285,580

Internet Capital Group
2009 Core Partner Company Information

The following table of ICG's supplemental financial information is a reconciliation of Aggregate Revenue and Aggregate EBITDA information(1) to GAAP Results.

Reconciliation of Aggregate Core Company Information to GAAP Results
Three Months Ended
Mar 31, 2008 Jun 30, 2008 Sep 30, 2008 Dec 31, 2008 Mar 31, 2009 Jun 30, 2009
Revenue

Core Company Aggregate Revenue $ 60,726 $ 63,585 $ 69,954 $ 70,415 $ 67,802 $ 68,651
Non-consolidated partner companies (44,704 ) (46,004 ) (52,850 ) (49,941 ) (46,150 ) (46,574 )
Consolidated Revenue $ 16,022 $ 17,581 $ 17,104 $ 20,474 $ 21,652 $ 22,077

Net Income (Loss)

Core Company Aggregate EBITDA/EBITDA (loss) $ (11,508 ) $ (11,908 ) $ (6,680 ) $ (2,040 ) $ (3,390 ) $ 817
Interest, Taxes, Depreciation/Amortization (4,993 ) (5,116 ) (4,874 ) (4,164 ) (3,836 ) (4,969 )
Core Company Aggregate Net Income (Loss) (16,501 ) (17,024 ) (11,554 ) (6,204 ) (7,226 ) (4,152 )
Amount attributable to equity companies / other stockholders / disc. ops (9,871 ) (10,338 ) (3,634 ) (357 ) (4,261 ) (2,090 )
ICG's share of net income (loss) of Aggregate Core Partner Companies $ (6,630 ) $ (6,686 ) $ (7,920 ) $ (5,847 ) $ (2,965 ) $ (2,062 )
Other holdings equity method companies (1,102 ) 168 (900 ) (11,406 ) (1,669 ) (635 )
Corporate general and administrative (3,814 ) (4,149 ) (2,555 ) (3,202 ) (3,521 ) (3,258 )
Corporate stock-based compensation (1,618 ) (1,568 ) (1,510 ) (1,339 ) (1,079 ) (1,047 )
Corporate interest, net 758 347 262 234 124 90
Other income(loss)/restructuring/impairments 5,853 (407 ) 34,791 (5,018 ) (1,895 ) (1,637 )
Income taxes - - 330 - - -
Consolidated net income (loss) $ (6,553 ) $ (12,295 ) $ 22,498 $ (26,578 ) $ (11,005 ) $ (8,549 )

Three Months Ended
Mar 31, 2008 Jun 30, 2008 Sep 30, 2008 Dec 31, 2008 Mar 31, 2009 Jun 30, 2009

Aggregate Core Company Information:
Aggregate Revenue $ 60,726 $ 63,585 $ 69,954 $ 70,415 $ 67,802 $ 68,651
Aggregate EBITDA/EBITDA (loss) $ (11,508 ) $ (11,908 ) $ (6,680 ) $ (2,040 ) $ (3,390 ) $ 817
Aggregate Net Loss $ (16,501 ) $ (17,024 ) $ (11,554 ) $ (6,204 ) $ (7,226 ) $ (4,152 )

Components of Aggregate Core Company Information

Consolidated Core Companies (Ownership %): (2)
Revenue $ 17,752 $ 18,235 $ 17,104 $ 20,474 $ 21,652 $ 22,077
ICG Commerce (64%) (3)
Investor Force Holdings, Inc. (80%) Expenses other than interest, taxes, depreciation and amortization (19,516 ) (19,322 ) (19,206 ) (20,188 ) (20,477 ) (20,585 )
Vcommerce Inc. (53%) EBITDA/EBITDA (loss) $ (1,764 ) $ (1,087 ) $ (2,102 ) $ 286 $ 1,175 $ 1,492
Interest (100 ) (61 ) (74 ) (64 ) (66 ) (65 )
Taxes (53 ) (239 ) (107 ) (288 ) 53 (421 )
Depreciation/Amortization (373 ) (417 ) (407 ) (438 ) (374 ) (365 )
Net income (loss) $ (2,290 ) $ (1,804 ) $ (2,690 ) $ (504 ) $ 788 $ 641

Equity Method Core Companies (Ownership %): (2)
Revenue $ 42,974 $ 45,350 $ 52,850 $ 49,941 $ 46,150 $ 46,574
Channel Intelligence, Inc. (46%)
Freeborders, Inc. (31%) Expenses other than interest, taxes, depreciation and amortization (52,718 ) (56,171 ) (57,428 ) (52,267 ) (50,715 ) (47,249 )
Metastorm (32%) (3) EBITDA/EBITDA (loss) $ (9,744 ) $ (10,821 ) $ (4,578 ) $ (2,326 ) $ (4,565 ) $ (675 )
StarCite, Inc. (35%) Interest (147 ) (179 ) (194 ) (405 ) (367 ) (413 )
WhiteFence, Inc. (36%) Taxes (623 ) (362 ) (76 ) 969 590 (213 )
Depreciation/Amortization (3,697 ) (3,858 ) (4,016 ) (3,938 ) (3,672 ) (3,492 )
Net loss $ (14,211 ) $ (15,220 ) $ (8,864 ) $ (5,700 ) $ (8,014 ) $ (4,793 )

(1) The definitions of Aggregate Revenue and Aggregate EBITDA, as well as the rationale for management's use of such non-GAAP measures are included in the "Description of Terms" supplement to this release.

(2) ICG's aggregate core company information represents the sum total of the individual GAAP results of each of the following eight companies: Channel Intelligence, Freeborders, ICG Commerce, Investor Force, Metastorm, StarCite, Vcommerce and WhiteFence. ICG's ownership in these eight core companies ranged from 31% to 80% and averaged 47% at June 30, 2009.

(3) ICG Commerce Holdings, Inc. is defined as "ICG Commerce" and Metastorm Inc. is defined as "Metastorm" throughout this release.

The following table reconciles our core company Aggregate EBITDA/EBITDA (loss) to Aggregate EBITDA/EBITDA (loss), exclusive of stock-based compensation and unusual items.
Three Months Ended
Mar 31, 2008 Jun 30, 2008 Sep 30, 2008 Dec 31, 2008 Mar 31, 2009 Jun 30, 2009
Aggregate EBITDA/EBITDA (Loss) $ (11,508 ) $ (11,908 ) $ (6,680 ) $ (2,040 ) $ (3,390 ) $ 817

Stock-based compensation 1,420 1,274 1,309 720 909 1,028
Severance/restructuring/other 320 - 990 2,040 530 1,206
Settlement charges - 410 - - 1,250 -
Litigation related charges 300 844 409 384 598 -
IPO related charges - - - 1,893 - -
Integration costs 1,305 1,340 1,560 310 - -

Aggregate EBITDA/EBITDA (Loss), exclusive of Stock-based compensation and unusual items $ (8,163 ) $ (8,040 ) $ (2,412 ) $ 3,307 $ (103 ) $ 3,051

INTERNET CAPITAL GROUP, INC.

June 30, 2009

Description of Terms

Consolidated Statements of Operations

Effect of Various Accounting Methods on our Results of Operations

The various interests that the Company acquires in its partner companies are
accounted for under three methods: the consolidation method, the equity method
and the cost method. The applicable accounting method is generally determined
based on the Company`s voting interest in a partner company.

Consolidation. Partner companies in which the Company directly or indirectly
owns more than 50% of the outstanding voting securities and for which other
stockholders do not possess the right to affect significant management decisions
are accounted for under the consolidation method of accounting. Under this
method, a partner company`s balance sheet and results of operations are
reflected within the Company`s Consolidated Financial Statements. All
significant intercompany accounts and transactions are eliminated. Participation
of other partner company stockholders in the net assets and in the earnings or
losses of a consolidated partner company is reflected in the caption
"Noncontrolling interest" in the Company`s Consolidated Balance Sheets and "Net
income (loss) attributable to the noncontrolling interest" on the Company`s
Consolidated Statements of Operations. Noncontrolling interest adjusts the
Company`s consolidated results of operations to reflect only the Company`s share
of the earnings or losses of the consolidated partner company. The results of
operations and cash flows of a consolidated partner company are included through
the latest interim period in which the Company owned a greater than 50% direct
or indirect voting interest for the entire interim period or otherwise exercised
control over the partner company. Upon dilution of control below 50%, the
accounting method is adjusted to the equity or cost method of accounting, as
appropriate, for subsequent periods.

During the three months ended June 30, 2009, the Company accounted for the
following three partner companies under this method: ICG Commerce, Investor
Force and Vcommerce. During the three months ended June 30, 2008, the Company
accounted for the following three partner companies under this method: ICG
Commerce, Investor Force and Vcommerce (starting May 1, 2008).

Equity Method. Partner companies that are not consolidated, but over which the
Company exercises significant influence, are accounted for under the equity
method of accounting. Whether or not the Company exercises significant influence
with respect to a partner company depends on an evaluation of several factors,
including, among others, representation on the partner company`s board of
directors and the Company`s ownership level, which is generally between a 20%
and 50% interest in the voting securities of the partner company, including
voting rights associated with the Company`s holdings in common stock, preferred
stock and other convertible instruments in the partner company. Under the equity
method of accounting, a partner company`s accounts are not reflected within the
Company`s Consolidated Balance Sheets and Statements of Operations; however, the
Company`s share of the earnings or losses of the partner company is reflected in
the caption "Equity loss" in the Consolidated Statements of Operations. The
carrying value of equity method partner companies is reflected in "Ownership
interests in partner companies" in the Company`s Consolidated Balance Sheets.
When the Company`s interest in an equity method partner company is reduced to
zero, no further losses are recorded in the Company`s Consolidated Financial
Statements unless the Company has guaranteed obligations of the partner company
or has committed to additional funding. When the partner company subsequently
reports income, the Company will not record its share of such income until it
equals the amount of its share of losses not previously recognized.

During the three months ended June 30, 2009, the Company accounted for seven of
its partner companies under this method.

Cost Method. Partner companies not accounted for under the consolidation or the
equity method of accounting are accounted for under the cost method of
accounting. Under this method, the Company`s share of the earnings or losses of
such companies is not included in the Consolidated Balance Sheets or
Consolidated Statements of Operations. However, cost method partner company
impairment charges are recognized in the Consolidated Statements of Operations.
If circumstances suggest that the value of the partner company has subsequently
recovered, such recovery is not recorded.

When a cost method partner company qualifies for use of the equity method, the
Company`s interest is adjusted retroactively for its share of the past results
of its operations. Therefore, prior losses could significantly decrease the
Company`s carrying value at that time.

The Company records its ownership interest in equity securities of partner
companies accounted for under the cost method at cost, unless these securities
have readily determinable fair values based on quoted market prices, in which
case these interests are valued at fair value and classified as marketable
securities or some other classification in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain
Investments in Debt and Equity Securities."

During the three months ended June 30, 2009, the Company accounted for five of
its partner companies under this method.

Certain items impacting the consolidated financial statements: ($ millions)

Q2 FYTD
Gains (losses): 2009 2008 2009 2008
Other gains (losses):
Unrealized gain/(loss) on mark-to-market of hedges $0.9 $(3.4) $(2.6) $2.3
Sales of partner companies 1.2 3.0 2.6 3.1
Sales of marketable securities - - 0.1 -
Other, net 1.1 - 0.9 0.1
Other Income (Loss) $3.2 $(0.4) $1.0 $5.5
Impairment of consolidated partner company $(3.7) $- $(3.7) $-
Impairment of equity method partner company $- $- $(0.5) $-
Income tax benefit (expense) $(0.4) $(0.2) $(0.4) $(0.3)
ICG`s share of Partner Company charges, net $(0.4) $(0.4) $(1.2) $(0.4)
$(1.3) $(1.0) $(4.8) $4.8

Stock-based compensation - Corporate and Consolidated Partner Companies $(1.2) $(1.7) $(2.5) $(3.5)

Aggregate Core Company Information

In an effort to illustrate macro trends within its core companies, ICG provides
an aggregation of revenue and net loss figures reflecting 100% of the Aggregate
Revenue and Aggregate EBITDA for these companies. ICG calculates Aggregate
EBITDA for these purposes as earnings (losses) before interest, tax,
depreciation and amortization and refers to it as "Aggregate EBITDA." ICG refers
to the Aggregate Revenue of its core partner companies as "Aggregate Revenue."
We report Aggregate Revenue and Aggregate EBITDA for our core companies based on
the sum total of the individual GAAP results of our core companies. ICG does not
own its core companies in their entirety and, therefore, this information should
be considered in this context. Aggregate Revenue and Aggregate EBITDA, in this
context, represent certain of the financial measures used by ICG`s management to
evaluate the performance of core companies. ICG`s management believes these
non-GAAP financial measures provide useful information to investors, potential
investors, securities analysts and others so each group can evaluate core
companies` current and future prospects in a similar manner as ICG`s management
and review results on a comparable basis for all periods presented.

Core Company Adjusted Aggregate EBITDA Reconciliation

We also report Aggregate EBITDA for our core companies exclusive of stock-based
compensation and unusual items. ICG`s management considers charges unusual when
they are transactional driven or non-recurring. ICG`s management believes this
non-GAAP financial measure provides useful information to investors, potential
investors, securities analysts and others so each group can evaluate core
companies` current and future prospects in a similar manner as ICG`s management
and review results on a comparable basis for all periods presented.

ICG`s Share of Net Loss of Core, Other Holdings and Disposed Partner Companies

This line item represents ICG`s share of the net loss of core, other holdings
and disposed partner companies accounted for under the consolidated and equity
method of accounting.

Corporate Expenses and Interest Income (Expense), net

Corporate general and administrative expenses consist of payroll and related
expenses for executive, operational, acquisitions, finance and administrative
personnel, professional fees and other general corporate expenses for Internet
Capital Group.

Corporate general and administrative expenses decreased during the three months
ended June 30, 2009 from the three months ended June 30, 2008, primarily due to
reduced employee-related expenses, specifically reductions in the target payouts
under the Internet Capital Group 2009 Performance Plan from the Internet Capital
Group 2008 Performance Plan.

Investor inquiries:
Internet Capital Group, Inc.
Karen Greene
Investor Relations
610-727-6900
IR@internetcapital.com

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