Table of Contents 

The following table sets forth the historical results of our operations expressed as a percentage of total revenues.  

2001 

2000 

1999 

Revenues 

100.0 % 

100.0 % 

100.0 % 

Cost of revenues 

25.8 % 

16.6 % 

18.7 % 

Gross profit 

74.2 % 

83.4 % 

81.3 % 

Operating expenses: 

Product development 

24.3 % 

18.9 % 

21.7 % 

Sales, general and administrative 

73.1 % 

61.1 % 

108.0 % 

Amortization of intangibles 

146.2 % 

79.9 % 

59.4 % 

Impairment of intangibles 

66.5 % 

4.2 % 

Acquisition and other related charges 

(2.2 )% 

57.8 % 

18.9 % 

Other charges 

7.1 % 

2.2 % 

15.8 % 

Restructuring charges 

10.8 % 

1.1 % 

0.0 % 

Total operating expenses 

325.8 % 

225.2 % 

223.8 % 

Loss from operations 

(251.6 )% 

(141.8 )% 

(142.5 )% 

Loss on investments 

(66.8 )% 

(0.2 )% 

0.0 % 

Other income, net 

10.7 % 

12.9 % 

31.1 % 

Minority interest 

0.0 % 

(1.5 )% 

0.0 % 

Loss from operations before income tax expense and cumulative effect of change in accounting 

principle 

(307.7 )% 

(130.6 )% 

(111.4 )% 

Income tax expense 

(0.4 )% 

(0.1 )% 

0.0 % 

Loss from operations before cumulative effect of change in accounting principle and preferred 

stock dividend 

(308.1 )% 

(130.7 )% 

(111.4 )% 

Preferred stock dividend 

0.0  % 

(222.2 )% 

Cumulative effect of change in accounting principle 

(2.0 )% 

(1.0 )% 

0.00 % 

Net loss applicable to common stockholders 

(310.1 )% 

(131.7 )% 

(333.6 )% 

Results of Operations for the Years Ended December 31, 1999, 2000 and 2001 

Revenues.     

Our revenues are derived from our products and application services, which are delivered to users and subscribers on 

wireline, wireless and broadband platforms and to merchants via merchant aggregators including merchant banks. We tailor agreements to fit 

the needs of our customers, merchant banks and aggregators and wireless carriers. Under any one agreement we may earn revenue from a 

combination of our products and application services. We identify revenues by our three business areas, which are wireline and broadband, 

merchant and wireless. We do not expect broadband to generate meaningful revenue until 2003.  

Revenues for wireline and broadband were $90.4 million in the year ended December 31, 2001, $156.9 million in the year ended 

December 31, 2000 and $56.1 million in the year ended December 31, 1999. The decline in total revenue from 2000 to 2001 reflects several 

factors including our decision in the first quarter of 2001 to eliminate direct to consumer properties including certain destination sites acquired 

in the Go2Net merger, our announcement in the second quarter of 2001 of our intention to not pursue agreements that are short term and 

comprised of non recurring revenue streams and declines in general economic conditions during the year. The revenue growth from 1999 to 

2000 reflects the growth of our network of Web portals and affinity Web sites, Go2Net's acquisition of Dogpile in August 1999, and the launch 

of new services that drove Web traffic and promoted longer usage at Web sites.  

Revenues for merchant were $39.8 million in the year ended December 31, 2001, $36.9 million in the year ended December 31, 2000 and 

$15.2 million in the year ended December 31, 1999. The decline in the annual  

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