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growth rates from 2000 to 2001 compared to 1999 to 2000 reflects the impact of general economic conditions and the transition of our 

merchant hosting services from a free service to a subscription model which resulted in a decline in monetization of the traffic to those services. 

The revenue increase from 1999 to 2000 is primarily attributable to the acquisition of Authorize.net in July 1999, accounted for as a purchase.  

Revenues for wireless were $31.7 million in the year ended December 31, 2001, $20.8 million in the year ended December 31, 2000 and 

$663,000 in the year ended December 31, 1999. The annual growth reflects the adoption of our wireless platform of products and application 

services by wireless carriers and consumer services companies and the launch of new applications and services. The number of active 

subscribers using our services grew from 1.2 million at December 31, 2000 to 2.4 million at December 31, 2001. The revenue growth from 

1999 to 2000 reflects the acquisition of Saraide in March 2000.  

For the first quarter of 2002, we expect revenues from our business areas to represent as a percentage of total revenues: Wireline and 

Broadband 40% to 45%; Merchant 30% to 35%; and Wireless 20% to 25%.  

Included in revenue are barter revenues generated from non cash transactions as defined by Emerging Issues Task Force (EITF) Issue No. 

99 17, 

Accounting for Advertising Barter Transactions 

. Revenue is recognized when we complete all of our obligations under the agreement. 

For non cash agreements, we record a receivable or liability at the end of the reporting period for the difference in the fair value of the services 

provided or received based on the value of comparable cash transactions. We recognized barter revenue of $14.0 million for the year ended 

December 31, 2001 compared to $9.8 million for the year ended December 31, 2000 and $948,000 for the year ended December 31, 1999, from 

these non cash agreements. Non cash barter transactions are common in our industry. Generally, these transactions consist of the right to place 

Internet advertisements. For the year ended December 31, 2001, barter advertising expense was $13.2 million compared to $8.7 million for the 

year ended December 31, 2000 and $878,000 for the year ended December 31, 1999. We expect barter revenue in 2002 will decrease from the 

amount of barter revenue recorded for 2001.  

We hold warrants and stock in public and privately held companies for business and strategic purposes. Some of these warrants were 

received in conjunction with equity investments, and are also included in the related party revenue described below. Additionally, some 

warrants and stock were received in connection with business agreements whereby we provide our products and services to the issuers. Some 

of these agreements contain provisions that require us to meet specific performance criteria in order for the stock or warrants to vest. When we 

meet our performance obligations we record revenue equal to the fair value of the stock or warrant. If no future performance is required, we 

recognize the revenue on a straight line basis over the contract term. Fair values are determined through third party investors or independent 

appraisal. We recorded revenue in the amount of $14.0 million for vesting in stock and warrants for the year ended December 31, 2001 

compared to $22.1 million for the year ended December 31, 2000 and $3.2 million for the year ended December 31, 1999. We expect warrant 

revenue in 2002 will decrease from the amount of warrant revenue recorded for 2001.  

From time to time, we have made investments in private and public companies for business and strategic purposes. In the normal course of 

business, we have entered into separate agreements to provide various promotional and other services for some of these companies. Revenues 

earned from companies in which we own stock are considered related party revenue, including independent service agreements entered into 

during the current year with companies we or Go2Net invested in during prior years. During the year ended December 31, 2001, we made 

investments in four private companies for business and strategic purposes. In the normal course of business, we also entered into short term 

agreements to provide various promotional services for these companies and other companies that we have made investments in during prior 

years. For the year ended December 31, 2001, related party revenue was $31.4 million compared to related party revenue of $32.1 million for 

the year ended December 31, 2000 and $2.9 million for the year ended December 31, 1999. We recognize revenue from our advertising, 

licensing and distribution agreements with related parties on the same basis as we recognize revenue from similar agreements with unrelated 

parties.  

Cost of Revenues.     

Cost of revenues consists of expenses associated with the delivery, maintenance and support of our products and 

application services, including direct personnel expenses, communication costs such  

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