TICKETMASTER ONLINE CITYSEARCH INC, S-1/A, 1998-10-19

TICKETMASTER ONLINE CITYSEARCH INC
S-1/A, 1998-10-19
COMPUTER PROCESSING & DATA PREPARATION

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 19, 1998

REGISTRATION NO. 333-64855
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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AMENDMENT NO. 1 TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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TICKETMASTER ONLINE-CITYSEARCH, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

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<S> <C> <C>
DELAWARE 7375 95-4546874
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>

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TICKETMASTER ONLINE-CITYSEARCH, INC.
790 E. COLORADO BOULEVARD, SUITE 200, PASADENA, CA 91101, (626) 405-0050
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

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CHARLES CONN, CHIEF EXECUTIVE OFFICER
TICKETMASTER ONLINE-CITYSEARCH, INC.
790 E. COLORADO BOULEVARD, SUITE 200, PASADENA, CA 91101, (626) 405-0050
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

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COPIES TO:

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<S> <C> <C>
LARRY W. SONSINI PAMELA S. SEYMON GLEN R. VAN LIGTEN
JOHN T. SHERIDAN ANDREW J. NUSSBAUM CRAIG E. SHERMAN
JULIE A. BELL WACHTELL, LIPTON, ROSEN & KATZ EDWARD Y. KIM
EILEEN MARSHALL 51 WEST 52ND STREET ROBERT S. SCHLOSSMAN
WILSON SONSINI GOODRICH
& ROSATI NEW YORK, NY 10019 VENTURE LAW GROUP
PROFESSIONAL CORPORATION (212) 403-1000 A PROFESSIONAL CORPORATION
650 PAGE MILL ROAD 2800 SAND HILL ROAD
PALO ALTO, CA 94304 MENLO PARK, CA 94025
(650) 493-9300 (650) 854-4488
</TABLE>

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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.

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If any securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

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CALCULATION OF REGISTRATION FEE
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<CAPTION>
PROPOSED
MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO PROPOSED AGGREGATE AMOUNT OF
SECURITIES TO BE BE MAXIMUM OFFERING OFFERING REGISTRATION
REGISTERED REGISTERED(1) PRICE PER SHARE PRICE(1)(2) FEE
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Class B Common Stock
$0.01 par value....... $ $92,000,000 $27,140 (3)
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(1) The Company has granted to the Underwriters a 30-day option to purchase up
to an additional shares of Class B Common Stock solely to cover over-
allotments, if any.
(2) Estimated solely for the purpose of computing the amount of the
registration fee pursuant to Rule 457(a) promulgated under the Securities
Act of 1933, as amended.

(3) Previously paid in connection with the Registration Statement filed
September 30, 1998.

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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO THE REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS +
+OF ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

SUBJECT TO COMPLETION DATED OCTOBER 19, 1998

[LOGO] SHARES [LOGO]

TICKETMASTER ONLINE-CITYSEARCH, INC.

CLASS B COMMON STOCK

All of the shares of Class B Common Stock (the "Class B Common Stock")
offered hereby are being offered by Ticketmaster Online-CitySearch, Inc. (the
"Company"). Prior to this offering, there has been no public market for the
Class B Common Stock. It is currently estimated that the initial public
offering price will be between $ and $ per share. See "Underwriting"
for a discussion of factors to be considered in determining the initial public
offering price. Application has been made to have the Class B Common Stock
approved for listing on the Nasdaq National Market under the symbol "TMCS."

(Continued)

THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON
PAGE 12 FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY
PROSPECTIVE PURCHASERS OF THE CLASS B COMMON STOCK OFFERED HEREBY.

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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

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Price Proceeds
to Underwriting to
Public Discount(1) Company(2)
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<S> <C> <C> <C>
Per Share........................................ $ $ $
Total(3)......................................... $ $ $
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(1) See "Underwriting" for information concerning indemnification of the
Underwriters and other matters.
(2) Before deducting offering expenses payable by the Company estimated at
$ . See "Underwriting."
(3) The Company has granted to the Underwriters a 30-day option to purchase up
to an additional shares of Class B Common Stock solely to cover over-
allotments, if any. If the Underwriters exercise this option in full, the
Price to Public will total $ , the Underwriting Discount will total
$ and the Proceeds to Company will total $ . See "Underwriting."

The shares of Class B Common Stock are offered by the Underwriters named
herein, subject to receipt and acceptance by them, and subject to their right
to reject any order in whole or in part. It is expected that delivery of the
certificates representing the shares will be made against payment therefor at
the office of NationsBanc Montgomery Securities LLC on or about , 1998.

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NationsBanc Montgomery Securities LLC
Allen & Company Incorporated
BancBoston Robertson Stephens
Bear, Stearns & Co. Inc.
Donaldson, Lufkin & Jenrette

, 1998
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(Continued from cover page)

Following this offering, the Company will have two classes of authorized
Common Stock (as defined below) outstanding, Class A Common Stock (the "Class
A Common Stock"), and the Class B Common Stock offered hereby. Immediately
prior to this offering, there were 62,486,478 shares of Class A Common Stock
and no shares of Class B Common Stock outstanding. The rights of the holders
of Class A Common Stock and Class B Common Stock are substantially identical,
except with respect to voting, conversion and transfer. Except as otherwise
required by applicable law, each share of Class A Common Stock entitles its
holder to 15 votes and each share of Class B Common Stock entitles its holder
to one vote on all matters submitted to a vote or for the consent of
stockholders. Except as otherwise required by applicable law, the Class A
Common Stock and the Class B Common Stock shall vote together as a single
class on all matters submitted to a vote or for the consent of stockholders.
The Company has also authorized Class C Common Stock (the "Class C Common
Stock" and, together with the Class A Common Stock and the Class B Common
Stock, the "Common Stock"), which is nonvoting and of which no shares are
issued and outstanding. See "Description of Capital Stock." The Company is
currently a direct, non-wholly-owned subsidiary of Ticketmaster Corporation,
an Illinois corporation ("Ticketmaster Corp."), which is an indirect wholly-
owned subsidiary of USA Networks, Inc., a Delaware corporation ("USAi"). USAi
beneficially owns 40,482,641 shares of Class A Common Stock, or approximately
64.8%, of the Company's outstanding Common Stock prior to this offering.
Immediately after this offering, USAi will beneficially own approximately %
of the outstanding Common Stock, representing approximately % of the total
voting power of the outstanding Common Stock. As a result of such ownership,
after giving effect to this offering, USAi will be able to control the outcome
of substantially all matters submitted to a vote or for the consent of
stockholders, including the election of directors and the approval of other
corporate transactions. See "Risk Factors--Control by and Relationship with
USAi," "--Potential Conflicts of Interest," "--Possible Future Sales of Common
Stock by USAi," "Principal Stockholders" and "Ticketmaster Online-CitySearch
Merger."
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[This page will contain a short paragraph of text from the Prospectus briefly
describing the Web services operated by Ticketmaster Online-CitySearch.
Immediately below this paragraph will be screen shots of the home pages of each
of the CitySearch and Ticketmaster Online Web sites. Below the home page screen
shots are maps of the United States and certain foreign countries on which the
cities where CitySearch provides local guides are indicated by the CitySearch
logo, and the areas with live event venues ticketed by Ticketmaster Online are
indicated by shading.]

CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE CLASS B COMMON STOCK
OFFERED HEREBY. SUCH TRANSACTIONS MAY INCLUDE STABILIZING THE PRICE OF THE
CLASS B COMMON STOCK TO COVER SYNDICATE SHORT POSITIONS AND THE IMPOSITION OF
PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

The CitySearch logo is a registered United States trademark of the Company.
"CitySearch" is a United States trademark of a third party, and the Company is
the exclusive third-party licensee of this trademark in its field of use.
"Ticketmaster" is a registered United States trademark of Ticketmaster Corp.
The Ticketmaster Online logo is a registered United States service mark of
Ticketmaster Corp. See "Risk Factors--Uncertain Protection of Intellectual
Property; Risks of Third-Party Licenses." This Prospectus also contains
trademarks and tradenames of other companies.

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[This page will be divided by a horizontal line roughly half of the distance
down the page. The upper half of the page will contain two citysearch.com
screen shots side by side, the left hand screenshot depicting a home page from
one of CitySearch's city guides and the righthand screen shot depicting an
"arts and entertainment" topic page indicating a search for "jazz" events in
the search box. There will be a short description of the contents of these
pages immediately above them. The lower half of the page will contain four
citysearch.com screen shots on the left two-thirds of the page and a short
description of the contents of these pages on the right one-third of the page.
The first screen shot will depict a listing of events resulting from the
search for "jazz" events. To the right of this screen shot will be a screen
shot of a listing of locations resulting from the search for "jazz" events.
Immediately below the screen shot of the events listing will be a screen shot
of an event profile created by CitySearch or its partners describing one of
the listed jazz events. Immediately below the screen shot of the locations
listing will be a screen shot of a custom Web site purchased by a CitySearch
business customer that hosts jazz events. This screen shot also depicts a
feature that enables Web users to get more information on places to go and
things to do nearby the business customer's location.]
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[This page will contain nine ticketmaster.com screen shots. The upper left
corner of the page will contain a screen shot of the Ticketmaster Online home
page. Immediately to the right of this screen shot will be a sentence
describing the contents of the home page. Immediately below this sentence will
be a sentence describing Ticketmaster Online's transactional features for
purchasing merchandise and music products. Two overlapping screen shots of The
Mall and Music Boulevard areas within the ticketmaster.com Web site will
appear below this description. The lower left corner of the page will contain
several ticketmaster.com screen shots relating to live event ticketing,
including screen shots of event and location listings, a seating chart and
directions to a venue. The lower right corner of the page will contain a
screen shot of Ticketmaster Online's travel service.]
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PROSPECTUS SUMMARY

The following summary should be read in conjunction with, and is qualified in
its entirety by, the more detailed information, including "Risk Factors," the
Consolidated Financial Statements of CitySearch, Inc. and Notes thereto, the
Financial Statements of Ticketmaster Multimedia Holdings, Inc. (the "Financial
Statements of Ticketmaster Online") and Notes thereto, which present the
historical financial statements of Ticketmaster Multimedia Holdings, Inc. prior
to the Merger (as defined below), and the consolidated financial statements of
Ticketmaster Online and CitySearch, Inc. subsequent to the Merger, and the
Unaudited Pro Forma Condensed Combined Financial Statements and Notes thereto,
appearing elsewhere in this Prospectus. The discussion in this Prospectus
includes forward-looking statements that involve risks and uncertainties. The
Company's actual results may differ materially from those discussed in such
forward-looking statements. Unless the context otherwise requires,
(i) "Ticketmaster Online" means, prior to the Merger, Ticketmaster Multimedia
Holdings, Inc. and, after the Merger, the Ticketmaster Online business of the
Company, (ii) "CitySearch" means, prior to the Merger, CitySearch, Inc. and its
subsidiaries and, after the Merger, the CitySearch business of the Company,
(iii) "Ticketmaster Group" means Ticketmaster Group, Inc., a wholly-owned
subsidiary of USA Networks, Inc., and its subsidiaries and managed affiliates
(other than Ticketmaster Online and the Company), (iv) "Ticketmaster Corp."
means Ticketmaster Corporation, a wholly-owned subsidiary of Ticketmaster
Group, and its subsidiaries and managed affiliates (other than Ticketmaster
Online and the Company) collectively or individually, and (v) "USAi" means USA
Networks, Inc. and its subsidiaries and managed affiliates (other than
Ticketmaster Online and the Company). All information in this Prospectus (i)
reflects the consummation of the merger of Ticketmaster Online with a wholly-
owned subsidiary of CitySearch, which became effective on September 28, 1998,
with Ticketmaster Online continuing as the surviving corporation and as a
wholly-owned subsidiary of CitySearch (the "Merger"), (ii) reflects the
conversion of all of the outstanding Series A, Series B, Series C, Series D and
Series E convertible preferred stock, each with a par value $.01 per share, of
CitySearch (collectively, the "CitySearch Convertible Preferred Stock") into
common stock, par value $.01 per share of CitySearch (the "CitySearch Common
Stock") which became effective immediately prior to consummation of the Merger
(the "Conversion") and the reclassification of all outstanding shares of the
CitySearch Common Stock into Class A Common Stock, which became effective on
September 28, 1998 (the "Reclassification"), and (iii) assumes no exercise of
the Underwriters' over-allotment option.

THE COMPANY

The Company is combining CitySearch and Ticketmaster Online to create a
leading provider of local city guides, local advertising and live event
ticketing on the Internet. The Company intends to integrate its local
CitySearch city guides with its Ticketmaster Online live events ticketing and
merchandise distribution capabilities to offer online ticketing, merchandise,
electronic coupons and other transactions to a broader audience of consumers.
The CitySearch city guides provide up-to-date information regarding arts and
entertainment events, community activities, recreation, business, shopping,
professional services and news/sports/weather to consumers in metropolitan
areas. Ticketmaster Online offers consumers up-to-date information on live
entertainment events and a convenient means of purchasing tickets for live
events and related merchandise on the World Wide Web (the "Web") in 44 states
and Canada and the United Kingdom. Consumers can access the Ticketmaster Online
service at www.ticketmaster.com and from CitySearch owned and operated city
guides at www.citysearch.com through numerous direct links from banners and
event profiles. Subject to certain limitations, Ticketmaster Online is the
exclusive agent for Ticketmaster Corp., a leading provider of live event
automated ticketing services in the United States, for the online sale of
tickets to live events presented by Ticketmaster Corp.'s clients. The Company
intends to do business under the name "CitySearch."

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Company plans to include selected CitySearch editorial content on the
Ticketmaster Online Web site, thereby providing additional information to
assist purchasing decisions. The Company believes that by expanding its branded
network of local city guides and continuing to offer attractive features and
services, such as live event ticketing, the Company's Web sites will
increasingly attract local, regional and national advertisers that seek to
efficiently target local consumers.

The CitySearch Service

Each local city guide primarily consists of original content developed and
designed specifically for the Web by the Company and its partners. The
CitySearch service is topically organized by categories, such as arts and
entertainment, restaurants and bars, community, shops and services, sports and
outdoors, hotels and tourism, local news and professional services. Within most
of the city guides, consumers can search neighborhood shopping areas, obtain
maps, contact community organizations and vendors by e-mail, and engage in
bulletin board discussions with individuals such as local public officials and
celebrities. In CitySearch owned and operated markets, consumers can also
access the Ticketmaster Online Web site through CitySearch city guides to
purchase live event tickets and related merchandise online.

The Company designs and produces custom-built Web sites and performs related
services for local and regional businesses, aggregates them in a local city
guide environment and provides these businesses with the ability to regularly
update and expand their sites. The CitySearch sites offer local and regional
businesses the opportunity to reach and interact with targeted consumers. The
Company builds its city guides with the involvement of local government,
community and volunteer associations, business and professional groups,
educational institutions and local media companies. In addition, content
generated by consumers through e-mail and bulletin boards, available in most
sites, enhances the sense of community in CitySearch sites.

The Company and its partners create original and locally focused content that
can be accessed using targeted, sophisticated searches across all content
residing on a CitySearch site. In contrast, many search engines and
navigational guides access pre-existing content from third-party Web sites that
may be incomplete or out of date. In its owned and operated markets, the
Company offers a broad array of updated, local content that is relevant to
consumers. In certain other markets, the Company provides local media companies
with the necessary technology and business expertise to design, launch and
operate a co-branded CitySearch site.

The Company launched its initial site in the Raleigh-Durham-Chapel Hill
metropolitan area in May 1996. The Company and its partners have since launched
or initiated a roll out of Web-based local city guides in Austin, Baltimore,
Dallas, Los Angeles, Nashville, New York City, Portland, Salt Lake City/Utah,
San Diego, the San Francisco Bay Area and Washington, D.C. in the United States
and in Copenhagen, Melbourne, Stockholm, Sydney and Toronto internationally. As
of September 30, 1998, approximately 8,500 CitySearch business Web sites were
online in the Company's owned and operated markets, while the Company believes
that approximately 8,400 business Web sites were online and operated by the
Company's local media partners ("partner-led markets").

The Company intends to enter targeted geographic regions, including those in
which Ticketmaster Corp. clients are located, through either an owned and
operated presence or by entering into partnerships and strategic alliances with
major media and telephony companies. The Company has, for instance, partnered
with The Baltimore Sun, The Dallas Morning News, the Los Angeles Times, The San
Diego Union-Tribune, Washingtonpost.Newsweek Interactive, Big Colour Pages
(independent yellow pages of Australia), The Melbourne Age, Schibsted
ASA/Scandinavia Online (Copenhagen, Oslo and Stockholm), The Sydney Morning
Herald, Tele-Direct (the yellow pages subsidiary of Bell Canada, Inc.) and the
Toronto Star. These major media partners bring capital, brand recognition,
promotional strength and local knowledge to their CitySearch sites and allow
the Company to build out its national and international network of sites faster
than it could solely through owned and operated sites.

The Company has also entered into an agreement with Classified Ventures,
L.L.C. ("Classified Ventures"), a leading provider of online classified
advertising products and services to the newspaper industry that was

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formed by eight leading newspaper companies. The Company has licensed elements
of its technology and business systems to Classified Ventures and provides
services in automotive and real estate classified advertising categories. The
Company has also entered into an agreement with American Express Travel Related
Services Company, Inc. ("American Express") that provides for marketing of
CitySearch's services to American Express merchant customers and various other
electronic commerce ("e-commerce") and marketing initiatives.

The Ticketmaster Online Service

Ticketmaster Online is a leading online ticketing service that enables
consumers to purchase tickets for live music, sports, theater and family
entertainment events presented by Ticketmaster Corp.'s clients and related
merchandise over the Web. The Company believes the online nature of the service
offers improved marketing and distribution capabilities as well as a larger
potential consumer base to Ticketmaster Corp. clients, while providing
consumers more convenient access to live event tickets and related merchandise.
In addition to these services, the Ticketmaster Online Web site provides local
information and original content regarding live events for Ticketmaster Corp.
clients throughout the United States, Canada and the United Kingdom.

Since its commencement of online ticket sales in November 1996, Ticketmaster
Online has experienced significant growth in tickets sold through its Web site.
Gross transaction dollars from ticket sales increased from approximately
$100,000 in November 1996 to approximately $11.7 million in September 1998.
Similarly, tickets sold on the Ticketmaster Online Web site in November 1996
represented less than 0.1% of total tickets sold by Ticketmaster Corp., while
tickets sold online in the month of September 1998 represented approximately
5.3%.

The Ticketmaster Online Web site consists primarily of original content
developed and designed specifically for the Web by Ticketmaster Online.
Information is currently available through a database with information on more
than 3,000 clients, and weekly listings of live events. Scheduled to launch in
the fourth quarter of 1998, the "my Ticketmaster" Web site is being developed
in partnership with Intel Corporation and will permit consumers to order
tickets and related merchandise over the Web while customizing live event
information to individual preferences.

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The Company is a direct, non-wholly-owned subsidiary of Ticketmaster Corp.,
which is an indirect wholly-owned subsidiary of USAi. USAi acquired a
controlling interest in Ticketmaster Group in July 1997 and the remainder of
the outstanding equity in Ticketmaster Group in June 1998, at which time
Ticketmaster Group became a wholly-owned subsidiary of USAi (the "Ticketmaster
Transaction"). The Company's other equity investors include entities affiliated
with The Goldman Sachs Group, L.P., Washingtonpost.Newsweek Interactive, The
Times Mirror Company, CPQ Holdings, Inc. (an entity affiliated with Compaq
Computer Corporation), Global Retail Partners, L.P., American Express, Intel
Corporation, AT&T Ventures, T. Rowe Price Threshold Fund III, L.P. and
Schibsted ASA.

The Company's principal executive offices are located at 790 E. Colorado
Boulevard, Suite 200, Pasadena, California 91101, and its telephone number at
that address is (626) 405-0050.

TICKETMASTER ONLINE-CITYSEARCH MERGER

On September 28, 1998, pursuant to an Amended and Restated Agreement and Plan
of Reorganization, dated August 12, 1998 (the "Merger Agreement"), by and among
CitySearch, USAi, Ticketmaster Group, Ticketmaster Corp., Ticketmaster Online,
and Tiberius, Inc., a wholly-owned subsidiary of CitySearch ("Merger Sub"),
Merger Sub was merged with and into Ticketmaster Online, with Ticketmaster
Online continuing as the surviving corporation and as a wholly-owned subsidiary
of the Company. Immediately prior to the Merger, all of the outstanding shares
of CitySearch Convertible Preferred Stock were converted into shares of
CitySearch Common Stock, and all outstanding options and warrants to purchase
shares of CitySearch Convertible Preferred Stock were converted into options or
warrants to purchase shares of CitySearch Common Stock. At the effective time
of the Merger, the outstanding capital stock of Ticketmaster Online was
converted into an aggregate of 37,238,000 shares of CitySearch Common Stock
which pursuant to the Reclassification was subsequently converted into Class A
Common Stock of the Company. In addition, all outstanding warrants and options

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exercisable for shares of CitySearch Common Stock became exercisable for shares
of Class A Common Stock (according to their existing vesting schedules and
other terms).

Pursuant to the terms of the Merger Agreement, on October 2, 1998, USAi
commenced an offer (the "Tender Offer") to purchase from holders of Common
Stock (including holders of outstanding options or warrants to acquire Common
Stock that were vested and exercisable at the effective time of the Merger) and
transferees of all such holders (excluding USAi and its affiliates) (each a
"Current CitySearch Holder") up to 20% of each such holder's shares of Common
Stock (including shares of Common Stock issuable upon exercise of options or
warrants that were vested and exercisable at the effective time of the Merger)
at a per share price of $8.67 net to the seller in cash. The Merger Agreement
provides that, notwithstanding the foregoing, USAi is not obligated to purchase
in the Tender Offer more than an aggregate of 2,924,339 shares of Common Stock.
The Tender Offer is scheduled to expire on November 3, 1998. See "Ticketmaster
Online-CitySearch Merger--Merger Agreement."

Following the Merger, USAi beneficially owns 40,482,641 shares of Class A
Common Stock, or approximately 64.8% of the outstanding Common Stock. Assuming
USAi purchases the total number of shares of Class A Common Stock of the
Company subject to the Tender Offer, USAi will beneficially own 43,406,980
shares of Class A Common Stock, or approximately 69.5%, of the outstanding
Common Stock prior to this offering and, immediately after this offering, will
beneficially own approximately % of the outstanding Common Stock,
representing approximately % of the total voting power of the Common Stock.
As a result of such ownership, after giving effect to this offering, USAi will
be able to control the outcome of substantially all matters submitted to a vote
of or for the consent of stockholders, including the election of directors and
the approval of other corporate transactions. See "Risk Factors--Control by and
Relationship with USAi," "--Potential Conflicts of Interest," "--Possible
Future Sales of Common Stock by USAi," "Principal Stockholders" and
"Ticketmaster Online-CitySearch Merger."

Concurrently with the execution of the Merger Agreement, Ticketmaster Corp.,
Ticketmaster Online and USAi entered into a License and Services Agreement,
dated August 12, 1998 (the "Ticketmaster License Agreement"). The Ticketmaster
License Agreement designates Ticketmaster Online as Ticketmaster Corp.'s
exclusive online sales agent for live event tickets and allows Ticketmaster
Online to use the Ticketmaster trademark in connection with online promotion of
sales of tickets to live events presented by Ticketmaster Corp.'s clients,
subject to certain limitations. For purposes of the Ticketmaster License
Agreement, "online sales" is defined to include sales over the Web and any
sales through commercial online services such as America Online and @Home. The
Ticketmaster License Agreement also grants Ticketmaster Online certain non-
exclusive rights to conduct online solicitation of sales for merchandise
offered by Ticketmaster Corp. The Ticketmaster License Agreement further
provides that Ticketmaster Online may not enter into arrangements with venues,
ticket sellers or sales agents to sell tickets online and that USAi and its
affiliates may not enter into arrangements with other parties for online sales
of tickets to events presented by Ticketmaster Corp.'s clients. See "Risk
Factors--Dependence on Relationship with Ticketmaster Corp." and "Business--
Ticketmaster Online Business--Ticketmaster License Agreement."

In addition, concurrently with the execution of the Merger Agreement, USAi
loaned $50 million in cash to CitySearch in exchange for a convertible note
with a $50 million principal amount (the "Convertible Note"). The Convertible
Note bears interest at a rate of 7.00% per annum and is generally due and
payable on the earlier to occur of (a) August 13, 2005 or (b) 20 days following
the closing of an initial public offering which meets certain criteria. The
Company intends to use approximately $51 million of the net proceeds of this
offering to repay in full the Convertible Note and the accrued interest
thereon. See "Use of Proceeds," "Capitalization" and "Ticketmaster Online-
CitySearch Merger."

RISK FACTORS

No assurances can be given that the Company's objectives or strategies will
be achieved. Prospective investors should carefully consider the factors
discussed in detail elsewhere in this Prospectus under "Risk Factors."

6
<PAGE>

THE OFFERING

<TABLE>
<S> <C>
Class B Common Stock offered...... shares
Common Stock to be outstanding
after this offering:
Class A Common Stock............ 62,486,478 shares(1)
Class B Common Stock............ shares(1)(2)
Total Common Stock............ shares(1)(2)
</TABLE>
- --------

(1) Based on shares of Class A Common Stock outstanding as of September 30,
1998. Does not include (i) 3,890,694 shares of Class A Common Stock
issuable upon exercise of options outstanding at September 30, 1998 at a
weighted average exercise price of $3.66 per share under the Company's 1996
Stock Option Plan (the "1996 Stock Plan") and (ii) 93,107 shares of Class A
Common Stock issuable upon exercise of an outstanding warrant at an
exercise price of $8.86 per share held by NationsBanc Montgomery Securities
LLC. See "Capitalization," "Management--Employee Benefit Plans,"
"Underwriting" and Note 6 of Notes to Consolidated Financial Statements of
Ticketmaster Online.

(2) Does not include, as of the date of this Prospectus, an aggregate of
shares of Class B Common Stock available for future grant or issuance under
the Company's 1998 Stock Option Plan (the "1998 Stock Plan") and 1998
Employee Stock Purchase Plan (the "Purchase Plan"). See "Management--
Employee Benefit Plans."

Relative rights of Class A Common
Stock
and Class B Common Stock...........
The Class A Common Stock and Class B
Common Stock have substantially identical
rights other than with respect to voting,
conversion and transfer. Except as
otherwise required by applicable law, the
Class A Common Stock entitles its holders
to 15 votes per share while the Class B
Common Stock entitles its holders to one
vote per share on all matters submitted
to a vote or for the consent of
stockholders. Except as otherwise
required by applicable law, the Class A
Common Stock and Class B Common Stock
will vote together as a single class on
all matters submitted to a vote or for
the consent of stockholders. The shares
of Class A Common Stock are convertible
at any time at the option of the holder
into shares of Class B Common Stock on a
share-for-share basis. In addition,
shares of Class A Common Stock will
automatically be converted into a like
number of shares of Class B Common Stock
upon any sale, pledge, conveyance,
hypothecation, assignment or other
transfer (a "Transfer") of such shares by
the initial registered holder, except
under certain limited circumstances. See
"Description of Capital Stock."

Controlling stockholder.............
USAi beneficially owns 40,482,641 shares
of Class A Common Stock, or approximately
64.8% of the Company's outstanding Common
Stock and, immediately after this
offering, will beneficially own
approximately % of the outstanding
Common Stock of the Company, representing
approximately % of the total voting
power of the Common Stock. Assuming USAi
purchases the total number of shares of
Class A Common Stock subject to the
Tender Offer, USAi will beneficially own
43,406,980 shares of Class A Common
Stock, or approximately 69.5% of the
Company's outstanding Common Stock prior
to this

7
<PAGE>

offering and, immediately after this
offering, will beneficially own
approximately % of the outstanding
Common Stock, representing approximately
% of the total voting power of the
Common Stock. See "Risk Factors--Control
by and Relationship with USAi," "--
Potential Conflicts of Interest," "--
Possible Future Sales of Common Stock by
USAi," "Principal Stockholders" and
"Ticketmaster Online-CitySearch Merger."

Use of proceeds.....................
The Company intends to use approximately
$51 million of the net proceeds of this
offering to repay in full the Convertible
Note and the accrued interest thereon.
The Convertible Note was issued to USAi
upon execution of the Merger Agreement in
exchange for a $50 million loan from USAi
to provide working capital to the
Company. The remaining proceeds from this
offering and the Company's available cash
will be used for capital expenditures
relating to the Company's Web sites, such
as enhancements to the Company's server
and networking and infrastructure,
working capital and other general
corporate purposes, including sales and
marketing. See "Use of Proceeds" and
"Ticketmaster Online-CitySearch Merger--
Convertible Note."

Proposed Nasdaq symbol.............. TMCS

8
<PAGE>

CITYSEARCH SUMMARY HISTORICAL FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

The CitySearch summary historical financial data set forth below have been
derived from the Consolidated Financial Statements of CitySearch, Inc. and the
Notes thereto set forth elsewhere in this Prospectus and should be read in
conjunction with those financial statements and notes. The data set forth below
do not give effect to the Merger.

<TABLE>
<CAPTION>
SEPTEMBER 28,
1998(1)
-------------
<S> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents........................................ $57,877
Working capital.................................................. 50,940
Total assets..................................................... 65,209
Long-term obligations, less current portion...................... 52,320
Stockholders' equity............................................. 3,837
</TABLE>
- --------

(1) The historical financial data of CitySearch is presented through the
effective date of the Merger (September 28, 1998). References throughout
this Prospectus to the nine months ended September 28, 1998 refer to the
period from January 1, 1998 through September 28, 1998.

(2) Shares used to compute pro forma basic and diluted net loss per share give
effect to the conversion of CitySearch Convertible Preferred Stock as if
converted at the earlier of the beginning of the period or issue date. See
Note 1 of Notes to Consolidated Financial Statements of CitySearch, Inc.
for an explanation of the determination of the number of shares used to
compute historical and pro forma basic and diluted net loss per share.

9
<PAGE>

TICKETMASTER ONLINE SUMMARY HISTORICAL FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

The Ticketmaster Online summary historical financial data set forth below
have been derived from the Financial Statements of Ticketmaster Online and the
Notes thereto set forth elsewhere in this Prospectus and should be read in
conjunction with those financial statements and notes. The data set forth below
presents the historical financial information of Ticketmaster Online prior to
the Merger and the combined financial information of Ticketmaster Online and
CitySearch for the two-day period ended September 30, 1998 subsequent to the
Merger.

<TABLE>
<CAPTION>
SEPTEMBER 30,
1998(5) AS ADJUSTED(6)
------------- --------------
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents......................... $ 57,877
Working capital................................... 49,364
Total assets(4)................................... 363,757
Long-term obligations, less current portion....... 52,320
Stockholders' equity(4)........................... 299,953
</TABLE>
- --------
(1) Ticketmaster Online did not incur costs or expenses until June 1995 and
commenced selling live event tickets and merchandise online in November
1996.

(2) Includes the operating results of CitySearch from September 29, 1998 to
September 30, 1998 as a result of the Merger.

(3) Basic and diluted net income (loss) per equivalent share is based on the
number of shares of CitySearch Common Stock exchanged in the Merger for all
periods presented, and for the eight months ended September 30, 1998
includes the outstanding Class A Common Stock for two days subsequent to
the Merger in the calculation of average shares.

(4) Total assets and stockholders' equity reflect a preliminary allocation of
$298.3 million of goodwill resulting from the Merger and the Ticketmaster
Transaction.

(5) The balance sheet data at September 30, 1998 represent the combined assets
and liabilities of Ticketmaster Online and CitySearch as a result of the
Merger.

(6) Adjusted to reflect the sale and issuance of the shares of Class B
Common Stock offered hereby at an assumed initial public offering price of
$ per share (after deducting the underwriting discount and estimated
offering expenses payable by the Company) and the application of the
estimated net proceeds from this offering. See "Use of Proceeds" and
"Capitalization."

10
<PAGE>

SUMMARY UNAUDITED PRO FORMA COMBINED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

The summary unaudited pro forma combined financial data set forth below give
effect to the Merger and the Ticketmaster Transaction. The Merger was accounted
for using the "reverse purchase" method of accounting, pursuant to which
Ticketmaster Online was treated as the acquiring entity for accounting
purposes, and the assets and liabilities of CitySearch will be recorded at
their respective fair values. The unaudited pro forma combined statements of
operations data give effect to the Merger and the Ticketmaster Transaction as
if they had occurred at the beginning of the respective periods. The summary
unaudited pro forma combined financial data have been derived from the
unaudited pro forma condensed combined financial statements and notes thereto
set forth elsewhere herein and should be read in conjunction with those
financial statements and notes. The summary unaudited pro forma combined
financial data do not purport to be indicative of future operations and should
not be construed as representative of future operations of the combined
companies.

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
1997 1998
------------ -------------
(IN THOUSANDS, EXCEPT
PER SHARE DATA)
<S> <C> <C>
PRO FORMA COMBINED STATEMENTS OF OPERATIONS DATA:
Revenues:
Ticketing operations.............................. $ 5,442 $ 10,571
Sponsorship and advertising....................... 3,965 4,915
City guide and related............................ 6,072 11,069
-------- --------
Total revenues.................................. 15,479 26,555
Costs and expenses:
Cost of ticketing operations...................... 3,865 7,810
Cost of city guide and related.................... 9,688 10,588
Sales and marketing............................... 20,611 15,734
Research and development.......................... 7,182 5,038
General and administrative........................ 6,993 5,998
Amortization of goodwill.......................... 51,725 38,795
Merger and other transactions costs............... -- 3,101
-------- --------
Total costs and expenses........................ 100,064 87,064
-------- --------
Loss from operations............................... (84,585) (60,509)
Interest expense, net.............................. (3,277) (1,929)
-------- --------
Loss before provision for income taxes............. (87,862) (62,438)
Provision for income taxes......................... 8 --
-------- --------
Net loss........................................... $(87,870) $(62,438)
======== ========
Basic and diluted net loss per share............... $ (1.57) $ (1.01)
Shares used to compute basic and diluted net loss
per share......................................... 55,883 61,798
</TABLE>

11
<PAGE>

RISK FACTORS

This offering involves a high degree of risk. In addition to the other
information set forth in this Prospectus, the following risk factors should be
considered carefully in evaluating the Company and its business before
purchasing any of the shares of Class B Common Stock offered hereby. This
Prospectus contains forward-looking statements that involve risks and
uncertainties, which statements may be deemed to include, but are not limited
to, the Company's plans to grow its online businesses, to expand the range of
services offered by the Company, to increase the number of customers and
venues using the Company's services and the dollar volume of transactions
booked through the Company's Web sites, to otherwise expand its business
activities in new cities and foreign countries, to retain key personnel or
otherwise to implement its strategy as well as the Company's beliefs regarding
consumer acceptance of the Internet as a means of commerce and the use of the
Internet as a source of advertising. Such statements include statements
regarding the belief or current expectation of the Company's management and
are necessarily based on management's current understanding of the markets and
industries in which the Company operates. That understanding could change or
could prove to be inconsistent with actual developments. The Company's actual
results could differ materially from the results discussed in this Prospectus,
including those anticipated in or implied by any forward-looking statements.
Factors that could cause or contribute to such differences include those
discussed below, as well as those discussed elsewhere in this Prospectus. The
cautionary statements made in this Prospectus should be read as being
applicable to all forward-looking statements wherever they appear in this
Prospectus.

LIMITED OPERATING HISTORY

CitySearch was incorporated in September 1995 and launched its initial local
city guide service in the Raleigh-Durham-Chapel Hill metropolitan area in May
1996. Ticketmaster Online commenced online ticket sales in November 1996.
Accordingly, the CitySearch and Ticketmaster Online businesses each have an
extremely limited operating history upon which an evaluation of the Company
and its prospects can be based. The Company's prospects must be considered in
light of the risks, expenses and difficulties frequently encountered by
companies in their early stages of development, particularly companies in new
and rapidly evolving markets such as those in which the Company competes. Such
risks include, but are not limited to, evolving and unpredictable business
models, management of growth, the Company's ability to anticipate and adapt to
developing markets, acceptance by Internet users, consumers and business
customers of the Company's services and the ability of the Company to
establish relationships with additional strategic partners. To address these
risks, the Company must, among other things, attract and retain an audience of
frequent users of its services in its target markets, maintain its business
customer base, attract a significant number of new CitySearch business
customers in target markets, expand its sales of tickets and merchandise
through Ticketmaster Online, respond to competitive developments, continue to
form and maintain relationships with media partners, continue to attract,
retain and motivate qualified personnel, provide superior customer service,
and continue to develop and upgrade its technologies and commercialize its
services incorporating such technologies. There can be no assurance that the
Company will be successful in addressing such risks, and a failure to do so
could have a material adverse effect on the Company's business, financial
condition and results of operations.

Furthermore, neither the Company, CitySearch nor Ticketmaster Online has any
history as a company with public reporting obligations, and operating the
Company with such obligations will place substantial demands on management and
the Company's operating systems. These increased demands may require further
expenditures to hire management personnel and to expand the Company's
operating systems. To the extent such expenditures precede or are not
subsequently followed by increased revenues, the Company's business, financial
condition and results of operations could be materially and adversely
affected. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

ABSENCE OF HISTORY OF TICKETMASTER ONLINE AS AN INDEPENDENT COMPANY

Prior to the Merger, Ticketmaster Online was operated as a wholly-owned
subsidiary of Ticketmaster Corp. As a result, Ticketmaster Online does not
have an operating history as an independent company. In addition,

12
<PAGE>

prior to the Merger, Ticketmaster Online relied on Ticketmaster Corp. to
provide certain human resource, finance, recruiting, legal and other services.
Neither USAi nor Ticketmaster Corp. is required to provide assistance, funding
or any such services to Ticketmaster Online or the Company, except as
described in the Ticketmaster License Agreement. The Company will be required
to develop and implement the operational, administrative and other systems and
infrastructure necessary to support Ticketmaster Online's current and future
business, and any failure to do so could have a material adverse effect on the
Company's business, financial condition and results of operations. See "--
Dependence on Relationship with Ticketmaster Corp.," "--Control by and
Relationship with USAi" and "--Management of Potential Growth; Risks
Associated with Expansion."

ANTICIPATED CONTINUED OPERATING LOSSES

CitySearch incurred net losses of $308,000, $13.9 million and $36.5 million
for the period from September 20, 1995 (date of formation) to December 31,
1995, and for the years ended December 31, 1996 and 1997, respectively, and
$27.1 million for the nine months ended September 28, 1998. At September 28,
1998, CitySearch had an accumulated deficit of $77.8 million. Ticketmaster
Online incurred net losses of $615,000 for the year ended January 31, 1997 and
generated net income of $2.3 million and $2.5 million for the year ended
January 31, 1998 and the eight months ended September 30, 1998, respectively.
As a result of the Ticketmaster Transaction and the Merger, the Company has
recorded a significant amount of goodwill which will adversely affect the
earnings and profitability of the Company for the foreseeable future. The
Company recorded an aggregate of $298.3 million of goodwill, $154.8 million of
which related to the Ticketmaster Transaction and is to be amortized through
2038, and $143.5 million of which related directly to the Merger and is to be
amortized through 2001. To the extent the amount of such recorded goodwill is
increased or the Company has future losses and is unable to demonstrate its
ability to recover the amount of goodwill recorded during such time periods,
the period of amortization could be shortened, which may further increase
annual amortization charges. In such event, the Company's business, financial
condition and results of operations could be materially and adversely
affected.

The Company believes that its future profitability and success will depend
in large part on, among other things, its ability to generate sufficient
revenues from sales of CitySearch Web sites to businesses and from the
licensing of its technology and business systems to partners setting up
CitySearch services in partner-led markets, the ability of Ticketmaster Corp.
to maintain existing relationships and enter into new relationships with live
event venues, sports franchises, promoters and other clients for which it
sells live event tickets and to obtain or retain for Ticketmaster Online the
right to sell live event tickets and related merchandise online, its ability
to effectively maintain existing relationships with its media partners, its
ability to successfully enter into new strategic relationships for
distribution and increased usage of the Ticketmaster Online and CitySearch
services and its ability to generate sufficient online traffic and sales
volume to achieve profitability of the Ticketmaster Online business.
Accordingly, the Company expects to expend significant financial and
management resources on the roll-out of the CitySearch service in new owned
and operated and partner-led markets, site and content development on its
CitySearch and Ticketmaster Online sites, integration of the CitySearch and
Ticketmaster Online services, strategic relationships, technology and
operating infrastructure. As a result, the Company expects to incur
significant additional losses and continued negative cash flow from operations
for the foreseeable future. There can be no assurance that the Company's
revenues will increase or even continue at their current levels or that the
Company will achieve or maintain profitability or generate cash from
operations in future periods. In view of the rapidly evolving nature of the
Company's business, the limited operating history of both CitySearch and
Ticketmaster Online and the risks associated with integrating these
businesses, the Company believes that period-to-period comparisons of
operating results are not meaningful and should not be relied upon as an
indication of future performance. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

DEPENDENCE ON RELATIONSHIP WITH TICKETMASTER CORP.

In connection with the Merger, Ticketmaster Online, Ticketmaster Corp. and
USAi entered into the Ticketmaster License Agreement, which agreement
designates, subject to certain limitations, Ticketmaster Online as
Ticketmaster Corp.'s exclusive agent for online live event ticket sales and as
its non-exclusive agent

13
<PAGE>

for the online sale of merchandise. See "Business--Ticketmaster Online
Business--Ticketmaster License Agreement."

The Company anticipates that, for the foreseeable future, a majority of its
revenues will be derived from the online sale of tickets and merchandise by
Ticketmaster Online. Ticketmaster Online currently derives and, for the
foreseeable future, will continue to derive a substantial portion of its
revenues from per ticket convenience charges and per order handling charges
paid by consumers in connection with online purchases of tickets to live
events presented or promoted by clients of Ticketmaster Corp. Ticketmaster
Online does not have contractual relationships with the entities for which it
sells tickets as Ticketmaster Corp.'s agent and it is restricted pursuant to
the Ticketmaster License Agreement from having such relationships, whether
with current Ticketmaster Corp. clients or its potential clients. Accordingly,
Ticketmaster Online's future revenues and business success are dependent on
Ticketmaster Corp.'s ability to maintain and renew relationships with its
existing clients and to establish relationships with additional clients.

For the year ended January 31, 1998, Ticketmaster Corp. processed ticket
sales for over 3,000 clients. Approximately 20% of Ticketmaster Corp.'s client
contracts are subject to renewal each year. Ticketmaster Online is dependent
upon Ticketmaster Corp.'s ability to enter into and maintain client contracts
on terms that are favorable to Ticketmaster Corp. and Ticketmaster Online.
There can be no assurance that Ticketmaster Corp. will be able to enter into
or maintain client contracts on such terms.

All of Ticketmaster Online's ticket sales are processed through Ticketmaster
Corp.'s systems. Under the Ticketmaster License Agreement, Ticketmaster Corp.
is generally obligated to provide order fulfillment services at least at the
same level as such services were generally provided as of the date of the
Ticketmaster License Agreement. The Ticketmaster License Agreement obligates
Ticketmaster Corp. to process a specified number of tickets sold online each
year through December 31, 2001. As a result, Ticketmaster Online's future
revenues are dependent upon Ticketmaster Corp.'s ability to process such
online ticket sales in an accurate and timely manner. While the Company
believes that, due to the perpetual right of Ticketmaster Online to serve as
Ticketmaster Corp.'s exclusive agent for online live event ticket sales,
Ticketmaster Corp. has a substantial interest in its relationship with
Ticketmaster Online, there can be no assurance that Ticketmaster Corp. will
provide fulfillment services to Ticketmaster Online in excess of the
requirements of the Ticketmaster License Agreement and, in particular, after
December 31, 2001.

Ticketmaster Online's ability to generate ticket and merchandise sales on
its Web sites is also dependent in part on Ticketmaster Corp.'s ability to
maintain and enhance the Ticketmaster brand name. Any failure on the part of
Ticketmaster Corp. to maintain its existing base of clients, to establish
relationships with new clients upon terms favorable to Ticketmaster Online, to
obtain or retain for Ticketmaster Online the right to sell tickets and
merchandise online for Ticketmaster Corp.'s clients, to process Ticketmaster
Online's online ticket sales in a timely and accurate manner or at levels
necessary to support Ticketmaster Online's business or to maintain and enhance
the Ticketmaster brand name would have a material adverse effect on the
Company's business, financial condition and results of operations. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Ticketmaster Online-CitySearch Merger."

CONTROL BY AND RELATIONSHIP WITH USAI

The Company is currently a direct, non-wholly owned subsidiary of
Ticketmaster Corp., which is an indirect wholly-owned subsidiary of USAi. Upon
completion of this offering, USAi will own approximately % of the total
outstanding Common Stock, representing approximately % of the total voting
power of the Common Stock. Assuming USAi purchases the total number of shares
of Class A Common Stock subject to the Tender Offer, following this offering,
USAi will beneficially own 43,406,980 shares of Class A Common Stock, or
approximately %, of the outstanding Common Stock, representing
approximately % of the total voting power of the Common Stock. Following
this offering, as a result of its ownership of Class A Common Stock, USAi will
have the right to control the outcome of any matter submitted for the vote or
consent of Company stockholders, except where a separate vote of the holders
of Class B Common Stock is required by Delaware law. Subject to applicable
Delaware law, USAi will generally not be restricted with regard to its ability

14
<PAGE>

to control the election of directors of the Company, to cause the amendment of
the Company's Amended and Restated Certificate of Incorporation, which will be
in effect immediately prior to the consummation of this offering (the
"Restated Certificate of Incorporation"), Amended and Restated Bylaws, which
will be in effect immediately prior to the consummation of this offering (the
"Restated Bylaws") and other documents (including the Ticketmaster License
Agreement) or generally to exercise a controlling influence over the business
and affairs of the Company, including any determinations with respect to
mergers or other business combinations involving the Company, the acquisition
or disposition of assets by the Company, future issuances of equity securities
by the Company, the incurrence of indebtedness by the Company and the payment
of dividends with respect to the Common Stock. Similarly, USAi will have the
power to prevent, delay or cause a change in control of the Company and could
take other actions that might be favorable to USAi but not necessarily
favorable to other stockholders of the Company. In addition, because of the
importance to the Company of the relationship between Ticketmaster Online and
Ticketmaster Corp., an indirect wholly-owned subsidiary of USAi, the Company
is to a large degree dependent on its business relationships with its
controlling stockholder. There can be no assurance that conflicts,
disagreements or other disputes between the Company and USAi will not arise,
or that such disputes will be resolved in a manner that does not adversely
affect the business, financial condition or results of operations of the
Company. There can be no assurance that USAi's ownership of the Company's
Class A Common Stock or its other relationships with the Company will not have
a material adverse effect on the Company's business, financial condition or
results of operations, on its other stockholders or on the market price of the
Company's Class B Common Stock.

Subject to applicable Delaware law, USAi could elect to sell all or a
substantial portion of its equity interest in the Company to a third party,
which would represent a controlling or substantial interest in the Company,
without offering to other stockholders of the Company the opportunity to
participate in such a transaction. Although there can be no assurance in this
regard, USAi has advised the Company that its current intent is to continue to
hold for the foreseeable future the shares of Class A Common Stock owned by
it. In the event of a sale of USAi's interest to a third party, such third
party may be able to control the Company in the manner that USAi is able to
control the Company, including with respect to the election of a majority of
the members of the Company's Board of Directors. Such a sale may adversely
affect the market price of the Class B Common Stock and may adversely affect
the Company's business, financial condition and results of operations. See "--
Possible Future Sales of Common Stock by USAi."

Barry Diller, who is a director of the Company, is also the Chairman and
Chief Executive Officer of USAi. In addition, as described in documents
publicly filed with the Securities and Exchange Commission (the "Commission")
by USAi, pursuant to stockholder and governance agreements among Mr. Diller,
Liberty Media Corp. ("Liberty,") a subsidiary of Tele-Communications, Inc.
("TCI"), The Seagram Company Ltd. ("Seagram"), Universal Studios, Inc.
("Universal," a subsidiary of Seagram) and USAi, Mr. Diller generally has the
right to control the outcome of any matter submitted to a vote or for the
consent of USAi stockholders, other than with respect to certain fundamental
changes relating to USAi, in which case the consent of Mr. Diller, Liberty and
Universal is generally required for any such fundamental change. Upon Mr.
Diller's departure from USAi, USAi may change in various fundamental ways,
including the possible exercise of control by Universal over the management
and governance of USAi, subject to certain rights of Liberty. Although Mr.
Diller has a significant equity interest in USAi, including in the form of
options to acquire shares of the common stock, par value $.01 per share, of
USAi (the "USAi Common Stock"), some of which are not fully vested and require
Mr. Diller's continued employment for a specified period to so vest, Mr.
Diller does not have an employment or noncompetition agreement with USAi and
is not obligated to remain as an executive officer or director of that
company. Any change in the management, operations or business of USAi could
have a material adverse effect on the Company's relationship with USAi and
Ticketmaster Corp. and could materially and adversely affect the Company's
business, financial condition and results of operations.

POTENTIAL CONFLICTS OF INTEREST

Conflicts of interest may arise between the Company, including Ticketmaster
Online, on the one hand, and USAi and its affiliates, including Ticketmaster
Corp., on the other hand, in areas relating to past, ongoing and

15
<PAGE>

future relationships, including the Ticketmaster License Agreement, corporate
opportunities, indemnity arrangements, tax and intellectual property matters,
potential acquisitions or financing transactions, sales or other dispositions
by USAi of shares of the Company's Class A Common Stock held by it and the
exercise by USAi of its ability to control the management and affairs of the
Company. These conflicts also may include disagreements regarding the
Ticketmaster License Agreement, including with respect to possible amendments
to, or modifications or waivers of provisions of, such agreement. Due to
USAi's ability to control the Company's Board of Directors and subject to
Delaware law, USAi may be able to effect such amendments without seeking the
approval of any other party. Such amendments, modifications or waivers may
adversely affect the Company's business, financial condition and results of
operations. Ownership interests of directors or officers of the Company in the
USAi Common Stock, or service as both a director or officer of the Company and
a director, officer or employee of USAi, could create or appear to create
potential conflicts of interest when directors and officers are faced with
decisions that could have different implications for the Company and USAi.
Seven of the members of the Company's Board of Directors are also directors,
officers or employees of USAi. See "Management" and "Ticketmaster Online--
CitySearch Merger."

In addition, USAi is engaged in a diverse range of media and entertainment-
related businesses, including businesses engaged in electronic and online
commerce (including Home Shopping Network and its USA Interactive business),
and these businesses may have interests that conflict or compete in some
manner with the businesses of the Company. Subject to applicable Delaware law,
USAi is under no obligation, and has not indicated any intention, to share any
future business opportunities available to it with the Company, except as
expressly provided by the Ticketmaster License Agreement. The Company's
Restated Certificate of Incorporation will also include provisions which
provide that (i) USAi shall have no duty to refrain from engaging in the same
or similar activities or lines of business of the Company, thereby competing
with the Company, (ii) USAi, its officers, directors and employees shall not
be liable to the Company or its stockholders for breach of any fiduciary duty
by reason of any activities of USAi in competition with the Company, and (iii)
USAi shall have no duty to communicate or offer corporate opportunities to the
Company and shall not be liable for breach of any fiduciary duty as a
stockholder of the Company in connection with such opportunities, provided
that certain procedures set forth in the Restated Certificate of Incorporation
are followed. There can be no assurance that any conflicts that may arise
between the Company and USAi, any loss of a corporate opportunity to USAi that
might otherwise be available to the Company or any engagement by USAi (subject
to the limitations of the Ticketmaster License Agreement) in any activity that
is similar to the businesses of the Company will not have a material adverse
effect on the Company's business, financial condition and results of
operations or its other stockholders. See "Description of Capital Stock."

POSSIBLE FUTURE SALES OF COMMON STOCK BY USAI

Subject to applicable federal securities laws and the restrictions set forth
below, after completion of this offering, USAi may sell a significant portion
of the shares of the Company's Class A Common Stock beneficially owned by it
(which, after completion of this offering, and assuming USAi purchases the
total number of shares of Class A Common Stock subject to the Tender Offer,
would represent approximately % of the outstanding Common Stock) or
distribute any or all of such shares of Class A Common Stock to its
stockholders. Pursuant to the Company's Restated Certificate of Incorporation,
each share of Class A Common Stock will be converted automatically into one
share of Class B Common Stock upon any Transfer by the initial registered
holder thereof (except in certain cases such as transfers to affiliates or
other holders of Class A Common Stock). See "Description of Capital Stock."
Any sales or distribution by USAi of substantial amounts of Class B Common
Stock issuable upon conversion of the Class A Common Stock held by USAi in the
public market or to its stockholders, or a transfer of beneficial ownership of
shares of Class A Common Stock that does not constitute a Transfer pursuant to
the Restated Certificate of Incorporation, or the perception that such
transfers, sales or distribution could occur, could adversely affect the
prevailing market prices for the Class B Common Stock. USAi is not subject to
any obligation to retain any portion of its controlling interest in the
Company, except that USAi has agreed not to sell or otherwise dispose of any
shares of its capital stock of the Company for a period of 180 days after the
date of this Prospectus without the prior written consent of NationsBanc
Montgomery

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<PAGE>

Securities LLC. See "Underwriting." Although there can be no assurance in this
regard, USAi has advised the Company that its current intent is to continue to
hold for the foreseeable future the shares of Class A Common Stock owned by
it. As a result, there can be no assurance concerning the period of time
during which USAi will maintain its beneficial ownership of capital stock of
the Company owned by it following this offering. Moreover, there can be no
assurance that, in any transfer by USAi of a controlling interest in the
Company, any other holders of Common Stock will be able to participate in such
transaction or will realize any premium or other amounts with respect to any
of their shares of such Common Stock.

COMPANY INTEGRATION RISKS

Prior to the Merger, CitySearch operated independently and Ticketmaster
Online operated as a wholly-owned subsidiary of Ticketmaster Corp. and USAi.
The Company's future success will depend to a significant extent on the
efficient, effective and timely integration of CitySearch's operations with
Ticketmaster Online's operations. Such integration will include the
combination of different business models, different technologies and personnel
with different expertise and backgrounds and the development of services in
which CitySearch's local content and Ticketmaster Online's live event-specific
content and transactional capabilities are integrated with each other. The
Company also will be required to evaluate its existing technologies and its
ability to support the expanded range of products and services the Company is
expected to offer. As a result of the Merger, the Company may attempt to link
the Ticketmaster Online ticketing service more closely with certain of its
CitySearch city guides. The Company has not executed such integration in the
past, and such integration could require adaptation of existing technologies
or development of new technologies. There can be no assurance that CitySearch
or Ticketmaster Online will be able to coordinate either operational or
technological integration effectively or efficiently with each other. Failure
to effectively accomplish the integration of the two companies' operations or
the loss of any of CitySearch's or Ticketmaster Online's key employees could
have a material adverse effect on the Company's business, financial condition
and results of operations.

DEPENDENCE ON INCREASED TICKET SALES

The Company's future success, and in particular its revenues and operating
results, depends in large part upon its ability to increase the dollar volume
of transactions through Ticketmaster Online, either by generating
significantly higher levels of traffic to its CitySearch and Ticketmaster
Online Web sites or by increasing the percentage of visitors to its online
sites who purchase tickets or merchandise, or through some combination
thereof. The Company's ability to increase ticket sales will also depend in
part upon Ticketmaster Corp.'s ability to obtain the rights to sell tickets
online for new Ticketmaster Corp. clients. The Company must also increase the
number of repeat purchasers of tickets and merchandise through Ticketmaster
Online. Under the Ticketmaster License Agreement, Ticketmaster Corp. is
generally obligated to provide order fulfillment services at least at the same
level as such services were generally provided as of the date of such
agreement. The Ticketmaster License Agreement obligates Ticketmaster Corp. to
process a specified number of tickets sold online each year through 2001.
While the Company believes that, due to the perpetual right of Ticketmaster
Online to serve as Ticketmaster Corp.'s exclusive agent for online live event
ticket sales, Ticketmaster Corp. has a substantial interest in its
relationship with Ticketmaster Online, there can be no assurance that
Ticketmaster Corp. will provide fulfillment services to Ticketmaster Online in
excess of the requirements of the Ticketmaster License Agreement and, in
particular, after December 31, 2001. In addition, in order to generate
sufficient revenues from sponsorship and advertising on the Ticketmaster
Online Web sites, the Company must deliver a high level of service and
compelling content in order to attract users with demographic characteristics
valuable to sponsors and advertisers. There can be no assurance that the
Company will be able to increase the dollar volume of transactions booked
through its online sites, increase traffic to its online sites, increase the
percentage of visitors who purchase tickets or merchandise, increase the
number of repeat purchasers or increase its sponsorship and advertising
revenues. In addition, there can be no assurance that the Company will be able
to offer its online ticketing services through its city guides in its partner-
led markets on terms acceptable to the Company. The failure to do one or more
of the foregoing would likely have a material adverse effect on the Company's
business, financial condition and results of operations. See "--Dependence on
Relationship with Ticketmaster Corp." and "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

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<PAGE>

FUTURE CAPITAL NEEDS; UNCERTAINTY OF ADDITIONAL FINANCING

Since inception, CitySearch has experienced negative cash flow from
operations and the Company expects to continue to experience significant
negative cash flow from operations for the foreseeable future. USAi has no
obligation or agreement to provide any future capital or other funding to the
Company. The Company currently believes that its existing capital resources,
including the proceeds from the Convertible Note, combined with the net
proceeds of this offering, after repayment in full of the Convertible Note and
any accrued interest thereon, will be sufficient to meet its presently
anticipated cash requirements through at least the next 12 months. Thereafter,
the Company may be required to raise additional funds. No assurance can be
given that the Company will not be required to raise additional financing
prior to such time. If additional funds are raised through the issuance of
equity securities, stockholders of the Company may experience significant
dilution. Furthermore, there can be no assurance that additional financing
will be available when needed or that if available, such financing will
include terms favorable to the Company or its stockholders. If such financing
is not available when required or is not available on acceptable terms, the
Company may be unable to develop or enhance its services, take advantage of
business opportunities or respond to competitive pressures, any of which could
have a material adverse effect on the Company's business, financial condition
and results of operations. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital
Resources."

UNPREDICTABILITY OF FUTURE REVENUES; FLUCTUATIONS IN OPERATING RESULTS

As a result of CitySearch's limited operating history and Ticketmaster
Online's lack of independent operating history, and the emerging nature of the
markets in which the Company competes, the Company is unable to accurately
forecast its future revenues. The Company's current and future expense levels
are based predominantly on its operating plans and estimates of future
revenues and are to a large extent fixed. For example, the CitySearch business
model, particularly in its owned and operated markets, requires significant
staffing to develop content and to create and maintain relationships with
small- and medium-size businesses. The Company may be unable to adjust
spending in a timely manner to compensate for any unexpected revenue
shortfall. Accordingly, any significant shortfall in revenues would likely
have an immediate material adverse effect on the Company's business, financial
condition and results of operations. Furthermore, the Company currently
intends to increase its operating expenses to roll out its CitySearch service
in new markets, to fund increased sales and marketing and customer service
operations, to attempt to further develop its technology infrastructure and to
integrate its local content with the event-specific content and transactional
capabilities of Ticketmaster Online. To the extent such expenses precede or
are not subsequently followed by increased revenues, the Company's operating
results will fluctuate and net anticipated losses in a given quarter may be
greater than expected.

The Company expects to experience significant fluctuations in its future
operating results due to a variety of factors, many of which are outside of
the Company's control. Factors that may adversely affect the Company's
operating results include, but are not limited to, Ticketmaster Corp.'s
ability to maintain and increase the number of clients for which it provides
online ticketing services and convenience charges relating thereto, the
ability of the Company's partners to meet roll-out schedules for CitySearch
city guide services, the timing and amount of license and royalty payments
from the Company's partners, the Company's ability to increase the volume of
online ticket sales through the Ticketmaster Online Web site, the Company's
ability to retain existing business customers, attract new business customers
at a steady rate and maintain customer satisfaction, the timing and volume of
new business Web site orders and the Company's capacity to meet such orders,
the Company's ability to maintain or increase current rates of sales
productivity, the announcement or introduction of new or enhanced sites and
services by the Company or its competitors, the amount of traffic on the
Company's online sites, the amount of expenditures for online advertising by
businesses, the level of use of the Web and online services and consumer
acceptance of the Internet for services such as those offered by the Company,
the Company's ability to upgrade and develop its systems and attract personnel
in a timely and effective manner, the amount and timing of operating costs and
capital expenditures relating to expansion of the Company's business and
infrastructure, technical difficulties, system downtime or Internet brownouts,
political or economic events affecting the cities in which the Company
operates and general economic conditions. Unfavorable changes in any of the
above factors

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<PAGE>

could adversely affect the Company's revenues, gross margins and results of
operations in future periods. In addition, Ticketmaster Online derives a
majority of its revenues directly or indirectly from the sale of tickets and
related merchandise for live entertainment, sporting and leisure events and is
directly affected by the popularity, frequency and location of such events.
Factors affecting the demand for and attendance of such events include,
without limitation, general economic conditions, consumer trends and work
stoppages. Any occurrence or condition that results in decreased attendance or
demand for such entertainment, sporting and leisure events would likely have a
material adverse effect on the Company's business, financial condition and
results of operations.

As a result of the foregoing, the Company believes that period-to-period
comparisons of its results of operations should not be relied upon as an
indication of future performance. In addition, the results of any quarterly
period are not indicative of results to be expected for a full fiscal year.
The foregoing factors which are largely unpredictable and may cause
significant fluctuations in operating results may cause the Company's annual
or quarterly results of operations to be below the expectations of public
market analysts or investors, in which case the market price of the Class B
Common Stock could be materially and adversely affected. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

NEW AND UNCERTAIN MARKETS; UNPROVEN MARKET ACCEPTANCE; RISK OF SIGNIFICANT
BUSINESS CUSTOMER TURNOVER

The markets for the Company's services have only recently begun to develop,
are rapidly evolving and are characterized by a number of entrants that have
introduced or plan to introduce competing services. As is typical in the case
of new and rapidly evolving industries, demand and market acceptance for
recently introduced services are subject to a high level of uncertainty and
risk. It is therefore difficult to predict the size and future growth rate, if
any, of these markets. There can be no assurance that the markets for the
Company's services will develop or that demand for the Company's services will
emerge or become economically sustainable. The success of the Ticketmaster
Online service will depend on the willingness of consumers to purchase tickets
to live events and related merchandise online and on Ticketmaster Online's
ability to significantly increase online traffic and sales volume. The success
of CitySearch's city guide service will depend on the willingness of local
businesses to pay for custom business Web sites developed by CitySearch and to
retain the service, which in turn may depend on the popularity of the guides
to consumers and on the actual or perceived revenues attributable to the
services. If such businesses are unwilling to pay for the CitySearch service
or retain the service, if the markets for the Company's services otherwise
fail to develop or develop more slowly than anticipated or if business
customer turnover rates are higher than expected by the Company, the Company's
business, financial condition and results of operations could be materially
and adversely affected. In addition, the turnover rate of business customers
using CitySearch's service has been higher than CitySearch had anticipated,
and there can be no assurance that such turnover rates would be at levels
which would not in the future materially and adversely affect the Company's
business, financial condition and results of operations. There can be no
assurance that businesses will elect to outsource the design, development and
maintenance of their Web sites to services such as CitySearch. Businesses may
elect to perform such tasks internally, particularly if third-party providers
of such services prove to be unreliable, ineffective or too expensive or if
software companies offer user-friendly and cost-effective tools for such
purpose. In the event that a significant number of businesses internalize such
tasks, such event may have a material adverse effect on the Company's
business, financial condition and results of operations.

DEPENDENCE ON CONTINUED GROWTH OF ONLINE COMMERCE

The Company's future revenues and any future profits are substantially
dependent upon the widespread acceptance and use of the Web and online
services as an effective medium of commerce by consumers. Rapid growth in the
use of and interest in the Web, the Internet and commercial online services is
a recent phenomenon, and there can be no assurance that acceptance and use
will continue to develop or that a sufficiently broad base of consumers will
adopt, and continue to use, the Web and online services as a medium of
commerce, particularly

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<PAGE>

for purchasing tickets to live events and related merchandise. Demand for
recently introduced services and products over the Web and online services is
subject to a high level of uncertainty, and there are relatively few proven
services and products. The development of the Web and online services as a
viable commercial marketplace is subject to a number of factors, including
continued growth in the number of Internet users and users of such services,
concerns about transaction security, continued development of the necessary
technological infrastructure and the development of complementary services and
products. If the Web and online services do not become a viable commercial
marketplace, the Company's business, financial condition and results of
operations would be materially and adversely affected. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

CITYSEARCH'S RELIANCE ON STRATEGIC RELATIONSHIPS

An important element of the Company's current business strategy with respect
to the CitySearch service is to enter into agreements with local media
companies to establish and support city guides. The Company has entered into,
and intends to enter into, agreements with media companies to address
opportunities. In these "partner-led" markets, the Company develops and
designs a city guide for local media companies and licenses certain
intellectual property to such companies in exchange for certain up-front and
continuing license payments and royalty payments. These royalty payments are
based on the amount of revenues generated by such companies through the
partner-led city guides. The Company currently anticipates that royalty
payments from such agreements will constitute a significant portion of the
Company's revenues in future periods. Accordingly, the Company's success will
depend in large part upon the ability of CitySearch's partners to timely
launch city guides in partner-led markets and the extent to which these
partners are able to generate revenue through their city guides. Under the
terms of the Company's agreements with its media company partners, the Company
has very limited control over the amount of time and financial resources that
a partner devotes to the launch of a city guide or over the day-to-day
operations and management of the city guide, including the marketing and sale
of business Web sites to potential business customers. For example, one of the
Company's partners did not launch its city guide in accordance with the
Company's initial expectations, thereby delaying revenues subject to royalty
payments payable to the Company. Furthermore, some of the Company's agreements
grant exclusivity in certain territories. There can be no assurance that the
Company's partners that are in the process of developing new city guides or
future partners will launch their sites in a timely manner, or at all, or that
if launched, such sites will generate revenues consistent with the Company's
expectations. Furthermore, due to the Company's limited experience with
partner-led city guides, it is unable to accurately forecast its revenues to
be derived from these agreements with such partners. Exclusivity provisions in
some of the Company's agreements place certain limitations on the Company's
ability to license its intellectual property to other partners. There also can
be no assurance that the Company will successfully enter into partnerships
with media companies in additional cities with respect to the CitySearch
service. In addition, certain of the Company's agreements with its media
company partners may be terminated for failure to meet performance criteria.
Any failure by one of the Company's proposed partner-led city guides to launch
in a timely manner or by one of the Company's existing partner-led city guides
to generate sufficient revenues, or a failure by the Company to enter into or
to renew agreements with media company partners on terms favorable to the
Company or early termination of certain existing agreements could have a
material adverse effect on the Company's business, financial condition and
results of operations.

The Company has recently entered into a license and services agreement with
Classified Ventures, pursuant to which the Company will license elements of
its technology and business systems to Classified Ventures and provide
services in automotive and real estate classified advertising categories. The
Company expects to receive significant revenues from licensing and service
fees under this agreement. Under this agreement, the Company is restricted
from entering into certain classified advertising markets and from licensing
its technology and business systems to competitors of Classified Ventures. In
addition, this agreement may be terminated effective 2001 by Classified
Ventures and there can be no assurance that it will be renewed on terms
favorable to the Company. The failure of the Company to meet certain
milestones under this agreement, early termination of this agreement or the
inability of the Company to compete with Classified Ventures or to license
technology to competitors of Classified Ventures may have a material adverse
effect on the Company's business, financial condition and results of
operations.

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In its owned and operated markets, the Company has entered into co-promotion
or distribution agreements with a number of television, radio, print media and
online companies. Some of these agreements are of a short duration and there
can be no assurance that the Company's co-promotion or distribution partners
with respect to the CitySearch business will not terminate their agreements
with the Company or that the Company will secure additional co-promotion or
distribution partners in the future which could have a material adverse effect
on the Company's business, financial condition and results of operations.

TICKETMASTER ONLINE'S RELIANCE ON STRATEGIC RELATIONSHIPS

Ticketmaster Online's business is to an extent dependent on its (and
Ticketmaster Corp.'s) relationships with certain strategic partners, including
N2K Inc. ("N2K") (relating to development of a co-branded online music store
available to users of the Ticketmaster Online and N2K Music Boulevard Web
sites) and Yahoo! Inc. ("Yahoo!") (relating to the sharing of certain
Ticketmaster Online Web site and user links between the Yahoo! and
Ticketmaster Online sites). The Company expects to derive significant
benefits, including increased revenues and consumer awareness, from these
agreements. Such arrangements also include, in certain cases, non-competition
provisions that restrict the ability of the Company to engage in similar
activities on its own or with other partners. There can be no assurance that
these relationships will continue, that such strategic relationships will be
successful in any respect or that the Company will be able to find suitable
additional or replacement strategic partners. The failure of such
relationships could have a material adverse effect on the Company's business,
financial condition and results of operations. See "Business--Ticketmaster
Online Business--Ticketmaster Online Strategic Alliances."

DEPENDENCE ON SALES PERSONNEL

The Company currently derives and, for the foreseeable future, intends to
derive a substantial portion of its revenues from sales of business Web sites
to local businesses in markets in which it owns and operates CitySearch city
guides. The Company depends on its direct sales force to sell business Web
sites in these markets. The creation of new revenue from CitySearch's city
guide service and its roll-out in additional cities requires the services of a
highly trained sales force working directly for the Company. Accordingly, a
shortage in the number of trained salespeople could limit the Company's
ability to sell business Web sites as it rolls out its service in new cities
or to maintain or increase its number of business customers in cities in which
CitySearch already operates. The Company has in the past and expects in the
future to experience a high rate of turnover in its direct sales force. There
can be no assurance that such turnover will not increase in the future or have
a material adverse effect on the Company's sales, which could have a material
adverse effect on the Company's business, financial condition and results of
operations. In addition, Ticketmaster Online currently derives a significant
portion of its revenues from the sale of banner advertising and sponsorships.
A shortage in the number of trained salespeople could limit the Company's
ability to sell additional banner advertising or sponsorships or renew
existing sponsorship or advertising relationships which could have a material
adverse effect on the Company's business, financial condition and results of
operations.

DEPENDENCE ON KEY PERSONNEL; NEED TO HIRE ADDITIONAL QUALIFIED PERSONNEL

The Company's success depends to a significant degree upon the continued
contributions of the Company's executive management team, including Charles
Conn, the Company's Chief Executive Officer, Thomas Layton, President and
Chief Operating Officer of the Company, and Robert Perkins, Executive Vice
President, Ticketing and Electronic Commerce. In connection with the Merger,
Mr. Conn and Mr. Layton received certain payments in exchange for entering
into non-competition agreements with CitySearch, Ticketmaster Corp. and
Ticketmaster Online (the "Non-Competition Agreements"), and the vesting of
options to purchase the Company's Class A Common Stock previously granted to
Mr. Conn and Mr. Layton was accelerated so that such options became fully
exercisable upon consummation of the Merger. The loss of the services of
Messrs. Conn, Layton or Perkins or other members of the Company's management
team could have a material adverse effect on the Company's business, financial
condition and results of operations. In addition, Ticketmaster Online has been
managed historically by the management of Ticketmaster Corp. The success of
the Company will depend upon a

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<PAGE>

successful transition of Ticketmaster Online's management responsibility to
the Company's senior management team. The Company's employees, including its
senior officers, may voluntarily terminate their employment with the Company
at any time, and competition for qualified employees is intense. The Company's
success also depends upon its ability to attract and retain additional highly
qualified management, technical and sales and marketing personnel. The process
of locating and hiring such personnel with the combination of skills and
attributes required to carry out the Company's strategy is often lengthy. The
loss of the services of key personnel or the inability to attract additional
qualified personnel could have a material adverse effect on the Company's
business, financial condition and results of operations.

UNCERTAIN ACCEPTANCE AND MAINTENANCE OF CITYSEARCH BRAND

The Company believes that establishing and maintaining the CitySearch brand
is critical to its efforts to attract consumers and business customers to its
sites and that the importance of brand recognition will increase due to the
growing number of Internet sites and relatively low barriers to entry to
providing Internet content. Promotion of the CitySearch brand will depend
largely on the success of CitySearch and its media company partners in
providing high quality Internet content. Under the terms of its agreements
with its media company partners, the Company has very limited control over the
content provided on the CitySearch partners' sites. If consumers and business
customers do not perceive the content of CitySearch's or its partners'
existing sites to be of high quality, the Company will be unsuccessful in
promoting and maintaining the CitySearch brand. Furthermore, not all of the
Company's partners promote the CitySearch brand on their services with a high
level of prominence. In addition, users accessing partner-led market sites
that contain different interfaces from the Company's owned and operated sites
may be confused by the differences in interface or navigation, and any such
confusion may inhibit the Company's ability to develop its brand and network.
Other than links to CitySearch's city sites, the Company has not entered into
a significant distribution relationship with any major online search or
navigation company. In order to attract and retain consumers and business
customers, and to promote the CitySearch brand in response to competitive
pressures, the Company may find it necessary to increase its budget for
content or otherwise to increase substantially its financial commitment to
creating and maintaining a distinct brand loyalty among consumers and business
customers. If either the Company or its media company partners are unable to
provide high quality content or otherwise fail to promote and maintain the
CitySearch brand or if the Company incurs excessive expenses in an attempt to
improve its CitySearch content or promote and maintain the CitySearch brand,
the Company's business, financial condition and results of operations could be
materially and adversely affected.

RISKS ASSOCIATED WITH ROLL OUT OF SERVICES

The Company's future success will depend to a significant extent on its
ability, on its own and with partners, to rapidly roll out the CitySearch
local city guide service in additional cities in the United States and
internationally. As of September 30, 1998, the Company had launched its local
city guide service in 15 metropolitan areas and intends to expand its service
in additional cities in the United States and internationally. There can be no
assurance that the Company will be able to launch the CitySearch service in
additional markets in a cost-effective or timely manner or in accordance with
its planned schedule, or that any newly launched service will achieve market
acceptance. Any new service that is not favorably received by local businesses
or consumers could damage the Company's reputation or the CitySearch brand.
Launching the CitySearch service or future services offered by the Company
will also require significant additional expenses and will strain the
Company's management, financial and operational resources. In particular, the
launch of the CitySearch service in additional cities will require the Company
to expand and upgrade its technology infrastructure and business systems,
including its enterprise management system (i.e., an integrated set of
software tools and business processes for sales force management, Web site
production, customer service and billing) and its business Web site production
system. The Company is in the process of launching a new version of the
software underlying the CitySearch service. There can be no assurance that
this new version will function as intended, and any failure of the software
could have a material adverse effect on the Company's business, financial
condition and results of operations. There can be no assurance that the
existing technology used by Ticketmaster Online would be

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<PAGE>

able to accommodate increased volumes of traffic and transactions that may
arise in the future. Expansion or increases of the Company's technology
capabilities could result in significant expenses. Moreover, the strain placed
on the Company's resources by simultaneous launches of the CitySearch service
in multiple cities and the Company's efforts to integrate CitySearch's local
content with the event-specific content and transactional capabilities of
Ticketmaster Online may adversely affect the roll-out schedule or quality of
the service in a particular city. The Company's failure to launch the
CitySearch service in new markets in a timely and cost effective manner in
accordance with its planned schedule or the lack of market acceptance of new
services would have a material adverse effect on the Company's business,
financial condition and results of operations.

RISKS OF FIXED-PRICE CONTRACTS

The services offered by the Company to CitySearch business customers
typically consist of the design, implementation, hosting and maintenance of
customized Web sites, for which the customers are billed on a fixed-price
basis, consisting of an up-front fee and monthly fees. The Company's failure
to estimate accurately the resources and time required for providing such
services, to manage client expectations effectively regarding the scope of
services to be delivered for the estimated fees or to complete the services
within budget, on time and to clients' satisfaction would expose the Company
to risks associated with cost overruns and customer dissatisfaction, which
could have a material adverse effect on the Company's business, financial
condition and results of operations. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations."

COMPETITION

The markets for local interactive content and services are highly
competitive. Currently, CitySearch's primary competitors include Digital City,
Inc., a company wholly-owned by America Online, Inc. and Tribune Company and
Microsoft Corporation (Sidewalk). CitySearch also competes against search
engine and other site aggregation companies which primarily serve to aggregate
links to sites providing local content such as Excite, Inc. (City.Net), Lycos,
Inc. (Lycos City Guide) and, while it is also a strategic partner of
Ticketmaster Online, Yahoo! (Yahoo! Local). In addition, CitySearch competes
against offerings from media companies, including Cox Interactive Media, Inc.,
Knight-Ridder, Inc. and Zip2 Corporation, as well as offerings from several
telecommunications and cable companies and Internet service providers that
provide local interactive programming such as SBC Communications, Inc. (At
Hand) and MediaOne Group, Inc. (DiveIn). There are also numerous niche
competitors which focus on a specific category or geography and compete with
specific content offerings provided by the Company. The Company may also
compete with online services and other Web site operators, as well as
traditional media such as television, radio and print, for a share of
advertisers' total advertising budgets. The Company faces different
competitors in most of its CitySearch markets. For example, competitors in the
San Francisco Bay Area, the Company's largest market in terms of CitySearch
subscription and services revenues for the six months ended June 30, 1998
(i.e., accounting for 14% of such revenues during such period) primarily
included Microsoft Corporation (Sidewalk), America Online, Inc. (Digital City)
and Yahoo! (SF Bay). Competitors in Raleigh-Durham-Chapel Hill, the Company's
second largest market in terms of subscription and services revenues for the
six months ended June 30, 1998 (i.e., accounting for 13% of such revenues
during such period) primarily included the Web site operated by The Raleigh
News & Observer, WRAL-TV, trianglerestaurants.com, Digital Center
(raleighonline.com), Yahoo! Local and Internet Presentations, Inc.
(citydirect.com). Furthermore, additional major media and other companies with
financial and other resources greater than those of the Company may introduce
new Internet products and services addressing these markets in the future.
There can be no assurance that the Company's competitors will not develop
services that are superior to those of the Company or that achieve greater
market acceptance than the Company's offerings.

The markets for the business of selling live events tickets and related
merchandise is highly competitive and diverse. Ticketmaster Online's
competitors include event facilities and promoters that handle their own
ticket sales and distribution through online and other distribution channels,
live event automated ticketing companies with Web sites which may or may not
currently offer online transactional capabilities and certain Web-based

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live event ticketing companies which only conduct business online. Where
facilities and promoters decide to utilize the services of a ticketing
company, Ticketmaster Online competes with international, national and
regional ticketing services, including TicketWeb, Telecharge (Shubert
Ticketing Services), NEXT Ticketing, Advantix, ETM Entertainment Network,
Dillard's, Prologue, Capital Tickets and Lasergate (Lasergate Systems, Inc.).
Several of Ticketmaster Online's competitors have operations in multiple
locations throughout the United States and compete with Ticketmaster Online on
a national level, while others compete with Ticketmaster Online principally in
one specific geographic region. In certain specific geographic regions,
including certain of the local markets in which CitySearch provides or intends
to provide its local city guide service, one or more of these competitors may
serve as the primary ticketing service in the region. The Company believes
that Ticketmaster Online will experience significant difficulty in
establishing a significant online presence in such regions and, as a result,
any local city guide for such a region may be unable to provide significant
ticketing capabilities. There can be no assurance that one or more of these
regional automated ticketing companies will not expand into other regions or
nationally, which could have a material adverse effect on the Company's
business, financial condition and results of operations.

Furthermore, certain of Ticketmaster Online's competitors have financial and
other resources greater than those of the Company and may introduce new
Internet products and services in these markets in the future. There can be no
assurance that Ticketmaster Online's competitors will not develop services
superior to those of Ticketmaster Online or achieve greater acceptance than
Ticketmaster Online's offerings. In addition, pursuant to the Ticketmaster
License Agreement, Ticketmaster Online is restricted from entering into
agreements with facilities, promoters or other ticket sellers for the online
sale of live event tickets. As a result, Ticketmaster Online is dependent on
the ability of Ticketmaster Corp. to acquire and maintain live event ticketing
rights, including online ticketing rights, with facilities and promoters and
to negotiate commercially favorable terms for such rights. Furthermore,
substantially all of the tickets sold through Ticketmaster Online's Web site
are also sold by Ticketmaster Corp. by telephone and through independent
retail outlets. Such sales by Ticketmaster Corp. could have a material adverse
effect on Ticketmaster Online's online sales, and as a result, on the
Company's business, financial condition and results of operations.

The Company believes that the principal competitive factors include depth,
quality and comprehensiveness of content, ease of use, distribution, search
capability and brand recognition. Many of the Company's competitors, whether
with respect to its CitySearch service or its Ticketmaster Online service,
have greater financial and marketing resources than the Company and may have
significant competitive advantages through other lines of business and
existing business relationships. There can be no assurance that the Company
will be able to successfully compete against its current or future competitors
or that competition will not have a material adverse effect on the Company's
business, financial condition and results of operations. Furthermore, as a
strategic response to changes in the competitive environment, the Company may
make certain pricing, servicing or marketing decisions or enter into
acquisitions or new ventures that could have a material adverse effect on the
Company's business, financial condition and results of operations.

RISKS ASSOCIATED WITH OFFERING NEW BUSINESS AND CONSUMER SERVICES

The Company is expected to introduce new and expanded services in order to
generate additional revenues, attract more businesses, consumers and respond
to competition. For example, the Company recently introduced business Web
sites containing new and enhanced functionality for its CitySearch business
customers. The Company also may in the future offer services facilitating the
purchase of goods by consumers from CitySearch's business customers or others.
A key element of the Company's strategy is to technologically enable its city
guides so that consumers and its business customers can buy and sell goods and
services online through the Company's city guides. The Company has limited
experience in building e-commerce functionality with its city guides. There
can be no assurance that the Company will be able to offer e-commerce or other
new services in a cost-effective or timely manner or that any such efforts
would be successful. Furthermore, any new service launched by the Company that
is not favorably received by consumers could damage the Company's reputation

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or its brand names. Expansion of the Company's services in this manner would
also require significant additional expenses and development and may strain
the Company's management, financial and operational resources. The Company's
inability to generate revenues from such expanded services sufficient to
offset their cost could have a material adverse effect on the Company's
business, financial condition and results of operations.

MANAGEMENT OF POTENTIAL GROWTH; RISKS ASSOCIATED WITH EXPANSION

CitySearch's and Ticketmaster Online's businesses have grown rapidly in
recent periods. The growth of their businesses and expansion of their consumer
bases have placed a significant strain on their management and operations. The
growth of the businesses of CitySearch and Ticketmaster Online has resulted,
and for the Company is expected in the future to result, in the growth in the
number of its employees, in the establishment of offices in disparate regions
of the country and in increased responsibility for both existing and new
management personnel. In addition, this growth has and will put additional
pressure on existing operational, financial and management information
systems. The Company's success will depend to a significant extent on the
ability of its executive officers and other members of senior management to
operate effectively, both independently and as a group. To manage its growth,
the Company must continue to implement and improve operational, financial and
management information systems and hire and train additional qualified
personnel, including sales and marketing staff. There can be no assurance that
the Company will be able to manage recent or any future expansions
successfully, and any failure of the Company to do so could have a material
adverse effect on the Company's business, financial condition and results of
operations. There also can be no assurance that either CitySearch or
Ticketmaster Online will be able to sustain the rate of expansion that each
has experienced in the past.

DEPENDENCE UPON CONTINUED CONTENT DEVELOPMENT

The Company's success depends in part upon its ability to deliver compelling
interactive content on its CitySearch service, such as local events
information, recreation, business, shopping, professional services and
news/sports/weather and online ticketing services in order to attract
consumers with demographic characteristics valuable to CitySearch's business
customers, as well as its ability to develop and integrate compelling content
with existing ticketing capabilities on the Ticketmaster Online Web site.
There can be no assurance that the Company will be successful in developing
new content and services or enhancing CitySearch's existing local city guide
service or the Ticketmaster Online service on a timely basis, or that such
content and services will effectively address consumer requirements and
achieve market acceptance. If the Company, for technological or other reasons,
is unable to develop and enhance CitySearch's and Ticketmaster Online's local
interactive content and services in a manner compatible with emerging industry
standards and that allows it to attract, retain and expand a consumer base
possessing demographic characteristics attractive to CitySearch's business
customers and Ticketmaster Online's advertisers and sponsors, the Company's
business, financial condition and results of operations would be materially
and adversely affected.

DEPENDENCE ON INCREASED USAGE AND STABILITY OF THE INTERNET AND THE WEB

The usage of the Web for services such as those offered by the Company will
depend in significant part on continued rapid growth in the number of
households and commercial, educational and government institutions with access
to the Web, in the level of usage by individuals and in the number and quality
of products and services designed for use on the Web. Because usage of the Web
as a source for information, products and services is a relatively recent
phenomenon, it is difficult to predict whether the number of users drawn to
the Web will continue to increase and whether any significant market for usage
of the Web for such purposes will continue to develop and expand. There can be
no assurance that Internet usage patterns will not decline as the novelty of
the medium recedes or that the quality of products and services offered online
will improve sufficiently to continue to support user interest. Failure of the
Web to stimulate user interest and be accessible to a broad audience at
moderate costs would jeopardize the markets for the Company's services.

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Moreover, issues regarding the stability of the Internet's infrastructure
remain unresolved. The rapid rise in the number of Internet users and
increased transmission of audio, video, graphical and other multimedia content
over the Web has placed increasing strains on the Internet's communications
and transmission infrastructures. Continuation of such trends could lead to
significant deterioration in transmission speeds and reliability of the Web
and could reduce the usage of the Web by businesses and individuals. In
addition, to the extent that the Web continues to experience significant
growth in the number of users and level of use without corresponding increases
and improvements in the Internet infrastructure, there can be no assurance
that the Internet will be able to support the demands placed upon it by such
continued growth. Any failure of the Internet to support such increasing
number of users due to inadequate infrastructure or otherwise would seriously
limit the development of the Web as a viable source of local interactive
content and services, which could materially and adversely affect the
acceptance of the Company's services, which would, in turn, materially and
adversely affect the Company's business, financial condition and results of
operations.

RISKS ASSOCIATED WITH INTERNATIONAL EXPANSION

A key component of the Company's strategy is to continue to expand its
services into international markets. The Company anticipates that it will
expend significant financial and management resources to operate overseas and,
with respect to the CitySearch service, create localized user interfaces
through the launch of additional partner-led markets. The Company believes
Ticketmaster Corp. intends to continue to expand its operations outside of the
United States, which will require additional resources from Ticketmaster
Online to the extent it distributes tickets online in those markets. If the
revenues generated by these international operations are insufficient to
offset the expense of establishing and maintaining such operations, the
Company's business, financial condition and results of operations will be
materially and adversely affected. To date, CitySearch has limited experience
in developing localized versions of its online sites and marketing and
distributing its products and services internationally. There can be no
assurance that the Company or its partners will be able to successfully market
or sell its services in these international markets. In addition to the
uncertainty as to the Company's ability to expand its international presence,
there are certain risks inherent in conducting business on an international
level, such as unexpected changes in regulatory requirements, tariffs and
other trade barriers, difficulties in staffing and managing foreign
operations, political instability, currency rate fluctuations and potentially
adverse tax consequences. There can be no assurance that one or more of the
foregoing factors will not have a material adverse effect on the Company's
current and future international operations and, consequently, on its
business, financial condition and results of operations.

CAPACITY CONSTRAINTS AND SYSTEM DISRUPTIONS; RELIANCE ON THIRD-PARTY SYSTEMS

The satisfactory performance, reliability and availability of CitySearch's
city guides and Ticketmaster Online's online service and their network
infrastructures are critical to attracting Web users and maintaining
relationships with business customers and consumers. System interruptions that
result in the unavailability of sites or slower response times for consumers
would reduce the number of business Web sites and advertisements purchased and
reduce the attractiveness of CitySearch's local city guides and Ticketmaster
Online's online service to business customers and consumers. CitySearch and
Ticketmaster Online have experienced system interruptions in the past and
believe that such interruptions will continue to occur from time to time in
the future. Additionally, any substantial increase in traffic on CitySearch's
local city guides and Ticketmaster Online's online service will require the
Company to expand and adapt its network infrastructure. The Company's
inability to add additional software and hardware to accommodate increased
traffic on CitySearch's local city guides and Ticketmaster Online's online
service may cause unanticipated system disruptions and result in slower
response times. In addition, CitySearch currently depends on a limited number
of suppliers for certain key technologies used to roll out and manage the
CitySearch service. There can be no assurance that the Company will be able to
expand its network infrastructure on a timely basis to meet increased demand
or that key technology suppliers will continue to provide the Company with
products and services that meet the Company's requirements. Any increase in
system interruptions or slower response times resulting from the foregoing
factors could have a material adverse effect on the Company's business,
financial condition and results of operations.

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The Company's operations are vulnerable to interruption by fire, earthquake,
power loss, telecommunications failure and other events beyond the Company's
control. Substantially all of the Company's server equipment is currently
located in California in areas that are susceptible to earthquakes. The
Company's business interruption insurance may not be sufficient to compensate
the Company for losses that may occur and would not compensate the Company for
the loss of consumer goodwill due to disruption of service, and any losses or
damages incurred by the Company could have a material adverse effect on its
business, financial condition and results of operations.

In addition, Ticketmaster Online's operations are substantially dependent
upon services and infrastructure provided by Ticketmaster Corp. that enable
Ticketmaster Online to access information on ticket and merchandise inventory,
events and consumers maintained by Ticketmaster Corp. In addition,
Ticketmaster Corp. has agreed to provide all order processing, payment
processing and fulfillment services for tickets to live events and merchandise
ordered through Ticketmaster Online pursuant to the terms and subject to the
limitations of the Ticketmaster License Agreement. Any discontinuation or
disruption of such services by Ticketmaster Corp. would be disruptive to the
Ticketmaster Online business and would likely have a material adverse effect
on the Company's business, financial condition and results of operations. See
"--Dependence on Relationship with Ticketmaster Corp." and "Business--
Ticketmaster Online Business."

Ticketmaster Online uses a custom-developed system for its online ticketing
operations and certain aspects of transaction processing. Ticketmaster Online
has experienced temporary system interruptions, which may continue to occur in
the future from time to time. Any substantial increase in the volume of
traffic on the Company's online sites or the number of tickets purchased by
consumers may require Ticketmaster Online to expand and upgrade further its
technology, transaction-processing systems and network infrastructure.
Ticketmaster Online has experienced and expects to continue to experience
temporary capacity constraints due to sharply increased traffic for certain
events, which may cause unanticipated system disruptions, slower response
times and degradation in levels of service. In addition, to the extent
Ticketmaster Online experiences delays in processing ticketing confirmations
and reporting accurate financial information, its operations would be
adversely affected. There can be no assurance that Ticketmaster Online's
transaction-processing systems and network infrastructure will be able to
accommodate such increases in traffic in the future, or that the Company will,
in general, be able to accurately project the rate or timing of such increases
or upgrade its systems and infrastructure to accommodate future traffic levels
on its online sites. In addition, there can be no assurance that Ticketmaster
Online will be able to effectively upgrade and expand its transaction-
processing systems in a timely manner or to successfully integrate any newly
developed or purchased components of its existing systems. Any inability to do
so could have a material adverse effect on the Company's business, financial
condition and results of operations. See "Business--Ticketmaster Online
Business."

ONLINE COMMERCE AND DATABASE SECURITY RISKS

A fundamental requirement for online commerce and communications is the
secure transmission of confidential information over public networks. The
Company relies on encryption and authentication technology licensed from third
parties to provide the security and authentication necessary to effect secure
transmission of confidential information, such as consumers credit card
numbers. In addition, the Company maintains an extensive confidential database
of consumer profiles and transaction information. There can be no assurance
that advances in computer capabilities, new discoveries in the field of
cryptography, or other events or developments will not result in a compromise
or breach of the methods used by the Company to protect consumer transaction
and personal data contained in the Company's database. If any such compromise
of the Company's security were to occur, it could have a material adverse
effect on the Company's reputation and on its business, operating results and
financial condition. A party who is able to circumvent the Company's security
measures could misappropriate proprietary information or cause interruptions
in the Company's operations. The Company may be required to expend significant
capital and other resources to protect against such security breaches or to
alleviate problems caused by such breaches. Concerns over the security of
transactions conducted on the Internet and commercial online services and the
privacy of users may also inhibit the growth of the Web and online

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services as a means of conducting commercial transactions. To the extent that
activities of the Company or third-party contractors involve the storage and
transmission of proprietary information, such as credit card numbers or other
personal information, security breaches could expose the Company to a risk of
loss or litigation and possible liability. In addition, the Company may suffer
losses as a result of orders placed with fraudulent credit card data, even
though the consumer's payment for such orders has been authorized by the
associated financial institution. Under current credit card practices, a
merchant is liable for fraudulent credit card transactions where, as is the
case with the transactions processed by the Company, no cardholder signature
is obtained. There can be no assurance that the Company will not suffer
significant losses as a result of fraudulent use of credit card data in the
future, which could have a material adverse effect on the Company's business,
financial condition and results of operations. See "Business--CitySearch
Business--Technology" and "Business--Ticketmaster Online Business--
Technology."

RAPID TECHNOLOGICAL CHANGE

The Internet and the online commerce industry are characterized by rapid
technological change, changes in user and customer requirements and
preferences, frequent new product and service introductions embodying new
technologies and the emergence of new industry standards and practices that
could render the Company's existing online sites and proprietary technology
and systems obsolete. The emerging nature of these products and services and
their rapid evolution will require that the Company continually improve the
performance, features and reliability of its online services, particularly in
response to competitive offerings. The Company's success will depend, in part,
on its ability to enhance its existing services, to develop new services and
technology that address the increasingly sophisticated and varied needs of its
prospective customers and to respond to technological advances and emerging
industry standards and practices on a cost-effective and timely basis. The
development of online sites and other proprietary technology entails
significant technical and business risks and requires substantial expenditures
and lead time. There can be no assurance that the Company will successfully
use new technologies effectively or adapt its online sites, proprietary
technology and transaction-processing systems to customer requirements or
emerging industry standards. If the Company is unable, for technical, legal,
financial or other reasons, to adapt in a timely manner in response to
changing market conditions or customer requirements, its business, operating
results and financial condition could be materially adversely affected. See
"Business--CitySearch Business--Technology" and "Business--Ticketmaster Online
Business--Technology."

YEAR 2000 COMPLIANCE

Many older computer systems and software products currently in use are coded
to accept only two digit entries in the date code field. These date code
fields will need to accept four digit entries to distinguish 21st century
dates from 20th century dates. As a result, in less than two years, computer
systems and/or software used by many companies may need to be upgraded to
comply with such "Year 2000" requirements. Significant uncertainty exists in
the software industry concerning the potential effects associated with such
compliance. Although the Company licenses to its CitySearch partners software
products that are designed to be Year 2000 compliant, there can be no
assurance that the Company's software products contain all necessary date
changes. In addition, Ticketmaster Online is largely dependent on Ticketmaster
Corp. to ensure that all of its software used in connection with its online
ticketing service will manage and manipulate data involving the transition of
dates from 1999 to 2000 without functional or data abnormality and without
inaccurate results related to such dates. Any failure by Ticketmaster Online
or Ticketmaster Corp. to ensure that such software complies with Year 2000
requirements could have a material adverse effect on the Company's business,
financial condition and results of operations. Furthermore, while the Company
has developed a plan to identify programs used by its computer systems that
may require modification, and has initiated programs to rectify any such
problems, there can be no assurance that such plans and programs will be
effective in making such programs Year 2000 compliant or will be completed
prior to December 31, 1999. In addition, the Company utilizes third-party
equipment and the Company licenses software from third parties that may not be
Year 2000 compliant. Failure of the Company's software or internal computer
systems or of third-party equipment or software utilized by the Company to be
Year 2000 compliant could result in a material adverse affect on the Company's
business,

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financial condition and results of operations. Furthermore, the spending
patterns of business customers or potential business customers may be affected
by Year 2000 issues as companies expend significant resources to correct or
update their current systems for Year 2000 compliance. These expenditures may
result in reduced funds available for such customers to pay for custom Web
sites, license the Company's software products and retain the Company's
services, which could have a material adverse effect on the Company's
business, financial condition and results of operations. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations--Year
2000."

LIABILITY FOR ONLINE CONTENT

The Company may face potential liability for defamation, negligence,
copyright, patent or trademark infringement and other claims based on the
nature and content of the materials that appear on the CitySearch or
Ticketmaster Online sites or on sites operated by their respective partners.
Such claims have been brought, and sometimes successfully pressed, against
online services. Although the Company intends to continue its general
liability insurance, the Company's insurance may not cover claims of these
types or may not be adequate to indemnify the Company for any liability that
may be imposed. Any imposition of liability, particularly liability that is
not covered by insurance or is in excess of insurance coverage, could have a
material adverse effect on the Company's reputation and its business,
financial condition and results of operations.

UNCERTAIN PROTECTION OF INTELLECTUAL PROPERTY; RISKS OF THIRD-PARTY LICENSES

The Company regards its copyrights, service marks, trademarks, trade dress,
trade secrets, proprietary software and similar intellectual property as
critical to its success, and relies on trademark and copyright law, trade
secret protection and confidentiality and/or license agreements with
employees, customers, partners and others to protect its proprietary rights.
The Company does not hold any patents. The Company pursues the registration of
certain of its key trademarks and service marks in the United States and
internationally. Effective trademark, service mark, copyright and trade secret
protection may not be available or sought by the Company in every country in
which the Company's products and services are made available online. The
Company has licensed in the past, and expects that it may license in the
future, certain proprietary rights, such as trademarks or copyrighted
material, to third parties. In addition, the Company has licensed in the past,
and expects that it may license in the future, certain content, including
trademarks and copyrighted material, from third parties. While the Company
attempts to ensure that the quality of its brands is maintained by such
licensees, there can be no assurance that such licensees will not take actions
that might materially adversely affect the value of the Company's proprietary
rights or reputation, which could have a material adverse effect on the
Company's business, financial condition and results of operations. There can
be no assurance that the steps taken by the Company to protect its proprietary
rights will be adequate or that third parties will not infringe or
misappropriate its copyrights, trademarks, trade dress and similar proprietary
rights. In addition, there can be no assurance that other parties will not
assert infringement claims, including patent infringement claims, against the
Company. The Company licenses the trademark "CitySearch" from a third party,
and there can be no assurance that the Company will be able to continue to
license the trademark on terms acceptable to the Company. The licensor of the
trademark has filed an application for United States registration of the
CitySearch trademark with the United States Patent and Trademark Office
("USPTO") and has recently received communications from a third party seeking
an extension of the time period during which third parties may oppose
registration of the mark to the licensor of such trademark. There can be no
assurance that the USPTO will grant registration of the CitySearch trademark
or that an inability to obtain such registration will not have an adverse
effect on the ability of such licensor or the Company to utilize such mark in
the future. The Company licenses the trademark "Ticketmaster" and related
trademarks from Ticketmaster Corp. pursuant to the Ticketmaster License
Agreement. The Company may be subject to legal proceedings and claims of
alleged infringement of the trademarks and other intellectual property rights
of third parties by the Company and its licensees. Such claims, even if not
meritorious, could result in the expenditure of significant financial and
managerial resources which could result in a material adverse effect on the
Company's business, financial condition and results of operations licensed to
Ticketmaster Corp. The Company is dependent upon Ticketmaster Corp. to
maintain and assert its rights to the trademarks and defend infringement
claims, if any.

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RISKS ASSOCIATED WITH REGULATORY MATTERS

The Company is subject to regulations applicable to businesses generally and
laws or regulations directly applicable to access to online commerce. Although
there are currently few laws and regulations directly applicable to the
Internet and commercial online services, it is possible that a number of laws
and regulations may be adopted with respect to the Internet or commercial
online services covering issues such as user privacy, pricing, content,
taxation, copyrights, distribution, antitrust and characteristics and quality
of products and services. Furthermore, the growth and development of the
market for online commerce may prompt calls for more stringent consumer
protection laws that may impose additional burdens on those companies
conducting business online. The adoption of any additional laws or regulations
may decrease the growth of the Internet or commercial online services, which
could, in turn, decrease the demand for the Company's products and services
and increase the Company's cost of doing business, or otherwise have a
material adverse effect on the Company's business, financial condition and
results of operations. Moreover, the applicability to the Internet and
commercial online services of existing laws in various jurisdictions governing
issues such as property ownership, sales and other taxes, libel and personal
privacy is uncertain and may take years to resolve. For example, tax
authorities in a number of states are currently reviewing the appropriate tax
treatment of companies engaged in online commerce, and new state tax
regulations may subject the Company to additional state sales and income
taxes. Any such new legislation or regulation, the application of laws and
regulations from jurisdictions whose laws do not currently apply to the
Company's business, or the application of existing laws and regulations to the
Internet and commercial online services could have a material adverse effect
on the Company's business, financial condition and results of operations.

Ticketmaster Online is regulated by certain state and local regulations,
including, but not limited to, a law in Georgia that establishes maximum
convenience charges on tickets for certain sporting events. Other legislation
that could affect the way Ticketmaster Online does business, including bills
that would regulate the amount of convenience charges and handling charges,
are introduced from time to time in federal, state and local legislative
bodies. The Company is unable to predict whether any such bills will be
adopted and, if so, whether such legislation would have a material effect on
the business, financial condition and results of operations of the Company.

POTENTIAL GOVERNMENTAL INVESTIGATIONS AND LITIGATION

From time to time, federal, state and local authorities have conducted
investigations or inquiries with respect to Ticketmaster Corp.'s compliance
with antitrust, unfair business practice and other laws. The most recent
federal investigation was commenced in 1994 by the Antitrust Division of the
Department of Justice and was concluded in 1995 with no enforcement action
being taken against Ticketmaster Corp.

In addition, in 1994, Ticketmaster Corp. was named as a defendant in
multiple class action lawsuits by ticket purchasers alleging that Ticketmaster
Corp.'s activities violated federal antitrust laws. All of such federal
lawsuits were consolidated by the Judicial Panel on Multidistrict Litigation
for Pretrial Proceedings. After an amended and consolidated complaint was
filed by the plaintiffs, Ticketmaster Corp. filed a motion to dismiss and, on
May 31, 1996, the United States District Court for the Eastern District of
Missouri granted the motion to dismiss for failure to state a claim upon which
relief could be granted. On June 12, 1996, the plaintiffs appealed the
dismissal, and on April 10, 1998, the Court of Appeals issued an opinion
affirming the district court's ruling that the plaintiffs were not entitled to
pursue their claims for damages under the federal antitrust laws. However, the
Court of Appeals also held that the plaintiffs' status as indirect purchasers
of Ticketmaster Corp.'s services did not bar them from seeking injunctive
relief. Discovery on the plaintiffs' claim for equitable relief is ongoing in
the United States District Court in the Eastern District of Missouri and a
trial date of July 17, 2000 has been set. On July 9, 1998, the plaintiffs
filed a petition for writ of certiorari in the United States Supreme Court
seeking review of the decision dismissing their claims. On October 5, 1998,
the Supreme Court invited the Solicitor General of the United States to file a
brief expressing the views of the United States in this case. Accordingly,
there can be no assurance that this lawsuit, if determined adversely against
Ticketmaster Corp., will not have a material adverse effect on the business,
financial condition or results of operations of Ticketmaster Online or the
Company.

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There can be no assurance that the Company, Ticketmaster Online or
Ticketmaster Corp. or its affiliates will not become the subject of future
governmental investigations or inquiries or named as a defendant in claims
alleging violations of federal or state antitrust laws or any other laws. Any
adverse outcome in such litigation, investigation or proceeding against the
Company, Ticketmaster Online or Ticketmaster Corp. or its affiliates could
limit or prevent Ticketmaster Online from engaging in its online ticketing
business or subject the Company to potential damage assessments, all of which
could have a material adverse effect on the Company's business, financial
condition or results of operations. Regardless of its merit, source or
outcome, any such litigation, investigation or proceeding would at a minimum
be costly and could divert the efforts of the Company's management and other
personnel from productive tasks, which could have a material adverse effect on
the Company's business, financial condition or results of operations.

RISKS ASSOCIATED WITH POTENTIAL ACQUISITIONS

As part of its business strategy, the Company may make acquisitions of, or
significant investments in, complementary companies, products or technologies.
Any such future acquisitions would be accompanied by the risks commonly
encountered in acquisitions of companies. Such risks include, among other
things, the difficulty of assimilating the operations and personnel of the
acquired companies, the potential disruption of the Company's ongoing
business, the diversion of resources from the Company's existing businesses,
sites and technologies, the inability of management to maximize the financial
and strategic position of the Company through the successful incorporation of
the acquired technology into the Company's products and services, additional
expense associated with amortization of acquired intangible assets, the
maintenance of uniform standards, controls, procedures and policies and the
impairment of relationships with employees and customers as a result of any
integration of new management personnel. There can be no assurance that the
Company would be successful in overcoming these risks or any other problems
encountered with such acquisitions, and the Company's inability to overcome
such risks could have a material adverse effect on its business, financial
condition and results of operations.

RISKS ASSOCIATED WITH DOMAIN NAMES

The Company currently holds and licenses various Web domain names relating
to its brand, including the "citysearch.com" and "ticketmaster.com" domain
names. The acquisition and maintenance of domain names generally is regulated
by governmental agencies and their designees. For example, in the United
States, the National Science Foundation has appointed Network Solutions, Inc.
as the exclusive registrar for the ".com," ".net" and ".org" generic top-level
domains. The regulation of domain names in the United States and in foreign
countries is subject to change. Governing bodies may establish additional top-
level domains, appoint additional domain name registrars or modify the
requirements for holding domain names. As a result, there can be no assurance
that the Company will be able to acquire or maintain relevant domain names in
all countries in which it conducts business. Furthermore, the relationship
between regulations governing domain names and laws protecting trademarks and
similar proprietary rights is unclear. The Company, therefore, may be unable
to prevent third parties from acquiring domain names that are similar to,
infringe upon or otherwise decrease the value of its trademarks and other
proprietary rights. Any such inability could have a material adverse effect on
the Company's business, financial condition and results of operations.

LACK OF PRIOR PUBLIC MARKET AND POSSIBLE VOLATILITY OF STOCK PRICE

Prior to this offering, there has been no public market for the Company's
Class B Common Stock, and there can be no assurance that an active trading
market will develop or be sustained. The initial public offering price for the
Class B Common Stock to be sold by the Company will be established by
negotiations among the Company and the representatives of the Underwriters and
may bear no relationship to the price at which the Class B Common Stock will
trade after completion of this offering. See "Underwriting" for factors to be
considered in determining such offering price. The market price of the Class B
Common Stock could be subject to significant fluctuations in response to
quarter-to-quarter variations in the Company's operating results,

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announcements of technological innovations or new products by the Company or
its competitors, and other events or factors. For example, a shortfall in
revenues or net income, or an increase in losses from levels expected by
securities analysts, could have an immediate and significant adverse effect on
the market price of the Company's Class B Common Stock. In addition, the stock
market in recent years has experienced extreme price and volume fluctuations
that have often dramatically affected the market prices of many high
technology companies, particularly those companies doing business on the
Internet. These fluctuations have often been unrelated or disproportionate to
the operating performance of the companies. Such fluctuations, as well as
general economic and market conditions, may adversely affect the market price
for the Class B Common Stock.

BENEFITS OF THE OFFERING TO EXISTING STOCKHOLDERS

This offering will provide substantial benefits to current stockholders of
the Company. Consummation of this offering is expected to create a public
market for the Class B Common Stock issuable upon conversion of the Class A
Common Stock held by current stockholders, including executive officers and
directors of the Company. As of September 30, 1998, existing stockholders paid
$359.3 million of aggregate consideration for an aggregate of 62,486,478
shares of Class B Common Stock issuable upon conversion of the Class A Common
Stock. Based upon an assumed initial public offering price of $ per
share, the value of the shares held by such existing stockholders would be
approximately $ million. Therefore, the aggregate unrealized gain to
existing stockholders of the Company resulting from the offering would be
approximately $ million. See "Principal Stockholders" and "Shares
Eligible for Future Sale."

ANTITAKEOVER EFFECT OF CERTAIN CHARTER PROVISIONS

Certain provisions of the Company's Restated Certificate of Incorporation
and the Restated Bylaws and Delaware General Corporation Law (the "DGCL")
Section 203 may render more difficult, or have the effect of discouraging,
unsolicited takeover bids from third parties or the removal of incumbent
management of the Company. These provisions include the right of the holders
of the Class A Common Stock to 15 votes per share, versus one vote per share
for the holders of Class B Common Stock and provide that the stockholders may
not call special meetings. In addition, upon completion of this offering, the
Company's Restated Certificate of Incorporation will authorize the Board of
Directors to issue, without stockholder approval, 2,000,000 shares of
preferred stock, par value $.01 per share ("Preferred Stock"), with voting,
conversion and other rights and preferences that could adversely affect the
voting power or other rights of the holders of Common Stock of the Company.
Although the Company has no current plans to issue any shares of Preferred
Stock, the issuance of Preferred Stock or rights to purchase Preferred Stock
could render more difficult, or have the effect of discouraging, unsolicited
takeover bids from third parties or the removal of incumbent management of the
Company, or otherwise adversely affect the market price for the Class B Common
Stock. See "Description of Capital Stock--Preferred Stock", "--Antitakeover
Effects of Provisions of Certificate of Incorporation and Bylaws" and "--
Effect of Delaware Antitakeover Statute." Although such provisions do not have
a substantial practical significance to investors while USAi, through its
ownership of Class A Common Stock, is in a position to effectively control all
matters affecting the Company, such provisions could have the effect of
depriving stockholders of an opportunity to sell their shares at a premium
over prevailing market prices should USAi no longer be in such control.

SHARES ELIGIBLE FOR FUTURE SALE

Sales of substantial amounts of Class B Common Stock in the public market
after this offering (including by optional or automatic conversion of shares
of Class A Common Stock into Class B Common Stock), or the anticipation of
such sales, could have a material adverse effect on then-prevailing market
prices. Upon completion of the offering, the Company will have shares
of Class B Common Stock outstanding and 62,486,478 shares of Class A Common
Stock outstanding (assuming no exercise of currently outstanding options or
warrants). Prior to this offering, USAi will beneficially own approximately
64.8% of the outstanding Common

32
<PAGE>

Stock (or approximately 69.5% assuming USAi purchases the total number of
shares of Class A Common Stock subject to the Tender Offer). Shares of Class A
Common Stock are convertible into Class B Common Stock on a share-for-share
basis at the election of the holder or automatically upon certain transfers
thereof. The shares of Class B Common Stock sold in this offering
(plus any additional shares sold upon exercise of the Underwriters' over-
allotment option) will be freely transferable without restriction under the
Securities Act of 1933, as amended (the "Securities Act"), unless they are
held by "affiliates" of the Company as that term is used under the Securities
Act and the regulations promulgated thereunder ("Affiliates"). The remaining
shares of Class B Common Stock issuable upon conversion of the
Class A Common Stock (including the shares of Class B Common Stock issuable
upon certain transfers of the Class A Common Stock or at the option of the
holder thereof) held by existing stockholders are "restricted securities" as
that term is defined in Rule 144 of the Securities Act (the "Restricted
Shares"). Restricted Shares may be sold in the public market only if
registered or if they qualify for an exemption from registration under Rule
144 or Rule 701 under the Securities Act. As a result of contractual
restrictions and the provisions of Rules 144 and 701, additional shares will
be available for sale in the public market as follows: (i) approximately
Restricted Shares will be eligible for immediate sale on the
effective date of this offering; (ii) approximately Restricted
Shares will be eligible for sale 90 days after the date of this offering;
(iii) approximately Restricted Shares will be eligible for sale
without restriction and Restricted Shares will be eligible for sale
subject to volume limitations, in each case 180 days after the effective date
of this offering upon the expiration of contractual lock-up agreements with
the Company and the representatives of the Underwriters and (iv) the remainder
of the Restricted Shares will be eligible for sale from time to time
thereafter upon expiration of their respective holding periods under Rule 144.
In addition, shares of Class B Common Stock issuable upon
conversion of Class A Common Stock will be issuable upon exercise of vested
stock options and eligible for sale 180 days after the date of this offering
upon the expiration of contractual lock-up agreements. NationsBanc Montgomery
Securities LLC, on behalf of the Underwriters, may, in its sole discretion and
at any time without notice, release all or any portion of securities subject
to the lock-up agreement with the Underwriters.

Upon consummation of this offering, the holders of 7,006,671 shares of Class
A Common Stock will have the right in certain circumstances to request the
Company to register their shares under the Securities Act for resale to the
public in the event of a Company-initiated registration. These registration
rights are subject to certain conditions and limitations, among them the right
of the underwriters of an offering to limit the number of shares included in
such registration. If the Company were required to include in a Company-
initiated registration shares held by such holders, such sales may have a
material adverse effect on the market price for the Company's Class B Common
Stock and on the Company's ability to raise new capital. In addition, the
Company expects to file a registration statement on Form S-8 registering a
total of approximately shares of Class A Common Stock subject to
outstanding stock options under the Company's 1996 Stock Plan and the
approximately shares of Class B Common Stock reserved for issuance
under the Company's 1998 Stock Plan and the Purchase Plan. The Form S-8
registration statement is expected to be filed and to become effective
immediately following the effective date of this offering. Shares registered
under such registration statement will be available for sale in the open
market, subject to Rule 144 volume limitations applicable to Affiliates,
unless such shares are subject to vesting restrictions with the Company or the
lock-up agreements described above. See "Description of Capital Stock--
Registration Rights" and "Shares Eligible for Future Sale."

DILUTION

The initial public offering price is substantially higher than the book
value per share of all of the outstanding classes of Common Stock. At an
assumed initial public offering price of $ per share, investors
purchasing shares of Class B Common Stock in the offering will incur
immediate, substantial dilution in the amount of $ per share. In
addition, investors purchasing shares of Class B Common Stock in this offering
will incur additional dilution to the extent outstanding options and warrants
are exercised. See "Dilution."

33
<PAGE>

USE OF PROCEEDS

The net proceeds to the Company from the sale of shares of Class B Common
Stock offered hereby are estimated to be $ million ($ million if the over-
allotment option is exercised in full) at an assumed initial public offering
price of $ per share and after deducting the underwriting discount and
estimated offering expenses payable by the Company. The Company intends to use
approximately $51 million of the net proceeds of this offering to repay in
full the Convertible Note and accrued interest thereon. The Convertible Note
was issued to USAi upon execution of the Merger Agreement in exchange for a
$50 million loan from USAi to provide working capital to the Company. The
Convertible Note bears interest at a rate of 7.00% per annum and is generally
due and payable on the earlier to occur of (i) August 13, 2005 or (ii) 20 days
following the closing of an initial public offering meeting certain criteria.
See "Ticketmaster Online-CitySearch Merger--Convertible Note." The remaining
proceeds from this offering and the Company's available cash will be used for
capital expenditures relating to the Company's Web sites such as enhancements
to the Company's servers and networking infrastructure, working capital and
other general corporate purposes, including sales and marketing. A portion of
the proceeds also may be used to acquire or invest in complementary
businesses, technologies or service offerings. In the ordinary course of
business, the Company evaluates potential acquisitions of such businesses,
technologies or service offerings. However, the Company has no present
understandings, commitments or agreements with respect to any such
acquisition, and the Company is not currently engaged in any negotiations with
respect to any such transaction. Pending use of the net proceeds for the above
purposes, the Company intends to invest such funds in short-term, interest-
bearing, investment-grade securities.

DIVIDEND POLICY

The Company has never declared or paid any cash dividends on its capital
stock. The Company currently anticipates that it will retain any future
earnings for use in its business and does not anticipate paying any cash
dividends for the foreseeable future.

34
<PAGE>

CAPITALIZATION

The following table sets forth the capitalization of the Company as of
September 30, 1998 (i) on an actual basis, and (ii) on an as-adjusted basis to
reflect the receipt of the net proceeds from the sale of the shares of
Class B Common Stock offered hereby at an assumed initial public offering
price of $ per share (after deducting the underwriting discount and
estimated offering expenses payable by the Company) and the application of the
estimated net proceeds therefrom.

<TABLE>
<CAPTION>
SEPTEMBER 30, 1998
-----------------------
ACTUAL AS ADJUSTED(2)
-------- --------------
(IN THOUSANDS)
<S> <C> <C>
Long-term obligations, less current portion(1)......... $ 52,320 $
Stockholders' equity:
Class A Common Stock, $0.01 par value; 100,000,000
shares authorized, actual and as adjusted;
62,486,478 shares issued and outstanding, actual and
as adjusted......................................... 625
Class B Common Stock, $0.01 par value; 250,000,000
shares authorized, actual and as adjusted; no shares
issued and outstanding, actual; shares issued
and outstanding, as adjusted........................ --
Class C Common Stock, $0.01 par value; 2,883,506
shares authorized, actual and as adjusted; no shares
issued and outstanding, actual and as adjusted...... --
Additional paid-in capital............................. 295,453 --
Retained earnings...................................... 3,875
-------- -----
Total stockholders' equity(3).......................... 299,953
-------- -----
Total capitalization............................... $352,273 $
======== =====
</TABLE>
- --------

(1) See Notes 7 and 8 of Notes to Financial Statements of Ticketmaster Online.

(2) Based on shares outstanding as of September 30, 1998. Does not include (i)
3,890,694 shares of Class A Common Stock issuable upon exercise of options
outstanding at September 30, 1998 at a weighted average price of $3.66 per
share under the 1996 Stock Plan, (ii) an aggregate of shares of
Class B Common Stock available for future grant or issuance as of the date
of this Prospectus under the 1998 Stock Plan and the Purchase Plan and
(iii) 93,107 shares of Class A Common Stock issuable upon exercise of an
outstanding warrant at an exercise price of $8.86 per share held by
NationsBanc Montgomery Securities LLC. See "Management--Employee Benefit
Plans," "Underwriting" and Note 6 of Notes to Financial Statements of
Ticketmaster Online.

(3) Includes a preliminary allocation of $298.3 million of goodwill resulting
from the Merger and the Ticketmaster Transaction.

35
<PAGE>

DILUTION

The net tangible book value of the Company as of September 30, 1998 was $2.9
million, or $0.05 per share of Common Stock. "Net tangible book value per
share" is determined by dividing the number of outstanding shares of Common
Stock into the net tangible book value of the Company (total tangible assets
less total liabilities). After giving effect to the application of the
estimated net proceeds from the sale by the Company of the shares of Class
B Common Stock offered hereby (based upon an assumed initial public offering
price of $ per share and after deducting the underwriting discount and
estimated offering expenses payable by the Company), the net tangible book
value of the Company as of September 30, 1998 would have been $ million, or
$ per share. This represents an immediate increase in net tangible book
value of $ per share to existing stockholders and an immediate dilution of
$ per share to new investors purchasing shares at the initial public
offering price. The following table illustrates the per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price................................. $
Net tangible book value as of September 30, 1998.................... $
Increase in net tangible book value attributable to new investors...
----
Net tangible book value per share after the offering..................
----
Dilution per share to new investors................................... $
====
</TABLE>

The following table summarizes as of September 30, 1998, the number of
shares of Common Stock purchased from the Company, the total consideration
paid to the Company and the average price per share paid by the existing
stockholders and by the investors purchasing shares of Class B Common Stock in
this offering, based upon an assumed initial public offering price of $ per
share (before deducting the underwriting discount and estimated offering
expenses payable by the Company):

<TABLE>
<CAPTION>
SHARES TOTAL
PURCHASED CONSIDERATION AVERAGE
-------------- -------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
------ ------- ------ ------- ---------
<S> <C> <C> <C> <C> <C>
Existing stockholders(1)............ % $ %
New investors(1)....................
----- --- ---- ---
Total............................. % $ %
===== === ==== ===
</TABLE>
- --------
(1) If the Underwriters' over-allotment is exercised in full, the number of
shares held by new investors will be increased to , or % of the total
shares of all classes of Common Stock to be outstanding after this
offering.

The foregoing computations assume no exercise of any outstanding stock
options or warrants. As of September 30, 1998, there were options outstanding
to purchase a total of 3,890,694 shares of Class A Common Stock at a weighted
average exercise price of $3.66 per share and warrants outstanding to purchase
a total of 93,107 shares of Class A Common Stock at an exercise price of $8.86
per share. In addition, as of the date of this Prospectus, an aggregate of
shares of Class B Common Stock were reserved for future issuance under
the 1998 Stock Plan and the Purchase Plan. To the extent that any shares
available for issuance upon exercise of outstanding stock options or warrants
or reserved for future issuance under the 1996 Stock Plan, the 1998 Stock Plan
or the Purchase Plan are issued, there will be future dilution to new
investors. See "Management--Employee Benefit Plans," "Underwriting" and Note 6
of Notes to Financial Statements of Ticketmaster Online.

36
<PAGE>

SELECTED HISTORICAL FINANCIAL DATA

CITYSEARCH

The selected consolidated financial data presented below for the period from
September 20, 1995 (date of formation) through December 31, 1995 and for, and
as of the end of, each of the years in the two-year period ended December 31,
1997, are derived from the Consolidated Financial Statements of CitySearch,
Inc., which consolidated financial statements have been audited by Ernst &
Young LLP, independent auditors, and are included elsewhere in this
Prospectus. The consolidated balance sheet data as of December 31, 1995 are
derived from audited Consolidated Financial Statements of CitySearch, Inc.
that are not included herein. The consolidated statements of operations data
for the nine-month periods ended September 30, 1997 and September 28, 1998,
respectively, and the consolidated balance sheet data at September 28, 1998
are derived from unaudited consolidated financial statements included
elsewhere in this Prospectus. In the opinion of management, the unaudited
consolidated financial statements have been prepared on the same basis as the
audited consolidated financial statements and contain all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of CitySearch's results of operations for such periods and
financial condition at such date. The results of operations for the nine
months ended September 28, 1998 are not necessarily indicative of the results
to be expected for the full year or future periods. The selected consolidated
financial data set forth below are qualified in their entirety by, and should
be read in conjunction with, "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the Consolidated Financial
Statements of CitySearch, Inc. and Notes thereto included elsewhere in this
Prospectus.

<TABLE>
<CAPTION>
PERIOD FROM
SEPTEMBER 20, YEAR ENDED
1995 (DATE OF DECEMBER 31, NINE MONTHS ENDED
FORMATION) TO ------------------ --------------------
DECEMBER 31, SEPT. 30, SEPT. 28,
1995 1996 1997 1997 1998(1)
------------- -------- -------- --------- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENTS
OF OPERATIONS DATA:
Revenues:
Subscription and
services............. $ -- $ 203 $ 4,913 $ 2,986 $ 9,458
Licensing and royalty. -- -- 1,271 677 1,859
------ -------- -------- -------- --------
Total revenues....... -- 203 6,184 3,663 11,317
Costs and expenses:
Cost of revenues...... -- 2,908 9,688 7,612 10,491
Sales and marketing... 57 6,369 20,172 13,716 14,902
Research and
development.......... 152 2,563 7,182 4,949 5,000
General and
administrative....... 104 2,475 5,883 4,263 5,104
Merger and other
transactions costs... -- -- -- -- 3,101
------ -------- -------- -------- --------
Total costs and
expenses............ 313 14,315 42,925 30,540 38,598
------ -------- -------- -------- --------
Loss from operations... (313) (14,112) (36,741) (26,877) (27,281)
Interest income, net... 5 217 223 104 227
------ -------- -------- -------- --------
Loss before provision
for income taxes...... (308) (13,895) (36,518) (26,773) (27,054)
Provision for income
taxes................. -- 2 8 -- --
------ -------- -------- -------- --------
Net loss............... $ (308) $(13,897) $(36,526) $(26,773) $(27,054)
====== ======== ======== ======== ========
Historical basic and
diluted net loss per
share(2).............. $(0.04) $ (1.58) $ (3.86) $ (2.84) $ (2.73)
====== ======== ======== ======== ========
Pro forma basic and
diluted net loss per
share(2).............. $ (1.96) $ (1.51) $ (1.10)
======== ======== ========
Shares used to compute
historical basic and
diluted net loss per
share(2).............. 7,895 8,786 9,452 9,431 9,923
====== ======== ======== ======== ========
Shares used to compute
pro forma basic and
diluted net loss per
share(2).............. 18,645 17,764 24,560
======== ======== ========
</TABLE>

37
<PAGE>

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------- SEPT. 28,
1995 1996 1997 1998(1)
------ -------- -------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents................ $1,413 $ 7,527 $ 25,227 $57,877
Working capital.......................... 1,323 4,257 19,375 50,940
Total assets............................. 1,490 13,370 31,655 65,209
Long-term obligations, less current
portion................................. -- 1,451 2,420 52,320
Redeemable Convertible Preferred Stock... -- 20,309 70,882 --
Stockholders' equity (deficit)........... 8,366 (11,943) (47,911) 3,837
</TABLE>
- --------

(2) Shares used to compute pro forma basic and diluted net loss per share give
effect to the conversion of outstanding CitySearch Convertible Preferred
Stock as if converted at the earlier of the beginning of the period or
issue date. See Note 1 of Notes to Consolidated Financial Statements of
CitySearch, Inc. for an explanation of the determination of the number of
shares used to compute historical and pro forma basic and diluted net loss
per share.

38
<PAGE>

TICKETMASTER ONLINE

The selected financial data presented below at January 31, 1997 and 1998 and
for each of the three years in the period ended January 31, 1998, are derived
from the Financial Statements of Ticketmaster Online, which financial
statements have been audited by Ernst & Young LLP, independent auditors, and
are included elsewhere in this Prospectus. The balance sheet data as of
January 31, 1996 are derived from unaudited financial statements of
Ticketmaster Online that are not included herein. The statements of operations
data for the eight-month periods ended September 30, 1997 and 1998 and the
balance sheet data at September 30, 1998 are derived from unaudited financial
statements included elsewhere in this Prospectus. In the opinion of
management, the unaudited financial statements have been prepared on the same
basis as the audited financial statements and contain all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of Ticketmaster Online's results of operations for such periods
and financial condition at such date. The results of operations for the eight
months ended September 30, 1998 are not necessarily indicative of the results
to be expected for the full year or future periods. The selected Ticketmaster
Online financial data set forth below are qualified in their entirety by, and
should be read in conjunction with, "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the Financial Statements of
Ticketmaster Online and Notes thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
EIGHT MONTHS
ENDED
YEAR ENDED JANUARY 31, SEPTEMBER 30,
------------------------ --------------
1996(1) 1997(1) 1998 1997 1998(2)
------- ------- ------ ------ -------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Ticketing operations.................. $ -- $ 199 $5,972 $3,413 $9,948
Sponsorship and advertising........... 14 997 3,933 2,410 4,210
City guide and related................ -- -- -- -- 112
------ ------ ------ ------ ------
Total revenues....................... 14 1,196 9,905 5,823 14,270
Costs and expenses:
Ticketing operations.................. -- 635 3,522 2,005 5,520
City guide and related................ 97
Sales and marketing................... -- 290 490 266 772
Research and development.............. -- -- -- -- 38
General and administrative............ 548 1,260 1,719 1,075 1,280
Amortization of goodwill.............. -- -- -- -- 1,224
------ ------ ------ ------ ------
Total costs and expenses............. 548 2,185 5,731 3,346 8,931
------ ------ ------ ------ ------
Income (loss) from operations.......... (534) (989) 4,174 2,477 5,339
Interest expense, net.................. -- -- -- -- (1)
------ ------ ------ ------ ------
Income (loss) before income taxes...... (534) (989) 4,174 2,477 5,338
Income tax provision (benefit)......... (204) (374) 1,827 1,089 2,865
------ ------ ------ ------ ------
Net income (loss)...................... $ (330) $ (615) $2,347 $1,388 $2,473
====== ====== ====== ====== ======
Basic and diluted net income (loss) per
equivalent share(3)................... $(0.01) $(0.02) $ 0.06 $ 0.04 $ 0.07
====== ====== ====== ====== ======
Number of shares used to compute basic
and diluted net income (loss) per
equivalent share (3).................. 37,238 37,238 37,238 37,238 37,425
====== ====== ====== ====== ======
</TABLE>

39
<PAGE>

<TABLE>
<CAPTION>
JANUARY 31,
--------------- SEPTEMBER 30,
1996 1997 1998 1998(5)
---- ---- ----- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents....................... $ -- $ 3 $ -- $ 57,877
Working capital (deficit)(4).................... 223 218 (100) 49,364
Total assets(6)................................. 354 554 688 363,757
Long-term obligations, less current portion..... -- -- -- 52,320
Stockholders' equity(6)......................... 354 489 289 299,953
</TABLE>
- --------
(1) Ticketmaster Online did not incur costs or expenses until June 1995 and
commenced selling live event tickets and merchandise online in November
1996.

(2) Includes the operating results of CitySearch from September 29, 1998 to
September 30, 1998 as a result of the Merger.

(3) Basic and diluted net income (loss) per equivalent share is based on the
number of shares of CitySearch Common Stock exchanged in the Merger for
all periods presented, and for the eight months ended September 30, 1998
includes the outstanding Class A Common Stock for two days subsequent to
the Merger in the calculation of average shares.

(4) Negative working capital at January 31, 1998 is primarily the result of
accounts receivable which are included as a receivable in "Due to (from)
Ticketmaster" in stockholders' equity. See Note 1 of Notes to the
Financial Statements of Ticketmaster Online and Notes thereto included
elsewhere in this Prospectus.

(5) The balance sheet data at September 30, 1998 represents the consolidated
assets and liabilities of Ticketmaster Online and CitySearch as a result
of the Merger.

(6) Total assets and stockholders' equity at September 30, 1998 reflect a
preliminary allocation of $298.3 million of goodwill resulting from the
Merger and the Ticketmaster Transaction.

40
<PAGE>

SELECTED UNAUDITED PRO FORMA COMBINED FINANCIAL DATA

The selected unaudited pro forma combined financial data give effect to the
Merger and the Ticketmaster Transaction. The Merger will be accounted for
using the "reverse purchase" method of accounting pursuant to which
Ticketmaster Online will be treated as the acquiring entity for accounting
purposes and the assets and liabilities of CitySearch will be recorded at
their respective fair values. The unaudited pro forma combined statements of
operations data assume that the Merger and Ticketmaster Transaction had
occurred at the beginning of the respective periods. The selected unaudited
pro forma combined financial data have been derived from the unaudited pro
forma condensed combined financial statements and notes thereto set forth
elsewhere herein and should be read in conjunction with those financial
statements and notes. The selected unaudited pro forma combined financial data
do not purport to be indicative of future operations and should not be
construed as representative of future operations of the combined companies.

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
1997 1998
------------ -------------
(IN THOUSANDS, EXCEPT
PER SHARE DATA)
<S> <C> <C>
PRO FORMA COMBINED STATEMENT OF OPERATIONS:
Revenues:
Ticketing operations.............................. $ 5,442 $ 10,571
Sponsorship and advertising....................... 3,965 4,915
City guide and related............................ 6,072 11,069
-------- --------
Total revenues.................................. 15,479 26,555
Costs and expenses:
Ticketing operations.............................. 3,865 7,810
City guide and related............................ 9,688 10,588
Sales and marketing............................... 20,611 15,734
Research and development.......................... 7,182 5,038
General and administrative........................ 6,993 5,998
Amortization of goodwill.......................... 51,725 38,795
Merger and other transactions costs............... -- 3,101
-------- --------
Total costs and expenses........................ 100,064 87,064
-------- --------
Loss from operations............................... (84,585) (60,509)
Interest expense, net.............................. (3,277) (1,929)
-------- --------
Loss before provision for income taxes............. (87,862) (62,438)
Provision for income taxes......................... 8 --
-------- --------
Net loss........................................... $(87,870) $(62,438)
======== ========
Basic and diluted net loss per share............... $ (1.57) $ (1.01)
Shares used to compute basic and diluted net loss
per share......................................... 55,883 61,798
</TABLE>

41
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of the financial condition and results of
operations of the Company should be read in conjunction with the Consolidated
Financial Statements of CitySearch, Inc. and the related Notes thereto and the
Financial Statements of Ticketmaster Online and the related Notes thereto
included elsewhere in this Prospectus. This discussion contains forward-
looking statements that involve risks and uncertainties. The Company's actual
results may differ materially from those anticipated in these forward-looking
statements as a result of certain factors, including, but not limited to,
those set forth under "Risk Factors" and elsewhere in this Prospectus.

OVERVIEW

CitySearch

The Company has two primary means of providing CitySearch local city guides.
In its owned and operated markets, the Company systematically produces the
majority of its own content, hires and rapidly deploys a direct sales force to
sell custom-built Web sites as well as related services to local and regional
businesses and launches a presence in approximately six months. In other
markets, the Company partners with a local media company that contracts with
the Company to assist in developing, designing and launching a city guide.
These partners license the Company's business and technology systems and
provide royalty payments to the Company for revenues derived from operations.
In partner-led markets, the Company's partners hire and train the local city
guide staff and purchase all necessary third-party hardware and software. The
Company's current owned and operated sites are Austin, Nashville, New York
City, Portland, Raleigh-Durham-Chapel Hill, Salt Lake City/Utah and the San
Francisco Bay Area, and current partner-led markets include Baltimore, Dallas,
Los Angeles, Washington D.C., Melbourne, Stockholm, Sydney and Toronto. The
Company has also deployed roll-out teams in the San Diego and Copenhagen
partner-led markets.

In its owned and operated city guide markets, the Company derives its
revenues primarily from subscription fees resulting from the creation, hosting
and maintenance of local business Web sites. Business customers typically
enter into one-year agreements that automatically convert to month to month
contracts upon expiration. The Company recognizes revenue from sales of local
business Web sites on a monthly basis over the term of each contract as
services are rendered. The Company's city guide business customers in its
owned and operated markets increased from approximately 1,300 as of December
31, 1996 to approximately 8,500 as of September 30, 1998. As of September 30,
1998, the Company believes that there were approximately 8,400 business
customers in its partner-led markets. The average monthly revenue from new
businesses signed up in its owned and operated markets in December 1996 was
approximately $50 per customer and in September 1998 was approximately $190
per customer. To a lesser extent, the Company derives city guide revenue from
banner and sponsorship advertising purchased by national and regional
advertisers and from barter agreements with television, radio and media
alliances. Banner revenue is recognized as earned. With barter agreements, the
Company receives television and radio broadcast advertising in exchange for
Web site design, hosting and maintenance. Barter revenue and expense are
recognized monthly over the term of each contract. For each barter agreement,
revenue and expense are equal and are recognized at a rate based on the
estimated cost of the specific services provided by the Company.

42
<PAGE>

In partner-led markets, the Company derives licensing and royalty revenues
from the licensing of the Company's technology and business systems,
consulting services and from providing back office and hosting services.
Royalty, consulting and technology customization revenues have not been
significant to date, but are expected to increase as a percentage of revenues
as partner-led markets mature and as more partner-led market sites are
launched. Licensing revenue under license agreements entered into prior to
December 31, 1997 is recognized upon the completion and installation of the
Company's business and technology systems and training of partner personnel in
each partner-led market. Pursuant to Statement of Position ("SOP") No. 97-2
and beginning with contracts signed in 1998, the Company is recognizing
revenues from the sale of licenses for use of the Company's business and
technology systems over the term of the license agreement or the period over
which the relevant services are delivered. See Note 1 of Notes to Consolidated
Financial Statements of CitySearch, Inc. Royalty revenue is recognized as
earned and is typically a percentage of partner-led market revenues from Web
site subscriptions, banners, advertisements, sponsorships, and other ancillary
offerings. In the second quarter of 1998, the Company began to derive revenue
from providing back office services, including business Web site design,
hosting, customer service and billing, to certain of its partners.

Ticketmaster Online

Through Ticketmaster Online, the Company derives revenues from its online
ticketing service, from the sale of sponsorships and advertising banners on
the Ticketmaster Online Web site and from the sale of merchandise through the
Ticketmaster Online Web site. Ticket operations revenues are primarily
comprised of convenience charges that are charged on a per ticket purchased
basis and shipping and handling fees which are collected on a per order basis.
The sale of tickets for an event often begins several months prior to the
scheduled date of the event. Ticket operations revenue is recognized when the
ticket is sold. If credit card chargeback or refund activity is likely to
occur with respect to an event, for example, due to the cancellation of such
event, an allowance is established for potential convenience charge refunds.
Sponsorship and advertising revenues are primarily recognized ratably over the
term of the promotion. Merchandise sale revenues are recognized when the
products are sold. The Company expects that revenues from Ticketmaster Online
will comprise a majority of the Company's overall revenues for the foreseeable
future.

Under the Ticketmaster License Agreement, subject to certain limitations,
Ticketmaster Corp. has granted Ticketmaster Online an exclusive, perpetual,
irrevocable, worldwide license to use the Ticketmaster trademark and certain
Ticketmaster Corp. databases to sell live event tickets online for
Ticketmaster Corp.'s clients. In addition, Ticketmaster Corp. has authorized
Ticketmaster Online to be Ticketmaster Corp.'s exclusive, perpetual, worldwide
agent for such online ticket sales. The Ticketmaster License Agreement further
provides that Ticketmaster Corp. may use and permit others to use the
Ticketmaster trademark in connection with the online promotion of ticket
sales.

Ticketmaster Corp. retains the rights to sell tickets by non-online means
and to use the Ticketmaster trademark in connection with such sales. The
Ticketmaster License Agreement defines such non-online means to include by
telephone; by other voice-to-voice means or voice-to-voice recognition unit
systems; by non-interactive broadcast, cable and satellite television; and by
kiosks and retail ticket outlets. Client venues retain the rights to sell
tickets at their box offices or as otherwise provided in client venue
agreements with Ticketmaster Corp.

Ticketmaster Corp. is the contracting party with client venues, promoters
and sports franchises, providing ticket inventory management, consumer
information and related data for all ticketing transactions. Ticketmaster
Corp. provides such information to Ticketmaster Online in connection with
processing online ticket sales and provides all transaction processing and
fulfillment services for online live event ticket sales. Ticketmaster Online
is required under the Ticketmaster License Agreement to comply with the terms
of Ticketmaster Corp.'s client agreements and Ticketmaster Online's rights as
set forth in the Ticketmaster License Agreement are subordinated and subject
to such agreements. The Ticketmaster License Agreement also generally
restricts Ticketmaster Online from cooperating with, offering online links to,
or entering into any agreements with venues, ticket sellers or sales agents
for online sale of tickets.

43
<PAGE>

Under the Ticketmaster License Agreement, Ticketmaster Online pays
Ticketmaster Corp. a royalty based on the percentage of the net profit it
derives from online ticket sales. Ticketmaster Online also reimburses
Ticketmaster Corp. for Ticketmaster Corp.'s direct expenses related to online
ticket sales.

Under the Ticketmaster License Agreement, Ticketmaster Online has also been
granted the non-exclusive right to promote and sell online certain merchandise
available through Ticketmaster Corp. Ticketmaster Corp. serves as Ticketmaster
Online's exclusive fulfillment provider for the online sales of such
merchandise. As long as Ticketmaster Corp.'s fees, terms and quality of
service are no less favorable than those available to Ticketmaster Online from
third parties, Ticketmaster Corp. or its affiliates will serve as Ticketmaster
Online's exclusive fulfillment provider for the online sales of all other
merchandise available through Ticketmaster Corp. Ticketmaster Corp. may also
solicit sponsorship and advertising for Ticketmaster Online's Web sites in a
bundle with other sponsorship and advertising opportunities offered by
Ticketmaster Corp. See "Risk Factors--Dependence on Relationship with
Ticketmaster Corp." and "--Potential Conflicts of Interest."

Pursuant to its client agreements, Ticketmaster Corp. is generally granted
the right to collect from ticket purchasers a per ticket convenience charge on
all tickets sold other than at the box office and an additional per order
handling charge on all tickets sold by Ticketmaster Corp. at other than remote
sales outlets to partially offset the cost of fulfillment. The amount of the
convenience charge is typically determined during the contract negotiation
process, and varies based upon numerous factors, including the services to be
rendered to the client, the amount and cost of equipment to be installed at
the client's box office and the amount of advertising and/or promotional
allowances to be provided, as well as the type of event and whether the ticket
is purchased at a remote sales outlet, by telephone, through the Ticketmaster
Online Web site or otherwise.

Operating Losses

Prior to the Merger, CitySearch incurred net losses of $308,000, $13.9
million and $36.5 million for the period from September 20, 1995 (date of
formation) to December 31, 1995, and for the years ended December 31, 1996 and
1997 respectively, and $27.1 million for the nine months ended September 28,
1998. At September 28, 1998, CitySearch had an accumulated deficit of $77.8
million. The net losses and accumulated deficit resulted from CitySearch's
lack of substantial revenues and the significant operation, infrastructure and
other costs incurred in the development and initial roll outs of CitySearch's
services.

Prior to the Merger, Ticketmaster Online incurred net losses of $330,000 and
$615,000 for the years ended January 31, 1996 and 1997, respectively, and
earned net income of $2.3 million and $2.5 million for the year ended January
31, 1998 and for the eight months ended September 30, 1998, respectively. At
September 30, 1998, Ticketmaster Online had retained earnings of $3.9 million.

Goodwill

The Merger resulted in $143.5 million of goodwill that will be amortized
over three years. Prior to the Merger, Ticketmaster Online was a wholly-owned
subsidiary of Ticketmaster Corp., which is a wholly-owned subsidiary of
Ticketmaster Group. Goodwill of $154.8 million, recorded by Ticketmaster
Online, which is being amortized over 40 years, represents a preliminary
allocation of goodwill resulting from the acquisition of Ticketmaster Group by
USAi.

RESULTS OF OPERATIONS

CitySearch

Revenues. CitySearch's revenues increased from $3.7 million for the nine
months ended September 30, 1997 to $11.3 million for the nine months ended
September 28, 1998, and increased from $203,000 for the year ended
December 31, 1996 to $6.2 million for the year ended December 31, 1997.
CitySearch did not recognize any revenue from September 20, 1995 (date of
formation) to December 31, 1995 (the "Inception Period"). CitySearch has two
revenue sources: (i) subscription and services revenue and (ii) licensing and
royalty revenue.

44
<PAGE>

Subscription and services revenue was $3.0 million and $9.5 million for the
nine months ended September 30, 1997 and September 28, 1998, respectively, and
was $203,000 and $4.9 million for the years ended December 31, 1996 and 1997
respectively. Subscription and services revenue increased for the nine months
ended September 28, 1998 as compared to the nine months ended September 30,
1997 and for the year ended December 31, 1997 as compared to the year ended
December 31, 1996 primarily as the result of increases in business Web site
subscription revenue of $4.2 million and $3.2 million, respectively, due to
increases in the number of city guides launched, an increased number of
business Web sites in each city guide market, and an increase in the average
sales price for business Web sites. The increases in subscription and services
revenue for the nine months ended September 28, 1998 and for the year ended
December 31, 1997 also resulted from increases in consulting revenue of $1.7
million and $306,000, respectively, barter revenue of $337,000 and
$1.1 million, respectively, and banner revenue of $316,000 and $113,000,
respectively. Licensing and royalty revenue was $677,000 and $1.9 million for
the nine months ended September 30, 1997 and September 28, 1998, respectively,
and was $0 and $1.3 million for the years ended December 31, 1996 and 1997,
respectively. The Company began recognizing licensing and royalty revenue
after the launch of its initial partner-led market city guide in July 1997.

Cost of Revenues. Cost of revenues consists primarily of the expenses
associated with the design, layout, photography, customer service and
editorial resources used in the production and maintenance of business Web
sites and editorial content, network infrastructure maintenance and the costs
of consulting services in partner-led markets. Cost of revenues is expended as
incurred. CitySearch had no cost of revenues for the Inception Period. Cost of
revenues were $7.6 million and $10.5 million for the nine months ended
September 30, 1997 and September 28, 1998, respectively, and were $2.9 million
and $9.7 million for the years ended December 31, 1996 and 1997, respectively.
The increases for the nine months ended September 28, 1998 as compared to the
nine months ended September 30, 1997 and for the year ended December 31, 1997
as compared to the year ended December 31, 1996 were due primarily to
increased personnel and freelance labor amounting to $2.3 million and $5.5
million, respectively, required to produce and maintain the increased number
of business Web sites and amount of editorial content. The remaining amount of
the increase during the periods was due to operating support costs associated
with the growth in the business.

Sales and Marketing Expenses. Sales and marketing expenses consist primarily
of the costs related to compensation of sales and marketing personnel,
advertising, public relations, travel, sales force training and marketing
literature. Sales and marketing expenses were $13.7 million and $14.9 million
for the nine months ended September 30, 1997 and September 28, 1998,
respectively, and were $57,000, $6.4 million and $20.2 million for the
Inception Period and for the years ended December 31, 1996 and 1997,
respectively. The increase for the nine months ended September 28, 1998 as
compared to the nine months ended September 30, 1997 was primarily due to
increased sales and marketing personnel and increased advertising expenses.
The increase for the year ended December 31, 1997 as compared to the year
ended December 31, 1996 was due primarily to increased labor related costs of
$7.6 million. The increase in the year ended December 31, 1997 was also
attributable, to a lesser extent, to an increase of $2.0 million in
advertising costs. The remaining increase in the period was related to
operating support costs associated with the growth in sales and marketing
activities. The Company expects that sales and marketing expenses will
continue to increase in absolute dollars as CitySearch expands its direct
sales force, hires additional marketing personnel and increases expenditures
for marketing and promotional activities.

Research and Development Expenses. Research and development expenses include
the costs to develop, test and upgrade the CitySearch online service and the
enterprise management systems. These costs consist primarily of salaries for
product development personnel, contract labor expense, consulting fees,
software licenses, hardware costs and recruiting fees. Research and
development expenses were $4.9 million and $5.0 million for the nine months
ended September 30, 1997 and September 28, 1998, respectively, and were
$152,000, $2.6 million and $7.2 million for the Inception Period and for the
years ended December 31, 1996 and 1997, respectively. The increases in
research and development expenses were primarily attributable to increased
staffing levels required to design, test, deploy and support expanded city
guide functionality and back-office systems. The Company believes that timely
deployment of new and enhanced products and technology is critical to
attaining its strategic objectives and to remaining competitive. Accordingly,
the Company intends to continue recruiting and hiring experienced research and
development personnel and making other investments in research

45
<PAGE>

and development. As such, the Company expects that research and development
expenditures will increase in absolute dollars in future periods. CitySearch
has expended research and development costs as incurred.

General and Administrative Expenses. General and administrative expenses
consist primarily of administrative and executive personnel costs, fees for
professional services and the costs of in-house infrastructure to support the
operations of CitySearch. General and administrative expenses were $4.3
million and $5.1 million for the nine months ended September 30, 1997 and
September 28, 1998, respectively, and were $104,000, $2.5 million and $5.9
million for the Inception Period and for the years ended December 31, 1996 and
1997, respectively. These increases were due primarily to increased staffing
levels to manage and support CitySearch's expanding operations. The Company
anticipates hiring additional personnel and incurring additional costs related
to being a publicly held entity, including directors' and officers' liability
insurance, investor relations programs and professional service fees.
Accordingly, the Company anticipates that general and administrative expenses
will continue to increase in absolute dollars.

Merger and Other Transactions Costs. CitySearch recorded $3.1 million in
costs during the nine months ended September 28, 1998, which were primarily
related to the Merger.

Interest Income, Net. Net interest income consists primarily of interest
earned on CitySearch's cash and cash equivalents, less interest expense on
capital lease obligations. CitySearch had net interest income of $104,000 and
$227,000 for the nine months ended September 30, 1997 and September 28, 1998,
respectively, and $5,000, $217,000 and $223,000 for the Inception Period and
for the years ended December 31, 1996 and 1997, respectively. Included in net
interest income during the nine months ended September 28, 1998 is interest
expense of $469,000 on the Convertible Note. CitySearch invests its cash
balances in short-term investment grade, interest-bearing securities.

Income Taxes. The provision for income, franchise and capital taxes of $800,
$1,600 and $8,330 for the Inception Period and for the years ended December
31, 1996 and December 31, 1997, respectively, is based solely on minimum state
tax requirements. CitySearch's effective tax rate differs from the statutory
federal income tax rate, primarily as a result of operating losses not
benefited. Due to the uncertainty surrounding the timing of realizing the
benefits of its favorable tax attributes in future tax returns, CitySearch has
placed a valuation allowance against its otherwise recognizable deferred tax
assets. At December 31, 1997, CitySearch had net operating loss carryforwards
for federal and state income tax purposes of approximately $47.5 million. The
federal carryforwards expire principally in the period from 2010 to 2012, and
the state carryforwards expire principally in 2003. See Note 4 of Notes to
Consolidated Financial Statements of CitySearch, Inc. The Tax Reform Act of
1986 imposes substantial restrictions on the utilization of net operating
losses and tax credits in the event of an "ownership change" of a corporation.
CitySearch's ability to utilize net operating loss carryforwards may be
limited as a result of "ownership change" as defined in the Internal Revenue
Code of 1986, as amended (the "Code"). The Merger, and prior issuances of
CitySearch Convertible Preferred Stock, have constituted "ownership changes"
that could result in limitations on the use of net operating loss
carryforwards in future periods.

Recent Accounting Pronouncement. In October 1997, the American Institute of
Certified Public Accountants issued SOP No. 97-2, Software Revenue
Recognition, which supersedes SOP No. 91-1. CitySearch adopted SOP No. 97-2
prospectively for software transactions entered into beginning January 1,
1998. SOP No. 97-2 generally requires revenue earned on software arrangements
involving multiple elements to be allocated to each element based on the
relative fair values of the elements. The fair value of an element must be
based on evidence that is specific to the vendor. If a vendor does not have
evidence of the fair value for all elements in a multiple-element arrangement,
all revenue from the arrangement is deferred until such evidence exists or
until all elements are delivered. Beginning with contracts signed in 1998
pursuant to SOP 97-2, CitySearch is recognizing revenues from the sale of
licenses for use of CitySearch's business and technology systems over the term
of the license agreement or the period over which the relevant services are
delivered. See Note 1 of Notes to Consolidated Financial Statements of
CitySearch, Inc.

Ticketmaster Online

Revenues. Ticketing operations revenues increased from $3.4 million for the
eight months ended September 30, 1997 to $9.9 million for the eight months
ended September 30, 1998, and increased from

46
<PAGE>

$199,000 for the fiscal year ended January 31, 1997 to $6.0 million for the
fiscal year ended January 31, 1998. Ticketmaster Online did not recognize
ticketing revenue for the fiscal year ended January 31, 1996, since
significant operations commenced in November 1996. The increase for the eight
months ended September 30, 1998 as compared to the comparable period in 1997
is primarily attributable to a significant increase in the number of tickets
sold (from 574,000 to 1,848,000 tickets), and a 6.4% increase in average per
ticket operations revenue (from $5.00 to $5.32). The increase for the fiscal
year ended January 31, 1998 is primarily attributable to a significant
increase in the number of tickets sold (from 39,000 to 1,065,000 tickets), and
an 11% increase in average convenience charge revenue (from $4.56 to $5.06).
The increase in the number of tickets sold in the fiscal year ended January
31, 1998 is largely attributable to the commencement of online ticket sales
through the Ticketmaster Online Web site in November 1996.

Sponsorship and advertising revenues were $2.4 million and $4.2 million for
the eight months ended September 30, 1997 and 1998, respectively, and $14,000,
$1.0 million and $3.9 million for the fiscal years ended January 31, 1996,
1997 and 1998, respectively. The increases are primarily attributable to an
increase in sponsorship and promotion activity with strategic marketing
partners.

Ticketing Operations Expenses. Ticketing operations expenses consist
primarily of expenses associated with ticket fulfillment, Web site design and
layout, service and network infrastructure maintenance and data
communications. Ticketing operating expenses were $2.0 million and $5.5
million for the eight months ended September 30, 1997 and 1998, respectively,
and were $635,000 and $3.5 million for the fiscal years ended January 31, 1997
and 1998, respectively. Ticketmaster Online did not incur any ticketing
operations expenses during the fiscal year ended January 31, 1996, since
significant ticketing operations began in November 1996. Ticketing operations
expenses are primarily variable in nature and have increased during the
periods presented in conjunction with the increase in ticketing operations
revenue and will continue to increase in future periods to the extent
ticketing operations revenues increase during such periods. In addition, the
Company expects that ticketing operations expenses will increase as a
percentage of ticketing revenues following the Merger as a result of expenses
associated with the Ticketmaster License Agreement.

Sales and Marketing Expenses. Sales and marketing expenses consist primarily
of costs related to the compensation of sales and marketing personnel,
advertising and travel. Sales and marketing expenses were $266,000 and
$772,000 for the eight months ended September 30, 1997 and 1998, respectively,
and $290,000 and $490,000 for the fiscal years ended January 31, 1997 and
1998, respectively. The increases for the fiscal year ended January 31, 1998
and the eight months ended September 30, 1998 over corresponding periods were
due primarily to increased salary related costs and operating support costs
associated with the growth in sales and marketing activities. The Company
expects that sales and marketing expenses will increase in absolute dollars.

General and Administrative Expenses. General and administrative expenses
consist primarily of administrative and executive personnel costs. General and
administrative expenses were $1.1 million and $1.3 million for the eight
months ended September 30, 1997 and 1998, respectively, and were $548,000,
$1.3 million and $1.7 million for the fiscal years ended January 31, 1996,
1997, and 1998, respectively. These increases were due primarily to increased
staffing levels to manage and support Ticketmaster Online's expanding
operations. The Company expects the general and administrative expenses will
increase in absolute dollars.

Income Taxes. The provision (benefit) for income taxes was $1.1 million and
$2.9 million for the eight months ended September 30, 1997 and 1998,
respectively, and $(204,000), $(374,000), and $1.8 million for the fiscal
years ended January 31, 1996, 1997 and 1998, respectively. Ticketmaster
Online's effective tax rate differs from the statutory federal income tax
rate, primarily as a result of state income taxes. Tax benefits were recorded
in fiscal years 1996 and 1997 as there were no valuation allowances recognized
against the deferred tax asset on a stand-alone basis for the respective
years. The Company expects that any taxable income of Ticketmaster Online for
1998 and 1999 will be offset by the expected future net operating losses of
CitySearch, resulting in a nominal tax provision on a combined basis
subsequent to the Merger. However, net operating loss carryforwards of
CitySearch will not be available to further offset taxable income of
Ticketmaster Online.

47
<PAGE>

SELECTED QUARTERLY OPERATING RESULTS

The following tables set forth certain historical statement of operations
data for CitySearch and Ticketmaster Online and certain pro forma combined
Ticketmaster Online-CitySearch, Inc. statement of operations data for the six
quarters ended June 30, 1998 and the period from July 1, 1998 through
September 28, 1998. This information has been derived from unaudited
historical and pro forma financial statements. In management's opinion, the
unaudited historical information has been prepared on the same basis as the
annual financial statements of CitySearch and Ticketmaster Online and includes
all adjustments (consisting only of normal recurring adjustments) necessary
for a fair presentation for the quarters presented. This information should be
read in conjunction with the Consolidated Financial Statements of CitySearch,
Inc. and Notes thereto, the Financial Statements of Ticketmaster Online and
Notes thereto and the Unaudited Pro Forma Condensed Combined Financial
Statements of Ticketmaster Online-CitySearch, Inc. and Notes thereto included
elsewhere in this Prospectus. The operating results for any quarter are not
necessarily indicative of results for any future period.

CitySearch (Historical)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
---------------------------------------------------------------------
MARCH 31, JUNE 30, SEPT. 30, DEC. 31, MARCH 31, JUNE 30, SEPT. 28,
1997 1997 1997 1997 1998 1998 1998
--------- -------- --------- -------- --------- -------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Subscription and
services............. $ 470 $ 1,038 $ 1,478 $ 1,927 $ 2,563 $ 3,014 $ 3,881
Licensing and
royalty.............. -- -- 677 594 528 693 638
------- ------- ------- ------- ------- ------- --------
Total revenues...... 470 1,038 2,155 2,521 3,091 3,707 4,519
Costs and expenses:
Cost of revenues...... 1,898 2,145 2,783 2,862 3,260 3,439 3,792
Sales and marketing... 4,661 4,963 4,878 5,670 4,757 5,055 5,090
Research and
development.......... 1,713 1,507 1,729 2,233 1,655 1,740 1,605
General and
administrative....... 1,363 1,380 1,520 1,620 1,468 1,687 1,949
Merger and other
transactions costs... -- -- -- -- 100 379 2,622
------- ------- ------- ------- ------- ------- --------
Total costs and
expenses........... 9,635 9,995 10,910 12,385 11,240 12,300 15,058
------- ------- ------- ------- ------- ------- --------
Loss from operations.... (9,165) (8,957) (8,755) (9,864) (8,149) (8,593) (10,539)
Interest income
(expense), net......... 84 20 -- 119 173 87 (33)
------- ------- ------- ------- ------- ------- --------
Loss before provision
for income taxes....... (9,081) (8,937) (8,755) (9,745) (7,976) (8,506) (10,572)
Provision for income
taxes.................. -- -- -- 8 -- -- --
------- ------- ------- ------- ------- ------- --------
Net loss................ $(9,081) $(8,937) $(8,755) $(9,753) $(7,976) $(8,506) $(10,572)
======= ======= ======= ======= ======= ======= ========
</TABLE>

Subscription and services revenues increased each period primarily as the
result of business Web site subscription revenue growth due to an increased
number of city guides launched, a greater number of business Web sites in each
city guide and an increase in the average sales price for business Web sites.
Licensing and royalty revenues have fluctuated with the timing of license
agreements in partner-led markets.

Cost of revenues has increased each period as CitySearch continues to sell
new business Web sites, add editorial content, host and maintain an increasing
number of business Web sites and, to a lesser extent, provide increasing
services in partner-led markets. Sales and marketing expenses fluctuate
primarily due to the timing of advertising and promotional campaigns. During
the three months ended December 31, 1997, the increase in sales and marketing
expense was primarily due to increased advertising expenditures. Research and
development expenses fluctuate primarily due to the periodic use of technology
consultants. During the three months ended December 31, 1997, consultants were
retained to assist with the development of version CS 2.5 of CitySearch's
online city guide application. General and administrative expenses have
increased due primarily to increased staffing levels to manage and support
CitySearch's expanding operations. During the three-month periods ended
June 30, 1998 and September 28, 1998, general and administrative expenses
increased primarily due to higher professional fees incurred during the
quarters. Merger and other transactions costs increased for the three months
ended September 28, 1998 primarily due to costs relating to the Merger.

48
<PAGE>

Ticketmaster Online (Historical)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------------------------------------------------
MARCH 31, JUNE 30, SEPT. 30, DEC. 31, MARCH 31, JUNE 30, SEPT. 30,
1997 1997 1997 1997 1998 1998 1998
--------- -------- --------- -------- --------- -------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Ticketing operations.. $ 528 $1,665 $1,302 $1,947 $2,237 $3,710 $4,624
Sponsorship and
advertising.......... 742 959 1,012 1,140 917 1,527 2,111
City guide and
related.............. -- -- -- -- -- -- 112
------ ------ ------ ------ ------ ------ ------
Total revenues...... 1,270 2,624 2,314 3,087 3,154 5,237 6,847
Costs and expenses:
Cost of ticketing
operations........... 441 753 863 1,203 1,377 2,074 2,496
Cost of city guide and
related.............. -- -- -- -- -- -- 97
Sales and marketing... 93 85 97 164 225 245 362
Research and
development.......... -- -- -- -- -- -- 38
General and
administrative....... 396 389 439 476 515 492 460
Amortization of
goodwill............. -- -- -- -- -- -- 1,224
------ ------ ------ ------ ------ ------ ------
Total costs and
expenses........... 930 1,227 1,399 1,843 2,117 2,811 4,677
------ ------ ------ ------ ------ ------ ------
Income from operations
..................... 340 1,397 915 1,244 1,037 2,426 2,170
Interest expense, net
..................... -- -- -- -- -- -- (1)
------ ------ ------ ------ ------ ------ ------
Income before
provision for income
taxes................ 340 1,397 915 1,244 1,037 2,426 2,169
Provision for income
taxes.................. 149 612 401 545 438 1,025 1,530
------ ------ ------ ------ ------ ------ ------
Net income............ $ 191 $ 785 $ 514 $ 699 $ 599 $1,401 $ 639
====== ====== ====== ====== ====== ====== ======
</TABLE>

During the three months ended June 30, 1997, ticketing operations revenues
included approximately $450,000 of revenue earned from Web site development
and support for an affiliate of Ticketmaster Online. During the three months
ended June 30, 1998, Ticketmaster Online began to recognize revenue from an
advertising and sponsorship agreement with N2K. See "Business--Ticketmaster
Online Business--Ticketmaster Online Strategic Alliances." The three months
ended September 30, 1998 include the two days of operating results of
CitySearch subsequent to the Merger.

Ticketmaster Online-CitySearch, Inc. (Pro Forma Combined)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------------------------------------------------------
MARCH 31, JUNE 30, SEPT. 30, DEC. 31, MARCH 31, JUNE 30, SEPT. 30,
1997 1997 1997 1997 1998 1998 1998
--------- -------- --------- -------- --------- -------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Ticketing operations.. $ 528 $ 1,665 $ 1,302 $ 1,947 $ 2,237 $ 3,710 $ 4,624
Sponsorship and
advertising.......... 744 968 1,047 1,206 1,014 1,707 2,194
City guide and
related.............. 468 1,029 2,120 2,455 2,994 3,527 4,548
-------- -------- -------- -------- -------- -------- --------
Total revenues...... 1,740 3,662 4,469 5,608 6,245 8,944 11,366
Costs and expenses:
Cost of ticketing
operations........... 450 915 1,018 1,482 1,691 2,717 3,402
Cost of city guide and
related.............. 1,898 2,145 2,783 2,862 3,260 3,439 3,889
Sales and marketing... 4,754 5,048 4,975 5,834 4,982 5,300 5,452
Research and
development.......... 1,713 1,507 1,729 2,233 1,655 1,740 1,643
General and
administrative....... 1,611 1,622 1,812 1,948 1,776 1,972 2,250
Amortization of
goodwill............. 12,932 12,931 12,932 12,930 12,932 12,931 12,932
Merger and other
transactions costs... -- -- -- -- 100 379 2,622
-------- -------- -------- -------- -------- -------- --------
Total costs and
expenses........... 23,358 24,168 25,249 27,289 26,396 28,478 32,190
-------- -------- -------- -------- -------- -------- --------
Loss from operations.... (21,618) (20,506) (20,780) (21,681) (20,151) (19,534) (20,824)
Interest expense, net... (791) (855) (875) (756) (702) (788) (439)
-------- -------- -------- -------- -------- -------- --------
Loss before provision
for income taxes....... (22,409) (21,361) (21,655) (22,437) (20,853) (20,322) (21,263)
Provision for income
taxes.................. -- -- -- 8 -- -- --
-------- -------- -------- -------- -------- -------- --------
Net loss................ $(22,409) $(21,361) $(21,655) $(22,445) $(20,853) $(20,322) $(21,263)
======== ======== ======== ======== ======== ======== ========
</TABLE>

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The Company's operating results have varied on a quarterly basis during its
short operating history and may fluctuate significantly in the future as a
result of a variety of factors, many of which are outside the Company's
control. Factors that may affect the Company's quarterly operating results
include, but are not limited to, Ticketmaster Corp.'s ability to maintain and
increase the number of clients for which it provides online ticketing services
and convenience charges relating thereto, the ability of the Company's
partners to meet roll-out schedules for CitySearch city guide services, the
timing and amount of license and royalty payments from CitySearch partners,
the Company's ability to increase the volume of online ticket sales through
the Ticketmaster Online Web site, the Company's ability to retain existing
business customers, attract new business customers at a steady rate and
maintain customer satisfaction, the timing and volume of new business Web site
orders and the Company's capacity to meet such orders, the Company's ability
to maintain or increase current rates of sales productivity, the announcement
or introduction of new or enhanced sites and services by the Company or its
competitors, the amount of traffic on the Company's online sites, the amount
of expenditures for online advertising by businesses, the level of use of the
Web and online services and consumer acceptance of the Internet for services
such as those offered by the Company, the Company's ability to upgrade and
develop its systems and attract personnel in a timely and effective manner,
the amount and timing of operating costs and capital expenditures relating to
expansion of the Company's business and infrastructure, technical
difficulties, system downtime or Internet brownouts, political or economic
events affecting the cities in which the Company operates and general economic
conditions. Unfavorable changes in any of the above factors could adversely
affect the Company's revenues, gross margins and results of operations in
future periods. In addition, Ticketmaster Online derives a majority of its
revenues directly or indirectly from the sale of tickets and related
merchandise for live entertainment, sporting and leisure events and is
directly affected by the popularity, frequency and location of such events.
Factors affecting the demand for and attendance of such events include,
without limitation, general economic conditions, consumer trends and work
stoppages. Any occurrence or condition that results in decreased attendance or
demand for such entertainment, sporting and leisure events would likely have a
material adverse effect on the Company's business, financial condition and
results of operations. As a result of the foregoing, the Company believes that
period-to-period comparisons of its results of operations should not be relied
upon as an indication of future performance. In addition, the results of any
quarterly period are not indicative of results to be expected for a full
fiscal year. The foregoing factors which are largely unpredictable and may
cause significant fluctuations in operating results may cause the Company's
annual or quarterly results of operations to be below the expectations of
public market analysts or investors, in which case the market price of the
Class B Common Stock could be materially and adversely affected.

LIQUIDITY AND CAPITAL RESOURCES

CitySearch

Since its inception, CitySearch has financed its operations primarily
through the private placement of equity securities, raising $81.0 million, and
capital equipment leases. At September 28, 1998, CitySearch had $57.9 million
in cash and cash equivalents. CitySearch has had significant negative cash
flows from operating activities in each fiscal and quarterly period to date.
Net cash used in operating activities was $22.8 million and $23.4 million for
the nine months ended September 30, 1997 and September 28, 1998, respectively,
and $213,000, $10.5 million and $30.1 million for the Inception Period and for
the years ended December 31, 1996 and 1997, respectively. Cash used in
operating activities from Inception through September 28, 1998 consisted
primarily of net operating losses and increases in accounts receivable, which
were partially offset by increases in deferred revenues, accrued expenses and
accounts payable. CitySearch received a $50.0 million loan from USAi upon
issuance of the Convertible Note in August 1998. See "Ticketmaster Online-
CitySearch Merger--Convertible Note."

Net cash used in investing activities was $1.4 million and $171,000 for the
nine months ended September 30, 1997 and September 28, 1998, respectively, and
was $82,000, $3.5 million and $2.0 million for the Inception Period and for
the years ended December 31, 1996 and 1997, respectively. Net cash used in
investing activities in these periods consisted primarily of capital
expenditures for computer equipment, purchased software, office equipment, and
leasehold improvements. As of December 31, 1997, the Company also had
commitments under non-cancelable operating leases of $5.3 million. Net cash
provided by financing activities was $18.0 million and

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<PAGE>

$56.2 million for the nine months ended September 30, 1997 and September 28,
1998, respectively, and was $1.7 million, $20.2 million and $49.7 million for
the Inception Period and the years ended December 31, 1996 and 1997,
respectively, attributable to the private sale of CitySearch Convertible
Preferred Stock.

Ticketmaster Online

Prior to the Merger, Ticketmaster Online's primary sources of liquidity were
cash from operations and funding from Ticketmaster Corp. Consistent with the
cash management policies of Ticketmaster Corp., Ticketmaster Online did not
maintain any cash balances prior to the date of the Merger (September 28,
1998). Since its inception through the fiscal year ended January 31, 1997,
Ticketmaster Online had negative cash flows from operating activities.
Subsequent to these periods, net cash provided from operating activities has
been positive. Net cash provided from operating activities was $1.8 million
and $6.0 million for the eight months ended September 30, 1997 and 1998,
respectively, and $2.9 million for the fiscal year ended January 31, 1998,
while net cash used in operating activities was $538,000 and $556,000 for the
years ended January 31, 1996 and 1997, respectively. Cash provided from
operating activities for the five months ended June 30, 1998 primarily
consists of net operating income and increases in deferred revenue.

Net cash used in investing activities was $125,000 and $401,000 for the
eight-month periods ended September 30, 1997 and 1998, respectively, and was
$146,000, $189,000 and $250,000 for the fiscal years ending January 31, 1996,
1997 and 1998, respectively. Net cash used in investing activities in these
periods consisted primarily of capital expenditures for computers, software,
equipment and leasehold improvements. Net cash used in financing activities
was $1.7 million and $5.5 million for the eight months ended September 30,
1997 and 1998, respectively, and $2.7 million for the fiscal year ended
January 31, 1998 attributable to repayments to Ticketmaster Corp. for prior
financing provided to Ticketmaster Online and distributions to Ticketmaster
Corp. Net cash provided by financing activities was $684,000 and $748,000 for
the fiscal years ended January 31, 1996 and 1997, respectively, attributed to
intercompany funding from Ticketmaster Corp.

At September 30, 1998, the Company's cash and cash equivalents were $57.9
million. The Company believes that net proceeds from this offering (following
the use of approximately $51 million of the proceeds to repay the Convertible
Note), together with existing cash and cash equivalents will be sufficient to
meet its working capital and capital expenditures requirements for at least
the next 12 months. Thereafter, the Company may be required to raise
additional funds. No assurance can be given that the Company will not be
required to raise additional financing prior to such time. If additional funds
are raised through the issuance of equity securities, stockholders of the
Company may experience significant dilution. Furthermore, there can be no
assurance that additional financing will be available when needed or that if
available, such financing will include terms favorable to the Company or its
stockholders. If such financing is not available when required or is not
available on acceptable terms, the Company may be unable to develop or enhance
its products and services, take advantage of business opportunities or respond
to competitive pressures, any of which could have a material adverse effect on
the Company's business, financial condition and results of operations. See
"Risk Factors--Future Capital Needs; Uncertainty of Additional Financing."

YEAR 2000

The widespread use of computer programs that rely on two-digit dates to
perform computation and decision-making functions may cause computer systems,
including systems and software used by the Company and its Web services, to
malfunction prior to or in the Year 2000 and lead to significant business
delays and disruptions in the Company's business and operations in the United
States and internationally. Both CitySearch and Ticketmaster Online have begun
to develop plans to minimize the impact of this Year 2000 problem. Pursuant to
such plans, CitySearch and Ticketmaster Online engaged in the process of
identifying programs used by its computer systems that may require
modification as well as potential hardware system upgrades that may be
necessary as a result of the use of such two-digit dates, and has initiated
programs to rectify any problems, including upgrading existing software
packages, implementing new Year 2000 compliant systems and repairing existing
software. The Company believes that the costs of resolving its own Year 2000
compliance issues, which

51
<PAGE>

it presently expects will not exceed $200,000, will not be material. Both
CitySearch and Ticketmaster Online have also begun communications with
significant suppliers to determine the extent to which these operations are
vulnerable to those third parties' failure to solve their own Year 2000
issues. In this regard, the plan includes vendor compliance certification and
an attempt to identify substitute suppliers. In some cases, however, it will
not be possible for the Company to identify an alternate supplier or third-
party service provider. Such cases include the functionality of the Internet
in general, the fulfillment and other services provided by Ticketmaster Corp.
as well as the payment clearing services of financial institutions and other
credit card issuers. The Company believes, based on its inquiry to date, that
these entities generally have either already addressed their Year 2000
compliance or are actively engaged in that process. There can be no assurance,
however, that a failure by the hardware or software systems of the Company's
third-party suppliers to be Year 2000 compliant will not have a material
adverse effect to the Company's business, financial condition or results of
operations.

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<PAGE>

BUSINESS

The discussion in this Prospectus contains forward-looking statements that
involve risks and uncertainties. The Company's actual results may differ
significantly from the results discussed in the forward-looking statements.
Factors that could cause or contribute to such differences include, but are
not limited to, those discussed in "Risk Factors" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations."

OVERVIEW

The Company is combining CitySearch and Ticketmaster Online to create a
leading provider of local city guides, local advertising and live event
ticketing on the Internet. CitySearch was incorporated in September 1995 and
launched its first local city guide in May 1996. Ticketmaster Online was
formed in 1993 to administer the online business of Ticketmaster Corp. and
began selling live event tickets and related merchandise online in November
1996. Prior to the Merger, Ticketmaster Online was operated as a wholly-owned
subsidiary of Ticketmaster Corp. The Company intends to integrate its local
CitySearch city guides with its Ticketmaster Online live events ticketing and
merchandising distribution capabilities to offer online ticketing,
merchandise, electronic coupons and other transactions to a broader audience
of consumers. The CitySearch city guides provide up-to-date information
regarding arts and entertainment events, community activities, recreation,
business, shopping, professional services and news/sports/weather to consumers
in metropolitan areas. Ticketmaster Online offers consumers up-to-date
information on live entertainment events and a convenient means of purchasing
tickets and related merchandise on the Web for live events in 44 states and in
Canada and the United Kingdom. Consumers can access the Ticketmaster Online
service at www.ticketmaster.com and from CitySearch owned and operated city
guides at www.citysearch.com through numerous direct links from banners and
event profiles. Subject to certain limitations, Ticketmaster Online is the
exclusive agent for Ticketmaster Corp., a leading provider of live event
automated ticketing services in the United States, for the online sale of
tickets to live events presented by Ticketmaster Corp.'s clients.

The Company intends to utilize Ticketmaster Online's presence in certain
domestic and international cities to accelerate the expansion of different
versions of the CitySearch city guides into new local territories. The Company
plans to include selected CitySearch editorial content on the Ticketmaster
Online Web site, thereby providing additional information to assist purchasing
decisions. The Company believes that by expanding its branded network of local
city guides and continuing to offer attractive features and services, such as
live event ticketing, the Company's Web sites will increasingly attract local,
regional and national advertisers that seek to efficiently target local
consumers.

INDUSTRY BACKGROUND

The Internet and the World Wide Web

The Internet is an increasingly significant global interactive medium for
communications, content and commerce. International Data Corporation ("IDC")
estimates that the number of Web users worldwide will increase from 69 million
at the end of 1997 to 320 million by the year 2002. According to The Media
Audit, in certain of the markets where CitySearch has offerings, including
Austin, Dallas, Portland, Raleigh-Durham-Chapel Hill, Salt Lake City, San
Diego, San Francisco and Washington, D.C., more than four in ten adults are
online. Growth in Internet usage has been fueled by a number of factors,
including (i) the large and growing installed base of personal computers in
the workplace and home, (ii) advances in the performance of personal computers
and modems, (iii) improvements in network systems and infrastructure, (iv)
more readily available and lower cost access to the Internet, (v) increased
awareness of the Internet among businesses and consumers, (vi) increased
volume of information and services offered on the Web and (vii) reduced
security risks in conducting transactions online. As Internet accessibility,
usage and functionality continue to grow, the Internet is increasingly being
used as a medium for direct communication among users (e.g., via e-mail and
bulletin boards) as well as a rapidly growing sales and marketing channel.

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The Demand for Local, Community-Oriented Information and Transactions over
the Internet

The Company believes that as users spend more time on the Web, they are
increasingly seeking local information relevant to their daily lives and
sophisticated online transaction capabilities including opportunities to
purchase products and services online. The Company believes that consumers
spend a large majority of their time and money in their local communities and
that, as a result, Web users are increasingly seeking targeted, relevant
information concerning local events, places of interest, products and services
available for sale and other information that is pertinent to their local
activities. The Media Audit reports that 39% of the adult population living in
66 metropolitan areas in the United States were online in the second quarter
of 1998. According to a survey conducted by Find/SVP, over half of United
States Internet users accessed some type of online local news and information
during the first three months of 1997. Additionally, businesses are seeking
cost-effective means to target advertising and direct marketing efforts based
on demographic characteristics, specific interests and geographic location.
McCann-Erickson Incorporated estimates that businesses spent approximately $77
billion in 1997 on traditional, indirect advertising efforts in local markets.
With the Internet, businesses can directly interact with consumers, receive
immediate feedback on their marketing efforts and refine advertising campaigns
on a real-time basis. The Company believes that the Web is becoming a more
effective and efficient means for businesses to reach local consumers. In
addition to improving advertising and marketing efforts, the increasing
functionality and availability of the Internet have made it an increasingly
attractive medium for conducting commerce. A broad range of consumer products
is being sold online, including tickets to live events, books, computers,
travel services, brokerage services, automobiles and music. IDC estimates that
the amount of commerce conducted worldwide over the Web will grow from over
$12 billion at the end of 1997 to more than $425 billion by the end of 2002,
of which approximately $93.5 billion is estimated to be goods and services
purchased by users over the Web from their homes.

Web users seeking relevant local information, as well as local businesses
interested in advertising to targeted consumers, currently lack effective Web
resources. As the Internet has evolved, Web users have used sites devoted to
local areas within navigational guides, such as search engines and
directories, and Web sites provided by newspapers and other traditional media
sources. Local content within large navigational guides is often comprised of
hypertext links to multiple, disparate Web sites that may provide the user
with inconsistent and confusing user interfaces, outdated information and no
common database to enable information searches. While Web sites for
traditional media, including newspapers and television stations, effectively
provide Web users with updated news coverage, traditional media organizations
often lack the internal resources to structure easy-to-use, interactive event
and transaction guides for Web users. In addition, the Company believes such
Web sites frequently do not provide local businesses with useful geographic
and editorial context for a business' Web presence. Finally, many traditional
media organizations, while possessing strong brand names in their local
markets, do not have experience in fielding, training and managing a sales and
production force skilled at selling Web sites to local businesses, producing
high quality Web-based advertising, providing sophisticated online transaction
capabilities and necessary customer support. For local businesses seeking a
means of establishing a Web presence, the current alternatives include either
building their own Web site or placing an advertisement with an electronic
yellow pages site. Custom Web sites are often expensive to develop and
maintain, and may not attract high levels of Web site traffic without
significant promotion. Placing an advertisement with an electronic yellow
pages typically provides neither an appropriate editorial context for a local
business' site nor assistance on how to effectively reach consumers.

The Company believes there is a growing demand for online city guides that
provide frequently updated local information organized in an intuitive manner
and targeted at metropolitan consumers. The Company believes that consumers
are seeking a guide that provides extensive information on local events,
business listings and community activities, offers a user-friendly interface
to facilitate rapid information access, allows users to search within a city-
specific site, and provides a platform for online transactions. The Company
additionally believes that as Internet users are increasingly seeking such
information, traditional media sources are also seeking to partner with
companies that are able to provide the appropriate technology and business
processes to develop an online presence. Similarly, businesses are seeking
high quality Web presences, editorially targeted at interested consumers, at
an affordable cost. Indicative of this opportunity, Jupiter Communications
estimates that

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<PAGE>

the amount of local business advertising online will grow from 9% of total
online advertising revenues in 1996 to 37% in 1998 and 54% of the $7.7 billion
in online advertising in 2002. Forrester estimates that total worldwide
Internet advertising will increase from $1.5 billion in 1998 to $15.2 billion
in 2003. As a result, the Company believes a significant opportunity exists
for a local city guide that meets consumers' demands for local information and
businesses' objectives for targeting, interacting with and selling to these
local consumers.

The Automated and Online Ticketing Industry

The supply of tickets for live events, both domestically and
internationally, has grown in recent years due to increases in the number of
facilities, facility size and seating capacity, event expansion into new
market areas (e.g., new sports teams and leagues) and increases in the number
of event performances. Ticket supply has also been enhanced by the need for
facilities to continually present as many revenue-producing events as possible
in order to meet their financial and other obligations. In recent years, the
public's increased demand for tickets to certain live entertainment events has
been evidenced by its willingness to pay higher ticket prices to attend these
events and the spread of public interest in certain types of events beyond
customary boundaries (e.g., increased worldwide interest in American
basketball).

Tickets have historically been distributed through box offices and retail
outlets. These traditional ticket distribution methods have been characterized
by inefficiencies, including the lack of ticket accountability, inefficient
inventory control systems, inability to capture ticket sales information on a
real-time basis, and limited public access to tickets. Automated ticketing
services have grown substantially in response to the needs of venues, sports
franchises and promoters to more effectively and efficiently distribute and
manage the expanding supply of tickets, and to accommodate the public's
increasing demand for fair and convenient access to such tickets.

Automated ticketing companies that process and sell tickets for live events
contract with arenas, stadiums and other venues, sports franchises and event
promoters to provide ticket sales, promotion, distribution, inventory control,
and transaction processing and fulfillment services. Currently, other than
tickets sold at venue box offices, the substantial majority of tickets for
live events which are made available to the general public by automated
ticketing companies are purchased through telephone call centers and
independent retail ticket outlets. The Web provides venues, sports franchises
and event promoters with innovative ways to market tickets to live events,
including seating maps, presentation of event related content, sale of
distressed inventory in the last hours or days before an event, and a
purchasing process that enables consumers to conveniently purchase tickets at
home. Jupiter Communications predicts that the percentage of concert tickets
sold online will increase from 1.8% of total concert ticket sales in 1998 to
19.2% in 2002.

By selling live event tickets through automated ticket companies, the
Company believes venues, sports franchises and event promoters are better able
to centrally control ticket inventory and proceeds, collect and utilize
accounting information and market research data, manage transaction costs,
effect the broad, expedient and equitable distribution of tickets and widely
disseminate event information. Consumers are able to purchase tickets over the
telephone or by visiting an independent retail ticket outlet, such as a music
store, that is more conveniently located by the consumer's home or office than
the box office of the applicable venue.

Automated ticket companies are increasingly utilizing the Internet in an
effort to provide greater marketing and distribution capabilities for clients
and to enable consumers to more conveniently purchase live event tickets. The
Company believes the Web provides significant opportunities for venues and
other clients and marketing partners to use collected demographic information
to reach and interact with targeted audiences (e.g., advance notice of
upcoming events and promotional and merchandising opportunities). Additional
opportunities may exist internationally to reach additional live event venues
in what the Company believes are historically under-penetrated geographic
regions for ticketing services. The Company further believes consumers will
increasingly recognize the convenience of the Web for purchasing tickets to
live entertainment events as the transactional capabilities of the Internet
become more familiar, comfortable and easier for consumers to use.

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<PAGE>

THE TICKETMASTER ONLINE-CITYSEARCH SOLUTION

The Company operates two complementary Web services: a network of CitySearch
local city guides and the Ticketmaster Online Web site. The CitySearch city
guides provide up-to-date information regarding arts and entertainment events,
community activities, recreation, business, shopping, professional services
and news/sports/weather to consumers in metropolitan areas. Ticketmaster
Online offers consumers up-to-date information on live entertainment events
and a convenient means of purchasing tickets for live events and related
merchandise on the Web in 44 states and in Canada and the United Kingdom.
Consumers can access the Ticketmaster Online service at www.ticketmaster.com
and from CitySearch owned and operated city guides at www.citysearch.com
through numerous direct links from banners and event profiles. Pursuant to the
terms of the Ticketmaster License Agreement and subject to certain
limitations, Ticketmaster Online is Ticketmaster Corp.'s exclusive agent for
the online sale of tickets to live events presented by Ticketmaster Corp.'s
clients.

CitySearch

Each local city guide primarily consists of original content developed and
designed specifically for the Web by the Company and its partners. The Company
designs and produces custom-built Web sites and performs related services for
local and regional businesses, aggregates them in a local city guide
environment and provides these businesses with the ability to regularly update
and expand their sites. The CitySearch sites offer local and regional
businesses the opportunity to reach and interact with targeted consumers.

The Company typically targets medium- to large-sized cities for its
CitySearch city guides with a combination of high personal computer
penetration, high Internet use, strong population growth, significant high
technology employment, a large university population and a government
presence. The Company has two primary means of providing its local city
guides. In its owned and operated markets, the Company systematically produces
the majority of its own content, hires and deploys a direct sales force to
sell custom-built Web sites to local businesses and contracts with local media
companies (primarily radio and television stations) for promotion and
distribution. In other markets, the Company partners with a local media
company (usually a leading daily newspaper) that contracts with the Company to
assist in designing, developing and launching a city guide. These partners
license the Company's systems and provide royalty payments to the Company on
revenues derived from operations. As of September 30, 1998, the Company
provided CitySearch city guides in 15 cities, seven of which are owned and
operated and eight of which are partner-led markets. The Company and its
partners are in the process of rolling out their services in two additional
partner-led markets in Copenhagen and San Diego.

Ticketmaster Online

Ticketmaster Online is a leading online ticketing service that enables
consumers to purchase tickets for live music, sports, theater and family
entertainment events presented by Ticketmaster Corp.'s clients and related
merchandise over the Web. The Company believes the online nature of the
service offers improved marketing and distribution capabilities as well as a
larger potential consumer base to Ticketmaster Corp. clients, while providing
consumers more convenient access to live event tickets and related
merchandise. In addition to these services, the Ticketmaster Online Web site
provides local information and original content regarding live events for
Ticketmaster Corp. clients throughout the United States, Canada and the United
Kingdom.

Ticketmaster Online distributes tickets over the Internet for Ticketmaster
Corp.'s clients, including over 3,000 venues, sports franchises and event
promoters. In addition to serving both multi-event and single event promoters,
Ticketmaster Corp.'s venues range in size from large stadiums with more than
60,000 seats to smaller theaters with fewer than 1,000 seats. Through
Ticketmaster Online, consumers can purchase tickets over the Internet for 94
professional sports franchises in North America, including 16 Major League
Baseball teams, 18 National Football League teams, 23 National Basketball
Association teams, 20 National Hockey League teams, ten Major League Soccer
teams and seven Women's National Basketball Association teams.

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<PAGE>

Key elements of the Company's solution include the following:

Leading Local Online Services and Ticketing. The Company is a leading
provider of online local city guides and ticketing services for live events.
CitySearch has launched or initiated a roll-out of Web-based local city guides
in major national and international markets, including Austin, Baltimore,
Dallas, Los Angeles, Nashville, New York City, Portland, Raleigh-Durham-Chapel
Hill, Salt Lake City/Utah, San Diego, the San Francisco Bay Area, Washington,
D.C., Copenhagen, Melbourne, Stockholm, Sydney and Toronto. The Company
believes the success of its city guide approach is evidenced by the
approximately 8,500 CitySearch local and regional business Web sites that were
online as of September 30, 1998 in its owned and operated markets, the
approximately 8,400 business Web sites that the Company believes were online
as of September 30, 1998 in its partner-led markets, and by its consumer base
penetration and consumer usage. According to a RelevantKnowledge study, the
Company had approximately 743,000 unique adult users in its CitySearch owned
and operated markets in June 1998. The Company believes that approximately
6.4% of the local market online consumers used the CitySearch service in these
markets. Media Metrix reports that Ticketmaster Online had 1.3 million unique
users in July 1998. Gross transaction dollars from live event ticket sales
through the Ticketmaster Online Web site increased from approximately $100,000
in November 1996 to more than $10.0 million in July 1998.

Differentiated Service Offering. The Company believes its CitySearch local
city guides in combination with its Ticketmaster Online sales of tickets and
related merchandise differ substantially from competitive offerings. The
Company develops and regularly updates the content of its city guides, both
internally and in conjunction with local media partners, as well as the live
event information presented by Ticketmaster Online. Unlike navigational guides
that typically access content from third-party Web sites that may be
incomplete or out of date, CitySearch sites encompass a broad array of
updated, community-specific content that is easily accessed through the
CitySearch common interface. The Company's city guides have received numerous
awards and recognition for design, functionality and content, including PC
Magazine's Editor's Choice, USA Today/Intelliquest's survey leader, the 1998
Webby award for best travel site, two 1998 Local Internet Service Awards for
Best Local/Regional Directory and Best City Guide, recognition by The New York
Times as best overall online guide to New York City and Net Guide's Platinum
"Best of the Web" award. In addition, the Ticketmaster Online Web site
received Internet Shopper Magazine's Spring 1997 Internet Shopper Choice award
for Best Entertainment Web Site and Interactive Services Association's award
for Best Online Application (Products and Services) and was included in
WebMaster Magazine's Top 50/50 Internet & Intranet Sites.

Strategic Partnerships. The Company is engaged in a number of strategic
partnerships with media, content and other companies in order to build the
CitySearch and Ticketmaster Online brand names as well as the network of city
guides. The Company has agreements to develop city guides in partnership with
The Baltimore Sun, The Dallas Morning News, the Los Angeles Times, The San
Diego Union-Tribune, Washingtonpost.Newsweek Interactive, Big Colour Pages
(independent yellow pages of Australia), The Melbourne Age, Schibsted
ASA/Scandinavia Online (Copenhagen, Oslo and Stockholm), The Sydney Morning
Herald, Tele-Direct (the yellow pages subsidiary of Bell Canada, Inc.), and
the Toronto Star. Several of the Company's strategic relationships involve
equity investments from the Company's partners, including
Washingtonpost.Newsweek Interactive Company, The Times Mirror Company, owner
of the Los Angeles Times and The Baltimore Sun, Schibsted ASA and Toronto Star
Newspapers Limited. These major media partners also bring capital, brand
recognition, promotional strength and local knowledge to their CitySearch
sites and allow the Company to build out its national and international
network of sites faster than it could solely through owned and operated sites.

In July 1998, the Company entered into an agreement with Classified
Ventures, a leading provider of online advertising products and services to
the newspaper industry. Classified Ventures is funded by Central Newspapers
Inc., Gannett Co., Inc., Knight Ridder, Inc., The McClatchy Company, The New
York Times Company, The Times Mirror Company, Tribune Company and The
Washington Post Company, and has a network of over 140 affiliated newspapers
in 44 states, including 34 of the nation's top 50 markets. CitySearch has
licensed elements of its technology and business systems to Classified
Ventures and provide services in

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automotive and real estate classified advertising categories. Certain
CitySearch owned and operated city guides may also participate as Classified
Ventures affiliates in their respective markets.

In owned and operated CitySearch markets, the Company partners with local
media companies to assist it in developing content and expanding its
promotional activities. For example, the Company has partnered in Salt Lake
City/Utah with the CBS television station (KUTV) and six radio stations owned
by Citadel Communications Corporation, in San Francisco with the ABC
television station (KGO) and two CBS-owned radio stations and in Raleigh-
Durham-Chapel Hill with the national public radio station (WUNC) and with four
radio stations owned by Capstar Broadcasting Corporation. In addition, the
Company is a party to an agreement with American Express pursuant to which
American Express made an equity investment in the Company, and that provides
for the distribution of co-branded marketing materials for the sale of
business Web sites to American Express merchant customers, American Express
sponsorship and banner advertising, introduction of e-commerce products and
services, sponsorships and other promotions. The Company has also reached
agreements or arrangements with Earthlink Network, Inc., The Walt Disney
Company's Family.com, CNET, Inc.'s Snap! Online, Planet Direct Corporation,
@Home Corporation and Internet Travel Network to expand its distribution
efforts.

The Company participates in several media, marketing and technology
initiatives. For example, Ticketmaster Online has entered into agreements with
major media companies such as the Los Angeles Times, The New York Times and
Tribune Interactive to create co-branded Web sites containing event listings,
other content and promotional opportunities for advertisers. Ticketmaster
Online has created a co-branded Web presence with N2K (Music Boulevard) to
promote and sell music products. Ticketmaster Online also advertises products
and services of Ford Motor Company, International Business Machines
Corporation, Red Lobster, Sprint Communications Company, L.P., United Parcel
Service of America, Inc. and Yahoo!. Ticketmaster Online is also working with
Intel Corporation to jointly develop the "my Ticketmaster" site, a
personalized Web application designed to enable users to choose categories of
event information based on personal preferences and that is scheduled to
launch in the fourth quarter of 1998.

Differentiated Presence on the Web For Local and Regional Businesses. The
Company creates CitySearch Web sites for local and regional businesses,
aggregates the Web sites in a local city guide environment and provides
businesses the ability to regularly update and expand their sites. The Company
believes its CitySearch service offers local and regional businesses the
opportunity to reach and interact with targeted audiences in a cost-effective
manner. The Company provides business customers with integrated solutions to
establish customized, multi-page Web sites including design, layout,
photography, posting of updated information, hosting and maintenance.
Businesses are able to provide a targeted audience with updated information
about their products and services, including photographs, prices, store
location, schedules of live entertainment, audio clips, e-mail distributions,
specials or sales and other relevant information. The Company typically
creates a customized, multi-page Web site for its customers with a minimal up-
front fee and monthly fees ranging from $60 to $750 per month. The Company
believes its broad offering of CitySearch services and prices compares
favorably to other Web advertising options available to businesses. Such
options range from low cost, low quality scanned-in information to free-
standing custom-designed sites that may cost in excess of $10,000 in up-front
fees to produce and that rely on significant additional promotion to attract
traffic. By providing a high quality Web presence at an affordable price, the
Company believes that its services address the demand of the large number of
businesses whose online needs fall between these market extremes.

Community-Based Approach. The Company differentiates itself from most
national developers of local city guides by building many of the CitySearch
owned and operated sites with involvement from city governments, chambers of
commerce, community associations, schools and other community groups, and by
focusing its hiring efforts within the local community. The Company builds
free Web sites for selected community organizations, provides tools for e-mail
to constituents and community forums and maintains guides to community
services and volunteer organizations, thereby enhancing the sense of community
each CitySearch site provides. The Company believes that its community-based
approach builds consumer interest in the site both

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directly, since the content it provides is of interest to many individuals and
is not generally covered by competing city sites, and indirectly, because it
builds broad support and "ownership" in the community. The Company has secured
strong community support for its service in each of its markets, and the
launch of many of its owned and operated markets has been presided over by the
mayor or governor.

STRATEGY

The Company's objective is to be the leading provider of comprehensive local
city guides and online live event ticketing to attract a new and larger group
of consumers to the Internet and provide an easy-to-use resource for local
information and transactions. The Company's strategy is focused on rapidly
rolling out its services in the most attractive, Web-penetrated communities
worldwide, establishing a leading presence in these communities while
increasing traffic and repeat usage of its network. In addition, the Company
intends to use the CitySearch local city guides and Ticketmaster Online
ticketing service as platforms for multiple revenue streams. The following are
key elements of this strategy:

Rapidly Build National and International Network and Brand Awareness. The
Company intends to establish its services as the category leader for local
information and live event ticketing on the Web by linking its local city
guides together in a national and international network. The Company believes
that as the number of its sites and usage of its service increase, it is
creating a readily recognizable brand name for local content and live event
ticketing on the Internet. As of September 30, 1998, the Company's CitySearch
service operated in 15 metropolitan areas worldwide, and the Company had
initiated roll out for launches in two additional metropolitan areas. The
Company intends to continue to aggressively enter targeted markets, including
territories in which Ticketmaster Corp. clients are located, through either an
owned and operated market presence or by entering into partnerships and
strategic alliances with major media and telephony companies. The Company's
roll-out teams are led by experienced managers who prepare for launch of a
CitySearch site in owned and operated markets by hiring and training local
management teams, building the initial community relationships, negotiating
promotional arrangements with local media, training a direct sales force of
Internet Business Advisors ("IBAs") and selling initial sites. The Company's
detailed roll-out process has been refined in seven owned and operated market
launches to date. In partner-led markets, the Company provides its roll-out
expertise, professional personnel and technical infrastructure to assist
partners in creating effective sites and initiating rapid and successful
launches.

The Company intends to further emphasize the differentiation of its services
by leveraging the widely-recognized Ticketmaster brand name and its live
events ticketing and merchandise distribution capabilities. The Company
believes that the Ticketmaster brand name and extensive distribution
capabilities of the Ticketmaster Online Web site combined with the local city
guides will help enable the Company to continue to increase penetration among
established live event ticketing and merchandise consumers, and will provide
opportunities to expand internationally to live event venues in historically
under-penetrated geographic regions. The Company believes that its branded and
expanding network of local city guides in Web-penetrated markets will
increasingly attract local, regional and national advertisers that seek to
efficiently target local markets and consumers seeking information about
cities where they live or intend to visit.

Provide Multiple Revenue Streams. CitySearch local city guides and the
Ticketmaster Online ticketing service provide platforms for multiple revenue
streams. With respect to Ticketmaster Online, the Company derives revenues
from online sales of tickets to live events and related merchandise, as well
as advertising. In owned and operated CitySearch markets, the Company derives
recurring fees from the sale of Web sites to local businesses, as well as
banner and sponsorship advertising. Part of the Company's strategy is to
increase average monthly revenue from new business customers, in part through
the introduction of new services. Between September 1997 and September 1998,
average monthly revenue from new customers on CitySearch local city guides
increased from $83 to $190. In partner-led markets, the Company derives
licensing and royalty revenues from the licensing of the Company's technology
and business systems, consulting services, and from providing back office and
hosting services. The Company intends to offer additional e-commerce
functionality and other features designed to enable businesses to better serve
consumers, including reservations, electronic coupons, and

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other transactions. The Company further believes that its platforms will help
enable it to take advantage of new opportunities in areas such as
entertainment information, merchandising, advertising, promotional services
and direct marketing.

Increase Usage and Frequency of Use of the Network. The Company plans to
increase usage of its network by continuing to provide compelling content and
expanding services that it believes are most desired by consumers. For
example, the Company is actively developing means of increasing the
personalization capabilities of its services to enable consumers to be
notified of upcoming events, reviews and transaction offerings for which they
specify a direct interest. In addition, the Company intends to introduce in
the fourth quarter of 1998 its new "my Ticketmaster" Web site, which is
designed to enable consumers to tailor live event information to individual
preferences. The Company intends to continually improve the convenience of its
services to businesses and consumers through technology enhancements such as
user interface refinements and increased efficiencies in transaction
processing and fulfillment operations. The Company also plans to increase
traffic over its network through strategic relationships and through increased
integration of the content and services provided by CitySearch city guides and
Ticketmaster Online. The Company believes these types of services offer the
Company the opportunity to attract new and existing consumers and businesses
to its sites. As the Company's network of city guides expands, the Company
intends to pursue regional and national media distribution arrangements to
help drive traffic to the Company's Web services.

Continue to Enter into Strategic Alliances. The Company intends to continue
to differentiate its services by entering into agreements with local radio,
television and other media and telephony companies in its future owned and
operated markets and with major newspapers and other media and telephony
companies in its domestic and international partner-led markets. The Company
believes major newspapers, in particular, are trusted sources for local
information and possess strong brand names in their communities. In addition,
the Company intends to aggressively pursue strategic relationships to enhance
its content offering, transaction capabilities and revenues. For example, the
Company has recently entered into relationships with Classified Ventures to
provide a variety of services and technology for classified advertising and
with American Express to promote the Company's services and coordinate e-
commerce initiatives. The Company will also continue to evaluate means of
expanding the reach of its services through additional alliances with other
Web sites, online service providers and through other relationships. Through
the Ticketmaster Online Web site, the Company participates in several media,
marketing and technology initiatives, with companies including N2K (Music
Boulevard), Yahoo!, Intel Corporation, Tribune Interactive, JAM TV, RealTime
Sports, the Los Angeles Times and The New York Times.

Expand Reach of Online Ticketing and City Guide Services. The Company
intends to increase the reach of its online live event ticketing and city
guide services. By further integrating ticketing functionality into its local
city guides, the Company intends to make online ticketing available to more
consumers. Furthermore, the Company believes that as a result of increases in
the number and seating capacity of venues, the number of teams and sports
leagues and the number of live entertainment events, significant opportunities
exist to increase the online sale of tickets and related merchandise. The
Company intends to work with Ticketmaster Corp. to extend the online
availability of live event tickets and related merchandise with respect to
smaller venues than have traditionally been served by automated ticketing
systems. The Company intends to increase the number of metropolitan areas
served by its CitySearch city guides by taking advantage of Ticketmaster
Online's presence in certain local areas.

CITYSEARCH BUSINESS

CitySearch Service for Consumers

The Company produces and delivers comprehensive local city guides on the
Web, providing up-to-date information regarding arts and entertainment events,
community activities, recreation, business, shopping, professional services
and news/sports/weather to consumers in metropolitan areas. Each local city
guide primarily consists of original content developed and designed
specifically for the Web by the Company and its partners. The CitySearch
service is topically organized by categories, such as arts and entertainment,
restaurants

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and bars, community, shops and services, sports and outdoors, hotels and
tourism, local news and professional services. Within most of the city guides,
consumers can search neighborhood shopping areas, obtain maps, contact
community organizations and vendors by e-mail, and engage in bulletin board
discussions with individuals such as local public officials and celebrities.
In CitySearch owned and operated markets, consumers can also access the
Ticketmaster Online Web site through CitySearch city guides to purchase live
event tickets and related merchandise online. In certain markets, consumers
can also access audio streams, including recent news and other information,
from local radio partners. CitySearch offers local and regional businesses the
opportunity to reach and interact with targeted consumers. In addition,
content generated by consumers through e-mail and bulletin boards enhances the
sense of community in CitySearch sites.

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The CitySearch service has been launched in markets across the United States
and in selected international markets. The Company plans to continue to expand
the service both in owned and operated markets and by partnering with major
media companies in other markets. These major media partners bring capital,
brand recognition, promotional strength and local knowledge to their city
guides and allow the Company to build out its national and international
network of sites faster than it could solely through owned and operated sites.
The following table lists the Company's owned and operated and partner-led
markets:

<TABLE>
<CAPTION>
MARKETS DATE OF LAUNCH SELECTED PARTNERS
<C> <C> <S>
OWNED AND OPERATED:
Raleigh-Durham-Chapel May 1996 WUNC (public radio station)
Hill Capstar Broadcasting Corporation (4
radio stations)
WCHL AM
The Independent (weekly arts and
entertainment publication)
San Francisco Bay Area October 1996 KGO (ABC)
CBS Radio (2 radio stations)
Austin March 1997 KTBC (Fox)
Clear Channel Communications, Inc. (4
radio stations)
Salt Lake City/Utah April 1997 KUTV (CBS)
Citadel Communications Corporation (6
radio stations)
Nashville May 1997 WZTV (Fox)
Dick Broadcasting (2 radio stations)
Portland June 1997 KATU (ABC)
KKCW FM
New York(1) September 1997 New York Daily News
Time Out New York (weekly arts and
entertainment publication)
PARTNER-LED:
Melbourne July 1997 The Melbourne Age
Big Colour Pages (independent yellow
pages of Australia)
Sydney September 1997 The Sydney Morning Herald
Big Colour Pages
Toronto September 1997 Toronto Star
Tele-Direct (the yellow pages
subsidiary of Bell Canada)
Washington, D.C. January 1997 Washingtonpost.Newsweek Interactive
Los Angeles(2) April 1998 Los Angeles Times
Dallas July 1998 The Dallas Morning News
Baltimore August 1998 The Baltimore Sun
Stockholm September 1998 Schibsted ASA/Scandinavia Online
Copenhagen 1998* Schibsted ASA/Scandinavia Online
Oslo 1999* Schibsted ASA/Scandinavia Online
San Diego 1999* The San Diego Union-Tribune
</TABLE>
* Estimated launch dates

(1) The Company acquired Metrobeat, Inc. ("Metrobeat") in June 1996 and
relaunched the Metrobeat site as a CitySearch site in September 1997.

(2) Includes Pasadena, California, which was launched as a beta test site in
January 1996.

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CitySearch Service for Business Customers

The Company creates and hosts CitySearch Web sites for local and regional
businesses and organizations for a monthly fee. The Company offers local
businesses a wide range of options in creating Web presences, from a basic Web
presence costing as little as $60 per month to a multi-page site with
additional features and functionality costing up to $750 per month. Most
business customers have entered into a one-year agreement that automatically
converts into a month-to-month contract upon expiration of the initial term.
By aggregating a customer's Web site with those of numerous other businesses
in a comprehensive local city guide, the Company provides categorical,
geographic and editorial context to a customer's Web presence to generate
usage by consumers, as well as significant Internet traffic. Based on internal
studies, the Company believes that CitySearch users are more evenly split
between men and women, better educated, slightly older and have higher annual
incomes than the typical Internet user. The Company believes that these
demographics are attractive to its business customers.

The Company provides an integrated solution for businesses to establish a
CitySearch Web presence, including design, photography, layout, posting of
updated information, hosting and maintenance. Businesses are able to provide a
targeted audience with current information about their products and services
including photographs, prices, location, schedules of live entertainment,
sales and other relevant information. Unlike traditional media such as yellow
pages advertising, the Company offers CitySearch business customers a certain
number of free updates each month. The business customers also receive usage
reports, e-mails from interested consumers and access to an expanded base of
potential buyers including tourists and out-of-town users. The Company has
recently introduced a strategy of bundling enhanced features and
functionality, including panoramic images and audio clips. These services,
when bundled with the Company's basic CitySearch services, are typically
priced from $190 to $1,195 per month, and have accounted for significant
increases in the average selling prices of the Company's offerings. The
Company believes its broad offering of services and its prices compare
favorably to other Web advertising options available to businesses. Such
options range from low cost, low quality scanned-in information to free-
standing custom-designed sites that may cost in excess of $10,000 in up-front
fees to produce and that rely on significant promotion to attract traffic. By
providing a high-quality Web presence at an affordable price, the Company
believes that its services address the demand of the large number of
businesses whose online needs fall between these market extremes.

The Company's proprietary site design tools and production economies enable
it to build customized multi-page Web sites for customers for a minimal up-
front fee. The production of business Web sites for CitySearch owned and
operated markets and certain partner-led markets is managed centrally in the
Company's headquarters to better control quality and cost and provide rapid
production. Business Web site creation follows a standardized process. First,
IBAs in the field work with customers to design their sites and gather images
and text. Once content is collected, IBAs forward this information to the
Company's central production site in Pasadena, California where data entry
personnel input the text. Graphic designers then use the Company's proprietary
software to combine the text and scanned images to create custom sites
designed to reflect the nature and style of each business customer. Once the
Web site designers have completed their work, the business Web site is checked
for accuracy and published online after a 14-day customer proofing period. The
entire process, from the receipt of content by the Company to putting a site
online, takes approximately one month to complete. Each step of the sales and
production process is monitored by an enterprise management system to ensure
that the process is consistent and complete. The Company believes the systems
and processes it has developed to produce business Web sites allow it to
create higher quality, more informative sites in a more cost-effective and
timely manner than its competitors.

The Company intends to offer e-commerce functionality and other innovative
features allowing businesses to better serve consumers, including ticketing,
reservations, sales events notifications, electronic coupons, newsletters and
other transactions. The Company believes these types of services offer the
Company the opportunity to further attract both consumers and businesses to
its local city guides.

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CitySearch Strategic Alliances

The Company has entered into partnerships and strategic alliances with third
parties in order to (i) rapidly build its national and international network
of CitySearch local city guides, (ii) generate licensing revenue in CitySearch
partner-led markets, (iii) facilitate branding, (iv) gain access to additional
content and (v) drive traffic on the Company's network of sites. Management
intends to continue to negotiate further partnerships and alliances.

Newspaper and Telephony Partnerships. The Company has entered into strategic
partnerships with major newspapers and media companies such as The Baltimore
Sun, The Dallas Morning News, the Los Angeles Times, The San Diego Union-
Tribune, Washingtonpost.Newsweek Interactive, Big Colour Pages (independent
yellow pages of Australia), The Melbourne Age, Schibsted ASA/Scandinavia
Online (Copenhagen, Oslo and Stockholm), The Sydney Morning Herald, Tele-
Direct (the yellow pages subsidiary of Bell Canada, Inc.) and the Toronto
Star. In these partner-led markets, the partner provides the capital and
management, while the Company contributes technology, a business model,
consulting services, business systems and processes and network participation.
The Company typically receives up-front license fees, ongoing license fees for
delivery of upgrades and support, and royalties based on revenues that the
partner generates through the city guide service. In addition, the Company
generally receives additional fees for consulting services in connection with
the launch of the partner's city guides, custom engineering requested by
particular partners, and compensation for business Web site production,
customer service, billing and hosting services. These partner agreements are
typically five to eight years in length, and contain customary termination
rights in the event of material breach or non-performance. The Company
believes these arrangements allow it to expand its national and international
network of cities in a more rapid and cost-effective manner than a solely
owned and operated network would allow.

In August 1998, the Company restructured its relationship with Toronto Star
Newspapers Limited in order to admit a new partner with significant brand,
sales and financial resources. Under the terms of the partnership agreement,
Toronto Star Newspapers Limited and Tele-Direct Inc. each hold a 45% interest
in the partnership and together operate the toronto.com Web service. The
Company holds a 10% interest in the partnership and licenses its technology
and business systems to the partnership for use in the defined territory.

In July 1998, the Company entered into agreement with Classified Ventures, a
leading provider of online advertising products and services to the newspaper
industry. Classified Ventures is funded by Central Newspapers, Inc., Gannett
Co., Inc., Knight Ridder, Inc., The McClatchy Company, The New York Times
Company, The Times Mirror Company, Tribune Company and The Washington Post
Company, and has a network of over 140 affiliated newspapers in 44 states,
including 34 of the nation's top 50 markets. The Company licensed elements of
its technology and business systems to Classified Ventures and provides
services in automotive and real estate classified advertising categories.
Certain CitySearch owned and operated city guides may also participate as
Classified Ventures affiliates in their respective markets.

Television and Radio Media Alliances. The Company has entered into co-
promotion agreements with local television and radio stations in most of its
CitySearch owned and operated markets. These relationships typically offer
content sharing and co-promotion to both parties. The Company works with each
partner to develop a multimedia Web site within the CitySearch site, while the
partner offers promotion and a recognized brand within the market. The Company
typically receives significant on-air promotion from these television and
radio stations that increases brand awareness and drives traffic to the
CitySearch site. For example, the Company has partnered in Salt Lake City/Utah
with the CBS television station (KUTV) as well as radio stations owned by
Citadel Communications Corporation and, in Raleigh-Durham-Chapel Hill, with
the national public radio station (WUNC) and radio stations owned by Capstar
Broadcasting Corporation. In San Francisco, the Company has agreements with
the ABC television station (KGO) and radio stations owned by CBS.

Marketing Agreements. The Company has entered into both local and national
marketing agreements. For example, the Company recently is a party to an
agreement with American Express which included an equity investment in the
Company. The agreement provides for distribution of co-branded marketing
materials to

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American Express merchant customers in the Company's local markets that will
offer merchant customers online Web site presences through the Company's local
city guides. The parties intend to create areas within the CitySearch sites to
aggregate promotions and discounts offered to consumers by American Express
merchant customers as well as develop additional e-commerce products. In
addition, American Express will purchase sponsorships and banner advertising
on the CitySearch sites. In local markets, the Company reached an agreement
with Levi Strauss Associates Inc.'s Dockers Khakis to provide sponsorship,
editorial features and contests relating to two 1998 San Francisco film
festivals, and created printed local information guides for the United States
Tennis Association and American Express for distribution at the U. S. Open.
The Company intends to continue to aggressively pursue such marketing
agreements in order to attract additional business customers and increase
usage of the CitySearch service by consumers.

Content Distribution Alliances. The Company has entered into agreements with
a number of companies to distribute its content and drive traffic to the
Company's Web sites. For example, the Company has entered into agreements or
arrangements with Earthlink Network, Inc., The Walt Disney Company's
Family.com, CNET, Inc.'s Snap! Online, Planet Direct Corporation, @Home
Corporation and Internet Travel Network to distribute content across relevant
sites.

Marketing and Sales

The Company emphasizes marketing activities in its owned and operated
markets aimed at increasing awareness of its CitySearch local city guides for
both consumers and business customers. The Company's roll-out teams are led by
experienced managers who prepare for launch by negotiating promotional
arrangements with local media, training a direct sales force and selling
initial sites. The Company conducts advertising and public relations campaigns
through low-cost "guerilla" marketing efforts and the Company's local media
partners in radio, television and print advertising to both drive business
customer sales and consumer usage. The Company also purchases targeted
advertising on Web sites such as Infoseek, Preview Travel and Yahoo! as well
as through traditional media such as radio, print and outdoor.

In partner-led markets, the Company's marketing efforts rely substantially
on the partner's existing franchise and resources in the community. Partners
typically market their city guide services through print promotion and
integration into a pre-existing news Web site. The partner's brand is also
used in conjunction with the CitySearch brand to build credibility with local
consumers. The Company provides its partners both with a roll-out team to
launch the service and ongoing support, including assistance with recruiting,
sales strategy and back office operations.

Once a city site has been launched, the Company and its partners rely upon a
direct sales force to accelerate the momentum established by the roll-out
team. As of September 30, 1998, the Company employed approximately 140 IBAs in
its seven owned and operated markets selling directly to local businesses as
well as field customers service representatives in these markets to maintain
regular contact with business customers and facilitate up-selling of Web site
functionality. Each IBA completes an intensive training program at the
Company's headquarters with follow-up field training. The Company's
proprietary enterprise management system tracks sales leads and prospect
status and allows sales managers to track performance. IBAs participate in
ongoing training sessions in sales techniques and new products.

Operations

The Company has created a systematic approach to market roll-out of its
CitySearch local city guides that is designed to enable it to launch its
service in owned and operated markets and to support a local service once
launched. In addition, the Company licenses its roll-out capabilities to media
companies in its partner-led markets. The Company has analyzed and documented
the best practices associated with its early city launches to refine and
standardize its field and home office production processes. The Company's
software systems monitor much of the sales and customer care functions.
Additionally, the Company has built custom systems that streamline the site
creation and maintenance process.

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Customer service operations are located in the Company's Pasadena
headquarters. The Company's enterprise management systems enable customer
service staff to view the customer's full profile, billing and interactive
history as they take the call, and to use the software tools to make changes
to the business customer's site in real time.

Technology

The Company has developed and implemented a number of technologies to
support its local city guide service and business operations, including (i) an
online city guide application, (ii) a set of content creation and management
tools and (iii) a suite of integrated enterprise management systems.

CitySearch Online Application. The CitySearch online application provides a
user interface intended to support novice online users while providing easily
accessible advanced features for experienced Web users. The core end-user
functionality of the CitySearch application includes (i) concurrently
performed keyword, geographic and temporal searches; (ii) personalization that
permits consumers, for example, to receive newsletters in areas of interest,
and register for special offers from CitySearch business customers that have
chosen to implement a one-to-one marketing approach; (iii) dynamic map
rendering and "nearby" functionality; (iv) real-time chat; and (v) message
boards.

CitySearch has to date employed an object-relational database to support Web
publishing and searching. With version CS 2.5 of its service, which the
Company is currently deploying in all of its markets, CitySearch is employing
a multi-tiered architecture, separating a standard relational database from
business rules and presentation logic. CS 2.5 is designed to permit city guide
publishers to create and change the appearance and, generally, the function of
the product using any commercially available Web page design tool or text
editor. As a result, the Company believes that both it and its partners will
be able to respond more quickly to changes in the marketplace and evolving
user preferences. In addition, the object-oriented architecture is designed to
provide for rapid development cycles and code reuse. The Company has made a
substantial investment in its product development infrastructure and intends
to continue to release product enhancements that address changing demands of
business customers and consumers.

Content Creation and Management Tools. The Company has created the following
applications to support editorial and advertising content production: (i)
SiteWorks, for design of business Web sites and editorial features; (ii)
EditWorks, for editorial content entry; (iii) User Interface Tree editor, for
defining and managing the site hierarchy; and (iv) MediaWorks, to enable
remote content partners, typically television and radio stations, to submit
content directly to the site. These tools are designed to minimize the
technical knowledge that editorial and advertising content producers need to
possess.

Enterprise Management Systems. CitySearch has developed and implemented a
suite of integrated enterprise management systems designed to handle an
increasing volume of business customers. The enterprise management system
consists of third-party and internally developed applications covering sales
force automation and telemarketing, production management and tracking
systems, customer service, accounting, billing and commissions systems.

The Company has also designed a sophisticated tool to manage the planning,
scheduling, forecasting and tracking of business Web sites, banners and other
services through the various stages of design and production. This tool
enables the Company to manage the large number of business Web sites and
banners developed simultaneously and originating from numerous cities. The
Company believes the systems and processes it has developed to produce
business Web sites allow it to create high quality sites in a more cost-
effective and timely manner.

TICKETMASTER ONLINE BUSINESS

Ticketmaster Online Service

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merchandise over the Web. Consumers can access the Ticketmaster Online service
at www.ticketmaster.com and from CitySearch owned and operated city guides at
www.citysearch.com through numerous direct links from banners and event
profiles. In addition to these services, the Ticketmaster Online Web site
provides local information and original content regarding live events for
Ticketmaster Corp. clients throughout the United States, Canada and the United
Kingdom.

Throughout the Ticketmaster Online Web site and at the conclusion of a
confirmed ticket purchase, the consumer is prompted to purchase merchandise
that is related to a particular event, such as videos, tour merchandise and
sports memorabilia. The Company intends to expand the types and range of
merchandise that can be ordered by consumers through the Ticketmaster Online
Web site. The Company also intends to organize membership programs that will
provide Ticketmaster Online members with certain benefits centered around
entertainment, leisure and travel activities. Membership is expected to
include participation in other activities not generally available to the
public.

Since the commencement of online ticket sales in November 1996, Ticketmaster
Online has experienced significant growth in tickets sold through its Web
site. Gross transaction dollars for ticket sales increased from approximately
$100,000 in November 1996 to more than $10 million in July 1998. Similarly,
tickets sold on the Ticketmaster Online Web site in November 1996 represented
less than 0.1% of total tickets sold by Ticketmaster Corp., while tickets sold
online in the month of July 1998 represented more than 5.0%.

Ticketmaster Corp. Clients

Ticketmaster Corp. is a leading provider of live event automated ticketing
services in the United States. Ticketmaster Corp. has over 3,000 clients,
including many well-known entertainment venues, sports teams and promoters.
Ticketmaster Corp. provides these clients with comprehensive ticket inventory
control and management, a broad distribution network and dedicated marketing
and support services. Ticket orders are received and fulfilled through call
centers, independent sales outlets remote to the facility box office, and
online. Pursuant to the Ticketmaster License Agreement and subject to certain
limitations, Ticketmaster Online acts as Ticketmaster Corp.'s exclusive agent
for online sales of live event tickets.

The Company believes that the Ticketmaster system for live event ticketing
transactions (the "Ticketmaster System") and its distribution capabilities
enhance Ticketmaster Corp.'s ability to attract new clients and maintain its
existing client base. The Ticketmaster System, which includes both hardware
and software, is typically installed in a client's box office and provides a
single centralized inventory control management system capable of tracking
total ticket inventory for all events, whether sales are made on a season,
subscription, group or individual ticket basis. The versatility of the
Ticketmaster System allows it to be customized to satisfy a full range of
client requirements.

Ticketmaster Corp. is the contracting party with the venues, promoters and
sports franchises that sell tickets through Ticketmaster Online. Ticketmaster
Corp. generally enters into written agreements with its clients pursuant to
which it agrees to provide the Ticketmaster System and to serve as the
client's exclusive ticket sales agent for all sales of individual tickets sold
outside of the facility's box office for a specified period, typically three
to five years. Pursuant to its agreements with facilities, Ticketmaster Corp.
generally is granted the right to sell tickets for all live events presented
at a facility, and installs the Ticketmaster System in the facility's box
office. Agreements with promoters generally grant Ticketmaster Corp. the right
to sell tickets for all live events presented by that promoter at any
facility, unless the facility is covered by an exclusive agreement with
another automated ticketing service company. The terms of Ticketmaster Corp.'s
agreements with clients are negotiated on a contract-by-contract basis. In the
case of contracts subject to public bid (e.g., by facilities owned or managed
by municipalities or governmental agencies), the terms are defined, to a
material degree, by the specifications and conditions set forth in the formal
requests for bid.

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order handling charge on all tickets sold by Ticketmaster Corp. other than at
remote sales outlets to partially offset the cost of fulfillment. The amount
of the convenience charge is typically determined during the contract
negotiation process, and varies based upon numerous factors, including the
services to be rendered to the client, the amount and cost of equipment to be
installed at the client's box office and the amount of advertising and/or
promotional allowances to be provided, as well as the type of event and
whether the ticket is purchased at a remote sales outlet, by telephone,
through the Ticketmaster Online Web site or otherwise. Any deviations from
those amounts for any event are negotiated and agreed upon by Ticketmaster
Corp. and the client prior to the commencement of ticket sales. During
Ticketmaster Corp.'s fiscal 1998, the convenience charges generally ranged
from $1.50 to $7.00 per ticket. Convenience charges, when added to per order
handling charges, averaged approximately $4.50 per ticket in fiscal 1998.
Ticketmaster Corp.'s client agreements also generally establish the amounts
and frequency of any increases in the convenience charge and handling charge
during the term of the agreement.

The agreements with certain of Ticketmaster Corp.'s clients may provide for
a client to participate in the convenience charges paid by ticket purchasers
for tickets bought through Ticketmaster Corp. for that client's events. The
amount of such participation, if any, is determined by negotiation with that
client. Some agreements also may provide for Ticketmaster Corp. to make
participation advances to the client, generally recoupable by Ticketmaster
Corp. out of the client's future right to participation. In limited cases,
Ticketmaster Corp. makes an upfront, non-recoupable payment to a client for
the right to sell tickets for that client.

Clients are routinely required by contract to include the Ticketmaster name
in print, radio and television advertisements for entertainment events
sponsored by such clients. The Ticketmaster name and logo are also prominently
displayed on printed tickets and ticket envelopes.

Ticketmaster Corp. generally does not buy tickets from its clients for
resale to the public and has no financial risk for unsold tickets. In the
United Kingdom, Ticketmaster Corp. may from time to time buy tickets from its
clients for resale to the public in an amount typically not exceeding
(Pounds)600,000 in the aggregate. Ticket prices are not determined by
Ticketmaster Corp. Ticketmaster Corp.'s clients also generally determine the
scheduling of when tickets go on sale to the public and what tickets will be
available for sale through Ticketmaster Corp. Facilities and promoters, for
example, often handle group and season ticket sales in-house. Ticketmaster
Corp. only sells a portion of its clients' tickets, the amount of which varies
from client to client and varies as to any single client from year to year.

The Company believes that the primary benefits derived by Ticketmaster
Corp.'s clients by use of the Ticketmaster System include (i) centralized
control of total ticket inventory as well as accounting information and market
research data, (ii) centralized accountability for ticket proceeds, (iii)
manageable and predictable transaction costs, (iv) broader and expedited
distribution of tickets, (v) wide dissemination of information about upcoming
events through Ticketmaster Corp.'s call centers, Ticketmaster Online and
other media platforms, (vi) the ability to easily add additional performances
if warranted by demand and (vii) marketing and promotional support.

If an event is canceled, Ticketmaster Corp.'s current policy is to refund
the per ticket convenience charges (but not the handling charge which is
payable with respect to online orders). Refunds of the ticket price for a
canceled event are funded by the client. To the extent that funds then being
held by Ticketmaster Corp. on behalf of the client are insufficient to cover
all refunds, the client is obligated to provide Ticketmaster Corp. with
additional amounts within 24 to 72 hours after a request by Ticketmaster Corp.

Ticketmaster License Agreement

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worldwide agent for such online ticket sales. The Ticketmaster License
Agreement further provides that Ticketmaster Corp. may use and permit others
to use the Ticketmaster trademark in connection with the online promotion of
ticket sales.

Ticketmaster Corp. is the contracting party with client venues, promoters
and sports franchises, providing ticket inventory management, consumer
information and related data for all ticketing transactions. Ticketmaster
Corp. provides such information to Ticketmaster Online in connection with
processing online live event ticket sales and provides all transaction
processing and fulfillment services for online live event ticket sales.
Ticketmaster Online is required under the Ticketmaster License Agreement to
comply with the terms of Ticketmaster Corp.'s client agreements and
Ticketmaster Online's rights as set forth in the Ticketmaster License
Agreement are subordinated and subject to such agreements. The Ticketmaster
License Agreement also generally restricts Ticketmaster Online from
cooperating with, offering online links to, or entering into any agreements
with venues, ticket sellers or sales agents for online sale of tickets.

Ticketmaster Online Strategic Alliances

Ticketmaster Online participates in certain strategic partnerships with
leading media, marketing and technology partners. The Company believes that
these alliances will assist in the development of compelling content, increase
consumer traffic to the Ticketmaster Online Web site, continue to build the
Ticketmaster Online brand name and expand the Company's promotional
opportunities.

Media Partnerships. Ticketmaster Online creates and acquires entertaining,
informative and timely local content (e.g., live event information, venue
information, articles on live entertainment topics, chat sessions,
entertainment reviews and Webcasts), for use on its Web sites. In this regard,
Ticketmaster Online has entered into agreements with media companies such as
JAM TV and RealTime Sports. These arrangements generally provide for the
development of a co-branded Web presence and links from the co-branded area to
event listings and ticketing and merchandising pages on the Ticketmaster
Online Web site. Ticketmaster Online shares in the advertising and
merchandising revenues generated under the applicable agreement.

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Advertising, Sponsorship and Marketing Partnerships. Ticketmaster Online has
entered into advertising, sponsorship and marketing alliances with Internet
content and service providers and other partners. In addition, Ticketmaster
Corp. has entered into similar agreements pursuant to which Ticketmaster
Online performs services and is allocated a percentage of revenues. For
example, pursuant to an agreement with Ticketmaster Corp., Ticketmaster Online
and N2K (Music Boulevard) have developed a co-branded presence on the Web for
retailing music products. Ticketmaster Online's other advertisers and
marketing partners include Yahoo!, United Parcel Service of America, Inc.,
International Business Machines Corporation, Sprint Communications Company,
Ltd., Red Lobster and Ford Motor Company. Client advertisements and marketing
opportunities are typically integrated into Ticketmaster Online's Web site
through banners and links that encourage viewers to click through for
additional information. The Company intends to continue to pursue such
advertising, sponsorship and marketing opportunities.

Technology Partnerships. Ticketmaster Online also participates in certain
arrangements with technology partners to provide enhanced features and
functionality on its Web site. For example, the Company's "my Ticketmaster"
Web site, which Ticketmaster Online is jointly developing with Intel
Corporation and currently anticipates will be launched in the fourth quarter
of 1998, is a personalized Web application designed to enable users to choose
categories of event information they receive based on personal preferences and
habits. This personalized and localized site is currently being designed to
include such features as seating charts (some of which are designed to provide
three-dimensional perspectives) and driving directions to venues.

Marketing and Sales

The Company believes that it will benefit from Ticketmaster Corp.'s
continued promotion of its brand name through Ticketmaster Corp.'s services
and advertising sales force. The Company intends to continue to leverage the
Ticketmaster brand name, Ticketmaster Corp.'s extensive distribution
capabilities and core ticketing services in an effort to offer live event
venues, sports franchises, promoters, advertisers, sponsors and other partners
a wider variety of advertising, promotional and marketing platforms for their
products and services. Through the Company's relationship with Ticketmaster
Corp., advertisers have access to a full array of advertising alternatives,
ranging from online advertising vehicles such as Web sites, banners and
sponsorships to traditional advertising on ticket stock and envelopes, during
telephone sales (e.g., "music on hold" and sales scripts) and through direct
mail campaigns. As of September 30, 1998, the Company had nine employees
dedicated to advertising and promotion of Ticketmaster Online's services.

Operations

Ticketmaster Online's ticketing system interfaces on a real-time basis with
the host ticketing systems developed by Ticketmaster Corp. This process is
designed to ensure that, except in limited circumstances, the inventory of
tickets available online is identical to that which is available through
Ticketmaster's other distribution methods (e.g., telephone call centers and
independent retail outlets) and to enable consumers to order tickets on a
"best available seat" basis. Measures are taken that are designed to prevent
system failure in Ticketmaster Corp.'s computer center. Each system has a live
back-up standing ready in the event of a primary system failure. The rooms
housing the computer-related equipment are protected by computer-safe fire
protection systems. To guard against power outages, uninterruptable power
supplies are utilized. High capacity back-up generators eliminate the
dependency on public electric sources. In addition, all data is continually
recorded on back-up tape.

Ticketmaster Online utilizes Secure Sockets Layer encryption technology
designed to allow users to securely transmit their personal information to the
Ticketmaster Online Web site. The decrypted data is then passed through two
levels of firewalls, using an internally developed communications protocol to
the Ticketmaster Corp. host systems where credit cards are processed and
customer accounts are created. The host systems communicate directly with bank
processing centers for instantaneous online credit card authorization and
electronic deposit of credit card receipts. Essentially, all order processing,
credit card billing, order fulfillment and consumer service functions for
online ticketing orders are handled by Ticketmaster Corp. in the same manner
as orders which are placed by telephone.

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Technology

Ticketmaster Online has an extensive database of live event information,
with event information updated 12 times every hour and more than 200 times
daily. This data base contains information on more than 30,000 events and over
3,000 clients and is designed to support an easy-to-use and reliable dynamic
event calendar and ticket-buying interface to the Ticketmaster System.

The Ticketmaster Online system is deployed as a multi-tiered system of
servers that separate database functions, Web page serving functions,
transaction processing functions and ticketing system interfacing functions.
The system is built using a combination of commercial and proprietary software
and hardware and is integrated into the Ticketmaster System. All Ticketmaster
Online ticket sales occur on one of 20 geographically dispersed host systems.
Credit card authorization and deposit, inventory control for events, customer
account management and ticket printing and distribution are all handled on the
Ticketmaster System. Internet users interact with various Web servers to find
an event using various criteria including event location, event type, or
performer name. Once an event is located users interact with forms-based HTML
pages to guide them through the ticket-buying process. The Web servers
communicate via a proprietary gateway to the host ticketing systems where the
transaction actually takes place. Since the online ticketing system interfaces
in real-time with the host ticketing systems, except in limited circumstances,
the seats are identical to those available for sale through Ticketmaster
Corp.'s other distribution systems such as call centers, outlets or box
offices.

COMPETITION

live event ticketing companies which only conduct business online. Where
facilities and promoters decide to

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utilize the services of a ticketing company, Ticketmaster Online competes with
international, national and regional ticketing services, including TicketWeb,
Telecharge (Shubert Ticketing Services), NEXT Ticketing, Advantix, ETM
Entertainment Network, Dillard's, Prologue, Capital Tickets and Lasergate
(Lasergate Systems, Inc.). Several of Ticketmaster Online's competitors have
operations in multiple locations throughout the United States and compete with
Ticketmaster Online on a national level, while others compete with
Ticketmaster Online principally in one specific geographic region. In certain
specific geographic regions, including certain of the local markets in which
CitySearch provides or intends to provide its local city guide service, one or
more of these competitors may serve as the primary ticketing service in the
region. The Company believes that Ticketmaster Online will experience
significant difficulty in establishing a significant online presence in such
regions and, as a result, any local city guide for such a region may be unable
to provide significant ticketing capabilities. There can be no assurance that
one or more of these regional automated ticketing companies will not expand
into other regions or nationally, which could have a material adverse effect
on the Company's business, financial condition and results of operations.

PROPRIETARY RIGHTS

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be no assurance that such licensees will not take actions that might
materially adversely affect the value of the Company's proprietary rights or
reputation, which could have a material adverse effect on the Company's
business, financial condition and results of operations. There can be no
assurance that the steps taken by the Company to protect its proprietary
rights will be adequate or that third parties will not infringe or
misappropriate its copyrights, trademarks, trade dress and similar proprietary
rights. In addition, there can be no assurance that other parties will not
assert infringement claims, including patent infringement claims, against the
Company. The Company licenses the trademark "CitySearch" from a third party,
and there can be no assurance that the Company will be able to continue to
license the trademark on terms acceptable to the Company. The licensor of the
trademark has filed an application for United States registration of the
CitySearch trademark with the USPTO and has recently received communications
from a third party seeking an extension of the time period during which third
parties may oppose registration of the mark. There can be no assurance that
the USPTO will grant registration of the CitySearch trademark. The Company
licenses the trademark "Ticketmaster" and related trademarks from Ticketmaster
Corp. pursuant to the Ticketmaster License Agreement. The Company is dependent
upon Ticketmaster Corp. to maintain and assert its rights to the trademarks
licensed from Ticketmaster Corp. and defend infringement claims, if any,
relating to the Company's use of such marks. The Company may be subject to
legal proceedings and claims of alleged infringement of the trademarks and
other intellectual property rights of third parties by the Company and its
licensees or licensors. Such claims, even if not meritorious, could result in
the expenditure of significant financial and managerial resources which could
result in a material adverse effect on the Company's business, financial
condition and results of operations.

EMPLOYEES

As of September 30, 1998, the Company employed 608 persons with respect to
the CitySearch business, including 214 persons in functions related to cost of
revenue (including 173 persons in design, content collection, editorial and
photography, 25 persons in customer service and 16 persons in professional
services), 272 persons in sales and marketing, 55 persons in research and
development and 67 persons in general and administrative areas. As of
September 30, 1998, the Company employed 25 persons with respect to the
Ticketmaster Online business, including 11 in advertising and promotion, six
in operations and technical support, five in graphic design and editorial and
content development and three in general and administrative services. None of
the Company's employees is represented by a labor union, and the Company
considers its employee relations to be good.

FACILITIES

The Company's headquarters are located in Pasadena, California, where the
Company currently leases approximately 28,000 square feet under a lease
expiring in 2002. The Company also leases approximately 4,500 square feet in
Austin, 3,900 and 7,880 square feet in Morrisville, North Carolina, 7,900
square feet in Research Triangle Park, North Carolina, 4,600 square feet in
Nashville, 10,000 square feet in New York, 4,700 square feet in Portland,
4,600 square feet in Salt Lake City and 5,800 square feet in San Francisco
under leases which expire in 2002, 2001, 2003, 2003, 2000, 2004, 2002, 2001
and 1999, respectively. Ticketmaster Online leases its principal offices in
Los Angeles, California, as well as office space in additional cities
throughout the United States, the United Kingdom and Canada, in each case on a
month-to-month basis from Ticketmaster Corp. on terms the Company believes are
at least as favorable as those it could obtain from a third party in an arm's-
length transaction. Ticketmaster Online currently occupies an aggregate of
approximately 3,900 square feet of space. The Company believes that its
facilities are adequate in those cities in which the Company currently does
business.

LEGAL PROCEEDINGS

The Company is not currently subject to any material legal proceedings. The
Company may from time to time become a party to various legal proceedings
arising in the ordinary course of business.

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MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth certain information regarding the executive
officers and directors of the Company as of September 30, 1998:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<C> <C> <S>
Alan Citron............. 40 Chairman of the Board
Charles Conn............ 37 Chief Executive Officer
Thomas Layton........... 35 President, Chief Operating Officer and
Treasurer
Robert Perkins.......... 43 Executive Vice President, Ticketing and
Electronic Commerce
Douglas McPherson....... 36 Chief Legal Officer and Vice President,
Business Development
Bradley Ramberg......... 35 Chief Financial Officer, Vice President,
Finance and Administration and Secretary
Terry Barnes............ 47 Director
Eugene L. Cobuzzi....... 41 Director
Stuart W. DePina........ 37 Director
Barry Diller............ 56 Director
Joseph Gleberman........ 40 Director
William Gross........... 39 Director
Victor A. Kaufman....... 54 Director
Robert Kavner........... 54 Director
William D. Savoy........ 33 Director
Alan Spoon.............. 47 Director
Thomas Unterman......... 53 Director
</TABLE>

Mr. Citron has served as Chairman of the Board of the Company since
September 1998 and the President of USA Interactive, a division of USAi, since
July 1998. From July 1997 until July 1998, Mr. Citron served as the President
and Chief Operating Officer of Ticketmaster Online. From January 1995 until
July 1997, Mr. Citron served as Senior Vice President--New Media of
Ticketmaster Corp. From January 1991 until December 1994, Mr. Citron was
employed by the Los Angeles Times, a division of The Times Mirror Company, as
a reporter and business writer and, commencing in 1992, as an assistant
business editor in charge of entertainment.

Mr. Conn has served as Chief Executive Officer of the Company since
September 1998 and served as Chief Executive Officer of CitySearch since he
co-founded CitySearch in September 1995, served as President of CitySearch
from September 1995 to October 1996 and served as a director from September
1995 until September 1998. From September 1990 to September 1995, he was a
consultant at McKinsey & Company, where he was elected Partner. From September
1986 to September 1988, Mr. Conn worked with the Boston Consulting Group in
Boston and Tokyo and in 1989 with Canon, Inc. Mr. Conn holds a B.A. from
Boston University, a B.A. and M.A. from Oxford University, where he was a
Rhodes Scholar, and an M.B.A. from Harvard Business School, where he was a
Baker Scholar.

Mr. Layton has served as President, Chief Operating Officer and Treasurer of
the Company since September 1998. Prior to such time, he served as President
of CitySearch since October 1996 and as Chief Operating Officer and Treasurer
since November 1995. He served as a director of CitySearch from May 1996 to
September 1998.

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He also served as Vice President, Sales and Marketing from November 1995 to
October 1996. From May 1994 to November 1995, he was with Score Learning
Corporation, a leading educational learning center, where he was promoted from
Chief Financial Officer to President and Chief Operating Officer. From January
1989 to October 1992, Mr. Layton was Vice President and General Manager of the
Western Region for Leasecomm, Inc., a national equipment leasing company, and
was previously with the Boston Consulting Group. Mr. Layton holds a B.S. from
the University of North Carolina at Chapel Hill and an M.B.A. from Stanford
University.

Mr. Perkins has served as Executive Vice President, Ticketing and Electronic
Commerce of the Company since September 1998. From 1982 until September 1998,
he served in a variety of senior management positions with Ticketmaster Group,
most recently as Vice President of Ticketmaster Online. Prior to joining
Ticketmaster Group, Mr. Perkins worked in Venue Management and Sports
Marketing, having directed ticketing for the 1987 Pan Am Games in
Indianapolis, Indiana and serving as Venue Manager for the Olympic Ice Center
at the 1980 Winter Olympics in Lake Placid, New York.

Mr. McPherson has served as Chief Legal Officer and Vice President, Business
Development since September 1998. From July 1998 until September 1998, he
served as Chief Legal Officer and Vice President, Business Development of
CitySearch. From November 1992 to July 1996, Mr. McPherson was with the law
firm of Heller Ehrman White & McAuliffe, where he specialized in intellectual
property law and general commercial litigation. From September 1991 to
September 1992, he served as a law clerk for a federal district judge. From
June 1986 to June 1988, he served as Assistant to the Vice President at The
Rockefeller Foundation in New York City. He holds a B.A. from the University
of North Carolina at Chapel Hill, an M.A. from the University of California,
Berkeley and a J.D. from Stanford Law School.

Mr. Ramberg has served as the Chief Financial Officer, Vice President,
Finance and Administration and Secretary of the Company since September 1998.
From April 1996 when he joined CitySearch until September 1998, he served as
Chief Financial Officer and Vice President, Finance and Administration of
CitySearch and also served as Secretary of CitySearch since February 1998.
From January 1994 to April 1996, he was Vice President of Finance and
Operations at the Fresh Gourmet Company, a joint venture between CPC
International Inc. and Prepco. From December 1992 to January 1994, he was Vice
President, Operations and Finance at Pro-Towel, a start-up consumer products
venture. He holds an A.B. from Brown University and an M.B.A. from Harvard
Business School.

Mr. Barnes has served as a director of the Company since September 1998 and
as the President and Chief Executive Officer of Ticketmaster Corp. since June
1998. From September 1995 until June 1998, Mr. Barnes was the President and
Chief Operating Officer of TM Ticketing Co. From January 1991 until August
1995, Mr. Barnes was Vice President and General Manager of numerous
subsidiaries of Ticketmaster Corp. in the Midwest.

Mr. Cobuzzi has served as a director of the Company since September 1998 and
as the Chief Operating Officer of Ticketmaster Corp. since June 1998. From
February 1997 until June 1998, Mr. Cobuzzi was the Senior Vice President of
Operations for Ticketmaster Corp. From September 1995 until February 1997, Mr.
Cobuzzi served as an Executive Vice President of TM Ticketing Co. From January
1991 until August 1995, Mr. Cobuzzi served as an officer of numerous
subsidiaries of Ticketmaster Corp. in the Northeast. Mr. Cobuzzi, a CPA, began
his career at Ticketmaster Corp. as Controller in August 1985.

Mr. DePina has served as a director of the Company since September 1998 and
as the Chief Financial Officer of Ticketmaster Corp. since June 1998. From
November 1995 until June 1998, Mr. DePina was the Vice President--Finance and
Treasurer of Ticketmaster Group. From August 1984 to November 1995, Mr. DePina
was employed by the public accounting firm of KPMG Peat Marwick LLP serving in
various capacities including, most recently, as a partner.

Mr. Diller has served as a director of the Company since September 1998 and
served as a director of CitySearch from December 1997 until September 1998.
Mr. Diller has been a director and Chairman of the Board and Chief Executive
Officer of USAi since August 1995. He was Chairman of the Board and Chief
Executive

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Officer of QVC, Inc., from December 1992 through December 1994. From 1984 to
1992, Mr. Diller served as the Chairman of the Board and Chief Executive
Officer of Fox, Inc. Prior to joining Fox, Inc., Mr. Diller served for ten
years as Chairman of the Board and Chief Executive Officer of Paramount
Pictures Corporation. Mr. Diller is also a director of The Seagram Company
Ltd. He also serves on the Board of the Museum of Television and Radio and is
a member of the Board of Councilors for the University of Southern
California's School of Cinema-Television. Mr. Diller also serves on the Board
of Directors of AIDS Project Los Angeles, the Executive Board for the Medical
Sciences of the University of California, Los Angeles and the Board of the
Children's Advocacy Center of Manhattan.

Mr. Gleberman has served as a director of CitySearch since May 1996 and of
the Company since September 1998. He is a Managing Director in the Principal
Investment Area of Goldman, Sachs & Co., an investment banking firm. He joined
Goldman, Sachs & Co. in 1982. Mr. Gleberman also serves as a director of
Applied Analytical Industries, Inc., Biofield Corp. and Dade International,
Inc.

Mr. Gross has served as a director of CitySearch since he co-founded it in
September 1995 and of the Company since September 1998. Since March 1996, Mr.
Gross has been Chairman of the Board, Chief Executive Officer and President of
bill gross' idealab!, a corporation which generates ideas for and creates new
companies. In 1991, he founded Knowledge Adventure Inc., a corporation which
developed educational software for children, and served as its Chairman from
June 1991 to January 1997. He was a developer at Lotus Development Corporation
from 1986 to 1991. Prior to joining Lotus Development Corporation, Mr. Gross
founded, in 1980, GNP Loudspeaker, Inc. to manufacture and sell his patented
designs. In 1995, Mr. Gross was elected to the Board of Trustees of California
Institute of Technology as the first Young Alumni Trustee.

Mr. Kaufman has served as a director of the Company since September 1998.
Mr. Kaufman has also served as a director of USAi since December 1996. Mr.
Kaufman has served in the Office of the Chairman of USAi since January 1997
and as its Chief Financial Officer since November 1997. Prior to that time, he
served as Chairman and Chief Executive Officer of Savoy Pictures
Entertainment, Inc. ("Savoy") from March 1992 through December 1996 and as a
director of Savoy from February 1992 through December 1996. Mr. Kaufman was
the founding Chairman and Chief Executive Officer of Tri-Star Pictures, Inc.
("Tri-Star") from 1983 until December 1987, at which time he became President
and Chief Executive Officer of Tri-Star's successor company, Columbia Pictures
Entertainment, Inc. ("Columbia"). He resigned from these positions at the end
of 1989 following the acquisition of Columbia by Sony USA, Inc. Mr. Kaufman
joined Columbia in 1974 and served in a variety of senior positions at
Columbia and its affiliates prior to the founding of Tri-Star.

Mr. Kavner has served as a director of CitySearch since December 1995,
including as Chairman of the Board from March 1996 to September 1998 and as a
director of the Company since September 1998. Mr. Kavner has served as the
Chief Executive Officer, President and a director of On Command Corporation, a
provider of hotel in-room entertainment and movies, since September 1996 and
was a consultant in the area of Internet services and content, interactive
entertainment and telecommunications from September 1995 to August 1996. From
June 1994 to September 1995, Mr. Kavner was the head of Creative Artists
Agency's business advisory group. From 1984 to 1994, Mr. Kavner held a number
of senior executive positions with AT&T, Inc. He also serves as a director of
Fleet Financial Group and Earthlink Networks, Inc.

Mr. Savoy has served as a director of the Company since September 1998.
Since 1990, Mr. Savoy has served as Vice President of Vulcan Ventures,
Incorporated, a venture capital fund. From 1987 until November 1990, Mr. Savoy
was employed by Layered, Inc., and became its President in 1988. Currently,
Mr. Savoy serves as President of Vulcan Northwest, Inc. Mr. Savoy also serves
on the Advisory Board of Dream Works SKG. Mr. Savoy serves as a director of
Cnet, Inc., Harbinger Corporation, Metricom, Inc., Telescan, Inc., United
States Satellite Broadcasting, Inc. and, since July 1997, has served as a
director of USAi.

Mr. Spoon has served as a director of CitySearch since December 1997 and as
a director of the Company since September 1998. Mr. Spoon has been President
of The Washington Post Company since September 1993 and Chief Operating
Officer and a director since May 1991. Prior to that, Mr. Spoon held a wide
variety of

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positions at The Washington Post Company, including President of Newsweek from
September 1989 to May 1991. He is also a director of American Management
Systems, Inc. and Human Genome Sciences, Inc.

Mr. Unterman has served as a director of CitySearch since June 1997 and as a
director of the Company since September 1998. Since March 1998, he has served
as Executive Vice President and Chief Financial Officer and from August 1995
to March 1998, he served as Senior Vice President and Chief Financial Officer
of The Times Mirror Company. From February 1995 to August 1995, Mr. Unterman
was a Senior Vice President and General Counsel and, from September 1992 to
February 1995, was Vice President and General Counsel of The Times Mirror
Company.

BOARD COMPOSITION

The Board of Directors of the Company is currently comprised of 12
directors, none of whom is an officer or employee of the Company. Upon
completion of this offering, pursuant to the Restated Certificate of
Incorporation of the Company, the number of directors of the Company will be
fixed from time to time by resolution of the Board of Directors. All members
of the Board of Directors are elected annually by the stockholders of the
Company. Seven of the Company's current directors are directors, officers or
employees of USAi or Ticketmaster Group. See "Risk Factors--Control By and
Relationship with USAi."

Prior to the completion of this offering, the Board of Directors will select
a Compensation Committee that shall make recommendations to the Board of
Directors concerning salaries and incentive compensation for officers and
employees of the Company, including equity compensation for senior executives
of the Company. In addition, the Board of Directors will also appoint an Audit
Committee that reviews and monitors corporate financial reporting and audits
of the Company, as well as any other accounting related matters.

DIRECTOR COMPENSATION

The members of the Board of Directors are not currently compensated for
their services to the Company other than for reimbursement of their expenses
incurred in connection with such services. In March and April 1996, Mr. Kavner
received options to purchase 50,000 shares, 10,000 shares and 81,681 shares of
CitySearch Common Stock (or 50,000 shares, 10,000 shares and 81,681 shares of
Class A Common Stock, respectively, pursuant to the Reclassification) under
the 1996 Stock Plan at an exercise price of $0.10 per share, $0.10 per share
and $0.25 per share, respectively. Upon completion of this offering, directors
may receive discretionary stock option grants pursuant to the provisions of
the 1998 Stock Plan. See "--Employee Benefit Plans."

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

None of the members of the Compensation Committee will be an officer or
employee of the Company. No interlocking relationship will exist between the
Company's Board of Directors or the Compensation Committee and the board of
directors or compensation committee of any other company, nor has such an
interlocking relationship existed in the past.

77
<PAGE>

EXECUTIVE COMPENSATION

The following table sets forth certain summary information concerning the
compensation awarded to, earned by or paid for services rendered during the
year ended December 31, 1997 by the Company's Chief Executive Officer and the
one executive officer who earned in excess of $100,000 in compensation during
such year (the "Named Executive Officers").

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
--------------
AWARDS
--------------
ANNUAL CITYSEARCH
COMPENSATION SECURITIES
--------------- OTHER ANNUAL UNDERLYING
NAME AND PRINCIPAL POSITION SALARY BONUS COMPENSATION OPTIONS (#)(1)
- --------------------------- ------- ------- ------------ --------------
<S> <C> <C> <C> <C>
Charles Conn....................... $93,333 $40,000 $ -- 125,000
Chief Executive Officer
Thomas Layton...................... 86,667 25,000 -- 75,000
President, Chief Operating Officer
and Treasurer
</TABLE>
- --------

(1) These options were granted pursuant to the 1996 Stock Plan and are options
to purchase Class A Common Stock of the Company. See "Employee Benefits
Plans--1996 Stock Option Plan."

78
<PAGE>

OPTION GRANTS IN 1997

The following table sets forth certain information regarding option grants
to each of the Named Executive Officers during the year ended December 31,
1997.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1)
---------------------------------------------------
POTENTIAL
REALIZABLE
VALUE AT
ASSUMED
ANNUAL RATES
OF STOCK
PRICE
NUMBER OF PERCENT OF APPRECIATION
SECURITIES TOTAL OPTIONS FOR OPTION
UNDERLYING GRANTED TO EXERCISE TERM(4)
OPTIONS EMPLOYEES IN PRICE EXPIRATION -------------
NAME GRANTED(#)(1) 1997(2) PER SHARE(3) DATE 5% 10%
---- ------------- ------------- ------------ ---------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Charles Conn............ 125,000 12.1% $2.00 10/01/07 $ $
Thomas Layton........... 75,000 7.2% 2.00 10/01/07
</TABLE>
- --------

(1) All options were granted under the 1996 Stock Plan and are exercisable for
Class A Common Stock of the Company. As of December 31, 1997, 10,416
shares and 6,250 shares subject to the options granted to Messrs. Conn and
Layton were vested, respectively. Prior to the Merger, an additional
20,833 shares and 12,500 shares subject to the options granted to Messrs.
Conn and Layton, respectively, vested. Upon the effectiveness of the
Merger, the remaining 93,751 shares and 56,250 shares subject to the
options granted to Messrs. Conn and Layton, respectively, immediately
vested.

(2) Based on options to purchase 1,035,219 shares granted to CitySearch
employees, including Messrs. Conn and Layton, during the year ended
December 31, 1997 (excluding options to purchase 84,895 shares of
CitySearch Common Stock that were granted to employees and subsequently
canceled during the fiscal year ended December 31, 1997).

(3) The exercise price per share of each option was equal to the fair market
value of the underlying CitySearch Common Stock on the date of grant as
determined by the CitySearch Board of Directors.

(4) Potential gains are calculated based on the assumed initial public
offering price of $ per share of Class B Common Stock net of the
respective exercise price but before taxes associated with the exercise.
The 5% and 10% assumed annual rates of compounded stock appreciation are
mandated by the rules of the Commission and do not represent the Company's
estimate or projection of the future Class B Common Stock price. Actual
gains, if any, on stock option exercises are dependent on the future
market price of shares of Class B Common Stock, the future financial
performance of the Company and overall market conditions.

79
<PAGE>

OPTION EXERCISES AND FISCAL YEAR-END VALUES

The following table sets forth the number of shares acquired upon the
exercise of stock options during the year ended December 31, 1997 and the
number of shares covered by both exercisable and unexercisable stock options
held by each of the Named Executive Officers at December 31, 1997.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT YEAR-END IN-THE-MONEY OPTIONS
(#)(1)(2) AT YEAR-END (3)
------------------------- -------------------------
SHARES ACQUIRED VALUE
NAME ON EXERCISE (#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Charles Conn............ -- -- 10,416 114,584 $ $
Thomas Layton........... -- -- 256,250 68,750
</TABLE>
- --------

(1) Options shown were granted under the 1996 Stock Plan and are exercisable
for Class A Common Stock. See "Employee Benefit Plans--1996 Stock Option
Plan" for a description of the material terms of these options.

(2) Upon the effectiveness of the Merger, the unvested stock options held by
Mr. Conn and Mr. Layton immediately vested and became fully exercisable.

(3) Based on the assumed initial public offering price of $ per share, less
the exercise price.

EMPLOYMENT AGREEMENTS

On May 9, 1996 and July 2, 1997, CitySearch entered into at-will employment
agreements with each of Messrs. Conn and Layton, respectively. Pursuant to
such employment agreements, in the event that Messrs. Conn's or Layton's, as
the case may be, employment is terminated, he will be entitled to receive
severance payments until the earlier of (i) such time as he is employed by a
recognized company or (ii) six months after termination. Such severance
payments will equal his full salary for the first three months after
termination and half of his salary for the second three months after
termination.

In addition, pursuant to stock option agreements between the Company and
each of Messrs. Conn and Layton, the vesting of such stock options was
accelerated and such stock options fully vested upon completion of the Merger.
Moreover, in connection with the Merger, each of Messrs. Conn and Layton
entered into the Non-Competition Agreements. See "Certain Transactions--
Acceleration of Stock Options" and "--Non-Competition Agreements."

EMPLOYEE BENEFIT PLANS

1996 Stock Option Plan

The Board of Directors of CitySearch adopted and the stockholders approved
the 1996 Stock Plan and the reservation of 2,500,000 shares of Common Stock
thereunder on March 1, 1996. On September 18, 1996, the Board of Directors and
the stockholders of CitySearch approved an increase of 500,000 shares reserved
for issuance under the 1996 Stock Plan. The Board of Directors and the
stockholders of CitySearch approved a further increase of 1,000,000 shares on
November 18, 1996 and November 20, 1996, respectively. Pursuant to the terms
of the 1996 Stock Plan, the Merger and the Reclassification, the CitySearch
Common Stock reserved for issuance under the 1996 Stock Plan has been
reclassified as Class A Common Stock of the Company. As of September 30, 1998,
there were options to purchase an aggregate of 3,890,694 shares of Class A
Common Stock outstanding under the 1996 Stock Plan. Subject to approval by the
stockholders of the Company, the Company amended the 1996 Stock Plan to
increase the number of shares reserved for issuance by 1,500,000 shares of
Class A Common Stock to an aggregate of 5,500,000 shares. The Company does not
intend to grant any additional options under the 1996 Stock Plan following the
consummation of this offering.

80
<PAGE>

The 1996 Stock Plan provides for the granting to employees (including
officers and employee directors) of incentive stock options within the meaning
of Section 422 of the Code and for the granting to employees (including
officers and employee directors) and consultants (including non-employee
directors) of nonstatutory stock options.

Unless determined otherwise by the administrator, an option granted under
the 1996 Stock Plan is not transferable by the optionee other than by will or
by the laws of descent or distribution, and is exercisable during the lifetime
of the optionee only by such optionee. Unless otherwise provided by the
administrator, an option granted under the 1996 Stock Plan must be exercised
within three months after termination of the optionee's status as an employee
or consultant of the Company (or within 12 months after termination of such
status by death or disability), but in no event later than the expiration of
the option in accordance with its terms. The shares subject to options granted
under the 1996 Stock Plan may be fully and immediately exercisable or may be
exercisable cumulatively over time or upon satisfaction of specified
performance criteria, as determined by the administrator. In most cases, 25%
of the shares subject to options granted under the 1996 Stock Plan are
exercisable at the end of one year with one forty-eighth of the shares subject
to the option becoming exercisable each month thereafter. The 1996 Stock Plan
provides that in the event of a merger of the Company with or into another
corporation, or a sale of substantially all of the Company's assets, each
option shall be assumed or an equivalent option substituted for by the
successor corporation. If the outstanding options are not assumed or
substituted for by the successor corporation, the administrator shall provide
for the optionee to have the right to exercise the option as to all of the
optioned stock, including shares as to which it would not otherwise be
exercisable. If the administrator makes an option exercisable in full in the
event of a merger or sale of assets, the administrator shall notify the
optionee that the option shall be fully exercisable for a period of 15 days
from the date of such notice, and the option will terminate upon the
expiration of such period.

1998 Stock Option Plan

Subject to approval by the Company's stockholders, the Company intends to
adopt the 1998 Stock Plan and reserve shares of Class B Common Stock
of the Company for issuance thereunder. The 1998 Stock Plan provides for the
grant of incentive stock options to employees (including officers and employee
directors) and for the grant of nonstatutory stock options and stock purchase
rights ("SPRs") to employees, directors and consultants. Unless terminated
sooner, the 1998 Stock Plan will terminate automatically in September 2008. As
of the date of this Prospectus, no options have been granted under the 1998
Stock Plan.

The administrator of the 1998 Stock Plan has the power to determine the
terms of the options or SPRs granted, including the exercise price of the
option or SPR, the number of shares subject to each option or SPR, the
exercisability thereof, and the form of consideration payable upon such
exercise. In addition, the administrator has the authority to amend, suspend
or terminate the 1998 Stock Plan, provided that no such action may affect any
shares of Class B Common Stock previously issued and sold or any option
previously granted under the 1998 Stock Plan. The maximum number of shares
covered by options that each optionee may be granted during a fiscal year is
500,000 shares. In addition, in connection with an optionee's initial
employment with the Company, such optionee may be granted an option covering
an additional 1,000,000 shares.

Options and SPRs granted under the 1998 Stock Plan are generally not
transferable by the optionee, and each option and SPR is exercisable during
the lifetime of the optionee only by such optionee. Options granted under the
1998 Stock Plan generally must be exercised within three months after the end
of the optionee's status as an employee, director or consultant of the
Company, or within 12 months after such optionee's termination by death or
disability, but in no event later than the expiration of the option's term.

In the case of SPRs, unless the administrator determines otherwise, the
restricted stock purchase agreement shall grant the Company a repurchase
option exercisable upon the voluntary or involuntary termination of the
purchaser's employment or consulting relationship with the Company for any
reason (including death or disability). The purchase price for shares
repurchased pursuant to the restricted stock purchase agreement shall be the
original price paid by the purchaser and may be paid by cancellation of any
indebtedness of the purchaser to the Company. The repurchase option shall
lapse at a rate determined by the administrator.

81
<PAGE>

The exercise price of all incentive stock options granted under the 1998
Stock Plan must be at least equal to the fair market value of the Class B
Common Stock on the date of grant. The exercise price of nonstatutory stock
options and SPRs granted under the 1998 Stock Plan is determined by the
administrator, but with respect to nonstatutory stock options intended to
qualify as "performance-based compensation" within the meaning of Section
162(m) of the Code, the exercise price must be at least equal to the fair
market value of the Class B Common Stock on the date of grant. With respect to
any participant who owns stock possessing more than 10% of the voting power of
all classes of the Company's outstanding capital stock, the exercise price of
any incentive stock option granted must be at least equal 110% of the fair
market value on the grant date, and the term of such incentive stock option
must not exceed five years. The term of all other options granted under the
1998 Stock Plan may not exceed ten years.

The 1998 Stock Plan provides that in the event of a merger of the Company
with or into another corporation, or a sale of substantially all of the
Company's assets, each option and SPR shall be assumed or an equivalent option
substituted for by the successor corporation. If the outstanding options and
SPRs are not assumed or substituted for by the successor corporation, the
administrator shall provide for the optionee to have the right to exercise the
option or SPR as to all of the optioned stock, including shares as to which it
would not otherwise be exercisable. If the administrator makes an option or
SPR exercisable in full in the event of a merger or sale of assets, the
administrator shall notify the optionee that the option or SPR shall be fully
exercisable for a period of 15 days from the date of such notice, and the
option or SPR will terminate upon the expiration of such period.

1998 Employee Stock Purchase Plan

Subject to approval by stockholders, the Company plans to adopt the Purchase
Plan and reserve an aggregate of shares of Class B Common Stock
thereunder. The number of shares reserved will be increased automatically each
year on the first day of the Company's fiscal year beginning in 1999 by an
amount equal to the lesser of (i) shares of Class B Common Stock,
(ii) 1.0% of the outstanding shares of Common Stock of the Company on such
date or (iii) a lesser amount determined by the Board of Directors. The
Purchase Plan is intended to qualify as an employee stock purchase plan within
the meaning of Section 423 of the Code. Under the Purchase Plan, the Board of
Directors may authorize participation by eligible employees, including
officers, in periodic offerings following the commencement of the Purchase
Plan. Each offering period will run for 12 months and will be divided into
consecutive purchase periods of approximately six months. The initial offering
period under the Purchase Plan will commence on the date of this Prospectus
and terminate on October 31, 1999. Thereafter, new 12-month offering periods
will commence every six months on each May 1 and November 1.

Unless otherwise determined by the Board of Directors, employees are
eligible to participate in the Purchase Plan only if they are customarily
employed by the Company or a subsidiary of the Company designated by the Board
of Directors for at least 20 hours per week and for at least five months per
calendar year. Amounts deducted and accumulated by the participant are used to
purchase shares of Class B Common Stock at the end of each purchase period.
Employees who participate in an offering may have up to 15% of their
compensation withheld pursuant to the Purchase Plan. The price of Class B
Common Stock purchased under the Purchase Plan will be equal to 85% of the
fair market value of the Class B Common Stock at the commencement date of each
offering period or the relevant purchase date, whichever is lower. In the
event the fair market value at the end of a purchase period is less than the
fair market value at the beginning of the offering period, the participants
will be withdrawn from the current offering period following exercise and
automatically re-enrolled in a new offering period. The new offering period
will use the lower fair market value as of the first date of the new offering
period to determine the purchase price for future purchase periods. Employees
may end their participation in any offering period at any time during any
offering period, and participation ends automatically on termination of
employment with the Company. The maximum number of shares that a participant
may purchase during each purchase period is shares during any purchase
period. In addition, no person may purchase shares under the Purchase Plan to
the extent such person would own 5% or more of the total combined value or
voting power of all classes of the capital stock of the Company or any of its
subsidiaries, or to the extent that such person's rights to purchase stock
under all employee stock purchase plans would exceed $25,000 for any calendar
year.

82
<PAGE>

The Purchase Plan will terminate ten years from the date of adoption of the
Purchase Plan, unless terminated earlier in accordance with the provisions of
the Purchase Plan.

In the event of a proposed sale of all or substantially all the assets of
the Company, or the merger of the Company with or into another corporation,
each outstanding option will be assumed or an equivalent option substituted by
the successor corporation. In the event the successor corporation does not
assume or substitute for the option, any offering periods then in progress
shall be shortened to a new date prior to the proposed sale or merger. The
Board of Directors has the authority to amend or terminate the Purchase Plan,
provided, that no such action may adversely affect any outstanding rights to
purchase Class B Common Stock.

USAi Options

In connection with prior employment with Ticketmaster Online certain
employees were previously given options to purchase USAi Common Stock. USAi
has informed the Company that all outstanding options to purchase shares of
USAi Common Stock held by employees of Ticketmaster Online shall remain
outstanding until the earliest to occur of the exercise thereof, the
expiration thereof and the date that the optionholder is no longer an employee
of Ticketmaster Online or another business of the Company, and that the
unvested options shall continue to vest and become exercisable pursuant to the
terms of grant until the earlier of the expiration thereof and the date the
optionholder is no longer an employee of Ticketmaster Online or another
business of the Company.

401(k) Plan

The Company participates in a tax-qualified employee savings and retirement
plan (the "Company 401(k) Plan") which covers all of the Company's full-time
employees who are at least 21 years of age and who have been employed with the
Company for at least three months. Pursuant to the Company 401(k) Plan,
eligible employees may defer up to 20% of their pre-tax earnings, subject to
the Internal Revenue Service's annual contribution limit. The Company 401(k)
Plan permits additional discretionary matching contributions by the Company on
behalf of all participants in the Company 401(k) Plan in such a percentage
amount as may be determined annually by the Board of Directors of the Company.
To date, the Company has made no such matching contributions. The Company
401(k) Plan is intended to qualify under Section 401 of the Code so that
contributions by employees or by the Company to the Company 401(k) Plan, and
income earned on plan contributions, are not taxable to employees until
withdrawn from the Company 401(k) Plan, and so that contributions by the
Company, if any, will be deductible by CitySearch when made. The trustee under
the Company 401(k) Plan, at the direction of each participant, invests the
assets of the Company 401(k) Plan in any of a number of investment options.

Prior to the Merger, the employees of Ticketmaster Online were eligible for
and participated in the Ticketmaster Corp. 401(k) Savings Plan and Trust (the
"Ticketmaster 401(k) Plan"). Pursuant to the terms of the Merger Agreement, it
is anticipated that the Ticketmaster Online employees shall cease
participation in and become ineligible to contribute to the Ticketmaster
401(k) Plan after the effectiveness of the Merger. It is further anticipated
that (i) the Company will accept a spin-off of the Ticketmaster 401(k) Plan as
a trustee-to-trustee transfer with respect to that portion of the Ticketmaster
401(k) Plan which is attributable to the employees of Ticketmaster Online,
(ii) the vested balances of these Ticketmaster Online employees will be
assumed by and transferred into the Company 401(k) Plan, and (iii) the Company
will maintain the level of plan benefits and features required by the Employee
Retirement Income Security Act of 1974, as amended, and the Code in the case
of such spin-offs. In the event that the Company, Ticketmaster Online and
Ticketmaster Corp. determine that such trustee-to-trustee transfer is
inadvisable, adjustments may be made to enable the affected Ticketmaster
Online employees to maintain certain benefits comparable to those previously
afforded such employees and to explore opportunities for such employees to
participate in the 1998 Stock Plan and any other benefits and plans offered or
adopted by the Company (including any welfare and other benefits plans).

83
<PAGE>

LIMITATIONS ON LIABILITY AND INDEMNIFICATION MATTERS

The Company's Restated Certificate of Incorporation limits the liability of
directors for breach of fiduciary duty as a director to the maximum extent
permitted by the DGCL. The DGCL provides that a corporation's certificate of
incorporation may contain a provision eliminating or limiting the personal
liability of directors for monetary damages for breach of their fiduciary
duties as directors, except for liability (i) for any breach of their duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) for unlawful payments of dividends or unlawful stock repurchases
or redemptions as provided for in Section 174 of the DGCL or (iv) for any
transaction from which the director derived an improper personal benefit. The
Company's Restated Certificate of Incorporation also provides that the Company
is required to indemnify to the fullest extent permitted by law any director,
officer or employee of the Company.

The Company's Restated Bylaws provide that (i) the Company is required to
indemnify its directors and officers to the maximum extent permitted by the
DGCL, subject to certain very limited exceptions, (ii) the Company may
indemnify its other employees and agents to the maximum extent permitted by
the DGCL, (iii) the Company is required to advance expenses, as incurred, to
its directors and officers in connection with a legal proceeding, subject to
certain very limited exceptions and (iv) the rights conferred in the Restated
Bylaws are not exclusive.

The Company will enter into indemnification agreements with its officers and
executive directors containing provisions that may require the Company, among
other things, to indemnify such officers and directors against certain
liabilities that may arise by reason of their status or service as directors
or officers (other than liabilities arising from willful misconduct of a
culpable nature), to advance their expenses incurred as a result of any
proceeding against them as to which they could be indemnified, and to obtain
directors' and officers' insurance if available on reasonable terms.

At present, there is no pending litigation or proceeding involving any
director, officer, employee or agent of the Company where indemnification will
be required or permitted. The Company is not aware of any threatened
litigation or proceeding that might result in a claim for such
indemnification.

84
<PAGE>

PRINCIPAL STOCKHOLDERS

The following tables set forth certain beneficial ownership information with
respect to the Company and USAi, the majority owner of the Company.

COMPANY CLASS B COMMON STOCK

The following table sets forth, as of September 30, 1998, certain
information regarding the beneficial ownership of the Company's Class B Common
Stock, adjusted to reflect the sale of the shares of Class B Common Stock
offered hereby, by (i) each person or entity who is known by the Company to
own beneficially 5% or more of the Company's outstanding Class B Common Stock;
(ii) each director of the Company; (iii) each of the Named Executive Officers;
and (iv) all directors and executive officers of the Company as a group.

<TABLE>
<CAPTION>
PERCENTAGE OF
TOTAL VOTING
POWER
NUMBER OF PERCENTAGE OF (OF ALL CLASSES)(3)
SHARES SHARES -----------------------
NAME AND ADDRESS BENEFICIALLY BENEFICIALLY BEFORE AFTER
OF BENEFICIAL OWNER(1) OWNED(2) OWNED(2) OFFERING OFFERING
- ---------------------- ------------ ------------- ---------- ---------
<S> <C> <C> <C> <C>
USA Networks, Inc.(4)............ 40,482,641 64.8%
152 West 57th Street, 42nd Floor
New York, NY 10019
Barry Diller(4)(5)............... 40,482,641 64.8
William Gross(6)................. 4,713,560 7.5
Alan Citron...................... -- -- -- --
Terry Barnes..................... -- -- -- --
Eugene L. Cobuzzi................ -- -- -- --
Stuart W. DePina................. -- -- -- --
Joseph Gleberman(7).............. 2,984,973 4.8 **
Victor A. Kaufman................ -- -- -- --
Alan Spoon(8).................... 748,692 1.2
Thomas Unterman(9)............... 750,413 1.2
Robert Kavner(10)................ 229,998 * ** **
William D. Savoy................. -- -- -- --
Charles Conn(11)................. 1,910,821 3.0
Thomas Layton(12)................ 1,203,821 1.9
All executive officers and
directors as a group
(17 persons)(13)................ 53,137,884 84.1
</TABLE>
- --------
* Less than 1% of the Company's outstanding Class B Common Stock.

** Less than 1% of the total voting power of the Company's outstanding Class
A Common Stock and Class B Common Stock.

(1) The address of Mr. Diller and Mr. Kaufman is c/o USA Networks, Inc. The
address of each of the other named individuals is: c/o Ticketmaster
Online-CitySearch, Inc., 790 E. Colorado Boulevard, Suite 200, Pasadena,
CA 91101.

(2) All numbers shown give effect to the sale of shares of Class B
Common Stock offered hereby. No shares of Class B Common Stock were
issued or outstanding, and no shares of Class B Common Stock were
beneficially owned, prior to the offering other than shares issuable upon
conversion of the Company's outstanding Class A Common Stock. Pursuant to
the Company's Restated Certificate of Incorporation, shares of Class A
Common Stock are convertible at any time into an equal number of shares
of Class B Common Stock. The percentage of shares beneficially owned
assumes the conversion

85
<PAGE>

of all shares of Class A Common Stock beneficially owned by such listed
person, but does not assume the conversion of Class A Common Stock owned
by any other person. Beneficial ownership is determined in accordance with
the rules of the Commission and generally includes voting or investment
power with respect to securities. Except as indicated by footnote, and
subject to community property laws where applicable, the persons named in
the table above have sole voting and investment power with respect to all
shares of Common Stock shown as beneficially owned by them. Amounts shown
in the above table and the following notes include shares issuable upon
exercise of stock options to purchase shares of Class A Common Stock which
are exercisable within 60 days of September 30, 1998.

(3) Percentage of total voting power of all classes after the offering gives
effect to the sale of shares of Class B Common Stock offered hereby.
Percent of total voting power before and after the offering is based on
one vote for each share of Class B Common Stock and 15 votes for each
share of Class A Common Stock, calculated assuming no conversion of the
Class A Common Stock by any holder.

(4) Does not reflect shares to be purchased by USAi pursuant to the Tender
Offer. See "Ticketmaster Online-CitySearch Merger--Merger Agreement--
Tender Offer." Assuming USAi purchases the maximum number of shares of
the Class A Common Stock subject to the Tender Offer (2,924,339 shares),
USAi will beneficially own 43,406,980 shares, or approximately %
after this offering ( % of the total voting power of all classes).

(5) Includes 40,482,641 shares of Class A Common Stock which are beneficially
owned by USAi. Mr. Diller disclaims beneficial ownership of such shares.

(6) Includes 1,178,234 shares of Class A Common Stock which Mr. Gross
transferred previously but as to which he retains voting power until the
closing of this offering. Includes 590,703 shares of Class A Common Stock
which are held by bill gross' idealab! Mr. Gross disclaims beneficial
ownership of such shares.

(7) Includes 2,984,973 shares of Class A Common Stock which are held by
entities affiliated with The Goldman Sachs Group L.P. (the "GS Group").
Mr. Gleberman is a managing director of Goldman, Sachs & Co., the general
partner of which is GS Group. Mr. Gleberman disclaims beneficial
ownership of the shares owned by the GS Group, except to the extent of
his pecuniary interest therein.

(8) Includes 748,692 shares of Class A Common Stock which are held by
Washingtonpost.Newsweek Interactive Company. Mr. Spoon disclaims
beneficial ownership of such shares.

(9) Includes 743,360 shares of Class A Common Stock which are held by The
Times Mirror Company. Mr. Unterman disclaims beneficial ownership of such
shares. Also includes 7,053 shares of Class A Common Stock which are held
by The Thomas and Janet Unterman Living Trust dated 12/30/94.

(10) Includes 115,282 shares of Class A Common Stock and options to purchase
114,716 shares of Class A Common Stock exercisable by Mr. Kavner within
60 days of September 30, 1998.

(11) Includes 1,585,821 shares of Class A Common Stock and options to purchase
325,000 shares of Class A Common Stock exercisable by Mr. Conn within 60
days of September 30, 1998.

(12) Includes 928,821 shares of Class A Common Stock and options to purchase
275,000 shares of Class A Common Stock exercisable by Mr. Layton within
60 days of September 30, 1998.

(13) See notes (2) through (12).

86
<PAGE>

COMPANY CLASS A COMMON STOCK

The following table sets forth information relating to the beneficial
ownership of the Company's Class A Common Stock by (i) each person or entity
who is known by the Company to beneficially own 5% or more of the Company's
outstanding Class A Common Stock; (ii) each director of the Company; (iii)
each of the Named Executive Officers; and (iv) all directors and executive
officers of the Company as a group.

<TABLE>
<CAPTION>
NUMBER OF
SHARES PERCENTAGE
NAME AND ADDRESS BENEFICIALLY OF
OF BENEFICIAL OWNER(1) OWNED(2) CLASS(2)
---------------------- ------------ ----------
<S> <C> <C>
USA Networks, Inc.(3)............................. 40,482,641 64.8
152 West 57th Street, 42nd Floor
New York, NY 10019
Barry Diller(3)(4)................................ 40,482,641 64.8
William Gross(5).................................. 4,713,560 7.5
Alan Citron....................................... -- --
Terry Barnes...................................... -- --
Eugene L. Cobuzzi................................. -- --
Stuart W. DePina.................................. -- --
Joseph Gleberman(6)............................... 2,984,973 4.8
Victor A. Kaufman................................. -- --
Alan Spoon(7)..................................... 748,692 1.2
Thomas Unterman(8)................................ 750,413 1.2
Robert Kavner(9).................................. 229,998 *
William D. Savoy.................................. -- --
Charles Conn(10).................................. 1,910,821 3.0
Thomas Layton(11)................................. 1,203,821 1.9
All executive officers and directors as a group
(17 persons)(12)................................. 53,137,884 84.1
</TABLE>
- --------
* Less than 1% of the Company's outstanding Class A Common Stock.

(2) Beneficial ownership is determined in accordance with the rules of the
Commission and generally includes voting or investment power with respect
to securities. Except as indicated by footnote, and subject to community
property laws where applicable, the persons named in the table above have
sole voting and investment power with respect to all shares of Class A
Common Stock shown as beneficially owned by them. Percentage of class is
based on 62,486,478 shares of Class A Common Stock outstanding as of
September 30, 1998. Amounts shown in the above table and the following
notes include shares issuable upon exercise of stock options to purchase
shares of Class A Common Stock which are exercisable within 60 days of
September 30, 1998. Shares of Class A Common Stock may be converted at
any time into an equal number of shares of Class B Common Stock.

(3) Does not reflect shares to be purchased by USAi pursuant to the Tender
Offer. See "Ticketmaster Online-CitySearch Merger--Merger Agreement--
Tender Offer." Assuming USAi purchases the maximum number of shares of
Class A Common Stock subject to the Tender Offer (2,924,339 shares), USAi
will beneficially own 43,406,980 shares, or approximately 69.5% of the
class.

(4) Includes 40,482,641 shares of Class A Common Stock beneficially owned by
USAi, as to which Mr. Diller disclaims beneficial ownership.

(5) Includes 1,178,234 shares of Class A Common Stock which Mr. Gross
transferred previously but as to which he retains voting power until the
closing of this offering. Includes 590,703 shares of Class A Common Stock
held by bill gross' idealab!, as to which Mr. Gross disclaims beneficial
ownership.

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<PAGE>

(6) Includes 2,984,973 shares of Class A Common Stock held by entities
affiliated with the GS Group. Mr. Gleberman is a managing director of
Goldman, Sachs & Co., the general partner of which is GS Group. Mr.
Gleberman disclaims beneficial ownership of the shares owned by the GS
Group, except to the extent of his pecuniary interest therein.

(7) Includes 748,692 shares of Class A Common Stock held by
Washingtonpost.Newsweek Interactive Company, as to which Mr. Spoon
disclaims beneficial ownership.

(8) Includes 743,360 shares of Class A Common Stock held by The Times Mirror
Company, as to which Mr. Unterman disclaims beneficial ownership, and
7,053 shares of Class A Common Stock held by The Thomas and Janet
Unterman Living Trust dated 12/30/94.

(9) Includes 114,716 shares issuable upon exercise of stock options to
purchase shares of Class A Common Stock which are exercisable by Mr.
Kavner within 60 days of September 30, 1998.

(10) Includes 325,000 shares issuable upon exercise of stock options to
purchase shares of Class A Common Stock which are exercisable by Mr. Conn
within 60 days of September 30, 1998.

(11) Includes 275,000 shares issuable upon exercise of stock options to
purchase shares of Class A Common Stock which are exercisable by Mr.
Layton within 60 days of September 30, 1998.

(12) See notes (2) through (11).

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<PAGE>

USAI COMMON STOCK

The following table sets forth, as of , 1998, information relating
to the beneficial ownership of the USAi Common Stock by (i) each director of
the Company; (ii) the Named Executive Officers of the Company; and (iii) all
executive officers and directors of the Company as a group.

<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER TOTAL VOTING
NAME AND ADDRESS OF PERCENT POWER
OF BENEFICIAL OWNER(1) SHARES OF CLASS(2) (OF ALL CLASSES)(3)
---------------------- ------ ----------- -------------------
<S> <C> <C> <C>
Barry Diller(4)......................
William Gross........................
Alan Citron..........................
Terry Barnes.........................
Eugene L. Cobuzzi....................
Stuart W. DePina.....................
Joseph Gleberman.....................
Victor A. Kaufman(5).................
Alan Spoon...........................
Thomas Unterman......................
Robert Kavner........................
William D. Savoy(6)..................
Charles Conn.........................
Thomas Layton........................
All executive officers and directors
of the Company as a group
(17 persons)........................
</TABLE>
- --------
* Less than 1% of the outstanding USAi Common Stock.

** Less than 1% of the total voting power of the USAi Common Stock and the
Class B common stock of USAi, par value $.01 per share ("USAi Class B
Common Stock").
(1) Mr. Diller and Mr. Kaufman may be contacted at USAi's corporate
headquarters, 152 West 57th Street, 42nd Floor, New York, NY 10019. The
address of each of the other named individuals is: c/o Ticketmaster
Online-CitySearch, Inc., 790 E. Colorado Boulevard, Suite 200, Pasadena,
CA 91101.
(2) The percentage of beneficial ownership listed assumes the conversion of
any shares of USAi Class B Common Stock owned by such listed person, but
does not assume the conversion of USAi Class B Common Stock owned by any
other person. Beneficial ownership has been determined in accordance with
the rules of the Commission. Shares of USAi Class B Common Stock are
convertible at any time into an equal number of shares of USAi Common
Stock.
(3) The percentage of votes for all classes is based on one vote for each
share of USAi Common Stock and ten votes for each share of USAi Class B
Common Stock (assuming no conversion of USAi Class B Common Stock).

(4) Liberty, a wholly-owned subsidiary of TCI, Universal, Seagram, USAi and
Mr. Diller are parties to a stockholders agreement (the "Stockholders
Agreement") pursuant to which Liberty and Mr. Diller have formed BDTV
INC., BDTV II INC., BDTV III INC. and BDTV IV INC. (together the "BDTV
Entities") which entities hold , , and shares
of USAi Class B Common Stock, respectively. Includes shares of
USAi Class B Common Stock, and shares of USAi Common Stock as to
which Mr. Diller has general voting power and which are otherwise
beneficially owned by Seagram. Mr. Diller also owns through intermediate
entities shares of USAi Common Stock and vested options to
purchase shares of USAi Common Stock. Pursuant to the Stockholders
Agreement, Mr. Diller generally has the right to vote all of the shares
of USAi stock held by the BDTV Entities, Seagram and Liberty. These
figures do not include any unissued shares of USAi Common Stock or

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<PAGE>

USAi Class B Common Stock issuable upon exchange of the shares of Home
Shopping Network, Inc. ("Home Shopping") held by Liberty HSN, Inc.
("Liberty HSN") and the shares of USANi LLC ("LLC Shares") beneficially
owned by Liberty or Seagram.
(5) Consists of shares of USAi Common Stock and vested options to
purchase shares of USAi Common Stock.
(6) Consists of shares of USAi Common Stock held by [ ] and vested
options to purchase shares of USAi Common Stock.

USAI CLASS B COMMON STOCK

The following table sets forth, as of , 1998, information relating
to the beneficial ownership of USAi Class B Common Stock for the individuals
described in the table regarding ownership of USAi Common Stock.

<TABLE>
<CAPTION>
NUMBER OF
NAME AND ADDRESS BENEFICIALLY PERCENTAGE
OF BENEFICIAL OWNER OWNED(1) OF CLASS
- ------------------- ------------ ----------
<S> <C> <C>
Barry Diller(2)......................................... %
c/o USA Networks, Inc.
152 West 57th Street
42nd Floor
New York, NY 10019
</TABLE>
- --------
(1) All or any portion of shares of USAi Class B Common Stock may be converted
at any time into an equal number of shares of USAi Common Stock.
(2) These figures do not include any unissued shares of USAi Common Stock or
USAi Class B Common Stock issuable upon conversion of Liberty HSN's Home
Shopping shares and LLC Shares beneficially owned by Liberty or Seagram.

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<PAGE>

TICKETMASTER ONLINE-CITYSEARCH MERGER

MERGER AGREEMENT

On September 28, 1998, pursuant to the Merger Agreement, the Merger was
consummated and Ticketmaster Online became a wholly-owned subsidiary of the
Company. Immediately prior to the Merger, all of the outstanding shares of
CitySearch Convertible Preferred Stock were converted into shares of
CitySearch Common Stock and all outstanding options or warrants to purchase
shares of CitySearch Convertible Preferred Stock were converted into options
or warrants to purchase shares of CitySearch Common Stock. At the effective
time of the Merger, the outstanding capital stock of Ticketmaster Online was
converted into an aggregate of 37,238,000 shares of CitySearch Common Stock
which, pursuant to the Reclassification, was subsequently converted into Class
A Common Stock. In addition, all outstanding options or warrants exercisable
for shares of CitySearch Common Stock became exercisable for shares of Class A
Common Stock (according to their existing vesting schedule and other terms).
The following is a summary of certain aspects of the Merger Agreement, the
Merger and related transactions and is qualified in its entirety by reference
to the Merger Agreement and the exhibits thereto, copies of which have been
filed as exhibits to the Registration Statement of which this Prospectus is a
part.

Tender Offer

Pursuant to the terms of the Merger Agreement, on October 2, 1998, USAi
commenced the Tender Offer to purchase from each Current CitySearch Holder up
to 20% of each such holder's shares of Common Stock (including shares of
Common Stock issuable upon exercise of options or warrants that were vested
and exercisable as of the effective time of the Merger) at a per share price
of $8.67 net to the seller in cash. The Merger Agreement provides that,
notwithstanding the foregoing, USAi is not obligated to purchase in the Tender
Offer more than an aggregate of 2,924,339 shares of Common Stock; provided
that in the event more than 2,924,339 shares are tendered, the number of
shares purchased from each holder in excess of 10% of any holder's shares will
be reduced on a pro rata basis. The Tender Offer is scheduled to expire on
November 3, 1998.

Assuming USAi purchases the total number of shares of Class A Common Stock
subject to the Tender Offer, USAi will beneficially own 43,406,980 shares of
Class A Common Stock, or approximately 69.5%, of the outstanding Common Stock
prior to this offering and, immediately after this offering, will beneficially
own % of the outstanding Common Stock, representing approximately % of
the total voting power of the Common Stock. All of the shares purchased
pursuant to the Tender Offer will be shares of Class A Common Stock and will
not be converted into Class B Common Stock when purchased by USAi. Such shares
of Class A Common Stock are convertible, however, into Class B Common Stock on
a share-for-share basis at the election of USAi or automatically upon certain
transfers thereof by USAi.

Put Option

The Merger Agreement provides that, in the event that the Company does not
close a Qualified IPO (as defined below) prior to any of the dates that are 12
months, 18 months and 24 months from the date of the Merger Agreement, then
during the 45-day period beginning on such dates, a majority in interest of
the Current CitySearch Holders may, upon notice to USAi, require USAi to
commence an exchange offer (the "Put Option"), consummation of which would be
subject to certain conditions, including that a minimum of 50.1% (on a fully
diluted basis) of the then-outstanding Common Stock held by Current CitySearch
Holders is tendered therein, for all shares of Common Stock then held by any
Current CitySearch Holder for consideration of (a) 0.1548 shares of USAi
Common Stock plus (b) at the election of USAi, either (i) $4.34 in immediately
available funds or (ii) a number of additional shares of USAi Common Stock
equal to $4.34 divided by the average closing price of a share of USAi Common
Stock for the 20 consecutive trading days ending on the date five days prior
to the date of the applicable notice, as reported on the Nasdaq National
Market or the New York Stock Exchange, as the case may be. Any such exchange
offer would be subject to certain conditions, including that a minimum of
50.1% (on a fully diluted basis) of the then-outstanding Common Stock held by
Current CitySearch Holders

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<PAGE>

is tendered therein. A "Qualified IPO" is defined in the Merger Agreement as
an underwritten public offering of the Company's Common Stock pursuant to a
registration statement declared effective by the Commission under the
Securities Act, involving the offer and sale of shares of the Company's Common
Stock either (x) equal in number to 10% of the number of all shares of
outstanding Common Stock of all classes at the time of such closing or (y) at
an aggregate offering price (after deduction of underwriter commissions and
offering expenses) of not less than $75 million. For all purposes under the
Merger Agreement, a Qualified IPO shall have occurred if an underwritten
public offering meeting the criteria specified in the immediately preceding
sentence is consummated and one of the investment banking institutions
specified on a list agreed to by CitySearch and USAi is a managing underwriter
(or the sole underwriter) of such underwritten public offering.

Based upon the number of shares of Class B Common Stock being offered
hereby, and the expected initial public offering price of such shares, this
offering, upon closing, will constitute a Qualified IPO. As a result, the Put
Option, as well as the other rights granted to the Current CitySearch Holders
in the Merger Agreement that terminate or expire upon the closing of a
Qualified IPO (including, without limitation, the right to nominate four
persons as directors on the Company's Board of Directors and certain Company
actions requiring supermajority board approvals), will terminate or expire, as
the case may be, upon the closing of this offering.

Indemnification by USAi

Pursuant to the Merger Agreement, USAi has agreed to indemnify each of the
Current CitySearch Holders and hold them harmless against any loss, loss of
value, liability, demand, claim, action or expense which any such person or
entity may suffer or become subject to as a result of a breach of certain
representations and warranties made by USAi, Ticketmaster Group, Ticketmaster
Corp. and Ticketmaster Online relating to Ticketmaster Corp. venue agreements
and Ticketmaster Online financial statements.

CONVERTIBLE NOTE

Concurrently with the execution of the Merger Agreement, USAi loaned $50
million in cash to CitySearch in exchange for the Convertible Note. The
Convertible Note, in the principal amount of $50 million, bears interest at a
rate per annum of 7.00%. Following consummation of the Merger, the Convertible
Note is convertible only upon the expiration of the final put right described
above under "Ticketmaster Online-CitySearch Merger" (if no Qualified IPO has
occurred) into that number of shares of Class A Common Stock equal to the
outstanding principal amount and any accrued and unpaid interest (which
interest has been outstanding for a period longer than one year) divided by
$7.33. Upon completion of this offering, which will result in the termination
of the Put Option, the Convertible Note and any remaining outstanding
principal or accrued interest thereon will no longer be convertible into
capital stock of the Company. The Convertible Note is generally due and
payable on the earlier to occur of (a) August 13, 2005 or (b) 20 days
following the closing of a Qualified IPO, which, as described above, would
include this offering. In the event that a Qualified IPO results in net cash
proceeds to the Company less than the aggregate amount of the outstanding
principal and accrued interest under the Convertible Note, the Company will be
required to pay USAi an amount equal to such net cash proceeds, with payment
of such proceeds first applied against the accrued and unpaid interest and
then to outstanding principal. See "Use of Proceeds."

TICKETMASTER LICENSE AGREEMENT

Concurrently with the execution of the Merger Agreement, Ticketmaster
Corp.,Ticketmaster Online and USAi entered into the Ticketmaster License
Agreement, which is described under "Business--Ticketmaster Online Business--
Ticketmaster License Agreement."

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<PAGE>

CERTAIN TRANSACTIONS

PRIVATE PLACEMENTS OF SECURITIES

On September 22, 1995, CitySearch issued an aggregate of 6,622,857 shares of
CitySearch Common Stock to Mr. Gross, a co-founder of CitySearch and director
of the Company, for services provided to CitySearch and aggregate proceeds of
$5,000. On December 9, 1995, CitySearch repurchased 2,000,000 shares of such
CitySearch Common Stock from Mr. Gross for an aggregate price of $1,510. On
October 11, 1995 CitySearch sold an aggregate of 4,233,500 shares of
CitySearch Common Stock to Messrs. Conn, Layton, Jeffrey Brewer and certain
other key employees (together with shares of CitySearch Common Stock issued to
Mr. Gross, the "Founders' Stock") for aggregate proceeds of $84,670. Pursuant
to the Reclassification, the Founders' Stock has been reclassified as Class A
Common Stock of the Company. Pursuant to the terms of the applicable
subscription agreement, Founders' Stock may not be transferred, prior to the
closing of a Qualified IPO, without the written consent of the Board of
Directors. To date, 1,178,234 shares of Founders' Stock have been transferred
by Mr. Gross and certain key employees with the approval of the Board of
Directors of CitySearch. However, Mr. Gross retains voting power over all of
shares transferred by him until the closing of this offering.

Between May 15, 1996 and July 31, 1996, CitySearch issued and sold an
aggregate of 3,261,024 shares of Series C Preferred Stock (or 3,170,356 shares
of Class A Common Stock pursuant to the Conversion and the Reclassification)
at a per share price of $3.4665. Entities affiliated with Goldman, Sachs & Co.
purchased 2,596,278 shares of these shares (or 2,465,686 shares of Class A
Common Stock pursuant to the Conversion and the Reclassification) for an
aggregate purchase price of approximately $9.0 million. Mr. Gleberman, a
director of the Company, is a Managing Director in the Principal Investment
Area of Goldman, Sachs & Co.

Between December 13, 1996 and October 22, 1997, CitySearch issued and sold
an aggregate of 4,430,313 shares of Series D Preferred Stock (or 4,297,824
shares of Class A Common Stock pursuant to the Conversion and the
Reclassification) at a per share price of $6.5251. These sales included the
following: 766,272 shares (or 743,360 shares of Class A Common Stock pursuant
to the Conversion and the Reclassification) were sold to The Times Mirror
Company for an aggregate purchase price of approximately $5.0 million; 475,085
shares (or 460,873 shares of Class A Common Stock pursuant to the Conversion
and the Reclassification) were sold to entities affiliated with Goldman, Sachs
& Co. for an aggregate purchase price of approximately $3.1 million; and
459,763 shares (or 446,015 shares of Class A Common Stock pursuant to the
Conversion and the Reclassification) were sold to Washingtonpost.Newsweek
Interactive Company for an aggregate purchase price of approximately $3.0
million. Mr. Unterman, a director of the Company, is an Executive Vice
President and Chief Financial Officer of The Times Mirror Company.
Mr. Gleberman, a director of the Company, is Managing Director in the
Principal Investment Area of Goldman, Sachs & Co. Mr. Spoon, a director of the
Company, is President, Chief Operating Officer and a director of The
Washington Post Company.

Between November 11, 1997 and November 26, 1997, CitySearch issued and sold
an aggregate of 4,655,347 shares of Series E Preferred Stock (or 4,714,286
shares of Class A Common Stock pursuant to the Conversion and the
Reclassification) at a per share price of $7.00. USAi purchased 2,857,143 such
shares (2,821,428 shares of Class A Common Stock pursuant to the Conversion
and the Reclassification) for an aggregate purchase price of approximately
$20.0 million. Mr. Diller, a director of the Company, is Chairman and Chief
Executive Officer of USAi. In addition, 302,677 shares (or 306,509 shares of
Class A Common Stock pursuant to the Conversion and the Reclassification) were
sold to Washingtonpost.Newsweek Interactive Company for an aggregate purchase
price of approximately $2.1 million.

On May 26, 1998, CitySearch issued and sold an aggregate of 1,000,000 shares
of Series E Preferred Stock (or 987,500 shares of Class A Common Stock
pursuant to the Conversion and the Reclassification) at a per share price of
$7.00. USAi purchased 428,571 of these shares (or 423,213 shares of Class A
Common Stock pursuant to the Conversion and the Reclassification) for an
aggregate purchase price of approximately $3.0 million.

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<PAGE>

TRANSACTIONS WITH AFFILIATES

USAi, Ticketmaster Corp. and Related Entities

In May 1997, CitySearch entered into a cross-promotional agreement with
Ticketmaster Online. Pursuant to the agreement, Ticketmaster Online agreed to
provide banner advertising promoting CitySearch's owned and operated city
sites on the Ticketmaster Online Web site, to provide access to Ticketmaster
Online ticket and information Web pages and to provide "music-on-hold" and/or
direct mail opportunities from Ticketmaster Corp. CitySearch agreed to provide
promotion of the Ticketmaster name and logo in selected advertising and
marketing materials, to co-produce with Ticketmaster Online broadcast
advertising, to provide banner advertising promoting Ticketmaster Online on
the CitySearch Web sites and to promote Ticketmaster Corp. events and
publications. This agreement terminates on October 31, 1998.

CitySearch, USAi, Ticketmaster Online and various affiliates are parties to
the Merger Agreement. In addition, pursuant to the Merger Agreement, USAi has
commenced the Tender Offer, which will be consummated on November 3, 1998.
Concurrently with the execution of the Merger Agreement, USAi loaned $50
million in cash to CitySearch in exchange for the Convertible Note. See
"Ticketmaster Online-CitySearch Merger--Merger Agreement."

In August 1998, Ticketmaster Online, Ticketmaster Corp. and USAi entered
into the Ticketmaster License Agreement. See "Business--Ticketmaster Online
Business--Ticketmaster License Agreement."

The Company expects that, both within and outside the ordinary course of
business, the Company and its affiliates (other than USAi and its controlled
affiliates), on the one hand, and USAi and its affiliates (other than the
Company and its controlled affiliates), on the other hand, will engage in
various transactions, including pursuant to the Ticketmaster License
Agreement. The Company expects that such transactions will result in terms to
the Company that are at least as favorable as those that could be obtained
from a third party, where applicable.

Other Affiliates

In June 1997, CitySearch entered into a license and services agreement with
the Los Angeles Times, a division of The Times Mirror Company. The agreement
provides for the license of CitySearch's intellectual property and consulting
services in exchange for an up-front license fee, ongoing royalties based on
the revenues generated by the city guide developed by the parties and fees for
consulting services. The agreement contains customary termination provisions
for material breach or non-performance. Mr. Unterman, a director of the
Company, is Executive Vice President and Chief Financial Officer of The Times
Mirror Company.

In September 1997, Ticketmaster Online entered into an agreement with The
Los Angeles Times, Inc. providing for Ticketmaster Online to create and
maintain a co-branded Web site with ticketing capabilities and information on
local live events. Under the agreement, Ticketmaster Online is required to pay
to The Los Angeles Times, Inc. 50% of net merchandising revenue from the co-
branded Web site.

In November 1997, CitySearch entered into a license and services agreement
with Washingtonpost.Newsweek Interactive Company. The agreement provides for
the license of the Company's intellectual property and consulting services in
exchange for an up-front license fee, ongoing royalties based on the revenues
generated by the city guide developed by the parties and fees for consulting
services. The agreement contains customary termination provisions for material
breach or non-performance. Mr. Spoon, a director of the Company, is the
President and a director of The Washington Post Company, the parent of
Washington-post.Newsweek Interactive Company.

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<PAGE>

ACCELERATION OF STOCK OPTIONS

Messrs. Conn and Layton are parties to stock option agreements under the
1996 Stock Plan pursuant to which Mr. Conn was granted options to purchase
125,000 shares and 200,000 shares of CitySearch Common Stock at exercise
prices of $2.00 per share and $7.00 per share, respectively, and Mr. Layton
was granted options to purchase 75,000 shares and 200,000 shares of CitySearch
Common Stock at exercise prices of $2.00 per share and $7.00 per share,
respectively. Each of these stock option agreements provides that in the event
of a substantial merger or a board approved acquisition of CitySearch, all
outstanding, unvested stock options will vest upon completion of such event.
Upon consummation of the Merger, 277,085 shares subject to unvested options
held by Mr. Conn and 239,584 shares subject to unvested options held by Mr.
Layton immediately vested. Pursuant to terms of the stock option agreements,
the Merger and the Reclassification, these options are exercisable for Class A
Common Stock.

NON-COMPETITION AGREEMENTS

In connection with the execution of the Merger Agreement, Messrs. Conn and
Layton each entered into the Non-Competition Agreements with CitySearch,
Ticketmaster Corp. and Ticketmaster Online.

The Non-Competition Agreements provide that each of Messrs. Conn and Layton
will not, for a period of 30 months from the date of the Non-Competition
Agreement, directly engage in or assist any activity that is the same or
materially competes with the local city guide business on the Web or the
business of the sale of tickets to live events through any distributed
channels. Messrs. Conn and Layton each received $250,000 from Ticketmaster
Group in connection with the execution of his Non-Competition Agreement. In
addition, neither Messrs. Conn nor Layton may solicit senior employees or
customers, advertisers or clients of CitySearch or Ticketmaster Online or any
of their respective subsidiaries for a period of one year following the date
of the termination of his employment with CitySearch for any reason.

The Company has also entered into employment agreements with each of Messrs.
Conn and Layton, which provide for certain severance payments upon termination
of employment. See "Management--Employment Agreements."

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<PAGE>

DESCRIPTION OF CAPITAL STOCK

The following summary of the terms of the Company's capital stock is
qualified in its entirety by reference to the applicable provisions of
Delaware law and the Company's Restated Certificate of Incorporation and
Restated Bylaws.

As of September 30, 1998, there were 62,486,478 shares of Class A Common
Stock outstanding, held of record by 298 stockholders of the Company, and
options to purchase 3,890,694 shares of Class A Common Stock outstanding.

COMMON STOCK

Upon the closing of this offering, the Company will be authorized to issue
100,000,000 shares of Class A Common Stock, 250,000,000 shares of Class B
Common Stock and 2,883,506 shares of Class C Common Stock. The Class A Common
Stock, Class B Common Stock and Class C Common Stock will have the following
rights, preferences and privileges:

Class A Common Stock

Except as otherwise provided by the Restated Certificate of Incorporation or
by applicable law, each share of Class A Common Stock issued and outstanding
shall have 15 votes on any matter submitted to a vote of stockholders.
Pursuant to the Reclassification, each share of CitySearch Common Stock
outstanding immediately prior to the Reclassification was reclassified on a
one-for-one basis as Class A Common Stock of the Company. Each share of Class
A Common Stock will be automatically converted into one share of Class B
Common Stock of the Company upon any Transfer of such share, whether or not
for value by the initial registered holder (the "Initial Holder") thereof,
other than any such Transfer by such holder to (i) a nominee of such holder
(without any change in beneficial ownership, within the meaning of Section
13(d) of the Securities and Exchange Act of 1934, as amended (the "Exchange
Act")) or (ii) another person that, at the time of the Transfer, beneficially
owns shares of Class A Common Stock or a nominee thereof; provided that,
notwithstanding the foregoing (A) any Transfer by the Initial Holder without
consideration to (i) any affiliated entity of such Initial Holder, (ii) a
partner, active or retired, of such Initial Holder, (iii) the estate of any
such Initial Holder or a trust established for the benefit of the descendants
or any relatives or spouse of such Initial Holder, (iv) a parent corporation
or wholly-owned subsidiary of such Initial Holder or to a wholly-owned
subsidiary of such parent unless and until such transferee ceases to be a
parent or wholly-owned subsidiary of the Initial Holder or a wholly-owned
subsidiary of such parent, or (v) the spouse of such Initial Holder, in each
case, shall not result in such conversion, or (B) any bona fide pledge to a
financial institution in connection with a borrowing shall not result in such
conversion; and provided further, that in the event any Transfer shall not
give rise to automatic conversion hereunder, then any subsequent Transfer by
the holder (other than any such Transfer by such holder to a nominee of such
holder (without any change in beneficial ownership, as such term is defined
under Section 13(d) of the Exchange Act)) or the pledgor, as the case may be,
shall be subject to automatic conversion upon such terms and conditions. In
addition, each share of Class A Common Stock may be converted at any time into
one share of Class B Common Stock at the option of the holder thereof. The
one-to-one conversion ratio shall be in all events equitably preserved in the
event of any merger, consolidation or other reorganization of the Company with
another corporation.

Pursuant to the terms of conversion described above, shares of Class A
Common Stock purchased by USAi pursuant to the Tender Offer will not convert
to Class B Common Stock and will remain shares of Class A Common Stock. See
"Ticketmaster Online-CitySearch Merger--Merger Agreement--Tender Offer."

Pursuant to the terms of the 1996 Stock Plan, as amended, and the
Reclassification, all outstanding options as of September 30, 1998 are
exercisable for shares of Class A Common Stock, and no additional options will
be granted under the 1996 Stock Plan. See "Management--Employee Benefit
Plans--1996 Stock Option Plan."

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<PAGE>

Class B Common Stock

Except as otherwise provided by applicable law, each share of Class B Common
Stock issued and outstanding shall have one vote on any matter submitted to a
vote of stockholders. The Restated Certificate of Incorporation provides that
the Company shall at all times reserve and keep available out of its
authorized but unissued shares of Class B Common Stock, solely for the purpose
of effecting the conversion of the shares of the Class A Common Stock, such
number of its shares of Class B Common Stock as shall be necessary to effect
the conversion of all outstanding shares of Class A Common Stock. Except as
otherwise required by applicable law, the Class A Common Stock and the Class B
Common Stock shall vote together as a single class on all matters submitted to
a vote of stockholders.

Class C Common Stock

No shares of Class C Common Stock issued and outstanding shall have any vote
on any matter submitted to a vote of stockholders, except as otherwise
required by applicable law. The Class C Common Stock is reserved for issuance
upon conversion of the Convertible Note held by USAi in certain limited
circumstances, as described in the Convertible Note. See "Ticketmaster Online-
CitySearch Merger--Convertible Note."

Except as set forth in the Company's Restated Certificate of Incorporation
and summarized in this Prospectus, with respect to voting rights, conversion
and transfer, and except as otherwise provided by applicable law, the Class A
Common Stock, Class B Common Stock and the Class C Common Stock have identical
rights, preferences and privileges. As such, subject to preferences that may
apply to shares of Preferred Stock outstanding from time to time, the holders
of outstanding shares of Common Stock of the Company are entitled to receive,
on a share-for-share basis, such dividends if, as and when declared from time
to time by the Board of Directors of the Company. Cumulative voting for the
election of directors is not provided for in the Company's Restated
Certificate of Incorporation; therefore, subject to applicable law, the
holders of a majority of the total voting power of the outstanding shares of
Common Stock voted will have the power to elect all of the directors then
standing for election. No class of Common Stock is entitled to preemptive or
redemption rights. Upon a liquidation, dissolution or winding-up of the
Company, the assets legally available for distribution to stockholders are
distributable ratably among the holders of each class of Common Stock, subject
to the preferences, if any, of any outstanding Preferred Stock and payment of
claims of creditors. The Company's Restated Certificate of Incorporation
further provides that in no event will any stock dividends or stock splits or
combinations of stock be declared or made on Class A Common Stock, Class B
Common Stock or Class C Common Stock unless all shares of Class A Common
Stock, Class B Common Stock and Class C Common Stock then outstanding are
treated equally and identically. Each outstanding share of Common Stock of the
Company is, and all shares of Common Stock to be outstanding upon completion
of this offering will be, fully paid and nonassessable.

PREFERRED STOCK

Upon the closing of this offering, the Company will be authorized to issue
2,000,000 shares of Preferred Stock. The Board of Directors is authorized,
subject to limitations prescribed by Delaware law, to provide for the issuance
of shares of Preferred Stock in one or more series, to establish from time to
time the number of shares to be included in each such series, to fix the
powers, designations, preferences and rights of the shares of each wholly
unissued series and designate any qualifications, limitations or restrictions
thereon and to increase or decrease the number of shares of any such series
(but not below the number of shares of such series then outstanding) without
any further vote or action by the stockholders. The issuance of Preferred
Stock may have the effect of delaying, deferring or preventing a change in
control of the Company and may adversely affect the voting and other rights of
the holders of Common Stock of the Company, which could have an adverse impact
on the market price of the Class B Common Stock. The Company has no current
plan to issue any shares of Preferred Stock.

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<PAGE>

WARRANTS

In November 1997, as additional consideration for service rendered by
NationsBanc Montgomery Securities LLC as placement agent for the Series E
Preferred Stock, CitySearch issued to NationsBanc Montgomery Securities LLC a
warrant to purchase 94,286 shares of Series E Preferred Stock (or 93,107
shares of Class A Common Stock pursuant to the Conversion and the
Reclassification). The warrant is exercisable at any time at an exercise price
of $8.86 per share of Class A Common Stock. Any unexercised portion of the
warrant is automatically convertible into Class A Common Stock immediately
prior to the closing of this offering for that number of shares of Class A
Common Stock equal to (x) the value of the unexercised portion as of the date
of the closing of this offering, which value shall equal the difference
between the aggregate exercise price and the aggregate value of the shares of
Class A Common Stock issuable upon exercise of the unexercised portion of the
warrant, at a per share price equal to the initial offering price divided by
(y) the per share initial offering price of the shares of Class B Common Stock
to be issued and sold in this offering.

CORPORATE OPPORTUNITIES

The Company's Restated Certificate of Incorporation will provide that "USA
Networks" (for purposes of this section only, as defined below) shall have no
duty to refrain from engaging in the same or similar activities or lines of
business as the Company, and neither USA Networks nor any officer, director or
employee thereof (except as described below) shall be liable to the Company or
its stockholders for breach of any fiduciary duty by reason of any such
activities of USA Networks. In the event that USA Networks acquires knowledge
of a potential transaction or matter which may be a corporate opportunity for
both USA Networks and the Company, USA Networks shall have no duty to
communicate or offer such corporate opportunity to the Company and shall not
be liable to the Company or its stockholders for breach of any fiduciary duty
as a stockholder of the Company by reason of the fact that USA Networks
pursues or acquires such corporate opportunity for itself, directs such
corporate opportunity to another person, or does not communicate information
regarding such corporate opportunity to the Company. Nothing in this provision
of the Company's Restated Certificate of Incorporation shall amend or modify
in any respect any written contractual agreement between USA Networks and the
Company.

In the event that a director or officer of the Company who is also a
director, officer or employee of USA Networks acquires knowledge of a
potential transaction or matter which may be a corporate opportunity for both
the Company and USA Networks, such director or officer of the Company shall
have fully satisfied and fulfilled the fiduciary duty of such director or
officer to the Company and its stockholders with respect to such corporate
opportunity, if such director or officer acts in a manner consistent with the
following policy:

(i) a corporate opportunity offered to any person who is an officer of
the Company, and who is also a director but not an officer or employee of
USA Networks, shall belong to the Company;

(ii) a corporate opportunity offered to any person who is a director but
not an officer of the Company, and who is also a director, officer or
employee of USA Networks shall belong to the Company if such opportunity is
expressly offered to such person in his or her capacity as a director of
the Company, and otherwise shall belong to USA Networks; and

(iii) a corporate opportunity offered to any person who is an officer or
employee of USA Networks and an officer of the Company shall belong to the
Company if such opportunity is expressly offered to such person in his or
her capacity as an officer or employee of the Company, and otherwise shall
belong to USA Networks.

For purposes of the foregoing:

(i) A director of the Company who is Chairman of the Board of Directors
of the Company or of a committee thereof shall not be deemed to be an
officer of the Company by reason of holding such position (without regard
to whether such position is deemed an office of the Company under the
Restated Bylaws of the Company), unless such person is a full-time employee
of the Company; and

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(ii) The term "Company" shall mean the Company and all corporations,
partnerships, joint ventures, associations and other entities in which the
Company beneficially owns (directly or indirectly) 50% or more of the
outstanding voting stock, voting power, partnership interests or similar
voting interests. The term "USA Networks" shall mean USA Networks, Inc., a
Delaware corporation, USANi LLC, a Delaware limited liability company, and
all corporations, partnerships, joint ventures, associations and other
entities (other than the Company, as defined in accordance with this
paragraph) in which USA Networks beneficially owns (directly or indirectly)
50% or more of the outstanding voting stock, voting power, partnership
interests or similar voting interests.

The foregoing provisions of the Company's Restated Certificate of
Incorporation shall expire on the date that USA Networks ceases to
beneficially own Common Stock representing at least 20% of the total voting
power of all classes of outstanding capital stock of the Company entitled to
vote in the election of directors and no
person who is a director or officer of the Company is also a director or
officer of USA Networks. In addition to any vote of the stockholders required
by law, until the time that USA Networks ceases to beneficially own Common
Stock representing at least 20% of the total voting power of all classes of
outstanding capital stock of the Company entitled to vote in the election of
directors, the affirmative vote of the holders of more than 80% of the total
voting power of all such classes of outstanding capital stock of the Company
shall be required to alter, amend or repeal in a manner adverse to the
interests of USA Networks, or adopt any provision adverse to the interests of
USA Networks and inconsistent with, the corporate opportunity provisions
described above.

Any person purchasing or otherwise acquiring any interest in shares of the
capital stock of the Company shall be deemed to have notice of and to have
consented to the foregoing provisions of the Company's Restated Certificate of
Incorporation.

ANTITAKEOVER EFFECTS OF PROVISIONS OF CERTIFICATE OF INCORPORATION AND BYLAWS

Certain provisions of the Company's Restated Certificate of Incorporation
and Restated Bylaws and DGCL Section 203 may render more difficult, or have
the effect of discouraging, unsolicited takeover bids from third parties or
the removal of incumbent management of the Company. These provisions include
the right of the holders of Class A Common Stock to 15 votes per share, versus
one vote per share for the holders of Class B Common Stock, and provide that
the stockholders may not call special meetings. In addition, the Company's
Restated Certificate of Incorporation authorizes the Board of Directors to
issue, without stockholder approval, 2,000,000 shares of Preferred Stock with
voting, conversion and other rights and preferences that could adversely
affect the voting power or other rights of the holders of Common Stock of the
Company. Although the Company has no current plans to issue any shares of
Preferred Stock, the issuance of Preferred Stock or rights to purchase
Preferred Stock could render more difficult, or have the effect of
discouraging, unsolicited takeover bids from third parties or the removal of
incumbent management of the Company, or otherwise adversely affect the market
price for the Class B Common Stock. See "--Preferred Stock." Although, such
provisions do not have a substantial practical significance to investors while
USAi, through its ownership of Class A Common Stock, is in a position to
effectively control all matters affecting the Company, such provisions could
have the effect of depriving stockholders of an opportunity to sell their
shares at a premium over prevailing market prices should USAi no longer be in
such control.

EFFECT OF DELAWARE ANTITAKEOVER STATUTE

The Company is subject to Section 203 of the DGCL (the "Antitakeover Law"),
which regulates corporate acquisitions. The Antitakeover Law prevents certain
Delaware corporations, including those whose securities are listed for trading
on the Nasdaq National Market, from engaging under certain circumstances in a
"business combination" with any "interested stockholder" for three years
following the date that such stockholder became an interested stockholder. For
purposes of the Antitakeover Law, a "business combination" includes, among
other things, a merger or consolidation involving the Company and the
interested stockholder and the sale of more than ten percent of the Company's
assets. In general, the Antitakeover Law defines an "interested stockholder"
as any entity or person beneficially owning 15% or more of the outstanding
voting stock of the

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<PAGE>

Company and any entity or person affiliated with or controlling or controlled
by such entity or person. A Delaware corporation may "opt out" of the
Antitakeover Law with an express provision in its original certificate of
incorporation or an express provision in its certificate of incorporation or
bylaws resulting from amendments approved by the holders of at least a
majority of the Company's outstanding voting shares. The Company has not
"opted out" of the provisions of the Antitakeover Law. The restrictions of the
Antitakeover Law will not apply to USAi, however, because (i) the Company's
Board of Directors approved the transaction which resulted in USAi becoming an
"interested stockholder" prior to the consummation of that transaction and
(ii) at the time USAi became an "interested stockholder," the restrictions of
Section 203 did not apply to the Company because the Company did not have a
class of voting stock (x) listed on a national securities exchange,
(y) authorized for quotation on the Nasdaq Stock Market or (z) held of record
by more than 2,000 stockholders.

REGISTRATION RIGHTS

After this offering, the holders of 7,006,671 shares of Class A Common Stock
will have the right in certain circumstances to request the Company to
register their shares under the Securities Act for resale to the public in the
event of a Company-initiated registration. Under the terms of the agreements
between the Company and the holders of such registrable securities, if the
Company proposes to register any of its securities under the Securities Act,
such holders are entitled to notice of such registration and are entitled to
include shares of such Class A Common Stock therein. These registration rights
are subject to certain conditions and limitations, among them the right of the
underwriters of an offering to limit the number of shares included in such
registration.

TRANSFER AGENT

The Transfer Agent and Registrar for the Common Stock is ChaseMellon
Shareholder Services, L.L.C.

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no public market for the Class B
Common Stock of the Company. Future sales of substantial amounts of Class B
Common Stock in the public market (including by optional or automatic
conversion of shares of Class A Common Stock into Class B Common Stock), or
the anticipation of such sales, could materially adversely affect prevailing
market prices. Furthermore, since only a limited number of shares will be
available for sale shortly after the offering because of certain contractual
and legal restrictions on resale described below, sales of substantial amounts
of Class B Common Stock of the Company in the public market (including by
optional or automatic conversion of shares of Class A Common Stock into Class
B Common Stock) after such restrictions lapse could materially adversely
affect the prevailing market price and the ability of the Company to raise
equity capital in the future.

Upon completion of this offering, the Company will have shares of Class B
Common Stock outstanding and 62,486,478 shares of Class A Common Stock
(assuming no exercise of currently outstanding options or warrants). USAi
beneficially owns 40,482,641 shares of Class A Common Stock (or 43,406,980
shares of Class A Common Stock assuming USAi purchases the total number of
shares of Common Stock subject to the Tender Offer). Shares of Class A Common
Stock are convertible into Class B Common Stock on a share-for-share basis at
the election of the holder or automatically upon certain transfers thereof.
The shares of Class B Common Stock sold in this offering (plus any
additional shares sold upon exercise of the Underwriters' over-allotment
option) will be freely transferable without restriction under the Securities
Act, unless they are held by Affiliates. The remaining shares of Class B
Common Stock issuable upon conversion of the Class A Common Stock (including
the shares of Class B Common Stock issuable upon certain transfers of the
Class A Common Stock or at the option of the holder thereof) held by existing
stockholders are Restricted Shares. Restricted Shares may be sold in the
public market only if registered or if they qualify for an exemption from
registration under Rule 144 or Rule 701 under the Securities Act. As a result
of contractual restrictions and the provisions of Rules 144 and 701,
additional shares will be available for sale in the public market as follows:
(i) approximately Restricted Shares will be eligible for immediate sale on
the effective date of this offering; (ii) approximately Restricted Shares
will be eligible for sale 90 days after the effective date of this offering;
(iii) approximately Restricted Shares will be eligible for sale without
restriction and Restricted Shares will be eligible for sale subject to
volume limitations, in each case 180 days after the effective date of this
offering upon the expiration of contractual lock-up agreements with the
Company and the representatives of the Underwriters, and (iv) the remainder of
the Restricted Shares will be eligible for sale from time to time thereafter
upon expiration of their respective holding periods under Rule 144. In
addition, shares will be issuable upon exercise of vested stock options
180 days after the effective date of this offering upon the expiration of
contractual lock-up agreements. NationsBanc Montgomery Securities LLC, on
behalf of the Underwriters, may, in its sole discretion and at any time
without notice, release all or any portion of securities subject to the lock-
up agreement with the Underwriters.

In addition, the Company expects to file a registration statement on Form S-
8 registering a total of approximately 4,183,068 shares of Class A Common
Stock subject to outstanding stock options under the 1996 Stock Plan and an
aggregate of shares of Class B Common Stock reserved for future issuance
under the 1998 Stock Plan and Purchase Plan. The Form S-8 registration
statement is expected to be filed and to become effective immediately
following the date of this offering. Shares registered under such registration
statement will be available for sale in the open market, subject to Rule 144
value limitations applicable to Affiliates, unless such shares are subject to
vesting restrictions with the Company or the lock-up agreements described
above.

In general, under Rule 144 as currently in effect, beginning 90 days after
the effective date of the offering, an Affiliate of the Company or person (or
persons whose shares are aggregated) who has beneficially owned Restricted
Shares for at least one year is entitled to sell within any three-month period
a number of shares that does not exceed the greater of (i) one percent of the
then outstanding shares of the Company's Class B Common Stock or (ii) the
average weekly trading volume of the Company's Class B Common Stock in the
Nasdaq

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National Market during the four calendar weeks immediately preceding the date
on which the notice of the sale is filed with the Commission. Sales pursuant
to Rule 144 are subject to certain requirements relating to the manner of
sale, notice, and availability of current public information about the
Company. A person (or persons whose shares are aggregated) who is not an
Affiliate of the Company at any time during the 90 days immediately preceding
the sale, and who has beneficially owned Restricted Shares for at least two
years is entitled to sell such shares under Rule 144(k) without regard to the
limitations described above.

An employee, officer or director of the Company or a consultant to the
Company who purchased or was awarded shares or options to purchase shares
pursuant to a written compensatory plan or contract is entitled to rely on the
resale provisions of Rule 701 of the Securities Act, which permits Affiliates
and non-Affiliates to sell their Rule 701 shares without having to comply with
Rule 144's holding period restrictions, in each case commencing 90 days after
the date of this offering. In addition, non-Affiliates may sell Rule 701
shares without complying with the public information, volume and notice
provisions of Rule 144.

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UNDERWRITING

The Underwriters named below (the "Underwriters"), represented by
NationsBanc Montgomery Securities LLC, Allen & Company Incorporated,
BancBoston Robertson Stephens Inc., Bear, Stearns & Co. Inc. and Donaldson,
Lufkin & Jenrette Securities Corporation (the "Representatives"), have
severally agreed, subject to the terms and conditions set forth in the
underwriting agreement, among the Underwriters and the Company (the
"Underwriting Agreement"), to purchase from the Company the number of shares
of Class B Common Stock indicated below opposite their respective names at the
initial public offering price less the underwriting discount set forth on the
cover page of this Prospectus. The Underwriting Agreement provides that the
obligations of the Underwriters are subject to certain conditions precedent
and that the Underwriters are committed to purchase all of the shares if they
purchase any.

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
------------ ---------
<S> <C>
NationsBanc Montgomery Securities LLC..............................
Allen & Company Incorporated.......................................
BancBoston Robertson Stephens Inc. ................................
Bear, Stearns & Co. Inc. ..........................................
Donaldson, Lufkin & Jenrette Securities Corporation................
---
Total............................................................
===
</TABLE>

The Representatives have advised the Company that the Underwriters initially
propose to offer the shares of Class B Common Stock to the public on the terms
set forth on the cover page of this Prospectus. The Underwriters may allow to
selected dealers a concession of not more than $ per share, and the
Underwriters may allow, and such dealers may reallow, a concession of not more
than $ per share to certain other dealers. After the offering, the offering
price and concessions and other selling terms may be changed by the
Representatives. No change in such terms shall change the amount of proceeds
to be received by the Company as set forth on the cover page of this
Prospectus. The Class B Common Stock is offered subject to receipt and
acceptance by the Underwriters and to certain other conditions, including the
right to reject orders in whole or in part. In addition, the Representatives
have agreed to reimburse the Company for a portion of the out-of-pocket
expenses incurred by the Company in connection with this offering.

The Company has granted an option to the Underwriters, exercisable during
the 30-day period after the date of this Prospectus, to purchase up to a
maximum of additional shares of Class B Common Stock to cover over-
allotments, if any, at the same price per share as the initial shares to be
purchased by the Underwriters. To the extent the Underwriters exercise this
option, each of the Underwriters will be committed to purchase such additional
shares in approximately the same proportion as set forth in the above table.
The Underwriters may purchase such shares only to cover over-allotments made
in connection with this offering.

The Underwriting Agreement provides that the Company will indemnify the
Underwriters against certain liabilities, including civil liabilities under
the Securities Act, or will contribute to payments the Underwriters may be
required to make in respect thereof.

All of the Company's officers and directors and certain stockholders have
agreed that, subject to certain exceptions, for a period of 180 days after the
date of this Prospectus, they will not, without the prior written consent of
NationsBanc Montgomery Securities LLC, directly or indirectly, sell, offer to
sell or otherwise dispose (other than pursuant to a conversion of shares of
Class A Common Stock to Class B Common Stock) of any shares of Class A Common
Stock, Class B Common Stock issuable upon conversion thereof or any right to
acquire such shares or any security convertible into or exchangeable or
exercisable for any such shares or rights

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<PAGE>

to acquire such shares. In addition, the Company has agreed that, for a period
of 180 days after the date of this Prospectus, it will not, without the prior
written consent of NationsBanc Montgomery Securities LLC, issue, offer, sell,
grant options to purchase or otherwise dispose of any of the Company's
securities or any other securities convertible into or exchangeable or
exercisable for the Class B Common Stock or other security of the Company,
other than the grant of options to purchase Class B Common Stock, or the
issuance of shares of Class B Common Stock under the Company's stock option
and stock purchase plans, the issuance of shares of Class B Common Stock in
connection with certain acquisitions and the issuance of shares of Class B
Common Stock pursuant to the exercise of outstanding options.

Prior to this offering, there has been no public market for the Class B
Common Stock. Consequently, the initial public offering price will be
determined by negotiations between the Company and the Representatives. Among
the factors to be considered in such negotiations will be the history of, and
the prospects for, the Company and the industry in which it competes, an
assessment of the Company's management, the prospects for future earnings of
the Company, the present state of the Company's development, the general
condition of the securities markets at the time of the offering, the market
prices of and demand for publicly traded common stock of comparable companies
in recent periods and other factors deemed relevant.

The Representatives, on behalf of the Underwriters, may engage in over-
allotment, stabilizing transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the Exchange Act. Over-
allotment involves syndicate sales in excess of the offering size, which
creates a syndicate short position. Stabilizing transactions permit bids to
purchase the underlying security so long as the stabilizing bids do not exceed
a specified maximum. Syndicate covering transactions involve purchases of
shares of Class B Common Stock in the open market after the distribution has
been completed in order to cover syndicate short positions. Penalty bids
permit the Representatives to reclaim a selling concession from a syndicate
member when the shares of Class B Common Stock originally sold by such
syndicate member are purchased in a syndicate covering transaction to cover
syndicate short positions. Such stabilizing transactions, syndicate covering
transactions and penalty bids may cause the price of the Class B Common Stock
to be higher than it would otherwise be in the absence of such transactions.
These transactions may be effected on the Nasdaq National Market or otherwise
and, if commenced, may be discontinued at any time.

The Representatives have informed the Company that the Underwriters do not
expect to make sales in excess of five percent of the number of shares of
Class B Common Stock offered hereby to accounts over which they exercise
discretionary authority.

In consideration of the services rendered by NationsBanc Montgomery
Securities LLC as placement agent for the Series E Preferred Stock, CitySearch
paid to NationsBanc Montgomery Securities LLC a fee equal to $1,546,182 in
November 1997. As additional consideration for such services, CitySearch
granted to NationsBanc Montgomery Securities LLC a warrant to purchase 94,286
shares of Series E Preferred Stock (or 93,107 shares of Class A Common Stock
pursuant to the Conversion and the Reclassification). The warrant is
exercisable at any time at an exercise price of $8.86 per share of Class A
Common Stock. Any unexercised portion of the warrant is automatically
convertible into Class A Common Stock immediately prior to the closing of this
offering for that number of shares of Class A Common Stock equal to (x) the
value of the unexercised portion as of the date of the closing of this
offering, which value shall equal the difference between the aggregate
exercise price and the aggregate value of the shares of Class A Common Stock
issuable upon exercise of the unexercised portion of the warrant, at a per
share price equal to the initial offering price divided by (y) the initial
offering price.

In connection with the Merger, NationsBanc Montgomery Securities LLC acted
as the Company's financial advisor. In addition to reimbursing NationsBanc
Montgomery Securities LLC for reasonable out-of-pocket expenses, the Company
will pay a customary fee to NationsBanc Montgomery Securities LLC in
connection with such services. In addition, the Company has agreed to
indemnify NationsBanc Montgomery Securities LLC

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against certain liabilities in connection with the Merger or will contribute
to payments that NationsBanc Montgomery Securities LLC may be required to make
in respect thereof.

Bayview Investors, Ltd., an entity affiliated with BancBoston Robertson
Stephens Inc., holds 25,165 shares of Class A Common Stock. Global Retail
Partners, L.P. and its affiliates, each an affiliate of Donaldson, Lufkin &
Jenrette Securities Corporation, holds 714,286 shares of Class A Common Stock.

Donald R. Keough, the Chairman of Allen & Company Incorporated, currently
serves as a director of USAi.

LEGAL MATTERS

The validity of the Class B Common Stock offered hereby will be passed upon
for the Company by Wilson Sonsini Goodrich & Rosati, Professional Corporation,
Palo Alto, California. Venture Law Group, A Professional Corporation, is
acting as counsel for the Underwriters in connection with certain legal
matters relating to the shares of Class B Common Stock offered hereby. An
entity affiliated with Wilson Sonsini Goodrich & Rosati, Professional
Corporation, holds an aggregate of 75,281 shares of Class A Common Stock.

EXPERTS

The consolidated financial statements of CitySearch, Inc. at December 31,
1996 and 1997 and for the period from September 20, 1995 (date of formation)
to December 31, 1995 and for the years ended December 31, 1996 and 1997, and
the financial statements of Ticketmaster Online-CitySearch, Inc. (Ticketmaster
Online) (formerly Ticketmaster Multimedia Holdings, Inc.) at January 31, 1997
and 1998 and for the years ended January 31, 1996, 1997 and 1998, included in
this Prospectus have been audited by Ernst & Young LLP, independent auditors,
as stated in their reports thereon appearing elsewhere herein and in the
Registration Statement, and are included in reliance upon such reports given
upon the authority of such firm as experts in accounting and auditing.

ADDITIONAL INFORMATION

The Company has filed with the Commission a Registration Statement under
the Securities Act with respect to the securities offered hereby. This
Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto. For further
information with respect to the Company and the Class B Common Stock,
reference is made to the Registration Statement and the exhibits and schedules
filed as a part thereof. Statements contained in this Prospectus as to the
contents of any contract or any other document referred to are not necessarily
complete. In each instance, reference is made to the copy of such contract or
document filed as an exhibit to the Registration Statement, and each such
statement is qualified in all respects by such reference. The Registration
Statement, including exhibits and schedules thereto, may be inspected without
charge at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549 and at the regional offices of the
Commission located at Seven World Trade Center, Suite 1300, New York, New York
10048 and Northwestern Atrium Center, 500 Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such materials may be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Commission maintains a World Wide Web site
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. The
address of the Commission's Web site is http://www.sec.gov.

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INDEX TO FINANCIAL STATEMENTS

CONTENTS

<TABLE>
<S> <C>
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
Introduction.............................................................. F-2
Unaudited Pro Forma Condensed Combined Statement of Operations for the
nine months ended September 30, 1998..................................... F-3
Unaudited Pro Forma Condensed Combined Statement of Operations for the
year ended December 31, 1997............................................. F-4
Notes to Unaudited Pro Forma Condensed Combined Financial Statements...... F-5
TICKETMASTER ONLINE-CITYSEARCH, INC. (TICKETMASTER ONLINE)
Report of Independent Auditors............................................ F-7
Balance Sheets at January 31, 1997 and 1998 and September 30, 1998
(unaudited).............................................................. F-8
Statements of Operations for the years ended January 31, 1996, 1997 and
1998 and the eight months ended September 30, 1997 and 1998 (unaudited).. F-9
Statements of Stockholders' Equity for the years ended January 31, 1996,
1997 and 1998 and the eight months ended September 30, 1998 (unaudited).. F-10
Statements of Cash Flows for the years ended January 31, 1996, 1997 and
1998 and the eight months ended September 30, 1997 and 1998 (unaudited).. F-11
Notes to Financial Statements............................................. F-12
CITYSEARCH, INC.
Report of Independent Auditors............................................ F-21
Consolidated Balance Sheets at December 31, 1996 and 1997 and at September
28, 1998 (unaudited)..................................................... F-22
Consolidated Statements of Operations for the period from September 20,
1995 (date of formation) to December 31, 1995, the years ended December
31, 1996 and 1997 and the nine months ended September 30, 1997 and
September 28, 1998 (unaudited)........................................... F-23
Consolidated Statements of Stockholders' Equity (Deficit) for the period
from September 20, 1995 (date of formation) to December 31, 1995, the
years ended December 31, 1996 and 1997 and the nine months ended
September 28, 1998 (unaudited)........................................... F-24
Consolidated Statements of Cash Flows for the period from September 20,
1995 (date of formation) to December 31, 1995, the years ended December
31, 1996 and 1997 and the nine months ended September 30, 1997 and
September 28, 1998 (unaudited)........................................... F-25
Notes to Consolidated Financial Statements................................ F-27
</TABLE>

F-1
<PAGE>

UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS

The following unaudited pro forma condensed combined financial statements
(the "Condensed Statements") have been prepared to give effect to the Merger,
which was effective September 28, 1998. In addition, the Condensed Statements
have been prepared to give effect to the Ticketmaster Transaction and the
Ticketmaster License Agreement. The Merger was accounted for using the
"reverse purchase" method of accounting, pursuant to which Ticketmaster Online
was treated as the acquiring entity for accounting purposes, and the assets
and liabilities of CitySearch will be recorded at their respective fair values
under the purchase method of accounting. Capitalized terms presented in the
unaudited condensed combined pro forma financial statements, including the
notes thereto, are defined elsewhere in this Prospectus.

The Condensed Statements reflect certain assumptions regarding the Merger
and are based on the historical consolidated financial statements of the
respective entities. The Condensed Statements, including the notes thereto,
are qualified in their entirety by reference to and should be read in
conjunction with, the audited financial statements of CitySearch, Inc. and
Ticketmaster Online, including the notes thereto, which are included in this
Prospectus. The unaudited financial statements of Ticketmaster Online for the
year ended December 31, 1997 and nine months ended September 30, 1998 were
derived from the historical financial information of Ticketmaster Online which
has been adjusted to reflect a change in year end to December 31.

The unaudited pro forma condensed combined statement of operations for the
nine months ended September 30, 1998 reflects the unaudited consolidated
statement of operations of CitySearch for the nine-month period ended
September 28, 1998, combined with the unaudited statement of operations of
Ticketmaster Online (including the pro forma effects of the Ticketmaster
Transaction), for the nine months ended September 30, 1998.

The unaudited pro forma condensed combined statement of operations for the
year ended December 31, 1997 reflects the audited consolidated statement of
operations of CitySearch for the year ended December 31, 1997, combined with
the unaudited results of operations of Ticketmaster Online for the year ended
December 31, 1997 (including the pro forma effects of the Ticketmaster
Transaction).

On October 2, 1998 USAi commenced a tender offer ("the Tender Offer") to
purchase up to 20% of each stockholder's Common Stock at a per share purchase
price of $8.67 in cash, up to an aggregate of 2,924,339 shares. The Unaudited
Pro Forma Condensed Combined Financial Statements do not give effect to the
Tender Offer (see Note 9).

The Company is in the process of evaluating the fair value of assets
acquired and liabilities assumed in order to make a final allocation of the
excess purchase price, including allocation to the intangibles other than
goodwill. Accordingly, the purchase accounting information is preliminary and
has been made solely for the purpose of developing such unaudited pro forma
condensed combined financial information.

The Condensed Statements are presented for illustrative purposes only and
are not necessarily indicative of the results of operations which would have
actually been reported for the nine months ended September 30, 1998, or for
the year ended December 31, 1997 had the Merger and Ticketmaster Transaction
occurred as of January 1, 1997 nor are the Condensed Statements necessarily
indicative of future results of operations.

F-2
<PAGE>

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS OF

TICKETMASTER ONLINE-CITYSEARCH, INC.

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
TICKETMASTER
TICKETMASTER PRO FORMA ONLINE AND
HISTORICAL ONLINE ADJUSTED CITYSEARCH
TICKETMASTER PRO FORMA TICKETMASTER HISTORICAL PRO FORMA PRO FORMA
ONLINE ADJUSTMENTS ONLINE CITYSEARCH ADJUSTMENTS COMBINED(9)
------------ ------------ ------------ ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Ticketing operations.. $10,571 $ -- $10,571 $ -- $ -- $ 10,571
Sponsorship and
advertising.......... 4,555 -- 4,555 360 -- 4,915
City guide and
related.............. 112 -- 112 10,957 -- 11,069
------- ------- ------- -------- -------- --------
15,238 -- 15,238 11,317 -- 26,555
Costs and expenses:
Ticketing operations.. 5,947 -- 5,947 -- 2,613 (2) 7,810
(750)(3)
City guide and
related.............. 97 -- 97 10,491 -- 10,588
Sales and marketing... 832 -- 832 14,902 -- 15,734
Research and
development.......... 38 -- 38 5,000 -- 5,038
General and
administrative....... 1,467 -- 1,467 5,104 (573)(3) 5,998
Amortization of
goodwill............. 1,224 1,935 (1) 3,159 -- 35,636 (4) 38,795
Merger and other
transactions costs... -- -- -- 3,101 -- 3,101
------- ------- ------- -------- -------- --------
9,605 1,935 11,540 38,598 36,926 87,064
------- ------- ------- -------- -------- --------
Income (loss) from
operations............. 5,633 (1,935) 3,698 (27,281) (36,926) (60,509)
Interest income......... 21 -- 21 995 -- 1,016
Interest expense........ (22) -- (22) (768) (2,155)(5) (2,945)
------- ------- ------- -------- -------- --------
(1) -- (1) 227 (2,155) (1,929)
------- ------- ------- -------- -------- --------
Income (loss) before
provision for income
taxes.................. 5,632 (1,935) 3,697 (27,054) (39,081) (62,438)
Provision for income
taxes.................. 2,993 -- 2,993 -- (2,993)(6) --
------- ------- ------- -------- -------- --------
Net income (loss)....... $ 2,639 $(1,935) $ 704 $(27,054) $(36,088) $(62,438)
======= ======= ======= ======== ======== ========
Basic and diluted net
loss per share......... $ (2.73) $ (1.01)
======== ========
Shares used to compute
basic and diluted net
loss per share......... 9,923 61,798 (7)
======== ========
</TABLE>

See accompanying notes to the unaudited pro forma condensed combined financial
statements.

F-3
<PAGE>

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS OF

TICKETMASTER ONLINE-CITYSEARCH, INC.

YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
TICKETMASTER
TICKETMASTER PRO FORMA ONLINE AND
HISTORICAL ONLINE ADJUSTED CITYSEARCH
TICKETMASTER PRO FORMA TICKETMASTER HISTORICAL PRO FORMA PRO FORMA
ONLINE ADJUSTMENTS ONLINE CITYSEARCH ADJUSTMENTS COMBINED(9)
------------ ------------ ------------ ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Ticketing operations.. $5,442 $ -- $ 5,442 $ -- $ -- $ 5,442
Sponsorship and
advertising.......... 3,853 -- 3,853 112 -- 3,965
City guide and
related.............. -- -- -- 6,072 -- 6,072
------ ------- ------- -------- -------- --------
9,295 -- 9,295 6,184 -- 15,479
Costs and expenses:
Ticketing operations.. 3,260 -- 3,260 -- 1,001 (2) 3,865
(396)(3)
City guide and
related.............. -- -- -- 9,688 -- 9,688
Sales and marketing... 439 -- 439 20,172 -- 20,611
Research and
development.......... -- -- -- 7,182 -- 7,182
General and
administrative....... 1,700 -- 1,700 5,883 (590)(3) 6,993
Amortization of
goodwill............. -- 3,870(1) 3,870 -- 47,855 (4) 51,725
------ ------- ------- -------- -------- --------
5,399 3,870 9,269 42,925 47,870 100,064
------ ------- ------- -------- -------- --------
Income (loss) from
operations............. 3,896 (3,870) 26 (36,741) (47,870) (84,585)
Interest income......... -- -- -- 494 -- 494
Interest expense........ -- -- -- (271) (3,500)(5) (3,771)
------ ------- ------- -------- -------- --------
-- -- -- 223 (3,500) (3,277)
------ ------- ------- -------- -------- --------
Income (loss) before
provision for income
taxes.................. 3,896 (3,870) 26 (36,518) (51,370) (87,862)
Provision for income
taxes.................. 1,707 -- 1,707 8 (1,707)(6) 8
------ ------- ------- -------- -------- --------
Net income (loss)....... $2,189 $(3,870) $(1,681) $(36,526) $(49,663) $(87,870)
====== ======= ======= ======== ======== ========
Basic and diluted net
loss per share......... $ (3.86) $ (1.57)
======== ========
Shares used to compute
basic and diluted net
loss per share......... 9,452 55,883 (8)
======== ========
</TABLE>

See accompanying notes to the unaudited pro forma condensed combined financial
statements.

F-4
<PAGE>

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS

MERGER COSTS:

Merger costs and the preliminary determination of the unallocated excess of
Merger costs over net assets acquired are set forth below (in thousands):

<TABLE>
<S> <C>
Initial investment at cost...................................... $ 23,000
Value of 37,238 shares of CitySearch Common Stock acquired in
the Merger..................................................... 120,864
Estimated transaction costs..................................... 1,500
--------
Total acquisition costs....................................... 145,364
Net assets acquired............................................. 1,898
--------
Unallocated excess of acquisition cost over net assets acquired
(see note 4)................................................... $143,466
========
</TABLE>

The value of the non-monetary exchange between Ticketmaster Online and
CitySearch was valued by Ticketmaster Online based on the fair value of the
50.7% of CitySearch acquired in the transaction. The fair value of CitySearch
was based on an assumed fair value of $8.67 per share of CitySearch Common
Stock and the number of shares outstanding at September 28, 1998, including
outstanding stock options under the treasury method.

The assumed fair value of the CitySearch Common Stock of $8.67 per share is
based on the Tender Offer consideration per share determined in a negotiated
transaction.

PRO FORMA ADJUSTMENTS:

(1) Reflects amortization expense resulting from the increase in goodwill and
other intangible assets. Additional goodwill of $154.8 million represents
a preliminary allocation of goodwill resulting from USAi's acquisition of
Ticketmaster Group, which is being amortized straight line over 40 years.
The Ticketmaster Online amortization period is consistent with the
historical amortization period of Ticketmaster Group due to the perpetual
Ticketmaster License Agreement, and the brand identity and age of the
overall Ticketmaster business.

(2) Represents license fee under the Ticketmaster License Agreement.

(3) Represents certain costs allocated from Ticketmaster Corp. to
Ticketmaster Online which are now covered under the license fee (see note
2).

(4) Reflects additional amortization expense resulting from the increase in
goodwill and other intangible assets due to the Merger. The unallocated
excess of acquisition costs over net assets acquired has been
preliminarily allocated as follows: $500,000 to intangibles related to
the Non-Competition Agreements, which is being amortized over 2.5 years,
and $143.5 million to goodwill, which is being amortized over three
years. In connection with finalizing the purchase price allocation, the
Company is currently evaluating the fair value of assets acquired and
liabilities assumed. Using this information, the Company will make a
final allocation of the excess purchase price, including allocation to
the intangibles other than goodwill. Accordingly, the purchase accounting
information set forth herein is preliminary.

(5) Reflects additional interest expense at a rate of 7% resulting from the
Convertible Note issued in connection with the Merger.

(6) Represents income tax benefit of the Merger, as taxable income of
Ticketmaster Online is offset by tax losses of CitySearch.

F-5
<PAGE>

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS--(CONTINUED)

(7) For the nine months ended September 30, 1998, the calculation of shares
used in calculating basic and diluted pro forma loss per share adjusts
the 9,923,000 CitySearch historical weighted average shares to reflect
the 37,238,000 shares issued to Ticketmaster Corp. in the Merger, and
14,637,000 shares issued upon the conversion of the CitySearch
Convertible Preferred Stock as if converted at the earlier of the
beginning of the period or date of issuance of the CitySearch Convertible
Preferred Stock.

(8) For the year ended December 31, 1997, basic and diluted pro forma loss
per share adjusts the 9,193,000 CitySearch historical weighted average
shares by 37,238,000 shares issued to Ticketmaster Corp. in the Merger,
and 9,452,000 shares issued upon the conversion of the CitySearch
Convertible Preferred Stock, as if converted at the earlier of the
beginning of the period or date of issuance of the CitySearch Convertible
Preferred Stock.

(9) The accompanying pro forma financial statements do not give any effect to
the Tender Offer. Assuming the maximum participation in the Tender Offer
on a pro forma combined basis, goodwill and stockholders' equity at
September 30, 1998 would have been $322.0 million and $325.5 million,
respectively. Furthermore, amortization expense, net loss and net loss
per share would have been $59.9 million, $96.1 million and $(1.72),
respectively, for the year ended December 31, 1997 and $45.2 million,
$68.5 million and $(1.11), respectively, for the nine months ended
September 30, 1998.

F-6
<PAGE>

REPORT OF INDEPENDENT AUDITORS

BOARD OF DIRECTORS

TICKETMASTER ONLINE-CITYSEARCH, INC.

We have audited the accompanying balance sheets of Ticketmaster Online-
CitySearch, Inc. (Ticketmaster Online) (formerly Ticketmaster Multimedia
Holdings, Inc., a wholly-owned subsidiary of Ticketmaster Corporation) as of
January 31, 1997 and 1998, and the related statements of operations,
stockholders' equity and cash flows for each of the three years in the period
ended January 31, 1998. These financial statements are the responsibility of
Ticketmaster Online's management. Our responsibility is to express an opinion
on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Ticketmaster Online at
January 31, 1997 and 1998, and the results of its operations and its cash
flows for each of the three years in the period ended January 31, 1998, in
conformity with generally accepted accounting principles.

Ernst & Young LLP

Los Angeles, California
September 3, 1998

F-7
<PAGE>

TICKETMASTER ONLINE

BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
JANUARY 31,
--------------- SEPTEMBER 30,
1997 1998 1998
------ ------- -------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents..................... $ 3 $ -- $ 57,877
Accounts receivable........................... 126 167 631
Related party receivable...................... -- -- 424
Due from licensees............................ -- -- 1,673
Prepaid expenses.............................. 154 124 243
------ ------- --------
Total current assets........................ 283 291 60,848
Computers, software, equipment and leasehold
improvements, net.............................. 271 397 5,878
Cost in excess of net assets acquired........... -- -- 297,031
------ ------- --------
Total assets................................ $ 554 $ 688 $363,757
====== ======= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.............................. $ -- $ 158 $ 2,797
Accrued expenses.............................. 65 144 4,465
Deferred revenue.............................. -- 89 3,314
Current portion of capital lease obligations.. -- -- 908
------ ------- --------
Total current liabilities................... 65 391 11,484
Deferred rent................................... -- 8 203
Deferred purchase price of subsidiary........... -- -- 446
Convertible promissory note payable to related
party.......................................... -- -- 50,000
Capital lease obligations, net of current
portion........................................ -- -- 1,671
Stockholders' equity:
Common Stock, no par value, 1,000 shares
authorized................................... -- -- --
Preferred stock, $0.01 par value;
Authorized shares--2,000,000 at September 30,
1998........................................ -- -- --
Class A Common Stock, $0.01 par value;
Authorized shares--100,000,000 at September
30, 1998
Issued and outstanding--62,486,478........... -- -- 625
Class B Common Stock--$0.01 par value;
Authorized shares--250,000,000 at September
30, 1998
Issued and outstanding--none................. -- -- --
Class C Common Stock--$0.01 par value;
Authorized shares--2,883,506 at September 30,
1998
Issued and outstanding--none................. -- -- --
Due to (from) Ticketmaster Corp............... 1,434 (1,113) --
Additional paid-in capital.................... -- -- 295,453
Retained earnings (deficit)................... (945) 1,402 3,875
------ ------- --------
Total stockholders' equity.................. 489 289 299,953
------ ------- --------
Total liabilities and stockholders' equity.. $ 554 $ 688 $363,757
====== ======= ========
</TABLE>

See accompanying notes.

F-8
<PAGE>

TICKETMASTER ONLINE

STATEMENTS OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED JANUARY EIGHT MONTHS
31, ENDED SEPTEMBER 30,
---------------------- -------------------
1996 1997 1998 1997 1998
------ ------ ------ --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues:
Ticketing operations............. $ -- $ 199 $5,972 $ 3,413 $ 9,948
Sponsorship and advertising...... 14 997 3,933 2,410 4,210
City guide and related........... -- -- -- -- 112
------ ------ ------ --------- ---------
Total revenues................. 14 1,196 9,905 5,823 14,270
Operating costs and expenses:
Ticketing operations............. -- 635 3,522 2,005 5,520
City guide and related........... -- -- -- -- 97
Sales and marketing.............. -- 290 490 266 772
Research and development......... -- -- -- -- 38
General and administrative....... 548 1,260 1,719 1,075 1,280
Amortization of goodwill......... -- -- -- -- 1,224
------ ------ ------ --------- ---------
Total costs and expenses....... 548 2,185 5,731 3,346 8,931
------ ------ ------ --------- ---------
Income (loss) from operations...... (534) (989) 4,174 2,477 5,339
Interest income.................... -- -- -- -- 21
Interest expense................... -- -- -- -- (22)
------ ------ ------ --------- ---------
-- -- -- -- (1)
------ ------ ------ --------- ---------
Income (loss) before income taxes.. (534) (989) 4,174 2,477 5,338
Income tax provision (benefit)..... (204) (374) 1,827 1,089 2,865
------ ------ ------ --------- ---------
Net income (loss).................. $ (330) $ (615) $2,347 $ 1,388 $ 2,473
====== ====== ====== ========= =========
Basic and dilutive net income
(loss) per equivalent share....... $(0.01) $(0.02) $ 0.06 $ 0.04 $ 0.07
====== ====== ====== ========= =========
Shares used to compute basic and
diluted net income (loss) per
equivalent share.................. 37,238 37,238 37,238 37,238 37,425
====== ====== ====== ========= =========
</TABLE>

See accompanying notes.

F-9
<PAGE>

TICKETMASTER ONLINE

STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
CLASS A
COMMON STOCK COMMON STOCK DUE TO ADDITIONAL RETAINED
-------------- ------------- (FROM) PAID-IN EARNINGS
SHARES AMOUNT SHARES AMOUNT TICKETMASTER CAPITAL (DEFICIT) TOTAL
------ ------ ------ ------ ------------ ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at inception.... -- $ -- -- $ -- $ -- $ -- $ -- $ --
Issuance of common
stock.................. 1,000 -- -- -- -- -- -- --
Net transfers from (to)
Ticketmaster Corp...... -- -- -- -- 684 -- -- 684
Net loss................ -- -- -- -- -- -- (330) (330)
------ ---- ------ ---- ------ -------- ------ --------
Balance at January 31,
1996................. 1,000 -- -- -- 684 -- (330) 354
Net transfers from (to)
Ticketmaster Corp...... -- -- -- -- 750 -- -- 750
Net loss................ -- -- -- -- -- -- (615) (615)
------ ---- ------ ---- ------ -------- ------ --------
Balance at January 31,
1997................. 1,000 -- -- -- 1,434 -- (945) 489
Net transfers from (to)
Ticketmaster Corp...... -- -- -- -- (2,547) -- -- (2,547)
Net income.............. -- -- -- -- -- -- 2,347 2,347
------ ---- ------ ---- ------ -------- ------ --------
Balance at January 31,
1998................. 1,000 -- -- -- (1,113) -- 1,402 289
Net transfers from (to)
Ticketmaster Corp.
(unaudited)............ -- -- -- -- (4,900) -- -- (4,900)
Allocation of purchase
price (unaudited)...... -- -- -- -- -- 154,789 -- 154,789
Reclassification of due
from Ticketmaster
(unaudited)............ -- -- -- 6,013 (6,013) -- --
Stock exchanged in
Merger (unaudited)..... (1,000) -- 37,238 372 -- 145,492 -- 145,864
Predecessor basis of
CitySearch (unaudited). -- -- 25,248 253 1,185 -- 1,438
Net income (unaudited).. -- -- -- -- -- -- 2,473 2,473
------ ---- ------ ---- ------ -------- ------ --------
Balance at
September 30, 1998
(unaudited).......... -- $ -- 62,486 $625 $ -- $295,453 $3,875 $299,953
====== ==== ====== ==== ====== ======== ====== ========
</TABLE>

See accompanying notes.

F-10
<PAGE>

TICKETMASTER ONLINE

STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED JANUARY EIGHT MONTHS
31, ENDED SEPTEMBER 30,
-------------------- ---------------------
1996 1997 1998 1997 1998
----- ----- ------ --------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income (loss)................ $(330) $(615) $2,347 $ 1,388 $ 2,473
Adjustments to reconcile net
income (loss) to net cash
provided by (used in) operating
activities:
Depreciation and amortization.. 15 51 268 171 1,585
Changes in operating assets and
liabilities:
Accounts receivable.......... (18) (108) (41) 77 (200)
Prepaid expenses............. (205) 51 30 (68) 58
Accounts payable............. -- -- 158 95 100
Accrued expenses............. -- 65 87 102 653
Deferred revenue............. -- -- 89 83 1,281
----- ----- ------ --------- ----------
Net cash provided by (used in)
operating activities............ (538) (556) 2,938 1,848 5,950
INVESTING ACTIVITIES
Purchase of property, equipment
and leasehold improvements...... (146) (189) (250) (125) (401)
----- ----- ------ --------- ----------
Net cash used in investing
activities...................... (146) (189) (250) (125) (401)
FINANCING ACTIVITIES
Net proceeds from (distributions
to) Ticketmaster Corp........... 684 748 (2,691) (1,726) (5,549)
----- ----- ------ --------- ----------
Net cash provided by (used in)
financing activities............ 684 748 (2,691) (1,726) (5,549)
----- ----- ------ --------- ----------
Net cash acquired in CitySearch
Merger.......................... -- -- -- -- 57,877
----- ----- ------ --------- ----------
Net increase (decrease) in cash
and cash equivalents............ -- 3 (3) (3) 57,877
Cash and cash equivalents at
beginning of period............. -- -- 3 3 --
----- ----- ------ --------- ----------
Cash and cash equivalents at end
of period....................... $ -- $ 3 $ -- $ -- $ 57,877
===== ===== ====== ========= ==========
</TABLE>
<TABLE>
<S> <C>
SUPPLEMENTAL STATEMENT OF CASH FLOW INFORMATION
NONCASH INVESTING AND FINANCING INFORMATION:
Acquisition of CitySearch, Inc.
Fair value of assets acquired (including cash and cash
equivalents of $57,877 and goodwill).............................. $208,675
Less:
Fair value of liabilities assumed................................. 61,373
Issuance of Class A Common Stock.................................. 147,302
--------
Cash paid........................................................ $ --
========
</TABLE>

See accompanying notes.

F-11
<PAGE>

TICKETMASTER ONLINE

NOTES TO FINANCIAL STATEMENTS

(INFORMATION AT SEPTEMBER 30, 1998 AND FOR THE EIGHT MONTHS ENDED

SEPTEMBER 30, 1997 AND 1998 IS UNAUDITED)

JANUARY 31, 1998

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

MERGER

Prior to the Merger (as defined below), Ticketmaster Multimedia Holdings,
Inc. (Ticketmaster Online) was a wholly-owned subsidiary of Ticketmaster
Corporation (Ticketmaster Corp.).

On September 28, 1998, pursuant to an Amended and Restated Agreement and
Plan of Reorganization dated as of August 12, 1998 (the Merger Agreement), by
and among CitySearch, Inc. (CitySearch), USA Networks, Inc. (USAi),
Ticketmaster Group, Inc. (Ticketmaster Group), Ticketmaster Online and
Tiberius, Inc. (Tiberius), a wholly-owned subsidiary of CitySearch, Tiberius
was merged with and into Ticketmaster Online, with Ticketmaster Online
continuing as the surviving corporation and as a wholly-owned subsidiary of
CitySearch (the Merger). In connection with the Merger Agreement, all issued
and outstanding shares of Ticketmaster Online's Common Stock held by
Ticketmaster Corp. were converted into an aggregate of 37,238,000 shares of
CitySearch Common Stock and such shares were subsequently reclassified as
Class A Common Stock of the Company. The Merger was accounted for using the
"reverse purchase" method of accounting, pursuant to which Ticketmaster Online
was treated as the acquiring entity for accounting purposes, and the assets
acquired and liabilities assumed of CitySearch were recorded at their
respective fair values. The accompanying financial statements prior to the
Merger reflect the financial position, results of operations and cash flows of
Ticketmaster Online. The accompanying financial statements, subsequent to the
Merger, include the assets and liabilities of CitySearch and the results of
operations of CitySearch from September 29, 1998 through September 30, 1998.
In connection with the Merger the name of the combined company was changed
from CitySearch, Inc. to Ticketmaster Online-CitySearch, Inc. (the Company or,
subsequent to the Merger, Ticketmaster Online).

The Merger costs and the preliminary determination of the unallocated excess
of Merger costs over net assets acquired are set forth below (in thousands):

<TABLE>
<S> <C>
Initial investment at cost......................................... $ 23,000
Value of 37,238 shares of CitySearch Common Stock acquired in the
Merger............................................................ 120,864
Estimated transaction costs........................................ 1,500
--------
Total acquisition costs.......................................... 145,364
Net assets acquired................................................ 1,898
--------
Unallocated excess of acquisition cost over net assets acquired ... $143,466
========
</TABLE>

The value of the non-monetary exchange between Ticketmaster Online and
CitySearch was determined by Ticketmaster Online based on the fair value of
the 50.7% of CitySearch acquired in the transaction. The fair value of
CitySearch was based on an assumed fair value of $8.67 per share of CitySearch
Common Stock and the number of shares outstanding at September 28, 1998,
including outstanding stock options under the treasury method.

The assumed fair value of the CitySearch Common Stock of $8.67 per share is
based on the Tender Offer consideration per share determined in a negotiated
transaction.

In connection with the Merger Agreement, Ticketmaster Online also entered
into a License and Services Agreement (the License Agreement) with
Ticketmaster Corp. and USAi to remain perpetually in effect unless terminated
as allowed under the License Agreement. Under the License Agreement, for a
license fee, Ticketmaster Corp. granted Ticketmaster Online, among other
things, the exclusive worldwide right to use the trademarks of Ticketmaster
Corp. in connection with the sale of tickets and merchandise via electronic
interactive services.

F-12
<PAGE>

TICKETMASTER ONLINE

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT SEPTEMBER 30, 1998 AND FOR THE EIGHT MONTHS ENDED

SEPTEMBER 30, 1997 AND 1998 IS UNAUDITED)

PRO FORMA FINANCIAL RESULTS (UNAUDITED)

The following unaudited pro forma information presents a summary of results
of the Company assuming the Merger had occurred as of January 1, 1997, with
pro forma adjustments to give effect to amortization of goodwill, certain
other adjustments to conform to the terms of the License Agreement, and the
related income tax effects. The pro forma financial information is not
necessarily indicative of the results of operations as they would have been
had the transactions been effective on January 1, 1997.

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
1997 1998
------------ -------------
(IN THOUSANDS)
<S> <C> <C>
Revenues.......................................... $ 15,479 $ 26,555
Net loss.......................................... $ (87,870) $ (62,438)
Net loss per share................................ $ (1.57) $ (1.01)
</TABLE>

BASIS OF PRESENTATION

The financial statements include revenues related to the convenience charges
in connection with tickets sold via the Internet and advertising sales on
Ticketmaster Online's web site. Costs of ticketing revenues have been
allocated on a per ticket sold basis. The financial statements include
expenses which have been allocated to Ticketmaster Online by Ticketmaster
Corp. on a specific identification basis. Further, Ticketmaster Online shares
certain employees and other resources with Ticketmaster Corp. Allocations from
Ticketmaster Corp. for indirect expenses for such shared resources have been
made primarily on a proportional cost allocation method based on tickets sold
and related revenues. Management believes these allocations are reasonable and
that such expenses would not differ materially had Ticketmaster Online
operated on a stand-alone basis for all periods presented. The financial
statements of Ticketmaster Online do not necessarily reflect the results of
operations or financial position that would have existed had Ticketmaster
Online been an independent company.

CHANGE IN YEAR-END

The statements of operations and cash flows for the eight months ended
September 30, 1997 and 1998 reflect a change in Ticketmaster Online's year-end
as a result of the purchase of Ticketmaster Group by USAi.

BUSINESS

Prior to the Merger, Ticketmaster Online was a wholly-owned subsidiary of
Ticketmaster Corp. which is a leading provider of automated ticketing services
in the United States, with clients including many of the country's most well-
known entertainment facilities, promoters and professional sports franchises.
Ticketmaster Online was formed in December 1993 to administer the online
business of Ticketmaster Corp. There were no costs and expenses incurred by
Ticketmaster Online until June 1995. Ticketmaster Online commenced online
ticket sales in November 1996 providing a ticketing outlet via the World Wide
Web (Web) which gives users access to live event tickets and event
information. Ticketmaster Online's operations are the online distribution
mechanism for Ticketmaster Corp., which utilizes Ticketmaster Corp.'s business
relationships and brand name.

CitySearch was organized on September 20, 1995. CitySearch produces and
delivers comprehensive local city guides on the Web, providing up-to-date
information regarding arts and entertainment events, community

F-13
<PAGE>

TICKETMASTER ONLINE

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT SEPTEMBER 30, 1998 AND FOR THE EIGHT MONTHS ENDED

SEPTEMBER 30, 1997 AND 1998 IS UNAUDITED)

events, community activities, recreation, business, shopping, professional
services and news/sports/weather to consumers in metropolitan areas.
CitySearch designs and produces custom-built Web sites and related services
for local businesses, aggregates them in a local city guide environment and
provides business customers the ability to regularly update and expand their
sites.

CitySearch has two primary means of providing its local city guides. In its
"owned and operated" markets CitySearch systematically produces the majority
of its own content, hires and rapidly deploys a direct sales force to sell
custom-built business Web sites as well as related services to local and
regional businesses and launches a presence in the market. In its partner-led
markets, CitySearch contracts with a local media company to provide assistance
in developing, designing and launching a city guide. Under these contracts,
the partners license CitySearch's business and technology systems and pay a
license fee and make royalty payments to CitySearch based on certain revenues
generated by the media partners from the operation of their sites and pay
CitySearch for additional consultation and design services not provided for
under the license fee.

INTERIM FINANCIAL STATEMENTS

The accompanying balance sheet as of September 30, 1998 and the statements
of operations and cash flows for the eight months ended September 30, 1997 and
1998 and the statement of stockholders' equity for the eight months ended
September 30, 1998 are unaudited. The accompanying balance sheet as of
September 30, 1998 reflects a preliminary allocation of the purchase price
paid by USAi in its acquisition of Ticketmaster Corp.'s ultimate parent,
Ticketmaster Group and its subsidiaries, including Ticketmaster Online. In the
opinion of management, the unaudited financial statements have been prepared
on the same basis as the audited financial statements and include all
adjustments, consisting of normal recurring adjustments, necessary for a fair
presentation of the financial position, results of operations, and cash flows
for the interim periods. The results of operations for the eight months ended
September 30, 1998 are not necessarily indicative of operating results to be
expected for the full fiscal year. As a result of the Merger, the financial
statements for the nine-month period ended September 30, 1998 have been
prepared on a consolidated basis including the assets and liabilities and the
results of operations of CitySearch from September 29, 1998 through September
30, 1998.

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements as of September 30, 1998
and for the nine months ended September 30, 1998 include the accounts of the
Company and its wholly-owned subsidiaries. All significant intercompany
amounts have been eliminated.

REVENUE RECOGNITION

Revenue from advertising and sponsorship agreements is recognized when the
service is provided or over the license period. Revenue from the sale of
tickets is recognized when tickets are sold.

City guide and related revenues include revenue from the sale of
subscriptions for custom-built business Web sites (designed and developed by
CitySearch) in its owned and operated markets, the performance of consultation
and design services and licensing and royalty revenues from the sale of
licenses for the use of CitySearch's business and technology systems in its
partner-led markets. License and royalty revenue is less than ten percent of
consolidated revenue.

The Company recognizes subscription revenues over the period the services
are provided. Royalty revenues are recognized when earned based on the
revenues generated by the license or based on the minimum royalty provisions
in the contract. Revenue from consultation and design services is recognized
as the services are provided.

F-14
<PAGE>

TICKETMASTER ONLINE

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT SEPTEMBER 30, 1998 AND FOR THE EIGHT MONTHS ENDED

SEPTEMBER 30, 1997 AND 1998 IS UNAUDITED)

Revenues from the sale of licenses for use of the Company's business and
technology systems to its partner-led markets generally will be recognized
over the term of the license agreement or the period over which the relevant
services are delivered in accordance with Statement of Position 97-2. The
Company's license agreements have terms ranging from five to nine years.

Deferred revenue primarily consists of advertising and sponsorship revenue,
revenue from Web site support agreements with joint venture partners of
Ticketmaster Corp., and prepayments of subscription services and licensing
agreements. Web site support is recognized straight line over the life of the
agreement.

CASH EQUIVALENTS

The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents. The Company places its
cash deposits with high-credit quality financial institutions.

ACCOUNTS RECEIVABLE

Accounts receivable prior to the Merger are principally from advertisers and
represent the net amount of the advertising agreement. The remainder is
comprised of receivables from Ticketmaster Corp.'s joint venture partners for
ticket revenues and Web site support. Subsequent to the Merger, accounts
receivable include the accounts receivable of CitySearch.

Concentration of credit risk with respect to trade receivables is limited
based on the size and diversity of Ticketmaster Online's clients and the large
number and geographic dispersion of CitySearch customers. The Company
generally does not require collateral, however, credit losses have generally
been within management's expectations and have not been significant.

COMPUTERS, SOFTWARE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS

Computers, software, equipment and leasehold improvements are stated at cost
and depreciated using the straight-line method over the estimated useful lives
of the assets, which range from three to seven years. Assets acquired under
capitalizable lease arrangements are recorded at the present value of the
minimum lease payments. Amortization of assets capitalized under capital
leases and leasehold improvements are computed using the straight-line method
over the life of the asset or term of the lease, whichever is shorter, and is
included in depreciation expense.

RESEARCH AND DEVELOPMENT

Research and development expenditures are charged to operations as incurred.
Based on the Company's product development process, technological feasibility
is established upon completion of a working model. Costs incurred by the
Company between completion of the working model and the point at which the
product is ready for general release have been insignificant.

COST IN EXCESS OF NET ASSETS ACQUIRED

During June 1998, USAi acquired the remaining interest in Ticketmaster Group
owned by public shareholders of Ticketmaster Group and allocated the cost in
excess of net assets acquired upon the completion of the acquisition. Cost in
excess of net assets acquired of $154.8 million represents goodwill allocated
to Ticketmaster Online from the purchase of Ticketmaster Group by USAi and is
being amortized by the straight-line method over 40 years.

F-15
<PAGE>

TICKETMASTER ONLINE

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT SEPTEMBER 30, 1998 AND FOR THE EIGHT MONTHS ENDED

SEPTEMBER 30, 1997 AND 1998 IS UNAUDITED)

As a result of the Merger, the Company recorded goodwill of $143.5 million,
which is being amortized using the straight line method over three years.
Accumulated amortization at September 30, 1998 was $1.2 million.

DUE TO (FROM) TICKETMASTER CORP.

Due to (from) Ticketmaster Corp. includes amounts payable to Ticketmaster
Corp. primarily for operations and working capital requirements, offset by
amounts receivable for cash collected by Ticketmaster Corp. The balances are
primarily the result of Ticketmaster Online's participation in Ticketmaster
Corp.'s central cash management system, wherein all of Ticketmaster Online's
cash receipts are collected by Ticketmaster Corp. and all cash disbursements
are funded by Ticketmaster Corp. Other transactions include Ticketmaster
Online's pro rata share of the current portion of Ticketmaster Corp.'s
consolidated income tax liability and other administrative expenses incurred
by Ticketmaster Corp. on behalf of Ticketmaster Online. Such amounts payable
do not have specific repayment terms and do not bear interest. The due to
(from) Ticketmaster Corp. was reclassified as additional paid-in capital in
connection with the Merger.

An analysis of transactions in the due (to) from Ticketmaster Corp. account
for each of the three years in the period ended January 31, 1998 follows:

<TABLE>
<CAPTION>
1996 1997 1998
----- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Balance at beginning of year....................... $ -- $ (684) $(1,434)
Net cash remitted to (from) Ticketmaster Corp...... (880) (986) 4,619
Share of Ticketmaster Corp.'s current federal
income tax benefit (provision).................... 204 374 (1,827)
Miscellaneous other administrative expenses........ (8) (138) (245)
----- ------- -------
Balance at end of year............................. $(684) $(1,434) $ 1,113
===== ======= =======
Average balance during the year.................... $(342) $(1,059) $ (161)
===== ======= =======
</TABLE>

INCOME TAXES

Historically, Ticketmaster Online's results have been included in
Ticketmaster Corp.'s consolidated federal and state income tax returns. The
income tax provision is calculated and deferred tax assets and liabilities are
recorded as if Ticketmaster Online had operated as an independent company.
Deferred tax assets and liabilities are recognized with respect to the tax
consequences attributable to the differences between the financial statement
carrying values and tax bases of assets and liabilities. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which these temporary differences are expected
to be recovered or settled. Further, the effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period
that includes the enactment date. Ticketmaster Corp. pays all taxes for
Ticketmaster Online and, as such, income taxes payable and deferred tax assets
have been included in due to (from) Ticketmaster Corp. Subsequent to the
Merger, the Company will file its Federal and State income tax returns on a
stand-alone basis.

BASIC AND DILUTED EARNINGS (LOSS) PER EQUIVALENT SHARE

Basic and diluted earnings per equivalent share is based on the number of
shares of CitySearch Common Stock exchanged in the Merger for all periods
presented and for the nine months ended September 30, 1998 includes the
outstanding shares of Class A Common Stock of the Company for the two days
subsequent to the effective date of the Merger.

F-16
<PAGE>

TICKETMASTER ONLINE

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT SEPTEMBER 30, 1998 AND FOR THE EIGHT MONTHS ENDED

SEPTEMBER 30, 1997 AND 1998 IS UNAUDITED)

FINANCIAL INSTRUMENTS

The estimated fair values of cash, accounts receivable, accounts payable,
and accrued expenses approximate their carrying value because of the short
term maturity of these instruments or the stated interest rates are indicative
of market interest rates.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of financial statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from those estimates.

IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF

In accordance with the Statement of Financial Accounting Standards Board
(SFAS) No. 121, "Accounting for the Impairment of Long-Lived Assets and Long-
Lived Assets to Be Disposed Of," the Company periodically reviews long-lived
assets and certain identifiable intangibles for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future net cash flows (on an
undiscounted basis) expected to be generated by the asset. If such assets are
considered to be impaired, the impairment to be recognized is measured by the
amount by which the carrying amount of the assets exceeds the fair value of
the assets.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 1997, the Financial Accounting Standards Board (FASB) issued SFAS
No. 130, "Reporting Comprehensive Income," effective for fiscal years
beginning after December 15, 1997. The Company will adopt SFAS No. 130 in
fiscal 1998 and does not expect that the adoption will have a material effect
on its financial statements.

In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information," effective for fiscal years beginning
after December 15, 1997. The new rules establish revised standards for public
companies relating to the reporting of financial and descriptive information
about their operating segments in financial statements. The Company will adopt
SFAS No. 131 in fiscal 1998 and does not expect that the adoption will have a
material effect on its financial statements.

2. COMPUTERS, SOFTWARE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS

Computers, software, equipment and leasehold improvements consisted of the
following:

<TABLE>
<CAPTION>
JANUARY
31,
-----------
1997 1998
---- -----
(IN
THOUSANDS)
<S> <C> <C>
Computer equipment.............................................. $311 $ 532
Furniture and fixtures.......................................... 8 20
Leasehold improvements.......................................... 16 33
---- -----
335 585
Less accumulated depreciation................................... (64) (188)
---- -----
$271 $ 397
==== =====
</TABLE>

F-17
<PAGE>

TICKETMASTER ONLINE

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT SEPTEMBER 30, 1998 AND FOR THE EIGHT MONTHS ENDED

SEPTEMBER 30, 1997 AND 1998 IS UNAUDITED)

Depreciation expense was $15,000, $49,000 and $124,000 for 1996, 1997 and
1998, respectively. During 1996, 1997, and 1998, rent expense allocated from
Ticketmaster Corp. amounted to $8,000, $42,000 and $149,000, respectively.

3. INCOME TAXES

The provision (benefit) for income taxes consisted of the following:

<TABLE>
<CAPTION>
YEARS ENDED
JANUARY 31,
--------------------
1996 1997 1998
----- ----- ------
(IN THOUSANDS)
<S> <C> <C> <C>
Current:
Federal.............................................. $(186) $(340) $1,445
State................................................ (24) (46) 395
----- ----- ------
(210) (386) 1,840
----- ----- ------
Deferred:
Federal.............................................. 6 12 (13)
State................................................ -- -- --
----- ----- ------
6 12 (13)
----- ----- ------
Total income tax provision (benefit)................... $(204) $(374) $1,827
===== ===== ======
</TABLE>

The following is a reconciliation of the statutory federal income tax rate
to Ticketmaster Online's effective income tax rate:

<TABLE>
<CAPTION>
YEARS ENDED JANUARY 31,
-----------------------------
1996 1997 1998
------- ------- -------
<S> <C> <C> <C>
Statutory federal income tax expense
(benefit)............................... (34)% (34)% 34%
State income tax expense (benefit)....... (5) (6) 9
Other.................................... 1 2 1
------- ------- -------
(38)% (38)% 44%
======= ======= =======
</TABLE>

The Company had net operating loss carryforwards for federal and state
income tax purposes at September 30, 1998 of approximately $70,450,000 which
had been generated by CitySearch. The federal carryforwards expire principally
in the period from 2010 to 2012, and the state carryforwards expire
principally in 2003. These net operating loss carryforwards represent a
deferred tax asset of approximately $28.2 million, which is fully reserved for
with a valuation allowance. If the deferred tax asset becomes realizable in
the future, the reversal of the valuation allowance will be recorded as a
reduction of goodwill. Utilization of the net operating loss carryforwards is
subject to limitations as a result of ownership changes as defined in the
Internal Revenue Code. Furthermore, the net operating loss carryforwards, to
the extent not otherwise limited, can only be used to offset the future
taxable income of CitySearch.

4. DEFINED CONTRIBUTION PLANS

Ticketmaster Online participates in the Ticketmaster Corp. 401(k) defined
contribution plan (the 401(k) Plan), covering substantially all Ticketmaster
Online employees, which contains an employer matching feature of 25% up to a
maximum of 6% of the employee's compensation. Ticketmaster Online's
contribution for the 401(k) Plan years ended December 31, 1995, 1996 and 1997
was $0, $6,000 and $12,000, respectively.

F-18
<PAGE>

TICKETMASTER ONLINE

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT SEPTEMBER 30, 1998 AND FOR THE EIGHT MONTHS ENDED

SEPTEMBER 30, 1997 AND 1998 IS UNAUDITED)

5. RELATED PARTY TRANSACTIONS

Ticketmaster Online is part of a consolidated group and, as such, has
significant transactions with related entities. The terms of those
transactions were determined between related parties and may differ from terms
which would have occurred between unrelated parties and may also differ from
the costs which would have been incurred had Ticketmaster Online operated as
an independent company.

On June 28, 1996, Ticketmaster Online entered into an agreement expiring on
December 31, 2003, with an affiliate of its then majority shareholder, whereby
in exchange for services rendered in connection with the development of
Ticketmaster Online's Web site, Ticketmaster Online will pay royalties
equaling 5% of net profit (as defined) from ticket convenience charges and 10%
of net profit (as defined) from merchandise sold through its Web site (net of
defined deductions). The agreement calls for an annual minimum royalty payment
of $100,000 per year (pro-rated for calendar 1996). Royalty expense incurred
for the years ended January 31, 1997 and 1998 amounted to $50,000 and
$138,000, respectively.

Revenues from affiliated companies for the fiscal years 1996, 1997 and 1998
amounted to $0, $21,000 and $583,000, respectively, primarily for Web site
development and support and license fee revenue.

6. STOCKHOLDERS' EQUITY AND STOCK OPTIONS

Stockholders' equity reflects the exchange of 1,000 shares of Common Stock
of Ticketmaster Online for 37,238,000 shares of CitySearch Common Stock
(subsequently reclassified as Class A Common Stock of the Company) and the
recording of the predecessor basis and outstanding shares of CitySearch Common
Stock (subsequently reclassified as Class A Common Stock of the Company) in
connection with the Merger. Holders of each share of Class A Common Stock have
15 votes. Each share of Class A Common Stock will automatically convert into
one share of Class B Common Stock upon a "transfer," as defined, of such share
except for transfers to certain parties. Holders of Class B Common Stock have
rights in the Company's Restated Certificate of Incorporation similar to
holders of Class A Common Stock except each share of Class B Common Stock
carries only one vote. Holders of Class C Common Stock have no voting rights.

The CitySearch 1996 Stock Option Plan (1996 Stock Plan) which authorized
members of management to grant non-statutory stock options or incentive stock
options to employees and consultants of the Company and its subsidiaries. As
of September 30, 1998 the maximum number of shares of Common Stock to be
issued under the Plan was 5,500,000 shares. All options granted under the 1996
Stock Plan have been made at prices not less than fair market value of the
stock at the date of grant. Options granted under the 1996 Stock Plan are
exercisable at various dates over their ten-year life. Options granted under
the 1996 Stock Plan vest principally 25% after the first year and ratably over
the remaining vesting period. At September 30, 1998 there were options to
purchase 3,890,694 shares of the Company's Class A Common Stock outstanding at
a weighted average exercise price of $3.66 per share. Options to purchase
290,000 shares of Class A Common Stock were available for future grants at
September 30, 1998.

7. CONVERTIBLE PROMISSORY NOTE PAYABLE TO RELATED PARTY

Concurrently with the execution of the Merger Agreement, the Company
received a $50 million loan from USAi in exchange for a convertible promissory
note (Convertible Note). The Convertible Note, in the principal amount of $50
million, bears interest at a rate per annum of 7.00% and, after consummation
of the Merger, is generally due and payable on the earlier to occur of (a)
August 13, 2005 or (b) 20 days following the closing of a qualified initial
public offering, as defined.

F-19
<PAGE>

TICKETMASTER ONLINE

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT SEPTEMBER 30, 1998 AND FOR THE EIGHT MONTHS ENDED

SEPTEMBER 30, 1997 AND 1998 IS UNAUDITED)

8. COMMITMENTS

LEASES

The Company (through its acquisition of CitySearch) has noncancelable
capital lease obligations for computers and equipment and leases its
facilities and other office equipment under noncancelable operating lease
agreements expiring through 2004. Certain of the Company's leases provide for
free rent and escalations. The Company is responsible for other costs such as
property taxes, insurance, maintenance and utilities.

The following is a schedule of future minimum lease payments at September
30, 1998:

<TABLE>
<CAPTION>
OPERATING CAPITAL
LEASES LEASES
--------- -------
(IN THOUSANDS)
<S> <C> <C>
Year ended December 31:
1998.................................................... $ 329 $ 416
1999.................................................... 1,219 1,557
2000.................................................... 1,189 945
2001.................................................... 1,095 120
2002.................................................... 342 --
Thereafter.............................................. 364 --
------ ------
$4,538 $3,038
======
Less amount representing interest......................... 459
------
Net present value of net minimum lease payments (including
approximately $908 payable currently).................... $2,579
======
</TABLE>

F-20
<PAGE>

REPORT OF INDEPENDENT AUDITORS

BOARD OF DIRECTORS AND STOCKHOLDERS
CITYSEARCH, INC.

We have audited the accompanying consolidated balance sheets of CitySearch,
Inc. as of December 31, 1996 and 1997 and the related statements of
operations, stockholders' equity, and cash flows for the period from September
20, 1995 (date of formation) to December 31, 1995 and for each of the two
years in the period ended December 31, 1997. These financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of CitySearch,
Inc. at December 31, 1996 and 1997, and the consolidated results of its
operations and its cash flows for the period from September 20, 1995 (date of
formation) to December 31, 1995 and for each of the two years in the period
ended December 31, 1997 in conformity with generally accepted accounting
principles.

Ernst & Young LLP

Los Angeles, California

March 11, 1998, except for Note 10 as to which the date is September 28, 1998

F-21
<PAGE>

CITYSEARCH, INC.

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31,
------------------ SEPTEMBER 28,
1996 1997 1998
-------- -------- -------------
ASSETS (UNAUDITED)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents................... $ 7,527 $ 25,227 $57,877
Accounts receivable, net of allowance for
doubtful accounts of $0 in 1996 $25 in 1997
and $72 in 1998............................ 34 100 264
Due from licensees.......................... -- 57 1,467
Due from licensees--related party........... -- 136 206
Prepaid expenses and other current assets... 249 119 178
-------- -------- -------
Total current assets....................... 7,810 25,639 59,992
Computers, software, equipment and leasehold
improvements:
Computers and software...................... 2,074 7,716 9,236
Furniture and equipment..................... 391 194 194
Leasehold improvements...................... 194 275 248
Enterprise system development in process.... 1,315 -- --
-------- -------- -------
3,974 8,185 9,678
Accumulated depreciation.................... (329) (2,169) (4,461)
-------- -------- -------
3,645 6,016 5,217
Intangible asset, net of accumulated
amortization of $422 in 1996................ 1,915 -- --
-------- -------- -------
Total assets............................... $ 13,370 $ 31,655 $65,209
======== ======== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)
Current liabilities:
Accounts payable............................ $ 1,975 $ 2,197 $ 2,540
Accrued payroll and related liabilities..... 174 664 1,270
Other accrued liabilities................... 991 760 2,398
Deferred subscription and license revenue... 327 1,836 1,936
Current portion of obligations under capital
leases..................................... 86 807 908
-------- -------- -------
Total current liabilities.................. 3,553 6,264 9,052
Deferred rent................................ 33 189 203
Deferred purchase price of subsidiary........ 1,336 891 446
Obligations under capital leases, net of
current portion............................. 82 1,340 1,671
Convertible promissory note payable to a
related party............................... -- -- 50,000
Commitments
Redeemable Convertible Preferred Stock, $0.01
par value, Series C, D, and E:
Authorized shares--12,500 at December 31,
1997
Issued and outstanding--4,706 at December
31, 1996 and 12,406 at December 31, 1997
and none at September 28, 1998
Liquidation preference--$20,731 at December
31, 1996 and $73,212 at December 31, 1997 . 20,309 70,882 --
Stockholders' equity (deficit):
Convertible Preferred Stock, $0.01 par
value, Series A and B:
Authorized shares--2,241 at December 31,
1997 and September 28, 1998
Issued and outstanding--1,948 at December
31, 1996 and 2,016 at December 31, 1997
and none at September 30, 1998
Liquidation preference--$2,165 at December
31, 1996 and $2,610 at December 31, 1997 . 2,165 2,610 --
Common Stock, $0.01 par value:
Authorized shares--75,000 at December 31,
1997 and September 30, 1998
Issued and outstanding shares--8,814 at
December 31, 1996 and 9,540 at
December 31, 1997 and 25,248 at September
28, 1998 ................................. 97 472 82,582
Deferred compensation....................... -- (262) (960)
Accumulated deficit......................... (14,205) (50,731) (77,785)
-------- -------- -------
Total stockholders' equity (deficit)....... (11,943) (47,911) 3,837
-------- -------- -------
Total liabilities and stockholders' equity
(deficit)................................. $ 13,370 $ 31,655 $65,209
======== ======== =======
</TABLE>

See accompanying notes to consolidated financial statements.

F-22
<PAGE>

CITYSEARCH, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
PERIOD FROM
SEPTEMBER 20,
1995 (DATE OF YEAR ENDED
FORMATION) TO DECEMBER 31, NINE MONTHS ENDED
DECEMBER 31, ------------------ -------------------------------------
1995 1996 1997 SEPTEMBER 30, 1997 SEPTEMBER 28, 1998
------------- -------- -------- ------------------ ------------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues:
Subscription and
services............. $ -- $ 203 $ 4,612 $ 2,781 $ 9,122
Subscription and
services--related
party................ -- -- 301 205 336
Licensing and royalty. -- -- 528 499 698
Licensing and
royalty--related
party................ -- -- 743 178 1,161
------ -------- -------- -------- --------
Total revenues...... -- 203 6,184 3,663 11,317
Costs and expenses:
Cost of revenues...... -- 2,908 9,688 7,612 10,491
Sales and marketing... 57 6,369 20,172 13,716 14,902
Research and
development.......... 152 2,563 7,182 4,949 5,000
General and
administrative....... 104 2,475 5,883 4,263 5,104
Merger and other
transactions costs... -- -- -- -- 3,101
------ -------- -------- -------- --------
Total costs and
expenses........... 313 14,315 42,925 30,540 38,598
------ -------- -------- -------- --------
Loss from operations.... (313) (14,112) (36,741) (26,877) (27,281)
Interest income......... 5 229 494 279 995
Interest expense........ -- (12) (271) (175) (768)
------ -------- -------- -------- --------
5 217 223 104 227
------ -------- -------- -------- --------
Loss before provision
for income taxes....... (308) (13,895) (36,518) (26,773) (27,054)
Provision for income
taxes.................. -- 2 8 -- --
------ -------- -------- -------- --------
Net loss................ $ (308) $(13,897) $(36,526) $(26,773) $(27,054)
====== ======== ======== ======== ========
Historical basic and
diluted net loss per
share.................. $(0.04) $ (1.58) $ (3.86) $ (2.84) $ (2.73)
====== ======== ======== ======== ========
Pro forma basic and
diluted net loss per
share.................. $ (1.96) $ (1.51) $ (1.10)
======== ======== ========
Shares used to compute
historical basic and
diluted net loss per
share.................. 7,895 8,786 9,452 9,431 9,923
====== ======== ======== ======== ========
Shares used to compute
pro forma basic and
diluted net loss per
share.................. 18,645 17,764 24,560
======== ======== ========
</TABLE>

See accompanying notes to consolidated financial statements.

F-23
<PAGE>

CITYSEARCH, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(IN THOUSANDS)

<TABLE>
<CAPTION>
CONVERTIBLE COMMON STOCK
PREFERRED STOCK --------------- DEFERRED ACCUMULATED
(SERIES A AND B) SHARES AMOUNT COMPENSATION DEFICIT TOTAL
------------------ ------ ------- ------------ ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Initial issuance of
Common Stock, September
20, 1995............... -- $ -- 6,623 $ 5 $ -- $ -- $ 5
Repurchase of Common
Stock.................. -- -- (2,000) (2) -- -- (2)
Issuance of Common
Stock.................. -- -- 4,233 85 -- -- 85
Issuance of Convertible
Preferred Stock........ 1,791 1,620 -- -- -- -- 1,620
Net loss................ -- -- -- -- -- (308) (308)
-------- -------- ------ ------- ------ -------- -------
Balance at December 31,
1995.................. 1,791 1,620 8,856 88 -- (308) 1,400
Repurchase of Common
Stock.................. -- -- (116) (2) -- -- (2)
Exercise of stock
options................ -- -- 74 11 -- -- 11
Issuance of Series B
Convertible Preferred
Stock ................. 157 545 -- -- -- -- 545
Net loss................ -- -- -- -- -- (13,897) (13,897)
-------- -------- ------ ------- ------ -------- -------
Balance at December 31,
1996.................. 1,948 2,165 8,814 97 -- (14,205) (11,943)
Exercise of stock
options................ -- -- 726 103 -- -- 103
Issuance of Series B
Convertible Preferred
Stock, ................ 68 445 -- -- -- -- 445
Deferred compensation... -- -- -- 272 (272) -- --
Amortization of deferred
compensation........... -- -- -- -- 10 -- 10
Net loss................ -- -- -- -- -- (36,526) (36,526)
-------- -------- ------ ------- ------ -------- -------
Balance at December 31,
1997.................. 2,016 2,610 9,540 472 (262) (50,731) (47,911)
Exercise of stock
options (unaudited).... -- -- 517 159 -- -- 159
Issuance of Series B
Convertible Preferred
Stock (unaudited)...... 64 446 -- -- -- -- 446
Deferred compensation
(unaudited)............ -- -- -- 1,054 (1,054) -- --
Conversion of Preferred
Stock (unaudited)...... (2,080) (3,056) 15,191 80,897 -- -- 77,841
Amortization of deferred
compensation
(unaudited)............ -- -- -- -- 356 -- 356
Net loss (unaudited).... -- -- -- -- -- (27,054) (27,054)
-------- -------- ------ ------- ------ -------- -------
Balance at September
28, 1998 (unaudited).. -- $ -- 25,248 $82,582 $ (960) $(77,785) $ 3,837
======== ======== ====== ======= ====== ======== =======
</TABLE>

See accompanying notes to consolidated financial statements.

F-24
<PAGE>

CITYSEARCH, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
PERIOD FROM
SEPTEMBER 20, YEAR ENDED
1995 (DATE OF DECEMBER 31, NINE MONTHS ENDED
FORMATION) TO ------------------ ---------------------------
DECEMBER 31, SEPTEMBER 30, SEPTEMBER 28,
1995 1996 1997 1997 1998
------------- -------- -------- ------------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net loss................ $ (308) $(13,897) $(36,526) $(26,773) $(27,054)
Adjustments to reconcile
net loss to net cash
used in
operating activities:
Equity interest in
loss from
partnership........... -- -- 259 113 --
Write-down of
investment in
partnership........... -- -- 321 321 --
Depreciation........... 5 325 1,841 1,087 2,291
Amortization........... -- 422 1,915 1,436 --
Change in operating
assets and
liabilities, net of
assets
acquired and
liabilities assumed:
Accounts receivable.. -- (34) (67) (62) (163)
Due from licensees... -- -- (57) (177) (1,410)
Due from licensees--
related party....... -- -- (136) (9) (70)
Prepaid expenses and
other current
assets.............. -- (249) 129 (53) (59)
Accounts payable..... 90 2,537 317 (763) 370
Accrued payroll and
related liabilities. -- -- 489 616 607
Other accrued
liabilities......... -- -- (221) 193 1,638
Deferred subscription
and license revenue. -- 327 1,510 1,174 100
Deferred rent........ -- 33 157 79 14
Deferred
compensation........ -- -- -- -- 356
------ -------- -------- -------- --------
Net cash used in
operating activities... (213) (10,536) (30,069) (22,818) (23,380)
INVESTING ACTIVITIES
Purchases of software,
equipment and
leasehold improvements. (82) (3,547) (1,391) (1,098) (171)
Investment in
partnership............ -- -- (580) (324) --
------ -------- -------- -------- --------
Net cash used in
investing activities... (82) (3,547) (1,971) (1,422) (171)
FINANCING ACTIVITIES
Payments on capital
leases................. -- (121) (840) (372) (917)
Exercise of stock
options................ -- 11 103 84 159
Issuance of Common
Stock.................. 90 -- -- -- --
Repurchases of Common
Stock.................. (2) (2) -- -- --
Convertible promissory
note payable to a
related party.......... -- -- -- -- 50,000
Issuance of Convertible
Preferred Stock, net... 1,620 20,309 50,477 18,274 6,959
------ -------- -------- -------- --------
Net cash provided by
financing activities... 1,708 20,197 49,740 17,986 56,201
------ -------- -------- -------- --------
Net increase (decrease)
in cash and cash
equivalents............ 1,413 6,114 17,700 (6,254) 32,650
Cash and cash
equivalents at
beginning of period.... -- 1,413 7,527 7,527 25,227
------ -------- -------- -------- --------
Cash and cash
equivalents at end of
period................. $1,413 $ 7,527 $ 25,227 $ 1,273 $ 57,877
====== ======== ======== ======== ========
Supplemental disclosure
of cash flow
information:
Cash paid for:
Interest............. $ -- $ 12 $ 271 $ 169 $ 329
Income taxes......... $ 1 $ 2 $ 8 $ -- $ --
</TABLE>

See accompanying notes to consolidated financial statements.

F-25
<PAGE>

CITYSEARCH, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS, EXCEPT SHARE DATA)

NON-CASH INVESTING AND FINANCING ACTIVITIES

During 1996 and 1997, the Company purchased computers and office equipment
under financing leases totaling $288 and $2,820, respectively.

On June 19, 1996, the Company acquired Metrobeat, Inc. in exchange for an
initial payment of Series B Convertible Preferred Stock valued at $544. During
the year ended December 31, 1997 and the nine months ended September 30, 1998,
the Company made its second and third annual installment of Series B
Convertible Preferred Stock valued at $445 and $445, respectively, pursuant to
the acquisition. The remaining purchase price of $446 is payable in two annual
installments, principally of Series B Convertible Preferred Stock.

During 1997, the Company issued 14,670 shares of Series D Redeemable
Convertible Preferred Stock valued at $96 as payment for accrued advertising
and recruiting fees.

During the nine months ended September 30, 1997 and September 28, 1998, the
Company purchased computers and office equipment under financing leases
totaling $1,836 and $1,350, respectively.

See accompanying notes to consolidated financial statements.

F-26
<PAGE>

CITYSEARCH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(INFORMATION AT SEPTEMBER 28, 1998 AND FOR THE NINE MONTHS ENDED

SEPTEMBER 30, 1997 AND SEPTEMBER 28, 1998 IS UNAUDITED)

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

THE COMPANY AND BASIS OF PRESENTATION

CitySearch, Inc. (the Company), a Delaware corporation, was organized on
September 20, 1995. The Company and its wholly-owned subsidiaries, Metrobeat,
Inc. (Metrobeat) and CitySearch Ontario, Inc. (CitySearch Ontario), produce
and deliver comprehensive local city guides on the World Wide Web (the Web),
providing up-to-date information regarding arts and entertainment events,
community activities, recreation, business, shopping, professional services
and news/sports/weather to consumers in metropolitan areas. Each local city
guide consists primarily of original content developed and designed
specifically for the Web by the Company and its media partners. The Company
designs and produces custom-built Web sites and related services for local
businesses, aggregates them in a local city guide environment and provides
business customers the ability to regularly update and expand their sites.

The Company has two primary means of providing its local city guides. In its
owned and operated markets the Company systematically produces the majority of
its own content, hires and rapidly deploys a direct sales force to sell
custom-built business Web sites as well as related services to local and
regional businesses and launches a presence in the market. In its other
markets, the Company contracts with a local media company to provide
assistance in developing, designing and launching a city guide. Under these
contracts, the partners license the Company's business and technology systems
and pay a license fee and make royalty payments to the Company based on
certain revenues generated by the media partner from the operation of their
sites and pay the Company for additional consultation and design services not
provided for under the license fee.

Subscription and services revenues include revenue generated from the sale
of subscriptions for custom-built business Web sites (designed and developed
by the Company) and advertising on its owned and operated city guides on the
Internet, and the performance of consultation and design services. Licensing
and royalty revenues include revenues generated from the sale of licenses for
the use of the Company's business and technology systems in its partner-led
markets and the receipt of royalty payments under its license agreements. See
Revenue Recognition.

The cost of designing and developing custom-built business Web sites in the
Company's owned and operated markets and the cost of providing other design
and consultation services including the cost of developing, designing and
launching a city guide in partner-led-markets is included, as incurred, in the
cost of revenues. The cost of developing, designing and launching a city
guide, that is not separately billable under license agreements as services
revenue in the Company's partner-led markets, is not significant and is
included, as incurred, in the cost of revenues. Any ongoing customer support
or upgrades, after the launch of the Web site that is not separately billable
under the licensing contract is insignificant.

Customers include restaurants, taverns, movie theaters, museums and retail
stores. The Company currently owns and operates sites in Austin, TX,
Nashville, TN, New York, NY, Portland, OR, Raleigh-Durham-Chapel Hill, NC,
Salt Lake City, UT, Los Angeles, CA, and San Francisco, CA. Through
partnership and licensing agreements, the Company has an internet presence in
Washington D.C., Melbourne and Sydney, Australia, and Toronto, Canada.

The Company has experienced operating losses and negative cash flows from
operations since its formation on September 20, 1995. Since its formation, the
Company has raised significant capital through the sale of Convertible
Preferred Stock to outside investors and expects to continue to raise capital
in 1998. The Company has also successfully licensed its product domestically
and internationally generating additional revenue streams.

F-27
<PAGE>

CITYSEARCH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT SEPTEMBER 28, 1998 AND FOR THE NINE MONTHS ENDED

SEPTEMBER 30, 1997 AND SEPTEMBER 28, 1998 IS UNAUDITED)

Management anticipates that its investment in new markets and technology will
result in operating losses in the near term but believes that anticipated
revenues, existing cash, cash equivalents, working capital and new capital
contributions will be sufficient to fund operations over the next year.

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiaries, Metrobeat and CitySearch
Ontario. All significant intercompany amounts have been eliminated.

INTERIM FINANCIAL INFORMATION

The accompanying balance sheet as of September 28, 1998, the statements of
operations and cash flows for the nine months ended September 30, 1997 and
September 28, 1998 and the statement of changes in shareholders equity
(deficit) for the nine months ended September 28, 1998 are unaudited.
References to the nine months ended September 28, 1998 refer to the period
from January 1, 1998 through September 28, 1998. In the opinion of management,
the statements have been prepared on the same basis as the audited financial
statements and include all adjustments, consisting of normal recurring
adjustments, necessary for the fair statement of interim periods. The data
disclosed in these notes to the financial statements for these periods is also
unaudited. The results of operations and cash flows for the interim period are
not necessarily indicative of the results to be expected for any other interim
future period.

ESTIMATES USED IN THE PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS

The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the consolidated financial
statements and the accompanying notes. Actual results could differ from those
estimates, although management does not believe that any differences would
materially affect the Company's consolidated financial position or results of
operations.

REVENUE RECOGNITION

The Company recognizes subscription revenues over the period the services
are provided. Licensing revenue, under agreements entered into prior to
December 31, 1997, for partner-led markets is recognized upon the completion
of the delivery and installation of the business and technology systems and
training of partner personnel in each partner-led-market. Royalty revenues are
recognized when earned based on the revenues generated by the license or based
on the minimum royalty provisions in the contract. Revenue from consultation
and design services is recognized as the services are provided. Advertising
revenues, which have not been significant, are recognized as earned and are
included in subscription and service revenues. Any ongoing customer support
costs or upgrades, after the launch of the Web site, that are not separately
billable under the licensing contract are insignificant.

Effective January 1, 1998, the Company adopted Statement of Position 97-2
(SOP 97-2), "Software Revenue Recognition," which impacts the manner companies
recognize revenue on sales and licensing of software. The Company, during
1997, accounted for licensing of its software under the provisions of SOP 91-
1. Under the provision of SOP 97-2 revenues from the sale of licenses for use
of the Company's business and technology systems to its partner-led markets
generally will be recognized over the term of the license agreement or the
period over which the relevant services are delivered. The Company's license
agreements have terms

F-28
<PAGE>

CITYSEARCH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT SEPTEMBER 28, 1998 AND FOR THE NINE MONTHS ENDED

SEPTEMBER 30, 1997 AND SEPTEMBER 28, 1998 IS UNAUDITED)

ranging from five to nine years. Licensing and royalty revenues, on a pro
forma basis, for the year ended December 31, 1997, and the nine months ended
September 30, 1997 and September 28, 1998 would have been $253,000, $132,000
and $783,000, respectively, had SOP 97-2 been effective January 1, 1997. SOP
97-2 is not expected to have a material effect on revenues from royalties,
services, and subscriptions.

Deferred revenues arise upon the prepayment of subscription services and
license agreements.

CASH EQUIVALENTS

The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.

CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to concentrations
of credit risk consist principally of trade accounts receivable and cash
deposits at financial institutions. Concentration of credit risk with respect
to trade receivables is limited due to the large number of customers and their
geographic dispersion. The Company requires no collateral from its customers.

The Company places its cash deposits with high-credit quality financial
institutions. At times, balances in the Company's cash accounts may exceed the
Federal Deposit Insurance Corporation (FDIC) limit.

COMPUTERS, SOFTWARE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS

RESEARCH AND DEVELOPMENT

MERGER AND OTHER TRANSACTIONS COSTS

Merger and other transactions costs consist of costs related to the Merger,
costs related to an initial public offering that was cancelled and costs
related to a previous merger transaction that was not consummated.

ADVERTISING COSTS

Advertising costs are expensed as incurred. Advertising costs for the years
ended December 31, 1996 and 1997, amounted to $1,305,859 and $2,464,641,
respectively. There was no advertising expense for the period from September
20, 1995 (date of formation) to December 31, 1995.

F-29
<PAGE>

CITYSEARCH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT SEPTEMBER 28, 1998 AND FOR THE NINE MONTHS ENDED

SEPTEMBER 30, 1997 AND SEPTEMBER 28, 1998 IS UNAUDITED)

During 1996 and 1997 the Company entered into several barter arrangements
whereby the Company has assisted in the design of a Web site in exchange for
broadcast advertising. The fair value of services provided and the services
received in the barter arrangement is not readily determinable and therefore
is not used to measure the value of the broadcast advertising received. The
Company valued these barter transactions at $60,000 and $1,158,000 for the
years ended December 31, 1996 and 1997, respectively, based on the estimated
cost of the specific services provided by the Company. Such amounts are
included in subscription and services revenue as well as recognized in sales
and marketing expense in the accompanying consolidated statements of
operations. Reciprocal noncash barter advertising on the Internet is not
valued in the consolidated financial statements because of the immateriality
of the associated costs and the indeterminable fair value.

PRO FORMA AND HISTORICAL NET LOSS PER SHARE

Pro forma net loss per share is computed using the weighted average number
of shares of Common Stock outstanding. Common equivalent shares from
Convertible Preferred Stock (using the if converted method) have been included
in the computation when dilutive, except that the Convertible Preferred Stock
which converted into Common Stock in connection with the Merger is included as
if converted at the original date of issuance, for both basic and diluted net
loss per share, even though inclusion is antidilutive, based on the conversion
price disclosed in Note 6.

Historical net loss per share is computed as described above except that it
excludes the Convertible Preferred Stock because it is antidilutive for
periods which incurred a net loss.

INTANGIBLE ASSET

The intangible asset is stated at cost and consists of goodwill resulting
from the purchase of Metrobeat in June 1996 (see Note 2).

IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF

In accordance with Statement of Financial Accounting Standards Board No.
121, "Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets
to Be Disposed Of," the Company periodically reviews long-lived assets and
certain identifiable intangibles for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future net cash flows (on an
undiscounted basis) expected to be generated by the asset. If such assets are
considered to be impaired, the impairment to be recognized is measured by the
amount by which the carrying amount of the assets exceeds the fair value of
the assets.

STOCK-BASED COMPENSATION

Statement of Financial Accounting Standards No. 123, "Accounting for Stock-
Based Compensation" (SFAS 123), requires that stock awards granted subsequent
to January 1, 1995, be recognized as compensation expense based on their fair
value at the date of grant. Alternatively, a company may use Accounting
Principles Board Opinion No. 25 (APB 25), "Accounting for Stock Issued to
Employees," and disclose pro forma results of operations which would have
resulted from recognizing such awards at their fair value. The Company will
continue to account for stock-based compensation under APB 25 and make the
required pro forma disclosures for compensation (see Note 8). Under APB 25
compensation expense is calculated based on the difference

F-30
<PAGE>

CITYSEARCH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT SEPTEMBER 28, 1998 AND FOR THE NINE MONTHS ENDED

SEPTEMBER 30, 1997 AND SEPTEMBER 28, 1998 IS UNAUDITED)

between the exercise price and the fair market value of the underlying stock
on the date of grant. The amount of compensation expense calculated under APB
25 is recognized over the vesting period of the options.

RECLASSIFICATIONS

Certain reclassifications have been made to the prior years' balances to
conform to the current year presentation.

2. ACQUISITION OF METROBEAT

On June 19, 1996, the Company purchased Metrobeat for approximately
$2,337,300. The Company assumed net liabilities of $456,303 and issued 157,074
shares of Series B Convertible Preferred Stock valued at $544,497. During the
year ended December 31, 1997 and the nine months ended September 28, 1998, the
Company made its second and third annual installment of Series B Convertible
Preferred Stock valued at $445,495 and $445,494, respectively. The remaining
purchase price of $445,506 is payable in one annual installment, principally
of Series B Convertible Preferred Stock . The remaining installment has been
recorded as a deferred purchase price liability in the accompanying
consolidated balance sheets. The transaction was accounted for using the
purchase method of accounting. The excess of the purchase price over the net
assets acquired has been allocated to goodwill and was initially to be
amortized over three years. Effective January 1, 1997, the Company reassessed
the future life of the goodwill recorded in connection with the Metrobeat
acquisition and concluded the remaining life was one year. Accordingly, the
unamortized goodwill as of December 31, 1996 was fully amortized to expense in
1997.

3. INVESTMENT IN PARTNERSHIP

On February 17, 1997, CitySearch Ontario entered into a partnership, Toronto
Star CitySearch (the Partnership), with others to launch CitySearch sites in
Canada. CitySearch Ontario contributed the Company's technology through a
licensing agreement valued by the other partners at $390,500 and cash of
$319,171 in exchange for a 20% interest in the partnership. The other partners
collectively contributed cash of $2,811,600 in exchange for the remaining 80%
interest. Profits are shared in accordance with the respective Partnership
interests. Losses are allocated to one of the other partners up to a
cumulative loss limit, and thereafter losses of the partnership shall be
allocated to CitySearch Ontario and the other partners at a ratio of 10% and
90%, respectively. CitySearch Ontario is committed to funding up to 10% of any
losses of the Partnership. In August 1998, the Company entered into a series
of agreements which effectively admitted a new party to the Partnership,
reduced the Company's interest in the Partnership to 10% and terminated its
commitment to fund any losses of the Partnership.

Summarized unaudited financial information of Toronto Star CitySearch as of
and for the year ended December 31, 1997 is as follows (in thousands):

<TABLE>
<S> <C>
As of December 31, 1997:
Current assets.................................................... $ 1,520
Total liabilities................................................. 2,006
Partners' capital................................................. 758
For the period ended December 31, 1997:
Revenues.......................................................... $ 123
Loss from operations.............................................. (2,658)
Net loss.......................................................... (2,806)
</TABLE>

F-31
<PAGE>

CITYSEARCH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT SEPTEMBER 28, 1998 AND FOR THE NINE MONTHS ENDED

SEPTEMBER 30, 1997 AND SEPTEMBER 28, 1998 IS UNAUDITED)

CitySearch Ontario carries its investment in Toronto Star CitySearch at
zero. CitySearch Ontario's share of partnership losses ($258,937) is included
in costs of revenues and sales and marketing expenses.

4. INCOME TAXES

Deferred tax assets and liabilities are determined based on differences
between the financial reporting and tax bases of assets and liabilities
measured using the enacted tax rates and laws that will be in effect when the
differences are expected to reverse. Deferred tax expense is determined by the
change in the net asset or liability for deferred taxes.

The provision for income, franchise and capital taxes of $800, $1,600 and
$8,330 is based solely on minimum state tax requirements. The Company's
effective tax rate differs from the statutory federal income tax rate,
primarily as a result of operating losses not benefited.

The tax effect of temporary differences resulted in net deferred income tax
assets and liabilities at December 31 are as follows:

<TABLE>
<CAPTION>
1996 1997
------- --------
(IN THOUSANDS)
<S> <C> <C>
Deferred tax assets:
Net operating loss and tax credits...................... $ 5,485 $ 21,239
Various accruals........................................ 58 636
Deferred rent........................................... 14 77
------- --------
5,557 21,952
Less valuation allowance................................ (5,103) (19,650)
------- --------
Net deferred tax assets................................... 454 2,302
Deferred tax liabilities:
Federal benefit for state income taxes.................. (427) (1,499)
Excess of tax depreciation and amortization............. (27) (803)
------- --------
Deferred tax liabilities.................................. (454) (2,302)
------- --------
$ -- $ --
======= ========
</TABLE>

Due to the uncertainty surrounding the timing of the realization of the
benefits from its favorable tax attributes in future tax returns, the Company
has placed a valuation allowance against its otherwise recognizable deferred
tax assets. The Company had federal and state operating loss carryforwards of
$47,450,000 at December 31, 1997. The federal carryforwards expire principally
in the period from 2010 to 2012, and the state carryforwards expire
principally in 2003. The Company has generated tax credit carryforwards for
federal and state purposes in the amounts of $329,723 and $107,353,
respectively, at December 31, 1997. Utilization of the above carryforwards is
subject to utilization limitations which may inhibit the Company's ability to
use carryforwards in the future.

F-32
<PAGE>

CITYSEARCH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT SEPTEMBER 28, 1998 AND FOR THE NINE MONTHS ENDED

SEPTEMBER 30, 1997 AND SEPTEMBER 28, 1998 IS UNAUDITED)

The following table reconciles the provision for taxes based on income
before taxes to the statutory federal income tax rate of 35%:

<TABLE>
<CAPTION>
PERIOD FROM
SEPTEMBER 20,
1995 (DATE OF YEAR ENDED
FORMATION TO DECEMBER 31,
DECEMBER 31, -----------------
1995 1996 1997
------------- ------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Tax benefit at statutory rate.............. $(108) $(4,864) $(12,781)
Increase related to:
State taxes, net of federal benefit........ 1 1 5
Meals and entertainment.................. 1 17 30
Amortization of goodwill................. -- 143 670
Foreign operations....................... -- -- 203
Valuation reserve on deferred taxes...... 106 4,705 11,881
----- ------- --------
$ -- $ 2 $ 8
===== ======= ========
</TABLE>

5. COMMITMENTS

LEASES

The Company entered into noncancelable capital lease obligations for
computers and equipment during the year ended December 31, 1997. In addition,
the Company leases its facilities and other office equipment under
noncancelable operating lease agreements expiring through 2004. Certain of the
Company's leases provide for free rent and escalations. The Company is
responsible for other costs such as property taxes, insurance, maintenance and
utilities.

The following is a schedule of future minimum lease payments:

<TABLE>
<CAPTION>
OPERATING CAPITAL
LEASES LEASES
--------- -------
(IN THOUSANDS)
<S> <C> <C>
December 31:
1998.................................................... $1,321 $1,115
1999.................................................... 1,191 1,028
2000.................................................... 1,167 517
2001.................................................... 1,043 4
2002.................................................... 265 --
Thereafter.............................................. 332 --
------ ------
$5,319 $2,664
======
Less amount representing interest......................... 517
------
Net present value of net minimum lease payments (including
approximately $807,000 payable currently)................ $2,147
======
</TABLE>

F-33
<PAGE>

CITYSEARCH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT SEPTEMBER 28, 1998 AND FOR THE NINE MONTHS ENDED

SEPTEMBER 30, 1997 AND SEPTEMBER 28, 1998 IS UNAUDITED)

Computers, software and equipment under capital leases had an original cost
basis of $288,419 and $2,819,842 at December 31, 1996 and 1997, respectively.
The net book value of the related computers, software and equipment was
$231,267 and $2,157,717 at December 31, 1996 and 1997, respectively.

Rent expense related to operating leases was $7,800, $291,000 and $1,372,000
for the period from September 20, 1995 (date of formation) to December 31,
1995 and for the years ended December 31, 1996 and 1997, respectively.

6. CONVERTIBLE PREFERRED STOCK

At December 31, 1997 and September 28, 1998, the Company was authorized to
issue 14,741,082 and 15,741,082 shares, respectively, of Convertible Preferred
Stock with a par value of $0.01 per share. The Company has designated
1,791,173 shares as Series A Convertible Preferred Stock; 450,000 shares as
Series B Convertible Preferred Stock; 3,261,024 shares as Series C Redeemable
Convertible Preferred Stock; 4,430,313 shares as Series D Redeemable
Convertible Preferred Stock; and 5,808,572 shares as Series E Redeemable
Convertible Preferred Stock.

Convertible Preferred Stock issued and outstanding as of December 31, 1997
and September 28, 1998 are as follows:

<TABLE>
<CAPTION>
ORIGINAL AS CONVERTED
AMOUNT PER SHARE EFFECTIVE PER
SHARES (NET OF ISSUANCE SHARE COMMON
OUTSTANDING ISSUANCE COST) PRICE STOCK PRICE DATE FIRST ISSUED
----------- -------------- --------- ------------- -----------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Series A................ 1,791 $ 1,620 $0.904 $0.904 October 31, 1995
Series B................ 157 545 3.467 3.467 June 19, 1996
Series B................ 68 445 6.525 6.525 June 19, 1997
Series B................ 64 445 7.000 7.00 June 21, 1998
Series C................ 3,261 11,261 3.467 3.57 May 15, 1996
Series D................ 4,431 28,265 6.525 6.73 December 13, 1996
Series E................ 4,714 31,356 7.000 7.09 November 10, 1997
Series E................ 1,000 6,959 7.000 7.09 May 26, 1998
------ -------
15,486 $80,896
====== =======
</TABLE>

Convertible Preferred Stock contains a liquidation preference of an amount
per share equal to the price for which such share of Convertible Preferred
Stock was originally issued, adjusted for any stock dividends, combinations or
splits with respect to such shares, plus any declared and unpaid dividends on
the Convertible Preferred Stock. The Series C Redeemable Convertible Preferred
Stock contains a May 2006 mandatory redemption provision. The Series D and
Series E Redeemable Convertible Preferred Stock contain mandatory redemption
provisions with a minimum of an 80% favorable vote, by the holders, beginning
December 2004.

Each share of Convertible Preferred Stock shall be, at the option of the
holder, convertible at any time into the number of shares of Common Stock as
determined by dividing the original issue price by the conversion price, as
defined. At the date of issuance, the conversion price for each series of
Convertible Preferred Stock was equal to the original per share issuance
price. The conversion price is subject to adjustment for stock splits and
stock combinations of outstanding Common Stock. The conversion price for
Series C, D and E Redeemable Convertible Preferred Stock, is also adjusted for
the forfeiture of Common Stock options outstanding from the

F-34
<PAGE>

CITYSEARCH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT SEPTEMBER 28, 1998 AND FOR THE NINE MONTHS ENDED

SEPTEMBER 30, 1997 AND SEPTEMBER 28, 1998 IS UNAUDITED)

date of issuance to the date of conversion. The Convertible Preferred Stock
has an automatic conversion feature which provides for each share of
Convertible Preferred Stock to be automatically converted into shares of
Common Stock based on the then effective conversion price immediately upon the
closing of an underwritten public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended, covering
the offer and sale of shares of Common Stock priced above $7.70 per share,
with aggregate net proceeds to the Company of not less than $20,000,000. At
September 28, 1998, on an unaudited pro forma basis, giving effect to Common
Stock option forfeitures through June 30, 1998, each share of Series A and B
Convertible Preferred Stock, and Series C, D and E Redeemable Convertible
Preferred Stock, was convertible into approximately 1.0, 1.0, .972, .970 and
.988 shares of Common Stock, respectively.

The as-converted effective per share Common Stock price presented in the
table above represents the effective price paid by the holders of the
Convertible Preferred Stock for each share of Common Stock to be obtained upon
conversion. The Convertible Preferred Stock was converted into 15,191,189
shares of Common Stock upon consummation of the Merger and share
reclassification discussed in Note 10.

7. STOCK OPTIONS

The Company has adopted the 1996 Stock Option Plan (1996 Stock Plan) which
authorizes members of management to grant non-statutory stock options or
incentive stock options to employees and consultants of the Company and its
subsidiaries. As of December 31, 1997 and September 28, 1998 the maximum
number of shares of Common Stock to be issued under the plan was 4,000,000 and
5,500,000 shares, respectively. All options granted under the 1996 Stock Plan
have been made at prices not less than fair market value of the stock at the
date of grant. Options granted under the 1996 Stock Plan are exercisable at
various dates over their ten-year life. Options granted under the 1996 Stock
Plan vest principally 25% after the first year and ratably over the remaining
vesting period.

The following table summarizes certain information related to options for
Common Stock:

<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
NUMBER OF PRICE PER EXERCISE
SHARES SHARE PRICE
-------------- -------------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Balance at January 1, 1996............ --
Granted during 1996................. 3,221 $0.10 to $0.75 $0.25
Forfeited........................... 314 0.10 to 0.75 0.15
Exercised........................... 74 0.10 to 0.75 0.16
-----
Outstanding at December 31, 1996...... 2,833 0.10 to 0.75 0.26
Granted during 1997................. 1,110 0.75 to 3.00 1.83
Forfeited........................... 485 0.10 to 2.00 0.64
Exercised........................... 726 0.10 to 2.00 0.15
-----
Outstanding at December 31, 1997...... 2,732 0.10 to 3.00 0.86
Granted............................. 1,999 3.00 to 8.67 6.36
Forfeited........................... 322 0.10 to 8.00 2.12
Exercised........................... 517 0.10 to 7.00 0.32
-----
Outstanding at September 28, 1998..... 3,892 0.10 to 8.67 3.66
=====
</TABLE>

F-35
<PAGE>

CITYSEARCH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT SEPTEMBER 28, 1998 AND FOR THE NINE MONTHS ENDED

SEPTEMBER 30, 1997 AND SEPTEMBER 28, 1998 IS UNAUDITED)

Options granted during the year ended December 31, 1997 and the nine months
ended September 28, 1998 resulted in a total compensation amount of $272,000
and $1,054,000, respectively, and were recorded as deferred compensation in
stockholders equity. The deferred compensation amount will be recognized as
compensation expense over the vesting period. During the year ended December
31, 1997 and the nine months ended September 28, 1998, such compensation
expense amounted to $10,000 and $356,000, respectively. Options outstanding at
December 31, 1996 and 1997 were exercisable for 1,100,000 and 1,135,500 shares
of Common Stock, respectively. Common Stock available for future grants at
December 31, 1996 and 1997 were 1,093,500 and 544,500 shares, respectively.

Additional information with respect to outstanding options as of December
31, 1997 is as follows:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING
------------------------------------ OPTIONS EXERCISABLE
WEIGHTED- ----------------------
WEIGHTED- AVERAGE WEIGHTED-
RANGE OF AVERAGE REMAINING AVERAGE
EXERCISE NUMBER OF EXERCISE CONTRACTUAL NUMBER OF EXERCISE
PRICES SHARES PRICE LIFE SHARES PRICE
------------- --------- --------- ----------- --------- ---------
(NUMBER OF SHARES IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
$0.10 to 0.25 1,206 $0.13 8.18 885 $0.12
0.50 to 0.75 631 0.61 8.83 168 0.57
2.00 to 3.00 895 2.02 9.76 83 2.00
----- -----
0.10 to 3.00 2,732 1,136
===== =====
</TABLE>

In connection with the Series E Redeemable Convertible Preferred Stock
issuance in November 1997, the Company granted warrants to a private placement
selling agent to purchase 94,286 shares of Series E Redeemable Convertible
Preferred Stock at an exercise price of $8.75 per share in exchange for
services. The warrants expire upon a closing of an initial public offering or
five years from the grant date, whichever is earlier. The fair value of these
warrants was not material at the date of issuance and therefore was included
in the amount of Series E Redeemable Convertible Preferred Stock reflected in
the accompanying balance sheet.

Pro forma information regarding the effect on operations is required by SFAS
123, and has been determined as if the Company had accounted for its employee
stock options under the fair value method of that statement. The fair value
for these options was estimated at the date of grant using the minimum-value
method, which utilizes a near-zero volatility factor.

<TABLE>
<CAPTION>
1996 1997
------- -------
<S> <C> <C>
Expected life (years)...................................... 6 years 5 years
Risk-free interest rate.................................... 6.30% 6.30%
Dividend yield............................................. -- --
</TABLE>

This option valuation model requires input of highly subjective assumptions.
Because the Company's employee stock options have characteristics
significantly different from those of traded options, and because changes in
the subjective input assumptions can materially affect the fair value
estimate, in management's opinion, the existing model does not necessarily
provide a reliable single measure of the fair value of its employee stock
options.

F-36
<PAGE>

CITYSEARCH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT SEPTEMBER 28, 1998 AND FOR THE NINE MONTHS ENDED

SEPTEMBER 30, 1997 AND SEPTEMBER 28, 1998 IS UNAUDITED)

For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the option's vesting period. The
Company's pro forma information follows:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
------------------
1996 1997
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Net loss, as reported.................................... $(13,897) $(36,526)
Pro forma net loss....................................... (13,953) (36,608)
Pro forma basic and diluted historical loss per share.... $ (1.59) $ (3.87)
Pro forma basic and diluted loss per share............... (1.10) (1.96)
</TABLE>

The effects of applying SFAS 123 in this pro forma disclosure may not be
indicative of future amounts. Additional awards in future years are
anticipated. The weighted-average fair value of options granted during the
years ended December 31, 1996 and 1997 was $0.19 and $0.56, respectively, for
options granted with an exercise price equal to the deemed fair market value,
at the date of grant, of the underlying Common Stock. The weighted-average
fair value of options, granted with an exercise price less than the deemed
fair market value, at the date of grant, of the underlying Common Stock during
1997 was $1.04.

8. DEFINED CONTRIBUTION PLAN

In July 1997, the Company established a defined contribution plan for
certain qualified employees as defined in the plan. Participants may
contribute from 1% to 20% of pretax compensation subject to certain
liabilities. The plan does provide for certain discretionary contributions by
the Company as defined in the plan. No Company contributions were made for the
year ended December 31, 1997.

9. RELATED PARTY TRANSACTIONS

Included in subscription and service-related party and license and royalty-
related party revenues for the year ended December 31, 1997 and the nine
months ended September 28, 1998 is approximately $1,044,000 and $1,497,000 of
revenues, respectively, generated under the Company's license agreements with
stockholders or other related parties. Included in due from licensees at
December 31, 1997 and September 28, 1998 is $136,000 and $206,000,
respectively, due from stockholders and other related parties.

10. MERGER AND RELATED EVENTS

On September 28, 1998 pursuant to an Amended and Restated Agreement and Plan
of Reorganization, dated as of August 12, 1998 (the Merger Agreement) by and
among the Company, USA Networks, Inc. (USAi), Ticketmaster Group, Inc.
(Ticketmaster Group), a wholly-owned subsidiary of USAi, Ticketmaster Corp., a
wholly-owned subsidiary of Ticketmaster Group, Ticketmaster Online and
Tiberius, Inc. (Tiberius), a wholly-owned subsidiary of CitySearch, Inc.,
whereby Tiberius was merged with and into Ticketmaster Online, with
Ticketmaster Online continuing as the surviving corporation and as a wholly-
owned subsidiary of CitySearch, Inc. Under the Merger Agreement, the Company
issued 37,238,000 shares of the Company's Common Stock in exchange for 100% of
the outstanding common stock of Ticketmaster Online. The Merger was accounted
for using the "reverse purchase" method of accounting, pursuant to which
Ticketmaster Online will be treated as the acquiring entity and for accounting
purposes the assets acquired and liabilities assumed of the Company will be
recorded at their respective fair values. Pursuant to the Merger Agreement,
USAi, the indirect parent of Ticketmaster Online, commenced a tender offer
(the Tender Offer) to purchase up to 2,924,339 shares of the

F-37
<PAGE>

CITYSEARCH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AT SEPTEMBER 28, 1998 AND FOR THE NINE MONTHS ENDED

SEPTEMBER 30, 1997 AND SEPTEMBER 28, 1998 IS UNAUDITED)

Company's Common Stock for $8.67 per share. The Tender Offer is scheduled to
expire 20 days after its commencement. The Merger Agreement contains a put
option which provides that in the event of consummation of the Merger, if a
Qualified IPO, as defined, is not closed within twelve, eighteen and
twenty-four months following the date of the Merger Agreement, the holders of
the Company's Common Stock could, subject to certain conditions, require USAi
to commence an exchange offer for all the then-outstanding shares of Common
Stock.

In addition, concurrently with the execution of the Merger Agreement, the
Company received a $50 million loan from USAi in exchange for the convertible
promissory note (the Convertible Note). The Convertible Note, in the principal
amount of $50 million, bears interest at a rate per annum of 7.00% and, after
consummation of the Merger, is generally due and payable on the earlier to
occur of (a) August 13, 2005 or (b) 20 days following the closing of a
Qualified IPO, as defined.

Upon consummation of the Merger, the Company amended its Certificate of
Incorporation and Bylaws to provide for, among other things, the authorization
of 100,000,000 shares of Class A Common Stock, 250,000,000 shares of Class B
Common Stock and 2,883,506 shares of Class C Common Stock. In addition, upon
consummation of a share reclassification immediately following the Merger,
each share of the Company's outstanding Common Stock was converted into one
share of Class A Common Stock entitled to 15 votes per share.

In connection with the Merger, all the Convertible Preferred Stock
outstanding converted into Common Stock. Such shares of Common Stock were
subsequently reclassified as shares of Class A Common Stock.

F-38
<PAGE>

[This page will be divided by a vertical line roughly two-thirds of the
distance across the page. The upper left two-thirds of the page will contain a
selection of [five] citysearch.com screen shots of the custom Web sites
purchased by CitySearch business customers. The screen shots will represent
business customers in a variety of service categories (e.g., restaurants,
professional services, entertainment venues, etc.) The lower left one-third of
the page will contain screen shots depicting Ticketmaster Online's
transactional features for purchasing merchandise and music products. The
right one-third of the page will contain three boxes. The first box will
contain the names and/or logos of the Company's domestic partners, including
washingtonpost.com, Los Angeles Times, The Baltimore Sun, The Dallas Morning
News and The San Diego Union-Tribune. The second box will contain the names
and/or logos of the Company's international partners organized by the city in
which the partner's service is available, including The Age, The Sydney
Morning Herald, Big Colour Pages, the Toronto Star, Tele-Direct, Schibsted and
Scandinavia Online. The third box will contain the names and/or logos of
certain of the businesses with which the Company has strategic relationships,
including American Express, Internet Travel Network, Classified Ventures, New
York Daily News, and EarthLink.]
<PAGE>

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

No dealer, salesperson or other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus in connection with this offering and, if given or made, such
information or representation must not be relied upon as having been
authorized by the Company or any Underwriter. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any
securities offered hereby in any jurisdiction to any person to whom it is
unlawful to make such offer in such jurisdiction. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that the information herein is correct as of any time
subsequent to the date hereof or that there has been no change in the affairs
of the Company since such date.

--------------------------

TABLE OF CONTENTS

--------------------------

<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary........................................................ 3
Risk Factors.............................................................. 12
Use of Proceeds........................................................... 34
Dividend Policy........................................................... 34
Capitalization............................................................ 35
Dilution.................................................................. 36
Selected Historical Financial Data........................................ 37
Selected Unaudited Pro Forma Combined Financial Data...................... 41
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 42
Business.................................................................. 53
Management................................................................ 74
Principal Stockholders.................................................... 85
Ticketmaster Online-CitySearch Merger..................................... 91
Certain Transactions...................................................... 93
Description of Capital Stock.............................................. 96
Shares Eligible for Future Sale........................................... 101
Underwriting.............................................................. 103
Legal Matters............................................................. 105
Experts................................................................... 105
Additional Information.................................................... 105
Index to Financial Statements............................................. F-1
</TABLE>

---------------

Until , 1998 (25 days after the date of this Prospectus), all dealers
effecting transactions in the Class B Common Stock, whether or not
participating in this distribution, may be required to deliver a Prospectus.
This is in addition to the obligation of dealers to deliver a Prospectus when
acting as Underwriters and with respect to their unsold allotments or
subscriptions.

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

[LOGO]

TICKETMASTER ONLINE-CITYSEARCH, INC.

[LOGO]

CLASS B COMMON STOCK

---------------

PROSPECTUS

---------------

NationsBanc Montgomery
Securities LLC

Allen & Company Incorporated

BancBoston
Robertson Stephens

Bear, Stearns & Co. Inc.

Donaldson, Lufkin & Jenrette
Securities Corporation

, 1998

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the costs and expenses, other than
underwriting discounts, commissions and certain accountable expenses, expected
to be incurred by the Company in connection with the sale of Class B Common
Stock being registered. All amounts are estimates except the Commission
registration fee and the National Association of Securities Dealers, Inc.
("NASD") filing fee.

<TABLE>
<S> <C>
SEC Registration Fee................................................ $27,140
NASD Filing Fee..................................................... 9,700
Nasdaq Listing Fee..................................................
Printing Fees and Expenses..........................................
Legal Fees and Expenses.............................................
Accounting Fees and Expenses........................................
Blue Sky Fees and Expenses..........................................
Transfer Agent and Registrar Fees...................................
Miscellaneous.......................................................
Less Reimbursement of Expenses by the Underwriters(1)...............
-------
Total............................................................. $
=======
</TABLE>
- --------
(1) In connection with this offering, the Underwriters have agreed to
reimburse the Company for up to $560,000 of out-of-pocket expenses
incurred by the Company.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the DGCL permits a corporation to include in its charter
documents, and in agreements between the corporation and its directors and
officers, provisions expanding the scope of indemnification beyond that
specifically provided by the current law.

The Registrant's Restated Certificate of Incorporation provides for the
indemnification of directors to the fullest extent permissible under Delaware
law.

The Registrant's Bylaws provide for the indemnification of officers,
directors and third parties acting on behalf of the Registrant if such person
acted in good faith and in a manner reasonably believed to be in and not
opposed to the best interest of the Registrant, and, with respect to any
criminal action or proceeding, the indemnified party had no reason to believe
his conduct was unlawful.

The Registrant has entered into indemnification agreements with its
directors and executive officers, in addition to indemnification provided for
in the Registrant's Bylaws, and intends to enter into indemnification
agreements with any new directors and executive officers in the future.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

Since inception of Registrant (September 20, 1995), the Registrant has
issued and sold the following unregistered securities:

(1) From September 20, 1995 to September 30, 1998, CitySearch granted
options to purchase 6,338,118 shares of CitySearch Common Stock pursuant to
its 1996 Stock Plan at exercise prices ranging from $0.10 to $8.67 per
share (or 6,338,118 shares of Class A Common Stock pursuant to the
Reclassification).

(2) From September 20, 1995 to September 30, 1998, CitySearch issued and
sold an aggregate of 1,316,932 shares of Common Stock (or 1,316,932 shares
of Class A Common Stock pursuant to the Reclassification) to its employees,
directors and consultants upon exercise of stock options granted pursuant
to its 1996 Stock Plan at exercise prices ranging from $0.10 to $8.00 per
share for an aggregate consideration of approximately $273,000.

II-1
<PAGE>

(3) In September 1995, at CitySearch's formation, CitySearch issued and
sold 6,622,857 shares of CitySearch Common Stock (or 6,622,857 shares of
Class A Common Stock pursuant to the Reclassification) to William Gross for
an aggregate cash consideration of $5,000 and for services provided to
CitySearch.

(4) In October 1995, CitySearch issued and sold an aggregate of 4,233,500
shares of CitySearch Common Stock (or 4,233,500 shares of Class A Common
Stock pursuant to the Reclassification) for an aggregate cash consideration
of $84,670. These shares were issued to the following key founding
employees: Charles Conn, III; Thomas Layton; Jeffrey Brewer; Kristen Ding;
Caskey Dickson; David Holtz; Tamar Halpern; Brad Haugaard; Taylor Wescoatt;
Linda Gross; Karen DeDea; Lee Husiuk and Michael Radford.

(5) From November 1995 to December 1995, CitySearch issued and sold an
aggregate of 1,791,173 shares of its Series A Preferred Stock (or 1,791,173
shares of Class A Common Stock pursuant to the Reclassification) for an
aggregate cash consideration of approximately $1.6 million. Such shares
were issued to the following: David M. Balkin; Robert McLean; Morris
Ventures; Robert W. Shaw, Jr.; Philip E. Berney; WS Investment Company 95B;
William N. Melton; Stuart Cohen; Robert Kavner; Edwin C. Cohen; Peter R.
Bleyleben; Steven Spielberg; Gerald Breslauer; Barry S. Volpert; Pando
Associates, Ltd.; John Wylie; Jeffrey Glynn and Victoria Jo Edwards, Co-
Trustees of the Edwards Family Trust of 1995; Charles R. Conn, II; Taylor
Wescoatt; North American Trust Co., TTEE FBO L&W Dickson #410280.

(6) In June 1996, CitySearch issued an aggregate of 157,074 shares of
Series B Preferred Stock (or 157,074 shares of Class A Common Stock
pursuant to the Reclassification) at $3.4665 per share as part
consideration for the acquisition of MetroBeat. Such shares were issued to
the following shareholders of MetroBeat: Mark Davies and Joshua White.

(7) From May 1996 to July 1996, CitySearch issued and sold an aggregate
of 3,261,024 shares of Series C Preferred Stock (or 3,170,356 shares of
Class A Common Stock pursuant to the Conversion and the Reclassification)
for an aggregate cash consideration of approximately $11.3 million. Such
shares were issued to the following: GS Capital Partners II, L.P; GS
Capital Partners II Offshore, L.P.; Goldman, Sachs & Co. Verwaltungs GmbH;
The Goldman Sachs Group, L.P.; AT&T Venture Fund I, L.P.; AT&T Venture Fund
II, L.P.; Steven Spielberg; Edwin C. Cohen; Pamela C. Alexander; Barry S.
Volpert; Alexander Communications, Inc.; Jeffrey G. Edwards; IRA MSTC
Custodian; Morris Ventures; Byters; David White; Robert W. Shaw, Jr.;
Charles R. Conn, II; The Pacific Bank, N.A., Trustee E. Keith Thomson IRA;
Michael Barton; Eric Higgs; Mark Lewyn; Emily Martin; Douglas M. McPherson;
Ted Meisel.

(8) From December 1996 to October 1997, CitySearch issued and sold an
aggregate of 4,430,313 shares of Series D Preferred Stock (or 4,297,824
shares of Class A Common Stock pursuant to the Conversion and the
Reclassification) for an aggregate cash consideration of approximately
$28.9 million and for services provided to CitySearch. Such shares were
issued to the following: GS Capital Partners II, L.P.; GS Capital Partners
II Offshore, L.P.; Goldman, Sachs & Co. Verwaltungs GmbH; Stone Street Fund
1996, L.P.; Bridge Street Fund 1996, L.P.; Edwin C. Cohen; EnCompass Group,
Inc.; Michael Barton; Mark Lewyn; Brian A. Goler; Emily Bloomfield; Bradley
Ramberg; Lamar Rutherford; Kristen Brown; James R. McGovern; AnneMarie
Weibel; Debra J. Wilkens; Francesca Colloredo-Mansfeld; Kathryn Takach;
Byters; Comcast CitySearch, Inc.; Far West Capital Partners, L.P.; Robert
McLean; Morris Ventures; Steven Spielberg; David White; CPQ Holdings, Inc.;
Intel Corporation; Bayview Investors, Ltd.; Toronto Star Newspapers
Limited; AT&T Venture Fund I, L.P.; AT&T Venture Fund II, L.P.; Bill Gross'
idealab!; Alexander Communications, Inc.; The Times Mirror Company; Paul S.
Larsen; ServiceMaster Venture Fund L.L.C.; Digital Ink Company and
Korn/Ferry International.

(9) In June 1997, CitySearch issued an aggregate of 68,274 shares of
Series B Preferred Stock (or 68,274 shares of Class A Common Stock pursuant
to the Reclassification) at $6.5251 per share as additional consideration
for the acquisition of Metro Beat. Such shares were issued to the following
shareholders of MetroBeat: Mark Davies and Joshua White.

II-2
<PAGE>

(10) In November 1997, CitySearch issued and sold an aggregate of
4,714,286 shares of Series E Preferred Stock (or 4,655,347 shares of Class
A Common Stock pursuant to the Conversion and the Reclassification) for an
aggregate cash consideration of approximately $33.0 million. Such shares
were issued to the following: USAi; Comcast CitySearch, Inc.; Far West
Capital Partners, LP; Intel Corporation; Endurance Fund; Gary Lauder; The
Thomas and Janet Unterman Living Trust dated 12/30/94; East Peak Partners;
Margaret L. Taylor; David A. Duffield Trust dated 7/14/88; Orchid & Co.;
Digital Ink Company; Global Retail Partners, L.P.; DLJ Diversified
Partners, L.P.; GRP Partners, L.P.; Global Retail Partners Funding, Inc.;
DLJ First ESC L.P. and Schibsted ASA. NationsBanc Montgomery Securities LLC
acted as placement agent. As consideration for such services, CitySearch
paid NationsBanc $1,546,182 in cash and issued a warrant to purchase shares
of Series E Preferred Stock which terms and conditions are described in
item (11) below.

(11) In November 1997, as part consideration for services provided as
placement agent, CitySearch issued to NationsBanc a warrant to purchase
94,286 shares of Series E Preferred Stock (or 93,107 shares of Class A
Common Stock pursuant to the Conversion and the Reclassification). The
warrant is exercisable at any time at an exercise price equal to $8.86 per
share of Class A Common Stock and any unexercised portion of the warrant is
automatically convertible immediately prior to the closing of this
offering.

(12) In May 1998, CitySearch issued an sold an aggregate of 1,000,000
shares of its Series E Preferred Stock (or 987,500 shares of Class A Common
Stock pursuant to the Conversion and the Reclassification) for an aggregate
cash consideration of approximately $7.0 million. Such shares were issued
to the following: USAi and American Express.

(13) In June 1998, CitySearch issued an aggregate of 63,644 shares of
Series B Preferred Stock (or 63,644 shares of Class A Common Stock pursuant
to the Reclassification) at $7.00 per share as additional consideration for
the acquisition of MetroBeat. Such shares were issued to the following
shareholders of MetroBeat: Mark Davies and Joshua White.

(14) In September 1998, CitySearch issued an aggregate of 37,238,000
shares of CitySearch Common Stock (or 37,238,000 of Class A Common Stock
pursuant to the Reclassification) as consideration for the acquisition of
Ticketmaster Multimedia Holdings, Inc. Such shares were issued to
Ticketmaster Corp.

(15) In September 1998, pursuant to the Reclassification, each issued and
outstanding share of CitySearch Common Stock, or 62,486,478 shares, was
reclassified into one share of Class A Common Stock of the Company for no
consideration.

The sales of the securities described in Items 15(1) and 15(2) were deemed
to be exempt from registration under the Securities Act in reliance on Rule
701 promulgated under Section 3(b) of the Securities Act as transactions
pursuant to compensatory benefit plans and contracts relating to compensation
as provided under such Rule 701. The sale of the securities described in Items
15(3) through 15(14) were deemed to be exempt from registration under the
Securities Act in reliance on Section 4(2) of the Securities Act, or
Regulation D promulgated thereunder, as transactions by an issuer not
involving a public offering. The recipients of securities in each such
transaction represented their intention to acquire the securities for
investment only and not with a view to or for sale in connection with any
distribution thereof and appropriate legends were affixed to the share
certificates and other instruments issued in such transactions. All recipients
either received adequate information about CitySearch or had access, through
employment or other relationships, to such information. The sale of securities
in Item 15(15) was deemed to be exempt from registration under the Securities
Act in reliance on Section 3(a)(9) of the Securities Act as an exchange by the
issuer with its existing security holders where no commission or other
remuneration is paid or given directly or indirectly for soliciting such
exchange.

II-3
<PAGE>

ITEM 16. EXHIBITS

(a) Exhibits

<TABLE>
<C> <S>
1.1 **Form of Underwriting Agreement.
2.1 *+Agreement and Plan of Reorganization, among CitySearch, Inc., MB
Acquisition Corporation, MetroBeat, Inc., Mark Davies and Joshua White,
dated May 31, 1996.
2.2 *Amended and Restated Agreement and Plan of Reorganization, among
CitySearch, Inc., Tiberius, Inc., USA Networks, Inc., Ticketmaster
Group, Inc., Ticketmaster Corporation and Ticketmaster Multimedia
Holdings, Inc., dated August 12, 1998.
3.1 *Amended and Restated Certificate of Incorporation, as currently in
effect.
3.2 **Amended and Restated Certificate of Incorporation, to be filed
immediately following the consummation of the offering.
3.3 **Amended and Restated Bylaws.
4.1 **Specimen Class B Common Stock Certificate.
5.1 **Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation,
as to the legality of the securities being registered.
10.1 *Form of Indemnification Agreement for directors and officers.
10.2 **1996 Stock Option Plan and form of agreement thereunder.
10.3 **1998 Stock Option Plan and form of agreement thereunder.
10.4 **1998 Employee Stock Purchase Plan.
10.5 *+License Agreement between CitySearch, Inc. and Perly, Inc., dated
March 9, 1996.
10.6 *+Marketing Agreement between CitySearch, Inc. and American Express
Travel Related Services Company, Inc., dated May 26, 1998.
10.7 *Employment Agreement between CitySearch, Inc. and Charles Conn, dated
May 9, 1996.
10.8 *+Unanimous Shareholder Agreement between Tele-Direct (Services), Inc.,
Metroland Printing, Publishing & Distributing Ltd., CitySearch Canada,
Inc. and 1310818 Ontario, Inc., dated August 31, 1998.
10.9 *+Limited Partnership Agreement between Metroland Printing, Publishing &
Distributing Ltd., 1310818 Ontario Inc., CitySearch Canada, Inc., Tele-
Direct (Services), Inc., Tele-Direct (Publications), Inc., CitySearch,
Inc. and Torstar Corporation, dated August 31, 1998.
10.10 *+Amended and Restated License and Services Agreement between
CitySearch, Inc. and CitySearch Canada, Inc., dated August 31, 1998.
10.11 *+Sublicense and Services Agreement between CitySearch Canada, Inc. and
toronto.com, dated August 31, 1998.
10.12 *+Non-competition Agreement between Toronto Star Newspapers Ltd., Tele-
Direct (Services), Inc., CitySearch Canada, Inc. and Metroland Printing,
Publishing & Distributing Ltd., dated August 31, 1998.
10.13 *Lease Agreement by and between CitySearch, Inc. and West End Land
Development Co., L.P., dated November 7, 1996.
10.14 *Standard Form of Lease, Aeriel Center Executive Park, between
Pizzagalli Investment Company and CitySearch, Inc., dated May 8, 1996.
10.15 *Standard Office Lease between CitySearch, Inc. and Sage Realty
Corporation, dated May 6, 1997.
10.16 *Standard Office Lease between CitySearch, Inc. and H. Naito
Corporation, dated March 6, 1997.
10.17 *Standard Office Lease between CitySearch, Inc. and Brazos Austin
Centre, Ltd., dated August 15, 1996.
10.18 *Standard Office Lease between CitySearch, Inc. and Judge Building
Group, dated September 10, 1996.
10.19 *Standard Office Lease between CitySearch, Inc. and Sobel Building
Development, dated May 31, 1996.
10.20 *Standard Office Lease between CitySearch, Inc. and BPG Pasadena, L.L.C.
(later assigned to Spieker Properties), dated September 30, 1996.
10.21 *Lease Agreement between CitySearch, Inc. and Secured Properties
Investors II, L.P., dated May 13, 1998.
10.22 *Employment Agreement between CitySearch, Inc. and Thomas Layton, dated
July 2, 1997.
</TABLE>

II-4
<PAGE>

<TABLE>
<C> <S>
10.23 *+License and Services Agreement between CitySearch, Inc. and Classified
Ventures, L.L.C.
10.24 *Convertible Promissory Note issued to CitySearch, Inc. by USA Networks,
Inc., dated August 12, 1998.
10.25 *Non-Competition Agreement between CitySearch, Inc., Ticketmaster
Corporation, Ticketmaster
Multimedia Holdings, Inc., and Charles Conn, dated August 12, 1998.
10.26 *Non-Competition Agreement between CitySearch, Inc., Ticketmaster
Corporation, Ticketmaster
Multimedia Holdings, Inc., and Thomas Layton, dated August 12, 1998.
10.27 +Letter Agreement between N2K Inc. and Ticketmaster Ticketing Co., Inc.,
dated April 23, 1998, as
amended by a Letter Agreement by and between the parties, dated June 16,
1998.
10.28 *Development and Services Agreement between Ticketmaster Multimedia
Holdings, Inc. and Starwave
Corporation, dated June 28, 1996.
10.29 *+License and Services Agreement between Ticketmaster Corporation,
Ticketmaster Multimedia
Holdings, Inc. and USA Networks, Inc., dated August 12, 1998.
21.1 *Subsidiaries of the Registrant.
23.1 Consent of Independent Auditors.
23.2 Consent of Independent Auditors.
23.3 **Consent of Counsel (included in Exhibit 5.1).
24.1 *Power of Attorney.
24.2 Power of Attorney (see page II-7).
27.1 Financial Data Schedule.
</TABLE>

(b) Schedules
Schedule II--Valuation and Qualifying Accounts
- --------

* Previously filed.

** To be filed by amendment.

+ Confidential treatment requested.

ITEM 17. UNDERTAKINGS

The Registrant hereby undertakes to provide the Underwriters at the closing
specified in the Underwriting Agreement certificates in such denominations and
registered in such names as required by the Underwriters to permit prompt
delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the provisions described in Item 14 above, or
otherwise, the Registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act, and will be governed by the final adjudication of such issue.

The undersigned Registrant undertakes that: (1) for purposes of determining
any liability under the Securities Act, the information omitted from the form
of prospectus as filed as part of the registration statement in reliance upon
Rule 430A and contained in the form of prospectus filed by the Registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this registration statement as of the time it was
declared effective, and (2) for the purpose of determining any liability under
the Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.

II-5
<PAGE>

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT HAS DULY CAUSED THIS AMENDMENT TO THE REGISTRATION STATEMENT ON
FORM S-1 TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF PASADENA, STATE OF CALIFORNIA, ON THE 19TH DAY OF
OCTOBER, 1998.

TICKETMASTER ONLINE-CITYSEARCH, INC.

/s/ Charles Conn
By: _________________________________
CHARLES CONN
CHIEF EXECUTIVE OFFICER

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
AMENDMENT TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING
PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----

<S> <C> <C>
/s/ Charles Conn Chief Executive Officer October 19,
____________________________________ (Principal Executive 1998
CHARLES CONN Officer)

/s/ Bradley Ramberg Chief Financial Officer and October 19,
____________________________________ Vice President, Finance and 1998
BRADLEY RAMBERG Administration and
Secretary (Principal
Financial Officer and
Principal Accounting
Officer)

* Director October 19,
____________________________________ 1998
TERRY BARNES

* Director October 19,
____________________________________ 1998
ALAN CITRON

* Director October 19,
____________________________________ 1998
EUGENE L. COBUZZI
* Director October 19,
____________________________________ 1998
STUART W. DEPINA

* Director October 19,
____________________________________ 1998
BARRY DILLER

* Director October 19,
____________________________________ 1998
JOSEPH GLEBERMAN

</TABLE>

II-6
<PAGE>

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Director October 19,
____________________________________ 1998
WILLIAM GROSS

* Director October 19,
____________________________________ 1998
VICTOR A. KAUFMAN

* Director October 19,
____________________________________ 1998
ROBERT KAVNER
* Director October 19,
____________________________________ 1998
WILLIAM D. SAVOY

* Director October 19,
____________________________________ 1998
ALAN SPOON

</TABLE>

/s/ Bradley Ramberg

*By: _____________________

BRADLEY RAMBERG

ATTORNEY-IN-FACT

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Charles Conn and Bradley Ramberg and
each one of them, acting individually and without the other, as his or her
attorney-in-fact, each with full power of substitution, for him and her in any
and all capacities, to sign any and all amendments to this Registration
Statement (including post-effective amendments), and to sign any registration
statement for the same offering covered by this Registration Statement that is
to be effective upon filing pursuant to Rule 462(b) promulgated under the
Securities Act of 1933, and all post-effective amendments thereto, and to file
the same, with exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, hereby ratifying and confirming
all that each of said attorneys-in-fact, or his substitute or substitutes may
do or cause to be done by virtue hereof.

<TABLE>
<S> <C> <C>
/s/ Thomas Unterman Director October 19,
____________________________________ 1998
THOMAS UNTERMAN
</TABLE>

II-7
<PAGE>

CITYSEARCH, INC.
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- ---------- --------------------- ---------- ----------
BALANCE AT CHARGED TO CHARGED TO BALANCE AT
BEGINNING COSTS AND OTHER THE END OF
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS DEDUCTIONS PERIOD
----------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Period from September 20
(date of formation)
through December 31,
1995................... $-- $ -- $-- $ -- $ --
Year ended December 31,
1996................... -- -- -- -- --
Year ended December 31,
1997................... -- 114,000 -- 89,000(a) 25,000
</TABLE>
- --------
(a) Represents amounts written-off against the allowance for doubtful accounts,
net of recoveries and reversals.
<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
1.1 **Form of Underwriting Agreement.
2.1 *+Agreement and Plan of Reorganization, among CitySearch, Inc., MB
Acquisition Corporation, MetroBeat, Inc., Mark Davies and Joshua
White, dated May 31, 1996.
2.2 *Amended and Restated Agreement and Plan of Reorganization, among
CitySearch, Inc., Tiberius, Inc., USA Networks, Inc., Ticketmaster
Group, Inc., Ticketmaster Corporation and Ticketmaster Multimedia
Holdings, Inc., dated August 12, 1998.
3.1 *Amended and Restated Certificate of Incorporation, as currently
in effect.
3.2 **Amended and Restated Certificate of Incorporation, to be filed
immediately following the consummation of the offering.
3.3 **Amended and Restated Bylaws.
4.1 **Specimen Class B Common Stock Certificate.
5.1 **Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, as to the legality of the securities being
registered.
10.1 *Form of Indemnification Agreement for directors and officers.
10.2 **1996 Stock Option Plan and form of agreement thereunder.
10.3 **1998 Stock Option Plan and form of agreement thereunder.
10.4 **1998 Employee Stock Purchase Plan.
10.5 *+License Agreement between CitySearch, Inc. and Perly, Inc.,
dated March 9, 1996.
10.6 *+Marketing Agreement between CitySearch, Inc. and American
Express Travel Related Services Company, Inc., dated May 26, 1998.
10.7 *Employment Agreement between CitySearch, Inc. and Charles Conn,
dated May 9, 1996.
10.8 *+Unanimous Shareholder Agreement between Tele-Direct (Services),
Inc., Metroland Printing, Publishing & Distributing Ltd.,
CitySearch Canada, Inc. and 1310818 Ontario, Inc., dated August
31, 1998.
10.9 *+Limited Partnership Agreement between Metroland Printing,
Publishing & Distributing Ltd., 1310818 Ontario Inc., CitySearch
Canada, Inc., Tele-Direct (Services), Inc., Tele-Direct
(Publications), Inc., CitySearch, Inc. and Torstar Corporation,
dated August 31, 1998.
10.10 *+Amended and Restated License and Services Agreement between
CitySearch, Inc. and CitySearch Canada, Inc., dated August 31,
1998.
10.11 *+Sublicense and Services Agreement between CitySearch Canada,
Inc. and toronto.com, dated August 31, 1998.
10.12 *+Non-competition Agreement between Toronto Star Newspapers Ltd.,
Tele-Direct (Services), Inc., CitySearch Canada, Inc. and
Metroland Printing, Publishing & Distributing Ltd., dated August
31, 1998.
10.13 *Lease Agreement by and between CitySearch, Inc. and West End Land
Development Co., L.P., dated November 7, 1996.
10.14 *Standard Form of Lease, Aeriel Center Executive Park, between
Pizzagalli Investment Company and CitySearch, Inc., dated May 8,
1996.
10.15 *Standard Office Lease between CitySearch, Inc. and Sage Realty
Corporation, dated May 6, 1997.
10.16 *Standard Office Lease between CitySearch, Inc. and H. Naito
Corporation, dated March 6, 1997.
10.17 *Standard Office Lease between CitySearch, Inc. and Brazos Austin
Centre, Ltd., dated August 15, 1996.
10.18 *Standard Office Lease between CitySearch, Inc. and Judge Building
Group, dated September 10, 1996.
10.19 *Standard Office Lease between CitySearch, Inc. and Sobel Building
Development, dated May 31, 1996.
10.20 *Standard Office Lease between CitySearch, Inc. and BPG Pasadena,
L.L.C. (later assigned to Spieker Properties), dated September 30,
1996.
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
10.21 *Lease Agreement between CitySearch, Inc. and Secured Properties
Investors II, L.P., dated May 13, 1998.
10.22 *Employment Agreement between CitySearch, Inc. and Thomas Layton,
dated July 2, 1997.
10.23 *+License and Services Agreement between CitySearch, Inc. and
Classified Ventures, L.L.C.
10.24 *Convertible Promissory Note issued to CitySearch, Inc. by USA
Networks, Inc., dated August 12, 1998.
10.25 *Non-Competition Agreement between CitySearch, Inc., Ticketmaster
Corporation, Ticketmaster Multimedia Holdings, Inc., and Charles
Conn, dated August 12, 1998.
10.26 *Non-Competition Agreement between CitySearch, Inc., Ticketmaster
Corporation, Ticketmaster Multimedia Holdings, Inc., and Thomas
Layton, dated August 12, 1998.
10.27 +Letter Agreement between N2K Inc. and Ticketmaster Ticketing Co.,
Inc., dated April 23, 1998, as amended by a Letter Agreement by
and between the parties, dated June 16, 1998.
10.28 *Development and Services Agreement between Ticketmaster
Multimedia Holdings, Inc. and Starwave Corporation, dated June 28,
1996.
10.29 *+License and Services Agreement between Ticketmaster Corporation,
Ticketmaster Multimedia Holdings, Inc. and USA Networks, Inc.,
dated August 12, 1998.
21.1 *Subsidiaries of the Registrant.
23.1 Consent of Independent Auditors.
23.2 Consent of Independent Auditors.
23.3 **Consent of Counsel (included in Exhibit 5.1).
24.1 *Power of Attorney.
24.2 Power of Attorney (see page II-7).
27.1 Financial Data Schedule.
</TABLE>
- --------

* Previously filed.

** To be filed by amendment.

+ Confidential treatment requested.

<PAGE>

EXHIBIT 10.27

April 23, 1998

N2K Inc.
55 Broad Street, 10th Floor
New York, NY 10004
Attention: Jon Diamond

Ladies and Gentlemen:

This letter describes the terms of a cross-promotional marketing, advertising
and retail agreement (the "Agreement") between Ticketmaster Ticketing Co., Inc.
("Ticketmaster") and N2K Inc. ("N2K") with respect to the subject matter set
forth below.

1. TERM. The term of this Agreement shall begin on May 1, 1998 and shall
----
continue through April 30, 2000.

2. JOINT RESPONSIBILITIES. N2K and TM Online shall create a co-branded online
----------------------
music store (the "Co-Branded Store") which shall feature the name and/or logo of
TM Online and N2K (or Music Blvd.) and be available to users from both the TM
Online and Music Blvd. web sites. All creative, editorial and design elements of
the Co-Branded Store shall be mutually determined by TM Online and N2K.

3. TICKETMASTER'S RESPONSIBILITIES.
-------------------------------

(a) Ticketmaster shall provide N2K with a variety of on-line and off-line
marketing, advertising and promotional opportunities during the term hereof, the
specifics of which shall be mutually determined by Ticketmaster and N2K. The
dollar value attributed to each such opportunity shall be applied against the
Marketing Fund (defined below) set forth in Section 5(a) below. The "off-line"
marketing, advertising and promotional opportunities may include (subject to
availability) "music-on-hold", direct mail inserts, Live! Magazine, data base
marketing, telemarketing/teleservicing and outbound marketing. Such "off-line"
marketing, advertising and promotional opportunities shall be provided to N2K at
[*]% off Ticketmaster's rate sheet (excluding ticket backs and ticket envelopes,
which shall be provided at a discount off Ticketmaster's rate sheet of [*]% and
[*]%, respectively). [*]

(b) The online representation and placement provided by TM Online to N2K
hereunder shall include the following (it being agreed that the specifics of
each, e.g., size, placement, graphics, rotational schedule, etc., shall be
mutually determined by TM Online and N2K and shall be consistent with TM
Online's design standards):

(i) Branded identification for N2K (or Music Blvd.) in every TM
Online "menu bar" directory;

[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
<PAGE>

(ii) Placement of a N2K (or Music Blvd.) icon on the home page of
each TM Online state page;

(iii) Placement of a N2K (or Music Blvd.) icon on each TM Online
concert page;

(iv) Prominent storefront placement for N2K (or Music Blvd.) on
the TM Mall home page;

(v) Thirteen (13) weeks of placement for N2K (or Music Blvd.) on
the Jumbotron at the TM Online home page;

(vi) Permanent ad placement for N2K (or Music Blvd.) below the
"search" button on the TM Online home page; and

(vii) Concert information links from TM Online to N2K (or Music
Blvd.).

4. N2K'S RESPONSIBILITIES. N2K shall manage and maintain the Co-Branded Store,
----------------------
which shall include, without limitation, sourcing all music products to be sold
through the Co-Branded Store, processing and fulfilling all orders placed
through the Co-Branded Store, handling customer service inquires and obtaining
all rights, licenses, permissions, clearances and consents from all applicable
parties required to include the written, video and audio content featured at the
Co-Branded Store.

5. COMPENSATION.
------------

(a) In consideration of the marketing, advertising and promotional
opportunities and services provided by Ticketmaster hereunder, N2K
shall pay to Ticketmaster the sum of $12,000,000. It is agreed that of
such total amount, $5,000,000 (the "Advance") shall be treated as a
non-refundable advance to Ticketmaster against Ticketmaster's share of
the Net Music Revenue (defined below) generated from TM Online's
activities hereunder payable under Section 5(b) below and the
remaining $7,000,000 (the "Marketing Fund") shall be treated as
payment to Ticketmaster for the marketing, advertising and promotional
opportunities which shall be provided by Ticketmaster under Section 3
above. It is understood that $[*] of the Marketing Fund shall be
allocated toward N2K's online marketing, advertising and promotional
activities hereunder on TM Online and $[*] of the Marketing Fund shall
be allocated toward N2K's "off-line" marketing, advertising and
promotional activities hereunder. The $12,000,000 shall be paid in the
following installments: (i) $4,000,000 immediately upon the execution
of this Agreement; (ii) $3,000,000 on or before November 1 1998; (iii)
$3,000,000 on or before May 1, 1999; and (iv) $2,000,000 on or before
November 1, 1999. Each installment payment shall be allocated pro rata
between the Advance and the Marketing Fund (i.e., [*]% of each payment
shall be applied against the Advance and [*]% of each payment shall be
applied against the Marketing Fund).

[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
<PAGE>

(b) Additionally, N2K will pay to Ticketmaster [*] percent ([*]%) of the
Net Music Revenue collected by N2K hereunder (i.e., all revenue
collected by N2K from the sale of music products through the Co-
Branded Store less all actual, direct out-of-pocket costs incurred by
N2K in connection with the costs of goods sold, shipping and handling,
returns, credit card charge backs and credit card fees, but not for
any of N2K's overhead). Such payments shall be applied toward the
recoupment of that portion of the Advance paid by N2K to Ticketmaster
as of such date, and then shall be paid by N2K to Ticketmaster, as
earned, within fifteen (15) days of the end of each month with respect
to Net Music Revenue collected by N2K during the preceding month. Each
payment will be accompanied with documentation reasonably detailing
the calculation of the payment. Additionally, N2K shall provide
monthly statements to Ticketmaster (whether or not the portion of the
Advance paid to Ticketmaster as of such date has been recouped by N2K)
detailing all business activities hereunder and Net Music Revenue
calculations. N2K will maintain accurate records with respect to all
business activities and calculations hereunder.

6. RIGHT TO MARKS; CUSTOMER INFORMATION. Neither Ticketmaster nor N2K is being
------------------------------------
granted any right or interest, ownership or otherwise, in or to any of the
trademarks, trade names, service marks or logos of the other pursuant to this
Agreement, except as expressly provided herein. Each party grants to the other a
non-exclusive, non transferable license to use throughout the world during the
term hereof the authorized trademarks, trade names, service marks and logos (the
"Marks") of the other party solely for such uses as are expressly provided for
in this Agreement. All such use shall be in accordance with each party's
reasonable and customary policies regarding trademark usage. Each party shall
have a right of prior written approval with respect to the use by the other
party and format of its Marks hereunder, provided that once any such use and
format are approved, no subsequent approvals shall be required for such use and
format. All customer information (e.g., names, addresses, etc.) with respect to
users purchasing items through the Co-Branded Store shall be jointly owned by
Ticketmaster and N2K.

7. MISCELLANEOUS.
-------------

(a) During the term of this Agreement, with respect to activities solely
relating to any such music retailer's music formats (i.e., compact
discs, cassettes and vinyl), Ticketmaster will not enter into any
agreement with any music retailer set forth on Exhibit A attached
hereto and incorporated herein for the purpose of authorizing such
music retailer to (i) link to TM Online (it being understood that
Ticketmaster is not responsible for any links to TM Online which
Ticketmaster does not approve and provided that Ticketmaster reserves
the right to provide an online listing of any such music retailer
which is also a Ticketmaster outlet), (ii) conduct advertising or
promotional activities on TM Online or (iii) sell event tickets
through the Ticketmaster system on such music retailer's web site (it
being understood that such restriction shall not prohibit Ticketmaster
from selling any such event tickets online).

(b) Ticketmaster and N2K each agree to (i) comply with all applicable
laws, statutes and regulations relating to the operation of their
respective web sites, (ii) be solely responsible for the content on
their respective web sites and for the content provided

[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
<PAGE>

by it to the other's web site, and (iii) to indemnify and hold the
other party harmless from and against any claims, damages, losses,
liabilities, costs, expenses (including court costs and reasonable
attorneys' fees), demands, proceedings, actions and causes of action
arising with respect to any such content and/or such party's operation
of its web site.

In no event shall either party be liable for special, consequential or
incidental damages for any breach of this Agreement.

N2K may not assign, transfer or resell, in whole or in part, any of
its rights or obligations under this Agreement without Ticketmaster's
prior written consent. No assignment under this Section 6(b) shall
relieve N2K of any of its obligations hereunder.

Neither Ticketmaster nor N2K shall be subject to any liability for any
failure to run all or any part of any advertisement or other
advertising vehicle due to strikes, work stoppages, accidents, fires,
acts of God or any other circumstances not within such party's
reasonable control.

This Agreement shall be governed by, and construed in accordance with,
the laws of the State of California. The parties agree that all legal
proceedings relating to the subject matter of this Agreement shall be
maintained exclusively in courts sitting within the County of Los
Angeles in the State of California, and that jurisdiction and venue
for such proceeding shall lie exclusively with such courts. N2K hereby
agrees to submit to personal jurisdiction in such county and state and
hereby waives, to the fullest extent permissible, the defense of an
inconvenient venue or forum to the maintenance of such proceeding.

This Agreement constitutes the sole and only agreement of the parties
relating to the matters covered hereby. Any prior or contemporaneous
agreements, promises, negotiations or representations not expressly
set forth in this Agreement are of no force or effect. This Agreement
supersedes any and all existing contracts and

4
<PAGE>

agreements by the parties with respect to the subject matter covered
herein.

IN WITNESS WHEREOF, Ticketmaster and N2K have caused this Agreement to be
duly executed as of the date first above written.

TICKETMASTER TICKETING CO., INC.,
a Delaware corporation

By: /s/ SIGNATURE ILLEGIBLE
-------------------------------------
An Authorized Signatory

Title: President
-------------------------------------

N2K INC.,
a ___________ corporation

By: /s/ SIGNATURE ILLEGIBLE
-------------------------------------
Authorized Signatory

Title: Vice Chairman
------------------------------------

5
<PAGE>

Exhibit A

MUSIC RETAILERS*

Hear Music
Believe In Music
Best Buy Co. (certain tours and attractions excluded)
Blockbuster Music
Borders Inc.
Camelot Music Inc.
Circuit City Stores Inc.
Compact Disc World
Disc- Go-Round
Face The Music
Fred Meyer Inc. (supermarkets excluded)
Fresh Picks, Inc.
Golden Music
Good Music Record Co. Inc.
Harmony House Records & Tape
Hasting Books Music & Video
HMV U.S.A.
J&R Music World
Magic Platter
Millennium Music LP
Music Den
Musicland Group (Sam Goody, Media Play)
Newbury Comics
Nobody Beats The Wiz (subject to discussion and certain restrictions)
National Record Mart
Musicmania
Peaches Entertainment
Plan 9 Inc.
Planet Music
Poplar Tunes Record Shop Inc.
Price/Costco
Record Archives
Record Cellar Inc.
Record X-Change
Soundwaves Inc.
Wax Works/Disc Jockey Records
Wherehouse Entertainment (subject to discussion and certain restrictions)
Specs Music
Strawberries Records

6
<PAGE>

The Wall Music Inc.
Transworld Entertainment (Cocanuts)
Virgin Music
Waterloo Records Inc.
Streetside
The Central South Stores (under Various Names)
Walmart
Amazon. Com
Barnes & Noble
CDnow
Microsoft Music Central
CD Universe
CD World
Tunes.com
Columbia House (retail music only)
Soundstone
BMG Direct (retail music only)
CD Connection
Alliance
Liquid Audio
World Wide Radio/Electric Village
Compact Discount
Mass Music
Planet Earth Music
Sitezero Music
Abby Road
AD Music
The Blues Mall
CD Club
CD Land
CD Warehouse
GEMM
GMO (Global Music Outlet)
Molly Malone's Music
MP Music Previews
R&Y Music
RockMall
Sound Spectrum
Sound World
The Tunes
CD Teleshop
Simply Music
Soundstone
Valley Distributors and Sound Delivery
Alliance Distribution (AbbyRoad, Bassett)

7
<PAGE>

MY-CD
Music Connection
SuperSonic Boom
Volatile Media Inc.
Custom Revolutions

* Restrictions pertaining to these music retailers only apply to their
activities in connection with music formats (compact discs, cassettes and vinyl)
and shall not apply to any other products or services.

8
<PAGE>

N2K INC.
55 BROAD STREET, 10/th/ FLOOR, NEW YORK, NY 10004
PHONE: 212.370.5555 FAX 212.742.1785
E-MAIL- [email protected] [LOGO OF N2K INC. APPEARS HERE]

June 16, 1998

Ticketmaster Ticketing Co., Inc.
8800 Sunset Blvd.
Suite 600
West Hollywood, CA 90069

Ladies/Gentlemen:

You and N2K Inc. ("N2K") agree as follows:

Reference is made to the agreement between Ticketmaster Ticketing Co., Inc.
("Ticketmaster") and N2K dated as of April 23, 1998
[file:h\users'\tolbert\forms\N2K2.doc] (the "Agreement"). All terms defined in
the Agreement shall have the same meanings when used herein. The Agreement is
modified as set forth below:

1. (a) The second sentence of section 5(a) of the Agreement shall be deleted
and replaced with the following sentence;

"It is agreed that of such total amount, $[*] shall be deemed a non-
refundable, non-recoupable fee to Ticketmaster in consideration of the
exclusive nature of this agreement as set forth in Section 7(a) below (the
"Fee"); $[*] (the 'Advance") shall Be treated as a non-refundable advance
to Ticketmaster against Ticketmaster's share of the Net Music Revenue (as
defined below) generated from TM online's activities hereunder payable
under Section 5(b) below and the remaining $[*] (the "Marketing Fund")
shall be treated as payment to Ticketmaster for the marketing, advertising
, and promotional opportunities which shall be provided by Ticketmaster
under Section 3 above."

(b) The last sentence of section 5(a) of the Agreement shall be deleted
and replaced with the following sentence:

"Each installment payment shall be allocated pro rata between the Advance,
the Fee and the Marketing Fund (i.e, [*]% of each payment shall be applied
against the Advance; [*]% of each payment shall be applied against the Fee;
and [*]% of each payment shall be applied against the Marketing Fund)."

[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
<PAGE>

Except as expressly set forth herein, all of the terms and conditions of the
Agreement shall continue in full force and effect and are hereby ratified and
confirmed by the parties

Sincerely,

N2K Inc.

/s/ SIGNATURE ILLEGIBLE
----------------------------------
An Authorized Representative

ACCEPTED AND AGREED:
TICKETMASTER TICKETING CO., INC.

/s/ SIGNATURE ILLEGIBLE
- ---------------------------------
An Authorized Rpresentative

<PAGE>

EXHIBIT 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the captions "Experts" and
"Selected Historical Financial Data" and to the use of our report dated
September 3, 1998 with respect to the financial statements of Ticketmaster
Multimedia Holdings, Inc., included in the Registration Statement Form S-1 and
related Prospectus of Ticketmaster Online-CitySearch, Inc. dated October 19,
1998.

/s/ Ernst & Young LLP

Los Angeles, California

October 16, 1998

<PAGE>

EXHIBIT 23.2

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the captions "Experts" and
"Selected Historical Financial Data" and to the use of our report dated March
11, 1998 (except Note 10, as to which the date is September 28, 1998), in the
Registration Statement Form S-1 and related Prospectus of Ticketmaster Online-
CitySearch, Inc. dated October 19, 1998.

Our audit also included the financial statement schedule of CitySearch, Inc.
listed in Item 16(b). The schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion on the schedule based
on our audit. In our opinion, the financial statement schedule referred to
above, when considered in relation to the basic financial statements taken as
a whole, presents fairly in all material respects the information set forth
therein.

/s/ Ernst & Young LLP

Los Angeles, California

October 16, 1998

<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000

<S> <C> <C>
<PERIOD-TYPE> YEAR 6-MOS
<FISCAL-YEAR-END> JAN-31-1998 JUN-30-1998
<PERIOD-START> FEB-01-1997 JAN-01-1998
<PERIOD-END> JAN-31-1998 JUN-30-1998
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</TABLE>