<PAGE>
Prospectus Supplement No. 2 Filed Pursuant To Rule 424(b)(3)
(To Prospectus Dated June 25, 1999) Registration No. 333-79059
$250,000,000
EXODUS COMMUNICATIONS, INC.
5% Convertible Subordinated Notes Due March 15, 2006 and 5,473,150 shares
of Common Stock Issuable Upon Conversion of the Notes
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This prospectus supplement relates to the resale by the holders of 5%
Convertible Subordinated Notes due March 15, 2006 of Exodus Communications,
Inc. and the shares of common stock of Exodus issuable upon the conversion of
the notes.
This prospectus supplement should be read in conjunction with the prospectus
dated June 25, 1999 and the prospectus supplement dated July 6, 1999, which are
to be delivered with this prospectus supplement. All capitalized terms used but
not defined in this prospectus supplement shall have the meanings given them in
the prospectus.
The information appearing under the heading "Recent Events" in the
prospectus is superseded in part by the following information:
On July 28, 1999, we completed our acquisition of Cohesive Technology
Solutions, Inc. for approximately $100.00 million in cash and Exodus common
stock. Cohesive is a technology professional services organization with
expertise in networking, web applications and technology solutions.
On July 21, 1999, we announced a two-for-one stock split to be effected in
the form of a stock dividend. Our transfer agent will mail certificates
representing stock split shares on or about August 12, 1999 to stockholders of
record on July 29, 1999.
The information in the table appearing under the heading "Selling Holders"
in the prospectus is superseded in part by the information appearing in the
table below:
<TABLE>
<CAPTION>
Principal Amount Common Stock Common Stock
of Notes Owned Owned After
Beneficially Owned Prior to the Common Stock Completion of
Name and Offered (1) Offering (1)(2) Offered (2) Offering
---- ------------------ --------------- ------------ -------------
<S> <C> <C> <C> <C>
BancBoston Robertson
Stephens Inc........... $3,000,000 65,677 65,677 --
BNP Arbitrage SNC....... 1,050,000 32,587(3) 22,987 9,600
HBK Cayman L.P. ........ 1,455,000 31,853 31,853 --
HBK Offshore Fund Ltd.
....................... 2,545,000 55,716 55716 --
Nicholas-Applegate
Convertible Fund....... 280,000 6,129 6,129 --
Pilgrim Convertible
Fund................... 1,440,000 31,525 31,525 --
PIMCO Convertible Bond
Fund................... 75,000 1,641 1,641 --
Tribeca Investments
LLC.................... 500,000 10,946 10,946 --
</TABLE>
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(1) Includes common stock into which the notes are convertible.
(2) Assumes a conversion price of 21.8926 shares per $1,000 principal amount of
notes and a cash payment in lieu of any fractional interest.
(3) Includes an additional 9,600 shares of our common stock held by BNP
Arbitrage SNC.
Investing in our Common Stock or our convertible subordinated notes involves
a high degree of risk. Please carefully consider the "Risk Factors" beginning
on Page 4 of this prospectus.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus or this prospectus supplement. Any
representation to the contrary is a criminal offense.
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The date of this prospectus supplement is August 5, 1999.
