<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): OCTOBER 22, 1999
GO2NET, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
--------------------------------------------
(STATE OR OTHER JURISDICTION OF INCORPORATION)
0-22047 91-1710182
(COMMISSION (IRS EMPLOYER
FILE NUMBER) IDENTIFICATION NO.)
999 THIRD AVENUE, SUITE 4700
SEATTLE, WASHINGTON 98104
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(206) 447-1595
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
NOT APPLICABLE
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
FREEYELLOW.COM, INC.
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Current Report on Form 8-K
dated October 22, 1999, related to the Registrant's completion of the
acquisition of FreeYellow.Com, Inc. ("FreeYellow") by means of a merger of FY
Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary
of the Registrant with and into FreeYellow, as set forth below and in the
pages attached hereto:
ITEM 7: FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED
See Exhibit 20.1 for the audited financial statements and unaudited interim
financial statements of FreeYellow
(b) UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited Pro Forma Condensed Combined Financial
Statements give effect to the current purchase business combination
between Go2Net, Inc. ("Go2Net" or the "Company") and FreeYellow. Under the
purchase method of accounting, the purchase price is allocated to the assets
acquired and liabilities assumed based on their estimated fair values. The
estimated fair values included herein are preliminary in nature and may not
be indicative of the final allocation of the purchase price consideration.
Any amounts that may be allocable to in-process research and development
would be recorded as one time charges that would reduce the goodwill
reflected in the Pro Forma Condensed Combined Balance Sheet and reduce the
amount of amortization of goodwill reflected in the Pro Forma Condensed
Combined Statement of Operations.
Such preliminary estimates of the fair values of the assets and liabilities
of FreeYellow have been combined with the recorded values of the assets and
liabilities of Go2Net in the unaudited Pro Forma Condensed Combined Financial
Statements. The unaudited Pro Forma Condensed Combined Financial Statements
are based on, and should be read in conjunction with the historical financial
statements and the notes thereto of Go2Net included in the Annual Report on
Form 10-K filed with the Securities and Exchange Commission (SEC) on December
29, 1999, and the historical financial statements and the notes thereto of
FreeYellow included herein.
<PAGE>
The unaudited Pro Forma Condensed Combined Balance Sheet has been
prepared to reflect the purchase of FreeYellow as if the FreeYellow purchase
had occurred on September 30, 1999. The unaudited Pro Forma Condensed
Combined Statement of Operations reflects the combined results of operations
of Go2Net and FreeYellow as if the Purchase occurred on October 1, 1998.
The unaudited Pro Forma Condensed Combined Balance Sheet and Statement
of Operations are provided for illustrative purposes only and should be read
in conjunction with the accompanying notes thereto, the audited financial
statements and notes thereto for the year ended September 30, 1999 of Go2Net
included in its annual report on Form 10-K filed on December 29, 1999, and
the audited financial statements and notes thereto of FreeYellow for the
period from December 29, 1998 (inception) to December 31, 1998, included
herein. The unaudited Pro Forma Condensed Combined Balance Sheet and
Statement of Operations are not necessarily indicative of the operating
results or financial position that would have been achieved had the purchase
of FreeYellow been consummated at the date indicated, nor is it necessarily
indicative of future operating results and financial condition.
-2-
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
<TABLE>
<CAPTION>
SEPTEMBER 30, 1999 PRO FORMA PRO FORMA
GO2NET FREEYELLOW ADJUSTMENTS AS ADJUSTED
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Current assets:
Cash $ 66,786,513 7,021 (1,000,000) 65,793,534
Short-term investments 151,000,000 - - 151,000,000
Trade accounts receivable, net 5,712,977 30,890 - 5,743,867
Other accounts receivable 3,818,410 - - 3,818,410
Deferred tax asset, net 2,144,637 - - 2,144,637
Prepaid expenses and other current assets 750,848 14,918 - 765,766
--------------------------------------- ------------------- -------------------
Total current assets 230,213,385 52,829 (1,000,000) 229,266,214
--------------------------------------- ------------------- -------------------
Property and equipment, net 3,254,594 962 - 3,255,556
Other assets 1,164,553 - - 1,164,553
Long-term investments 53,771,208 - - 53,771,208
Investment in affiliates 21,676,129 - - 21,676,129
Deposits 250,000 - - 250,000
Intangibles, net 197,929,199 9,833 19,820,615 217,759,647
--------------------------------------- ------------------- -------------------
Total assets $508,259,068 63,624 18,820,615 527,143,307
--------------------------------------- ------------------- -------------------
--------------------------------------- ------------------- -------------------
Liabilities and Stockholder's Equity
Current liabilities:
Accounts payable $ 1,253,843 26,000 - 1,279,843
Accrued expenses 3,139,409 69,500 - 3,208,909
Accrued compensation and benefits 2,425,013 10,883 - 2,435,896
Deferred revenues 3,072,755 17,416 - 3,090,171
--------------------------------------- ------------------- -------------------
Total current liabilities 9,891,020 123,799 - 10,014,819
--------------------------------------- ------------------- -------------------
Deferred revenue 530,796 - - 530,796
Deferred tax liability 16,905,877 - 260,440 17,166,317
Stockholder's equity (deficit):
Preferred stock and additional paid-in capital 450,927,510 - - 450,927,510
Common stock and additional paid-in capital 42,721,806 168,774 18,500,000 61,221,806
(168,774)
Accumulated other comprehensive income 2,500,337 - 2,500,337
Accumulated deficit (15,218,278) (228,949) 228,949 (15,218,278)
--------------------------------------- ------------------- -------------------
Total stockholder's equity (deficit) 480,931,375 (60,175) 18,560,175 499,431,375
--------------------------------------- ------------------- -------------------
--------------------------------------- ------------------- -------------------
Total liabilities and stockholder's equity $508,259,068 63,624 18,820,615 527,143,307
--------------------------------------- ------------------- -------------------
--------------------------------------- ------------------- -------------------
</TABLE>
See accompanying notes.
-3-
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED NINE MONTHS ENDED
SEPTEMBER 30, 1999 SEPTEMBER 30, 1999 PRO FORMA PRO FORMA AS
GO2NET FREEYELLOW ADJUSTMENTS ADJUSTED
------------------------------------------------------------ ----------------
<S> <C> <C> <C> <C>
Revenues, net $ 22,435,035 271,587 - 22,706,622
Cost of revenues 4,604,193 253,242 - 4,857,435
---------------------------------------- ------------------- ----------------
Gross profit 17,830,842 18,345 - 17,849,187
---------------------------------------- ------------------- ----------------
Operating expenses:
Selling and marketing 6,347,873 59,405 - 6,407,278
General and administrative 6,068,647 187,889 - 6,256,536
Product development 2,703,874 - - 2,703,874
Merger and acquisition related costs 873,094 - - 873,094
Stock compensation 773,584 - - 773,584
Amortization of intangibles 19,432,304 - 6,606,871 26,039,175
---------------------------------------- ------------------- ----------------
Total operating expenses 36,199,376 247,294 6,606,871 43,053,541
---------------------------------------- ------------------- ----------------
Loss from operations (18,368,534) (228,949) (6,606,871) (25,204,354)
Interest income 6,810,866 - - 6,810,866
---------------------------------------- ------------------- ----------------
Loss before income taxes (11,557,668) (228,949) (6,606,871) (18,393,488)
Income tax expense (benefit) (714,862) - (86,813) (801,675)
---------------------------------------- ------------------- ----------------
Loss on extinguishment of debt, net of tax
Net loss (10,842,806) (228,949) (6,520,058) (17,591,813)
Preferred stock dividend 159,930,733 - - 159,930,733
---------------------------------------- ------------------- ----------------
Net loss applicable to common stockholders $(170,773,539) (228,949) (6,520,058) (177,522,546)
--------------------------------------- ------------------- -------------------
--------------------------------------- ------------------- -------------------
Shares used in computing basic and diluted net loss
per common share 26,524,025 344,161 26,868,186
Basic and diluted net loss per common share $ (6.44) (6.61)
</TABLE>
See accompanying notes.
-4-
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
1. PERIODS COMBINED
The unaudited Pro Forma Condensed Combined Balance Sheet has been prepared to
reflect the purchase of FreeYellow as if it had occurred on September 30,
1999. The unaudited Pro Forma Condensed Combined Statement of Operations for
the year ended September 30, 1999 reflects the combined results of operations
of Go2Net and FreeYellow as if the purchases occurred on October 1, 1998.
The unaudited Pro Forma Condensed Combined Financial Statements reflect the
issuance of approximately 334,161 shares of Go2Net common stock and
$1,000,000 in cash in connection with the purchase of all the outstanding
shares of FreeYellow.
This purchase was accounted for under the purchase method of accounting in
accordance with APB Opinion No. 16, whereby, the purchase price is allocated
to the assets acquired and liabilities assumed based on their estimated fair
values. Estimates of the fair values of the assets and liabilities of
FreeYellow have been combined with the recorded values of the assets and
liabilities of Go2Net in the unaudited Pro Forma Condensed Combined Financial
Statements.
-5-
<PAGE>
2. PURCHASE TRANSACTION COSTS
Go2Net and FreeYellow incurred direct transaction costs of approximately
$140,000 associated with the purchase, primarily for legal and accounting
fees. These costs will be included with goodwill and amortized over three
years. There can be no assurance that Go2Net will not incur additional
charges in subsequent quarters to reflect costs associated with the purchase
or that management will be successful in their efforts to integrate the
operations of the two companies.
3. PRO FORMA LOSS PER COMMON SHARE
The pro forma combined basic and diluted net loss per common share are based
on the combined weighted average number of common shares of Go2Net common
stock outstanding during the period presented and the common stock issued in
connection with the purchase of FreeYellow assuming that the shares issued
were outstanding as of October 1, 1998.
4. CONFORMING AND RECLASSIFICATION ADJUSTMENTS
There were no adjustments required to conform the accounting policies of
Go2Net and FreeYellow. Certain amounts for FreeYellow have been reclassified
to conform with Go2Net's financial statement presentation. Pro forma
adjustments were required to record goodwill and the related amortization
expense as if the transaction occurred on October 1, 1998.
5. PRO FORMA ADJUSTMENTS
(a) To reflect the issuance of approximately 334,116 shares of
Go2Net common stock and $1,000,000 in cash in connection with
the FreeYellow purchase for an aggregate purchase price of
approximately $19.5 million, including approximately $140,000
of transaction costs.
(b) To eliminate the historical accumulated deficit of FreeYellow.
(c) To record the excess of the purchase price over the fair value
of assets and liabilities acquired in connection with the
acquisition of FreeYellow. The purchase price allocation is
based on management's estimates of the fair values of the
tangible assets, intangible assets and technology. The book
value of tangible assets and liabilities acquired are assumed to
approximate fair value.
(d) To recognize amortization expense related to goodwill and other
purchased intangible assets on a straight-line basis over
approximately 3 years.
-6-
<PAGE>
(c) EXHIBITS.
The following exhibits are filed herewith:
20.1 FreeYellow.com, Inc. audited financial statements for the
period from December 29, 1998 (inception) to December 31,
1998.
23.1 Consent of KPMG LLP, Independent Auditors
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this amendment to be signed on its behalf by the
undersigned thereunto duly authorized.
GO2NET, INC.
Date: January 4, 2000 By: /s/ Russell C. Horowitz
Russell C. Horowitz
Chief Executive Officer,
Chief Administrative Officer and
Chief Financial Officer
-7-
<PAGE>
Exhibit 20.1
Independent Auditors' Report
The Board of Directors
FreeYellow.Com, Inc.:
We have audited the accompanying balance sheet of FreeYellow.Com, Inc. as of
December 31, 1998, and the related statements of operations, stockholder's
equity (deficit), and cash flows for the period from December 29, 1998
(inception) to December 31, 1998. 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 audit.
We conducted our audit 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 audit provides 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 FreeYellow.Com, Inc. as of
December 31, 1998, and the results of its operations and its cash flows for
the period from December 29, 1998 (inception) to December 31, 1998 in
conformity with generally accepted accounting principles.
Seattle, Washington KPMG LLP
December 15, 1999
<PAGE>
FREEYELLOW.COM, INC.
Balance Sheets
December 31, 1998 and September 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
SEPTEMBER 30,
DECEMBER 31, 1999
ASSETS 1998 (UNAUDITED)
------------------- -------------------
<S> <C> <C>
Current assets:
Cash $ -- 7,021
Accounts receivable -- 30,890
Prepaid expenses -- 13,918
Other current assets -- 1,000
Receivable from stockholder 100 --
------------------- -------------------
Total current assets 100 52,829
Office equipment, net -- 962
Software licenses, net of accumulated amortization of $4,167 in 1999
-- 9,833
------------------- -------------------
Total assets $ 100 63,624
=================== ===================
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ -- 26,000
Accrued liabilities -- 69,500
Accrued payroll -- 10,883
Deferred revenues -- 17,416
------------------- -------------------
Total current liabilities -- 123,799
Stockholder's equity (deficit):
Common stock, $1.00 par value. 100 shares authorized, issued and
outstanding 100 100
Additional paid in capital -- 168,674
Accumulated deficit -- (228,949)
------------------- -------------------
Total stockholder's equity (deficit) 100 (60,175)
------------------- -------------------
Total liabilities and stockholder's equity (deficit)
$ 100 63,624
=================== ===================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
FREEYELLOW.COM, INC.
Statements of Operations
Period from December 29, 1998 (inception) to December 31, 1998 and
the nine-month period ended September 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM NINE-MONTH PERIOD
DECEMBER 29, 1998 ENDED SEPTEMBER
(INCEPTION) TO 30, 1999
DECEMBER 31, 1998 (UNAUDITED)
------------------- -------------------
<S> <C> <C>
Revenues, net $ -- 271,587
Cost of revenues -- 253,242
------------------- -------------------
Gross profit -- 18,345
------------------- -------------------
Operating expenses:
General and administrative -- 187,889
Selling and marketing -- 59,405
------------------- -------------------
Total operating expenses -- 247,294
------------------- -------------------
Net loss $ -- (228,949)
=================== ===================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
FREEYELLOW.COM, INC.
Statements of Stockholder's Equity (Deficit)
Period from December 29, 1998 (inception) to December 31, 1998 and the
nine-month period ended September 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCK
----------------------------------- ADDITIONAL TOTAL
PAID-IN ACCUMULATED STOCKHOLDER'S
SHARES DOLLARS CAPITAL DEFICIT EQUITY (DEFICIT)
--------------- ---------------- ---------------- ---------------- -------------------
<S> <C> <C> <C> <C> <C>
Issuance of common stock 100 $ 100 $ -- $ -- $ 100
--------------- ---------------- ---------------- ---------------- -------------------
Balances at December 31, 1998
100 100 -- -- 100
Accrued liabilities and note
payable to stockholder
converted to capital
(unaudited) -- -- 181,186 -- 181,186
Cash distributions to
stockholder (unaudited) -- -- (12,512) -- (12,512)
Net loss (unaudited) -- -- -- (228,949) (228,949)
--------------- ---------------- ---------------- ---------------- -------------------
Balances at September 30,
1999 (unaudited) 100 $ 100 $ 168,674 $ (228,949) $ (60,175)
=============== ================ ================ ================ ===================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
FREEYELLOW.COM, INC.
Statements of Cash Flows
Period from December 29, 1998 (inception) to December 31,
1998 and the nine-month period ended September 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM
DECEMBER 29, 1998 NINE-MONTH PERIOD
(INCEPTION) ENDED SEPTEMBER
TO DECEMBER 31, 30, 1999
1998 (UNAUDITED)
------------------- -------------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ -- (228,949)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization -- 4,197
Changes in operating assets and liabilities:
Accounts receivable -- (30,890)
Prepaid expenses -- (13,918)
Other current assets -- (1,000)
Receivable from stockholder -- 100
Accounts payable -- 26,000
Accrued liabilities -- 224,013
Accrued payroll -- 10,883
Deferred revenue -- 17,416
------------------- -------------------
Net cash used in operating activities -- 7,852
------------------- -------------------
Cash flows from investing activities:
Purchases of office equipment -- (992)
Purchase of software license -- (14,000)
------------------- -------------------
Net cash used in investing activities -- (14,992)
------------------- -------------------
Cash flows from financing activities:
Cash distributions to stockholder -- (12,512)
Proceeds from notes payable to stockholder -- 26,673
------------------- -------------------
Net cash provided by financing activities -- 14,161
------------------- -------------------
Net increase in cash -- 7,021
Cash at beginning of period -- --
------------------- -------------------
Cash at end of period $ -- 7,021
=================== ===================
Supplemental disclosure of non-cash investing and financing activities:
Issuance of common stock for stockholder receivable $ 100 --
Accrued liabilities payable to stockholder converted to capital -- 154,513
Notes payable to stockholder converted to capital -- 26,673
=================== ===================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
FREEYELLOW.COM, INC.
Notes to Financial Statements
(Information as of and for the nine-month period ended
September 30, 1999 is unaudited)
(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) DESCRIPTION OF BUSINESS
FreeYellow.Com, Inc. (Company), a corporation incorporated on
December 29, 1998 in the State of Florida provides free web site
building tools and hosting services. Its technologies enable small
and medium-sized business to easily build their own web sites. The
Company also offers a domain name hosting and top-level web domain
registration services.
(b) RECEIVABLE FROM STOCKHOLDER
The Company's initial capital contribution of $100 was not paid by
the sole stockholder until January 7, 1999 and therefore was
recorded as a receivable at December 31, 1998.
(c) OFFICE EQUIPMENT
Office equipment is stated at cost less accumulated depreciation
of $30. Depreciation is calculated using the straight-line method
over the estimated useful lives of the assets of three years.
Expenditures for maintenance and repairs are charged to expense as
incurred.
(d) SOFTWARE LICENSE
The software license is stated at cost. Amortization is calculated
using the straight-line method over the useful life of the license
of three years.
(e) REVENUE RECOGNITION
The Company derives its revenue from the sale of advertisements on
short-term contracts and domain name sales. Domain name revenue is
recognized upon sale. Advertising revenues are recognized ratably
over the period in which the advertisements are displayed.
Deferred revenues represent unearned advertising revenues at
September 30, 1999.
(f) ADVERTISING EXPENSE
The Company expenses costs associated with advertising and
marketing as they are incurred. Advertising expense for the
nine-month period ended September 30, 1999 was $390.
<PAGE>
FREEYELLOW.COM, INC.
Notes to Financial Statements
(Information as of and for the nine-month period ended
September 30, 1999 is unaudited)
(g) INCOME TAXES
The stockholder of the Company has elected to utilize the
provisions of subchapter S of the Internal Revenue Code and
similar provisions for state income tax purposes and thus include
the Company's income or loss in personal income tax returns.
Accordingly, the Company has not recorded a provision for income
taxes.
(h) IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE
DISPOSED OF
Long-lived assets and certain identifiable intangibles are
reviewed 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 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. Assets to be
disposed of are reported at the lower of the carrying amount or
fair value less cost to sell.
(i) USE OF ESTIMATES
The preparation of the 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 and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
(j) UNAUDITED INTERIM FINANCIAL STATEMENTS
In the opinion of Company's management, the September 30, 1999
unaudited interim financial statements include all adjustments,
consisting of normal recurring adjustments, necessary for fair
presentation.
(2) CONCENTRATIONS OF RISK
The Company extends credit to customers in the ordinary course of
business. Accounts receivable reflects a broad customer base concentrated
in the United States. The Company does not generally require collateral
or other security to support credit sales. One customer accounted for
approximately 86% of the accounts receivable balance at September 30,
1999. In addition, sales to the same customer
<PAGE>
FREEYELLOW.COM, INC.
Notes to Financial Statements
(Information as of and for the nine-month period ended
September 30, 1999 is unaudited)
represented greater than 50% of net revenues for the nine-month period
ended September 30, 1999.
(3) RELATED PARTY TRANSACTIONS
The Company leases certain computer equipment from an affiliate under a
three year operating lease at $600 per month. During the nine-month
period ended September 30, 1999, the Company accrued $4,513 in rent
expense under the agreement which was converted to capital prior to
September 30, 1999.
The Company has also entered into a licensing agreement with the
shareholder of the Company to license certain software. Under the
licensing agreement, the Company will pay an annual fee as follows for
each of the calendar years ending December 31:
<TABLE>
<S> <C>
1999 $ 200,000
2000 300,000
2001 400,000
2002 500,000
</TABLE>
For each year subsequent to 2002, the Company will pay an annual fee of
$500,000 plus 10% of net profits before tax, as defined in the agreement.
During the nine-month period ended September 30, 1999, the Company
accrued $150,000 in licensing expense under the agreement that was
converted to capital prior to September 30, 1999.
(4) LEASE COMMITMENTS
The Company entered into various operating leases for computer and office
equipment during the nine-month period ended September 30, 1999 which
expire through April 2002. Aggregate minimum lease payments to be made
under these agreements at September 30, 1999 are as follows for each of
the 12-month periods ending September 30:
<TABLE>
<S> <C>
2000 $ 145,200
2001 145,200
2002 84,700
-------------------
$ 375,100
===================
</TABLE>
<PAGE>
FREEYELLOW, LLC
Notes to Financial Statements
December 31, 1997 and 1998
(Information as of June 30, 1999 and for the six months
ended June 30, 1998 and 1999 are unaudited)
(5) SUBSEQUENT EVENT
On October 22, 1999, Go2Net, Inc., a public company, acquired all of the
outstanding common stock of the Company for $1,000,000 in cash and common
stock of Go2Net, Inc. valued at $18,500,000.
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS'
The Board of Directors
Go2Net, Inc.:
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 333-63729) pertaining to the Go2Net, Inc. 1996 Stock Option
Plan and Silicon Investor, Inc. 1996 Stock Plan, the Registration Statement
(Form S-3 No. 333-63725) pertaining to the registration of 1,295,536 shares
of Common Stock of Go2Net, Inc., the Registration Statement (Form S-3 No.
333-76069) pertaining to the registration of 717,390 shares of Common Stock
of Go2Net, Inc., the Registration Statement (Form S-8 No. 333-76071)
pertaining to the Go2Net, Inc. 1996 Stock Option Plan and Web21 Stock Option
Plan, the Registration Statement (Form S-8 No. 333-82765) pertaining to the
Authorize.Net Corporation 1999 Stock Incentive Plan, the Haggle Online, Inc.
Stock Option Agreement, and the IQC Corporation Stock Option Agreement, the
Registration Statement (Form S-3 No. 333-82773) pertaining to the
registration of 1,512,514 shares of Common Stock of Go2Net, Inc. and the
Registration Statement (Form S-3 No. 333-86529) pertaining to registration of
686,900 shares of Common Stock of Go2Net, Inc. of our report dated December
15, 1999 with respect to the balance sheet of FreeYellow.Com, Inc. as of
December 31, 1998 and the related statements of operations, stockholder's
equity (deficit) and cash flows for the period from December 29, 1998
(inception) to December 31, 1998, included herein.
Seattle, Washington KPMG LLP
January 4, 2000
